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EXHIBIT 10.20
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS
AMENDED, OR ANY ANALOGOUS STATE SECURITIES LAWS, AND MAY NOT BE
TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER
OR THE
PROVISIONS OF THIS WARRANT. ANY SHARES ISSUED UNDER THIS WARRANT
WILL CONTAIN
THIS SAME LEGEND.
PRIMEDEX HEALTH SYSTEMS, INC.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
(Void after 5:00 pm. Pacific time,
on March 27, 2013)
THIS CERTIFICATE is issued in connection with the extension of
the
Employment Agreement between Norman Hames (the "Holder") and Radnet
Management,
Inc., a California corporation, and wholly-owned subsidiary of
PRIMEDEX HEALTH
SYSTEMS, INC., a New York corporation (the "Company"), and
certifies that the
Holder is entitled to purchase from the Company prior to 5:00 pm.,
Pacific time,
on March 27, 2013, or ninety (90) days after Holder ceases to be an
employee of
the Company, whichever first occurs (the "Expiration Date"), Three
Million
(3,000,000) shares ("Warrant Shares") of fully paid and
nonassessable shares of
common stock, par value $.01 per share, of the Company ("Common
Stock") at a
price of $.56 per share (the "Warrant Price"), or as otherwise
provided herein,
subject to the provisions and upon the terms and conditions
hereinafter set
forth.
This Warrant is subject to the following additional terms and
conditions.
1. EXERCISABILITY. Holder may exercise (a) Four Hundred Fifty
Thousand
(450,000) shares from and after May 1, 2007, (b) Four Hundred Fifty
Thousand
(450,000) shares from and after May 1, 2008, (c) Four Hundred Fifty
Thousand
(450,000) shares from and after May 1, 2009, (d) Four Hundred Fifty
Thousand
(450,000) shares from and after May 1, 2010, (e) Four Hundred Fifty
Thousand
(450,000) shares from and after May 1, 2011, (f) Four Hundred Fifty
Thousand
(450,000) shares from and after March 1, 2012, (g) Three Hundred
Thousand
(300,000) shares from and after May 1, 2012, and until the
Expiration Date, the
purchase rights represented by this Warrant are exercisable after
vesting at the
option of the Holder, either as an entirety, or from time to time
for any part
of the Warrant Shares which may be purchased hereunder.
Notwithstanding the
foregoing, the vesting under this Warrant shall accelerate and
become fully
vested upon (i) a "change in control" of the Company or (ii) the
closing price
of the Company's Common Stock in the public market in which it
trades averaging
no less than $3.00 per share for thirty (30) consecutive days. A
change of
control is defined as: (a) any person or group of persons (within
the meaning of
the Securities Exchange Act of 1934) shall have acquired beneficial
ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange
Commission under the Securities Exchange Act of 1934) of 40% or
more of the
issued and outstanding shares of common stock of the Company having
the right to
vote for the election of directors of the Company under ordinary
circumstances;
(b) during any period of twelve consecutive calendar months,
individuals who at
the beginning of such period constituted the board of directors of
the Company
(together with any new directors whose election by the board of
directors of the
Company or whose nomination for election by the stockholders of the
Company was
approved by a vote of at least two-thirds (2/3) of the directors
then still in
office who either were directors at the beginning of such period or
whose
election or nomination for election was previously so approved)
cease for any
reason other than death or disability to constitute a majority of
the directors
then in office; or (c) the Company ceases to own and control all of
the economic
and voting rights associated with all of the outstanding stock of
Radnet
Management, Inc.
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2. RESERVATION OF WARRANT SHARES. The Company agrees at all times
to
reserve a sufficient number of shares of authorized but unissued
Common Stock,
when and as required for the purpose of complying with the terms of
this
Warrant.
3. NO RIGHTS AS SHAREHOLDER; NOTICES TO HOLDER. Nothing contained
in
this Warrant shall be construed as conferring upon the Holder the
right to vote
or to receive dividends or to consent or to receive notice as a
shareholder in
respect of any meeting of shareholders for the election of
directors of the
Company or any other matter, or any rights whatsoever as a
shareholder of the
Company.
If, however, at any time prior to the expiration of this Warrant
and
prior to its exercise, any of the following events shall occur:
(a) The Company shall take a record of the holders of its
Common
Stock for the purpose of entitling them to receive a dividend
(other than a cash
dividend payable out of earnings or earned surplus legally
available for the
payment of dividends under the laws of the jurisdiction of
incorporation of
Company) or other distribution, or any right to subscribe for or
purchase any
evidences of its indebtedness, any shares of stock of any class or
any other
securities or property, or to receive any other right, or
(b) There shall be any capital reorganization of Company, any
reclassification or recapitalization of the capital stock of
Company or any
consolidation or merger of Company with, or any sale, transfer or
other
disposition of all or substantially all the property, assets or
business of
Company to another corporation, or
(c) A dissolution, liquidation or winding up of the Company
(other
than in connection with a consolidation, merger, or sale of all or
substantially
all of its property, assets and business as an entirety) shall be
proposed, then
in any one or more of said events, the Company shall give to the
Holder (i) at
least 30 days' prior written notice of the date on which a record
date shall be
selected for such dividend, distribution or right or for
determining rights to
vote in respect of any such reorganization, reclassification,
merger,
liquidation or winding up, and (ii) in the case of any such
transfer,
disposition, dissolution, liquidation or winding up, at least 30
days' prior
written notice of the date when the same shall take place. Such
notice in
accordance with the foregoing clause also shall specify (i) the
date on which
any such record is to be taken for the purpose of such dividend,
distribution or
right, the date on which the holders of Common Stock shall be
entitled to any
such dividend, distribution or right, and the amount and character
thereof, and
(ii) the date on which any such reorganization, reclassification,
merger,
consolidation, sale, transfer, disposition, proposed dissolution,
liquidation or
winding up is to take place and the time, if any such time is to be
fixed, as of
which the holders of Common Stock shall be entitled to exchange
their shares of
Common Stock for securities or other property deliverable upon
such
reorganization, reclassification, merger, consolidation, sale,
transfer,
proposed disposition, dissolution, liquidation or winding up. Each
such written
notice shall be sufficiently given if a
