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Exhibit A
Exhibit 99.A
ALLEN PERRES
154 West Hubbard Street
Sixth Floor
Chicago, Illinois 60610
312 464-1113
312 464-1652
[ ]
Approve
by Initialing
December 6, 1999
Dan Mulvena, CEO
Magna-Lab, Inc.
6 Fuller Lane
Marblehead, MA 01945
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 Amendment, Seymour Kessler 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, Allan Perres 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. Kessler and Perres so
long as they remain directors. The Company agrees to include Messrs. Kessler and
Perres 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 Seymour Kessler, Dr. Larry Minkoff, and Daniel M.
Mulvena. 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
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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 ALLEN PERRES: For services rendered and to be rendered
by Allen Perres as Vice President of the Company, the Company agrees to pay Mr.
Perres $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 Allen
Perres 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 Allen
Perres 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 Allen Perres 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 Allen Perres 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 Allen Perres 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 Allen Perres 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
------ ------ -------
Larry Minkoff 2.2 million options 1.3 million immediately
.9 million vest over three years
beginning at the end of the
first year
Dan Mulvena 1.3 million options .7 million vest immediately
.6 million vest over three years
beginning at the end of the
first year
Ken Riscica 1.0 million options .53 million vest immediately
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Person Amount Vesting
------ ------ -------
.47 Million vest over three
years beginning at the end
of the first year
Board Members 75,000 each Total vesting
(other than those
specified by name)
Irwin M. Rosenthal 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 Laurence Minkoff and Dr. Valentine Fuster) 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 on 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/ Allen Perres
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Allen Perres
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Accepted and agreed to this day of December, 1999.
MAGNA-LAB, INC.
By: /s/ Daniel Mulvena
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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 , 1999
/s/ Daniel Mulvena
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Daniel Mulvena Joel Kanter
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Lawrence A. Minkoff, Ph,D Michael J. Rosenberg
/s/ Irwin Rosenthal
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Irwin Rosenthal Louis E. Teicholz, MD
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