Document:

LOAN AGREEMENT

     This  Loan  Agreement  (the "Agreement") is entered into as of May 21, 2004
                                  ---------
between  Positron  Corporation, a Texas corporation (the "Borrower"), and IMAGIN
                                                          --------
Diagnostic  Centres,  Inc., an Ontario, Canada corporation whose address is 1835
Yonge  St., Suite 500, Toronto, Ontario, Canada M4S 1XB ("Lender").  All numbers
                                                          ------
expressed  herein  as  "$"  or  "dollars"  are  in  United  States  dollars.

     SECTION 1  LOANS AND NOTE

     1.1  Loans and Issue of Notes.  Subject to the terms and conditions of this
          ------------------------
Agreement  and  in  reliance  upon  the  representations  and  warranties of the
Borrower  set forth herein, Lender hereby agrees to make advances of immediately
available  funds  to Borrower up to an aggregate principal amount of One Million
Three  Hundred Thousand Dollars ($1,300,000) from time to time, between the date
hereof  and  December  31, 2004 as requested by Borrower (the "Loans" and each a
                                                               -----
"Loan").  The  Loans  will  be  evidenced  by  Borrower's  secured  convertible
 ----
promissory  note  in  the  form  attached hereto as Exhibit A (the "Note").  The
                                                    ---------       ----
Loans  shall  be  made  in  accordance  with  the  terms  and provisions of this
Agreement  and shall bear interest and be payable as set forth herein and in the
Note.  The  Loans  shall  be  secured by a security interest as set forth in the
Security Agreement between Lender and Borrower attached hereto as Exhibit B (the
                                                                  ---------
"Security  Agreement").  This Agreement, the Note and the Security Agreement are
 -------------------
collectively  referred  to  herein  as  the  "Loan  Documents."
                                              ---------------

     1.2  Interest Rate on Loans.  All Loans shall accrue interest until paid in
          ----------------------
full  at  the  interest  rate  of 10% per annum simple interest or, if less, the
maximum  rate allowed by applicable law ("Interest Rate").  Interest is computed
                                          -------------
on  a  365  day  year  for  the  actual  number  of  days  elapsed.

     1.3  Maturity  Date.  All outstanding amounts with respect to the Loans are
          --------------
due  and  payable in full, and the term of the Loans shall expire two years from
the  date  of  origination.

     1.4  Funding of Loans.  All Loans shall be in a minimum principal amount of
          ----------------
$100,000.  Lender  shall  not  be obligated to fund more than $200,000 in any 30
day  period.  Lender  shall  have  at  least  three business days after Borrower
requests  a  Loan  to  fund  the  same.

     1.5  Prepayment  of  Loans.  Subject  to applicable notice set forth in the
          ---------------------
Note,  Borrower shall have the right at any time and from time to time to prepay
any  Loan,  in  whole  or  in  part.

     SECTION 2  CONDITIONS OF LENDING

     2.1  Conditions  Precedent  to  Initial  Loan.  The obligation of Lender to
          ----------------------------------------
make  the  initial  Loan,  if  any,  is subject to the conditions precedent that
Lender  shall  have received in form and substance satisfactory to Lender all of
the  following:

          2.1.1     A  certified  copy  of  the  resolutions  of  the  Board  of
Directors  of  the  Borrower  in  a  form  satisfactory  to Lender, approving or
ratifying  each  of  the  Loan  Documents  and of all documents evidencing other
necessary  corporate  action and governmental approvals, if any, with respect to
each  of  the  Loan  Documents;

<PAGE>
          2.1.2     A  certificate  of  the  chief  executive  officer and chief
financial  officer  of  the  Borrower,  dated  as  of  even  date with the Note,
certifying  to  Lender  that  the  representations  and  warranties  made by the
Borrower  in  Section  3  herein  are  true  and  correct;

          2.1.3     The  Note,  duly  executed  by  the  Borrower;

          2.1.4     The  Security  Agreement and such UCC-1 financing statements
and  other  documents  required  by Lender to perfect its Lien in the collateral
covered  thereby,  each  duly  executed  by  the  Borrower;

          2.1.5     Conversion.  The  outstanding  principal  amount of the Note
                    ----------
shall  be convertible in accordance with the terms set forth in Section 4 of the
Note.  Accrued  but  unpaid  interest  shall  be  payable in cash at the time of
conversion.

          2.1.6     Conditions  Precedent  to  All  Loans.  The  obligations  of
                    -------------------------------------
Lender  to  make  each Loan (including the initial Loan) shall be subject to the
further  conditions precedent that no Event of Default has occurred and no event
has  occurred  and  is  continuing,  or  would result from such Loan or from the
application  of  the  proceeds therefrom, which constitutes an Event of Default.

          2.1.7     Lender shall have received such other approvals, opinions or
documents  as  Lender  shall  have  reasonably  requested.

     SECTION 3  REPRESENTATIONS  AND  WARRANTIES

     Except  as  set  forth  in  the  Schedule  of  Exceptions (as noted herein)
attached  hereto  as  Schedule  1,  Borrower  hereby represents and warrants the
                      -----------
following  as  of  the  date  hereof:

     3.1  Organization  and  Qualification.  Borrower  is  a  corporation  duly
          --------------------------------
organized,  validly existing and in good standing under the laws of the State of
Texas.  Borrower  is  qualified  to  do  business and is in good standing in all
jurisdictions  that  it  is  operating in.  Borrower has all requisite power and
authority  to  conduct  its  business  and  own  its  property.

     3.2  Authorization  of  Transaction;  No  Violation.  The  borrowing of the
          ----------------------------------------------
principal amount of the Loans, the issuance of the Note, the execution, delivery
and  performance  by  Borrower  of  this  Agreement,  the  Note and the Security
Agreement  (including,  without  limitation,  the  issuance  or  reservation for
issuance  of  shares of Borrower's Series D Preferred Stock upon conversion) (i)
are  within  the corporate powers of Borrower, (ii) have been duly authorized by
all  necessary  corporate  action  of  Borrower,  its  officers,  directors  and
stockholders, and (iii) will not violate, conflict with, result in any breach of
any  of  the  provisions  of, constitute (with or without the passage of time or
giving  of notice or both a default under, or result in the creation of any Lien
upon any Property of Borrower or any Subsidiary (except pursuant to the terms of
the  Security  Agreement)  under  the  provisions of, any law, rule, regulation,
judgment,  order,  decree,  instrument,  agreement, charter instrument, bylaw or
other  instrument to which Borrower or any Subsidiary is a party or by which the
Borrower  or any Subsidiary or any Property of Borrower or any Subsidiary may be
bound.

     3.3  Binding  Obligation.  This  Agreement,  the  Note,  and  the  Security
          -------------------
Agreement  are valid and legally binding obligations of Borrower, enforceable in
accordance  with  their  terms.

                                      -2-
<PAGE>
     3.4  Valid  Issuance  of  Note  and Series D Preferred Stock.  The Note has
          -------------------------------------------------------
been issued in compliance with all applicable federal and state securities laws.
Except as set forth in Schedule 3.4 of the Schedule of Exceptions, the shares of
                       ------------
Series  D Preferred Stock issuable upon conversion of the Note (and Common Stock
issuable  upon  conversion  thereof)  have  been  duly  and validly reserved for
issuance,  and upon issuance in accordance with the terms thereof and Borrower's
charter  instruments,  shall  be  duly  and  validly  issued,  fully  paid  and
nonassessable  and  not  subject  to  any  preemptive  or  similar  rights.

     3.5  Governmental  Consent.  Except  as  set  forth  in Schedule 3.5 of the
          ---------------------                              ------------
Schedule  of Exceptions, neither the nature of Borrower nor any Subsidiary or of
the  business  or  Properties of Borrower or any Subsidiary nor any relationship
between Borrower or any Subsidiary and any other Person, nor any circumstance in
connection  with  the making of the Loans or the offer, issue, sale, delivery or
exercise of the Note, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any governmental authority on
the  part  of  Borrower  in  connection  with or on account of the execution and
delivery  of  this  Agreement  or  the  Security Agreement, the borrowing of the
principal  amount of the Loans or the offer, issue, sale, execution, delivery or
exercise  of  the  Note.

     3.6  Ownership  of Property.  Borrower owns all of its Property, except for
          ----------------------
Permitted  Liens  to  which  any  such  Property  is  subject.

     3.7  Use of Proceeds.  The Borrower agrees to use the proceeds of the Loans
          ---------------
for  (i)  payment  of  expenses related to the transactions contemplated by this
Agreement  and  certain  related  transactions  with  Lender,  (ii)  payment  of
outstanding  accounts  payable,  and  (iii)  current  operating  expenses.

     3.8  Litigation.  Except  as  set  forth in Schedule 3.8 of the Schedule of
          ----------                             ------------
Exceptions, there are no claims, actions, suits or other proceedings pending, or
to  the knowledge of Borrower, threatened, at law or in equity, by or before any
governmental agency or any arbitrator against Borrower which could reasonably be
expected to have a Material Adverse Effect on the ability of Borrower to perform
its  obligations  under  this  Agreement.

     3.9  Compliance  with Laws and Agreements.  Neither Borrower nor any of its
          ------------------------------------
Subsidiaries  is  in  violation  of  any  law,  statute,  regulation, ordinance,
judgment,  order  or decree applicable to it which violation could reasonably be
expected  to  have  a Material Adverse Effect on Borrower.  Neither Borrower nor
any of its Subsidiaries is in default with respect to any note, mortgage, lease,
agreement  to  which  Borrower  or  such Subsidiary is a party or by which it is
bound,  which  default  could reasonably be expected to have a  Material Adverse
Effect  on  Borrower.

     3.10  Taxes.  Except  as  set  forth  in  Schedule  3.10 of the Schedule of
           -----                               --------------
Exceptions,  Borrower  and its Subsidiaries have filed all federal and other tax
returns  and  reports  required to be filed, and have paid all federal and other
taxes,  assessments,  fees and other governmental charges levied or imposed upon
them  or  their  Property,  which  are  due  and  payable.

     3.11  Survival  of  Representations and Warranties.  So long as any amounts
           --------------------------------------------
are  available  for  borrowing  and until all obligations of Borrower under this
Agreement  and  under  the

                                      -3-
<PAGE>
Note are satisfied in full, the representations and warranties contained in this
Agreement  shall  have  a  continuing  effect  as  having  been  true when made.

     SECTION 4  BORROWER'S  AFFIRMATIVE  COVENANTS

     Borrower  covenants  that  until  all  obligations  of  Borrower under this
Agreement,  the Security Agreement and the Note are satisfied in full, Borrower:

     4.1  Borrower  Governmental  Documents.  Shall  prepare and timely file all
          ---------------------------------
reports  and  other filings required under all applicable U.S. federal and state
laws  in  accordance  with  all  relevant  statutory  requirements.

     4.2  Compliance  with  Law.  Borrower shall comply in all material respects
          ---------------------
with  the  requirement  of all applicable laws, rules, regulations and orders of
any  governmental  authority, and shall comply with all provisions of Borrower's
articles  of  incorporation  and  bylaws.

     4.3  Taxes and Other Liabilities.  Shall pay and discharge when due any and
          ---------------------------
all  indebtedness,  obligations,  assessments  and  taxes, including federal and
state  income  taxes, except such as Borrower may in good faith contest or as to
which  a  bona  fide  dispute  may arise; provided that provision is made to the
satisfaction  of  Lender  for  eventual  payment thereof in the event that it is
found  that  the  same  is  an  obligation  of  Borrower.

     4.4  Litigation.  Shall  promptly  give  notice in writing to Lender of any
          ----------
litigation  pending  or  threatened  by  or  against  Borrower  with a potential
liability  in  excess  of  $100,000.

     4.5  Notice  to Lender.  Shall promptly give notice in writing to Lender of
          -----------------
(i) the occurrence of any Event of Default, or (ii) any change in name, identity
or corporate structure of Borrower, regardless of whether such event is a breach
of  this  Agreement  or  any  of  the  other  Loan  Documents.

     4.6  Legal Existence and Good Standing.  Shall, and shall cause each of its
          ---------------------------------
Subsidiaries  to  maintain  its  legal  existence and its qualification and good
standing  in  all  jurisdictions in which the failure to maintain such existence
and  qualification  or  good  standing  could  reasonably  be expected to have a
Material  Adverse  Effect  on  Borrower.

     4.7  Maintenance  of  Property;  Inspection  of  Property.
          ----------------------------------------------------

          4.7.1     Shall, and shall cause each of its Subsidiaries to, maintain
all of its Property necessary and useful in the conduct of its business, in good
operating  condition  and  repair,  ordinary  wear  and  tear  excepted.

          4.7.2     Shall  permit representatives and independent contractors of
Lender  to  visit  and  inspect any of its Properties, to examine its corporate,
financial  and operating records, and make copies thereof or abstracts therefrom
and  to  discuss its affairs, finances and accounts with its directors, officers
and  independent  public  accountants,  at  such  reasonable times during normal
business  hours  and  as  soon  as  may  be  reasonably  desired.

                                      -4-
<PAGE>
     4.8  Insurance.  Shall  maintain,  and shall cause each of its Subsidiaries
          ---------
to  maintain  insurance  against  loss or damage by fire with extended coverage,
public  liability  and  third  party  property  damage.

     4.9  Transaction  Fee.  In  consideration  for this Agreement, the Borrower
          ----------------
shall pay to Lender a transaction fee equal to $200,000, payable out of the last
$200,000  available  for  advances  hereunder  (the  "Transaction  Fee").  The
                                                      ----------------
Transaction  Fee  shall be reduced by an amount equal to $0.02 multiplied by the
number  of  warrants issued to Borrower pursuant to Section 7.14 of that certain
Note Purchase Agreement dated as of the date hereof between Lender and Borrower.

     SECTION 5  BORROWER'S  NEGATIVE  COVENANTS

     Borrower  further  covenants that until payment in full of the Note and all
other amounts duo hereunder, Borrower will not without the prior written consent
of  Lender:

     5.1  Guarantees.  Guarantee or become liable in any way as surety, endorser
          ----------
(other  than  as  endorser  of  negotiable instruments in the ordinary course of
business) or accommodation endorser or otherwise for the debts or obligations of
any  other  person  or  entity.

     5.2  Loans  or Advances.  Make or permit to exist any loans or advances to,
          ------------------
or  investments  in,  any  person  or  entity  other  than  Lender.

     5.3  Distributions.  Except  as  required  under  or effected in accordance
          -------------
with  the  Borrower's  Articles  of  Incorporation  (including all statements of
designation establishing and designating the rights of preferred stock), declare
or  pay any dividends or any other distributions on account of any shares of any
class of capital stock of Borrower, either in cash or any other property, to any
stockholder  or  equity interest holder of or in Borrower or any Subsidiary, nor
redeem,  retire,  repurchase or otherwise acquire any shares of capital stock of
Borrower.

     5.4  Pledge  Of  Assets.  Mortgage,  pledge,  grant  or  permit  to exist a
          ------------------
security  interest  in,  or  Lien  upon, all or any portion of Borrower's or any
Subsidiary's  assets  now  owned  or  hereafter  acquired,  except:

               (a)  the  Lien  created  under  the  Security  Agreement;

               (b)  Liens  existing  as  of  the  date  hereof  and described on
Schedule  3.6  of  the  Schedule  of  Exceptions;
-------------

               (c)  other  Permitted  Liens.

     5.5  Conduct  of  Business.  Change  the  nature of the business heretofore
          ---------------------
conducted  by  Borrower  in  the  usual,  regular  and  ordinary  course.

     SECTION 6  DEFAULT

     6.1  Events of Default.  The following events are "Events of Default" under
          -----------------                             -----------------
the  Loan  Documents:

                                      -5-
<PAGE>
          6.1.1     Default  shall  be  made  by  Borrower  in  the  payment  of
principal  of  or any interest on the Note when and as the same shall become due
and  payable,  whether  at  maturity  or  at  a  date fixed for prepayment or by
acceleration  or  otherwise;

          6.1.2     Default  shall  be made in the due performance or observance
of any other covenant, agreement or provision herein or in any of the other Loan
Documents  to  be  performed or observed by Borrower, or a breach shall exist in
any  representation  or  warranty  herein  contained or in any of the other Loan
Documents;

          6.1.3     Borrower  shall  be  involved  in  financial difficulties as
evidenced  by:

               (a)  Borrower  filing  a  petition  in  bankruptcy  or  for
reorganization  or  for the adoption of an arrangement under the Bankruptcy Code
(as  now  or  in  the future amended) or an admission seeking the relief therein
provided;

               (b)  Borrower  making a general assignment for the benefit of its
creditors;

               (c)  Borrower  consenting  to  the  appointment  of a receiver or
trustee  for  all or a substantial part of the property of Borrower or approving
as  filed  in good faith a petition filed against Borrower under said Bankruptcy
Code  (in  both  cases  without  the  consent  of  Borrower);

               (d)  the  assumption  of  custody  or sequestration by a court of
competent  jurisdiction of all or substantially all the Property of Borrower; or

               (e)  an  attachment  being  made  on  any substantial part of the
Property or assets of Borrower which shall not be discharged within 90 days from
the  making  thereof.

          6.1.4     Borrower  terminates  or  suspends its business, or there is
filed by or against Borrower any petition seeking the liquidation or dissolution
of  Borrower or the commencement of any other procedure to liquidate or dissolve
Borrower, or there occurs any event, condition or circumstances which causes the
liquidation  or  dissolution  of  Borrower.

          6.1.5     Borrower  or  any  person  acting  for  Borrower  makes  any
material  misrepresentation or material misstatement now or in the future in any
warranty  or  representation  in  this  Agreement or in any writing delivered to
Lender  to  induce  Lender to enter this Agreement or any of the Loan Documents.

          6.1.6     The  closing of (i) a merger, consolidation, reorganization,
transaction  or  series  of  transactions  which  results in the stockholders of
Borrower  as  constituted  immediately  prior  to such event holding less than a
majority  of  the  voting  power  of  Borrower  or  the surviving entity in such
transaction(s),  or  (ii) a sale, transfer or other disposition of substantially
all  of  the  assets  of  Borrower  (each  a  "Change  of  Control").
                                               -------------------

     6.2  Remedies  Upon  Default.
          -----------------------

          6.2.1     Upon  the  occurrence  and during the continuation of any of
the  above  Events  of Default, Lender may, by notice to Borrower, terminate its
commitment  to  make  any

                                      -6-
<PAGE>
further  Loans  and declare the unpaid principal and all accrued interest on the
Loans  and  the Note, and all other amounts payable under the Loan Documents, to
be immediately due and payable, whereupon all such principal, interest and other
amounts shall be forthwith due and payable, without presentment, demand, protest
or  further  notice of any kind; and provided that, in the case of occurrence of
an  Event  of  Default  under  6.1.3 or 6.1.6, Borrower's commitment to make any
further Loans shall be automatically terminated and all such principal, interest
and  other  amounts shall be automatically due and payable, without presentment,
demand,  protest  or  further  notice  of  any  kind.

          6.2.2     Upon  the  occurrence  and during the continuation of any of
the  above Events of Default, Lender shall have, in addition to all other rights
and  remedies  provided  herein  or  by  applicable  law,  all of the rights and
remedies  of  a  secured party under the Uniform Commercial Code of the State of
Texas,  including,  but  not  limited  to,  the  right to take possession of the
Collateral,  and  for  that  purpose  Lender may, and Borrower hereby authorizes
Lender  to,  enter  upon  any  premises  on  which  Collateral may be located or
situated  and  remove  the  same  therefrom  or  without removal render the same
unusable  and  may use or dispose of the Collateral on such premises without any
liability  for rent, storage, utilities or other sums, and upon request Borrower
shall,  to the extent practicable, assemble and make the Collateral available to
Lender  at a place to be designated by Lender, which is reasonably convenient to
Borrower  and  Lender.  Borrower agrees that, to the extent notice of sale shall
be required by law, at least five days' notice to Borrower of the time and place
of  any  public  sale  or  the  time  after  which any private sale or any other
intended  disposition  is to be made shall constitute reasonable notification of
such  sale  or  disposition.  Lender  shall also have the right to apply for and
have  a  receiver  appointed  by a court of competent jurisdiction in any action
taken by Lender to enforce its rights and remedies hereunder, to manage, protect
and  preserve  the  Collateral  or  continue  the  operation  of the business of
Borrower,  and  Lender  shall  be  entitled  to collect all revenues and profits
thereof  and  apply the same to the payment of all expenses and other charges of
such  receivership,  including  the  compensation  of  the  receiver, and to the
payment  of  the Note until a sale or other disposition of such Collateral shall
be  finally made and consummated.  In the event of any disposition or collection
of or any other realization upon all or any part of the Collateral, Lender shall
apply  the  proceeds  of  such  disposition,  collection or other realization as
follows:

               (a)  First,  to  the payment of the reasonable costs and expenses
of  Lender  in  exercising or enforcing its rights hereunder, including, but not
limited  to,  costs  and expenses incurred in retaking, holding and/or preparing
the  Collateral  for sale, lease or other disposition, and to the payment of all
Lender  Expenses;

               (b)  Second, to the payment of the Note and all other Obligations
(as  that  term  is  defined  in  the  Security  Agreement);  and

               (c)  Third,  the surplus, if any, shall be paid to Borrower or to
whoever  may  be  lawfully  entitled  to  receive  such  surplus.

     SECTION 7  MISCELLANEOUS

     7.1  Amendment.  No  amendment or waiver of any provision of this Agreement
          ---------
or the other Loan Documents, nor consent to any departure by Borrower therefrom,
shall  in  any event be effective unless the same shall be in writing and signed
by  Lender  and  then  such  waiver  or

                                      -7-
<PAGE>
consent  shall  be  effective only in the specific instance and for the specific
purpose  for  which  given.

     7.2  Notices.  All  notices,  requests,  demands  and  other communications
          -------
under  this  Agreement or the other Loan Documents shall be in writing and shall
be  deemed  to  have  been  duly  given  on  the  date of delivery, if delivered
personally  or  by  telegram  or  telecopy  to the party to whom notice is to be
given, or on the third business day after mailing if mailed by first class mail,
registered  or  certified,  postage  prepaid  and properly addressed as follows:

          If to the Borrower:     Positron Corporation
                                  1304 Langham Creek Drive, #300
                                  Houston, Texas 77084
                                  Facsimile:  281-492-2961
                                  Attn: Chief Executive Officer

          If to the Lender:       IMAGIN Diagnostic Centres, Inc.
                                  1835 Yonge St., Suite 500
                                  Toronto, Ontario, Canada M4S 1XB
                                  Attn: President

     Either  party may change its address for purposes of this Section by giving
the other party written notice of the new address in the manner set forth above.

     7.3  No  Waiver;  Remedies.  No  failure  on  the  part  of  the  Lender to
          ---------------------
exercise,  and  no delay on the part of Lender in exercising any right hereunder
or  under  the other Loan Documents shall operate as a waiver thereof; nor shall
any  single  or  partial exercise of any right hereunder or under the other Loan
Documents  preclude any other or further exercise thereof or the exercise of any
other  right.  The  remedies herein provided are cumulative and not exclusive of
any  remedies  provided  by  law.

     7.4  Accounting  Terms.  All  accounting  terms  not  specifically  defined
          -----------------
herein  shall  be  construed  in  accordance  with generally accepted accounting
principles  consistently  applied,  except  as  otherwise  stated  herein.

     7.5  Binding  Effect;  Governing  Law.  This  Agreement  and the other Loan
          --------------------------------
Documents  shall be binding upon and inure to the benefit of Borrower and Lender
and  their respective successors and assigns.  This Agreement and the other Loan
Documents  shall  be governed by, and construed in accordance with, the internal
laws  of  the  State  of Texas, excluding conflict of laws principles that would
cause  the  application  of  laws  of  any  other  jurisdiction.

     7.6  JURISDICTION  AND  VENUE.  BORROWER  HEREBY AGREES THAT ALL ACTIONS OR
          ------------------------
PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
AGREEMENT  OR  ANY  OF  THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN THE TEXAS
SUPERIOR  COURT  OR  THE  UNITED  STATES  DISTRICT  COURT LOCATED IN THE CITY OF
HOUSTON,  TEXAS.  BORROWER  HEREBY  EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH
COURTS,  AND  AGREES  THAT  SERVICE OF SUMMONS AND COMPLAINT OR OTHER PROCESS OR
PAPERS  MAY BE MADE BY REGISTERED OR

                                      -8-
<PAGE>
CERTIFIED  MAIL  ADDRESSED TO BORROWER AT THE ADDRESS TO WHICH NOTICES ARE TO BE
SENT  PURSUANT  TO THIS AGREEMENT. BORROWER WAIVES ANY CLAIM THAT HOUSTON, TEXAS
IS  AN  INCONVENIENT  FORUM  OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD
BORROWER  AFTER  BEING  SO  SERVED,  FAIL  TO  APPEAR  OR ANSWER TO ANY SUMMONS,
COMPLAINT,  PROCESS  OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY
LAW  AFTER THE MAILING THEREOF, BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER
AND/OR  JUDGMENT MAY BE ENTERED BY LENDER AGAINST BORROWER AS DEMANDED OR PRAYED
FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM
FOR  BORROWER  SET  FORTH  IN  THIS  SECTION SHALL NOT BE DEEMED TO PRECLUDE THE
ENFORCEMENT, BY LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER PERMITTED FORUM OR
THE  TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION,  AND  BORROWER  HEREBY  WAIVES  THE RIGHT, IF ANY, TO COLLATERALLY
ATTACK  ANY  SUCH  JUDGMENT  OR  ACTION.

     7.7  WAIVER  OF  RIGHT  TO JURY TRIAL.  LENDER AND BORROWER ACKNOWLEDGE AND
          --------------------------------
AGREE  THAT  ANY  CONTROVERSY  WHICH MAY ARISE UNDER THIS AGREEMENT OR THE OTHER
LOAN  DOCUMENTS  OR  WITH  RESPECT  TO  THE TRANSACTIONS CONTEMPLATED HEREIN AND
THEREIN  WOULD  BE  BASED  UPON  DIFFICULT AND COMPLEX ISSUES AND THEREFORE, THE
PARTIES AGREE THAT ANY COURT PROCEEDING ARISING OUT OF ANY SUCH CONTROVERSY WILL
BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

     7.8  Investment Representation.  Lender represents and warrants to Borrower
          -------------------------
that  it is acquiring the Note for its own account for investment and not with a
view  to,  or  for  a  sale  in  connection  with,  any  distribution  thereof.

     7.9  Assignment.  Borrower  shall  not assign its rights or delegate any of
          ----------
its  duties  under  any  of  the  Loan  Documents without Lender's prior written
consent.  Lender  may  freely  assign  its rights and obligations under the Loan
Documents.

     7.10 Conversion of Stock.  Lender agrees that it will not convert to Common
          -------------------
Stock  any of the shares of Series D Preferred Stock obtained upon conversion of
a  Note,  until  lender  shall  have  purchased  at  least two PET scanners from
Borrower  pursuant  to  the  terms  of that certain Equipment Purchase Agreement
dated  as  of  the  date  hereof.

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

          7.11.1    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.

          7.11.2    Definitions.  For  purposes  of  this  Section  7.11  the
                    -----------
following  terms  shall  have  the  following  meanings:

                                      -9-
<PAGE>
               "BOARD"  means  the  Borrower's  Board  of  Directors.

               "COMMON STOCK" shall mean the Common Stock of Borrower, 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  Borrower  acting  in  accordance  with  applicable  law.

          7.11.3    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 Borrower, the transaction will be presumed to be in the
interest  of  Borrower  unless  it  results  in  an  "ownership  change".

          7.11.4    Transfer  to  Agent  of  Prohibited  Shares;  Sale by Agent;
                    ------------------------------------------------------------
Payment of Proceeds.  On demand by Borrower (which demand must be made within 30
-------------------
days  of  the  time  Borrower  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  Borrower  with  respect  to  the  Prohibited  Shares
("Prohibited  Distributions"), to an agent designated by Borrower (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  Borrower'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

                                      -10-
<PAGE>
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 Borrower. In no
event  shall  amounts due to the Initial Transferor pursuant to Article inure to
the  benefit  of  Borrower  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 Borrower, then the Borrower will institute legal
proceedings  to  compel  the  surrender.

          7.11.5    Legend.  Lender understands and agrees that each certificate
                    ------
held  by  Lender  representing  a  Note, and Series D Preferred Stock and Common
Stock  issuable  upon  conversion  thereof,  or  any  other securities issued in
respect  of  a Note, and Series D 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  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  LOAN  AGREEMENT BETWEEN THE COMPANY AND THE
          HOLDER HEREOF, OR ITS SUCCESSOR, A COPY OF WHICH IS AVAILABLE FROM THE
          COMPANY."

     SECTION 8  DEFINITIONS

     As used in this Agreement and the other Loan Documents, the following terms
have  the  respective  meanings set forth below or in the indicated part of this
Agreement:

     8.1  "ACT"  shall  mean the Securities Act of 1933, as amended from time to
time.

     8.2  "BANKRUPTCY  CODE" shall mean the federal bankruptcy law of the United
States  as  from  time  to  time  in effect, currently as Title 11 of the United
States  Code.  Section  references  to  current  sections of the Bankruptcy Code
shall  refer  to  comparable  sections of any revised version thereof if section
numbering  is  changed.

     8.3  "COLLATERAL"  has  the  meaning  ascribed  in  the Security Agreement.

     8.4  "LIEN"  shall  mean  any  mortgage,  deed  of  trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien, or other
type  of  preferential  arrangement.

     8.5  "MATERIAL  ADVERSE EFFECT" 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 Borrower and
its  Subsidiaries  taken  as  a  whole.

                                      -11-
<PAGE>
     8.6  "OBLIGATIONS"  shall  have  the  meaning  ascribed  in  the  Security
Agreement.

     8.7  "PERMITTED  LIENS" has the meaning ascribed in the Security Agreement.

     8.8  "PROPERTY"  shall  mean any interest in any kind of property or asset,
whether  real,  personal  or  mixed,  and  whether  tangible  or  intangible.
"Properties"  shall  mean  all  Property  held by an entity or any other person.
 ----------

     8.9  "SERIES  D PREFERRED STOCK" shall mean the Series D Preferred Stock of
Positron Corporation having all rights and terms of other preferred shares and a
priority  and  preference over all other issued and outstanding (or to be issued
and  outstanding)  capital  stock  of  Positron  Corporation.

     8.10  "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  Borrower

                  [Remainder of page intentionally left blank.]

                                      -12-
<PAGE>
                        SIGNATURE PAGE TO LOAN AGREEMENT

     IN  WITNESS  WHEREOF, the parties hereto have caused this Loan Agreement to
be  executed  by  their  respective officers thereunto duly authorized as of the
date  first  above  written.

BORROWER:                              LENDER:

Positron Corporation,                  IMAGIN Diagnostic Centres, Inc.,
a Texas corporation                    an Ontario, Canada corporation

By:  /s/ Gary H. Brooks                By:  /s/ Cynthia R. Jordan
     -------------------                    -----------------------
     Gary H. Brooks, President              Name:  Cynthia R. Jordan
                                            Its:  Chief Executive Officer

Address: 1304 Langham Creek Drive, #300,
         Houston, Texas 77084          Address: 1835 Yonge St., Suite 500
                                                Toronto, Ontario, Canada M4S 1XB

                                      -13-
<PAGE>
                                   SCHEDULE 1
                                   ----------

                             SCHEDULE OF EXCEPTIONS

                                       TO

                                 LOAN AGREEMENT

                                 BY AND BETWEEN

                              POSITRON CORPORATION

                                       AND

                         IMAGIN DIAGNOSTIC CENTRES, INC.

                            DATED AS OF MAY 21, 2004

CAPITALIZED  TERMS  USED  HEREIN  AND  NOT OTHERWISE DEFINED SHALL HAVE THE SAME
MEANING  AS  IN  THE  AGREEMENT  TO  WHICH  THESE  SCHEDULES  ARE  ATTACHED  AND
INCORPORATED  BY  REFERENCE.

<PAGE>
                                  SCHEDULE 3.4

Valid Issuance of Note and Series D Preferred Stock.
---------------------------------------------------

As of the date of this Agreement, there are insufficient shares of Common Stock
to allow for the exercise of all outstanding options and warrants, and
conversion of all outstanding convertible securities, including the Borrower's
Series C Preferred Stock and Series D Preferred Stock, to Common Stock.  The
Borrower will use its reasonable efforts to obtain stockholder approval to amend
its Articles of Incorporation to increase the number of shares of authorized
Common Stock to account for conversion of the Series D Preferred Stock.

Pursuant to that certain Statement of Designation Establishing Series D
Preferred Stock of Positron Corporation filed with the Texas Secretary of State
on May 21, 2004, the Series D Preferred Stock is junior to the Borrower's Series
A Preferred Stock and Series C Preferred Stock, both as to dividends and as to
distributions of assets upon liquidation or winding up of the Borrower.

                                        1
<PAGE>
                                  SCHEDULE 3.5

Governmental Consent.
--------------------

In connection with the transactions contemplated by the Agreement, the Borrower
filed a Statement of Designation Establishing Series D Preferred Stock of
Positron Corporation with the Texas Secretary of State on May 21, 2004 and will
file (i) a registration statement on an applicable form to register the shares
of Series D Preferred Stock (and Common Stock issuable upon conversation
thereof) issuable upon conversion of the Note, (ii) a proxy statement on
Schedule 14A to approve an amendment to its Articles of Incorporation to
increase the number of its authorized shares of Common Stock, and (iii)
appropriate UCC-1 financing statements with applicable jurisdictions pursuant to
the Security Agreement.

                                        2
<PAGE>
                                  SCHEDULE 3.8

Litigation.
----------

The Company received a warning letter ("Warning Letter") dated April 26, 2004
from the Department of Health and Human Services regarding various alleged
deficiencies under the Current Good Manufacturing Practice requirements of the
Quality System regulations for medical devices, a copy of which has been
provided to Investor.

The Borrower is subject to the following legal proceedings:

PROFUTURES CAPITAL BRIDGE FUND, L.P.

On September 26, 2000, ProFutures Bridge Capital Fund, L.P. ("ProFutures") filed
a complaint against the Borrower in Colorado state court for declaratory relief
and breach of contract (the "Complaint").  The Complaint alleged that the
Borrower breached four stock purchase warrants issued to ProFutures on the basis
that the Borrower failed to notify ProFutures of dilutive events and failed to
register the full number of shares ProFutures was allegedly entitled to purchase
under the warrants when, on February 14, 2000, the Borrower registered 1,500,000
shares of stock underlying ProFutures' warrants instead of 4,867,571.  The
Complaint further alleged that the Borrower's issuance of shares of common stock
to Imatron, Inc. on or about January 22, 1999, (the "Imatron Transaction") was a
dilutive event pursuant to the anti-dilution provisions contained in the four
stock purchase warrants.  The Complaint sought declarations that the
consideration received by the Borrower in the Imatron Transaction increased the
number of shares issuable under the warrants, the Borrower breached the warrants
by failing to notify ProFutures of the Imatron Transaction and its effect on
ProFutures' warrants at the time of the Imatron Transaction and that the
Borrower further breached the warrants by failing to register the number of
shares ProFutures alleged were purchasable under its warrants.  The Complaint
sought an unspecified amount of monetary damages.

The Colorado State level case of ProFutures v. Positron, District Court, City
and County of Denver, Colorado, Case No. 00CV7146, was tried before the Court in
June 2002.  The Court issued its Findings of Fact, Conclusions of Law and
Judgment on November 13, 2002.  The Court agreed with the Borrower's
determination of the value of the consideration paid for the shares issued to
Imatron and that there was no evidence of fraud by the Borrower.  The Court
agreed with ProFutures that the Borrower breached the 1996 stock purchase
warrant with ProFutures by failing to give ProFutures written notice stating the
adjusted exercise price and the new number of shares deliverable as a result of
the Imatron Transaction and by failing to register the shares to which
ProFutures was entitled under the warrant as a result of the Imatron
Transaction.  Nevertheless, the Court also found that ProFutures' alleged
damages were uncertain and speculative and that ProFutures was not entitled to
recover actual damages.  Therefore ProFutures was awarded $1 in nominal damages.
ProFutures has appealed the trial Court's findings and the Borrower has
cross-appealed.  Those appeals are presently pending before the Court of
Appeals, State of Colorado.

In the federal case of ProFutures v. Positron, et al., United States District
Court for the District of Colorado, Case No. 02-N-0154, the Complaint alleged
two causes of action against the Borrower: fraudulent transfer and injunctive
relief.  The allegations arose out of a June 2001 loan agreement between the
Borrower and Imatron.  The action was dismissed in 2002 without prejudice.

                                        3
<PAGE>
                             SCHEDULE 3.8 CONTINUED

10P10, L.P.

In December 2001, 10P10, L.P., the Borrower's previous landlord for its premises
located at 16350 Park Ten Place, Suite 150, Houston, Texas, filed a complaint
(Cause No. 2001-65534 in the 165th Judicial District Court of Harris County,
Texas) against the Borrower alleging breach of lease agreement. The Borrower
disputes the amount of lease commissions and construction costs charged by
10P10, L.P. in conjunction with the subleasing of the premises. Although 10P10,
L.P. asserted a claim in excess of $150,000, a subsequent analysis of the
transactions under the lease has resulted in the reduction of the lease
obligation alleged by 10P10, L.P. to approximately $97,000. Although the
Borrower disputes the amount of the claim, due to the pending lawsuit,
approximately $97,000 is recorded as an accrued liability as of December 31,
2003. The case is set for trial on a two week docket beginning in September
2004.

RADIOLOGY CORPORATION OF AMERICA, INC.

A judgment in the amount of $75,000 has been entered against the Borrower in
Texas state court in favor of Radiology Corporation of America, Inc., a vendor
to the Borrower.  In satisfaction of the judgment the Borrower and the creditor
have agreed that the judgment may be satisfied by five monthly payments of
$15,000 each commencing March 10, 2004.

                                        4
<PAGE>
                                  SCHEDULE 3.9

Compliance with Laws and Agreements.
-----------------------------------

See Warning Letter on Schedule 3.8.

                                        5
<PAGE>
                                  SCHEDULE 3.10

Taxes.
-----

The following taxes are due and payable:

Sales Tax:
     New York                                        $94,881.78
     Florida                                          $7,875.00
     Alabama                                         $31,250.00
     Texas                                            $2,894.81

Property Tax:                                       $321,884.17

                                        6
<PAGE>
                                    EXHIBIT A
                                    ---------

                                      NOTE

                                      -1-
<PAGE>
                                    EXHIBIT B
                                    ---------

                               SECURITY AGREEMENT

                                      -1-
<PAGE>THE  SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
     BE  SOLD,  TRANSFERRED,  ASSIGNED,  PLEDGED  OR HYPOTHECATED EXCEPT IN
     ACCORDANCE  WITH  THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE
     SECURITIES  ACT,  PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR
     PURSUANT  TO  AN  AVAILABLE  EXEMPTION  FROM  REGISTRATION.

     THIS  NOTE  IS  RESTRICTED  BY  THE  TERMS  OF,  AND  IS  SUBJECT  TO
     RESTRICTIONS  ON  TRANSFER  AND  RIGHTS  OF SALE AS PROVIDED IN A LOAN
     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

$__________                                                       Houston, Texas
                                                                  ________, 2004

     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 IMAGIN Diagnostic Centres,
Inc., located at 1835 Yonge St., Suite 500, Toronto, Ontario, Canada M4S 1XB, or
its  registered  assigns  ("IMAGIN"  or  the  "Holder"),  the  sum  of
                                               ------
____________________________  ($_________),  or such lesser amount as shall then
equal  the  outstanding  principal amount hereof on the terms and conditions set
forth hereinafter.  The principal hereof and any unpaid accrued interest hereon,
as  set  forth  below,  shall  be due and payable on the earlier to occur of (i)
______, 2006 (two years from the date of this Note, the "Maturity Date") or (ii)
                                                         -------------
when  declared  due and payable by the Holder upon the occurrence of an Event of
Default  (as defined below).  Commencing on the Maturity Date, all principal and
accrued  interest  hereunder  shall  be  payable  upon  demand.  Payment for all
amounts  due  hereunder  shall  be made by mail to the registered address of the
Holder.  All  numbers  expressed herein as "$" 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.  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.

                                      -1-
<PAGE>
                    (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)  "Loan  Agreement" shall mean the Loan Agreement between
                          ---------------
the  Company  and  IMAGIN,  dated  as  of  May  21,  2004.

                    (e)  "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.

                    (f)  "Purchase Agreement" shall mean the Note Purchase
                          ------------------
Agreement between the Company and IMAGIN, dated as of May 21, 2004.

                    (g)  "Securities Act" shall mean the Securities Act of 1933,
                          --------------
as  amended,  including  the  rules promulgated thereunder by the Securities and
Exchange  Commission.

                    (h)  "Security  Agreement" shall mean the Security Agreement
                          -------------------
between  the  Company  and  IMAGIN,  dated  as  of  May  21,  2004.

          2.   Interest.  Simple  interest  shall  accrue  at  the  rate  of ten
               --------
percent  (10%)  per  annum  on the principal of this Note outstanding during the
period beginning the date of this Note and ending on the date that the principal
amount  of  this Note is repaid.  Interest shall be calculated on the basis of a
365-day  year  for the actual number of days elapsed.  Accrued interest shall be
payable in cash annually on the anniversary date of this note; provided however,
that  in the event the accrued interest on this Note together with the aggregate
accrued  interest  on  all  outstanding  notes  issued  pursuant to the Purchase
Agreement  and  pursuant  to  the  Loan Agreement (such notes collectively being
hereinafter  referred  to  as  the  "Imagin 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 pro-rata among the Imagin 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:

                                      -2-
<PAGE>
                    (a)  The Company shall default in the payment of any part of
the  principal or accrued and unpaid interest on this Note after it shall become
due  and  payable,  whether  at maturity or at a date fixed for prepayment or by
acceleration  or  otherwise;  or

                    (b)  The  institution  by  the  Company of proceedings to be
adjudicated  as  bankrupt  or  insolvent, or the consent by it to institution of
bankruptcy  or  insolvency  proceedings  against  it  or  the  filing by it of a
petition  or  answer  or  consent  seeking  reorganization  or release under the
federal  Bankruptcy  Act,  or  any other applicable federal or state law, or the
consent  by  it  to  the  filing  of  any  such petition or the appointment of a
receiver,  liquidator,  assignee,  trustee  or  other  similar  official  of the
Company,  or  of any substantial part of its property, or the making by it of an
assignment  for  the  benefit of creditors, or the taking of corporate action by
the  Company  in  furtherance  of  any  such  action;  or

                    (c)  If, within sixty (60) days after the commencement of an
action  against  the Company, without the consent or acquiescence of the Company
(and  service  of  process  in  connection therewith on the Company) seeking any
bankruptcy,  insolvency,  reorganization,  liquidation,  dissolution  or similar
relief under any present or future statute, law or regulation, such action shall
not  have  been  resolved  in  favor of the Company or all orders or proceedings
thereunder affecting the operations or the business of the Company stayed, or if
the  stay  of any such order or proceeding shall thereafter be set aside, or if,
within sixty (60) days after the appointment without the consent or acquiescence
of  the  Company of any trustee, receiver or liquidator of the Company or of all
or any substantial part of the properties of the Company, such appointment shall
not  have  been  vacated;  or

                    (d)  Any  material  breach  by  the  Company  of  any
representation,  warranty  or  covenant  contained in the Loan Agreement or this
Note.

                    (e)  As  of  January  1,  2005,  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  D 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 D 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.

                                      -3-
<PAGE>
     4.2  Conversion  Price.  The  Conversion  Price  (the  "Conversion  Price")
          -----------------
applicable  per  share  of  Series D 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 D Preferred Stock outstanding is
increased  by  a stock dividend payable in shares of Series D Preferred Stock or
by  a  subdivision  or  split-up  of  shares  of Series D Preferred Stock, then,
following the record date for the determination of holders of Series D 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 D Preferred Stock issuable on conversion
of Note shall be increased in proportion to such increase in outstanding shares.

          4.3.2     Adjustment  Upon  Combinations.  If, at any time, the number
                    ------------------------------
of  shares of Series D Preferred Stock outstanding is decreased by a combination
of  the  outstanding shares of Series D Preferred Stock into a smaller number of
shares of Series D 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 D 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 D 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  D 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  D 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

                                      -4-
<PAGE>
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  Conversion  Procedure.
          ---------------------

          4.4.1     Notice  of  Conversion.  In  order  to convert this Note (in
                    ----------------------
whole or in part) into full shares of Series D 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 D
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 D 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 D
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 D Preferred
Stock issuable with respect to such conversion shall be validly issued and fully
paid.

                                      -5-
<PAGE>
          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  D Preferred Stock issuable upon such conversion shall be treated for
all  purposes  as  the  record  holder  or  holders  of  such shares of Series D
Preferred  Stock on such date.  No fractional shares of Series D 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.

     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 D Preferred Stock, reserve and keep
available  out of its authorized but unissued shares of Series D Preferred Stock
solely  for  the  purpose  of  effecting  the

                                      -6-
<PAGE>
conversion  of the Note such number of its shares of Series D 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 D Preferred Stock into
Common  Stock  in  accordance  with  its  Articles.  If at any relevant time the
number of authorized but unissued shares of Series D Preferred Stock (and shares
of  Common  Stock  for  issuance on conversion of such Series D 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 D Preferred Stock (and shares of
its Common Stock for issuance on conversion of such Series D Preferred Stock) to
such  number  of  shares  as  shall  be  sufficient  for  such  purposes.

          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.  The  offer,  sale  or other disposition of this Note or securities into
which  such  Note  may  be  converted,  shall  be subject to the restrictions on
transfer  set  forth  in Section 7.11 of the Loan Agreement.  Holder understands
and  agrees that each certificate held by Holder representing Series D 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  LOAN  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

                                      -7-
<PAGE>
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.

          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 D 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.

                                      -8-
<PAGE>
     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-
<PAGE>
                              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 D 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
                                          --------------------------------------

                                          --------------------------------------

                                          --------------------------------------

<PAGE>

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