FORM 10-Q IMATRON INC. JUNE 30, 2001
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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.
Registration Rights
Definitions. As used in this Article
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");
"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);
"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
"Imatron" shall mean IMATRON INC. or any Affiliate holding Registrable
Securities.
"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.
Piggy-Back Registration.
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.
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.
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FORM 10-Q IMATRON INC. JUNE 30, 2001
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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.
Registration Procedures.
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:
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;
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;
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;
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;
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;
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;
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;
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
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.
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.
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FORM 10-Q IMATRON INC. JUNE 30, 2001
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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.
Indemnification.
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.
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.
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.
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
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FORM 10-Q IMATRON INC. JUNE 30, 2001
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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.
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.
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.
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.
Miscellaneous
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:
To Company:
Positron Corporation.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇.▇▇▇▇
To Imatron:
Imatron Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 650.871.0418
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.
Waivers; Amendments.
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
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FORM 10-Q IMATRON INC. JUNE 30, 2001
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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.
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).
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.
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.
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.
Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of California.
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.
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.
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:
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Imatron Inc.
By: ___________________________________________________________________
Its: __________________________________________________________________
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