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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED: MARCH 31, 1996
COMMISSION FILE NUMBER: 0-16334
ALLIANCE IMAGING, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0239910
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
3111 NORTH TUSTIN AVENUE
SUITE 150
ORANGE, CA 92665
(Address of principal executive office)
(714) 921-5656
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1996:
Common Stock, $.01 par value, 10,857,971.
1
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ALLIANCE IMAGING, INC.
FORM 10-Q
March 31, 1996
Index
<TABLE>
<CAPTION>
Page
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PART I - FINANCIAL INFORMATION
Item 1 - Condensed Financial Statements:
Condensed Consolidated Balance Sheets - 3
March 31, 1996 and December 31, 1995
Condensed Consolidated Statements of Income 4
Three months ended March 31, 1996 and 1995
Condensed Consolidated Statements of Cash Flows 5
Three months ended March 31, 1996 and 1995
Note to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis 7
of Financial Condition and Results of
Operations
PART II - OTHER INFORMATION 12
SIGNATURES 18
</TABLE>
2
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ALLIANCE IMAGING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and short-term investments $ 11,920,000 $ 11,128,000
Accounts receivable, net of allowance
for doubtful accounts 6,905,000 5,583,000
Prepaid expenses 514,000 369,000
Other receivables 17,000 109,000
------------ ------------
Total current assets 19,356,000 17,189,000
------------ ------------
Equipment, at cost 111,119,000 112,014,000
Less--Accumulated depreciation (48,683,000) (52,368,000)
------------ ------------
62,436,000 59,646,000
------------ ------------
Goodwill 23,733,000 23,971,000
Deferred charges 329,000 361,000
Deposits and other assets 2,034,000 2,160,000
------------ ------------
Total assets $107,888,000 $103,327,000
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,027,000 $ 692,000
Accrued compensation and related expenses 2,283,000 2,310,000
Other accrued liabilities 5,918,000 5,025,000
Current portion of long-term debt 10,679,000 9,948,000
------------ ------------
Total current liabilities 19,907,000 17,975,000
------------ ------------
Long-term debt, net of current portion 67,047,000 65,932,000
Other liabilities 721,000 575,000
Deferred income taxes 790,000 790,000
------------ ------------
Total liabilities 88,465,000 85,272,000
Minority interests 16,000 21,000
Redeemable preferred stock 16,663,000 16,430,000
Common stock 109,000 108,000
Additional paid-in capital 31,916,000 31,908,000
Accumulated deficit (29,281,000) (30,412,000)
------------ ------------
Total liabilities and stockholders' equity $107,888,000 $103,327,000
------------ ------------
------------ ------------
</TABLE>
See Note to Condensed Consolidated Financial Statements
3
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ALLIANCE IMAGING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended March 31,
1996 1995
---- ----
<S> <C> <C>
Revenues $14,685,000 $14,481,000
Costs and expenses:
Operating expenses, excluding depreciation 7,181,000 7,169,000
Depreciation expense 2,866,000 2,992,000
Selling, general and administrative expenses 1,507,000 1,542,000
Amortization expense, primarily goodwill 344,000 331,000
Interest expense, net of interest income 1,185,000 1,254,000
----------- -----------
Total costs and expenses 13,083,000 13,288,000
----------- -----------
Income before income taxes 1,602,000 1,193,000
Provision for income taxes 239,000 172,000
----------- -----------
Net income 1,363,000 1,021,000
Preferred stock dividends 233,000 233,000
----------- -----------
Income applicable to common stock $ 1,130,000 $ 788,000
----------- -----------
----------- -----------
Net income per common share $ .10 $ .07
----------- -----------
----------- -----------
Weighted average common and common equivalent
shares outstanding 11,309,000 10,881,000
----------- -----------
----------- -----------
</TABLE>
See Note to Condensed Consolidated Financial Statements
4
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ALLIANCE IMAGING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,363,000 $ 1,021,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 3,210,000 3,323,000
Amortization of deferred financing charges 32,000 20,000
Distributions in excess of (undistributed) equity
in income of investee 75,000 (138,000)
Gain on disposal of equipment -- (30,000)
Changes in operating assets and liabilities:
Accounts receivable, net (1,322,000) 70,000
Prepaid expenses (145,000) (181,000)
Other receivables 92,000 (17,000)
Other assets (33,000) (30,000)
Other liabilities 146,000 --
Accounts payable, accrued compensation and
other accrued liabilities 1,201,000 (1,356,000)
----------- -----------
Net cash provided by operating activities 4,619,000 2,682,000
INVESTING ACTIVITIES:
Purchase of contracts and related assets of
Mobile M.R. Venture, Ltd. (455,000) --
Equipment purchases (6,200,000) (1,849,000)
Decrease (Increase) in deposits on equipment 978,000 (50,000)
Proceeds from disposal of equipment -- 270,000
----------- -----------
Net cash used in investing activities (5,677,000) (1,629,000)
FINANCING ACTIVITIES:
Principal payments on long-term debt (2,470,000) (3,493,000)
Proceeds from long-term debt 4,316,000 5,994,000
Proceeds from exercise of employee stock options 9,000 --
Decrease in minority interests in partnership (5,000) (5,000)
----------- -----------
Net cash provided by financing activities 1,850,000 2,496,000
----------- -----------
NET INCREASE IN CASH AND SHORT-TERM INVESTMENTS 792,000 3,549,000
CASH AND SHORT-TERM INVESTMENTS,
BEGINNING OF PERIOD 11,128,000 2,478,000
----------- -----------
CASH AND SHORT-TERM INVESTMENTS, END
OF PERIOD $11,920,000 $ 6,027,000
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $ 1,280,000 $ 1,268,000
Income taxes paid 38,000 135,000
</TABLE>
See Note to Condensed Consolidated Financial Statements
5
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Alliance Imaging, Inc.
Note to Condensed Consolidated
Financial Statements
March 31, 1996
(Unaudited)
BASIS OF PREPARATION
The accompanying unaudited condensed consolidated financial statements
have been prepared by Alliance Imaging, Inc. (the Company) in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X of the
Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the Company,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 1996, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1995.
The earnings per common share for the three month period ended March 31,
1996 calculation is based upon average common and common equivalent shares
outstanding during the period, and reflects preferred dividend requirements
totaling $233,000. Common equivalent shares include vested stock options with
an exercise price lower than current market value.
The provision for income taxes for the three months ended March 31, 1996
is less than the statutory federal rate due to utilization of certain net
operating loss carryforwards during the period.
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Alliance Imaging, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
GENERAL
The Company's financial performance depends substantially upon the scan
volume of its magnetic resonance imaging (MRI) systems. Revenues are
generally derived from one to eight year contracts with health care providers.
Since a majority of the Company's expenses are fixed, increased revenues as a
result of higher scan volumes significantly improve the Company's
profitability. Conversely, lower scan volumes result in lower profitability.
Among other things, the Company is subject to the risk that customers
will cease using the Company's MRI services upon expiration of contracts to
purchase or lease their own MRI systems. In the past, when this has occurred,
the Company has generally been able to obtain replacement customers. However,
it is not always possible to immediately obtain replacement customers, and
some replacement customers have been smaller facilities and have had lower
scan volumes.
The health care industry is highly regulated and very competitive. The
current health care environment is characterized by increasing cost
containment pressures which management believes have resulted in decreasing
revenues per scan. The Company expects pricing levels to continue to decline
moderately in the immediate future. However, in many cases higher scan
volumes associated with new customer contracts justify lower scan prices and
such contracts do not adversely impact the Company's revenues and
profitability. Although the Company experienced increased scan volumes in
1995 and 1996, it has also had periods of declining volumes in prior years,
and there can be no assurance that the recent positive trends will continue.
In response to these operating challenges, the Company has implemented
numerous cost containment and efficiency measures to reduce operating, payroll
and selling, general and administrative costs. It has also refocused and
expanded its sales and marketing efforts and embarked on a major MRI fleet
upgrade program. Additionally, the Company continues to evaluate the
profitability of certain existing customer relationships with a view toward
eliminating unprofitable accounts and redeploying or otherwise disposing of
certain equipment.
The Company intends to continue its ongoing equipment trade-in and
upgrade program which has substantially improved the marketability and
productivity of its MRI and computed axial tomography (CT) systems. The
Company intends to either trade-in older, less marketable MRI systems in
connection with new system purchases, or to upgrade them with new computers,
software and coils to enable its MRI fleet to remain competitive in the
marketplace.
Beginning in late 1993, the Company commenced a continuing review of the
carrying value of certain older equipment and other assets, as well as its
capital structure, in view of then current operating conditions. As a result,
the Company recorded non-cash asset impairment
7
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charges in 1993 and 1994, and began an ongoing equipment trade-in and upgrade
program to improve the marketability and productivity of the Company's MRI and
CT systems. In addition, the Company completed a comprehensive financial
restructuring with the holders of its senior notes and senior subordinated
debentures effective December 31, 1994. For further details concerning these
matters, please refer to the Company's 1995 Annual Report to Stockholders.
RESULTS OF OPERATIONS - COMPARISON OF QUARTER ENDED MARCH 31, 1996 TO QUARTER
ENDED MARCH 31, 1995
Revenues for the first three months of 1996 were $14,685,000, an increase
of $204,000, or 1.4%, over 1995. Excluding the revenues of $760,000 from
operations which were sold in the second half of 1995, the increase in
revenues was $964,000, or 7.0%. This increase reflects a scan-based MRI
revenue increase of $510,000, or 4.1%, resulting from a 7.6% increase in scan
volume partially offset by a 3.3% decrease in the average revenue realized per
MRI scan. Management attributes the volume increase to the Company's
continuing fleet upgrade program, which has enabled the Company to obtain new
long-term contracts from both existing and new customers. Management believes
the decrease in average revenues realized per scan is the result of continuing
competitive pressure in the MRI service industry and cost containment efforts
by health care payers, as well as obtaining contracts with customers that have
high scan volumes which justify lower scan prices. Revenue under fixed fee
contracts increased $258,000, or 76.6%, resulting from an increased number of
MRI systems under interim rental contracts. Other revenue increased $196,000,
primarily as a result of the third quarter 1995 acquisition of a mobile CT
business.
The Company's fleet included 81 MRI systems at March 31, 1996 compared to
72 MRI systems at March 31, 1995. The average number of MRI systems operated
by the Company was 80.5 during the first quarter of 1996, compared to 69
during the first quarter of 1995.
Operating expenses, excluding depreciation, totaled $7,181,000 in the
first three months of 1996, an increase of $12,000, or 0.2%, from first
quarter 1995. Excluding expenses of $326,000 related to operations which were
sold in the second half of 1995, the increase in operating expenses was
$338,000, or 4.9%. Payroll and related employee expenses increased $180,000,
or 6.5%. Maintenance and cryogen contract and repairs expense increased
$160,000, or 6.4%. These increases resulted from a higher number of MRI
systems in operation in the 1996 first quarter.
Depreciation expense during the first three months of 1996 decreased
$126,000, or 4.2%, from the 1995 level due to a lower amount of depreciable
assets, primarily resulting from asset sales in late 1995 partially offset by
equipment additions in the first quarter of 1996. Amortization expense in the
1996 first quarter increased $13,000, or 3.9%, over the 1995 period as a
result of two acquisitions, one in the third quarter of 1995 and the other in
the first quarter of 1996.
Selling, general and administrative expenses totaled $1,507,000 in the
first quarter of 1996, a decrease of $35,000, or 2.3%, from the first quarter
of 1995. Bad debt expense decreased
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$34,000, or 45.3%, in the first three months of 1996 as a result of revised
billing practices and continuing intensive collection efforts, primarily with
respect to the Company's retail accounts receivable. Other expense categories
were essentially unchanged from the prior period.
Interest expense of $1,185,000 in the first three months of 1996 was
$69,000, or 5.5%, lower than the same period in 1995 primarily as a result of
lower average outstanding debt balances during the first quarter of 1996 as
compared to the first quarter of 1995.
An income tax provision of $239,000 was recorded in the first quarter of
1996. The Company's pre-tax income in 1996 is substantially offset by net
operating loss carryforwards; however, certain federal alternative minimum
taxes and state tax liabilities apply to this income, giving rise to the tax
provision recorded. In the first quarter of 1995, an income tax provision of
$172,000 was recorded, also related to certain federal alternative minimum
taxes and state tax liabilities. The Company's effective tax rate was
approximately constant at 15% of pre-tax income.
The Company's net income was $1,363,000 in the first quarter of 1996
compared to net income of $1,021,000 in the first quarter of 1995, an
increase of $342,000, or 33.5%, primarily attributable to increased revenues
and lower selling, general and administrative and depreciation and interest
expense. Earnings per common share totaled $.10 in the first quarter of 1996,
compared to earnings per common share of $.07 for the same period in 1995, an
increase of 42.9%. The earnings per common share calculations reflect
preferred dividend requirements of $233,000 in the first quarter of 1995 and
1996.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, cash and short-term investments were $11,920,000
compared to $11,128,000 at December 31, 1995, and the aggregate of the
Company's long-term debt and senior subordinated debentures was $67,047,000
compared to $65,932,000 at December 31, 1995. The Company obtained a
$3,000,000 revolving line of credit secured by accounts receivable in December
1995. This line, which has not been utilized, is intended to act as a
temporary supplement to fund working capital needs.
The Company generated $4,619,000 in net cash from operating activities
during the first three months of 1996, compared to $2,682,000 during 1995's
first three months. This cash flow was sufficient to meet the Company's debt
service obligations and capital expenditures not financed. During the first
quarter of 1996, the Company financed $4.3 million of capital expenditures and
repaid $2.5 million of long-term debt. The Company believes its continuing
cash flow from operations as well as its cash balances and other credit
sources will be adequate for anticipated operating, debt service, preferred
dividend and capital expenditure requirements.
Debt service requirements on the Company's restructured senior notes,
with a balance of $26,600,000 at March 31, 1996 require quarterly payments of
interest at 7.5%, plus aggregate principal payments of $400,000 in 1996
(gradually increasing to $7,200,000 in 2003). The Company made an additional
$1,000,000 principal payment in April 1996 in connection with the lender's
agreement to increase capital expenditure limitations (see below). The senior
9
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subordinated debentures with a balance of $16,445,000 at March 31, 1996,
require quarterly payments of $187,500 through 2003 (increasing to
approximately $1,900,000 in 2004 and 2005) which, for financial statement
purposes, are recorded as principal reductions; no interest expense will be
recorded during the contractual term of the debentures, in accordance with
generally accepted accounting principles.
The Company's Series A preferred stock, with a balance of $16,663,000
(including accumulated dividends of $1,163,000) at March 31, 1996, bears a
dividend at 6% of its original liquidation value ($15,500,000) annually.
However, dividends may be paid in cash only if certain defined operating cash
flow levels are achieved or to the extent of proceeds from the sale of new
common equity. The Company's 1995 cash flow substantially exceeded the level
required to pay the 1995 Series A preferred stock dividend in cash and such
dividend was paid in April 1996 in the amount of $930,000. Although the
Company expects to be able to pay the Series A preferred stock dividends
attributable to 1996 and subsequent years in cash, there can be no assurance
that future cash flow levels will be sufficient to permit the payment of such
future dividends in cash. If annual cash dividends are not or cannot be paid,
dividends will be payable in Series B preferred stock, which has no dividend
requirement and is convertible into common stock at specified prices.
Consequently, substantial amounts of common stock equivalents may be issued to
the holders of the Series A preferred stock in the future, which would cause
significant dilution to present common stockholders. Both series of preferred
stock have mandatory redemption requirements (in the case of Series B, if not
previously converted to common stock) applicable after the senior notes and
senior subordinated debentures are fully repaid.
The senior notes, senior subordinated debentures and certain other credit
agreements contain various covenants related to financial ratios and other
matters. The Company was in compliance with these covenants at March 31, 1996.
CAPITAL EXPENDITURES
The Company purchased two new high-field MRI systems and upgraded five
MRI systems at a total approximate cost of $6,200,000 during the first quarter
of 1996. The Company currently plans to purchase seven additional high-field
MRI systems in 1996 and plans to upgrade several existing systems. The
Company's senior secured and subordinated lenders have recently agreed to
increase the Company's allowable capital expenditures to a total of $34
million in 1996 and 1997, an increase of $14 million from previous levels.
Consequently, the Company may purchase or upgrade several more systems in 1996
as opportunities to place new equipment into service arise as future contracts
are signed and existing contracts are renewed.
In addition, the Company expects to dispose of substantially all of its
remaining less technologically advanced systems in 1996 in exchange for new or
used MRI systems. The Company intends to use a combination of existing cash
reserves, cash flow from operations and long-term secured equipment financing
to finance its capital expenditures, although there can be no assurance that
such financing will be available to the Company. The Company intends to
continue focusing on acquiring state-of-the-art equipment while disposing of
older systems.
10
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In February 1996, the Company acquired four MRI systems and associated
MRI contracts from Mobile M.R. Venture, Ltd. In April 1996, the Company
acquired Royal Medical Health Services, Inc., including six MRI systems.
These transactions were primarily funded from existing cash reserves.
Additional investments of this nature may be made in the future (subject to
certain conditions contained in the Company's long-term financing
arrangements) from a combination of cash reserves, cash flow from operations
and long-term secured or unsecured financing, if available.
If the Company adds MRI systems at a more rapid rate than is currently
planned, or if it acquires additional business entities, or if the net cash
generated by operations declines from current or anticipated levels, the
Company could be required to raise additional capital. However, there can be
no assurance that the Company would be able to raise such capital, or do so on
terms acceptable to the Company, or that consents from present lenders, if
required, could be obtained.
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Note Description
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<C> <C> <S>
3.1 (1) Restated Certificate of Incorporation of Alliance Imaging.
3.1.1 (1) Certificate of Amendment of Restated Certificate of Incorporation
of Alliance Imaging, Inc.
3.1.2 (1) Certificate of Correction of Certificate of Amendment of Restated
Certificate of Incorporation of Alliance Imaging, Inc.
3.1.3 (8) Certificate of Amendment of Restated Certificate of Incorporation
of Alliance Imaging, Inc.
3.2 (1) By-Laws of Alliance Imaging, Inc., as amended.
4.1 (1) Specimen of Common Stock Certificate.
4.2 (11) Amended and Restated Purchase Agreement dated as of December
31, 1994 among the Registrant and the holders of the Registrant's
Senior Subordinated Debentures due 2005.
4.2.1 (9) Amendment No. 1 to Amended and Restated Purchase Agreement
dated as of December 31, 1994 among the Registrant and the
holders of the Registrant's Senior Subordinated Debentures due
2005.
4.2.2 (20) Amendment No. 2 to Amended and Restated Purchase Agreement
dated as of April 15, 1996 among the Registrant and the holders
of the Registrant's Senior Subordinated Debentures due 2005.
4.3 (1) Note Purchase Agreement dated as of April 14, 1989 governing
sale of Senior Notes by Alliance Imaging, Inc.
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4.4 (1) First Amendment to Note Purchase Agreement dated as of
September 20, 1990 among Alliance Imaging, Inc., CIGNA
Property and Casualty Insurance Company, Connecticut General
Life Insurance Company, Insurance Company of America and Life
Insurance Company of North America.
4.4.1 (1) Amendment No. 2 to Note Purchase Agreement dated as of June 3,
1991.
4.4.2 (2) Amendment No. 3 to Note Purchase Agreement dated as of
December 1, 1991.
4.4.3 (3) Amendment No. 4 to Note Purchase Agreement dated as of
December 31, 1992.
4.4.4 (4) Amendment No. 5 to Note Purchase Agreement dated as of June
30, 1993.
4.4.5 (6) Amendment No. 6 to Note Purchase Agreement dated as of
January 1, 1994.
4.4.9 (12) Amendment No. 7 to Note Purchase Agreement dated as of
December 31, 1994.
4.4.10 (9) Amendment No. 8 to Note Purchase Agreement dated as of
December 31, 1994.
4.4.11 (20) Amendment No. 9 to Note Purchase Agreement dated as of April
15, 1996.
4.5 (1) Amended and Restated Shareholders Agreement dated as of April
17, 1989.
4.6 (13) Security Agreement dated as of December 31, 1994 among the
Registrant, the holders of the Senior Notes and the Collateral
Agent for the Senior Noteholders.
4.7 (14) Guaranty dated as of December 31, 1994 of the Registrant's
obligations to the Senior Noteholders and the Senior Subordinated
Debentureholders executed by the subsidiaries of the Registrant
identified therein.
4.8 (15) Registration Rights Agreement dated as of December 31, 1994
among the Registrant, the Senior Noteholders and the Senior
Subordinated Debentureholders.
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4.9 (16) Certificate of Designation concerning the Registrant's Series A
6.0% Cumulative Preferred Stock.
4.10 (17) Certificate of Designation Concerning the Registrant's Series B
Convertible Preferred Stock.
4.11 (20) Certificate of Designation Concerning the Registrant's Series C
5% Cumulative Convertible Redeemable Preferred Stock.
9.1 (1) Amended and Restated Voting Trust Agreement between
Donaldson, Lufkin & Jenrette Capital Corporation and Meridian
Trust Company dated December 29, 1988.
10.4 (3) 1991 Stock Option Plan of Alliance Imaging, Inc. adopted on May
10, 1991, amended on May 23, 1991, amended on March 17,
1992, and amended on February 23, 1993.
10.5 (1) Form of Incentive Stock Option Agreement pursuant to 1991
Stock Option Plan of Alliance Imaging, Inc.
10.5.1 (1) Form of Non-Qualified Stock Option Agreement pursuant to 1991
Stock Option Plan of Alliance Imaging, Inc.
10.5.2 (7) Form of Incentive Stock Option Agreement pursuant to 1991
Stock Option Plan of Alliance Imaging, Inc., utilized for certain
option grants beginning in 1994.
10.5.3 (9) Form of letter to optionees dated February 21, 1995 amending
terms of stock options granted March 10, 1994.
10.11 (1) Association Agreement by and between Alliance Imaging, Inc. and
Alliance Medical, Ltd., dated September 30, 1989.
10.16 (1) Form of Indemnification Agreement between Alliance Imaging,
Inc. and its directors and/or officers.
10.18 (2) Lease Agreement dated September 13, 1991, by and between
Alliance Imaging, Inc. and Crestview Partners.
10.20 (5) Georgia Magnetic Imaging Center, Ltd. Limited Partnership
Agreement dated as of March 22, 1985.
10.20.1 (5) Amendment to Georgia Magnetic Imaging Center, Ltd. Limited
Partnership Agreement dated as of July 1, 1993.
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10.24 (8) Employment Agreement dated as of September 9, 1993, between
Alliance Imaging, Inc. and Richard N. Zehner.
10.25 (8) Employment Agreement dated as of September 9, 1993, between
Alliance Imaging, Inc. and Vincent S. Pino.
10.26 (8) Employment Agreement dated as of September 9, 1993, between
Alliance Imaging, Inc. and Terry A. Andrues.
10.27 (8) Employment Agreement dated as of September 9, 1993, between
Alliance Imaging, Inc. and Jay A. Mericle.
10.28 (8) Employment Agreement dated as of September 9, 1993, between
Alliance Imaging, Inc. and Terrence M. White.
10.29 (8) Employment Agreement dated as of June 6, 1994, between
Alliance Imaging, Inc. and Neil M. Cullinan.
10.30 (8) Employment Agreement dated as of June 6, 1994, between
Alliance Imaging, Inc. and Cheryl A. Ford.
10.31 (10) Standstill Agreement dated as of December 31, 1994 between the
Registrant and Connecticut General Life Insurance Company,
CIGNA Property and Casualty Insurance Company, Insurance
Company of North America and Life Insurance Company of North
America.
10.32 (10) Standstill Agreement dated as of December 31, 1994 between the
Registrant and Northwestern Mutual Life Insurance Company.
10.33 (10) Standstill Agreement dated as of December 31, 1994 between the
Registrant and The Travelers Indemnity Company, The Travelers
Insurance Company and The Travelers Life and Annuity Company.
10.34 (10) Standstill Agreement dated as of December 31, 1994 between the
Registrant and The Lincoln National Life Insurance Company.
10.35 (10) Standstill Agreement dated as of December 31, 1994 between the
Registrant and The Equitable Life Assurance Society of the United
States.
10.36 (18) Employment Agreement dated July 7, 1995 between Alliance
Imaging, Inc. and Michael W. Grismer.
15
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10.37 (19) Long-Term Executive Incentive Plan dated as of March 28, 1995,
adopted in final form November 28, 1995.
10.38 (19) Loan and Security Agreement with Comerica Bank-California,
dated as of December 21, 1995.
10.39 (20) Royal Medical Health Services, Inc. Merger Agreement dated as of
April 16, 1996.
10.40 (20) A & M Trucking, Inc. Acquisition Agreement dated as of April 16,
1996.
10.41 (20) Form of Warrant Agreement concerning 100,000 common shares
with an exercise price of $3.9375 per share dated as of April 15,
1996.
10.42 (20) Form of Warrant Agreement concerning 100,000 common shares
with an exercise price of $5.00 per share dated as of April 15,
1996.
</TABLE>
- - ------------------------------
(1) Incorporated by reference herein to the indicated exhibits filed in
response to Item 16, "Exhibits" of the Company's Registration Statement on
Form S-1, No. 33-40805, initially filed on May 24, 1991.
(2) Incorporated by reference herein to the indicated exhibits filed in
response to Item 21, "Exhibits" of the Company's Registration Statement on
Form S-4, No. 33-46052, initially filed on February 28, 1992.
(3) Incorporated by reference herein to the indicated exhibits filed in
response to Item 14(a)(3), "Exhibits" of the Company's Annual Report on
Form 10-K for the year ended December 31, 1992.
(4) Incorporated by reference herein to the indicated exhibits filed in
response to Item 6(a), "Exhibits" of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1993.
(5) Incorporated by reference herein to the indicated exhibits filed in
response to Item 6(a), "Exhibits" of the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993.
(6) Incorporated by reference herein to the indicated exhibits filed in
response to Item 14(a)(3), "Exhibits" of the Company's Annual Report on
Form 10-K for the year ended December 31, 1993.
16
<PAGE>
(7) Incorporated by reference herein to the indicated exhibit filed in
response to item 6(a), "Exhibits" of the Company's Quarterly report on
Form 10-Q for the quarter ended March 31, 1994.
(8) Incorporated by reference herein to the indicated exhibit filed in
response to Item 6(a), "Exhibits" of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994.
(9) Incorporated by reference herein to the indicated exhibit filed in
response to Item 14(a)(3), "Exhibits" of the Company's Annual Report on
Form 10-K for the year ended December 31, 1994.
(10) Incorporated by reference herein to Exhibit 10 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(11) Incorporated by reference herein to Exhibit 4.4 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(12) Incorporated by reference herein to Exhibit 4.1 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(13) Incorporated by reference herein to Exhibit 4.2 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(14) Incorporated by reference herein to Exhibit 4.3 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(15) Incorporated by reference herein to Exhibit 4.5 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(16) Incorporated by reference herein to Exhibit 4.6 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(17) Incorporated by reference herein to Exhibit 4.7 filed in response to Item
7, "Exhibits" of the Company's Form 8-K Current Report dated January 25,
1995.
(18) Incorporated by reference herein to the indicated Exhibit filed in
response to Item 6(a), "Exhibits" of the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995.
(19) Incorporated by reference herein to the indicated Exhibit in response to
Item 14(a)(3), "Exhibits" of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.
(20) Filed herewith.
17
<PAGE>
(b) REPORTS ON FORM 8-K IN THE FIRST QUARTER OF 1996:
None filed for the quarter ended March 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLIANCE IMAGING, INC.
May 9, 1996 By: /s/ Richard N. Zehner
---------------------------------
Richard N. Zehner
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on May 9, 1996.
Signature Title
--------- -----
/s/ Richard N. Zehner Chairman of the Board of Directors,
- - ---------------------- President and Chief Executive Officer
Richard N. Zehner (Principal Executive Officer)
/s/ Terrence M. White Senior Vice President-Finance, Chief
- - ---------------------- Financial Officer and Secretary
Terrence M. White (Principal Financial Officer)
18
<PAGE>
ALLIANCE IMAGING, INC.
SECOND AMENDMENT
TO AMENDED AND RESTATED PURCHASE AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (this
"SECOND AMENDMENT") is dated as of April 15, 1996 and entered into by and among
Alliance Imaging, Inc., a Delaware corporation (the "COMPANY") and each of the
purchasers listed on the signature page hereto (the "PURCHASERS"), and is made
with reference to that certain Amended and Restated Purchase Agreement dated as
of December 31, 1994, as amended by that certain First Amendment to Amended and
Restated Purchase Agreement dated as of December 31, 1994 (as so amended, the
"PURCHASE AGREEMENT"), by and among the Company and the Purchasers. Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Purchase Agreement.
RECITALS
WHEREAS, the Company and the Purchasers desire to amend the Purchase
Agreement to (i) amend certain covenants contained in the Purchase Agreement,
and (ii) make certain other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
1. AMENDMENTS TO THE PURCHASE AGREEMENT
.1 MANDATORY PREPAYMENTS.
Section 6.02 of the Purchase Agreement is amended to add as a new second
sentence thereof the following sentence:
"In the event that the Company has repaid in full all of the
Senior Notes prior to December 31, 2003, then the mandatory
prepayments referred to in the preceding sentence shall
accelerate to commence on the last day of the first full
fiscal quarter following the date of such repayment in full
of the Senior Notes (PROVIDED, HOWEVER, that if such
repayment occurs during the first 45 days of a fiscal
quarter, then such mandatory prepayments shall instead
commence on the last day of the fiscal quarter in which such
<PAGE>
repayment occurs). If such mandatory prepayments are
accelerated pursuant to the preceding sentence, then the
amounts and periodicity thereof shall be exactly as
indicated in the second preceding sentence, excepting only
the acceleration of commencement of prepayments."
.2 DEBT INCURRENCE.
Section 10.03(d)(ii) of the Purchase Agreement is amended by changing the
figures under the column "Minimum Ratio of Consolidated Operating Income Before
Depreciation to Pro Forma Debt Service" for the years indicated as follows:
<TABLE>
<S> <C>
1996 1.10:1.00
1997 1.15:1.00
1998 1.20:1.00
1999 1.20:1.00
2000 1.20:1.00,
and thereafter
</TABLE>
.3 REFINANCINGS.
Section 10.03(h) of the Purchase Agreement is amended and restated to read
in full as follows: "Indebtedness which is a renewal, extension or replacement
of existing Indebtedness permitted under this Section 10.03;
provided that (A) in the case of such Indebtedness which is a renewal, extension
or replacement of existing Indebtedness incurred to acquire equipment subject to
Liens permitted under any of Sections 10.02(e), 10.02(i) and 10.02(j)
(hereinafter "Refinanced Equipment Indebtedness"), (i) the periodic debt payment
with respect to such Refinanced Equipment Indebtedness is less than or equal to
the periodic debt payment currently payable with respect to the existing
Indebtedness being renewed, extended or replaced, (ii) the term of such
Refinanced Equipment Indebtedness does not exceed five years and (iii) the
aggregate amount by which all such Refinanced Equipment Indebtedness entered
into after the date of the Second Amendment which is in excess of the existing
Indebtedness being renewed, extended or replaced does not exceed $2,000,000 plus
the aggregate amount of Supplemental Mandatory Principal Prepayments made prior
to the incurrence of any such Refinanced Equipment Indebtedness, and (B) in the
case of such Indebtedness other than Refinanced Equipment Indebtedness, the
principal amount of such Indebtedness is less than or equal to the principal
amount outstanding immediately prior to such renewal, extension or replacement
and the periodic debt payment with respect thereto is
-2-
<PAGE>
less than or equal to the periodic debt payment currently payable with
respect to such Indebtedness."
.4 RESTRICTED PAYMENTS.
Clause (a) of Section 10.05 of the Purchase Agreement, beginning with the
first word of that clause and ending immediately prior to the first instance of
"(i)" therein, is amended and restated to read as follows: "payments made by the
Company to pay cash dividends on Preferred Stock issued to the holders of the
Subordinated Debentures on the Seventh Amendment Effective Date and to pay cash
dividends on the Series C 5% Cumulative Convertible Redeemable Preferred Stock
of the Company (the "Series C Preferred Stock"), provided that in the case of
such Series C Preferred Stock the amount of cash dividends shall not exceed
$20,000 per year, and provided further that any such dividend payments shall be
made". Section 10.05(a) is also hereby amended to add thereto as a new final
sentence the following: "In addition to the foregoing exceptions, the Company
shall be permitted to make cash payments in lieu of issuing fractional shares in
connection with a recapitalization of its Common Stock (including a reverse
stock split thereof) or any similar event, provided that the aggregate amount
expended therefor from and after the date of this Second Amendment and prior to
the repayment in full of the Debentures shall not exceed the lesser of $25,000
and the actual amount expended to effect the first such recapitalization or
similar event."
.5 FIXED PAYMENT AND FIXED CHARGE COVERAGE RATIOS.
Section 10.07 of the Purchase Agreement is amended by changing the figures
under the columns "Minimum Fixed Payment Ratio" and "Fixed Charge Coverage
Ratio" for the indicated years as follows:
<TABLE>
<CAPTION>
Minimum Fixed Fixed Charge
Payment Ratio Coverage Ratio
------------- --------------
<S> <C> <C>
1996 1.10 2.50
1997 1.15 2.75
1998 1.15 2.75
1999 1.20 2.75
2000 1.20 2.75
2001 1.20 2.75
and thereafter
</TABLE>
In addition, the following new sentence is added at the end of Section 10.07:
"The amount of Supplemental Mandatory Principal Prepayments (as defined in
-3-
<PAGE>
Section 6.02) shall be excluded from the computation of the Minimum Fixed
Payment Ratio for purposes of this Section 10.07."
.6 CAPITAL EXPENDITURES.
The first sentence of Section 10.08 of the Purchase Agreement is amended to
add the phrase "Except as set forth in the next sentence," to the beginning of
such sentence. A new sentence, placed after the existing first sentence, of
Section 10.08 is added as follows: "During the two Fiscal Years beginning
January 1, 1996 and ending December 31, 1997 (the "Special Cap Ex Period"), the
Company may make Capital Expenditures and cash payments in respect of Capital
Expenditures in excess of the amounts provided in the immediately preceding
sentence, provided that the aggregate amount of such excess Capital Expenditures
shall not exceed $14,000,000 during the Special Cap Ex Period, and provided
further that the aggregate amount of such excess cash payments made in respect
of Capital Expenditures shall not exceed $3,500,000 during the Special Cap Ex
Period (each cash payment made in reliance on this sentence is referred to
herein as an "Excess Cash Cap Ex Payment")."
.7 LIMITATION ON LEASES.
The first sentence of Section 10.14 of the Purchase Agreement is amended to
add the phrase "Except as set forth in the next sentence," to the beginning of
such sentence. The reference to "$1,500,000" at the end of such sentence is
stricken and in lieu thereof the following text is inserted:
"the applicable amount set forth below based upon
the Fiscal Year in which such Long-Term Lease is
proposed to be entered into:
1996 $2,700,000
1997 2,500,000
1998 2,200,000
1999 1,750,000
Thereafter 1,500,000."
In addition, a new second sentence is added to Section 10.14, reading in full as
follows: "Notwithstanding the foregoing, there shall be excluded from the
calculation of Consolidated Rental Obligations pursuant to the preceding
sentence any and all variable lease payments (i.e., payments made pursuant to a
Long-Term Lease or otherwise that are based solely upon usage or other operating
criteria rather than being fixed in amount and as to which there are no minimum
and no guaranteed periodic payment obligations)."
-4-
<PAGE>
2. CONSIDERATION FOR SECOND AMENDMENT
In consideration of their agreement to enter into this Second Amendment,
the Company agrees to issue to the holders of the Debentures warrants to
purchase an aggregate of 88,800 shares of Common Stock of the Company at an
exercise price of $3.9375 per share, such warrants to be issued to such holders
pro rata in accordance with the respective remaining unpaid principal amounts of
the Debentures held by each of such holders as of the date of this Second
Amendment. The warrants will be evidenced by warrant certificates substantially
in the form attached to this Second Amendment as Exhibit A. Notwithstanding the
foregoing, any holder entitled to receive warrants may elect in lieu thereof (by
written notice to the Company prior to the execution and delivery of this Second
Amendment by such Purchaser) to receive an additional cash payment calculated at
the rate of $1.875 for each warrant to purchase one share of Common Stock
foregone.
3. SUBSIDIARY GUARANTY
In connection with the Company's proposed acquisition of the capital stock
of Royal Medical Health Services, Inc., a Pennsylvania corporation, the Company
agrees that, pursuant to Section 10.17 of the Purchase Agreement, not later than
the closing of such acquisition, the Subsidiary created or acquired as a result
of such acquisition will execute and deliver to each of the holders of
Debentures a Guaranty. Simultaneously with the execution and delivery of this
Second Amendment by the Company, the Company shall provide or cause to be
provided to the Purchasers certified resolutions of the Board of Directors of
the entity providing such Guaranty approving such acquisition and authorizing
the execution and delivery and a legal opinion of Irell & Manella LLP as to the
enforceability of such Guaranty against such entity, in form and substance
reasonably satisfactory to the Purchasers.
4. MISCELLANEOUS
.1 REFERENCE TO AND EFFECT ON THE PURCHASE AGREEMENT.
(i) On and after the date of this Second Amendment, each reference in
the Purchase Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of like import referring to the Purchase Agreement, and each
reference in any other related documents to the "Purchase Agreement",
"thereunder", "thereof" or words of like import referring to the Purchase
Agreement shall mean and be a reference to the Agreement as amended to give
effect to the Second Amendment.
-5-
<PAGE>
(ii) Except as specifically amended by this Second Amendment, the
Purchase Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
(iii) The execution, delivery and performance of this Second
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power or
remedy of the Purchasers under, the Purchase Agreement.
.2 HEADINGS. Section and subsection headings in this Second Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose or be given any substantive
effect.
.3 APPLICABLE LAW. THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
.4 COUNTERPARTS; EFFECTIVENESS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Second Amendment shall
become effective upon the completion or satisfaction of each of the following,
which shall constitute conditions precedent to the effectiveness of this Second
Amendment: (i) the execution of a counterpart hereof by each of the parties
hereto and receipt by the Company and the Purchasers of written or telephonic
notification of such execution and authorization of delivery thereof; (ii)
execution and delivery by each of the holders of Senior Notes of the instrument
referred to in Section 4.5 below (with evidence of the same having been provided
to the Purchasers); (iii) receipt by each of the Purchasers of the consideration
referred to in Section 2 above; and (iv) the accuracy of the representation and
warranty of the Company set forth in Section 4.6 below.
.5 CONSENT TO SENIOR NOTE AMENDMENTS. Each of the undersigned Purchasers
does hereby consent to an amendment to the terms of the Senior Notes pursuant to
an instrument substantially in the form attached hereto as Exhibit B.
.6 NO DEFAULTS. By its execution hereof, the Company represents and
warrants that, after giving effect to the amendments contained in this Second
-6-
<PAGE>
Amendment, no Default or Event of Default exists under the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
"COMPANY" ALLIANCE IMAGING, INC.
By:_________________________________
Title:______________________________
"PURCHASERS" THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By:_________________________________
Title:______________________________
THE TRAVELERS INSURANCE COMPANY
By:_________________________________
Title:______________________________
THE TRAVELERS INDEMNITY COMPANY
By:_________________________________
Title:______________________________
-7-
<PAGE>
THE TRAVELERS LIFE AND ANNUITY COMPANY
By:_________________________________
Title:______________________________
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY
BY: LINCOLN INVESTMENT MANAGEMENT, INC.,
ITS ATTORNEY-IN-FACT
By:_________________________________
Title:______________________________
BEDROCK ASSET TRUST I
BY: WILMINGTON TRUST CO., ITS TRUSTEE
By:_________________________________
Title:______________________________
-8-
<PAGE>
List of Exhibits:
Exhibit A Form of Warrants
Exhibit B Form of Amendment to Senior Notes
<PAGE>
ALLIANCE IMAGING, INC.
NINTH AMENDMENT
TO NOTE PURCHASE AGREEMENT
This NINTH AMENDMENT TO NOTE PURCHASE AGREEMENT (this "NINTH AMENDMENT")
is dated as of April 15, 1996 and entered into by and among Alliance Imaging,
Inc., a Delaware corporation (the "COMPANY") and each of the holders listed
on the signature page hereto (the "HOLDERS"), and is made with reference to
that certain Note Purchase Agreement dated as of April 14, 1989, as amended
by that certain First Amendment to Note Purchase Agreement dated as of
September 20, 1990, that certain Second Amendment to Note Purchase Agreement
dated as of June 3, 1991, that certain Third Amendment to Note Purchase
Agreement dated as of December 1, 1991, that certain Fourth Amendment to Note
Purchase Agreement dated as of December 31, 1992, that certain Fifth
Amendment to Note Purchase Agreement dated as of June 30, 1993, that certain
Sixth Amendment to Note Purchase Agreement dated as of March 18, 1994, that
certain Seventh Amendment to Note Purchase Agreement dated as of December 31,
1994, and that certain Eighth Amendment to Note Purchase Agreement dated as
of December 31, 1994 (as so amended, the "PURCHASE AGREEMENT"), by and among
the Company and the Holders. Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Purchase Agreement.
RECITALS
WHEREAS, the Company and the Holders desire to amend the Purchase
Agreement to (i) amend certain covenants contained in the Purchase Agreement,
and (ii) make certain other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO THE PURCHASE AGREEMENT
.1 MANDATORY PREPAYMENTS.
Section 6.02 of the Purchase Agreement is amended to add at the end
thereof the following additional provisions:
"In addition to the foregoing, the Company shall prepay
the aggregate principal amount of the Notes in the
<PAGE>
amounts set forth below, at 100% of the aggregate principal
amount then outstanding, plus accrued interest (collectively,
the "Supplemental Mandatory Principal Prepayments"):
(i) The amount of each Excess Cash Cap Ex Payment (as
defined in Section 10.08). Each prepayment pursuant to this
Section 6.02(i) shall be made in four equal quarterly
installments commencing with the last day of the quarter in
which the applicable Excess Cap Ex Payment is made;
(ii) The amount of all cash dividends on Preferred Stock or
Series C Preferred Stock (as defined in Section 10.05) made
after April 30, 1996. Each prepayment pursuant to this
Section 6.02(ii) shall be made simultaneously with the
applicable payment of such cash dividends; and
(iii) One Million Dollars ($1,000,000) upon the closing of
the acquisition by the Company or a Subsidiary thereof of
Royal Medical Health Services, Inc., a Pennsylvania
corporation, whether by acquisition of stock, merger or
consolidation, purchase of assets or otherwise. The
prepayment pursuant to this Section 6.02(iii) shall be made
simultaneously with the closing of such acquisition.
The payment of Supplemental Mandatory Principal Prepayments
shall be applied first against the last remaining unpaid
mandatory prepayment described in the first sentence of this
Section 6.02, then to the second to last remaining unpaid
mandatory prepayment, and so on (i.e., such payments will be
applied in reverse order of maturity)."
.2 DEBT INCURRENCE.
Section 10.03(d)(ii) of the Purchase Agreement is amended by changing
the figures under the column "Minimum Ratio of Consolidated Operating Income
Before Depreciation to Pro Forma Debt Service" for the years indicated as
follows:
-2-
<PAGE>
1996 1.10:1.00
1997 1.15:1.00
1998 1.20:1.00
1999 1.20:1.00
2000 1.20:1.00.
and thereafter
.3 REFINANCINGS.
Section 10.03(h) of the Purchase Agreement is amended and restated to
read in full as follows: "Indebtedness which is a renewal, extension or
replacement of existing Indebtedness permitted under this Section 10.03;
provided that (A) in the case of such Indebtedness which is a renewal,
extension or replacement of existing Indebtedness incurred to acquire
equipment subject to Liens permitted under any of Sections 10.02(e), 10.02(i)
and 10.02(j) (hereinafter "Refinanced Equipment Indebtedness"), (i) the
periodic debt payment with respect to such Refinanced Equipment Indebtedness
is less than or equal to the periodic debt payment currently payable with
respect to the existing Indebtedness being renewed, extended or replaced,
(ii) the term of such Refinanced Equipment Indebtedness does not exceed five
years and (iii) the aggregate amount by which all such Refinanced Equipment
Indebtedness entered into after the date of the Ninth Amendment which is in
excess of the existing Indebtedness which is being renewed, extended or
replaced does not exceed $2,000,000 plus the aggregate amount of Supplemental
Mandatory Principal Prepayments made prior to the incurrence of any such
Refinanced Equipment Indebtedness, and (B) in the case of such Indebtedness
other than Refinanced Equipment Indebtedness, the principal amount of such
Indebtedness is less than or equal to the principal amount outstanding
immediately prior to such renewal, extension or replacement and the periodic
debt payment with respect thereto is less than or equal to the periodic debt
payment currently payable with respect to such Indebtedness."
.4 RESTRICTED PAYMENTS.
Clause (a) of Section 10.05 of the Purchase Agreement, beginning with
the first word of that clause and ending immediately prior to the first
instance of "(i)" therein, is amended and restated to read as follows:
"payments made by the Company to pay cash dividends on Preferred Stock issued
to the holders of the Subordinated Debentures on the Seventh Amendment
Effective Date and to pay cash dividends on the Series C 5% Cumulative
Convertible Redeemable Preferred Stock of the Company (the "Series C
Preferred Stock"), provided that
-3-
<PAGE>
in the case of such Series C Preferred Stock the amount of cash dividends
shall not exceed $20,000 per year, and provided further that any such
dividend payments shall be made". Section 10.05(a) is also hereby amended to
add thereto as two new final sentences the following: "The Company shall be
required to make mandatory prepayments on the Notes in connection with the
making of cash dividends on the Series C Preferred Stock, as indicated in
Section 6.02 of this Agreement. In addition to the foregoing exceptions, the
Company shall be permitted to make cash payments in lieu of issuing
fractional shares in connection with a recapitalization of its Common Stock
(including a reverse stock split thereof) or any similar event, provided that
the aggregate amount expended therefor from and after the date of this Ninth
Amendment and prior to the repayment in full of the Senior Notes shall not
exceed the lesser of $25,000 and the actual amount expended to effect the
first such recapitalization or similar event."
.5 FIXED PAYMENT AND FIXED CHARGE COVERAGE RATIOS.
Section 10.07 of the Purchase Agreement is amended by changing the
figures under the columns "Minimum Fixed Payment Ratio" and "Fixed Charge
Coverage Ratio" for the indicated years as follows:
Minimum Fixed Fixed Charge
Payment Ratio Coverage Ratio
--------------- ----------------
1996 1.10 2.50
1997 1.15 2.75
1998 1.15 2.75
1999 1.20 2.75
2000 1.20 2.75
2001 1.20 2.75
and thereafter
In addition, the following new sentence is added at the end of Section 10.07:
"The amount of Supplemental Mandatory Principal Prepayments (as defined in
Section 6.02) shall be excluded from the computation of the Minimum Fixed
Payment Ratio for purposes of this Section 10.07."
.6 CAPITAL EXPENDITURES.
The first sentence of Section 10.08 of the Purchase Agreement is amended
to add the phrase "Except as set forth in the next sentence," to the
beginning of such sentence. Two new sentences, placed after the existing
first sentence, of Section 10.08 are added as follows: "During the two
Fiscal Years
-4-
<PAGE>
beginning January 1, 1996 and ending December 31, 1997 (the
"Special Cap Ex Period"), the Company may make Capital Expenditures and cash
payments in respect of Capital Expenditures in excess of the amounts provided
in the immediately preceding sentence, provided that the aggregate amount of
such excess Capital Expenditures shall not exceed $14,000,000 during the
Special Cap Ex Period, and provided further that the aggregate amount of such
excess cash payments made in respect of Capital Expenditures shall not exceed
$3,500,000 during the Special Cap Ex Period (each cash payment made in
reliance on this sentence is referred to herein as an "Excess Cash Cap Ex
Payment"). The Company shall be required to make mandatory prepayments on
the Notes in connection with each Excess Cash Cap Ex Payment, as indicated in
Section 6.02 of this Agreement."
.7 LIMITATION ON LEASES.
The first sentence of Section 10.14 of the Purchase Agreement is amended
to add the phrase "Except as set forth in the next sentence," to the
beginning of such sentence. The reference to "$1,500,000" at the end of such
sentence is stricken and in lieu thereof the following text is inserted:
"the applicable amount set forth below based upon the
Fiscal Year in which such Long-Term Lease is proposed
to be entered into:
1996 $2,700,000
1997 2,500,000
1998 2,200,000
1999 1,750,000
Thereafter 1,500,000."
In addition, a new second sentence is added to Section 10.14, reading in full
as follows: "Notwithstanding the foregoing, there shall be excluded from the
calculation of Consolidated Rental Obligations pursuant to the preceding
sentence any and all variable lease payments (i.e., payments made pursuant to
a Long-Term Lease or otherwise that are based solely upon usage or other
operating criteria rather than being fixed in amount and as to which there
are no minimum and no guaranteed periodic payment obligations)."
-5-
<PAGE>
SECTION 2. CONSIDERATION FOR NINTH AMENDMENT
In consideration of their agreement to enter into this Ninth Amendment,
the Company agrees to pay the holders of the Notes an aggregate cash fee of
$75,000, such amount to be paid to such holders pro rata in accordance with
the respective remaining unpaid principal amounts of the Notes held by each
of such holders as of the date of this Ninth Amendment ("Pro Rata"). Such
payment will be made on the earliest date that all of the parties to this
Ninth Amendment have executed and delivered it. In addition, in
consideration of their agreement to enter into this Ninth Amendment, on the
same date referred to in the preceding sentence, the Company shall issue to
the holders of the Notes warrants to purchase an aggregate of 11,200 shares
of Common Stock of the Company at an exercise price of $3.9375 per share,
such warrants to be issued to such holders Pro Rata. The warrants will be
evidenced by warrant certificates substantially in the form attached to this
Ninth Amendment as Exhibit A. Notwithstanding the foregoing, any holder
entitled to receive warrants may elect in lieu thereof (by written notice to
the Company prior to the execution and delivery of this Ninth Agreement by
such holder) to receive an additional cash payment calculated at the rate of
$1.875 for each warrant to purchase one share of Common Stock foregone.
SECTION 3. APPROVAL OF ROYAL TRANSACTION
In consideration of the Company's agreements in this Ninth Amendment,
the holders of the Notes by their execution below do hereby consent to the
acquisition (substantially on the terms and conditions set forth in the
Summary of Principal Terms dated February 9, 1996 previously provided to the
Holders) by the Company or a Subsidiary thereof of the capital stock of Royal
Medical Health Services, Inc., a Pennsylvania corporation, and the creation
of a Subsidiary in order to accomplish such acquisition, for purposes of
Section 10.17 of the Purchase Agreement. The Company agrees that, not later
than the closing of such acquisition, the Subsidiary created or acquired as a
result of such acquisition or surviving any merger to accomplish such
acquisition will execute and deliver to each of the holders of Notes a
Guaranty. Simultaneously with the execution and delivery of this Ninth
Amendment by the Company, the Company shall provide or cause to be provided
to the Holders certified resolutions of the Board of Directors of the entity
providing such Guaranty approving such acquisition and authorizing the
execution and delivery of such Guaranty and a legal opinion of Irell &
Manella LLP as to the enforceability of such Guaranty against such entity in
form and substance reasonably satisfactory to the Holders.
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<PAGE>
SECTION 4. MISCELLANEOUS
.1 REFERENCE TO AND EFFECT ON THE PURCHASE AGREEMENT.
(i) On and after the date of this Ninth Amendment, each reference in
the Purchase Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Purchase Agreement,
and each reference in any other related documents to the "Purchase
Agreement", "thereunder", "thereof" or words of like import referring to
the Purchase Agreement shall mean and be a reference to the Agreement as
amended to give effect to the Ninth Amendment.
(ii) Except as specifically amended by this Ninth Amendment, the
Purchase Agreement shall remain in full force and effect and is hereby
ratified and confirmed.
(iii) The execution, delivery and performance of this Ninth
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power or
remedy of the Holders under, the Purchase Agreement.
.2 HEADINGS. Section and subsection headings in this Ninth Amendment
are included herein for convenience of reference only and shall not
constitute a part of this Ninth Amendment for any other purpose or be given
any substantive effect.
.3 APPLICABLE LAW. THIS NINTH AMENDMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
.4 COUNTERPARTS; EFFECTIVENESS. This Ninth Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Ninth Amendment shall
become effective upon the completion or satisfaction of each of the
following, which shall constitute conditions precedent to the effectiveness
of this Ninth Amendment: (i) the execution of a counterpart hereof by each
of the parties hereto and receipt by the Company and the Holders of written
or telephonic notification of such execution and authorization of delivery
thereof; (ii) execution and delivery by each of the holders of Subordinated
Debentures of
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<PAGE>
the instrument referred to in Section 4.5 below (with evidence of the same
having been provided to the Holders); (iii) receipt by each of the Holders of
the consideration referred to in Section 2 above; and (iv) the accuracy of
the representation and warranty of the Company set forth in Section 4.6 below.
4.5 CONSENT TO SUBORDINATED DEBENTURES AMENDMENTS. Each of the
undersigned Holders does hereby consent to an amendment to the terms of the
Subordinated Debentures pursuant to an instrument substantially in the form
attached hereto as Exhibit B.
4.6 NO DEFAULTS. By its execution hereof, the Company represents and
warrants that, after giving effect to the amendments contained in this Ninth
Amendment, no Default or Event of Default exists under the Purchase
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Ninth Amendment
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
"COMPANY" ALLIANCE IMAGING, INC.
By:__________________________________
Title:________________________________
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<PAGE>
"HOLDERS" * CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
BY CIGNA INVESTMENTS, INC.
By:__________________________________
Title:________________________________
* CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY,
BY CIGNA INVESTMENTS, INC.
By:__________________________________
Title:________________________________
* INSURANCE COMPANY OF NORTH AMERICA,
BY CIGNA INVESTMENTS, INC.
By:__________________________________
Title:________________________________
* LIFE INSURANCE COMPANY OF NORTH AMERICA,
BY CIGNA INVESTMENTS, INC.
By:__________________________________
Title:________________________________
*THIS ENTITY IS EITHER THE REGISTERED OWNER OF
ONE OR MORE OF THE SECURITIES PERTAINING HERETO
OR IS A BENEFICIAL OWNER OF ONE OR MORE OF SUCH
SECURITIES OWNED BY AND REGISTERED IN THE NAME
OF A NOMINEE FOR THAT ENTITY.
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<PAGE>
ALLIANCE IMAGING, INC.
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C 5% CUMULATIVE CONVERTIBLE REDEEMABLE
PREFERRED STOCK
(Pursuant to Section 151(g) of the General Corporation
Law of the State of Delaware.)
Alliance Imaging, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "COMPANY"), DOES HEREBY CERTIFY THAT,
pursuant to authority conferred upon the Board of Directors of the Company (the
"BOARD") by the Restated Certificate of Incorporation of the Company, as
amended (the "CERTIFICATE OF INCORPORATION"), the Board, pursuant to a
unanimous written consent dated as of April [__], 1996, adopted the following
resolutions authorizing the issuance of Series C 5% Cumulative Convertible
Redeemable Preferred Stock of the Company, which resolutions are still in full
force and effect and are not in conflict with any provisions of the Certificate
of Incorporation or Bylaws of the Company:
RESOLVED, that pursuant to authority vested in the Board by the
Certificate of Incorporation, the Board does hereby establish a series of
Preferred Stock of the Company from the Company's authorized class of 1,000,000
shares of $0.01 par value preferred shares, such series to consist of 4000
shares, which number may be decreased (but not below the number of shares
thereof then outstanding) from time to time by the Board, and to the extent
that the voting rights, designation, powers, preferences and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions of that series are not stated and expressed in the
Certificate of Incorporation, does hereby fix and state the voting rights,
designation, powers, preferences and relative participating, optional or other
special rights and the qualifications, limitations or restrictions thereof, as
follows:
<PAGE>
1. DEFINITIONS. Unless otherwise specified herein, the following
capitalized terms shall have the meanings ascribed to them below:
A. COMMON STOCK. "COMMON STOCK" shall mean the Company's Common
Stock, $0.01 par value per share.
B. DGCL. "DGCL" shall mean the Delaware General Corporation Law.
C. FACE AMOUNT. The "FACE AMOUNT" of each share of Series C Stock
(as defined below), regardless of its par value, shall be One Hundred Dollars
($100.00), as the Series C Stock is presently constituted, such amount to be
proportionately adjusted to reflect any combination, consolidation,
reclassification or like adjustment to the Series C Stock.
D. MARKET PRICE. The "MARKET PRICE" of a share of Common Stock on
or with respect to any day shall mean (i) the closing sales price on the
immediately preceding trading day of a share of Common Stock on the principal
national securities exchange or automated quotation system on which the shares
of Common Stock are listed or admitted to trading or, if not listed or admitted
to trading on any national securities exchange or automated quotation system,
the average of the last reported bid and asked prices on such immediately
preceding trading day in the over-the-counter market as furnished by the
National Association of Securities Dealers, Inc., or, if such firm is not then
engaged in the business of reporting such prices, as furnished by any similar
firm then engaged in such business selected in good faith by the Company or, if
there is no such firm, as furnished by any member of the National Association
of Securities Dealers, Inc., selected in good faith by the Company, or (ii) if
the shares of Common Stock are not then traded on any such exchange or system,
the amount determined in good faith by the Board to represent the fair value of
a share of Common Stock, which determination shall be conclusive.
2. DESIGNATION OF SERIES; ISSUANCE AND FACE AMOUNT. This series of
Preferred Stock is designated "Series C 5% Cumulative Convertible Redeemable
Preferred Stock" (the "SERIES C STOCK"), and the number of shares which shall
constitute such series shall be 4000, which number may be
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<PAGE>
decreased (but not below the number thereof then outstanding) from time to
time by the Board. The shares of Series C Stock shall be issued by the
Company for their Face Amount (as herein defined), in such amounts, at such
times and to such persons as shall be specified by the Board, from time to
time. Fractional shares of Series C Stock may be issued.
3. RANK; SENIOR AND JUNIOR SECURITIES. The Series C Stock shall, with
respect to dividend rights and rights on liquidation, winding up and
dissolution, rank junior to all Senior Securities and senior to all Junior
Securities, all as more fully set forth herein. For purposes hereof, "SENIOR
SECURITIES" shall mean the Company's Series A 6.0% Cumulative Preferred Stock
("SERIES A STOCK"), the Company's Series B Convertible Preferred Stock ("SERIES
B STOCK"), and all other classes and series of stock of the Company hereafter
authorized, issued or outstanding except for Junior Securities and any classes
or series of stock or other securities of the Company that are designated as
equal in rank to the Series C Stock with respect to dividend rights and rights
on liquidation, winding up and dissolution by (i) the Board pursuant to the
authority granted to it under Article FOUR of the Company's Certificate of
Incorporation or (ii) amendment to the Certificate of Incorporation duly
adopted by the Company and its stockholders as provided pursuant to the DGCL.
For purposes hereof, "JUNIOR SECURITIES" shall mean the Common Stock, any other
class or series of the Company's common equity, and such other classes or
series of stock and other securities of the Company as shall be designated as
junior to the Series C Stock with respect to dividend rights and rights on
liquidation, winding up and dissolution by (i) the Board pursuant to the
authority granted to it under Article FOUR of the Company's Certificate of
Incorporation or (ii) amendment to the Company's Certificate of Incorporation
duly adopted by the Company and its stockholders as provided pursuant to the
DGCL.
4. DIVIDENDS.
A. AMOUNT. The holders of shares of the Series C Stock shall be
entitled to receive, when, as and if declared by the Board, out of funds
legally available therefor, cash dividends at the rate of 5% per annum of the
Face Amount per
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<PAGE>
share, and no more. Declared dividends shall be paid pro rata to the holders
entitled thereto.
B. CUMULATION AND TIME OF PAYMENT. The dividends indicated in
paragraph 4.a shall be cumulative and shall accrue from day to day, whether or
not earned or declared, commencing with the date of issue of the particular
shares of Series C Stock or from the most recent preceding Dividend Payment
Date (as defined below) through which all dividends have been paid, whichever
is later. Dividends with respect to any year, as and if declared by the Board,
shall be payable annually at a date to be designated by the Board which falls
within the last fifteen days (or, if the Board of Directors has not designated
a day, the last day) of April of the succeeding year (each such date being a
"Dividend Payment Date"), the first such Dividend Payment Date being within the
last fifteen days of April 1997. No undeclared or unpaid dividend shall bear
or accrue interest.
C. PAYMENT OF ACCUMULATED DIVIDENDS. Accumulated dividends not
paid on prior Dividend Payment Dates may be declared by the Board and paid to
the holders of record of outstanding shares of Series C Stock as their names
shall appear on the stock register of the Company on a record date to be
established by the Board, which record date shall be not more than sixty (60)
nor less than thirty (30) days preceding the date of payment, whether or not
such date is a Dividend Payment Date. Holders of outstanding shares of
Series C Stock shall not be entitled to receive any dividends in excess of the
full cumulative dividends to which such holders are entitled as herein
provided. Any payment of accumulated dividends pursuant to this provision
shall be applied first to accumulated dividends relating to the earliest
Dividend Payment Date for which dividends were not paid, then to the next such
Dividend Payment Date, and so on, up to and including the most recent Dividend
Payment Date for which dividends were not paid.
D. PRIORITY OF CUMULATIVE DIVIDENDS. In addition to certain other
restrictions contained herein, so long as any shares of Series C Stock are
outstanding, the Company shall not (i) declare, pay or set apart for payment
any dividend on, or make any distribution in respect of, the Junior Securities
or any warrants, rights, calls or options exercisable for or
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<PAGE>
convertible into any of the Junior Securities, either directly or indirectly,
whether in cash, obligations or shares of the Company or other property
(other than distributions or dividends of a particular class or series of
Junior Securities, or warrants, rights or options exercisable for such Junior
Securities, to holders of such Junior Securities), or (ii) make any payment
on account of, or set apart for payment money for a sinking or other similar
fund for, the purchase, redemption, retirement or other acquisition for value
of any of, or redeem, purchase, retire or otherwise acquire for value any of,
the Junior Securities (other than as a result of a reclassification of Junior
Securities into other Junior Securities or the exchange or conversion of one
class or series of Junior Securities for or into another class or series of
Junior Securities) or any warrants, rights, calls or options exercisable for
or convertible into any of the Junior Securities, or (iii) permit any
corporation or other entity directly or indirectly controlled by the Company
to purchase, redeem, retire or otherwise acquire for value any of the Junior
Securities or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities, unless, and in each such case,
prior to or concurrently with such declaration, payment, setting apart for
payment, purchase, redemption, retirement or other acquisition for value or
distribution in respect of Junior Securities, all accumulated and unpaid
dividends (including accumulated dividends, if any, not paid by reason of the
terms and conditions of Section 4.e hereof), if any, on shares of Series C
Stock shall have been paid through the most recent Dividend Payment Date or,
if such declaration, payment, setting apart for payment, purchase,
redemption, retirement, other acquisition for value or distribution occurs on
a Dividend Payment Date, through such Dividend Payment Date; PROVIDED,
HOWEVER, that the restrictions provided in this subparagraph d. shall not
apply to the repurchase of shares of Common Stock held by any employee or
consultant of the Company or any of its subsidiaries (or their permitted
transferees) in connection with the termination of such employee's or
consultant's services to the Company or any of its subsidiaries.
E. RESTRICTIONS ON PAYMENT OF DIVIDENDS. Notwithstanding anything
contained herein to the contrary, no cash dividends on shares of Series C Stock
shall be declared
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<PAGE>
by the Board or paid or set apart for payment by the Company: (i) unless,
prior to or concurrently with such declaration, payment or setting apart, all
accrued and unpaid dividends, if any, on shares of Senior Securities shall
have been paid or declared and set apart for payment through the dividend
payment period with respect to such Senior Securities which immediately
precedes or coincides with the date of declaration, payment or setting apart
for payment by the Company of such cash dividends; or (ii) at such time as
such declaration, payment or setting apart is prohibited by the DGCL; or
(iii) at such time as the terms and provisions of any contract or other
agreement of the Company or any of its subsidiaries entered into or assumed
providing financing or working capital to the Company or any of its
subsidiaries (whether entered into prior to, at or after the issuance of the
Series C Stock), specifically prohibits such declaration, payment or setting
apart for payment or provides that such declaration, payment or setting apart
for payment would constitute a breach thereof or a default thereunder.
5. LIQUIDATION PREFERENCE.
A. GENERAL. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the
holders of Series C Stock shall be entitled to receive, prior and in preference
to any distribution of any of the assets or surplus funds of the Company in
respect of any Junior Securities, but after all required distributions of
assets and surplus funds in respect of any Senior Securities, an amount equal
to the Face Amount per share plus accumulated and unpaid dividends to the date
fixed for liquidation, dissolution or winding up. Upon any liquidation,
dissolution or winding up of the Company, after payment shall have been made in
full on the Series C Stock as provided in the preceding sentence, but not prior
thereto, the holders of Junior Securities shall, subject to the respective
terms and provisions applying thereto, if any, be entitled to receive any and
all assets and surplus funds remaining to be paid or distributed, and the
Series C Stock shall not be entitled to share therein.
B. DISTRIBUTIONS PRO RATA. If upon any liquidation, dissolution or
winding up of the Company the amounts payable on or with respect to the Series
C Stock are
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<PAGE>
not paid in full, the holders of shares of Series C Stock together
with all classes or series of stock ranking on a parity with the Series C Stock
as to distribution of assets and surplus funds shall share ratably in any
distribution of assets according to the respective amounts which would be
payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to the Series C Stock and any other class or
series of stock that so ranks on a parity with the Series C Stock were paid in
full.
C. MERGER OR CONSOLIDATION. Neither the merger nor consolidation
of the Company with another corporation nor the sale or lease of all or
substantially all of the assets of the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company.
D. NOTICE REQUIRED. Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, stating
the payment date and the place where the distributable amount shall be payable,
shall be given by mail, postage prepaid, not less than thirty (30) days prior
to the payment date stated therein, to the holders of record of the Series C
Stock at their respective addresses as the same shall then appear on the books
of the Company.
6. CONVERSION.
A. EXERCISE OF CONVERSION RIGHT. Each holder of Series C Stock
shall have the right, at his or her option, at any time and from time to time
after issuance of the Series C Stock, to convert, subject to the terms and
provisions of this Section 6, all or any portion of its Series C Stock then
outstanding into fully paid and non-assessable shares of Common Stock at a
conversion rate of twenty (20) shares of Common Stock for each one (1) share of
Series C Stock (the "CONVERSION RATE"). At the time of any such conversion,
any accumulated and unpaid dividends on the Series C Stock to be so converted
shall likewise be converted, at the Conversion Rate, into fully paid and non-
assessable shares of Common Stock. Any such conversion shall be deemed to have
been made at the close of business on the date that the certificate or
certificates for shares of Series C Stock shall have been surrendered for
conversion and written notice shall have been
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<PAGE>
received as provided in Section 6.b (the "CONVERSION DATE"), so that the
person or persons entitled to receive the shares of Common Stock upon
conversion of such shares of Series C Stock shall be treated for all purposes
as having become the record holder or holders of such shares of Common Stock
at such time.
B. NOTICE TO COMPANY. In order to convert all or any portion of
its outstanding Series C Stock into shares of Common Stock, the holder of such
Series C Stock shall deliver the shares to be converted to the Company at its
principal office, together with written notice that it elects to convert those
shares of Series C Stock into shares of Common Stock in accordance with the
provisions of this Section 6. Such notice shall specify the number of shares
of Series C Stock to be converted and the name or names in which the holder
wishes the certificates for shares of Common Stock to be registered, together
with the address or addresses of the person or persons so named, and, if so
required by the Company, be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company, duly executed by the
registered holder of the shares of Series C Stock to be converted or by his or
her attorney duly authorized in writing.
C. DELIVERY OF CERTIFICATE. As promptly as practicable after the
surrender as hereinabove provided of shares of Series C Stock for conversion
into shares of Common Stock, the Company shall deliver or cause to be delivered
to the holder, or the holder's designees, certificates representing the number
of fully paid and non-assessable shares of Common Stock into which the shares
of Series C Stock (and any accumulated and unpaid dividends thereon) are
entitled to be converted, together with a cash adjustment in respect of any
fraction of a share of Common Stock to which the holder would otherwise be
entitled, and, if less than the entire number of shares of Series C Stock
represented by the certificate or certificates surrendered is to be converted,
a new certificate for the number of shares of Series C Stock not so converted.
So long as any shares of Series C Stock remain outstanding, the Company shall
not close its Common Stock transfer books. The issuance of certificates for
shares of Common Stock upon the conversion of shares of Series C Stock shall be
made without charge to the holder for any tax in
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<PAGE>
respect of the issuance of such certificates (other than any transfer tax if
the shares of Common Stock are to be registered in a name different from that
of the registered holder of Series C Stock).
D. FRACTIONAL SHARES. No fractional shares of Common Stock or
scrip representing fractional shares of Common Stock shall be issued upon any
conversion of any shares of Series C Stock, but, in lieu thereof, there shall
be paid an amount in cash equal to the same fraction of the Market Price of a
whole share of Common Stock as of the Conversion Date.
E. ADJUSTMENT TO CONVERSION RATE. The Conversion Rate and other
terms of conversion shall be subject to adjustment from time to time as
follows:
(1) If, at any time or times after issuance of shares of Series C
Stock, the Company shall (x) declare and pay to the holders of Common Stock a
dividend or other distribution payable in shares of Common Stock or
(y) subdivide the outstanding shares of Common Stock into a greater number of
shares of Common Stock or combine the outstanding shares of Common Stock into a
lesser number of shares or issue by reclassification of its shares of Common
Stock any shares of the Company or other property, then in each such case the
Conversion Rate and other terms of conversion in effect immediately prior
thereto shall be adjusted so that the holders of Series C Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other securities or property which such holder would have owned
or been entitled to receive after the declaration and payment of the dividend
or other distribution described in clause (x) or after the happening of the
event described in clause (y), if such shares of Series C Stock had been
converted immediately prior to the record date for the determination of
stockholders entitled to receive the dividend or other distribution described
in clause (x) or the happening of the event described in clause (y) on the day
upon which such event becomes effective.
(2) If, at any time or times after the issuance of shares of
Series C Stock, the Company shall effect a reorganization, shall merge with or
into or consolidate into another corporation, or shall sell, transfer or
otherwise
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<PAGE>
dispose of all or substantially all of its property, assets or business and,
pursuant to the terms of such reorganization, merger, consolidation or
disposition of assets, shares of stock or other securities, property or
assets of the Company (or the successor, transferee or affiliate of the
Company) or cash are to be received by or distributed to the holders of
Common Stock, then the holder of shares of Series C Stock shall have the
right thereafter to receive, upon conversion of each share of Series C Stock,
the number of shares of stock or other securities, property or assets of the
Company (or the successor, transferee or affiliate of the Company), or cash
receivable upon or as a result of such reorganization, merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock
into which a share of Series C Stock was convertible immediately prior to
such event. The provisions of this subparagraph (2) shall similarly apply to
successive reorganizations, mergers, consolidations or dispositions of assets.
(3) Anything herein to the contrary notwithstanding, no
adjustments pursuant to this Section 6.e shall be made by reason of or in
connection with the issuance of shares of Common Stock upon (x) conversion of
any shares of Series C Stock, (y) conversion of any convertible securities of
the Company outstanding as of the date on which this Certificate is filed with
the Secretary of State of the State of Delaware or (z) exercise of any warrant,
option or other right entitling the holder thereof to subscribe for or purchase
shares of Common Stock.
F. RESERVATION OF SHARES. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the conversion of shares of Series C Stock,
the full number of whole shares of Common Stock then deliverable upon the
conversion of all shares of Series C Stock then outstanding. The Company shall
take at all times such corporate action as shall be necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
Common Stock upon the conversion of shares of Series C Stock in accordance with
the provisions of this Section 6.
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<PAGE>
G. RETIREMENT OF SHARES. Any shares of Series C Stock converted
pursuant to the provisions of this Section 6 shall be retired and given the
status of authorized and unissued Preferred Stock, undesignated as to series,
subject to reissuance by the Company as shares of Preferred Stock of one or
more series, as may be determined from time to time by the Board.
7. VOTING RIGHTS.
A. GENERAL. Except as specifically set forth in the DGCL or
provided in the balance of this Section 7, the holders of shares of Series C
Stock shall not be entitled to any voting rights with respect to any matters
voted upon by stockholders.
B. VOTING BY CLASS ON CERTAIN MATTERS. So long as any shares of
Series C Stock are outstanding, the written consent or the affirmative vote at
a meeting called for that purpose of the holders of a majority of the votes of
the shares of Series C Stock then outstanding, voting separately as a class,
shall be necessary to validate or effectuate any of the following: (i) the
amendment, alteration or repeal of the Certificate of Incorporation of the
Company so as to affect adversely the powers, preferences or special rights of
such Series C Stock, or (ii) any increase in the number of authorized shares of
Series C Stock.
8. REDEMPTION.
A. OPTIONAL REDEMPTION. The Company may at any time redeem out of
funds legally available therefor all or any part of the shares of Series C
Stock at its election expressed by resolution of the Board, upon not less than
thirty (30) days' prior notice to the holders of record of the Series C Stock
to be redeemed, given by mail, at a price per share of Series C Stock equal to
the Face Amount thereof plus accumulated and unpaid dividends thereon up to the
date of redemption. The date of redemption shall be the date fixed therefor in
the notice of redemption.
B. PRO RATA REDEMPTION. If less than all outstanding Series C
Stock is to be redeemed, the redemption may be made either pro rata or by lot
or in some other
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equitable manner as may be prescribed by resolution of the Board.
C. NOTICE OF REDEMPTION. Any notice of redemption mailed to a
holder of Series C Stock at his or her address as the same shall appear on the
books of the Company shall be conclusively presumed to have been given whether
or not the holder receives the notice. Each such notice shall state: the date
of redemption; the number of shares of Series C Stock to be redeemed, and, if
less than all shares of Series C Stock held by such holder are to be redeemed,
the number of such shares to be redeemed from him or her and the fact that a
new certificate or certificates representing any unredeemed shares shall be
issued without cost to such holder; the redemption price applicable to the
shares to be redeemed; the place or places where such shares are to be
surrendered; and that shares to be redeemed may be converted at any time prior
to the close of business on the business day immediately preceding the
redemption date pursuant to Section 6 hereof, giving the then applicable
Conversion Rate. No defect in any such notice to any holder of Series C Stock
shall affect the validity of the proceedings for the redemption of any other
shares of such Series C Stock.
D. EFFECT OF REDEMPTION. From and after the date of redemption,
all dividends on the Series C Stock called for redemption shall cease to
accumulate and all rights of the holders thereof as stockholders of the
Company, except the right to receive the redemption price, shall terminate.
E. RETIREMENT OF SHARES. Any shares of Series C Stock redeemed
pursuant to the provisions of this Section 8 shall be retired and given the
status of authorized and unissued Preferred Stock, undesignated as to series,
subject to reissuance by the Company as shares of Preferred Stock of one or
more series, as may be determined from time to time by the Board.
9. NO SINKING FUND.
No sinking fund shall be established for the retirement or redemption of
shares of Series C Stock.
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10. PREEMPTIVE OR SUBSCRIPTION RIGHTS.
No holder of shares of Series C Stock shall have any preemptive or
subscription rights in respect of any securities of the Company that may be
issued.
11. NO OTHER RIGHTS.
The shares of Series C Stock shall not have any designations, preferences
or relative, participating, optional or other special rights except as
expressly set forth in the Company's Certificate of Incorporation, this
Certificate or as otherwise required by law.
RESOLVED FURTHER, that the Secretary of this Company be, and he hereby is,
authorized, empowered and directed to execute a Certificate of Designation,
Preferences and Rights of Series C Stock and that such Certificate be delivered
to and filed with the Secretary of State of the State of Delaware pursuant to
the provisions of Section 103 and Section 151(g) of the DGCL, both as amended.
IN WITNESS WHEREOF, Alliance Imaging, Inc., has caused this Certificate of
Designation to be executed by its Secretary as of April [__], 1996.
ALLIANCE IMAGING, INC.
By:
------------------------------------
Terrence M. White,
Secretary
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<PAGE>
AGREEMENT AND PLAN OF MERGER
dated as of April 16, 1996
By and Among
ALLIANCE IMAGING, INC.,
ALLIANCE IMAGING OF PENNSYLVANIA, INC.
and
ROYAL MEDICAL HEALTH SERVICES INC.
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is dated as of April
16, 1996, by and among ALLIANCE IMAGING, INC., a Delaware corporation
("Parent"), ALLIANCE IMAGING OF PENNSYLVANIA, INC., a Pennsylvania
corporation ("Acquisition Sub"), and ROYAL MEDICAL HEALTH SERVICES INC., a
Pennsylvania corporation ("Seller").
W I T N E S S E T H
A. Each of Parent and Seller is in the business of providing medical
diagnostic imaging equipment and services to health care providers.
B. Parent owns all of the issued and outstanding capital stock of
Acquisition Sub.
C. The Boards of Directors of each of Parent, Acquisition Sub and
Seller deem it advisable and in the best interests of their respective
stockholders that, subject to the terms and conditions hereof, Acquisition
Sub be merged with and into Seller, with Seller being the surviving
corporation (the "Merger"). Each of the foregoing Boards of Directors has
approved this Agreement, and Parent, as the sole stockholder of Acquisition
Sub, has likewise approved this Agreement, all in accordance with applicable
corporate law.
D. On or before the Closing (as hereinafter defined), the
stockholders of Seller as of the date of this Agreement holding not less than
ninety percent (90%) of the issued and outstanding stock of Seller as of such
date shall execute and deliver to Parent, Acquisition Sub and Seller a
Joinder and Consent substantially in the form of Exhibit A hereto
(collectively, the "Stockholder Consents"), pursuant to which, among other
things, such stockholder will (a) consent to the terms and conditions hereof,
(b) join in certain provisions hereof, (c) agree not to sell, transfer or
assign any of such stockholder's right, title or interest in or to any of the
capital stock of Seller (except pursuant to this Agreement) unless this
Agreement shall have been terminated in accordance with Article 7 hereof, and
(d) make certain representations
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concerning the lack of an intention to resell securities of Parent, if any,
acquired pursuant to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein, and for the purpose of
setting forth certain terms and conditions of the Merger and the mode of
carrying the same into effect, Parent, Acquisition Sub and Seller agree as
follows:
II.
MERGER AND ORGANIZATION
A. THE MERGER.
1. REVERSE MERGER. Subject to the terms and conditions hereof,
Acquisition Sub shall be merged with and into Seller as soon as practicable
following the satisfaction (or waiver by the appropriate party or parties) of
all of the conditions hereinafter set forth, as permitted by and in
accordance with Section 1922 and other applicable provisions of the
Pennsylvania Consolidated Statutes and other applicable law. Acquisition Sub
and Seller are herein sometimes referred to as the "Constituent
Corporations." Seller shall be the surviving corporation following the
effectiveness of the Merger (sometimes referred to herein as the "Surviving
Corporation").
2. EFFECT OF MERGER. The parties agree to the following
provisions with respect to the Merger:
(1) NAME OF SURVIVING CORPORATION. The name of the
Surviving Corporation from and after the Effective Date (as hereinafter
defined) shall be "Royal Medical Health Services, Inc."
(2) ARTICLES OF INCORPORATION. The Articles of
Incorporation of Acquisition Sub as in effect immediately prior to the
Effective Date shall from and after the Effective Date be and continue to be
the Articles of Incorporation of the Surviving Corporation, except that the
name of the Surviving Corporation shall be as specified in clause (i)
immediately above.
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(3) BYLAWS. The Bylaws of Acquisition Sub as in effect
immediately prior to the Effective Date shall from and after the Effective
Date be and continue to be the Bylaws of the Surviving Corporation until
changed or amended in accordance with the Articles of Incorporation or such
Bylaws or the provisions of applicable law.
(4) CORPORATE ORGANIZATION. The separate corporate
existence of Acquisition Sub shall cease on the Effective Date. All the
property, real, personal and mixed, and franchises of each of the Constituent
Corporations, and all debts due on whatever account to each of them,
including choses in action belonging to each of them, shall be taken and
deemed to be transferred to and vested in the Surviving Corporation without
further act or deed. The Surviving Corporation shall thenceforth be
responsible for all the liabilities and obligations of each of the
Constituent Corporations, with the effect set forth in applicable law. In
addition to the foregoing, the Merger shall have the further effects set
forth herein.
(5) DIRECTORS AND OFFICERS.
(a) The directors of Acquisition Sub immediately
prior to the Effective Date shall be the directors of the Surviving
Corporation and will hold office from the Effective Date until their
respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by applicable law.
(b) The officers of Acquisition Sub immediately
prior to the Effective Date shall be the officers of the Surviving
Corporation and will hold office from the Effective Date until their
respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by applicable law.
(6) FILING OF CERTIFICATE OF MERGER. This Agreement
having been duly approved by the Boards of Directors of each of the
Constituent Corporations and Parent, as the sole stockholder of Acquisition
Sub, in accordance with
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the Pennsylvania Consolidated Statutes and the respective Articles of
Incorporation and Bylaws of the Constituent Corporations, as soon as
practicable after the conditions to the Merger set forth in Article 6 hereof
have been satisfied (or waived by the appropriate party or parties), and
provided that this Agreement has not theretofore been terminated pursuant to
Article 7 hereof, Parent, Acquisition Sub and Seller shall cause articles of
merger which conform to the provisions of this Agreement (the "Certificate of
Merger") to be executed and filed with the Department of State of the
Commonwealth of Pennsylvania as provided in the Business Corporation Law of
Pennsylvania. The Merger shall be consummated and the closing of this
Agreement (the "Closing") shall occur immediately upon the filing of the
Certificate of Merger with the Department of State of the Commonwealth of
Pennsylvania (the date and time of such filing and Closing being referred to
herein as the "Effective Date"). The Closing shall take place at the offices
of Irell & Manella, 333 South Hope Street, 33rd Floor, Los Angeles,
California 90071, or at such other place as the parties may mutually agree,
on or before April 30, 1996 (as such date may be extended by mutual agreement
of the parties, the "Terminal Date").
(7) FURTHER ASSURANCES. If at any time after the Effective
Date, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to
or under any of the rights, properties or assets of the Constituent
Corporations acquired or to be acquired as a result of the Merger, or (b)
otherwise to carry out the purposes of this Agreement, the Surviving
Corporation and its officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of the
Constituent Corporations, all such deeds, bills of sale, assignments and
assurances and do, in the name and on behalf of the Constituent Corporations,
all such other acts and things necessary, desirable or proper to vest,
perfect or confirm its right, title or interest in, to or under any of the
rights, properties or assets of the Constituent Corporations acquired or to
be acquired as a
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result of the Merger and otherwise to carry out the purposes of this
Agreement.
III.
CONVERSION OF SHARES
ON THE EFFECTIVE DATE
A. CONVERSION OF SHARES IN THE MERGER. Each share of Common Stock,
no par value, of Seller ("Seller Common Stock") that is issued and
outstanding immediately prior to the Effective Date shall, by virtue of the
Merger, be converted into the right to receive the Securities and Cash
Consideration or the Cash Only Consideration, at the election of each holder
of record of Seller Common Stock (subject to Section 2.4 below) as indicated
in such holder's Stockholder Consent or by separate letter of instruction.
"Cash Only Consideration" means Ten Dollars ($10.00) in cash per share of
Seller Common Stock. "Securities and Cash Consideration" means, per share of
Seller Common Stock, a combination of (a) Eight Dollars ($8.00) in cash, (b)
.04 shares of Parent's Series C Cumulative Convertible Redeemable Preferred
Stock, such stock to have rights, preferences and privileges and to be
subject to restrictions substantially as indicated in the form of designation
attached hereto as Exhibit 2.1A (the "Parent Preferred Stock"), and (c) a
warrant to acquire one (1) share of Parent Common Stock for $5.00 in cash,
such warrant to be evidenced by a Warrant Certificate substantially in the
form attached hereto as Exhibit 2.1B (the "Parent Warrants"; together, the
Parent Preferred Stock and the Parent Warrants are sometimes referred to
herein as the "Parent Securities").
B. CANCELLATION OF SHARES OF SELLER COMMON STOCK. Notwithstanding
anything in Section 2.1 to the contrary, each of the shares of Seller Common
Stock held by Seller as treasury shares or which is owned by Parent or
Acquisition Sub, if any, immediately prior to the Effective Date shall be
cancelled.
C. CONVERSION OF SHARES OF ACQUISITION SUB. The shares of the capital
stock of Acquisition Sub that are issued and outstanding immediately prior to
the Effective Date shall, by virtue of the Merger and without any action of
the part of
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the holder thereof, be converted into One Thousand (1,000) newly issued
shares of capital stock of the Surviving Corporation.
D. NO FURTHER TRANSFERS OF STOCK. On the date hereof, the stock
transfer books of Seller shall be closed and, unless this Agreement has
theretofore been terminated as provided herein, no transfers of shares of
Seller Common Stock shall be made thereafter, nor shall any such attempted
transfers be recognized by Seller on the stock transfer books or otherwise.
If, after the Effective Date, certificates representing former shares of
Seller Common Stock are properly presented to the Surviving Corporation, they
shall be exchanged for the appropriate Securities and Cash Consideration or
Cash Only Consideration and cancelled as provided in Section 2.5 below;
provided, however, that notwithstanding anything herein to the contrary any
such certificates surrendered after sixty (60) days following the Effective
Date will be exchanged for the Cash Only Consideration, and the holder
thereof will not have an election to select the Securities and Cash
Consideration.
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E. SURRENDER OF CERTIFICATES.
(1) On the Effective Date, each holder of former shares of Seller
Common Stock (other than shares, if any, held by Parent or Acquisition Sub)
who has executed a Stockholder Consent, shall surrender all certificates
representing such shares to the Surviving Corporation for cancellation. All
such shares shall be delivered to the Surviving Corporation free and clear
of all liens, claims and encumbrances of any party and of any nature
whatsoever. Upon surrender of such certificates to the Surviving Corporation,
each such holder of former shares of Seller Common Stock shall be entitled to
receive in exchange therefor the applicable Securities and Cash Consideration
or Cash Only Consideration in the form indicated in Section 2.1 above. No
interest will accrue or be paid with respect to any Merger consideration,
either with respect to the period from the date hereof to the Effective Date
or any period after the Effective Date. Until certificates representing
former shares of Seller Common Stock are surrendered as provided herein, such
certificates shall represent only the right to receive the applicable Merger
consideration, and shall not represent any right, title or interest in or to
the capital stock of Seller, either of the Constituent Corporations or the
Surviving Corporation.
(2) Seller shall use its best efforts to advise Parent and
Acquisition Sub, on a date that is at least five (5) business days prior to
the Closing, of the names in which certificates for new Parent Securities to
be issued in the Merger shall be issued and the names in which checks for the
Cash Only Consideration shall be drawn. If any such issuance or payment is to
be made in a name other than that of the registered holder of the former
Seller Common Stock being converted in the Merger, then it shall be a
condition of the issuance of the corresponding Parent Securities or payment
of Cash Only Consideration that the holder of the former Seller Common Stock
establish to the satisfaction of the Surviving Corporation that no transfer
or other tax is payable by reason of such issuance or payment, or that all
such taxes have been paid.
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IV.
ADDITIONAL AGREEMENTS IN
CONNECTION WITH THE MERGER
A. SELLER STOCKHOLDER APPROVAL.
3.1.1 STOCKHOLDER APPROVAL. Between the date hereof and the
Closing, Seller shall, in accordance with applicable requirements of the
Pennsylvania Consolidated Statutes and any other applicable law, and its
Articles of Incorporation and Bylaws, duly give notice of, and duly call, an
annual or a special meeting of the stockholders of Seller to be held at the
earliest practicable date for the purpose of voting on and approving this
Agreement and the Merger in accordance with the requirements of the
Pennsylvania Consolidated Statutes and any other applicable law. In
connection with such annual or special meeting (or, as provided in the next
sentence, written consent of stockholders), the Board of Directors of Seller
shall recommend that all of Seller's stockholders approve such matters and
shall otherwise use its best efforts to obtain such approval. Notwithstanding
the first sentence of this Section, subject to applicable provisions of the
Pennsylvania Consolidated Statutes and any other applicable law, Seller may
dispense with the annual or special meeting referred to above and, in lieu of
holding such a meeting, may provide for stockholder consent of this Agreement
and the Merger pursuant a written consent of stockholders. Whether the
approval of Seller's stockholders is obtained pursuant to a meeting or
written consent as hereinabove provided, Seller agrees to use, in addition to
any solicitation materials prepared by Seller (copies of which will be
provided to Parent), the Private Placement Memorandum (as hereinafter
defined) in connection with the solicitation of approval of its stockholders
of this Agreement and the Merger.
3.1.2 PRIVATE PLACEMENT MEMORANDUM. Promptly after the date hereof,
Parent shall prepare a Private Placement Memorandum (the "Private Placement
Memorandum") covering the issuance of shares of Parent Securities pursuant to
the Merger as provided in this Agreement. Prior to finalizing the Private
Placement Memorandum, Parent will
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provide a copy thereof to the Board of Directors of Seller to allow such
Board to provide input concerning the substance thereof, for Parent's
reasonable consideration. Parent represents and warrants to Seller, and
Seller represents and warrants to Parent and Acquisition Sub, that none of
the information with respect to it or them (in the case of Seller, including
its directors, officers and stockholders and their respective affiliates)
that is included in the Private Placement Memorandum will contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
3.1.3 STATE SECURITIES APPROVALS. Parent, Acquisition Sub and
Seller shall cooperate with one another in taking all such action as may be
required under state blue-sky or securities laws in connection with the
transactions contemplated by this Agreement.
B. NOTICE OF PROPOSALS; NO SHOP. If after the making of this Agreement
any person or entity extends to Seller any offer, or Seller becomes aware of
any offer, to acquire any shares of any capital stock of Seller or any assets
or properties of Seller, directly or indirectly and regardless of the form of
the transaction, or Seller becomes aware that any person or entity is seeking
to conduct any discussions with respect to any such matters, then in each
such case Seller shall promptly notify Parent and Acquisition Sub of such
information, including the identity of such person or entity. Unless this
Agreement has theretofore been terminated in accordance with Article 7
hereof, Seller shall not, and shall not permit any of its officers,
directors, employees, agents or representatives (including, without
limitation, investment bankers, attorneys and accountants) to, directly or
indirectly, initiate, solicit, encourage (including, without limitation, by
way of furnishing any non-public information concerning Seller) or conduct or
participate in any discussions with respect to any matter described in the
preceding sentence.
C. REASONABLE EFFORTS. Subject to the terms and conditions hereof, each
of the parties hereto agrees to use all its reasonable efforts to take, or
cause to be taken, to
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do, or cause to be done, and to assist and cooperate with the other parties
hereto in doing, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective, as soon as
practicable, the transactions contemplated by this Agreement. Such actions
shall include, without limitation, (a) using reasonable efforts to obtain any
consents, amendments to or waivers under the terms of any borrowing
arrangements of Parent, Acquisition Sub and Seller that are required or
advisable as a result of the transactions contemplated by this Agreement, (b)
using reasonable efforts to obtain consents, amendments to or waivers under
the terms of Seller's other material contracts and arrangements that are
required or advisable as a result of the transactions contemplated by this
Agreement, and (c) using reasonable efforts to defend any lawsuits or other
legal proceedings, whether judicial or administrative and whether brought
derivatively or on behalf of third parties (including governmental agencies
or officials), challenging this Agreement or the consummation of the
transactions contemplated hereby. Subject to the terms and conditions hereof,
each of the parties hereto agrees to use all its reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy all the conditions of Closing set forth herein at the
earliest possible time.
D. CONDUCT OF BUSINESS BY SELLER PENDING THE MERGER. Seller covenants
and agrees that, prior to the Effective Date, unless Parent and Acquisition
Sub shall otherwise agree in writing and except as contemplated by this
Agreement:
(1) the business of Seller shall be conducted only in the ordinary
and usual course and consistent with past practices, Seller shall not enter
into any agreement or transaction other than in the ordinary and usual course
of business, and Seller shall not purchase, lease or sell (or enter into any
agreement to purchase, lease or sell) any material properties, service or
cryogen contracts or other assets other than in the ordinary and usual course
of business; PROVIDED, HOWEVER, that Seller shall not enter into any
agreement or transaction for the acquisition (by purchase, lease, rental or
otherwise) of a diagnostic imaging unit or equipment or for provision of
equipment or services to a health-care provider client, whether or not such
agreement or transaction is in the ordinary course of business. In
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particular, but without limitation of the foregoing, Seller shall not (a)
incur or assume any indebtedness for money borrowed, or (b) agree to any
amendment, adjustment or modification of or to any Material Contract (as
hereinafter defined). Parent and Acquisition Sub acknowledge that Seller is
contemplating a transaction for a full-time unit at the Samaritan Medical
Center in Watertown, New York; consistent with the terms of this clause (i),
Seller agrees to obtain the consent of Parent and Acquisition Sub before
entering into any agreements with respect to the acquisition of a unit or its
provision to such customer for imaging services and the terms of such MRI
services contracts. Parent and Acquisition Sub acknowledge that Seller will
spend up to $30,000 (including costs incurred prior to the date hereof) on
the renovation and refurbishing of the Seller's office space;
(2) Seller shall not (a) amend its Articles of Incorporation or
Bylaws, (b) change the number of authorized or outstanding shares of its
capital stock or effect any reclassification thereof, or (c) declare, set
aside or pay any dividend or other distribution or payment in cash, stock or
property in respect of any of its shares of capital stock;
(3) Seller shall not (a) issue, grant, sell or pledge any shares of
its capital stock, equity securities or rights of any kind or rights to
acquire any such shares, securities or rights of Seller, (b) acquire,
directly or indirectly, by redemption or otherwise, any shares of the capital
stock or other securities of Seller, or (c) enter into or modify any
contract, agreement, commitment or arrangement with respect to any of the
foregoing;
(4) Seller shall use its best efforts to preserve intact the
business organization of Seller and to preserve the goodwill of those having
business relationships with it;
(5) Seller shall conduct its relations with employees, including
termination and hiring practices, and their employee benefit plans only in
the ordinary and usual course and consistent with the past practices and
policies of Seller, and shall not increase or pay any employee salaries or
compensation in any manner; in particular, but without
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limitation of the foregoing, the salary of each of Mark J. Graham and Albert
F. Calfo, II shall continue through the Closing at $122,000 per annum, with
$8,000 per month of such salary for each accruing but not paid;
(6) Seller shall not assume, guarantee, endorse or otherwise become
responsible for the obligations of any other individual, firm or corporation
or make any loans or advances to any individual, firm or corporation, except
any assumptions, guarantees, endorsements, loans advances or other
obligations in the ordinary and usual course of its business, and which do
not exceed $5,000 in the aggregate;
(7) Seller shall not make any investment of a capital nature either
by purchase of stock or securities, contributions to capital, property
transfers or otherwise, or by the purchase of any property or assets of any
individual, firm or corporation; and
(8) Seller shall not enter into an agreement or otherwise agree to
do any of the things described in any of clauses (i) through (vii).
E. NOTICE OF ACTIONS AND PROCEEDINGS. Seller shall promptly notify
Parent and Acquisition Sub of any claims, actions, proceedings or
investigations commenced or, to the best of its knowledge, threatened,
involving or affecting Seller or any of its properties or assets, or, to the
best of its knowledge, against any employee, consultant, director, officer or
stockholder of Seller in his, her or its capacity as such, which (a) if
decided adversely to Seller or such other person, might reasonably be
expected to materially and adversely affect the financial condition,
business, properties or results of operations of Seller, or (b) relates to
the consummation of the Merger or any of the other transactions or
obligations contemplated hereby.
F. NOTIFICATION OF CERTAIN OTHER MATTERS. Seller shall give prompt
notice to Parent and Acquisition Sub of (a) any notice of, or other
communication relating to, a default or event which, with notice or lapse of
time or both, would become a default, received by Seller subsequent to the
date of this Agreement and prior to the Effective Date, under any agreement,
indenture or instrument material to the
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financial condition, business, properties or results of operations of Seller,
and (b) any notice or other communication from any third party alleging that
the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement. In addition, each of Seller, on
the one hand, and Parent and Acquisition Sub, on the other hand, shall give
prompt notice to the other parties or party of any materially adverse change
in, or any facts or circumstances that arise or become evident after the date
of this Agreement and on or before the Effective Date that might result in a
materially adverse change in, its or their financial condition, properties,
business or results of operations.
G. ACCESS TO BOOKS AND RECORDS. Seller shall afford Parent, Acquisition
Sub and their attorneys, accountants and other agents and representatives
(collectively, "Representatives") access during normal business hours to all
of the assets, properties, books and records of Seller and such additional
information concerning the business and properties of Seller as Parent,
Acquisition Sub or their Representatives may request. Parent and Acquisition
Sub will, and will cause their Representatives to, hold in confidence all
confidential information, and will not use any such confidential information
except in connection with the transactions contemplated hereby, until such
time as (a) such information is otherwise publicly available, (b) they are
advised by counsel that any such information is required by law or
governmental process to be disclosed or (c) such information becomes known to
any of them through a third party that is not known to them to be under a
duty of confidentiality to Seller. In the event of the termination of this
Agreement for any reason, Parent and Acquisition Sub will, and will cause
their Representatives to, deliver to Seller all documents, work papers and
other materials obtained by them or on their behalf as a result of this
Agreement or in connection herewith, whether so obtained before or after the
execution hereof.
H. FEES AND EXPENSES. If the Merger is completed, Parent will cause the
Surviving Corporation to pay Seller's fees and expenses (including, without
limitation, all fees and expenses of attorneys, accountants and other agents
and representatives of Seller; PROVIDED, HOWEVER, that the fees
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and expenses of Seller's outside attorneys shall not exceed $25,000) in
connection with the transactions contemplated by this Agreement.
I. PUBLIC ANNOUNCEMENTS. Parent and Acquisition Sub, on the one
hand, and Seller, on the other hand, will consult with each other and
obtain the other's consent before issuing any press release or otherwise
making any public statements with respect to this Agreement, the Merger or
the other transactions contemplated hereby. Prior to such consultation
and obtaining such consent, no party hereto shall issue any such press
release or make any such public statement except as may otherwise be
required by law or governmental process (in which case the party required
to make disclosure shall nonetheless reasonably attempt to obtain approval
of the other party to the proposed disclosure).
J. PAYMENT OF CERTAIN TRUCKING TRADE PAYABLES. At the Closing,
Seller shall pay to A&M Trucking, Inc. ("Trucking") an amount in respect
of the accrued and outstanding trade payable amounts owed by Seller to
Trucking (the "Trucking Trade Payable") such that Trucking has an
amount of cash at the Closing equal to the accrued and unpaid outstanding
salary and payroll and employment taxes; provided, the amount to be so
paid shall not exceed the amount of the Trucking Trade Payable.
V.
REPRESENTATIONS AND WARRANTIES
OF SELLER
As an inducement to Parent and Acquisition Sub to enter into this
Agreement, Seller represents and warrants to Parent and Acquisition Sub as
follows:
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A. EXISTENCE AND RIGHTS; COMPLIANCE WITH LAWS.
1. EXISTENCE AND RIGHTS. Seller (i) is a corporation duly
organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania without limit as to the duration of its
existence; (ii) has the corporate power and adequate authority, rights and
franchises to own its properties and to carry on its business as now
conducted and to make and carry out this Agreement; and (iii) is duly
qualified and in good standing in each jurisdiction in which its owned or
leased properties or the character of its business makes such qualification
necessary. The copies of the Articles of Incorporation and Bylaws of Seller
previously delivered to Parent and Acquisition Sub remain complete and in
full force. Schedule 4.1.1 hereto contains a complete list of all
Certificates of Need and similar governmental approvals held by Seller or
under which Seller operates any part of its business, in the latter case
including the identity of the holder of such certificate or approval, and in
each case indicating the status thereof and whether the approval is being
actively used. All such certificates and approvals are valid and in full
force and effect.
2. COMPLIANCE WITH LAWS. Seller's business has been and is being
conducted in all material respects in accordance with all applicable federal,
state and local laws and regulations and rules and regulations of all
applicable private third party insurers and reimbursers of health care costs
and expenses, including, without limitation, such laws, regulations and rules
as relate to the practice of medicine and the provision of medical diagnostic
mobile imaging services and otherwise.
B. STOCK. Seller's authorized capital stock consists of 100,000
shares of a single class of stock, the Seller Common Stock, of which 100,000
have been duly authorized and are validly issued and outstanding as of the
date hereof and will be duly authorized and validly issued and outstanding as
of the Effective Date. All shares of such outstanding capital stock are
fully paid and non-assessable and were issued in compliance with all
applicable state and federal securities laws and other applicable laws.
There are no outstanding securities convertible into, or options, warrants,
rights,
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calls or other commitments of any nature relating to, the issuance of any
securities of Seller. Schedule 4.2 contains a true and correct list showing
the shareholders of record of Seller as of the date hereof, the number of
shares of Seller Common Stock owned of record by each such shareholder and,
to the best of Seller's knowledge, the state of residence of each such
shareholder.
C. AGREEMENT AUTHORIZED. Except for obtaining stockholder approval as
elsewhere provided in this Agreement, the execution, delivery and performance
of this Agreement by Seller have been duly and validly authorized by all
necessary corporate action (including, without limitation, approval by the
Board of Directors and stockholders of Seller in accordance with applicable
law) on the part of Seller and do not require notice to, or the consent or
approval of, any governmental body or other regulatory authority. This
Agreement is a legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
D. SUBSIDIARIES. Seller has no subsidiaries and no equity interests
in any other entities nor any obligation, option or right to acquire any such
interest, excepting solely six (6) limited partnership units of Western
Pennsylvania Eye Laser Associates, L.P., an entity that operates a Summit eye
laser in Pittsburgh, Pennsylvania. Seller has supplied to Parent a copy of
the private placement memorandum relating to such investment.
E. CONTRACTS. All Material Contracts (or copies thereof) to which
Seller is a party or by which it or any of its assets or properties are bound
have been previously delivered to Parent or its counsel by Seller. For the
purpose of this Section 4.5, the term "Material Contracts" means (a) all
contracts or commitments arising out of the ordinary and usual course of
business; (b) all contracts or commitments involving an obligation which
cannot or in reasonable probability will not be performed or terminated
within six (6) months from the date hereof or providing for termination only
upon the payment of a penalty or the equivalent thereof; (c) all contracts or
commitments affecting ownership of, title to, use of, or any interest in real
estate; (d) all bonuses, incentive compensation, pension, group insurance or
employee welfare plans of any nature whatsoever; (e) all collective
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bargaining agreements or other contracts or commitments to or with any labor
unions or other employee representatives or groups of employees; (f)
employment contracts and all other contracts, agreements or commitments to or
with individual employees or agents extending for a period of more than three
(3) months from the date hereof or providing for earlier termination only
upon the payment of a penalty or the equivalent thereof; (g) all other
contracts or commitments providing for payments based in any manner upon the
sales, purchases or profits of Seller; (h) all contracts or commitments,
whether in the ordinary course of business or not, which involve future
payments, performance of services or delivery of goods and/or materials, to
or by Seller of an aggregate amount or value in excess of Twenty-Five
Thousand Dollars ($25,000), including, without limitation, and whether or not
meeting that numerical standard all such contracts or commitments relating to
(x) the purchase, lease or other acquisition or use of medical diagnostic
imaging equipment, or (y) the provision of equipment or services to health
care providers or other customers or clients of Seller (in the case of this
clause (4), Schedule 4.5 attached hereto listing all such Material Contracts
and indicating which of them were entered into after February 1, 1996, if
any); and (i) all patent licensing agreements and all other agreements and
commitments with respect to patents, patent applications, trademarks, trade
names, service marks, inventions, technical assistance, know-how, special
processes, copyrights or other like items. There is no material default in
any obligation to be performed by Seller under any Material Contract and
Seller has not waived any material right under any Material Contract. Seller
does not have any outstanding contract, commitment or undertaking which will
result in any material loss upon completion or performance thereof after
allowance for general and administrative selling and distribution expenses or
will be unreasonably adverse, onerous or harmful to its assets, business,
operation or financial condition. Seller is not in default nor is there any
basis for any claim of default under any contract made or obligation owed to
it, and Seller has not waived any material right under any such contract or
obligation, except for defaults and waivers which are not material to the
financial condition, properties, business or results of operations of Seller.
Seller (including its employees) is not restricted by agreement from
carrying on its business anywhere in the United States.
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F. NO CONFLICT. The execution, delivery and perform-ance of this
Agreement will not (i) breach or constitute grounds for the occurrence or
declaration of an acceleration of payment or a default or a right of
termination under any agreement, indenture, undertaking or other instrument
to which Seller is a party or by which it or any of its properties may be
bound or affected; (ii) violate any provision of law or any regulation or any
order, judgment or decree of any court or other agency of government, the
violation of which could have a material adverse effect on the financial
condition, properties, business or results of operations of Seller; (iii)
result in a breach of, conflict with, or give to others any rights of
termination, amendment, or cancellation of, any permit, franchise or license
to which Seller is a party or by which it or any of its properties may be
bound or affected or which is otherwise material to the operation of its
business; (iv) violate any provision of the Articles of Incorporation or
Bylaws of Seller; or (v) result in the creation or imposition of (or the
obligation to create or impose) any lien, charge or encumbrance on, or
security interest in or on, any of its properties. Without limiting the
generality of the foregoing, the execution, delivery and performance of this
Agreement does not and will not require the consent of any third party under
any Material Contract except as set forth on Schedule 4.6 hereto.
G. LITIGATION. Except as set forth on Schedule 4.7, there is no
litigation, investigation, arbitration or other proceedings (formal or
informal) pending or, to the best knowledge of Seller, threatened against or
affecting it or its properties; nor does Seller know of any reasonable basis
for any litigation, investigation, arbitration or other pro-ceedings (formal
or informal), the results of which could have a material adverse effect on
its financial condition, properties, business or results of operations.
Seller is not in default with respect to any order, writ, injunction, decree
or demand of any court or other governmental or regulatory authority.
H. FINANCIAL CONDITION. The balance sheets of Seller as of June 30,
1995, February 29, 1996 and March 31, 1996, and the related profit and loss
and cash flow statements for the periods ended on those dates, and the
related notes for such
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financial statements, copies of which have heretofore been or will be
delivered to Parent and Acquisition Sub by Seller, and all other historical
financial statements and data submitted in writing by Seller to Parent and
Acquisition Sub at any time (collectively, the "Financial Statements"), are
or, when delivered, will be true and correct as of the respective dates
thereof, and the Financial Statements truly present and will truly present
the financial condition of Seller as at the respective dates thereof and the
results of the operations of Seller for the respective periods covered
thereby, and have been and will have been prepared in all material respects
in accordance with generally accepted accounting principles on a basis
consistently maintained ("GAAP"); provided, however, with respect to
technical GAAP issues relating to methods of depreciation, calculation of
depreciation, capitalization of leases, carrying value of intangible assets
and capitalization of equipment, Seller represents to the best of its
knowledge that the Financial Statements have been and will have been prepared
in all material respects in accordance with GAAP. Seller has no knowledge of
any liabilities or guarantees, matured or unmatured, contingent or otherwise,
as of the respective dates of the Financial Statements not accurately
reflected in the Financial Statements, and none have arisen since those times
except in the ordinary and usual course of business. With respect to
Seller's contracts, commitments and loss contingencies, the Financial
Statements contain and reflect adequate reserves. In addition to the
Financial Statements, Seller has provided Parent and Acquisition Sub with
financial projections relating to its 1996 fiscal year. Except as reflected
in the notes or assumptions to the latest iteration of such projections
delivered prior to the date hereof, Seller is not aware of any facts or
contingencies that cast significant doubt on Seller's ability to achieve the
financial results reflected in such projections nor does Seller otherwise
have a basis for believing that the financial results that are reflected in
such projections are not reasonably achievable. As of March 31, 1996, there
were no obligations or liabilities of Seller accrued and owing (or which
should have been shown on Seller's financial statements as accrued and owing)
other than those set forth on Schedule 4.8 (which Schedule provides a
detailed listing of all such obligations and liabilities).
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I. ACCOUNTANTS INDEPENDENT; BOOKS AND RECORDS. To Seller's knowledge,
the accountants who examined and reported on the Financial Statements, as
applicable, are, with respect to Seller, independent certified public
accountants within the meaning of the professional rules of the American
Institute of Certified Public Accountants. Seller maintains a system of
internal accounting control sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounting for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
J. NO SUBSEQUENT CHANGES. Except as contemplated in this Agreement or
reflected in any Schedule attached hereto, since the respective dates of the
Financial Statements, (i) there have been no material adverse changes
(whether by sale, destruction, pledge, lease or otherwise and whether or not
covered by insurance) in the assets (including licenses, permits and
franchises), liabilities or financial condition of Seller, and (ii) Seller
has not entered into any commitments, contracts or transactions not reflected
in the Financial Statements, as required in accordance with GAAP, except as
specified on Schedule 4.10. Since the respective dates of the Financial
Statements, (a) Seller has not, directly or indirectly, paid, declared, or
set aside any dividends or distributions with respect to, nor repurchased,
any of its capital stock or securities of any class, and (b) to the knowledge
of Seller, no events have occurred which have had or can reasonably be
expected to have a material adverse effect on the financial condition,
properties, business, results of operations or prospects of Seller. Since
December 31, 1995, each of Mark J. Graham and Albert F. Calfo, II has earned
salary (including all cash compensation) at the rate of $122,000 per year and
neither of them has received any dividend or other distribution on Seller
Common Stock or any similar payment or distribution. No later than the
Closing, Seller shall have taken steps to terminate (without any cost to
Seller) the existing employment agreements with each of Mr. Graham and Mr.
Calfo, such agreements to be replaced by new
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employment agreements between each of Mr. Graham and Mr. Calfo, on the one
hand, and the Parent, on the other.
K. TITLE TO AND CONDITION OF ASSETS. Schedule 4.11 sets forth all
interests in real property held by Seller, including all leases of real
property. Seller has good, clear and marketable title to its assets
(including, without limitation, those shown in the Financial Statements,
except as subsequently sold in the ordinary course of business and listed on
Schedule 4.11 hereto) and the same are not subject to any mortgages, deeds of
trust, pledges, security interests, leases, licenses or other encumbrances
other than indicated in the Financial Statements or listed on Schedule 4.11
hereto. Schedule 4.11 includes a schedule of all bank indebtedness and
related liens currently in effect. None of the assets of Seller, tangible or
intangible, are located outside of the United States and Seller does not own
or hold any stock or securities, or receivables from or claims against
foreign entities. All of the assets and currently used properties of Seller
are in good operating condition, ordinary wear and tear excepted.
L. ENVIRONMENTAL MATTERS. Except as set forth on Schedule 4.12, Seller
has all permits, licenses and other authorizations required for the operation
of its business (as presently conducted) under federal, state, and local laws
relating to pollution, protection of the environment and the storage,
presence and discharge of chemicals and other substances (collectively,
"Environmental Laws"). There is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter under the Environmental Laws pending, or to the best
knowledge of Seller threatened, against Seller or any of its owned or leased
real or personal property. Neither Seller nor, to the best knowledge of
Seller, any other person or entity has placed, stored, buried, dumped or
disposed of any regulated or prohibited substances or any materials produced
by, or resulting from, any business, commercial or industrial activities,
operations or processes on, beneath, or adjacent to any owned or leased real
property of Seller, except to the extent handled or reported and remedied in
all material respects in accordance with applicable Environmental Laws. To
the best knowledge of Seller, no employee of Seller has been exposed in the
course
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of his or her employment with Seller to any regulated or prohibited
substances or any materials produced or used by Seller in any manner that
could give rise to any material liability under any applicable Environmental
Law against Seller or its properties. Seller has not received any notice
from any governmental agency or private or public entity advising Seller that
it is responsible or potentially responsible for actual or potential response
costs with respect to a release, a threatened release or clean-up of
materials (including hazardous substances as defined in any Environmental
Laws) nor is Seller aware of any facts that might reasonably be expected to
give rise to any such notice.
M. TAX STATUS.
1. RETURNS FILED. Seller has timely filed all Tax Returns
required to have been filed by it and has paid or accrued all Taxes due to
any taxing authority with respect to all taxing periods ending on or prior to
the date hereof; and all such Tax Returns are true, correct and complete in
all material respects. The Financial Statements include an adequate reserve
for all Taxes not yet due or with respect to which Tax Returns, as of the
Closing, are not required to have been filed, in each case to reflect the
operations of Seller through the Closing. There is no pending Tax audit by a
governmental authority against or affecting Seller. Seller has (or before
the Closing will have) filed its federal and state income Tax Returns
relating to its fiscal year ended June 30, 1995 and paid all Taxes shown as
payable thereon. Seller has (or will) provide copies of such Tax Returns to
Parent.
2. COLLECTIONS AND PAYMENTS. (a) All amounts that are required
to be collected or withheld by Seller have been duly collected or withheld,
and (b) all such amounts that are required to be remitted to any taxing
authority (including license and other similar fees payable to the Department
of Motor Vehicles and other governmental agencies) have been duly remitted.
For purposes of this Agreement, "Taxes" means all taxes imposed of
any nature including federal, state, commonwealth, local or foreign net
income tax, alternative or add-on minimum tax, profits or excess profits tax,
franchise
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tax, gross income, adjusted gross income or gross receipts tax, employment
related tax (including employee withholding and employer payroll tax, FICA
and FUTA), real and personal property tax or ad valorem tax, sales or use
tax, excise tax, stamp tax or duty, any withholding or back up withholding
tax, value added tax, severance tax, prohibited transaction tax, premiums
tax, occupation tax, together with any interest or any penalty, in addition
to any tax or additional amount imposed by any governmental authority
(domestic or foreign) responsible for the imposition of such tax. "Tax
Return" means all returns, reports, forms or other information required to be
filed with respect to any Taxes.
N. MARKS. Seller owns or has the right to use its corporate name in
all jurisdictions in which the business of Seller is conducted as of the date
hereof. Seller is not infringing on any trademark, trade name, service mark,
copyright, patent, or license in the operation of its business, and Seller
does not know of any third party who has asserted any claim concerning such
an infringement.
O. ERISA. Neither Seller nor any affiliated company under common
control of or with Seller within the meaning of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), maintains on the date
hereof any employee benefit plan subject to the provisions of ERISA, nor
contributes to any such plan (including any multi-employer plan) on behalf of
its employees. Seller does not have any unfunded pension, profit sharing or
deferred compensation plans or arrangements. Seller has complied in all
respects with, and is currently in compliance with, the continuation of
benefits provisions applicable to former employees under ERISA and similar
federal and state laws and regulations.
P. INSURANCE. Schedule 4.16 to this Agreement sets forth all insurance
policies of Seller that are currently in effect, including in each case the
type and amount of coverage and carrier. All of the material properties and
assets of Seller which are of an insurable character are insured against loss
or damage by fire, casualty and other risks, and Seller has general liability
insurance with independent carriers, in each case to the extent and in the
manner customary for companies engaged in a similar business or owning
similar assets.
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Q. LABOR CONTROVERSIES. There are no material labor controversies
pending or threatened between Seller and any of its employees and Seller does
not know of any organizational efforts presently being made involving any of
such employees. Seller's relations with its employees are generally good.
Seller does not know of any executive or key employee of Seller who has any
plans to terminate his or her employment with Seller.
R. MANAGEMENT TRANSACTIONS. Other than (a) the lease of Seller's
offices at a monthly rate of $5,756 from a partnership in which stockholders
of Seller have an interest and (b) the rental or lease of tractors from
Trucking, and except as disclosed on Schedule 4.18 hereto, none of Seller's
officers, directors or stockholders (i) owns, directly or indirectly,
individually or collectively, any interest in a corporation, partnership,
firm or association which is a competitor, potential competitor, customer or
supplier of Seller or has an existing contractual, business or financial
relationship with Seller, or (ii) owes any money to or is owed any money by
Seller, other than indebtedness for compensation earned and not yet paid in
the ordinary course of business (including, in the case of each of Mark J.
Graham and Albert F. Calfo, II, accrued and unpaid gross salary in the amount
of $95,000 through March 31, 1996, such amount increasing at the rate of
$8,000 per month (prorated for partial months on a daily basis) thereafter)
and other than notes payable to Mark J. Graham and Albert F. Calfo, II in the
aggregate amount of $104,868 plus accrued interest of $21,364 through March
31, 1996. The foregoing accrued and unpaid salary shall be paid to each of
Mr. Graham and Mr. Calfo at the Closing. Schedule 4.18 hereto lists all
affiliates and related entities of Seller, Mr. Graham and Mr. Calfo which own
assets related to, or engage in activities related to, the diagnostic medical
imaging business, in each case including the name of the entity and its type
and jurisdiction of organization, the nature and amount of the interest
therein of Seller and each of Mr. Graham and Mr. Calfo, and a brief
description of each agreement or transaction currently in effect or in effect
at any time during the last twelve months between such entity and Seller.
Since December 31, 1995, Seller has not (i) declared, set aside or paid any
dividend or other distribution or payment in cash, stock or property in
respect of any of its
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shares of capital stock, or (ii) paid any amounts to Mark J. Graham or Albert
F. Calfo II as salary, bonus or other compensation except in accordance with
Section 3.4(v) hereof.
S. NO FINDER'S FEES. Neither Seller nor any of its officers,
directors, agents or employees have employed or incurred any liability to any
broker, finder or agent for any brokerage fees, finder's fees, commissions or
other amounts with respect to the transactions contemplated by this
Agreement, and Seller agrees to hold Parent and Acquisition Sub harmless from
and against damages or cost incurred by reason of any such assertions.
T. NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 4.20,
to the best of Seller's knowledge, there is no outstanding claim, liability
or obligation of any nature, whether absolute, accrued, known or unknown,
contingent or otherwise, affecting Seller or its business, other than
obligations incurred in the ordinary course of the business consistent with
Seller's prior practices, none of which is materially adverse individually to
the financial condition, results of operations or prospects of Seller and all
of which are not materially adverse in the aggregate to the financial
condition, results of operations or prospects of Seller.
U. DISCLOSURE. This Agreement (including its Schedules and Exhibits)
and each other document and certificate prepared or delivered by or on behalf
of Seller and furnished or to be furnished to Parent in connection herewith,
as of their respective dates, did not, and as of the date hereof, do not (i)
contain any untrue statement of a material fact, or (ii) omit to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. Except as disclosed in this Agreement (including its
Schedules and Exhibits) and such other documents and certificates, there is
no fact known to Seller (other than matters relating to economic conditions
generally) which is materially adverse to the financial condition, results of
operations or prospects of Seller.
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VI.
REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION SUB
As an inducement to Seller to enter into this Agreement, Parent and
Acquisition Sub, jointly and severally, represent and warrant to Seller as
follows:
A. EXISTENCE AND RIGHTS; COMPLIANCE WITH LAWS.
1. EXISTENCE AND RIGHTS. Parent is a corporation duly organized
and validly existing in good standing under the laws of Delaware without
limit as to the duration of its existence. Acquisition Sub is a corporation
duly organized and validly existing in good standing under the laws of the
Commonwealth of Pennsylvania without limit as to the duration of its
existence. Acquisition Sub is a direct wholly-owned subsidiary of Parent.
Each of Parent and Acquisition Sub (i) has the corporate power and adequate
authority, rights and franchises to own its properties and to carry on its
business as now conducted and to make and carry out this Agreement, and (ii)
is duly qualified and in good standing in each jurisdiction in which its
owned or leased properties or the character of its business makes such
qualification necessary, or, if not so qualified, the failure to so qualify
will not have a material adverse effect upon the consolidated financial
condition of Parent.
2. COMPLIANCE WITH LAWS. Parent's business has been and is being
conducted in all material respects in accordance with all applicable federal,
state and local laws and regulations and rules and regulations of all
applicable private third party insurers and reimbursers of health care costs
and expenses, including, without limitation, such laws, regulations and rules
as relate to the practice of medicine and the provision of medical diagnostic
imaging services and otherwise.
B. AGREEMENT AUTHORIZED. The execution, delivery and performance of
this Agreement by each of Parent and Acquisition Sub have been duly and
validly authorized by all necessary corporate action on the part of each of
them and do not require notice to, or the consent or approval of, any
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governmental body or other regulatory authority. This Agreement is a legal,
valid and binding obligation of each of Parent and Acquisition Sub,
enforceable against each of them in accordance with its terms.
C. NO CONFLICT. The execution, delivery and performance of this
Agreement will not (i) except as will be cured, waived or consented to
pursuant to the Parent Debt Consents referred to in Section 6.1, breach or
constitute grounds for the occurrence or declaration of a default under any
agreement, indenture, undertaking or other instrument to Parent or
Acquisition Sub is a party or by which it or any of its properties may be
bound of affected, except any such breach or default which would not have a
material adverse effect on the ability of Parent and Acquisition Sub to
consummate the transactions contemplated by this Agreement; (ii) violate any
provision of law or any regulation or any order, judgment or decree of any
court of other agency of government, the violation of which could have a
material adverse effect on the ability of Parent and Acquisition Sub to
consummate the transactions contemplated by this Agreement; or (iii) violate
any provision of the Certificate of Incorporation or Bylaws of Parent or the
Articles of Incorporation or Bylaws of Acquisition Sub.
D. LITIGATION. There is no litigation, investigation, arbitration or
other proceedings (formal or informal) pending or, to the best knowledge of
Parent, threatened against or affecting it or its properties; nor does Parent
know of any reasonable basis for any litigation, investigation, arbitration
or other proceedings (formal or informal), in the case of any matter referred
to in this Section 5.4 the results of which could have a material adverse
effect on its financial condition, properties, business or results of
operations. Parent is not in default with respect to any order, writ,
injunction, decree or demand of any court or other governmental or regulatory
authority.
E. FINANCIAL STATEMENTS. The consolidated financial statements of
Parent included in the Private Placement Memorandum (collectively, the
"Parent Financial Statements"), are true and correct as of the respective
dates thereof, and the Parent Financial Statements fairly present the
consolidated financial condition of Parent as at the
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respective dates thereof and the consolidated results of the operations of
Parent for the respective periods covered thereby, and have been prepared in
accordance with GAAP. Parent has no knowledge of any liabilities or
guarantees, matured or unmatured, contingent or otherwise, as of the
respective dates of the Parent Financial Statements not accurately reflected
in the Parent Financial Statements, and none have arisen since those times
except in the ordinary and usual course of business. With respect to
Parent's contracts, commitments and loss contingencies, the Parent Financial
Statements contain and reflect adequate reserves.
F. SHARES DULY AUTHORIZED. The shares of Parent Preferred Stock to be
issued in the Merger will, when issued pursuant to the terms and conditions
of this Agreement, and the shares of Parent Common Stock issuable upon
exercise of the Parent Warrants will, when issued pursuant to the terms and
conditions of the Parent Warrants, be duly and validly issued, fully paid and
non-assessable.
G. NO FINDER'S FEES. None of Parent, Acquisition Sub nor any of their
respective officers, directors, agents or employees have employed or incurred
any liability to any broker, finder or agent for any brokerage fees, finder's
fees, commissions or other amounts with respect to the transactions
contemplated by this Agreement, and Parent and Acquisition Sub agree to hold
Seller harmless from and against damages or cost incurred by reason of any
such assertions.
VII.
CONDITIONS
A. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger and consummate the
other transactions contemplated hereby shall be subject to the fulfillment at
or prior to the Effective Date (or the written waiver by all parties hereto)
of the following conditions:
(1) ADVERSE PROCEEDINGS. No effective preliminary or permanent
injunction or other order shall have been issued by any court of competent
jurisdiction or other
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governmental body preventing the consummation of the Merger or any material
part of such other transactions; and
(2) LENDER CONSENTS. Parent and Acquisition Sub shall have
obtained all necessary and, as determined by Parent and Acquisition Sub,
advisable, consents with respect to the transactions contemplated by this
Agreement from their senior bank lenders and the holders of their debt
securities (the "Parent Debt Consents").
B. CONDITIONS TO OBLIGATION OF PARENT AND ACQUISITION SUB TO EFFECT
THE MERGER. The obligation of Parent and Acquisition Sub to effect the
Merger shall be subject to the fulfillment at or prior to the Effective Date
(or their written waiver) of the following additional conditions:
(1) REPRESENTATIONS AND WARRANTIES; AGREEMENTS. Each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects as of the date hereof and (having
been deemed to have been made again at and as of the Closing) shall be true
and correct in all material respects as of the Closing; PROVIDED, HOWEVER,
that if any such representation or warranty is already qualified by
materiality, for purposes of determining whether this condition has been
satisfied, such representation or warranty as so qualified must be true and
correct in all respects. Each obligation of Seller under this Agreement
required to be performed by it at or prior to the Closing shall have been
duly performed and complied with in all material respects as of the Closing.
At the Closing, Parent and Acquisition Sub shall have received a certificate,
dated the Effective Date and duly executed by the chief executive officer and
the chief financial officer of Seller, to the effect that the conditions set
forth in this Section 6.2(i) have been satisfied;
(2) THIRD PARTY CONSENTS. All notices to, and declarations,
filings and registrations with, and consents, authorizations, approvals and
waivers from, governmental and regulatory bodies required to consummate the
transactions contemplated hereby, if any, and all material third party
consents or waivers necessary or advisable in connection with the
transactions contemplated hereby (including all necessary or appropriate
consents or waivers of Seller's bank(s),
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equipment lenders and other third party providers of financing) shall have
been made or obtained. In particular, but without limitation of the
foregoing, Seller shall have secured and delivered to Parent and Acquisition
Sub the written consent or waiver (whether or not such consent or waiver is
listed as being required on Schedule 4.6 hereto) of each provider of
equipment or other financing that is an affiliate or related party of Seller
or its shareholders ("Related Party Lenders"), such that no "due on sale",
change of control or similar or other provision shall be applicable resulting
in or providing the lender the right to cause the repayment of the financing.
Notwithstanding the first sentence of this clause (ii), with respect to any
consent or waiver listed on Schedule 4.6 as being required from a provider of
equipment financing under a "due on sale", change of control or similar
provision, if such provider of equipment financing is not a Related Party
Lender, the obtaining of the indicated consent or waiver shall not be a
condition to Closing hereunder provided that Seller has nonetheless used its
reasonable best efforts to obtain the consent or waiver prior to Closing;
(3) STOCKHOLDER CONSENTS. Parent and Acquisition Sub shall have
received duly executed and delivered Stockholder Consents from Seller's
stockholders holding beneficially and of record not less than 90% of the
issued and outstanding Seller Common Stock, and all such Stockholder Consents
shall remain in full force and effect, and none of Parent, Acquisition Sub or
Seller shall have received any notice from any party challenging the
validity, effectiveness or enforceability thereof or of this Agreement;
(4) EMPLOYMENT AGREEMENT. Effective as of the Closing, Parent
and each of Mark J. Graham and Albert F. Calfo, II shall have entered into an
Employment Agreement substantially in the form attached hereto as Exhibit
6.2(iv);
(5) NONCOMPETITION AGREEMENTS. Parent shall have received duly
executed and delivered Covenants Not to Compete substantially in the form
attached hereto as Exhibit 6.2(v) from each of Mark J. Graham and Albert F.
Calfo, II;
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(6) STOCKHOLDER APPROVAL. The stockholders of Seller shall have
approved this Agreement and the Merger as provided in Section 3.1.1 hereof;
(7) NO MATERIAL ADVERSE CHANGE. There shall not have been a
material adverse change from the date hereof in the financial condition,
properties, business, results of operations or prospects of Seller. For
purposes of this clause (vii), the termination of services to any of Seller's
top five (5) customers (determined based upon gross revenues during the
six-month period immediately preceding the date hereof), whether such
termination is the result of an election by the customer, Seller or
otherwise, shall be conclusively deemed to be a material adverse change
described in the preceding sentence;
(8) DUE DILIGENCE. Parent and Acquisition Sub shall have
completed their "due diligence" review of Seller's business and shall be
reasonably satisfied with the results thereof;
(9) OFFICE LEASE. Seller and the landlord of Seller's office
space shall have entered into an agreement unconditionally cancelling any
previously existing lease or rental agreement relating to the space and
releasing Seller from any and all liability with respect thereto, and the
Surviving Corporation and the landlord shall have entered into a new lease
covering the same premises in form and substance reasonably acceptable to
Parent, providing, among other things, for a term of two years and a rental
of $4,000 per month plus telephone bills, electricity and maintenance
attributable to such leased space;
(10) TRUCKING AGREEMENT. Parent and Trucking shall have
entered into and closed (such closing to be simultaneous with the Closing
hereunder) an agreement (the "Trucking Agreement") whereby Parent shall have
acquired substantially all of the assets of Trucking excluding only (a) such
entity's interest in the partnership owning the real estate that includes
Seller's office space and (b) the net intercompany account owed by Seller's
shareholders to Seller;
(11) SATISFACTION OF RMG RECEIVABLE. Royal Medical Group, Inc.
("RMG") shall have paid in full to Seller
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all amounts owed by RMG to Seller; PROVIDED, HOWEVER, $104,107 of such
amounts owed may be satisfied by the assignment to Seller by RMG of the
$104,107 intercompany amount which Trucking owes to RMG as of the date hereof
(the "Trucking Intercompany Payable") and the execution by RMG of a release
of Parent and Trucking with respect to the Trucking Intercompany Payable in
form and substance satisfactory to Parent; and
(12) OTHER CERTIFICATES. Parent and Acquisition Sub shall have
been furnished by Seller with such other certificates of Seller's officers
and others as Parent and Acquisition Sub may have reasonably requested to
evidence compliance with the conditions set forth in this Section 6.2.
C. CONDITIONS TO OBLIGATIONS OF SELLER TO EFFECT THE MERGER. The
obligations of Seller to effect the Merger and consummate the other
transactions contemplated hereby shall be subject to the fulfillment at or
prior to the Effective Date (or the written waiver by Seller) of the
following additional condition:
(1) REPRESENTATIONS AND WARRANTIES; AGREEMENTS. Each of the
representations and warranties of Parent and Acquisition Sub contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and (having been deemed to have been made again at and as of the
Closing) shall be true and correct in all material respects as of the
Closing; provided, however, that if any such representation or warranty is
already qualified by materiality, for purposes of determining whether this
condition has been satisfied, such representation or warranty as so qualified
must be true and correct in all respects. Each obligation of Parent and
Acquisition Sub under this Agreement required to be performed by either of
them at or prior to the Closing shall have been duly performed and complied
with in all material respects as of the Closing. At the Closing, Seller
shall have received a certificate, dated the Effective Date and duly executed
by the chief executive officer and the chief financial officer of each of
Parent and Acquisition Sub, to the effect that the conditions set forth in
this Section 6.3 have been satisfied;
-32-
<PAGE>
(2) EMPLOYMENT AGREEMENT. Effective as of the Closing Date,
Parent and each of Mark J. Graham and Albert F. Calfo, II shall have entered
into an Employment Agreement substantially in the form attached hereto as
Exhibit 6.2(iv);
(3) NONCOMPETITION AGREEMENTS. Each of Mark J. Graham and Albert
F. Calfo, II shall have received a duly executed and delivered Covenant Not
to Compete substantially in the form attached hereto as Exhibit 6.2(v) from
Parent;
(4) STOCKHOLDER APPROVAL. The stockholders of Seller shall have
approved this Agreement and the Merger as provided in Section 3.1.1 hereof;
(5) OFFICE LEASE. Seller and the landlord of Seller's office
space shall have entered into an agreement unconditionally cancelling any
previously existing lease or rental agreement relating to the space, and the
Surviving Corporation and the landlord shall have entered into a new lease
covering the same premises providing, among other things, for a rental of
$4,000 per month;
(6) TRUCKING AGREEMENT. Parent and Trucking shall have entered
into and closed an agreement (the "Trucking Agreement") whereby Parent shall
have acquired substantially all of the assets of Trucking excluding only (a)
such entity's interest in the partnership owning the real estate that
includes Seller's office space, (b) the net intercompany account owed by such
entity to Seller, and (c) an account receivable from its shareholders in the
amount of $19,799.50, for $628,000 in cash, subject to any contrary terms set
forth in the Trucking Agreement; and
(7) NO MATERIAL ADVERSE CHANGE. There shall not have been a
material adverse change from the date hereof in the financial condition,
properties, business, results of operations or prospects of Parent.
-33-
<PAGE>
VIII.
TERMINATION
A. TERMINATION. This Agreement may be terminated by written notice
from the party or parties indicated below under the following circumstances:
(1) ADVERSE PROCEEDINGS. By either Parent and Acquisition Sub
or Seller in the event that any court of competent jurisdiction or other
governmental body shall have issued an order (other than a temporary
restraining order or preliminary injunction), decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Merger or
any material part of the other transactions contemplated hereby, and such
order, decree, ruling or other action shall have become final and
nonappealable;
(2) FAILURE OF CONDITION TO PARENT AND ACQUISITION SUB
OBLIGATIONS. By Parent and Acquisition Sub, if any of the conditions in
Section 6.1 or 6.2 is not satisfied by April 30, 1996 (other than as a result
of such party's breach or default hereunder) and is not waived in writing by
Parent and Acquisition Sub;
(3) FAILURE OF CONDITION TO SELLER OBLIGATIONS. By Seller, if any
of the conditions in Section 6.1 or 6.3 is not satisfied by April 30, 1996
(other than as a result of such party's breach or default hereunder) and is
not waived in writing by Seller; or
(4) MUTUAL AGREEMENT. By mutual agreement of the Boards of
Directors of Parent, Acquisition Sub and Seller.
B. EFFECT OF TERMINATION. In the event of the termination of this
Agreement according to its terms, this Agreement shall, except as provided in
Section 3.7 hereof, thereafter become void and have no effect and no party
hereto shall have any liability to any other party hereto or its stockholders
or directors or officers in respect thereof.
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<PAGE>
IX.
GENERAL AGREEMENTS
A. COOPERATION. Each of the parties hereto shall cooperate with the
others in every reasonable way in carrying out the transactions contemplated
herein, and in delivering all documents and instruments deemed reasonably
necessary or useful by counsel for any party hereto.
B. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties in this Agreement or in any instrument or certificate
delivered pursuant to this Agreement delivered on or prior to the Effective
Date shall survive the consummation of the Merger. Except as expressly set
forth in the Schedules hereto, Parent and Acquisition Sub shall not be deemed
to have knowledge of any exceptions to the representations and warranties of
Seller, and Seller shall not be deemed to have knowledge of any exceptions to
the representations and warranties of Parent and Acquisition Sub, and the
decision by a party hereto to proceed with the closing of the transactions
contemplated herein shall not be deemed to be a waiver of any breach of any
representation or warranty of another party hereto.
C. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telecopy, telex or telegram or mailed by registered
or certified mail, postage prepaid, as follows:
i) If to Parent or Acquisition Sub:
Alliance Imaging, Inc.
3111 No. Tustin Avenue, Suite 150
Orange, California 92665
Telecopy No. (714) 921-5678
Attention: Richard N. Zehner
President
-35-
<PAGE>
(b) If to Seller:
Royal Medical Health Services Inc.
245 Fort Pitt Boulevard, Fifth Floor
Pittsburgh, Pennsylvania 15222
Telecopy No. (412) 281-1767
Attention: Mark J. Graham and Albert F.
Calfo, II
The date of any such notice shall be deemed the date hand delivered or
transmitted by telecopy, telex or telegram (in each case provided written
confirmation of sending is retained) or three (3) days after being mailed as
provided above. Any party may change its address for notice by sending a
notice to that effect as herein provided to the other parties.
D. AMENDMENT; ENTIRE AGREEMENT; BENEFICIARIES. This Agreement
(including the documents and instruments referred to herein) (a) except as
provided in the Stockholder Consents, constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof and (b)
except as provided in the Stockholder Consents, is not intended to confer
upon any other person any rights or remedies hereunder. This Agreement may
be amended or modified in whole or in part to the extent permitted by
California law at any time, by an agreement in writing executed in the same
manner as this Agreement after authorization to do so by the Board of
Directors of Parent, Acquisition Sub and Seller.
E. WAIVER. At any time prior to the Effective Date, the parties
hereto may (a) extend the time for the performance of any of the obligations
or other acts of the other parties hereto, (b) by mutual agreement waive any
inaccuracies contained herein or in any document delivered pursuant hereto,
and (c) by mutual agreement waive compliance with any of the agreements
contained herein, or, in the case of each party, waive compliance with any of
the conditions to its obligations contained herein. Any agreement on the
part of a party hereto and any such extension or waiver shall be valid if
set forth in an instrument in writing signed on behalf of the party making
the agreement or providing the extension or waiver.
-36-
<PAGE>
F. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
G. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. The rights of Parent and
Acquisition Sub hereunder may be transferred in whole or in part to any
direct or indirect wholly-owned subsidiary of Parent.
H. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
the choice of law provisions thereof.
I. COSTS AND EXPENSES. If the transactions contemplated hereby are not
completed, except pursuant to available legal remedies, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses. If
the transactions contemplated hereby are completed, Parent shall cause the
Surviving Corporation to pay all such costs and expenses subject to the
limitations provided in Section 3.8 hereof.
J. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
K. ATTORNEYS' FEES. Should any litigation be commenced between the
parties hereto or their representatives concerning any provision of this
Agreement or the rights and duties of any person or entity hereunder, solely
as between the parties hereto or their successors, the party prevailing in
such proceeding will be entitled to the attorneys' fees and expenses of
counsel and court costs incurred by reason of such litigation.
IN WITNESS WHEREOF the parties have executed this Agreement by their
duly authorized officers as of the date first above written.
-37-
<PAGE>
ALLIANCE IMAGING, INC.
By
---------------------------------
Its
--------------------------------
ALLIANCE IMAGING OF PENNSYLVANIA,
INC.
By
---------------------------------
Its
--------------------------------
ROYAL MEDICAL HEALTH SERVICES, INC.
By
---------------------------------
Its
--------------------------------
-38-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 MERGER AND ORGANIZATION. . . . . . . . . . . . . . . 2
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . 2
1.1.1 Reverse Merger. . . . . . . . . . . . . . . . 2
1.1.2 Effect of Merger. . . . . . . . . . . . . . . 2
(i) Name of Surviving
Corporation. . . . . . . . . . . . . . 2
(ii) Articles of
Incorporation. . . . . . . . . . . . . 2
(iii) Bylaws . . . . . . . . . . . . . . . . 2
(iv) Corporate Organization . . . . . . . . 2
(v) Directors and Officers . . . . . . . . 3
(vi) Filing of Certificate
of Merger. . . . . . . . . . . . . . . 3
(vii) Further Assurances . . . . . . . . . . 3
ARTICLE 2 CONVERSION OF SHARES ON THE EFFECTIVE DATE . . . . . 4
2.1 Conversion of Shares in the Merger . . . . . . . . . 4
2.2 Cancellation of Shares of Seller Common
Stock. . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Conversion of Shares of Acquisition Sub. . . . . . . 5
2.4 No Further Transfers of Stock. . . . . . . . . . . . 5
2.5 Surrender of Certificates. . . . . . . . . . . . . . 5
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 3 ADDITIONAL AGREEMENTS IN CONNECTION WITH
THE MERGER . . . . . . . . . . . . . . . . . . . . . 6
3.1 Seller Stockholder Approval. . . . . . . . . . . . . 6
3.1.1 Stockholder Approval. . . . . . . . . . . . . 6
3.1.2 Private Placement Memorandum. . . . . . . . . 6
3.1.3 State Securities Approvals. . . . . . . . . . 7
3.2 Notice of Proposals; No Shop . . . . . . . . . . . . 7
3.3 Reasonable Efforts . . . . . . . . . . . . . . . . . 7
3.4 Conduct of Business by Seller Pending
the Merger . . . . . . . . . . . . . . . . . . . . . 8
3.5 Notice of Actions and Proceedings. . . . . . . . . . 9
3.6 Notification of Certain Other Matters. . . . . . . . 10
3.7 Access to Books and Records. . . . . . . . . . . . . 10
3.8 Fees and Expenses. . . . . . . . . . . . . . . . . . 11
3.9 Public Announcements . . . . . . . . . . . . . . . . 11
3.10 Payment of Certain Trucking Trade
Payables . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . 11
4.1 Existence and Rights; Compliance With
Laws . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1.1 Existence and Rights. . . . . . . . . . . . . 11
4.1.2 Compliance With Laws. . . . . . . . . . . . . 12
4.2 Stock. . . . . . . . . . . . . . . . . . . . . . . . 12
4.3 Agreement Authorized . . . . . . . . . . . . . . . . 12
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
4.4 Subsidiaries . . . . . . . . . . . . . . . . . . . . 13
4.5 Contracts. . . . . . . . . . . . . . . . . . . . . . 13
4.6 No Conflict. . . . . . . . . . . . . . . . . . . . . 14
4.7 Litigation . . . . . . . . . . . . . . . . . . . . . 14
4.8 Financial Condition. . . . . . . . . . . . . . . . . 15
4.9 Accountants Independent; Books and
Records. . . . . . . . . . . . . . . . . . . . . . . 15
4.10 No Subsequent Changes. . . . . . . . . . . . . . . . 16
4.11 Title to and Condition of Assets . . . . . . . . . . 16
4.12 Environmental Matters. . . . . . . . . . . . . . . . 17
4.13 Tax Status . . . . . . . . . . . . . . . . . . . . . 17
4.13.1 Returns Filed. . . . . . . . . . . . . . . . 17
4.13.2 Collections and Payments . . . . . . . . . . 18
4.14 Marks. . . . . . . . . . . . . . . . . . . . . . . . 18
4.15 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 18
4.16 Insurance. . . . . . . . . . . . . . . . . . . . . . 18
4.17 Labor Controversies. . . . . . . . . . . . . . . . . 19
4.18 Management Transactions. . . . . . . . . . . . . . . 19
4.19 No Finder's Fees . . . . . . . . . . . . . . . . . . 20
4.20 No Undisclosed Liabilities. . . . . . . . . . . . . 20
4.21 Disclosure . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUISITION SUB . . . . . . . . . . . . . . . . 20
5.1 Existence and Rights; Compliance With
Laws.. . . . . . . . . . . . . . . . . . . . . . . . 20
5.1.1 Existence and Rights. . . . . . . . . . . . . 20
5.1.2 Compliance With Laws. . . . . . . . . . . . . 21
5.2 Agreement Authorized . . . . . . . . . . . . . . . . 21
5.3 No Conflict. . . . . . . . . . . . . . . . . . . . 21
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . 21
5.5 Financial Statements . . . . . . . . . . . . . . . . 22
5.6 Shares Duly Authorized . . . . . . . . . . . . . . . 22
5.7 No Finder's Fees . . . . . . . . . . . . . . . . . . 22
ARTICLE 6 CONDITIONS . . . . . . . . . . . . . . . . . . . . . 22
6.1 Conditions to Each Party's Obligation to
Effect the Merger. . . . . . . . . . . . . . . . . . 22
(i) Adverse Proceedings . . . . . . . . . . . . . 23
(ii) Lender Consents . . . . . . . . . . . . . . . 23
6.2 Conditions to Obligation of Parent and
Acquisition Sub to Effect the Merger . . . . . . . . 23
(i) Representations and Warranties;
Agreements. . . . . . . . . . . . . . . . . . 23
(ii) Third Party Consents. . . . . . . . . . . . . 23
(iii) Stockholder Consents. . . . . . . . . . . . . 24
(iv) Employment Agreement. . . . . . . . . . . . . 24
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
(v) Noncompetition Agreements . . . . . . . . . . 24
(vi) Stockholder Approval. . . . . . . . . . . . . 24
(vii) No Material Adverse Change. . . . . . . . . . 24
(viii) Due Diligence . . . . . . . . . . . . . . . . 25
(ix) Office Lease. . . . . . . . . . . . . . . . . 25
(x) Trucking Agreement. . . . . . . . . . . . . . 25
(xi) Satisfaction of RMG Receivable. . . . . . . . 25
(xii) Other Certificates. . . . . . . . . . . . . . 25
6.3 Conditions to Obligations of Seller to
Effect the Merger. . . . . . . . . . . . . . . . . . 25
(i) Representations and Warranties;
Agreements. . . . . . . . . . . . . . . . . . 25
(ii) Employment Agreement. . . . . . . . . . . . . 26
(iii) Noncompetition Agreements . . . . . . . . . . 26
(iv) Stockholder Approval. . . . . . . . . . . . . 26
(v) Office Lease. . . . . . . . . . . . . . . . . 26
(vi) Trucking Agreement. . . . . . . . . . . . . . 26
(vii) No Material Adverse Change. . . . . . . . . . 26
ARTICLE 7 TERMINATION. . . . . . . . . . . . . . . . . . . . . 27
7.1 Termination. . . . . . . . . . . . . . . . . . . . . 27
(i) Adverse Proceedings . . . . . . . . . . . . . 27
(ii) Failure of Condition to Parent
and Acquisition Sub Obligations . . . . . . . 27
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
(iii) Failure of Condition to Seller
Obligations . . . . . . . . . . . . . . . . . 27
(iv) Mutual Agreement. . . . . . . . . . . . . . . 27
7.2 Effect of Termination. . . . . . . . . . . . . . . . 27
ARTICLE 8 GENERAL AGREEMENTS . . . . . . . . . . . . . . . . . 27
8.1 Cooperation. . . . . . . . . . . . . . . . . . . . . 27
8.2 Survival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . 27
8.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 28
8.4 Amendment; Entire Agreement;
Beneficiaries. . . . . . . . . . . . . . . . . . . . 28
8.5 Waiver . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Headings . . . . . . . . . . . . . . . . . . . . . . 29
8.7 Successors and Assigns . . . . . . . . . . . . . . . 29
8.8 Governing Law. . . . . . . . . . . . . . . . . . . . 29
8.9 Costs and Expenses . . . . . . . . . . . . . . . . . 29
8.10 Counterparts . . . . . . . . . . . . . . . . . . . . 29
8.11 Attorneys' Fees. . . . . . . . . . . . . . . . . . . 29
</TABLE>
-vi-
<PAGE>
SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT ITEM
------- ----
<S> <C>
A Joinder and Consent
2.1A Parent Preferred Stock
2.1B Parent Warrants
6.2(iv) Employment Agreements
6.2(v) Noncompetition Agreements
SCHEDULE ITEM
-------- ----
4.1.1 Certificates of Need, Etc.
4.2 List of Shareholders
4.5 Certain Material Contracts
4.6 Third Party Consents
4.7 Seller Litigation
4.8 March 31, 1996 Detail of Liabilities and
Payables
4.10 Certain Commitments
4.11 Title to Assets; Certain Dispositions
4.12 Environmental Matters
4.16 Insurance
4.18 Management Transactions
4.20 Undisclosed Liabilities
5.4 Alliance Litigation
</TABLE>
-vii-
<PAGE>
SCHEDULE 5.4
ALLIANCE LITIGATION
NONE
-viii-
<PAGE>
JOINDER AND CONSENT
THIS JOINDER AND CONSENT (the "Agreement") is dated as of April 16, 1996,
by and among ALLIANCE IMAGING, INC., a Delaware corporation ("Parent"), ALLIANCE
IMAGING OF PENNSYLVANIA, INC., a Pennsylvania corporation ("Acquisition Sub"),
and ___________________________________, an individual ("Stockholder").
W I T N E S S E T H
A. Parent, Acquisition Sub and Royal Medical Health Services Inc., a
Pennsylvania corporation ("Seller"), are parties to an Agreement and Plan of
Merger dated as of April 16, 1996 (the "Merger Agreement"), pursuant to which,
among other things, it is contemplated that Acquisition Sub will be merged with
and into Seller (the "Merger") and that all of the shares of Seller's capital
stock issued and outstanding will be converted into the right to receive either
the Cash Only Consideration or the Securities and Cash Consideration (both as
defined in and subject to the terms of the Merger Agreement). A copy of the
Merger Agreement is attached hereto as Exhibit A.
B. Stockholder is the record, legal and beneficial owner of _________
shares (approximately ___% of the issued and outstanding capital stock of Seller
as of the date hereof) (the "Stockholder Shares") of the Common Stock, no par
value, of Seller ("Seller Common Stock"). Stockholder has approved of and
consented to the Merger Agreement and the Merger and the other transactions
contemplated by the Merger Agreement. As a stockholder of Seller, Stockholder
will derive significant benefits from the closing of such transactions.
C. The execution and delivery of this Agreement by Stockholder is a
condition to the obligations of Parent and Acquisition Sub under the Merger
Agreement. In order to induce Parent and Acquisition Sub to complete the Merger
and the other transactions contemplated by the Merger Agreement and to satisfy
such condition, Stockholder has agreed to the provisions herein.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein and, in the case of Parent and
Acquisition Sub, in the Merger Agreement, Parent, Acquisition Sub and
Stockholder agree as follows:
II. REPRESENTATIONS AND WARRANTIES. Stockholder hereby represents and
warrants to Parent and Acquisition Sub as follows:
-2-
<PAGE>
A. OWNERSHIP OF SHARES. Stockholder is the record, legal and
beneficial owner of all of the Stockholder Shares referred to in Recital B
above, and no other person or entity has any right, title or interest in or to
any of such shares. Stockholder does not have any option, warrant or other
right to acquire any shares of capital stock of Seller. At the Closing (as
defined in the Merger Agreement), in accordance with Section 2.5(i) of the
Merger Agreement, Stockholder will deliver to the Surviving Corporation (as
defined in the Merger Agreement) for cancellation all certificates representing
the Stockholder Shares, free and clear of all liens, claims and encumbrances of
any party and of any nature whatsoever.
B. RESALE. As of the date hereof and the Closing, Stockholder does
not have and will not have a present plan or intention of disposing of any
Parent Securities (as defined in the Merger Agreement) acquired pursuant to the
Merger, if any. Assuming completion of the Merger, Stockholder will acquire
such Parent Securities for investment purposes and not for resale in any manner
that would violate any applicable federal or state securities law or other law
or regulation. Stockholder is aware that the Parent Securities issued in the
Merger (including the Common Stock issuable upon exercise or conversion thereof)
will be "restricted securities" within the meaning of Rule 144 promulgated under
the Securities Act of 1933, as amended, and that no trading market for either
the Parent Warrants or the Parent Preferred Stock (both as defined in the Merger
Agreement) exists or is contemplated to exist. Consequently, if Stockholder has
elected to receive the Securities and Cash Consideration, Stockholder has the
ability to hold the Parent Securities for an indefinite period of time.
Pursuant to the Pennsylvania Securities Law any Pennsylvania purchaser hereby
agrees not to sell, transfer or otherwise dispose of the Parent Securities
within 12 months of the date of purchase.
C. CONSENT. Stockholder has carefully reviewed the Merger Agreement
and sought independent legal counsel as necessary to fully understand its terms
and conditions, and based upon such review and consultation approves of and
consents to the Merger Agreement and the Merger and the other transactions
contemplated by the Merger Agreement. Stockholder has approved such agreement
and transactions in accordance with the Pennsylvania Consolidated Statutes and
-3-
<PAGE>
other applicable laws and the Articles of Incorporation and Bylaws of Seller.
III. ADDITIONAL AGREEMENTS.
A. NO TRANSFER OF STOCK. Unless and until the Merger Agreement
shall have been terminated in accordance with its terms, Stockholder shall
not sell, transfer or otherwise dispose of any right, title or interest in or
to any of the Stockholder Shares.
-4-
<PAGE>
B. FEES AND EXPENSES. If the Merger is completed and the legal fees
and legal expenses incurred by Seller in connection with the transactions
contemplated by the Merger Agreement exceed $25,000, then Stockholder agrees to
pay, in addition to the fees and expenses incurred by him in connection with the
Merger Agreement and this Agreement and the transactions contemplated thereby
and hereby, his Pro Rata Share (as hereinafter defined) of such fees and
expenses in excess of such amount. If Parent or the Surviving Corporation pays
any such fees or expenses on behalf of Stockholder or Seller (which they shall
not be obligated to do), then Stockholder shall, promptly following notice
thereof from Parent or the Surviving Corporation, reimburse Parent or the
Surviving Corporation for such Stockholder's Pro Rata Share of such payment.
"Pro Rata Share" means the number of shares of Seller Common Stock owned by
Stockholder as of the date hereof divided by the number of shares of Seller
Common Stock issued and outstanding as of the date hereof.
C. COOPERATION; FURTHER ASSURANCES. Stockholder agrees to use all
reasonable efforts (in all capacities, including, without limitation, as an
officer, director, employee and stockholder of Seller, as applicable) to take,
or cause to be taken, to do, or cause to be done, and to assist and cooperate
with Parent, Acquisition Sub and Seller in order to aid and facilitate the
completion of the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement at the earliest practicable times. In particular,
but without limitation, Stockholder agrees to use all reasonable efforts (in all
capacities, as provided above) to cause Seller to perform all of its agreements
in the Merger Agreement and to cause all of its representations and warranties
therein to be and remain true and correct. In addition to the specific
provisions of the Merger Agreement, Stockholder further agrees to execute and
deliver such further documents and to perform such further actions as Parent or
the Surviving Corporation shall reasonably request from time to time, both
before and after the completion of the Merger, in connection with the
transactions contemplated by the Merger Agreement and this Agreement.
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<PAGE>
2.4 RELEASE. Stockholder agrees and acknowledges that he has taken
all steps that he has deemed appropriate to fully inform himself of the
transactions contemplated by the Merger Agreement and to make an informed
decision to enter into this Agreement. Stockholder further acknowledges that,
if he has elected to receive the Securities and Cash Consideration in the
Merger, (a) he has carefully reviewed the Private Placement Memorandum (as
defined in the Merger Agreement), and (b) he has not relied upon any
representation, warranty or other communication, written or oral, in electing to
receive Parent Securities, except for the information set forth in the Private
Placement Memorandum. Further, Stockholder, on behalf of himself and his
affiliates, and for all of his and their respective affiliates, administrators,
trustees, beneficiaries and successors and assigns, does hereby fully, finally
and forever irrevocably and unconditionally release, acquit and discharge
Parent, Acquisition Sub and Seller, and all past, present and future parents,
subsidiaries and affiliates thereof, and all past, present and future officers,
directors, partners, employees, agents, attorneys, shareholders, accountants,
financial advisors, successors, heirs and assigns of such party or parties, of
and from any and all liabilities, claims or obligations, whensoever arising,
relating to or arising from the transactions contemplated by the Merger
Agreement (excluding from the foregoing only, if Stockholder has elected to
receive the Securities and Cash Consideration, any breach or default by or of
Parent under or with respect to the Parent Securities). As further
consideration for this Agreement, each person granting or deemed to be granting
a release hereunder hereby agrees, represents and warrants that the matters
released herein are not limited to matters which are known or disclosed, and in
connection with the subject matter of this Agreement and the Merger Agreement,
each such person granting or deemed to be granting a release hereunder, hereby
waives any and all rights and benefits which it now has or in the future may
have conferred upon it by virtue of any provision of law of any jurisdiction
which may now exist or hereafter be enacted and which may be applicable to the
subject matter of this Agreement, purporting to grant to any such person fully
or partial relief from the releases contained in this Agreement, including,
without limitation, the provisions of Section 1542 of the Civil Code of the
State of California, or any similar or comparable provision of law of any
jurisdiction. Said Section 1542 provides as follows:
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<PAGE>
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
IV. INDEMNITY.
A. STOCKHOLDER INDEMNITIES. Stockholder agrees to indemnify, hold
harmless and reimburse Parent, Acquisition Sub and Seller from and against any
and all losses, liabilities, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees) (hereinafter "Losses"), actually
suffered or incurred by any of Parent, Acquisition Sub and/or Seller, or any
parent, subsidiary or affiliate thereof or any assignee or successor thereof,
and each officer and director of any of the foregoing, which is incurred as a
result of any breach of a representation, warranty or covenant of Stockholder in
this Agreement.
B. RECOVERIES. The amount of any Loss suffered or incurred by any
person entitled to indemnification hereunder (an "Indemnified Person") shall be
reduced by the amount of any insurance proceeds or other cash receipts paid to
the Indemnified Person or any affiliate thereof as an offset against such Loss
(and no right of subrogation shall accrue to any insurer hereunder), including
any indemnification received by the Indemnified Person or such affiliate from an
unrelated party with respect to such Loss.
C. CLAIMS. An Indemnified Person shall promptly give the
indemnifying party (an "Indemnifying Person") written notice of any matter which
such Indemnified Person has determined has given rise to a right of
indemnification under this Agreement, stating the amount of the Loss, if known,
and method of computation thereof, all with reasonable particularity (subject to
the last sentence of this paragraph). The obligations and liabilities of any
party under this Section 3 with respect to Losses arising from claims,
assertions, events or proceedings of any third party (including, without
limitation, claims by any assignee or successor of the Indemnified Person or any
governmental agency), which are subject to the indemnification provided for in
this Section 3 ("Third Party Claims") shall be governed by and be subject to the
following additional terms and
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<PAGE>
conditions: if any Indemnified Person shall receive written notice of any
Third Party Claim, the Indemnified Person shall give the Indemnifying Person
prompt written notice of such Third Party Claim (subject to the last sentence
of this paragraph) and shall permit the Indemnifying Person, at its option,
to participate in the defense of such Third Party Claim by counsel of its own
choosing and at its expense. Furthermore, if the Indemnifying Person
acknowledges in writing its obligation to indemnify the Indemnified Person
hereunder against any Loss (without limitation) that may result from such
Third Party Claim, then the Indemnifying Person shall be entitled, at its
option, to assume and control the defense against such Third Party Claim at
its expense and through counsel of its choice if it gives prompt written
notice of its intention to do so to the Indemnified Person unless, in the
reasonable opinion of counsel for the Indemnified Person, there is a conflict
or a potential conflict of interests between the Indemnified Person and the
Indemnifying Person in such action, suit or proceeding, in which event the
Indemnified Person shall be entitled to direct the defense with respect to,
but only with respect to, those issues with respect to which such conflict
exists. In the event the Indemnifying Person exercises its right to undertake
the defense against any such Third Party Claim as provided above, the
Indemnified Person shall, and it shall cause its affiliates to, cooperate
with the Indemnifying Person in such defense and make available to he
Indemnifying Person all pertinent records, materials and information in their
possession or under their control relating thereto as is required by the
Indemnifying Person. No such Third Party Claim, except the settlement
thereof which involves (i) the payment of money only for which any
Indemnified Person is totally indemnified (without limitation) by the
Indemnifying Person and (ii) the unconditional release from all related
liability of the Indemnified Person, may be settled by the Indemnifying
Person without the written consent of the Indemnified Person. Any settlement
of a Third Party Claim by an Indemnified Person without the written consent
of the Indemnifying Person shall discharge the Indemnifying Person from all
liability hereunder with respect to the subject matter of such Third Party
Claim. The foregoing notwithstanding, the failure of any Indemnified Person
to give any notice required to be given hereunder shall not affect such
Indemnified Person's right to indemnification hereunder except to the extent
the Indemnifying Person from whom such indemnity is sought shall have been
actually and materially
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<PAGE>
prejudiced in its ability to defend the claim or action for which such
indemnification is sought by reason of such failure.
V. GENERAL AGREEMENTS.
A. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties in this Agreement or in any instrument or certificate delivered
pursuant to this Agreement delivered on or prior to the Effective Date (as
defined in the Merger Agreement) shall survive the completion of the Merger.
B. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telecopy, telex or telegram or mailed by registered or
certified mail, postage prepaid, as follows:
(1) If to Parent or Acquisition Sub:
Alliance Imaging, Inc.
3111 No. Tustin Ave., Suite 150
Orange, California 92665
Telecopy No. (714) 921-5678
Attention: Richard N. Zehner
President
(2) If to Stockholder:
__________________________
__________________________
__________________________
__________________________
Telecopy No. (___) ___-___
The date of any such notice shall be deemed the date hand delivered or
transmitted by telecopy, telex or telegram (in each case provided written
confirmation of sending is retained) or three (3) days after being mailed as
provided above. Any party may change its address for notice by sending a notice
to that effect as herein provided to the other parties.
C. AMENDMENT; ENTIRE AGREEMENT; BENEFICIARIES. This Agreement
(including the documents and instruments
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<PAGE>
referred to herein) (a) constitutes the entire agreement and supersedes all
other prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and (b) is not intended to
confer upon any other person any rights or remedies hereunder. This
Agreement may be amended or modified in whole or in part by an agreement in
writing executed in the same manner as this Agreement after authorization to
do so, as applicable, by the Boards of Directors of Parent and Acquisition
Sub and Stockholder.
D. WAIVER. Any agreement on the part of a party hereto and any
extension or waiver granted by any such party shall be valid only if set forth
in an instrument in writing signed on behalf of the party making the agreement
or providing the extension or waiver.
E. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
F. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. The rights of Parent and Acquisition
Sub hereunder may be transferred in whole or in part to any direct or indirect
wholly-owned subsidiary of Parent.
G. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
the choice of law provisions thereof.
H. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
I. ATTORNEYS' FEES. Should Parent or Acquisition Sub (or, following
the Merger, the Surviving Corporation) be required to engage counsel to seek to
enforce any of the provisions of this Agreement (whether or not a legal
proceeding is required to be filed), such party or parties shall be entitled, in
addition to its or their other remedies, to recover the fees and expenses of
counsel and, as
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<PAGE>
applicable, court costs, incurred in connection with such matter.
IN WITNESS WHEREOF the parties have executed this Agreement by their duly
authorized officers as of the date first above written.
ALLIANCE IMAGING, INC.
By______________________________
Its_____________________________
ALLIANCE IMAGING OF
PENNSYLVANIA, INC.
By______________________________
Its_____________________________
STOCKHOLDER(S)
Name(s):________________________
________________________________
________________________________
Stockholder elects to receive the following consideration in the Merger
(check one):
____ Cash Only Consideration
____ Securities and Cash Consideration
Stockholder Initials: ____
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JOINDER AND CONSENT
THIS JOINDER AND CONSENT (the "Agreement") is dated as of April 16,
1996, by and among ALLIANCE IMAGING, INC., a Delaware corporation ("Parent"),
ALLIANCE IMAGING OF PENNSYLVANIA, INC., a Pennsylvania corporation
("Acquisition Sub"), and ________________ an individual ("Stockholder").
W I T N E S S E T H
A. Parent, Acquisition Sub and Royal Medical Health Services Inc., a
Pennsylvania corporation ("Seller"), are parties to an Agreement and Plan of
Merger dated as of April 16, 1996 (the "Merger Agreement"), pursuant to
which, among other things, it is contemplated that Acquisition Sub will be
merged with and into Seller (the "Merger") and that all of the shares of
Seller's capital stock issued and outstanding will be converted into the
right to receive either the Cash Only Consideration or the Securities and
Cash Consideration (both as defined in and subject to the terms of the Merger
Agreement). A copy of the Merger Agreement is attached hereto as Exhibit A.
B. Stockholder is the record, legal and beneficial owner of 41,736
shares (approximately 41.7% of the issued and outstanding capital stock of
Seller as of the date hereof) (the "Stockholder Shares") of the Common Stock,
no par value, of Seller ("Seller Common Stock"). Stockholder has approved of
and consented to the Merger Agreement and the Merger and the other
transactions contemplated by the Merger Agreement. As a substantial
stockholder of Seller, Stockholder will derive substantial benefits from the
closing of such transactions.
C. The execution and delivery of this Agreement by Stockholder is a
condition to the obligations of Parent and Acquisition Sub under the Merger
Agreement. In order to induce Parent and Acquisition Sub to complete the
Merger and the other transactions contemplated by the Merger Agreement and to
satisfy such condition, Stockholder has agreed to the provisions herein.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained herein and, in the case of Parent
and Acquisition Sub, in the Merger Agreement, Parent, Acquisition Sub and
Stockholder agree as follows:
II. REPRESENTATIONS AND WARRANTIES. Stockholder hereby represents and
warrants to Parent and Acquisition Sub as follows:
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<PAGE>
A. OWNERSHIP OF SHARES. Stockholder is the record, legal and
beneficial owner of all of the Stockholder Shares referred to in Recital B
above, and no other person or entity has any right, title or interest in or
to any of such shares. Stockholder does not have any option, warrant or
other right to acquire any shares of capital stock of Seller. At the Closing
(as defined in the Merger Agreement), in accordance with Section 2.5(i) of
the Merger Agreement, Stockholder will deliver to the Surviving Corporation
(as defined in the Merger Agreement) for cancellation all certificates
representing the Stockholder Shares, free and clear of all liens, claims and
encumbrances of any party and of any nature whatsoever.
B. RESALE. As of the date hereof and the Closing, Stockholder
does not have and will not have a present plan or intention of disposing of
any Parent Securities (as defined in the Merger Agreement) acquired pursuant
to the Merger, if any. Assuming completion of the Merger, Stockholder will
acquire such Parent Securities for investment purposes and not for resale in
any manner that would violate any applicable federal or state securities law
or other law or regulation. Stockholder is aware that the Parent Securities
issued in the Merger (including the Common Stock issuable upon exercise or
conversion thereof) will be "restricted securities" within the meaning of
Rule 144 promulgated under the Securities Act of 1933, as amended, and that
no trading market for either the Parent Warrants or the Parent Preferred
Stock (both as defined in the Merger Agreement) exists or is contemplated to
exist. Consequently, if Stockholder has elected to receive the Securities
and Cash Consideration, Stockholder has the ability to hold the Parent
Securities for an indefinite period of time. Pursuant to the Pennsylvania
Securities Law any Pennsylvania purchaser hereby agrees not to sell, transfer
or otherwise dispose of the Parent Securities within 12 months of the date of
purchase.
C. CONSENT. Stockholder has carefully reviewed the Merger
Agreement and sought independent legal counsel as necessary to fully
understand its terms and conditions, and based upon such review and
consultation approves of and consents to the Merger Agreement and the Merger
and the other transactions contemplated by the Merger Agreement. Stockholder
has approved such agreement and transactions in accordance with the
Pennsylvania Consolidated Statutes and
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<PAGE>
other applicable laws and the Articles of Incorporation and Bylaws of Seller.
D. SELLER REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Seller in the Merger Agreement (including,
without limitation, those in Article 4 of such agreement) were, are and will
be, as of the respective dates made or deemed to have been made pursuant to
the terms of the Merger Agreement, true and correct in all respects
(qualified by materiality to the extent provided therein). Stockholder
agrees that the representation and warranty contained in this Section 1.4
shall survive consummation of
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<PAGE>
the Merger and shall remain in full force and effect for the period of
limitations provided under applicable law.
III. ADDITIONAL AGREEMENTS.
A. NO TRANSFER OF STOCK. Unless and until the Merger Agreement
shall have been terminated in accordance with its terms, Stockholder shall
not sell, transfer or otherwise dispose of any right, title or interest in or
to any of the Stockholder Shares.
B. FEES AND EXPENSES. If the Merger is completed and the legal
fees and legal expenses incurred by Seller in connection with the
transactions contemplated by the Merger Agreement exceed $25,000, then
Stockholder agrees to pay, in addition to the fees and expenses incurred by
him in connection with the Merger Agreement and this Agreement and the
transactions contemplated thereby and hereby, his Pro Rata Share (as
hereinafter defined) of such fees and expenses in excess of such amount. If
Parent or the Surviving Corporation pays any such fees or expenses on behalf
of Stockholder or Seller (which they shall not be obligated to do), then
Stockholder shall, promptly following notice thereof from Parent or the
Surviving Corporation, reimburse Parent or the Surviving Corporation for such
Stockholder's Pro Rata Share of such payment. "Pro Rata Share" means the
number of shares of Seller Common Stock owned by Stockholder as of the date
hereof divided by the number of shares of Seller Common Stock issued and
outstanding as of the date hereof.
C. COOPERATION; FURTHER ASSURANCES; NAME CHANGES. Stockholder
agrees to use all reasonable efforts (in all capacities, including, without
limitation, as an officer, director, employee and stockholder of Seller, as
applicable) to take, or cause to be taken, to do, or cause to be done, and to
assist and cooperate with Parent, Acquisition Sub and Seller in order to aid
and facilitate the completion of the Merger and the other transactions
contemplated by the Merger Agreement and this Agreement at the earliest
practicable times. In particular, but without limitation, Stockholder agrees
to use all reasonable efforts (in all capacities, as provided above) to cause
Seller to perform all of its agreements in the Merger Agreement and to cause
all of its representations and warranties therein to be and remain true and
correct. In addition to the specific provisions of the Merger Agreement,
Stockholder further agrees to execute and
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<PAGE>
deliver such further documents and to perform such further actions as Parent
or the Surviving Corporation shall reasonably request from time to time, both
before and after the completion of the Merger, in connection with the
transactions contemplated by the Merger Agreement and this Agreement. In
addition, Stockholder agrees to cause all affiliated and related entities of
Seller and all entities owned or controlled by Stockholder that are engaged
in the diagnostic medical imaging business, to take all necessary steps to
change their names as promptly following the Closing as is practicable (and
in any event within 30 days thereof) to eliminate the word "Royal" and any
derivative or similar word or phrase.
2.4 RELEASE. Stockholder agrees and acknowledges that he has taken
all steps that he has deemed appropriate to fully inform himself of the
transactions contemplated by the Merger Agreement and to make an informed
decision to enter into this Agreement. Stockholder further acknowledges
that, if he has elected to receive the Securities and Cash Consideration in
the Merger, (a) he has carefully reviewed the Private Placement Memorandum
(as defined in the Merger Agreement), and (b) he has not relied upon any
representation, warranty or other communication, written or oral, in electing
to receive Parent Securities, except for the information set forth in the
Private Placement Memorandum. Further, Stockholder, on behalf of himself and
his affiliates, and for all of his and their respective affiliates,
administrators, trustees, beneficiaries and successors and assigns, does
hereby fully, finally and forever irrevocably and unconditionally release,
acquit and discharge Parent, Acquisition Sub and Seller, and all past,
present and future parents, subsidiaries and affiliates thereof, and all
past, present and future officers, directors, partners, employees, agents,
attorneys, shareholders, accountants, financial advisors, successors, heirs
and assigns of such party or parties, of and from any and all liabilities,
claims or obligations, whensoever arising, relating to or arising from the
transactions contemplated by the Merger Agreement (excluding from the
foregoing only (i) any breach of an obligation under the employment agreement
with Stockholder referred to therein and (ii) if Stockholder has elected to
receive the Securities and Cash Consideration, any breach or default by or of
Parent under or with respect to the Parent Securities). As further
consideration for this Agreement, each person granting or deemed to be
granting a release
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<PAGE>
hereunder hereby agrees, represents and warrants that the matters released
herein are not limited to matters which are known or disclosed, and in
connection with the subject matter of this Agreement and the Merger
Agreement, each such person granting or deemed to be granting a release
hereunder, hereby waives any and all rights and benefits which it now has or
in the future may have conferred upon it by virtue of any provision of law of
any jurisdiction which may now exist or hereafter be enacted and which may be
applicable to the subject matter of this Agreement, purporting to grant to
any such person fully or partial relief from the releases contained in this
Agreement, including, without limitation, the provisions of Section 1542 of
the Civil Code of the State of California, or any similar or comparable
provision of law of any jurisdiction. Said Section 1542 provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
IV. INDEMNITY.
A. STOCKHOLDER INDEMNITIES. Stockholder agrees to indemnify, hold
harmless and reimburse Parent, Acquisition Sub and Seller from and against
any and all losses, liabilities, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) (hereinafter "Losses"),
actually suffered or incurred by any of Parent, Acquisition Sub and/or
Seller, or any parent, subsidiary or affiliate thereof or any assignee or
successor thereof, and each officer and director of any of the foregoing,
which is incurred as a result of any breach of a representation, warranty or
covenant of Stockholder in this Agreement.
B. RECOVERIES. The amount of any Loss suffered or incurred by any
person entitled to indemnification hereunder (an "Indemnified Person") shall
be reduced by the amount of any insurance proceeds or other cash receipts
paid to the Indemnified Person or any affiliate thereof as an offset against
such Loss (and no right of subrogation shall accrue to any insurer
hereunder), including any indemnification received by the Indemnified Person
or such affiliate from an unrelated party with respect to such Loss.
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<PAGE>
C. CLAIMS. An Indemnified Person shall promptly give the
indemnifying party (an "Indemnifying Person") written notice of any matter
which such Indemnified Person has determined has given rise to a right of
indemnification under this Agreement, stating the amount of the Loss, if
known, and method of computation thereof, all with reasonable particularity
(subject to the last sentence of this paragraph). The obligations and
liabilities of any party under this Section 3 with respect to Losses arising
from claims, assertions, events or proceedings of any third party (including,
without limitation, claims by any assignee or successor of the Indemnified
Person or any governmental agency), which are subject to the indemnification
provided for in this Section 3 ("Third Party Claims") shall be governed by
and be subject to the following additional terms and conditions: if any
Indemnified Person shall receive written notice of any Third Party Claim, the
Indemnified Person shall give the Indemnifying Person prompt written notice
of such Third Party Claim (subject to the last sentence of this paragraph)
and shall permit the Indemnifying Person, at its option, to participate in
the defense of such Third Party Claim by counsel of its own choosing and at
its expense. Furthermore, if the Indemnifying Person acknowledges in writing
its obligation to indemnify the Indemnified Person hereunder against any Loss
(without limitation) that may result from such Third Party Claim, then the
Indemnifying Person shall be entitled, at its option, to assume and control
the defense against such Third Party Claim at its expense and through counsel
of its choice if it gives prompt written notice of its intention to do so to
the Indemnified Person unless, in the reasonable opinion of counsel for the
Indemnified Person, there is a conflict or a potential conflict of interests
between the Indemnified Person and the Indemnifying Person in such action,
suit or proceeding, in which event the Indemnified Person shall be entitled
to direct the defense with respect to, but only with respect to, those issues
with respect to which such conflict exists. In the event the Indemnifying
Person exercises its right to undertake the defense against any such Third
Party Claim as provided above, the Indemnified Person shall, and it shall
cause its affiliates to, cooperate with the Indemnifying Person in such
defense and make available to he Indemnifying Person all pertinent records,
materials and information in their possession or under their control relating
thereto as is required by the Indemnifying Person. No such Third Party
Claim, except the settlement thereof which involves (i) the
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<PAGE>
payment of money only for which any Indemnified Person is totally indemnified
(without limitation) by the Indemnifying Person and (ii) the unconditional
release from all related liability of the Indemnified Person, may be settled
by the Indemnifying Person without the written consent of the Indemnified
Person. Any settlement of a Third Party Claim by an Indemnified Person
without the written consent of the Indemnifying Person shall discharge the
Indemnifying Person from all liability hereunder with respect to the subject
matter of such Third Party Claim. The foregoing notwithstanding, the failure
of any Indemnified Person to give any notice required to be given hereunder
shall not affect such Indemnified Person's right to indemnification hereunder
except to the extent the Indemnifying Person from whom such indemnity is
sought shall have been actually and materially prejudiced in its ability to
defend the claim or action for which such indemnification is sought by reason
of such failure.
V. GENERAL AGREEMENTS.
A. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties in this Agreement or in any instrument or
certificate delivered pursuant to this Agreement delivered on or prior to the
Effective Date (as defined in the Merger Agreement) shall survive the
completion of the Merger.
B. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered by
messenger, transmitted by telecopy, telex or telegram or mailed by registered
or certified mail, postage prepaid, as follows:
(1) If to Parent or Acquisition Sub:
Alliance Imaging, Inc.
3111 No. Tustin Ave., Suite 150
Orange, California 92665
Telecopy No. (714) 921-5678
Attention: Richard N. Zehner
President
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<PAGE>
(b) If to Stockholder:
[___________________________]
___________________________
___________________________
___________________________
Telecopy No. (___) ___-____
The date of any such notice shall be deemed the date hand delivered or
transmitted by telecopy, telex or telegram (in each case provided written
confirmation of sending is retained) or three (3) days after being mailed as
provided above. Any party may change its address for notice by sending a
notice to that effect as herein provided to the other parties.
C. AMENDMENT; ENTIRE AGREEMENT; BENEFICIARIES. This Agreement
(including the documents and instruments referred to herein) (a) constitutes
the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any other person
any rights or remedies hereunder. This Agreement may be amended or modified
in whole or in part by an agreement in writing executed in the same manner as
this Agreement after authorization to do so, as applicable, by the Boards of
Directors of Parent and Acquisition Sub and Stockholder.
D. WAIVER. Any agreement on the part of a party hereto and any
extension or waiver granted by any such party shall be valid only if set
forth in an instrument in writing signed on behalf of the party making the
agreement or providing the extension or waiver.
E. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
F. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors
and permitted assigns of the parties hereto. The rights of Parent and
Acquisition Sub hereunder may be transferred in whole or in part to any
direct or indirect wholly-owned subsidiary of Parent.
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<PAGE>
G. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to the choice of law provisions thereof.
H. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
I. ATTORNEYS' FEES. Should Parent or Acquisition Sub (or,
following the Merger, the Surviving Corporation) be required to engage
counsel to seek to enforce any of the provisions of this Agreement (whether
or not a legal proceeding is required to be filed), such party or parties
shall be entitled, in addition to its or their other remedies, to recover the
fees and expenses of counsel and, as applicable, court costs, incurred in
connection with such matter.
IN WITNESS WHEREOF the parties have executed this Agreement by their
duly authorized officers as of the date first above written.
ALLIANCE IMAGING, INC.
By______________________________
Its_____________________________
ALLIANCE IMAGING OF PENNSYLVANIA, INC.
By______________________________
Its_____________________________
STOCKHOLDER(S)
Name(s):________________________
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________________________________
________________________________
Stockholder elects to receive the following consideration in the Merger
(check one):
____ Cash Only Consideration
____ Securities and Cash Consideration
Stockholder Initials: ______
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (the "Agreement") is entered
into as of this 16th day of April 1996, by and among ALLIANCE
IMAGING, INC., a Delaware corporation ("Buyer"), A&M Trucking,
Inc., a Pennsylvania corporation (the "Seller" or the
"Company"), and each of Mark J. Graham and Albert F. Calfo, II
(the "Shareholders"), with reference to the following:
A. Seller is engaged in the business of providing
tractor equipment and services to MRI service providers,
including Royal Medical Health Services Inc. ("Royal") (the
"Business").
B. Subject to the terms and conditions of this
Agreement, Buyer desires to buy from Seller, and Seller
desires to sell to Buyer, substantially all of the assets and
properties of Seller used or usable in the Business; and,
subject to such terms and conditions, Buyer has agreed to
assume certain specified obligations of Seller as hereinafter
specified.
C. Each of the Shareholders, being the owners of all of
the outstanding capital stock of Seller and thereby expecting
to benefit substantially from the consummation of the
transactions contemplated by this Agreement, desires to join
in certain representations, warranties and covenants of Seller
provided for herein.
NOW, THEREFORE, in consideration of these premises and of
the mutual agreements and representations contained herein,
the parties hereto agree as follows:
1. SALE AND PURCHASE OF ASSETS.
.1 SALE AND PURCHASE OF ASSETS. For the
consideration and subject to the terms and conditions
contained herein, Seller hereby agrees to sell, convey, assign
and deliver to Buyer at the Closing (as hereinafter defined),
and Buyer hereby agrees to purchase and accept the sale,
conveyance, assignment and delivery of, all of Seller's right,
title, and interest in and to all of the assets and properties
of Seller used or usable in the Business (excluding the assets
<PAGE>
described in Section 1.2 below, the "Purchased Assets"),
including, without limitation, the following:
.1 EQUIPMENT AND OTHER PERSONAL PROPERTY.
The tractors identified on Schedule 1.1.1 hereto, together
with all related spare parts and equipment inventory, and all
fixed assets, vehicles and other tangible personal property
relating thereto, as detailed on Schedule 1.1.1 hereto (such
related personal property being the "Ancillary Property" and,
collectively, all of the assets and property described in this
Section 1.1.1 being the "Equipment");
.2 RECORDS. Originals or copies of all of
the files, correspondence, customer lists, vendor lists,
employee lists, books, records, accounts, costs and supply
data and other materials and information utilized in the
Business (the "Records");
.3 CLAIMS. All claims of Seller against
third parties relating to the Purchased Assets, including,
without limitation, liquidated and unliquidated rights under
manufacturers' and vendors' warranties;
.4 LICENSES. To the extent transferable,
all licenses, permits and authorizations of governmental or
quasi-governmental agencies and authorities and private
parties relating to the use, operation or enjoyment of the
Purchased Assets; and
1.1.5 CONTRACTS, ETC. All of Seller's right, title
and interest in and to the rental or lease agreements,
customer contracts and other agreements listed on Schedule 5.5
attached hereto, including all goodwill therein and in the
Business of Seller, and all rights of Seller under insurance
policies, covenants not to compete, confidentiality agreements
and similar agreements, and all accounts and notes receivable,
intangible assets (including, without limitation, all of
Seller's right, title and interest in and to all trademarks,
tradenames, service marks and other intellectual property
rights used in the Business), all computer software and
transferable licenses thereto owned by Seller and used in the
Business, and all other assets or property, tangible or
intangible.
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Seller's right, title and interest in and to
the Purchased Assets shall be sold, conveyed, assigned and
delivered by Seller to Buyer at the Closing and from time to
time thereafter as reasonably requested by Buyer by
appropriate bills of sale and evidences of assignment, all in
form and substance reasonably satisfactory to Buyer, and free
and clear of any and all liens, claims, liabilities and
encumbrances whatsoever, except for the Assumed Liabilities
(as hereinafter defined).
.2 EXCLUDED ASSETS. The parties agree and
acknowledge that Buyer is not purchasing (a) the partnership
interest held by Seller in the partnership that owns the real
estate that includes Royal's office space, (b) the net account
receivable owed by the Shareholders to Seller, provided that
the amount of such net account receivable as of the Closing
shall not exceed $19,799.50, or (c) any cash held by Seller.
2. LIMITED ASSUMPTION OF LIABILITIES. On the Closing
Date, except as otherwise specifically provided in this
Agreement, as additional consideration for the Purchased
Assets, Buyer shall assume and agree to pay Seller's
obligations consisting solely of (a) the obligations of Seller
to perform under the contracts and agreements listed on
Schedule 5.5 attached hereto (including those relating to
indebtedness or lease obligations secured by or relating to
Equipment) and (b) the other obligations and liabilities of
Seller with respect to the Business disclosed on Schedule 2
attached hereto (collectively, the "Assumed Liabilities").
Except for the Assumed Liabilities, Buyer does not assume and
shall not be liable or responsible for any other liabilities,
obligations, debts or expenses of Seller whatsoever, whether
matured or unmatured, liquidated or unliquidated, fixed or
contingent, or related to the Business or not (collectively,
the "Unassumed Liabilities"). As provided in Section 12.1
hereof, Seller agrees to indemnify Buyer from and against any
and all Unassumed Liabilities, and Buyer agrees to indemnify
Seller from and against any and all Assumed Liabilities.
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3. PURCHASE PRICE.
.1 CONSIDERATION FOR PURCHASED ASSETS; ALLOCATION.
Subject to the terms and conditions of this Agreement, at the
Closing, Buyer shall pay to Seller as consideration for the
Purchased Assets the purchase price (the "Purchase Price")
equal to (a) Six Hundred Twenty-Eight Thousand Dollars
($628,000) minus (b) the sum of (x) the excess (if any) of the
amount of cash held by Seller at the Closing (including any
cash transferred from Royal in respect of trade payables owed
by Royal to Seller) over the amount of accrued and outstanding
salary and payroll and employment taxes payable as of the
Closing and (y) the excess (if any) of the amount of salary
and distributions actually paid by Seller to Mr. Graham and
Mr. Calfo prior to the Closing over the amount of pro-rated
salary and distributions Seller is permitted to pay to Mr.
Graham and Mr. Calfo with respect to periods prior to the
Closing under part (y) of Section 5.10 hereof. The Purchase
Price shall be paid by Buyer in cash or by wire transfer of
funds to an account designated by Seller. The Purchase Price
shall be allocated as follows:
Tractors $150,000
Accounts Receivable Face Amount as of
and Prepaid Amounts Closing
Goodwill and other Balance of
Intangibles Purchase Price.
The parties agree to use such allocated amounts in reporting
the transaction contemplated hereunder for all state, federal
and local tax purposes, and not to take any inconsistent
position in any tax filing. Buyer will be responsible for
paying any sales taxes required to be paid in connection with
the purchase of the Purchased Assets, but Seller shall
reasonably cooperate with Buyer to minimize the extent to
which such taxes are legally required to be paid.
4. CLOSING.
.1 TIME AND PLACE. The closing hereunder (the
"Closing") shall be held on the Closing Date at the offices of
Irell & Manella, 333 South Hope Street, Suite 3300, Los
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Angeles, California 90071, at 9:00 a.m. Los Angeles time, or
at such other place as the parties may agree. Each party
hereto agrees to use its reasonable best efforts to satisfy
promptly the respective conditions to the obligations of the
parties hereto in order to expedite the Closing. The "Closing
Date" shall be the same date as the "Closing" under that
certain Agreement and Plan of Merger (the "Merger Agreement")
dated as of April 16, 1996 among Buyer, Royal and Alliance
Imaging of Pennsylvania, Inc. (but not later than April 30,
1996 without the mutual consent of the parties hereto) or, if
Buyer and Seller shall mutually agree upon a different date,
the date that they shall have mutually agreed upon in writing.
.2 CLOSING DELIVERIES. Subject to the terms and
conditions of this Agreement, at the Closing, Buyer shall pay
the Purchase Price to Seller in the manner specified in
Section 3.1. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall deliver to Buyer all
such bills of sale, contract assignments, motor vehicle
certificates of title and other documents and instruments of
sale, assignment, conveyance and transfer as Buyer or its
counsel may reasonably deem to be necessary or desirable in
order to effect or evidence the transfer of the Purchased
Assets to Buyer.
5. REPRESENTATIONS AND WARRANTIES OF SELLER. As an
inducement for Buyer to enter into and consummate the
transactions contemplated by this Agreement, the Company and
each of the Shareholders, jointly and severally, represents
and warrants to Buyer as follows:
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<PAGE>
.1 EXISTENCE AND RIGHTS; COMPLIANCE WITH LAWS.
.1 EXISTENCE AND RIGHTS. Seller (i) is a
corporation duly organized and validly existing in good
standing under the laws of the Commonwealth of Pennsylvania
without limit as to the duration of its existence; (ii) has
the corporate power and adequate authority, rights and
franchises to own its properties and to carry on its business
as now conducted and to make and carry out this Agreement; and
(iii) is duly qualified and in good standing in each
jurisdiction in which its owned or leased properties or the
character of its business makes such qualification necessary,
or, if not so qualified, the failure to so qualify will not
have a materially adverse effect upon its financial condition,
properties, or business or results of operation. The copies
of the Articles of Incorporation and Bylaws of Seller
previously delivered to Buyer remain complete and in full
force and effect.
.2 COMPLIANCE WITH LAWS. Seller's business
has been and is being conducted in all material respects in
accordance with all applicable federal, state and local laws
and regulations and rules and regulations of all applicable
private third party insurers and reimbursers of health care
costs and expenses, including, without limitation, such laws,
regulations and rules as relate to the practice of medicine
and the provision of medical diagnostic mobile imaging
services and otherwise.
.2 STOCK. Seller's authorized capital stock consists
of 10,000 shares of a single class of stock, all of which have
been duly authorized and are validly issued and outstanding as
of the date hereof. All shares of such outstanding capital
stock are fully paid and non-assessable, are owned
beneficially and of record by the Shareholders, and were
issued in compliance with all applicable state and federal
securities laws and other applicable laws. There are no
outstanding securities convertible into, or options, warrants,
rights, calls or other commitments of any nature relating to,
the issuance of any securities of Seller.
.3 AGREEMENT AUTHORIZED. The execution, delivery and
performance of this Agreement by Seller have been duly and
validly authorized by all necessary corporate action
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<PAGE>
(including, without limitation, approval by the Board of
Directors and stockholders of Seller in accordance with
applicable law) on the part of Seller and do not require
notice to, or the consent or approval of, any governmental
body or other regulatory authority. This Agreement is a
legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms.
.4 SUBSIDIARIES. Seller has no subsidiaries and no
equity interests in any other entities nor any obligation,
option or right to acquire any such interest.
.5 CONTRACTS. Schedule 5.5 attached hereto lists each
of the rental and lease agreements, customer contracts and
other agreements (including, without limitation, those
relating to indebtedness or lease obligations secured by or
relating to Equipment) (the "Assumed Contracts"). There is no
material default in any obligation to be performed by Seller
under any Assumed Contract and Seller has not waived any
material right under any Assumed Contract, and, to Seller's
knowledge, no counterparty to any Assumed Contract is in
material default of any obligation thereunder. Seller does
not have any outstanding contract, commitment or undertaking
which will result in any material loss upon completion or
performance thereof after allowance for general and
administrative selling and distribution expenses or will be
unreasonably adverse, onerous or harmful to its assets,
business, operation or financial condition. Seller is not in
default nor is there any basis for any claim of default under
any Assumed Contract, and Seller has not waived any material
right under any such Assumed Contract, except for defaults and
waivers which are not material to the financial condition,
properties, business or results of operations of Seller.
Seller (including its employees) is not restricted by
agreement from carrying on its business anywhere in the United
States.
.6 NO CONFLICT. The execution, delivery and perform-
ance of this Agreement will not (i) breach or constitute
grounds for the occurrence or declaration of an acceleration
of payment or a default or a right of termination under any
agreement, indenture, undertaking or other instrument to which
Seller is a party or by which it or any of its properties may
be bound or affected; (ii) violate any provision of law or any
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<PAGE>
regulation or any order, judgment or decree of any court or
other agency of government, the violation of which could have
a material adverse effect on the financial condition,
properties, business or results of operations of Seller;
(iii) violate any provision of the Articles of Incorporation
or Bylaws of Seller; or (iv) result in the creation or
imposition of (or the obligation to create or impose) any
lien, charge or encumbrance on, or security interest in or on,
any of its properties. Without limiting the generality of the
foregoing, the execution, delivery and performance of this
Agreement does not and will not require the consent of any
third party under any Assumed Contract except as set forth on
Schedule 5.6 hereto.
.7 LITIGATION. Except as set forth on Schedule 5.7,
there is no litigation, investigation, arbitration or other
proceedings (formal or informal) pending or, to the best
knowledge of Seller, threatened against or affecting it or its
properties; nor does Seller know of any reasonable basis for
any litigation, investigation, arbitration or other pro-
ceedings (formal or informal), the results of which could have
a material adverse effect on its financial condition,
properties, business or results of operations. Seller is not
in default with respect to any order, writ, injunction, decree
or demand of any court or other governmental or regulatory
authority.
.8 FINANCIAL CONDITION. The balance sheets of Seller
as of December 31, 1995, February 29, 1996, and March 31, 1996
and the related profit and loss and cash flow statements for
the periods ended on those dates, and the related notes for
such financial statements, copies of which have heretofore
been or will be delivered to Buyer by Seller, and all other
historical financial statements and data submitted in writing
by Seller to Buyer at any time (collectively, the "Financial
Statements"), are or, when delivered, will be true and correct
as of the respective dates thereof, and the Financial
Statements truly present and will truly present the financial
condition of Seller as at the respective dates thereof and the
results of the operations of Seller for the respective periods
covered thereby, and have been and will have been prepared in
accordance with generally accepted accounting principles on a
basis consistently maintained ("GAAP"). Seller has no
knowledge of any liabilities or guarantees, matured or
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<PAGE>
unmatured, contingent or otherwise, as of the respective dates
of the Financial Statements not accurately reflected in the
Financial Statements, and none have arisen since those times
except in the ordinary and usual course of business. With
respect to Seller's contracts, commitments and loss
contingencies, the Financial Statements contain and reflect
adequate reserves.
.9 BOOKS AND RECORDS. Seller maintains a system of
internal accounting control sufficient to provide reasonable
assurances that (i) transactions are executed in accordance
with management's general or specific authorization,
(ii) transactions are recorded as necessary to permit prepara-
tion of financial statements in conformity with GAAP,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the
recorded accounting for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
.10 NO SUBSEQUENT CHANGES. Except as contemplated in
this Agreement or reflected in any Schedule attached hereto,
since December 31, 1995, (i) there have been no material
adverse changes (whether by sale, destruction, pledge, lease
or otherwise and whether or not covered by insurance) in the
assets (including licenses, permits and franchises),
liabilities or financial condition of Seller, and (ii) Seller
has not entered into any commitments, contracts or
transactions not reflected in the Financial Statements, as
required in accordance with GAAP, except in each case for
changes in the ordinary and usual course of business. Since
the respective dates of the Financial Statements, (a) Seller
has not, directly or indirectly, paid, declared, or set aside
any dividends or distributions with respect to, nor
repurchased, any of its capital stock or securities of any
class, and (b) to the knowledge of Seller, no events have
occurred which have had or can reasonably be expected to have
a material adverse effect on the financial condition,
properties, business, results of operations or prospects of
Seller. Since December 31, 1995, each of Mark J. Graham and
Albert F. Calfo, II has earned salary (including all cash
compensation) at the rate of $1,000 per month and neither of
them has received any dividend or other distribution on Seller
Common Stock or any other payment or distribution of any kind,
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<PAGE>
except for (x) prior distributions totalling $14,500 to each
of Mr. Graham and Mr. Calfo and (y) additional distributions
of $1,687.50 per month (prorated for partial months on a daily
basis through the Closing) to each of Mr. Graham and Mr.
Calfo.
.11 TITLE TO AND CONDITION OF ASSETS. Seller has no
interest in real property, including, without limitation, any
leasehold interest. Seller has good, clear and marketable
title to its assets (including, without limitation, those
shown in the Financial Statements, except as subsequently sold
in the ordinary course of business) and the same are not
subject to any mortgages, deeds of trust, pledges, security
interests, leases, licenses or other encumbrances other than
indicated in the Financial Statements or listed on Schedule
5.5 or 5.11 hereto. None of the assets of Seller, tangible or
intangible, are located outside of the United States and
Seller does not own or hold any stock or securities, or
receivables from or claims against foreign entities. All of
the assets and currently used properties of Seller are in good
operating condition, ordinary wear and tear excepted.
.12 ENVIRONMENTAL MATTERS. Except as set forth on
Schedule 5.12, Seller has all permits, licenses and other
authorizations required for the operation of its business (as
presently conducted) under federal, state, and local laws
relating to pollution, protection of the environment and the
storage, presence and discharge of chemicals and other
substances (collectively, "Environmental Laws"). There is no
civil, criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding,
notice or demand letter under the Environmental Laws pending,
or to the best knowledge of Seller threatened, against Seller
or any of its owned or leased real or personal property.
Neither Seller nor, to the best knowledge of Seller, any other
person or entity has placed, stored, buried, dumped or
disposed of any regulated or prohibited substances or any
materials produced by, or resulting from, any business,
commercial or industrial activities, operations or processes
on, beneath, or adjacent to any owned or leased real property
of Seller, except to the extent handled or reported and
remedied in all material respects in accordance with
applicable Environmental Laws. To the best knowledge of
Seller, no employee of Seller has been exposed in the course
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of his or her employment with Seller to any regulated or
prohibited substances or any materials produced or used by
Seller in any manner that could give rise to any material
liability under any applicable Environmental Law against
Seller or its properties. Seller has not received any notice
from any governmental agency or private or public entity
advising Seller that it is responsible or potentially
responsible for actual or potential response costs with
respect to a release, a threatened release or clean-up of
materials (including hazardous substances as defined in any
Environmental Laws) nor is Seller aware of any facts that
might reasonably be expected to give rise to any such notice.
.13 TAX STATUS.
.1 RETURNS FILED. Seller has timely filed all
Tax Returns required to have been filed by it and has paid or
accrued all Taxes due to any taxing authority with respect to
all taxing periods ending on or prior to the date hereof; and
all such Tax Returns are true, correct and complete in all
material respects. The Financial Statements include an
adequate reserve for all Taxes not yet due or with respect to
which Tax Returns, as of the Closing, are not required to have
been filed, in each case to reflect the operations of Seller
through the Closing. There is no pending Tax audit by a
governmental authority against or affecting Seller.
.2 COLLECTIONS AND PAYMENTS. (a) All amounts
that are required to be collected or withheld by Seller have
been duly collected or withheld, and (b) all such amounts that
are required to be remitted to any taxing authority (including
license and other similar fees payable to the Department of
Motor Vehicles and other governmental agencies) have been duly
remitted.
For purposes of this Agreement, "Taxes" means all
taxes imposed of any nature including federal, state, local or
foreign net income tax, alternative or add-on minimum tax,
profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment
related tax (including employee withholding and employer
payroll tax, FICA and FUTA), real and personal property tax or
ad valorem tax, sales or use tax, excise tax, stamp tax or
duty, any withholding or back up withholding tax, value added
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tax, severance tax, prohibited transaction tax, premiums tax,
occupation tax, together with any interest or any penalty, in
addition to any tax or additional amount imposed by any
governmental authority (domestic or foreign) responsible for
the imposition of such tax. "Tax Return" means all returns,
reports, forms or other information required to be filed with
respect to any Taxes.
.14 MARKS. Seller owns or has the right to use its
corporate name in all jurisdictions in which the business of
Seller is conducted as of the date hereof. Seller is not
infringing on any trademark, trade name, service mark, copy-
right, patent, or license in the operation of its business,
and Seller does not know of any third party who has asserted
any claim concerning such an infringement.
.15 ERISA. Neither Seller nor any affiliated company
under common control of or with Seller within the meaning of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), maintains on the date hereof any employee
benefit plan subject to the provisions of ERISA, nor
contributes to any such plan (including any multi-employer
plan) on behalf of its employees. Seller does not have any
unfunded pension, profit sharing or deferred compensation
plans or arrangements. Seller has complied in all respects
with, and is currently in compliance with, the continuation of
benefits provisions applicable to former employees under ERISA
and similar federal and state laws and regulations.
.16 INSURANCE. Schedule 5.16 to this Agreement sets
forth all insurance policies of Seller that are currently in
effect, including in each case the type and amount of coverage
and carrier. All of the material properties and assets of
Seller which are of an insurable character are insured against
loss or damage by fire, casualty and other risks, and Seller
has general liability insurance with independent carriers, in
each case to the extent and in the manner customary for
companies engaged in a similar business or owning similar
assets.
.17 LABOR MATTERS. Except for Mark J. Graham and Albert
F. Calfo, II, Seller has no employees.
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.18 MANAGEMENT TRANSACTIONS. Other than the
Shareholders' interest in Royal, none of Seller's officers,
directors or stockholders (i) owns, directly or indirectly,
individually or collectively, any interest in a corporation,
partnership, firm or association which is a competitor,
potential competitor, customer or supplier of Seller or has an
existing contractual, business or financial relationship with
Seller, or (ii) owes any money to or is owed any money by
Seller, other than indebtedness for compensation earned and
not yet paid in the ordinary course of business.
.19 NO FINDER'S FEES. Neither Seller nor any of its
officers, directors, agents or employees have employed or
incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts
with respect to the transactions contemplated by this
Agreement, and Seller agrees to hold Buyer harmless from and
against damages or cost incurred by reason of any such
assertions.
.20 NO UNDISCLOSED LIABILITIES. Except as set forth in
Schedule 5.20, to the best of Seller's knowledge, there is no
outstanding claim, liability or obligation of any nature,
whether absolute, accrued, known or unknown, contingent or
otherwise, affecting Seller or its business, other than
obligations incurred in the ordinary course of the business
consistent with Seller's prior practices, none of which is
materially adverse individually to the financial condition,
results of operations or prospects of Seller and all of which
are not materially adverse in the aggregate to the financial
condition, results of operations or prospects of Seller.
.21 DISCLOSURE. This Agreement (including its Schedules
and Exhibits) and each other document and certificate prepared
or delivered by or on behalf of Seller and furnished or to be
furnished to Buyer in connection herewith, as of their
respective dates, did not, and as of the date hereof, do not
(i) contain any untrue statement of a material fact, or
(ii) omit to state a material fact necessary in order to make
the statements contained herein and therein not misleading.
Except as disclosed in this Agreement (including its Schedules
and Exhibits) and such other documents and certificates, there
is no fact known to Seller (other than matters relating to
economic conditions generally) which is materially adverse to
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the financial condition, results of operations or prospects of
Seller.
6. REPRESENTATIONS AND WARRANTIES OF BUYER. As an
inducement for Seller and Shareholders to enter into and
consummate the transactions contemplated by this Agreement,
Buyer represents and warrants to Seller and each of the
Shareholders as follows:
.1 EXISTENCE AND RIGHTS; COMPLIANCE WITH LAWS.
.1 EXISTENCE AND RIGHTS. Buyer is a corporation
duly organized and validly existing in good standing under the
laws of Delaware without limit as to the duration of its
existence. Buyer (i) has the corporate power and adequate
authority, rights and franchises to own its properties and to
carry on its business as now conducted and to make and carry
out this Agreement, and (ii) is duly qualified and in good
standing in each jurisdiction in which its owned or leased
properties or the character of its business makes such
qualification necessary, or, if not so qualified, the failure
to so qualify will not have a material adverse effect upon the
consolidated financial condition of Buyer.
.2 COMPLIANCE WITH LAWS. Buyer's business has
been and is being conducted in all material respects in
accordance with all applicable federal, state and local laws
and regulations and rules and regulations of all applicable
private third party insurers and reimbursers of health care
costs and expenses, including, without limitation, such laws,
regulations and rules as relate to the practice of medicine
and the provision of medical diagnostic imaging services and
otherwise.
.2 AGREEMENT AUTHORIZED. The execution, delivery and
performance of this Agreement by Buyer has been duly and
validly authorized by all necessary corporate action on the
part of Buyer and do not require notice to, or the consent or
approval of, any governmental body or other regulatory
authority. This Agreement is a legal, valid and biding
obligation of Buyer enforceable against Buyer in accordance
with its terms.
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.3 NO CONFLICT. The execution, delivery and
performance of this Agreement will not (i) except as will be
cured, waived or consented to prior to the Closing, breach or
constitute grounds for the occurrence or declaration of a
default under any agreement, indenture, undertaking or other
instrument to Buyer is a party or by which it or any of its
properties may be bound of affected, except any such breach or
default which would not have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated
by this Agreement; (ii) violate any provision of law or any
regulation or any order, judgment or decree of any court of
other agency of government, the violation of which could have
a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement; or
(iii) violate any provision of the Certificate of
Incorporation or Bylaws of Buyer.
.4 LITIGATION. There is no litigation, investigation,
arbitration or other proceedings (formal or informal) pending
or, to the best knowledge of Buyer, threatened against or
affecting it or its properties; nor does Buyer know of any
reasonable basis for any litigation, investigation,
arbitration or other proceedings (formal or informal), in the
case of any matter referred to in this Section 6.4 the results
of which could have a material adverse effect on its financial
condition, properties, business or results of operations.
Parent is not in default with respect to any order, writ,
injunction, decree or demand of any court or other
governmental or regulatory authority.
.5 NO FINDER'S FEES. None of Buyer nor any of its
officers, directors, agents or employees have employed or
incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, commissions or other amounts
with respect to the transactions contemplated by this
Agreement, and Buyer agree to hold Seller and the Shareholders
harmless from and against damages or cost incurred by reason
of any such assertions.
7. ADDITIONAL AGREEMENTS.
.1 CONDUCT OF THE BUSINESS BY SELLER PENDING
CLOSING. Seller covenants and agrees that, prior to the
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Closing Date, unless Buyer shall otherwise agree in writing
and except as contemplated by this Agreement:
(i) the business of Seller shall be conducted
only in the ordinary and usual course and consistent with past
practices, Seller shall not enter into any agreement or
transaction other than in the ordinary and usual course of
business, and Seller shall not purchase, lease or sell (or
enter into any agreement to purchase, lease or sell) any
material properties or assets other than in the ordinary and
usual course of business; PROVIDED, HOWEVER, that Seller shall
not enter into any agreement or transaction for the
acquisition (by purchase, lease, rental or otherwise) of a
tractor, whether or not such agreement or transaction is in
the ordinary course of business. In particular, but without
limitation of the foregoing, Seller shall not (a) incur or
assume any indebtedness for money borrowed, or (b) agree to
any amendment, adjustment or modification of or to any Assumed
Contract;
(ii) Seller shall not (a) amend its Articles of
Incorporation or Bylaws, (b) change the number of authorized
or outstanding shares of its capital stock or effect any
reclassification thereof, or (c) declare, set aside or pay any
dividend or other distribution or payment in cash, stock or
property in respect of any of its shares of capital stock;
(iii) Seller shall not (a) issue, grant, sell or
pledge any shares of its capital stock, equity securities or
rights of any kind or rights to acquire any such shares,
securities or rights of Seller, (b) acquire, directly or
indirectly, by redemption or otherwise, any shares of the
capital stock or other securities of Seller, or (c) enter into
or modify any contract, agreement, commitment or arrangement
with respect to any of the foregoing;
(iv) Seller shall use its best efforts to
preserve intact the business organization of Seller and to
preserve the goodwill of those having business relationships
with it;
(v) Seller shall conduct its relations with
employees, including termination and hiring practices, and
their employee benefit plans only in the ordinary and usual
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course and consistent with the past practices and policies of
Seller, and shall not increase or pay any employee salaries or
compensation in any manner; in particular, but without
limitation of the foregoing, the salary of each of Mark J.
Graham and Albert F. Calfo, II shall continue through the
Closing at $1,000 per month;
(vi) Seller shall not assume, guarantee, endorse
or otherwise become responsible for the obligations of any
other individual, firm or corporation or make any loans or
advances to any individual, firm or corporation;
(vii) Seller shall not make any investment of a
capital nature either by purchase of stock or securities,
contributions to capital, property transfers or otherwise, or
by the purchase of any property or assets of any individual,
firm or corporation; and
(viii) Seller shall not enter into an agreement or
otherwise agree to do any of the things described in any of
clauses (i) through (vii).
.2 PUBLIC ANNOUNCEMENT. Buyer and Seller will
consult with each other and obtain the other's consent before
issuing any press release or otherwise making any public
statements with respect to this Agreement or the other
transactions contemplated hereby. Prior to such consultation
and obtaining such consent, no party hereto shall issue any
such press release or make any such public statement except as
may otherwise be required by law or governmental process (in
which case the party required to make disclosure shall
nonetheless reasonably attempt to obtain approval of the other
party to the proposed disclosure).
.3 ACCESS. Seller shall afford Buyer and its
attorneys, accountants and other agents and representatives
(collectively, "Representatives") access during normal
business hours to all of the assets, properties, books and
records of Seller and such additional information concerning
the business and properties of Seller as Buyer or its
Representatives may request. Buyer will, and will cause its
Representatives to, hold in confidence all confidential
information, and will not use any such confidential
information except in connection with the transactions
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contemplated hereby, until such time as (a) such information
is otherwise publicly available, (b) they are advised by
counsel that any such information is required by law or
governmental process to be disclosed or (c) such information
becomes known to any of them through a third party that is not
known to them to be under a duty of confidentiality to Seller.
In the event of the termination of this Agreement for any
reason, Buyer will, and will cause its Representatives to,
deliver to Seller all documents, work papers and other
materials obtained by them or on their behalf as a result of
this Agreement or in connection herewith, whether so obtained
before or after the execution hereof.
8. BULK TRANSFER. Seller and Buyer waive compliance
with the bulk transfer provisions of the Uniform Commercial
Code, if applicable, and Seller shall indemnify and hold Buyer
harmless from any claims of Seller's creditors that result
from such waiver (except to the extent that any such claim
constitutes an Assumed Liability hereunder).
9. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations
of Buyer hereunder are subject, at its election, to the
satisfaction at or prior to the Closing Date of the following
conditions:
.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE.
Each of the representations and warranties of Seller and the
Shareholders contained in this Agreement shall be true and
correct in all material respects as of the date hereof and
(having been deemed to have been made again at and as of the
Closing) shall be true and correct in all material respects as
of the Closing; PROVIDED, HOWEVER, that if any such
representation or warranty is already qualified by
materiality, for purposes of determining whether this
condition has been satisfied, such representation or warranty
as so qualified must be true and correct in all respects.
Each obligation of Seller and the Shareholders under this
Agreement required to be performed by it at or prior to the
Closing shall have been duly performed and complied with in
all material respects as of the Closing. At the Closing,
Buyer shall have received a certificate, dated the Closing
Date and duly executed by the chief executive officer and the
chief financial officer of Seller, to the effect that the
conditions set forth in this Section 9.1 have been satisfied;
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.2 THIRD PARTY CONSENTS. All notices to, and
declarations, filings and registrations with, and consents,
authorizations, approvals and waivers from, governmental and
regulatory bodies required to consummate the transactions
contemplated hereby, if any, and all material third party
consents or waivers necessary or advisable in connection with
the transactions contemplated hereby, if any, shall have been
made or obtained. In particular, but without limitation of
the foregoing, Seller shall have secured and delivered to
Buyer the written consent or waiver (whether or not such
consent or waiver is listed as being required on Schedule 5.6
hereto) of each provider of equipment or other financing that
is an affiliate or related party of Seller or its shareholders
("Related Party Lenders"), such that no "due on sale", change
of control or similar or other provision shall be applicable
resulting in or providing the lender the right to cause the
repayment of the financing. Notwithstanding the first
sentence of this clause (ii), with respect to any consent or
waiver listed on Schedule 5.6 as being required from a
provider of equipment financing under a "due on sale", change
of control or similar provision, if such provider of equipment
financing is not a Related Party Lender, the obtaining of the
indicated consent or waiver shall not be a condition to
Closing hereunder provided that Seller has nonetheless used
its reasonable best efforts to obtain the consent or waiver
prior to Closing;
.3 CLOSING OF MERGER AGREEMENT. The Closing
contemplated by the Merger Agreement shall have occurred;
.4 NO MATERIAL ADVERSE CHANGE. There shall not
have been a material adverse change from the date hereof in
the financial condition, properties, business, results of
operations or prospects of Seller;
.5 OTHER DOCUMENTS. Buyer shall have been
furnished by Seller with such other certificates of Seller's
officers and others as Buyer may have reasonably requested to
evidence compliance with the conditions set forth in this
Section 9;
.6 INSTRUMENTS OF CONVEYANCE; LIEN RELEASES.
Seller shall have executed and delivered, or caused to be
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executed and delivered, to Buyer the instruments of conveyance
contemplated by Section 1.1, and executed copies of all
consents of third parties which may be required for any
assignment or transfer contemplated hereby, except as
otherwise provided in Section 9.2 above;
.7 SATISFACTION OF RMG RECEIVABLE. Royal Medical
Group, Inc. ("RMG") shall have paid in full to Royal all
amounts owed by RMG to Royal; provided, however, $104,107 of
such amounts owed may be satisfied by the assignment to Royal
by RMG of the $104,107 amount which Seller owes to RMG as of
the date hereof (the "Trucking Payable") and the execution by
RMG of a release of Buyer and Seller with respect to the
Trucking Payable in form and substance satisfactory to Buyer;
and
.8 DUE DILIGENCE. Buyer shall have completed its
"due diligence" review of Seller and the Business and shall be
reasonably satisfied with the results thereof.
10. CONDITIONS TO OBLIGATIONS OF SELLER. The
obligations of Seller and the Shareholders hereunder are
subject, at their election, to the satisfaction at or prior to
the Closing Date of the following conditions:
.1 REPRESENTATIONS AND WARRANTIES; COMPLIANCE.
Each of the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material
respects as of the date hereof and (having been deemed to have
been made again at and as of the Closing) shall be true and
correct in all material respects as of the Closing; PROVIDED,
HOWEVER, that if any such representation or warranty is
already qualified by materiality, for purposes of determining
whether this condition has been satisfied, such representation
or warranty as so qualified must be true and correct in all
respects. Each obligation of Buyer under this Agreement
required to be performed by Buyer at or prior to the Closing
shall have been duly performed and complied with in all
material respects as of the Closing. At the Closing, Seller
shall have received a certificate, dated the Closing Date and
duly executed by the chief executive officer and the chief
financial officer of Buyer, to the effect that the conditions
set forth in this Section 10.1 have been satisfied;
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.2 THIRD PARTY CONSENTS. All notices to, and
declarations, filings and registrations with, and consents,
authorizations, approvals and waivers from, governmental and
regulatory bodies required to consummate the transactions
contemplated hereby, if any, and all material third party
consents or waivers necessary or advisable in connection with
the transactions contemplated hereby, if any, shall have been
made or obtained;
.3 CLOSING OF MERGER AGREEMENT. The Closing
contemplated by the Merger Agreement shall have occurred;
.4 PAYMENT TO SELLER. Buyer shall have delivered
the amount of the Purchase Price to be paid at Closing to
Seller; and
.5 OTHER DOCUMENTS. Seller shall have been
furnished by Buyer with such other certificates of Buyer's
officers and others as Seller may have reasonably requested to
evidence compliance with the conditions set forth in this
Section 10.
11. COVENANTS AND AGREEMENTS OF THE PARTIES. The
parties mutually covenant and agree as follows:
.1 CONDUCT AND PRESERVATION OF BUSINESS. Until
the Closing, Seller shall conduct the Business only in the
ordinary and usual course of business consistent with past
practices and, with respect to the Business, shall use its
best efforts to (i) preserve its business organization intact,
(ii) keep available the services of its employees,
(iii) maintain its current customers and suppliers, and
(iv) preserve its goodwill.
.2 LITIGATION. Until the Closing, Seller shall
promptly notify Buyer of any action, suit, proceeding, claim
or investigation which is threatened or commenced against
Seller, or against any officer, employee, agent, consultant or
director of Seller, which may relate to or affect the
Purchased Assets, the Business, or this Agreement or the
transactions contemplated hereby.
.3 EXPENSES OF SALE. Seller and the Shareholders,
on the one hand, and Buyer, on the other hand, shall each bear
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their own direct and indirect expenses incurred in connection
with the negotiation and preparation of this Agreement and the
consummation and performance of the transactions contemplated
hereby.
.4 ACTIONS WITH RESPECT TO CLOSING. The parties
agree to use their reasonable best efforts (not involving
unreasonable expense) to bring about the satisfaction of the
conditions precedent to the Closing and to cause the covenants
and agreements contained in this Section 11 to be satisfied
and performed hereunder by each of them.
12. INDEMNITY.
.1 SELLER'S INDEMNITY. Buyer shall be
indemnified, held harmless and reimbursed by each of Seller
and the Shareholders, jointly and severally, for any and all
losses, liabilities, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) (hereinafter
"Losses"), actually suffered or incurred by Buyer, or any
parent, subsidiary or affiliate thereof or any assignee or
successor thereof, and each officer and director of any of the
foregoing, which is incurred as a result of (i) any breach of
any representation, warranty or agreement made by Seller in
this Agreement (including all Schedules and Exhibits hereto
and all instruments and undertakings delivered or made in
connection herewith), (ii) any Unassumed Liability, or (iii)
except for Assumed Liabilities, the operation of the Business
prior to the Closing.
.2 BUYER'S INDEMNITY. Seller and each of the
Shareholders shall be indemnified, held harmless and
reimbursed by Buyer for any and all Losses actually suffered
or incurred by Seller or any assignee or successor thereof,
which is incurred as a result of (i) any breach of any
representation, warranty or agreement made by Buyer in this
Agreement (including all Schedules and Exhibits hereto and all
instruments and undertakings delivered or made in connection
herewith), or (ii) any Assumed Liability.
.3 RECOVERIES. The amount of any Loss suffered or
incurred by any person entitled to indemnification hereunder
(an "Indemnified Person") shall be reduced by the amount of
any insurance proceeds or other cash receipts paid to the
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Indemnified Person or any affiliate thereof as an offset
against such Loss (and no right of subrogation shall accrue to
any insurer hereunder), including any indemnification received
by the Indemnified Person or such affiliate from an unrelated
party with respect to such Loss.
.4 CLAIMS. An Indemnified Person shall promptly
give the indemnifying party (an "Indemnifying Person") written
notice of any matter which such Indemnified Person has
determined has given rise to a right of indemnification under
this Agreement, stating the amount of the Loss, if known, and
method of computation thereof, all with reasonable
particularity (subject to the last sentence of this
paragraph). The obligations and liabilities of any party
under this Section 12 with respect to Losses arising from
claims, assertions, events or proceedings of any third party
(including, without limitation, claims by any assignee or
successor of the Indemnified Person or any governmental
agency), which are subject to the indemnification provided for
in this Section 12 ("Third Party Claims") shall be governed by
and be subject to the following additional terms and
conditions: if any Indemnified Person shall receive written
notice of any Third Party Claim, the Indemnified Person shall
give the Indemnifying Person prompt written notice of such
Third Party Claim (subject to the last sentence of this
paragraph) and shall permit the Indemnifying Person, at its
option, to participate in the defense of such Third Party
Claim by counsel of its own choosing and at its expense.
Furthermore, if the Indemnifying Person acknowledges in
writing its obligation to indemnify the Indemnified Person
hereunder against any Loss (without limitation) that may
result from such Third Party Claim, then the Indemnifying
Person shall be entitled, at its option, to assume and control
the defense against such Third Party Claim at its expense and
through counsel of its choice if it gives prompt written
notice of its intention to do so to the Indemnified Person
unless, in the reasonable opinion of counsel for the
Indemnified Person, there is a conflict or a potential
conflict of interests between the Indemnified Person and the
Indemnifying Person in such action, suit or proceeding, in
which event the Indemnified Person shall be entitled to direct
the defense with respect to, but only with respect to, those
issues with respect to which such conflict exists. In the
event the Indemnifying Person exercises its right to undertake
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the defense against any such Third Party Claim as provided
above, the Indemnified Person shall, and it shall cause its
affiliates to, cooperate with the Indemnifying Person in such
defense and make available to the Indemnifying Person all
pertinent records, materials and information in their
possession or under their control relating thereto as is
required by the Indemnifying Person. No such Third Party
Claim, except the settlement thereof which involves (i) the
payment of money only for which any Indemnified Person is
totally indemnified (without limitation) by the Indemnifying
Person and (ii) the unconditional release from all related
liability of the Indemnified Person, may be settled by the
Indemnifying Person without the written consent of the
Indemnified Person. Any settlement of a Third Party Claim by
an Indemnified Person without the written consent of the
Indemnifying Person shall discharge the Indemnifying Person
from all liability hereunder with respect to the subject
matter of such Third Party Claim. The foregoing
notwithstanding, the failure of any Indemnified Person to give
any notice required to be given hereunder shall not affect
such Indemnified Person's right to indemnification hereunder
except to the extent the Indemnifying Person from whom such
indemnity is sought shall have been actually and materially
prejudiced in its ability to defend the claim or action for
which such indemnification is sought by reason of such
failure.
13. TERMINATION.
.1 TERMINATION. This Agreement may be terminated
by written notice from the party or parties indicated below
under the following circumstances:
(i) ADVERSE PROCEEDINGS. By either Buyer
or Seller in the event that any court of competent
jurisdiction or other governmental body shall have issued an
order (other than a temporary restraining order or preliminary
injunction), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting any material
part of the transactions contemplated hereby, and such order,
decree, ruling or other action shall have become final and
nonappealable;
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(ii) FAILURE OF CONDITION TO BUYER
OBLIGATIONS. By Buyer, if any of the conditions in Section 9
is not satisfied by April 30, 1996 (other than as a result of
such party's breach or default hereunder) and is not waived in
writing by Buyer;
(iii) FAILURE OF CONDITION TO SELLER
OBLIGATIONS. By Seller, if any of the conditions in
Section 10 is not satisfied by April 30, 1996 (other than as a
result of such party's breach or default hereunder) and is not
waived in writing by Seller; or
(iv) MUTUAL AGREEMENT. By mutual
agreement of the Boards of Directors of Buyer and Seller.
.2 MANNER AND EFFECT OF TERMINATION. In the event
of the termination of this Agreement according to its terms,
this Agreement shall, except as provided in Section 7.3
hereof, thereafter become void and have no effect and no party
hereto shall have any liability to any other party hereto or
its stockholders or directors or officers in respect thereof.
14. MISCELLANEOUS.
.1 COOPERATION. Each of the parties hereto shall
cooperate with the others in every reasonable way in carrying
out the transactions contemplated herein, and in delivering
all documents and instruments deemed reasonably necessary or
useful by counsel for any party hereto.
.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties in this Agreement or in any
instrument or certificate delivered pursuant to this Agreement
delivered on or prior to the Closing Date shall survive the
consummation of the transactions contemplated hereby. Except
as expressly set forth in the Schedules hereto, Buyer shall
not be deemed to have knowledge of any exceptions to the
representations and warranties of Seller and Shareholders, and
Seller and Shareholders shall not be deemed to have knowledge
of any exceptions to the representations and warranties of
Buyer, and the decision by a party hereto to proceed with the
closing of the transactions contemplated herein shall not be
deemed to be a waiver of any breach of any representation or
warranty of another party hereto.
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.3 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered by messenger, transmitted by telecopy,
telex or telegram or mailed by registered or certified mail,
postage prepaid, as follows:
(a) If to Buyer:
Alliance Imaging, Inc.
3111 No. Tustin Avenue, Suite 150
Orange, California 92665
Telecopy No. (714) 921-5678
Attention: Richard N. Zehner
President
(b) If to Seller:
A&M Trucking, Inc.
245 Fort Pitt Boulevard, Fifth Floor
Pittsburgh, Pennsylvania 15222
Telecopy No. (412) 281-1767
Attention: Mark J. Graham and Albert F.
Calfo, II
The date of any such notice shall be deemed the date hand
delivered or transmitted by telecopy, telex or telegram (in
each case provided written confirmation of sending is
retained) or three (3) days after being mailed as provided
above. Any party may change its address for notice by sending
a notice to that effect as herein provided to the other
parties.
.4 AMENDMENT; ENTIRE AGREEMENT; BENEFICIARIES.
This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the
subject matter hereof, and is not intended to confer upon any
other person any rights or remedies hereunder. This Agreement
may be amended or modified in whole or in part to the extent
permitted by California law at any time, by an agreement in
writing executed in the same manner as this Agreement after
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authorization to do so by the Board of Directors of Buyer and
Seller.
.5 WAIVER. At any time prior to the Closing Date,
the parties hereto may (a) extend the time for the performance
of any of the obligations or other acts of the other parties
hereto, (b) by mutual agreement waive any inaccuracies
contained herein or in any document delivered pursuant hereto,
and (c) by mutual agreement waive compliance with any of the
agreements contained herein, or, in the case of each party,
waive compliance with any of the conditions to its obligations
contained herein. Any agreement on the part of a party hereto
and any such extension or waiver shall be valid if set forth
in an instrument in writing signed on behalf of the party
making the agreement or providing the extension or waiver.
.6 HEADINGS. The headings contained in this
Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
.7 SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the
parties hereto. The rights of Buyer hereunder may be
transferred in whole or in part to any direct or indirect
wholly-owned subsidiary of Buyer.
.8 GOVERNING LAW. This Agreement shall be
governed by and construed in accordance with the laws of the
State of California, without giving effect to the choice of
law provisions thereof.
.9 COUNTERPARTS. This Agreement may be executed
in two or more counterparts, each of which shall be an
original, but all of which together shall constitute one and
the same agreement.
.10 ATTORNEYS' FEES. Should any litigation be
commenced between the parties hereto or their representatives
concerning any provision of this Agreement or the rights and
duties of any person or entity hereunder, solely as between
the parties hereto or their successors, the party prevailing
in such proceeding will be entitled to the attorneys' fees and
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expenses of counsel and court costs incurred by reason of such
litigation.
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[Signature Page - Acquisition Agreement]
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the day and year first written above.
ALLIANCE IMAGING, INC.,
a Delaware corporation
By: ___________________________
Name: _________________________
Its: __________________________
A&M TRUCKING, INC.
a Pennsylvania corporation
By: ___________________________
Name: _________________________
Its: __________________________
________________________________
Mark J. Graham
________________________________
Albert F. Calfo, II
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SCHEDULES
1.1.1 Tractors and Related Property
2 Other Assumed Liabilities
5.5 Assumed Contracts
5.6 Third Party Consents
5.7 Seller Litigation
5.11 Title to Assets
5.12 Environmental Matters
5.16 Insurance
5.20 Undisclosed Liabilities
<PAGE>
THESE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON THEIR EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (i) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, SHALL HAVE BECOME EFFECTIVE WITH
RESPECT THERETO AND ALL APPLICABLE QUALIFICATIONS UNDER STATE SECURITIES LAWS
SHALL HAVE BEEN OBTAINED WITH RESPECT THERETO; OR (ii) EXEMPTIONS FROM SUCH
REGISTRATION AND ALL SUCH APPLICABLE QUALIFICATION REQUIREMENTS ARE AVAILABLE.
No. __ ______ Warrants
Date of Issuance:
April 15, 1996
FORM OF WARRANTS TO PURCHASE COMMON STOCK
OF ALLIANCE IMAGING, INC.
Warrant Certificate
THIS CERTIFIES THAT _____________________________ ("Original Warrant
Holder") or registered assigns is the registered owner of the number of
warrants set forth above (the "Warrants"), each of which entitles the owner
thereof to purchase, subject to the terms and conditions hereof, at any time
prior to 5:00 P.M. (Los Angeles time) on the Expiration Date (as hereinafter
defined) at the principal office of Alliance Imaging, Inc., a Delaware
corporation (the "Company"), one fully paid and non-assessable share of the
Common Stock, $.01 par value ("Common Stock"), of the Company, at a cash
purchase price which shall initially be $ 3.9375 per share (as such purchase
price may be adjusted pursuant to the terms hereof, the "Purchase Price") upon
presentation and surrender of this Warrant Certificate with the Form of
Election to Purchase duly executed and accompanied by payment of the Purchase
Price in the manner specified herein. As provided herein, the Purchase Price
and the number of shares of Common Stock which may be purchased upon the
exercise of the Warrants evidenced by this Warrant Certificate are, upon the
happening of certain events, subject to modification and adjustment. The
holder or holders of these Warrants, whether the Original Warrant Holder or
registered assigns, shall be collectively referred to herein as the "Holder."
1. FORM OF WARRANT CERTIFICATES. All certificates representing the
Warrants ("Warrant Certificates"), if any in addition to this Warrant
Certificate,
<PAGE>
which may hereinafter be issued and the forms of election to purchase shares
and of assignment that accompany such Warrant Certificates shall be
substantially in the form of this Warrant Certificate and may have such
letters, numbers or other marks of identification or designation and such
legends (including, without limitation, a legend referring to restrictions on
resale by statutory underwriters), summaries or endorsements printed thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Warrant Certificate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto. All Warrant
Certificates shall be executed on behalf of the Company by its President or a
senior or executive vice president.
2. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES.
Subject to the provisions of Section 11 hereof, this Warrant Certificate may
be transferred, split up, combined or exchanged for another Warrant
Certificate or Warrant Certificates, entitling the Holder to purchase a like
number of shares of Common Stock as the Warrant Certificate or Warrant
Certificates surrendered then entitled him to purchase; provided, however,
that (i) any Warrant Certificate with which this Warrant Certificate is
combined shall have the same terms as this Warrant Certificate, and (ii)
notwithstanding anything in this Warrant Certificate to the contrary, the
Holder may transfer all or a portion of its right, title and interest in and
to the Warrants to another person or entity. If the Holder desires to
transfer, split up, combine or exchange any Warrant Certificate, he or she
shall make such request in writing delivered to the Company, and shall
surrender the Warrant Certificate or Warrant Certificates to be transferred,
split up, combined or exchanged at the principal office of the Company.
Thereupon, the Company shall have such new Warrant Certificate or Warrant
Certificates, as the case may be, signed as provided in Section 1 and
delivered to the person entitled thereto, as so requested. The Company may
require payment by the Holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Warrant Certificates.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory
to it (including with respect to the amount of such indemnity or security),
and reimbursement by the Holder to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant
Certificate if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor to the Holder in lieu of the Warrant Certificate so
lost, stolen, destroyed or mutilated. Notwithstanding anything in the
foregoing to the contrary, so long as the Holder is the Original Warrant
Holder, the Company will not require security (other than its own
indemnification referred to above) in connection with any such issuance of
replacement Warrant Certificates.
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3. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES. Subsequent to the issuance
of this Warrant Certificate, additional Warrant Certificates shall be issued,
as necessary, in connection with (a) any transfer, combination, split up or
exchange of Warrants pursuant to Section 2 hereof, (b) the replacement of
mutilated, destroyed, lost or stolen Warrant Certificates pursuant to Section
2 hereof, (c) the partial exercise of any Warrant Certificate to evidence the
unexercised portion of such Warrant Certificate, pursuant to Section 4
hereof, and (d) the exercise of the Company's election set forth in Section
8(e) hereof.
4. EXERCISE OF WARRANTS; PURCHASE PRICE.
(a) Subject to the final sentence of this paragraph (a), the Holder of
this Warrant Certificate may exercise the Warrants evidenced hereby in whole or
in part at any time upon surrender of the Warrant Certificate with the form of
election to purchase attached hereto duly executed and accompanied by payment
of the Purchase Price for each share of Common Stock as to which the Warrants
are exercised, at or prior to 5:00 p.m. (Los Angeles time) on the Expiration
Date. The "Expiration Date" shall be the date that is ten (10) years from the
date of the issuance of these Warrants. The Purchase Price shall initially be
$3.9375 but shall be subject to adjustment as provided in Section 8 hereof, and
shall be payable only in the consideration specified in paragraph (b)
immediately below.
(b) Upon receipt of this Warrant Certificate, with the form of election
to purchase duly executed, accompanied by payment, in cash, or by certified
check or bank draft payable to the order of the Company, or by surrender of a
debt instrument of the Company held by the Holder (valued at the outstanding
principal amount thereof plus, at the option of the Holder, any accrued and
unpaid interest thereon) or a preferred stock instrument of the Company held by
the Holder (valued at the liquidation preference thereof, including, without
duplication, at the option of the Holder, any accumulated and unpaid dividends
thereon), of the Purchase Price for the shares to be purchased and an amount
equal to any applicable transfer tax, if any, the Company shall thereupon
promptly deliver to or upon the order of the Holder of a Warrant Certificate
(i) certificates for the number of whole shares of Common Stock to be
purchased, registered in such name or names as may be designated by the Holder
and (ii) when appropriate, the amount of cash to be paid in lieu of issuance of
fractional shares.
(c) In case the Holder of this Warrant Certificate shall exercise less
than all the Warrants evidenced hereby, a new Warrant Certificate evidencing
Warrants equivalent to the Warrants remaining unexercised shall be issued by
the Company to the Holder or to his duly authorized assigns, subject to the
provisions of Section 11 hereof. In addition, if the Holder exercises Warrants
using debt or preferred stock instruments of the Company as hereinabove
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provided, the Company shall return balance certificates representing such
instruments to the Holder unless the full amount of such instruments is
tendered as payment of the Purchase Price.
(d) All shares of Common Stock issued upon the exercise of Warrants
shall be deemed to be Registrable Securities within the meaning of that
certain Registration Rights Agreement dated as of December 31, 1994 among the
Company and the Noteholders and Debentureholders named therein, with the same
registration and other rights afforded to other Registrable Securities
covered thereby.
5. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATE. Upon surrender
of this Warrant Certificate for the purpose of exercise (in whole or in
part), exchange, substitution or transfer, this Warrant Certificate shall be
cancelled, and no Warrant Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Warrant Certificate.
If the Company purchases or acquires Warrants, the Company shall cancel and
retire the Warrant Certificates evidencing such Warrants.
6. RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock, the number of shares
of Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Common Stock delivered upon the
exercise of Warrants shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price and compliance with all
other provisions of this Warrant Certificate), be duly and validly authorized
and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of Warrant Certificates or of
any shares of Common Stock upon the exercise of Warrants. The Company shall
not, however, be required (i) to pay any tax or taxes based upon the income
of the Holder or any tax or taxes which may be payable in respect of any
transfer involved in the transfer or delivery of Warrant Certificates or the
issuance or delivery of certificates for Common Stock in a name other than
that of the Holder or (ii) to issue or deliver any certificates for shares of
Common Stock upon the exercise of any Warrants until any such tax shall have
been paid (any such tax being payable by the Holder of the Warrant
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
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7. COMMON STOCK RECORD DATE. Each person in whose name any certificate
for shares of Common Stock is issued upon the exercise of the Warrants shall
for all purposes be deemed to have become the holder of record of the Common
Stock represented thereby, and such certificate shall be dated on the
exercise date, which is the date upon which the Warrant Certificate
evidencing such Warrants was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that
if such exercise date is a date upon which the Common Stock transfer books of
the Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding business day on which the Common Stock transfer books of the
Company are open.
The Holder, as such, shall not be entitled to vote or receive dividends
or be deemed for any purpose the holder of Common Stock or of any other
securities of the Company which may at any time be issuable on the exercise
of the Warrants, nor shall anything contained in this Warrant Certificate be
construed to confer upon the Holder, as such, any of the rights of a
shareholder of the Company or any right to vote upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise, until the Warrants shall have
been exercised as provided in this Warrant Certificate.
8. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
WARRANTS. The Purchase Price and the number of shares covered by this Warrant
Certificate are subject to adjustment from time to time upon the occurrence
of the events enumerated in this Section 8.
(a) In case the Company shall at any time after the date of the
issuance of this Warrant Certificate (i) declare a dividend on the Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock into a greater number of shares, (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger), the Purchase
Price in effect at the time of the record date for such dividend, or such
issuance, or of the effective date of such subdivision, combination,
distribution or reclassification, and the number and kind of shares of
capital stock issuable on such date shall be proportionately adjusted so that
upon the exercise after such time of any Warrant, the Holder shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Warrant had been exercised immediately prior to such date and
at a time when the Common Stock transfer books of the Company were open, the
Holder would have owned
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upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, distribution or reclassification, subject to the
provisions of Section 8(c) hereof. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) In case after the date hereof the Company shall (except as
hereinafter provided) issue any Additional Securities for a consideration
less than (a) the then effective per share Purchase Price or (b) the Fair
Market Value per share, then the per share Purchase Price upon each such
issuance shall be adjusted to that price determined by multiplying the per
share Purchase Price in effect immediately prior to such event by a fraction:
(A) if issued for a consideration per share less than the then
effective per share Purchase Price:
(1) the numerator of which shall be the number of Outstanding
Shares (as hereinafter defined) immediately prior to the issuance of such
Additional Securities PLUS the number of shares of Common Stock which the
aggregate consideration for the total number of such Additional Securities so
issued would purchase at the then effective per share Purchase Price, and
(2) the denominator of which shall be the number of
Outstanding Shares immediately after the issuance of such Additional
Securities.
(B) if issued for a consideration per share less than the Fair
Market Value per share of Common Stock:
(1) the numerator of which shall be the number of Outstanding
Shares immediately prior to the issuance of such Additional Securities plus
the number of shares of Common Stock which the aggregate consideration for
the total number of such Additional Securities so issued would purchase at
the Fair Market Value per share; and
(2) the denominator of which shall be the number of
Outstanding Shares immediately after the issuance of such Additional
Securities.
If such additional Securities shall be issued at a price per share less
than both the then effective per share Purchase Price and the Fair Market
Value per share of Common Stock, the per share Purchase Price shall be
adjusted in the manner which will result in a greatest reduction of the per
share Purchase Price. The provisions of this Section 8(b) shall not apply to
any Additional Securities which are distributed to holders of Common Stock as
a stock dividend or subdivision, for which an adjustment is provided for
under Section 8(a). Such
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<PAGE>
adjustment shall be made successively whenever Additional Securities are
issued, subject to Section 8(c) hereof.
(i) "Additional Securities" shall mean (A) shares of Common Stock
and (B) options, warrants or rights to purchase Common Stock or securities
convertible into or exchangeable for Common Stock ("Derivative Securities");
provided, however, that Additional Securities shall not include (A) shares of
Common Stock issued upon exercise of any warrants, options or rights issued
or granted on or prior to April 15, 1996 and any warrant certificates or
similar instruments issued upon transfer, split up, combination or exchange
of any of such warrants, options or rights, (B) Derivative Securities granted
by the Company prior to the issuance date of these Warrants, (C) Derivative
Securities granted to any investor in debt securities of the Company in order
to induce such investor to purchase such debt securities, provided that such
Derivative Securities represent the right to acquire not more than five
percent (5%) of the Outstanding Shares in the aggregate, and the Common Stock
issuable upon the exercise or conversion thereof or exchange therefor, (D)
options to acquire Common Stock issued pursuant to a compensatory plan duly
approved by the Board of Directors of the Company, and (E) shares of Common
Stock issued in a secondary offering registered under the Securities Act of
1933, as amended, provided that the public offering price in such offering is
not less than 95% of the Fair Market Value of the Common Stock.
(ii) "Consideration" shall mean (A) all consideration received by
the Company upon the issuance or sale of Additional Securities and (B) the
minimum amounts of consideration payable to the Company upon the exercise,
conversion or exchange of any Derivative Securities that are Additional
Securities. For the purpose of calculating Consideration, the consideration
received by the Company for any issue or sale of securities shall (A) to the
extent it consists of cash, be computed at the net amount of cash received by
the Company after any deduction of any expenses payable by the Company and
any underwriting or similar commissions, compensation, or concessions paid or
allowed by the Company in connection with such issue or sale, (B) to the
extent it consists of property other than cash, be computed at the fair value
of that property as determined in good faith by the Board of Directors of the
Company, and (C) if Additional Securities are issued or sold together with
other stock or securities or other assets of the Company for a consideration
which covers both, be computed as the portion of the consideration so
received that may be reasonably determined in good faith by the Board of
Directors to be allocable to such Additional Securities.
(iii) "Outstanding Shares" shall, at any given time, mean (A)
all shares of Common Stock outstanding at such time and (B) all shares of
Common Stock that could be acquired through the exercise, conversion or
exchange of Derivative Securities that are outstanding at such time.
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<PAGE>
(iv) "Fair Market Value" means, as of any date of determination,
the closing sale price of the Common Stock on the principal national
securities exchange on which the Common Stock is then traded on the last
preceding trading day on which the Common Stock was traded (the "Last Trading
Day"), or, if the Common Stock is not traded on a national securities
exchange, the closing sale price of the Common Stock on the National Market
System of NASDAQ on the Last Trading Day, or, if the Common Stock is not
traded on a national securities exchange or the National Market System, the
average of the last bid and asked prices of the Common Stock on the Small Cap
market of the NASDAQ on the Last Trading Day, or, if the Common Stock is not
then traded on any of the foregoing markets, the value of the Common Stock
determined by the Board of Directors of the Company in good faith.
Notwithstanding the foregoing, in the event that Additional Securities are
issued pursuant to a private placement, Fair Market Value shall mean the
average of the amounts described above on each of the 10 trading days
immediately preceding the determination date.
(v) No adjustment of the Purchase Price under this Section 8(b)
shall be made as a result of the actual issuance of Common Stock upon the
exercise, conversion or exchange of any Derivative Securities, other than the
adjustment made upon the issuance or sale of any such Derivative Securities.
If an adjustment has been made upon the issuance or sale of Derivative
Securities and the rights to acquire Common Stock under such Derivative
Securities shall expire without having been exercised, the Purchase Price
adjusted upon the issuance of such Derivative Securities shall be readjusted
to the Purchase Price which would have been in effect had an adjustment been
made on the basis that the only Additional Securities so issued were the
shares of Common Stock, if any, actually issued or sold on the exercise,
conversion or exchange of such Derivative Securities, and such shares of
Common Stock, if any, were issued or sold for the consideration actually
received by the Company for the granting of all such Derivative Securities,
plus the consideration, if any, actually received by the Company upon the
exercise or conversion or exchange of such Derivative Securities.
(c) Notwithstanding anything in this Section 8 to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment,
together with any amount being carried forward as hereinafter provided, would
require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 8(c) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 8 shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case
may be. Notwithstanding the first sentence of this Section 8(c), any
adjustment required by this Section 8 shall be made no later than the earlier
of one year from the date of the transaction which mandates such adjustment
or the expiration of the right to exercise any Warrant.
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<PAGE>
(d) In the event that at any time, as a result of an adjustment made
pursuant to Section 8(a) hereof, the Holder shall become entitled to receive
any shares or units of capital stock of the Company other than shares of
Common Stock upon the exercise or conversion of Warrants, thereafter the
number of such other shares or units so receivable upon exercise of the
Warrants shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Common Stock contained in Section 8(a) hereof, and the provisions of this
Warrant Certificate with respect to the shares of Common Stock shall apply on
like terms to any such other shares or units.
(e) Irrespective of any adjustments in the Purchase Price or the number
of shares of Common Stock issuable upon the exercise of Warrants, this
Warrant Certificate or Warrant Certificates thereafter issued may continue to
express the Purchase Price and the number of shares stated in this Warrant
Certificate and the Purchase Price and such number of shares specified
thereon shall be deemed to have been so adjusted.
(f) Upon each adjustment of the Purchase Price as a result of the
calculations made in Section 8(b) hereof, each Warrant outstanding
immediately prior to the making of such adjustment shall thereafter be deemed
to evidence the right to purchase, at the adjusted Purchase Price, that
number of shares (calculated to the nearest one-hundredth) obtained by (i)
multiplying the number of shares covered by a Warrant immediately prior to
the adjustment of the number of shares by the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(g) The Company may elect to adjust the number of Warrants, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of the Warrants as provided in Section 8(a)
hereof, such that the total number of shares of Common Stock issuable upon
exer cise of the Warrants is the same as if such adjustment had been made but
such that each of the Warrants outstanding after such adjustment of the
number of Warrants is exercisable for one share of Common Stock. The Company
shall notify the Holder in writing of such election. Upon each adjustment of
the number of Warrants pursuant to this subsection (g), the Company shall as
promptly as practicable cause to be distributed to the Holder Warrant
Certificates evidencing, subject to Section 11, the additional or substitute
Warrants to which the Holder shall be entitled as a result of such
adjustment; or, at the option of the Company, shall cause to be distributed
to the Holder in substitution and replacement for the Warrant Certificates
held by the Holder prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Warrant Certificates evidencing all
the Warrants
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<PAGE>
to which the Holder shall be entitled after such adjustment.
Warrant Certificates so to be distributed shall be issued in the manner
provided for herein (and shall bear the adjusted Purchase Price, if
applicable) and shall be registered in the name of the Holder.
(h) In any case in which this Section 8 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the Holder of any Warrant exercised after such record date the
shares of Common Stock and other capital stock of the Company, if any, issuable
upon such exercise over and above the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
9. CERTIFICATION OF ADJUSTED PURCHASE PRICE AND NUMBER OF SHARES
ISSUABLE. Whenever the Purchase Price and the number of shares of Common
Stock issuable upon the exercise of each Warrant are adjusted as provided in
Section 8 above, the Company shall provide notice to the Holder in writing
setting forth the Purchase Price as so adjusted, the number of shares of
Common Stock issuable upon the exercise of each Warrant as so adjusted, and a
brief statement of the facts accounting for such adjustment to the Holder.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any action referred to in Section 8 hereof.
10. CONSOLIDATION, MERGER OR SALE OF ASSETS. If (i) the Company shall
at any time consolidate with or merge with or into another corporation and
(ii) the Common Stock is exchanged, cancelled or reclassified in connection
with such transaction, the Holder will thereafter receive, upon the exercise
hereof in accordance with the terms of this Agreement, the securities,
property or cash to which the holder of the number of shares of Common Stock
deliverable upon the exercise of the Warrants immediately prior to such
transaction would have been entitled upon such consolidation or merger, and
the Company shall take such steps in connection with such consolidation or
merger as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
securities or property thereafter deliverable upon the exercise of the
Warrants. A sale or lease of all or substantially all the assets of the
Company for a consideration (apart from the assumption of obligations)
consisting primarily of securities shall be deemed a consolidation or merger
for the purposes of clause (i) of the first sentence of this Section 10. The
provisions of this Section 10 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
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<PAGE>
11. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) Notwithstanding an adjustment pursuant to Section 8(e) hereof in
the number of Warrants, the Company shall not be required to issue Warrant
Certificates which evidence fractional Warrants. If the Company so elects,
in lieu of such fractional Warrants, there shall be paid to the Holder to
whom such fractional Warrants would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Warrant (as
determined in good faith by the Board of Directors of the Company).
(b) Notwithstanding an adjustment pursuant to Section 8(a) hereof in
the number of shares covered by a Warrant, the Company shall not be required
to issue fractions of shares upon exercise of the Warrants or to distribute
certificates which evidence fractional shares. In lieu of fractional shares,
at the Company's election, there shall be paid to the Holder at the time
Warrants are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a share of Common Stock (as
determined in good faith by the Board of Directors of the Company).
(c) The Holder, by the acceptance of the Warrant, expressly waives his
right to receive any fractional Warrant or any fractional share upon exercise
of a Warrant.
12. RIGHT OF ACTION. All rights of action in respect of this Warrant
Certificate are vested in the Holder.
13. AGREEMENT OF WARRANT CERTIFICATE HOLDERS. The Holder of this
Warrant Certificate by accepting the same consents and agrees with the
Company and with every other holder of a Warrant Certificate that:
(a) the Warrant Certificates are transferable only on the registry
books of the Company if surrendered at the principal office of the Company;
and
(b) the Company may deem and treat the person in whose name each
Warrant Certificate is registered as the absolute owner thereof and of the
Warrants evidenced thereby (notwithstanding any notations of ownership or
writing on the Warrant Certificates made by anyone other than the Company)
for all purposes whatsoever, and the Company shall not be affected by any
notice to the contrary.
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<PAGE>
14. NOTICES. Notices or demands authorized by this Warrant Certificate to
be given or made by the Holder to the Company shall be sufficiently given or
made if made in writing and shall be delivered by personal service or telegram,
telecopier or registered or certified mail (if such service is not available,
then by first class mail), postage prepaid, to such address as may be
designated to the Holders from time to time by the Company and which shall
initially be:
Alliance Imaging, Inc.
3111 No. Tustin Avenue, Suite 150
Orange, California 92665
Attention: Chief Financial Officer
Telecopier No. (714) 921-5678
Notices or demands authorized by this Warrant Certificate to be given or made
by the Company to the Holder shall be sufficiently given or made if made in
writing and shall be delivered by personal service or telegram, telecopier or
registered or certified mail (if such service is not available, then by
first-class mail), postage prepaid, addressed to the Holder at the address of
the Holder as shown on the registry books of the Company. Any notice
hereunder sent by registered or certified mail shall be deemed to have been
given three (3) days after the date on which it is mailed. All other notices
shall be deemed given when received. No objection may be made to the manner
of delivery of any notice actually received in writing by an authorized agent
of a party.
15. SUPPLEMENTS AND AMENDMENTS. This Warrant Certificate, together
with other agreements being executed and delivered simultaneously herewith,
constitutes the Company's and the Holder's entire agreement with respect to
the subject matter hereof and supersedes all agreements, representations,
warranties, statements, promises and understandings, whether oral or written,
with respect to the subject matter hereof. This Warrant Certificate may be
amended, altered or modified only by a writing signed by the Company and the
Holder.
16. SUCCESSORS AND ASSIGNS. All the covenants and provisions of this
Warrant Certificate by or for the benefit of the Company or the Holder shall
bind and inure to the benefit of their respective successors and assigns.
This Warrant Certificate and the Warrants represented hereby are assignable,
in whole or in part, at the option of the Holder.
17. BENEFITS OF THIS AGREEMENT. Nothing in this Warrant Certificate
shall be construed to give to any person or entity other than the Company and
the Holder any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of
the Company and the Holder.
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<PAGE>
18. GOVERNING LAW. This Warrant Certificate has been negotiated and issued
in the State of California, concerns a California issuer, and all questions
with respect to the Warrant Certificate and the rights and liabilities of the
Company and the Holder shall be governed by the laws of that state,
regardless of the choice of laws provisions of California or any other
jurisdiction. Any and all disputes between the Company and the Holder which
may arise pursuant to this Warrant Certificate shall be heard and determined
before the appropriate federal or state court located in Orange County,
California. The Company and the Holder acknowledge that each such court has
the jurisdiction to interpret and enforce the provisions of this Warrant
Certificate and the parties waive any and all objections that they may have
as to venue in any of the above courts.
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<PAGE>
19.
20. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections of
this Warrant Certificate are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Warrant
Certificate as of the date first set forth above.
ALLIANCE IMAGING, INC.
By:_________________________________
Its:_________________________________
WARRANT HOLDER
____________________________________
Name_______________________________
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<PAGE>
ASSIGNMENT
(To be executed by the Holder if such
Holder desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _____________________________________________
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ____________
attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.
Dated __________
Signature ___________________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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<PAGE>
ELECTION TO PURCHASE
(To be executed if the Holder desires
to exercise the Warrant Certificate)
To: ALLIANCE IMAGING, INC.
The undersigned hereby irrevocably elects to exercise
______________________ Warrants represented by this Warrant Certificate to
purchase the shares of Common Stock issuable upon the exercise of such
Warrants and requests that certificates for such shares be issued in the name
of:
(Please print name and address and insert
social security or other identifying number)
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of
such Warrants shall be registered in the name of and delivered to:
(Please print name and address and insert
social security or other identifying number)
Dated: _________
______________________________________
Signature
(Signature must conform in all respects to name
of the Holder as specified on the face of this
Warrant Certificate)
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<PAGE>
FORM OF WARRANTS
THESE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON THEIR EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED
UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (i) A REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, SHALL HAVE BECOME EFFECTIVE WITH
RESPECT THERETO AND ALL APPLICABLE QUALIFICATIONS UNDER STATE SECURITIES LAWS
SHALL HAVE BEEN OBTAINED WITH RESPECT THERETO; OR (ii) A WRITTEN OPINION FROM
COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO THE ISSUER HAS BEEN OBTAINED
STATING THAT NO SUCH REGISTRATION OR QUALIFICATION IS REQUIRED.
THESE WARRANTS AND THE SHARES OF COMMON STOCK ISSUABLE UPON THEIR EXERCISE HAVE
NOT BEEN REGISTERED UNDER THE PENNSYLVANIA SECURITIES ACT OF 1972 AND,
THEREFORE, CANNOT BE RESOLD FOR A PERIOD OF 12 MONTHS AFTER THE DATE OF
PURCHASE UNLESS THEY ARE REGISTERED UNDER SUCH ACT, THE SECURITIES ACT OF 1933
OR THE SECURITIES EXCHANGE ACT OF 1934 OR UNLESS CERTAIN OTHER CONDITIONS ARE
MET.
No. __ ______ Warrants
Date of Issuance:
April [____], 1996
WARRANTS TO PURCHASE COMMON STOCK
OF ALLIANCE IMAGING, INC.
Warrant Certificate
THIS CERTIFIES THAT _____________________________ ("Original Warrant
Holder") or registered assigns is the registered owner of the number of
warrants set forth above (the "Warrants"), each of which entitles the owner
thereof to purchase, subject to the terms and conditions hereof, at any time
prior to 5:00 P.M. (Los Angeles time) on the Expiration Date (as hereinafter
defined) at the principal office of Alliance Imaging, Inc., a Delaware
corporation (the "Company"), one fully paid and non-assessable share of the
Common Stock, $.01 par value ("Common Stock"), of the Company, at a cash
purchase price which shall initially be $5.00 per
<PAGE>
share (as such purchase price may be adjusted pursuant to the terms hereof,
the "Purchase Price") upon presentation and surrender of this Warrant
Certificate with the Form of Election to Purchase duly executed and
accompanied by payment of the Purchase Price in the manner specified herein.
As provided herein, the Purchase Price and the number of shares of Common
Stock which may be purchased upon the exercise of the Warrants evidenced by
this Warrant Certificate are, upon the happening of certain events, subject
to modification and adjustment. The holder or holders of these Warrants,
whether the Original Warrant Holder or registered assigns, shall be
collectively referred to herein as the "Holder."
1. FORM OF WARRANT CERTIFICATES. All certificates representing the
Warrants ("Warrant Certificates"), if any in addition to this Warrant
Certificate, which may hereinafter be issued and the forms of election to
purchase shares and of assignment that accompany such Warrant Certificates
shall be substantially in the form of this Warrant Certificate and may have
such letters, numbers or other marks of identification or designation and such
legends (including, without limitation, a legend referring to restrictions on
resale by statutory underwriters), summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the
provisions of this Warrant Certificate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto. All Warrant
Certificates shall be executed on behalf of the Company by its President or a
senior or executive vice president.
2. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF WARRANT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES. Subject to the
provisions of Section 11 hereof, this Warrant Certificate may be transferred,
split up, combined or exchanged for another Warrant Certificate or Warrant
Certificates, entitling the Holder to purchase a like number of shares of
Common Stock as the Warrant Certificate or Warrant Certificates surrendered
then entitled him to purchase; provided, however, that (i) any Warrant
Certificate with which this Warrant Certificate is combined shall have the same
terms as this Warrant Certificate, and (ii) notwithstanding anything in this
Warrant Certificate to the contrary, the Holder may transfer all, but not less
than all, of its right, title and interest in and to the Warrants to
-2-
<PAGE>
another person or entity. If the Holder desires to transfer, split up,
combine or exchange any Warrant Certificate, he or she shall make such
request in writing delivered to the Company, and shall surrender the Warrant
Certificate or Warrant Certificates to be transferred, split up, combined or
exchanged at the principal office of the Company. Thereupon, the Company
shall have such new Warrant Certificate or Warrant Certificates, as the case
may be, signed as provided in Section 1 and delivered to the person entitled
thereto, as so requested. The Company may require payment by the Holder of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Warrant
Certificates.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
it (including with respect to the amount of such indemnity or security), and
reimbursement by the Holder to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of this Warrant
Certificate if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor to the Holder in lieu of the Warrant Certificate so
lost, stolen, destroyed or mutilated. In requesting a substitute Warrant
Certificate the Holder shall also comply with such other regulations and pay
such other reasonable charges as the Company may prescribe.
3. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES. Subsequent to the issuance
of this Warrant Certificate, additional Warrant Certificates shall be issued,
as necessary, in connection with (a) any transfer, combination, split up or
exchange of Warrants pursuant to Section 2 hereof, (b) the replacement of
mutilated, destroyed, lost or stolen Warrant Certificates pursuant to Section 2
hereof, (c) the partial exercise of any Warrant Certificate to evidence the
unexercised portion of such Warrant Certificate, pursuant to Section 4 hereof,
and (d) the exercise of the Company's election set forth in Section 8(e)
hereof.
-3-
<PAGE>
4. EXERCISE OF WARRANTS; PURCHASE PRICE.
(a) Subject to the final sentence of this paragraph (a), the Holder of
this Warrant Certificate may exercise the Warrants evidenced hereby in whole or
in part at any time upon surrender of the Warrant Certificate with the form of
election to purchase attached hereto duly executed and accompanied by payment
of the Purchase Price for each share of Common Stock as to which the Warrants
are exercised, at or prior to 5:00 p.m. (Los Angeles time) on the Expiration
Date. The "Expiration Date" shall be the date that is four (4) years from the
date of the issuance of these Warrants. The Purchase Price shall initially be
$5.00 but shall be subject to adjustment as provided in Section 8 hereof,
and shall be payable only in the consideration specified in paragraph
(b) immediately below.
(b) Upon receipt of this Warrant Certificate, with the form of election
to purchase duly executed, accompanied by payment, in cash, or by certified
check or bank draft payable to the order of the Company, of the Purchase Price
for the shares to be purchased and an amount equal to any applicable transfer
tax, if any, the Company shall thereupon promptly deliver to or upon the order
of the Holder of a Warrant Certificate (i) certificates for the number of whole
shares of Common Stock to be purchased, registered in such name or names as may
be designated by the Holder and (ii) when appropriate, the amount of cash to be
paid in lieu of issuance of fractional shares.
(c) In case the Holder of this Warrant Certificate shall exercise less
than all the Warrants evidenced hereby, a new Warrant Certificate evidencing
Warrants equivalent to the Warrants remaining unexercised shall be issued by
the Company to the Holder or to his duly authorized assigns, subject to the
provisions of Section 11 hereof.
5. CANCELLATION AND DESTRUCTION OF WARRANT CERTIFICATE. Upon surrender
of this Warrant Certificate for the purpose of exercise (in whole or in part),
exchange, substitution or transfer, this Warrant Certificate shall be
cancelled, and no Warrant Certificates shall be issued in lieu thereof except
as expressly permitted by any of the provisions of this Warrant Certificate.
If the Company purchases or acquires Warrants,
-4-
<PAGE>
the Company may cancel and retire the Warrant Certificates evidencing such
Warrants.
6. RESERVATION AND AVAILABILITY OF SHARES OF COMMON STOCK. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued shares of Common Stock, the number of shares of
Common Stock that will be sufficient to permit the exercise in full of all
outstanding Warrants.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all shares of Common Stock delivered upon the
exercise of Warrants shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price and compliance with all
other provisions of this Warrant Certificate), be duly and validly authorized
and issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of Warrant Certificates or of
any shares of Common Stock upon the exercise of Warrants. The Company shall
not, however, be required (i) to pay any tax or taxes based upon the income of
the Holder or any tax or taxes which may be payable in respect of any transfer
involved in the transfer or delivery of Warrant Certificates or the issuance or
delivery of certificates for Common Stock in a name other than that of the
Holder or (ii) to issue or deliver any certificates for shares of Common Stock
upon the exercise of any Warrants until any such tax shall have been paid (any
such tax being payable by the Holder of the Warrant Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
7. COMMON STOCK RECORD DATE. Each person in whose name any certificate
for shares of Common Stock is issued upon the exercise of the Warrants shall
for all purposes be deemed to have become the holder of record of the Common
Stock represented thereby, and such certificate shall be dated on the exercise
date, which is the date upon which the Warrant Certificate evidencing such
Warrants was duly surrendered and payment of the Purchase Price (and any
applicable transfer
-5-
<PAGE>
taxes) was made; PROVIDED, HOWEVER, that if such exercise date is a date upon
which the Common Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding business day on which the
Common Stock transfer books of the Company are open.
The Holder, as such, shall not be entitled to vote or receive dividends or
be deemed for any purpose the holder of Common Stock or of any other securities
of the Company which may at any time be issuable on the exercise of the
Warrants, nor shall anything contained in this Warrant Certificate be construed
to confer upon the Holder, as such, any of the rights of a shareholder of the
Company or any right to vote upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, consolidation, merger, conveyance, or otherwise) or
to receive notice of meetings, or to receive dividends or subscription rights
or otherwise, until the Warrants shall have been exercised as provided in this
Warrant Certificate.
8. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF WARRANTS.
The Purchase Price and the number of shares covered by this Warrant Certificate
are subject to adjustment from time to time upon the occurrence of the events
enumerated in this Section 8.
In case the Company shall at any time after the date of the issuance
of this Warrant Certificate (i) declare a dividend on the Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock into a
greater number of shares, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger), the Purchase Price in effect at the
time of the record date for such dividend, or such issuance, or of the
effective date of such subdivision, combination, distribution or
reclassification, and the number and kind of shares of capital stock issuable
on such date shall be proportionately adjusted so that upon the exercise after
such time of any Warrant, the Holder shall be entitled to receive the
-6-
<PAGE>
aggregate number and kind of shares of capital stock which, if such Warrant
had been exercised immediately prior to such date and at a time when the
Common Stock transfer books of the Company were open, the Holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, distribution or reclassification, subject
to the provisions of Section 8(b) hereof. Such adjustment shall be made
successively whenever any event listed above shall occur.
(b) Notwithstanding anything in this Section 8 to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment,
together with any amount being carried forward as hereinafter provided, would
require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 8(b) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 8 shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may
be. Notwithstanding the first sentence of this Section 8(b), any adjustment
required by this Section 8 shall be made no later than the earlier of one year
from the date of the transaction which mandates such adjustment or the
expiration of the right to exercise any Warrant.
(c) In the event that at any time, as a result of an adjustment made
pursuant to Section 8(a) hereof, the Holder shall become entitled to receive
any shares or units of capital stock of the Company other than shares of Common
Stock upon the exercise or conversion of Warrants, thereafter the number of
such other shares or units so receivable upon exercise of the Warrants shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Section 8(a) hereof, and the provisions of this Warrant
Certificate with respect to the shares of Common Stock shall apply on like
terms to any such other shares or units.
(d) Irrespective of any adjustments in the Purchase Price or the number
of shares of Common Stock issuable upon the exercise of Warrants, this Warrant
Certificate or Warrant Certificates thereafter issued may continue to express
the Purchase Price and the number of shares stated in this Warrant
-7-
<PAGE>
Certificate and the Purchase Price and such number of shares specified
thereon shall be deemed to have been so adjusted.
(e) The Company may elect to adjust the number of Warrants, in
substitution for any adjustment in the number of shares of Common Stock
purchasable upon the exercise of the Warrants as provided in Section 8(a)
hereof, such that the total number of shares of Common Stock issuable upon
exercise of the Warrants is the same as if such adjustment had been made but
such that each of the Warrants outstanding after such adjustment of the
number of Warrants is exercisable for one share of Common Stock. The Company
shall notify the Holder in writing of such election. Upon each adjustment of
the number of Warrants pursuant to this subsection (e), the Company shall as
promptly as practicable cause to be distributed to the Holder Warrant
Certificates evidencing, subject to Section 11, the additional or substitute
Warrants to which the Holder shall be entitled as a result of such
adjustment; or, at the option of the Company, shall cause to be distributed
to the Holder in substitution and replacement for the Warrant Certificates
held by the Holder prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Warrant Certificates evidencing all
the Warrants to which the Holder shall be entitled after such adjustment.
Warrant Certificates so to be distributed shall be issued in the manner
provided for herein (and shall bear the adjusted Purchase Price, if
applicable) and shall be registered in the name of the Holder.
(f) In any case in which this Section 8 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the Holder of any Warrant exercised after such record date the
shares of Common Stock and other capital stock of the Company, if any, issuable
upon such exercise over and above the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to the Holder a due bill or other appropriate instrument
evidencing the Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
-8-
<PAGE>
9. CERTIFICATION OF ADJUSTED PURCHASE PRICE AND NUMBER OF SHARES
ISSUABLE. Whenever the Purchase Price and the number of shares of Common Stock
issuable upon the exercise of each Warrant are adjusted as provided in
Section 8 above, the Company shall provide notice to the Holder in writing
setting forth the Purchase Price as so adjusted, the number of shares of Common
Stock issuable upon the exercise of each Warrant as so adjusted, and a brief
statement of the facts accounting for such adjustment to the Holder. Failure
to give such notice, or any defect therein, shall not affect the legality or
validity of any action referred to in Section 8 hereof.
10. CONSOLIDATION, MERGER OR SALE OF ASSETS. If (i) the Company shall at
any time consolidate with or merge with or into another corporation and
(ii) the Common Stock is exchanged, cancelled or reclassified in connection
with such transaction, the Holder will thereafter receive, upon the exercise
hereof in accordance with the terms of this Agreement, the securities, property
or cash to which the holder of the number of shares of Common Stock deliverable
upon the exercise of the Warrants immediately prior to such transaction would
have been entitled upon such consolidation or merger, and the Company shall
take such steps in connection with such consolidation or merger as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to any securities or property
thereafter deliverable upon the exercise of the Warrants. A sale or lease of
all or substantially all the assets of the Company for a consideration (apart
from the assumption of obligations) consisting primarily of securities shall be
deemed a consolidation or merger for the purposes of clause (i) of the first
sentence of this Section 10. The provisions of this Section 10 shall similarly
apply to successive mergers or consolidations or sales or other transfers.
11. FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) Notwithstanding an adjustment pursuant to Section 8(e) hereof in the
number of Warrants, the Company shall not be required to issue Warrant
Certificates which evidence fractional Warrants. If the Company so elects, in
lieu of such fractional Warrants, there shall be paid to the Holder to whom
such fractional Warrants would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Warrant (as
determined in good faith by the Board of Directors of the Company).
(b) Notwithstanding an adjustment pursuant to Section 8(a) hereof in the
number of shares covered by a Warrant, the Company shall not be required to
issue fractions of shares upon exercise of the Warrants or to distribute
certificates which evidence fractional shares. In lieu of fractional shares,
at the Company's election, there shall be paid to the Holder at the time
Warrants are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a share of Common Stock (as determined
in good faith by the Board of Directors of the Company).
(c) The Holder, by the acceptance of the Warrant, expressly waives his
right to receive any fractional Warrant or any fractional share upon exercise
of a Warrant.
12. RIGHT OF ACTION. All rights of action in respect of this Warrant
Certificate are vested in the Holder.
13. AGREEMENT OF WARRANT CERTIFICATE HOLDERS. The Holder of this Warrant
Certificate by accepting the same consents and agrees with the Company and with
every other holder of a Warrant Certificate that:
(a) the Warrant Certificates are transferable only on the registry books
of the Company if surrendered at the principal office of the Company; and
(b) the Company may deem and treat the person in whose name each Warrant
Certificate is registered as the absolute owner thereof and of the Warrants
evidenced thereby (notwithstanding any notations of ownership or writing on the
Warrant Certificates made by anyone other than the Company) for all purposes
whatsoever, and the Company shall not be affected by any notice to the
contrary.
14. NOTICES. Notices or demands authorized by this Warrant Certificate to
be given or made by the Holder to the Company shall be sufficiently given or
made if made in writing and shall be delivered by personal service or telegram,
telecopier or registered or certified mail (if such service is not available,
then by first class mail), postage prepaid, to such address as may be
designated to the Holders from time to time by the Company and which shall
initially be:
Alliance Imaging, Inc.
3111 No. Tustin Avenue, Suite 150
Orange, California 92665
Attention: Chief Financial Officer
Telecopier No. (714) 921-5678
Notices or demands authorized by this Warrant Certificate to be given or made
by the Company to the Holder shall be sufficiently given or made if made in
writing and shall be delivered by personal service or telegram, telecopier or
registered or certified mail (if such service is not available, then by first-
class mail), postage prepaid, addressed to the Holder at the address of the
Holder as shown on the registry books of the Company. Any notice hereunder
sent by registered or certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be
deemed given when received. No objection may be made to the manner of delivery
of any notice actually received in writing by an authorized agent of a party.
15. SUPPLEMENTS AND AMENDMENTS. This Warrant Certificate, together with
other agreements being executed and delivered simultaneously herewith,
constitutes the Company's and the Holder's entire agreement with respect to the
subject matter hereof and supersedes all agreements, representations,
warranties, statements, promises and understandings, whether oral or written,
with respect to the subject matter hereof. This Warrant Certificate may be
amended, altered or modified only by a writing signed by the Company and the
Holder.
16. SUCCESSORS AND ASSIGNS. All the covenants and provisions of this
Warrant Certificate by or for the benefit of the Company or the Holder shall
bind and inure to the benefit of their respective successors and assigns. This
Warrant Certificate and the Warrants represented hereby are assignable, in
whole or in part, at the option of the Holder.
17. BENEFITS OF THIS AGREEMENT. Nothing in this Warrant Certificate
shall be construed to give to any person or entity other than the Company and
the Holder any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the Company
and the Holder.
18. GOVERNING LAW. This Warrant Certificate has been negotiated and
issued in the State of California, concerns a California issuer, and all
questions with respect to the Warrant Certificate and the rights and
liabilities of the Company and the Holder shall be governed by the laws of that
state, regardless of the choice of laws provisions of California or any other
jurisdiction. Any and all disputes between the Company and the Holder which
may arise pursuant to this Warrant Certificate shall be heard and determined
before the appropriate federal or state court located in Orange County,
California. The Company and the Holder acknowledge that each such court has
the jurisdiction to interpret and enforce the provisions of this Warrant
Certificate and the parties waive any and all objections that they may have as
to venue in any of the above courts.
19. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Warrant Certificate are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this Warrant
Certificate as of the date first set forth above.
ALLIANCE IMAGING, INC.
By:
------------------------------------
Its:
-----------------------------------
WARRANT HOLDER
---------------------------------------
Name
-----------------------------------
ASSIGNMENT
(To be executed by the Holder if such
Holder desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED ______________________________________ hereby sells,
assigns and transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint attorney, to transfer the
within Warrant Certificate on the books of the within-named Company, with full
power of substitution.
Dated
Signature
------------------------------
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
ELECTION TO PURCHASE
(To be executed if the Holder desires
to exercise the Warrant Certificate)
To: ALLIANCE IMAGING, INC.
The undersigned hereby irrevocably elects to exercise
______________________ Warrants represented by this Warrant Certificate to
purchase the shares of Common Stock issuable upon the exercise of such Warrants
and requests that certificates for such shares be issued in the name of:
(Please print name and address and insert
social security or other identifying number)
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of
such Warrants shall be registered in the name of and delivered to:
(Please print name and address and insert
social security or other identifying number)
Dated:
---------------------------------------
Signature
(Signature must conform in all respects
to name of the Holder as specified on
the face of this Warrant Certificate)
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<PAGE>
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 11920
<SECURITIES> 0
<RECEIVABLES> 6905
<ALLOWANCES> 0
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<CURRENT-ASSETS> 19356
<PP&E> 111119
<DEPRECIATION> 48683
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<CURRENT-LIABILITIES> 19907
<BONDS> 67047
16663
0
<COMMON> 109
<OTHER-SE> 2760
<TOTAL-LIABILITY-AND-EQUITY> 107888
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