Document:

Bonus Incentive Plan

 EXHIBIT 10.3 
 THE PMI GROUP, INC. 
 BONUS INCENTIVE PLAN 
 (September 20, 2006 Amendment and Restatement) 
 SECTION 1 
 BACKGROUND, PURPOSE AND DURATION 
 1.1
Effective Date. The Plan originally was effective as of February 18, 1999. This amendment and restatement is effective as of September 20, 2006, subject to ratification by an affirmative vote of the holders of a majority of the
Shares that are present in person or by proxy and entitled to vote at the 2007 Annual Meeting of Stockholders of the Company. 
 1.2
Purpose of the Plan. The Plan is intended to increase shareholder value and the success of the Company by motivating key executives (a) to perform to the best of their abilities, and (b) to achieve the Company’s objectives. The
Plan’s goals are to be achieved by providing such executives with incentive awards based on the Company’s net income. The Plan is further intended to permit the grant of awards that qualify as performance-based compensation under section
162(m) of the Code. 
 SECTION 2 
 DEFINITIONS 
 The following words and phrases shall have the following meanings unless a different meaning is plainly
required by the context: 
 2.1 “Actual Award” means as to any Performance Period, the actual award (if any) payable to a
Participant for the Performance Period, subject to the Committee’s authority under Section 3.5 to reduce the award. 
 2.2
“Affiliate” means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company (within the meaning of section 414(b), (c) or (m) of the Code). 
 2.3 “Base Salary” means as to any Performance Period, the Participant’s annualized salary rate on the last day of the Performance
Period. Such Base Salary shall be before both (a) deductions for taxes or benefits, and (b) deferrals of compensation pursuant to Company-sponsored plans. 
 2.4 “Board” means the Board of Directors of the Company. 

 2.5 “Change of Control” means a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the Company (as determined in accordance with section 409A(a)(2)(A)(v) of the Code and the applicable regulations issued there under). 
 2.6 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
 2.7 “Committee” means the committee appointed by the Board (pursuant to Section 5.1) to administer the Plan. Until otherwise
determined by the Board, the Company’s Compensation Committee shall constitute the Committee. 
 2.8 “Company” means
The PMI Group, Inc., a Delaware corporation, or any successor thereto. 
 2.9 “Disability” or “Disabled”
means (a) the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, or (b) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employer. Notwithstanding the foregoing, a Participant shall be
deemed Disabled if he or she is determined to be totally disabled by the Social Security Administration. The Committee shall determine whether or not a Participant is Disabled based on such evidence as the Committee deems necessary or advisable.

 2.10 “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at the time
the Plan is adopted or becomes so employed subsequent to the , adoption of the Plan. 
 2.11 “Employee Performance Pool”
means the pool of funds available for distribution to Participants. Subject to the terms of the Plan, the Committee establishes the Employee Performance Pool for each Performance Period. 
 2.12 “Fair Market Value” means the arithmetic mean of the highest and lowest per share selling prices of the Shares, as quoted in the
New York Stock Exchange Composite Transactions Index for the date in question. 
 2.13 “Participant” means as to any
Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period. 
 2.14
“Performance Period” means any period of not less than twelve consecutive calendar months, as determined by the Committee in its sole discretion. No more than three Performance Periods may be in effect at any one time. 

 

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 2.15 “Plan” means The PMI Group, Inc. Bonus Incentive Plan, as set forth in this
instrument and as hereafter amended from time to time. 
 2.16 “Retirement” means (a) a Termination of Service
occurring on or after age sixty-five, (b) a Termination of Service at or after age fifty-five with at least ten years of Benefit Accrual Service (as defined under The PMI Group, Inc. Retirement Plan, as amended), or (c) a Termination
of Service approved by the Company as an early retirement; provided that in the case of a person subject to Section 16 of the Exchange Act, such early retirement must be approved by the Committee. 
 2.17 “Shares” means shares of the Company’s common stock, $0.01 par value. 
 2.18 “Target Award” means the target award payable under the Plan to a Participant for the Performance Period, expressed as a percentage
of his or her Base Salary, as determined by the Committee in accordance with Section 3.2. 
 2.19 “Termination of
Service” means a cessation of the employee-employer relationship between an Employee and the Company or an Affiliate for any reason, (as determined in accordance with section 409A(a)(2)(A) of the Code), including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, Retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate. For this
purpose, the employment relationship shall be treated as continuing intact while the Participant is on military leave, sick leave or other bona fide leave of absence (such as temporary employment by the government), except that if the period of such
leave exceeds six (6) months and the Participant’s right to reemployment is not provided for by statute or contract, then the employment relationship shall be deemed to have terminated on the first day immediately following such six-month
period. 
 SECTION 3 
 SELECTION OF PARTICIPANTS AND DETERMINATION OF AWARDS 
 3.1 Selection of Participants. The Committee, in its sole
discretion, shall select the Employees who shall be Participants for any Performance Period. Participation in the Plan is in the sole discretion of the Committee, and on a Performance Period by Performance Period basis. Accordingly, an Employee who
is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period or Periods. 
 3.2 Determination of Target Awards. Subject to the limitations of Section 3.4 below, the Committee, in its sole discretion, shall establish a Target Award for each Participant. Each Participant’s
Target Award shall be determined by the Committee in its sole discretion, and each Target Award shall be set forth in writing. 
  

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 3.3 Employee Performance Pool. Each Performance Period, an amount equal to no more than 5% of the
Company’s net income shall be allocated to the Employee Performance Pool. The Committee, in its sole discretion, shall determine the size of the Employee Performance Pool, subject to the limitation in the preceding sentence. 
 3.4 Determination of Awards for Covered Employees. Each year the maximum Actual Award payable under the Plan to a Participant shall be no more
than 30% of the amount allocated to the Employee Performance Pool. In addition, the total of all Actual Awards payable for any Performance Period may not exceed the size of the Employee Performance Pool. 
 In the event a partial Performance Period occurs during any calendar year, the percent of pool limitation in this Section 3.4 shall be calculated
based on the pro-rata portion of the Performance Pool established for the partial Performance Period (e.g., if a twelve-month Performance Period ends March 31, 2006, one-fourth of the Performance Pool for that Performance Period will be used to
calculate the percent of pool limitation in this Section 3.4 for 2006.) 
 3.5 Discretion to Reduce Awards. Notwithstanding any
contrary provision of the Plan, the Committee may, in its sole discretion and at any time, reduce or eliminate (a) a Participant’s Actual Award, and/or (b) the amount allocated to the Employee Performance Pool. The Committee may
determine the amount of any reduction on the basis of such factors as it deems relevant, and shall not be require to establish any allocation or weighting with respect to the factors it considers. 
 3.6 Discretion to Include Additional Criteria. Notwithstanding any contrary provision of the Plan, the Committee may, in its sole discretion,
place additional vesting or performance requirements upon any Target Award. The additional requirements may be on the basis of any factors the Committee determines relevant, and may be on an individual, divisional, business unit or Company-wide
basis. Failure to meet the additional requirements will result in a failure to earn the Target Award. 
 3.7 Special Rule for Change of
Control. Notwithstanding any contrary provision of the Plan, the then ongoing Performance Period shall be deemed terminated immediately prior to the occurrence of a Change of Control and 100% of Target Awards shall be deemed to be earned and
shall be immediately payable to the Participants. 
 SECTION 4 
 PAYMENT OF AWARDS 
 4.1 Right to Receive Payment. Each Actual Award shall
be paid solely from the general assets of the Company. Nothing in this Plan shall be construed to create a trust or to establish or evidence any Participant’s claim of any right other than an unsecured general creditor with respect to any
payment to which he or she may be entitled. 
 4.2 Timing of Payment. Payment of each Actual Award shall be made as soon as
practicable, no more than sixty days from the end of the Performance Period, and in no event will the payment occur later than two and half months from the end of the Participant’s (or the Company’s) 

  

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first taxable year after the end of the Performance Period during which the Actual Award was earned. Unless otherwise determined by the Committee, and except
as provided in Section 4.4 (relating to death and Disability), a Participant must be employed by the Company or any Affiliate on the date of payment to receive a payment under the Plan. 
 4.3 Form of Payment. Each Actual Award normally shall be paid in cash (or its equivalent) in a single lump sum. However, the Committee, in its
sole discretion, may declare any Actual Award, in whole or in part, payable in restricted stock granted under the Company’s Equity Incentive Plan. The number of Shares of restricted stock granted shall be determined by dividing the cash amount
foregone by the Fair Market Value of a Share on the date that the cash payment otherwise would have been made. Any such restricted stock shall be subject to the vesting schedule (not to exceed two calendar years) as may be determined by the
Committee, provided that accelerated vesting automatically shall occur upon death, Disability, Retirement or involuntary Termination of Service without cause. 
 4.4 Payment in the Event of Death or Disability. If a Participant dies or becomes Disabled prior to the payment of an Actual Award earned by him or her prior to death or Disability for a prior Performance
Period, the Actual Award shall be paid to his or her estate or to the Participant, as the case may be, subject to the Committee’s discretion to reduce or eliminate any Actual Award otherwise payable. 
 SECTION 5 
 ADMINISTRATION

 5.1 Committee is the Administrator. The Plan shall be administered by the Committee. The Committee shall consist of not less
than two members of the Board. The members of the Committee shall be appointed from time to time by, and serve at the pleasure of, the Board. Each member of the Committee shall qualify as an “outside director” under
section 162(m) of the Code. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify. 
 5.2 Committee Authority. It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees shall be granted awards, (b) prescribe the terms
and conditions of awards, (c) interpret the Plan and the awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside of the
United States, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (f) interpret, amend or revoke any such rules. 
 5.3 Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law. 
  

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 5.4 Delegation by the Committee. The Committee, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company; provided, however, that the Committee may delegate its authority and powers only with respect
to awards that are not intended to qualify as performance-based compensation under section 162(m) of the Code. 
 SECTION 6

 GENERAL PROVISIONS 
 6.1 Tax Withholding. The Company shall withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant’s FICA and SDI obligations). 
 6.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any
Participant’s employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a
Termination of Service. Employment with the Company and its Affiliates is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time and without regard to when during a Performance Period such exercise
occurs, to terminate any individual’s employment with or without cause, and to treat him or her without regard to the effect which such treatment might have upon him or her as a Participant. 
 6.3 Participation. No Employee shall have the right to be selected to receive an award under this Plan, or, having been so selected, to be
selected to receive a future award. 
 6.4 Indemnification. Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit,
or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any award, and (b) from any and all amounts paid by him or her in settlement thereof, with
the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the
Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless. 
 6.5 Successors. All obligations of the Company under the Plan, with respect to awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 
  

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 6.6 Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name
a beneficiary or beneficiaries to whom any vested but unpaid award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in a
form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate. 
 6.7 Nontransferability of Awards. No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6.6. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the
Participant. 
 SECTION 7 
 AMENDMENT, TERMINATION AND DURATION 
 7.1 Amendment, Suspension or Termination. The Board, in its sole discretion,
may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Target
Award theretofore granted to such Participant. No award may be granted during any period of suspension or after termination of the Plan. 
 7.2 Duration of the Plan. The Plan shall commence on the date specified herein, and subject to Section 7.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect thereafter. 
 SECTION 8 
 LEGAL CONSTRUCTION

 8.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also, shall include the
feminine; the plural shall include the singular and the singular shall include the plural. 
 8.2 Severability. In the event any
provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been
included. 
 8.3 Requirements of Law. The granting of awards under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required, including if applicable, the provisions of section 409A of the Code. Notwithstanding any contrary Plan provision, the Plan shall be
construed, administered and enforced in a manner that is consistent with such intent, and any provision that would cause the Plan to fail to satisfy section 409A of the Code shall have no force and effect until 

  

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amended to comply with section 409A of the Code (which amendment may be retroactive to the extent permitted by section 409A of the Code and may be made
without the consent of any Participant or beneficiary). 
 8.4 Governing Law. The Plan and all awards shall be construed in accordance
with and governed by the laws of the State of California, but without regard to its conflict of law provisions. 
 8.5 Captions.
Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. 
 EXECUTION

 IN WITNESS WHEREOF, the Company, by its duly authorized officer, has executed The PMI Group, Inc. Bonus Incentive Plan on the date
indicated below. 
  

									
		 		 	THE PMI GROUP, INC.
					
	Dated:	 	___________________	 		 	By	 	  
		 		 		 	Name:	 	  
		 		 		 	Title:	 	  

  

 -8-Warrant to Purchase Common Stock

 Exhibit 4.1 
 THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING ANY OTHER PROVISIONS CONTAINED HEREIN, NO TRANSFER, HYPOTHECATION OR OTHER
DISPOSITION OF THIS WARRANT IN FAVOR OF ANY PERSON OTHER THAN THE HOLDER HEREOF, SHALL BE VALID OR EFFECTIVE UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. 
 WARRANT 
 TO PURCHASE 

COMMON STOCK 
 VIRTUAL RADIOLOGIC
CONSULTANTS, INC. 
 Incorporated Under the Laws of the State of Delaware 
  

			
	No. W-1	 	Warrant to Purchase
	Holder: William Blair & Company, L.L.C.	 	 72,533 Shares of Common Stock
 (subject to adjustment)

 THIS CERTIFIES THAT, for value received, the above named holder or its assigns is entitled
to subscribe for and purchase during the period specified in this Warrant the number of shares (the “Warrant Stock”) set forth above (subject to adjustment as hereinafter provided) of fully paid and non-assessable shares of the Common
Stock, par value $0.001 per share (the “Common”), of VIRTUAL RADIOLOGIC CONSULTANTS, INC., a Delaware corporation (the “Corporation”), at a per share price equal to the Warrant Price, subject, however, to the provisions and upon
the terms and conditions hereinafter set forth. Capitalized terms not otherwise defined shall have the meanings set forth in Section 13 hereof. 
  

	1)	Duration. The right to subscribe for and purchase shares of Common represented hereby shall expire at 5:00 P.M. Central Standard Time, on May 2, 2010.

  

	2)	Method of Exercise, Payment; Issuance of New Warrant. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the
subscription form attached hereto duly executed) at the principal office of the Corporation and by the payment to the Corporation of the then applicable Warrant Price for the shares being acquired. Payment of the Warrant Price shall be made by
certified check payable to the order of the Company. In the event of any exercise of the rights represented by this Warrant, (i) stock certificates for the shares of Common so purchased 

  

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	  	shall be delivered to the Holder hereof, and unless this Warrant has expired, a new Warrant representing the number of shares, if any, with respect to which this Warrant shall not
then have been exercised shall also be delivered to the Holder hereof and shall be dated the date of this Warrant, and (ii) stock certificates for the shares of Common so purchased shall be dated the date of exercise of his Warrant, and the
Holder exercising this Warrant shall be deemed for all purposes to be the Holder of the shares of Common so purchased as of the date of such exercise. Such stock certificates (and new Warrant, if applicable) shall be delivered to the Holder hereof
within a reasonable time, not exceeding ten (10) business days, after the rights represented by this Warrant shall have been so exercised. Each stock certificate so delivered shall be in such denominations as may be requested by the Holder
hereof and shall be registered in the name of said Holder or such other name (upon compliance with the transfer requirements hereinafter set forth) as shall be designated by said Holder. The Corporation shall pay all expenses and charges payable in
connection, with the preparation, execution and delivery of stock certificates (and new Warrants, if applicable) pursuant to this paragraph except that, in case such stock certificates shall be registered in a name or names other than the Holder of
this Warrant or its nominee, funds sufficient to pay all stock transfer taxes which shall be payable in connection with the execution and delivery of such stock certificates shall be paid by the Holder hereof to the Corporation at the time of the
delivery of such stock certificates by the Corporation as mentioned above. 

  

	3)	Transfer of Securities. 

  

	 	(a)	Restrictions on Transfer. The securities represented by this Warrant are subject to restrictions on transfer and to the terms of an irrevocable proxy pursuant to a
Stockholders’ Agreement among the issuer of this Warrant and certain holders of the issuer’s securities. No transfer of such securities will be valid unless the conditions to transfer contained in the Stockholders’ Agreement have been
satisfied. All transferees of this Warrant and the securities issuable hereunder will take them subject to the terms and conditions of the Stockholders’ Agreement, including the restrictions on transfer and the irrevocable proxy contained
therein. A copy of the Stockholders’ Agreement may be obtained at no cost by written request made by the holder of this Warrant to the Secretary of the Corporation. 

  

	 	(b)	Compliance with Laws; Restrictive Legend. 

  

	 	i.	The Holder of this Warrant, or if the Holder is a custodian, the beneficial owner of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Common
Stock to be issued upon exercise hereof are being acquired solely for the Holder’s (or beneficial owner’s) own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any shares of Common to be issued upon exercise hereof except under circumstances that will not result in a violation of any federal or state securities laws. Upon exercise of the Warrant, the Holder shall as a condition
to such exercise, if requested by the Company, confirm in 

  

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	 	  	writing, in a form satisfactory to the Company that the shares of Common Stock so purchased are being acquired solely for the Holder’s own account and not as a nominee for any
other party, for investment, and not with a view toward distribution or resale. 

  

	 	ii.	So long as this Warrant or any Warrant Stock is not freely transferable, the certificates evidencing this Warrant or such Warrant Stock shall be stamped or otherwise inscribed with
an appropriate legend to such effect, provided that whenever the restrictions imposed by this Section 3 shall terminate, as herein above provided, the Holder of any Warrant then outstanding as to which such restrictions shall have terminated
shall be entitled to receive from the Corporation, without expense to such Holder, one or more new certificates for such securities not bearing the restrictive legend set forth in Section 3 hereof. 

  

	4)	Exchange of Warrants. On receipt of evidence reasonably satisfactory to the Company of loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, on delivery of an indemnity bond or other security in an amount reasonably satisfactory as sufficient security, or in the case of mutilation, on surrender and cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and amount. 

  

	5)	Adjustment of Warrant Price and Number of Shares. The number of shares of Common issuable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment
from time to time upon the happening of certain events, as follows, provided, however, in no event shall the Warrant Price be reduced to less than $.01: 

  

	 	(a)	Reclassification Consolidation or Merger In case of any reclassification or change of outstanding Common issuable upon exercise of this Warrant (other than a change in par
value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation or merger of the Corporation with or into another corporation (other than a merger with
another corporation in which the Corporation is the surviving corporation and which does not result in any reclassification or change — other than a change in par value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination — of outstanding Common issuable upon such exercise) or the acquisition of 66 2/3% of the then outstanding shares of Common (on a fully diluted basis) by any Person or group (as defined pursuant to
Section 13 under the Securities Exchange Act of 1934, as amended) the rights of the Holders of this Warrant shall be adjusted in the manner described below: 

  

	 	i.	In the event that the Corporation is the surviving corporation, this Warrant shall, without payment of additional consideration therefor, be deemed modified so as to provide that
upon exercise thereof the Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of each share of 

  

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	 	  	Common theretofore issuable upon such exercise, the kind and amount of shares of Stock, other securities, money and Property receivable upon such reclassification, change,
consolidation or merger by the holder of each share of Common issuable upon such exercise had exercise of this Warrant, occurred immediately prior to such reclassification, change, consolidation or merger. This Warrant (as adjusted) shall be deemed
to provide for further adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this clause (i) shall similarly apply to successive reclassifications,
changes, consolidations and mergers. 

  

	 	ii.	In the event that the Corporation is not the surviving corporation, the surviving corporation shall, without payment of any additional consideration therefore, issue a new Warrant,
providing that upon exercise thereof, the Holder thereof shall procure in lieu of each share of Common theretofore issuable upon exercise of this Warrant the kind and amount of shares of Stock, other securities, money and Property receivable upon
such reclassification, change, consolidation or merger by the Holder of each share of Common issuable upon exercise of this Warrant had such exercise occurred immediately prior to such reclassification, change, consolidation or merger. Such new
Warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 5. The provisions of this clause (ii) shall similarly apply to successive reclassifications,
changes, consolidations and mergers. 

  

	 	(b)	Subdivision or Combination of Shares. If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide, reverse
split or combine the securities as to which purchase rights under the Warrant exist, into a different number of securities of the same class, the Warrant Price per share for such securities shall be proportionately decreased in the case of a split
or subdivision or proportionately increased in the case of a combination or reverse split and the number of shares which the Holder hereof shall be entitled to receive upon exercise shall be correspondingly appropriately adjusted.

  

	 	(c)	Adjustment of Number of Shares. Upon the occurrence of each adjustment or readjustment pursuant to this Section 5, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to each Holder of this Warrant in detail the facts upon which such adjustment of readjustment is based. 

  

	6)	Notice of Adjustments. Whenever any Warrant Price shall be adjusted pursuant to Section 5 hereof, the Corporation shall make a certificate signed by its President or a
Vice President and by its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, setting forth in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated

  

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 (including a description of the basis on which the Board made any determination hereunder), and the
Warrant Price and the number of shares issuable upon the exercise of the Warrant after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder of this Warrant at
its address shown on the books of the Corporation. The Corporation shall make such certificate and mail it to each Holder promptly after each adjustment. 
  

	7)	Fractional Shares. No fractional shares of Common shall be issued in connection with any exercise of this Warrant, but in lieu of such fractional shares, the Corporation
shall make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the Warrant Price then in effect, to the extent sufficient funds are legally available to make such cash payment on the date of such exercise
of this Warrant. 

  

	8)	Shares To be Fully Paid: Reservation of Shares. The Corporation covenants and agrees that all Common stock issued upon exercise of this Warrant will, upon issuance, be fully
paid and non-assessable and free from preemptive rights and all taxes, liens and charges with respect to the issuance thereof. The Corporation further covenants and agrees that during the period within which the rights represented by this Warrant
may be exercised, the Corporation will at all times have authorized, and reserved for the purpose of issue upon exercise of the subscription rights evidenced by this Warrant, a sufficient number of shares of Common to provide for the exercise of the
rights represented by this Warrant. 

  

	9)	Registration. The Corporation and Holder acknowledge and agree that this Warrant is subject to the rights, privileges obligations set forth in that certain Investor Rights
Agreement by and between the Corporation, the Investors and William Blair & Company, L.L.C. dated May 2, 2005. 

  

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 Miscellaneous. 
  

	 	(a)	Governing Law. This warrant shall be construed in accordance with and governed by the laws of the State of Delaware without regard to the principles of conflicts of laws.

  

	 	(b)	Amendments. This Warrant and any provision hereof may be amended or waived only by an instrument in writing signed by the Holder and, if it is to be bound thereby, by the
Corporation. 

  

	 	(c)	Descriptive Headings. The descriptive headings of the several paragraphs of this Warrant are inserted for purposes of reference only, and shall not affect the meaning or
construction of any of the provisions hereof. 

  

	 	(d)	Notices. All notices, requests and other communications required or permitted to be given or delivered to the Holders of this Warrant or the Warrant Stock issuable upon
exercise thereof shall be in writing, and shall be mailed (by first class mail, postage prepaid) to each Holder of this Warrant or the Warrant Stock issuable upon exercise thereof at its address, shown on the books of the Corporation.

  

	10)	Definitions. For the purposes of this Warrant the following terms have the following meanings: 

 “Board” shall mean the Board of Directors of the Corporation. 
 “Common” shall mean the Corporation’s Common Stock, par value $0.001 per share, and any stock into which such stock may hereafter be changed. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
 “Holders” shall mean William Blair & Company, L.L.C. or its registered assigns. The term “Holder” shall mean one of the
Holders. 
 “Person” shall mean an individual, a corporation, a partnership, a limited liability company, a trust, an
unincorporated organization or a government organization or an agency or political subdivision thereof. 
 “Property” shall mean an
interest in any kind of property or assets, whether real, personal or mixed, or tangible or intangible. 
 “Securities Act” shall
mean the Securities Act of 1933, as amended. 
 “Stock” shall include any and all shares, interests or other equivalents (however
designated) of, or participations in, corporate stock. 
 “Warrant Price” shall mean $0.01 per share, subject to adjustment
pursuant to the provisions of Section 5 hereof. 
  

 - 6 - 

 “Warrant” shall mean this Warrant. 
 “Warrant Stock” shall mean at any time, the shares of the then Common outstanding upon exercise of any part of this Warrant and the Common
Stock then issuable upon exercise of the then Warrant by the Holder thereof, provided, however, that Warrant Stock shall not be deemed to include any shares after such shares have been registered under the Securities Act and sold
pursuant to such registration or any shares sold without registration under the Securities Act in compliance with Rule 144, or Pursuant to any other exemption from registration under the Securities Act to a Person who is free to resell such shares
without registration or restriction under the Securities Act, and provided, further, that at any time subsequent to the closing of a firmly underwritten initial public offering of Common Stock by means of a registration statement filed
by the Company with the United States Securities and Exchange Commission, Warrant Stock shall not include any shares which are eligible to be sold without registration under the Securities Act in compliance with subsection (k) of Rule 144.

 Dated: May 2, 2005 
  

			
	VIRTUAL RADIOLOGIC CONSULTANTS, INC.
		
	By:	 	 /s/ Sean O. Casey

	Name:	 	Sean O. Casey
	Title:	 	CEO

  

 - 7 - 

 EXHIBIT A 
 SUBSCRIPTION FORM 
 [To be executed only upon exercise of Warrant] 
 The undersigned registered owner of the attached Warrant irrevocably exercises such Warrant for the purchase of
             Shares of Common Stock of                      and herewith
makes payment therefor, all at the price and on the terms and conditions specified in such Warrant and requests that certificates for the shares of Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be
issued in the name of and delivered to                      whose address is
                                        
             and, if such shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in such Warrant that a new Warrant of like tenor and date for
the balance of the shares of Common Stock issuable hereunder be delivered to the undersigned. 
  

			
		 	  

	(Name of Registered Owner)	 	
		
		 	  
 (Signature of Registered
Owner)

		
		 	  
 (Street Address)

		
		 	  
 (City)
            (State)             (ZipCode)

 NOTICE The signature on this subscription must correspond with the name as written upon the face
of the attached Warrant in every particular, without alteration or enlargement or any change whatsoever. 

 EXHIBIT B 
 PARTIAL ASSIGNMENT 
 [To be executed only upon exercise of the Warrant] 
 FOR VALUE RECEIVED                      hereby
sells, assigns and transfers unto                      the right to purchase
                     shares of Common Stock evidenced by the within Warrant together with all rights therein, and does irrevocably constitute
and appoint                                      attorney to
transfer that part of the said Warrant on the books of the within name Corporation. 
  

			
	 Signature
	 	  

  

			
	Dated:	 	Signature Guaranteed

 FOR USE BY THE CORPORATION ONLY 
 This Warrant No. W-             canceled (or transferred or exchanged) this
                     day of
                    ,
19    ,                     shares of Common Stock issued therefor in the name of
                    , Warrant No. W-             issued for
                     shares of Common Stock in the name of

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