EXHIBIT 4.7
WARRANT PURCHASE AGREEMENT BETWEEN
THE COMPANY AND TERARECON INC. DATED APRIL 24, 1998
THIS WARRANT PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 24th day of April, 1998 by and between IMATRON INC., a New Jersey
corporation (the "Company") and TeraRecon Inc., a Delaware corporation (the
"Investor").
R E C I T A L S:
WHEREAS, the Company desires to issue to Investor and the Investor
desires to purchase from the Company a warrant (the "Warrant") to purchase
1,000,000 shares of the Company's common stock (the "Shares") all on the terms
and conditions hereinafter provided. The Warrant and the Shares are hereafter
collectively referred to as the "Securities".
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Issuance of Warrant. For good and valuable consideration the receipt
and sufficiency of which is acknowledged by the Company, the Company agrees to
issue to Investor the Warrant, the form of which is attached hereto as Exhibit
A.
2. Investor Representations. Investor hereby represents and warrants to
the Company as follows:
(a) The Investor understands that: (a) The offer and sale of
the Securities by the Company to Investor has not been registered under the
Securities Act of 1933 (the "Securities Act"), in reliance on an exemption from
such registration available under the Securities Act and rules adopted
thereunder; (b) The Investor must hold the Warrant indefinitely unless the
Securities are subsequently registered under the Securities Act and qualified
under applicable state securities laws, or unless an exemption from such
registration and qualification is available.
(b) The Investor is acquiring the Securities for his or her
own account, for investment, and not with a view to any sale or distribution of
any interest therein.
(c) The Investor has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Securities, and the Investor is able to bear the
economic risks of such an investment.
(d) All statements made, and information furnished, by the
Investor in this certificate and all other information furnished by the Investor
to the Company, are true and complete, to the best of the Investor's knowledge.
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3. Restrictions on Transfer. The Investor agrees that:
(a) The Investor will not attempt to transfer the Securities
in violation of the restrictions set forth in this Agreement.
(b) The Company may note such restrictions on transfer in its
records and refuse to recognize any transfer which violates this agreement or
for which the Company has not received an acceptable opinion of counsel stating
that such transfer will not violate such restrictions.
(c) One or more legends indicating a lack of registration
under the Securities Act and a lack of qualification under state securities laws
will be imprinted on the Securities. One such legend shall read substantially as
follows:
THE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION THEREOF MAY BE MADE ONLY (i) IN A
REGISTRATION UNDER SAID ACT OR (ii) IF AN EXEMPTION FROM REGISTRATION UNDER SAID
ACT IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL TO THAT
EFFECT REASONABLY SATISFACTORY TO IT.
4. Binding on Successors; Indemnification. The Investor agrees that the
above representations and warranties are binding on the Investor's successors
and assigns and are made for the benefit of the Company and any other persons
who may become liable for violations of federal or state securities laws as a
result of the falsity of any of the Investor's representations or warranties.
The Investor agrees to indemnify, defend, and hold harmless such persons from
any liability arising from the falsity of any of the Investor's representations
or warranties or from the breach of any covenant of Investor contained herein.
5. Registration Rights. The Company hereby grants to Investor the
following registration rights with respect to the Shares:
(a) Definitions.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act of 1933
(the "Securities Act").
"Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, and the declaration or ordering of
the effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by
the Company in compliance with the provisions of this Section 5, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses, and
the expenses of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
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"Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Shares and all fees and
disbursements of counsel to Investor.
"Shares" means the shares of the Company's common stock
exercisable upon exercise of the Warrant and any common stock issued with
respect thereto (e.g. upon a stock split or stock dividend.
"Investor" means the person set forth above and any permitted
assignee.
(b) Company Registration.
i) Notice of Registration. If, at any time after
the date hereof, the Company shall determine to register any of its
securities either for its own account or the account of a security holder
or holders exercising their respective demand registration rights, other than
a registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales, the Company will:
a) promptly give to Investor written notice
thereof (which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
b) include in such registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Shares specified in a written request
or requests, made by Investor within fifteen (15) days after receipt of the
written notice from the Company described in this clause (i), except as set
forth in Section 5(b)(ii) below.
ii) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting: the Company shall so advise Investor as part of the written
notice given pursuant to Section 5(b) hereof. In such event, the right of
Investor to registration pursuant to this Section 5 shall be conditioned
upon Investor's participation in such underwriting and the inclusion of
Investor's Shares in the underwriting to the extent provided herein. Investor
shall (together with the Company, its directors and officers, and any other
shareholders distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 5, if the
underwriter determines that marketing factors require a limitation on the number
of shares to be underwritten, the underwriter may exclude from such registration
and underwriting some or all of the Shares which would otherwise be underwritten
pursuant hereto. Any securities so excluded shall be apportioned pro rata among
Investor and any other shareholders distributing their securities through such
underwriting according to the total amount of securities otherwise entitled to
be included therein owned by such shareholders or in such other proportions as
shall mutually be agreed upon.
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If Investor disapproves of the terms of any such underwriting, it may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Shares excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
The Company shall bear all Registration Expenses incurred in connection
with any registration, qualification and compliance by the Company pursuant to
this Section 5(b). All Selling Expenses shall be borne by the holders of the
securities so registered pro rata on the basis of the number of their shares so
registered.
iii) Registration Procedures. In the case of
registration effected by the Company pursuant to this Agreement, the Company
will keep Investor advised in writing as to the initiation of registration and
as to the completion thereof. At its expense, the Company will:
a) keep such registration effective for a period of
one year or until Investor has completed the distribution described in the
registration statement relating thereto, whichever first occurs;
b) furnish such number of prospectuses and other documents
incident thereto as Investor from time to time may reasonably request; and
c) use its best efforts to register or qualify the
Shares under the securities or blue sky laws of such jurisdictions as Investor
may request; provided, however, that the Company shall not be obligated to
register or qualify such Shares in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
order to effect such registration, qualification, or compliance, unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder.
d) Notify the holder of Shares covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Act of the happening of any event as a result of which
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(c) Request for Registration. In case the Company shall
receive from the Investor a written request that the Company effect any
registration, qualification, or compliance with respect to all or a part of the
Shares the Company will: (i) as soon as practicable, use its diligent best
efforts to effect all such registrations, qualifications and compliances
(including, without limitations, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under the applicable blue
sky or other state securities laws and appropriate compliance with exemptive
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of the Investor's
Shares as are specified in such request, together with all or such portion of
the Shares of any Holder or Holders joining in such request as are specified in
a written request given within thirty days after receipt of such written notice
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from the Company; provided that the Company shall not be obligated to take any
action to effect such registration, qualification or compliance pursuant to this
subparagraph 5(c): (A) After the Company has effected two such registrations
pursuant to this subparagraph 5(c) and such registrations have been declared or
ordered effective; or (B) If the amount of securities being offered for sale is
less than 25 percent of the Shares.
Subject to the foregoing clauses (A) through (B), the Company shall
file a registration statement covering the Shares so requested to be registered
as soon as practical, but in any event within ninety days, after receipt of the
request or requests of the Investor; provided, however, that if the Company
shall furnish to such Investor a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company and it stockholders for such
registration statement to be filed at the date filing would be required and it
is therefore essential to defer the filing of such registration statement, the
Company shall have an additional period of not more than ninety days within
which to file such registration statement.
The Investor shall bear all Registration Expenses incurred in connection
with any registration, qualification and compliance by the Company pursuant to
this Section 5(c). All Selling Expenses shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of their shares so
registered.
(d) Indemnification.
i) The Company will indemnify the Investor, each of its officers,
directors and partners, and each person controlling such Investor within the
meaning of Section 15 of the Securities Act or the 1934 Act, with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act or the 1934
Act, against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to ny such registration, qualification
or compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading, or any violation by the Company of the Securities Act, or the 1934
Act, or any rule or regulation promulgated under the Securities Act, or the 1934
Act, or under any state securities law or under common law, applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse the Investor, each of its officers, directors and
partners, and each person controlling the Investor, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred, as such expenses are incurred, in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action; provided, however, that the Company will not be liable (i) for amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld) and (ii) in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is based on any
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untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by the Investor, controlling person or
underwriter and stated to be specifically for use therein.
ii) The Investor will, if Shares held by the Investor are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act against all
claims, losses, damages and liabilities (or actions in respect thereof)arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, 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 will reimburse the Company, such
directors, officers, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by an instrument
duly executed by the Investor and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of the Investor under this
subsection shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Investor (which consent shall not be unreasonably withheld), and
(ii) shall be limited in an amount equal to the ggregate net proceeds of the
shares sold by the Investor, except to the extent such liability arises out of
or is based on willful misconduct by the Investor.
iii) Each party entitled to indemnification under this Section
5(d)(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement except to the extent that the failure to
give such notice is materially prejudicial to an Indemnifying Party's ability to
defend such action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of interest or
separate and different defenses, but shall pay the fees and expenses of one
separate counsel retained by the Indemnified Party in the event of such conflict
of interest. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
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iv) If the indemnification provided for in this Section 5(d) is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
v) The obligations of the Company and the Investor under this
Section 5(d) shall survive the completion of any offering of Shares in a
registration statement under this Section 5 and otherwise.
vi) Information by Investor. The Investor of Shares included in
any registration shall furnish to the Company such information regarding
Investor, the Shares held by it and the distribution proposed by such Investor
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
vii) Transfer of Registration Rights. The rights to cause the
Company to register securities granted Holders under Section 5 may be assigned
to a transferee or assignee in connection with any transfer or assignment of
Shares by a Holder provided that: (i) such transfer may otherwise be effected in
accordance with applicable securities laws and (ii) such assignee or transferee
becomes a party to this Agreement and assumes all of the obligations of the
transferring Holder under Section 5.
6. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Shares to the public without registration, Imatron agrees to use its
best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date that Imatron becomes subject to the reporting requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended.
(b) File with the Commission in a timely manner all reports and other
documents required of Imatron under the Securities Act and the Securities
Exchange Act of 1934, as amended (at any time after it has become subject to
such reporting requirements); and
(c) So long as Investor owns any Shares, to furnish to the Purchaser
forthwith upon request a written statement by Imatron as to its compliance with
the reporting requirements of said Rule 144 (at any time after ninety (90) days
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after the effective date of the first registration statement filed by Imatron
for an offering of its securities to the general public), and of the Securities
Act and the Securities Exchange Act of 1934 (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of Imatron
and other information in the possession of or reasonably obtainable by Imatron
as a Shareholder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Shareholder to sell any such securities
without registration.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned purchasers of securities and the
Company have executed this Agreement as of the day and year first above written.
COMPANY:
IMATRON INC.
By:
President
INVESTOR:
TERARECON INC.
By:
Its:
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