SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 15, 1996
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Advanced Mammography Systems, Inc.
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(Exact name or registrant as specified in its charter)
Delaware 0-20968 04-3166348
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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>
Item 5. Other Events.
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As of May 15, 1996, Advanced Mammography Systems, Inc.
(the "Registrant") closed a private placement (the "Placement")
of $3 million principal amount of 4% Convertible Debentures of
the Registrant (the "Debentures") due December 1, 1998 (the
"Maturity Date").
The Debentures accrue interest at the rate of 4% per
annum from the date of issuance to the Maturity Date, or earlier
either upon conversion or prepayment. Upon conversion, the
Registrant has the option to pay the accrued interest on the
Debentures being converted in shares of its Common Stock at the
then conversion rate.
A Debentureholder may, at his election, convert at all
or part of his Debentures at any time (a) commencing 45 days
after the closing as to one-half (1/2) of the principal amount of
his Debentures, and (b) commencing 60 days after the closing as
to the balance of his Debentures into shares of the Registrant's
Common Stock at a conversion price equal to the lesser of (i)
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125% of the Market Price on the closing, or (ii) 75% of the
Market Price on the date of conversion, subject to customary
anti-dilution provisions. The Market Price is defined as the
average closing bid price of the Common Stock for the three
trading days immediately preceding the closing or conversion
date, as may be applicable, as reported on the NASDAQ system (or
the closing bid price for the applicable day if the Common Stock
is traded on the over-the-counter market or on an exchange). In
the event that during the period commencing June 1, 1997, the per
share price of the Common Stock exceeds $4.00 for five trading
days during any ten day period, the Registrant may, upon three
days written notice, elect to convert the Debentures into shares
of Common Stock at the applicable conversion rate as of the date
of notice.
Assuming a conversion price based on the average
closing bid price of the Registrant's Common Stock on the NASDAQ
System for the three trading days immediately preceding May 15,
1996, and the conversion of all of the Debentures, the Registrant
would issue 1,442,308 shares of its Common Stock.
The Placement was offered and sold outside the United
States to non-U.S. persons pursuant to an exemption from the
registration requirements of the Securities Act of 1933 available
under Regulation S promulgated thereunder. The Debentures will
not be registered and may not be offered or sold in the United
States absent such registration or an applicable exemption from
the registration requirements of the Securities Act.
The net proceeds of the Placement of approximately
$2,750,000, after payment of fees and related expenses, will be
used for completion of product development of the Registrant's
dedicated MR breast imaging "Aurora" system, the
commercialization and marketing of the Aurora system and working
capital. Management believes that the net proceeds should be
sufficient to meet the Company's operating needs for the next 12
months.
The Placement was effected pursuant to Offshore
Securities Subscription Agreements (the "Subscription Agreement")
entered into between the Registrant and each of the subscribers.
A form of Subscription Agreement (without exhibits) is included
as an Exhibit hereto.
In connection with the Placement, the Registrant issued
to the placement agents for the Debentures warrants for the
purchase of 197,500 shares of the Registrant's Common Stock at an
exercise price of $2.20 per share for a period of eighteen (18)
months and warrants for an additional 197,500 shares of the
Common Stock at an exercise price of $2.50 per share for a period
of five years.
Upon the closing of the placement, the Registrant and
Advanced NMR Systems, Inc. ("ANMR") which owns 61% of the
outstanding Common Stock of the Registrant, terminated a
previously announced Agreement and Plan of Merger, dated as of
February 4, 1996, providing for the merger (the "Merger") of AMS
Merger Corporation, a wholly-owned subsidiary of ANMR, with and
into the Registrant.
On May 16, 1996, the Registrant issued a press release
announcing the closing of the Placement and the termination of
the Merger Agreement. A copy of such press release is included
as an exhibit hereto.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits:
4. Form of 4% Convertible Debenture due December 1, 1998
10. Form of Offshore Securities Subscription
Agreement (without exhibits)
99. Press release dated May 16, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
Dated: May 16, 1996 By: /s/ Jack Nelson
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Name: Jack Nelson
Title: Chairman
<PAGE>
EXHIBIT INDEX
Exhibit Description
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4. Form of 4% Convertible Debenture due
December 1, 1998
10. Form of Offshore Securities Subscription
Agreement (without exhibits)
99. Press release dated May 16, 1996
Exhibit 4
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES ARE
RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR
TRANSFERRED EXCEPT IN ACCORDANCE WITH REGULATION S
UNDER THE ACT, OR AS PERMITTED UNDER THE ACT PURSUANT
TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.
No. _________ US $___________
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
4% CONVERTIBLE DEBENTURE DUE December 1, 1998
THIS DEBENTURE is one of a duly authorized issue of
$3,000,000 in Debentures of ADVANCED MAMMOGRAPHY SYSTEMS, INC., a
corporation duly organized and existing under the laws of the
State of Delaware (the "Company") designated as its 4%
Convertible Debenture Due December 1, 1998.
FOR VALUE RECEIVED, the Company promises to pay to
___________________________, the registered holder hereof (the
"Holder"), the principal sum of __________________________ (US
$____________) on December 1, 1998 (the "Maturity Date") and to
pay interest on the principal sum outstanding from time to time
in arrears on December 1, 1998, at the rate of 4% per annum
accruing from the date of initial issuance. Accrual of interest
shall commence on the first such business day to occur after the
date hereof until payment in full of the principal sum has been
made or duly provided for. All interest so payable will be paid
to the person in whose name this Debenture (or one or more
predecessor Debentures) is registered on the records of the
Company regarding registration and transfers of the Debentures
(the "Debenture Register") on the tenth day prior to the Maturity
Date, provided, however, that the Company's obligation to a
transferee of this Debenture arises only if such transfer, sale
or other disposition is made in accordance with the terms and
conditions of the Regulation S Subscription Agreement executed by
the original Holder. Subject to the provisions of 4 below, the
principal of, and interest on, this Debenture are payable in such
coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private
debts, at the address last appearing on the Debenture Register of
the Company as designated in writing by the Holder from time to
time. The Company will pay the principal of and interest upon
this Debenture on the Maturity Date, less any amounts required by
law to be deducted, to the registered holder of this Debenture as
of the tenth day prior to the Maturity Date and addressed to such
holder as the last address appearing on the Debenture Register.
The forwarding of such check shall constitute a payment of
interest hereunder and shall satisfy and discharge the liability
for principal and interest on this Debenture to the extent of the
sum represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional
provisions:
1. The Debentures are issuable in denominations of Fifty
Thousand Dollars (US$ 50,000) and integral multiples thereof.
The Debentures are exchangeable for an equal aggregate principal
amount of Debentures of different authorized denominations, as
requested by the Holders surrendering the same. No service
charge will be made for such registration or transfer or
exchange.
2. The Company shall be entitled to withhold from all
payments of principal of, and interest on, this Debenture any
amounts required to be withheld under the applicable provisions
of the United States income tax laws or other applicable laws at
the time of such payments, and Holder shall execute and deliver
all required documentation in connection therewith.
3. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be
transferred or exchanged only in compliance with the Securities
Act of 1933, as amended (the "Act"), and other applicable state
and foreign securities laws. In the event of any proposed
transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person,
that it receive reasonable transfer documentation including
opinions that the issuance of the Debenture in such other name
does not and will not cause a violation of the Act or any
applicable state or foreign securities laws. Prior to due
presentment for transfer of this Debenture, the Company and any
agent of the Company may treat the person in whose name this
Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
4. The Holder of this Debenture is entitled, at its
option, to convert at any time (a) commencing forty-five (45)
days after the closing of the sale of the Debenture (the
"Closing"), one-half (1/2) of the principal amount of this
Debenture, and (b) commencing sixty (60) days after the Closing,
the balance of the principal amount of this Debenture, provided
that the principal amount is at least US $50,000 (unless if at
the time of such election to convert the aggregate principal
amount of all Debentures registered to the Holder is less than
Fifty Thousand Dollars (US $50,000), then the whole amount
thereof), into shares of Common Stock of the Company at a
conversion price for each share of Common Stock equal to the
lesser of (a) 125% of the Market Price on the Closing, or (b)
seventy-five (75%) percent of the Market Price on the Conversion
Date. For purposes of this Section 4, the Market Price shall be
the average closing bid price of the Common Stock on the three
(3) trading days immediately preceding the Closing or Conversion
Date, as may be applicable, as reported by the National
Association of Securities Dealers Automated Quotation System
("NASDAQ"), or the closing bid price on the over-the-counter
market on such date or, in the event the Common Stock is listed
on a stock exchange, the Market Price shall be the closing price
on the exchange on such dates, as reported in the Wall Street
Journal. Conversion shall be effectuated by surrendering the
Debentures to be converted to the Company with the form of
conversion notice attached hereto as Exhibit A, executed by the
Holder of the Debenture evidencing such Holder's intention to
convert this Debenture or a specified portion (as above provided)
hereof, and accompanied, if required by the Company, by proper
assignment hereof in blank. Interest accrued or accruing from
the date of issuance to the date of conversion shall, at the
option of the Company, be paid in kind upon conversion. No
fraction of Shares or scrip representing fractions of shares will
be issued on conversion, but the number of shares issuable shall
be rounded to the nearest whole share. The date on which notice
of conversion is given (the "Conversion Date") shall be deemed to
be the date on which the Holder has delivered this Debenture,
with the conversion notice duly executed, to the Company or, if
earlier, the date set forth in such notice of conversion if the
Debenture is received by the Company within three (3) business
days therefrom. Facsimile delivery of the conversion notice
shall be accepted by the Company at telephone number (201) 592-
0393. Certificates representing Common Stock upon conversion
will be delivered within three (3) business days from the date
the notice of conversion and this Debenture is delivered to the
Company.
5. No provision of this Debenture shall alter or impair
the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and interest on, this
Debenture at the time, place, and rate, and in the coin or
currency, herein proscribed. This Debenture and all other
Debentures now or hereafter issued of similar terms are direct
obligations of the Company. This Debenture ranks equally with
all other Debentures, excluding conventional, institutional or
secured debt.
6. No recourse shall be had for the payment of the
principal of, or the interest on, this Debenture, or for any
claim based hereon, or otherwise in respect hereof, against any
incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and
released.
7. The number of Shares issuable upon the conversion of
the Debenture (the "Exercise Rate") is subject to adjustment from
time to time as set forth in this Section 7.
(a) Adjustment for Change in Capital Stock. If the
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Issuer:
(i) subdivides its outstanding shares of Common
Stock into a greater number of shares;
(ii) combines its outstanding shares of Common
Stock into a smaller number of shares; or
(iii) issues by reclassification of its Common
Stock any shares of its Capital Stock (as defined in Section
(e));
then the Exercise Rate in effect immediately prior to such action
shall be adjusted so that the registered Holder of the Debenture
thereafter exercised may receive the number of shares of Common
Stock or Capital Stock of the Company which such Holder would
have owned immediately following such action if such Holder had
converted the Debenture immediately prior to such action. The
adjustment shall become effective immediately after the effective
date of any subdivision, combination or reclassification.
(b) Notice of Adjustment. Whenever the Exercise Rate
--------------------
is adjusted, the Issuer shall mail to the Debenture holder a
notice of such event.
(c) No Other Adjustment for Dividends. Except as
---------------------------------
provided in this Section 7, no adjustment will be made for
dividends on any Common Stock.
(d) Multiple Adjustments. After an adjustment to the
--------------------
Exercise Rate under this Section 7, any subsequent event
requiring an adjustment under this Section 7 shall cause an
adjustment to the Exercise Rate as so adjusted.
(e) Definitions.
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"Capital Stock" means, with respect to any
---------------
corporation, any and all shares, interests, rights to purchase,
warrants, options, participation's or other equivalents of or
interests (however designated) in stock issued by that
corporation.
8. If the Company merges or consolidates with another
corporation or sells or transfers all or substantially all of its
assets to another person and the holders of the Common Stock are
entitled to receive stock, securities or property in respect of
or in exchange for Common Stock, then as a condition of such
merger, consolidation, sale or transfer, the Company and any such
successor, purchaser or transferee shall amend this Debenture to
provide that it may thereafter be converted on the terms and
subject to the conditions set forth above into the kind and
amount of stock, securities or property receivable upon such
merger, consolidation, sale or transfer by a holder of the number
of shares of Common Stock into which this Debenture might have
been converted immediately before such merger, consolidation,
sale or transfer, subject to adjustments which shall be as nearly
equivalent as may be practicable. In the event of any proposed
merger, consolidation or sale or transfer of all or substantially
all of the assets of the Company (a "Sale"), the Holder hereof
shall have the right to convert by delivering a Notice of
Conversion to the Company within fifteen (15) days of receipt of
notice of such Sale from the Company. In the event the Holder
hereof shall elect not to convert, the Company may prepay all
outstanding principal and accrued interest on this Debenture,
less all amounts required by law to be deducted, upon which
tender of payment following such notice, the right of conversion
shall terminate.
9. The Holder of the Debenture, by acceptance hereof,
agrees that this Debenture is being acquired for investment and
that such Holder will not offer, sell or otherwise dispose of
this Debenture or the Shares of Common Stock issuable upon
conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky
or foreign laws or similar laws relating to the sale of
securities.
10. (a) In the event that during the period
commencing June 1, 1997 the Market Price as previously defined
exceeds $4.00 for five (5) trading days during any ten (10) day
period, the Company may, upon three (3) day written notice, elect
to convert the Debentures into Shares of Common Stock at an
Exercise Rate computed in accordance with the provisions of
pargraph 4 hereof, as of the date of such notice.
(b) In the event that there shall not be available any
shares to effect the conversions of this Debenture, the Company
shall immediately notify all Holders as listed in the Debenture
Register. If upon conversion of this Debenture a sufficient
amount of Common Stock is not available to satisfy all
conversions in full, the Company shall use the available Common
Stock to satisfy the conversions in part and the balance of the
Debentures sought to be converted shall be redeemed for an amount
equal to the sum of (x) 133% of the principal sum of such
unconverted Debentures, and (y) all accrued interest, provided,
--------
however, that nothing contained herein shall be deemed to require
-------
the payment of interest, at a rate in excess of the maximum rate
permitted by applicable law.
11. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of
principal or interest on this Debenture for in
excess of ten (10) days after the due date; or
b. Any of the representations or warranties made by
the Company herein, in the Subscription Agreement,
or in any certificate or financial or other
written statements heretofore or hereafter
furnished by or on behalf of the Company in
connection with the execution and delivery of this
Debenture or the Subscription Agreement shall be
false or misleading in any material respect at the
time made; or
c. The Company shall fail to perform or observe, in
any material respect, any other covenant, term,
provision, condition, agreement or obligation of
the Company under this Debenture and such failure
shall continue uncured for a period of thirty (30)
days after notice from the Holder of such failure;
or
d. The Company shall (1) admit in writing its
inability to pay its debts generally as they
mature; (2) make an assignment for the benefit of
creditors or commence proceedings for its
dissolution; or (3) apply for or consent to the
appointment of a trustee, liquidator or receiver
for its or for a substantial part of its property
or business; or
e. A trustee, liquidator or receiver shall be
appointed for the Company or for a substantial
part of its property or business without its
consent and shall not be discharged within ninety
(90) days after such appointment; or
f. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental
agency shall assume custody or control of the
whole or any substantial portion of the properties
or assets of the Company and shall not be
dismissed within ninety (90) days thereafter; or
g. Any money judgment, writ or warrant of attachment,
or similar process in excess of Two Hundred
Thousand ($200,000) Dollars in the aggregate shall
be entered or filed against the Company or any of
its properties or other assets and shall remain
unpaid, unvacated, unbonded or unstayed for a
period of sixty(60) days or in any event later
than five (5) days prior to the date of any
proposed sale thereunder; or
h. Bankruptcy, reorganization, insolvency or
liquidation proceedings or other proceedings for
relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or
against the Company and, if instituted against the
Company, shall not be dismissed within ninety (90)
days after such institution or the Company shall
by any action or answer approve of, consent to, or
acquiesce in any such proceedings or admit the
material allegations of, or default in answering a
petition filed in any such proceeding; or
i. The Company shall have its Common Stock delisted
from an exchange or over-the-counter market or
suspended from trading.
Then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by
the Holder (which waiver shall not be deemed to be a waiver of
any subsequent default) at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Debenture
immediately due and payable, without presentment, demand, protest
or notice of any kinds, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to
the contrary notwithstanding, and the Holder may immediately, and
without expiration of any period of grace, enforce any and all of
the Holder's rights and remedies provided herein or any other
rights or remedies afforded by law.
12. Nothing contained in this Debenture shall be construed
as conferring upon the Holder the right to vote or to receive
dividends or to consent or receive notice as a shareholder in
respect of any meeting of shareholders or any rights whatsoever
as a shareholder of the Company, unless and to the extent
converted in accordance with the terms hereof.
13. This Debenture shall be governed and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed by an officer thereunto duly authorized.
Dated: __________________, 1996
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
By:_______________________________
__________________________________
(Print Name)
__________________________________
(Title)
ATTEST:
_______________________________
<PAGE>
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the
Debenture)
The undersigned hereby irrevocably elects to convert
$________________ of the principal amount of the above Debenture
No. ___ into Shares of Common Stock of ADVANCED MAMMOGRAPHY
SYSTEMS, INC. (the "Company") according to the conditions hereof,
as of the date written below.
The undersigned represents that it is not a U.S. Person as
defined in Regulation S promulgated under the Securities Act of
1933 and is not converting the Debenture on Behalf of any U.S.
Person.
Date of Conversion* ________________________________________
Applicable Conversion Price ________________________________
Signature __________________________________________________
[Name]
Address: ___________________________________________________
___________________________________________________
* This original Debenture and Notice of Conversion must be
received by the Company by the fifth business date following
the Date of Conversion.
Exhibit 10
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Subscription Agreement
("Agreement") is executed in reliance upon the transaction
exemption afforded by Regulation S ("Regulation S") as
promulgated by the Securities and Exchange Commission ("SEC"),
under the Securities Act of 1933, as amended ("1933 Act").
This Agreement has been executed by the undersigned in
connection with the private placement of up to $3,000,000 4%
Convertible Debentures (hereinafter referred to as the
"Debentures") of Advanced Mammography Systems, Inc., a
corporation organized and existing under the laws of the State of
Delaware, U.S.A., NASDAQ/Small Cap Symbol "MAMO" (hereinafter
referred to as the "COMPANY"). The Debentures being sold
pursuant to this Agreement, and the Shares (as defined below),
have not been registered under the 1933 Act and may not be
offered or sold in the United States or to U.S. Persons, other
than distributors (as such terms are defined in Regulation S),
unless the Debentures or the Shares, as the case may be, are
registered under the 1933 Act, or an exemption from the
registration provisions of the 1933 Act is available. The terms
on which the Debentures may be converted into common stock (the
"Shares") and the other terms of the Debentures are set forth in
the pro forma Debenture in ANNEX I annexed hereto. This
subscription and, if accepted by the COMPANY, the offer and sale
of Debentures and the Shares issuable upon conversion thereof
(collectively the "Securities"), are being made in reliance upon
the provisions of Regulation S ("Regulation S") under the 1933
Act.
The undersigned
NAME: __________________________________________________
ADDRESS: __________________________________________________
__________________________________________________
__________________________________________________
if applicable, a [Corporation][Partnership][Trust]
organized under the laws of __________, a non USA jurisdiction
(hereinafter referred to as the "PURCHASER")
hereby represents and warrants to, and agrees with, the COMPANY
as follows:
1. AGREEMENT TO SUBSCRIBE.
a. SUBSCRIPTION AMOUNT. The undersigned hereby subscribes
for $______________ in principal amount of 4%
Debentures.
b. FORM OF PAYMENT. The PURCHASER shall pay the purchase
price for the Debentures by simultaneously herewith
delivering good funds in United States Dollars to the
escrow agent identified in the Joint Escrow
Instructions attached hereto as ANNEX II (the "Escrow
Agent"). Delivery of such funds to the COMPANY by the
Escrow Agent shall be made against delivery by the
COMPANY of one or more Debentures in accordance with
this Agreement. By signing this Agreement, the
PURCHASER and the COMPANY each agrees to all of the
terms and conditions of, and becomes a party to, the
Joint Escrow Instructions attached hereto as ANNEX II,
all of the provisions of which are incorporated herein
by this reference as if set forth in full.
c. METHOD OF PAYMENT. Payment of the purchase price for
the Debentures shall be made by wire transfer of funds
to:
Bank of New York
350 Fifth Avenue
New York, New York 10001
ABA# 021000018
for credit to the account of Krieger &
Prager, Attorneys
Adar Equities LLC - Account No. 637-1496910
2. SUBSCRIBER REPRESENTATIONS AND COVENANTS; ACCESS TO
INFORMATION; INDEPENDENT INVESTIGATION.
a. OFFSHORE TRANSACTION. PURCHASER represents,
warrants and covenants to COMPANY as follows:
(i) PURCHASER is not a U.S. Person as that term
is defined under Regulation S, as set forth
in Annex III.
(ii) PURCHASER is outside the United States as of
the date of the execution and delivery of
this Agreement.
(iii) PURCHASER is purchasing the Debentures for
its own account and not on behalf of any U.S.
Person, and PURCHASER is the sole beneficial
owner of the Debentures, and has not pre-
arranged any sale with any purchaser or
purchasers in the United States.
(iv) PURCHASER represents and warrants and hereby
agrees that all offers and sales of the
Debentures prior to the expiration of a
period commencing on the date of the receipt
of funds by the COMPANY and ending 40 days
thereafter (the "Restricted Period") shall
only be made in compliance with the safe
harbor contained in Regulation S, pursuant to
the registration provisions under the 1933
Act or pursuant to an exemption from
registration, and all offers and sales after
the expiration of the 40-day period shall be
made only pursuant to such registration or to
an exemption from registration.
(v) PURCHASER acknowledges that the purchase of
the Debentures involves a high degree of
risk, is aware of the risks and further
acknowledges that it can bear the economic
risk of the purchase of the Debentures,
including the total loss of its investment.
(vi) PURCHASER understands that the Debentures are
being offered and sold to it in reliance on
specific exemptions from the registration
requirements of U.S. securities laws and that
the COMPANY is relying upon the truth and
accuracy of the representations, warranties,
agreements, acknowledgements and
understandings of PURCHASER set forth herein
in order to determine the applicability of
such exemptions and the suitability of
PURCHASER to acquire the Debentures, and the
Shares issuable upon conversion thereof.
PURCHASER represents and warrants that the
information contained herein is complete and
accurate. PURCHASER further represents and
warrants that it will notify the COMPANY
immediately upon the occurrence of any
material change therein occurring prior to
the issuance of Shares upon conversion of the
Debenture.
(vii) PURCHASER is sufficiently experienced in
financial and business matters to be capable
of evaluating the merits and risks of its
investments, and to make an informed decision
relating thereto.
(viii) In evaluating its investment, PURCHASER has
consulted its own investment and/or legal
and/or tax advisors. PURCHASER is not
relying on the COMPANY respecting the tax and
other economic considerations of an
investment in the Debentures.
(ix) PURCHASER understands that in the view of the
SEC the statutory basis for the exemption
claimed for this transaction would not be
present if the offering of Debentures, and
the Shares issuable upon conversion thereof,
although in technical compliance with
Regulation S, is part of a plan or scheme to
evade the registration provisions of the 1933
Act. PURCHASER is acquiring the Debentures
for investment purposes and has no present
intention to sell the Debentures, or the
Shares issuable upon conversion thereof, in
the United States or to a U.S. Person or for
the account or benefit of a U.S. Person
either now or after the expiration of the
Restricted Period.
(x) PURCHASER is not an underwriter of, or dealer
in, the Securities, and PURCHASER is not
participating, pursuant to a contractual
agreement, in the distribution of the
Securities.
(xi) Neither PURCHASER or any of its affiliates
presently have or will, directly or
indirectly, maintain any short position in
securities of the COMPANY during the
Restricted Period.
(xii) During the period commencing on the Closing
Date (as defined herein) and ending on the
45th day following such date, PURCHASER will
not sell, commit or agree to sell or pledge
any shares of Common Stock of the COMPANY or
any other securities convertible into or
exercisable for shares of Common Stock of the
COMPANY.
(xiii) PURCHASER has taken no action which would
give rise to any claim by any person for
brokerage commission, finders' fees or the
like relating to this Agreement or the
transactions contemplated hereby.
b. CURRENT PUBLIC INFORMATION. PURCHASER
acknowledges that PURCHASER has been furnished
with or has acquired copies of the COMPANY's most
recent Annual Report on the Form 10-K filed with
the SEC, Forms 10-Q and 8-K filed thereafter
(collectively the "SEC Filings"). PURCHASER is
not relying upon any representations or other
information (whether oral or written) other than
as set forth in the SEC filings or in Annex IV.
c. INDEPENDENT INVESTIGATION; ACCESS. PURCHASER
acknowledges that PURCHASER, in making the
decision to purchase the Debentures subscribed
for, has relied upon independent investigations
made by it and its representatives, if any, and
PURCHASER and such representatives, if any, have,
prior to any sale to it, been given access and the
opportunity to examine all material publicly
available, books and records of the COMPANY, all
material contracts and documents relating to this
offering and an opportunity to ask questions of,
and to receive answers from the COMPANY or any
person acting on its behalf concerning the terms
and conditions of this offering. PURCHASER and
its advisors, if any, have been furnished with
access to all publicly available materials
relating to the business, finances and operation
of the COMPANY and materials relating to the offer
and sale of the Debentures which have been
requested. PURCHASER and its advisors, if any,
have received complete and satisfactory answers to
any such inquiries.
d. NO GOVERNMENT RECOMMENDATION OR APPROVAL.
PURCHASER understands that no federal or state
agency has passed on or made any recommendation or
endorsement of the Securities.
e. ENTITY PURCHASERS. If PURCHASER is a partnership,
corporation or trust, the person executing this
Agreement on its behalf represents and warrants
that:
(i) He or she has made due inquiry to determine
the truthfulness of the representations and
warranties made pursuant to this Agreement.
(ii) He or she is duly authorized (if the
undersigned is a trust, by the trust
agreement) to make this investment and to
enter into and execute this Agreement on
behalf of such entity.
f. Individual Purchasers. PURCHASER, if an
individual, represents that he or she has reached
the age of 21 and has adequate means for providing
for his or her current and anticipated financial
needs and possible contingencies for emergencies
and has no need for liquidity in the proposed
investment.
g. Binding Commitment. This Agreement constitutes a
legal, valid and binding obligation of the
PURCHASER. The PURCHASER has full power, right
and authority to enter into and perform this
Agreement. The execution and delivery and
performance of this Agreement will not violate or
be in conflict with any order, judgment,
injunction, agreement or controlling document to
which the PURCHASER is a party or by which it is
bound. If the PURCHASER is an entity, it was not
formed for the specific purpose of acquiring the
Debenture.
h. Compliance. PURCHASER hereby covenants that it
will comply with all laws and regulations in each
foreign jurisdiction in which it purchases,
offers, sells or deliver the Securities, or has in
its possession or distributes any offering
material. PURCHASER undertakes and agrees to make
all necessary filings in connection with the
purchase of the Debentures as required by United
States laws and regulations or any domestic
securities exchange or trading market.
3. COMPANY REPRESENTATIONS.
a. REPORTING COMPANY STATUS. The COMPANY is a
reporting issuer as defined by Rule 902 of
Regulation S. The COMPANY is in full compliance,
to the extent applicable, with all reporting
obligations under Section 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"). The COMPANY has registered its common
stock pursuant to Section 12 of the Exchange Act
and the common stock trades on NASDAQ/Small Cap,
and has received no notice, either oral or
written, with respect to its continued eligibility
for such listing.
b. OFFSHORE TRANSACTION. The COMPANY has not offered
these securities to any person in the United
States or to any U.S. Person as that term is
defined in Regulation S.
c. NO DIRECTED SELLING EFFORTS. In regard to this
transaction, the COMPANY has not conducted any
"direct selling efforts" as that term is defined
in Rule 902 of Regulation S nor has the COMPANY
conducted any general solicitation relating to the
offer and sale of the within securities to persons
resident within the United States or elsewhere.
d. TERMS OF DEBENTURES. The COMPANY will issue the
Debentures in accordance with the terms of ANNEX I
attached hereto.
e. LEGALITY. The COMPANY has the requisite corporate
power and authority to enter into this Agreement
and to sell and deliver the Debentures; this
Agreement and the issuance of the Debentures have
been duly and validly authorized by all necessary
corporate action by the COMPANY; this Agreement
has been duly and validly executed and delivered
by and on behalf of the COMPANY, and is a valid
and binding agreement of the COMPANY, enforceable
against it in accordance with its terms, except as
enforceability may be limited by general equitable
principles, bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other
laws affecting creditors rights generally.
f. NON-CONTRAVENTION. The execution and delivery of
this Agreement and the consummation of the
issuance of the Debentures, and the consummation
of the transactions contemplated by this Agreement
by the COMPANY do not and will not conflict with
or result in a breach by the COMPANY of any of the
terms or provisions of, or constitute a default
under, the Certificate of Incorporation or by-laws
of the COMPANY, or any material indenture,
mortgage, deed of trust, or other material
agreement or instrument to which the COMPANY is a
party or by which it or any of its properties or
assets are bound or (assuming that the
representations and warranties of the PURCHASER in
Section 2 hereof, and the representations and
warranties of the distributor to the COMPANY, are
true and correct), any existing applicable U.S.
law, rule, or regulation or any applicable
decrees, judgment or order of any U.S. court,
federal or state regulatory body, administrative
agency or other U.S. governmental body having
jurisdiction over the COMPANY or any of its
properties or assets, the conflict, breach,
violation or default of or under which would have
a material adverse effect on the COMPANY's
business or financial condition.
g. FILINGS. The COMPANY undertakes and agrees to
make all necessary filings in connection with the
sale of the Debentures as required by United
States laws and regulations or any domestic
securities exchange or trading market.
h. ABSENCE OF CERTAIN CHANGES. Since December 31,
1995, there has been no material adverse
development in the assets, liabilities, business,
properties, operations, financial condition or
results of operations of the COMPANY, except as
disclosed in the SEC Filings or in Annex IV.
4. TRANSFER AGENT INSTRUCTIONS.
a. Debentures. Upon the conversion of the
Debentures, the PURCHASER thereof shall submit
such Debenture to COMPANY, and COMPANY shall,
within five (5) business days of receipt of such
Debenture, instruct COMPANY's transfer agent to
issue one or more certificates representing that
number of shares of Common Stock into which the
Debenture or Debentures are convertible in
accordance with the provisions regarding
conversion set forth in ANNEX I hereto. The
COMPANY shall act as Debenture Registrar and shall
maintain an appropriate ledger containing the
necessary information with respect to each
Debenture.
b. Subject to the completeness and accuracy of the
PURCHASER's representations and warranties herein,
upon the conversion of any Debenture by a person
who is a non-U.S. Person, COMPANY shall instruct
the COMPANY's transfer agent to issue stock
certificates without restrictive legend in the
name of PURCHASER (or its nominee (being a non-
U.S. Person) or such non-U.S. Persons as may be
designated by PURCHASER) and in such denominations
to be specified at conversion representing the
number of shares of Common Stock issuable upon
such conversion, as applicable; provided, however,
that if the nominee or other non-U.S. Person in
whose name a certificate or certificates for
shares are requested to be registered is other
than PURCHASER, or if there has been a regulatory
development including, but not limited to, an
amendment or proposed amendment of Regulation S,
or any "no-action" or interpretive guidance
whether oral or written from the Securities and
Exchange Commission, which call into question the
ability of COMPANY to issue to PURCHASER the
Securities without registration under the United
States Securities Act of 1933, COMPANY may require
prior to issuance of a certificate in the name of
PURCHASER or such other person, that it receive
reasonable transfer documentation including
opinions of counsel acceptable to COMPANY that the
issuance of certificates without restrictive
legend and/or in such other name does not and will
not cause a violation of the Act or any applicable
state or foreign securities laws. The COMPANY
warrants that no instructions other than these
instructions and instructions to impose a "stop
transfer" instruction with respect to the
Debenture until the end of the Restricted Period
have been or will be given to the transfer agent
and that the Shares will not be subject to any
transfer limitations other than those imposed by
applicable securities laws. Nothing in this
Section 4, however, shall affect in any way
PURCHASER's or such nominee's obligations and
agreement to comply with all applicable securities
laws upon resale of the Securities.
c. If upon conversion of the Debentures effected by
the PURCHASER pursuant to the terms of this
Agreement and the Form of Debenture following the
expiration of the Restricted Period, the COMPANY
fails to issue certificates for Shares issuable
upon such conversion to the PURCHASER bearing no
restrictive legend for any reason other than the
COMPANY's reasonable good faith belief that the
representations and warranties made by the
PURCHASER in this Agreement were untrue when made,
the COMPANY shall pay to the PURCHASER by wire
transfer, as liquidated damages for such failure
and not as a penalty, an amount in cash equal to
$50,000; provided, however, that the payment of
such liquidated damages shall not relieve the
COMPANY from its obligations to register the
Shares pursuant to Section 9.
5. EXEMPTION; RELIANCE ON REPRESENTATION. PURCHASER
understands that the
offer and sale of the Debentures, and the Shares issuable upon
conversion thereof, is not being registered under the 1933 Act.
The COMPANY is relying on the rules governing offers and sales
made outside the United States pursuant to Regulation S. Rules
901 through 904 of Regulation S govern this transaction.
6. CLOSING DATE AND ESCROW AGENT. The date of the
issuance of the Debentures and the sale of the Debentures as
evidenced by receipt by the COMPANY from the Escrow Agent or the
total purchase funds (the "Closing Date") shall be no later than
ten (10) business days after execution hereof by all parties or
such other mutually agreed to time. Debentures will be delivered
to the Escrow Agent at the instructions of the COMPANY.
PURCHASER agrees that the Escrow Agent has no liability as a
result of any fraudulent or unlawful conduct of any other party,
and agrees to hold the Escrow Agent harmless.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
PURCHASER understands that COMPANY's obligation to sell the
Debentures is conditioned upon:
a. Acceptance by PURCHASER of an Agreement for the
sale of Debentures;
b. Delivery to the Escrow Agent by each PURCHASER of
good funds as payment in full for the purchase of
the Debentures; and
c. The accuracy on the Closing Date of the
representations and warranties of PURCHASER
contained in this Agreement and the performance by
PURCHASER on or before the Closing Date of all
covenants and agreements of PURCHASER required to
be performed on or before the Closing Date.
d. There shall not be in effect any law, rule or
regulation prohibiting or restricting the
transactions contemplated hereby, or requiring any
consent or approval which shall not have been
obtained.
8. CONDITIONS TO PURCHASER'S OBLIGATION TO PURCHASE. The
COMPANY understands that PURCHASER's obligation to purchase the
Debentures is conditioned upon:
a. The receipt and acceptance by the COMPANY of this
Agreement as evidenced by execution of this
Agreement by the Chairman of the Board, President
or any Vice President of the COMPANY. The
acceptance of funds by the COMPANY shall be deemed
to be constructive acceptance of this Agreement;
b. Delivery of Debentures to Escrow Agent as herein
set forth;
c. The accuracy on the Closing Date of the
representations and warranties of the COMPANY
contained in this Agreement and the performance by
the COMPANY on or before the Closing Date of all
covenants and agreements of the COMPANY required
to be performed on or before the Closing Date; and
d. Delivery to the Escrow Agent of an opinion of
counsel for the COMPANY, dated the Closing Date
and addressed to PURCHASER, in the form attached
hereto as ANNEX III.
9. REGISTRATION OF THE SECURITIES. COMPANY hereby agrees
that, upon demand of a majority in interest of holders of the
Securities as a result of a regulatory development including, but
not limited to, an amendment or proposed amendment of Regulation
S, or any "no-action" or interpretive guidance whether oral or
written from the Securities and Exchange Commission, which call
into question the ability of PURCHASER to resell the Securities
without registration, COMPANY will file, and use its reasonable
best efforts to cause to become effective a registration
statement on Form S-3 under the 1933 Act covering the resale of
the Shares issuable upon conversion of the Debentures. Any such
registration statement shall remain effective for up to twelve
(12) months, or until all of the Securities are sold, whichever
is earlier. The COMPANY shall provide the PURCHASER with such
number of copies of the prospectus as shall be reasonably
requested to facilitate the sale of the Shares issuable upon
conversion of the Debentures. The COMPANY shall bear and pay all
expenses incurred in connection with any such registration,
excluding discounts and commissions.
10. FURTHER OFFERINGS. COMPANY agrees that, for a period
of 180 days from the Closing Date, it will not offer for sale or
sell any securities other than the Shares issuable upon
conversion of the Debentures issued to the PURCHASER and to other
purchasers contemporaneously herewith, unless, in the opinion of
COMPANY's counsel, such offer or sale does not jeopardize the
availability of exemptions from the registration and
qualification requirements under all applicable securities laws
with respect to the Shares. COMPANY hereby warrants that it has
not engaged in any such offering during the six months prior to
the Closing Date, except as disclosed in ANNEX V hereof.
11. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York without giving
effect to principles governing the conflicts of laws. A
facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.
12. NOTICES. Any notice required or permitted hereunder
shall be given in writing (unless otherwise specified herein) and
shall be deemed effectively given upon personal delivery or three
business days after deposit in the United States Postal Service,
by registered or certified mail with postage and fees prepaid,
addressed to each of the other parties thereunto entitled at the
following addresses, or at such other addresses as a party may
designate by ten days advance written notice to each of the other
parties hereto.
COMPANY: Advanced Mammography Systems, Inc.
2 Executive Drive
Suite 755
Fort Lee, New Jersey 07024
ATT: Chief Financial Officer
PURCHASER: At the address set forth on the first page of this
Agreement.
ESCROW AGENT: Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
13. Survival of Representations and Warranties.
PURCHASER's representations and warranties shall survive the
execution and delivery hereof of this Agreement and the delivery
of the Debenture.
14. Each of the parties shall pay its own fees and expenses
in connection with this Agreement and the transactions
contemplated hereby whether or not consummated.
<PAGE>
SIGNATURE(S) FOR INDIVIDUAL SUBSCRIBER(S)
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and correct and that he, she or
they have executed this Offshore Securities Subscription
Agreement this ______ day of ______________, 1996.
_______________________________________
Printed Name Signature
_______________________________________
Printed Name Signature
SIGNATURES FOR ENTITIES
IN WITNESS WHEREOF, the undersigned represents that the
foregoing statements are true and correct and that it has caused
this Offshore Securities Subscription Agreement to be duly
executed on its behalf this ________ day of ___________________,
1996.
___________________________________
Printed Name of Subscriber
By: _______________________________
(Signature of Authorized Person)
___________________________________
Printed Name and Title
Accepted this __________ day of the month of ___________________,
199___.
ADVANCED MAMMOGRAPHY SYSTEMS, INC.
By: _______________________________________
Title: _______________________________
<PAGE>
All correspondence and delivery of certificates and
confirmations should be addressed to the above named person and
sent by the COMPANY to his _____ business _____ home address
(check one).
Capacity of Subscriber (check one):
Individual __________
Corporation __________
Partnership __________
Other __________ (please specify)
Ownership of Debentures (check one):
Individual __________
Joint Tenants, with right of survivorship __________*
Tenants in Common __________*
Tenants in Entirety __________*
Community Property __________*
Country of Citizenship:
______________________________________________
Country of incorporation or formation:
_________________________________
* If you are purchasing Debentures with only your spouse as
co-owner, both you and your spouse must sign the signature
page. If any co-owner is not your spouse, all co-owners
must sign the signature page.
Name of PURCHASER Representative, if any:
___________________________________
Address:
___________________________________
___________________________________
Telephone:
___________________________________
FULL NAME AND ADDRESS OF PURCHASER FOR REGISTRATION PURPOSES:
NAME:
_______________________________________________________________
ADDRESS:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
TEL. NO.
_______________________________________________________________
FAX. NO.
_______________________________________________________________
CONTACT NAME:
_______________________________________________________________
DELIVERY INSTRUCTIONS (IF DIFFERENT FROM REGISTRATION NAME):
NAME:
_______________________________________________________________
ADDRESS:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
TEL. NO.
_______________________________________________________________
FAX. NO.
_______________________________________________________________
CONTACT NAME:
_______________________________________________________________
SPECIAL
INSTRUCTIONS:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
Exhibit 99
ADVANCED MAMMOGRAPHY SYSTEMS, INC. ANNOUNCED IT HAS ISSUED
$3 MILLION IN CONVERTIBLE DEBENTURES IN A PRIVATE PLACEMENT;
IT WILL REMAIN AN INDEPENDENT PUBLIC COMPANY
Wilmington, MA, May 16, 1996 --- Advanced Mammography
Systems, Inc. (NASDAQ: MAMO) announced it has completed a private
placement of $3,000,000 principal amount of 4% Convertible
Debentures due December 1, 1998. The placement was exempt from
the registration requirements of the Securities Act of 1933, as
amended, pursuant to Regulation S promulgated thereunder. The
securities issued by the Company in the placement were not
registered or exempted from registration requirements.
Advanced Mammography also announced its Board of
Directors, given the completion of the financing, has terminated
a previously-announced Agreement and Plan of Merger with Advanced
NMR Systems, Inc.
The net proceeds of the financing will be used to
accelerate the completion of product development for the
company's dedicated MR Breast Imaging system and to fund a
worldwide product launch of the system which received FDA
clearance on February 26, 1996.
Jack Nelson, Chairman and Chief Executive Officer of
Advanced Mammography Systems and Advanced NMR Systems commented:
"This financing will enable AMS to accomplish several objectives
which, we believe, will accelerate the acceptance of our "Aurora"
system in clinical markets, including: rapid deployment of a
biopsy guidance capability and other options that will maximize
the capabilities designed into our system, collection and
dissemination of clinical data to demonstrate its efficacy and an
appropriate dedication of marketing resources to accomplish
market penetration worldwide."
This release contains forward-looking statements based
upon current expectations that include a number of business risks
and uncertainties. The factors that could cause results to
differ materially include the following: delays in product
development, lack of market acceptance of the technology and
changes in health care regulations, including reimbursement
programs.
Advanced Mammography Systems, Inc., a majority-owned
subsidiary of Advanced NMR Systems, Inc. (NASDAQ: ANMR), had
developed the only dedicated Breast Imaging system based on
magnetic resonance imaging technology. The Company received U.S.
Food and Drug Administration (FDA) clearance to begin commercial
marketing activities for the product in February 1996.
* * *
