Document:

EXHIBIT
        10.1

    

     

    

      POSITRON
        CORPORATION

      NOTE
        PURCHASE AGREEMENT

       

      THIS
        NOTE
        PURCHASE AGREEMENT (the "Agreement")
        is
        made as of June 27, 2005 by and between Positron Corporation, a Texas
        corporation (the "Company"),
        and
        Solaris Opportunity Fund, L.P. ("Investor").
        All
        numbers expressed herein as "$" or "dollars" are in United States
        dollars.

       

      R
        E C
        I T A L S :

       

       

      WHEREAS,
        the Company desires to issue Secured Convertible Promissory Notes in the
        aggregate principal amount of $400,000, subject to the terms and conditions
        set
        forth in this Agreement.

       

      WHEREAS,
        the Investor desires to purchase the Secured Convertible Promissory Notes,
        subject to the terms and conditions set forth in this Agreement.

       

      NOW,
        THEREFORE, in consideration of the respective undertakings, covenants and
        agreements of the parties set forth herein, the parties hereby agree as
        follows:

       

      
        	 	
                SECTION
                  1

              	
                PURCHASE
                  AND SALE OF THE NOTES.

              

      

       

      1.1   Issuance
        of the Notes.
        The
        Company has authorized the issuance and sale to the Investor of, and, subject
        to
        and in reliance upon the representations, warranties, terms and conditions
        of
        this Agreement, the Investor the have agreed to purchase, the Company's Secured
        Convertible Promissory Notes (individually, a "Note,"
        and
        collectively, the "Notes"),
        in
        the principal amount of $400,000. Each Note shall be substantially in the
        form
        set forth in Exhibit A
        hereto.

       

      1.2   Closing.
        The
        Company agrees to issue and sell to the Investor, and, subject to and in
        reliance upon the representations, warranties, terms and conditions of this
        Agreement, the Investor agrees to purchase, the Notes for the aggregate purchase
        price of $400,000. Such purchase and sale shall take place (a) at the initial
        closing (the "Closing") to be held at the offices of the Company on June
        27,
        2005, at 10:00 A.M. (the "Closing
        Date"),
        or on
        such other dates and at such times as may be mutually agreed upon. At the
        Closing, the Company will issue a Note, dated the Closing Date, payable to
        the
        order of Investor, in the principal amount of $400,000 in exchange for
        cash.

       

      1.3   Payments
        and Endorsements.
        Payments of principal, interest and premium, if any, on the Notes, shall
        be made
        directly by wire transfer or by checks duly mailed or delivered to the Investor
        at address specified in the Notes without any presentment or notation of
        payment, except that prior to any transfer of any Note, the holder of record
        shall endorse on such Note a record of the date to which interest has been
        paid
        and all payments made on account of principal of such Note.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      1.4   Payment
        on Non-Business Days.
        Whenever any payment to be made shall be due on a day which is not a Business
        Day, such payment may be made on the next succeeding Business Day, and such
        extension of time shall in such case be included in the computation of payment
        of interest due.

       

      1.5   Registration,
        etc.
        The
        Company shall maintain at its principal office a register of the Notes and
        shall
        record therein the name and address of the registered holder of the Notes,
        the
        address to which notices are to be sent and the address to which payments
        are to
        be made as designated by the registered holder if other than the address
        of the
        holder, and the particulars of all transfers, exchanges and replacements
        of the
        Notes. No transfer of a Note shall be valid unless made on such register
        for the
        registered holder or his executors or administrators or his or their duly
        appointed attorney, upon surrender therefor for exchange as hereinafter
        provided, accompanied by an instrument in writing, in form and execution
        reasonably satisfactory to the Company. Each Note issued hereunder, whether
        originally or upon transfer, exchange or replacement of a Note or Notes,
        shall
        be registered on the date of execution thereof by the Company and shall be
        dated
        the date to which interest has been paid on such Note or Notes. The registered
        holder of the Note shall be that Person in whose name the Note has been so
        registered by the Company. A registered holder shall be deemed the owner
        of a
        Note for all purposes of this Agreement and, subject to the provisions hereof,
        shall be entitled to the principal, premium, if any, and interest evidenced
        by
        such Note free from all equities or rights of set-off or counterclaim among
        the
        Company and the transferor of such registered holder or any previous registered
        holder of such Note.

       

      1.6   Limitations
        on Transferability.
        The
        Investor covenants that in no event will it dispose of any Note or any shares
        of
        capital stock into which such Note is convertible unless and until Investor
        shall have complied with Sections 4.7 and 4.8 hereof and (a) the
        Investor shall have notified the Company of the proposed disposition and
        shall
        have furnished the Company with a statement of the circumstances surrounding
        the
        proposed disposition, and (b) if requested by the Company, the Investor
        shall have furnished the Company with an opinion of counsel satisfactory
        in form
        and substance to the Company and the Company's counsel to the effect that
        (x) such disposition will not require registration under the Securities
        Act
        and (y) appropriate action necessary for compliance with the Securities
        Act
        and any applicable state, local, or foreign law has been taken.

       

      1.7   Replacement
        of Notes.
        Upon
        receipt of evidence satisfactory to the Company of the loss, theft, destruction
        or mutilation of any Note and, if requested in the case of any such loss,
        theft
        or destruction, upon delivery of an indemnity bond or other agreement or
        security reasonably satisfactory to the Company, or, in the case of any such
        mutilation, upon surrender and cancellation of such Note, the Company will
        issue
        a new Note, of like tenor and amount and dated the date to which interest
        has
        been paid, in lieu of such lost, stolen, destroyed or mutilated Note;
provided,
        however,
        if any
        Note of which an Investor, its nominee, or any of its partners or affiliates
        is
        the registered holder is lost, stolen or destroyed, the affidavit of the
        registered holder setting forth the circumstances with respect to such loss,
        theft or destruction shall be accepted as satisfactory evidence thereof,
        and no
        indemnification bond or other security shall be required as a condition to
        the
        execution and delivery by the Company of a new Note in replacement of such
        lost,
        stolen or destroyed Note other
        than
        the
        registered holder's written agreement to indemnify the Company.

       

      
        
          
          

        

        
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      1.8   Conversion
        of Note.
        All or
        any portion of the principal amounts of the Notes, may be converted at the
        option of the Investor, into shares of Series F Preferred Stock (as
        defined
        herein) at a conversion price and on such terms as are provided in the
        Notes.

       

      
        	 	
                SECTION
                  2

              	
                DEFINITIONS.

              

      

       

      For
        purposes of this Agreement the following terms shall have the following
        meanings:

       

      2.1   "Articles"
        shall
        mean the Company's Articles of Incorporation, as amended, as of the First
        Closing, and including the Series A Statement, Series C Statement,
        Series D Statement, Series E Statement and Series F
        Statement
        thereto.

       

      2.2   "Business
        Day"
        shall
        mean a day other than Saturday, Sunday or a public holiday under the laws
        of the
        State of Texas.

       

      2.3   "Commission"
        shall
        mean the Securities and Exchange Commission.

       

      2.4   "Common
        Stock"
        shall
        mean the Common Stock of the Company, par value $0.01 per share.

       

      2.5   "GAAP"
        shall
        mean United States generally accepted accounting principles.

       

      2.6   "Intellectual
        Property"
        shall
        mean patents, patent applications, trademarks, service marks, mask works,
        trade
        names, copyrights, trade secrets, information, proprietary rights and
        processes.

       

      2.7   "Material
        Adverse Event"
        shall
        mean any change, event or effect that is materially adverse to the general
        affairs, business, operations, assets, condition (financial or otherwise)
        or
        results of operations of the Company and its subsidiaries taken as a whole;
        provided, however, that the following shall not be taken into account in
        determining a "Material
        Adverse Event":
        (a) any adverse change, event or effect that is directly attributable
        to
        conditions affecting the United States economy generally unless such conditions
        adversely affect the Company in a materially disproportionate manner, and
        (b) any adverse change, event or effect that is directly attributable
        to
        conditions affecting the Company's industry generally, unless such conditions
        adversely affect the Company in a materially disproportionate manner.

       

      2.8   "Person"
        shall
        mean an individual, corporation, partnership, joint venture, limited liability
        company, trust, or unincorporated organization, or a government or any agency
        or
        political subdivision thereof, or any other entity or business
        form.

       

      2.9   "Preferred
        Stock"
        shall
        mean the Company's Series A Preferred Stock, Series C Preferred Stock,
        Series D Preferred Stock, Series E Preferred Stock and
        Series F
        Preferred Stock.

       

      2.10  "Registration
        Rights Agreement"
        shall
        mean the Registration Rights Agreement dated as of the First Closing by and
        between the Company and the Investor in the form attached hereto as Exhibit B.

       

      
        
          
          

        

        
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      2.11  "Schedule of
        Exceptions"
        shall
        mean the schedule of exceptions to the representations and warranties of
        the
        Company in Section 3. The Schedule of Exceptions is attached
        as
Schedule
        1
        hereto.

       

      2.12  "Securities
        Act"
        shall
        mean the Securities Act of 1933, as amended and the rules and regulations
        of the
        Commission promulgated thereunder.

       

      2.13  "Security
        Agreement"
        shall
        mean the Security Agreement dated as of the First Closing by and between
        the
        Company and the Investor in the Form attached hereto as Exhibit C.

       

      2.14  "Series
        A Preferred Stock"
        shall
        mean the Series A Preferred Stock of the Company, par value $1.00
        per
        share.

       

      2.15  "Series
        A Statement"
        shall
        mean the Statement of Designation Establishing Series A 8% Cumulative
        Convertible Redeemable Preferred Stock of Position Corporation, filed with
        the
        Texas Secretary of State on February 29, 1996.

       

      2.16  "Series
        C Preferred Stock"
        shall
        mean the Series C Preferred Stock of the Company, par value $1.00
        per
        share.

       

      2.17  "Series
        C Statement"
        shall
        mean the Statement of Designation Establishing Series C Preferred
        Stock of
        Positron Corporation, filed with the Texas Secretary of State on May 21,
        2004.

       

      2.18  "Series
        D Preferred Stock"
        shall
        mean the Series D Preferred Stock of the Company, par value $1.00
        per
        share.

       

      2.19  "Series
        D Statement"
        shall
        mean the Statement of Designation Establishing Series D Preferred
        Stock of
        Positron Corporation, filed with the Texas Secretary of State on May 21,
        2004.

       

      2.20  "Series
        E Preferred Stock"
        shall
        mean the Series E Preferred Stock of the Company, par value $1.00
        per
        share.

       

      2.21  "Series
        E Statement"
        shall
        mean the Statement of Designation Establishing Series E Preferred
        Stock of
        Positron Corporation, to be filed with the Texas Secretary of State following
        the Closing. 

       

      2.22  "Series
        F
        Preferred Stock" shall mean the Series F Preferred Stock of the
        Company, par value $1.00 per share.

       

      
        2.23  "Series
          F
          Preferred Statement" shall mean the Statement of Designation
          Establishing Series F Preferred Stock of Positron Corporation, to be filed
          with
          the Texas Secretary of State following the closing. 

      

       

      2.24  "Subsidiary"
        shall
        mean any corporation, partnership or other entity, more than 50% of whose
        equity
        interests (measured by virtue of voting rights) in the aggregate is owned
        by the
        Company.

       

      2.25  "Transactional
        Agreements"
        shall
        mean this Agreement, the Notes, the Security Agreement, and the Registration
        Rights Agreement.

       

      
        	 	
                SECTION
                  3

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE COMPANY.

              

      

       

      The
        Company hereby represents and warrants to the Investor that:

       

      
        
          
          

        

        
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      3.1   Corporate
        Organization and Authority.
        The
        Company:

       

      3.1.1   is
        a
        corporation duly organized, validly existing, authorized to exercise all
        its
        corporate powers, rights and privileges, and in good standing in the State
        of
        Texas;

       

      3.1.2   has
        the
        corporate power and corporate authority to own and operate its properties
        and to
        carry on its business as now conducted and as proposed to be
        conducted;

       

      3.1.3   has
        made
        available to the Investor or their counsel a copy of the minute books of
        the
        Company, and said copies are true, correct, and complete and contain all
        amendments and all minutes of meetings and actions taken by the shareholders
        and
        directors of the Company through the date of this Agreement.

       

      3.2   Subsidiaries.
        The
        Company does not presently own, have any equity interest or investment in,
        or
        control, directly or indirectly, any other corporation, partnership or entity.
        The Company is not a participant in any joint venture or
        partnership.

       

      3.3   SEC
        Filings; Financial Statements.
        The
        Company has filed (i) its Annual Report on Form 10-K for the
        fiscal
        year ended December 31, 2004 (the "Company
        Current 10-K"),
        and
        (ii) its Quarterly Reports on Form 10-Q for the fiscal quarter ended
        March 31, 2005, (the "Company
        Current 10-Q"
        and,
        together with the Company Current 10-K and the "Company
        SEC Reports"),
        all
        of which complied when filed in all material respects with all applicable
        requirements of the Securities Act and the Exchange Act of 1934, as amended.
        The
        audited financial statements and unaudited interim financial statements
        of the Company included or incorporated by reference in such Company SEC
        Reports
        were prepared in accordance with GAAP applied on a consistent basis during
        the
        periods involved (except as may be indicated in the notes thereto) and present
        fairly, in all material respects, the financial position and results of
        operations and cash flows of the Company at the respective dates and for
        the
        respective periods indicated (and in the case of all such financial statements
        that are interim financial statements, contain all adjustments so to present
        fairly). Except to the extent that information contained in any Company SEC
        Report was revised or superseded by a later filed report, none of the Company
        SEC Reports contained any untrue statement of a material fact or omitted
        to
        state any material fact required to be stated therein or necessary in order
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading.

       

      3.4   Corporate
        Power.
        The
        Company will have at the Closing Date all requisite legal and corporate power
        and authority to execute and deliver the Transactional Agreements, to sell
        and
        issue the Notes hereunder, to issue the Series E Preferred Stock upon
        conversion of the Notes, to issue the Common Stock issuable upon conversion
        of
        the Series E Preferred Stock (subject to stockholder approval as set
        forth
        in Section 7.1 hereof), and to carry out and perform its obligations
        under
        the terms of the Transactional Agreements.

       

      3.5   Authorization.
        All
        corporate action on the part of the Company, its officers, directors, and
        stockholders necessary for the authorization, execution, delivery, and
        performance of all obligations under the Transactional Agreements, and for
        the
        authorization, issuance, and delivery of the Notes, of the Series E
        Preferred Stock issuable upon conversion of the Notes (subject to filing
        the
        Series E Statement immediately following the Closing), and of the Common
        Stock
        (subject to stockholder approval as set forth in Section 7.1 hereof)
        issuable upon conversion of the Series E Preferred Stock has been
        taken.
        The Transactional Agreements constitute legally binding and valid obligations
        of
        the Company enforceable in accordance with their respective terms, except
        to the
        extent that such enforcement may be subject to applicable bankruptcy,
        insolvency, reorganization, moratorium, or other laws of general application
        relating to or affecting enforcement of creditors' rights and laws concerning
        equitable remedies.

       

      
        
          
          

        

        
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      3.6   Validity
        of Shares.
        Upon
        the filing of the Series E Statement, the Series E Preferred Stock
        issuable
        upon conversion of the Notes will be duly and validly reserved and, assuming
        such Series E Preferred Stock is issued in accordance with the Articles
        and
        the terms of this Agreement, will be duly and validly issued (including,
        without
        limitation, issued in compliance with applicable federal and state securities
        laws) and non-assessable and will be free of any liens or encumbrances other
        than any liens or encumbrances created by or imposed thereon under this
        Agreement, the Notes, or the Registration Rights Agreement. Subject to
        stockholder approval, as set forth in Section 7.1 hereof, the Common
        Stock
        issuable upon conversion of the Series E Preferred Stock has been
        duly and
        validly reserved and, assuming such Common Stock is issued in accordance
        with
        the Articles, will be duly and validly issued (including, without limitation,
        issued in compliance with applicable federal and state securities laws) and
        non-assessable and will be free of any liens or encumbrances other than any
        liens or encumbrances created by or imposed thereon by the holders; provided,
        however, that the Series E Preferred Stock (and the Common Stock issuable
        upon conversion thereof) shall be subject to restrictions on transfer under
        state and/or federal securities laws. Except as set forth in the Articles
        and
        the Notes, the Series E Preferred Stock issuable upon conversion of
        the
        Notes and the Common Stock issuable upon conversion of the Series E
        Preferred Stock are not subject to any preemptive or other similar statutory
        or
        contractual rights and will not conflict with any provisions of any agreement
        or
        instrument to which the Company is a party or by which it is bound.

       

      
        	 	
                SECTION
                  4

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE INVESTOR.

              

      

       

      The
        Investor represents and warrants to the Company as follows:

       

      4.1   Authorization.
        When
        executed and delivered by the Investor, and assuming execution and delivery
        by
        the Company, the Transactional Agreements will each constitute a valid
        obligation of the Investor, enforceable in accordance with its terms, except
        to
        the extent that such enforcement may be subject to applicable bankruptcy,
        insolvency, reorganization, moratorium, or other laws of general application
        relating to or affecting enforcement of creditors' rights and laws concerning
        equitable remedies.

       

      4.2   Brokers
        and Finders.
        The
        Investor has not retained any investment banker, broker, or finder in connection
        with the transactions contemplated by this Agreement.

       

      4.3   Investment.
        This
        Agreement is made with the Investor in reliance upon the Investor's
        representation to the Company, which by the Investor's execution of this
        Agreement the Investor hereby confirms, that the Notes (including capital
        stock
        issuable upon conversion thereunder) to be received by the Investor will
        be
        acquired for investment for the Investor's own account, not as a nominee
        or
        agent, and not with a view to the sale or distribution of any part thereof,
        and
        that the Investor has no present intention of selling, granting any
        participation in, or otherwise distributing any of the Notes (including capital
        stock issuable upon conversion thereunder). By executing this Agreement,
        the
        Investor further represents that it has no contract, undertaking, agreement,
        or
        arrangement with any person to sell, transfer, or grant participation to
        such
        person or to any third person, with respect to any of the Notes (including
        capital stock issuable upon conversion thereunder).

       

      
        
          
          

        

        
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      4.4   No
        Public Market.
        The
        Investor understands that no public market now exists for the Series E
        Preferred Stock and that the Company has given no assurances that a public
        market will ever exist for the Series E Preferred Stock. The investor
        understands that the Company's Common Stock is currently quoted by the Nasdaq
        OTC Bulletin Board and that although the Company will use its best efforts
        to
        obtain listing on the Nasdaq SmallCap Market and Toronto Street Exchange,
        no
        assurance can be given that the Company's securities will be approved for
        listing on such exchanges. 

       

      4.5   Experience.
        The
        Investor represents that: (a) it has such knowledge and experience
        in
        financial and business matters as to be capable of evaluating the merits
        and
        risks of its prospective investment in the Notes; (b) it believes
        it has
        received all the information it has requested from the Company and considers
        necessary or appropriate for deciding whether to obtain the Notes; (c) it
        has had the opportunity to discuss the Company's business, management, and
        financial affairs with the Company's management; (d) it understands the economic
        implications of the transactions contemplated by this Agreement and confronting
        the Company; (e) it has had the full opportunity to seek advice of counsel
        and
        any other appropriate advice with respect to the transactions contemplated
        by
        this Agreement; (f) it has the ability to bear the economic risks
        of its
        prospective investment; and (g) it is able, without materially impairing
        its financial condition, to hold the Notes for an indefinite period of time
        and
        to suffer a complete loss on its investment.

       

      4.6   Accredited
        Investor.
        The
        Investor presently qualifies and will as of the Closing qualify as an
        "accredited investor" within the meaning of Regulation D of the rules and
        regulations promulgated under the Securities Act.

       

      4.7   Limitations
        on Transferability.
        The
        Investor covenants that in no event will it dispose of the Notes (other than
        pursuant to Rule 144 promulgated by Securities and Exchange Commission under
        the
        Securities Act ("Rule
        144")
        or any
        similar or analogous rule) unless and until (a) the Investor shall
        have
        notified the Company of the proposed disposition and shall have furnished
        the
        Company with a statement of the circumstances surrounding the proposed
        disposition, and (b) if requested by the Company, the Investor shall
        have
        furnished the Company with an opinion of counsel satisfactory in form and
        substance to the Company and the Company's counsel to the effect that
        (x) such disposition will not require registration under the Securities
        Act
        and (y) appropriate action necessary for compliance with the Securities
        Act
        and any applicable state, local, or foreign law has been taken. Notwithstanding
        the limitations set forth in the foregoing sentence, if the Investor is a
        partnership or limited liability company it may transfer Notes (or portions
        thereof) to its constituent partners or a retired partner of such partnership
        who retires after the date hereof, or its constituent members or retired
        members
        of such limited liability company who retires after the date hereof, as the
        case
        may be, or to the estate of any such partner, member or retired partner or
        member or transfer by gift, will, or intestate succession to any such partner's
        or member's spouse or lineal descendants or ancestors without the necessity
        of
        registration or opinion of counsel if the transferee agrees in writing to
        be
        subject to the terms of this Agreement to the same extent if such transferee
        were an Investor; provided, however, that Investor hereby covenants not to
        effect such transfer if such transfer either would invalidate the securities
        laws exemptions pursuant to which the Notes were originally offered and sold
        or
        would itself require registration and/or qualification under the Securities
        Act
        or applicable state securities laws. Each Note transferred as above provided
        shall bear the appropriate restrictive legend set forth in Section 5
        below,
        except that such Note shall not bear such legend if the transfer was made
        in
        compliance with subsection (k) of Rule 144 or if the opinion of counsel
        referred to above is to the further effect that such legend is not required
        in
        order to establish compliance with any provisions of the Securities
        Act.

       

      
        
          
          

        

        
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      4.8   Ownership
        Change Under Section 382 of the Internal Revenue Code; Special Restrictions
        Upon
        Transfer.
        

       

      4.8.1   Special
        Restrictions Upon Transfer.
        The
        following restrictions shall apply to the transfer of shares of Common Stock,
        issuable directly or indirectly upon the conversion of any Note.

       

      4.8.2   Definitions.
        For
        purposes of this Section 4.8 the following terms shall have the following
        meanings:

       

      "Board"
        means
        the Company's Board of Directors.

       

      "Common
        Stock"
        shall
        mean the Common Stock of the Company, par value $0.01 per share.

       

      "Section
        382"
        means
        Section 382 of the Internal Revenue Code of 1986, as amended, and the
        regulations thereunder.

       

      "Special
        Board Approval"
        shall
        mean the approval by the Board of Directors of the Company acting in accordance
        with applicable law.

       

      4.8.3   Purported
        Transfers Not Effective.
        Unless
        such transfer shall have been preceded by Special Board Approval, any purported
        transfer of Common Stock into which any Note is directly or indirectly
        convertible in excess of the number of shares that can be transferred without
        increasing the transferee's ownership interest percentage above 4.5% is not
        effective to transfer ownership of such excess shares (the "Prohibited
        Shares")
        from
        the transferor (the "Initial
        Transferor")
        to the
        purported acquiror (the "Purported
        Acquiror").
        For
        this purpose a transferee's ownership interest percentage shall be calculated
        pursuant to Section 382. By way of explanation, a transferees ownership interest
        is generally the sum of the transferee's direct ownership interest percentage
        as
        calculated pursuant to Section 382 and the transferee's indirect ownership
        interest as calculated pursuant to Section 382, with adjustments made to
        include
        ownership interests that, under ordinary circumstances, are not included
        in
        measuring ownership interests. In the event a Initial Transferor seeks a
        Special
        Board Approval, to the extent that the transaction reflected in the proposed
        request for a Special Board Approval does not result in an "ownership shift"
        in
        excess of 40% and does not result in an "ownership change" as those terms
        are
        used in Section 382, the approval of the Board will not be unreasonably
        withheld. Moreover, to the extent that the proceeds of any "ownership shift"
        of
        up to 40% results directly or indirectly in the receipt of cash by the Company,
        the transaction will be presumed to be in the interest of the Company unless
        it
        results in an "ownership change".

       

      
        
          
          

        

        
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      4.8.4   Transfer
        to Agent of Prohibited Shares; Sale by Agent; Payment of
        Proceeds.
        On
        demand by the Company (which demand must be made within 30 days of the time
        Company learns of the transfer of Prohibited Shares), a Purported Acquiror
        must
        transfer any certificate or other evidence of ownership of the Prohibited
        Shares
        within the Purported Acquiror's possession or control, together with any
        dividends or other distributions that were received by the Purported Acquiror
        from Company with respect to the Prohibited Shares ("Prohibited
        Distributions"),
        to an
        agent designated by Company (the "Agent").
        The
        Agent will sell the Prohibited Shares in an arms-length transaction (over
        a
        public exchange, if reasonable possible), and the Purported Acquiror will
        receive an amount of sales proceeds not in excess of the price paid or
        consideration surrendered by the Purported Acquiror for the Prohibited Shares
        (or the fair market value of the Prohibited Shares at the time of an attempted
        transfer to the Purported Acquiror by gift, inheritance, or a similar transfer).
        If the Purported Acquiror has resold the Prohibited Shares prior to receiving
        the Company's demand to surrender the Prohibited Shares to the Agent, the
        Purported Acquiror shall be deemed to have sold the Prohibited Shares as
        agent
        for the Initial Transferor and shall be required to transfer to the Agent
        any
        Prohibited Distributions and the proceeds of such sale, except to the extent
        that the Agent grants written permission to the Purported Acquiror to retain
        a
        portion of such sales proceeds not exceeding the amount that the Purported
        Acquiror would have received from the Agent if the Agent rather than the
        Purported Acquiror had resold the Prohibited Shares. If the Initial Transferor
        can be identified, the Agent will pay to the Initial Transferor any sales
        proceeds in excess of those due to the Purported Acquiror, together with
        any
        amounts received by the Agent from the Purported Acquiror that are attributable
        to Prohibited Distributions. If the Initial Transferor cannot be identified
        within 90 days, the Agent may pay any amounts due to the Initial Transferor
        into
        a court or governmental agency, if applicable law permits, and otherwise
        must
        transfer such amounts to a charity designated by Company. In no event shall
        amounts due to the Initial Transferor pursuant to Article inure to the benefit
        of Company or the Agent, but such amounts may be used to cover expenses incurred
        by Agent in attempting to identify the initial Transferor. If the Purported
        Acquiror fails to surrender the Prohibited Shares within the next 30 business
        days from demand by Company, then the Company will institute legal proceedings
        to compel the surrender.

       

      4.8.5   Legend.
        The
        Investor understands and agrees that each certificate held by the Investor
        representing the Notes, and Series F Preferred Stock and the Common
        Stock
        issuable upon conversion thereof, or any other securities issued in respect
        of
        the Notes, and Series F Preferred Stock and Common Stock issuable
        upon
        conversion thereof upon any stock split, stock dividend, recapitalization,
        merger, consolidation or similar event, shall bear the following legend ((in
        addition to any legend required by this Agreement, the other Agreements or
        under
        applicable state securities laws):

       

      "THE
        SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF, AND
        ARE
        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."

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

         

      

      
        	 	
                SECTION
                  5

              	
                CONDITIONS
                  OF INVESTOR'S OBLIGATIONS AT
                  CLOSING.

              

      

       

      The
        obligations of the Investor under Section 1 of this Agreement are
        subject
        to the fulfillment at or before each of the Closings of the following
        conditions, any of which may be waived in writing by such Investor:

       

      5.1   Representations
        and Warranties.
        The
        representations and warranties of the Company contained in Section 3
        shall
        be true in all respects on and as of the Closing with the same effect as
        if made
        on and as of the Closing.

       

      5.2   Performance.
        The
        Company shall have performed or fulfilled in all material respects all
        agreements, obligations, and conditions contained herein required to be
        performed or fulfilled by the Company before the Closing.

       

      5.3   Qualifications.
        All
        authorizations, approvals, or permits, if any, of any governmental authority
        or
        regulatory body of the United States or any state that are required in
        connection with the lawful issuance and sale of the Notes pursuant to this
        Agreement shall be duly obtained effective as of the Closing.

       

      5.4   Compliance
        Certificate.
        Upon
        request by the Investor the Company shall deliver to the Investor a certificate
        dated as of the Closing, signed by the Company's Secretary, certifying as
        to
        (a) the Company's Articles, (b) the Company's Bylaws, (c) the
        resolutions adopted by, and other consents and approvals of, the Company's
        Board
        of Directors and stockholders in connection with the Transactional Agreements
        and the transactions contemplated hereby and thereby, and (d) the
        names of
        the officers of the Company authorized to sign the Transactional Agreements
        and
        the other documents or certificates to be delivered pursuant to this Agreement
        by the Company, or any of its officers, together with the true signatures
        of
        such officers. Upon request by the Investor, the Company shall deliver to
        the
        Investor a certificate dated as of the Closing, signed by the Company's
        President, certifying that the conditions set forth in Sections 5.1,
        5.2
        and 5.3 have been satisfied.

       

      5.5   Notes.
        The
        Company shall have executed and delivered to Investor the original
        Notes.

       

      5.6   Security
        Agreement.
        The
        Company shall have executed and delivered to Investor the Security
        Agreement.

       

      5.7   Registration
        Rights Agreement.
        The
        Company shall have executed and delivered to Investor the Registration Rights
        Agreement.

       

      
        	 	
                SECTION
                  6

              	
                CONDITIONS
                  OF THE COMPANY'S OBLIGATIONS AT
                  CLOSING.

              

      

       

      The
        obligations of the Company under Section 1 of this Agreement are subject
        to
        the fulfillment at or before the Closing of the following conditions, any
        of
        which may be waived in writing by the Company:

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

         

      

      6.1   Representations
        and Warranties.
        The
        representations and warranties of the Investor contained in Section 4
        shall
        be true in all respects on and as of the Closing with the same effect as
        though
        said representations and warranties had been made on and as of the
        Closing.

       

      6.2   Blue
        Sky Compliance.
        The
        Company shall have complied with the securities laws of the State of Texas
        and
        any other applicable states as necessary to offer and sell the Notes to the
        Investor.

       

      6.3   Legal
        Matters.
        All
        material matters of a legal nature which pertain to the Transactional Agreements
        and the transactions contemplated hereby and thereby shall have been reasonably
        approved by counsel to the Company.

       

      6.4   Registration
        Rights Agreement.
        Investor shall have executed and delivered to the Company the Registration
        Rights Agreement.

       

      6.5   Security
        Agreement.
        Investor shall have executed and delivered to the Company the Security
        Agreement.

       

      
        	 	
                SECTION
                  7

              	
                POST-CLOSING
                  COVENANTS OF THE COMPANY.

              

      

       

      7.1   Stockholder
        Approval.
        The
        Company shall use reasonable efforts to obtain all required stockholder approval
        of the transactions contemplated by the Transactional Agreements, including
        amending the Articles to increase the number of shares of authorized Common
        Stock to account for conversion of the Series E Preferred Stock and
        all
        other series of Preferred Stock.

       

      7.2   Securities
        Laws Compliance.
        Within
        15 days after the Closing the Company shall make any filings necessary under
        the
        securities or blue sky laws of any applicable jurisdiction.

       

      7.3   Private
        Offering.
        The
        Company agrees that neither the Company nor anyone acting on its behalf will
        offer the Notes or any similar securities for issuance or sale to, or solicit
        any offer to acquire any of the same from, anyone or take any other action
        so as
        to make the issuance and sale of the Notes subject to the registration
        requirements of Section 5 of the Securities Act.

       

      7.4   Properties,
        Business, Insurance.
        The
        Company shall maintain, and cause each of its subsidiaries to maintain, as
        to
        their respective properties and business, insurance against such casualties
        and
        contingencies and of such types and in such amounts as is customary for
        companies similarly situated, of similar size, scope and financial condition,
        which insurance shall be deemed by the Company to be sufficient. 

       

      7.5   Restrictive
        Agreements Prohibited.
        Neither
        the Company nor any of its subsidiaries shall become a party to any agreement
        which by its terms restricts the Company's performance of the Transactional
        Agreements or the Articles.

       

      7.6   Use
        of
        Proceeds.
        The
        Company agrees to use the proceeds from the sale of the Notes for (i) payment
        of
        expenses related to the transactions contemplated by the Transactional
        Agreements, (ii) payment of outstanding accounts payable, and (iii) current
        operating expenses.

       

      
        
          
          

        

        
          -11-

          
            

          

        

        
          
          

        

         

      

      7.7   Material
        Changes and Litigation.
        The
        Company shall promptly notify the Investor of any Material Adverse Event
        and of
        any litigation or governmental proceeding or investigation brought or, to
        the
        Company's knowledge, threatened in writing against the Company, officer,
        director, key employee or principal stockholder of the Company which, if
        adversely determined, would result in a Material Adverse Event.

       

      7.8   Punctual
        Payment.
        The
        Company shall pay the principal of, premium, if any, and interest on the
        Notes
        at the times and place and in the manner provided in the Notes and
        herein.

       

      7.9   Preservation
        of Corporate Existence.
        The
        Company shall preserve and maintain its corporate existence and all rights,
        franchises and privileges in the jurisdiction of its organization, and qualify
        and remain qualified as a foreign corporation in each jurisdiction in which
        such
        qualification is necessary or desirable in view of its business and operations
        or the ownership of its properties, except where the failure to qualify would
        not constitute a Material Adverse Event. The Company shall preserve and maintain
        all licenses and other rights to use patents, processes, licenses, trademarks,
        trade names, inventions, intellectual property rights or copyrights owned
        or
        possessed by it, and material to the conduct of its business.

       

      7.10  Compliance
        with Laws.
        The
        Company shall comply, and cause each Subsidiary to comply, with all applicable
        laws, rules, regulations and orders of any governmental authority, noncompliance
        with which could materially adversely affect its business or condition,
        financial or other.

       

      7.11  Keeping
        of Records and Books of Account.
        The
        Company shall keep adequate records and books of account, in which complete
        entries will be made in accordance with GAAP consistently applied, reflecting
        all material financial transactions of the Company and in which, for each
        fiscal
        year, are proper reserves for depreciation, depletion, obsolescence,
        amortization, taxes, bad debts and other purposes in connection with its
        business shall be made.

       

      7.12  Compliance
        with ERISA.
        The
        Company shall comply with all minimum funding requirements applicable to
        any
        pension or other employee benefit or employee contribution plans which are
        subject to ERISA or to the Code, and comply in all material respects with
        the
        provisions of ERISA and the Code, and the rules and regulations thereunder,
        which are applicable to any such plan. The Company will not permit any event
        or
        condition to exist which could permit any such plan to be terminated under
        circumstances which would cause the lien provided for in Section 4068
        of
        ERISA to attach to the assets of the Company.

       

      7.13  Foreign
        Corrupt Practices Act.
        The
        Company shall comply and cause each officer, director, partner, employee
        and
        agent of the Company, each Subsidiary to comply, at all times with the
        prohibitions on certain acts and practices set forth in the Foreign Corrupt
        Practices Act of 1977, and any rules or regulations promulgated
        thereunder.

       

      7.14  Exchange
        Relisting.
        The
        Company shall use its best efforts to obtain listing of its Common Stock
        on the
        Nasdaq SmallCap Market and the Toronto Stock Exchange.

       

      7.15  Negative
        Covenants.
        Without
        limiting any other covenants and provisions hereof, the Company covenants
        and
        agrees that, as long as any of the Notes remains outstanding, it will comply
        with and observe the following covenants and provisions, and will cause each
        Subsidiary to comply with and observe such of the following covenants and
        provisions as are applicable to such Subsidiary, and will not, without the
        prior
        written consent of the holder of the Notes:

       

      
        
          
          

        

        
          -12-

          
            

          

        

        
          
          

        

         

      

      7.15.1   Distributions.
        Except
        as required by the Notes and the Articles, declare or pay any dividends,
        purchase, redeem, retire, or otherwise acquire for value any of its capital
        stock (or rights, options or warrants to purchase such shares) now or hereafter
        outstanding, return any capital to its stockholders as such, or make any
        distribution of assets to its stockholders as such, or permit any Subsidiary
        to
        do any of the foregoing (such transactions being hereinafter referred to
        as
        "Distributions"),
        except that the Subsidiaries may declare and make payment of cash and stock
        dividends, return capital and make distributions of assets to the Company;
        and,
        except
        that
        nothing herein contained shall prevent the Company from effecting a stock
        split
        or declaring or paying any dividend consisting of shares of any class of
        capital
        stock pro rata to the holders of shares of such class of capital
        stock.

       

      7.15.2   Extraordinary
        Corporate Transactions.
        Take
        any corporate action, enter into any agreement to take such action, or obligate
        itself to take any such action, if such action would: (i) provide
        for the
        voluntary liquidation, dissolution or winding up of the Company; (ii) enter
        into any transaction that expressly prohibits or limits the Company's right
        to
        perform its obligations under this Agreement or the Notes; or
        (iii) transfer, sell or license any material amount of its assets
        other
        than in the ordinary course of business or other than obsolete equipment
        or
        unsaleable inventory.

       

      7.15.3   Dealings
        with Affiliates.
        Except
        for transactions involving the Company and Investor, enter or permit any
        Subsidiary to enter into any transaction with any holder of five percent
        (5%) or
        more of any class of capital stock of the Company, or any member of their
        families or any corporation or other entity in which anyone or more of such
        stockholders or members of their immediate families, directly or indirectly
        holds five percent (5%) or more of any class of capital stock or other ownership
        interest, except in the ordinary course of business and on terms not less
        favorable to the Company or any Subsidiary than it would obtain in a transaction
        between unrelated parties.

       

      7.15.4   Change
        in Nature of Business.
        Make
        any material change in the nature of the Company's business as carried on
        at the
        date hereof, without the prior approval of its Board of Directors.

       

      7.16   Articles.
        The
        Company shall file the Series F Statement with the Secretary of State
        of
        the State of Texas and deliver to the Investor a certified copy of the
        Series F Statement.

       

      
        	 	
                SECTION
                  8

              	
                MISCELLANEOUS.

              

      

       

      8.1   Governing
        Law.
        This
        Agreement shall be governed by, and construed in accordance with, the laws
        of
        the State of Texas, excluding those laws that direct the application of the
        laws
        of another jurisdiction.

       

      8.2   Counterparts.
        This
        Agreement may be executed 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.

       

      
        
          
          

        

        
          -13-

          
            

          

        

        
          
          

        

         

      

      8.3   Headings.
        The
        headings of the sections of this Agreement are for convenience and shall
        not by
        themselves determine the interpretation of this Agreement.

       

      8.4   Notices.
        Any
        notice required or permitted hereunder shall be given in writing and shall
        be
        conclusively deemed effectively given upon personal delivery or delivery
        by
        courier, or on the first business day after transmission if sent by confirmed
        facsimile transmission or electronic mail transmission, or five days after
        deposit in the United States mail, by registered or certified mail, postage
        prepaid, addressed (i) if to the Company, as set forth below the Company's
        name on the signature page of this Agreement, and (ii) if to an Investor,
        at such Investor's address as set forth on the Signature page of this Agreement,
        or at such other address as the Company or such Investor may designate by
        10
        days' advance written notice to the other parties hereto.

       

      8.5   Survival
        of Warranties.
        The
        warranties and representations of the parties contained in or made pursuant
        to
        this Agreement shall survive for two years after the execution and delivery
        of
        this Agreement and the First Closing; provided, however, that such
        representations and warranties need only be accurate as of the date of such
        execution and delivery and as of the Closing.

       

      8.6   Amendments,
        Waivers and Consent.
        Any
        provision in this Agreement or the Notes to the contrary notwithstanding,
        changes in or additions to this Agreement may be made, and compliance with
        any
        covenant or provision herein or therein set forth may be omitted or waived,
        if
        the Company shall obtain consent thereto in writing from the holder of the
        Notes; provided
        that no
        such consent shall be effective to reduce or to postpone the date fixed for
        the
        payment of the principal (including any required redemption) or interest
        payable
        on the Notes, without the consent of the holder thereof. Any waiver or consent
        may be given subject to satisfaction of conditions stated therein and any
        waiver
        or consent shall be effective only in the specific instance and for the specific
        purpose for which given. Written notice of any waiver or consent effected
        under
        this subsection shall promptly be delivered by the Company to any holder
        who did
        not execute the same. No failure or delay on the part of the Investor, or
        any
        other holder of the Notes in exercising any right, power or remedy hereunder
        shall operate as a waiver thereof, nor shall any single or partial exercise
        of
        any such right, power or remedy preclude any other or further exercise thereof
        or the exercise of any other right, power or remedy hereunder. The remedies
        herein provided are cumulative and not exclusive of any remedies provided
        by
        law.

       

      8.7   Finders'
        Fees.
        The
        Company and the Investor will indemnify the other against all liabilities
        incurred by the indemnifying party with respect to claims related to investment
        banking or finders' fees in connection with the transactions contemplated
        by
        this Agreement, arising out of arrangements between the party asserting such
        claims and the indemnifying party, and all costs and expenses (including
        reasonable fees of counsel) of investigating and defending such
        claims.

       

      8.8   Expenses.
        The
        Company and the Investor will bear their respective legal and other fees
        and
        expenses with respect to this Agreement and the transactions contemplated
        hereby.

       

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

         

      

      8.9   Confidentiality.
        Each
        party hereto agrees that, except with the prior written permission of the
        Company, it shall at all times keep confidential and not divulge or furnish
        or
        make accessible to anyone any confidential information concerning or relating
        to
        the business or financial affairs of the Company to which such party has
        become
        privy by reason of this Agreement, discussions or negotiations relating to
        this
        Agreement or the exhibits to this Agreement, provided that an Investor may
        disclose confidential information if (i) the information is publicly
        known
        through publication or otherwise through no wrongful act of the Investor;
        (ii) the information is received from a third party who rightfully
        discloses it to the Investor without restriction on its subsequent disclosure;
        (iii) the information is disclosed pursuant to the lawful requirement
        of a
        governmental agency or by order of court of competent jurisdiction, provided
        that in such event, Investor will provide prior written notice of such proposed
        disclosure to the Company; or (iv) the information is reasonably required
        to be disclosed in order for the Investor or their transferee to market an
        interest in the capital stock of the Company, provided that in such instance
        the
        person to whom the information is provided shall be required to hold such
        information in confidence.

       

      8.10  Further
        Assurances.
        From
        and after the date of this Agreement, upon the request of the Investor, the
        Company and each Subsidiary shall execute and deliver such instruments,
        documents and other writings as may be necessary or desirable to confirm
        and
        carry out and to effectuate fully the intent and purposes of this Agreement
        and
        the Notes.

       

      8.11  Jury
        Waiver.
        THE
        COMPANY AND THE INVESTOR AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR
        SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
        COUNTERCLAIM, OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT
        OR ANY OF THE OTHER TRANSACTIONAL AGREEMENTS, ANY RELATED INSTRUMENTS, ANY
        COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM,
        OR
        (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH
        A
        JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; PROVIDED, HOWEVER, THAT THE
        FOREGOING SHALL NOT PRECLUDE ANY PARTY OR ITS SUCCESSORS FROM ASSERTING ANY
        COUNTERCLAIM WHICH WOULD OTHERWISE BE BARRED OR FORFEITED. EXCEPT AS STATED
        IN
        THE PRECEDING SENTENCE, THE PROVISIONS OF THIS SECTION SHALL BE SUBJECT TO
        NO
        EXCEPTIONS. NEITHER THE COMPANY NOR ANY OF THE INVESTOR HAS AGREED WITH OR
        REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS SECTION WILL NOT BE
        FULLY
        ENFORCED IN ALL INSTANCES.

       

      8.12  Entire
        Agreement; Successors and Assigns.
        This
        Agreement (and the exhibits hereto) constitutes the entire contract between
        the
        Company and the Investor relative to the subject matter hereof. Any prior
        and
        contemporaneous agreement, discussion, understanding or correspondence between
        the Company and the Investor regarding the purchase of the Notes is superseded
        by this Agreement. Subject to the exceptions specifically set forth in this
        Agreement, the terms and conditions of this Agreement shall inure to the
        benefit
        of and be binding upon the respective executors, administrators, heirs,
        successors, and assigns of the parties. All subsequent transferees or assigns
        of
        the Notes shall be deemed a party to this Agreement and bound by the obligations
        imposed upon Investor herein.

       

      
        
          
          

        

        
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      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
          
          

        

        
          -16-

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Note Purchase Agreement
        as of the date first above written.

       

      
        	 	 	 
	COMPANY: 	POSITRON
                CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Gary
                H. Brooks
	 	
                
Gary
                H. Brooks, President
	 	
                Address: 1304
                  Langham Creek Drive, #300, 

                      Houston,
                  Texas
                  77084

              

      

       

      
        	 	 	 
	INVESTOR: 	SOLARIS
                OPPORTUNITY FUND, L.P.
	 
 	 
 	 
 
	 	By:  	/s/ Patrick
                G. Rooney
	 	
                
Name:
                Patrick G. Rooney
	 	Its:
                Managing Director
	 	 
	 	
                Address:  700
                  Commerce Drive 

                       Oak
                  Brook,
                  Illinois 60523

              

      

       

       

      
        
          
          

        

        
          -17-

          
            

          

        

        
          
          

        

      

       

      

       

      SCHEDULES
        AND EXHIBITS

       

      
        
          	Schedule 1 	Schedule of Exceptions 
	 	 
	Exhibit A 	Secured Convertible Promissory
                  Note 
	 	 
	Exhibit B 	Registration Rights Agreement
	 	 
	Exhibit C	Security
                  Agreement

        

      

       

       

      
        
          
          

        

        
          -18-EXHIBIT
        10.2

    

     

    

      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

       

      
        	$400,000.00	
                 Houston,
                  Texas

              
	 	
                 June
                  27,
                  2005

              

      

       

      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 Four Hundred Thousand Dollars ($400,000), or such lesser amount as
        shall
        then equal the outstanding principal amount hereof on the terms and conditions
        set forth hereinafter. The principal hereof and any unpaid accrued interest
        hereon, as set forth below, shall be due and payable on the earlier to occur
        of
        (i) March 6, 2007 (the "Maturity
        Date")
        or
        (ii) when declared due and payable by the Holder upon the occurrence
        of an
        Event of Default (as defined below). Commencing on the Maturity Date, all
        principal and accrued interest hereunder shall be payable upon demand. Payment
        for all amounts due hereunder shall be made by mail to the registered address
        of
        the Holder. All numbers expressed herein as "$" or "dollars" are in United
        States dollars.

       

      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 June 20,
        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 May 31, 2005
        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:

       

      (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

       

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

         

      

      (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 F 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 F 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.

       

      4.2   Conversion
        Price. The Conversion Price (the "Conversion Price") applicable per share
        of
        Series F 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 F Preferred Stock outstanding is
        increased by a stock dividend payable in shares of Series F Preferred Stock
        or
        by a subdivision or split-up of shares of Series F 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 F Preferred Stock issuable on conversion
        of Note shall be increased in proportion to such increase in outstanding
        shares.

       

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

         

      

      4.3.2   Adjustment
        Upon Combinations.
        If, at
        any time, the number of shares of Series F Preferred Stock outstanding is
        decreased by a combination of the outstanding shares of Series F Preferred
        Stock
        into a smaller number of shares of Series F 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
        F
        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
        F
        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 F Preferred Stock
        immediately theretofore issuable upon conversion, such stock, securities,
        cash
        or other assets which the Holder of would have been entitled to receive in
        such
        transaction had the Note been converted in full immediately prior to such
        transaction (without regard to any limitations on conversion contained herein),
        and in any such case appropriate provisions shall be made with respect to
        the
        rights and interests of the Holder to the end that the provisions hereof
        (including, without limitation, provisions for adjustment of the applicable
        Conversion Price and of the number of shares of Series F Preferred Stock
        issuable upon conversion of the Note) shall thereafter be applicable, as
        nearly
        as may be practicable in relation to any securities or assets thereafter
        deliverable upon the conversion of the Note. The above provisions shall
        similarly apply to successive mergers, consolidations, share exchanges,
        recapitalizations, reorganizations, business combinations or other similar
        events or sales of assets.

       

      4.3.4   Deferral
        in Certain Circumstances.
        In any
        case in which the provisions of this Section 4.3 shall require that an
        adjustment shall become effective immediately after a record date of an event,
        the Company may defer until the occurrence of such event issuing to the Holder
        of the Note, converted after such record date and before the occurrence of
        such
        event, the shares of capital stock issuable upon such conversion by reason
        of
        the adjustment required by such event and issuing to such Holder only the
        shares
        of capital stock issuable upon such conversion before giving effect to such
        adjustments; provided, however, that the Company shall deliver to such Holder
        an
        appropriate instrument or due bills evidencing such holder's right to receive
        such additional shares.

       

      4.3.5   Notice
        of Adjustment of Conversion Price.
        Whenever the Conversion Price is adjusted as herein provided: (i) the Company
        shall compute the adjusted Conversion Price in accordance with this Section
        4.3
        and shall prepare a certificate signed by the Chief Financial Officer of
        the
        Company setting forth the adjusted Conversion Price and showing in reasonable
        detail the facts upon which such adjustment is based, and such certificate
        shall
        forthwith be filed at each office or agency maintained for such purpose of
        conversion of the Note; and (ii) a notice stating that the Conversion Price
        has
        been adjusted and setting forth the adjusted Conversion Price shall forthwith
        be
        prepared by the Company, and as soon as practicable after it is prepared,
        such
        notice shall be mailed by the Company at its expense to the Holder at the
        Holder's last addresses as it shall appear in the Company's
        records.

       

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

         

      

      4.4   Conversion
        Procedure.

       

      4.4.1   Notice
        of Conversion.
        In
        order to convert this Note (in whole or in part) into full shares of Series
        F
        Preferred Stock, the Holder shall surrender the Note, duly endorsed, by either
        overnight courier or by hand, to the principal office of the Company, and
        shall
        give written notice (the "Conversion
        Notice")
        by
        facsimile (with the original of such notice forwarded with the foregoing
        courier) to the Company at such office that the Company elects to convert
        the
        amount specified therein, which such notice and election shall be irrevocable
        by
        the Holder; provided however, that the Company shall not be obligated to
        issue
        certificates evidencing the shares of the Series F Preferred Stock issuable
        upon
        such conversion unless either the Note evidencing the principal amount is
        delivered to the Company as provided above, or the Holder notifies the Company
        that such Note(s) have been lost, stolen or destroyed and promptly executes
        an
        agreement reasonably satisfactory to the Company to indemnify the Company
        from
        any loss incurred by its connection with such Note(s).

       

      4.4.2   Delivery
        of Stock Certificates.
        Upon
        receipt of such Conversion Notice, the Company shall immediately verify the
        Holder's calculation of the conversion rate and shall use its best efforts
        to
        cause its transfer agent to issue and deliver as promptly as practical to
        the
        Company of such Note(s), or after receipt of such agreement and indemnification,
        to such Holder of Note(s) at the address of the Holder, or to its designee,
        a
        certificate or certificates for the number of shares of Series F Preferred
        Stock
        to which the Holder shall be entitled, together with a Note or Notes for
        the
        principal amount of Notes not submitted for conversion. The issuance of such
        certificates upon conversion of this Note shall be made without charge to
        the
        Holder of this Note for any issuance tax in respect thereof or other cost
        incurred by the Company in connection with such conversion and the related
        issuance of the Series F Preferred Stock. Upon the conversion of this Note,
        the
        Company shall take all such actions as are necessary in order to insure that
        the
        Series F Preferred Stock issuable with respect to such conversion shall be
        validly issued and fully paid.

       

      4.4.3   Effect
        of Conversion.
        The
        date on which the Conversion Notice is given shall be deemed to be the date
        the
        Company received by facsimile the Conversion Notice, and the person or persons
        entitled to receive the shares of Series F Preferred Stock issuable upon
        such
        conversion shall be treated for all purposes as the record holder or holders
        of
        such shares of Series F Preferred Stock on such date. No fractional shares
        of
        Series F Preferred Stock shall be issued upon conversion of this Note. In
        lieu
        of the Company issuing any fractional shares to the Holder upon the conversion
        of this Note, the Company shall pay to the Holder the amount of outstanding
        principal that is not converted because its conversion would require fractional
        shares, such payment to be in the form as provided below. Upon conversion
        of
        this Note, the Company shall be forever released from all of its obligations
        and
        liabilities under this Note,
        except
        that the Company shall be obligated to pay the Holder, within ten (10)
        days
        after the date of such conversion, any interest accrued and unpaid or
        unconverted to and including the date of such conversion, and no
        more.

       

      
        
          
          

        

        
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      4.5   Notices
        of Record Date, etc. In the event of:

       

      4.5.1   Any
        taking by the Company of a record of the holders of any class of securities
        of
        the Company for the purpose of determining the holders thereof who are entitled
        to receive any dividend (other than a cash dividend payable out of earned
        surplus at the same rate as that of the last such cash dividend theretofore
        paid) or other distribution, or any right to subscribe for, purchase or
        otherwise acquire any shares of stock of any class or any other securities
        or
        property, or to receive any other right; or

       

      4.5.2   Any
        capital reorganization of the Company, any reclassification or recapitalization
        of the capital stock of the Company or any transfer of all or substantially
        all
        of the assets of the Company to any other person or any consolidation or
        merger
        involving the Company; or

       

      4.5.3   Any
        voluntary or involuntary dissolution, liquidation or winding-up of the Company,
        

       

      the
        Company will mail to the holder of this Note at least five (5) days
        prior
        to the earliest date specified therein, a notice specifying:

       

      4.5.3.1   The
        date
        on which any such record is to be taken for the purpose of such dividend,
        distribution or right, and the amount and character of such dividend,
        distribution or right; and

       

      4.5.3.2   The
        date
        on which any such reorganization, reclassification, transfer, consolidation,
        merger, dissolution, liquidation or winding-up is expected to become effective
        and the record date for determining shareholders entitled to vote
        thereon.

       

      4.6   Notice
        of Prepayment. The Company shall mail to the holder of this Note at least
        sixty (60) days prior to repayment of any principal due hereunder.

       

      4.7   Reservation
        of Stock Issuable Upon Conversion. The Company shall, prior to conversion of
        this Note into Series F Preferred Stock, reserve and keep available out of
        its
        authorized but unissued shares of Series F Preferred Stock solely for the
        purpose of effecting the conversion of the Note such number of its shares
        of
        Series F Preferred Stock as shall from time to time be sufficient to effect
        the
        conversion of the Note. The Company shall at all times reserve and keep
        available out of its authorized but unissued Common Stock, such number of
        its
        duly authorized Common Stock as shall be sufficient to effect the conversion
        of
        the Series F Preferred Stock into Common Stock in accordance with its Articles.
        If at any relevant time the number of authorized but unissued shares of Series
        F
        Preferred Stock (and shares of Common Stock for issuance on conversion of
        such
        Series F Preferred Stock) shall not be sufficient to effect the conversion
        of
        the entire outstanding principal amount of this Note, in addition to such
        other
        remedies as shall be available to the holder of this Note, the Company will
        use
        its reasonable efforts to forthwith take such corporate action as may be
        necessary to increase its authorized but unissued shares of Series F
        Preferred Stock (and shares of its Common Stock for issuance on conversion
        of
        such Series E Preferred Stock) to such number of shares as shall be
        sufficient for such purposes.

       

      
        
          
          

        

        
          -6-

          
            

          

        

        
          
          

        

         

      

      5.   Assignment.
        Subject
        to the restrictions on transfer described in Section 8 below, the
        rights
        and obligations of the Company and the Holder of this Note shall be binding
        upon
        and benefit the successors, assigns, heirs, administrators and transferees
        of
        the parties.

       

      6.   Waiver
        and Amendment.
        Any
        provision of this Note may be amended, waived or modified (either generally
        or
        in a particular instance, either retroactively or prospectively, and either
        for
        a specified period of time or indefinitely), upon the written consent of
        the
        Company and of the Holder.

       

      7.   Waiver
        of Notice.
        The
        Company hereby waives notice, presentment, demand, protest and notice of
        dishonor.

       

      8.   Transfer
        of this Note or Securities Issuable on Conversion Hereof.
        Transfer of this Note or the Series F Preferred Stock and Common Stock
        issuable upon conversion thereof shall only be made in accordance with Section
        4.7 and 4.8 of the Purchase Agreement. All transferees of this Note agree
        to be
        bound by the obligations set forth under Sections 1.6, 1.7 and Section 4
        (and
        related definitions) of the Purchase Agreement, which Sections are incorporate
        herein by reference. In connection with any such transfer, such transferee
        shall
        sign an acknowledgment stating that it will become bound by the terms of
        such
        sections Purchase Agreement. Holder understands and agrees that each certificate
        held by Holder representing Series F Preferred Stock and Common Stock
        issuable upon conversion of this Note, or any other securities issued in
        respect
        of this Note issuable upon conversion thereof upon any stock split, stock
        dividend, recapitalization, merger, consolidation or similar event, shall
        bear
        the following legend (in addition to any legend required under applicable
        federal or state securities laws): 

       

      "THE
        SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF, AND
        ARE
        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."

       

      9.   Notices.
        Any
        notice, request or other communication required or permitted hereunder shall
        be
        in writing and shall be deemed to have been duly given if personally delivered
        or if sent by nationally recognized courier service or mailed by registered
        or
        certified mail, postage prepaid, to the respective addresses of the parties
        as
        set forth herein or if sent by facsimile to the respective facsimile numbers
        of
        the parties set forth herein. Any party hereto may by notice so given change
        its
        address for future notice hereunder. Notice shall conclusively be deemed
        to have
        been given and received when personally delivered or three (3) Business
        Days after deposited in the mail or one Business Day after sent by courier
        or
        upon confirmation of facsimile delivery in the manner set forth
        above.

       

      
        
          
          

        

        
          -7-

          
            

          

        

        
          
          

        

         

      

      10.   Loss,
        Theft or Destruction of Note.
        Upon
        receipt by the Company of evidence reasonably satisfactory to it of the loss,
        theft or destruction of this Note and of indemnity or security reasonably
        satisfactory to it, the Company will make and deliver a new Note which shall
        carry the same rights to interest (unpaid and to accrue) carried by this
        Note,
        stating that such Note is issued in replacement of this Note, making reference
        to the original date of issuance of this Note, (and any successors hereto)
        and
        dated as of such cancellation, in lieu of this Note.

       

      11.   Usury
        Disclosure.
        Regardless of any provision contained in this Note, it is expressly stipulated
        and agreed that the intent of the Holder and the Company is to comply at
        all
        times with all usury and other laws relating to this Note. If the laws of
        the
        State of Texas would now or hereafter render usurious, or are revised, repealed
        or judicially interpreted as to render usurious, the indebtedness evidenced
        by
        this Note, or if any prepayment by the Company results in the Company's having
        paid any interest in excess of that permitted by law, then it is the Holder's
        and the Company's express intent that all excess amounts theretofore collected
        by the Holder be credited to the principal balance of this Note (or, if this
        Note has been paid in full, refunded to the Company), and the provisions
        of this
        Note immediately be deemed reformed the amounts therefor collectible hereunder
        reduced, without the necessity of execution of any new document, so as to
        comply
        with the then applicable law, but so as to permit the recovery of the fullest
        amount otherwise called for hereunder.

       

      12.   No
        Shareholder Rights.
        Nothing
        contained in this Note shall be construed as conferring upon the Holder or
        any
        other person the right to vote or to consent or to receive notice as a
        shareholder in respect of meetings of shareholders for the election of directors
        of the Company or any other matters or any rights whatsoever as a shareholder
        of
        the Company.

       

      13.   Impairment
        of Rights.
        The
        Company shall not amend or otherwise modify the terms of the Series F
        Preferred Stock without the written consent of the Holder.

       

      14.   Security.
        This
        Note is secured pursuant to the terms of the Security Agreement.

       

      15.   Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Texas, excluding that body of law relating to conflict of
        laws.

       

      16.   Heading;
        References.
        All
        headings used herein are used for convenience only and shall not be used
        to
        construe or interpret this Note. Except as otherwise indicated, all references
        herein to Sections refer to Sections hereof.

       

      [Remainder
        of page intentionally left blank]

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the Company has caused this Note to be issued as of the
        date
        first set forth above.

      

      
        
          	 	 	 
	COMPANY: 	POSITRON
                  CORPORATION,
                  a
                  Texas corporation
	 
 	 
 	 
 
	 	By:  	 
	 	
                  
Gary
                  H. Brooks, President
	 	
                  Address:   1304
                    Langham Creek Drive, #300

                          Houston,
                    Texas
                    77084

                          Facsimile:
                    281-492-2961

                

        

       

      
        
          
          

        

        
          -9-

          
            

          

        

        
          
          

        

      

      NOTICE
        OF CONVERSION

      (To
        Be
        Signed Only Upon Conversion of Note)

      

      

      

      TO
        POSITRON CORPORATION

       

      The
        undersigned, the holder of the foregoing Note, hereby surrenders such Note
        for
        conversion into ___ shares of Series F Preferred Stock of POSITRON
        CORPORATION, to the extent of ________________________ dollars ($____________)
        unpaid principal amount of such Note, and requests that the certificates
        for
        such shares be issued in the name of, and delivered to,
        _________________________________________, whose address is
        __________________________________________________.

       

      Dated:
        ________________________.

      

      
        
          	 	 	 
	 	 
	 
 	 
 	 
 
	 	  	 
	 	
                  

                  (Signature
                    must conform in all respects to name of 

                  holder
                    as specified on the face of the Note)

                
	 	 
	 	Address 
                  ____________________________________________
	 	       
                   ____________________________________________
	 	     ____________________________________________

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