EXECUTION
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of August 18,
1997 between ADVANCED NMR SYSTEMS, INC., a Delaware corporation
(the "Company"), and GENERAL ELECTRIC COMPANY, a New York
corporation (the "Stockholder").
Terms not otherwise defined herein have the meanings
stated in the Purchase Agreement (as defined below).
RECITALS
A. The Company and the Stockholder have executed and
delivered the Purchase Agreement dated as of August 18, 1997 (the
"Purchase Agreement"), pursuant to which, among other things, on
the date hereof the Stockholder is purchasing the Preferred
Shares from the Company and hereafter may, upon the conversion of
the Preferred Shares, acquire the Preferred Conversion Shares.
B. The Company and the Stockholder desire to enter
into this Agreement to provide for the registration under the
Securities Act of the disposition of the Preferred Conversion
Shares and certain other matters. The Preferred Conversion
Shares are referred to as the "Registerable Shares".
C. Pursuant to the Purchase Agreement, on the date
hereof the Company and the Purchaser are entering into a
Stockholders Agreement to provide for certain restrictions on the
ownership, voting and disposition of the Preferred Shares and the
Preferred Conversion Shares by the Stockholder and certain other
matters.
AGREEMENT
The parties agree as follows:
SECTION 1. REGISTRATION RIGHTS.
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(a) From and after the first date on which shares
of Common Stock may be acquired by the Purchaser upon the
conversion of any Preferred Share (the "Commencement Date") and
to and including the date that is the tenth anniversary of the
date hereof, subject to extension pursuant to Section 1(f), on
one or more occasions when the Company shall have received the
written request of the Stockholder, any pledgee of Preferred
Conversion Shares from the Stockholder or holders of at least
100,000 Preferred Conversion Shares in the aggregate (as such
number of shares may be adjusted in the event of any change in
the Registerable Shares by reason of stock dividends, split-ups,
reverse split-ups, mergers, recapitalizations, subdivisions,
conversions, exchanges of shares or the like) that shall have
been acquired directly or indirectly from the Stockholder and to
which rights under this Section 1(a) shall have been assigned
pursuant to Section 11(a), in each case in a transaction or
series of transactions not constituting a Rule 144 Transaction
(as defined in Section 1(h)) (each such person, when requesting
registration under this Section 1(a) and thereafter in connection
with any such registration, being hereinafter referred to as a
"Registering Stockholder"), as expeditiously as practicable the
Company shall include the Preferred Conversion Shares specified
by the Registering Stockholder in a Registration Statement (as
defined in Section 1(h)). If the requested registration pursuant
to this Section 1(a) shall involve an underwritten offering, the
Registering Stockholder initiating a request for registration of
Preferred Conversion Shares pursuant to this Section 1(a) shall
select (with the consent of the Company, not to be unreasonably
withheld) the managing underwriter in connection with the
offering and any additional investment bankers and managers to be
used in connection with the offering. Notwithstanding anything
to the contrary in the foregoing:
(1) the Company shall not be required to prepare and
file pursuant to this Section 1(a) more than one
Registration Statement; provided that a Registration
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Statement shall be deemed not to have been prepared and
filed if the same does not become effective;
(2) the Company shall not be required to prepare and
file a Registration Statement pursuant to this Section 1(a)
if the Registering Stockholder does not specify at least
300,000 (or, if less, all outstanding) Preferred Conversion
Shares to be included in such Registration Statement; and
(3) if a requested registration pursuant to this
Section 1(a) shall involve an underwritten offering, and if
the managing underwriter shall advise in writing the Company
and the Registering Stockholders that, in its opinion, the
number of Preferred Conversion Shares of any class proposed
to be included in the registration (including securities of
the Company which are proposed to be offered by persons
other than Registering Stockholders) exceeds the number
which would have an adverse effect on the offering,
including the price at which the Preferred Conversion Shares
can be sold, the Company will include in the registration
the maximum number of securities which it is so advised can
be sold without the adverse effect, allocated as follows:
(A) first, all Preferred Conversion Shares owned
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by Registering Stockholders and requested to be included in such
registration (if necessary, allocated pro rata among all
Registering Stockholders on the basis of the relative number of
Preferred Conversion Shares each such Registering Stockholder has
requested to be included in the registration); and
(B) second, any other securities proposed to be
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included in the registration.
(b) From and after the Commencement Date, if the
Company shall determine to register or qualify by a registration
statement filed under the Securities Act and under any applicable
state securities laws, any offering of any Equity Securities of
the Company, whether pursuant to Section 1(a) or otherwise, the
Company shall give notice of such determination to each potential
Registering Stockholder and each other person having rights with
respect to the registration under the Securities Act of the
disposition of securities of the Company (each such potential
Registering Stockholder and each such other person, being
hereinafter referred to as a "Transaction Registering
Stockholder") about which the Company has knowledge; it being
understood that without prior notice to the Company, the Company
shall not be deemed to have knowledge of the existence of any
pledgee of Preferred Conversion Shares. The Company shall, as
expeditiously as possible and in good faith, include in the
registration statement such Preferred Conversion Shares (the
"Transaction Preferred Conversion Shares"), as those persons
shall specify by notice received by the Company not later than 30
days after the giving of the notice by the Company (each person
so notifying the Company being hereinafter referred to as a
"Piggy-Back Stockholder"). Notwithstanding anything in the
foregoing to the contrary,
(1) the Company shall not be required to include any
shares owned by Piggy-Back Stockholders in a registration
statement on Form S-4 or S-8 (or any successor form) or a
registration statement filed in connection with an exchange
offer or other offering of securities solely to the then
existing shareholders of the Company; and
(2) if a registration pursuant to this Section 1(b)
involves an underwritten offering, the Company shall select
the managing underwriter for the offering and any additional
investment bankers and managers to be used in connection
with the offering, and if the managing underwriter advises
the Company in writing that, in its opinion, the number of
securities requested to be included in the registration is
so great as would adversely affect the offering, including
the price at which the Preferred Conversion Shares can be
sold, the Company will include in the registration the
maximum number of securities which it is so advised can be
sold without the adverse effect, allocated as follows:
(A) first, all securities proposed to be
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registered by the Company for its own account;
(B) second, all securities proposed to be
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registered by the Company pursuant to the exercise by any person
other than a Registering Stockholder of a right to request the
registration of securities of Common Stock in accordance with an
agreement substantially similar to the provisions of Section 1(a)
and effective prior to the date of this Agreement;
(C) third, all Transaction Preferred Conversion
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Shares requested to be included in the registration under Section
1(b) of this Agreement (if necessary, allocated pro rata among
all requesting Transaction Registering Stockholders, on the basis
of the relative number of Transaction Preferred Conversion
Shares, each Transaction Registering Stockholder has requested to
be included in the registration); and
(D) fourth, any other securities proposed to be
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registered by the Company other than for its own account,
including, without limitation, securities proposed to be
registered by the Company pursuant to the exercise by any person
other than a Registering Stockholder of any right in accordance
with an agreement substantially similar to this Section 1(b);
provided, however, that in no event will the number of Preferred
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Conversion Shares included in the Registration pursuant to this
Section 1(b)(2) be reduced to less than 10% of the aggregate
number of securities included in the registration and provided,
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further that the reductions specified under this Section
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1(b)(2)(A)-(D) shall not apply in the case of a registration
requested under Section 1(a).
(c) The Company shall make available for
inspection by each Registering Stockholder, each underwriter
participating in any disposition pursuant to such registration
and their respective representatives all financial and other
records, pertinent corporate documents and properties of the
Company as shall be reasonably necessary to enable them to
exercise their due diligence responsibility in connection with
each registration of Registered Shares of the Registering
Stockholder pursuant to this Section 1, and shall cause the
Company's officers, directors and employees to supply all
information reasonably requested by any such person in connection
with such registration; provided that records and documents which
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the Company determines, in good faith, after consultation with
counsel for the Company and counsel for the Registering
Stockholder or underwriter, as the case may be, to be confidential
and which it notifies such persons are confidential shall not be
disclosed to them unless (1) the disclosure of such records or
documents is necessary to avoid or correct a misstatement
or omission in the Registration Statement or (2) the release of
such records or documents is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction. Each
Registering Stockholder shall, upon learning that disclosure
of any such records is sought in a court of competent
jurisdiction, give notice to the Company, and allow the Company,
at the Company's expense, to undertake appropriate action and to
prevent disclosure of any such records or documents deemed
confidential.
(d) At the request of one or more of the
Registering Stockholders or the Company in connection with any
registration pursuant to this Section 1, the Company and the
requesting Registering Stockholders shall enter into an
appropriate underwriting agreement with respect to the Preferred
Conversion Shares of the Registering Stockholders containing
terms and provisions customary in agreements of that nature,
including provisions with respect to expenses substantially the
same as those set forth in Section 2 and provisions with respect
to indemnification and contribution substantially the same as
those set forth in Section 3.
(e) Notwithstanding anything herein to the
contrary, the Company shall not be required to include in any
registration pursuant to this Section 1 any Preferred Conversion
Shares owned by a Registering Stockholder (1) if the Company
shall deliver to the Registering Stockholder an opinion,
satisfactory in form, scope and substance to the Registering
Stockholder and addressed to the Registering Stockholder by legal
counsel satisfactory to the Registering Stockholder, to the
effect that the distribution of Preferred Conversion Shares
proposed by the Registering Stockholder is exempt from
registration under the Securities Act and all applicable state
securities laws (including, if the proposed method of
distribution consists of brokers transactions or sales to market
makers within the meaning of Rule 144 under the Securities Act of
1933, pursuant to all applicable provisions of Rule 144) or (2)
if such Registering Stockholder or any underwriter of Preferred
Conversion Shares shall fail to furnish to the Company the
information in respect of the distribution of the shares that may
be required under this Agreement to be furnished by the
Registering Stockholder or the underwriter to the Company.
(f) Upon written notice ("Black-out Notice") to
each Registering Stockholder, the Company may postpone effecting
a registration pursuant to this Section 1 on one occasion during
any period of nine consecutive months, may require other holders
of shares registered pursuant to this Section 1 to refrain from
disposing of the shares under the registration or may require
Transaction Registering Stockholders to refrain from otherwise
disposing of any shares of Equity Securities of the Company owned
by them (whether pursuant to Rule 144 under the Securities Act or
otherwise), in each case for a reasonable time specified in the
notice but not exceeding 90 days in the aggregate in any six
month period (or, if the Effective Period (as defined in Section
1(g)(3)) is nine months, 90 days in the aggregate in any nine
month period) (which period may be renewed on no more than two
(2) occasions), if (1) an investment banking firm of recognized
national standing shall advise the Company and the Registering
Stockholders in writing that effecting the registration or
disposition would materially and adversely affect an offering of
Equity Securities of the Company the preparation of which had
then been commenced or (2) the Company is in possession of
material non-public information the disclosure of which during
the period specified in such notice the Company believes would
not be in the best interests of the Company. The period during
which the rights granted under Section 1(a) may be exercised by a
Registering Stockholder shall be extended by one day beyond the
tenth anniversary of the date hereof for each day that pursuant
to this Section 1(f), the Company postpones effecting a
registration, requires the Registering Stockholder to refrain
from disposing of Preferred Conversion Shares under a
registration or otherwise requires the Registering Stockholder to
refrain from disposing of shares of Equity Securities of the
Company pursuant to this Section 1(f).
(g) In the event the registration of Preferred
Conversion Shares shall be required by this Section 1:
(1) Each Registering Stockholder shall furnish, and
shall cause each underwriter of the Preferred Conversion
Shares of the Registering Stockholder to be distributed
pursuant to the registration to furnish, to the Company in
writing promptly upon the request of the Company the
additional information regarding the Registering Stockholder
or the underwriter, the contemplated distribution of the
Preferred Conversion Shares and the other information
regarding the proposed distribution by the Registering
Stockholder and the underwriter that shall be required in
connection with the proposed distribution by the applicable
securities laws of the United States of America and the
states thereof in which the Preferred Conversion Shares are
contemplated to be distributed. The information furnished
by any Registering Stockholder or any underwriter shall be
certified by the Registering Stockholder or the underwriter,
as the case may be, and shall be stated to be specifically
for use in connection with the registration.
(2) The Company shall prepare and file with the
Securities and Exchange Commission the Registration
Statement, including the Prospectus (as defined in
Section 1(h)), under the Securities Act and as required
under any applicable state securities laws, on the form that
is then required or available for use by the Company to
permit each Registering Stockholder, upon the effective date
of the Registration Statement, to use the Prospectus in
connection with the contemplated distribution by the
Registering Stockholder of the Preferred Conversion Shares
so registered. A registration pursuant to Section 1 shall
be effected pursuant to Rule 415 (or any similar provision
then in force) under the Securities Act if the manner of
distribution contemplated by the Registering Stockholder
shall include an offering on a delayed or continuous basis.
If any Registration Statement refers to any Registering
Stockholder by name or otherwise as the holder of any
securities of the Company, then the Registering Stockholder
shall have the right to require, in the event that such
reference to the Registering Stockholder by name or
otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the
reference to the Registering Stockholder. The Company shall
deliver to each Registering Stockholder, without charge, one
executed copy of the Registration Statement and each
amendment or post-effective amendment thereof and one copy
of each document incorporated therein by reference. If the
registration shall have been initiated solely by the Company
or shall not have been initiated by the Registering
Stockholder, the Company shall not be obligated to prosecute
the registration, and may withdraw the Registration
Statement at any time prior to the effectiveness thereof, if
the Company shall determine in good faith not to proceed
with the offering of securities included in the Registration
Statement. In all other cases, the Company shall use its
best efforts to cause the Registration Statement to become
effective and, as soon as practicable after the
effectiveness thereof, shall deliver to each Registering
Stockholder evidence of the effectiveness and a reasonable
supply of copies of the Prospectus. In addition, if
necessary for resale by the Registering Stockholders, the
Company shall qualify or register in such states as may be
reasonably requested by each Registering Stockholder the
Preferred Conversion Shares of the Registering Stockholder
that shall have been included in the Registration Statement;
provided that the Company shall not be obligated to file any
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general consent to service of process or to qualify as a
foreign corporation in any state in which it is not subject
to process or qualified as of the date of the request.
(3) The Company shall use its best efforts to cause
the Registration Statement and the Prospectus to remain
effective or current, as the case may be, including the
filing of necessary amendments, post-effective amendments
and supplements, and shall furnish copies of such
amendments, post-effective amendments and supplements to the
Registering Stockholders, so as to permit distributions by
the Registering Stockholders during the respective
contemplated periods of distribution (the "Effective
Period"), but in no event longer than six consecutive months
from the effective date of the Registration Statement;
provided that the period shall be increased by the number of
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days that any Registering Stockholder shall have been
required by Section 1(f) to refrain from disposing of the
Preferred Conversion Shares owned by the Registering
Stockholder in the distribution; and provided further that
the period shall be increased by ninety
(90) days in the event more than one Black-out Notice is given to
the Registering Stockholders. During such respective
contemplated periods of distribution, the Company shall comply
with the provisions of the Securities Act applicable to it with
respect to the disposition of all Preferred Conversion Shares
that shall have been included in the Registration Statement in
accordance with the intended methods of disposition by the
Registering Stockholders set forth in the Registration Statement,
the Prospectus or the supplement, as the case may be. The
Company shall not be deemed to have used its best efforts to
cause the Registration Statement to remain effective during the
applicable period if it voluntarily takes any action (other than
an action required under applicable law) that would result in the
Registering Stockholders not being able to dispose of the
Preferred Conversion Shares during that period in accordance with
the intended methods of disposition. The Company shall notify
each Registering Stockholder, at any time when a prospectus with
respect to the Preferred Conversion Shares is required to be
delivered under the Securities Act, when the Company becomes
aware of the happening of any event as a result of which the
Prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein (in the case of the Prospectus or any
preliminary prospectus, in light of the circumstances under which
they were made) not misleading and, as promptly as practicable
thereafter, prepare and file with the Securities and Exchange
Commission an amendment or supplement to the Registration
Statement or the Prospectus so that, as thereafter delivered to
the purchasers of such Preferred Conversion Shares, such
Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The Company shall make every
reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the
earliest possible moment. Notwithstanding anything in the
foregoing to the contrary, the Company may at any time upon
notice to each Registering Stockholder terminate the
effectiveness of the Registration Statement or upon notice to any
Registering Stockholder withdraw from the Registration Statement
the Preferred Conversion Shares of the Registering Stockholder
if, in the opinion of counsel for the Company, there shall have
arisen any legal impediment to the offer of the Preferred
Conversion Shares made by the Prospectus or if any legal action
or administrative proceeding shall have been instituted or
threatened or any other claim shall have been made relating to
the offer made by the Prospectus or against any of the parties
involved in the offer; provided that, promptly after
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those matters shall be resolved to the satisfaction of
counsel for the Company, pursuant to this Section 1 the
Company shall cause the registration of Preferred Conversion
Shares formerly covered by the Registration Statement that
were removed from registration by the action of the Company.
(4) If requested by any Registering Stockholder or an
underwriter, the Company shall as promptly as practicable
prepare and file with the Securities and Exchange Commission
an amendment or supplement to the Registration Statement or
the Prospectus containing such information as the
Registering Stockholder or the underwriter requests to be
included therein, including, without limitation, information
with respect to the Preferred Conversion Shares being sold
by the Registering Stockholder to the underwriter, the
purchase price being paid therefor by such underwriter and
other terms of the underwritten offering of the Preferred
Conversion Shares to be sold in such offering.
(5) Each Registering Stockholder shall report to the
Company distributions made by the Registering Stockholder of
Preferred Conversion Shares pursuant to the Prospectus and,
upon written notice by the Company that an event has
occurred as a result of which an amendment or supplement to
the Registration Statement or the Prospectus is required,
the Registering Stockholder shall cease further
distributions pursuant to the Prospectus until notified by
the Company of the effectiveness of the amendment or
supplement. Each Registering Stockholder shall distribute
Preferred Conversion Shares only in accordance with the
manner of distribution contemplated by the Prospectus with
respect to the Preferred Conversion Shares. Each
Registering Stockholder, by participating in a registration
pursuant to this Section 1, acknowledges that the remedies
of the Company at law for failure by the Registering
Stockholder to comply with the undertaking contained in this
Section 1(g) would be inadequate and that the failure would
not be adequately compensable in damages and would cause
irreparable harm to the Company, and therefore agrees that
undertakings made by the Registering Stockholder in this
Section 1(g) may be specifically enforced.
(6) The Company shall deliver to the Registering
Stockholders, their counsel and the underwriters, if any, of
Preferred Conversion Shares owned by Registering
Stockholders to be distributed pursuant to such
registration, the certificates, opinions of counsel and
comfort letters that are customarily delivered in connection
with underwritten public offerings.
(7) The Company shall cooperate with each Registering
Stockholder and each underwriter to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legends) representing Preferred Conversion
Shares to be sold under the Registration Statement, and
enable such Preferred Conversion Shares to be in such
denominations and registered in such names as the
Registering Stockholder or the underwriter may request.
(8) The Company shall use its best efforts to comply
with all applicable rules and regulations of the Securities
and Exchange Commission, and make available to its
securityholders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with
the first calendar month after the effective date of the
Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities
Act.
(9) The Company shall take all action required to
cause the Preferred Conversion Shares to be listed on each
national securities exchange on which the Common Stock shall
then be listed, if any, and to be qualified for inclusion in
the National/National Market System or the NASDAQ/SmallCap
Market, as the case may be, if the Common Stock is then so
qualified.
(h) For the purposes of this Section 1, the
following terms shall have the following meanings:
(1) "Registration Statement" means a registration
statement filed by the Company in accordance with Section
1(g)(2), including exhibits and financial statements
thereto, in the form in which it shall become effective and,
in the event of any amendment thereto after the effective
date of the registration statement, also means (from and
after the effectiveness of the amendment) the registration
statement as so amended;
(2) "Rule 144 Transaction" means a transaction
involving the sale of Preferred Conversion Shares to a
person other than an affiliate of the Company under
circumstances in which all of the applicable conditions of
Rule 144 or Rule 144A (or any similar provisions then in
force) under the Securities Act are satisfied; and
(3) "Prospectus" means the prospectus relating to the
Preferred Conversion Shares owned by the Registering
Stockholders included in a Registration Statement and, in
the event of any amendment or supplement to the prospectus
after the effective date of the Registration Statement, also
means (from and after the effectiveness of the amendment or
the filing with the Securities and Exchange Commission of
the supplement) the prospectus as so amended or supplemented
and, if a prospectus relating to the Preferred Conversion
Shares shall be filed with the Securities and Exchange
Commission pursuant to Rule 424 under the Securities Act,
such prospectus.
SECTION 2. EXPENSES.
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(a) The Company shall bear all expenses of the
following in connection with the registration of Preferred
Conversion Shares pursuant to Section 1, whether or not any
related Registration Statement shall become effective:
(1) preparing, printing and filing each Registration
Statement, Preliminary Prospectus, and Supplement thereto
Prospectus and each qualification or notice required to be
filed under federal and state securities laws or the rules
and regulations of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with a registration
pursuant to Section 1;
(2) all fees and expenses of complying with federal
and state securities laws and the rules and regulations of
the NASD;
(3) furnishing to each Registering Stockholder one
executed copy of the related Registration Statement and the
number of copies of the related Prospectus that may be
required by Sections 1(g)(2) and 1(g)(3) to be so furnished,
together with a like number of copies of each amendment,
post-effective amendment or supplement;
(4) performing its obligations under Section 1(g)(6);
(5) printing and issuing share certificates, including
the transfer agent's fees, in connection with each
distribution so registered; and
(6) preparing audited financial statements required by
the Securities Act and the rules and regulations thereunder
to be included in the Registration Statement and preparing
audited financial statements for use in connection with the
registration other than audited financial statements
required by the Securities Act and the rules and regulations
thereunder;
(7) internal expenses of the Company (including,
without limitation, all salaries and expenses of its
officers and employees performing legal or accounting
duties);
(8) premiums or other expenses relating to liability
insurance required by the Company or underwriters of the
Registering Stockholders;
(9) fees and disbursements of underwriters of the
Registering Stockholders customarily paid by issuers or
sellers of securities;
(10) listing of the Preferred Conversion Shares on
national securities exchanges and inclusion of the Preferred
Conversion Shares on the NASDAQ/National Market System or
the NASDAQ/SmallCap Market, as the case may be; and
(11) fees and expenses of any special experts retained
by the Company in connection with the registration.
(b) The Registering Stockholders shall bear all
other expenses incident to the distribution by the respective
Registering Stockholders of their Preferred Conversion Shares in
connection with a registration pursuant to Section 1, including
without limitation the selling expenses of the Registering
Stockholders, commissions, underwriting discounts, insurance,
fees of counsel for the Registering Stockholders and their
underwriters.
SECTION 3. INDEMNIFICATION
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(a) The Company shall indemnify and hold harmless
each Registering Stockholder participating in a registration
pursuant to Section 1, each underwriter of any of the Preferred
Conversion Shares owned by the Registering Stockholder to be
distributed pursuant to the registration, each partner in each
Registering Stockholder, the officers and directors of the
Registering Stockholder and the underwriter and each person, if
any, who controls the Registering Stockholder, each partner in
each Registering Stockholder or the underwriter within the
meaning of Section 15 (or any successor provision) of the
Securities Act, and their respective successors, against all
claims, losses, damages and liabilities to third parties (or
actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in the Registration Statement or the Prospectus or
other document incident thereto or any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and shall reimburse each such Registering Stockholder
and each other person indemnified pursuant to this Section 3(a)
for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss,
damage, liability or action; provided that the Company shall not
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be liable in any case to the extent that any such claim,
claim, loss, damage or liability arises out of or is based on any
untrue statement or omission based upon written information
furnished to the Company by any Registering Stockholder or
underwriter for a Registered Stockholder specifically for use in
the Registration Statement or the Prospectus.
(b) Each Registering Stockholder, by
participating in a registration pursuant to Section 1, thereby
agrees to indemnify and to hold harmless the Company and its
officers and directors and each person, if any, who controls any
of them within the meaning of Section 15 (or any successor
provision) of the Securities Act, and their respective
successors, against all claims, losses, damages and liabilities
to third parties (or actions in respect thereof) arising out of
or based upon any untrue statement (or alleged untrue statement)
of a material fact contained in the Registration Statement or the
Prospectus or other document incident thereto or any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and shall reimburse the Company and each other person
indemnified pursuant to this Section 3(b) for any legal and any
other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage,
liability or action; provided that this Section 3(b) shall apply
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only if (and only to the extent that) the statement or omission
was made in reliance upon and in conformity with information
furnished to the Company in writing by the Registering Stockholder
specifically for use in the Registration Statement or the Prospectus.
(c) If any action or proceeding (including any
governmental investigation or inquiry) shall be brought, asserted
or threatened against any person indemnified under this Section
3, the indemnified person shall promptly notify the indemnifying
party in writing, and the indemnifying party shall assume the
defense of the action or proceeding, including the employment of
counsel satisfactory to the indemnified person and the payment of
all expenses. The indemnified person shall have the right to
employ separate counsel in any action or proceeding and to
participate in the defense of the action or proceeding, but the
fees and expenses of that counsel shall be at the expense of the
indemnified person unless
(1) the indemnifying party shall have agreed to pay
those fees and expenses; or
(2) the indemnifying party shall have failed to assume
the defense of the action or proceeding or shall have failed
to employ counsel reasonably satisfactory to the indemnified
person in the action or proceeding; or
(3) the named parties to the action or proceeding
(including any impleaded parties) include both the
indemnified person and the indemnifying party, and the
indemnified person shall have been advised by counsel that
there may be one or more legal defenses available to the
indemnified person that are different from or additional to
those available to the indemnifying party (in which case, if
the indemnified person notifies the indemnifying party in
writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party
shall not have the right to assume the defense of such
action or proceeding on behalf of the indemnified person; it
being understood, however, that the indemnifying party shall
not, in connection with any one action or proceeding or
separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm
of attorneys at any time for the indemnified person, which
firm shall be designated in writing by the indemnified
person).
The indemnifying party shall not be liable for any settlement of
any action or proceeding effected without its written consent,
but if settled with its written consent, or if there be a final
judgment for the plaintiff in any such action or proceeding, the
indemnifying party shall indemnify and hold harmless the
indemnified person from and against any loss or liability by
reason of the settlement or judgment.
(d) If the indemnification provided for in this
Section 3 is unavailable to an indemnified person (other than by
reason of exceptions provided in this Section 3) in respect of
losses, claims, damages, liabilities or expenses referred to in
this Section 3, then each applicable indemnifying party, in lieu
of indemnifying the indemnified person, shall contribute to the
amount paid or payable by the indemnified person as a result of
the losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified person
on the other in connection with the statements or omissions which
resulted in the losses, claims, damages, liabilities or expenses
as well as any other relevant equitable considerations. The
relative fault of the indemnifying party on the one hand and of
the indemnified person on the other shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified person and by
these persons' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this Section 3(d) were determined by pro
rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in
the immediately preceding sentence. The amount paid or payable
by a person as a result of the losses, claims, damages,
liabilities and expenses shall be deemed to include any legal or
other fees or expenses reasonably incurred by the person in
connection with investigating or defending any action or claim.
Notwithstanding in the foregoing to the contrary, no Registering
Stockholder or underwriter shall be required to contribute any
amount in excess of the amount by which (1) in the case of any
Registering Stockholder, the net proceeds received by the
Registering Stockholder the sale of Registerable Shares or (2) in
the case of an underwriter, the total price at which the
Registerable Shares purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount
of any damages that the Registering Stockholder or underwriter,
as the case may be, has otherwise been required to pay by reason
of any untrue or alleged untrue statement or omission. No person
guilty of fraudulent representation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
(e) Each Registering Stockholder participating in
a registration pursuant to Section 1 shall cause each underwriter
of any of the Preferred Conversion Shares owned by the
Registering Stockholder to be distributed pursuant to the
registration to agree in writing on terms reasonably satisfactory
to the Company to indemnify and to hold harmless the Company and
its officers and directors and each person, if any, who controls
any of them within the meaning of Section 15 (or any successors
provision) of the Securities Act, and their respective
successors, against all claims, losses, damages and liabilities
to third parties (or actions in respect thereof) arising out of
or based upon any untrue statement (or alleged untrue statement)
of a material fact contained in the Registration Statement or the
Prospectus or other document incident thereto or any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and to reimburse the Company and each other person
indemnified pursuant to the agreement for any legal or any other
expense reasonably incurred in connection with investigating or
defending any claim, loss, damage, liability or action; provided
--------
that the agreement shall apply only if (and only to the extent
that) the statement or omission was made in reliance upon and
in conformity with information furnished to the Company in
writing by the underwriter specifically for use in the Registration
Statement or the Prospectus.
SECTION 4. TRANSFER RESTRICTIONS.
---------------------
(a) The Stockholder acknowledges that the Company
issued and sold the Preferred Shares and will issue and sell the
Preferred Conversion Shares in reliance upon the exemption
afforded by Section 4(2) of the Securities Act for transactions
by an issuer not involving any public offering. The Stockholder
represents that (1) it has acquired the Preferred Shares and will
acquire the Preferred Conversion Shares for investment and
without any view toward distribution of any of the shares to any
other person, (2) it will not sell or otherwise dispose of the
Preferred Shares or Preferred Conversion Shares except in
compliance with the registration requirements or exemption
provisions under the Securities Act and (3) before any sale or
other disposition of any of the Preferred Shares or Preferred
Conversion Shares other than in a sale registered under the
Securities Act, or pursuant to Rule 144 under the Securities Act
unless the Company shall have been advised by counsel that the
sale does not meet the requirements of Rule 144 for the sale, it
will deliver to the Company an opinion of counsel, which counsel
shall be reasonably satisfactory to the Company, to the effect
that such registration is unnecessary.
(b) Except as provided to the contrary in this
Section 4, each certificate for Preferred Shares or Preferred
Conversion Shares, and any certificate issued in exchange
therefor or upon conversion, exchange or transfer thereof, shall
bear legends to the effect stated in clauses (1) and (2) below:
(1) "The shares represented by this certificate have
not been registered under the Securities Act of 1933 and may
not be offered, sold, transferred or otherwise disposed of
except in compliance with said Act."
(2) "The shares represented by this certificate are
subject to the restrictions contained in the Registration
Rights Agreement dated as of August 18, 1997, a copy of
which is on file at the office of the Secretary of the
Company."
(c) The legend stated in Section 4(b)(1) shall be
removed by delivery of one or more substitute certificates
without such legend if either (1) the related certificates are
issued in connection with a sale registered under the Securities
Act or pursuant to Rule 144 under the Securities Act or (2) the
holder thereof shall have delivered to the Company a copy of a
letter from the staff of the Securities and Exchange Commission
or an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that the legend is not
required for purposes of the Securities Act.
(d) The legend stated in Section 4(b)(2) shall be
removed by delivery of one or more substitute certificates
without such legend at such time as the related securities are no
longer subject to this Agreement.
SECTION 5. FILINGS. The Company shall make all
-------
filings with the Securities and Exchange Commission required in
order to make available to the holders of Preferred Conversion
Shares the exemption from the registration requirements provided
by Rule 144 (or any successor regulation) under the Securities
Act.
SECTION 6. MERGER, CONSOLIDATION, EXCHANGE, ETC. In
------------------------------------
the event, directly or indirectly, (1) the Company shall merge
with and into, or consolidate with, or consummate a share
exchange pursuant to Subchapter IX of the Delaware General
Corporation Law (or successor provisions or statutes) with, any
other person, or (2) any person shall merge with and into, or
consolidate, the Company and the Company shall be the surviving
corporation of such merger or consolidation and, in connection
with such merger or consolidation, all or part of the Preferred
Conversion Shares shall be changed into or exchanged for stock or
other securities of any other person, then, in each such case,
proper provision shall be made so that such other person shall be
bound by the provisions of this Agreement and the term "Company"
shall thereafter be deemed to refer to such other person.
SECTION 7. NOTICES. All notices, requests and other
-------
communications to any party under this Agreement shall be in
writing. Communications may be made by telecopy or similar
writing. Each communication shall be given to the party at its
address stated on the signature pages of this Agreement or at any
other address as the party may specify for this purpose by notice
to the other party. Each communication shall be effective (1) if
given by telecopy, when the telecopy is transmitted to the proper
address and the receipt of the transmission is confirmed, (2) if
given by mail, 72 hours after the communication is deposited in
the mails properly addressed with first class postage prepaid or
(3) if given by any other means, when delivered to the proper
address and a written acknowledgement of delivery is received.
SECTION 8. NO WAIVERS; REMEDIES. No failure or delay
--------------------
by any party in exercising any right, power or privilege under
this Agreement shall operate as a waiver of the right, power or
privilege. A single or partial exercise of any right, power or
privilege shall not preclude any other or further exercise of the
right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies provided in this
Agreement shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9. AMENDMENTS, ETC. No amendment,
---------------
modification, termination or waiver of any provision of this
Agreement, and no consent to any departure by a party to this
Agreement from any provision of this Agreement, shall be
effective unless it shall be in writing and signed and delivered
by the other party to this Agreement, and then it shall be
effective only in the specific instance and for the specific
purpose for which it is given.
SECTION 10. SUCCESSORS AND ASSIGNS.
----------------------
(a) The Stockholder may assign to any transferee
of Preferred Shares, or Preferred Conversion Shares its rights
and delegate its obligations under this Agreement; provided that
such transferee assignee shall accept those rights and assume
those obligations for the benefit of the Company in writing in
form reasonably satisfactory to the Company. Thereafter, without
any further action by any person, all references in this
Agreement to the "Stockholder", and all comparable references,
shall be deemed to be references to the transferee, and the
Stockholder shall be released from any obligation or liability
under this Agreement with respect to the Preferred Shares, or
Preferred Conversion Shares so transferred.
(b) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and permitted assigns
pursuant to Section 10(a).
SECTION 11. GOVERNING LAW. This Agreement shall be
-------------
governed by and construed in accordance with the internal laws of
the State of New York.
SECTION 12. COUNTERPARTS; EFFECTIVENESS. This
---------------------------
Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if all
signatures were on the same instrument.
SECTION 13. SEVERABILITY OF PROVISIONS. Any provision
--------------------------
of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to
the extent of the prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of the provision in any
other jurisdiction.
Section 14. Headings and References. Section headings
-----------------------
in this Agreement are included for the convenience of reference
only and do not constitute a part of this Agreement for any other
purpose. References to parties and sections in this Agreement
are references to the parties to or the sections of this
Agreement, as the case may be, unless the context shall require
otherwise.
SECTION 15. ENTIRE AGREEMENT. Except as otherwise
----------------
specifically provided in the Purchase Agreement, the Transaction
Documents embody the entire agreement and understanding of the
respective parties and supersede all prior agreements or
understandings with respect to the subject matters of those
documents.
SECTION 16. SURVIVAL. Except as otherwise
--------
specifically provided in this Agreement, each representation,
warranty or covenant of each party to this Agreement contained in
or made pursuant to this Agreement shall survive the Closing and
remain in full force and effect, notwithstanding any
investigation or notice to the contrary or any waiver by any
other party of a related condition precedent to the performance
by the other party of an obligation under this Agreement.
SECTION 17. DISPUTE RESOLUTION (a) General
------------------ -------
Provisions. (i) Any dispute, controversy or claim arising out of
----------
or relating to this Agreement or any related agreement or the
validity, interpretation, breach or termination thereof (a
"Dispute"), including claims seeking redress or asserting rights
under applicable law, shall be resolved in accordance with the
procedures set forth herein. Until completion of such
procedures, no party may take any action not contemplated herein
to force a resolution of the Dispute by any judicial, arbitral or
similar process, except to the limited extent necessary to (A)
avoid expiration of a claim that might eventually be permitted
hereby or (B) obtain interim relief, including injunctive relief,
to preserve the status quo or prevent irreparable harm.
(ii) All communications between the parties or their
representatives in connection with the attempted resolution
of any Dispute shall be deemed to have been delivered in
furtherance of a Dispute settlement and shall be exempt from
discovery and production, and shall not be admissible in
evidence (whether as an admission or otherwise), in any
arbitral or other proceeding for the resolution of the
Dispute.
(iii) In connection with any Dispute, the parties
expressly waive and forego any right to trial by jury.
(b) Consideration by Senior Executives. If a Dispute
----------------------------------
cannot be resolved at an operational level, either party may, by
notice to the other, request referral to the President and CEO of
the General Electric Medical Services Division and the
[President] of the Company (or comparable officers of any
permitted successor or assignee) for their consideration. Such
request shall be accompanied by a written statement of the
Dispute and of each party's position. Within 30 days after the
request, the other party will either concur in such statement or
prepare its own, and such statement(s) will be delivered to the
officers named above. Such officers will meet in person or by
telephone within 30 days thereafter to seek a resolution. If no
resolution is reached by the expiration of 60 days from the
referral request, then either party may submit the Dispute to
resolution as further provided herein by notice to the other
party.
(c) Mediation. After completion of any prior
---------
procedures required hereby, either party may submit the Dispute
for resolution by mediation pursuant to the Center for Public
Resources Model Procedure for Mediation of Business Disputes as
then in effect. Mediation will continue for at least 60 days
unless the mediator chooses to withdraw sooner. At the request
of either party at commencement of the mediation, the mediator
will be asked to provide an evaluation of the Dispute and the
parties' relative positions.
(d) Arbitration. (i) After completion of any prior
-----------
procedures required hereby, either party may submit the Dispute
for resolution by arbitration pursuant to the Rules of the Center
for Public Resources ("CPR") for Non-Administered Arbitration of
Business Disputes as in effect at the time of the arbitration.
The parties consent to a single, consolidated arbitration for all
Disputes for which arbitration is permitted.
(ii) The neutral organization for purposes of the CPR
rules will be the CPR. The arbitral tribunal shall be
composed of one arbitrator selected by agreement of the
parties or, in the absence of such agreement within 60 days
after either party first proposes an arbitrator, by the CPR.
The arbitration shall be conducted in New York. Each party
shall be permitted to present its case, witnesses and
evidence, if any, in the presence of the other party. A
written transcript of the proceedings shall be made and
furnished to the parties. The arbitrators shall determine
the Dispute in accordance with the law of the State of New
York, without giving effect to any conflict of law rules or
other rules that might render such law inapplicable or
unavailable, and shall apply this Agreement according to its
terms.
(iii) The parties agree to be bound by any award or
order resulting from any arbitration conducted hereunder and
further agree that:
(1) any monetary award shall include pre-award interest,
to the extent appropriate, and shall be made and
payable in U.S. dollars through a bank selected by
the recipient of such award, free of any withholding
tax or other deduction, together with interest
thereon at the prime rate in effect at such bank on
the date of the award, from the date the award is
granted to the date it is paid in full.
(2) in the context of an attempt by either party to
enforce an arbitral award or order, any defenses
relating to the parties' capacity or the validity of
this Agreement or any related agreement under any law
are hereby waived; and
(3) judgement on any award or order resulting from an
arbitration conducted under this Section may be
entered and enforced in any court, in any country,
having jurisdiction thereof or having jurisdiction
over any of the parties or any of their assets.
(iv) Except as expressly permitted by this
Agreement, no party will commence or voluntarily participate
in any court action or proceeding concerning a Dispute,
except (A) for enforcement as contemplated by paragraph
(iii)(3) above, (B) to restrict or vacate an arbitral
decision based on the grounds specified under applicable law
and not waived in paragraph (iii)(2) above, or (C) for
interim relief as provided in paragraph (e) below. For
purposes of the foregoing or enforcement of any undisputed
obligation, the parties hereto submit to the non-exclusive
jurisdiction of the courts of the State of New York.
(v) In addition to the authority otherwise conferred
on the arbitral tribunal, the tribunal shall have the
authority to make such orders for interim relief, including
injunctive relief, as it may deem just and equitable. If
the tribunal shall not have been appointed, either party may
seek interim relief from a court having jurisdiction if the
award to which the applicant may be entitled may be rendered
ineffectual without such interim relief. Upon appointment
of the tribunal following any grant of interim relief by a
court, the tribunal may affirm or disaffirm such relief, and
the parties will seek modification or rescission of the
court action as necessary to accord with the tribunal's
decision.
(vi) The prevailing party in any arbitration
conducted under this Section shall be entitled to recover
from the other party (as part of the arbitral award or
order) its reasonable attorneys' fees and other costs of
arbitration.
SECTION 18. AFFILIATE. Nothing contained in this
---------
Agreement shall constitute the Stockholder an "affiliate" of any
of the Company and its Subsidiaries within the meaning of the
Securities Act or the Exchange Act.
____________________________
[Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed and
delivered this Registration Rights Agreement as of the date
first written above in New York, New York.
ADVANCED NMR SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: Chairman and CEO
Address: Advanced NMR Systems, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
GENERAL ELECTRIC COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: President of GE Medical
Systems
Address: General Electric Company
Medical Services Division
0000 Xxxxx Xxxxxxxxx Xxxx.
(P.O. Box 414)
Xxxxxxxx, Xxxxxxxxx 00000
Telecopy: (000) 000-0000
