Exhibit 10.84
THE SECURITIES EVIDENCED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE " ACT "), AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS (A) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, AND APPLICABLE STATE
SECURITIES LAWS, COVERING ANY SUCH TRANSACTION INVOLVING SAID
SECURITIES, (B) THE COMPANY RECEIVES AN OPINION OF LEGAL
COUNSEL FOR THE HOLDER OF THESE SECURITIES SATISFACTORY TO THE
COMPANY STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION,
OR (C) THE COMPANY OTHERWISE SATISFIES ITSELF THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION.
THIS NOTE IS RESTRICTED BY
THE TERMS OF, AND IS SUBJECT TO RESTRICTIONS ON TRANSFER AND RIGHTS
OF SALE AS PROVIDED IN A NOTE PURCHASE AGREEMENT BETWEEN THE
COMPANY AND THE HOLDER HEREOF, OR ITS SUCCESSOR, A COPY OF WHICH IS
AVAILABLE FROM THE COMPANY.
POSITRON CORPORATION
SECURED CONVERTIBLE PROMISSORY
NOTE
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$200,000.00
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Houston, Texas
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March 7, 2005
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POSITRON CORPORATION, a Texas corporation (the "
Company "), the principal office of which is located at 1304
Langham Creek Drive, #300, Houston, Texas 77084, for value received
hereby promises to pay to Solaris Opportunity Fund, L.P., located
at 700 Commerce Drive, Oak Brook, Illinois 60523, or its registered
assigns (the " Holder "), the sum of Two Hundred Thousand
Dollars ($200,000), or such lesser amount as shall then equal the
outstanding principal amount hereof on the terms and conditions set
forth hereinafter. The principal hereof and any unpaid accrued
interest hereon, as set forth below, shall be due and payable on
the earlier to occur of (i) March 6, 2007 (the "
Maturity Date ") or (ii) when declared due and payable
by the Holder upon the occurrence of an Event of Default (as
defined below). Commencing on the Maturity Date, all principal and
accrued interest hereunder shall be payable upon demand. Payment
for all amounts due hereunder shall be made by mail to the
registered address of the Holder. All numbers expressed herein as
"$" or "dollars" are in United States dollars.
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The following is a statement of the rights of
the Holder of this Note and the conditions to which this Note is
subject, and to which the Holder hereof, by the acceptance of this
Note, agrees:
1.
Definitions
. Except as otherwise defined
herein, each capitalized term used herein shall have the meaning
assigned to it in the Note Purchase Agreement dated as of February
28, 2005 (the " Purchase Agreement "). As used in this Note,
the following terms, unless the context otherwise requires, have
the following meanings:
(a) " Business Day " shall mean a day other
than Saturday, Sunday or a public holiday under the laws of the
State of Texas.
(b) " Company " includes any corporation that
shall succeed to or assume the obligations of the Company under
this Note.
(c) " Holder ," when the context refers to a
holder of this Note, shall mean any person who shall at the time be
the registered holder of this Note.
(d) " Operating Cash Flow " shall mean the
sum of net income, depreciation, change in accruals and change in
accounts payable, minus change in accounts receivable, minus change
in inventories.
2.
Interest . Simple interest shall accrue at the rate of
ten percent (10%) per annum on the principal of this Note
outstanding during the period beginning the date of this Note and
ending on the date that the principal amount of this Note is
repaid. Interest shall be calculated on the basis of a 365-day year
for the actual number of days elapsed. Accrued interest shall be
payable in cash annually on the anniversary date of this note;
provided however, that in the event the accrued interest on this
Note together with the aggregate accrued interest on all other
outstanding notes, including without limitation the notes issued
pursuant to the Purchase Agreement (such notes collectively being
hereinafter referred to as the " Investor Notes "), exceeds
50% of the Company’s Operating Cash Flow during the twelve
month period ending on the last completed calendar quarter which
preceded the interest payment date by at least 60 days (" 50% of
cash flow "), at the Company's option, the accrued interest
shall be payable (i) in cash in an amount equal to the product of
(x) accrued interest and (y) a fraction, with (A) the numerator of
such fraction equal to unpaid principal on the Note and (B) the
denominator of such fraction equal to unpaid principal owing under
the Investor Notes, up to an aggregate amount equal to 50% of cash
flow, and (ii) by issuance to Holder of a new note identical in
form to this Note and in an amount equal to the accrued interest
not otherwise paid in cash. In the event that a payment date falls
on a non-Business Day, payment shall be made on the next Business
Day, while taking into account such extra days in calculating the
accrued interest. In the event of an earlier conversion,
acceleration or payment of the Note, interest shall be payable in
cash on such date.
3.
Events of Default
. If any of the events specified in
this Section 3 shall occur (herein individually referred to as
an " Event of Default "), the Holder of the Note may, so
long as such condition exists, declare the entire principal and
unpaid accrued interest hereon immediately due and payable, by
notice in writing to the Company:
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(a) The Company shall default in the payment of any
part of the principal or accrued and unpaid interest on this Note
after it shall become due and payable, whether at maturity or at a
date fixed for prepayment or by acceleration or otherwise;
or
(b) The institution by the Company of proceedings to
be adjudicated as bankrupt or insolvent, or the consent by it to
institution of bankruptcy or insolvency proceedings against it or
the filing by it of a petition or answer or consent seeking
reorganization or release under the federal Bankruptcy Act, or any
other applicable federal or state law, or the consent by it to the
filing of any such petition or the appointment of a receiver,
liquidator, assignee, trustee or other similar official of the
Company, or of any substantial part of its property, or the making
by it of an assignment for the benefit of creditors, or the taking
of corporate action by the Company in furtherance of any such
action; or
(c) If, within sixty (60) days after the
commencement of an action against the Company, without the consent
or acquiescence of the Company (and service of process in
connection therewith on the Company) seeking any bankruptcy,
insolvency, reorganization, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Company or all
orders or proceedings thereunder affecting the operations or the
business of the Company stayed, or if the stay of any such order or
proceeding shall thereafter be set aside, or if, within
sixty (60) days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator
of the Company or of all or any substantial part of the properties
of the Company, such appointment shall not have been vacated;
or
(d) Any material breach by the Company of any
representation, warranty or covenant contained in the Purchase
Agreement or this Note.
(e) As of January 1, 2006, the Company shall not
have obtained stockholder approval to amend its Articles of
Incorporation to increase the number of shares of its authorized
Common Stock to account for the conversion of Series E
Preferred Stock issuable upon conversion of this Note.
In the case of
an Event of Default pursuant to (b) or (c) above, all amounts
shall automatically, without notice, become immediately due and
payable and collectible by Holder pursuant to applicable
law.
4.
Conversion
.
4.1
Conversion
. The principal amount of this Note,
or any portion thereof may be converted by the Holder at any time
prior to Maturity into the number of fully paid shares of the
Company's Series E Preferred Stock as is determined by
dividing the unpaid principal under the Note by the Conversion
Price (as hereinafter defined) in effect at the time of conversion.
Accrued but unpaid interest shall be payable in cash at the time of
conversion.
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4.2 Conversion Price. The Conversion Price (the
"Conversion Price") applicable per share of Series E Preferred
Stock shall initially be equal to $1.00, subject to adjustment from
time to time in accordance with Section 4.3 below.
4.3 Adjustments to the Conversion Price. The
Conversion Price shall be subject to adjustment from time to time
as follows:
4.3.1
Adjustment Upon Stock Dividends,
Subdivisions or Splits .
If, at any time, the number of shares of Series E Preferred
Stock outstanding is increased by a stock dividend payable in
shares of Series E Preferred Stock or by a subdivision or
split-up of shares of Series E Preferred Stock, then,
following the record date for the determination of holders of
Series E Preferred Stock entitled to receive such stock
dividend, or to be affected by such subdivision or split-up, the
Conversion Price shall be appropriately decreased so that the
number of shares of Series E Preferred Stock issuable on
conversion of Note shall be increased in proportion to such
increase in outstanding shares.
4.3.2
Adjustment Upon
Combinations . If, at any
time, the number of shares of Series E Preferred Stock
outstanding is decreased by a combination of the outstanding shares
of Series E Preferred Stock into a smaller number of shares of
Series E Preferred Stock, then, following the record date to
determine shares affected by such combination, the Conversion Price
shall be appropriately increased so that the number of shares of
Series E Preferred Stock issuable on conversion of the Note
shall be decreased in proportion to such decrease in outstanding
shares.
4.3.3
Adjustment Upon
Reclassifications, Reorganizations, Consolidations or
Mergers . If, at any time
when the Note is issued and outstanding, there shall be any merger,
consolidation, share exchange, recapitalization, reorganization,
business combination, or other similar event, as a result of which
shares of Series E Preferred Stock shall be changed into the
same or a different number of shares of another class or classes of
stock or securities of the Company or another entity, or in case of
any sale or conveyance of all or substantially all of the assets of
the Company then the Holder shall thereafter have the right to
receive upon conversion of the Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of
Series E Preferred Stock immediately theretofore issuable upon
conversion, such stock, securities, cas
