EXHIBIT 10.86
REGISTRATION RIGHTS
AGREEMENT
This Registration Rights Agreement (this "
Agreement ") is made and entered into as of February 28,
2005 by and between Solaris Opportunity Fund, L.P. ("
Purchaser "), and Positron Corporation, a Texas corporation
(the " Company ").
R E C I T A L S
:
WHEREAS, concurrent with the execution of this
Agreement the Company and Purchaser are entering into a Note
Purchase Agreement (as defined below) pursuant to which Purchaser
will purchase from the Company Secured Convertible Promissory Notes
in the aggregate principal amount of $1,000,000 (the " Notes
"); and
WHEREAS, the Notes are convertible at the option
of the holders into shares of the Company's Series E Preferred
Stock, $1.00 par value (the " Series E Preferred Stock "),
which shares are in turn convertible into shares of the Company's
Common Stock (the "Common Stock ").
NOW, THEREFORE, in consideration of the mutual
promises, representations, warranties and conditions set forth in
this Agreement, the parties hereto, intending to be legally bound,
hereby agree as follows:
A G R E
E M E N
T :
1.
Definitions
. For purposes of this Agreement, in
addition to the definitions set forth above and elsewhere herein,
the following terms shall have the following respective
meanings:
" Acquisition Shares " shall mean the
shares of Series E Preferred Stock and Common Stock which the
Purchaser will have a right to acquire upon the conversion of the
Notes.
" Commission " shall mean the United
States Securities and Exchange Commission and any successor
agency.
" Demand Date " shall mean the date the
Company receives the written request for registration of
Registrable Stock from Purchaser pursuant to Section 3
hereof.
" Exchange Act " shall mean the
Securities Exchange Act of 1934, as amended, or any similar federal
statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the
time.
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" Holder " shall mean the Purchaser and
all transferees or assignees thereof to whom the rights under this
Agreement are assigned in accordance with the provisions of
Section 8 hereof.
" Note Purchase Agreement " shall mean
the Note Purchase Agreement between the Company and the Purchaser,
dated February 28, 2005.
" Person " shall mean an individual,
corporation, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association or
entity or government, political subdivision, agency or
instrumentality of a government.
" Register, " " registered " and "
registration " shall refer to a registration effected by
preparing and filing a registration statement or similar document
in compliance with the Securities Act and the declaration or
ordering of effectiveness of such registration statement or
document.
" Registrable Stock " shall mean
(a) the Acquisition Shares, (b) any shares of Common
Stock or other capital stock issued as a dividend, or other
distribution with respect to, or in exchange for, or in replacement
of, any of the Acquisition Shares and (c) any shares of
capital stock issued by way of a stock split of the Acquisition
Shares referred to in clause (a) above. For purposes of this
Agreement, any Registrable Stock shall cease to be Registrable
Stock when (i) a registration statement covering such
Registrable Stock has been declared effective and such Registrable
Stock has been disposed of pursuant to such effective registration
statement, (ii) such Registrable Stock is sold by a person in
a transaction in which the rights under the provisions of this
Agreement are not assigned, or (iii) all such Registrable
Stock may be sold by any and all Holders pursuant to Rule 144(k)
(or any similar provision then in force, but not Rule 144A)
under the Securities Act without registration under the Securities
Act.
" Securities Act " shall mean the
Securities Act of 1933, as amended, or any similar federal statute,
and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
2.
Restrictive Legend
. Each certificate representing
Acquisition Shares shall, except as otherwise provided in this
Section 2, be stamped or otherwise imprinted with a legend
substantially in the form set forth in the Note Purchase Agreement.
A certificate shall not bear such legend if in the opinion of
counsel satisfactory to the Company or the Company shall determine
that the securities being sold thereby may be publicly sold without
registration under the Securities Act or the transfer of such
securities is permitted under the provisions of Regulation D,
Rule 144(k) or Rule 144A (or any rule permitting public
sale without registration under the Securities Act).
3.
Registration Rights
. Upon the written request of
Purchaser to the Company, the Company shall use its reasonable best
efforts to prepare and file with the Commission a registration
statement on an applicable form, signed, pursuant to
Section 6(a) of the Securities Act, by the officers and
directors of the Company, with respect to the Registrable Stock. If
the Company shall fail to register the shares of Registrable Stock,
the Company shall deliver the unregistered shares of Registrable
Stock to the Purchaser and such shares may be sold pursuant to and
subject to the requirements of Rule 144 under the Securities Act.
The Company's delivery of the unregistered shares shall be the
Purchaser's sole remedy for any failure by the Company to register
shares pursuant to this Section 3. In connection with this
Section 3, the Company shall:
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(a)
cause such registration statement to
become effective on or before the three-month anniversary of the
Demand Date and to remain effective through and including the
earlier of (i) the time when all of the Registrable Stock has
been sold pursuant to such registration statement or (ii) the
time when all of the Holders of the Registrable Stock can sell all
of the Registrable Stock pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A) under the
Securities Act without registration under the Securities
Act.
(b)
prepare and file with the Commission
such amendments and supplements to such registration statement,
signed, pursuant to Section 6(a) of the Securities Act, by the
officers and directors of the Company, and the prospectus used in
connection therewith as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of
all Registrable Stock covered by such registration
statement;
(c)
furnish to the Holders such numbers
of copies of the registration statement and the prospectus included
therein (including each preliminary prospectus and any amendments
or supplements thereto) in conformity with the requirements of the
Securities Act and such other documents and information as they may
reasonably request;
(d)
use its reasonable best efforts to
register or qualify the Registrable Stock covered by such
registration statement under such other securities or blue sky laws
of such jurisdictions within the United States and Puerto Rico as
required by law for the distribution of the Registrable Stock
covered by the registration statement; provided, however, that the
Company shall not be required in connection therewith or as a
condition thereto to qualify to do business in or to file a general
consent to service of process in any jurisdiction wherein it would
not but for the requirements of this paragraph (d) be
obligated to do so; and provided, further, that the Company shall
not be required to qualify such Registrable Stock in any
jurisdiction in which the securities regulatory authority requires
that any Holder submit any shares of its Registrable Stock to the
terms, provisions and restrictions of any escrow, lockup or similar
agreement(s) for consent to sell Registrable Stock in such
jurisdiction unless such Holder agrees to do so;
(e)
promptly notify each Holder for whom
such Registrable Stock is covered by such registration statement,
at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were
made, and at the request of any such Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to Holders of such
securities, such prospectus shall not include any 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 in light of the circumstances under which they were
made;
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(f)
enter into customary agreements and
take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Stock to
be so included in the registration statement;
(g)
otherwise use its reasonable best
efforts to comply with all applicable rules and regulations of the
Commission;
(h)
use its reasonable best efforts to
list the Registrable Stock covered by such registration statement
with any securities exchange on which Common Stock is then listed;
and
(i)
after the effectiveness of the
registration statement, cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing
the Registrable Stock to be sold, which certificates shall not bear
any restrictive legends other than restrictive legends still
required to be imposed by the Note Purchase Agreement.
4.
Suspension of Trading
. Notwithstanding any other
provision of this Agreement, the Company shall have the right at
any time to require that all Holders suspend further open market
offers and sales of Registrable Stock whenever, and for so long as,
in the reasonable judgment of the Company in good faith based upon
the advice of counsel satisfactory to the Holders of a majority of
the Registrable Stock, there is in existence material undisclosed
information or events with respect to the Company (the "
Suspension Right ") such that the registration statement
would contain any 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 not misleading in light of the
circumstances under which they were made. In the event the Company
exercises the Suspension Right, such suspension will continue for
such period of time reasonably necessary for disclosure to occur at
a time that is not materially detrimental to the Company or until
such time as the registration statement does not include any 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 not misleading in light of the circumstances under which
they were made, each as determined in good faith by the Company.
The Company will promptly give the Holders notice, in a writing
signed by an executive officer of the Company, of any exercise of
the Suspension Right. The Company agrees to notify the Holders
promptly upon termination of the Suspension Right. Notwithstanding
the foregoing, under no circumstances shall Holder be entitled to
exercise the Suspension Right for more than sixty calendar days in
any twelve-month period.
5.
Furnish Information
. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to
this Agreem
