SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 18, 1999
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POSITRON CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Texas
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(State or Other Jurisdiction of Incorporation)
000-24092 76-0083622
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(Commission File Number) (I.R.S. Employer Identification No.)
1304 Langham Creek Drive, Suite 310, Houston, Texas 77048
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(Address of Principal Executive Offices) (Zip Code)
(281) 492-7100
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5: Other Events.
Private Placement
On August 18, 1999 Positron Corporation ("Positron") announced the
completion of a private placement of 42,166,664 shares of its common stock at
$0.30 per share. Positron realized gross proceeds of $12,650,000 from the sale
and net proceeds, after fees and expenses, of approximately $11,400,000 which
will be used to pay debt, including approximately $650,000 owed to Imatron Inc.,
and for general corporate purposes and working capital. In connection with the
company's recapitalization and with the placement, Positron issued 10,650,000
five year warrants with an exercise price of $0.05 per share and 10,810,000
warrants with an exercise price of $0.30 per share. Upon completion of the
transaction, Positron had issued and outstanding 57,459,836 shares of common
stock, 1,137,000 shares of Series A Preferred Stock, and warrants and options to
purchase 28,642,933 shares of common stock. The securities have not been
registered under the Securities At of 1933 and may not be offered or sold in the
United States absent registration or an applicable exemption from registration
requirements.
Attached hereto as Exhibit 99.1 and incorporated by reference herein is a
press release issued by Positron on August 18, 1999 relating to the foregoing
transaction.
Item 7. Financial Statements and Exhibits.
Exhibit No. Description
Exhibit 5.1 Form of Stock Purchase Agreement
Exhibit 5.2 Form of Stock Purchase Warrant
Exhibit 99.1 Press Release dated August 18, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
Positron Corporation has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
POSITRON CORPORATION
By: /s/ GARY H. BROOKS
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Gary H. Brooks
President
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Document Numbered Page
Exhibit 5.1: Form of Stock Purchase Agreement 5
Exhibit 5.2 Form of Common Stock Purchase Warrant 11
Exhibit 99.1 Press Release dated August 18, 1999 14
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the date set
forth on the signature page hereof ("Signature Page") by and between POSITRON
CORPORATION, a Texas corporation with principal offices located at 1304 Langham
Creek Drive, Houston, Texas 77084 ("Seller") and the purchaser whose name and
authorized signature appear on the Signature Page (the "Purchaser").
WHEREAS, Seller has authorized the issuance and sale of certain shares of
its Common Stock (the "Common Stock") in exchange for certain consideration; and
WHEREAS, Purchaser desires to purchase and Seller desires to sell the
Shares on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements,
the Seller and Purchaser hereby agree as follows:
AGREEMENT
1. Purchase and Sale of Shares. Seller agrees to sell to Purchaser and upon
the basis of the representations and warranties, and subject to the terms and
conditions, set forth in this Agreement, Purchaser agrees to purchase that
number of Shares set forth opposite its name on the Signature Page ("Shares")
for an Aggregate Purchase Price equal to the number of Shares times US$0.30.
2. Closing. The closing of the purchase and sale of Shares pursuant to
Section 1 hereof shall take place at the offices of Seller set forth in Section
12 below on July 16, 1999 The Aggregate Purchase Price shall be transmitted by
Purchaser by wire transfer into an Escrow Account as set forth in Exhibit A
hereto where such funds shall be held until Closing. In the event the conditions
set forth in Section 6 have not been satisfied or waived by July 16, 999, at the
option of either party all funds shall be returned to Purchaser together with
the interest thereon and this Agreement shall thereafter be without further
force or effect. Until Closing all funds deposited into escrow shall belong to
and be the property of Purchaser.
At the Closing, Seller will deliver to Purchaser certificates representing
the Shares. Delivery of such certificates shall be in accordance with
Purchaser's instructions.
3. Restriction on Transfer of Securities.
3.1 Restrictions. The Shares are transferable only pursuant to (a) a
public offering registered under the Securities Act of 1933, as amended (the
"Securities Act"), (b) Rule 144 (or any similar rule then in effect) adopted
under the Securities Act, if such rule is available, and (c) subject to the
conditions elsewhere specified in this Section 3, any other legally available
means of transfer.
3.2 Legend. Each certificate representing Shares will be endorsed with
the following legend: "The securities evidenced hereby may not be transferred
without (i) the opinion of counsel satisfactory to the Company that such
transfer may be lawfully made without registration under the Securities Act of
1933 and all applicable state securities laws or (ii) such registration."
3.3 Stop Transfer Order. A stop transfer order shall be placed with
the Seller's transfer agent preventing transfer of any of the Shares pending
compliance with the conditions set forth in any such legend.
3.4 Removal of Legend. Any legend endorsed on a certificate or
instrument evidencing the Shares shall be removed, and Seller shall issue a
certificate or instrument without such legend to the holder of such security (a)
if such security is being disposed of pursuant to registration under the
Securities Act and any applicable state acts or pursuant to Rule 144 or any
similar rule then in effect, or (b) if such holder provides Seller with an
opinion of counsel satisfactory to it to the effect that a sale, transfer,
assignment, offer, pledge or distribution for value of such security may be made
without registration and that such legend is not required to satisfy the
applicable exemption from registration.
4. Representations and Warranties by Seller. Seller represents and warrants
to Purchaser that:
4.1 Organization, Standing, Power. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has the requisite corporate power and authority to own its properties
and to carry on its business in all material respects as it is now being
conducted. Seller has, or at the Closing will have, the requisite corporate
power and authority to issue the Shares, and to otherwise perform its
obligations under this Agreement.
4.2 Qualification. Seller is duly qualified or licensed as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or of its properties owned or leased makes such qualification or
licensing necessary and failure to be so qualified or licensed would have a
material adverse impact on its business.
4.3 Compliance with Applicable Laws and Other Instruments. The
business and operations of Seller have been and are being conducted in
accordance with all applicable laws, rules and regulations of all governmental
authorities. Neither the execution nor delivery of, nor the performance of or
compliance with, this Agreement nor the consummation of the transactions
contemplated hereby will conflict with or, with or without the giving of notice
or passage of time, result in any breach of, or constitute a default under, or
result in the imposition of any lien or encumbrance upon any asset or property
of Seller pursuant to, any applicable law, administrative regulation or
judgment, order or decree of any court or governmental body, any agreement or
other instrument to which Seller is a party or by which it or any of its
properties, assets or rights is bound or affected, and will not violate the
Articles of Incorporation or Bylaws of Seller. Seller is not in violation of its
Articles of Incorporation or its Bylaws.
4.4 Common Stock. The Common, when issued and paid for pursuant to the
terms of this Agreement, will be duly authorized, validly issued and
outstanding, fully paid, nonassessable and free and clear of all pledges, liens,
encumbrances and restrictions.
5. Representations and Warranties of Purchaser. Purchaser represents and
warrants that:
5.1 Investment Intent. The Shares being acquired hereunder are being
purchased for Purchaser's own account and not with the view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act. Purchaser understands that the Shares have not been
registered under the Securities Act or any applicable state laws by reason of
their issuance or contemplated issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act and such
laws and that the reliance of Seller and others upon this exemption is
predicated in part upon this representation and warranty. Purchaser further
understands that the Shares may not be transferred or resold without (a)
registration under the Securities Act and any applicable state securities laws
or (b) an exemption from the requirements of the Securities Act and applicable
state securities laws.
5.2 Accredited Investor. The place in which Purchaser's principal
office or residence is located is set forth in Purchaser's address as set forth
in this Agreement. Purchaser qualifies as an accredited investor within the
meaning of Rule 501 under the Securities Act. Purchaser has such knowledge and
experience in financial and business matters that Purchaser is capable of
evaluating the merits and risks of the investment to be made hereunder by
Purchaser.
5.3 Acts and Proceedings. This Agreement has been duly authorized by
all necessary action on the part of Purchaser, has been duly executed and
delivered by Purchaser, and is a valid and binding agreement upon the part of
Purchaser.
5.4 No Brokers or Finders. No person, firm or corporation has or will
have, as a result of any act or omission by Purchaser, any right, interest or
valid claim against Seller for any commission, fee or other compensation as a
finder or broker, or in any similar capacity, in connection with the
transactions contemplated by this Agreement. Purchaser will indemnify and hold
Seller harmless against any and all liability with respect to any such
commission, fee or other compensation which may be payable or determined to be
payable as a result of the actions of Purchaser in connection with the
transactions contemplated by this Agreement.
6. Conditions of Purchaser's Obligation. Purchaser's obligation to purchase
and pay for the Shares on the Closing Date is subject to the fulfillment prior
to or on the Closing Date of the conditions set forth below. In the event that
any such condition is not satisfied to Purchaser's satisfaction, then Purchaser
shall not be obligated to proceed with the purchase of such Shares nor further
with any of its obligations pursuant to this Agreement.
6.1 No Errors. etc. The representations and warranties of Seller under
this Agreement shall be true in all material respects as of the Closing Date
with the same effect as though made on and as of the Closing Date.
6.2 Compliance with Agreement. Seller shall have performed and
complied in all material respects with all agreements or conditions required by
this Agreement to be performed and complied with by it prior to or as of the
Closing.
6.3 Qualification Under State Securities Laws. All registrations,
qualifications, permits and approvals required under applicable state securities
laws for the lawful execution and delivery of this Agreement and the offer,
sale, issuance and delivery of the Shares shall have been obtained.
6.4 Proceedings and Documents. All corporate and other proceedings and
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to Purchaser and its counsel.
7. Conditions of Seller's Obligation. Seller's obligation to sell the
Common Stock to Purchaser on the Closing Date is subject to the fulfillment
prior to or on the Closing Date of the conditions set forth below. In the event
that any such condition is not satisfied, Seller shall not be obligated to
proceed with the sale of such Shares.
7.1 No Errors, etc. The representations and warranties of Purchaser
under this Agreement shall be true in all material respects as of the Closing
with the same effect as though made on and as of the Closing.
7.2 Compliance with Conditions. Purchaser shall have performed and
complied with all agreements or conditions required by this Agreement to be
performed and complied with by it prior to or as of the Closing.
8. Seller Affirmative Covenants. Seller covenants and agrees that:
8.1 Corporate Existence. Seller will maintain and cause each
Subsidiary (as hereinafter defined) to maintain its corporate existence in good
standing and comply with all applicable laws and regulations of the United
States or of any state or states thereof or of any political subdivision thereof
and of any governmental authority where failure to so comply would have a
material adverse impact on Seller or its business or operations.
8.2 Books of Account and Reserves. Seller will, and will cause each of
its Subsidiaries to, keep books of record and account in which full, true and
correct entries are made of all of its and their respective dealings, business
and affairs, in accordance with generally accepted accounting principles. Seller
will employ certified public accountants selected by the Board who are
"independent" within the meaning of the accounting regulations of the Commission
and will have annual audits made by such independent public accountants in the
course of which such accountants shall make such examinations, in accordance
with generally accepted auditing standards, as will enable them to give such
reports or opinions with respect to the financial statements of Seller and its
Subsidiaries that will satisfy the requirements of the Commission in effect at
such time with respect to certificates and opinions of accountants.
8.3 Furnishing of Financial Statements and Information. Seller will
deliver to Purchaser:
(a) as soon as practicable, but in any event within 45 days after
the close of each quarterly period, unaudited consolidated balance sheets of
Seller and its Subsidiaries as of the end of such period, together with the
related consolidated statements of operations and cash flow for such period,
setting forth the budgeted figures for such period prepared and submitted in
connection with Seller's annual business plan and in comparative form figures
for the corresponding quarterly period of the previous fiscal year, all in
reasonable detail and certified by an authorized accounting officer of Seller,
subject to year-end adjustments;
(b) as soon as practicable, but in any event within 90 days after
the end of each fiscal year, a consolidated balance sheet of Seller and its
Subsidiaries, as of the end of such fiscal year, together with the related
consolidated statements of operations, shareholders' equity and cash flow for
such fiscal year, setting forth in comparative form figures for the previous
fiscal year, all in reasonable detail and duly certified by Seller's independent
public accountants, which accountants shall have given Seller an opinion,
unqualified as to the scope of the audit, regarding such statements;
(c) with reasonable promptness, such other financial data
relating to the business, affairs and financial condition of Seller and any
Subsidiaries as is available to Seller and as from time to time Purchaser may
reasonably request; and
(d) at least 20 days prior to the earlier of (i) the execution of
any agreement relating to any merger or consolidation of Seller or any of its
Subsidiaries with another corporation, or a plan of exchange involving the
outstanding capital stock of Seller or any of its Subsidiaries, or the sale,
transfer or other disposition of all or substantially all of the property,
assets or business of Seller or any of its Subsidiaries to another corporation,
or (ii) the holding of any meeting of the shareholders of Seller for the purpose
of approving such action, written notice of the terms and conditions of such
proposed merger, consolidation, plan of exchange, sale, transfer or other
disposition.
9. Registration of Stock.
9.1 Rights to Registration. The Company shall file with the SEC as
promptly as practicable and thereafter shall use its best efforts to cause to be
declared effective within ninety (90) days from the date of the Closing a
"shelf" registration statement on the appropriate form under the Securities Act
providing for the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Shares, pursuant to Rule 415 or any similar rule
that may be adopted by the SEC (the "Shelf Registration Statement"). The Company
shall use its best efforts to keep the Shelf Registration Statement continuously
effective in order to permit the prospectus forming part thereof to be usable by
Purchasers for a period ending on the earlier of (i) (x) the second anniversary
of the Closing, (y) the expiration of the period following the Closing after
which Rule 144(k) under the Securities Act becomes available to the Purchasers
or (z) in the event the Company has at any time suspended the use of the
prospectus contained in the Shelf Registration Statement pursuant to this
paragraph, the date beyond the earlier of the periods referred to in clauses (x)
and (y) that reflects an additional period of days equal to the number of days
during all of the periods from and including the dates the Company gives notice
of such suspension pursuant to this paragraph to and including the date when
holders of Shares receive an amended or supplemented prospectus necessary to
permit resales of Shares under the Shelf Registration Statement or to and
including the date on which the Company gives a resumption notice or (ii) such
time as all of the Shares covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or pursuant to Rule 144 (in
any such case, such period being called the "Shelf Registration Period"). The
Company shall be deemed not to have used its best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in holders of Shares covered thereby not
being able to offer and sell Shares during that period, unless such action, in
the opinion of the Company after consulting with legal counsel, is required by
applicable law. Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Shelf Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue statement of a material fact
or omit to state a material fact required to be stated herein or necessary to
make the statements therein not misleading and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus does
not include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
9.2 Other Registrations. If at any time during the period commencing
six (6) months after the Closing of the purchase and sale pursuant to this
Agreement and ending ten (10) years thereafter, Seller shall determine to
register under the Securities Act of 1933, as amended, any shares of Stock to be
offered for cash by it or others, pursuant to a registration statement on Form
S-1 (or its equivalent), Seller will (i) promptly give written notice to
Purchaser of its intention to file such registration statement and (ii) at
Seller's expense (which shall include, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent accountants for Seller, and fees and expenses incident to compliance
with state securities law, but shall not include fees and disbursements of
counsel for Purchaser) include among the securities covered by the registration
statement such portions of the Shares then held by Purchaser as shall be
specified in a written request to Seller within thirty (30) days after the date
on which Seller gave the notice described in (i) above. Upon receipt of such
written request and of the shares of Stock specified in the request (any
shareholder requesting registration being individually called a "Selling
Shareholder"), Seller shall (i) use its reasonable best efforts to effect the
registration, qualification or compliance of the Shares under the Securities Act
and under any other applicable federal law and any applicable securities or blue
sky laws of jurisdictions within the United States; (ii) furnish each Selling
Shareholder such number of copies of the prospectus contained in the
registration statement filed under the Securities Act (including preliminary
prospectus) in conformity with the requirements of the Securities Act, and such
other documents as the Selling Shareholder may reasonably request in order to
facilitate the disposition of the Stock covered by the registration statement;
and (iii) notify each Selling Shareholders, at any time when a prospectus
relating to the Stock covered by such registration statement is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus forming a part of such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (iv) at the request of the Selling Shareholders
prepare and furnish to the Selling Shareholders any reasonable number of copies
of any supplement to or amendment of such prospectus as may be necessary so
that, as thereafter delivered to purchasers of the Stock, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
9.3 Registration of Underwritten Offering. If the offering of
securities to be registered by Seller is underwritten, each Selling shareholder
shall sell the Stock to or through the underwriter(s) of the securities being
registered for the account of Seller or others upon the same terms applicable to
Seller or others, and if the managing underwriter(s) reasonably determine that
all or any portion of the shares of Stock held by the Selling Shareholders
should not be included in the registration statement, then notwithstanding
anything to the contrary in this Section, the determination of such
underwriter(s) shall be conclusive; provided, however, that if such
underwriter(s) determine that some but not all of the Stock of the Selling
Shareholders shall be included in the registration statement, the number of
shares of Stock owned by each Selling Shareholder to be included in the
registration statement will be proportionately reduced in accordance with the
respective written requests given as provided above.
9.4 Indemnification. In the event that Shares purchased pursuant to
this Agreement are included in a registration statement under this Section 9,
Seller will indemnify and hold harmless each Selling Shareholder and each other
person, if any, who controls such Selling shareholder within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Selling Shareholder or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement pursuant
to which the Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the 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 arise out of or are based upon the
failure by Seller to file any amendment or supplement thereto that was required
to be filed under the Securities Act, and will reimburse such Selling
Shareholder and each such controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. Notwithstanding the foregoing,
Seller will not be liable in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon an untrue statement
or omission made in such registration statement, preliminary prospectus, final
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to Seller through an instrument duly executed by
or on behalf of any Selling Shareholder specifically for use in the preparation
of such registration statement, preliminary prospectus, final prospectus, or
amendment or supplement.
It shall be a condition precedent to the obligation of Seller to take any
action pursuant to this Section that seller shall have received an undertaking
satisfactory to it from each Selling Shareholder to indemnify and hold harmless
Seller (in the same manner and to the same extent as set forth in this Section),
each director of Seller, each officer who shall sign such registration
statement, and any persons who control Seller within the meaning of the
Securities Act, with respect to any statement or omission from such registration
statement, preliminary prospectus, or any final prospectus contained therein, or
any amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished to Seller
through an instrument duly executed by the indemnifying party specifically for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, or amendment or supplement.
Promptly following receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to above in this Section
9.3, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action. In case any such action is brought against an
indemnified party, the indemnifying party will be entitled to participate in and
to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party for any
legal or other expenses subsequently incurred by the latter in connection with
the defense thereof.
9.5 Binding Provisions. The provisions of this Section 9 shall be
binding on the successors of Seller. No Shareholder may assign the provisions of
this Section 9 or all or any part of its or their rights or obligations
hereunder, except that in the event of a merger or consolidation in which the
Seller is not the survivor, the Seller shall assign and transfer, and successor
shall assume, the provisions of this Section 9.
9.6 Conflicts. To the extent that Seller's compliance with the
obligations set forth in Sections 9.1 through 9.5 above would conflict with or
otherwise cause a breach of or default under any of its existing obligations
pursuant to any agreements to which it currently is a party, Seller's failure to
comply with those obligations shall not be deemed a breach of this Agreement.
10. Remedies Cumulative, and not Waived. (a) No right, power or remedy
conferred upon any party shall be exclusive, and each such right, power or
remedy shall be cumulative and in addition to every other right, power or
remedy, whether conferred hereby or by any such security or now or hereafter
available at law or in equity or by statute or otherwise. (b) No course of
dealing between the parties or the holder of any Shares purchased pursuant to
this Agreement, and no delay in exercising any right, power or remedy conferred
hereby or by any such security or now or hereafter existing at law or in equity
or by statute or otherwise, shall operate as a waiver of or otherwise prejudice
any such right, power or remedy; provided, however, that this Section 10 shall
not be construed or applied so as to negate the provisions and intent of any
statute which is otherwise applicable.
11. Changes. Waivers. etc. Neither this Agreement nor any provision hereof
may be changed, waived, discharged or terminated orally, but only by a statement
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
12. Notices. All communications hereunder shall be in writing and if sent
to the Purchaser, shall be sufficient in all respects if personally delivered,
sent by registered mail, or by telecopy and confirmed to the Purchaser at the
address set forth on the Signature Page, or if sent to the Company, shall be
personally delivered, sent by registered mail, or by telecopy and confirmed to
the Company as follows:
Positron Corporation
1304 Langham Creek Drive, Suite 310
Houston, Texas 77084
Attn: President
Telephone: (281) 492-7100
Facsimile: (281) 492-2961
13. Survival of Representations and Warranties, etc. All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement, any investigation at any time made by Purchaser or on its behalf, and
the sale and purchase of the Shares. All statements contained in any
certificate, instrument or other writing delivered by or on behalf of Seller
pursuant hereto or in connection with or contemplation of the transactions
herein contemplated (other than legal opinions) shall constitute representations
and warranties by Seller hereunder and not by the individual officer who signed
the certificate, instrument or writing by or on behalf of Seller.
14. Parties in Interest. All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, whether so expressed or
not, and, in particular, shall inure to the benefit of and be enforceable by the
current holder or holders of any of the Shares.
15. Headings. The headings of the Sections and paragraphs of this Agreement
have been inserted for convenience of reference only and do not constitute a
part of this Agreement.
16. Choice of Law. It is the intention of the parties that the laws of
California shall govern the validity of this Agreement, the construction of its
terms and the interpretation of the rights and duties of the parties.
17. Counterparts. This Agreement may be executed concurrently in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Severability. In the event that any part of this Agreement is
determined by a court of competent jurisdiction to be unenforceable, the balance
of the Agreement shall remain in full force and effect.
IN WITNESS WHEROF, the parties execute this Agreement as of the date first
written above.
SELLER:
POSITRON CORPORATION
By:________________________
President
PURCHASER:
$
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Aggregate Purchase Price Name of Purchaser
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Shares to be delivered at Closing Signature
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Title
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Address
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City and Country
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Facsimile Number
THIS WARRANT AND THE SHARES OF STOCK OF IMATRON INC TO BE ISSUED UPON ANY
EXERCISE OF THIS WARRANT HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER ANY STATE SECURITIES LAW 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 AND APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
TO THAT EFFECT REASONABLY SATISFACTORY TO IT.
POSITRON CORPORATION
COMMON STOCK PURCHASE WARRANT
TO PURCHASE _________ SHARES OF COMMON STOCK
OF POSITRON CORPORATION
This Warrant Expires ________
Warrant No. 99-__ ____________ Shares
THIS CERTIFIES that, subject to the terms and conditions herein set
forth in this warrant, [ ] (the "Holder") is entitled to purchase from Positron
Corporation, a Texas corporation ("Company"), at any time or from time to time
during the Exercise Period (defined in Section 12 below) and subject to the
provisions regarding Exercise of Warrant (as set forth in Section 6 below) the
number of fully paid and non-assessable shares of common stock of the Company
(the "Shares") as provided herein upon surrender of this Warrant at the
principal office of the Company, and, at the election of the Holder, upon
payment of the purchase price at said office in cash or by cashier's check or by
the wire transfer of funds in a dollar amount equal to the purchase price of the
Shares for which the consideration is being given.
This Warrant shall be exercisable for that number of Shares as set forth
above.
1. Purchase Price. Subject to adjustment as hereinafter provided, the
purchase price of one share of Common Stock (or such securities as may be
substituted for one share of Common Stock pursuant to the provisions hereinafter
set forth) (the "Warrant Price") shall Thirty Cents ($0.30).
2. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities issuable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the happening of certain events as follows:
a. Adjustment for Dividends in Stock. If at any time on or after the
date hereof, the holders of the Common Stock of the Company (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received, or, on or after the record date fixed for the
determination of eligible stockholders, shall have become entitled to receive,
without payment therefor, other or additional stock of the Company by way of
dividend (other than as provided for in Section 2(b) below), then and in each
such case, upon the exercise of this Warrant, the Holder shall be entitled to
receive, in addition to the number of shares of Common Stock receivable, and
without payment of any additional consideration therefor, the amount of such
other or additional stock of the Company which the Holder would receive on the
date of such exercise had it been the holder of record of such Common Stock on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock receivable by it as aforesaid during such period and given
effect to all adjustments called for during such period by this Section 2.
b. Adjustment for Changes in Common Stock. In the event of changes in
the outstanding Common Stock of the Company by reason of split--ups,
recapitalizations, reclassifications, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Warrant Price shall be correspondingly adjusted by the Board of Directors of
the Company. The adjustment shall be such as will give the Holder on exercise
for the same aggregate Warrant Price the total number, class, and kind of shares
as the Holder would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event requiring
adjustment.
3. No Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any subscription under this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the fair market value of one
share of Common Stock on the date of exercise as determined in good faith by the
Company's Board of Directors.
4. No Stockholder Rights. This Warrant shall not entitle its holder to any
of the rights of a stockholder of the Company prior to its exercise.
5. Reservation of Stock. The Company covenants that during the period this
Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of this Warrant. The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
6. Exercise of Warrant. Subject to the terms and conditions hereof, this
Warrant may be exercised by the holder hereof then registered on the books of
the Company as follows: 750,000 shares at any time one year from the Date of
Issuance and before the Expiration Date; 750,000 shares at any time after one
year from the Date of Issuance and before the Expiration Date; and 750,000
shares at any time after two years from the Date of Issuance and before the
Expiration Date; 750,000 shares at any time after three years from the Date of
Issuance and before the Expiration Date; and 750,000 shares at any time after
four years from the Date of Issuance and before the Expiration Date. Subject to
the foregoing, This Warrant may be exercised by the Holder or its registered
assigns, in whole or in part and in minimum units of 10,000 shares, by the
surrender of this Warrant at the principal office of the Company, together with
the attached form of subscription duly executed, accompanied by payment in full
of the amount of the Warrant Price in the form described in this Warrant. Upon
partial exercise of this Warrant, a new warrant or warrants containing the same
date and provisions as this Warrant shall be issued by the Company to the
registered holder for the number of shares of Common Stock with respect to which
this Warrant shall not have been exercised. A Warrant shall be deemed to have
been exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
shares of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of such shares of record as of the close of business on
such date. As promptly as practicable on or after such date, the Company shall
issue and deliver to the person or persons entitled to receive the shares, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share as provided above.
7. Certificate of Adjustment. Whenever the Warrant Price is adjusted as
provided in Section 2, the Company shall promptly deliver to the record holder
of this Warrant a certificate of an officer of the Company setting forth the
relevant Warrant Price or number of shares after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
8. Compliance With Securities Act. The Holder, by acceptance of this
Warrant, agrees that this Warrant and the shares of Common Stock to be issued
upon its exercise (or shares of any security into which such Common Stock may be
converted) (the "Shares") are being acquired for investment and that the Holder
will not offer, sell, or otherwise dispose of this Warrant and any shares of
Common Stock to be issued upon its exercise (or shares of any security into
which such Common Stock may be converted) except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"). Upon exercise of this Warrant, the holder hereof shall, if
requested by the Company, confirm in writing its investment purpose and
acceptance of the restrictions on transfer of the Shares.
9. Subdivision of Warrant. At the request of the holder of this Warrant in
connection with a transfer or exercise of a portion of the Warrant and upon
surrender of this Warrant for such purpose to the Company, the Company at its
expense (except for any transfer tax payable) will issue in exchange therefor
warrants of like tenor and date representing in the aggregate the right to
purchase such number of shares of such Common Stock as shall be designated by
such holder at the time of such surrender; provided, however, that the Company's
obligations to subdivide securities under this Section shall be subject to and
conditioned upon the compliance of any such subdivision with applicable state
securities laws and with the Securities Act.
10. Loss, Theft, Destruction, or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in the case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it and
reimbursement to the Company of all reasonable expenses incidental thereto, in
the case of mutilation, and upon surrender and cancellation of this Warrant the
Company will make and deliver a new Warrant of like tenor and dates as of such
cancellation, in lieu of this Warrant.
11. Miscellaneous. This Warrant shall be governed by the laws of the State
of Texas. The headings in this Warrant are for purposes of convenience and
reference only, and shall not be deemed to constitute a part of this Warrant.
Neither this Warrant nor any term included may be changed, waived, discharged,
or terminated orally but only by an instrument in writing signed by the Company
and the Holder. All notices and other communications from the Company to the
Holder shall be by telecopy or expedited courier service to the address
furnished to the Company in writing by the last holder of this Warrant who shall
have furnished an address to the Company in writing. This Warrant has been
issued pursuant to a Warrant Purchase Agreement dated as of June 15, 1999, the
terms of which, including certain repurchase provisions, are incorporated herein
by reference. A copy of such Warrant Purchase Agreement may be inspected at the
<PAGE>
office of the Company during normal business hours.
12. Exercise Period. The Exercise Period shall mean the period commencing
on the date hereof and ending on ___________, 2004.
ISSUED this ___ day of August _______, 1999.
POSITRON CORPORATION
By:
--------------------------------
S. Lewis Meyer, Chairman
ATTEST:
- - -------------------------
Contact: Gary Brooks, President S. Lewis Meyer, CEO
Positron Corporation Imatron, Inc.
Robin Kelley, Investor Relations
(650) 742-8805
For Immediate Release
Positron Corporation and Imatron Announce Completion of
$12.7 Million Private Equity Financing for Positron
Financing to Fund Positron's Re-launch into
PET Imaging Marketplace
Houston, TX, August 18, 1999 - Positron Corporation (OTC BB: POSC) and Imatron
Inc. (Nasdaq: IMAT) of So. San Francisco announced today the completion of a
private placement of 42,166,664 shares of Positron's common stock for a total of
$12.7 million. In connection with this private placement, Positron issued
21,460,000 five-year warrants. Proceeds will be used to pay debt and for general
corporate purposes. The securities have not been registered under the Securities
Act of 1933 and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
Gary Brooks, President of Positron commented, "Proceeds from this private equity
financing will provide us with sufficient working capital to re-launch Positron
and begin manufacturing and marketing of the company's Posicam(TM) positron
emission tomography (PET) scanners. The company's capital infusion comes on the
heels of recent favorable reimbursement recommendations for a broad range of PET
procedures from the U.S. Health Care Financing Administration (HCFA), the
federal agency which oversees Medicare. Currently, eight clinical applications
utilizing PET have been approved by HCFA for reimbursement: five oncology
procedures, two cardiology procedures and one neurology procedure. HCFA has
stated that, `as scientific evidence becomes available showing the effectiveness
of new technologies to diagnose and manage certain cancers, the administration
will act fast to ensure access to safe and effective technology.' Based on this
positive reimbursement trend, we are optimistic that additional PET procedures
will be approved for reimbursement by HCFA in the future."
Mr. Brooks continued, "This is an exciting and challenging turning point in
Positron's history. As we rebuild the company and move forward with the
company's sales and marketing plans, management will prudently monitor costs and
invest in Positron's growth in parallel with our continued success. We are
actively seeking qualified individuals to fill critical executive positions to
strengthen the company's management team. We look forward to keeping our
shareholders apprised of our progress as we achieve our business objectives."
S. Lewis Meyer, CEO of Imatron, stated, "As the largest shareholder of Positron,
the completion of this equity financing provides Imatron with an excellent
baseline for the valuation of our nine million share ownership position in
Positron. In addition, a portion of the proceeds from the financing will be used
to repay Imatron's $600,000 working capital loan and interest to Positron. We
are encouraged by the current reimbursement climate for PET procedures and
believe that Imatron's investment in Positron will appreciate as the company
establishes itself as a commercially viable participant in the PET imaging
marketplace delivering value to Imatron's shareholders."
Mr. Meyer continued, "One of the strategic objectives of Imatron's investment in
Positron was to secure product flow to Imatron-Japan, the exclusive distributor
of Positron's Posicam PET scanners in Japan. Given the recent approval of
Posicam systems by the Japanese Ministry of Health & Welfare (MHW), and the
proceeds from the equity financing, we believe that Positron is now in a strong
position to complete an open order from Imatron-Japan for delivery of ten
Posicam systems over the next 36 months."
Positron Corporation is primarily engaged in designing, manufacturing, marketing
and supporting advanced medical imaging devices utilizing positron emission
tomography (PET) technology under the trade name POSICAM(TM) systems.
POSICAM(TM) systems incorporate patented and proprietary technology for the
diagnosis and treatment of patients in the areas of oncology, cardiology and
neurology. POSICAM(TM) systems are in use at leading medical facilities,
including the Cleveland Clinic Foundation, Yale University/Veterans
Administration, Crawford Long Hospital, Hermann Hospital and the University of
Madrid.
Imatron, Inc. is primarily engaged in designing, manufacturing, marketing, and
supporting high performance EBT scanners based on the Company's proprietary
electron beam tomography (EBT) technology. Imatron's EBT scanner is now in use
at more than 110 major medical centers around the world, including the Mayo
Clinic, Cedars-Sinai Medical Center, Mount Sinai Medical Center, University of
Iowa, National Institutes of Health, UCLA Medical Center, Stanford University,
University of Illinois, Arizona Heart Institute, Landeskrankenhaus Graz in Graz,
Austria, Klinikum Grosshadern in Munich, Germany, Academisch Ziekenhuis
Rotterdam in Rotterdam, Netherlands, Universitaetsklinikum Mannheim in Mannheim,
Germany and Beijing Hospital in China.
Except for the historical information contained herein, the matters discussed in
this news release may contain forward-looking statements that are based on
current expectations and estimates about the industry in which Imatron operates,
the estimated impact of certain technological advances, the estimated impact of
published research studies on scanner sales and procedures, as well as
management's beliefs and assumptions. It is important to note that the Company's
actual results could differ materially from those projected in such
forward-looking statements. The factors that could cause actual results to
differ materially include, among others: failed clinical demonstration of
certain asserted technological advantages and diagnostic capabilities; reliance
on product distributors; competition in the diagnostic imaging market; failure
to improve product reliability or introduce new product models and enhancements;
delays in production and difficulty in obtaining components and sub-assemblies
from limited sources of supply; inability to meet cash-on-delivery or prepayment
terms from vendors; determinations by regulatory and administrative government
authorities; patent expiration and denial of patent applications; the high cost
of the scanner as compared to commercially available CT scanners; and the risk
factors listed from time to time in the Company's Securities and Exchange
Commission reports, including their reports on Form 10-K for their current
fiscal year.
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