EXECUTION
SETTLEMENT AND RELEASE AGREEMENT
SETTLEMENT AND RELEASE AGREEMENT dated as of August 18,
1997 between ADVANCED NMR, INC., a Delaware corporation (the
"Company"), and GENERAL ELECTRIC COMPANY, a New York corporation
(the "Purchaser").
Terms not otherwise defined in this Agreement have the
meanings stated in the Purchase Agreement (as defined below).
RECITALS
A. The Purchaser has filed a Demand for Arbitration
dated May 15, 1997 (the "Demand for Arbitration") with the American
Arbitration Association at its office in New York, New York with
respect to disagreements concerning certain matters (collectively,
the "Disputed Matters") subject to or arising out of a development
agreement dated December 3, 1987, as amended and restated as of
November 30, 1989 (the "1989 Agreement"), Purchase Agreement (No.
800206) dated as of Xxxxx 0, 0000, Xxxxxxxx Agreement (No. 800247)
dated as of July 29, 1994, as amended as of December 5, 1995, a
letter agreement dated July 13, 1994, and a letter agreement dated
June 13, 1996, and a Master Leaseline Agreement, number 2002,
contract number 8506792-001, dated as of July 27, 1993, in each
case between the Company and the Purchaser, and amendments,
waivers, modifications, purchase orders, purchase order releases,
documents transmitted by computer access, agreements and other
documents related to the foregoing or otherwise entered into or
delivered by one or both parties in the course of the dealings
between the parties (collectively, the "ANMR/GE Agreements").
B. The Purchaser has commenced a litigation styled
General Electric Co. vs. Advanced NMR Systems, Inc., in the United
States District Court in and for the Southern District of New York,
Civ. No. 97-CIV-3560 (JSR) (the "Litigation"), to compel
arbitration with respect to the Disputed Matters.
C. The Company and the Purchaser have entered into the
Purchase Agreement dated as of August 18, 1997 (the "Purchase
Agreement") and are entering into this Agreement, the Registration
Rights Agreement and the Stockholders Agreement, each dated as of
the date hereof, and each of the Company and the Purchaser is
executing and delivering certain other instruments and documents in
connection with the conclusion of one or more of the transactions
contemplated hereby and thereby (collectively, the "Transaction
Documents").
D. The Company and the Purchaser desire to enter into
this Agreement to provide for a mutual and general release (except
with respect to the Transaction Documents), the withdrawal of the
Demand for Arbitration, the termination of the Litigation and the
termination of the ANMR/GE Agreements.
AGREEMENT
The parties agree as follows:
SECTION 1. RELEASE BY COMPANY PARTIES. Effective on
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and as of the date hereof, the Company, for itself and its
Subsidiaries (collectively, the "Company Parties"), hereby releases
and forever discharges the Purchaser and its Subsidiaries, and each
past, present or future principal, partner, stockholder, officer,
director, nominee, beneficiary, attorney-in-fact, agent, employee
or other representative of the foregoing (collectively, the
"Purchaser Released Parties") from any and all demands, damages,
debts, costs, expenses, liabilities, contracts, agreements,
obligations, accounts, defenses, suits, losses, claims (including,
without limitation, warranty claims and claims for
indemnification), actions, causes of action or claims for relief of
any kind or character whatsoever, whether now known or unknown,
suspected or unsuspected, in contract or in tort, joint or several,
at law or in equity, whether heretofore or hereafter accruing
(collectively, "Claims"), which any of the Company Parties or their
respective heirs, executors, legal representatives, administrators,
successors and assigns, ever had or now have or may in the future
have against the Purchaser Released Parties, jointly or severally,
at any time prior to and including the date hereof, for or by
reason of any matter, cause, or thing done, admitted to, or
suffered to be done by the Purchaser Released Parties, jointly or
severally, at any time prior to the date hereof, including, without
limitation, Claims with respect to any of the Disputed Matters and
the ANMR/GE Agreements (collectively, the "Purchaser Released
Claims"); provided that the Purchaser Released Claims shall not
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include Claims with respect to any of the rights of the Company
Parties and the duties and obligations of the Purchaser Released
Parties owed to the Company Parties pursuant to the Transaction
Documents. The foregoing release shall include, without limitation,
to the extent allowed by applicable law, such claims or defenses
as fraud, mistake (mutual or unilateral), duress, overreaching,
failure to disclose, interference with business management or
relationship, tortious interference with corporate or partnership
governance or prospective business advantage or contract, breach of
contract, injury to any person or entity of whatever nature, libel
or slander (without admitting or implying that any such claim exists
or has validity).
SECTION 2. RELEASE BY PURCHASER PARTIES. Effective on
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and as of the date hereof, the Purchaser, for itself and its
Subsidiaries (collectively, the "Purchaser Parties"), hereby
releases and forever discharges each of the Company Parties and
each past, present or future principal, partner, stockholder,
officer, director, nominee, beneficiary, attorney-in-fact, agent,
employee or other representative of the Company Parties
(collectively, the "Company Released Parties") from any and all
Claims which any of Purchaser Parties or their respective
affiliates, heirs, executors, legal representatives,
administrators, successors and assigns, ever had or now have or may
in the future have against the Company Released Parties, jointly or
severally, at any time prior to and including the date hereof, for
or by reason of any matter, cause, or thing done, admitted to, or
suffered to be done by the Company Parties, jointly or severally,
at any time prior to the date hereof, including, without
limitation, Claims with respect to any of the Disputed Matters and
the ANMR/GE Agreements (collectively, the "Company Released
Claims"); provided that the Released Claims shall not include Claims
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with respect to any of the rights of the Purchaser Parties and the
duties and obligations of the Company Released Parties owed to
the Purchaser Parties pursuant to the Transaction Documents. The
foregoing release shall include, without limitation, to the
extent allowed by applicable law, such claims or defenses as fraud,
mistake (mutual or unilateral), duress, overreaching, failure to
disclose, interference with business management or relationship,
tortious interference with corporate or partnership governance or
prospective business advantage or contract, breach of contract,
injury to any person or entity of whatever nature, libel or slander
(without admitting or implying that any such claim exists or has
validity).
SECTION 3. DISPUTED MATTERS; ANMR/GE AGREEMENTS.
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(a) The Purchaser is delivering to the Company a
Withdrawal of Demand for Arbitration with respect to the Demand for
Arbitration and, promptly after the execution and delivery hereof,
shall cause an original copy of the same to be duly filed with the
American Arbitration Association at its office in New York, New
York.
(b) The Purchaser is delivering to the Company a
Stipulation of Dismissal with Prejudice with respect to the
Litigation and, promptly after the execution and delivery hereof,
shall cause an original copy of the same to be duly filed with the
United States District Court in and for the Southern District of
New York.
(c) Each of the ANMR/GE Agreements is hereby cancelled
and is without further force or effect. Notwithstanding the
foregoing, the Parties agree that their respective ownership rights
in the Deliverable Technology and Product as provided in Section
1.3, 1.8, 4.1 and 4.2 of the 1989 Agreement and the inventions and
improvements described in Section 8 of Purchase Agreement (No.
800247), shall survive. Each party hereby waives the benefit of
any period or passage of time that may be provided in any ANMR/GE
Agreement or otherwise as (1) a condition to the effectiveness of
such termination or (2) a warranty period.
SECTION 4. FURTHER ASSURANCES. Promptly upon request
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by the other party or by any other express beneficiary of this
Agreement, each party shall execute, acknowledge, deliver, file,
re-file, register and re-register, any and all such further acts,
certificates, assurances and other instruments as the requesting
party may require from time to time in order to carry out more
effectively the purposes of this Agreement or to better transfer,
preserve, protect and confirm to the requesting party the benefits
intended to be granted to the requesting party under this
Agreement.
For a period from the date hereof for four years, neither
party hereto nor any of its respective affiliates or associates
shall, directly or indirectly, make or issue or cause to be made or
issued any disclosure, announcement or statement concerning the
other party hereto or its subsidiaries or affiliates, or any of its
respective stockholders, directors, officers or employees which
portrays such other party or its subsidiaries or affiliates or its
respective stockholders, directors, officers or employees in an
unfavorable light with respect to the Disputed Matters.
Neither party hereto nor any of its respective
subsidiaries or affiliates shall, without the written consent of
the other party hereto or a person duly authorized thereby,
disclose to any person any information heretofore obtained by them
with respect to the other party hereto, disclosure of which it
knows or, in the exercise of reasonable case, should know may be
damaging to the other party hereto; provided, however, that such
information shall not include any information known generally to
the public (other than as a result of unauthorized disclosure by a
party hereto or any of its respective subsidiaries or affiliates);
and provided, further, that the duties of the parties hereto and
their respective subsidiaries and affiliates under this paragraph
shall not extend to any disclosure that may be required by law in
connection with any judicial or administrative proceeding or
inquiry.
SECTION 5. NOTICES. All notices, requests and other
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communications to any party or 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 6. AMENDMENTS, ETC. No amendment,
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modification, termination, or waiver of any provision of this
Agreement, and no consent to any departure by a party from any
provision of this Agreement, shall be effective unless it shall be
in writing and signed and delivered by the other party, and then it
shall be effective only in the specific instance and for the
specific purpose for which it is given.
SECTION 7. SUCCESSORS AND ASSIGNS; THIRD PARTY
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Beneficiaries. No party may assign its rights under this
Agreement. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement, the
express beneficiaries hereof (to the extent provided herein) and
their respective heirs, executors, legal representatives,
successors and permitted assigns, and no other person.
SECTION 8. GOVERNING LAW. This Agreement shall be
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governed by and construed in accordance with the internal laws of
the State of New York.
SECTION 9. COUNTERPARTS; EFFECTIVENESS. This Agreement
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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 10. SEVERABILITY OF PROVISIONS. Any provision
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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 11. HEADINGS AND REFERENCES. Section headings
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in this Agreement are included in this Agreement for the
convenience of reference only and do not constitute a part of this
Agreement for any other purpose. References to parties, express
beneficiaries and sections in this Agreement are references to the
parties to or the express beneficiaries and sections of this
Agreement, as the case may be, unless the context shall require
otherwise.
SECTION 12. ENTIRE AGREEMENT. Except as otherwise
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specifically provided in the Purchase Agreement, this Agreement
embodies the entire agreement and understanding of the parties and
supersedes all prior agreements or understandings with respect to
the subject matters of this Agreement.
SECTION 13. DISPUTE RESOLUTION (a) General Provisions.
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(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 (1) avoid expiration of a claim
that might eventually be permitted hereby or (2) 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
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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 Chairman 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
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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
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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 (v) 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.
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[Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above in New
York, New York.
ADVANCED NMR SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
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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
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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
