STOCKHOLDER AGREEMENT dated
as of March 12, 1998 among EMBARCADERO
HOLDING CORP. I, a Delaware corporation
("Embarcadero I"), EMBARCADERO HOLDING
CORP. II, a Delaware corporation
("Embarcadero II" and, together with
Embarcadero I, the "Purchasers"), and
Xxxxxx Xxxxx, M.D. (the "Stockholder").
WHEREAS, the Purchasers, Alliance Imaging, Inc., a Delaware corporation,
American Shared Hospital Services, a California corporation ("Parent") and MMRI,
Inc., a California corporation and a wholly-owned subsidiary of Parent ("M Sub")
propose to enter into a Securities Purchase Agreement dated as of the date
hereof (as the same may be amended, modified or supplemented, the "Purchase
Agreement") providing for the purchase by the Purchasers of the Shares, upon the
terms and subject to the conditions set forth in the Purchase Agreement; and
WHEREAS, the Stockholder owns the number of shares of Parent Common Stock
set forth opposite his name on Schedule A attached hereto (such shares of Parent
Common Stock, together with any other shares of capital stock of Parent acquired
by such Stockholder after the date hereof (including, without limitation,
through the exercise of any options, warrants, rights to acquire capital stock
or similar instruments), being collectively referred to herein as the "Subject
Shares"); and
WHEREAS, as a condition to the Purchasers entering into the Purchase
Agreement, the Purchasers have requested that the Stockholder enter into this
Agreement.
NOW, THEREFORE, to induce the Purchasers to enter into, and in
consideration of its entering into, the Purchase Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows (capitalized terms used herein but not
defined herein have the meanings set forth in the Purchase Agreement):
1. Representations and Warranties of the Stockholder.
The Stockholder hereby represents and warrants to each of the
Purchasers as of the date hereof as follows:
(a) Authority. The Stockholder has all requisite power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the
Stockholder, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary action on the part of the
Stockholder. This Agreement has been duly executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the Stockholder
enforceable against the Stockholder in accordance with its terms. Except for
informational filings with the SEC, the execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, (i) conflict with, or result in any
violation of, or default (with or without notice or lapse of time or both) under
any provision of, any certificate or articles of incorporation, bylaws,
certificate or articles of limited partnership, limited partnership agreement,
trust agreement, loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule or regulation
applicable to the Stockholder or to the Stockholder's property or assets,
including the Subject Shares, (ii) require any filing with, or permit,
authorization, consent or approval of, or notice to, any federal, state or local
government or any court, tribunal, administrative agency or commission or other
governmental or regulatory authority or agency, domestic, foreign or
supranational, or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Stockholder or any of the Stockholder's
properties or assets, including the Subject Shares. If the Stockholder is
married, and the Stockholder's Subject Shares constitute community property or
otherwise need spousal or other approval for this Agreement to be legal, valid
and binding, this Agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, the Stockholder's spouse,
enforceable against such spouse in accordance with its terms. No trust of which
such Stockholder is a trustee requires the consent of any beneficiary to the
execution and delivery of this Agreement or to the consummation of the
transactions contemplated hereby.
(b) The Subject Shares. The Stockholder is the record and beneficial
owner of, and has good and marketable title to the Subject Shares and the
Options (as defined below) set forth opposite his name on Schedule A attached
hereto, free and clear of any Encumbrances. The Stockholder does not own, of
record or beneficially, any shares of capital stock of the Parent or any
Subsidiary other than the Subject Shares set forth opposite his name on Schedule
A attached hereto. The Stockholder has the sole right to vote such Subject
Shares, and none of such Subject Shares is subject to any voting trust or other
agreement, arrangement or restriction with respect to the voting of such Subject
Shares, except as contemplated by this Agreement.
(c) Brokers. No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the execution and delivery
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of this Agreement by the Stockholder or the performance by the Stockholder of
his obligations hereunder.
2. Voting of Shares.
The Stockholder hereby agrees, subject to the terms and conditions
set forth herein, to vote (or cause to be voted) the Subject Shares in favor of
(i) the Parent entering into the Purchase Agreement and the Related Documents to
be entered into by Parent, and (ii) approval of the terms thereof and each of
the transactions contemplated by the Purchase Agreement and the Related
Documents, at any meeting of stockholders of Parent called to vote upon the
Purchase Agreement and the Related Documents or at any adjournment thereof or in
any other circumstances upon which a vote, consent or other approval (including
by written consent) with respect to the foregoing is sought.
3. Option Exercise
(a) The Stockholder hereby agrees, upon the written request of the
Purchasers (which will be delivered only if the Purchasers reasonably deem it
necessary to achieve the approval of the Purchase Agreement by the holders of a
majority of the outstanding shares of Parent Common Stock), promptly to exercise
all or a portion of his options and/or warrants to purchase shares of Parent
Common Stock (including, without limitation, options granted under the Parent's
Stock Option Agreement with the Stockholder, dated August 15, 1995, granting the
Stockholder options to purchase 1,495,000 shares of Parent Common Stock)
(collectively, the "Options") such that after giving effect to the exercise of
the Options, the sum of (i) the number of shares of Parent Common Stock issued
to such Stockholder upon the exercise of Options (the "Option Shares"), (ii) the
number of Subject Shares subject to this Agreement prior to giving effect to
such exercise, and (iii) all other shares of Parent Common Stock voted to
approve the Purchase Agreement at a duly convened meeting of Parent's
stockholders (or any adjournment thereof) shall be no less than fifty and
one-tenth (50.1%) percent of the number of shares of Parent Common Stock
outstanding as of the date of exercise. The Stockholder further agrees that: (i)
all Option Shares issued upon exercise of Options shall constitute "Subject
Shares" hereunder; and (ii) all representations and warranties of the
Stockholder contained in this Agreement are repeated by the Stockholder as of
the date of exercise of Options.
(b) The Purchasers hereby agree that following compliance by the
Stockholder with his obligations under Sections 3(a) and 2 hereof, the
Purchasers will pay to the Stockholder cash in the amount of (the "Gross Up
Amount") nineteen (19%) percent of: (x) the fair market value of the Option
Shares as of the date of the exercise of the Options minus (y) the aggregate
exercise price paid by the Stockholder for the Option Shares. For purposes of
this Section 3(b), the
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"fair market value" of Option Shares shall be determined based upon the closing
price on the American Stock Exchange for shares of the Parent Common Stock on
the date that the Stockholder exercises his Options pursuant to Section 3(a)
hereof. The Purchasers shall pay to the Stockholder: (i) twenty-eight (28%)
percent of the Gross Up Amount immediately following compliance by the
Stockholder with his obligations under Sections 3(a) and 2 hereof; and (ii)
seventy-two (72%) percent of the Gross Up Amount on the April 1st thereafter.
(c) The Purchasers hereby further agree that following (i)
compliance by the Stockholder with his obligations under Sections 3(a) and 2
hereof and (ii) delivery by the Stockholder's accountant of a certificate
specifying the Stockholder's aggregate Federal, State and local income tax
liability incurred solely by reasons of the Stockholder's exercise of his
options pursuant to Section 3(a) hereof (the "Tax Liability"), Embarcadero I, at
the request of the Stockholder, will loan to the Stockholder, on a fully
recourse basis, an amount (the "Loan Amount") equal to (x) the Tax Liability
minus (y) the Gross Up Amount.
(d) Simultaneously with Embarcadero I making a loan to the
Stockholder of the Loan Amount, the Stockholder shall: (i) deliver to
Embarcadero I an executed Note (the "Note") in a principal amount equal to the
Loan Amount, with a maturity of five (5) years from the date thereof, bearing a
rate of interest equal to the Applicable Federal Rate of Interest (as such term
is defined in the Code) for an instrument of similar principal amount and
maturity and on other terms and conditions mutually satisfactory to Embarcadero
I and the Stockholder; and (ii) execute a Pledge Agreement granting to
Embarcadero I, as security for the obligations under such Note, a security
interest in the Option Shares. The Note shall be mandatorily prepayable in the
event of a Transfer (as defined below) by the Stockholder of any shares of
capital stock of the Parent with the proceeds thereof.
4. Covenants of the Stockholder.
Until the earlier of the Closing Date and the termination of this
Agreement in accordance with Section 9, the Stockholder agrees as follows:
(a) At any meeting of stockholders of Parent or at any adjournment
thereof or in any other circumstances upon which the Stockholder's vote, consent
or other approval is sought, the Stockholder shall vote (or cause to be voted)
the Subject Shares (and each class thereof) against (i) any Alternative
Transaction, (ii) any amendment of Parent's certificate of incorporation or
by-laws or other proposal or transaction involving Parent, which amendment or
other proposal or transaction could impede, frustrate, prevent or nullify the
Purchase Agreement, the Related Documents or any of the transactions
contemplated thereby or change in any manner the
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voting rights of any class of Parent's capital stock, or (iii) any action that
could cause Parent to breach any representation, warranty or covenant contained
in the Purchase Agreement or the Related Documents. The Stockholder further
agrees not to enter into any agreement or take any action inconsistent with the
foregoing.
(b) The Stockholder shall not (A) sell, transfer, give, pledge,
assign or otherwise dispose of (including by gift) (collectively, "Transfer"),
or consent to any Transfer of, any or all of such Subject Shares or the Options
or any interest therein or enter into any contract, option or other arrangement
(including any profit sharing arrangement) with respect to the Transfer of, the
Subject Shares or the Options to any Person or (B) enter into any voting
arrangement, directly or indirectly, whether by proxy, voting agreement or
otherwise, in respect of the Subject Shares or the Options, and the Stockholder
agrees not to commit or agree to take any of the foregoing actions.
(c) Except as permitted by the Purchase Agreement, the Stockholder
shall not, nor shall he cause any investment banker, financial advisor,
attorney, accountant or other representative, to, directly or indirectly, (i)
solicit, initiate or encourage (including by way of furnishing information), or
take any other action to facilitate, any inquiries or the making of any proposal
that may lead to an Alternative Transaction or (ii) participate in any
discussions or negotiations regarding any proposed Alternative Transaction.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any investment banker,
financial advisor, attorney, accountant or other representative of such
Stockholder, whether or not such Person is purporting to act on behalf of the
Stockholder, shall be deemed to be a violation of this Section 4(c) by the
Stockholder.
(d) The Stockholder, and any beneficiary of a revocable trust for
which such Stockholder serves as trustee, shall not take any action to revoke or
terminate such trust or take any other action which would restrict, limit or
frustrate in any way the transactions contemplated by this Agreement, the
Purchase Agreement or the Related Documents. Each such beneficiary hereby
acknowledges and agrees to be bound by the terms of this Agreement applicable to
it.
5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Stockholder hereby irrevocably grants to, and appoints,
Embarcadero I and Xxxx Xxxxxx, in his capacity as an officer of such Purchaser,
and any individual who shall hereafter succeed to any such office of such
Purchaser, as such Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Stockholder, to vote
such Stockholder's Subject Shares, or grant a consent or approval in respect of
such Subject Shares against
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(i) any Alternative Transaction, (ii) any amendment of Parent's certificate of
incorporation or by-laws or other proposal or transaction involving Parent,
which amendment or other proposal or transaction could impede, frustrate,
prevent or nullify the Purchase Agreement or the Related Documents or any of the
transactions contemplated thereby or change in any manner the voting rights of
any class of Parent's capital stock, or (iii) any action that could cause Parent
to breach any representation, warranty or covenant contained in the Purchase
Agreement or the Related Documents. The proxy granted pursuant to this Section
5(a) shall terminate upon the earlier of (i) the Closing Date and (ii) the
termination of this Agreement pursuant to Section 9.
(b) The Stockholder represents that there are no proxies heretofore
given in respect of the Stockholder's Subject Shares. The Stockholder further
covenants not to grant any such proxies to any Person during the term of this
Agreement.
(c) The Stockholder hereby affirms that the irrevocable proxy set
forth in this Section 5 is given in connection with the execution and delivery
of the Purchase Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Stockholder under this Agreement. The
Stockholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Stockholder hereby
ratifies and confirms all that the holder of such irrevocable proxy may lawfully
do or cause to be done by virtue hereof. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section 705(e)
of California General Corporation Law.
6. Further Assurances.
The Stockholder will, at Purchasers' expense, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further consents, documents and other instruments as any Purchaser may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
7. Certain Events.
The Stockholder agrees that this Agreement and the obligations
hereunder shall attach to the Stockholder's Subject Shares (and the associated
rights in respect thereof) and shall be binding upon any Person or entity to
which legal or beneficial ownership of such Subject Shares shall pass, whether
by operation of law or otherwise, including without limitation such
Stockholder's heirs, guardians, administrators or successors. In the event of
any stock split, stock dividend, merger, reorganization, recapitalization or
other change in the capital structure of Parent affecting the Parent Common
Stock (or any other class of Parent's capital stock), or the acquisition of
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additional shares of Parent Common Stock (or any other class of Parent's capital
stock) or other voting securities of Parent by the Stockholder (including the
Option Shares), the number of Subject Shares listed in Schedule A beside the
name of the Stockholder shall be deemed to be automatically adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Parent Common Stock or other voting securities of
Parent issued to or acquired by the Stockholder.
8. Assignment.
Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that any Purchaser may assign, in
its sole discretion, any and all of its rights, interests and obligations
hereunder to any of its Affiliates or its or its Affiliates' lenders. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
permitted assigns.
9. Termination.
This Agreement, and all rights and obligations of the parties
hereunder, shall terminate upon the earlier to occur of (i) the Closing Date and
(ii) the date upon which the Purchase Agreement is terminated in accordance with
its terms.
10. General provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered by facsimile (with
confirmation of delivery) or personally or sent by overnight courier (providing
proof of delivery) to the Purchasers in accordance with Section 9.7 of the
Purchase Agreement and to the Stockholder at his address and facsimile number
set forth on Schedule A attached hereto (or at such other address and facsimile
number as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement to an
Article or a Section, such reference shall be deemed made to an Article or a
Section of this Agreement, unless otherwise indicated. 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. Unless the context otherwise
requires, words importing the singular shall include the plural, and vice versa.
Wherever the words "include," "includes" or "including" are used in this
Agreement,
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they shall be deemed to be followed by the words "without limitation."
(d) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
(g) Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses.
11. Stockholder Capacity.
No person executing this Agreement who is or becomes during the term
hereof a director or officer of Parent or any of its Subsidiaries makes any
agreement or understanding herein in his capacity as such director or officer.
The Stockholder signs solely in his capacity as the record holder and beneficial
owner of, or the trustee of a trust whose beneficiaries are the beneficial
owners of, the Stockholder's Subject Shares and nothing herein shall limit or
affect any actions taken by the Stockholder in his capacity as an officer or
director of Parent.
12. Enforcement.
The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in any court of the United States located in the State of New
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York or in a New York state court, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the parties
hereto (i) consents to submit such party to the personal jurisdiction of any
Federal court located in the State of New York or any New York state court in
the event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that such party will not bring any action relating to
this Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the state of New York or a New York state court and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
13. Public Announcements.
The Stockholder shall not issue any press release or make any public
statement without the prior written consent of the Purchasers, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange.
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IN WITNESS WHEREOF, the Purchasers and the Stockholder have caused
this Agreement to be duly executed and delivered as of the date first written
above.
EMBARCADERO HOLDING CORP. I
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
EMBARCADERO HOLDING CORP. II
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX, M.D., as
Stockholder
SCHEDULE A
Number of Number of Warrants
Name and Address Shares of Parent and Options
of Stockholder Common Stock Owned Owned
-------------- ------------------ -----
Xxxxxx Xxxxx, M.D. 839,070 1,495,000 options,
c/o American Shared Hospital Services fully vested,
Four Embarcadero Center exercisable at $.01
San Francisco, CA per share