PLEDGE AGREEMENT
COLLATERAL
PLEDGE AGREEMENT, dated January 26, 2007, by and between IMAGING
PET TECHNOLOGIES, INC.,
a
Canadian corporation (the “Pledgor”) and POSITRON
CORPORATION, a
publicly owned Texas corporation (the "Pledgee").
W
I T
N E S S E T H
WHEREAS,
simultaneously with the execution of this Agreement, Pledgor and Pledgee have
entered into a Purchase Agreement (the “Exchange Agreement”) whereby Pledgee
transferred thirty million (30,000,000) common shares of Quantum Molecular
Technologies Inc. (the “QMT”) to Pledgor in exchange for a promissory note (the
“Note”) in the principal amount of two million eight hundred thousand dollars
($2,800,000.00);
WHEREAS,
to induce the Pledgee to transfer the securities to Pledgor and to secure the
repayment of the Note, Pledgor has agreed to pledge the shares in favor of
Pledgee, pursuant to the terms and conditions of this Agreement;
and
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Pledgor hereby
agrees as follows:
1.
Defined
Terms.
As used
herein, the following terms shall have the following meanings:
"Agreement"
shall
mean this Pledge Agreement, as the same may from time to time be amended or
supplemented.
"Pledged
Securities"
shall
mean the QMT Common Shares, as those terms are defined in the Purchase
Agreement, together with the certificates therefor, and any additional shares,
certificates or other property received pursuant to Section 3 of this
Agreement.
"Security
Interest"
shall
have the meaning provided in Section 2(a) of this Agreement.
"UCC"
shall
have the meaning provided in Section 5(c) of this Agreement.
Capitalized
terms used by not defined herein shall have the same meaning as ascribed to
such
terms in the Note and the Exchange Agreement.
2.
Pledge.
(a) As
security for the full payment and performance of the obligations under the
Note,
the Pledgor does hereby pledge, assign, hypothecate, mortgage, transfer and
deliver to the Pledgee all of their rights and interest in and to the Pledged
Securities (together with appropriate undated stock powers duly executed in
blank) and hereby grants to the Pledgee, as collateral security for the payment
and performance when due of all the obligations under the Note, a continuing
first priority security interest in the Pledged Securities, together with all
additions thereto, substitutions and replacements thereof (the "Security
Interest").
(b) The
Pledgor herewith deposits with the Pledgee, and the Pledgee acknowledges receipt
of, certificates representing the Pledged Securities. The Pledgee hereby accepts
delivery of the Pledged Securities and shall hold the Pledged Securities
pursuant to this Agreement. The certificates representing the Pledged Securities
are accompanied by undated stock powers endorsed in blank for
transfer.
3.
Stock
Dividends, Distributions, etc.
Subject
to Section 5 hereof, if, while this Agreement is in effect, the Pledgor shall
become entitled to receive any shares of stock (including, without limitation,
a
distribution in connection with any reclassification, increase or reduction
of
capital or in connection with any reorganization), or any option or right to
acquire shares of stock, in substitution of, or in exchange for, any shares
of
Pledged Securities, or shall receive any stock dividend with respect to any
shares of Pledged Securities, the Pledgor agrees to pledge the same as
additional collateral security for the obligations under the Note, such shares
shall become part of the Pledged Securities, the Pledgor shall deposit with
the
Pledgee the certificates representing such shares (together with appropriate
undated stock powers duly executed in blank), and the Pledgee shall hold such
additional shares of Pledged Securities pursuant to this Agreement. Any sums
paid upon or in respect of the Pledged Securities upon the recapitalization,
reorganization, liquidation or dissolution of the issuer thereof shall be paid
over to the Pledgee, as additional collateral security for the payment of the
obligations under the Note.
4.
Representations
and Warranties.
The
Pledgor hereby represents and warrants that:
(a) Except
for the security interest granted to the Pledgee pursuant to this Agreement,
the
Pledgor is the sole owner of the Pledged Securities, having good and valid
title
thereto, free and clear of any and all liens, claims, encumbrances, security
interests, attachments, charges, rights or equitable rights of any other
persons.
(b) All
books, records and documents relating to the Security Interest are genuine,
true
and correct and in all respects what they purport to be.
(c) The
security interest granted to the Pledgee pursuant to this Agreement constitutes
and creates a valid and continuing and first, prior and perfected lien on and
first security interest in the Security Interest in favor of the
Pledgee.
(d) The
Pledged Securities delivered to the Pledgee pursuant to this Agreement are
fully
paid and is non-assessable as of the date of issuance. There are no options,
warrants, convertible securities or other securities exchangeable, convertible
or issuable into any of the Pledged Securities or that give the holder thereof
any rights, directly or indirectly, to any of the Pledged
Securities.
5.
Covenants
and Agreements.
The
Pledgor hereby agrees that, so long as the Note has not been terminated, the
Pledgor shall:
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(a) Defend
the Security Interest against all claims and demands of all Persons (other
than
the Pledgee) at any time claiming the same or any interest therein.
(b) Furnish
to the Pledgee such information concerning the Security Interest as the Pledgee
may from time to time reasonably request, and will allow the Pledgee to inspect
and copy, or will furnish the Pledgee with copies of, all records reasonably
requested by the Pledgee.
(c) At
any
time and from time to time, upon the request of the Pledgee and at the expense
of the Pledgor promptly execute and deliver any and all such further instruments
and documents and will cause such opinions of counsel to be delivered and will
take such further action as may be deemed necessary or desirable in the
reasonable discretion of the Pledgee to obtain, maintain and perfect the
security interest granted hereby, including, without limitation, the provision
of all instruments and documents reasonably necessary to perfect the security
interest granted hereby under Article 8 of Uniform Commercial Code as in effect
in New York (the “UCC”), and execute and deliver one or more proxies, powers of
attorney, orders, notices, statements, agreements or other
writings.
(d) Not
sell,
assign, transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Pledged Securities, or create, incur or permit to exist any
adverse claim or Lien with respect to any of the Pledged Securities, or any
interest therein, or any proceeds thereof, except for the security interest
provided for by this Agreement.
(e) Require
the Pledgee to present, send or file any claim or notices, perform any services,
exercise any rights of collection, enforcement, conversion or exchange, vote,
pay for any insurance, pay any taxes or other charges, make any demand, make
any
inquiry as to the nature or sufficiency of any payment received by them or
take
any action of any kind in connection with the management thereof, and the
Pledgee's only duty with respect thereto shall be to use reasonable care in
the
custody and preservation of the Security Interest while the Security Interest
is
in its actual possession, which shall not include any steps necessary to
preserve rights against prior or third parties.
(f)
File,
record, make, execute and deliver all such acts, deeds, things, notices and
instruments as may be reasonably necessary or desirable to vest in and assure
to
the Pledgee a continuing first priority security interest in and to the
collateral and the enforcement of, and giving effect to, the rights, remedies
and powers hereunder.
(g) In
the
event that all or any part of the securities constituting the Security Interest
are lost, destroyed or wrongfully taken while such securities are in the
possession of the Pledgee, cause the issuance of new securities in place of
the
lost, destroyed or wrongfully taken securities upon request therefor by the
Pledgee without the necessity of the provision by the Pledgee of any indemnity
bond or other security, other than the Pledgee's agreement of indemnity
therefor.
(h) Not
redeem, or permit the redemption, of any part of the Security Interest, or
sell
or permit the sale or other transfer of any of the Pledged
Securities.
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(i)
Not
declare, or permit the declaration of, any dividends on or make any distribution
in respect of the Pledged Securities, or purchase, redeem or acquire for value
any shares of the Pledged Securities.
(j)
Not
take
any action which the Pledgee may reasonably request in order for the Pledgee
to
obtain and enjoy the full rights and benefits granted to it by this Agreement
and the Note.
6.
Voting
Rights.
Unless
and until an Event of Default shall have occurred and be continuing, the Pledgor
shall retain the right to vote the Pledged Securities and to give consents,
waivers and ratifications in respect of the Pledged Securities. Subject to
the
receipt of all required regulatory approvals, once an Event of Default shall
have occurred and so long as it is continuing, the Pledgee shall have the right
to vote the Pledged Securities and to give consents, waivers and ratification
in
respect of the Pledged Securities.
7.
Events
of Default.
The
occurrence of an Event of Default under the Note shall constitute an Event
of
Default hereunder.
8.
Rights
and Remedies Upon an Event of Default.
If an
Event of Default shall have occurred and be continuing, subject to the receipt
of all required regulatory approvals:
(a) The
Pledgee shall, after giving written notice to the Pledgor specifying the action
to be taken, register any or all shares of the Pledged Securities held by the
Pledgee in the name of the Pledgee.
(b) The
Pledgee may demand, xxx for, collect or make any compromise or settlement the
Pledgee deems suitable in respect of the Pledged Securities held by it
hereunder.
(c) The
Pledgee shall have all of the rights and remedies with respect to the Pledged
Securities of a secured party under the UCC.
(d) The
Pledgee may, upon fifteen (15) days prior written notice to the Pledgor of
the
time and place, with respect to the Pledged Securities, sell, lease, assign
or
otherwise dispose of all or any of such Pledged Securities, at such place or
places as the Pledgee deems best, and for cash or on credit for future delivery
(without thereby assuming any credit risk), at public or private sale, without
demand of performance or notice of intention to erect any such disposition
or of
time or place thereof (except such notice as is required hereunder or by
applicable statute and cannot be waived) and the Pledgee or anyone else may
be
the purchaser, lessee, assignee or recipient of any or all of the Pledged
Securities so disposed of at public sale (or, to the extent permitted by law,
at
any private sale), and thereafter hold the same absolutely, free from any claim
or right of whatsoever kind, including any equity of redemption, of the Pledgor,
any such demand, notice or right and equity being hereby expressly waived and
released. The net proceeds of any sale of Pledged Securities pursuant to this
Section 8 shall be applied first to the repayment of the outstanding principal
and accrued interest under the Note and any reasonable costs and expenses of
Pledgee (including attorney's fees) incurred by Pledgee in enforcing its rights
under this Agreement and only after so applying such net proceeds and after
such
payment need the Pledgee account for the surplus, if any, to the Pledgor or
his
successors or assigns, or to whomsoever may be lawfully entitled to receive
the
same, or as a court of competent jurisdiction may direct.
4
9.
Private
Sale and Compliance with Law.
(a) The
Pledgee shall incur no liability as a result of the sale of the Pledged
Securities, or any part thereof, at any private sale conducted in a commercially
reasonable manner. The Pledgor hereby waives any claim against the Pledgee
arising by reason of the fact that the price at which the Pledged Securities
may
have been sold at such a private sale conducted in a commercially reasonable
manner was less than the price which might have been obtained at a public sale
or was less than the aggregate amount of the loan amount of the Note, even
if
the Pledgee accepts the first offer received and does not offer the Pledged
Securities to more than one offeree.
(b) The
Pledgor agrees that in any sale of any of the Pledged Securities whenever an
Event of Default shall have occurred and be continuing, the Pledgee is hereby
authorized to comply with any limitation or restriction in connection with
such
sale as it may be advised by counsel is necessary in order to avoid any
violation of applicable law (including, without limitation, compliance with
such
procedures as may restrict the number of prospective bidders and purchasers
or
require that such prospective bidders and purchasers be persons who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Pledged
Securities), or in order to obtain any required approval of the sale or of
the
purchaser by any governmental regulatory authority or official, and the Pledgor
further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Pledgee be liable or accountable to the Pledgor for any discount
allowed by the reason of the fact that such Pledged Securities is sold in
compliance with any such limitation or restriction.
10. Retention
of Collateral.
Notwithstanding any provision of this Agreement to the contrary and subject
to
the receipt of all required regulatory approvals, the Pledgee may in its
discretion retain all or a portion of the Security Interest in satisfaction
of
any or all due and payable obligations under the Note. The portion of the
Security Interest that may in its discretion be retained by the Pledgee in
satisfaction of such obligations shall be that portion having a fair market
value or cash value, as applicable, equal to the amount of such obligations
at
the time such public or private sale would have been held. Such fair market
value or cash value, as applicable, shall be determined jointly by the Pledgor
and the Pledgee, and the parties hereby agree to cooperate in such
determination. In the event that the parties are unable to agree on such fair
market value or cash value, as applicable, it shall be determined by a
recognized actuarial or accounting firm jointly selected by the Pledgor and
the
Pledgee. All expenses of such determination, including without limitation the
fees and expenses of such actuarial or accounting firm, shall he borne by the
Pledgor.
11. Further
Assurances.
The
Pledgor agrees that at any time and from time to time upon the written request
of the Pledgee, it will execute and deliver such further documents and do such
further acts and things as the Pledgee may reasonably request in order to affect
the purposes of this Agreement.
5
12. No
Waiver; Cumulative Remedies.
The
Pledgee shall not by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder and no waiver shall be valid
unless in writing, and then only to the extent therein set forth. A waiver
by
the Pledgee of any right or remedy hereunder on any one occasion shall not
be
construed as a bar to any right or remedy which the Pledgee would otherwise
have
on any future occasion. No failure to exercise nor any delay in exercising
on
the part of the Pledgee of any right, power or privilege hereunder, shall
operate as a waiver thereof by the Pledgee; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.
13. Notices.
All
communications, notices, instructions or demands given under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
to, or on the third business day after the same is mailed by prepaid registered
or certified mail addressed to, or when sent by facsimile to, the party for
whom
intended, as follows, or to such other address as may be furnished by such
party
by notice in the manner provided herein:
To
the
Pledgor:
Imaging
PET Technologies, Inc.
00
Xxxxx
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
XX, X0X 0X0
|
Attention:
|
Xxxxx
Olinoski
|
|
Facsimile:
|
(000)
000-0000
|
To
the
Pledgee:
Positron
Corporation
0000
Xxxxxxx Xxxxx Xx #000
Xxxxxxx,
Xxxxx 00000
|
Attention:
|
Xxxxxxx
X. Xxxxxx
|
|
Facsimile:
|
(000)
000-0000
|
with
a copy to:
Levy
& Boonshoft, P.C.
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
|
Attention:
|
Xxxxx
Xxxxxxxxxxx, Esq.
|
|
Facsimile:
|
(000)
000-0000
|
14. Waivers,
Amendments.
None of
the terms or provisions of this Agreement may be waived, altered, modified
or
amended except by an instrument in writing, duly executed by the Pledgor and
the
Pledgee.
6
15. Indemnification.
Without
limitation of any of the provisions of the Note, Pledgor hereby covenants and
agrees to pay, indemnify, and hold the Pledgee harmless from and against any
and
all other out-of-pocket liabilities, costs, expenses or disbursements of any
kind or nature whatsoever arising in connection with any claim or litigation
by
any Person resulting from the execution, delivery, enforcement, performance
and
administration of this Agreement, provided,
however,
that
the Pledgor shall have no obligation hereunder with respect to indemnified
liabilities directly or primarily arising from, the willful misconduct or gross
negligence of the Pledgee. The provisions in this Section 15 shall survive
repayment of the loan facility under the Note and termination of this
Agreement.
16. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the heirs,
executors, administrators, successors and assigns of the Pledgor and the
Pledgee. The benefits of this Agreement may not be assigned or transferred
by
the Pledgee without the prior written consent of the Pledgor. The rights and
obligations of the Pledgor may not be assigned or transferred by the Pledgor
without the prior written consent of the Pledgee.
17. Governing
Law; Severability; Submission to Jurisdiction.
(a) THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK
APPLICABLE TO AGREEMENTS MADE AND FULLY TO BE PERFORMED THEREIN BY RESIDENTS
THEREOF. The provisions of this Agreement are severable and if any clause or
provisions shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in
any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision in this Agreement in any jurisdiction.
(b) THE
PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
NEW
YORK STATE COURT LOCATED IN NEW YORK CITY OR ANY FEDERAL COURT LOCATED IN NEW
YORK CITY FOR THE ADJUDICATION OF ANY MATTER ARISING OUT OF OR RELATING TO
THIS
AGREEMENT AND CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED OR CERTIFIED
MAIL
TO ITS ADDRESS SET FORTH IN SECTION 13 HEREOF OUT OF ANY SUCH COURT. NOTHING
CONTAINED IN THE FOREGOING SHALL AFFECT THE RIGHT OF THE PLEDGEE TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER OR TO BRING ANY PROCEEDING HEREUNDER OR UNDER THE
NOTE IN ANY JURISDICTION WHERE THE BORROWER MAY BE AMENABLE TO SUIT. THE
BORROWER HEREBY WAIVES ANY CLAIM THAT ANY NEW YORK STATE COURT LOCATED IN NEW
YORK CITY OR ANY FEDERAL COURT LOCATED IN NEW YORK CITY IS AN INCONVENIENT
FORUM.
18. Termination.
(a) This
Agreement shall terminate upon the payment in full of the obligations under
the
Note.
7
(b) Upon
termination of this Agreement, the Pledgee shall deliver the Pledged Securities
to the Pledgor and all instruments evidencing the Pledged Securities and
necessary to transfer such Pledged Securities, and the Pledgee will execute
and
deliver to the Pledgor all such further agreements and instruments as the
Pledgor shall reasonably request in order to terminate the security interest
in
the Pledged Securities and this Agreement.
[Remainder
of this page left intentionally blank.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered on the day and year first above written.
|
POSITRON
CORPORATION
|
IMAGING
PET TECHNOLOGIES, INC.
|
|||
|
By:
|
/s/ Xxxxxxx Xxxxxx |
By:
|
/s/ Xxxxx Olinoski | |
|
Xxxxxxx
Xxxxxx, Chairman
|
Xxxxx
Olinoski, President & CEO
|
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