EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made and entered into as of January 1, 2006 (the “Agreement”), by
and between MEDLINK INTERNATIONAL, INC., a Delaware corporation (“MLI”), and XXX
XXXXX (“Employee”)(collectively the “Parties”).
WITNESSETH:
WHEREAS,
MLI is engaged, through its subsidiaries, in the business of providing a virtual
private network, paging and other services to doctors and hospitals (the
“Business”); and
WHEREAS,
Employee has represented that he has the experience, background and expertise
necessary to enable him to perform all of the duties and execute all of the
responsibilities contemplated by this Agreement; and
WHEREAS,
based on such representation, MLI wishes to employ Employee as its Chief
Executive Officer & President upon the terms hereinafter set
forth;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, and other good and valuable consideration, the
Parties agree as follows:
| 1. |
DEFINITIONS.
|
| 1.1. |
“Affiliate”
means any Person controlling, controlled by or under common control
with
MLI.
|
| 1.2. |
“Board”
means the Board of Directors of MLI.
|
| 1.3. |
“Cause”
means (a) Employee is convicted of or pleads guilty to a felony, (b)
the
Employee, in carrying out the Employee’s duties and responsibilities under
this Agreement, is guilty of neglect or misconduct resulting, in either
case, in economic harm to MLI and/or any of its subsidiaries or
Affiliates.
|
| 1.4. |
“Change
in Control” means any transaction or series of transactions pursuant to
which a non-Affiliate obtains more than fifty percent (50%) of MLI’s
voting securities or obtains the ability to cast more than fifty percent
(50%) of the votes at MLI’s shareholder
meetings.
|
| 1.5. |
“Common
Stock” means MLI’s $.01 par value per share common
stock.
|
| 1.6. |
“Date
of Termination” means (a) in the case of a termination for which a Notice
of Termination (as hereinafter defined in Section 5) is required, the
date
of actual receipt of such Notice of Termination or, if later, the date
specified therein, as the case may be, and (b) in all other cases,
the
actual date on which the Employee’s employment terminates during the Term
of Employment (as hereinafter defined in Section 3) (it being understood
that nothing contained in this definition of “Date of Termination” shall
affect any of the cure rights provided to the Employee or MLI in this
Agreement).
|
-1-
| 1.7. |
“Disability”
means the Employee’s inability to render, for a period of three
consecutive months, services hereunder.
|
| 1.8. |
“Person(s)”
means any individual or entity of any kind or nature, including any
other
person as defined in Section 3(a)(9) of the Exchange Act, and as used
in
Sections 13(d) and 14(d) thereof.
|
| 1.9. |
“Prospective
Customer” shall mean any corporation, partnership, trust or Person which
has either (a) entered into a nondisclosure agreement with MLI or any
MLI
subsidiary or Affiliate or (b) has within the proceeding 18 months
received a currently pending and not rejected written proposal in
reasonable detail from MLI or any MLI subsidiary or
Affiliate.
|
| 2. |
EMPLOYMENT.
MLI
hereby agrees to employ Employee, and Employee hereby agrees to serve,
subject to the provisions of this Agreement, as an employee of MLI.
|
Duties.
Executive
shall serve as MLI’s Chief Executive Officer & President and shall be
responsible for the management of MLI’s business and strategic planning and
responsibilities as are from time to time assigned to him by the
Board.
| 3. |
TERM
OF AGREEMENT.
This Agreement shall commence on January 1, 2006, and shall continue
until
December 31, 2010 (the “Term” or “Term of Employment”), unless terminated
as set forth herein.
|
| 4. |
COMPENSATION.
|
| 4.1. |
Salary.
Employee’s
salary during the Term shall be $130,000 per year and 480,000 options
to
purchase Common Stock (the “Salary”) payable during the first quarter of
the year. The exercise price of the options shall be the fair market
value
of the Common Stock on the date granted to Employee as determined by
the
closing price of the Common Stock on such date, or, if the Common Stock
is
not quoted in any inter-dealer quotation medium or trading on any
exchange, as may be reasonably determined by the Board. Employee’s salary
may be increased at the discretion of the Compensation Committee of
MLI’s
Board of Directors.
|
| 4.2. |
Salary
Vesting.
Any Salary earned by Employee shall have a vesting period of two years
(the “Vesting Period”); provided, however, that any unvested Salary at the
end of the Term shall immediately vest. During the Term, Employee hereby
consents to the placement of a stop transfer order by MLI and/or its
transfer agent, with respect to any unvested Salary. All Salary shall
immediately vest upon a Change in Control or termination of
employment.
|
| 4.3. |
Bonus.
MLI
shall determine in its sole discretion to pay Employee any bonus amount
above the salary set forth above.
|
-2-
| 4.4. |
Health
Insurance.During
the Term, Employee shall receive full coverage under any health insurance
plan, if any, that MLI, may, from time to time, have in
place.
|
| 4.5. |
Expense
Reimbursement.Employee
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in performing the Employee’s duties and
responsibilities hereunder in accordance with the policies and procedures
of MLI. At the end of each fiscal year, the Employee and MLI shall
in good
faith reconcile any differences and disputes with respect to timing,
right
to reimbursement, reasonableness or documentation of any items of expense
reimbursement, it being agreed that no good faith dispute respecting
any
of the foregoing shall constitute a basis for the Employee or MLI
terminating or attempting to terminate this Agreement.
|
| 4.6. |
Vacation.During
each year of the Term of Employment, the Employee shall be entitled
to
four weeks of paid vacation taken at such times so as to not materially
impede his duties hereunder. Vacation days that are not taken may not
be
carried over into future years.
|
| 5. |
Termination.
|
| 5.1. |
Termination
Due to Death or Disability.
|
| 5.1.1. |
Death.
This Agreement shall terminate immediately upon the death of Employee.
Upon Employee’s death, Employee’s estate or Employee’s legal
representative, as the case may be, shall be entitled to only the
following:
|
| 5.1.1.1. |
All
unvested Salary accrued, but unpaid as of the date of Employee’s death,
which shall immediately vest;
|
| 5.1.1.2. |
reimbursement
pursuant to Section 4.5, or any other provision hereof, for all expenses
incurred but not yet paid.
|
| 5.1.1.3. |
continuation
of Employee’s Salary on a pro-rata basis for the additional term of this
agreement; and
|
| 5.1.2. |
Disability.
In
the event of Employee’s Disability, this Agreement shall terminate and
Employee shall be entitled to receive only the
following:
|
| 5.1.2.1. |
continuation
of Employee’s Salary on a pro-rata basis for Employee’s Disability period
(it being understood that such period will be six months from the first
date that Employee is unable to work) and 50% of Employee’s Salary for the
additional term of this agreement; and
|
| 5.1.2.2. |
reimbursement
pursuant to Section 4.5, or any other provision hereof, for all expenses
incurred but not yet paid.
|
-3-
| 5.2. |
Termination
by MLI for Cause.
MLI may terminate the Employee’s employment hereunder for Cause as
provided in this Section 5.2. If MLI terminates the Employee’s employment
hereunder for Cause, all unvested Salary shall be forfeited and the
Employee shall be entitled only to:
|
| 5.2.1.1. |
All
unvested Salary accrued, but unpaid as of the date of Employee’s
termination, which shall immediately vest;
|
| 5.2.1.2 | reimbursement pursuant to Section 4.5 hereof or any other provision of this Agreement for expenses incurred, but not yet paid prior to such termination of employment. |
| 5.3. |
Termination
Without Cause.MLI
may terminate the Employee’s employment hereunder without Cause. If MLI
terminates the Employee’s employment hereunder without Cause, other than
due to death or Disability, the Employee shall be entitled only to
the
following:
|
5.3.1.
the Employee’s accrued and vested Salary through the Date of Termination;
and
5.3.2.
reimbursement pursuant to Section 4.6 hereof or any other provision of this
Agreement for expenses incurred, but not paid prior to such termination of
employment.
5.3.3 continuation
of Employee’s Salary for the additional term of this agreement shall immediately
vest; and
| 5.4. |
Termination
by Employee.
Any
termination of this Agreement by Employee, by formal notice, or failure
to
perform under this Agreement, shall have the same effect as a termination
by MLI for Cause.
|
| 5.5. |
Notice
of Termination.
Any termination of the Employee by MLI shall be communicated by a notice
of termination to Employee given in accordance with Section 8.3 of
this
Agreement (the “Notice of Termination”). Such notice shall (a) indicate
the specific termination provision in this Agreement relied upon and
(b)
if the termination date is other than the date of receipt of such notice,
specify the dates on which the Employee’s employment is to be terminated
(which date shall not be earlier than the date on which such notice
is
given).
|
| 5.6. |
Payment.Except
as otherwise provided in this Agreement, any payments to which the
Employee shall be entitled under this Section 5, including, without
limitation, any economic equivalent of any benefit, shall be made as
promptly as possible following the Date of Termination. If the amount
of
any payment due to the Employee cannot be finally determined within
thirty
(30) days after the Date of Termination, such amount shall be estimated
on
a good faith basis by MLI and the estimated amount shall be paid no
later
than thirty (30) days after such Date of Termination. As soon as
practicable thereafter, the final determination of the amount due shall
be
made and any adjustment requiring a payment to or from the Employee
shall
be made as promptly as practicable.
|
-4-
| 6. |
Employee’s
Representation.The
Employee represents and warrants to MLI that: (a) he is subject to
no
contractual, fiduciary or other obligation which may affect the
performance of his duties under this Agreement; and (b) his employment
with MLI will not require him to use or disclose proprietary or
confidential information of any other person or
entity.
|
| 7. |
Non-Competition:
Non-Disclosure.
|
| 7.1. |
Trade
Secrets.
Employee
acknowledges that his employment position with MLI is one of trust
and
confidence. The Employee further understands and acknowledges that,
during
the course of the Employee's employment with MLI, the Employee will
be
entrusted with access to certain confidential information, specialized
knowledge and trade secrets which belong to MLI, or its subsidiaries,
including, but not limited to, their methods of operation and developing
customer base, its manner of cultivating customer relations, its practices
and preferences, current and future market strategies, formulas, patterns,
devices, secret inventions, processes, compilations of information,
records, and customer lists, all of which are regularly used in the
operation of their business and which the Employee acknowledges have
been
acquired, learned and developed by them only through the expenditure
of
substantial sums of money, time and effort, which are not readily
ascertainable, and which are discoverable only with substantial effort,
and which thus are the confidential and the exclusive Property of MLI
and
its subsidiaries (hereinafter “Trade Secrets”). The Employee covenants and
agrees to use his best efforts and utmost diligence to protect those
Trade
Secrets from disclosure to third parties. The Employee further
acknowledges that, absent the protections afforded MLI and its
subsidiaries in this paragraph, the Employee would not be entrusted
with
any of such Trade Secrets. Accordingly, the Employee agrees and covenants
(which agreement and covenant shall survive the termination of this
Agreement, regardless of the reason) as follows:
|
| 7.1.1. |
The
Employee will at no time take any action or make any statement that
will
discredit MLI, any of its subsidiaries or their products or services.
|
| 7.1.2. |
During
the period of the Employee's employment with MLI and for 60 months
immediately following the termination of such employment, the Employee
will not disclose or reveal to any person, firm or corporation other
than
in connection with the business of MLI and its subsidiaries or as may
be
required by law, any Trade Secret used or useable by MLI or any of
its
subsidiaries, divisions or affiliated companies (collectively the
“Companies”) in connection with their respective businesses, known to
Employee as a result of his employment by MLI, or other relationship
with
the Companies, and which is not otherwise publicly available. Employee
further agrees that during the term of this Agreement and at all times
thereafter, he will keep confidential and not disclose or reveal to
any
person, firm or corporation other than in connection with the business
of
the Companies or as may be required by applicable law, any information
received by him during the course of his employment with regard to
the
financial, business, or other affairs of the Companies, their respective
officers, directors, customers or suppliers which is not publicly
available.
|
-5-
| 7.1.3. |
Upon
the termination of the Employee's employment with MLI, the Employee
will
return to MLI all documents, customer lists, customer information,
product
samples, presentation materials, drawing specifications, equipment
and
other materials relating to the business of any of the Companies, which
the Employee hereby acknowledges are the sole and exclusive property
of
the Companies or any one of them.
|
| 7.1.4. |
During
the term of the Agreement and, subject to the provisions of Subsection
7.1.6 hereof, for a period of 36 months immediately following the
termination of the Employee's employment with MLI, Employee will
not:
|
| 7.1.4.1. |
solicit
or accept competing business from any customer of any of the Companies
or
any person or entity known by the Employee to be or have been, during
the
term of the Employee's employment with MLI, a customer or Prospective
Customer (as hereinafter defined) of any of the Companies without the
prior written consent of MLI;
|
| 7.1.4.2. |
encourage,
request or advise any such customer or prospective customer of any
of the
Companies to withdraw or cancel any of their business from or with
any of
the Companies; or
|
| 7.1.4.3. |
compete,
or participate as a shareholder, director, officer, partner (limited
or
general), trustee, holder of a beneficial interest, employee, agent
of or
representative in any business competing directly with the Companies
without the prior written consent of MLI, which may be withheld in
MLI's
sole discretion; provided, however, that nothing contained herein shall
be
construed to limit or prevent the purchase or beneficial ownership
by
Employee of less than five percent of any security registered under
Section 12 or 15 of the Securities Exchange Act of 1934.
|
| 7.1.4.4. |
The
Employee will not during the period of his employment with MLI and,
subject to the provisions hereof for a period of 36 months immediately
following the termination of Employee's employment with
MLI,
|
| 7.1.4.4.1. |
conspire
with any person employed by any of the Companies with respect to any
of
the matters covered hereunder;
|
| 7.1.4.4.2. |
encourage,
induce or solicit any person employed by any of the Companies to
facilitate the Employee's violation of the covenants contained
hereunder;
|
| 7.1.4.4.3. |
assist
any entity to solicit the employment of any employee of any of the
Companies; or
|
| 7.2. |
The
Employee expressly acknowledges that all of the provisions of this
Section
7 of this Agreement have been bargained for and the Employee's agreement
hereto is an integral part of the consideration to be rendered by the
Employee which justify the rate and extent of the compensation provided
for hereunder.
|
-6-
| 7.3. |
The
Employee acknowledges and agrees that a violation of any one of the
covenants contained in this Section 7 shall cause irreparable injury
to
MLI, that the remedy at law for such a violation would be inadequate
and
that MLI shall thus be entitled to injunctive relief to enforce that
covenant.
|
| 7.4. |
Successors.
|
| 7.4.1. |
The
Employee.This
Agreement is personal to the Employee and, without the prior express
written consent of MLI, shall not be assignable by the Employee, except
that the Employee’s rights to receive any compensation or benefits under
this Agreement may be transferred or disposed of pursuant to testamentary
disposition, intestate succession or a qualified domestic relations
order
or in connection with a Disability. This Agreement shall inure to the
benefit of and be enforceable by the Employee’s estate, heirs,
beneficiaries, and/or legal
representatives.
|
| 7.4.2. |
MLI.
This
Agreement shall inure to the benefit of and be binding upon MLI and
its
successors and assigns.
|
| 8. |
Miscellaneous.
|
| 8.1. |
Applicable
Law.Except
as may be otherwise provided herein, this Agreement shall be governed
by
and construed in accordance with the laws of the State of New York,
applied without reference to principles of conflict of
laws.
|
| 8.2. |
Amendments.This
Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors
or
legal representatives.
|
| 8.3. |
Notices.
All notices and other communications hereunder shall be in writing
and
shall be given by hand-delivery to the other party or by registered
or
certified mail, return receipt requested, postage prepaid, addressed
as
follows:
|
|
If
to the Employee:
|
|
Xxx
Xxxxx
|
|
0
Xxxxxx Xxxxx
|
|
Xxxxxxxxxx,
XX 00000
|
|
If
to MLI:
|
-7-
|
00
Xxxx Xxxxx
|
|
Xxxxx
000X
|
Xxxxxxxx,
X.X. 00000
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxxxxxx
& Xxxxx LLP
Attn:
Xxxx Xxxxxxx
The
Chrysler Building
000
Xxxxxxxxx Xxxxxx, 00xx xxxxx
Xxx
Xxxx,
XX 00000
Fax
#:
(000) 000-0000
|
Or
to such other address as either party shall have furnished to the
other in
writing in accordance herewith. Notices and communications shall
be
effective when actually received by the
addressee.
|
| 8.4. |
Withholding.MLI
may withhold from any amounts payable under the Agreement, such federal,
state and local income, unemployment, social security and similar
employment related taxes and similar employment related withholdings
as
shall be required to be withheld pursuant to any applicable law or
regulation.
|
| 8.5. |
Severability.The
invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of
this
Agreement, and any such provision which is not valid or enforceable
in
whole shall be enforced to the maximum extent permitted by
law.
|
| 8.6. |
Captions.The
captions of this Agreement are not part of the provisions and shall
have
no force or effect.
|
| 8.7. |
Entire
Agreement.This
Agreement contains the entire agreement among the parties concerning
the
subject matter hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or oral,
between the parties with respect thereto.
|
| 8.8. |
Survivorship.
The
respective rights and obligations of the parties hereunder shall survive
any termination of this Agreement or the Employee’s employment hereunder
to the extent necessary to the intended preservation of such rights
and
obligations.
|
| 8.9. |
Waiver.
Either Party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such
provision or provisions, or prevent that party thereafter from enforcing
each and every other provision of this
Agreement.
|
-8-
|
8.10.
|
Joint
Efforts/Counterparts.
Preparation of this Agreement shall be deemed to be the joint
effort of the parties hereto and shall not be construed more severely
against any party. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original and all of
which
together shall constitute one and the same
instrument.
|
| 8.11. |
Representation
by Counsel.
Each Party hereby represents that it has had the opportunity to be
represented by legal counsel of its choice in connection with the
negotiation and execution of this
Agreement.
|
IN
WITNESS WHEREOF, the parties have executed this Agreement as of January 26,
2006.
| MEDLINK INTERNATIONAL, INC., | |||
| a Delaware corporation | |||
|
By:
|
|||
|
Xxx
Xxxxx
|
Xxxxx Xxxx |
||
| Title: Chief Financial Officer | |||
-9-
COMMON
STOCK OPTION
NEITHER
THIS OPTION NOR THE SECURITIES ISSUABLE UPON EXERCISE THEREOF HAVE BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). THIS OPTION IS RESTRICTED AND MAY NOT
BE
OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
| Void after: January 1, 2012 | Right to Purchase 480,000 shares of Common Stock (subject to adjustment) |
PREAMBLE
MedLink
International, Inc., a Delaware corporation (the "Company"), hereby certifies
that, for value received, Xxx Xxxxx, the holder hereof (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company
at
any time or from time to time before 5:00 P.M. New York time, on January 1,
2012, fully paid and nonassessable shares of the Company’s $.001 par value per
share common stock (the “Common Stock”). The purchase price per share (the
"Purchase Price") shall be, in the event of a purchase at any time during the
period commencing on the date hereof and ending on January 1, 2012, $0.136.
The
number of shares of Common Stock and the amount of the Purchase Price are
subject to adjustment as provided herein.
This
option is the “Option” (this "Option"), evidencing the right to purchase shares
of Common Stock of the Company, issued pursuant to that certain Employment
Agreement dated as of January 1, 2006 (the “Employment”), between the Company
and the Holder. Capitalized terms used and not otherwise defined herein shall
have the meanings set forth for such terms in the Consulting Agreement. This
Option evidences the right to purchase an aggregate of 480,000 shares of Common
stock of the Company, subject to adjustment as provided in this Option.
As
used
herein, the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term
"Company" includes any corporation which shall succeed to or assume the
obligations of the Company hereunder.
(b) The
term
"Common Stock" includes all stock of any class or classes (however designated)
of the Company, authorized on or after the date hereof, the holders of which
shall have the right, without limitation as to amount, either to all or to
a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference,
and
the holders of which shall ordinarily, in the absence of contingencies, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such
a
contingency).
-10-
(c) The
term
"Other Securities" refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which
the
Holder of this Option at any time shall be entitled to receive, or shall have
received, on the exercise of this Option, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant
to
Section 6 or otherwise.
(d) The
term
“Registration Statement” means any registration statement of the Company filed
or to be filed with the SEC which covers any of the Registrable Securities
pursuant to the provisions of this Option, including all amendments (including
post-effective amendments) and supplements thereto, all exhibits thereto and
all
material incorporated therein by reference.
(e) The
term
“SEC,” "Securities and Exchange Commission" or "Commission" refers to the
Securities and Exchange Commission or any other federal agency then
administering the Securities Act.
(f) The
term
"Shares" means the Common Stock issued or issuable upon exercise of this
Option.
(g) The
term
"Securities Act" means the Securities Act of 1933, as amended, or any successor
federal statute, and the rules and regulations of the Securities and Exchange
Commission thereunder, all as the same shall be in effect at the
time.
(h) The
term
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder, all as the same shall be in
effect at the time.
(i) The
term
“Cashless
Exercise” means, to the extent that a Stock Option Agreement so provides and as
permitted by applicable law, a program approved by the Committee in which
payment may be made all or in part by delivery (on a form prescribed by the
Committee) of an irrevocable direction to a securities broker to sell Shares
and
to deliver all or part of the sale proceeds to the Company in payment of the
aggregate Exercise Price and, if applicable, the amount necessary to satisfy
the
Company’s withholding obligations at the minimum statutory withholding rates,
including, but not limited to, U.S. federal and state income taxes, payroll
taxes, and foreign taxes, if applicable.
-11-
1. Restricted
Stock.
1.1
If,
at the time of any transfer or exchange (other than a transfer or exchange
not
involving a change in the beneficial ownership of this Option or the Shares)
of
this Option or the Shares, this Option or the Shares shall not be registered
under the Securities Act, the Company will require, as a condition of allowing
such transfer or exchange, that the Holder or transferee of this Option or
the
Shares, as the case may be, furnish to the Company an opinion of counsel
reasonably acceptable to the Company or a "no action" or similar letter from
the
Securities and Exchange Commission to the effect that such exercise transfer
or
exchange may be made without registration under the Securities Act. In the
case
of such transfer or exchange and in the case of an exercise of this Option
if
the Shares to be issued thereupon are not registered pursuant to the Securities
Act, the Company will require a written statement that this Option or the
Shares, as the case may be, are being acquired for investment and not with
a
view to the distribution thereof. The certificates evidencing the Shares issued
on the exercise of this Option shall, if such Shares are being sold or
transferred without registration under the Securities Act, bear a legend similar
to the legend on the face page of this Common Stock Purchase
Option.
1.2
(a)
The Company shall make and keep public information available, as those terms
are
understood and defined in Rule 144 under the Securities Act, at all times from
and after 90 days following the effective date of the first registration of
the
Company under the Securities Act of an offering of its securities to the general
public.
(b)
The
Company shall file with the Commission in a timely manner all required reports
and other documents as the Commission may prescribe under Section 13(a) or
15(d)
of the Exchange Act.
(c)
The
Company shall furnish to the Holder of this Option or the Shares designated
by
the Holder, forthwith upon request, (i) a written statement by the Company
as to
its compliance with the reporting requirements under the Securities Act (at
any
time from and after 90 days following the effective date of the first
registration statement of the Company for an offering of its securities to
the
general public) and of the reporting requirements of the Exchange Act, (ii)
a
copy of the most recent annual or quarterly report of the Company, (iii) any
other reports and documents necessary to satisfy the information-furnishing
condition to offers and sales under Rule 144A under the Securities Act, and
(iv)
such other reports and documents as the Holder of this Option or the Shares
reasonably requests to avail itself of any rule or regulation of the Commission
allowing the Holder to sell any such securities without
registration.
2. Exercise
of Option.
2.1 Exercise
in Full.
The
Holder of this Option may exercise it in full by surrendering this Option,
with
the form of subscription at the end hereof duly executed by the Holder, to
the
Company at its principal office. The surrendered Option shall be accompanied
by
payment, in cash or by certified or official bank check payable to the order
of
the Company, in the amount obtained by multiplying the number of shares of
Common Stock called for on the face of this Option by the applicable Purchase
Price.
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2.2 Partial
Exercise.
This
Option may be exercised in part by surrender of this Option in the manner and
at
the place provided in Subsection 2.1 except that the amount of Common Stock
obtained through the exercise shall be calculated by multiplying (a) the number
of shares of Common Stock called for on the face of this Option as shall be
designated by the Holder in the subscription at the end hereof by (b) the
Purchase Price. On any such partial exercise, subject to the provisions of
Section 2 hereof, the Company at its expense will forthwith issue and deliver
to, or upon the order of the Holder, a new Option or Options of like tenor,
in
the name of the Holder, calling in the aggregate on the face or faces thereof,
for the number of shares of Common Stock equal to the number of such shares
called for on the face of this Option minus the number of such shares designated
by the Holder in the subscription at the end hereof.
2.3 Cashless
Exercise.
Payment
for all or any part of the Exercise Price may be made through Cashless
Exercise.
2.4 Company
Acknowledgment.
The
Company will, at the time of the exercise, exchange or transfer of this Option,
upon the request of the Holder acknowledge in writing its continuing obligation
to afford to the Holder any rights (including, without limitation, any right
to
registration of the Shares) to which the Holder shall continue to be entitled
after such exercise or exchange in accordance with the provisions of this
Option. If the Holder of this Option shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to afford
to
the Holder any such rights.
3. Delivery
of Stock Certificates, Etc., on Exercise.
As soon
as practicable after the exercise of this Option, in full or in part, and in
any
event within ten business (10) days thereafter, the Company, at its expense,
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, a certificate or certificates
for the number of fully paid and nonassessable Shares to which the Holder shall
be entitled on such exercise. No fractional Share or scrip representing a
fraction of a Share will be issued on exercise, but the number of Shares
issuable shall be rounded to the nearest whole Share.
4. Adjustment
for Reorganization, Consolidation, Merger, Etc.
4.1
Merger,
Etc.
If the
Company shall (a) effect a reorganization, (b) consolidate with or merge into
any other person, or (c) transfer all or substantially all of its properties
or
assets to any other person under any plan or arrangement contemplating the
dissolution of the Company (any such transaction being hereinafter sometimes
referred to as a "Reorganization") then, in each such case, the Holder of this
Option, on the exercise hereof as provided in Section 2 at any time after the
consummation or effective date of such Reorganization (the "Effective Date"),
shall receive, in lieu of the Shares issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which the Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if
the
Holder had so exercised this Option, immediately prior thereto. The successor
corporation in any such Reorganization described in clause (b) or (c) above
where the Company will not be the surviving entity (the "Acquiring Company")
must agree prior to such Reorganization in a writing satisfactory in form and
substance to the Holder that this Option shall continue in full force and effect
and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on exercise after the consummation of such
Reorganization, and shall be binding upon the issuer of any such stock or other
securities (including, in the case of any transfer of properties or assets
referred to above, the person acquiring all or substantially all of the
properties or assets of the Company). If the Acquiring Company has not so agreed
to continue this Option, then the Company shall give 30 days' prior written
notice to the Holder of this Option of such Reorganization, during which 30-day
period (the "Notice Period") the Holder at its option and upon written notice
to
the Company shall be able to (i) exercise this Option or any part thereof at
an
exercise price (the "Discounted Exercise Price") equal to the then prevailing
purchase price hereunder discounted at the Discount Rate (as used herein the
"Discount Rate" shall mean the then prevailing interest rate on U.S. Treasury
Notes issued on (or immediately prior to) the date of such 30-day notice and
maturing on October 18, 2004 (or immediately prior thereto), such rate to be
compounded annually through October 18, 2004, and in no event to be less than
10% annually); or (ii) on the Effective Date, the Holder of this Option shall
be
paid an amount (the "Merger Profit Amount") equal to the difference between
the
fair market value per share of Common Stock of the Company being purchased
by
the Acquiring Company in the Reorganization and the Discounted Exercise Price
described in clause (i) above and the Option shall simultaneously expire. The
Merger Profit Amount shall be payable in the same form as the common
stockholders of the Company shall be paid by the Acquiring Company for their
shares of common stock of the Company. The fair market value of any noncash
property received from the Acquiring Company upon the Reorganization shall
be
determined in good faith by the Board of Directors of the Company, as approved
by the Company's stockholders.
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4.2
Dissolution.
Except
as otherwise expressly provided in Subsection 5.1, in the event of any
dissolution of the Company following the transfer of all or substantially all
of
its properties or assets, the Company, prior to such dissolution, shall at
its
expense deliver or cause to be delivered the stock and other securities and
property (including cash, where applicable) receivable by the Holder of this
Option after the effective date of such dissolution pursuant to this Section
4
to a bank or trust company having its principal office in New York, New York,
as
trustee for the Holder of this Option.
4.3
Continuation
of Terms.
Except
as otherwise expressly provided in Subsection 4.1, upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer)
referred to in this Section 4, this Option shall continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and
other
securities and property receivable on the exercise of this Option after the
consummation of such reorganization, consolidation or merger or the effective
date of dissolution following any such transfer, as the case may be, and shall
be binding upon the issuer of any such stock or other securities, including,
in
the case of any such transfer, the person acquiring all or substantially all
of
the properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Option as provided in Section
4.1.
5. No
Impairment.
The
Company will not, by amendment of its certificate of incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Option, but
will, at all times, in good faith, assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in
order
to protect the rights of the Holders of this Option against dilution or other
impairment. Without limiting the generality of the foregoing, the Company (a)
will not increase the par value of any shares of stock receivable on the
exercise of this Option above the amount payable therefor on such exercise
and
(b) will at all times reserve and keep available out of its authorized capital
stock, solely for the purpose of issue upon exercise of this Option as herein
provided, such number of shares of Common Stock as shall then be issuable upon
exercise of this Option in full and shall take all such action as may be
necessary or appropriate in order that all shares of Common Stock that shall
be
so issuable shall be duly and validly issued and fully paid and nonassessable
and free from all taxes, liens and charges with respect to the issue
thereof.
-14-
6.
No
Dilution.
(a)
In
the
event the Company shall pay a share dividend or other distribution payable
in
shares of Common Stock, or the issued shares of Common Stock shall be
subdivided, combined or consolidated, by reclassification or otherwise, into
a
greater or lesser number of shares of Common Stock, the Purchase Price in effect
immediately prior (and each Purchase Price in effect subsequent) to such
subdivision or combination, and the number of shares of Common Stock into which
this option is exercisable, shall be proportionately adjusted.
(b)
Upon
the
occurrence of each adjustment of the Purchase Price pursuant to this Section
6,
the Company shall prepare a certificate setting forth such adjustment and
showing in detail the facts upon which such adjustment is based.
(c)
The
form
of this Option need not be changed because of any change in the Purchase Price
pursuant to this Section 6 and any Option issued after such change may state
the
same Purchase Price and the same number of shares of Common Stock as are stated
in this Option as initially issued. However, the Company may at any time in
its
sole discretion (which shall be conclusive) make any change in the form of
this
Option that it may deem appropriate and that does not affect the substance
thereof. Any Option thereafter issued or countersigned, whether in exchange
or
substitution for an outstanding Option or otherwise, may be in the form as
so
changed.
|
(d)
|
In
case at any time after the date of this
Option:
|
(i)
The
Company shall declare a dividend (or any other distribution) on its shares
of
Common Stock payable otherwise than in cash out of its earned surplus;
or
(ii)
The
Company shall authorize any reclassification of the shares of its Common Stock,
or any consolidation or merger to which it is a party and for which approval
of
any shareholders of the Company is required, or the sale or transfer of all
or
substantially all of its assets or all or substantially all of its issued and
outstanding stock; or
(iii)
Events
shall have occurred resulting in the voluntary and involuntary dissolution,
liquidation or winding up of the Company; then the Company shall cause notice
to
be sent to the Holder at least twenty (20) days prior (or ten (10) day prior
in
any case specified in clause (i) above, or on the date of any case specified
in
clause (iii) above) to the applicable record date hereinafter specified, a
notice stating (1) the date on which a record is to be taken or the purpose
of
such dividend, distribution or rights, or, if a record is not to be taken,
the
date as of which the holders of shares of Common Stock of record will be
entitled to such dividend, distribution or rights are to be determined or (2)
the date on which such reclassification, consolidation, merger, sale, transfer,
initial public offering, dissolution, liquidation or winding up is expected
to
become effective, and the date as of which it is expected that holders of shares
of Common Stock or record shall be entitled to exchange their shares for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale transfer, dissolution, liquidation or winding up.
Failure to give any such notice of any defect therein shall not affect the
validity of the proceedings referred to in clauses (i), (ii) and (iii)
above.
-15-
7. Replacement
of Options.
On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Option and, in the case of any such loss,
theft or destruction of this Option, on delivery of an indemnity agreement
or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Option,
the
Company at its expense will execute and deliver, in lieu thereof, a new Option
of like tenor.
8. Expenses.
The
Company agrees to pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the execution and
delivery of this Option and the issuance of this Option.
9. Option
Agent.
The
Company may, by written notice to the Holder of this Option, appoint an agent
having an office in New York, New York, or U.S. Stock Transfer Corp. for the
purpose of issuing Shares on the exercise of this Options pursuant to Section
2,
exchanging this Option pursuant to Section 6, and replacing this Option pursuant
to Section 8, or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by
such agent.
10. Remedies.
The
Company stipulates that the remedies at law of the Holder of this Option, in
the
event of any default or threatened default by the Company in the performance
of
or compliance with any of the terms of this Option, are not and will not be
adequate, and that such terms may be specifically enforced by a decree for
the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
11. Negotiability,
Etc.
This
Option is issued upon the following terms, to all of which the Holder or owner
hereof, by the taking hereof, consents and agrees:
(a)
title
to this Option may be transferred by endorsement (by the Holder executing the
form of assignment at the end hereof) and delivery in the same manner as in
the
case of a negotiable instrument transferable by endorsement and
delivery;
(b)
any
person in possession of this Option, properly endorsed, is authorized to
represent himself as absolute owner hereof and is empowered to transfer absolute
title hereto by endorsement and delivery hereof to a bona fide purchaser hereof
for value; each prior taker or owner waives and renounces all of his equities
or
rights in this Option in favor of each such bona fide purchaser, and each such
bona fide purchaser shall acquire absolute title hereto and to all rights
represented hereby; and
-16-
(c)
until
this Option is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
12. Notice,
Etc.
All
notices and other communications from the Company to the Holder of this Option
shall be mailed by first class registered or certified airmail, postage prepaid,
at such address as may have been furnished to the Company in writing by the
Holder.
13. Miscellaneous.
This
Option and any term hereof may be changed, waived, discharged or terminated
only
by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought. This Option is being
delivered in the State of New York and shall be construed and enforced in
accordance with and governed by its laws. The headings in this Option are for
purposes of reference only, and shall not limit or otherwise affect any of
the
terms hereof. This Option is being executed as an instrument under seal. All
nouns and pronouns used herein shall be deemed to refer to the masculine,
feminine or neuter, as the identity of the person or persons to whom reference
is made herein may require.
14. Expiration.
The
right to exercise this Option shall expire at 5:00 P.M.,
New
York time, on January 1, 2012.
| Dated:_______________________ | MEDLINK INTERNATIONAL, INC. | |
| By:________________________ | ||
|
Name:______________________
|
||
| Title:_______________________ |
-17-
ATTACHMENT
A
NOTICE
OF EXERCISE
(To
be
Executed by the Registered Holder in order to Exercise the Option)
The
undersigned holder hereby irrevocably elects to purchase ____ shares of Common
Stock of MedLink International, Inc. (the “Company”) pursuant to the Common
Stock Option void after ______________________ issued by the Company according
to the conditions set forth in said warrant and as of the date set forth
below.*
Date
of
Exercise:
Number
of
Shares be Purchased: __________________________________________
Applicable
Purchase Price:
Signature:
[Name]
Address:
*
This
original Option must accompany this Notice of Exercise.
-18-
