EXHIBIT 10.21
STOCKHOLDER'S AGREEMENT
This Stockholder's Agreement (this "Agreement") is entered into as of
November 2, 1999 by and between ALLIANCE IMAGING, INC., a Delaware corporation
(the "Company"), [__________________] (the "Purchaser") and VIEWER HOLDINGS
LLC, a Delaware limited liability company ("Viewer") (being hereinafter
collectively referred to as the "Parties").
RECITALS
Certain employees of the Company, including Purchaser, have previously
been granted options to purchase common stock of the Company ("Common Stock")
pursuant to the Alliance Imaging, Inc. 1997 Stock Option Plan or the Three
Rivers Holding Corp. 1997 Stock Option Plan (the "1997 Option Plan") and may
hold shares of Common Stock received upon the exercise of such options.
Pursuant to the terms of the 1999 Equity Plan for Employees of Alliance
Imaging, Inc. and Subsidiaries, as the same may be amended from time to time
(the "1999 Equity Plan"), the Company is granting additional options to
purchase Common Stock to certain employees, including the Purchaser. This
Agreement is one of several agreements ("Other Purchasers' Agreements") which
have been, or which in the future will be, entered into between the Company
and other individuals who are or will be employees of the Company or one of
its Subsidiaries (collectively, the "Other Purchasers"). For purposes of this
Agreement, "Subsidiary," with respect to any entity, shall mean any
corporation in an unbroken chain of corporations beginning with such entity
if each of the corporations, or group of commonly controlled corporations,
other than the last corporation in the unbroken chain, then owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain; "Affiliate" shall mean,
with respect to any Person, a Person directly or indirectly controlling,
controlled by, or under common control with, such Person; "Person" means an
individual, partnership, corporation, business trust, joint stock company,
trust, unincorporated association, joint venture, governmental authority or
other entity of whatever nature, and "control" shall have the meaning given
such term under Rule 405 of the Securities Act of 1933, as amended (the
"Securities Act").
On the date hereof (the "Purchase Date") the Company will grant to the
Purchaser an option or options to purchase the number of shares of Common
Stock set forth on Exhibit A hereto as New Options (the " New Options") at an
exercise price equal to the Cash Merger Price (as defined in the Agreement
and Plan of Merger between Viewer Acquisition Corp. and Alliance Imaging,
Inc. dated as of September 13, 1999, (the "Merger Agreement")) per share (the
"Initial Price Per Share"), pursuant to the terms of the 1999 Equity Plan and
the "Non-Qualified Stock Option Agreement" attached hereto as Exhibit B. The
New Options may be granted as Time Options or Performance Options (each as
defined in the Non-Qualified Stock Option Agreement).
In addition to the New Options, Purchaser, immediately following
consummation of the transactions contemplated by the Merger Agreement, will
own the number of shares of Common Stock, if any, as set forth on Exhibit A
as Existing Stock (the "Existing Stock") and will hold options under the 1997
Option Plan for the number of shares of Common Stock set forth on Exhibit A
as Rollover Options, (the "Rollover Options"), which consist of options to
purchase the number of shares of Common Stock set forth and designated on
Exhibit A as Old Options (the "Old Options") and options to purchase the
number of shares of Common Stock set forth and designated on Exhibit A as
Repurchase Options (the "Repurchase Options").
The term "Options" as used in this Agreement shall include the Rollover
Options, the New Options and any other options to purchase Common Stock
granted to the Purchaser by the Company and held by the Purchaser at any time
when this Agreement is in effect. The term "Stock" as used in this Agreement
shall include all Rollover Stock and all shares of Common Stock issued to the
Purchaser by the Company upon exercise of the Options and of any other stock
options held by the Purchaser and any other Common Stock otherwise acquired
by the Purchaser at any time when this Agreement is in effect. The term
"Rollover Stock" as used in this Agreement shall include all Existing Stock
and all Stock issued to Purchaser by the Company upon exercise of the Old
Options. The term "New Option Stock" as used in this Agreement shall include
all Stock issued to Purchaser by the Company upon exercise of the New Options.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the Parties agree as follows:
1. ISSUANCE OF NEW OPTIONS.
Upon and as of the Purchase Date, the Company shall issue to the
Purchaser the New Options subject to the terms and conditions hereinafter set
forth and contained in the 1999 Equity Plan and the Non-Qualified Stock
Option Agreement, and the Parties shall execute and deliver to each other
copies of the Non-Qualified Stock Option Agreement concurrently with the
issuance of the New Options.
2. THE PURCHASER'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) The Purchaser agrees and acknowledges that he will not, directly
or indirectly, offer, transfer, sell, assign, pledge, hypothecate or
otherwise dispose of any shares of the Stock (any such act sometimes
referred to herein as a "Transfer," whether voluntary or involuntary)
unless such Transfer complies with the terms and conditions of this
Agreement and (i) the Transfer is pursuant to an effective registration
statement under the Securities Act, or the rules and regulations in effect
thereunder or (ii) (A) counsel for the Purchaser (which shall be O'Melveny
& Xxxxx LLP or such other counsel acceptable to the Company) shall have
furnished the Company with an opinion, satisfactory in form and substance
to the Company, that no such
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registration is required because of the availability of an exemption
from registration under the Securities Act and (B) if the Purchaser is a
citizen or resident of any country other than the United States, or the
Purchaser desires to effect any Transfer in any such country, counsel
for the Purchaser (which counsel shall be reasonably satisfactory to the
Company) shall have furnished the Company with an opinion or other
advice satisfactory in form and substance to the Company to the effect
that such Transfer will comply with the securities laws of such
jurisdiction. Notwithstanding the foregoing, the Company acknowledges
and agrees that any of the following Transfers are deemed to be in
compliance with the Securities Act and this Agreement and no opinion of
counsel is required in connection therewith: (x) a Transfer made
pursuant to Section 5, 6, 8 or 9 hereof, (y) a Transfer upon the death
of the Purchaser to his executors, administrators, testamentary
trustees, legatees or beneficiaries (the "Purchaser's Estate") or a
Transfer to the executors, administrators, testamentary trustees,
legatees or beneficiaries of an individual who has become a holder of
Stock in accordance with the terms of this Agreement, provided that it
is expressly understood that any such transferee shall be bound by the
provisions of this Agreement and (z) a Transfer made after the Purchase
Date in compliance with the federal securities laws to a trust,
custodianship or other similar entity the beneficiaries or holders of
which may include only the Purchaser, his spouse or his lineal
descendants (which term shall include biological as well as adoptive
descendants) or directly to the Purchaser's spouse or lineal descendants
(a "Purchaser's Trust") or a Transfer made after the third anniversary
of the Purchase Date to such a trust by an individual who has become a
holder of Stock in accordance with the terms of this Agreement, provided
that such Transfer is made expressly subject to this Agreement and that
the transferee agrees in writing to be bound by the terms and conditions
hereof.
(b) The certificate (or certificates) representing the Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE
STOCKHOLDER'S AGREEMENT DATED AS OF NOVEMBER 2, 1999 BY AND BETWEEN
ALLIANCE IMAGING, INC. (THE "COMPANY"), THE PURCHASER NAMED ON THE
FACE HEREOF AND VIEWER HOLDINGS LLC (A COPY OF WHICH IS ON FILE WITH
THE SECRETARY OF THE COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH
AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF (I) THE
COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR
THE HOLDER THAT
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SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE
ACT OR THE RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN
COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS, AND
(II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF ANY COUNTRY OTHER THAN
THE UNITED STATES, OR THE HOLDER DESIRES TO EFFECT ANY SUCH
TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN FURNISHED WITH A
SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR THE HOLDER THAT
SUCH TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH COUNTRY."
(c) The Purchaser acknowledges that he has been advised that (i) the
Stock has not been registered under the Securities Act, (ii) the Stock must
be held indefinitely and the Purchaser must continue to bear the economic
risk of the investment in the Stock unless it is subsequently registered
under the Securities Act or an exemption from registration is available,
(iii) it is not anticipated that there will be any public market for the
Stock, (iv) an exemption from registration under Rule 144 promulgated under
the Securities Act is not currently available with respect to the sales of
any securities of the Company, and the Company has made no covenant to make
such Rule available (except as provided in Section 11(b) hereof), (v) when
and if shares of the Stock may be disposed of without registration in
reliance on Rule 144, such disposition can be made only in limited amounts
in accordance with the terms and conditions of such Rule, (vi) if the Rule
144 exemption is not available, public sale without registration will
require compliance with some other exemption under the Securities Act,
(vii) a restrictive legend in the form heretofore set forth shall be placed
on the certificates representing the Stock and (viii) a notation shall be
made in the appropriate records of the Company indicating that the Stock is
subject to restriction on transfer and, if the Company should at some time
in the future engage the services of a stock transfer agent, appropriate
stop transfer restrictions will be issued to such transfer agent with
respect to the Stock.
(d) If any shares of the Stock are to be disposed of in accordance
with Rule 144 under the Securities Act or otherwise, the Purchaser shall
promptly notify the Company of such intended disposition and shall deliver
to the Company at or prior to the time of such disposition such
documentation as the Company may reasonably request in connection with such
sale, and, in the case of a disposition pursuant to Rule 144, shall deliver
to the Company an executed copy of any notice on Form 144 required to be
filed with the Securities and Exchange Commission.
(e) The Purchaser agrees that, if any shares of the Common Stock (or
securities convertible into or exchangeable for Common Stock) of the
Company are offered to the public pursuant to an effective registration
statement under the Securities Act, the Purchaser will not effect any
public sale or distribution of any shares of the Stock not covered by such
registration statement within 7 days prior to, or within 180 days (or such
other shorter time
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period as may be permitted by the underwriters in such offering, but no
less than the number of days applicable to Viewer) after, the effective
date of such registration statement, unless otherwise agreed to in writing
by the Company.
(f) The Purchaser represents and warrants that (i) he has received and
reviewed a Private Placement Memorandum (the "Private Placement
Memorandum") relating to the Stock and the documents referred to therein,
certain of which documents set forth the rights, preferences and
restrictions relating to the Stock and (ii) he has been given the
opportunity to obtain any additional information or documents and to ask
questions and receive answers about such documents, the Company and its
Subsidiaries and Affiliates and the business and prospects of the Company
and its Subsidiaries and Affiliates and which he deems necessary to
evaluate the merits and risks related to his investment in the Stock and he
has relied solely on such information.
(g) The Purchaser further agrees that upon exercise of the Options, he
will represent and warrant that (i) his financial condition is such that he
can afford to bear the economic risk of holding the Stock for an indefinite
period of time and has adequate means for providing for his current needs
and personal contingencies, (ii) he can afford to suffer a complete loss of
his investment in that Stock, (iii) all information which he has provided
to the Company concerning himself and his financial position is correct and
complete as of that date, (iv) he understands and has taken cognizance of
all risk factors related to the purchase of the Stock, including those set
forth in the Private Placement Memorandum referred to above, and (v) his
knowledge and experience in financial and business matters are such that he
is capable of evaluating the merits and risks of his purchase of the Stock
as contemplated by this Agreement.
3. RESTRICTION ON TRANSFER.
(a) Except for Transfers permitted by clauses (x), (y) and (z) of
Section 2(a) or a sale of shares of Stock pursuant Section 12, the
Purchaser agrees that he will not transfer, sell, assign, pledge,
hypothecate or otherwise dispose of any shares of Stock at any time prior
to the fifth anniversary of the Purchase Date. No Transfer of any such
shares in violation hereof shall be made or recorded on the books of the
Company and any such Transfer shall be void and of no effect.
(b) Any attempt to Transfer any shares of Stock not in compliance with
this Agreement shall be null and void and neither the Company nor any
transfer agent shall give any effect in the Company's stock records to such
attempted Transfer.
4. RIGHT OF FIRST REFUSAL.
If, at any time after the fifth anniversary of the Purchase Date and prior
to a Public Offering (as defined in Section 7(i) below), the Purchaser receives
a bona fide offer to purchase any or all of his shares of Stock (the "Offer")
from a third party (the "Offeror") which the Purchaser wishes to accept, the
Purchaser shall cause the Offer to be reduced to writing and shall notify the
Company in writing of his wish to accept the Offer. The Purchaser's notice shall
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contain an irrevocable offer to sell such shares of Stock to the Company, (in
the manner set forth below) at a purchase price equal to the price contained
in, and on the same terms and conditions of, the Offer, and shall be
accompanied by a true copy of the Offer (which shall identify the Offeror).
At any time within 45 days after the date of the receipt by the Company of
the Purchaser's notice, the Company shall have the right and option to
purchase, or to arrange for a third party to purchase, all of the shares of
Stock covered by the Offer either (i) at the same price and on the same terms
and conditions as the Offer or (ii) if the Offer includes any consideration
other than cash, then at the sole option of the Company, at the equivalent
all cash price, determined in good faith by the Company's Board of Directors,
by delivering a certified bank check or checks in the appropriate amount to
the Purchaser at the principal office of the Company against delivery of
certificates or other instruments representing the shares of Stock so
purchased, appropriately endorsed by the Purchaser. If at the end of such 45
day period, the Company has not tendered the purchase price for such shares
in the manner set forth above, the Purchaser may during the succeeding 30 day
period sell not less than all of the shares of Stock covered by the Offer to
the Offeror at a price and on terms no less favorable to the Purchaser than
those contained in the Offer. No sale may be made to any Offeror unless the
Offeror agrees in writing with the Company to be bound by the provisions of
this Section 4 in connection with any resale by the Offeror. Promptly after
such sale, the Purchaser shall notify the Company of the consummation thereof
and shall furnish such evidence of the completion and time of completion of
such sale and of the terms thereof as may reasonably be requested by the
Company. If, at the end of the 30 day period following the expiration of the
45 day period for the Company to purchase the Stock, the Purchaser has not
completed the sale of such shares of Stock as aforesaid, all the restrictions
on sale, transfer or assignment contained in this Agreement shall again be in
effect with respect to such shares of Stock.
5. THE PURCHASER'S RESALE OF STOCK AND OPTIONS TO THE COMPANY UPON THE
PURCHASER'S DEATH, PERMITTED RETIREMENT OR DISABILITY; AND PURCHASER'S
RESALE OF REPURCHASE STOCK.
(a) If on or before the later of the first Public Offering and the fifth
anniversary of the Purchase Date, (i)(A) the Purchaser is still in the employ
of the Company or any Subsidiary or Affiliate of the Company, or had retired
from the Company or any Subsidiary or Affiliate of the Company at age 65 or
over (or such other age as may be approved by the Board of Directors of the
Company) after having been employed by the Company or any of its Subsidiaries
for at least three years after the Purchase Date (a "Permitted Retirement")
and (B) the Purchaser either dies or becomes permanently disabled, or (ii)
the Purchaser retires pursuant to a Permitted Retirement, then the Purchaser,
the Purchaser's Estate or the Purchaser's Trust, as the case may be, shall
have the right, for sixty days following the date of death, permanent
disability or Permitted Retirement, to (X) sell to the Company, and the
Company shall be required to purchase, on one occasion, all or any portion of
the shares of Stock then held by the Purchaser, the Purchaser's Estate and/or
the Purchaser's Trust, as the case may be, at the Section 5 Repurchase Price,
as determined in accordance with Section 7, and (Y) require the Company to
pay to the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the
case may be, an amount equal to the Option Excess Price (as defined in
Section 10) determined on the basis of a Section 5 Repurchase Price as
provided in Section 10 with respect to the termination of all or any
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portion of the outstanding exercisable Options then held by the Purchaser.
The Purchaser, the Purchaser's Estate and/or the Purchaser's Trust, as the
case may be, shall send written notice to the Company of its intention to
sell shares of Stock and/or to terminate Options in exchange for the payment
referred to in the preceding sentence (the "Redemption Notice"). The
completion of the purchase shall take place at the principal office of the
Company on the tenth business day after the giving of the Redemption Notice.
The Section 5 Repurchase Price and any payment with respect to the Options as
described above shall be paid by delivery to the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, of a certified bank
check or checks in the appropriate amount payable to the order of the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may
be, against delivery of certificates or other instruments representing the
Stock so purchased and appropriate documents canceling the Options so
terminated, appropriately endorsed or executed by the Purchaser, the
Purchaser's Estate or the Purchaser's Trust, or his or its duly authorized
representative. For purposes of this Agreement, the Purchaser shall be deemed
to have a "permanent disability" if the Purchaser is unable to engage in the
activities required by the terms of Purchaser's employment with the Company
by reason of any medically determined physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months, as reasonably determined
by the Board of Directors of the Company in good faith and in its discretion.
(b) The Purchaser shall have the right, either (i) to cause the Company
to purchase, on one occasion, all or any portion of the vested portion of the
Repurchase Options for an amount equal to the difference between the Initial
Price Per Share and the exercise prices per share of such Repurchase Options
multiplied by the number of Repurchase Options being so purchased, or (ii)
for sixty days following the exercise of the Repurchase Options to sell to
the Company, and the Company shall be required to purchase, all or any
portion of the shares of Stock acquired by the Purchaser upon the exercise of
the Repurchase Options, at the Initial Price Per Share. The Purchaser, or the
Purchaser's Trust, as the case may be, shall send the Company a Redemption
Notice of its intention to exercise Purchaser's rights under this Section
5(b) in exchange for the applicable payment under Section 5(b)(i) or (ii)
above. The completion of the purchase shall take place at the principal
office of the Company on the tenth business day after the giving of the
Redemption Notice in accordance with the procedures set forth in Section 5(a).
(c) Notwithstanding anything in Section 5(a) or (b) to the contrary and
subject to Section 13, if there exists and is continuing a default or an
event of default on the part of the Company or any Subsidiary of the Company
under any loan, guarantee or other agreement under which the Company or any
Subsidiary of the Company has borrowed money or such repurchase would result
in a default or an event of default on the part of the Company or any
Subsidiary of the Company under any such agreement or if a repurchase would
not be permitted under Section 170 of the General Corporation Law of the
State of Delaware or would otherwise violate the General Corporation Law of
the State of Delaware (each such occurrence being an "Event"), the Company
shall not be obligated to repurchase any of the Stock or the Options from the
Purchaser, the Purchaser's Estate, or the Purchaser's Trust, as the case may
be, until the first business day which is 15 calendar days after all of the
foregoing Events have ceased to exist (the "Repurchase Eligibility Date");
provided, however, that (i) the number of shares of Stock subject
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to repurchase under this Section 5(c) shall be that number of shares of
Stock, and (ii) the number of Exercisable Option Shares (as defined in
Section 10) for purposes of calculating the Option Excess Price payable
under this Section 5(c) shall be the number of Exercisable Option Shares
held by the Purchaser, the Purchaser's Estate or the Purchaser's Trust,
as the case may be, at the time of delivery of a Redemption Notice in
accordance with Section 5(a) or (b) hereof. All Options exercisable as of
the date of a Redemption Notice shall continue to be exercisable until the
repurchase pursuant to such Redemption Notice.
6. THE COMPANY'S OPTION TO REPURCHASE STOCK AND OPTIONS OF THE PURCHASER.
(a) (i) If, on or prior to the fifth anniversary of the Purchase Date,
(A) the Purchaser's active employment with the Company (and/or, if
applicable, its Subsidiaries or Affiliates) is voluntarily or involuntarily
terminated for any reason whatsoever, (B) the beneficiaries of the
Purchaser's Trust shall include any person or entity other than the
Purchaser, his spouse or his lineal descendants, (C) the Purchaser shall
effect a Transfer of any of the Stock other than as permitted in this
Agreement, unless such Transfer is corrected within 10 days after the date
of the Call Notice, or (D) there shall occur a Transfer of any of the Stock
pursuant to any bankruptcy proceeding, levy, property settlement or
disposition pursuant to law incident to marital separation or divorce
(alternatively, a "Call Event"), the Company shall have the right to
purchase all or any portion of the shares of the Stock then held by the
Purchaser, the Purchaser's Estate or the Purchaser's Trust at the Section 6
Repurchase Price determined in accordance with Section 7 hereof; provided
however, that the Call Event described in clause (D) of this Section
6(a)(i) shall entitle the Company to repurchase only that number of shares
of Stock that are the subject of the transfer resulting in the Call Event;
and provided further, that if the Call Event results from the death,
permanent disability or Permitted Retirement of the Purchaser, the Company
shall have the right to purchase all or any portion of the shares of the
Stock held by the Purchaser, the Purchaser's Estate or the Purchaser's
Trust only at the Section 5 Repurchase Price. The Company shall have until
60 days after the date on which the Company has actual knowledge of a Call
Event in which to give notice in writing to the Purchaser of the exercise
of such election ("Call Notice").
(ii) In the event that (A) the Purchaser, the Purchaser's Estate
and/or the Purchaser's Trust holds Stock and Options and the Company
exercises its right to repurchase Stock pursuant to this Section 6 or (B)
the Purchaser, the Purchaser's Estate and/or the Purchaser's Trust holds
only Options and the Company elects to cash out such Options upon the
occurrence of an event specified in Section 6(a)(i) (in accordance with the
requirements of the Call Notice), the Company shall pay the Purchaser, the
Purchaser's Estate or the Purchaser's Trust, as the case may be, an amount
equal to the Option Excess Price determined on the basis of the Section 6
Repurchase Price or the Section 5 Repurchase Price, as applicable, with
respect to the termination of (x) if the Call Event is described in clause
(A), (B) or (C) of Section 6(a)(i), all or any portion of
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the then exercisable outstanding Options held by the Purchaser, Purchaser's
Estate or Purchaser's Trust and (y) if the Call Event is described in
clause (D) of Section 6(a)(i), a PRO RATA portion (based on the ratio of
the number of shares of Stock that are the subject of the Transfer to the
sum of such number and the number of additional shares so held) of the then
exercisable outstanding Options held by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust.
(iii) The completion of the purchases pursuant to the foregoing shall
take place at the principal office of the Company on the tenth business day
after the later of the giving of notice of the exercise of the option to
purchase or the date of the Call Event. The Section 5 Repurchase Price or
the Section 6 Repurchase Price, as the case may be, and any payment with
respect to the Options as described above shall be paid by delivery to the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may
be, of a certified bank check or checks in the appropriate amount payable
to the order of the Purchaser, the Purchaser's Estate or the Purchaser's
Trust, as the case may be, against delivery of certificates or other
instruments representing the Stock so purchased and appropriate documents
canceling the Options so terminated, appropriately endorsed or executed by
the Purchaser, the Purchaser's Trust or his or its duly authorized
representative.
(b) Notwithstanding any other provision of this Section 6 to the
contrary and subject to Section 13, if there exists and is continuing any
Event, the Company shall delay the repurchase of any of the Stock or the
Options (pursuant to a Call Notice timely given in accordance with Section
6(a) hereof) from the Purchaser, the Purchaser's Estate or the Purchaser's
Trust, as the case may be, until the Repurchase Eligibility Date; PROVIDED,
HOWEVER, that (i) the number of shares of Stock subject to repurchase under
this Section 6(c) shall be that number of shares of Stock and (ii) the number
of Exercisable Option Shares for purposes of calculating the Option Excess
Price payable under this Section 6(c) shall be the number of Exercisable
Option Shares held by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, at the time of delivery of a Call
Notice in accordance with Section 6(a) hereof. All Options exercisable as of
the date of a Call Notice shall continue to be exercisable until the
repurchase pursuant to such Call Notice.
7. DETERMINATION OF REPURCHASE PRICE.
(a) The Section 5 Repurchase Price and the Section 6 Repurchase Price
are hereinafter collectively referred to as the "Repurchase Price." The event
giving rise to the repurchase shall be deemed to be the Transfer, death,
permanent disability, Permitted Retirement or termination of employment, or
other event, as the case may be (the "Repurchase Event"), not the giving of
any notice required pursuant to Section 5 or Section 6.
(b) The "Repurchase Calculation Date" shall be determined as follows:
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(i) For purposes of subsection (c), the Repurchase Calculation Date
shall be the last day of the month preceding either (A) the month in which
the Repurchase Event occurs or (B) the month in which the Repurchase
Eligibility Date occurs, whichever produces the greater Section 5
Repurchase Price;
(ii) For purposes of subsection (d), the Repurchase Calculation Date
shall be the last day of the month preceding either (A) the month in which
the Repurchase Event occurs or (B) the month in which the Repurchase
Eligibility Date occurs, whichever produces the greater Section 6
Repurchase Price;
(iii) For purposes of subsections (e) or (f) , the Repurchase
Calculation Date shall be the last day of the month preceding either (A)
the month in which the Repurchase Event occurs or (B) the month in which
the Repurchase Eligibility Date occurs, whichever produces the lesser
Section 6 Repurchase Price;
(c) Prior to a Public Offering (as hereinafter defined) the Section 5
Repurchase Price shall be Fair Market Value (as defined in Section 7(k)) as
of the Repurchase Calculation Date. After a Public Offering, the Section 5
Repurchase Price shall be the Market Price Per Share (as defined in Section
7(j)) as of the Repurchase Calculation Date.
(d) In the event of Purchaser's termination without Cause by the Company
(and/or, if applicable, its Subsidiaries or Affiliates), or resignation with
Good Reason (as defined in Section 7(g)), the Section 6 Repurchase Price
shall be (i) for Rollover Stock, either (A) Fair Market Value if the
Repurchase Calculation Date is prior to a Public Offering or (B) Market Price
Per Share if the Repurchase Calculation Date is after a Public Offering (Fair
Market Value and Market Price Per Share, as applicable, the "Market Value"),
and (ii) for New Option Stock the lesser of (A) the Market Value or (B) the
Initial Price Per Share increased or decreased by the amount by which the
Book Value Per Share as of the Repurchase Calculation Date exceeds or is less
than the Book Value Per Share as of the Purchase Date; PROVIDED, HOWEVER, if
the Repurchase Eligibility Date is more than 12 months following the
Repurchase Event, then the Section 6 Repurchase Price shall not be less than
the Section 6 Repurchase Price determined as of the last day of the month
preceding the month in which the Repurchase Event occurs, plus interest
compounded annually thereon at a rate equal to the interest rate applicable
under Section 1274(d) of the Code on short term obligations.
(e) In the event of the Purchaser's resignation without Good Reason (as
defined in Section 7(g)), the Section 6 Repurchase Price shall be (i) if (A)
the Book Value Per Share on the Repurchase Calculation Date is less than the
Book Value Per Share on the Purchase Date (such difference being the "Book
Value Decrease") and (B) the Market Value is greater than the Initial Price
Per Share less the Book Value Decrease, then the Section 6 Repurchase Price
shall be equal to the lesser of (x) the Market Value or (y) the Initial Price
Per Share, (ii) if (A) the Book Value Per Share on Repurchase Calculation
Date is less than the Book Value Per Share on the Purchase Date and (B) the
Market Value is less than the Initial Price Per Share less the Book Value
Decrease, then the Section 6 Repurchase Price shall be equal to the Market
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Value, or (iii) if the Book Value Per Share on the Repurchase Calculation
Date is greater than the Book Value Per Share on the Purchase Date the
Section 6 Repurchase Price shall be the lesser of (A) the Market Value, and
(B) the Initial Price Per Share, plus (x) the Percentage (as defined below)
multiplied by (y) the amount, if any, by which the Book Value Per Share as of
the Repurchase Calculation Date exceeds the Book Value Per Share on the
Purchase Date.
(f) In the event of the Purchaser's termination by the Company (and/or,
if applicable, its Subsidiaries or Affiliates) for Cause or an event
described in Section 6(a)(i)(B), (C) or (D), the Section 6 Repurchase Price
shall be a per share Repurchase Price equal to the least of (i) Market Value,
(ii) the Initial Price Per Share, or (iii) the Initial Price Per Share less
the amount of any Book Value Decrease.
(g) For purposes of this Agreement the following definitions shall
apply: "Cause" shall mean (i) the Purchaser's willful refusal to perform in
any material respects the Purchaser's lawful duties or responsibilities for
the Company or its Subsidiaries, (ii) the Purchaser's willful disregard in
any material respect of any financial or other budgetary limitations
established in good faith by the Company's Board of Directors, (iii)
misconduct by the Purchaser that causes material and demonstrable injury,
monetarily or otherwise, to the Company or its Subsidiaries, including but
not limited to misappropriation or conversion of assets of the Company or its
Subsidiaries (other than non-material assets); (iv) conviction of or entry of
a plea of NOLO CONTENDERE to a non-vehicular felony; or (v) the Purchaser's
violation of any restrictive covenant contained in any employment or other
agreement to which he and the Company or one of its Subsidiaries are parties,
which violation constitutes a material breach by the Purchaser of such
agreement. No act or failure to act by the Purchaser shall be deemed
"willful" if done, or omitted to be done, by him in good faith and with the
reasonable belief that his action or omission was in the best interest of the
Company or consistent with Company policies or the directive of the Company's
Board of Directors. "Good Reason" shall mean (A) a reduction in the
Purchaser's base salary (other than as part of a broad salary reduction
program instituted because the Company is in financial distress), (B) a
substantial reduction in the Purchaser's duties and responsibilities other
than as approved by Xxxxxxx X. Xxxxxx of the Company (C) the elimination or
reduction of the Purchaser's eligibility to participate in the Company's
benefit programs that is inconsistent with the eligibility of other similarly
situated employees of the Company to participate therein, (D) the transfer of
the Purchaser's primary place of work which increases the Purchaser's one-way
commute by more than twenty-five (25) miles, and (E) any serious chronic
mental or physical illness of an immediate family member that requires the
Purchaser to terminate his or her employment because of substantial
interference with his or her duties at the Company.
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The "Percentage" shall be determined as follows:
Repurchase Calculation Date Percentage
--------------------------- ----------
Prior to the first anniversary of the Purchase Date - 0 -
On or after the first anniversary of the Purchase Date and prior to the 20%
second anniversary of the Purchase Date
On or after the second anniversary of the Purchase Date and prior to the 40%
third anniversary of the Purchase Date
On or after the third anniversary of the Purchase Date and prior to the 60%
fourth anniversary of the Purchase Date
On or after the fourth anniversary of the Purchase Date and prior to the 80%
fifth anniversary of the Purchase Date
On or after the fifth anniversary of the Purchase Date 100%
(h) "Book Value Per Share" as of any date of determination shall equal
the result of (x) the sum of (A) the stockholders' equity of the Company,
excluding amounts attributable to shares of the Company's capital stock other
than its Common Stock as of the relevant date; and excluding (i) the effect
of any extraordinary, non-recurring, certain non-operating, or unusual items
and (ii) any decrease after the Purchase Date in a valuation allowance or
other reserve related to deferred tax assets recognized by the Company, if
and to the extent determined in the sole discretion of the Compensation
Committee of the Board of Directors of the Company, all as determined in
accordance with generally accepted accounting principles applied on a basis
consistent with any prior periods, and (B) the aggregate exercise prices of
all outstanding stock options and other dilutive rights to acquire Common
Stock of the Company and the aggregate dilutive conversion prices of all
securities convertible into shares of Common Stock, divided by (y) the sum of
the number of shares of Common Stock then outstanding and the number of
shares of Common Stock issuable upon the exercise of all outstanding stock
options and other dilutive rights to acquire Common Stock and the conversion
of all dilutive securities convertible into shares of Common Stock, BUT
EXCLUDING IN SUCH CALCULATION, (z) any decrease in stockholder's equity as a
result of the Company's purchase of Repurchase Options or shares acquired
upon the exercise of any Repurchase Options under Section 5(b). For purposes
of this Agreement, Book Value Per Share as of the Purchase Date will be based
on the stockholder's equity of the Company immediately after giving effect to
the transactions contemplated by the Merger Agreement and the incurrence of
related transaction fees and expenses related thereto.
(i) As used herein the term "Public Offering" shall mean the sale of
shares of Common Stock to the public pursuant to a registration statement
under the Securities Act which has been declared effective by the Securities
and Exchange Commission (other than a registration statement on Form X-0,
Xxxx X-0, or any other similar form) which results in gross proceeds to the
Company in excess of $50,000,000 and an active trading market in the Common
Stock. A "Qualified Public Offering" shall mean a Public Offering pursuant to
an effective registration statement relating to the sale of shares of the
Common Stock held by any or all of Viewer and its Affiliates.
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(j) As used herein the term "Market Price Per Share" shall mean the
price per share equal to the average of the last sale price (or if no sales
occur on such day, then the average of the closing bid and asked prices for
such day) of the Common Stock for the ten trading days ending on the
Repurchase Calculation Date on each exchange on which the Common Stock may at
the time be listed and on which the Common Stock may be traded on such dates
or, if the Common Stock shall not be so listed, the average of the closing
sales prices as reported by NASDAQ for the ten trading days ending on the
Repurchase Calculation Date in the over-the-counter market.
(k) As used herein the term "Fair Market Value" of a share shall mean
the fair market value, as determined in good faith by the Board of Directors
of the Company in its sole discretion without giving effect to any discount
for minority status or transfer restrictions, based upon such facts and
circumstances as it deems relevant.
(l) In determining the Repurchase Price, appropriate adjustments shall
be made for any future issuances of rights to acquire and securities
convertible into Common Stock and any stock dividends, splits, combinations,
recapitalizations or any other adjustment in the number of shares of
outstanding shares of Common Stock.
8. "TAG-ALONG" RIGHT.
(a) In the event that at any time prior to the fifth anniversary of
the first Public Offering, Viewer (or a Viewer Affiliate to whom Viewer has
transferred any of its shares of Common Stock, a "Transfer Affiliate")
proposes to sell for cash or any other consideration any shares of Stock
owned by it to any person (a "Proposed Purchaser"), in any transaction other
than (i) a Public Offering or (ii) a sale to a Viewer Affiliate, Viewer (or
such Transfer Affiliate) will notify the Purchaser, the Purchaser's Estate or
the Purchaser's Trust, as the case may be, in writing (a "Sale Notice") of
such proposed sale (a "Proposed Sale") and the material terms of the Proposed
Sale as of the date of the Sale Notice (the "Material Terms") promptly, and
in any event not less than 25 days prior to the consummation of the Proposed
Sale and not more than 5 days after the execution of the definitive agreement
relating to the Proposed Sale, if any (the "Sale Agreement"). If within 20
days of the receipt of the Sale Notice, Viewer (or such Transfer Affiliate)
receives a written request (a "Sale Request") to include Common Stock held by
the Purchaser, the Purchaser's Estate or the Purchaser's Trust in the
Proposed Sale, the Common Stock so held by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust shall be so included as provided herein;
provided, that only one such Sale Request may be delivered by the Purchaser
or the Purchaser's Estate or the Purchaser's Trust, as the case may be, with
respect to any single Proposed Sale for any Stock held by the Purchaser or
the Purchaser's Estate or the Purchaser's Trust and provided, further, that
any Sale Request shall be irrevocable unless (x) there shall be a material
adverse change in the Material Terms or (y) otherwise mutually agreed to in
writing by the Purchaser, the Purchaser's Estate or the Purchaser's Trust, as
the case may be, and Viewer (or such Transfer Affiliate). Promptly after the
receipt of the Sale Request, Viewer (or such Transfer Affiliate) will furnish
the Purchaser, the Purchaser's Estate or the Purchaser's Trust with a copy of
the Sale Agreement, if any.
13
(b) The maximum number of shares of Stock that the Purchaser or the
Purchaser's Estate or the Purchaser's Trust, as the case may be, will be
permitted to include in a Proposed Sale pursuant to a Sale Request will be
the product of (i) the sum of number of shares of Stock (A) then held by the
Purchaser or the Purchaser's Estate or the Purchaser's Trust, including all
Exercisable Option Shares (as defined in Section 10(b)) and (B) Option Shares
which will become exercisable prior to or in connection with the proposed
sale, multiplied by (ii) the ratio of (A) the number of shares of Stock which
Viewer (or the Transfer Affiliate) proposes to sell in the Proposed Sale,
divided by (B) the number of shares of Stock then held by Viewer (or the
Transfer Affiliate). Notwithstanding the above, if one of more holders of
shares of Stock who have been granted the same rights granted hereunder elect
not to include in the Proposed Sale the maximum number of shares of Stock
which such holder would have been permitted to include in a Proposed Sale
(the "Eligible Shares"), the remaining holders of shares of Stock (other than
Viewer and Viewer Affiliates), or any of them, may sell in the Proposed Sale
a number of additional shares of Stock owned by any of them equal to their
pro rata portion of the number of Eligible Shares not included in the
Proposed Sale, based on the relative number of shares of Stock then held by
each such holder, and such additional shares of Stock which any such holder
or holders propose to sell shall not be included in the calculation made
pursuant to this Paragraph (b) for the purpose of determining the maximum
number of shares of Stock which the Purchaser or the Purchaser's Estate or
the Purchaser's Trust, as the case may be, will be permitted to include in a
Proposed Sale. Viewer (or the Transfer Affiliate) may sell in the Proposed
Sale additional shares of Stock owned by it equal to any remaining Eligible
Shares that will not be included in the Proposed Sale pursuant to the
foregoing sentence.
(c) Except as may otherwise be provided herein, shares of Stock subject
to a Sale Request will be included in a Proposed Sale pursuant hereto and in
any agreements with the Proposed Purchaser relating thereto on the same terms
and subject to the same conditions applicable to the shares of Stock which
Viewer (or the Transfer Affiliate) proposes to sell in the Proposed Sale.
Such terms and conditions shall include, without limitation: the sales price;
the payment of fees, commissions and expenses; the provision of, and
representation and warranty as to, information requested by Viewer (or the
Transfer Affiliate), and the provision of requisite indemnifications;
PROVIDED that any indemnification provided by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust shall be pro rata in proportion with the
number of shares of Stock to be sold.
(d) Upon delivering a Sale Request, the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, will, if requested by
Viewer (or the Transfer Affiliate), execute and deliver a custody agreement
and power of attorney in form and substance satisfactory to Viewer (or the
Transfer Affiliate) (a "Custody Agreement and Power of Attorney") with
respect to the shares of Stock which are to be included in the Proposed Sale
pursuant hereto. The Custody Agreement and Power of Attorney will provide,
among other things, that the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, will deliver to and deposit in custody
with the custodian and attorney-in-fact named therein a certificate or
certificates representing such shares of Stock (duly endorsed in blank by the
registered owner or owners thereof or accompanied by duly executed stock
powers in blank) and irrevocably appoint said custodian and attorney-in-fact
as the Purchaser, the Purchaser's Estate's
14
or the Purchaser's Trust's, as the case may be, agent and attorney-in-fact
with full power and authority to act under the Custody Agreement and Power of
Attorney on behalf of the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, with respect to the matters specified
therein.
(e) The Purchaser agrees that he will execute such other agreements as
Viewer (or the Transfer Affiliate) may reasonably request in connection with
the consummation of a Proposed Sale and Sale Request and the transactions
contemplated hereby.
(f) As used in this Agreement, the term "Viewer Affiliate" means any
Affiliate of Viewer and any Affiliate of any partner of Kohlberg Kravis
Xxxxxxx & Co., L.P. ("KKR").
9. "BRING-ALONG" RIGHT.
(a) In the event that at any time prior to the fifth anniversary of the
first Public Offering, Viewer (or a Transfer Affiliate) proposes to sell any
of its holdings of Stock (the "Viewer Shares") in a Proposed Sale (a
"Bring-Along Sale"), Viewer may provide Purchaser or Purchaser's Estate or
Purchaser's Trust, as the case may be, written notice (a "Bring-Along
Notice") of such Proposed Sale and the Material Terms not less than 10
business days prior to the proposed date of the Bring-Along Sale (the
"Bring-Along Sale Date") and the Purchaser hereby agrees to sell to such
Proposed Purchaser the number of shares of Stock equal to the product of (i)
the sum of the number of shares of Stock (A) then held by the Purchaser or
the Purchaser's Estate or the Purchaser's Trust, including all Exercisable
Option Shares and (B) any Option Shares which will become exercisable prior
to or in connection with the Bring-Along Sale, multiplied by (ii) the ratio
of (A) the number of shares of Stock which Viewer (or a Transfer Affiliate)
proposes to sell in the Proposed Sale, divided by (B) the number of shares of
Stock then held by Viewer (or a Transfer Affiliate) at the same price and
upon the same terms and conditions as such transfer of Viewer Shares. The
Purchaser shall not exercise any dissenter's rights with respect to the
consummation of any Proposed Sale.
(b) On the Bring-Along Sale Date, the Purchaser shall deliver a
certificate or certificates for all of his Stock, duly endorsed for transfer
with signatures guaranteed, to such Proposed Purchaser in the manner and at
the address indicated in the Bring-Along Notice against delivery of the
purchase price for such Stock. The provisions of this Section 9 shall apply
regardless of the form of consideration in the Bring-Along Sale.
10. STOCK ISSUED TO THE PURCHASER UPON EXERCISE OF STOCK OPTIONS;
TERMINATION OF OPTIONS.
(a) The Company may from time to time grant to the Purchaser, in
addition to the Options granted pursuant to this Agreement, Options under the
1999 Equity Plan or otherwise to purchase shares of Common Stock. All Options
and shares of Stock issuable by the Company upon exercise of such Options
shall be subject to the terms and conditions of this Agreement.
15
(b) All outstanding Options granted to the Purchaser under the 1999
Equity Plan or otherwise, whether or not then exercisable, will be
automatically terminated upon the payment by the Company to the Purchaser,
pursuant to the provisions of Section 5 or 6 of this Agreement, of an amount
equal to the Option Excess Price. If the Option Excess Price is zero or a
negative number, all outstanding stock Options granted to the Purchaser under
the 1999 Equity Plan or otherwise, whether or not then exercisable, shall be
automatically terminated upon the repurchase of Stock as provided in Section
5 or 6. The "Option Excess Price" is the excess, if any, of the Section 5
Repurchase Price or the Section 6 Repurchase Price, depending on which
Repurchase Price is being used to repurchase the Stock, over the exercise
prices applicable to such Options multiplied by the number of Exercisable
Option Shares. For purposes hereof, "Exercisable Option Shares" shall mean
the shares of Common Stock which, at the time of determination, could be
purchased by the Purchaser upon exercise of his outstanding Options.
11. THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to the Purchaser that (i) this
Agreement has been duly authorized, executed and delivered by the Company and
(ii) the Stock, when issued and delivered in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Company shall have filed a registration statement pursuant to
the requirements of Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or engaged in a Public Offering, (i) the
Company shall use reasonable efforts to register the Options and the Stock to
be acquired on exercise thereof on a Form S-8 Registration Statement or any
successor to Form S-8 to the extent that such registration is then available
with respect to such Options and Stock and (ii) the Company will file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the Securities and Exchange
Commission ("SEC") thereunder, to the extent required from time to time to
enable the Purchaser to sell shares of Stock without registration under the
Securities Act within the limitations of the exemptions provided any
applicable rule or regulation of the SEC. Notwithstanding anything contained
in this Section 11(b), the Company may deregister under Section 12 of the
Exchange Act if it is then permitted to do so pursuant to the Exchange Act
and the rules and regulations thereunder. Nothing in this Section 11(b) shall
be deemed to limit in any manner the restrictions on sales of Stock contained
in this Agreement.
12. "PIGGYBACK" REGISTRATION RIGHTS.
(a) The Company will promptly notify the Purchaser in writing (a
"Notice") of any proposed registration (a "Proposed Registration") in
connection with a Qualified Public Offering. If within 15 days of the receipt
by the Purchaser of such Notice, the Company receives from the Purchaser, the
Purchaser's Estate or the Purchaser's Trust a written request (a "Request")
to register shares of Stock held by the Purchaser, the Purchaser's Estate or
the Purchaser's Trust (which Request will be irrevocable unless otherwise
mutually agreed to in writing by the Purchaser and the Company), shares of
Stock will be so registered as provided in
16
this Section 12; PROVIDED, HOWEVER, that for each such registration statement
only one Request, which shall be executed by the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, may be submitted for any
Stock held by the Purchaser, the Purchaser's Estate and the Purchaser's Trust.
(b) The maximum number of shares of Stock which will be registered
pursuant to a Request will be the lesser of (i) the number of shares of Stock
then held by the Purchaser (which for purposes of this subparagraph (b) shall
include shares held by the Purchaser's Estate or a Purchaser's Trust),
including all shares of Stock which the Purchaser is then entitled to acquire
under an unexercised Option to the extent then exercisable or (ii) the
maximum number of shares of Stock which the Company can register in the
Proposed Registration without adverse effect on the offering in the view of
the managing underwriters (reduced pro rata with all Other Purchasers).
(c) Upon delivering a Request the Purchaser will, if requested by the
Company, execute and deliver a Custody Agreement and Power of Attorney in
form and substance satisfactory to the Company and as described pursuant to
Section 8(d) with respect to the shares of Stock to be registered pursuant to
this Section 12.
(d) The Purchaser agrees that he will execute such other agreements as
the Company may reasonably request to further evidence the provisions of this
Section 12.
13. PRO RATA REPURCHASES.
Notwithstanding anything to the contrary contained in Sections 5, 6 or
7, if at any time consummation of all purchases and payments to be made by
the Company pursuant to this Agreement and the Other Purchasers' Agreements
would result in an Event, then the Company shall make purchases from, and
payments to, the Purchaser and Other Purchasers pro rata (on the basis of the
proportion of the number of shares of Stock and the number of Options each
such Purchaser and all Other Purchasers have elected or are required to sell
to the Company) for the maximum number of shares of Stock and shall pay the
Option Excess Price for the maximum number of Options permitted without
resulting in an Event (the "Maximum Repurchase Amount"). The provisions of
Section 5(a) and 6(b) shall apply in their entirety to payments and
repurchases with respect to Options and shares of Stock which may not be made
due to the limits imposed by the Maximum Repurchase Amount under this Section
13. Until all of such Stock and Options are purchased and paid for by the
Company, the Purchaser and the Other Purchasers whose Stock and Options are
not purchased in accordance with this Section 13 shall have priority, on a
pro rata basis, over other purchases of Common Stock and Options by the
Company pursuant to this Agreement and Other Purchasers' Agreements.
14. RIGHTS TO NEGOTIATE REPURCHASE PRICE.
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing shares of Stock or Options from the Purchaser, at any
time, upon such terms and conditions, and for such price, as may be mutually
agreed upon between the Parties, whether
17
or not at the time of such purchase circumstances exist which specifically
grant the Company the right to purchase, or the Purchaser the right to sell,
shares of Stock or the Company has the right to pay, or the Purchaser has the
right to receive, the Option Excess Price under the terms of this Agreement.
15. COVENANT REGARDING 83(b) ELECTION.
Except as the Company may otherwise agree in writing, the Purchaser
hereby covenants and agrees that he will make an election provided pursuant
to Treasury Regulation 1.83-2 with respect to the Stock to be acquired upon
each exercise of the Purchaser's Options; and the Purchaser further covenants
and agrees that he will furnish the Company with copies of the forms of
election the Purchaser files within 30 days after the date hereof, and within
30 days after each exercise of the Purchaser's Non-Qualified Options and with
evidence that each such election has been filed in a timely manner.
16. NOTICE OF CHANGE OF BENEFICIARY.
Immediately prior to any transfer of Stock to a Purchaser's Trust, the
Purchaser shall provide the Company with a copy of the instruments creating
the Purchaser's Trust and with the identity of the beneficiaries of the
Purchaser's Trust. The Purchaser shall notify the Company immediately prior
to any change in the identity of any beneficiary of the Purchaser's Trust.
17. EXPIRATION OF CERTAIN PROVISIONS.
(a) The provisions contained in Sections 2, 4, 5, 6, 8, 9 and 12 of
this Agreement and the portion of any other provision of this Agreement which
incorporates the provisions of Section 4, 5 or 6, shall terminate and be of
no further force or effect with respect to any shares of Stock sold by the
Purchaser pursuant to an effective registration statement filed by the
Company pursuant to Section 12 hereof.
(b) The provisions contained in Sections 2(e), 3, 4, 5, 6, 8, 9, 12
and 15 of this Agreement, and the portion of any other provisions of this
Agreement which incorporate the provisions of any of such Sections, shall
terminate and be of no further force or effect upon the consummation of a
Change of Control. For purposes of this Agreement, "Change of Control" means
(i) a sale of all or substantially all of the assets of the Company to a
Person who is not a Viewer Affiliate or an entity in which the shareholders
of the Company immediately prior to such transaction do not control more than
50% of the voting power immediately following the transaction, (ii) a sale by
Viewer or any of its Affiliates resulting in more than 50% of the voting
stock of the Company being held by a Person or Group that does not include
Viewer or any of its Affiliates or (iii) a merger or consolidation of the
Company with or into another Person which is not a Viewer Affiliate, if and
only if, after such merger or consolidation, Viewer and its Affiliates lose
the ability to elect a majority of the Board of Directors of the Company or
the surviving company. "Group" means two or more Persons acting together as a
18
partnership, limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of securities of the Company.
18. RECAPITALIZATIONS, ETC.
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the Options, to any and all shares
of capital stock of the Company or any capital stock, partnership units or
any other security evidencing ownership interests in any successor or assign
of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for, or in
substitution of the Stock or the Options, by reason of any stock dividend,
split, reverse split, combination, recapitalization, liquidation,
reclassification, merger, consolidation or otherwise.
19. THE PURCHASER'S EMPLOYMENT BY THE COMPANY.
Nothing contained in this Agreement (i) obligates the Company or any
Subsidiary or Affiliate of the Company to employ the Purchaser in any
capacity whatsoever or (ii) prohibits or restricts the Company (or any of its
Subsidiaries or Affiliates) from terminating the employment, if any, of the
Purchaser at any time or for any reason whatsoever, with or without Cause,
and the Purchaser hereby acknowledges and agrees that except as may be
contained in Purchaser's employment agreement with the Company, neither the
Company nor any other Person has made any representations or promises
whatsoever to the Purchaser concerning the Purchaser's employment or
continued employment by the Company.
20. STATE SECURITIES LAWS.
The Company hereby agrees to use its reasonable efforts to comply with
all state securities or "blue sky" laws that might be applicable to the sale
of the Stock and the issuance of the Options to the Purchaser.
21. BINDING EFFECT.
The provisions of this Agreement shall be binding upon and accrue to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns. Purchaser may assign his
rights and obligations under this Agreement only to those transferees to whom
he is required to do so pursuant to the terms hereof. In the case of a
transferee permitted under Section 2(a) hereof, such transferee shall be
deemed the Purchaser hereunder; provided, however, that no transferee
(including without limitation, transferees referred to in Section 2(a)
hereof) shall derive any rights under this Agreement unless and until such
transferee has delivered to the Company a valid undertaking and becomes bound
by the terms of this Agreement.
22. AMENDMENT.
19
This Agreement may be amended only by a written instrument signed by the
Parties hereto.
23. CLOSING.
Except as otherwise provided herein, the closing of each purchase and
sale of shares of Stock and the payment of the Option Excess Price, if any,
pursuant to this Agreement shall take place at the principal office of the
Company on the tenth business day following delivery of the notice by either
Party to the other of its exercise of the right to purchase or sell such
Stock hereunder or to cause the payment of the Option Excess Price, if any.
24. APPLICABLE LAW.
The law of the state of Delaware shall govern the interpretation,
validity and performance of the terms of this Agreement, regardless of the
law that might be applied under principles of conflicts of law. Any suit,
action or proceeding against the Purchaser, with respect to this Agreement,
or any judgment entered by any court in respect of any thereof, may be
brought in any court of competent jurisdiction in the State of Delaware, and
the Purchaser hereby submits to the non-exclusive jurisdiction of such courts
for the purpose of any such suit, action, proceeding or judgment. By the
execution and delivery of this Agreement, the Purchaser appoints The
Corporation Trust Company, at its office in Wilmington, Delaware as his agent
upon which process may be served in any such suit, action or proceeding.
Service of process upon such agent, together with notice of such service
given to the Purchaser in the manner provided in Section 28 hereof, shall be
deemed in every respect effective service of process upon him in any suit,
action or proceeding. Nothing herein shall in any way be deemed to limit the
ability of the Company to serve any such writs, process or summonses in any
other manner permitted by applicable law or to obtain jurisdiction over the
Purchaser, in such other jurisdictions and in such manner, as may be
permitted by applicable law. The Purchaser hereby irrevocably waives any
objections which he may now or hereafter have to the laying of the venue of
any suit, action or proceeding arising out of or relating to this Agreement
brought in any court of competent jurisdiction in the State of Delaware, and
hereby further irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in any inconvenient
forum. No suit, action or proceeding against the Company with respect to this
Agreement may be brought in any court, domestic or foreign, or before any
similar domestic or foreign authority other than in a court of competent
jurisdiction in the State of Delaware, and the Purchaser hereby irrevocably
waives any right which he may otherwise have had to bring such an action in
any other court, domestic or foreign, or before any similar domestic or
foreign authority. The Company hereby submits to the jurisdiction of such
courts for the purpose of any such suit, action or proceeding.
25. ASSIGNABILITY OF CERTAIN RIGHTS BY THE COMPANY.
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The Company shall have the right to assign any or all of its rights or
obligations to purchase shares of Stock pursuant to Sections 4, 5 and 6
hereof, provided that the Company shall remain liable for all of its
obligations pursuant to such Sections.
26. LIMITED LIABILITY OF MEMBERS OF VIEWER.
Notwithstanding any other provision of this Agreement, no recourse under
this Agreement or any documents or instruments delivered in connection with
this Agreement or any of the transactions contemplated hereby shall be had
against any current or future director, officer, employee, general or limited
partner or member, of Viewer or KKR, or any of the foregoing, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any statute, regulation or other applicable law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach
to, be imposed on or otherwise be incurred by any current or future officer,
agent or employee of, or any current or future member of Viewer or any
current or future director, officer, employee, general or limited partner,
member, assignee or affiliate of any of the foregoing, as such for any
obligation of Viewer under this Agreement or any documents or instruments
delivered in connection with this Agreement or any of the transactions
contemplated hereby or for any claim based on, in respect of or by reason of
such obligations or their creation.
27. MISCELLANEOUS.
In this Agreement (i) all references to "dollars" or "$" are to United
States dollars and (ii) the word "or" is not exclusive. If any provision of
this Agreement shall be declared illegal, void or unenforceable by any court
of competent jurisdiction, the other provisions shall not be affected, but
shall remain in full force and effect.
28. NOTICES.
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or
certified mail, return receipt requested, postage prepaid, to the Party to
whom it is directed:
(a) If to the Company, to it at the following address:
Alliance Imaging, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
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with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
(b) If to Viewer, to it at the following address:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co., L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
(c) If to the Purchaser, to him at his most recent address as
reflected in the Company's records, or at such other address as the Party
shall have specified by notice in writing to the other Parties.
IN WITNESS WHEREOF, the Parties have executed this Stockholder's
Agreement as of the date first above written.
ALLIANCE IMAGING, INC.
By
--------------------------------
VIEWER HOLDINGS LLC
By:
-------------------------------
Its:
-------------------------------
PURCHASER
----------------------------------
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