Exhibit10.20
Magna - Lab ,Inc.
AND
Xxxxxx & Co. Securities, Inc.
---------------------------------------------------------
WARRANT AGREEMENT
Dated as of January 1, 2002
WARRANT AGREEMENT dated as of January 1, 2002 between Magna-Lab, Inc. a
New York Corporation (the "Company"), and Xxxxxx & Co. Securities Inc.
(hereinafter referred to variously as a "Holder" or "Xxxxxx & Co.").
WITNESSETH:
WHEREAS, the Company proposes to issue toDonald & Co., or its designees,
warrants (the "Warrants") to purchase up to 1,500,000 shares of Common Stock,
Class A, $.001 par value, of the Company ("Common Stock"); and
WHEREAS, Xxxxxx & Co. has agreed pursuant to that certain Engagement
Letter Agreement for Financial Advisory Services (the "Financial Advisory
Agreement"), dated as of December 13, 2001, between Xxxxxx & Co. and the Company
to act as the Company's financial advisor to render financial and other general
advice to the Company upon the terms and conditions more fully set forth in the
Financial Advisory Agreement; and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued by the Company to Xxxxxx & Co. and its designees in consideration for,
and as part of Xxxxxx & Co.'s compensation in connection with, its acting as
financial advisor pursuant to the Financial Advisory Agreement;
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NOW, THEREFORE, in consideration of the premises made herein, the
agreements herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Grant. The Company will grant to Xxxxxx & Co. or its designees
the right to purchase, up to 1,500,000 shares of Common Stock (subject to
adjustment as provided in Section 6 hereof) subject to the terms and
conditions of this Agreement according to the following schedule:
(a) (i) warrants (the "$0.80 Warrants") to purchase 375,000
shares of Common Stock at an exercise price of $0.80 per share of
Common Stock (subject to adjustment as provided in Section 6 below);
(ii) warrants (the "$1.10 Warrants") to purchase 375,000
shares of Common Stock at an exercise price of $1.10 per share of
Common Stock (subject to adjustment as provided in Section 6 below);
and,
(b) unless a notice of "Early Termination" shall have been sent
under the Financial Advisory Agreement on or prior to March 15, 2002,
(i) warrants (the "$1.25 Warrants") to purchase 375,000 shares
of Common Stock at an exercise price of $1.25 per share of Common
Stock (subject to adjustment as provided in Section 6 below); and
(ii) warrants (the "$1.50 Warrants") to purchase 375,000
shares of Common Stock at an exercise price of $1.50 per share of
Common Stock (subject to adjustment as provided in Section 6 below).
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If a notice of "Early Termination" shall have been sent on or prior
to March 15, 2002, the Company shall have no obligation to issue the
second tranche of 750,000 Warrants. Each Warrant may be exercised at
any time on or after the date of issuance thereof through and until
5:30 P.M., New York City time on June 30, 2003, at which time each
Warrant shall expire and be of no further force or effect. Time
shall be of the essence with respect to any purported exercise of a
Warrant.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") to be delivered pursuant to this Agreement shall be in the
form set forth in Exhibit A attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other
variations as required or permitted by this Agreement. The Warrants shall
be issued to the following persons or entities and in the amounts as
follows:
Xxxxxx & Co. 125,000 $0.80 Warrants
125,000 $1.10 Warrants
125,000 $1.25 Warrants
125,000 $1.50 Warrants
Xxxxxx Xxxxxx 250,000 $0.80 Warrants
250,000 $1.10 Warrants
250,000 $1.25 Warrants
Address: 000 Xxxx Xxxx Xxxxx 250,000 $1.50 Warrants
Xxxxx Xxxxxxxx, XX 00000
SS# ###-##-####
Xxxxxx & Co. or Xxxxxx Xxxxxx may request that the Warrants held by it or him be
issued or transferred to one or more other persons, and the Company shall comply
with such request if: (v) such Warrants shall not be issued in amounts less than
50,000 shares of Common Stock (subject to
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adjustment as provided in Section 6 hereof) and in increments of 5,000 shares of
Common Stock (subject to adjustment as provided in Section 6 hereof),
(w) such request shall have been delivered to the Company at least five (5)
business days prior to the date of proposed issuance or transfer and shall
include the name and social security number or employer identification number
and the address of the proposed transferee, (x) Xxxxxx & Co. or Xxxxxx Xxxxxx,
as the case may be, shall have paid all stamp, documentary or similar taxes in
connection with the transfer and/or issuance of the Warrants to such persons,
(y) all of the conditions to such issuance set forth in Section 5 shall have
been satisfied, and (z) Xxxxxx & Co. or Xxxxxx Xxxxxx, as the case may be, shall
have presented the Company with evidence satisfactory to the Company that the
transfer of the Warrants to such other person(s) or entity(ies) is in compliance
with all securities laws, including, without limitation, the Securities Act (as
hereinafter defined).
3. Exercise of Warrant.The exercise price for the Warrants shall be as set
forth in Section 2 above (subject to adjustment as provided in Section 6 below),
and shall be payable by delivery of a certified check of a bank in New York
Clearing House funds made payable to the order of the Company or, at the
election of the Holders, such funds may be sent by wire transfer to an account
designated by the Company. Upon surrender at the Company's principal offices
(presently located at 0 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000) of a
Warrant Certificate prior to the expiration or termination thereof with the
annexed Form of Election to Purchase duly completed and executed by the Holder
thereof (signature guaranteed if requested by the Company), together with full
payment of the exercise price in the manner provided above for the purchase of
the shares of Common Stock or other securities to be purchased pursuant thereto
(the "Warrant
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Securities") the registered holder of such Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or certificates for the
Warrant Securities purchased pursuant thereto. Time is of the essence in
exercising any such rights. The purchase rights represented by each Warrant
Certificate will be exercisable at the option of the Holder thereof, in whole or
in part; provided, however, in each case, Warrants must be exercised for at
least 50,000 shares of Common Stock (subject to adjustment in accordance with
Section 6 below) and in increments of 5,000 shares of Common Stock (subject to
adjustment in accordance with Section 6 below). In the case of the purchase of
less than all the Warrant Securities purchasable under any Warrant Certificate,
the Company shall cancel said Warrant Certificate upon the surrender thereof as
aforesaid, and shall execute and deliver to the Holder thereof a new Warrant
Certificate of like tenor for the balance of the Warrant Securities purchasable
thereunder.
4. Issuance of Certificates. Upon the satisfaction of all conditions
precedent under this Agreement to the exercise of the Warrants, the issuance of
the certificates for Warrant Securities to be delivered upon exercise thereof
shall be made forthwith (and in any event within three (3) business days
thereafter) without charge (except to the extent otherwise expressly set forth
in this Agreement) to the Holder thereof including, without limitation, any
stamp, documentary or other similar tax which may be payable in respect of the
issuance thereof, and such certificates shall be issued in the name of, the
Holder thereof.
The Warrant Certificates and the certificates representing the Warrant
Securities shall be executed on behalf of the Company by the manual or facsimile
signature of the then present Chairman or Vice Chairman of the Board of
Directors or President or Vice President of the
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Company under its corporate seal reproduced thereon, attested to by the manual
or facsimile signature of the then present Secretary or Assistant Secretary of
the Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. Restrictions on Transfer, etc. As a condition precedent to the issuance
of any Warrant, each Holder of such Warrant must agree to be bound by the terms
and provisions of this Agreement that are binding on Xxxxxx & Co. or any other
Holder as if such Holder were a party to this Agreement, and each Holder of such
Warrant must acknowledge that each Warrant issued to such Holder and the Warrant
Securities issuable pursuant thereto have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and each prospective
Holder shall agree not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of any Warrant or any Warrant Securities issued upon its
exercise in the absence of (a) an effective registration statement under the
Securities Act as to the resale of such Warrant or such Warrant Securities and
registration or qualification of such Warrant or such Warrant Securities for
resale under any applicable Blue Sky or state securities law then in effect, or
(b) an exemption from such registration and qualification and an opinion of
Company's counsel to such effect. Each Warrant Certificate and each certificate
or other instrument representing Warrant Securities issued upon the exercise of
any Warrant may bear a legend substantially to the foregoing effect. As a
condition precedent to the issuance thereof, each Holder of a Warrant must
acknowledge and agree that such Holder shall not, except as expressly set forth
in this Agreement, have any right to require the Company to register the resale
of the Warrant or any Warrant Securities
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issuable upon its exercise under the Securities Act or under any applicable
state securities laws, nor, except as expressly set forth in this Agreement,
shall such Holder have any right to include the Warrant or any Warrant
Securities issuable upon its exercise as part of any registration statement
otherwise filed by the Company under the Securities Act or any applicable state
securities laws. As a condition precedent to the issuance thereof, each Holder
of a Warrant must (x) represent and warrant to the Company that the Warrants are
being acquired, and the Warrant Securities issuable upon exercise thereof will
be acquired, by the Holder for investment for its, his or her own account and
not with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act or any applicable state securities law,
and (y) acknowledge that the Warrants and the Warrant Securities issued pursuant
thereto constitute restricted securities under Rule 144 promulgated by the
Securities and Exchange Commission pursuant to the Securities Act, and may have
to be held indefinitely. As a condition precedent to the issuance thereof, each
Holder of a Warrant must represent and warrant that it, he or she has the
knowledge and experience in financial and business matters and is otherwise
capable of evaluating the merits and risks of the investment in the Warrants and
the Warrant Securities issuable upon exercise of the Warrants, is able to bear
the economic risk of such investment, and is an accredited investor within the
meaning of Regulation D promulgated pursuant to the Securities Act. As a
condition precedent to the issuance thereof, each Holder of a Warrant must
represent and warrant that it, he or she has had the opportunity to make
inquiries of and obtain from representatives and employees of the Company such
other information about the Company as he, she or it deems necessary in
connection with such investment.
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Section 6. Adjustments of Exercise Price and Number of Shares.
6.1 Adjustment in Exercise Price. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the exercise price
under the Warrants forthwith shall be proportionately decreased in the case of
subdivision or proportionately increased in the case of combination.
6.2 Adjustment in Number of Shares. Upon each adjustment of the exercise
price pursuant to the provisions of this Section 6, the number of shares of
Common Stock issuable upon the exercise of the Warrants shall be adjusted to the
nearest full share by multiplying a number equal to the exercise price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted exercise price.
6.3. Reclassification, Consolidation, Merger, etc. In case of any
reclassification of the outstanding shares of Common Stock (other than a change
in par value to no par value, or from no par value to par value, or as a result
of a subdivision or combination), or in the case of any consolidation of the
Company with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification of the outstanding shares of
Common Stock, except a change as a result of a subdivision or combination of
such shares or a change in par value, as aforesaid), the Holder of each Warrant
shall thereafter have the right to purchase, in lieu of the shares of Common
Stock, upon the satisfaction of all of the conditions to the exercise of such
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Warrant in accordance with this Agreement, the kind and number of shares of
stock and other securities and property receivable upon such reclassification,
consolidation, or merger, as if the Holder were the owner of the shares of
Common Stock underlying such Warrant immediately prior to any such events.
6.4 Minimum Exercise Price. In no event shall the exercise price per share
of Common Stock be less than the par value of a share of Common Stock.
7.1 Piggyback Registration. If, at any time commencing after the date
hereof and expiring at 5:30 P.M., New York City time on June 30, 2003, the
Company proposes to register any of its shares of Common Stock under the
Securities Act (other than in connection with a merger, acquisition, employee
stock option or employee stock purchase or savings or similar plan on Form S-4
or S-8 (or successor forms)), it will give written notice at least thirty (30)
days prior to the filing of each such registration statement, to the Holders of
the Warrants and/or the Warrant Securities of its intention to do so. If Holders
of Warrant Securities notify the Company within fifteen (15) days after receipt
of any such notice of its, his, her or their desire to include any such Warrant
Securities in such proposed registration statement, the Company shall afford
such Holders of the Warrants and/or Warrant Securities the opportunity to have
the resale of any such Warrant Securities (but not the Warrants) registered
under such registration statement. However, the Company shall not be obligated
to include any portion (or all) of such Warrant Securities under such
registration statement to the extent any underwriter or underwriters for the
sale of such securities being otherwise registered by the Company shall
determine in good faith that the inclusion of such Warrant Securities (or any
portion thereof) would jeopardize the successful sale
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of such other securities proposed to be sold by such underwriter or
underwriters; provided, however, that if such offering includes securities being
offered for resale by other sellers of the Company, then the Warrant Securities
may be eliminated from such offering only to the extent that the securities
being offered by such other sellers also are eliminated on a pari passu basis.
Notwithstanding the provisions of this Section 7.1, the Company shall have the
right at any time after it shall have given written notice pursuant to this
Section 7.1 (irrespective of whether a written request for inclusion of any such
securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
7.2 Demand Registration.
(a) At any time commencing after the date hereof and expiring at 5:30 P.M.
New York City time onJune 30, 2003, the Holders of the Warrants and/or Warrant
Securities representing a "Majority" (as hereinafter defined) of such securities
shall have the right on one occasion only (which right is in addition to the
registration rights under Section 7.1 hereof), exercisable by written notice to
the Company, to require the Company to use its reasonable commercial efforts to
prepare and file with the Securities and Exchange Commission (the "Commission")
a registration statement and such other documents, including a prospectus, as
may be necessary in the opinion of counsel for the Company in order to comply
with the provisions of the Securities Act, so as to permit a public offering and
sale of their respective Warrant Securities (but not the Warrants) by such
Holders and any other Holders of the Warrant Securities who notify the Company
within five (5) days after receiving notice from the Company of such request.
Notwithstanding the foregoing,
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the Company shall have no obligation to undertake to prepare or file (or
undertake to cause to be declared effective) any such registration statement if
it would require the Company to prepare or cause to be audited financial
statements other than those financial statements prepared by the Company for its
most recently filed Schedule 10-K, or if the Company shall have completed a
public offering with respect to which the Holders were entitled to request
inclusion pursuant to Section 7.1 above within 180 days from the date of such
demand. (b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.2 by any Holder or Holders to all
other registered Holders of the Warrants and the Warrant Securities within
fifteen (15) days from the date of the receipt of any such registration request.
7.3 Covenants of the Company with Respect to Registration.
In connection with any registration under 7.2 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its reasonable commerical efforts to file a
registration statement within ninety (90) days of receipt of any demand
therefor, shall use its reasonable commerical efforts to have any registration
statement declared effective at the earliest possible time, and shall furnish
each Holder desiring to sell Warrant Securities such number of prospectuses as
shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses of the
Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.1 and 7.2(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, blue sky fees and expenses.
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(c) The Company will take all necessary action which may be required in
qualifying or registering the Warrant Securities included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to do business
under the laws of any such jurisdiction.
(d) The Company shall indemnify the Holder(s) of the Warrant Securities to
be sold pursuant to any registration statement and each person, if any, who
controls such Holders within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
from and against any and all loss, claim, damage, expense or liability
(including all expenses reasonably incurred in investigating, preparing or
defending against any claim whatsoever) to which any of them may become subject
under the Securities Act, the Exchange Act or otherwise, arising from such
registration statement except to the extent arising from information furnished
to Company by or on behalf of any of the Holders.
(e) The Holder(s) of the Warrant Securities to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, from and against any and all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished in writing by or
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on behalf of such Holders, or their successors or assigns, for specific
inclusion in such registration statement.
(f) Nothing contained in this Agreement shall be construed as requiring
the Holder(s) to exercise their Warrants prior to the initial filing of any
registration statement or the effectiveness thereof; it being understood,
however, that the resale of Warrants shall not be covered by any registration
statement.
(g) For pursposes of this Agreement, the term "Majority" in reference to
the Holders of Warrants or Warrant Securities, shall mean in excess of fifty
percent (50%) of the then outstanding Warrant Securities.
8. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
Holder at the principal executive office of the Company, for a new Warrant
Certificate of like tenor and date representing in the aggregate the right to
purchase the same number of Warrant Securities in such denominations as shall be
designated by the Holder thereof at the time of such surrender; provided,
however, the Company shall not be required to deliver any Warrant Certificate
representing a right to purchase less than 50,000 shares of Common Stock
(subject to adjustment as provided in Section 6 above), or to purchase shares of
Common Stock in anything but increments of 5,000; provided, further, the Holder
requesting such new certificate shall pay any stamp, documentary or similar tax
in connection therewith.
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Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be required
to issue certificates representing fractions of shares of capital stock upon the
exercise of the Warrants, nor shall it be required to issue scrip or pay cash in
lieu of fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by rounding any fraction up or down to
the nearest whole number of shares of capital stock, or other securities,
properties or rights.
11. Reservation and Listing of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants, such number of
shares of Common Stock or other securities, properties or rights as shall be
issuable upon the exercise thereof. The Company covenants and agrees that, upon
exercise of the Warrants and payment of the exercise price therefor, all shares
of Common Stock and other securities issuable upon such exercise shall be duly
and validly issued, full paid, non-assessable and not subject to the preemptive
rights of any stockholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all shares of Common Stock issuable
upon the exercise of the Warrants to be listed (subject to official notice of
issuance)
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on all securities exchanges, if any, on which the Common Stock issued to the
public in connection herewith may then be listed and/or quoted on NASDAQ.
12. Notices to Warrant Holders. Nothing contained in this Agreement shall
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the following events
shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or
distribution payable otherwise than out of current or retained earnings,
as indicated by the accounting treatment of such dividend or distribution
on the books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities
convertible into or exchangeable for shares of capital stock of the
Company, or any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety
shall be proposed; then, in any one or more of said events, the Company
shall use its reasonable commercial efforts to give written notice of such
event at least fifteen (15) days prior to the date fixed as a record date
or
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the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on
such proposed dissolution, liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested
properly addressed and postage prepaid, or on the next business day if sent by
nationally recognized overnight courier service, properly addressed and postage
prepaid:
(a) If to the registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 hereof
with a copy to:
Xxxxxx Beach LLP
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
or to such other address as the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and Xxxxxx & Co. may from time
to time supplement or amend this Agreement without the approval of any other
Holders of Warrant Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company may deem necessary or desirable
and which the Company and Xxxxxx & Co. xxxx shall not adversely affect the
interests of the Holders of Warrant Certificates.
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15. Successors. All the covenants and provisions of this Agreement shall
be binding upon and inure to the benefit of the Company, the Holders and their
respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of business
on,June 30, 2003
17. Governing Law; Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the internal, substantive laws of said State applicable to
contracts executed delivered and to be fully performed in such State (regardless
of where actually executed, delivered and performed), without giving effect to
any contrary rules of said State governing the conflicts of laws.
The Company, Xxxxxx & Co. and the Holders hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of New York
or of the United States of America for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company, Xxxxxx & Co. and the Holders hereby irrevocably waive any objection
to such exclusive jurisdiction or inconvenient forum. Any such process or
summons to be served upon any of the Company, Xxxxxx & Co. and the Holders (at
the option of the party bringing such action, proceeding or claim) may be served
by transmitting a copy thereof, by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
13 hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the
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party so served in any action, proceeding or claim. 18. Entire Agreement;
Modification. This Agreement contains the entire understanding between the
parties hereto with respect to the subject matter hereof and may not be modified
or amended except by a writing duly signed by the party against whom enforcement
of the modification or amendment is sought.
19. Severability. If any provision of this Agreement shall be held to be
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision of this Agreement.
20. Captions. The caption headings of the Sections of this Agreement are
for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and Xxxxxx
& Co. and any other registered Holder(s) of the Warrant Certificates or Warrant
Securities any legal or equitable right, remedy or claim under this Agreement;
and this Agreement shall be for the sole and exclusive benefit of the Company
and Xxxxxx & Co. and any other Holder(s) of the Warrant Certificates or Warrant
Securities.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
[SEAL] Magna-Lab, Inc.
By: /s/ Xxxx Xxxxxx
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Attest: Name: Xxxx Xxxxxx
Title: CEO
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Secretary
Xxxxxx & Co. Securities, Inc.
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title:
20
EXHIBIT A
THE OFFER, SALE OR RESALE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND
THE OTHER SECURITIES ISSUABLE UPON EXERCISE HEREOF HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES OR
BLUE SKY LAWS AND MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, EXCEPT
PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (ii)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND AN OPINION OF
COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE
ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
Dated:
EXERCISABLE ON OR BEFORE
5:30 P.M. NEW YORK TIME,June 30, 2003
NO. W-______ (Number of) Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ( Name of Holder ), or registered
assigns, is the registered holder of ( Number of ) Warrants to purchase
initially at any time from [ ] until 5:30 p.m. New York time on June 30, 2003
(the "Expiration Date"), up to ( Number of ) fully-paid and non-assessable
shares of Class A Common Stock, $.001 par value ("Common Stock") of
Magna-Lab,Inc. a New York corporation (the "Company"), at the initial exercise
price, subject to adjustment in certain events (the "Exercise Price"), of per
share of Common Stock; upon surrender of this Warrant Certificate and payment of
the applicable Exercise Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the Warrant Agreement dated as of
January 1,2002 between the Company and Xxxxxx & Co. Securities,. Inc. (the
"Warrant Agreement"). Payment of the applicable Exercise Price shall be made by
certified check in New York Clearing House funds payable to the order of the
Company or, at the election of the Holders, such funds may be sent by wire
transfer to an account designated by the Company.
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void. Time is of the essence with respect to
exercising the Warrants.
21
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference herein and made a part of
this instrument and is hereby referred to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain events,
the then applicable Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the then applicable Exercise
Price and the number and/or type of securities issuable upon the exercise of the
Warrants; provided, however, that the failure of the Company to issue such new
Warrant Certificates shall not in any way change, alter, or otherwise impair,
the rights of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement. If any terms set forth in this Warrant Certificate shall conflict
with any of the terms set forth in the Warrant Agreement, the terms set forth in
the Warrant Agreement shall govern.
By his, her, or its acceptance of this Warrant Certificate, the Holder of
this Warrant Certificate agrees, acknowledges, represents, and warrants as
follows: The Holder of this Warrant agrees to be bound by all of the terms and
conditions binding on Xxxxxx & Co.
22
Securities, Inc. or the other Holders under the Warrant Agreement as if the
Holder hereof was a party to such Warrant Agreement. The Holder of this Warrant
acknowledges that this Warrant and the Warrant Shares or other securities (the
"Warrant Securities") issuable pursuant hereto have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and the Holder of
this Warrant agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Securities issued upon its
exercise in the absence of (a) an effective registration statement under the
Securities Act as to the resale of such Warrant or such Warrant Securities and
registration or qualification of such Warrant or such Warrant Securities for
resale under any applicable Blue Sky or state securities law then in effect, or
(b) an exemption from such registration and qualification and an opinion of
Company's counsel to such effect. The Holder of this Warrant acknowledges and
agrees that such Holder shall not, except as expressly set forth in the Warrant
Agreement, have any right to require the Company to register the resale of the
Warrant or any Warrant Securities issuable upon its exercise under the
Securities Act or under any applicable state securities laws, nor, except as
expressly set forth in the Warrant Agreement, shall such Holder have any right
to include the Warrant or any Warrant Securities issuable upon its exercise as
part of any registration statement otherwise filed by the Company under the
Securities Act or any applicable state securities laws. The Holder of this
Warrant (x) represents and warrants to the Company that the Warrants are being
acquired, and the Warrant Securities issuable upon exercise hereof will be
acquired, by the Holder for investment for its, his or her own account and not
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act or any applicable state securities law, and
(y) acknowledges that the Warrants and the Warrant Securities issued pursuant
thereto constitute restricted securities under Rule 144 promulgated by the
Securities and Exchange Commission pursuant to the Securities Act, and may have
to be held indefinitely. The Holder of this Warrant represents and warrants that
it has the knowledge and experience in financial and business matters and is
otherwise capable of evaluating the merits and risks of the investment in the
Warrants and the Warrant Securities issuable upon exercise of the Warrants, is
able to bear the economic risk of such investment, and is an accredited investor
within the meaning of Regulation D promulgated pursuant to the Securities Act.
The Holder of this Warrant represents and warrants that it, he or she has had
the opportunity to make inquiries of and obtain from representatives and
employees of the Company such other information about the Company as he, she or
it deems necessary in connection with such investment.
23
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed under its corporate seal.
Dated as of , 2002
Magna-Lab,Inc.
[SEAL] By: ______________________________
Name:
Title:
Attest:
-------------------------------
, Secretary
24
[FORM OF ELECTION TO PURCHASE ]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _______ shares of Common
Stock and herewith tenders in payment for such securities a certified check of a
bank payable in New York Clearing House Funds to the order ofMagna-Lab,Inc.. in
the amount of $__________, all in accordance with the terms of the Warrant
Agreement, dated as of January 1, 2002, between Magna-Lab, Inc. and Xxxxxx & Co.
Securities., Inc. (the "Warrant Agreement"). The undersigned requests that a
certificate for such securities be registered in the name of __________________
whose address is ____________________ and that such Certificate be delivered to
_______________ whose address is ____________________. The undersigned
represents and warrants that all conditions precedent to the exercise of the
warrants to be exercised hereby have been satisfied in full as of the date
hereof.
Dated:
Signature ______________________________
(Signature must conform in all respects to name of holder as
specified on the face of the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
(Insert Social Security or Other
Identifying Number of Holder)
25
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder desires to
transfer the Warrant Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and hereby irrevocably constitutes and appoints _________ Attorney, to transfer
the within Warrant Certificate on the books of the within-named Company, with
full power of substitution.
Dated:
Signature: _________________
(Signature must confirm in all respects to name of holder as
specified on the face of the Warrant Certificate.)
(Insert Social Security or Other Identifying Number of
Assignee).
26
Magna-Lab Inc.
0 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
March 26, 2002
Xx. Xxxxxx Xxxxx
Xxxxxx & Co., Securities, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Engagement Letter Agreement for Financial Advisory Services dated as
of December 13, 2001 (the "Advisory Agreement"), and Warrant
Agreement dated as of January 1, 2002 (the "Warrant Agreement").
Dear Ed:
We hereby regretfully notify you that the Advisory Agreement is
terminated, and accordingly, no further warrants will be issued under the
Warrant Agreement. We would, as you know, prefer to extend the date to terminate
the Advisory Agreement, and we would be amenable to discussions to reinstate the
Advisory Agreement on terms acceptable to you and to us.
Sincerely,
Magna-Lab Inc.
S/Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxx
Treasurer and Secretary
