SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): February 4, 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 48 Pages
Exhibit Index on Page 5
<PAGE>
Item 5. Other Events.
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On February 4, 1996, the registrant Advanced NMR
Systems, Inc. ("ANMR") and its wholly-owned subsidiary AMS
Merger Corporation (the "Subsidiary") entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Advanced
Mammography Systems, Inc., a Delaware corporation ("AMS"). The
Merger Agreement provides for the merger (the "Merger") of the
Subsidiary into AMS, with AMS as the surviving corporation of
the Merger, which would operate as a wholly-owned subsidiary of
ANMR. A copy of the Merger Agreement is attached hereto as
Exhibit 1, and is incorporated by reference. The description
of the transaction provided herein is qualified in its entirety
by reference to the Merger Agreement.
ANMR owns 4,000,000 shares (including 2,750,000
shares held in escrow under an Escrow Agreement) of the
6,598,376 outstanding shares of common stock, $.01 par value
per share ("AMS Common Stock"), or approximately 61% of the
outstanding AMS Common Stock. The AMS Common Stock is traded in
the Nasdaq Small Cap System under the symbol MAMO.
AMS is a development stage company which was
organized by ANMR in July 1992 to acquire and develop
proprietary technology from ANMR to design, manufacture and
commercialize a dedicated (or partial body) magnetic resonance
imaging (MRI) system for breast imaging which can be used to
detect and characterize breast tissue abnormalities. Pursuant
to the License Agreement entered into upon the formation of
AMS, ANMR granted to AMS a perpetual, worldwide, exclusive,
royalty-free license for the ANMR technology relating to the
development of a dedicated MRI system for mammography (the
"Field of Use"). This Agreement also granted to ANMR rights to
future technology developed by AMS for use in connection with
mammography, and to AMS rights to future technology developed
by ANMR for use outside of the Field of Use. AMS has completed
a prototype of its dedicated MRI mammography system and in
February 1995 had filed an application with the U.S. Food and
Drug Administration seeking clearance for commercial use.
ANMR has provided executive officers, research
scientists and other personnel to AMS and AMS has occupied a
portion of the office and research premises leased by ANMR for
which AMS pays ANMR a fee based upon a fixed percentage of
overhead expenses and an allocation of the time spent by ANMR
executive officers, pursuant to a Shared Services Agreement
which has been extended to April 24, 1996.
Upon closing of the Merger, each share of AMS Common
Stock (except for the shares owned by ANMR) shall be converted
into the right to receive a number of fully paid and
nonassessable shares of common stock, par value $.01 per share,
of Advanced NMR ("ANMR Common Stock"), determined by dividing
$2.625 by the average closing price of the ANMR Common Stock
over the 30 trading days ending five trading days prior to the
closing of the Merger Agreement, provided that ANMR will not be
required to issue more than 1.297059 or fewer than 1.173529
shares of ANMR Common Stock for each share of AMS Common Stock.
The Merger Agreement provides that ANMR will assume the
outstanding AMS options and is obligated to issue under the AMS
options shares of ANMR Common Stock. On February 2, 1996, the
closing prices of the AMS Common Stock and the ANMR Common
Stock were $2.625 and $2.125, respectively. The Merger
Agreement also provides that the Advanced NMR Board shall
nominate one of the members of the special committee of
independent directors of the AMS Board of Directors to serve on
the ANMR Board after consummation of the Merger.
The closing of the Merger is subject to approval by
the stockholders of AMS, the consent of Chemical Bank, senior
lender to ANMR, and customary closing conditions. ANMR and AMS
will shortly file a Form S-4 as a proxy statement/prospectus.
It is anticipated that the AMS stockholder meeting will be held
in the late spring, and the Merger would close immediately upon
stockholder approval and fulfillment of the other conditions.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits:
2. Agreement and Plan of Merger, dated
as of February 4, 1996, among Advanced NMR
Systems, Inc., AMS Merger Corporation and
Advanced Mammography Systems, Inc.
(without schedules).
<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: February 9, 1996 By: /s/ Charles Moche
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Name: Charles M. Moche
Title: Secretary
<PAGE>
EXHIBIT INDEX
Exhibit Description Page
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2 Agreement and Plan of Merger, dated 6
as of February 4, 1996, among Advanced
NMR Systems, Inc., AMS Merger
Corporation and Advanced Mammography
Systems, Inc. (without schedules).
Exhibit 2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ADVANCED NMR SYSTEMS, INC.,
A DELAWARE CORPORATION,
AMS MERGER CORPORATION,
A DELAWARE CORPORATION, AND
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
A DELAWARE CORPORATION
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
ADOPTION OF AGREEMENT AND PLAN OF MERGER 2
1.1 The Merger 2
1.2 Effective Date of the Merger 2
1.3 Surviving Corporation; Certificate of Incorporation of
Surviving Corporation 2
1.4 Merger Consideration; Conversion of AMS Common Stock;
Cancellation of Acquisition Corp. Common Stock 2
1.5 Exchange of Certificates 3
1.6 No Fractional Shares 5
1.7 Certificates in Other Names 5
1.8 Treatment of AMS Options 5
ARTICLE II
CLOSING 6
2.1 Closing Date 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMS 6
3.1 Due Incorporation 6
3.2 Due Authorization 7
3.3 Non-Contravention; Consents and Approvals 7
3.4 Capitalization 8
3.5 Financial Statements; Undisclosed Liabilities;
Other Documents 9
3.6 Commission Filings 9
3.7 No Material Adverse Effects or Changes 10
3.8 Registration Statement and Proxy Statement/Prospectus 10
3.9 Intellectual Property 11
3.10 Tax Returns and Audits 11
3.11 Litigation 12
3.12 Compliance with Applicable Laws 12
3.13 Medical Devices 13
3.14 Contracts; No Defaults 13
3.15 Fees of Brokers, Finders and Financial Advisors 13
3.16 Special Committee Recommendation; Board of
Directors Recommendation 13
3.17 Opinion of Financial Advisor 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
ACQUISITION CORP. AND ADVANCED NMR 14
4.1 Due Incorporation 14
4.2 Due Authorization 14
4.3 Non-Contravention; Consents and Approvals 15
4.4 Capitalization 16
4.5 Financial Statements; Undisclosed Liabilities;
Other Documents 16
4.6 Commission Filings 17
4.7 No Material Adverse Effects or Changes 17
4.8 Registration Statement and Proxy Statement/Prospectus 18
4.9 Intellectual Property 18
4.10 Insurance 19
4.11 Employee Benefit Plans and Employment Agreements 19
4.12 Labor Matters 20
4.13 Tax Returns and Audits 20
4.14 Litigation 21
4.15 Compliance with Applicable Laws 21
4.16 Medical Devices 21
4.17 Contracts; No Defaults 22
4.18 Fees of Brokers, Finders and Investment Bankers 22
4.19 Absence of Certain Changes or Events 23
ARTICLE V
COVENANTS 23
5.1 Implementing Agreement 23
5.2 Access to Information and Facilities 23
5.3 Preservation of Business 24
5.4 Proxy Materials and AMS Stockholder Approval 24
5.5 Consents and Approvals 25
5.6 Periodic Reports 26
5.7 Publicity 26
5.8 Listing of Common Stock 26
5.9 Blue Sky Approvals 26
5.10 Rule 145 Affiliates 26
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF ACQUISITION CORP. AND ADVANCED NMR 26
6.1 Warranties True as of Closing Date 27
6.2 Compliance With Agreements and Covenants 27
6.3 Consents and Approvals 27
6.4 Actions or Proceedings 27
6.5 Approval of Merger 27
6.6 Consent of Chemical Bank 27
6.7 Registration Statement 27
6.8 Listing of Common Stock 27
6.9 Other Closing Documents 27
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMS 28
7.1 Warranties True as of Closing Date 28
7.2 Compliance with Agreements and Covenants 28
7.3 Consents and Approvals 28
7.4 Actions or Proceedings 28
7.5 Approval of Merger 28
7.6 Registration Statement 28
7.7 Listing of Common Stock 28
7.8 Other Closing Documents 29
7.9 Consent of Chemical Bank 29
7.10 Fairness Opinion 29
7.11 Board Appointment 29
ARTICLE VIII
TERMINATION AND INDEMNIFICATION 29
8.1 Termination 29
8.2 Effect of Termination and Abandonment 30
8.3 Indemnification by Advanced NMR 31
ARTICLE IX
MISCELLANEOUS 33
9.1 Expenses 33
9.2 Amendment 33
9.3 Non-Survival of Representations, Warranties,
Covenants and Agreements 33
9.4 Notices 33
9.5 Waivers 34
9.6 Interpretation 34
9.7 Applicable Law 34
9.8 Assignment 34
9.9 No Third Party Beneficiaries 34
9.10 Enforcement of the Agreement 35
9.11 Further Assurances 35
9.12 Severability 35
9.13 Remedies Cumulative 35
9.14 Entire Understanding 35
9.15 Waiver of Jury Trial 35
9.16 Counterparts 35
<PAGE>
SCHEDULES
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Number Description
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1.8 AMS Options and AMS Option Plans
3.7 Material Adverse Effects, Changes -- AMS
3.9 Intellectual Property -- AMS
3.13 Medical Devices -- AMS
4.7 Material Adverse Effects -- ANMR Companies
4.9 Intellectual Property -- Advanced NMR and
Subsidiaries
4.13 Tax Returns and Audits -- Advanced NMR
4.14 Litigation -- ANMR Companies
4.15 Compliance Matters -- ANMR Companies
4.16 Medical Devices -- Advanced NMR and
Subsidiaries
4.17 Contract Matters -- ANMR Companies
4.19 Certain Changes or Events -- Advanced NMR
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 4,
1996, by and among ADVANCED NMR SYSTEMS, INC., a Delaware
corporation ("Advanced NMR"), AMS MERGER CORPORATION, a Delaware
corporation ("Acquisition Corp."), and ADVANCED MAMMOGRAPHY
SYSTEMS, INC., a Delaware corporation ("AMS").
W I T N E S S E T H :
WHEREAS, Acquisition Corp. is a wholly-owned subsidiary
of Advanced NMR;
WHEREAS, Advanced NMR is the owner of 4,000,000 shares
(the "AMS Shares") of common stock, $.01 par value per share
("AMS Common Stock"), of AMS;
WHEREAS, Advanced NMR desires to acquire the shares of
AMS Common Stock not owned by it through the merger of
Acquisition Corp. with and into AMS pursuant to the terms
hereinafter set forth (the "Merger");
WHEREAS, the respective Boards of Directors of Advanced
NMR and Acquisition Corp. deem it advisable and in the best
interests of Advanced NMR and Acquisition Corp. that Acquisition
Corp. be merged with and into AMS upon the terms and conditions
hereinafter specified;
WHEREAS, the Board of Directors of AMS, upon the
recommendation of a special committee ("Special Committee") of
independent directors of AMS, deems it advisable and in the best
interests of AMS that Acquisition Corp. be merged with and into
AMS upon the terms and conditions hereinafter specified;
WHEREAS, for Federal income tax purposes, it is
intended that the Merger shall qualify as a reorganization within
the meaning of Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code");
WHEREAS, Acquisition Corp. has an authorized capital
stock consisting of 1,000 shares of Common Stock, $.01 par value
per share (the "Acquisition Corp. Common Stock"), of which 100
shares are currently issued and outstanding and owned by Advanced
NMR; and
WHEREAS, AMS has an authorized capital stock consisting
of (i) 5,000,000 shares of preferred stock, $.01 par value per
share (the "AMS Preferred Stock"), none of which is issued and
outstanding; and (ii) 25,000,000 shares of AMS Common Stock, of
which 6,598,376 shares are currently issued and outstanding.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements hereinafter contained, the parties
hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
ADOPTION OF AGREEMENT AND PLAN OF MERGER
1.1 The Merger. At the Effective Time (as defined in
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Section 1.2 herein), in accordance with this Agreement and the
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relevant provisions of the Delaware General Corporation Law (the
"DGCL"), Acquisition Corp. shall be merged with and into AMS.
AMS shall be the surviving corporation of the Merger and AMS
shall continue, and be deemed to continue, for all purposes after
the Merger, and the existence of Acquisition Corp. shall cease at
the Effective Time.
1.2 Effective Date of the Merger. This Agreement
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shall be submitted to the stockholders of AMS as provided in
Section 5.4 hereof, and to the sole stockholder of Acquisition
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Corp., as provided in Section 5.4 hereof, for approval as soon as
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practicable after the execution of this Agreement. Subject to
the terms and conditions hereof, upon the authorization, approval
and adoption hereof by the affirmative vote of the holders of at
least a majority of the outstanding shares of each of AMS Common
Stock and Acquisition Corp. Common Stock entitled to vote thereon
as provided by the DGCL, a Certificate of Merger (the "Certificate
of Merger") meeting the requirements of Section 251 of the DGCL
shall be executed, verified and acknowledged as required by the
provisions of Sections 251 and 103 of the DGCL and be delivered
to the Secretary of State of Delaware for filing (the time of
such filing being the "Effective Time" and the date of such
filing being the "Effective Date").
1.3 Surviving Corporation; Certificate of
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Incorporation of Surviving Corporation. Following the Merger,
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AMS shall continue to exist under, and be governed by, the laws
of the State of Delaware. The Certificate of Incorporation of
AMS, as in effect on the Closing Date, shall continue in full
force and effect as the Certificate of Incorporation of AMS,
except that upon the Merger the Certificate of Incorporation of
AMS shall be amended to change its authorized capital stock to
consist of only 10,000 shares of common stock, $.01 par value per
share.
1.4 Merger Consideration; Conversion of AMS Common
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Stock; Cancellation of Acquisition Corp. Common Stock. (a) At
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the Effective Time, by virtue of the Merger and without any
action on the part of Acquisition Corp., AMS or the holders of
any shares of AMS Common Stock, each share of AMS Common Stock
(except for 4,000,000 shares of AMS Common Stock owned by
Advanced NMR), issued and outstanding immediately prior to the
Effective Time, shall be converted into the right to receive a
number of fully paid and nonassessable shares of common stock,
par value $.01 per share, of Advanced NMR ("Advanced NMR Common
Stock"), equal to the Exchange Ratio (as defined herein). The
number of shares of Advanced NMR Common Stock to be received by
the AMS stockholders other than Advanced NMR in exchange for each
share of AMS Common Stock pursuant to the Merger is hereinafter
referred to as the "Merger Consideration." All shares of AMS
Common Stock to be converted into shares of Advanced NMR Common
Stock pursuant to the Merger are hereinafter referred to as the
"Converted Shares." The Exchange Ratio shall mean a number of
shares of Advanced NMR Common Stock determined by dividing (x)
$2.625 by (y) the Advanced NMR Average Trading Price (as
hereinafter defined), and rounding the result to six decimal
places; provided, however, if the quotient (x) divided by (y) is
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greater than 1.297059, then the Exchange Ratio shall be 1.297059,
and if the quotient (x) divided by (y) is less than 1.173529,
then the Exchange Ratio shall be 1.173529. The Advanced NMR
Average Trading Price shall mean the average daily closing price
per share, rounded to six decimal places, of the Advanced NMR
Common Stock as reported through the NASDAQ National Market
System or on NASDAQ for the thirty (30) consecutive trading days
ending on (and including) the fifth trading day prior to the
Effective Date.
(b) If between the date of this Agreement and the
Effective Time the outstanding shares of AMS Common Stock and/or
Advanced NMR Common Stock shall have been changed into a
different number of shares or a different class by reason of a
stock dividend, subdivision, reclassification, recapitalization,
split-up or combination, the Merger Consideration shall be
appropriately adjusted.
(c) At the Effective Time, each share of Acquisition
Corp. Common Stock issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger and without any
action on the part of Advanced NMR, be cancelled and cease to
exist.
(d) At the Effective Time, the 4,000,000 shares of AMS
Common Stock owned by Advanced NMR shall be converted into 1,000
shares of AMS Common Stock.
1.5 Exchange of Certificates. (a) Prior to the
------------------------
Effective Time, Advanced NMR will select an exchange agent (the
"Exchange Agent") reasonably acceptable to AMS to effectuate the
delivery of the consideration provided for in Section 1.4 to
-----------
holders of AMS Common Stock upon surrender of certificates which
immediately prior to the Effective Time represented shares of AMS
Common Stock ("Certificates").
(b) As of the Effective Time, Advanced NMR shall
provide, or shall take all steps necessary to provide, to the
Exchange Agent, the aggregate number of shares of Advanced NMR
Common Stock to be issued in the Merger pursuant to Section
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1.4(a) in exchange for the shares of AMS Common Stock. The
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Exchange Agent shall, pursuant to irrevocable instructions, make
the deliveries of the Merger Consideration required in respect of
the Merger.
(c) Promptly after the Effective Time, the Exchange
Agent shall mail to each record holder of an outstanding
Certificate, determined as of the Effective Date, a form letter
of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange
Agent), advising such holder of the terms of the exchange
effected by the Merger and the procedure for surrendering to the
Exchange Agent such Certificate in exchange for the Merger
Consideration.
(d) Upon surrender of a Certificate to the Exchange
Agent, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration provided for in
Section 1.4(a) (consisting of a certificate representing that
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whole number of shares of Advanced NMR Common Stock which such
holder has the right to receive hereunder), and the Certificate
so surrendered shall forthwith be canceled. Shares of Advanced
NMR Common Stock shall be delivered to such holder as promptly as
practicable and (except as hereinafter provided) in no event
later than twenty (20) days after proper delivery of the
applicable Certificates and letters of transmittal to the
Exchange Agent.
(e) All shares of Advanced NMR Common Stock issued
upon conversion of the shares of AMS Common Stock in accordance
with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of AMS
Common Stock.
(f) Neither Acquisition Corp., Advanced NMR nor AMS
shall be liable to any holder of shares of AMS Common Stock for
any such shares of Advanced NMR Common Stock delivered to a
public official pursuant to any abandoned property, escheat or
similar law. Until surrendered in accordance with the provisions
of Section 1.5, each Certificate representing Converted Shares
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shall represent, for all purposes, only the right to receive the
Merger Consideration.
(g) Any shares of Advanced NMR Common Stock which
remain undistributed to holders of AMS Common Stock for six (6)
months after the Effective Time shall be delivered to Advanced
NMR, upon demand, and any holder of AMS Common Stock who has not
theretofore complied with this Section 1.5 shall thereafter look
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to Advanced NMR for the Merger Consideration to which he is
entitled.
1.6 No Fractional Shares. No certificates or scrip
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for fractional shares of Advanced NMR Common Stock will be
issued, no Advanced NMR stock split or dividend shall relate to
any fractional share interest, and no such fractional share
interest shall entitle the owner thereof to vote or to any rights
of or as a stockholder of Advanced NMR. In lieu of issuing any
such fractional shares to which a holder of AMS Common Stock
would otherwise be entitled to receive, the Exchange Agent shall
round up or down to the nearest whole share.
1.7 Certificates in Other Names. If any certificate
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evidencing shares of Advanced NMR Common Stock is to be issued in
a name other than that in which the Certificate surrendered in
exchange therefore is registered, it shall be a condition of the
issuance thereof that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and
that the person requesting such exchange pay to the Exchange
Agent or to Advanced NMR acting solely in its corporate capacity,
as the case may be, any transfer or other taxes required by
reason of the issuance of a certificate for shares of Advanced
NMR Common Stock in any name other than that of the registered
holder of the Certificate surrendered or otherwise required or
establish to the satisfaction of the Exchange Agent or of
Advanced NMR acting solely in its corporate capacity, as the case
may be, that such tax has been paid or is not payable.
1.8 Treatment of AMS Options. At the Effective Time,
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Advanced NMR shall assume all of the rights and obligations of
AMS pursuant to the AMS Option Plans (as hereinafter defined),
except that Advanced NMR shall not be obligated to issue AMS
Common Stock upon the exercise of the Options (as hereinafter
defined), but, pursuant to the terms of such Options as modified
in accordance with this Section 1.8, shall instead be obligated
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to issue, for each share of AMS Common Stock that would have been
issuable upon the exercise of such Options immediately prior to
the Effective Time, a number of shares of Advanced NMR Common
Stock equal to the Merger Consideration. (All such Options are
sometimes hereinafter referred to as the "Derivative
Securities".) At or prior to the Effective Time, AMS shall make
all necessary and appropriate adjustments to the Derivative
Securities to provide that such Derivative Securities shall be
amended and converted as of the Effective Time into an option to
acquire shares of Advanced NMR Common Stock as described in the
first sentence of this Section. All other terms and conditions
of such options including, without limitation, terms and
conditions relating to the exercisability, and the maximum term
of such options shall be identical to the terms of the respective
Derivative Securities being replaced. No fractional shares of
Advanced NMR Common Stock shall be issued upon the exercise of
such Derivative Securities, and if the number of shares of
Advanced NMR Common Stock issuable upon exercise of all or any
portion of such Derivative Securities shall include a fraction of
a share, then the number of shares of Advanced NMR Common Stock
deliverable upon exercise shall be rounded up or down to the
nearest whole share. The term "Options" and "AMS Option Plans"
are defined in Schedule 1.8.
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ARTICLE II
CLOSING
2.1 Closing Date. The closing of the Merger (the
------------
"Closing") shall take place at the offices of Reid & Priest LLP,
40 West 57th Street, New York, New York 10019 at 10:00 a.m., New
York time, on that day on which the last of the conditions set
forth in Articles VI and VII shall have been satisfied or, if
permissible, waived (other than those conditions which by their
terms are to occur only at the Closing), or on and at such other
date, time and place as Advanced NMR, Acquisition Corp. and AMS
may agree (the date of the Closing hereinafter being referred to
as the "Closing Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AMS
AMS hereby represents and warrants to Advanced NMR and
Acquisition Corp. as follows:
3.1 Due Incorporation. AMS is a corporation duly
-----------------
organized, validly existing and in good standing under the laws
of its jurisdiction of organization, with all requisite power and
authority to own, lease and operate its properties and to carry
on its business as they are now being owned, leased, operated and
conducted. AMS is qualified to do business and is in good
standing as a foreign corporation in the States of Massachusetts
and New Jersey which are the only jurisdictions where the nature
of the properties owned, leased or operated by it and the
business transacted by it require such qualification. AMS has no
direct or indirect subsidiaries, either wholly or partially
owned, and AMS does not hold any voting or management interest in
any corporation, proprietorship, firm, partnership, limited
partnership, limited liability company, trust, association,
individual or other entity (a "Person") or own any security
issued by any Person.
3.2 Due Authorization. AMS has full power and
-----------------
authority to enter into this Agreement and the Certificate of
Merger (the "Related Agreement") and, subject to obtaining the
necessary approval of this Agreement and the Merger by the
stockholders of AMS, to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance by
AMS of this Agreement and the Related Agreement have been duly
and validly approved and authorized by the Board of Directors of
AMS, and, subject to obtaining the necessary approval of the
Merger by the AMS stockholders, the Related Agreement and the
transactions contemplated hereby and thereby. AMS has duly and
validly executed and delivered this Agreement and will duly and
validly execute and deliver the Related Agreement. Subject to
obtaining the necessary approval of the AMS stockholders, this
Agreement constitutes the legal, valid and binding obligation of
AMS and the Related Agreement to which AMS is a party, will, upon
execution thereof by AMS, constitute the legal, valid and binding
obligation of AMS, in each case enforceable in accordance with
their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or other laws from time to
time in effect which affect creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
3.3 Non-Contravention; Consents and Approvals. (a)
-----------------------------------------
The execution and delivery of this Agreement by AMS do not, and
the performance by AMS of its obligations hereunder and the
consummation of the transactions contemplated hereby will not,
conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default
under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any
lien upon any of the assets or properties of AMS under, any of
the terms, conditions or provisions of (i) the Certificate of
Incorporation or By-Laws of AMS, or (ii) subject to obtaining the
necessary approval of this Agreement and the Merger by the AMS
stockholders and the taking of the actions described in paragraph
(b) of this Section, (x) any statute, law, rule, regulation or
ordinance (together, "Laws"), or any judgment, decree, order,
writ, permit or license, of any Governmental Entity (as defined
in paragraph (b) below), applicable to AMS or any of its assets
or properties, or (y) any contract, agreement or commitment to
which AMS is a party or by which AMS or any of its assets or
properties is bound, excluding from the foregoing clauses (x) and
(y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of
liens which would not have an AMS Material Adverse Effect or
result in the inability of AMS to consummate the transactions
contemplated by this Agreement.
(b) No consent, approval, order or authorization of,
or registration, declaration or filing with any court,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required by AMS in connection with the
execution and delivery of this Agreement and the Related
Agreement or the consummation by AMS or the AMS stockholders of
the transactions contemplated hereby and thereby, the failure to
obtain which would have an AMS Material Adverse Effect or result
in the inability of AMS to consummate the transactions
contemplated hereby, except for:
(i) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware in
accordance with the requirements of the DGCL and if
applicable, the filing of the appropriate documents
with the relevant authorities of other states in which
AMS is qualified to transact business; and
(ii) the filing of a proxy statement ("Proxy
Statement") with the Securities and Exchange Commission
("Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and the
Securities Act of 1933, as amended (the "1933 Act") and
the declaration of the effectiveness of the
Registration Statement (as hereinafter defined) by the
Commission and filings with various blue sky
authorities.
3.4 Capitalization. (a) The authorized capital stock
--------------
of AMS consists of 5,000,000 shares of AMS Preferred Stock and
25,000,000 shares of AMS Common Stock. On the date hereof, there
are issued and outstanding no shares of AMS Preferred Stock and
6,598,376 shares of AMS Common Stock. All of the issued and
outstanding shares of AMS Common Stock are validly issued, fully
paid and nonassessable and the issuance thereof was not subject
to preemptive rights.
(b) Except for shares issuable pursuant to the AMS
Option Plans, there are no shares of AMS Common Stock or other
equity securities (whether or not such securities have voting
rights) of AMS issued or outstanding or any subscriptions,
options, warrants, calls, rights, convertible securities or other
agreements or commitments of any character obligating AMS to
issue, transfer or sell any shares of capital stock or other
securities (whether or not such securities have voting rights) of
AMS. Except for the Escrow Agreement dated January 23, 1993 (the
"Escrow Agreement") among AMS, Advanced NMR and American Stock
Transfer & Trust Company, there are no outstanding contractual
obligations of AMS which relate to the purchase, sale, issuance,
repurchase, redemption, acquisition, transfer, disposition,
holding or voting of any shares of capital stock or other
securities of AMS.
3.5 Financial Statements; Undisclosed Liabilities;
----------------------------------------------
Other Documents. (a) For purposes of this Agreement, "AMS
---------------
Financial Statements" shall mean the audited financial statements
of AMS as of September 30, 1995 and December 31, 1994 (including
all notes thereto) which are included in the AMS SEC Documents
(as defined in Section 3.6), consisting of the consolidated
balance sheets at such dates and the related consolidated
statements of income, stockholders' equity and cash flows for the
nine-month period ended September 30, 1995 and the twelve-month
period ended December 31, 1994. The AMS Financial Statements
have been prepared in accordance with GAAP consistently applied
(except as may be indicated therein or in the notes thereto) and
present fairly the consolidated financial position of AMS as at
the dates thereof and the consolidated results of operations and
cash flows of AMS for the periods covered thereby.
(b) AMS does not have any liabilities or obligations
of any nature, whether accrued, absolute, contingent or
otherwise, which individually or in the aggregate could be
reasonably expected to have an AMS Material Adverse Effect except
(i) as set forth on or reflected in the AMS Financial Statements
as of and for the period ended September 30, 1995 or (ii)
liabilities and obligations incurred since September 30, 1995 in
the ordinary and usual course of its business.
3.6 Commission Filings. AMS has timely filed all
------------------
required forms, reports and other documents with the Commission
since January 1, 1994, all of which complied when filed, in all
material respects, with all applicable requirements of the 1933
Act and 1934 Act as applicable. AMS has heretofore delivered to
Acquisition Corp. complete and correct copies of (i) its Annual
Report on Form 10-K for the nine-month period ended September 30,
1995, (ii) all proxy statements relating to AMS' meetings of
stockholders (whether annual or special) since January 1, 1994,
and (iii) all other reports, forms and other documents filed by
AMS with the Commission since January 1, 1994 (together, the "AMS
SEC Documents"). As of their respective dates, the AMS SEC
Documents (including all exhibits and schedules thereto and
documents incorporated by reference therein) did not contain any
untrue statement of material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading. The audited financial statements and
the unaudited interim financial statements of AMS included or
incorporated by reference in the AMS SEC Documents were prepared
in accordance with GAAP consistently applied during the periods
involved (except as may be otherwise indicated in the notes
thereto and except with respect to unaudited statements as
permitted by Form 10-Q of the Commission), and fairly present the
consolidated financial position of AMS as of the dates thereof
and the consolidated results of its operations and cash flows for
the periods then ended (subject, in the case of any unaudited
interim financial statements, to normal year-end adjustments).
3.7 No Material Adverse Effects or Changes. Except as
--------------------------------------
listed on Schedule 3.7, or as disclosed in or reflected in the
------------
AMS SEC Documents, or as contemplated by this Agreement or the
Related Agreements, since September 30, 1995, AMS has not
(i) suffered any damage, destruction or Loss to any of its assets
or properties (whether or not covered by insurance) which is
having or could reasonably be expected to have an AMS Material
Adverse Effect, or (ii) increased the compensation of any
executive officer of AMS. "Loss" shall mean liabilities, losses,
costs, claims, damages (including consequential damages),
penalties and expenses (including attorneys' fees and expenses
and costs of investigation and litigation). An "AMS Material
Adverse Effect" shall mean an effect on or circumstance involving
the business, operations, assets, liabilities, results of
operations, cash flows or condition (financial or otherwise) of
AMS which is materially adverse to AMS. Except as disclosed in
the AMS SEC Documents filed prior to the date of this Agreement
or in Schedule 3.7 hereto or in the AMS Financial Statements,
------------
since September 30, 1995 AMS has not (v) declared, set aside or
paid any dividend or other distribution in respect of its capital
stock; (w) made any direct or indirect redemption, purchase or
other acquisition of any shares (other than purchases in
connection with the exercise of options) of its capital stock or
made any payment (other than dividends) to any of its
stockholders (in their capacity as stockholders); (x) issued or
sold any shares of its capital stock or any options, warrants or
other rights to purchase any such shares or any securities
convertible into or exchangeable for such shares or taken any
action to reclassify or recapitalize or split up its capital
stock; (y) mortgaged, pledged or subjected to any lien, lease,
security interest, encumbrance or other restriction, any of its
material properties or assets except in the ordinary and usual
course of its business and consistent with past practice; or (z)
except in the ordinary and usual course of its business and
consistent with its past practice forgiven or canceled any
material debt or claim, waived any material right.
3.8 Registration Statement and Proxy Statement/
-------------------------------------------
Prospectus. None of the information supplied, or to be supplied,
----------
by AMS or any of its accountants, counsel or other authorized
representatives for inclusion in (a) the Registration Statement
on Form S-4 to be filed with the Commission by Advanced NMR under
the 1933 Act for the purpose of registering the shares of
Advanced NMR Common Stock to be issued in the Merger (the
"Registration Statement") or (b) the proxy statement to be
distributed in connection with the meeting of stockholders of AMS
("AMS Stockholders' Meeting") to vote upon this Agreement (the
"Proxy Statement/Prospectus") will, in the case of the Proxy
Statement/Prospectus or any amendments thereof or supplements
thereto, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto,
and at the time of the AMS Stockholders' Meeting to be held in
connection with the Merger, or, in the case of the Registration
Statement and any amendments thereto, at the time it is declared
effective and at the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made,
not misleading, it being understood and agreed that no
representation or warranty is made by AMS with respect to any
information supplied by Advanced NMR or its accountants, counsel
or other authorized representatives. If at any time prior to the
Effective Time any event with respect to AMS, its officers and
directors shall occur which is or should be described in an
amendment of, or a supplement to, the Proxy Statement/Prospectus
or the Registration Statement, such event shall be so described
and the presentation in such amendment or supplement of such
information will not contain any statement which, at the time and
in light of the circumstances under which it is made, is false or
misleading in any material respect or omits to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not false or misleading.
3.9 Intellectual Property. Schedule 3.9 is a true and
--------------------- ------------
complete list of all of the trademarks, tradenames, service
marks, and patents material to AMS' MRI technology (including any
registrations of or pending applications for any of the
foregoing) ("Intellectual Property") used by AMS in the conduct
of its business. Except as disclosed on Schedule 3.9:
------------
(a) all of such Intellectual Property is owned by AMS
free and clear of all liens, and is not subject to any license,
royalty or other agreement, except the License Agreement dated as
of July 29, 1992 ("License Agreement") between AMS and Advanced
NMR;
(b) none of such Intellectual Property has been or is
the subject of any pending or, to the best of AMS' knowledge,
threatened litigation or claim of infringement; or
(c) no license or royalty agreement to which AMS is a
party is in breach or default by any party thereto except where
such breach or default would not have an AMS Material Adverse
Effect or is the subject of any notice of termination given or,
to AMS' knowledge, threatened.
3.10 Tax Returns and Audits. AMS has duly filed all
----------------------
federal, state, local and foreign tax returns, reports and forms
required to be filed by it, except where the failure to so file
would not have an AMS Material Adverse Effect. AMS has duly paid
(except for Taxes being contested in good faith) or made adequate
provisions on its books in accordance with GAAP for the payment
of all Taxes which have been incurred or are due and payable, and
AMS will on or before the Effective Time of the Merger make
adequate provision on its books in accordance with GAAP for all
Taxes payable for any period through the Effective Time of the
Merger for which no return is required to be filed prior to the
Effective Time. The federal and state income tax returns of AMS
have never been examined by the Internal Revenue Service or state
taxing authority, respectively, nor has AMS granted or given any
extensions or waivers of the statute of limitations with respect
to any such federal and state income tax returns. AMS is not
aware of any basis for the assertion of any deficiency against it
for Taxes, which, if adversely determined, would have an AMS
Material Adverse Effect. For purposes of this Agreement, "Taxes"
shall mean all taxes, assessments and governmental charges
imposed by any federal, state, local or foreign government,
taxing authority, subdivision or agency thereof, including, but
not limited to, any withholding, payroll, employment, custom,
duty, sales, any other governmental fee or assessment, and
penalties, in addition to any liability to a third party for such
amounts.
3.11 Litigation. There are no actions, suits,
----------
arbitrations, regulatory proceedings or other litigation,
proceedings or governmental investigations pending or, to AMS'
knowledge, threatened against or affecting AMS any of its
officers or directors in their capacity as such, or any of its
property or business which could reasonably be expected to have
an AMS Material Adverse Effect. AMS is not subject to any order,
judgment, decree, injunction, stipulation or consent order of or
with any court or other Governmental Entity, other than orders of
general applicability.
3.12 Compliance with Applicable Laws. AMS holds all
-------------------------------
permits, licenses, variances, exemptions, orders and approvals of
all Governmental Entities which are required in the operation of
its business (the "AMS Permits"), except for those the failure of
which to hold would not have an AMS Material Adverse Effect. AMS
is in compliance with the terms of the AMS Permits, except where
the failure so to comply would not have an AMS Material Adverse
Effect. To AMS' knowledge, AMS is not in violation of any law,
ordinance or regulation of any Governmental Authority, including
environmental and labor laws and regulations, except for possible
violations which individually and in the aggregate do not, and,
insofar as reasonably can be foreseen by AMS, will not in the
future have an AMS Material Adverse Effect.
3.13 Medical Devices. Except as set forth on
---------------
Schedule 3.13, AMS has not applied for premarket approval of, or
-------------
510(k) notification to, the U.S. Food and Drug Administration
(the "FDA") for any products it plans to sell. Except as set
forth on Schedule 3.13, there are no products proposed to be sold
-------------
by AMS for which pre-market approval or 510(k) notification is
required.
3.14 Contracts; No Defaults. Except as disclosed in
----------------------
the AMS SEC Documents, neither AMS, nor to AMS' knowledge any
other party thereto, is in breach or violation of, or in default
in the performance or observance of any term or provision of, and
no event has occurred or by reason of the Merger would occur
which, with notice or lapse of time or both, could be reasonably
expected to result in a default under, any contract, agreement or
commitment to which AMS is a party or by which AMS or any of its
assets or properties is bound, except for breaches, violations
and defaults which are not having and could not be reasonably
expected to have an AMS Material Adverse Effect. AMS is not is
required to give any notice to any person regarding this
Agreement or the Related Agreement or the transactions
contemplated hereby or thereby other than any notice, the failure
of which to give would not have an AMS Material Adverse Effect.
3.15 Fees of Brokers, Finders and Financial Advisors.
-----------------------------------------------
Except for the Special Committee ("Special Committee") of the AMS
Board of Directors' engagement of Houlihan Lokey Howard & Zukin,
whose fees and expenses shall be paid by AMS, neither AMS, nor
any officer, director, or employee of AMS, has employed any
broker, finder or investment banker or incurred any liability for
any brokerage or investment banking fees, commissions or finders'
fees in connection with the transactions contemplated by this
Agreement.
3.16 Special Committee Recommendation; Board of
------------------------------------------
Directors Recommendation. The Special Committee of the Board of
------------------------
Directors of AMS has duly adopted at a special meeting duly held
on February 4, 1996 resolutions recommending to the Board
approval of this Agreement, the Related Agreement, and the
Merger, and the transactions contemplated hereby on the terms and
conditions set forth herein. Upon the recommendation of the
Special Committee, the Board of Directors of AMS has duly adopted
at a special meeting of such Board duly held on February 4, 1996
resolutions approving this Agreement, the Related Agreement, and
the Merger, and the transactions contemplated hereby on the terms
and conditions set forth herein and has determined to recommend
that the stockholders of AMS approve this Agreement and the
Merger (subject to the fiduciary duty of the AMS Board of
Directors determined by the directors after consultation with
legal counsel).
3.17 Opinion of Financial Advisor. AMS has received
----------------------------
the opinion of Houlihan Lokey Howard & Zukin, to the effect that,
as of the date hereof, the consideration to be received in the
Merger by the stockholders of AMS (other than Advanced NMR) is
fair from a financial point of view to the stockholders of AMS,
and a true and complete copy of such opinion has been delivered
to Advanced NMR prior to the execution of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
ACQUISITION CORP. AND ADVANCED NMR
Acquisition Corp. and Advanced NMR, jointly and
severally, hereby represent and warrant to AMS as follows:
4.1 Due Incorporation. Each of Advanced NMR,
-----------------
Acquisition Corp. and Advanced NMR's wholly-owned subsidiary,
Medical Diagnostics, Inc., a Delaware corporation (the
"Subsidiary") (Advanced NMR, Acquisition Corp. and the Subsidiary
are referred to collectively herein as the "ANMR Companies") is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with all
requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
Each of the ANMR Companies is qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where
the nature of the properties owned, leased or operated by it and
the business transacted by it require such qualification, except
where the failure to be so qualified could not have an ANMR
Material Adverse Effect (as defined in Section 4.7 hereof).
4.2 Due Authorization. Each of Advanced NMR and
-----------------
Acquisition Corp. has full power and authority to enter into this
Agreement and the Related Agreement to which it is a party and to
consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Advanced NMR of this
Agreement has been duly and validly approved by the Board of
Directors of Advanced NMR, and no other actions or proceedings on
the part of Advanced NMR are necessary to authorize this
Agreement. The execution, delivery and performance by
Acquisition Corp. of this Agreement and the Related Agreement
have been duly and validly approved by the Board of Directors and
stockholder of Acquisition Corp., and no other actions or
proceedings on the part of Acquisition Corp. or its stockholder
are necessary to authorize this Agreement and the Related
Agreement. Each of Advanced NMR and Acquisition Corp. has duly
and validly executed and delivered this Agreement and Acquisition
Corp. has duly and validly executed and delivered (or will duly
and validly execute and deliver on or prior to the Closing Date)
the Related Agreement. This Agreement constitutes the legal,
valid and binding obligations of each of Advanced NMR and
Acquisition Corp., and the Related Agreement will, upon
execution, constitute the legal, valid and binding obligation of
Acquisition Corp., in each case enforceable in accordance with
their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or other laws from time to
time in effect which affect creditors' rights generally and by
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
4.3 Non-Contravention; Consents and Approvals. (a)
-----------------------------------------
The execution and delivery of this Agreement by Advanced NMR and
Acquisition Corp. does not, and the performance by Advanced NMR
and Acquisition Corp. of their obligations hereunder and the
consummation of the transactions contemplated hereby will not,
conflict with, result in a violation or breach of, constitute
(with or without notice or lapse of time or both) a default
under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or
acceleration of, or result in the creation or imposition of any
lien upon any of the assets or properties of any of the ANMR
Companies under, any of the terms, conditions or provisions of
(i) the certificate of incorporation or bylaws of each of the
ANMR Companies, or (ii) subject to the taking of the actions
described in paragraph (b) of this Section, (x) any statute, law,
rule, regulation or ordinance (together, "Laws"), or any
judgment, decree, order, writ, permit or license, of any
Governmental Entity, or (y) except for the Credit Agreement dated
August 31, 1995 between the Subsidiary and Chemical Bank, and the
related security agreements and guaranties, any contract,
agreement or commitment to which any ANMR Company is a party or
by which any ANMR Company or any of their respective assets or
properties is bound, excluding from the foregoing clauses (x) and
(y) conflicts, violations, breaches, defaults, terminations,
modifications, accelerations and creations and impositions of
liens which would not have an ANMR Material Adverse Effect or
result in the inability of Advanced NMR or Acquisition Corp. to
consummate the transactions contemplated by this Agreement.
(b) No consent, approval, order or authorization of,
or registration, declaration or filing with any Governmental
Entity is required by Advanced NMR or Acquisition Corp. in
connection with the execution and delivery of this Agreement and
the Related Agreement or the consummation by each of Advanced NMR
and Acquisition Corp. or each of their respective stockholders of
the transactions contemplated hereby and thereby, the failure to
obtain which would have an ANMR Material Adverse Effect or result
in the inability of Advanced NMR or Acquisition Corp. to
consummate the transactions contemplated hereby, except for:
(i) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware in
accordance with the requirements of the DGCL; and
(ii) the filing of the Proxy Statement/Prospectus
with the Commission pursuant to the 1933 Act and the
declaration of the effectiveness of the Registration
Statement by the Commission and filings with various blue
sky authorities.
4.4 Capitalization. (a) The authorized capital stock
--------------
of Advanced NMR consists of 1,000,000 shares of Preferred Stock,
$.01 par value per share ("Advanced NMR Preferred Stock") and
50,000,000 shares of Advanced NMR Common Stock. On the date
hereof, there are no shares of Advanced NMR Preferred Stock
issued and outstanding and 30,183,745 shares of Advanced NMR
Common Stock issued and outstanding. The authorized capital
stock of Acquisition Corp. consists of 1,000 shares of
Acquisition Corp. Common Stock, of which there are 100 shares
issued and outstanding on the date hereof. All of the issued and
outstanding shares of Advanced NMR and Acquisition Corp. Common
Stock are, and all shares of Advanced NMR Common Stock to be
issued to AMS stockholders in the Merger or upon exercise of the
Derivative Securities will be, validly issued, fully paid and
nonassessable and the issuances thereof were not and will not be
subject to preemptive rights. As of December 31, 1995, there are
4,311,955 shares of Advanced NMR Common Stock reserved for
issuance under Advanced NMR stock option plans and warrants (the
"ANMR Derivative Securities").
(b) Except for the ANMR Derivative Securities, there
are no shares of Advanced NMR Common Stock and Acquisition Corp.
Common Stock or other equity securities (whether or not such
securities have voting rights) of Advanced NMR and Acquisition
Corp. issued or outstanding or any subscriptions, options,
warrants, calls, rights, convertible securities or other
agreements or commitments of any character obligating Advanced
NMR and/or Acquisition Corp. to issue, transfer or sell any
shares of capital stock or other securities (whether or not such
securities have voting rights) of Advanced NMR and Acquisition
Corp. There are no outstanding contractual obligations of
Advanced NMR or Acquisition Corp. which relate to the purchase,
sale, issuance, repurchase, redemption, acquisition, transfer,
disposition, holding or voting of any shares of capital stock or
other securities of each of Advanced NMR and Acquisition Corp.
4.5 Financial Statements; Undisclosed Liabilities;
----------------------------------------------
Other Documents. (a) For purposes of this Agreement, "Advanced
---------------
NMR Financial Statements" shall mean the audited financial
statements of Advanced NMR as of September 30, 1995 and December
31, 1994 (including all notes thereto) which are included in the
ANMR SEC Documents (as defined in Section 4.6), consisting of the
balance sheets at such dates and the related statements of
operations, stockholders' equity and cash flows for the nine-
month period ended September 30, 1995 and the twelve-month period
ended December 31, 1994. The Advanced NMR Financial Statements
have been prepared in accordance with GAAP consistently applied
and present fairly the financial position, of Advanced NMR as at
the dates thereof and the results of operations and cash flows of
Advanced NMR for the periods covered thereby.
(b) Advanced NMR does not have any liabilities or
obligations of any nature, whether accrued, contingent, absolute
or otherwise, which individually or in the aggregate could be
reasonably expected to have an ANMR Material Adverse Effect
except (i) as set forth in the September 30, 1995 balance sheet
(the "ANMR Base Balance Sheet") in the Advanced NMR Form 10-K for
fiscal 1995 or (ii) liabilities or obligations incurred since
September 30, 1995 in the ordinary and usual course of its
business.
4.6 Commission Filings. Advanced NMR has in a timely
------------------
manner filed all required forms, reports and other documents with
the Commission since January 1, 1994, all of which complied when
filed, in all material respects, with all applicable requirements
of the 1933 Act and 1934 Act. Advanced NMR has heretofore
delivered to AMS complete and correct copies of (i) its Annual
Report on Form 10-K for the nine-month period ended September 30,
1995, as filed with the Commission, (ii) all proxy statements
relating to Advanced NMR's meetings of stockholders (whether
annual or special) since January 1, 1994, and (iii) all other
reports, forms and other documents filed by Advanced NMR with the
Commission since January 1, 1994 (together, the "ANMR SEC
Documents"). As of their respective dates, the ANMR SEC
Documents (including all exhibits and schedules thereto and
documents incorporated by reference therein) did not contain any
untrue statement of material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading. The audited financial statements and
the unaudited interim financial statements of Advanced NMR,
included or incorporated by reference in the ANMR SEC Documents
were prepared in accordance with GAAP consistently applied during
the periods involved (except as may be otherwise indicated in the
notes thereto and except with respect to unaudited statements as
permitted by Form 10-Q of the Commission), and fairly present the
financial position of Advanced NMR as of the dates thereof and
the results of its operations and cash flows for the periods then
ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments).
4.7 No Material Adverse Effects or Changes. Except as
--------------------------------------
listed on Schedule 4.7, or as disclosed in or reflected in the
------------
financial statements included in the ANMR SEC Documents, or as
contemplated by this Agreement or the Related Agreements, since
September 30, 1995, none of the ANMR Companies has (i) suffered
any damage, destruction or Loss to any of its assets or
properties (whether or not covered by insurance) which is having
or could be expected to have an ANMR Material Adverse Effect, or
(ii) increased the compensation of any executive officer of any
ANMR Company except for increases consistent with past practices.
An "ANMR Material Adverse Effect" shall mean an effect on or
circumstances involving the business, operations, assets,
liabilities, results of operations, cash flows or condition
(financial or otherwise) which is materially adverse to the ANMR
Companies, taken as a whole.
4.8 Registration Statement and Proxy Statement/
-------------------------------------------
Prospectus. None of the information supplied, or to be supplied
----------
by, Advanced NMR or any of its accountants, counsel or other
authorized representatives to the AMS Board of Directors or its
Special Committee in connection with this Agreement or for
inclusion in (a) the Registration Statement or (b) the Proxy
Statement/Prospectus will, in the case of the Proxy
Statement/Prospectus or any amendments thereof or supplements
thereto, at the time of the mailing of the Proxy
Statement/Prospectus and any amendments or supplements thereto,
or, in the case of the Registration Statement and any amendments
thereto, at the time it is declared effective and at the
Effective Time, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading, it
being understood and agreed that no representation or warranty is
made by Advanced NMR with respect to any information supplied by
AMS or its accountants, counsel or other authorized
representatives. If at any time prior to the Effective Time any
event with respect to Advanced NMR, its officers or directors,
shall occur which is or should be described in an amendment of,
or a supplement to, the Proxy Statement/Prospectus or the
Registration Statement, such event shall be so described and the
presentation in such amendment or supplement of such information
will not contain any statement which, at the time and in light of
the circumstances under which it is made, is false or misleading
in any material respect or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not false or misleading. The Registration
Statement will comply as to form in all material respects with
all applicable laws, including the provisions of the 1933 Act and
the rules and regulations promulgated thereunder.
4.9 Intellectual Property. Schedule 4.9 is a true and
--------------------- ------------
complete list of all of Intellectual Property used by Advanced
NMR and the Subsidiary in the conduct of their businesses.
Except as disclosed on Schedule 4.9:
------------
(a) all of the Intellectual Property is owned by
Advanced NMR and the Subsidiary free and clear of all liens, and
is not subject to any license, royalty or other agreement, other
than the License Agreement;
(b) none of the Intellectual Property has been or is
the subject of any pending or, to the best of Advanced NMR's
knowledge, threatened litigation or claim of infringement; or
(c) no license or royalty agreement to which Advanced
NMR or the Subsidiary is a party is in breach or default by any
party thereto or the subject of any notice of termination given
or threatened.
4.10 Insurance. Each of Advanced NMR and the
---------
Subsidiary is insured with reputable insurers against all risks
and in such amounts normally insured against by companies of the
same type and in the same line of business as Advanced NMR and
the Subsidiary.
4.11 Employee Benefit Plans and Employment Agreements.
------------------------------------------------
(a) For purposes of this Agreement, the term "Advanced NMR
Employee Plan" shall mean any pension, profit sharing,
retirement, deferred compensation, bonus or other incentive plan,
any other employee program, arrangement, agreement or
understanding, any medical, vision, dental or other health plan,
any life insurance plan, or any other employee benefit plan,
including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of ERISA to which Advanced NMR or the
Subsidiary contributes or is a party or is bound or under which
it may have a liability and under which its employees or retirees
(or their beneficiaries) are eligible to participate or derive a
benefit.
(b) The only Advanced NMR Employee Plan which is
intended to be qualified under Section 401(a) of the Code is the
Advanced NMR Systems, Inc. 401(k) Retirement Plan (the "Advanced
NMR Qualified Plan"). The Advanced NMR Qualified Plan has
received a favorable determination letter from the Internal
Revenue Service. During the six year period preceding the
Closing Date, neither Advanced NMR nor any other entity with
which Advanced NMR is in any way affiliated has sponsored or
otherwise had an obligation to contribute to any "defined benefit
plan" (within the meaning of the Section 3(35) of ERISA).
(c) The Advanced NMR Employee Plan has been maintained
in substantial compliance with its terms and in all material
respects with the applicable requirements of law (including,
without limitation, ERISA and the Code) and, other than claims
for benefits submitted by participants or beneficiaries in the
ordinary course, there is no legal action, investigation, claim
or proceeding pending or, to the knowledge of Advanced NMR,
threatened against or affecting any Advanced NMR Employee Plan
which would have an ANMR Material Adverse Effect.
(d) There is no employment contract or agreement
covering any employee of Advanced NMR or the Subsidiary (i) that
could give rise to the payment of any amount that would not be
deductible by reason of Section 280G of the Code or (ii) that is
not terminable at will by Advanced NMR or the Subsidiary.
4.12 Labor Matters. Each of the ANMR Companies has
-------------
conducted and currently is conducting, its respective business in
full compliance with all laws relating to employment and
employment practices, terms and conditions of employment, wages
and hours and nondiscrimination in employment except where such
failure to be in compliance would not have an ANMR Material
Adverse Effect. The relationship of the ANMR Companies with its
respective employees is generally satisfactory, and there is, and
during the past three years there has been, no labor strike,
dispute, slow-down, work stoppage or other labor difficulty
pending or, to Advanced NMR's knowledge, threatened against or
involving the ANMR Companies. None of the employees of the ANMR
Companies are covered by any collective bargaining agreement, no
collective bargaining agreement is currently being negotiated by
the ANMR Companies and to Advanced NMR's knowledge, no attempt is
currently being made or during the past three years has been made
to organize any employees of the ANMR Companies to form or enter
a labor union or similar organization.
4.13 Tax Returns and Audits. Except as set forth on
----------------------
Schedule 4.13, Advanced NMR has duly filed all federal, state,
-------------
local and foreign tax returns, reports and forms required to be
filed by it, except where the failure to so file would not have
an ANMR Material Adverse Effect. Advanced NMR has duly paid
(except for Taxes being contested in good faith) or made adequate
provisions on their books in accordance with GAAP for the payment
of all Taxes which have been incurred or are due and payable, and
Advanced NMR will on or before the Effective Time of the Merger
make adequate provision on its books in accordance with GAAP for
all Taxes payable for any period through the Effective Time of
the Merger for which no return is required to be filed prior to
the Effective Time. Except as set forth on Schedule 4.13, the
-------------
federal and state income tax returns of Advanced NMR have never
been examined by the Internal Revenue Service or state taxing
authority, respectively, nor has Advanced NMR granted or given
any extensions or waivers of the statute of limitations with
respect to any such federal and state income tax returns.
Advanced NMR is not aware of any basis for the assertion of any
deficiency against Advanced NMR for Taxes, which, if adversely
determined, would have an ANMR Material Adverse Effect.
4.14 Litigation. (a) Except as disclosed in Schedule
---------- --------
4.14, there are no actions, suits, arbitrations, regulatory
----
proceedings or other litigation, proceedings or governmental
investigations pending or, to Advanced NMR's knowledge,
threatened against or affecting any ANMR Company or any of its
respective officers or directors in their capacity as such, or
any of its respective properties or businesses which could
reasonably be expected to have an ANMR Material Adverse Effect.
Except as set forth on Schedule 4.14, all of the proceedings
-------------
pending against any ANMR Company is covered and being defended by
insurers (subject to such deductibles as are set forth in such
Schedule). Except as disclosed in Schedule 4.14, no ANMR Company
-------------
is subject to any order, judgment, decree, injunction,
stipulation or consent order of or with any court or other
Governmental Entity, other than orders of general applicability.
Since January 1, 1994, none of the ANMR Companies has entered
into any agreement to settle or compromise any proceeding pending
or threatened against it which has involved any obligation other
than the payment of money or for which it has any continuing
obligation.
(b) There are no claims, actions, suits, proceedings,
or investigations pending or, to Advanced NMR's knowledge,
threatened by or against any of the ANMR Companies with respect
to this Agreement or the Related Agreement, or in connection with
the transactions contemplated hereby or thereby.
(c) Except as set forth on Schedule 4.14, there are no
-------------
pending or, to Advanced NMR's knowledge, threatened claims
against any director, officer, employee or agent of any ANMR
Company or any other Person which could give rise to any claim
for indemnification against any ANMR Company.
4.15 Compliance with Applicable Laws. Except as
-------------------------------
disclosed in Schedule 4.15, each of the ANMR Companies holds all
-------------
permits, licenses, variances, exemptions, orders and approvals of
all Governmental Entities which are required in the operation of
its respective business (the "ANMR Permits") except for those the
failure of which to hold would have an ANMR Material Adverse
Effect. The ANMR Companies are in compliance with the terms of
the ANMR Permits, except where the failure so to comply would not
have an ANMR Material Adverse Effect. Except as disclosed in
Schedule 4.15, to Advanced NMR's knowledge, none of the ANMR
-------------
Companies is in violation of any law, ordinance or regulation of
any Governmental Authority, including environmental laws and
regulations, except for possible violations which individually
and in the aggregate do not, and, insofar as reasonably can be
foreseen by Advanced NMR, will not in the future have an ANMR
Material Adverse Effect.
4.16 Medical Devices. (a) Except for the products
---------------
set forth on Schedule 4.16, Advanced NMR and the Subsidiary sell
-------------
no products for which a premarket approval of, or 510(k)
notification to, the FDA or other Governmental Authority is
required, and Advanced NMR and the Subsidiary are not, as to any
other product, otherwise subject to the jurisdiction of the FDA
or any similar state, local or foreign Governmental Authority.
There are no products sold by Advanced NMR and the Subsidiary for
which a new or modified pre-market approval or 510(k)
notification is required and for which such approval has not been
issued or clearance has not been made by the FDA.
(b) Except as set forth on Schedule 4.16, to Advanced
-------------
NMR's knowledge, there exists no set of facts:
(i) which could furnish a basis for the
withdrawal, suspension or termination of any
pre-market product approval or 510(k)
approval or the request for a recall or
cessation of sales of any product, by the FDA
or any other Governmental Entity, with
respect to any product sold by Advanced NMR
or the Subsidiary;
(ii) which would otherwise be expected to cause
Advanced NMR or the Subsidiary to recall any
product or to restrict the marketing of any
product or to terminate or suspend testing of
any product; or
(iii) which would have a material adverse effect on
the continued operation of any registered
device establishment (or portion thereof) of
Advanced NMR or the Subsidiary.
4.17 Contracts; No Defaults. Except as disclosed in
----------------------
the ANMR SEC Documents, neither any ANMR Company nor to Advanced
NMR's knowledge any other party thereto, is in breach or
violation of, or in default in the performance or observance of
any term or provision of, and no event has occurred or by reason
of the Merger would occur which, with notice or lapse of time or
both, could be reasonably expected to result in a default under,
any contract, agreement or commitment to which any ANMR Company
is a party or by which any ANMR Company or any of its assets or
properties is bound, except for breaches, violations and defaults
which are not having and could not be reasonably expected to have
an ANMR Material Adverse Effect. Except as described in Schedule
--------
4.17, none of the ANMR Companies is required to give any notice
----
to any person regarding this Agreement or the Related Agreement
or the transactions contemplated hereby or thereby.
4.18 Fees of Brokers, Finders and Investment Bankers.
-----------------------------------------------
Neither Advanced NMR nor any officer, director, or employee of
Advanced NMR has employed any brokers, finder or investment
banker (except for Leeds Group Inc.) or incurred any liability
for any brokerage or investment banking fees, commissions or
finders' fees in connection with the transactions contemplated by
this Agreement.
4.19 Absence of Certain Changes or Events. Except as
------------------------------------
disclosed in the Advanced NMR SEC Documents filed prior to the
date of this Agreement or in Schedule 4.19 hereto, since
-------------
September 30, 1995, Advanced NMR has not (i) declared, set aside
or paid any dividend or other distribution in respect of its
capital stock; (ii) made any direct or indirect redemption,
purchase or other acquisition of any shares (other than purchases
in connection with the exercise of options) of its capital stock
or made any payment (other than dividends) to any of their
stockholders (in their capacity as stockholders); (iii) issued or
sold any shares of its capital stock or any options, warrants or
other rights to purchase any such shares or any securities
convertible into or exchangeable for such shares or taken any
action to reclassify or recapitalize or split up their capital
stock; (iv) mortgaged, pledged or subjected to any lien, lease,
security interest, encumbrance or other restriction, any of their
material properties or assets except in the ordinary and usual
course of their business and consistent with past practice; (v)
except in the ordinary and usual course of its business and
consistent with its past practices forgiven or canceled any
material debt or claim, waived any material right; or (vi)
adopted or amended any plan or arrangement (other than amendments
that are not material or that were made to comply with laws or
regulations) for the benefit of any director, officer or employee
or changed the compensation (including bonuses) to be paid to any
director, officer or employee, except for changes made consistent
with the prior practice of Advanced NMR.
ARTICLE V
COVENANTS
5.1 Implementing Agreement. Subject to the terms and
----------------------
conditions hereof, each party hereto shall use its best efforts
to take all action required of it to fulfill its obligations
under the terms of this Agreement and to facilitate the
consummation of the transactions contemplated hereby.
5.2 Access to Information and Facilities. From and
------------------------------------
after the date of this Agreement, AMS shall give Advanced NMR and
Acquisition Corp. and their representatives access during normal
business hours and upon reasonable notice to all of the
facilities, properties, books, contracts, commitments and records
of AMS and shall make the officers and employees of AMS available
to Advanced NMR and Acquisition Corp. and their representatives
as Advanced NMR or Acquisition Corp. or their representatives
shall from time to time reasonably request. Advanced NMR and
Acquisition Corp. and their representatives will be furnished
with any and all information concerning AMS which Advanced NMR or
Acquisition Corp. or their representatives reasonably request.
The obligations set forth in this Section 5.2 shall also apply to
-----------
Advanced NMR and Acquisition Corp., mutatis mutandis.
------- --------
5.3 Preservation of Business. From the date of this
------------------------
Agreement until the Closing Date, each of AMS and Advanced NMR
shall operate only in the ordinary and usual course of business
consistent with past practice, and shall use reasonable
commercial efforts to (a) preserve intact its respective business
organization, (b) preserve the good will and advantageous
relationships with customers, suppliers, independent contractors,
employees and other Persons material to the operation of its
business, and (c) not permit any action or omission which would
cause any of the representations or warranties contained herein
to become inaccurate or any of the covenants to be breached in
any material respect.
5.4 Proxy Materials and AMS Stockholder Approval. (a)
--------------------------------------------
As soon as practicable after the date hereof, Advanced NMR and
AMS will prepare and file the Proxy Statement/Prospectus that
will be included in the Registration Statement containing (i) the
Proxy Statement relating to the AMS Stockholders' Meeting at
which this Agreement and the Merger will be voted upon and (ii) a
prospectus relating to the shares of Advanced NMR Common Stock to
be issued by Advanced NMR in connection with the Merger, and each
of Advanced NMR and AMS shall use all reasonable efforts to have
the Registration Statement declared effective as promptly as
practicable. AMS will convene the AMS Stockholders' Meeting as
promptly as practicable after the Registration Statement is
declared effective to consider and vote upon the approval of this
Agreement and the Merger. Subject to fiduciary obligations of
the AMS Board of Directors or the members of the Special
Committee under applicable law as determined by such AMS Board
members or Special Committee members in good faith after
consultation with legal counsel, the board of directors of AMS
shall recommend such approval to its stockholders and use its
best efforts to obtain such approval.
(b) The information supplied by AMS for inclusion in
the Proxy Statement/Prospectus shall not, at the time the Proxy
Statement/Prospectus is declared effective, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading. The information supplied by
AMS for inclusion in the Proxy Statement/Prospectus to be sent to
the stockholders of AMS in connection with the AMS Stockholders'
Meeting shall not, at the date the Proxy Statement/Prospectus (or
any amendment thereof or supplement thereto) is first mailed to
stockholders, at the time of the AMS Stockholders' Meeting or at
the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event
or circumstance relating to AMS, or its officers or directors,
should be discovered by AMS which should be set forth in an
amendment to the Proxy Statement/Prospectus, AMS shall promptly
inform Advanced NMR. All documents that AMS is responsible for
filing with the Commission in connection with the transactions
contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the 1933
Act and the rules and regulations thereunder, and the 1934 Act
and the rules and regulations thereunder.
(c) The information supplied by Advanced NMR and
Acquisition Corp. for inclusion in the Proxy Statement/Prospectus
shall not, at the time the Proxy Statement/Prospectus is declared
effective, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading.
The information supplied by Advanced NMR and Acquisition Corp.
for inclusion in the Proxy Statement/Prospectus to be sent to AMS
stockholders in connection with the AMS Stockholders' Meeting
shall not at the date the Proxy Statement/Prospectus (or any
amendment thereof or supplement thereto) is first mailed to AMS
stockholders, at the time of the AMS Stockholders' Meeting or at
the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time any event
or circumstance relating to Advanced NMR or Acquisition Corp., or
to their respective officers or directors, should be discovered
by Advanced NMR which should be set forth in an amendment to the
Proxy Statement/Prospectus or a supplement thereto, Advanced NMR
shall promptly inform AMS. All documents that Advanced NMR is
responsible for filing with the Commission in connection with the
transactions contemplated herein will comply as to form and
substance in all material respects with the applicable
requirements of the 1933 Act and the rules and regulations
thereunder and the 1934 Act and the rules and regulations
thereunder.
5.5 Consents and Approvals. Subject to the terms and
----------------------
conditions provided herein, each of the parties hereto shall use
reasonable commercial efforts to obtain all consents, approvals,
certificates and other documents required in connection with the
performance by it of this Agreement and the consummation of the
transactions contemplated hereby. As soon as practicable after
the date hereof, each of the parties hereto shall make all
filings, applications, statements and reports to all Governmental
Authorities and other Persons which are required to be made prior
to the Closing Date pursuant to any applicable law or contract in
connection with this Agreement and the transactions contemplated
hereby.
5.6 Periodic Reports. Until the Effective Time,
----------------
Advanced NMR and AMS each will, subject to the requirements of
applicable laws, furnish to the other all filings to be made with
the Commission and will solicit comments with respect thereto
from the other, in each case at least 48 hours (or as soon
thereafter as is practicable) prior to the time of such filings
and the time of such mailings.
5.7 Publicity. Prior to issuing any public
---------
announcement or statement with respect to the transactions
contemplated hereby and prior to making any filing with any
Federal or state governmental or regulatory agency or with any
securities exchange with respect thereto, Advanced NMR and AMS
will, subject to their respective legal obligations, consult with
each other and will allow each other to review the contents of
any such public announcement or statement and any such filing.
Subject to the preceding sentence, Advanced NMR and AMS each
agree to furnish to the other copies of all other public
announcements they may make concerning their respective business
and operations promptly after such public announcements are made.
5.8 Listing of Common Stock. Advanced NMR will cause
-----------------------
to be prepared and submitted to NASDAQ an application covering
the listing of the shares of Advanced NMR Common Stock on NASDAQ
issuable in connection with the Merger and will use its
reasonable best efforts to obtain, prior to the Closing, approval
for the listing of such shares.
5.9 Blue Sky Approvals. Advanced NMR and AMS will
------------------
obtain, prior to the effective date of the Registration
Statement, all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the transactions
contemplated by this Agreement and the Merger.
5.10 Rule 145 Affiliates. Prior to the Closing Date,
-------------------
AMS shall deliver to Advanced NMR a letter representing that
other than Advanced NMR, and to its best knowledge AMS has no
"affiliates" for purposes of Rule 145 under the 1933 Act.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS
OF ACQUISITION CORP. AND ADVANCED NMR
The obligations of Acquisition Corp. and Advanced NMR
to consummate the Merger are subject to the fulfillment at or
before the Closing of each of the following conditions:
6.1 Warranties True as of Closing Date. The
----------------------------------
representations and warranties of AMS contained herein shall be
true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on and
as of the Closing Date.
6.2 Compliance With Agreements and Covenants. AMS
----------------------------------------
shall have performed and complied with in all material respects
all of its covenants, obligations and agreements contained in
this Agreement to be performed and complied with by AMS on or
prior to the Closing Date.
6.3 Consents and Approvals. Advanced NMR shall have
----------------------
received written evidence satisfactory to it that all consents
and approvals required for the consummation of the transactions
contemplated hereby have been obtained, and all required filings
have been made, except where the failure to obtain any such
consent or approval or to make any such filing would not have an
AMS Material Adverse Effect or an ANMR Material Adverse Effect.
6.4 Actions or Proceedings. No preliminary or
----------------------
permanent injunction or other order by any federal or state court
preventing consummation of the Merger shall have been issued and
shall be continuing in effect, and the Merger and the other
transactions contemplated hereby shall not be prohibited under
any applicable federal or state law or regulation.
6.5 Approval of Merger. The stockholders of AMS shall
------------------
have approved this Agreement and the Merger contemplated hereby
in accordance with its certificate of incorporation and by-laws
and the DGCL.
6.6 Consent of Chemical Bank. Advanced NMR shall have
------------------------
obtained the written consent of Chemical Bank to the Merger.
6.7 Registration Statement. The Registration
----------------------
Statement shall have become effective, and no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and remain in effect.
6.8 Listing of Common Stock. NASDAQ shall have
-----------------------
approved the listing of all shares of Advanced NMR Common Stock
to be issued in the Merger.
6.9 Other Closing Documents. Advanced NMR shall have
-----------------------
received the executed Certificate of Merger and such other
agreements and instruments as Advanced NMR shall reasonably
request, in each case in form and substance reasonably
satisfactory to Advanced NMR.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF AMS
The obligations of AMS to consummate the Merger are
subject to the satisfaction or waiver by AMS of the following
conditions precedent on or before the Closing Date:
7.1 Warranties True as of Closing Date. The
----------------------------------
representations and warranties of Acquisition Corp. and Advanced
NMR contained herein shall be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as though made by Acquisition Corp. and Advanced NMR on
and as of the Closing Date.
7.2 Compliance with Agreements and Covenants.
----------------------------------------
Acquisition Corp. and Advanced NMR shall have performed and
complied with in all material respects all of their covenants,
obligations and agreements contained in this Agreement, to be
performed and complied with by them on or prior to the Closing
Date.
7.3 Consents and Approvals. AMS shall have received
----------------------
written evidence satisfactory to it that all consents and
approvals required for the consummation of the transactions
contemplated hereby have been obtained, and all required filings
have been made, except where the failure to obtain any such
consent or approval or to make any such filing would not have an
AMS Material Adverse Effect or an ANMR Material Adverse Effect.
7.4 Actions or Proceedings. No preliminary or
----------------------
permanent injunction or other order by any federal or state court
preventing consummation of the Merger shall have been issued and
shall be continuing in effect, and the Merger and the other
transactions contemplated hereby shall not be prohibited under
any applicable federal or state law or regulation.
7.5 Approval of Merger. The stockholders of AMS shall
------------------
have approved this Agreement and the Merger contemplated hereby
in accordance with its certificate of incorporation and by-laws
and the DGCL.
7.6 Registration Statement. The Registration
----------------------
Statement shall have become effective, and no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and remain in effect.
7.7 Listing of Common Stock. NASDAQ shall have
-----------------------
approved the listing of all shares of Advanced NMR Common Stock
to be issued in the Merger.
7.8 Other Closing Documents. AMS shall have received
-----------------------
such other agreements and instruments as AMS shall reasonably
request, in each case in form and substance reasonably
satisfactory to AMS.
7.9 Consent of Chemical Bank. Advanced NMR shall have
------------------------
received the written consent of Chemical Bank to the Merger.
7.10 Fairness Opinion. Delivery to AMS of Houlihan
----------------
Lokey's fairness opinion as provided in Section 3.17 of this
Agreement.
7.11 Board Appointment. The Advanced NMR Board shall
-----------------
recommend the appointment of one member of the Special Committee
to serve on the Advanced NMR Board subsequent to the Merger.
ARTICLE VIII
TERMINATION AND INDEMNIFICATION
8.1 Termination. This Agreement may be terminated and
-----------
the Merger may be abandoned at any time prior to the Effective
Time, whether before or after approval by the stockholders of
AMS:
(a) by mutual written consent of the Board of
Directors of Advanced NMR and the Board of Directors of AMS;
(b) by either Advanced NMR or AMS, by written notice
to the other, if (i) the Effective Time shall not have occurred
on or before October 1, 1996, (ii) the requisite vote of the
stockholders of AMS to approve this Agreement shall not be
obtained at the AMS Stockholders' Meeting, or any adjournments or
postponements thereof, called therefor, (iii) a bona fide
acquisition proposal is made by a third party to acquire all or
substantially all of the outstanding shares of AMS Common Stock
or a similar acquisition proposal for AMS or its assets is made
which in either case the Board of Directors of AMS determines in
good faith is more favorable to the AMS stockholders from a
financial point of view than the Merger; or (iv) any court of
competent jurisdiction in the United States or any state shall
have issued an order, judgment or decree (other than a temporary
restraining order) restraining, enjoining or otherwise
prohibiting the Merger and such order, judgment or decree shall
have become final and non-appealable; provided, however, that the
right to terminate this Agreement (x) under clause (i) shall not
be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before such date or
(y) under clause (iv) shall not be available to any party unless
such party shall have used all reasonable efforts to remove such
order, judgment or decree;
(c) by Advanced NMR, by written notice to AMS, if:
(i) there shall have been any breach of any
representation, warranty, covenant or agreement of AMS
hereunder which, if not remedied prior to the Closing
Date, would have an AMS Material Adverse Effect and
such breach shall not have been remedied, or AMS shall
not have provided Advanced NMR with reasonable
assurance that such breach will be remedied prior to
the Closing Date, within ten days after receipt by AMS
of notice in writing from Advanced NMR, specifying the
nature of such breach and requesting that it be
remedied; or
(ii) the Special Committee of the Board of
Directors and/or the Board of Directors of AMS shall
withdraw or modify in any manner adverse to Advanced
NMR its approval or recommendation of this Agreement or
the Merger.
(d) by AMS, by written notice to Advanced NMR, if:
(i) there shall have been any breach of any
representation, warranty, covenant or agreement of
Advanced NMR hereunder which, if not remedied prior to
the Closing Date, would have an ANMR Material Adverse
Effect and such breach shall not have been remedied or
Advanced NMR shall not have provided AMS with
reasonable assurance that such breach will be remedied
prior to the Closing Date, within ten days after
receipt by Advanced NMR of notice in writing from AMS,
specifying the nature of such breach and requesting
that it be remedied; or
(ii) the Board of Directors of Advanced NMR or
any committee thereof shall withdraw or modify in any
manner adverse to AMS its approval or recommendation of
this Agreement or the Merger.
8.2 Effect of Termination and Abandonment. In the
-------------------------------------
event of termination of this Agreement and abandonment of the
Merger pursuant to this Article VIII, no party hereto (or any of
------------
its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except that
nothing herein will relieve any party from liability for any
willful breach of this Agreement.
8.3 Indemnification by Advanced NMR.
-------------------------------
(a) For a period of six years after the Effective
Time, Advanced NMR shall indemnify, defend and hold harmless the
present and former officers, directors and employees of AMS (the
"Indemnified Parties") against all losses, claims, damages,
costs, expenses, obligations, liabilities or judgments, or
amounts that are paid in settlement with the approval of Advanced
NMR (which approval shall not be unreasonably withheld) resulting
from or arising out of actions or omissions occurring on or prior
to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement) to the full extent
permitted or required under applicable law and under the
provisions of the Certificate of Incorporation and the By-Laws of
AMS, each as in effect at the date hereof (which provisions shall
not be amended in any manner which adversely affects any
Indemnified Party, for a period of six years) including
provisions relating to advances of expenses incurred in defense
of any action or suit (the "Indemnified Liabilities") (and
Advanced NMR will pay expenses in advance of the final
disposition of any such action or proceeding to each Indemnified
Party to the full extent permitted by law), except for a claim
arising or based upon the gross negligence or willful misconduct
of the Indemnified Party. Without limiting the foregoing, in the
event any such claim, action, suit, proceeding or investigation
is brought against any Indemnified Party (whether initiated,
asserted, or arising before or within six years after the
Effective Time), (i) the Indemnified Party may retain counsel
satisfactory to it and Advanced NMR, (ii) Advanced NMR will pay
all reasonable fees and expenses of such counsel for the
Indemnified Party promptly as statements therefor are received,
(iii) the Indemnified Party may participate in any such defense
at such Indemnified Party's expense, (iv) Advanced NMR will use
all reasonable efforts to assist in the vigorous defense of any
such matter and all rights to indemnification shall continue
until final disposition of such claim, provided that Advanced NMR
shall not be liable for any settlement of any claim effected
without its prior written consent, which consent shall not be
unreasonably withheld, and (v) Advanced NMR shall not, in the
defense of any such claim or litigation, except with the consent
of the Indemnified Party, consent to the entry of any judgment or
enter into any settlement that provides for injunction or other
non-monetary relief effecting the Indemnified Party or that does
not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from
all liability with respect to such claim or litigation. If more
than one Indemnified Party is subject to a claim giving rise to
indemnification hereunder, the Indemnified Parties as a group may
retain one law firm to represent them with respect to each such
matter unless there is, under applicable standards of
professional conduct (as determined by counsel to the Indemnified
Parties), a conflict on any significant issue between the
positions of any two or more Indemnified Parties in which event,
such additional counsel as may be required may be retained by the
Indemnified Parties. Any Indemnified Party wishing to claim
indemnification under this Section 8.3, upon learning of any such
claim, action, suit, proceeding or investigation, shall notify
Advanced NMR in writing (but the failure so to notify an
indemnifying party shall not relieve it from any obligation or
liability which it may have under this Section 8.3, except to the
extent such failure prejudices such party), and shall, to the
extent required by laws of the indemnifying party's state of
incorporation, deliver to Advanced NMR any undertaking required
prior to payment of expenses in advance of final disposition.
(b) In the event that Advanced NMR or any of its
successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii)
transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provisions
shall be made so that the successors and assigns of Advanced NMR
shall assume the obligations set forth in paragraph (a) above.
(c) For six years after the Effective Time, Advanced
NMR shall cause to be maintained its current policies
("Policies") of directors' and officers' liability insurance
(provided that Advanced NMR may substitute therefor policies
having at least comparable coverage containing terms that are no
less advantageous) with respect to matters occurring prior to the
Effective Time to the extent such liability insurance can be
maintained at a cost at no greater than one and one-half times
the current amount paid by Advanced NMR annually for its existing
coverage) (the "Cap"); provided that if comparable coverage
cannot be obtained, or can be obtained only by paying an annual
premium in excess of the Cap, Advanced NMR shall only be required
to obtain as much coverage as can be obtained by paying an annual
premium equal to the Cap. In the event that the Policies do not
provide insurance coverage (at least in an amount up to the
current coverage limits) for the directors and officers of AMS
for claims that might be brought in connection with the Merger,
Advanced NMR agrees, consistent with the provisions of this
Section 8.3(c), to use its best commercially reasonable and
practicable efforts to obtain such insurance policy or policies
covering the officers and directors of AMS having at least
comparable coverage and terms as the Policies.
(d) Advanced NMR shall pay all expenses, including
reasonable attorneys' fees, that may be incurred by any
Indemnified Party in enforcing the indemnity and other
obligations provided for in this Section 8.3.
(e) This Section 8.3 is intended for the benefit of
and to grant third party rights to the Indemnified Parties and
each of the Indemnified Parties is entitled to enforce the rights
contained herein.
ARTICLE IX
MISCELLANEOUS
9.1 Expenses. Each party hereto shall bear its own
--------
expenses with respect to the transactions contemplated hereby.
9.2 Amendment. This Agreement may be amended,
---------
modified or supplemented but only in writing signed by
Acquisition Corp., Advanced NMR and AMS.
9.3 Non-Survival of Representations, Warranties,
--------------------------------------------
Covenants and Agreements. All representations, warranties,
------------------------
covenants and agreements contained in this Agreement or in any
instrument delivered in connection herewith shall not survive the
Merger, except as otherwise specifically provided in this
Agreement and except for the agreements contained in this Section
-------
9.3 and in Articles I and IX and in Section 8.3.
--- ---------- --
9.4 Notices. Any notice, request, instruction or
-------
other document to be given hereunder by a party hereto shall be
in writing and shall be deemed to have been given, (a) when
received if given in person, (b) on the date of transmission if
sent by telex, facsimile or other wire transmission or (c) three
Business Days after being deposited in the U.S. mail, certified
or registered mail, postage prepaid:
(a) If to AMS:
Advanced Mammography Systems, Inc.
46 Jonspin Road
Wilmington, Massachusetts 01187
Attention: Gary A. Kittrell, Director
Facsimile No.: (212) 732-1058
with a copy to:
Kittrell & Kittrell, P.C.
Six Maiden Lane
New York, New York 10038
Attention: Gary A. Kittrell, Esq.
(b) If to Advanced NMR or Acquisition Corp.:
Advanced NMR Systems, Inc.
46 Jonspin Road
Wilmington, Massachusetts 01887
Attention: Jack Nelson
Chairman of the Board
Facsimile No.: (508) 658-8876
with a copy to:
Reid & Priest LLP
40 West 57th Street
New York, NY 10019
Attention: Bruce A. Rich, Esq.
Facsimile No.: (212) 603-2001
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
9.5 Waivers. The failure of a party hereto at any
-------
time or times to require performance of any provision hereof
shall in no manner affect its right at a later time to enforce
the same. No waiver by a party of any condition or of any breach
of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach in
other instances or a waiver of any other condition or breach of
any other term, covenant, representation or warranty.
9.6 Interpretation. The headings preceding the text
--------------
of Articles and Sections included in this Agreement and the
headings to Schedules attached to this Agreement are for
convenience only and shall not be deemed part of this Agreement
or be given any effect in interpreting this Agreement. The use
of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean
"including, without limitation" or "include, without limitation,"
respectively. Underscored references to Articles, Sections,
Paragraphs, Subsections, Subparagraphs, Schedules or Exhibits
shall refer to those portions of this Agreement.
9.7 Applicable Law. This Agreement shall be governed
--------------
by and construed and enforced in accordance with the internal
laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
9.8 Assignment. This Agreement shall be binding upon
----------
and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no
assignment of any rights or obligations shall be made by any
party without the prior written consent of all the other parties
hereto.
9.9 No Third Party Beneficiaries. This Agreement is
----------------------------
solely for the benefit of the parties hereto and, to the extent
provided herein, and their respective directors, officers,
employees, agents and representatives, and no provision of this
Agreement shall be deemed to confer upon other third parties any
remedy, claim, liability, reimbursement, cause of action or other
right.
9.10 Enforcement of the Agreement. The parties hereto
----------------------------
agree that irreparable damage would result in the event that any
provision of this Agreement is not performed in accordance with
specific terms or is otherwise breached. It is accordingly
agreed that the parties hereto will be entitled to equitable
relief including an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and
provisions hereof.
9.11 Further Assurances. Upon the request of Advanced
------------------
NMR or Acquisition Corp., AMS will on and after the Closing Date
execute and deliver to Acquisition Corp. such other documents,
releases, assignments and other instruments as may be required to
effectuate completely the transactions contemplated by this
Agreement.
9.12 Severability. If any provision of this Agreement
------------
shall be held invalid, illegal or unenforceable, the validity,
legality or enforceability of the other provisions hereof shall
not be affected thereby, and there shall be deemed substituted
for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
9.13 Remedies Cumulative. The remedies provided in
-------------------
this Agreement shall be cumulative and shall not preclude the
assertion or exercise of any other rights or remedies available
by law, in equity or otherwise.
9.14 Entire Understanding. This Agreement and the
--------------------
Related Agreements set forth the entire agreement and
understanding of the parties hereto and supersede all prior
agreements, arrangements and understandings among the parties
hereto.
9.15 Waiver of Jury Trial. Each party hereto waives
--------------------
the right to a trial by jury in any dispute in connection with
the transactions contemplated by this Agreement and the Related
Agreements, and agrees to take any and all action necessary or
appropriate to effect such waiver.
9.16 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
[Signature Page Appears On Next Page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered on the date first above
written.
ADVANCED NMR SYSTEMS, INC.
By: /s/ Jack Nelson
---------------------------
Name: Jack Nelson
Title: Chairman
AMS MERGER CORPORATION
By: /s/ Jack Nelson
---------------------------
Name: Jack Nelson
Title: President
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
By: /s/ Enrique Levy
---------------------------
Name: Enrique Levy
Title: President
<PAGE>
NOTE TO THE COMMISSION REGARDING THE FILING OF SCHEDULES TO THE
AGREEMENT AND PLAN OF MERGER, AS OF FEBRUARY 4, 1996, AMONG
ADVANCED NMR SYSTEMS, INC., AMS MERGER CORPORATION AND ADVANCED
MAMMOGRAPHY SYSTEMS, INC.:
The registrant has omitted from this filing the schedules to
the above-referenced agreement, which are listed on page (iv)
thereof. These schedules do not contain information that is
material to an investment decision. The registrant will provide
the omitted schedules to the Commission on request.
