Exhibit 10.1

 

AMERICAN SHARED HOSPITAL SERVICES

 

WARRANT AMENDMENT AGREEMENT

  

This warrant amendment agreement, dated as of December 5, 2014, (this
“Amendment”), is entered into by and among American Hospital Services, a
California corporation (the “Company”), and Raymond C. Stachowiak, John F.
Ruffle, Mert Ozyurek and David A. Larson, M.D. (each an “Investor” and,
collectively, the “Investors”);

 

WHEREAS, the Company entered into the Note and Warrant Purchase Agreement
between and among the Company and the Investors, dated as of October 22, 2014
(the “Purchase Agreement”);

 

WHEREAS, the Company issued to the Investors warrants pursuant to the Purchase
Agreement (the “Original Warrant”);

 

WHEREAS, the Company desires to amend and restate the Original Warrant issued
pursuant to the Purchase Agreement by removing the text of and references to
Section 7(b) to comply with certain rules of the New York Stock Exchange MKT;

 

WHEREAS, the Company and the Investors agree that all other terms of the
Original Warrant (including its date of issuance, number of underlying shares,
exercise price and other anti-dilution protections) shall remain unchanged and
in full force and effect;

 

NOW THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, each Investor hereby agrees to deliver his Original Warrant to
the Company for cancellation and to accept in exchange an amended and restated
warrant in the form of Exhibit A.

 

 

 

 

The parties have caused this Amendment to be duly executed and delivered as of
the date and year first written above.

 

COMPANY:       AMERICAN SHARED HOSPITAL SERVICES       By: /s/ Ernest A. Bates,
M.D.        

 

 

 

 

INVESTORS:

 

Raymond C. Stachowiak   By: /s/ Raymond C. Stachowiak  

 

John F. Ruffle   By: /s/ John F. Ruffle  

 

Mert Ozyurek   By: /s/ Mert Ozyurek  

 

David A. Larson, M.D.   By: /s/ David A. Larson, M.D.  

 

 

 

 

Exhibit A

 

AMERICAN SHARED HOSPITAL SERVICES

AMENDED AND RESTATED
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF AMERICAN SHARED HOSPITAL SERVICES

 

No. ____ Warrant to Purchase
_________ Shares

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”) OR UNDER ANY STATE SECURITIES LAW. IT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO THE PROVISIONS OF
THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH SALE, ASSIGNMENT, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH AN AVAILABLE EXEMPTION UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS.

 

This Warrant (“Amended Warrant”) is issued pursuant to the terms of the Warrant
Amendment Agreement dated as of December 5, 2014 among American Shared Hospital
Services (the “Company”) and the other parties thereto, and amends and restates
the terms of the warrant issued to [ ], his successor or permitted assigns (the
“Holder”), on October 22, 2014 (the “Original Warrant”) in connection with the
Note and Warrant Purchase Agreement between and among the Company and Raymond C.
Stachowiak, John F. Ruffle, Mert Ozyurek and David A. Larson, M.D., dated as of
October 22, 2014.

 

By accepting this Amended Warrant, the Holder hereby (i) represents that the
Original Warrant has not been transferred and (ii) surrenders to the Company for
cancellation the Original Warrant. The Holder and the Company hereby acknowledge
and agree that upon the issuance of this Amended Warrant, all of the Company’s
obligations under such Original Warrant shall be discharged and released in full
without any further action on the part of the Company or the Holder.

 

FOR VALUE RECEIVED, AMERICAN SHARED HOSPITAL SERVICES, a California corporation,
hereby certifies that the Holder is entitled, subject to the provisions of this
Warrant, to purchase from the Company, at the times specified herein, [ ] fully
paid and non-assessable shares of Common Stock of the Company, no par value per
share (the “Common Stock”), at a purchase price per share equal to the Exercise
Price (as hereinafter defined). The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for a share
of Common Stock are subject to adjustment from time to time as hereinafter set
forth.

 

1.                    Definitions. a) The following terms, as used herein, have
the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For the purpose of this definition, the term “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Aggregate Offering Price” shall mean, calculated on a per share of Common Stock
basis, (i) in respect of any Common Stock, the consideration received by the
Company for the issuance of such Common Stock and (ii) in respect of any
convertible securities (as defined in paragraph ‎8(b)), the sum of (A) the
consideration received by the Company for the issuance of such convertible
securities plus (B) the consideration payable to the Company upon exercise,
exchange or conversion in full of such convertible securities (excluding the
forfeiture of such convertible securities) for the issuance of the underlying
shares of Common Stock.

 

“Board of Directors” means the board of directors of the Company.

 

 

 

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in the City of New York are authorized by law to close.

 

“Current Market Price Per Common Share” means, on any determination date, the
average of the Daily Prices per share of Common Stock for the 20 consecutive
trading days immediately prior to such date. If, on any determination date, the
shares of Common Stock are not traded on a national securities exchange or
quoted by any regulated quotation service, the Current Market Price Per Common
Share shall be the fair market value per share as determined in good faith by
the Board.

 

“Daily Price” means (i) if the shares of Common Stock are then listed and traded
on a national securities exchange, the closing price on the applicable day as
reported by the principal national securities exchange on which such shares are
listed and traded and (ii) if such shares are not then listed and traded on a
national securities exchange, the closing price on such day as quoted by any
regulated quotation service.

 

“Excluded Securities” means shares of Common Stock issued or issuable (i)
pursuant to the Company’s stock option plan or any similar employee compensation
plan of the Company that is approved by the Board of Directors, (ii) pursuant to
the exercise of any convertible securities if no adjustment was required
pursuant to paragraph 7(b) at the time such convertible security was issued,
(iii) pursuant to an underwritten public offering and (iv) as consideration for
or to fund the acquisition of any company, business or asset.

 

“Exercise Price” means $2.20 per Warrant Share, as the same may be adjusted from
time to time as provided in this Warrant.

 

“Expiration Time” means 5:00 p.m. New York City on October 22, 2017.

 

“Note and Warrant Purchase Agreement” means the Note and Warrant Purchase
Agreement dated as of the date hereof among the Company and the holders listed
on the signature pages thereto, as the same may be amended from time to time.

 

“Person” means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

 

“Warrant Shares” means the shares of Common Stock deliverable upon exercise of
this Warrant, as the same may be adjusted from time to time as provided in this
Warrant.

 

(b)          Capitalized terms used but not defined in this Warrant shall have
the meanings assigned to such terms in the Note and Warrant Purchase Agreement.

 

2.                         Exercise of Warrant.

 

(a)          The Holder is entitled to exercise this Warrant in whole or in part
at any time, or from time to time, commencing on the first anniversary of the
Closing Date and ending at the Expiration Time. To exercise this Warrant, the
Holder shall deliver to the Company i) an executed Warrant Exercise Notice
substantially in the form annexed to this Warrant, ii) this Warrant and iii)
subject to paragraph ‎2(e), the applicable Exercise Price. Upon such delivery
and payment, the Holder shall be deemed to be the holder of record of the
Warrant Shares subject to such exercise, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder.

 

(b)          The Exercise Price may be paid either by wire transfer of
immediately available funds to an account designated by the Company or by
certified or official bank check or bank cashier’s check payable to the order of
the Company. The Company shall pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of the
Warrant Shares; provided that the Company shall not be required to pay any taxes
that may be payable in respect of any transfer involved in the issuance and
delivery of the Warrant Shares in a name other than that of the Holder.

 

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(c)          If the Holder exercises this Warrant in part, this Warrant shall be
surrendered by the Holder to the Company and a new Warrant of the same tenor and
for the unexercised number of Warrant Shares registered in the name of the
Holder shall be executed by the Company as promptly as reasonably practicable.

 

(d)          Upon surrender of this Warrant in conformity with the foregoing
provisions, the Company shall transfer to the Holder appropriate evidence of
ownership of the shares of Common Stock or other securities or property
(including any money) to which the Holder is entitled, registered or otherwise
placed in, or payable to the order of, the name or names of the Holder as may be
directed in writing by the Holder, and shall promptly deliver such evidence of
ownership and any other securities or property (including any money) to the
Person or Persons entitled to receive the same, together with an amount in cash
in lieu of any fraction of a share as provided in paragraph ‎5 below.

 

(e)          In lieu of making a cash payment of the Exercise Price to exercise
this Warrant pursuant to paragraph ‎2(a) (but in all other respects in
accordance with the exercise procedure set forth in paragraph ‎2(a)), the Holder
may elect to convert this Warrant into shares of Common Stock, in which event
the Company will issue to the Holder the number of shares of Common Stock equal
to the amount resulting from the following equation:

 

X = (A - B) x C where:
A

 

X =      the number of shares of Common Stock issuable upon exercise pursuant to
this paragraph ‎2(e);

 

A =      the Current Market Price Per Common Share on the date on which the
Holder delivers a Warrant Exercise Notice to the Company pursuant to paragraph
‎2(a);

 

B =      the Exercise Price; and

 

C =      the number of shares of Common Stock as to which this Warrant is being
exercised pursuant to paragraph ‎2(a).

 

If the foregoing calculation results in zero or a negative number, then no
shares of Common Stock shall be issued upon exercise pursuant to this paragraph
‎2(e).

 

3.                    Restrictive Legend. Certificates representing shares of
Common Stock issued pursuant to this Warrant shall bear a legend substantially
in the form of the legend set forth on the first page of this Warrant to the
extent that and for so long as such legend is required pursuant to applicable
securities laws.

 

4.                    Reservation of Shares. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant such number of its authorized but unissued shares of Common Stock
or other securities of the Company from time to time issuable upon exercise of
this Warrant as will be sufficient to permit the exercise in full of this
Warrant. All such shares shall be duly authorized and, when issued upon such
exercise, shall be validly issued, fully paid and non-assessable, free and clear
of all liens, security interests, charges and other encumbrances or restrictions
on sale and free and clear of all preemptive rights, in each case except
restrictions on transfer contemplated by paragraph ‎3, to the extent set forth
in the Note and Warrant Purchase Agreement and to the extent created by the
Holder.

 

5.                    Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant, and in lieu of delivery of any such fractional share to which the
Holder may be entitled upon any exercise of this Warrant, the Company shall pay
to the Holder an amount in cash equal to such fraction multiplied by the Current
Market Price Per Common Share on the Business Day immediately preceding the date
on which the Holder delivers the Warrant Exercise Notice pursuant to paragraph
‎2(a).

 

6.                    Loss or Destruction of Warrant. Upon receipt by the
Company of evidence satisfactory to it (in the exercise of its reasonable
discretion) of the loss, theft, destruction or mutilation of this Warrant, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant, if
mutilated, the Company shall execute and deliver a new Warrant of like tenor and
date.

 

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7.                         Anti-dilution Provisions.

 

(a)          Common Stock Dividends, Subdivisions or Combinations. If the
Company shall at any time after the date hereof (A) declare and pay a dividend
or make a distribution on Common Stock payable in Common Stock, (B) subdivide or
split the outstanding shares of Common Stock into a greater number of shares or
(C) combine or reclassify the outstanding shares of Common Stock into a smaller
number of shares, then in each such case:

 

(i)                         the number of Warrant Shares issuable upon exercise
of this Warrant thereafter shall be proportionately adjusted so that the
exercise of this Warrant after such event shall entitle the Holder to receive
the aggregate number of shares of Common Stock that such Holder would have been
entitled to receive had such Holder exercised this Warrant immediately prior to
such event; and

 

(ii)                         the Exercise Price thereafter shall be adjusted to
equal the product of the Exercise Price in effect immediately prior to such
event multiplied by a fraction (a) the numerator of which shall be the number of
Warrant Shares issuable upon the exercise of this Warrant immediately prior to
such event and (b) the denominator of which shall be the number of Warrant
Shares issuable upon the exercise of this Warrant immediately following such
event.

 

Any adjustment made pursuant to this paragraph ‎7(a) shall become effective
immediately after the applicable record date in the case of a dividend or
distribution and immediately after the applicable effective date in the case of
a subdivision, split, combination or reclassification.

 

(b)          [Reserved.]

 

(c)          Consolidation, Merger or Sale of Assets. In the event of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Company to the Person formed by such
consolidation or resulting from such merger, as the case may be, the Holder
shall have the right thereafter to exercise this Warrant for the kind and amount
of securities, cash and/or other property receivable upon such consolidation,
merger, sale or transfer by a holder of the number of shares of Common Stock for
which this Warrant may have been exercised immediately prior to such
consolidation, merger, sale or transfer. In determining the kind and amount of
securities, cash and/or other property receivable upon such consolidation,
merger, sale or transfer, if the holders of Common Stock have the right to elect
as to the consideration to be received upon the consummation of such
consolidation, merger, sale or transfer, then the consideration that the Holder
shall be entitled to receive upon exercise shall be deemed to be the kind and
amount of consideration received by the majority of all holders of Common Stock
that affirmatively make an election (or of all such holders if none make an
election). Adjustments for events subsequent to the effective date of such a
consolidation, merger, sale or transfer of assets shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Warrant. In any
such event, effective provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving corporation, in any contract of
sale, merger, conveyance, lease, transfer or otherwise so that the provisions
set forth herein for the protection of the rights of the Holder shall thereafter
continue to be applicable; and any such resulting or surviving corporation shall
expressly assume the obligation to deliver, upon exercise, such shares of stock,
other securities, cash and property.

 

(d)          Certain Determinations. For purposes of any computation of any
adjustment required under this paragraph 7:

 

(i)                         adjustments shall be made successively whenever any
event giving rise to such an adjustment shall occur;

 

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(ii)                         if any portion of any consideration to be received
by the Company in a transaction giving rise to such an adjustment shall be in a
form other than cash, the fair market value of such non-cash consideration shall
be utilized in such computation. Such fair market value shall be determined by
the Board of Directors; provided that if the Holder shall object to any such
determination, the Board of Directors shall retain an independent appraiser
reasonably satisfactory to the Holder to determine such fair market value. The
expense of such independent appraiser shall be shared equally by the Company and
the Holder. The Holder shall be notified promptly of any consideration other
than cash to be received by the Company and furnished with a description of the
consideration and the fair market value thereof, as determined in accordance
with the foregoing provisions;

 

(iii)                         such calculations shall be made to the nearest
one-tenth of a cent or to the nearest hundredth of a share, as the case may be;
and

 

(iv)                         no adjustment in the Exercise Price or the number
of Warrant Shares issuable upon exercise of the Warrant, as the case may be,
shall be required if the amount of such adjustment would be less than one-tenth
of a cent or hundredth of a share, as the case may be; provided that any
adjustments which by reason of this paragraph ‎7(e)(iv) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.

 

(e)          Certificates as to Adjustments. Upon the occurrence of each
adjustment to the Exercise Price and/or the number of Warrant Shares issuable
upon exercise of this Warrant, the Company shall promptly compute such
adjustment in accordance with the terms hereof and furnish to the Holder a
certificate setting forth such adjustment and showing in reasonable detail the
facts upon which such adjustment is based.

 

(f)          Notices. In the event that the Company shall propose at any time to
effect any of the events described in paragraphs ‎(a) through ‎(e) above that
would result in an adjustment to the Exercise Price, the number of Warrant
Shares issuable upon exercise of this Warrant or a change in the type of
securities or property to be delivered upon exercise of this Warrant, the
Company shall send notice to the Holder in the manner set forth in paragraph ‎8.
In the case of a dividend or other distribution, such notice shall be sent at
least 10 days prior to the applicable record date and shall specify such record
date and the date on which such dividend or other distribution is to be made. In
any other case, such notice shall be sent at least 15 days prior to the
effective date of any such event and shall specify such effective date. In all
cases, such notice shall specify such event in reasonable detail, including the
effect on the Exercise Price and the number, kind or class of securities or
other property issuable upon exercise of this Warrant. Failure to furnish any
certificate pursuant to paragraph 7(e) or to give any notice pursuant to this
paragraph 7(f), or any defect in any such certificate or notice, shall not
affect the legality or the validity of the adjustment of the Exercise Price
and/or the number of securities, cash and/or other property issuable upon
exercise of this Warrant, or any transaction giving rise thereto.

 

8.                         Notices. Any notice, demand or delivery authorized by
this Warrant shall be in writing and shall be given to the Holder or the
Company, as the case may be, at the respective addresses of the parties as set
forth in the Note and Warrant Purchase Agreement, or such other address (or
facsimile number) as shall have been furnished to the party giving or making
such notice, demand or delivery. Each such notice, demand or delivery shall be
deemed received on the date of receipt by the recipient thereof if received
prior to 5:00 p.m. in the place of receipt and such day is a Business Day.
Otherwise, any such notice, demand or delivery shall be deemed not to have been
received until the next succeeding Business Day.

 

9.                         Rights of the Holder. Prior to any exercise of this
Warrant, the Holder shall not, by virtue hereof, be entitled to any rights of a
shareholder of the Company, including, without limitation, the right to vote, to
receive dividends or other distributions, to exercise any preemptive right or to
receive any notice of meetings of shareholders or any notice of any proceedings
of the Company except as may be specifically provided for herein.

 

10.                       GOVERNING LAW. THIS WARRANT AND ALL RIGHTS ARISING
HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF CALIFORNIA, AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND
ENFORCED IN ACCORDANCE WITH SUCH LAWS.

 

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11.         Amendments; Waivers. Any provision of this Warrant may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Holder and the Company, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by its
duly authorized officer and to be dated as of October 22, 2014.

 

  AMERICAN SHARED HOSPITAL SERVICES         By:       Name:     Title:

 

Acknowledged and Agreed:

 

[HOLDER]         By:       Name:     Title:  

 

 

 

   

WARRANT EXERCISE NOTICE

 

(To be delivered prior to exercise of the Warrant
by execution of the Warrant Exercise Subscription Form)

 

To:American Shared Hospital Services

 

The undersigned hereby notifies you of its intention to exercise the Warrant to
purchase shares of Common Stock, no par value, of American Shared Hospital
Services. The undersigned intends to exercise the Warrant to purchase
___________ shares (the “Warrant Shares”) at $______ per Warrant Share (the
Exercise Price currently in effect pursuant to the Warrant). As indicated below,
the undersigned intends to pay the aggregate Exercise Price for the Warrant
Shares by wire transfer of immediately available funds or by certified or
official bank or bank cashier’s check or by reduction in the number of Warrant
Shares that would otherwise be issued upon exercise pursuant to paragraph ‎2(e)
of the Warrant.

 

Date: _________________

 

      (Signature of Owner)           (Street Address)           (City) (State)
(Zip Code)

 

Payment:$_____________ wire transfer of immediately available funds

$_____________ certified or official bank or bank cashier’s check

Reduction in number of Warrant Shares

 

 

 

  

WARRANT EXERCISE SUBSCRIPTION FORM

 

(To be executed only upon exercise of the Warrant
after delivery of Warrant Exercise Notice)

 

To:American Shared Hospital Services

 

The undersigned irrevocably exercises the Warrant for the purchase of
___________ shares (the “Warrant Shares”) of Common Stock, no par value per
share, of American Shared Hospital Services (the “Company”) at $_____ per
Warrant Share (the Exercise Price currently in effect pursuant to the Warrant)
and herewith makes payment of $___________ (such payment being made as specified
in the undersigned’s previously-delivered Warrant Exercise Notice), all on the
terms and conditions specified in the within Warrant Certificate, surrenders
this Warrant Certificate and all right, title and interest therein to the
Company and directs that the Warrant Shares deliverable upon the exercise of
this Warrant be registered or placed in the name and at the address specified
below and delivered thereto.

 

Date: _________________

 

      (Signature of Owner)           (Street Address)           (City) (State)
(Zip Code)

 

 

 

  

Securities and/or check to be issued
to:_________________________________________________________

 

Please insert social security or identifying
number:________________________________________________

 

Name:__________________________________________________________________________________

 

Street
Address:___________________________________________________________________________

 

City, State and Zip
Code:____________________________________________________________________

 

Any unexercised portion of the Warrant evidenced by the within Warrant to be
issued to:

 

Please insert social security or identifying
number:________________________________________________

 

Name:__________________________________________________________________________________

 

Street
Address:___________________________________________________________________________

 

City, State and Zip
Code:____________________________________________________________________