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Annex
1
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Articles
of Association
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Annex
2
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Technologies
Contribution Agreement
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1.
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DEFINITIONS
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2.
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INTERPRETATION
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2.1
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Words
importing the singular shall include the plural and vice versa; words
denoting persons shall include bodies corporate and unincorporated
associations of persons and vice
versa.
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2.2
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The
headings in this Contract do not affect its
interpretation.
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2.3
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The
Annexes to this Contract form an integral part of
it.
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3.
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REPRESENTATIONS
AND WARRANTIES OF THE PARTIES
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3.1
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Representations
and Warranties of NMS
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(a)
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NMS
is a limited liability company duly organized and validly existing
under
the laws of the PRC.
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(b)
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NMS
has submitted to POSITRON a valid, true and complete copy of its
current
business license bearing a current annual inspection seal from the
relevant administration for industry and
commerce.
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(c)
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Each
of NMS and its relevant Affiliates has taken all appropriate and
necessary
corporate action to (i) empower its legal representative or such
other
duly authorized representative whose signature is affixed hereto
and
thereto to sign this Contract and all of the contracts contemplated
herein
to which it is a party, (ii) authorize the execution and delivery
of this
Contract and all of the contracts contemplated herein to which it
is a
party, and (iii) authorize the performance and observance of the
terms and
conditions hereof and thereof.
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(d)
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Each
of NMS and its relevant Affiliates has obtained all consents, approvals
and authorizations necessary for the valid execution and delivery
of this
Contract and all of the contracts contemplated herein to which it
is a
Party and to observe and perform its obligations hereunder and thereunder;
provided, however, that this Contract shall be subject to the approval
of
the Examination and Approval Authority or other examination and approval
authority before the same may become
effective.
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(e)
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Upon
the approval of the Examination and Approval Authority, this Contract
shall constitute the legal, valid and binding obligation of NMS
enforceable against NMS in accordance with its
terms.
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(f)
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NMS
's execution, delivery and performance of this Contract or any of
the
other contracts contemplated herein will not violate any of their
constitutive documents, any other agreement or obligation of NMS,
or
currently effective law, regulation or decree of China that may be
applicable to any aspect of the transactions contemplated
hereunder.
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3.2
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Representations
and Warranties of POSITRON
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(a)
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POSITRON
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas of the United States of
America.
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(b)
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POSITRON
has submitted to NMS a valid, true and complete copy of its proof
of
registration with the Secretary of State of the State of
Texas.
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(c)
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POSITRON
has taken all appropriate and necessary corporate action (i) to empower
its duly authorized representative whose signature is affixed hereto
or
thereto to sign this Contract and all of the contracts contemplated
herein
to which it is a party, (ii) authorize the execution and delivery
of this
Contract and all of the contracts contemplated herein to which it
is a
party, (iii) to authorize the performance and observance of the terms
and
conditions hereof and thereof; provided however, this Contract shall
be
effective and binding upon POSITRON only when executed by both Gary
H.
Brooks and Patrick G. Rooney, POSITRON's President and Chairman,
respectively.
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(d)
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POSITRON
has obtained all consents, approvals and authorizations necessary
for the
valid execution and delivery of this Contract and all of the contracts
referred to herein to which it is a party; provided, however, that
this
Contract shall be subject to the approval of the Examination and
Approval
Authority before the same may become
effective.
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(e)
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Upon
the approval of the Examination and Approval Authority, this Contract
shall constitute the legal, valid and binding obligation of POSITRON
enforceable against POSITRON in accordance with its
terms.
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(f)
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Upon
the Contribution Date, POSITRON shall shut down its product line
in
connection with the PET products and stop competing with the Company,
subject to the terms of this
Contract.
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(g)
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POSITRON's
execution, delivery and performance of this Contract or any of the
other
contracts contemplated herein will not violate any of their constitutive
documents, any other agreement or obligation of POSITRON, or currently
effective law, regulation or decree of United States of America and
PRC
that may be applicable to any aspect of the transactions contemplated
hereunder.
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4.
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ESTABLISHMENT
OF THE COMPANY
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4.1
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Establishment
of the Company
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4.2
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Name
and Address of the Company
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(b)
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The
legal address of the Company shall be as follows: No. 2 Xinxiu Street,
Hun
Nan New District, Shenyang 110179,
PRC.
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4.3
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Limited
Company
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4.4
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Profits
and Losses
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4.5
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Other
Contracts
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4.6
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Branches
and Offices
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5.
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PURPOSES,
SCOPE OF BUSINESS AND SCALE OF PRODUCTION OF THE
COMPANY
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5.1
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Purposes
and Scope of the Company
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5.2
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Estimated
Scale of Production
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6.
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TOTAL
AMOUNT OF INVESTMENT AND REGISTERED CAPITAL
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6.1
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Total
Amount of Investment
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6.2
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Registered
Capital
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(a)
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NMS's
aggregate contribution to the registered capital of the Company shall
be
sixty-seven point five percent (67.5%) of the total registered capital
of
the Company, and shall be Renminbi equivalent to One Million Three
Hundred
and Fifty Thousand United States Dollars (US$ 1,350,000). NMS's
contribution shall be made in cash.
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(b)
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POSITRONS
aggregate contribution to the registered capital of the Company shall
be
thirty two point five percent (32.5%) of the total registered capital
of
the Company, and shall be Six Hundred and Fifty Thousand United States
Dollars (US$ 650,000), among which Two Hundred and Fifty Thousand
United
States Dollars (US$ 250,000) shall be made in cash, and Four Hundred
Thousand United States Dollars (US$ 400,000) shall be made in the
form of
the technology (see the Technologies Contribution Agreement for
details).
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6.3
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Timing
of Capital Contributions
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6.4
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Investment
Certificates
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6.5
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Increase
or Reduction of Registered
Capital
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6.6
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Indemnification
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7.
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TRANSFER
OF INTEREST
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7.1
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Non-Encumbrance
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7.2
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Valuation
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7.3
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Transfer
of Interest
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(a)
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Subject
to the provisions of this section 7, a Party may assign, sell or
otherwise
dispose of all or part of its Interest in the Company to any third
party
(the "Transfer").
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(b)
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When
a Party (the "Transferring
Party")
wishes to transfer all or part of its Interest to a third party,
it shall
provide written notice (the "Notice")
to the other Party (the "Non-Transferring
Party")
specifying its wish to make the Transfer; the Interest it wishes
to
transfer; the terms and conditions of the Transfer; and the identity
of
the proposed transferee.
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(c)
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The
Non-Transferring Party shall have a right of first refusal to purchase
the
whole of such offered Interest on terms and conditions no less favourable
than those specified in the Notice. If the Non-Transferring Party
elects
to exercise its right of first refusal, it shall notify the Transferring
Party in writing within thirty (30) days of the giving of the Notice
to
the Non-Transferring Party of its intention to purchase the whole
of the
Interest to be transferred and both Parties shall cause the Directors
appointed by it to approve the Transfer at a duly convened Board
meeting.
The Non-Transferring Party shall then, within thirty (30) days following
its written acceptance, subject only to delays caused by obtaining
necessary government approvals, purchase such Interest on the terms
and
conditions specified in the Notice, unless both Parties agree otherwise
in
writing.
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(d)
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If
the Non-Transferring Party fails to respond in writing to the Notice
within such thirty (30)-day period, the Non-Transferring Party shall
be
deemed to have consented to the Transfer. If the Non Transferring
Party
consents, or is deemed to have consented to the Transfer, the Transferring
Party shall be free during the period of ninety (90) days following
the
expiration of the thirty (30)-day notice period to transfer such
Interest
to a third party at a price which equals or exceeds the price specified
in
the Notice and on terms and conditions no more favourable to the
third
party than those of the original Notice without again complying with
the
procedures set forth in Articles 7.3 (b) and (c); provided, however,
that
the Transfer shall not be deemed effective and shall be subject to
rescission unless and until (i) a copy of the transfer agreement
to be
executed between the Transferring Party and the transferee has been
submitted to the Non-Transferring Party and, if only a portion of
the
Transferring Party's Interest in the Company is being transferred,
the
transferee has agreed therein to assume, jointly and severally with
the
Transferring Party, the rights and obligations of the Transferring
Party
under this Contract, or, if all of the Transferring Party's Interest
in
the Company is being transferred, the transferee has agreed therein
to
assume all of the rights and obligations of the Transferring Party
under
this Contract, (ii) the Board of Directors unanimously approves the
Transfer at a duly convened Board meeting, and (iii) all necessary
amendments to this Contract, the Annexes and other contracts and
documents
contemplated herein and therein have been submitted for approval
to and
have received the approval of, the Examination and Approval Authority,
and
(iv) all other government approvals necessary to give effect to the
Transfer have been obtained.
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(e)
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The
Transfer and payment of the purchase price shall be completed within
such
ninety (90)-day period, subject only to delays caused by obtaining
necessary government approvals. If the Transfer is not completed
within
such ninety (90)-day period, except for the reason indicated above,
the
Transferring Party shall not be permitted to transfer its Interest
to the
third party without again complying with the procedures set forth
in
Articles 7.3(b) and (c).
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(f)
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The
Transferring Party shall provide the Non-Transferring Party with
a
duplicate of the executed transfer agreement with the transferee
within
fourteen (14) days after such agreement is
executed.
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7.4
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Transfer
to Affiliated Companies
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7.5
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Continued
Implementation of Contract
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7.6
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Effect
of Transfer
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8.
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RESPONSIBILITIES
OF THE PARTIES
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8.1
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Responsibilities
of NMS:
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(a)
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Make
its contributions to the registered capital of the Company in accordance
with the relevant provisions of this
Contract;
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(b)
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Enter
into, or cause its Affiliates to enter into, the Annexes hereto and
any
other contracts contemplated herein to which it or any of its Affiliates
is a party;
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(c)
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Assist
the Company in obtaining the Business License providing for a term
of
validity and scope of business acceptable to both
Parties;
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(d)
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Assist
the Company in handling the registration of the Company's right to
use the
Sites with all relevant government departments and handling all other
necessary procedures to ensure that the Company has the right to
use the
Sites for the Joint Venture Term;
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(e)
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Assist
the Company in obtaining the Chinese tax preferences, holidays and
concessions and other preferential tax treatment available to or
for the
Company;
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(f)
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Assist
the Company, if requested, in handling all licenses, approvals and
registrations for the importation of technology in accordance with
the
terms set forth in the Technologies Contribution Agreement and Software
Sub-License Agreement;
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(g)
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Assist
the Company with the smooth transfer of employees from NMS who are
recruited by the Company;
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(h)
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Supply
to the Company such CT products as the Company may require for its
Products at prices not greater than the lesser of (i) cost plus 8%,
or
(ii) the lowest price at which such products are sold to unaffiliated
parties; and
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(i)
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Handle
other matters entrusted to it by the Company and as agreed from time
to
time by NMS.
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8.2
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Responsibilities
of POSITRON:
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(a)
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Make
its contributions to the registered capital of the Company in accordance
with the relevant provisions of this
Contract;
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(b)
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Enter
into the Annexes hereto and any other contracts contemplated herein
to
which it is a party;
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(c)
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Handle
export license and other procedures for the Company necessary for
the
export of technology from United States of America pursuant to the
Technologies Contribution Agreement and Software Sub -License
Agreement;
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(d)
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Assist
the Company to obtain the necessary approval from the relevant authorities
for the import of technology and the technology contribution of POSITRON
into the Company, including but not limited to providing the list
of such
technologies and relevant documents to the Company and relevant
authorities;
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(e)
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(e)
Assist the Company with the smooth transfer of one hardware engineer
to
the Company, and such engineer shall work full-time at the Company
for at
least one year;
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(f)
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Assist
the Company in obtaining the Business License providing for a term
of
validity and scope of business acceptable to both
Parties;
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(g)
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Make
great efforts to assist the Company to recruit competent employees
from
United States of America to work at the
Company;
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(h)
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Provide
certain training to selected employees of the Company, the expenses
for
which shall be borne by the Company;
and
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(i)
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Handle
other matters entrusted to it by the Company and agreed from time
to time
by POSITRON.
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9.
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LEASE
OF THE SITES AND BUILDING
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9.1
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The
sites to be determined.
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10.
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OWNERSHIP
AND LICENSING OF IPR
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10.1
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Licensing
of Trademark
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10.2
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Ownership
of Patents, Patent Rights and Proprietary
Information
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| 10.2.1 |
Ownership
of Inversion of the Company during the term of this
Contract
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Ownership
of Invention of the Company after Dissolution of the
Company.
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Ownership
of the Original Technologies after the Dissolution of the
Company
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11.
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PURCHASE
OF MATERIALS
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12.
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SALES
OF PRODUCTS
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12.1
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General
principle
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12.2
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The
Products shall be sold to the Parties for further resale, and the
transfer
price of the Products shall be calculated as follows:
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(a)
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"A"
means the cost of the raw
materials;
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(b)
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"B"
means other expenses, including but not limited to labour cost, cost
related to R&D, rental fee, depreciation and amortization, training
fee, travelling fee, public utility fee, custom duty and VAT,
administrative expenditures, financial cost, and other fees agreed
by the
Parties from time to time, with the exception of income
tax.
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12.3
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NMS's
Undertakings
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13.
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BOARD
OF DIRECTORS
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13.1
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Establishment
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13.2
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Composition
and Term
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13.3
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Legal
Representative
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13.4
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Authority
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13.5
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Personal
Liability of Directors
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(a)
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is
outside the scope of the approval or authorization given to him by
this
Contract or the Board of Directors' resolution ;
or
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(b)
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is
in breach of Articles 59 to 63 of the Company Law of
PRC.
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13.6
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Unanimous
Approval
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(a)
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Amendment
of the Articles of Association;
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(b)
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Increase,
reduction or assignment of registered capital and the adjustment
of each
Party's share of interest in the registered capital of the
Company;
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(c)
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Merger
or consolidation of the Company with any other economic organization
or
reorganization of the Company; and
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(d)
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Extension,
termination, Liquidation or dissolution of the
Company.
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13.7
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Other
Decisions of the Board
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13.8
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Deadlock
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(a)
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if
neither Party wishes to continue the business of the Company as a
going
concern, the provisions of Article 22.1(e) shall apply;
or
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(b)
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if
only one (1) Party desires to carry on the business of the Company
as a
going concern, the other Party may sell its Interest to the Party
desiring
to carry on the business of the Company in accordance with Article
7.4;
or
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(c)
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if
both Parties wish to continue the business of the Company as a going
concern, the provisions of Article 22.2(b) shall apply;
or
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(d)
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failing
all of the foregoing, the matter shall be submitted for resolution
in
accordance with Article 28 of this
Contract.
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13.9
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Board
Meetings
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13.10
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Interim
Board Meeting
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13.11
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Notice
of Meetings
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13.12
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Attendance
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13.13
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Quorum
for Meetings
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13.14
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Voting
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13.15
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Written
Consent
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13.16
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Compensation
and Expenses
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13.17
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Minutes
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13.18
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Further
Policies and Procedures
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14.
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MANAGEMENT
ORGANIZATION
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14.1
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Establishment
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(a)
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The
Board of Directors of the Company shall establish a management
organization comprised of Management Personnel who shall be in charge
of
the day-to-day operations and management of the Company. The management
organization shall be headed by one (1) General Manager. The General
Manager shall be nominated by NMS. The Company shall initially have
the
following managerial departments: R&D and Manufacturing (including
Sourcing and Logistics); Finance and Accounting; Administration (including
Human Resources and Government Relations, etc.). The Company's initial
Management Personnel shall be as follows: one (1) Administration
Manager,
one (1) Finance and Accounting Manager and one (1) R&D and
Manufacturing Manager as nominated by NMS; as well as one (1) Deputy
R&D and Manufacturing Manager, one (1) Deputy Finance and Accounting
Manager as nominated by POSITRON. The above management personnel
shall be
nominated by the Parties, but shall only be appointed or removed
by the
Board. Without prejudice to the foregoing, the actual management
organization of the Company may deviate from time to time from the
positions set out above, based on mutual consent of the
Parties.
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(b)
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Each
Party agrees to cause the Directors appointed by it to approve all
persons
nominated to Management Personnel positions; provided, however, that
each
Party may veto the nomination of any candidate for a Management Personnel
position if such candidate fails to meet the criteria ascribed to
the
position for which the candidate is nominated as may be provided
in the
Articles of Association or otherwise determined by the General Manager
and
the vetoing Party provides reasonable evidence of such failure. Each
individual serving in the capacity of Management Personnel shall
be
appointed for a term of two (2) years, and each shall be eligible
for
consecutive terms of office if re-nominated by the original nominating
Party. If it becomes necessary, due to dismissal or resignation,
to
replace the individual serving in the capacity of Management Personnel,
the Party that originally nominated such individual shall nominate
a
replacement to serve the remainder of the relevant
term.
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(c)
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The
duties of the General Manager shall consist of carrying out the decisions
of the Board of Directors and organizing and directing the day-to-day
operations and management of the
Company.
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(d)
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Any
Management Personnel are forbidden from concurrently serving or working
in
any other company, unit, entity or organization whatsoever unless
expressly approved by the Board.
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14.2
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Employment
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14.3
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Compensation
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14.4
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Confidentiality
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15.
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LABOUR
MANAGEMENT
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15.1
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Enterprise
Autonomy
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15.2
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Employment
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15.3
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Compensation
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16.
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ANNUAL
OPERATING PLANS AND BUDGETS
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16.1
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Preparation
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(a)
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procurement
of materials, machinery, equipment and other capital expenditures
of the
Company;
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(b)
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plans
and policies with respect to the manufacture of the
Products;
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(c)
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estimated
revenues, expenditures and profits of the
Company;
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(d)
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staffing
levels and plans for training personnel of the
Company;
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(e)
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R&D,
Product roadmap, projects and investment
plans;
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(f)
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annual
production and sales plan agreements with the different local and
international sales organizations.
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16.2
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Examination
and Implementation
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16.3
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R&D
Budget
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17.
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TAXATION,
THREE FUNDS AND PROFIT DISTRIBUTION
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17.1
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Tax
Treatment
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17.2
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Three
Funds
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17.3
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Profit
Distribution
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(a)
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After
paying taxes in accordance with the law and making contributions
to the
Three Funds, the remaining earnings of the Company shall be available
for
dividend distribution to the Parties. The General Manager shall recommend
a dividend distribution plan to the Board of Directors within the
first
three (3) months following the end of each fiscal year of the Company
for
the Board's consideration and approval or modification. In his or
her
recommendation, the General Manager shall consider that the Company
has
sufficient funds on hand to pay the dividends and meet its approved
capital expenditure budget and working capital requirement for the
current
budget year. The Company shall not distribute dividends unless the
losses
of previous fiscal year(s) have been fully made up. Remaining
undistributed dividend from previous years may be distributed together
with that of the current year and the Board of Directors may authorise
the
payment of dividends from undistributed dividends from previous years
at
any time.
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(b)
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Dividends
shall be distributed to the Parties in proportion to each Party's
holding
of the registered capital of the Company at the time of the distribution.
Payment of dividend distributions to POSITRON shall be in United
States
Dollars and POSITRONS right to receive previous declared dividends
shall
not lapse due to unavailability of Foreign Exchange. The rate of
exchange
for all Renminbi amounts that are required to be converted to United
States Dollars for payment of such dividends shall be the rate announced
by the People's Bank of China for the conversion from Renminbi to
United
States Dollars on the date that dividends are
declared.
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18.
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FINANCIAL
AFFAIRS AND ACCOUNTING
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18.1
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Accounting
System
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(a)
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The
Company shall maintain its accounts in accordance with officially
promulgated PRC laws and regulations and the provisions of this Contract
and the Articles of Association and in a manner sufficient to satisfy
the
generally accepted accounting principles and the financial and tax
reporting requirements of both Parties. The Finance and Accounting
Manager, under the supervision of the General Manager, shall establish
the
accounting system and procedures for the
Company.
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(b)
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The
fiscal year of the Company shall start on January 1 of the year and
end on
December 31 of the same year. The first fiscal year of the Company
shall
commence on the Establishment Date and end on December 31 of the
same
year. The last fiscal year of the Company shall start on January
1 of the
year of termination and end on the date of
termination.
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18.2
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Books
and Records
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18.3
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Inspection
of Books and Records
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18.4
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Accounting
Unit
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18.5
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Reports
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(a)
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Within
ninety (90) days after the last day of each fiscal year, the balance
sheet
of the Company as of the end of such fiscal year and the related
profit
and loss statement and statement of cash flows for the fiscal year
then
ended, in each case audited as provided
below.
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(b)
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Within
thirty (30) days after the last day of each financial quarter, the
unaudited balance sheet of the Company as of the end of such quarter
and
the related profit and loss statement (for such quarter and for the
year-to-date).
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(c)
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Within
thirty (30) days after the last day of each month, (i) a profit and
loss
statement for such month; and (ii) a forecast/outlook for the remainder
of
the current fiscal quarter as well as the next fiscal quarter, which
shall
include without limitation the number of personnel, revenue, cash
balance
and expenses.
|
|
18.6
|
Audit
|
|
18.7
|
Provision
of Returns
|
|
19.
|
BANK
ACCOUNTS AND FOREIGN EXCHANGE
|
|
19.1
|
Bank
Accounts
|
|
19.2
|
Foreign
Exchange Requirements of the
Company
|
|
20.
|
CONFIDENTIALITY
AND NON-COMPETITION
|
|
20.1
|
Confidentiality
|
|
(a)
|
Each
of the Parties acknowledges and agrees that the discharge of its
obligations under this Contract and the contracts and documents referred
to herein to which it is a party will involve the disclosure of
Confidential Information.
|
|
(b)
|
The
Parties and their Affiliates shall use the Confidential Information
only
for the purposes specified in this Contract, the Annexes and the
other
contracts and documents contemplated, herein and therein to which
it is a
party, and shall not disclose any Confidential Information to third
parties without the prior written consent of the Party providing
such
Confidential Information; provided, however, (i) that a Party may
be
permitted to disc lose Confidential Information received by it to
its
Affiliate(s) when such disclosure is necessary for such Party to
carry out
its obligations under this Contract, the Articles of Association
or the
other contracts referred to herein upon the execution of a non-disclosure
agreement between such Affiliate(s) and the Party providing the
Confidential Information, and (ii) that either Party may disclose
certain
required Confidential Information to the relevant stock exchange
authorities in the event this is required under applicable regulations,
provided, however, that such Party shall always provide timely and
detailed written notice to the other Party in such event. Each Party
warrants the full adherence of its Affiliates to these confidentiality
obligations, and hereby fully and unconditionally guarantees such
adherence by its Affiliates.
|
|
(c)
|
The
Company, the Parties and their respective Affiliates that receive
Confidential Information shall make such Confidential Information
available only to those of their directors, managers and personnel
whose
duties necessitate familiarity with such Confidential Information
and
shall cause such directors, managers and personnel also to comply
with the
confidentiality obligations set forth in Article
20.1(b).
|
|
(d)
|
The
confidentiality obligations set forth in this Article 20.1 shall
be
maintained during the Joint Venture Term and for an additional period
of
five (5) years after the termination of this Contract; subject to
the
rights of the Parties following Dissolution or termination as provided
in
this Contract.
|
|
20.2
|
Non-Competition
|
|
21.
|
DURATION
OF THE COMPANY
|
|
22.
|
EARLY
TERMINATION
|
|
22.1
|
Triggering
Events
|
|
(a)
|
Either
Party fails to make its contributions to the registered capital of
the
Company on the Contribution Date and such failure continues for a
period
of more than ninety (90) days and is not waived by the other Party.
In
such case, either Party may give notice of
termination.
|
|
(b)
|
There
occurs a material breach of this Contract and such breach is not
cured by
the breaching Party within sixty (60) days after receipt of written
notice
of the breach from the non-breaching Party. In such case, the
non-breaching Party may give notice of
termination.
|
|
(c)
|
Any
Party or its relevant Affiliate fails to perform any of its material
obligations under the Annexes or any other contract referred to herein
if,
in the reasonable opinion of the non-breaching Party, such non-performance
creates a material risk of loss to such non-breaching Party or the
Company
and such risk is not cured by the breaching party within sixty (60)
days
after receipt of notice from the non breaching Party. In such case,
the
non-breaching Party may give notice of
termination.
|
|
(d)
|
The
Company sustains serious losses for three (3) consecutive years or
the
Company is unable to attain its business goals and, after consultation,
the Parties are unable to agree on a Business Plan to improve the
economic
situation of the Company. In such case, either Party may give notice
of
termination.
|
|
(e)
|
Deadlock
occurs and neither Party wishes to continue the business of the Company
as
a going concern. In such case, either Party may give notice of
termination.
|
|
(f)
|
Total
or partial performance of this Contract is prevented by an Event
of Force
Majeure lasting for more than one hundred and twenty (120) consecutive
days and, after consultation, the Parties are unable to agree on
a method
to perform this Contract. In such case, either Party may give notice
of
termination, provided, however, that in the case of partial performance
being prevented, such partial performance is material to the
Company.
|
|
(g)
|
The
Parties mutually agree to terminate this Contract and agree on the
terms
for the dissolution of the Company. In such case, the Company and
its
assets shall be dealt with in accordance with such agreement and
applicable law.
|
|
22.2
|
Purchase
of the Company as a Going
Concern
|
|
(a)
|
In
the event that (1) one (1) Party is the subject of proceedings for
Liquidation or dissolution or ceases to carry on business, or (2)
notice
of termination is given by a Party pursuant to Article 22.1(b) or
(c), the
remaining or non-breaching Party may elect to purchase the Company
as a
going concern in accordance with the procedures set forth
below:
|
|
(b)
|
Each
Party shall, at its own cost, engage a reputable, independent and
qualified appraiser to appraise the Company as a going concern with
the
same instruction going to the two appraisers. The average of the
two
appraisals shall be considered the fair market value ("Fair Market
Value")
of the Company, provided that, if only one Party engages such an
appraiser, the purchase price shall be based on that one appraiser's
valuation. In the event the appraisals (or, in the case of ranges
of
values, the averages of the two ranges) deviate more than 100% (e.g.
200-420) then the following applies: A third appraiser, being a top
5
internationally reputed investment bank, will be appointed by the
Parties
at the cost of the Company, which investment bank must choose within
thirty (30) days between one and the other appraisal, and such choice
will
constitute the binding Fair Market
Value.
|
|
(i)
|
The
purchasing Party shall purchase the Interest of the selling Party
in the
Company for a purchase price equal to the percentage interest that
such
selling Party then currently holds in the registered capital of the
Company multiplied by the Fair Market Value of the Company; provided
however, that the purchase price paid to POSITRON in the event NMS
is the
purchasing Party shall be not less than USD
$20,000,000.
|
|
(c)
|
After
determination of the purchase price, the Parties shall execute a
purchase
and sale agreement and shall use their best efforts to secure, within
thirty (30) days of the execution of such purchase and sale agreement,
all
necessary governmental approvals required to give effect to such
purchase
and sale agreement. The closing of such purchase and sale shall occur
within fifteen (15) days following approval of the purchase and sale
agreement; provided, however, that the selling Party shall not be
required
to complete any sale pursuant to this Article 22.2 unless the entire
purchase price is paid in the lawful currency of, or a currency which
may
be freely converted and remitted to, the jurisdiction of organization
of
the selling Party.
|
|
(i)
|
After
approval of the purchase and sale agreement has been obtained and
the
purchase price has been paid in accordance with (iii) above, the
Parties
shall terminate this Contract, the Annexes and all of the contracts
contemplated herein by a writing executed by the duly authorized
representative of each of the
Parties.
|
|
(d)
|
In
the event that Deadlock occurs and both Parties wish to continue
the
business of the Company as a going concern, the Fair Market Value
shall be
determined pursuant to Article 22.2(a) (i) and an auction shall be
conducted by the Company's auditor to determine which Party shall
sell its
Interest to the other Party. During such auction, each Party shall
bid
openly for the purchase of the other Party's Interest, and each Party
may
repeatedly place a higher bid than the other Party until the highest
bid
has been made. No bid shall be lower than the applicable percentage
held
by the selling Party in the registered capital of the Company multiplied
by the Fair Market Value of the Company. The Party making the highest
bid
(per percentage interest) shall be entitled to purchase the Interest
of
the other Party. After determination of the final purchase price,
the
procedures set forth in Articles 22.2(a) (iii) and (iv) shall apply.
Notwithstanding the foregoing, any purchase price paid to POSITRON
in the
event NMS is the purchasing Party shall be not less than USD
$20,000,000.
|
|
(e)
|
Both
Parties shall continue to perform their obligations under this Contract
prior to completion of Article 22.2(a)(iv)
above.
|
|
23.
|
LIQUIDATION
AND DISSOLUTION
|
|
23.1
|
Liquidation
|
|
23.2
|
Effect
of Dissolution or Sale as a Going
Concern
|
|
23.3
|
Termination
|
|
24.
|
LIABILITY
FOR BREACH OF CONTRACT
|
|
24.1
|
Breach
of Contract
|
|
24.2
|
Failure
to Pay Capital Contributions
|
|
24.3
|
Continued
Implementation of Contract
|
|
25.
|
INSURANCE
|
|
26.
|
FORCE
MAJEURE
|
|
26.1
|
Performance
of Obligations
|
|
26.2
|
Notice
|
|
26.3
|
Continued
Implementation of Contract
|
|
27.
|
APPLICABLE
LAW
|
|
27.1
|
Governing
Law
|
|
28.
|
DISPUTE
RESOLUTION
|
|
28.1
|
Arbitration
|
|
(a)
|
Any
dispute arising from, out of or in connection with this Contract
shall be
settled through friendly consultations between the Parties. Such
consultations shall begin immediately after a Party has delivered
to the
other Party a written request for such consultation. If within forty-five
(45) days following the date on which such notice is given, the dispute
cannot be settled through consultations, the dispute shall, upon
the
request of any Party with notice to the other Party, be submitted
to
arbitration at Singapore International Arbitration Center in
Singapore.
|
|
(b)
|
There
shall be three (3) arbitrators, who shall be appointed in accordance
with
the Rules of Arbitration of the United Nations Commission on International
Trade Law ("UNCITRAL") which are effective at that
time.
|
|
(c)
|
The
arbitration proceedings shall be conducted in Chinese. The arbitration
tribunal shall apply the Rules of UNCITRAL which are effective at
that
time.
|
|
(d)
|
Each
Party shall cooperate with the other Party in making full disclosure
of
and providing complete access to all information and documents requested
by the other Party in connection with such proceedings, subject only
to
any confidentiality obligations binding on such
Party.
|
|
(e)
|
The
arbitral award shall be final and binding upon all Parties, not subject
to
any appeal, and shall deal with the question of costs of arbitration
and
all matters related thereto.
|
|
(f)
|
Judgment
upon the award rendered by the arbitration may be entered into any
court
having jurisdiction, or application may be made to such court for
a
judicial recognition of the award or any order of enforcement
thereof.
|
|
28.2
|
Continued
Implementation of Contract
|
|
29.
|
MISCELLANEOUS
|
|
29.1
|
Language
|
|
29.2
|
Entire
Agreement
|
|
29.3
|
Amendment
|
|
29.4
|
Conflict
or Inconsistency
|
|
29.5
|
Notices
|
|
(a)
|
Notices
given by personal delivery shall be deemed effectively given on the
date
of personal delivery.
|
|
(b)
|
Notices
given by registered airmail (postage prepaid) shall be deemed effectively
given on the seventh (7th) day after the date on which they were
mailed
(as indicated by the postmark).
|
|
(c)
|
Notices
given by air courier shall be deemed effectively given on the date
of
delivery (as indicated by the airway
bill).
|
|
(d)
|
Notices
given by facsimile transmission shall be deemed effectively given
on the
first (1st) business day following the date of
transmission.
|
|
NMS:
|
Neusoft
Park, Hun Nan New District
|
|
|
Shenyang
110179, Liaoning Province
|
||
|
People's
Republic of China
|
||
|
Attention:
|
Quanlu
Zheng, President
|
|
|
Telephone
No.:
|
(86
)24 2378 2784
|
|
|
Facsimile
No.:
|
(86
)24 8378 0480
|
|
|
POSITRON:
|
Positron
Corporation
|
|
|
1304
Langham Creek Drive, Suite 300
|
||
|
Houston,
TX 77084
|
||
|
Attention:
|
Gary
H. Brooks, CEO and President
|
|
|
Telephone
No:
|
(011)
281 492-7100
|
|
|
Facsimile
No:
|
(011)
281 492-2961
|
|
29.6
|
Waiver
|
|
29.7
|
Survival
|
|
29.8
|
Headings
|
|
NEUSOFT
MEDICAL SYSTEMS CO., LTD.
|
|
|
By:
|
|
|
Name:
|
Liu
Jiren
|
|
Title:
|
Chairman
|
|
POSITRON
CORPORATION
|
|
|
By:
|
|
|
Name:
|
Gary
H. Brooks
|
|
Title:
|
President
and Chief Executive Officer
|
|
By:
|
|
|
Name:
|
Patrick
G. Rooney
|
|
Title:
|
Chairman
of the Board
|