Exhibit 10.19
Magna - Lab ,Inc.
AND
Sands Brothers & Co., Ltd.
---------------------------------------------------------
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 Sands Brothers Capital Corp.,Inc.
(hereinafter referred to variously as a "Holder" or "Sands Brothers").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to Sands Brothers, or its
designees, warrants (the "Warrants") to purchase up to 500,000 shares of Class A
Common Stock, $.001 par value, of the Company ("Common Stock"); and
WHEREAS, Sands Brothers has agreed pursuant to that certain Engagement
Letter Agreement for Financial Advisory Services (the "Financial Advisory
Agreement"), dated as ofJanuary 1, 2002, between Sands Brothers and the Company
to act as the Company's financial advisor to render financial and other general
advice to the Company as an investment banker and communications counselor 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 Sands Brothers and its designees in consideration for,
and as part of Sands Brothers'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 the Holder (as such term is defined in
Section 3 below) or its designees the right to purchase, up to 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:
warrants to purchase 250,000 shares of the Company's Common Stock to be issued
by delivery of Warrant Certificates (as defined below) within thirty (30) days
after the date hereof; and, unless a notice of "Early Termination" shall have
been sent under the Financial Advisory Agreement,warrants to purchase an
additional 250,000 shares to be issued by delivery of Warrant Certificates by
the close of business on April 1, 2002. If a notice of "Early Termination" shall
have been sent on or prior to April 1, 2002, the Company shall have no
obligation to issue the second tranche of 250,000 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 first 250,000 of Warrants shall be
issued to the following persons or entities and in the amounts as follows:
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Sands Brothers; Co., Ltd. 37,500 Warrants
Xxxx Xxxxxxx 37,500 Warrants
Xxxxxx X. Xxxxx, Xx 37,500 Warrants
Xxxxxxx X. Xxxxxxx 37,500 Warrants
Xxxx Xxxx 12,500 Warrants
Such Holders (as hereinafter defined) may request that the Warrants 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 for less than
40,000 Warrant Shares, (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) the
transferring Holder 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) the transferring Holder 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 $0.80
per Warrant Share (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. 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
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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 to be purchased
pursuant thereto (the "Warrant Shares") the registered holder of such Warrant
Certificate ("Holder" or "Holders") shall be entitled to receive a certificate
or certificates for the shares of Common Stock 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, Warrants must be exercised for
at least 40,000 Warrant Shares in each case. In the case of the purchase of less
than all the Warrant Shares purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver to the Holder thereof a new Warrant Certificate of
like tenor for the balance of the Warrant Shares 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 Shares or other securities, properties or rights 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
Shares (and/or other securities, property or rights issuable upon the exercise
of the Warrants) shall be executed on behalf
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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
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 Sands Brothers 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
Shares or other securities (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
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expressly set forth in this 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 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 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
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information about the Company as he, she or it deems necessary in connection
with such investment.
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 Warrant Shares
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 Warrant Shares 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
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Warrant Shares, upon the satisfaction of all of the conditions to the exercise
of such 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 Warrant Shares underlying such Warrant immediately prior to any such events.
6.4 Minimum Exercise Price. In no event shall the exercise price per
Warrant Share be less than the par value of a Warrant Share.
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 securities 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 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
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Warrant Securities (or any portion thereof) would jeopardize the successful sale
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 on June 30, 2003], the Holders of the Warrants and/or
Warrant Securities representing a "Majority" (as hereinafter defined) of such
securities shall have the right (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
ten (10) days after receiving
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notice from the Company of such request. Notwithstanding the foregoing, 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. If any
registration statement filed as a result of the exercise of the right to demand
registration pursuant to this Section 7.1 shall be declared effective, then no
Holder shall have any further right to demand registration pursuant to this
Section 7.2
(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 ten
(10) 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.
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(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.
(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,
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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 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 40,000 Warrant Shares ; 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 Sands Brothers 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
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necessary or desirable and which the Company and Sands Brothers deem shall not
adversely affect the interests of the Holders of Warrant Certificates.
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, Sands Brothers 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, Sands Brothers 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, Sands Brothers 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
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set forth in Section 13 hereof. Such mailing shall be deemed personal service
and shall be legal and binding upon the 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 Sands
Brothers 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 Sands Brothers 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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23. BlueStone Agreements terminated. Sands Brothers represents and
warrants that, to the best of its knowledge after diligent inquiry, , any
warrant agreement or advisory agreement between the Company and BlueStone
Capital Corp., Inc. ("BlueStone"), and any warrants issued or issuable in
connection therewith, are null and void and of no further force or effect, and
Sands Brothers represents and warrants that it has not acquired any warrants or
rights to acquire warrants from BlueStone or any rights in any agreement to
issue warrants to BlueStone or in any advisory agreement between BlueStone and
the Company.;.
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
--------------------------------
Attest: Name: Xxxx Xxxxxx
Title: CEO
/s/ Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx, Secretary
Sands Brothers & Co., Inc.
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title:
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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.
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 June 30, 2003] 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 common stock, $.01 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
$0.80per 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 Sands Brothers Capital Corp,.
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.
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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.
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.
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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 Sands Brothers & Co., Ltd. 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.
22
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
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[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 Sands
Brothers & Co., 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)
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(Insert Social Security or Other
Identifying Number of Holder)
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[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).
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