REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is dated as of June 29,
2001 by and between POSITRON CORPORATION, a Texas corporation ("Company") and
IMATRON INC., a New Jersey corporation ("Imatron") in connection with the
issuance of a Warrant to purchase 6,000,000 shares of the Company's Common Stock
("Warrant") and the execution of that certain Loan Agreement by and between
Company and Imatron of even date.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in the Loan Agreement, the Warrant and herein, the Company and Imatron
hereby agree as follows:
Capitalized terms used in this Agreement but not otherwise defined shall
have the respective meanings ascribed thereto in the Loan Agreement.
ARTICLE I
Registration Rights
-------------------
SECTION 1.01 Definitions. As used in this Article
(a) The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement by the Securities and Exchange Commission ("SEC");
(b) "Registration Expenses" shall mean all expenses incurred by the
Company in compliance with Sections 1.02, 1.03, 1.04 and 1.05 hereof, including,
without limitation, all registration and filing fees, printing, messenger and
delivery expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses (including, without limitation, fees and expenses of counsel
for the underwriters in connection with blue sky qualifications of the
Registrable Securities), all fees and expenses incurred in connection with the
listing of the Registrable Securities on a national securities exchange or
automated quotation system pursuant to Section 1.06(a)(x) and the expense of any
special audits and/or "cold comfort" letters incident to or required by any such
registration, liability insurance if the Company so desires or if the
underwriters so require and the reasonable fees and expenses of any special
experts retained by the Company in connection with the registration (but
excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company);
(c) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for Imatron; and
(d) "Imatron" shall mean IMATRON INC. or any Affiliate holding
Registrable Securities.
(e) "Registrable Securities" shall mean (i) shares of Common Stock
issued or issuable pursuant to the exercise of the Warrant or any portion
thereof and (ii) any Common Stock issued as a dividend or other distribution
with respect to or in exchange for and in replacement of the shares referenced
in clause (i) above, provided however that Registrable Securities shall not
include ay shares of Common Stock which have previously been registered or which
have been sold to the public either pursuant to a registration statement or Rule
144, or which have been sold in a private transaction in which the transferor's
rights under this Agreement are not assigned.
SECTION 1.02 Piggy-Back Registration.
-----------------------
(a) Right to Include Registrable Securities. If at any time and from
time to time the Company proposes to register under the Securities Act any
shares of capital stock held by shareholders of the Company, on a form and in a
manner that would permit registration of some or all of the Registrable
Securities for the sale to the public under the Act, the Company shall give
prompt written notice to the Holders of Registrable Securities of its intention
to do so. Upon the written request of any Holder of Registrable Securities given
within ten (10) days after the giving of such notice by the Company, the Company
shall use its reasonable best efforts to cause to be included in such
registration statement all of the Registrable Securities so requested for
inclusion by such Holder. If the registration statement is to cover, in whole or
in part, any underwritten distribution, the Company shall use its best efforts
to cause the Registrable Securities requested for inclusion pursuant to this
Section 1.02 to be included in the underwriting on the same terms and conditions
(including any lock-up) as the shares otherwise being sold through the
underwriters.
(b) Priority in Incidental Registrations. If, in the good faith
judgment of the lead-managing underwriter of any underwritten offering, the
inclusion of all of the Registrable Securities requested for inclusion pursuant
to this Section 1.02 would materially and adversely affect the successful
marketing of the proposed offering, then the number of shares of capital stock
and Registrable Securities, if any, to be included in such registration shall be
reduced, such reduction to be applied by excluding (on a pro rata basis) capital
stock to be sold by Persons other than the Company. Notwithstanding the
foregoing provisions, the Company may withdraw any registration statement
referred to in this Section 1.023 without incurring any liability to any holder
of Registrable Securities.
SECTION 1.03 Expenses of Registration.
------------------------
All Registration Expenses incurred in connection with any Piggy Back
Registration Statement, qualification or compliance pursuant to this Article I
shall be borne by the Company, and Selling Expenses shall be borne by the
Holders of Registrable Securities included in such registration.
SECTION 1.04 Registration Procedures.
-----------------------
(a) In the case of each registration effected by the Company pursuant
to Section 1.02, the Company will keep each Holder advised in writing as to the
initiation of each registration, and as to the completion thereof. At its
expense, the Company will use its reasonable best efforts to:
(i) Keep such registration effective for a period of at least one
hundred and eight (180) days or until the Holder has completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided however that (i) such 180-day period shall be extended for a
period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; and (ii) in the case of any
registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such 180-day period shall be extended,
if necessary, to keep the registration statement effective until all such
Registrable Securities are sold, however in no event longer than one year from
the effective date of the registration statement and provided that Rule 145, or
any successor rule under the Securities Act, permits an offering on a continuous
or delayed basis, and provided further that applicable rules under the
Securities Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment that (A) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (B) reflects
facts or events representing a material or fundamental change in the information
set forth in the registration statement, the incorporation by reference of
information required to be included in (A) and (B) above to be contained in
periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act of
1934 in the registration statement;
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
at least 180 days and to comply with the provisions of the Securities Act with
respect to the offer of the Registrable Securities covered by such Registration
Statement during the period required for distribution of the Registrable
Securities;
(iii) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the prospectus, as
Holder from time to time may reasonably request;
(iv) Register or qualify, not later than the effective date of
any filed Registration Statement, the Registrable Securities covered by such
Registration Statement under the securities or "blue sky" laws of such
jurisdictions as such holders of Registrable Securities reasonably request;
(v) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
(vi) If the Registrable Securities covered by the Registration
Statement are to be sold through one or more underwriters, make available, upon
reasonable notice and during business hours, for inspection by such underwriter
or underwriters (collectively, the "Inspectors"), all financial and other
records, pertinent corporate documents, agreements and properties of the Company
(collectively the "Records") as shall be necessary to enable the Inspectors to
conduct due diligence to their reasonable satisfaction, and cause the Company's
officers, directors and employees to supply all information reasonably requested
by any such Inspector in connection with the Registration Statement;
(vii) if the Registrable Securities covered by the Demand
Registration Statement are to be sold through one or more underwriters, obtain a
comfort letter from the Company's independent public accountants dated within
five business days prior to the effective date of the Demand Registration
Statement (and as of such other dates as the underwriter or underwriters for the
Registrable Securities may reasonably request) in customary form and covering
such matters of the type customarily covered by such comfort letters as such
underwriter or underwriters reasonably request;
(viii) During the Registration Period, notify the holders of
Registrable Securities of the happening of any event which results in the
prospectus included in the Registration Statement containing an untrue statement
of a material fact or omitting to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Company will
forthwith prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the shareholders of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and
(ix) Otherwise use reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to the holders
of the Company's Common Stock, as soon as reasonably practicable, an earnings
statement governing a period of twelve months, beginning within three months
after the effective date of the Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(b) The holders of Registrable Securities shall timely furnish to the
Company such information regarding the distribution of such Registrable
Securities as the Company may from time to time reasonably request.
(c) The holders of Registrable Securities shall agree that upon the
receipt of any notice from the Company of the happening of any event of the kind
described in paragraph (a)(vii) above, such holders will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until receipt by Imatron of the copies of
the supplemented or amended prospectus contemplated by paragraph (a)(viii)
above.
SECTION 1.05 . Indemnification.
---------------
(a) The Company will indemnify the relevant holders of Registrable
Securities, their respective officers, directors and partners, and each Person
controlling any of them, with respect to each registration which has been
effected pursuant to this Article I (a "Registration"), and each underwriter, if
any, and each Person who controls any underwriter, 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 prospectus, offering circular or other document (including any
related Registration Statement, notification or the like) 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 not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such Registration, qualification or compliance, and will
reimburse the relevant holders of Registrable Securities, their respective
officers, directors and partners, and each Person controlling any of them, each
such underwriter and each Person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the relevant
holders of Registrable Securities or any underwriter or Person controlling the
relevant holders of Registrable Securities or any underwriter to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished in
writing to the Company by the relevant holders of Registrable Securities or such
underwriter or Person controlling or the relevant holders of Registrable
Securities or such underwriter and stated to be specifically for use therein.
(b) The relevant holders of Registrable Securities, severally and not
jointly, will indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Registrable Securities covered by a Registration
Statement, each Person who controls the Company or such underwriter within the
meaning of the Securities Act and the rules and regulations thereunder, 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 made by the relevant holders of Registrable
Securities, severally and not jointly, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by the relevant holders of Registrable Securities therein not
misleading, and will reimburse the Company and its directors, officers,
partners, 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 the relevant
holders of Registrable Securities and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section 1.05
(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 any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld ) or delayed) and the Indemnified Party may participate
in such defense at such party's expense (unless (i) the employment of counsel by
such Indemnified Party has been authorized by the Indemnifying Party, or (ii)
the Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified Party in
the defense of such action, in each of which cases the fees and expenses of one
law firm serving as counsel for each Indemnified Party shall be at the expense
of the Indemnifying Party), 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 Article II unless such failure
or any delay in providing such notice results in the loss of material defenses
or rights. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party (which
consent shall not be unreasonably withheld ) or delayed), 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. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.05 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 thereunder, 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
hand, in connection with the statements or omissions which 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.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in a negotiated underwriting
agreement entered into in connection with an underwritten public offering are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall be controlling.
SECTION 1.06 Assignability of Registration Rights.
------------------------------------
The registration rights granted pursuant to this Article I shall be
assignable at the option of, in whole or in part, but in no event in increments
of less than 25% of the aggregate Registrable Securities then held by the
Holder, provided that the Company is given written notice at the time of or
within a reasonable period after said transfer or assignment, stating the name
and address of the transferee or assignee and identifying the securities with
respect to which such egistration rights are being transferred or assigned and,
provided further, that the transferee or assignee of such rights assumes in
writing the obligations of such Holder under this Section I. All references to
Holder shall include any future assignees.
SECTION 1.07 Termination of Rights.
---------------------
Notwithstanding any provisions to the contrary herein, the registration
rights set forth in this Article I shall terminate on the earlier of 12 months
from the effective date of this Agreement or such time as the holders of all
Registrable Securities hold less than 25% of the aggregate number of Shares
purchased pursuant to exercise of the Warrant during the first 12 months of the
Exercise Period.
ARTICLE II
Miscellaneous
-------------
SECTION 2.01 Notices.
-------
Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) To Company:
Positron Corporation.
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000.0000
(b) To Imatron:
Imatron Inc.
000 Xxxxxx Xxxxx Xxxx.
Xx. Xxx Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone: 000.000.0000
Facsimile: 650.871.0418
(c) if to a party other than the Company or Imatron, to such address
or telecopy number as such party may supply.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto in the manner
provided by this Section 2.01. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed
to have been given on the date of receipt.
SECTION 2.02 Waivers; Amendments.
-------------------
(a) No failure or delay by Imatron (or its successors or assigns) or
the holders of Registrable Securities in exercising any right or power hereunder
or under the other Transaction Documents shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of Imatron and the holders of
Registrable Securities hereunder and under the Transaction Documents are
cumulative and are not exclusive of any rights or remedies that it would
otherwise have. No waiver of any provision of this Agreement or any of the other
Transaction Documents or consent to any departure by the Company therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
(b) Neither this Agreement nor any of the other Transaction Documents,
nor any provision hereof or thereof, may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Company
and Imatron (or the holders of Registrable Securities, as appropriate).
SECTION 2.03 Successors and Assigns.
----------------------
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Company may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
Imatron or the holders of Registrable Securities, as appropriate (and any
attempted assignment or transfer by the Company without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of ) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
SECTION 2.04 Counterparts; Integration; Effectiveness.
----------------------------------------
This Agreement may be executed in counterparts (and by the parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and the other Transaction Documents constitute the entire agreement among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. This Agreement shall become effective when the parties hereto exchange
signed counterparts and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 2.05 Severability.
------------
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 2.06 Governing Law.
-------------
This Agreement shall be construed in accordance with and governed by the
law of the State of California.
SECTION 2.07 WAIVER OF JURY TRIAL.
--------------------
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 2.07.
SECTION
2.08 Headings.
--------
Article and Section headings used herein are for convenience of reference
only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement.
SECTION 2.09 Directly or Indirectly.
----------------------
Where any provision in this Agreement refers to action to be taken by, or
prohibited to be taken by, any Person, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.
IN WITNESS WHEREOF, the parties execute this Agreement as f the date first
written above.
Company:
Positron Corporation.
By:
------------------------------------------
Its: President
Purchaser:
Imatron Inc.
By:
-----------------------------------------
Its:
----------------------------------------
