SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 30, 1996
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Advanced NMR Systems, Inc.
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(Exact name or registrant as specified in its charter)
Delaware 0-11914 22-2457487
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification
No.)
46 Jonspin Road, Wilmington, Massachusetts 01887
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(508) 657-8876
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N/A
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(Former name or former address, if changed since last report)
Page 1 of __ Pages
Exhibit Index on Page 5
<PAGE>
Item 5. Other Events.
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On May 30 and May 31, 1996, Advanced NMR Systems, Inc.
(the "Registrant") closed two private placements (the
"Placements") for 3,500 and 200 shares, respectively, of its
newly-created Series A Preferred Stock, $.01 par value per share
(the "Preferred Stock"), for an aggregate purchase price of
$3,700,000.
The holder of each issued and outstanding share of
Preferred Stock shall be entitled to receive dividends at a rate
of $40.00 per share per annum, when and as declared by the Board
of Directors of the Registrant. At the sole option of the
Registrant, dividends on each share of Series A Preferred Stock
may be paid in either (a) cash, out of the assets at the time
legally available for such purpose, or (b) shares of Common Stock
in an amount determined by dividing (x) the amount of the
dividend payable thereon by (y) the conversion price (as defined
below).
Each holder of the Preferred Stock may, at any time
commencing forty-five (45) days after the last closing date,
convert 50% of its shares of Preferred Stock into shares of the
Registrant's common stock, $.01 par value per share (the "Common
Stock") and convert the balance of its Preferred Stock
commencing seventy-five (75) days after the last closing date.
Each share of Preferred Stock is convertible into the number of
shares of Common Stock determined by dividing (i) 1,000 by (ii) a
conversion price based on the product of (x) .75 and (y) the
average closing bid price of the Registrant's Common Stock on the
Nasdaq System for the five trading days immediately preceding the
date the Registrant receives notice of conversion, provided such
conversion price shall be not more than $1.93 per share (125% of
the average closing bid prices of the Common Stock for the five
trading days immediately preceding the initial closing date),
subject to customary anti-dilution provisions. The Registrant,
at its sole discretion, may convert each share of Series A
Preferred Stock outstanding on May 31, 1998 into Common Stock on
such date at the conversion price then in effect. Assuming a
conversion price of $1.93 per share, upon conversion of all of
the shares of Preferred Stock, the Registrant would issue an
additional 1,917,099 shares of its Common Stock.
The Placements were offered and sold outside the United
States to non-U.S. persons pursuant to an exemption from the
registration requirements of the Securities Act of 1933 available
under Regulation S promulgated thereunder. The Preferred Stock
will not be registered and may not be offered or sold in the
United States absent such registration or an applicable exemption
from the registration requirements of the Securities Act.
The net proceeds of the Placement of approximately
$3,320,000, after payment of fees and related expenses, will be
used for expansion of the diagnostic imaging and rehabilitation
services and centers, establishing MR breast imaging clinics,
marketing and production of very high field MRI systems and
working capital.
In connection with the Placement, in addition to an 8%
placement fee, the Registrant issued to the placement agents
warrants for the purchase of 450,000 shares of Common Stock, of
which 225,000 shares are purchasable at a price of $2.00 per
share for a period of eighteen (18) months from June 1, 1996 and
225,000 are purchasable at a price of $2.50 per share for a
period of five (5) years from June 1, 1996.
The Placements were effected pursuant to a Regulation S
Securities Subscription Agreement (the "Subscription Agreement")
entered into between the Registrant and each of the Subscribers.
A form of Subscription Agreement (without exhibits) is included
as an Exhibit hereto. The powers, designations, preferences and
relative, participating, optional, and other rights and the
qualifications, limitations and restrictions (pursuant to Section
151(g) to the Delaware General Corporation Law) defining the
rights of the holders of the Preferred Stock are set forth in a
Certificate of Designations, as amended by a Certificate of
Correction, copies of which Certificates are included as Exhibits
hereto.
On May 31, 1996, Registrant issued a press release
announcing the closing of the initial placement. A copy of such
press release is included as an exhibit hereto.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits:
4.1 Certificate of Designations of the Series A
Preferred Stock, of the Registrant
4.2 Certificate of Correction
10. Form of Regulation S Securities Subscription
Agreement (without exhibits)
99. Press release dated May 31, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ADVANCED NMR SYSTEMS, INC.
Dated: May 31, 1996 By: /s/ Jack Nelson
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Name: Jack Nelson
Title: Chairman
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
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4.1 Certificate of Designations of the Series A
Preferred Stock, of the Registrant
4.2 Certificate of Correction
10. Form of Regulation S Securities Subscription
Agreement (without exhibits)
99. Press release dated June 3, 1996
EXHIBIT 4.1
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CERTIFICATE OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL, AND OTHER RIGHTS AND THE
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF THE
SERIES A PREFERRED STOCK
OF
ADVANCED NMR SYSTEMS, INC.
___
(Pursuant to Section 151(g) of
the Delaware General Corporation Law)
___
1. The name of the corporation is Advanced NMR Systems,
Inc. (the "Corporation"), a corporation organized and existing
under the laws of the State of Delaware.
2. The Certificate of Incorporation, as amended, of the
Corporation authorizes the issuance of One Million (1,000,000)
shares of Preferred Stock, $.01 par value per share, and
expressly vests in the Board of Directors of the Corporation the
authority to issue any or all of said shares in one or more
series and by resolution or resolutions to establish such voting
powers, full or limited, or no voting powers and such
designations, preferences, and relative, participating, optional
or other special rights and qualifications, or restrictions
hereof, as shall be stated and expressed in such resolution or
resolutions.
3. The Board of Directors of the Corporation, pursuant to
the authority expressly vested in it as aforesaid, at a meeting
thereof duly called and held on May 30, 1996, has adopted the
following resolutions creating a Series A issue of Preferred
Stock:
"RESOLVED, that Three Thousand Five Hundred (3,500) of
the One Million (1,000,000) authorized shares of Preferred
Stock of the Corporation shall be designated Series A
Preferred Stock (the "Series A Preferred Stock") and shall
possess the rights and privileges set forth below:
A. General. All shares of Series A Preferred
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Stock shall be identical with each other in all respects. All of
the shares of Series A Preferred Stock shall be of such rank as
to any other outstanding series of Preferred Stock, if any, of
the Corporation as to dividends and as to distributions upon
liquidation, dissolution or winding up, as shall be provided in
the resolutions of the Board of Directors of the Corporation
creating such other series, subject in each case to the
conditions contained herein, provided, however, that while any
shares of Series A Preferred Stock are outstanding the
Corporation shall not create any other series of Preferred Stock
with a liquidation preference senior to the liquidation
preference on the Series A Preferred Stock.
B. Dividends. (i) The holder of each issued and
---------
outstanding share of Series A Preferred Stock shall be entitled
to receive dividends at a rate of $40.00 per share per annum,
when and as declared by the Board of Directors of the
Corporation. No dividends shall be declared or paid with respect
to the Corporation's Common Stock (other than a dividend payable
solely in Common Stock of the Corporation), or upon any other
class of Preferred Stock of the Corporation which may then be
outstanding with a dividend preference subordinate to the
dividend preference of the Series A Preferred Stock, unless a
dividend of equal or greater amount per share (on an as-if-
converted to Common Stock basis in accordance with Part D below)
is first declared and paid with respect to the Series A Preferred
Stock. At the sole option of the Corporation, dividends on each
share of Series A Preferred Stock shall be paid in either (a)
cash, out of the assets at the time legally available for such
purpose, or (b) shares of Common Stock in an amount determined by
dividing (x) the amount of the dividend payable thereon by (y)
the Conversion Price (as such term is defined in Part D hereof)
in effect on the dividend declaration date.
(ii) No dividends shall be paid on the Series
A Preferred Stock at such time as such payment would
violate the laws of the State of Delaware.
C. Liquidation Preference. (i) In the event of
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any liquidation, dissolution or winding-up of the Corporation,
either voluntary or involuntary (a "Liquidation"), the holders of
shares of the Series A Preferred Stock then issued and
outstanding shall be entitled to be paid out of the assets of the
Corporation available for distribution to its stockholders,
whether from capital, surplus or earnings, before any payment
shall be made to the holders of shares of the Common Stock or
upon any other series of Preferred Stock of the Corporation with
a liquidation preference subordinate to the liquidation
preference of Series A Preferred Stock, an amount per share equal
to one thousand dollars ($1,000) plus any declared, unpaid and
accrued dividends. If, upon any Liquidation of the Corporation,
the assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares
of the Series A Preferred Stock and the holders of any other
series of Preferred Stock with a liquidation preference equal to
the liquidation preference of the Series A Preferred stock the
full amounts to which they shall respectively be entitled, the
holders of shares of the Series A Preferred Stock and the holders
of any other series of Preferred Stock with liquidation
preference equal to the liquidation preference of the Series A
Preferred Stock shall receive all of the assets of the
Corporation available for distribution and each such holder of
shares of the Series A Preferred Stock and the holders of any
other series of Preferred Stock with a liquidation preference
equal to the liquidation preference of the Series A Preferred
Stock shall share ratably in any distribution in accordance with
the amounts due such stockholders. After payment shall have been
made to the holders of shares of Series A Preferred Stock of the
full amount to which they shall be entitled, as aforesaid, the
holders of shares of the Series A Preferred Stock shall be
entitled to no further distributions thereon and the holders of
shares of the Common Stock and of shares of any other series of
stock of the Corporation shall be entitled to share, according to
their respective rights and preferences, in all remaining assets
of the Corporation available for distribution to its
stockholders.
(ii) A merger or consolidation of the Corporation
with or into any other corporation, or a sale, lease,
exchange, or transfer of all or any part of the assets
of the Corporation which shall not in fact result in
the liquidation (in whole or in part) of the
Corporation and the distribution of its assets to its
stockholders shall not be deemed to be a voluntary or
involuntary liquidation (in whole or in part),
dissolution, or winding-up of the Corporation within
the meaning of this Part C.
D. Conversion of Series A Preferred Stock. The
--------------------------------------
holders of Series A Preferred Stock shall have the
following conversion rights:
(i) Right to Convert. Each share of Series A
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Preferred Stock shall be convertible, on and after the
Conversion Dates and at the Conversion Ratio set forth
below, into fully paid and nonassessable shares of
Common Stock.
(ii) Mechanics of Conversion. Subject to paragraph
-----------------------
(iii) below, each holder of Series A Preferred Stock who
desires to convert the same into shares of Common Stock
shall provide notice to the Corporation by the execution and
delivery to it of a notice of conversion for not less than
$50,000 aggregate liquidation preference of Preferred Stock,
or the balance of the holder's certificates for Series A
Preferred Stock if less than $50,000 aggregate liquidation
preference. The date on which a notice of conversion for
the shares of Series A Preferred Stock to be converted is
duly received by the Corporation by mail at its then
principal executive offices or by facsimile to (201) 592-
0393 (or such other facsimile number as the Corporation
shall designate in writing to holder) shall be a "Notice
Date". The Corporation shall use its reasonable best
efforts to issue and deliver, within three (3) business days
after it receives the certificate or certificates for the
shares of Series A Preferred Stock to be converted, with
proper endorsement if necessary, from the holder electing
conversion, a certificate or certificates for the number of
shares of Common Stock to which the holder shall be entitled
upon the conversion.
(iii) Conversion Date. The Series A Preferred
---------------
Stock shall become convertible into shares of Common Stock at any
time commencing forty-five (45) days after the last day on which
there is an original issuance of the Series A Preferred Stock
(the "Conversion Date"), provided, however, that a holder may
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convert only fifty percent (50%) of the shares of Series A
Preferred Stock held by it as of the Conversion Date, and the
balance of such shares commencing fifteen (15) days after the
Conversion Date.
(iv) Conversion Ratio. In addition to such
----------------
shares of Common Stock as may be issued upon the election of the
Corporation pursuant to Part B hereinabove (dividends), each
share of Series A Preferred Stock shall be convertible into the
number of shares of Common Stock according to the following
formula:
N x 1,000
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CONVERSION PRICE
where:
N = the number of shares of the Class A
Preferred Stock for which
conversion is being elected.
Conversion
Price = the lesser of: (a) the product of
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(i) the average closing bid price,
as reported on the Nasdaq system
(or on such national securities
exchange or automated trading
system on which the Common Stock is
then primarily traded), of the
Corporation's Common Stock for the
five (5) consecutive trading days
immediately preceding the Notice
Date and (ii) .75 (i.e. the
floating conversion price) or (b)
--
the product of (i) the average
closing bid price, as reported on
the Nasdaq system (or on such
national securities exchange or
automated trading system on which
the Common Stock is then primarily
traded), of the Corporation's
Common Stock for the five (5)
consecutive trading days
immediately preceding the closing
day for the original issuance of
the Series A Preferred Stock and
(ii) 1.25 (i.e. the fixed
conversion price).
(v) Forced Conversion. The Corporation, at its
-----------------
sole discretion, may convert any or all shares of
Series A Preferred Stock outstanding on May 31, 1998
into Common Stock on such date at the Conversion Ratio
then in effect, and May 31, 1998 shall be deemed to be
the Notice Date with respect to such conversion;
provided, however, that if May 31, 1998 is not a day on
which the Nasdaq system is open for trading, the deemed
Notice Date shall be the next succeeding day on which
the Nasdaq system is open for trading. If the
conversion pursuant to paragraph is for less than all
Series A Preferred Stock then outstanding, the
Corporation may choose the shares to be converted
either by lot or pro rata.
(vi) Fractional Shares. No fractional share
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shall be issued upon the conversion of any shares of
Series A Preferred Stock. All shares of Common Stock
(including fractions thereof) issuable upon conversion
of shares of Series A Preferred Stock by a holder
thereof shall be aggregated for purposes of determining
whether the conversion would result in the issuance of
any fractional share. If, after the aforementioned
aggregation, the conversion would result in the
issuance of a fraction of a share of Common Stock, the
Corporation shall, in lieu of issuing any fractional
share, round up or down any fractional share to the
nearest whole share of Common Stock.
(vii) Adjustment to Conversion Price.
------------------------------
(a) If, prior to the conversion of all shares of
Series A Preferred Stock, the number of outstanding shares
of Common Stock or the Series A Preferred Stock is increased
by a stock split, stock dividend or other similar event, or
if the number of outstanding shares of Common Stock is
decreased by a combination or reclassification of shares, or
other similar event, the Board of Directors of the
Corporation shall make an equitable adjustment in the
Conversion Ratio, if necessary, to reflect such event in
order to preserve substantially the initial Conversion
Ratio. The Corporation shall send to each holder of Series
A Preferred Stock written notice of each change in the
Conversion Ratio.
(b) If, prior to the conversion of all shares of
Series A Preferred Stock, there shall be any merger,
consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which
shares of Common Stock of the Corporation shall be changed
into the same or a different number of shares of the same or
another class or classes of stock or securities of the
Corporation or another entity, then the holders of Series A
Preferred Stock shall thereafter have the right to purchase
and receive upon conversion of shares of Series A Preferred
Stock, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such
shares of stock and/or securities as may be issued or
payable with respect to or in exchange for the number of
shares of Common Stock immediately theretofore purchasable
and receivable upon the conversion of shares of Series A
Preferred Stock held by such holders had such merger,
consolidation, exchange of shares, recapitalization or
reorganization not taken place. In any case subject to this
subsection (b) appropriate provisions shall be made with
respect to the rights and interests of the holders of the
Series A Preferred Stock to the end that the provisions
hereof (including, without limitation, provisions for
adjustment of the Conversion Price and of the number or type
of shares issuable upon conversion of the Series A Preferred
Stock) shall thereafter be applicable, as nearly as may be
practicable in relation to any shares of stock or securities
thereafter deliverable upon the exercise hereof. The
Corporation shall not effect any transaction described in
this subsection (b) unless the resulting successor or
acquiring entity (if not the Corporation) assumes by written
instrument the obligation to deliver to the holders of the
Series A Preferred Stock such shares of stock and/or
securities as, in accordance with the foregoing provisions,
the holders of the Series A Preferred Stock may be entitled
to purchase upon conversion.
(viii) Reservation of Stock Issuable Upon
----------------------------------
Conversion. The Corporation shall at all times reserve
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and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A
Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to
effect the conversion of all then outstanding shares of
the Series A Preferred Stock. If at any time the
number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A
Preferred Stock, the Corporation will take such
corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such
purpose.
(ix) Status of Converted Stock. Upon the
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Corporation receiving a notice of conversion for any
shares of Series A Preferred Stock pursuant to this
Part D, the shares covered by such notice of conversion
shall no longer be deemed outstanding and all rights
with respect to such shares shall cease and be
cancelled and such shares shall return to the status of
authorized but unissued Preferred Stock of no
designated class or series, and shall not be issuable
by the Corporation as Series A Preferred Stock.
E. Voting. The holders of the Series A Preferred
------
Stock shall have no voting power whatsoever, and no
holder of Series A Preferred Stock shall vote or
otherwise participate in any proceeding in which
actions shall be taken by the Corporation or the
stockholders thereof or be entitled to notification as
to any meeting of the Board of Directors or the
stockholders, except (i) as otherwise required by the
General Corporation Law of the State of Delaware, or
(ii) as to any repeal, amendment or modification to
this Certificate of Designation, which repeal,
amendment or modification shall require the affirmative
vote of the holders of a majority of the then
outstanding shares of Series A Preferred Stock.
F. Redemption. Neither the Corporation nor the
----------
holders of Series A Preferred Stock shall have any
right to permit or compel, as the case may be, the
redemption by the Corporation of the outstanding shares
of Series A Preferred Stock.
FURTHER RESOLVED, that the statements contained in
the foregoing resolutions creating and designating the
Series A Preferred Stock and fixing the number, powers,
preferences and relative, optional, participating, and
other special rights and the qualifications,
limitations, restrictions, and other distinguishing
characteristics thereof shall, upon the effective date
of said series, be deemed to be included in and be a
part of the Certificate of Incorporation of the
Corporation pursuant to the provisions of Sections 104
and 151 of the General Corporation Law of the State of
Delaware."
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Designations to be executed by a duly authorized
officer and attested to by its secretary on the 30th day of May,
1996.
ADVANCED NMR SYSTEMS, INC.
By: /s/ Jack Nelson
----------------------------------
Jack Nelson, Chairman of the Board
Attest:
/s/ Charles Moche
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Charles Moche, Secretary
EXHIBIT 4.2
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
ADVANCED NMR SYSTEMS, INC.
-------------------------------
Pursuant to Section 103(f) of the General
Corporation Law of the State of Delaware
I, the undersigned, of ADVANCED NMR SYSTEMS, INC., do
hereby certify that the Certificate of Designations filed on May
30, 1996 contained an inaccurate record.
ARTICLE 3 provided that Three Thousand Five Hundred
(3,500) of the One Million (1,000,000) authorized
shares of Preferred Stock of the Corporation shall be
designated Series A Preferred Stock ...
ARTICLE 3 should read as follows: Four Thousand
(4,000) of the One Million (1,000,000) authorized
shares of Preferred Stock of the Corporation shall be
designated Series A Preferred Stock ...
IN WITNESS WHEREOF, said corporation has caused this
Certificate to be signed by its Chairman of the Board, this 31st
day of May, A.D. 1996.
/s/ Jack Nelson
------------------------------
Jack Nelson
Authorized Officer
EXHIBIT 10
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OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement
("Agreement") is executed in reliance upon the transaction
exemption afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"),
under the Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in
connection with the private placement of $3,500,000 aggregate
principal amount of 4% Convertible Preferred Stock, Series A
(hereinafter referred to as the "Preferred Shares") of ADVANCED
NMR SYSTEMS, INC., a corporation organized and existing under the
laws of the State of Delaware, U.S.A., NASDAQ Market Symbol
"ANMR" (hereinafter referred to as the "COMPANY"). Neither the
Preferred Shares being sold pursuant to this Agreement, nor the
Common Stock issuable upon its conversion (the "Shares"), have
been registered under the 1933 Act and may not be offered or sold
in the United States or to U.S. persons, other than distributors
(as such terms are defined in Regulation S), unless the Preferred
Shares or Shares are registered under the 1933 Act, or an
exemption from the registration provisions of the 1933 Act is
available. The terms on which the Preferred Shares may be
converted into Shares and the other terms of the Preferred Shares
are set forth in ANNEX I annexed hereto. This subscription and,
if accepted by the COMPANY, the offer and sale of Preferred
Shares and the Shares issuable upon conversion thereof
(collectively the "Securities"), are being made in reliance upon
the provisions of Regulation S ("Regulation S") under the 1933
Act.
The undersigned
NAME:
-------------------------------------------------------
ADDRESS:
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-------------------------------------------------------
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if applicable, a [Corporation][Partnership][Trust] organized
under the laws of __________, a non USA jurisdiction (hereinafter
referred to as the "PURCHASER")
hereby represents and warrants to, and agrees with, the COMPANY
as follows:
1. AGREEMENT TO SUBSCRIBE.
a. SUBSCRIPTION AMOUNT. The undersigned hereby subscribes
for $______________ in liquidation preference of
Preferred Shares.
b. FORM OF PAYMENT. The PURCHASER shall pay the purchase
price for the Preferred Shares by delivering good funds
in United States Dollars to the escrow agent identified
in the Joint Escrow Instructions attached hereto as
ANNEX II (the "Escrow Agent"). Promptly following
notice by the Escrow Agent of receipt of payment from
the PURCHASER of the subscription price for the
Preferred Shares, the COMPANY shall determine whether
to accept such subscription and, if so accepted, shall
deliver one or more certificates for the Preferred
Shares to the Escrow Agent. Delivery of such funds to
the COMPANY by the Escrow Agent shall be made against
delivery by the COMPANY of one or more certificates for
the Preferred Shares in accordance with this Agreement.
By signing this Agreement, the PURCHASER and the
COMPANY each agrees to all of the terms and conditions
of, and becomes a party to, the Joint Escrow
Instructions attached hereto as ANNEX II, all of the
provisions of which are incorporated herein by this
reference as if set forth in full.
c. METHOD OF PAYMENT. Payment of the purchase price for
the Preferred Shares shall be made by wire transfer of
funds to:
Bank of New York
350 Fifth Avenue
New York, New York 10001
ABA# 021000018
For credit to the account of Krieger &
Prager, Attorneys
Adar Equities Escrow Account No. 637-1496910
2. SUBSCRIBER REPRESENTATIONS; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
a. OFFSHORE TRANSACTION. PURCHASER represents and
warrants to COMPANY as follows:
(i) PURCHASER is not a U.S. person as that term
is defined under Regulation S.
(ii) PURCHASER is outside the United States as of
the date of the execution and delivery of
this Agreement.
(iii) PURCHASER is purchasing the Preferred
Shares for its own account and not on behalf
of any U.S. person, and PURCHASER is the sole
beneficial owner of the Preferred Shares, and
has not pre-arranged any sale with purchasers
in the United States.
(iv) PURCHASER represents and warrants and hereby
agrees that all offers and sales of the
Preferred Shares prior to the expiration of a
period commencing on the date of the receipt
of funds by the COMPANY and ending 40 days
thereafter shall only be made in compliance
with the safe harbor contained in Regulation
S, pursuant to the registration provisions
under the 1933 Act or pursuant to an
exemption from registration, and all offers
and sales after the expiration of the 40-day
period shall be made only pursuant to such
registration or to such exemption from
registration.
(v) PURCHASER acknowledges that the purchase of
the Preferred Shares involves a high degree
of risk , is aware of the risks and further
acknowledges that it can bear the economic
risk of the purchase of the Preferred Shares,
including the total loss of its investment.
(vi) PURCHASER understands that the Preferred
Shares are being offered and sold to it in
reliance on specific exemptions from the
registration requirements of U.S. securities
laws and that the COMPANY is relying upon the
truth and accuracy of the representations,
warranties, agreements, acknowledgements and
understandings of PURCHASER set forth herein
in order to determine the applicability of
such exemptions and the suitability of
PURCHASER to acquire the Preferred Shares.
(vii) PURCHASER is sufficiently experienced in
financial and business matters to be capable
of evaluating the merits and risks of its
investments, and to make an informed decision
relating thereto.
(viii) In evaluating its investment, PURCHASER has
consulted its own investment and/or legal
and/or tax advisors.
(ix) PURCHASER understands that in the view of the
Securities and Exchange Commission ("SEC")
the statutory basis for the exemption claimed
for this transaction would not be present if
the offering of Preferred Shares, although in
technical compliance with Regulation S, is
part of a plan or scheme to evade the
registration provisions of the 1933 Act.
PURCHASER is acquiring the Preferred Shares
for investment purposes and has no present
intention to sell the Preferred Shares in the
United States or to a U.S. Person or for the
account or benefit of a U.S. Person either
now or after the expiration of the Restricted
Period.
(x) PURCHASER is not an underwriter of, or dealer
in, the Securities, and PURCHASER is not
participating, pursuant to a contractual
agreement, in the distribution of the
Securities.
(xi) During the Restricted Period (as hereinafter
defined), neither PURCHASER nor any of its
affiliates will, directly or indirectly,
maintain any short position in the securities
of the COMPANY.
b. CURRENT PUBLIC INFORMATION. PURCHASER
acknowledges that PURCHASER has been furnished
with or has acquired copies of the COMPANY's most
recent Annual Report on the Form 10-K filed with
the SEC and the Forms 10-Q and 8-K filed
thereafter (collectively the "SEC Filings").
Purchaser is not relying upon any representations
or other information (whether oral or written)
other than as set forth in the SEC filings or in
Annex VI.
c. INDEPENDENT INVESTIGATION; ACCESS. PURCHASER
acknowledges that PURCHASER, in making the
decision to purchase the Preferred Shares
subscribed for, has relied upon independent
investigations made by it and its representatives,
if any, and PURCHASER and such representatives, if
any, have, prior to any sale to it, been given
access and the opportunity to examine all material
publicly available, books and records of the
COMPANY, all material contracts and documents
relating to this offering and an opportunity to
ask questions of, and to receive answers from the
COMPANY or any person acting on its behalf concerning
the terms and conditions of this
offering. PURCHASER and its advisors, if any,
have been furnished with access to all publicly
available materials relating to the business,
finances and operation of the COMPANY and
materials relating to the offer and sale of the
Preferred Shares which have been requested.
PURCHASER and its advisors, if any, have received
complete and satisfactory answers to any such
inquiries.
d. NO GOVERNMENT RECOMMENDATION OR APPROVAL.
PURCHASER understands that no federal or state
agency has passed on or made any recommendation or
endorsement of the Securities.
e. ENTITY PURCHASERS. If PURCHASER is a partnership,
corporation or trust, the person executing this
Agreement on its behalf represents and warrants
that:
(i) He or she has made due inquiry to determine
the truthfulness of the representations and
warranties made pursuant to this Agreement.
(ii) He or she is duly authorized (if the
undersigned is a trust, by the trust
agreement) to make this investment and to
enter into and execute this Agreement on
behalf of such entity.
(iii) The investment is within the powers and
purposes of the entity.
f. FILINGS. The PURCHASER undertakes and agrees to
make all necessary filings in connection with the
purchase of the Preferred Shares as required by
United States laws and regulations, including
applicable tax laws, or any domestic securities
exchange or trading market.
3. COMPANY Representations.
a. REPORTING COMPANY Status. The COMPANY is a
reporting issuer as defined by Rule 902 of
Regulation S. The COMPANY is in full compliance,
to the extent applicable, with all reporting
obligations under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"). The COMPANY has registered its common stock
pursuant to Section 12 of the Exchange Act
and the common stock trades on NASDAQ/SMALL CAP,
and has received no notice, either oral or
written, with respect to its continued eligibility
for such listing.
b. OFFSHORE TRANSACTION. The COMPANY has not offered
these securities to any person in the United
States or to any U.S. person as that term is
defined in Regulation S.
c. NO DIRECTED SELLING EFFORTS. In regard to this
transaction, the COMPANY has not conducted any
"direct selling efforts" as that term is defined
in Rule 902 of Regulation S nor has the COMPANY
conducted any general solicitation relating to the
offer and sale of the within securities to persons
resident within the United States or elsewhere.
d. TERMS OF PREFERRED SHARES. The COMPANY will issue
the Preferred Shares in accordance with the terms
of ANNEX I attached hereto and a Certificate of
Designation will be filed by the COMPANY with the
Secretary of State of the State of Delaware
promptly after acceptance of one or more
subscription agreements and prior to closing.
e. LEGALITY. The COMPANY has the requisite corporate
power and authority to enter into this Agreement
and to sell and deliver the Preferred Shares; this
Agreement and the issuance of the Preferred Shares
have been duly and validly authorized by all
necessary corporate action by the COMPANY; this
Agreement has been duly and validly executed and
delivered by and on behalf of the COMPANY, and is
a valid and binding agreement of the COMPANY,
enforceable against it in accordance with its
terms, except as enforceability may be limited by
general equitable principles, bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium or other laws affecting creditors
rights generally.
f. NON-CONTRAVENTION. The execution and delivery of
this Agreement and the consummation of the
issuance of the Preferred Shares, and the
consummation of the transactions contemplated by
this Agreement by the COMPANY do not and will not
conflict with or result in a breach by the COMPANY
of any of the terms or provisions of, or
constitute a default under, the Certificate of
Incorporation or by-laws of the COMPANY, or any
material indenture, mortgage, deed of trust, or other
material agreement or instrument to which
the COMPANY is a party or by which it or any of
its properties or assets are bound or (assuming
that the representations and warranties of the
PURCHASER in Section 2 hereof, and the
representations and warranties of the distributor
to the COMPANY, are true and correct), any
existing applicable U.S. law, rule, or regulation
or any applicable decrees, judgment or order of
any U.S. court, federal or state regulatory body,
administrative agency or other U.S. governmental
body having jurisdiction over the COMPANY or any
of its properties or assets, the conflict, breach,
violation or default of or under which would have
a material adverse effect on the COMPANY's
business or financial condition.
g. FILINGS. The COMPANY undertakes and agrees to
make all necessary filings in connection with the
sale of the Preferred Shares as required by United
States laws and regulations or any domestic
securities exchange or trading market.
h. ABSENCE OF CERTAIN CHANGES. Since December 31,
1995, there has been no material adverse
development in the assets, liabilities, business,
properties, operations, financial condition or
results of operations of the COMPANY, except as
disclosed in the SEC filings, or otherwise
disclosed in the documents annexed hereto or in
Annex VI.
4. EXPIRATION OF RESTRICTED PERIOD.
a. The COMPANY will determine whether to accept such
subscription and, if so accepted, will prepare and issue one or
more certificates for the Preferred Shares registered in such
name or names as specified by PURCHASER and cause the same to be
delivered to the Escrow Agent. Within three (3) days after
delivery of a Conversion Notice and a Certificate for Preferred
Shares, and any other required documents, the COMPANY's will
issue one or more certificates for the Shares without restrictive
legend upon conversion of the Preferred Shares in accordance with
this Agreement, registered in the name of the holder of Preferred
Shares who converts any Preferred Shares or its nominee and in
such denominations to be specified by the such holder in
connection with such conversion. The COMPANY warrants that no
restriction or instruction (other than these instructions and a
"stop transfer" restriction on the COMPANY's stock ledger
relating to the Preferred Shares until the end of the forty (40)
day Restricted Period applicable under Regulation S) will be
imposed by the COMPANY or given by the COMPANY to its transfer
agent for the Shares and that the Preferred Shares and the Shares
issuable upon conversion thereof shall otherwise be freely
transferable on the books and records of the COMPANY as and to
the extent provided in this Agreement. Nothing in this Section
shall affect in any way PURCHASER's obligations and agreement to
comply with all applicable securities laws and PURCHASER's
representations and warranties set forth herein.
b. In connection with the exercise of conversion
rights relating to the Preferred Shares, if the Preferred Shares
and the Shares have not been registered under the 1933 Act prior
to such conversion, PURCHASER or any subsequent holder of the
Preferred Shares shall, in addition to any other requirement
imposed by the terms of the Preferred Shares as set forth in the
Certificate of Designation, be required to complete, sign and
furnish to the COMPANY a conversion certificate in the form
attached as Exhibit 1 to ANNEX I hereto. PURCHASER acknowledges
that the COMPANY is under no obligation to register the Preferred
Shares or the Shares issuable upon conversion thereof under the
1933 Act.
c. If upon conversion of the Preferred Shares
effected by the PURCHASER pursuant to the terms of this Agreement
following the expiration of the Restricted Period, the COMPANY
fails to issue certificates for Shares issuable upon such
conversion to the PURCHASER bearing no restrictive legend for any
reason other than the COMPANY's reasonable good faith belief that
the issuance is prohibited by law, or that the representations
and warranties made by the Buyer in this Agreement were untrue
when made, the COMPANY shall pay to the PURCHASER by wire
transfer, as liquidated damages for such failure and not as a
penalty, an amount in cash equal to $50,000; provided, however,
that the payment of such liquidated damages shall not relieve the
COMPANY from its obligations to register the Shares pursuant to
Section 10.
5. EXEMPTION; RELIANCE ON REPRESENTATION. PURCHASER
understands that the offer and sale of the Preferred Shares is
not being registered under the 1933 Act. The COMPANY is relying
on the rules governing offers and sales made outside the United
States pursuant to Regulation S. Rules 901 through 904 of
Regulation S govern this transaction.
6. CLOSING DATE AND ESCROW AGENT. The date of the
issuance of the Preferred Shares and the sale of the Preferred
Shares as evidenced by receipt by the COMPANY of PURCHASER's
purchase funds (the "Closing Date") shall be no later than two
(2) business days after execution hereof by all parties or such
other mutually agreed to time. PURCHASER shall, within one (1)
business day after acceptance and execution of this Agreement by
the COMPANY, deliver the necessary funds as indicated in
Paragraph 1 to the Escrow Agent. Preferred Shares will be
delivered to the Escrow Agent at the instructions of the COMPANY.
PURCHASER agrees that the Escrow Agent has no liability as a result of
any fraudulent or unlawful conduct of any other party,
and agrees to hold the Escrow Agent harmless.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
PURCHASER understands that COMPANY's obligation to sell the
Preferred Shares is conditioned upon:
a. The receipt and acceptance by the COMPANY of this
Agreement as evidenced by execution of this
Agreement by the President or any Vice President
of the COMPANY. The acceptance of funds by the
COMPANY shall be deemed to be constructive
acceptance of this Agreement;
b. Delivery to the Escrow Agent by PURCHASER of good
funds as payment in full for the purchase of the
Preferred Shares; and
c. The accuracy on the Closing Date of the
representations and warranties of PURCHASER
contained in this Agreement and the performance by
PURCHASER on or before the Closing Date of all
covenants and agreements of PURCHASER required to
be performed on or before the Closing Date.
d. There shall not be in effect any law, rule or
regulation prohibiting or restricting the
transactions contemplated hereby, or requiring any
consent or approval which shall not have been
obtained.
8. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE. The
COMPANY understands that PURCHASER's obligation to purchase the
Preferred Shares is conditioned upon:
a. Acceptance by PURCHASER of an Agreement for the
sale of Preferred Shares, as indicated by
execution of this Agreement;
b. Delivery of Preferred Shares to Escrow Agent as
herein set forth;
c. The accuracy on the Closing Date of the
representations and warranties of the COMPANY
contained in this Agreement and the performance by
the COMPANY on or before the Closing Date of all
covenants and agreements of the COMPANY required
to be performed on or before the Closing Date; and
d. Delivery to the Escrow Agent of an opinion of
counsel for the COMPANY, dated the Closing Date
and addressed to PURCHASER, in the form attached
hereto as ANNEX III.
9. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York without giving
effect to principles governing the conflicts of laws. A
facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.
10. REGISTRATION OF THE SECURITIES. COMPANY hereby agrees
that, upon demand of a majority in interest of holders of the
Securities as a result of a regulatory development including, but
not limited to, an amendment or proposed amendment of Regulation
S, or any "no-action" or interpretive guidance whether oral or
written from the Securities and Exchange Commission, which call
into question the ability of PURCHASER to resell the Securities
without registration, COMPANY will file, and use its reasonable
best efforts to cause to become effective a registration
statement on Form S-3 under the 1933 Act covering the resale of
the Shares issuable upon conversion of the Preferred Shares. Any
such registration statement shall remain effective for up to
twelve (12) months, or until all of the Securities are sold,
whichever is earlier. The COMPANY shall provide the PURCHASER
with such number of copies of the prospectus as shall be
reasonably requested to facilitate the sale of the Shares
issuable upon conversion of the Preferred Shares. The COMPANY
shall bear and pay all expenses incurred in connection with any
such registration, excluding discounts and commissions.
11. FURTHER OFFERINGS. The COMPANY agrees that for a
period of 150 days from the Closing Date, it will not offer for
sale or sell any securities for cash or similar consideration
other than the Shares issuable upon conversion of the Preferred
Shares issued to the PURCHASER and to other purchasers
contemporaneously herewith. COMPANY hereby warrants that it has
not engaged in any such offering during the six months prior to
the Closing Date.
12. NOTICES. Any notice required or permitted hereunder
shall be given in writing (unless otherwise specified herein) and
shall be deemed effectively given upon personal delivery or three
business days after deposit in the United States Postal Service,
by registered or certified mail with postage and fees prepaid,
addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may
designate by ten days advance written notice to each of the other
parties hereto.
COMPANY: Advanced NMR Systems, Inc.
2 Executive Drive, Suite 755
Fort Lee, New Jersey 07024
ATT: Mr. Jack Nelson, Chairman
PURCHASER: At the address set forth on the first page of this
Agreement.
ESCROW AGENT: Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
SIGNATURE(S) FOR INDIVIDUAL SUBSCRIBER(S)
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and correct and that he, she or
they have executed this Offshore Securities Subscription
Agreement this ______ day of ______________, 1996.
____________________________ ___________________________________
Printed Name Signature
____________________________ ___________________________________
Printed Name Signature
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the
following statements are true and correct and that it has caused
this Offshore Securities Subscription Agreement to be duly
executed on its behalf this ________ day of ___________________,
1996.
___________________________________
Printed Name of Subscriber
By: ______________________________
(Signature of Authorized Person)
___________________________________
Printed Name and Title
Accepted this __________ day of the month of ___________________,
199___.
ADVANCED NMR SYSTEMS, INC.
By: __________________________________________
Title: _______________________________
All correspondence and delivery of certificates and
confirmations should be addressed to the above named person and
sent by the COMPANY to his _____ business _____ home address
(check one).
Capacity of Subscriber (check one):
Individual __________
Corporation __________
Partnership __________
Other __________ (please
specify)
Ownership of Preferred Shares (check one):
Individual __________
Joint Tenants, with right of
survivorship __________*
Tenants in Common __________*
Tenants in Entirety __________*
Community Property __________*
Country of Citizenship: _________________________________________
Country of incorporation or
formation: ______________________________________________________
* If you are purchasing Preferred Shares with only your spouse
as co-owner, both you and your spouse must sign the
signature page. If any co-owner is not your spouse, all co-
owners must sign the signature page.
Name of PURCHASER Representative,
if any:__________________________________________________________
Address: ________________________________________
________________________________________
Telephone: ________________________________________
FULL NAME AND ADDRESS OF PURCHASER for Registration Purposes:
NAME:___________________________________________________________
ADDRESS:________________________________________________________
________________________________________________________
________________________________________________________
TEL. NO.________________________________________________________
FAX. NO.________________________________________________________
CONTACT NAME:___________________________________________________
DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
NAME:___________________________________________________________
ADDRESS:________________________________________________________
________________________________________________________
________________________________________________________
TEL. NO.________________________________________________________
FAX. NO.________________________________________________________
CONTACT NAME:___________________________________________________
SPECIAL
INSTRUCTIONS:____________________________________________________
____________________________________________________
____________________________________________________
NEWS
---------- [ANMR LOGO]
FOR IMMEDIATE RELEASE ADVANCED NMR SYSTEMS, INC.
CONTACT: EILEEN KIRRANE
(508) 657-8876
ADVANCED NMR SYSTEMS, INC. ANNOUNCES IT HAS
COMPLETED A $3.5 MILLION PRIVATE PLACEMENT
AND WILL COMMENCE RESTRUCTURING ITS OPERATIONS
Wilmington, MA, May 31, 1996 --Advanced NMR Systems,
Inc. (NASDAQ: ANMR) today announced it has concluded a private
placement of newly issued Series A Convertible Preferred Stock,
$.01 par value, for an aggregate purchase price of $3.5 million.
Today's placement is exempt from the registration requirements of
the Securities Act of 1933, as amended, pursuant to Regulation S
promulgated thereunder. The shares were not registered and may
not be offered or sold in the United States unless registered or
exempted from registration requirements.
ANMR also announced a new Strategic Plan that will
focus company resources on its profitable Medical Diagnostics,
Inc. (MDI) diversified healthcare service business and expects to
achieve a significant reduction in resources dedicated to
technology development. ANMR will continue to work with General
Electric Medical Systems as the exclusive systems integrator of
very high field 3 and 4 Tesla MRI systems under a contract
extending through June 1999. As previously announced, Advanced
NMR Systems had terminated its Merger Agreement with Advanced
Mammography Systems, Inc. (AMS), its majority-owned subsidiary.
Advanced Mammography will continue to operate as an independent,
publicly-traded company with Advanced NMR Systems providing
certain management services.
Jack Nelson, Chairman and Chief Executive Officer of
Advanced NMR Systems noted: "The financing announced today will
allow ANMR to adequately fund development and marketing programs
that we have identified as critical to the successful
implementation of our strategic objectives, the first of which
must be the creation of shareholder value. ANMR will invest a
majority of its financial and human resources, along with the
proceeds from today's financing, to expand our growing diagnostic
imaging and rehabilitation services businesses, including an
important new venture to develop MR Breast Imaging clinics using
Advanced Mammography's dedicated Breast Imaging system. We
expect to de-emphasize areas where market penetration has proved
difficult and costly. Over the next several months, we will be
exploring alternatives that will allow us to realize an
appropriate return on our investment in InstaScan products. It
seems clear at this point that the market for very high field 3
and 4 Tesla MRI systems, sold through General Electric Medical
Systems, is the area of greatest profit potential for ANMR's
systems business."
Nelson continued: "We are confident that, having
sought and completed an independent financing for Advanced
Mammography, we are positioned to successfully commercialize our
"Aurora" Breast Imaging product. As shareholders in the
business, we have concluded that an independent and highly
focused Advanced Mammography organization is best equipped to
maximize the return on our shareholders' investment."
In connection with the capital infusion, the
restructuring of operations and the decision to withdraw from a
merger with Advanced Mammography, Mr. Nelson also noted the
Company will propose diversification of the Boards of Directors
of both ANMR and AMS to reflect the new focus on its commercial
operations and will review possible modifications to the Shared
Services and License Agreement between ANMR and AMS in light of
the merger termination and the financing completed today. He
also stated a company-wide review, currently underway, is
expected to result in a streamlining of operations that will
allow significant reductions in the overall cost structure of the
business.
This release contains forward-looking statements based
upon current expectations that include a number of business risks
and uncertainties. The factors that could cause results to
differ materially include the following: delays in product
development, lack of market acceptance of the Company's
technology and changes in health care regulations, including
reimbursement programs.
Advanced NMR Systems, Inc. develops and manufactures
ultrafast magnetic resonance imaging products and components and
is a provider of diagnostic imaging and rehabilitation services
through its wholly-owned subsidiary, Medical Diagnostics, Inc.
Its majority-owned subsidiary, Advanced Mammography Systems, Inc.
has developed a dedicated MR Breast Imaging System that received
FDA clearance in February, 1996.
* * *
