▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, CEO
Magna-Lab, Inc.
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
This letter sets forth our agreement under which a group of investors (the
"Investors") will make a cash investment in Magna Lab Inc. (the "Company").
The Company has prepared and delivered to the Investors a confidential
private placement memorandum (the "Memorandum") and a subscription agreement
("Subscription") covering an offering of shares of common stock in the Company
which have been circulated to the Investors (the "Private Placement"). The
Investors will make an investment under the Memorandum and Subscription subject
to and provided the Company agrees to the terms and conditions of this letter.
To the extent that the provisions of this letter and the Memorandum,
Subscription agreement and any documents prepared by the Company in connection
with the placement are inconsistent with this letter, this letter shall control,
shall be deemed an amendment to such instruments and documents, and such
documents shall incorporate, and not supercede such instruments and documents.
1. DIRECTORS: The Company has authorized seven director seats and now has six
directors. Upon execution of this Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ will be elected as
a member of the Board of Directors of the Company to fill a current vacancy. On
or prior to closing of $1,500,000 of the Private Placement, ▇▇▇▇▇ ▇▇▇▇▇▇ will be
elected as a member of the Board of Directors of the Company. This will be
accomplished through the filling of a vacancy created either through the
resignation of an existing director or by increasing the size of the Board of
Directors from 7 to 8. In any event, any further increase in the size of the
Board shall require the affirmative vote of both Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ so
long as they remain directors. The Company agrees to include Messrs. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ as director nominees at all future stockholder meetings at which
directors are to be elected. The obligations of the Company under this Paragraph
shall be for a period of three years from the date of this Letter or until a
subsequent offering of at least $3 million is completed, whichever occurs
sooner.
2. EXECUTIVE COMMITTEE: The board of directors will create an Executive
Committee consisting of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇. The Executive Committee shall have the powers defined by the By-Laws
and shall vote by a majority vote. The By-Laws of the Company shall be amended
to establish such committee, if it does not exist, with powers determined by the
board of directors. The obligation to maintain the Executive Committee under
this Paragraph shall apply for a period of three years from the date of this
Letter or until a subsequent offering of at least $3 million is completed,
whichever occurs sooner.
3. COMPENSATION TO ▇▇▇▇▇ ▇▇▇▇▇▇: For services rendered and to be rendered by
▇▇▇▇▇ ▇▇▇▇▇▇ as Vice President of the Company, the Company agrees to pay ▇▇.
▇▇▇▇▇▇ $90,000 per year, payable monthly, effective from the date of his
appointment as Vice President. It is contemplated that a two year agreement will
be entered into governing the terms of such relationship promptly following
execution of this Letter, with compensation for the second year to be determined
by the Board of Directors. In addition, the Company agrees to issue to ▇▇▇▇▇
▇▇▇▇▇▇ options to purchase shares of common stock. The options shall be
exercisable at $.02 per share, shall vest in full immediately upon grant and
shall expire five years from date of grant. The options shall be granted at the
following times in the following amounts: At such time as the Company has raised
at least $500,000 in the Private Placement, the Company shall issue to ▇▇▇▇▇
▇▇▇▇▇▇ options to purchase 1,000,000 shares of common stock. At such time as the
Company has raised an additional $500,000 in the Private Placement, the Company
shall issue to ▇▇▇▇▇ ▇▇▇▇▇▇ options to purchase an additional 1,500,000 shares
of common stock. At such time as the Company has raised an additional $1,500,000
in the Private Placement, the Company shall issue to ▇▇▇▇▇ ▇▇▇▇▇▇ options to
purchase an additional 2,000,000 shares of common stock. At such time as the
Company has raised an additional $500,000 in the Private Placement the Company
shall issue to ▇▇▇▇▇ ▇▇▇▇▇▇ options to purchase an additional 1,500,000 shares
of common stock. At such time as the Company has raised an additional $1,000,000
in the Private Placement, the Company shall issue to ▇▇▇▇▇ ▇▇▇▇▇▇ options to
purchase an additional 1,000,000 shares of common stock (for options to purchase
a maximum aggregate of 7,000,000 shares). The foregoing dollar amounts are net
of commissions which may become payable to registered broker/dealers. The shares
underlying the options shall not be registered, and therefore shall be
restricted securities under Rule 144 of the Securities and Exchange Commission.
4. OFFICERS' OPTIONS: The Company has recently granted options to other Company
executives in the amounts shown below. These options are exercisable at $.22 per
share and expire 5 years from date of grant.
Person Amount Vesting
------ ------ -------
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2.2 million options 1.3 million vest immediately
.9 million vest over three years
beginning at the end of the first year
▇▇▇ ▇▇▇▇▇▇▇ 1.3 million options .7 million vest immediately
.6 million vest over three years
beginning at the end of the first year
▇▇▇ ▇▇▇▇▇▇▇ 1.0 million options .53 million vest immediately
.47 million vest over three years
beginning at the end of the first year
Board Members (other 75,000 each Total vesting
than those specified by
name)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 225,000 options Total vesting
5. MINIMUM OFFERING: The Company shall not be entitled to close on any proceeds
from the Private Placement unless a minimum of at least $750,000 in proceeds has
been accepted.
6. ASSIGNMENT: The Company will cause the appropriate scientists, officers
and/or directors (including ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇) to assign
to the Company all patent applications and patents on the cardiac probe and
tutervascular cathetors and related items being developed for the Company.
7. COMMISSIONS: Commissions not exceeding 10% of the gross offering proceeds may
be payable to registered broker/dealers who participate in the Private
Placement.
8. ALL DOCUMENTS: All documents signed and to be signed by the Investors shall
reflect this agreement, and to the extent that any such documents state that
there are no documents other than the offering documents reflected therein, such
documents shall be revised to list this Agreement as one of the offering
documents.
9. DOCUMENT EXECUTION: This letter agreement may be signed in counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same instrument.
10. GOVERNING LAW: This letter agreement shall be interpreted in accordance with
the laws of the State of New York.
If this letter correctly sets forth the Company's undertakings and
agreements, please sign a copy and return it to us, upon which it shall be a
binding agreement of the Company, a material representation by the Company to
the Investors in connection with their investment in the Company and a condition
to the investment by the Investors in the Company.
Very truly yours,
/s/▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Accepted and agreed to this 6th day of December, 1999.
MAGNA-LAB, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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The undersigned, all directors of the Company, hereby consent to the
provisions of this letter agreement which require action by the board of
directors of the Company, and agree that this letter agreement, when signed by
all of such directors, shall be deemed a unanimous consent to action by the
board of directors of the Company.
Dated: December 6, 1999
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/▇▇▇▇ ▇▇▇▇▇▇
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/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Ph.D ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, MD
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, MD
