Exhibit No. 1.3 Form of Representative's Warrant Option Agreement.
Exhibit 1.3
FIRSTLINK COMMUNICATIONS, INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.
REPRESENTATIVE'S WARRANT OPTION AGREEMENT
Dated as of ________
REPRESENTATIVE'S WARRANT OPTION AGREEMENT
This Representative's Warrant Option Agreement (the "Agreement"), dated
as of ____, is made and entered into by and between FirstLink Communications,
Inc., an Oregon corporation (the "Company"), and ▇▇▇▇▇▇▇ Davidson Securities
Corporation ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇").
The Company agrees to issue and sell, and ▇▇▇▇▇▇▇ Davidson agrees to
purchase, for the price of $100, options ("Options") to purchase up to an
aggregate of 100,000 warrants, subject to the terms and conditions set forth
below.
In consideration of the foregoing and for the purpose of defining the terms
and provisions of the Options and the respective rights and obligations
thereunder, the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, for value received, hereby agree
as follows:
SECTION 1. DEFINITIONS
The following terms used in this agreement shall have the following
meanings (unless otherwise expressly provided herein):
1.1. THE "ACT." The Securities Act of 1933, as amended.
1.2. THE "COMMISSION." The Securities and Exchange Commission.
1.3. THE "COMPANY." FirstLink Communications, Inc., an Oregon
corporation.
1.4. "COMMON STOCK." The Company's No Common Stock.
1.5. "EFFECTIVE DATE." _________
1.6. "EXERCISE DATE." __________
1.7. "EXERCISE PRICE." $ per Warrant, as modified in accordance with
Section 4, below.
1.8. "EXPIRATION DATE." ________
1.9. "HOLDER." ▇▇▇▇▇▇▇ Davidson Securities Corporation, and any valid
transferee thereof pursuant to Section 3.1. below.
1.10. "MAJORITY HOLDER." Any Holder, any holder of Option Securities, or
any combination of Holders and such holders of Option Securities; and any Holder
of Share Options, any holder of Share Option Securities, or any combination of
such Holders and such holders of Share Option Securities, if they hold, in the
aggregate, unexercised Options plus issued and outstanding Option Securities
equal to more than 50% of the total of (i) all Option Securities issued and
outstanding as a result of the exercise of the Option, and (ii) all Option
Securities that may at that time be purchased by exercising the unexercised
portion of the Option. For purposes hereof, a Holder of an Option which
entitles the Holder to purchase more than one share or Warrant shall be deemed
to hold Options equal to the number of shares or Warrants which may be acquired
pursuant to any such Option.
1.11. "NASD." The National Association of Securities Dealers, Inc.
1.12. "OPTIONS." The options issued in accordance with the terms of this
Agreement and any options issued in substitution for or replacement of such
options, or any options into which this option may be divided or exchanged.
1.13. "OPTION SECURITIES." The Warrants issued or issuable upon exercise
of an Option; and the Common Stock issued or issuable upon exercise of such
Warrants.
1.14. "PUBLIC OFFERING." The public offering by the Company of 1,000,000
shares of Common Stock and 1,000,000 Warrants pursuant to an underwriting
agreement dated as of ______, between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ as
Representative of the several Underwriters named in the underwriting agreement.
1.15. "SHARE OPTIONS." Those options to purchase Warrants issued to the
Holder concurrently with the issuance of the Share Options under this Agreement,
pursuant to a Representative's Warrant Option Agreement dated the date of this
Agreement.
1.16. "UNDERWRITER." A broker-dealer identified as an Underwriter in the
Final Prospectus for the Public Offering.
1.17. "WARRANTS." The Warrants issued to the public pursuant to the
Registration Statement.
SECTION 2. TERM OF OPTIONS; EXERCISE OF OPTION
2.1. EXERCISE OF OPTION. Subject to the terms of this Agreement, the
Optionholder shall have the right, at any time during the four-year period
commencing at 9:00 a.m., Portland, Oregon time, on the Exercise Date and ending
at 5:00 p.m., Portland time, on the Expiration Date to purchase from the Company
up to the number of fully paid and nonassessable Warrants to which the
Optionholder may at the time be entitled to purchase pursuant to this Agreement,
upon surrender to the Company, at its principal office, of the certificate
evidencing the Options to be exercised, together with the purchase form on the
reverse thereof, duly filled in and signed, and upon payment to the Company of
the Exercise Price for the number of Warrants in respect of which such Options
are then exercised, but in no event for less than 100 Warrants (unless fewer
than an aggregate of 100 Warrants are then purchasable under all outstanding
Options held by a Optionholder).
2.2. PAYMENT OF EXERCISE PRICE. Payment of the aggregate Exercise Price
shall be made in cash or by check, or any combination thereof.
2.3. ISSUANCE OF WARRANTS. Upon such surrender of Options and payment
of such Exercise Price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Optionholder and in such name or names as the Optionholder may designate, a
certificate or certificates for the number of Warrants so purchased upon the
exercise of the Option. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become the holder of record of such securities as of the date of
surrender of the Options, notwithstanding that the transfer books of the Company
may then be closed or that certificates representing such Option Securities may
not have been prepared or actually delivered to the Holder. Unless the context
indicates otherwise, the term "Optionholder" shall include any transferee or
transferees of the Options pursuant to this Subsection 2.3, and the term
"Options" shall include any and all Options outstanding pursuant to this
Agreement, including those evidenced by a certificate or certificates issued
upon division, exchange, substitution or transfer pursuant to this Agreement.
SECTION 3. TRANSFERABILITY AND FORM OF OPTION
3.1. LIMITATION ON TRANSFER. This Option may not be sold, transferred,
assigned, pledged or hypothecated until the Exercise Date, except for (i) the
sale, transfer, or assignment, in whole or in part, to or among the officers of
▇▇▇▇▇▇▇ Davidson and other Underwriters and the officers or partners of those
Underwriters, (ii) the transfer by operation of law as a result of the death of
any transferee to whom all or a portion of this Option may be transferred, and
(iii) the transfer to any successor to the business of an Underwriter. All
sales, transfers, assignments or hypothecations of this Option must be in
compliance with Section 8 hereof. Any assignment or transfer of this Option
shall be made by the presentation and surrender of this Option to the Company at
its principal office or the office of its transfer agent, if any, accompanied by
a duly executed Assignment Form, in the form attached to and by this reference
incorporated in this Option as Exhibit B. Upon the presentation and surrender
of these items to the Company, the Company, at its sole expense, shall execute
and deliver to the new Holder or Holders a new Option or Options, containing the
same terms and conditions as this Option, in the name of the new Holder or
Holders as named in the Assignment Form, and this Option shall at that time be
cancelled.
3.2. EXCHANGE OF CERTIFICATE. Any Option certificate may be exchanged
for another certificate or certificates entitling the Optionholder to purchase a
like aggregate number of Shares as the certificate or certificates
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surrendered then entitled such Optionholder to purchase. Any Optionholder
desiring to exchange a Option certificate shall make such request in writing
delivered to the Company, and shall surrender, properly endorsed, the
certificate evidencing the Option to be so exchanged. Thereupon, the Company
shall execute and deliver to the person entitled thereto a new Option
certificate as so requested.
3.3. MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATE. In case the
certificate or certificates evidencing the Options shall be mutilated, lost,
stolen or destroyed, the Company shall, at the request of the Optionholder,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated certificate or certificates, or in lieu of and substitution for the
certificate or certificates lost, stolen or destroyed, a new Option certificate
or certificates of like tenor and representing an equivalent right or interest,
but only upon receipt of evidence satisfactory to the Company of such loss,
theft or destruction of such Option and a bond of indemnity, if requested, also
satisfactory in form and amount, at the applicant's cost. Applicants for such
substitute Option certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company may prescribe.
3.4. FORM OF CERTIFICATE. The text of the Option and of the form of
election to purchase Warrants shall be substantially as set forth in Exhibit A
attached hereto. The number of Warrants issuable upon exercise of the Options
is subject to adjustment upon the occurrence of certain events, all as
hereinafter provided. The Options shall be executed on behalf of the Company
by its President or by a Vice President and attested to by its Secretary or an
Assistant Secretary. An Option bearing the signature of an individual who was
at any time the proper officer of the Company shall bind the Company,
notwithstanding that such individual shall have ceased to hold such officer
prior to the delivery of such Option or did not hold such office on the date of
this Agreement.
3.5. DATE OF CERTIFICATE. The Options shall be dated as of the date of
signature thereof by the Company either upon initial issuance or upon division,
exchange, substitution or transfer.
SECTION 4. ADJUSTMENT OF NUMBER OF SHARES
4.1. ADJUSTMENTS. The adjustments to the number of Shares
purchasable upon the exercise of the Warrants underlying the Options and the
adjustments to the exercise price of such Warrants shall be made to the
Options, notwithstanding that such Options shall not have been exercised at the
time of the event which causes such adjustment.
4.2. NOTICE OF ADJUSTMENT. Whenever the number of Shares purchasable
upon exercise of the Options is adjusted as herein provided, the Company shall
cause to be promptly mailed to the Optionholder by first class mail, postage
prepaid, notice of such adjustment and a certificate of the chief financial
officer of the Company setting forth the number of Shares purchasable upon the
exercise of the Options after such adjustment, a brief statement of the facts
requiring such adjustment and the computation by which such adjustment was
made.
4.3. PRESERVATION OF PURCHASE RIGHTS UPON RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation, or in case of any sale or conveyance to
another corporation of the property, assets, or business of the Company as an
entirety or substantially as an entirety, the Company or such successor or
purchasing corporation, as the case may be, shall execute with the Optionholder
an agreement that the Optionholder shall have the right thereafter upon payment
of the Exercise Price in effect immediately prior to such action to purchase,
upon exercise of the Options, the kind and amount of shares and other securities
and property which it would have owned or have been entitled to receive after
the happening of such consolidation, merger, sale, or conveyance had the Options
been exercised immediately prior to such action. In the event of a merger
described in Section 368(a)(2)(E) of the Internal Revenue Code of 1986, in which
the Company is the surviving corporation, the right to purchase Warrants under
the Options shall terminate on the date of such merger and thereupon the Options
shall become null and void, but only if the controlling corporation shall agree
to substitute for the Options, its Options which entitle the holder thereof to
purchase upon their exercise the kind and amount of Warrants and other
securities and property which it would have owned or been entitled to receive
had the Options been exercised immediately prior to such merger. Any such
agreements referred to in this subsection 4.3 shall provide for adjustments,
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in Section 4 hereof. The provisions of this subsection 4.3 shall
similarly apply to successive consolidations, mergers, sales, or conveyances.
4.4. INDEPENDENT PUBLIC ACCOUNTANTS. The Company may retain a firm of
independent public
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accountants of recognized national standing (which may be any such firm
regularly employed by the Company) to make any computation required under
this Section 4, and a certificate signed by such firm shall be conclusive
evidence of the correctness of any computation made under this Section 4.
SECTION 5. NOTICE TO HOLDERS
If, prior to the expiration of this Option either by its terms or by its
exercise in full, any of the following shall occur:
(i) the Company shall declare a dividend or authorize any other
distribution on its Common Stock; or
(ii) the Company shall authorize the granting to the shareholders of its
Common Stock of rights to subscribe for or purchase any securities or any other
similar rights; or
(iii) any reclassification, reorganization or similar change of the
Common Stock, or any consolidation or merger to which the Company is a party, or
the sale, lease, or exchange of any significant portion of the assets of the
Company; or
(iv) the voluntary or involuntary dissolution, liquidation or winding up
of the Company; or
(v) any purchase, retirement or redemption by the Company of its Common
Stock;
then, and in any such case, the Company shall deliver to the Holder or Holders
written notice thereof at least 30 days prior to the earliest applicable date
specified below with respect to which notice is to be given, which notice shall
state the following:
(x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights, or, if a record is not to be taken, the date
as of which the shareholders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined;
(y) the date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
purchase, retirement or redemption is expected to become effective, and the
date, if any, as of which the Company's shareholders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, reorganization, consolidation,
merger, sale, transfer, dissolution, liquidation, winding up, purchase,
retirement or redemption; and
(z) if any matters referred to in the foregoing clauses (x) and (y) are
to be voted upon by shareholders of Common Stock, the date as of which those
shareholders to be entitled to vote are to be determined.
SECTION 6. OFFICERS' CERTIFICATE
Whenever the Exercise Price or the aggregate number of Option Securities
purchasable pursuant to this Option shall be adjusted as required by the
provisions of Section 4 above, the Company shall promptly file with its
Secretary or an Assistant Secretary at its principal office, and with its
transfer agent, if any, an officers' certificate executed by the Company's
President and Secretary or Assistant Secretary, describing the adjustment
and setting forth, in reasonable detail, the facts requiring such
adjustment and the basis for and calculation of such adjustment in
accordance with the provisions of this Option. Each such officers'
certificate shall be made available to the Holder or Holders of this Option
for inspection at all reasonable times, and the Company, after each such
adjustment, shall promptly deliver a copy of the officers' certificate
relating to that adjustment to the Holder or Holders of this Option. The
officers' certificate described in this Section 6 shall be deemed to be
conclusive as to the correctness of the adjustment reflected therein if,
and only if, no Holder of this Option delivers written notice to the Company
of an objection to the adjustment within 30 days after the officers'
certificate is delivered to the Holder or Holders of this Option. The
Company will make its books and records available for inspection and copying
during normal business hours by the Holder so as to permit a determination as
to the correctness of the adjustment. If written notice of an objection is
delivered by a Holder to the Company and the parties cannot reconcile the
dispute, the Holder and the Company shall submit the dispute to arbitration
pursuant to the provisions of Section 19 below. Failure to prepare or
provide the officers' certificate shall not modify the parties' rights
hereunder.
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SECTION 7. RESERVATION OF OPTION SECURITIES
There has been reserved, and the Company shall at all times keep
reserved so long as the Options remain outstanding, out of its authorized and
unissued Common Stock, such number of shares of Common Stock as shall be
subject to purchase under the Options. Every transfer agent for the Common
Stock and other securities of the Company issuable upon the exercise of the
Options will be irrevocably authorized and directed at all times to reserve
such number of authorized shares and other securities as shall be requisite
for such purpose. The Company will keep a copy of this Agreement on file with
every transfer agent for the Common Stock and other securities of the Company
issuable upon the exercise of the Options. The Company will supply every
such transfer agent with duly executed stock and other certificates, as
appropriate, for such purpose and will provide or otherwise make available
any cash which may be payable as provided in Section 10 hereof.
SECTION 8. REGISTRATION RIGHTS.
8.1. DEMAND REGISTRATION RIGHTS. Upon the written request of a
Majority Holder, made at any time after the Exercise Date, but before the
Expiration Date, the Company shall file within 90 days of such written
request a registration statement or Regulation A offering statement pursuant
to the Act, and all necessary amendments thereto, to register or qualify the
Option Securities (including both the Warrants issued or issuable upon
exercise of the Options and the shares issued or issuable upon exercise of
such Warrants). No additional securities shall be included in such
registration statement or offering statement without the written consent of
the Majority Holder. The Company may use the Regulation A exemption if
available, but the Company must file a registration statement if the
securities that are to be covered cannot be sold pursuant to Regulation A
because of the limitations applicable to the use of the Regulation A
exemption. The Company agrees to use its best efforts to cause this
registration or qualification to become effective as promptly as practicable
and to keep such registration effective for a period of the lesser of 180
days or the date of completion of the distribution described in the
Registration Statement; and its officers, directors, consultants, auditors
and counsel shall cooperate in all matters necessary or advisable to pursue
this objective. All of the expenses of this registration or qualification
shall be borne by the Company, including, but not limited to, legal,
accounting, consulting, printing, filing and NASD fees, out-of-pocket
expenses incurred by counsel, accountants, and consultants retained by the
Company and miscellaneous expenses directly related to the registration
statement or offering statement and the offering, and the underwriter's
accountable and nonaccountable expense allowances and fees; but the Company
shall not pay any brokerage fees, commissions or underwriting discounts
except to the extent they are attributable to other securities that the
Company has been permitted to register or qualify or to offer in conjunction
with the registration and qualification of the Option Securities.
Notwithstanding the foregoing, if, as a qualification of any offering in any
state or jurisdiction in which the Company (by vote of its Board of
Directors) or any underwriter determines in good faith that it wishes to
offer securities registered in the offering, it is required that offering
expenses be allocated in a manner different from that provided above, then
the offering expenses shall be allocated in whatever manner is most nearly in
compliance with the provisions set out above. The Majority Holder shall be
entitled to exercise the rights described in this subsection 8(b) one time
only.
Within 10 days after the delivery by the Majority Holder to the Company
of the notice described above, the Company shall deliver written notice to
all other Holders of this Option and holders of the Option Securities, if
any, advising them that the Company is proceeding with a registration
statement or offering statement and offering them the right to include the
Option Securities of those Holders or holders therein. If any Holder of an
Option and/or Option Securities delivers written acceptance of that offer to
the Company within 30 days after the delivery of the Company's notice, the
Company shall be obligated to include that holder's Option Securities in the
contemplated registration statement or offering statement.
8.2. "PIGGY-BACK" REGISTRATION RIGHTS. If at any time prior to the
Expiration Date the Company files a registration statement with the
Commission pursuant to the Act, or pursuant to any other act passed after the
date of this Agreement, which filing provides for the sale of securities by
the Company to the public, or files a Regulation A offering statement under
the Act, the Company shall offer to the Holder or Holders of this Option and
the holders of any Option Securities the opportunity to register or qualify
the Option Securities, at the Company's sole expense, regardless of whether
the Holder or Holders of this Option or the holders of Option Securities or
both may have previously availed themselves of any of the registration rights
described in this Section 8; provided, however, that in the case of a
Regulation A offering, the opportunity to qualify shall be limited to the
amount of the available exemption after taking into account the securities
that the Company wishes to qualify. Notwithstanding anything to the
contrary, this subsection 8.2 shall not be applicable to a registration
statement registering securities issued pursuant to an employee benefit plan
or as to a transaction subject to Rule 145 promulgated under the Act or which
a
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form S-4 registration statement could be used.
The Company shall deliver written notice to the Holder or Holders of
this Option and to any holders of Option Securities of its intention to file
a registration statement or Regulation A offering statement under the Act at
least 60 days prior to the filing of such registration statement or offering
statement, and the Holder or Holders and holders of Option Securities shall
have 30 days thereafter to request in writing that the Company register or
qualify the Option Securities in accordance with this subsection 8.2. Upon
the delivery of such a written request within the specified time, the Company
shall be obligated to include in its contemplated registration statement or
offering statement all information necessary or advisable to register or
qualify the Option Securities, if the Company does file the contemplated
registration statement or offering statement; provided, however, that neither
the delivery of the notice by the Company nor the delivery of a request by a
Holder or by a holder of Option Securities shall in any way obligate the
Company to file a registration statement or offering statement. Furthermore,
notwithstanding the filing of a registration statement or offering statement,
the Company may, at any time prior to the effective date thereof, determine
not to offer the securities to which the registration statement or offering
statement relates, other than the Option Securities. Notwithstanding the
foregoing, if, as a qualification of any offering in any state or
jurisdiction in which the Company (by vote of its Board of Directors) or any
underwriter determines in good faith that it wishes to offer securities
registered in the offering, it is required that offering expenses be
allocated in a manner different from that provided above, then the offering
expenses shall be allocated in whatever manner is most nearly in compliance
with the provisions set out above.
The Company shall comply with the requirements of this subsection 8.2.
at its own expense. That expense shall include, but not be limited to,
legal, accounting, consulting, printing, federal and state filing fees, NASD
fees, out-of-pocket expenses incurred by counsel, accountants and consultants
retained by the Company, and miscellaneous expenses directly related to the
registration statement or offering statement and the offering. However, this
expense shall not include the portion of any underwriting commissions,
transfer taxes and the underwriter's accountable and nonaccountable expense
allowances attributable to the offer and sale of the Option Securities, all
of which expenses shall be borne by the Holder or Holders of this Option and
the holders of the Option Securities registered or qualified.
If the registration for which the Company gives notice is for a
registered public offering involving an underwriting, the Company shall so
advise as part of the written notice given pursuant to this Section. In such
event, the right of any Optionholder or holder of Option Securities to
registration pursuant to Section 8.2. shall be conditioned upon such holder's
participation in such underwriting, and the inclusion of Option Securities in
the underwriting shall be limited to the extent provided herein. All holders
proposing to distribute their Option Securities through such underwriting
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the managing underwriter selected for such underwriting
by the Company. Notwithstanding any other provision of this Section, if the
managing underwriter determines that marketing factors require a limitation
of the number of shares to be underwritten, such underwriter may limit the
amount of securities to be included in the registration and underwriting by
the holders of Company securities exercising "piggyback" registration rights
(including the Optionholder and each holder of Options and Shares). The
Company shall so advise all such holders, and the number of shares of such
securities that may be included in the registration and underwriting shall be
allocated among all of such holders, in proportion, as nearly as practicable,
to the respective amounts of securities requested to be included in such
registration held by such holders at the time of filing the registration
statement, PROVIDED, HOWEVER, that no security holder other than one
exercising a demand registration right shall have superior rights with
respect to inclusion in a registration than those of the Optionholder and
each holder of Option Securities and if any party is granted such superior
rights hereafter the Optionholder and each holder of Option Securities shall
be deemed to be automatically granted similar rights. The Company shall
advise all such holders of any such limitations and of the number of
securities that may be included in the registration. Any securities excluded
or withdrawn from such underwriting shall not be transferred prior to one
hundred twenty (120) days after the effective date of the registration
statement relating thereto, or such shorter period of time as the
underwriters may require.
8.3. INCLUSION OF INFORMATION. In the event that the Company
registers or qualifies the Option Securities pursuant to subsections 8.1 or
8.2 above, the Company shall include in the registration statement or
qualification, and the prospectus included therein, all information and
materials necessary or advisable to comply with the applicable statutes and
regulations so as to permit the public sale of the Option Securities. As
used in subsections 8.1 and 8.2, reference to the Company's securities shall
include, but not be limited to, any class or type of the Company's securities
or the securities of any of the Company's subsidiaries or affiliates.
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8.4. REGISTRATION STATEMENT FILED BY HOLDER. In addition to the
registration rights described in subsections 8.1 and 8.2 above, upon the
written request of any Majority Holder, the Company, as promptly as possible
after delivery of such request, shall cooperate with the requesting Holder or
holder in preparing and signing any registration statement or offering
statement that the Holder or holder may desire to file in order to sell or
transfer the Option Securities. Within 10 days after the delivery of the
written request described above, the Company shall deliver written notice to
all other Holders of this Option and holders of Option Securities, if any,
advising them that the Company is proceeding with a registration statement or
offering statement and that their Option Securities will be included therein
if they so desire and agree to pay their pro rata share of the cost of
registration or qualification and provided that the Holder or holder delivers
written notice to the Company of their desire to be included and their
agreement to pay their pro rata share of the cost within 30 days after the
delivery of the Company's notice to them. The Company will supply all
information necessary or advisable for any such registration statements or
offering statements; provided, however, that all the costs and expenses of
such registration statements or offering statements shall be borne, in a
manner proportionate to the number of securities for which they indicate a
desire to register, by the Holders of this Option and the holders of Option
Securities who seek the registration or qualification of their Option
Securities. In determining the amount of costs and expenses to be borne by
those Holders or holders, the only costs and expenses of the Company to be
included are the additional costs and expenses that would not have otherwise
been incurred by the Company if those Holders or holders had not desired to
file a registration statement or offering statement. As an example, and
without limitation, audit fees would not be charged to those Holders or
holders if or to the extent that the Company would have incurred the same
audit fees for its year-end or other use in the absence of the registration
statement or offering statement. The Holders or holders responsible for the
costs and expenses shall reimburse the Company for those reimbursable costs
and expenses reasonably incurred by the Company within 30 days after the
initial effective date of the registration statement or qualification at
issue.
8.5. PAYMENT OF EXERCISE PRICE FROM PROCEEDS. In the event that any
registration statement is utilized for a public offering of any of the Option
Securities to be received upon exercise of the Options pursuant to this
Section 8, the Optionholder may elect to pay the exercise price of the
Options to the Company out of the proceeds of the sale of the Option
Securities pursuant to the registration statement concurrently with the
closing of such sale of the Option Securities; provided that if such sale is
not closed within 90 days of the effective date of such registration
statement, then the Optionholder shall be obligated to pay the exercise price
of the Options and/or the Warrants to the Company on such 90th day.
8.6. CONDITION OF COMPANY'S OBLIGATIONS. As to each registration
statement or offering statement, the Company's obligations contained in this
Section 8 shall be conditioned upon a timely receipt by the Company in
writing of the following:
(a) Information as to the terms of the contemplated public offering
furnished by and on behalf of each Holder or holder intending to make a
public distribution of the Option Securities; and
(b) Such other information as the Company may reasonably require from
such Holders or holders, or any underwriter for any of them, for inclusion in
the registration statement or offering statement.
8.7. ADDITIONAL REQUIREMENTS. In each instance in which the Company
shall take any action to register or qualify the Option Securities, if any,
pursuant to this Section 8, the Company shall do the following:
(a) Supply to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as the representative of the Holders
of the Option and the holders of Option Securities whose Option Securities
are being registered or qualified, two (2) manually signed copies of each
registration statement or offering statement, and all amendments thereto, and
a reasonable number of copies of the preliminary, final or other prospectus
or offering circular, all prepared in conformity with the requirements of the
Act and the rules and regulations promulgated thereunder, and such other
documents as ▇▇▇▇▇▇▇ Davidson shall reasonably request;
(b) Cooperate with respect to (i) all necessary or advisable actions
relating to the preparation and the filing of any registration statements or
offering statements, and all amendments thereto, arising from the provisions
of this Section 8, (ii) all reasonable efforts to establish an exemption from
the provisions of the Act or any other federal or state securities statutes,
(iii) all necessary or advisable actions to register or qualify the public
offering at issue pursuant to federal securities statutes and the state "blue
sky" securities statutes of each jurisdiction that the Holders of the Option
or holders of Option Securities shall reasonably request, and (iv) all other
necessary or
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advisable actions to enable the Holders of the Option Securities to complete
the contemplated disposition of their securities in each reasonably requested
jurisdiction; and
(c) Keep all registration statements or offering statements to which
this Section 8 applies, and all amendments thereto, effective under the Act
for a period of at least 180 days after their initial effective date and
cooperate with respect to all necessary or advisable actions to permit the
completion of the public sale or other disposition of the securities subject
to a registration statement or offering statement.
8.9. INDEMNIFICATION AGREEMENTS. In each instance in which pursuant
to this Section 8 the Company shall take any action to register or qualify
the Option Securities, prior to the effective date of any registration
statement or offering statement, the Company and each Holder or holder of
Options or Option Securities being registered or qualified shall enter into
reciprocal indemnification agreements, in the form customarily used by
reputable investment bankers with respect to public offerings of
securities, containing substantially the same terms as described in Section
10. These indemnification agreements also shall contain an agreement by the
Holder or holder at issue to indemnify and hold harmless the Company, its
officers and directors from and against any and all losses, claims, damages
and liabilities, including, but not limited to, all expenses reasonably
incurred in investigating, preparing, defending or settling any claim,
directly resulting from any untrue statements of material facts, or omissions
to state a material fact necessary to make a statement not misleading,
contained in a registration statement or offering statement to which this
Section 8 applies, if, and only if, the untrue statement or omission directly
resulted from information provided in writing to the Company by the
indemnifying Holder or shareholder expressly for use in the registration
statement or offering statement at issue.
8.10. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AS REPRESENTATIVE. For purposes of subsection
8.7(i) above, by the receipt of this Option or any Option Securities, all
Holders and all holders of Option Securities acknowledge and agree that
▇▇▇▇▇▇▇ Davidson is and shall be their representative.
8.11. SURVIVAL. The Company's obligations described in this Section 8
shall continue in full force and effect regardless of the exercise,
surrender, cancellation or expiration of this Option.
SECTION 9. PAYMENT OF TAXES
The Company will pay all documentary stamp taxes, if any, attributable
to the initial issuance of the Options or the securities comprising the
Shares; provided, however, the Company shall not be required to pay any tax
which may be payable in respect of any transfer of the Options or the
securities comprising the Shares.
SECTION 10. INDEMNIFICATION AND CONTRIBUTION
10.1. INDEMNIFICATION BY COMPANY. In the event of the filing of any
Registration Statement with respect to the Shares pursuant to Section 8
hereof, the Company agrees to indemnify and hold harmless the Optionholder or
any holder of Option Securities and each person, if any, who controls the
Optionholder or any holder of Option Securities within the meaning of the
Act, against any and all loss, claim, damage or liability, joint or several
(which shall, for all purposes of this Agreement include, but not be limited
to, all costs of defense and investigation and all attorneys' fees), to which
such Optionholder or any holder of Option Securities may become subject,
under the Act or otherwise, insofar as such loss, claim, damage, or liability
(or action with respect thereto) arises out of or is based upon (a) any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus, or the Final Prospectus or any amendment or supplement thereto;
or (b) the omission or alleged omission to state in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or the Final
Prospectus or any amendment or supplement thereto a material fact required to
be stated therein or necessary to make the statements therein not misleading;
except that the Company shall not be liable in any such case to the extent,
but only to the extent, that any such loss, claim, damage, or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by such
Optionholder or the holder of such Option Securities specifically for use in
the preparation of the Registration Statement, any Preliminary Prospectus,
the Effective Prospectus and the Final Prospectus or any amendment or
supplement thereto. This indemnity will be in addition to any liability
which the Company may otherwise have.
10.2. INDEMNIFICATION BY UNDERWRITERS. The Optionholders and the
holders of Option Securities agree that they, severally, but not jointly,
shall indemnify and hold harmless the Company, each other person referred to
in
8
subparts (1), (2) and (3) of Section 11(a) of the Act in respect of the
Registration Statement and each person, if any, who controls the Company
within the meaning of the Act, against any and all loss, claim, damage or
liability, joint or several (which shall, for all purposes of this Agreement
include, but not be limited to, all costs of defense and investigation and
all attorneys' fees), to which the Company may become subject under the Act
or otherwise, insofar as such loss, claim, damage, liability (or action in
respect thereto) arises out of or are based upon (a) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Effective Prospectus or the Final
Prospectus or any amendment or supplement thereto; or (b) the omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Effective Prospectus or the Final Prospectus or any amendment
or supplement thereto a material fact required to be stated therein or
necessary to make the statements therein not misleading; except that such
indemnification shall be available in each such case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon information and in
conformity with written information furnished to the Company by the
Optionholder or the holder of Option Securities specifically for use in the
preparation thereof. This indemnity will be in addition to any liability
which the Company may otherwise have.
10.3. RIGHT TO PROVIDE DEFENSE. Promptly after receipt by an
indemnified party under Section 10.1 or 10.2 above of written notice of the
commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
section, notify the indemnifying party in writing of the claim or the
commencement of that action; the failure to notify the indemnifying party
shall not relieve it of any liability which it may have to an indemnified
party, except to the extent that the indemnifying party did not otherwise
have knowledge of the commencement of the action and the indemnifying party's
ability to defend against the action was prejudiced by such failure. Such
failure shall not relieve the indemnifying party from any other liability
which it may have to the indemnified party. If any such claim or action
shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under such section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; except that ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ shall have the right to employ counsel to represent it and the other
Optionholders of holders of Option Securities who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by such
persons against the Company under such section if, in ▇▇▇▇▇▇▇ Davidson's
reasonable judgment, it is advisable for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and those
Optionholders or holders of Option Securities to be represented by separate
counsel, and in that event the fees and expenses of such separate counsel
shall be paid by the Company.
10.4. CONTRIBUTION. If the indemnification provided for in Sections
10.1 and 10.2 of this Agreement is unavailable or insufficient to hold
harmless an indemnified party, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages, or liabilities referred to in Sections 10.1 or 10.2
above (a) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Optionholders on the
other; or (b) if the allocation provided by clause (a) above is not permitted
by applicable law, in such proportion as is appropriate to reflect the
relative benefits referred to in clause (a) above but also the relative fault
of the Company on the one hand and the Optionholders on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Optionholders shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and un-itemized expenses
received by the Underwriters, in each case as set forth in the table on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether the untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
untrue statement or omission. For purposes of this Section 10.4, the term
"damages" shall include any counsel fees or other expenses reasonably
incurred by the Company or the Underwriters in connection with investigating
or defending any action or claim which is the subject of the contribution
provisions of this Section 10.4. No person adjudged guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it shall promptly
give
9
written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or
parties of any such service shall not relieve the party from whom
contribution may be sought from any obligation it may have hereunder or
otherwise (except as specifically provided in Section 10.4 hereof).
SECTION 11. RESTRICTIONS ON TRANSFER
11.1. RESTRICTIONS ON TRANSFER. This Option, the Option Securities,
and all other securities issued or issuable upon exercise of this Option, may
not be offered, sold or transferred, in whole or in part, except in
compliance with the Act, and except in compliance with all applicable state
securities laws. The Optionholder agrees that prior to making any disposition
of the Options, other than to persons or entities identified in Section 3.1,
the Optionholder shall give written notice to the Company describing briefly
the manner in which any such proposed disposition is to be made; and no such
disposition shall be made if the Company has notified the Optionholder that
in the opinion of counsel reasonably satisfactory to the Optionholder a
registration statement or other notification or post-effective amendment
thereto (hereinafter collectively a "Registration Statement") under the Act
is required with respect to such disposition and no such Registration
Statement has been filed by the Company with, and declared effective, if
necessary, by, the Commission.
11.2. RESTRICTIVE LEGEND. The Company may cause substantially the
following legends, or their equivalents, to be set forth on each certificate
representing the Options, the Option Securities, or any other security issued
or issuable upon exercise of this Option or the Option Securities, not
theretofore distributed to the public or sold to underwriters, as defined by
the Act, for distribution to the public pursuant to Section 8 above:
a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, EXCHANGED, HYPOTHECATED OR TRANSFERRED IN
ANY MANNER EXCEPT IN COMPLIANCE WITH THE AGREEMENT PURSUANT TO
WHICH THEY WERE ISSUED.
(b) Any legend required by applicable state securities laws.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legends (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Act"), or the securities
represented thereby) shall also bear the above legends unless, in the opinion
of the Company's counsel, the securities represented thereby need no longer
be subject to such restrictions.
SECTION 12. FRACTIONAL SHARES
No fractional Warrant shall be issued upon the exercise of all
or any part of this Option. In any case in which other than a full number of
Warrants would be issuable hereunder, the number of Warrants issuable shall
be rounded up to the next whole number.
SECTION 13. NO RIGHTS AS STOCKHOLDER; NOTICES TO OPTIONHOLDER
Nothing contained in this Agreement or in the Options shall be construed
as conferring upon the Optionholder or its transferees any rights as a
stockholder of the Company, including the right to vote, receive dividends,
consent or receive notices as a stockholder in respect to any meeting of
stockholders for the election of directors of the Company or any other
matter. The Company covenants, however, that for so long as this Option is
at least partially unexercised, it will furnish any Holder of this Option
with copies of all reports and communications furnished to the shareholders
of the Company. In addition, if at any time prior to the expiration of the
Options and prior to their exercise, any one or more of the following events
shall occur:
(a) Any action which would require an adjustment pursuant to
Section 4.1 (except subsections 4.1(e) and 4.1(h)) or 4.4; or
(b) A dissolution, liquidation, or winding up of the Company (other
than in connection with a consolidation, merger, or sale of its property,
assets, and business as an entirety or substantially as an entirety) shall be
proposed:
10
then the Company shall give notice in writing of such event to the
Optionholder, as provided in Section 16 hereof, at least 20 days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation, or
winding up. Such notice shall specify such record date or the date of
closing the transfer books, as the case may be. Failure to mail or receive
notice or any defect therein shall not affect the validity of any action
taken with respect thereto.
SECTION 14. CHARGES DUE UPON EXERCISE
The Company shall pay any and all issue or transfer taxes, including,
but not limited to, all federal or state taxes, that may be payable with
respect to the transfer of this Option or the issue or delivery of Option
Securities upon the exercise of this Option.
SECTION 15. OPTION SECURITIES TO BE FULLY PAID
The Company covenants that all Option Securities that may be issued and
delivered to a Holder of this Option upon the exercise of this Option and
payment of the Exercise Price will be, upon such delivery, validly and duly
issued, fully paid and nonassessable.
SECTION 16. NOTICES
Any notice pursuant to this Agreement by the Company or by an
Optionholder or a holder of Option Securities shall be in writing and shall
be deemed to have been duly given if delivered or mailed by certified mail,
return receipt requested:
(a) If to an Optionholder or a holder of Option Securities, addressed
to ▇▇▇▇▇▇▇ Davidson Securities Corporation, ▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; or
(b) If to the Company, addressed to it at ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
Each party may from time to time change the address to which notices to
it are to be delivered or mailed hereunder by notice in accordance herewith
to the other party.
SECTION 17. MERGER OR CONSOLIDATION OF THE COMPANY
The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another
corporation, unless the provisions of Section 4.4 are complied with.
SECTION 18. APPLICABLE LAW
This Option shall be governed by and construed in accordance with the
laws of the State of Oregon, and courts located in Oregon shall have
exclusive jurisdiction over all disputes arising hereunder.
SECTION 19. ARBITRATION
The Company and the Holder, and all subsequent Holders or holders of
Option Securities, agree to submit all controversies, claims, disputes and
matters of difference with respect to this Option, including, without
limitation, the application of this Section 19 to arbitration in Portland,
Oregon, according to the rules and practices of the American Arbitration
Association from time to time in force; provided, however, that if such rules
and practices conflict with the applicable procedures of Oregon courts of
general jurisdiction or any other provisions of Oregon law then in force,
those Oregon rules and provisions shall govern. This agreement to arbitrate
shall be specifically enforceable. Arbitration may proceed in the absence of
any party if notice of the proceeding has been given to that party. The
parties agree to abide by all awards rendered in any such proceeding. These
awards shall be final and binding on all parties to the extent and in the
manner provided by the rules of civil procedure enacted in Oregon. All
11
awards may be filed, as a basis of judgment and of the issuance of execution
for its collection, with the clerk of one or more courts, state or federal,
having jurisdiction over either the party against whom that award is rendered
or its property. No party shall be considered in default hereunder during
the pendency of arbitration proceedings relating to that default.
SECTION 20. MISCELLANEOUS PROVISIONS
(a) Subject to the terms and conditions contained herein, this Option
shall be binding on the Company and its successors and shall inure to the
benefit of the original Holder, its successors and assigns and all holders of
Option Securities and the exercise of this Option in full shall not
terminate the provisions of this Option as it relates to holders of Option
Securities.
(b) If the Company fails to perform any of its obligations hereunder,
it shall be liable to the Holder for all damages, costs and expenses
resulting from the failure, including, but not limited to, all reasonable
attorney's fees and disbursements.
(c) This Option cannot be changed or terminated or any performance or
condition waived in whole or in part except by an agreement in writing signed
by the party against whom enforcement of the change, termination or waiver is
sought; provided, however, that any provisions hereof may be amended, waived,
discharged or terminated upon the written consent of the Company and ▇▇▇▇▇▇▇
Davidson.
(d) If any provision of this Option shall be held to be invalid,
illegal or unenforceable, such provision shall be severed, enforced to the
extent possible, or modified in such a way as to make it enforceable, and the
invalidity, illegality or unenforceability shall not affect the remainder of
this Option.
(e) The Company agrees to execute such further agreements,
conveyances, certificates and other documents as may be reasonably requested
by the Holder to effectuate the intent and provisions of this Option.
(f) Paragraph headings used in this Option are for convenience only
and shall not be taken or construed to define or limit any of the terms or
provisions of this Option. Unless otherwise provided, or unless the context
shall otherwise require, the use of the singular shall include the plural and
the use of any gender shall include all genders.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed, all as of the day and year first above written.
FIRSTLINK COMMUNICATIONS, INC.
By:
------------------------------------
A. ▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇▇▇ DAVIDSON SECURITIES CORPORATION
By:
------------------------------------
12
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, EXCHANGED,
HYPOTHECATED OR TRANSFERRED IN ANY MANNER EXCEPT IN COMPLIANCE WITH THE
AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
Option Certificate No. RWO-
----
REPRESENTATIVE'S OPTIONS TO PURCHASE 100,000 WARRANTS
FIRSTLINK COMMUNICATIONS, INC.
INCORPORATED UNDER THE LAWS
OF THE STATE OF OREGON
This certifies that, for value received, , the
registered holder hereof or assigns (the "Optionholder"), is entitled to
purchase from FirstLink Communications, Inc. (the "Company"), at any time
during the period commencing at 9:00 a.m., Portland time, on at the
purchase price of $ per Warrant (the "Exercise Price"), the number of
Warrants of the Company set forth above (the "Warrants"). The number of
Warrants purchasable upon exercise of the Options evidenced hereby shall be
subject to adjustment from time to time as set forth in the
Representative's Option Agreement.
The Options evidenced hereby may be exercised in whole or in part by
presentation of this Option Certificate with the Purchase Form attached
hereto duly executed (with a signature guarantee as provided thereon) and
simultaneous payment of the Exercise Price at the principal office of the
Company. Payment of such price shall be made at the option of the
Optionholder in cash or by check.
The Options evidenced hereby represent the right to purchase an
aggregate of up to 100,000 Warrants and are issued under and in accordance
with an Representative's Option Agreement, dated as of , between the
Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Securities Corporation and are subject to the
terms and provisions contained in the Representative's Option Agreement, to
all of which the Optionholder by acceptance hereof consents.
Upon any partial exercise of the Options evidenced hereby, there shall
be signed and issued to the Optionholder a new Option Certificate in respect
of the Warrants as to which the Options evidenced hereby shall not have been
exercised. These Options may be exchanged at the office of the Company by
surrender of this Option Certificate properly endorsed for one or more new
Options of the same aggregate number of Warrants as here evidenced by the
Option or Options exchanged. No fractional Warrants will be issued upon the
exercise of rights to purchase hereunder, but the Company shall issue an
additional Warrant in lieu of a fractional Warrant if the fractional Warrant
otherwise issuable would be equivalent to one-half a Warrant or more. These
Options are transferable at the office of the Company in the manner and
subject to the limitations set forth in the Representative's Option Agreement.
This Option Certificate does not entitle any Optionholder to any of the
rights of a stockholder of the Company.
FIRSTLINK COMMUNICATIONS, INC.
Dated: By:
------------------------------------
A. ▇▇▇▇▇ ▇▇▇▇▇, President
[Seal]
Attest:
-----------------------------------
Secretary
NOTICE OF EXERCISE
(To be executed by a Holder desiring to exercise the right to purchase Warrants
pursuant to an Option.)
The undersigned Holder of a Option hereby
(a) irrevocably elects to exercise the Option to the extent of
purchasing _______________ Warrants;
(b) makes payment in full of the aggregate Exercise Price for those
Warrants in the amount of $_________________ by the delivery of certified funds
or a bank cashier's check in the amount of $_________________;
(c) requests that certificates evidencing the Warrants be issued in the
name of the undersigned, or, if the name and address of some other person is
specified below, in the name of such other person:
__________________________________________________________________________
(Name and address of person OTHER than the undersigned in whose name
Warrants are to be registered)
(d) requests, if the number of Warrants purchased are not all the
Warrants purchasable pursuant to the unexercised portion of the Option, that
a new Option of like tenor for the remaining Warrants purchasable pursuant to
the Option be issued and delivered to the undersigned at the address stated
below.
Dated:
-------------------- --------------------------------------------------
Signature((This signature must conform in all
respects to the name of the Holder as specified on
the face of the Option.)
--------------------------- -------------------------------------------------
Social Security Number Printed Name
or Employer ID Number Address:
------------------------------------
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned, __________________________________, hereby
sells, assigns and transfers unto:
Name: ----------------------------------------------------
(Please type or print in block letters)
Address: -----------------------------------------------
the right to purchase _________________ Warrants of FirstLink Communications,
Inc. (the "Company") pursuant to the terms and conditions of the Option held
by the undersigned. The undersigned hereby authorizes and directs the
Company (i) to issue and deliver to the above-named assignee at the above
address a new Option pursuant to which the rights to purchase being assigned
may be exercised, and (ii) if there are rights to purchase Warrants remaining
pursuant to the undersigned's Option after the assignment contemplated
herein, to issue and deliver to the undersigned at the address stated below a
new Option evidencing the right to purchase the number of Warrants remaining
after issuance and delivery of the Option to the above-named assignee.
Except for the number of Warrants purchasable, the new Options to be issued
and delivered by the Company are to contain the same terms and conditions as
the undersigned's Option. To complete the assignment contemplated by this
Assignment Form, the undersigned hereby irrevocably constitutes and appoints
____________________________________ as the undersigned's attorney-in-fact to
transfer the Options and the rights thereunder on the books of the Company
with full power of substitution for these purposes.
-------------------------------------------------
Signature (This signature must conform in all
respects to the name of the Holder as specified on
the face of the Option.)
-------------------------------------------------
Printed Name
Address:
-----------------------------------------
