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 XXXXX XXXX ("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 Financial Officer & executive Vice 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).
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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.
2.1. Duties. Employee shall serve as MLI's Executive Vice President and
Chief Financial Officer and shall be responsible for MLI's financial
reporting, disclosure controls, book keeping, serving as a liason
with auditors and accountants, overseeing all stock issuances and
transfer agency issues and responsibilities as are from time to time
assigned to him by the Board or MLI's Chief Executive Officer.
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 $110,000 per year
and 400,000 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.
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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
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5.1.2.2. reimbursement pursuant to Section 4.5, or any other
provision hereof, for all expenses incurred but not yet
paid.
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. continuation of Employee's Salary for the additional
term of this agreement shall immediately vest; and
5.2.1.3 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.
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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.
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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
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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.
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:
Xxxxx Xxxx
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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If to MLI:
MedLink International, Inc.
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.
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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.
8.10. 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, 2004.
MEDLINK INTERNATIONAL, INC.,
a Delaware corporation
By: __________________________
__________________________ Xxx Xxxxx
Xxxxxxx Xxxx
Title: Chief Executive Officer
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MEDLINK INTERNATIONAL, INC.
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 400,000 shares of Common
Stock (subject to adjustment)
PREAMBLE
MedLink International, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, Xxxxx Xxxx, 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 400,000 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).
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(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.
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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
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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.
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.
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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.
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
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(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.
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;
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(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
(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: ____________________
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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.
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