WARRANT PURCHASE AGREEMENT
EXHIBIT
10.1
THIS
WARRANT PURCHASE AGREEMENT (the "Agreement") is made and entered into this 12th
day of May, 2005 effective as of August 31, 2004 by and between POSITRON
CORPORATION, a Texas corporation (the "Company"), and those persons set forth on
the signature page hereof as Investors (the "Investors").
R E C
I T A L S :
WHEREAS,
the Company desires to issue to Investors and the Investors desire to purchase
from the Company, warrants (the "Warrants") to purchase 3,825,000 shares of the
Company's common stock (the "Shares") all on the terms and conditions
hereinafter provided. The Warrants and the Shares are hereafter collectively
referred to as the "Securities".
NOW,
THEREFORE, IT IS AGREED AS FOLLOWS:
1. Issuance
of Warrants; Repurchase Right. In
consideration of the surrender to the Company by the Investors of warrants to
purchase an aggregate of 7,650,000 shares of the Company's common stock, the
Company agrees to issue to Investors an aggregate of 3,825,000 Warrants, the
form of which is attached hereto as Exhibit A, in the amounts and to the
Investors as set forth on the signature page hereto.
2. Investors
Representations. The
Investors hereby severally represent and warrant to the Company as
follows:
(a) The
Investors understand that: (i) the offer and sale of the Securities by the
Company to the Investors has not been registered under the Securities Act of
1933, as amended (the "Securities Act"), in reliance on an exemption from such
registration available under the Securities Act and rules adopted thereunder;
and (ii) the Investors must hold the Warrants indefinitely unless the Securities
are subsequently registered under the Securities Act and qualified under
applicable state securities laws, or unless an exemption from such registration
and qualification are available.
(b) The
Investors are acquiring the Securities for his or her own account, for
investment, and not with a view to any sale or distribution of any interest
therein.
(c) The
Investors have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Securities, and the Investors is able to bear the economic risks of such an
investment.
(d) All
statements made, and information furnished, by the Investors in this certificate
and all other information furnished by the Investors to the Company, are true
and complete, to the best of the Investors' knowledge.
3. Restrictions
on Transfer. The
Investors agree that:
(a) The
Investors will not attempt to transfer the Securities in violation of the
restrictions set forth in this Agreement.
(b) The
Company may note such restrictions on transfer in its records and refuse to
recognize any transfer which violates this agreement or for which the Company
has not received an acceptable opinion of counsel stating that such transfer
will not violate such restrictions.
(c) One or
more legends indicating a lack of registration under the Securities Act and a
lack of qualification under state securities laws will be imprinted on the
Securities. One such legend shall read substantially as follows:
"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY, TRANSFERRED, ASSIGNED,
PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S
PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION."
4. Binding
on Successors; Indemnification. The
Investors agree that the above representations and warranties are binding on the
Investors' successors and assigns and are made for the benefit of the Company
and any other persons who may become liable for violations of federal or state
securities laws as a result of the falsity of any of the Investors'
representations or warranties. The Investors agree to indemnify, defend, and
hold harmless such persons from any liability arising from the falsity of any of
the Investors' representations or warranties or from the breach of any covenant
of Investors contained herein.
5. Registration
Rights. The
Company hereby grants to Investors the following registration rights with
respect to the Shares:
(a) Notice
of Registration. If, at
any time after the date hereof, the Company shall determine to register any of
its securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales, the Company will:
(i) promptly
give to Investors written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable blue sky or other state securities laws); and
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(ii) include
in such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the shares of the
Company's common stock exercisable upon exercise of the Warrants and any common
stock issued with respect thereto (e.g. upon a stock split or stock dividend)
specified in a written request or requests, made by Investors within fifteen
(15) days after receipt of the written notice from the Company described in this
clause. Notwithstanding the foregoing, if the underwriter advises the Company in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Company shall so advise all holders of common stock
which would otherwise be underwritten pursuant to existing registration rights,
and the number of shares of common stock that may be included in the
underwriting shall be allocated among all holders thereof, including the
Investors, in proportion (as nearly as practicable) to the amount of shares of
common stock of the Company owned by each holder.
(b) The
Company shall bear all registration expenses, except selling expenses, incurred
in connection with any registration, qualification and compliance by the Company
pursuant to Section 5(a).
6. Repurchase
Right.
The
Company reserves to itself the right to repurchase upon 30 says written notice
any portion of the Warrants issued pursuant to this Agreement ("Repurchase
Right") at any time after August 31, 2004, provided that the closing price of a
share of the Company's common stock shall be not less than $0.25 for a period at
least 20 consecutive trading days after August 31, 2004; and provided further
that a
registration statement filed pursuant to Section 5, above, permitting a sale of
the Shares shall have become effective and remain effective for a period of 90
days. The
repurchase price will be $0.001 per share for any portion of the Warrants that
remain unexercised at the time the Company exercises its Repurchase
Right.
7. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas.
8. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one
instrument.
IN
WITNESS WHEREOF, the undersigned purchasers of securities and the Company have
executed this Agreement as of the day and year first above written.
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[Signature
Page to Warrant Purchase Agreement]
| POSITRON CORPORATION | ||
| By: ____________________________________________________ | ||
| Xxxx X. Xxxxxx, President | ||
| INVESTORS: | ||
| Xxxxxx Sao Paulo | ||
| Warrants: 1,325,000 | ||
| Xxxxx Xxxxxx Garção | ||
| Warrants: 2,000,000 | ||
| Xxxxx Xxxxxxxx Xxxxxxxx | ||
| Warrants: 1,650,000 | ||
| Xxxx Xxxxx Xxxxxx Garção | ||
| Warrants: 2,000,000 |
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