Exhibit 10.57
WARRANT PURCHASE AGREEMENT
THIS WARRANT PURCHASE AGREEMENT (the "Agreement") is made and entered into this
21st day of October, 1997 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 2,000,000 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 an aggregate purchase price of One Million Dollars
($1,000,000), 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.
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).
"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.
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 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 any 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 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 aggregate 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 settle-ment 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.
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
after the effective date of the first registration state-ment 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
