WARRANT AGREEMENT
-------------------------
MULTI-LINK TELECOMMUNICATIONS, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.
WARRANT AGENT
_________________, 1999
WARRANT AGREEMENT
THIS AGREEMENT dated as of _______________, 1999, between MULTI-LINK
TELECOMMUNICATIONS, INC., a Colorado corporation (the "Company"), and AMERICAN
SECURITIES TRANSFER & TRUST, INC., a transfer agency located in Denver, Colorado
(the "Warrant Agent").
WHEREAS: The Company is conducting a public offering (the "Public
Offering") of 1,150,000 shares (the "Firm Shares") of Common Stock of the
Company ("Common Stock") and 1,150,000 warrants ("Firm Warrants"), two Warrants
entitling the Registered Owner thereof to purchase one share of Common Stock, or
an aggregate of 575,000 shares of Common Stock of the Company on exercise of all
Firm Warrants; and
The Company also is granting the several underwriters (the "Underwriters")
of the Company's Public Offering pursuant to an underwriting agreement (the
"Underwriting Agreement"), the option to purchase up to an additional 172,500
shares (the "Over-Allotment Shares") and 172,500 warrants (the "Over-Allotment
Warrants") exercisable to purchase up to an aggregate of 86,250 shares of Common
Stock; and
The Company desires to provide for the issuance, registration, transfer,
exchange and exercise of certificates (the "Warrant Certificates") representing
the Firm Warrants and the Over-Allotment Warrants (collectively, herein, the
"Warrants") and for the exercise of the Warrants;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth and for the purpose of defining the terms and provisions
of the Warrant Certificates and the Warrants, and the respective rights and
obligations thereunder of the Company, the registered holders of the Warrant
Certificates and the Warrant Agent, the parties hereto agree as follows:
1. Definitions. As used herein:
(a) "Common Stock" shall mean Common Stock, of the Company, whether
now or hereafter authorized, holders of which have the right to participate
in the distribution of earnings and assets of the Company without limit as
to amount or percentage.
(b) "Corporate Office" shall mean the place of business of the Warrant
Agent (or its successor) located in Denver, Colorado, which office is
presently located at 1825 Lawrence Street, Denver, Colorado 80202.
(c) "Effective Date" shall mean ___________________, 1999, the date on
which the Company's Registration Statement is declared effective by the
Securities and Exchange Commission.
(d) "Exercise Date" shall mean the date of surrender for exercise of
any Warrant Certificate, provided the exercise form on the back of the
Warrant Certificate or a form substantially similar thereto has been
completed in full by the Registered Owner or a duly appointed attorney and
the Warrant Certificate is accompanied by payment in full of the Exercise
Price.
(e) "Exercise Period" shall mean the period commencing on the
Effective Date and extending to and through the Expiration Date.
(f) "Exercise Price" shall mean a purchase price of $9.00 per share of
Common Stock (150% of the offering price for one Firm Share); provided,
however, that in the event the Company reduces the Exercise Price in
accordance with Section 9(i) hereof, the Exercise Price shall be as
established by the Company in accordance with such Section.
(g) "Expiration Date" shall mean 5:00 P.M. Mountain Time on the last
day of the 3 year period commencing on the Effective Date, subject to the
terms provided in Section 5 herein for redemption; provided however, if
such date shall be a holiday or a day on which banks are authorized to
close, then Expiration Date shall mean 5:00 p.m., Mountain Time on the next
following day which in the State of Colorado is not a holiday or a day on
which banks are authorized to close. If the Company redeems the Warrants as
provided in Section 5 of this Agreement, the Expiration Date shall be the
date fixed for redemption.
(h) "Firm Warrants" shall mean 1,150,000 Warrants to purchase 575,000
shares of Common Stock, all of which will be purchased by the several
Underwriters from the Company and sold in the Public Offering in accordance
with the Underwriting Agreement.
(i) "Over-Allotment Warrants" shall mean 172,500 Warrants to purchase
86,250 shares of Common Stock, any or all of which may be purchased by the
Representative for the several Underwriters from the Company in accordance
with the Underwriting Agreement. The Over-Allotment Warrants shall have
identical terms and conditions to those established for the Firm Warrants,
subject to their issuance in accordance with Section 2 hereof.
(j) "Representative" shall mean Schneider Securities, Inc., the
representative of the several Underwriters.
(k) "Registered Owner" shall mean the person in whose name any Warrant
Certificate shall be registered on the books maintained by the Warrant
Agent pursuant to Section 6 of this Agreement.
(l) "Registration Statement" shall mean the Company's Registration
Statement on Form SB-2 (S.E.C. File No. 333-____), as amended.
(m) "Subsidiary" shall mean any corporation of which shares having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (regardless of whether the shares of any other class or classes
of such corporation shall have or may have voting power by reason of the
happening of any contingency) are at the time directly or indirectly owned
by the Company or one or more subsidiaries of the Company.
(n) "Warrant" or the "Warrants" shall mean and include up to 1,322,500
Warrants to purchase 661,250 authorized and unissued Shares of Common Stock
of the Company and, unless otherwise noted, shall include 1,150,000 Firm
Warrants and 172,500 Over-Allotment Warrants.
(o) "Warrant Agent" shall mean American Securities Transfer & Trust,
Inc., or its successor, as the transfer agent and registrar of the
Warrants.
(p) "Warrant Shares" shall mean and include up to 661,250 authorized
and unissued shares of Common Stock reserved for issuance on exercise of
the Warrants, and unless otherwise noted, shall include 575,000 shares of
Common Stock issuable upon exercise of the Firm Warrants and 86,250 shares
of Common Stock issuable upon exercise of the Over-Allotment Warrants and
any additional shares of Common Stock or other property which may hereafter
be issuable or deliverable on exercise of the Warrants pursuant to Section
9 of this Agreement.
2. Warrants and Issuance of Warrant Certificates. Each two Warrants shall
initially entitle the Registered Owner of the Warrant Certificates representing
such Warrants to purchase one share of Common Stock on exercise thereof, subject
to modification and adjustment as hereinafter provided in Section 9. Warrant
Certificates representing 1,150,000 Firm Warrants and evidencing the right to
purchase an aggregate of 575,000 shares of Common Stock of the Company shall be
executed by the proper officers of the Company and delivered to the Warrant
Agent for countersignature. Certificates representing the Firm Warrants to be
delivered to the Warrant Agent shall be in direct relation to the Firm Shares
sold in the Company's Public Offering and shall be attached to certificates
representing an equal number of Firm Shares. The Warrant Certificates
representing the Firm Warrants will be issued and delivered on written order of
the Company signed by the proper officers of the Company. The Warrant Agent
shall deliver Warrant Certificates in required whole number denominations to the
persons entitled thereto in connection with any transfer or exchange permitted
under this Agreement.
The Over-Allotment Warrants shall carry identical terms and conditions to
those established for the Firm Warrants and outlined herein. Up to 172,500
Over-Allotment Warrants may be issued and such Over-Allotment Warrants shall
evidence the right of the Registered Owners thereof to purchase an aggregate of
up to 86,250 shares of Common Stock of the Company. Any Warrant Certificates for
Over-Allotment Warrants to be issued will be issued and delivered on written
order of the Company signed by the proper officers of the Company on exercise of
the option to purchase Over-Allotment Warrants by the several Underwriters in
accordance with the Underwriting Agreement. Certificates representing
Over-Allotment Warrants will be initially attached to certificates representing
an equal number of Over-Allotment Shares.
Except as provided in Section 8 hereof, share certificates representing the
Warrant Shares shall be issued only on or after the Exercise Date on exercise of
the Warrants or on transfer or exchange of the Warrant Shares. The Warrant
Agent, if other than the Company's Transfer Agent, shall arrange with the
Transfer Agent for the issuance and registration of all Warrant Shares.
3. Form and Execution of Warrant Certificates. The Warrant Certificates
shall be substantially in the form attached as Exhibit "A" and may have such
letters, numbers or other marks of identification and such legends, summaries or
endorsements printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement.
The Warrant Certificates shall be dated as of the date of issuance, whether on
initial issuance, transfer, exchange or in lieu of mutilated, lost, stolen or
destroyed Warrant Certificates.
Each Warrant Certificate for Firm Warrants shall be initially issued only
when attached to a certificate representing an equal number of Firm Shares of
Common Stock as Firm Warrants and shall be separately transferable from the
certificate representing Firm Shares immediately upon issuance. Warrant
Certificates issued for Over-Allotment Warrants shall be issued together with
certificates representing an equal number of shares of Common Stock as
Over-Allotment Warrants.
The Warrant Certificates shall be executed on behalf of the Company by its
duly authorized officers, by manual signatures or by facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of the Company's
seal. The Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. In the
event any officer of the Company who executed the Warrant Certificates shall
cease to be an officer of the Company before the date of issuance of the Warrant
Certificates or before countersignature and delivery by the Warrant Agent, such
Warrant Certificates may be countersigned, issued and delivered by the Warrant
Agent with the same force and effect as though the person who signed such
Warrant Certificates had not ceased to be an officer of the Company.
4. Exercise. The exercise of Warrants in accordance with this Agreement
shall only be permitted during the Exercise Period.
Warrants shall be deemed to have been exercised immediately prior to the
close of business on the Exercise Date. The exercise form shall be executed by
the Registered Owner thereof or the Registered Owner's attorney duly authorized
in writing and shall be delivered together with payment to the Warrant Agent, in
cash or by official bank or certified check, of an amount in lawful money of the
United States of America. Such payment shall be in an amount equal to the
Exercise Price as hereinabove defined.
The person entitled to receive the number of Warrant Shares deliverable on
such exercise shall be treated for all purposes as the Registered Owner of such
Warrant Shares as of the close of business on the Exercise Date. The Company
shall not be obligated to issue any fractional share interests in Warrant
Shares. If Warrants represented by more than one Warrant Certificate shall be
exercised at one time by the same Registered Owner, the number of full Warrant
Shares which shall be issuable on exercise thereof shall be computed on the
basis of the aggregate number of full Warrant Shares issuable on such exercise.
As soon as practicable on or after the Exercise Date and in any event
within 30 days after such date, the Warrant Agent shall cause to be issued and
delivered by the Transfer Agent to the person or persons entitled to receive the
same, a certificate or certificates for the number of Warrant Shares deliverable
on such exercise. No adjustment shall be made in respect of cash dividends on
Warrant Shares deliverable on exercise of any Warrant. The Warrant Agent shall
promptly notify the Company in writing of any exercise and of the number of
Warrant Shares caused to be delivered and shall cause payment of an amount in
cash equal to the Exercise Price to be made promptly to the order of the
Company. The parties contemplate such payments will be made by the Warrant Agent
to the Company on a weekly basis and will consist of collected funds only. The
Warrant Agent shall hold any proceeds collected and not yet paid to the Company
in a Federally-insured escrow account at a commercial bank selected by agreement
of the Company and the Warrant Agent, at all times relevant hereto. Following a
determination by the Warrant Agent that collected funds have been received, the
Warrant Agent shall cause the Transfer Agent to issue share certificates
representing the number of Warrant Shares purchased by the Registered Owner.
Expenses incurred by the Warrant Agent, including administrative costs, and
the standard fees imposed by the Warrant Agent for the Warrant Agent's services,
shall be paid by the Company and shall be deducted from the Escrow Account prior
to distribution of funds to the Company.
A detailed accounting statement setting forth the number of Warrants
exercised, the number of Warrant Shares issued, the net amount of exercised
funds and all expenses incurred by the Warrant Agent shall be transmitted to the
Company on payment of each exercise amount. Such accounting statement shall
serve as an interim accounting for the Company during the Exercise Period. The
Warrant Agent shall render to the Company, at the completion of the Exercise
Period, a complete accounting setting forth the number of Warrants exercised,
the identity of persons exercising such Warrants, the number of Warrant Shares
issued, the amounts distributed to the Company, and all expenses incurred by the
Warrant Agent.
The Company may be required to deliver a prospectus that satisfies the
requirements of Section 10 of the Securities Act of 1933, as amended (the "1933
Act") with delivery of the Warrant Shares and must have a registration statement
(or a post-effective amendment to an existing registration statement) effective
under the 1933 Act in order for the Company to comply with any such prospectus
delivery requirements. The Company will advise the Warrant Agent of the status
of any such registration statement under the 1933 Act and of the effectiveness
of the Company's registration statement or lapse of effectiveness.
No issuance of Warrant Shares shall be made unless there is an effective
registration statement under the 1933 Act, and registration or qualification of
the Warrant Shares, or an exemption therefrom, has been obtained from state or
other regulatory authorities in the jurisdiction in which such Warrant Shares
are sold. The Company will provide to the Warrant Agent written confirmation of
all such registration or qualification, or an exemption therefrom, when
requested by the Warrant Agent.
5. Redemption. Commencing one year from the Effective Date, the Company
may, at its option, redeem the Warrants in whole, but not in part, for a
redemption price of $.05 per Warrant, on not less than 30 days' notice to the
Registered Owners. The right to redeem the Warrants may be exercised by the
Company following such one year period and during the Exercise Period only in
the event (i) the closing bid price for Company's shares of Common Stock has
equaled or exceeded $11.25 (125% of the Warrant Exercise Price) for 20
consecutive trading days, (ii) any notice of the call for redemption is given
not more than five (5) business days after the conclusion of the 20 consecutive
trading days referred to in the foregoing (i), (iii) the Company has a
registration statement (or a post-effective amendment to an existing
registration statement) pertaining to the Warrant Shares effective with the
Securities and Exchange Commission, which registration statement would enable a
Registered Owner to exercise the Warrants, and (iv) the expiration of the 30 day
notice period is within the Exercise Period. In the event the Company exercises
its right to redeem the Warrants, the Expiration Date will be deemed to be, and
the Warrants will be exercisable until the close of business on, the date fixed
for redemption in such notice. If any Warrant called for redemption is not
exercised by such time, it will cease to be exercisable and the Registered Owner
thereof will be entitled only to the redemption price
6. Reservation of Shares and Payment of Taxes. The Company covenants that
it will at all times reserve and have available from its authorized shares of
Common Stock such number of shares of Common Stock as shall then be issuable on
exercise of all outstanding Warrants. The Company covenants that all Warrant
Shares issuable shall be duly and validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issue thereof.
The Registered Owner shall pay all documentary, stamp or similar taxes and
other government charges that may be imposed with respect to the issuance of the
Warrants, or the issuance, transfer or delivery of any Warrant Shares on
exercise of the Warrants. In the event the Warrant Shares are to be delivered in
a name other than the name of the Registered Owner of the Warrant Certificates,
no such delivery shall be made unless the person requesting the same has paid to
the Warrant Agent or Transfer Agent the amount of any such taxes or charges
incident thereto.
The Company will supply the Warrant Agent with blank Warrant Certificates,
so as to maintain an inventory satisfactory to the Warrant Agent. The Company
will file with the Warrant Agent a statement setting forth the name and address
of its Transfer Agent for Warrant Shares and of each successor Transfer Agent,
if any.
7. Registration of Transfer. The Warrant Certificates may be transferred in
whole or in part and may be separately transferred from the Common Stock share
certificate to which such Warrant Certificate is attached upon initial issuance,
if any, at any time during the Exercise Period. Warrant Certificates to be
exchanged shall be surrendered to the Warrant Agent at its corporate office. The
Company shall execute and the Warrant Agent shall countersign, issue and deliver
in exchange therefor, the Warrant Certificate or Certificates which the holder
making the transfer shall be entitled to receive.
The Warrant Agent shall keep transfer books at its corporate office on
which Warrant Certificates and the transfer thereof shall be registered. On due
presentment for registration of transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and deliver
to the transferee or transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
All Warrant Certificates presented for registration of transfer or exercise
shall be duly endorsed or be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Company and the Warrant Agent.
Prior to due presentment for registration of transfer thereof, the
Company and the Warrant Agent may treat the Registered Owner of any Warrant
Certificate as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the Company or the
Warrant Agent) and the parties hereto shall not be affected by any notice to the
contrary.
8. Loss or Mutilation. On receipt by the Company and the Warrant Agent of
evidence satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of any Warrant Certificate, the Company shall execute and the Warrant
Agent shall countersign and deliver in lieu thereof, a new Warrant Certificate
representing an equal aggregate number of Warrants. In the case of loss, theft
or destruction of any Warrant Certificate, the Registered Owner requesting
issuance of a new Warrant Certificate shall be required to secure an indemnity
bond from an approved surety bonding company in favor of the Company and Warrant
Agent in an amount satisfactory to each of them. In the event a Warrant
Certificate is mutilated, such Certificate shall be surrendered and cancelled by
the Warrant Agent prior to delivery of a new Warrant Certificate. Applicants for
a substitute Warrant Certificate shall also comply with such other regulations
and pay such other reasonable charges as the Company may prescribe.
9. Adjustment of Exercise Price and Shares.
(a) If at any time prior to the expiration of the Warrants by their
terms or by exercise, the Company increases or decreases the number of its
issued and outstanding shares of Common Stock, or changes in any way the
rights and privileges of such shares of Common Stock, by means of (i) the
payment of a share dividend or the making of any other distribution on such
shares of Common Stock payable in its shares of Common Stock, (ii) a split
or subdivision of shares of Common Stock, or (iii) a consolidation or
combination of shares of Common Stock, then the Exercise Price in effect at
the time of such action and the number of Warrants required to purchase
each Warrant Share at that time shall be proportionately adjusted so that
the numbers, rights and privileges relating to the Warrant Shares then
purchasable upon the exercise of the Warrants shall be increased, decreased
or changed in like manner, for the same aggregate purchase price set forth
in the Warrants, as if the Warrant Shares purchasable upon the exercise of
the Warrants immediately prior to the event had been issued, outstanding,
fully paid and nonassessable at the time of that event. Any dividend paid
or distributed on the shares of Common Stock in shares of any other class
of shares of the Company or securities convertible into shares of Common
Stock shall be treated as a dividend paid in shares of Common Stock to the
extent shares of Common Stock are issuable on the payment or conversion
thereof.
(b) In the event, prior to the expiration of the Warrants by exercise
or by their terms, the Company shall be recapitalized by reclassifying its
outstanding shares of Common Stock into shares with a different par value,
or by changing its outstanding shares of Common Stock to shares without par
value or in the event of any other material change in the capital structure
of the Company or of any successor corporation by reason of any
reclassification, recapitalization or conveyance, prompt, proportionate,
equitable, lawful and adequate provision shall be made whereby any
Registered Owner of the Warrants shall thereafter have the right to
purchase, on the basis and the terms and conditions specified in this
Agreement, in lieu of the Warrant Shares theretofore purchasable on the
exercise of any Warrant, such securities or assets as may be issued or
payable with respect to or in exchange for the number of Warrant Shares
theretofore purchasable on exercise of the Warrants had such
reclassification, recapitalization or conveyance not taken place; and in
any such event, the rights of any Registered Owner of a Warrant to any
adjustment in the number of Warrant Shares purchasable on exercise of such
Warrant, as set forth above, shall continue and be preserved in respect of
any stock, securities or assets which the Registered Owner becomes entitled
to purchase.
(c) In the event the Company, at any time while the Warrants shall
remain unexpired and unexercised, shall sell all or substantially all of
its property, or dissolves, liquidates or winds up its affairs, prompt,
proportionate, equitable, lawful and adequate provision shall be made as
part of the terms of such sale, dissolution, liquidation or winding up such
that the Registered Owner of a Warrant may thereafter receive, on exercise
thereof, in lieu of each Warrant Share which the Registered Owner would
have been entitled to receive, the same kind and amount of any stock,
securities or assets as may be issuable, distributable or payable on any
such sale, dissolution, liquidation or winding up with respect to each
share of Common Stock of the Company; provided, however, that in the event
of any such sale, dissolution, liquidation or winding up, the right to
exercise the Warrants shall terminate on a date fixed by the Company, such
date to be not earlier than 5:00 P.M., Mountain Time, on the 30th day next
succeeding the date on which notice of such termination of the right to
exercise the Warrants has been given by mail to the Registered Owners
thereof at such addresses as may appear on the books of the Company.
(d) In the event prior to the expiration of the Warrants by exercise
or by their terms, the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to purchase its shares of
Common Stock at a price per share more than 10% below the then-current
market price per share (as defined below) at the date of taking such
record, then, (i) the number of Warrant Shares purchasable pursuant to the
Warrants shall be redetermined as follows: the number of Warrant Shares
purchasable pursuant to a Warrant immediately prior to such adjustment
(taking into account fractional interests to the nearest 1,000th of a
share) shall be multiplied by a fraction, the numerator of which shall be
the number of shares of Common Stock of the Company outstanding (excluding
shares of Common Stock then owned by the Company) immediately prior to the
taking of such record, plus the number of additional shares offered for
purchase, and the denominator of which shall be the number of shares of
Common Stock of the Company outstanding (excluding shares of Common Stock
owned by the Company) immediately prior to the taking of such record, plus
the number of shares which the aggregate offering price of the total number
of additional shares so offered would purchase at such current market
price; and (ii) the Exercise Price per Warrant Share purchasable pursuant
to a Warrant shall be redetermined as follows: the Exercise Price in effect
immediately prior to the taking of such record shall be multiplied by a
fraction, the numerator of which is the number of Warrant Shares
purchasable immediately prior to the taking of such record, and the
denominator of which is the number of Warrant Shares purchasable
immediately after the taking of such record as determined pursuant to
clause (i) above; provided, however, (i) that any adjustment in the number
of shares issuable as set forth above shall be effective only to the extent
sufficient shares of Common Stock have bee registered through a
registration statement effective under the 1933 Act, and (ii) that any
adjustment in the Exercise Price does not cause the Company to receive
proceeds in excess of the amount authorized by any such registration
statement. For the purpose hereof, the current market price per share at
any date shall be determined as follows:
(i) If the Common Stock is listed on the New York Stock Exchange,
the American Stock Exchange or such other securities exchange
designated by the Board of Directors of the Company, or admitted to
unlisted trading privileges on any such exchange, or if the Common
Stock is quoted on a National Association of Securities Dealers, Inc.
system that reports closing prices, the current market price shall be
the average of the closing prices of the Common Stock as reported by
such exchange or system for 10 consecutive business days commencing 30
business days prior to the record date;
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges or so quoted, the current market price shall be the
average of the last reported highest bid and the lowest asked prices
quoted on the National Association of Securities Dealers, Inc.
Automated Quotations System or, if not so quoted, then by the National
Quotation Bureau, Inc. for 10 consecutive business days commencing 30
business days prior to the record date; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges or so quoted, and bid and asked prices are
not reported, the current market price shall be determined in such
reasonable manner as may be prescribed by the Board of Directors.
(e) On exercise of the Warrants by the Registered Owners, the Company
shall not be required to deliver fractions of Warrant Shares; provided,
however, that the Company shall make prompt, proportionate, equitable,
lawful and adequate provisions in respect of any such fraction of one
Warrant Share either on the basis of adjustment in the then applicable
Exercise Price or a purchase of the fractional interest at the price of the
Company's shares of Common Stock or such other reasonable basis as the
Company may determine.
(f) In the event, prior to expiration of the Warrants by exercise or
by their terms, the Company shall determine to take a record of the holders
of its shares of Common Stock for the purpose of determining shareholders
entitled to receive any stock dividend, distribution or other right which
will cause any change or adjustment in the number, amount, price or nature
of the shares of Common Stock or other stock, securities or assets
deliverable on exercise of the Warrants pursuant to the foregoing
provisions, the Company shall give to the Registered Owners of the Warrants
at the addresses as may appear on the books of the Company at least 30
days' prior written notice to the effect that it intends to take such a
record. Such notice shall specify the date as of which such record is to be
taken; the purpose for which such record is to be taken; and the number,
amount, price and nature of the shares of Common Stock or other stock,
securities or assets which will be deliverable o exercise of the Warrants
after the action for which such record will be taken has been completed.
Without limiting the obligation of the Company to provide notice to the
Registered Owners of the Warrants of any corporate action hereunder, the
failure of the Company to give notice shall not invalidate such corporate
action of the Company.
(g) The Warrants shall not entitle the Registered Owner thereof to any
of the rights of shareholders or to any dividend declared on the shares of
Common Stock unless the Warrant is exercised and the Warrant Shares
purchased prior to the record date fixed by the Board of Directors of the
Company for the determination of holders of shares of Common Stock entitled
to such dividend or other right.
(h) On and after ____________, 2000, the Company shall be empowered,
in the sole and unconditional discretion of the Board of Directors, at any
time during the Exercise Period, to reduce the applicable Exercise Price of
the Warrants. Prior to _____________, 2000, the Company may reduce the
applicable Exercise Price of the Warrants only with the prior written
consent of the Representative. Any reduction in the applicable Exercise
Price shall be effective upon written notice to the Warrant Agent, which
notice shall be given pursuant to a duly and validly authorized resolution
of the Board of Directors of the Company. Any such reduction in the
Exercise Price shall not entitle the Registered Owners to issuance of any
additional Common Shares pursuant to the adjustment provisions set forth
elsewhere herein, regardless of whether the reduction in the Exercise Price
was effected either prior to or following exercise of Warrants by the
Registered Owners thereof. A nonexercising Registered Owner shall have no
remedy or rights to receive any additional Warrant Shares as a result of
any reduction in any applicable Exercise Price pursuant to this subsection.
10. Duties, Compensation and Termination of Warrant Agent. The Warrant
Agent shall act hereunder as agent and in a ministerial capacity for the
Company, and its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not, by issuing and delivering Warrant Certificates or by
any other act hereunder, be deemed to make any representations as to the
validity, value or authorization of the Warrant Certificate or the Warrants
represented thereby or of the Warrant Shares or other property delivered on
exercise of any Warrant. The Warrant Agent shall not be under any duty or
responsibility to any holder of the Warrant Certificates to make or cause to be
made any adjustment of the Exercise Price or to determine whether any fact
exists which may require any such adjustment.
The Warrant Agent shall not (i) be liable for any recital or statement of
fact contained herein or for any action taken or omitted by it in reliance on
any Warrant Certificate or other document or instrument believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties, (ii) be responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in this Agreement or
in the Warrant Certificates, or (iii) be liable for any act or omission in
connection with this Agreement except for its own negligence or willful
misconduct.
The Warrant Agent may at any time consult with counsel satisfactory to it
(who may be counsel for the Company) and shall incur no liability or
responsibility for any action taken or omitted by it in good faith in accordance
with the opinion or advice of such counsel.
Any notice, statement, instruction, request, direction, order or demand of
the Company shall be sufficiently evidenced by an instrument signed by an
officer of the Company. The Warrant Agent shall not be liable for any action
taken or omitted by it in accordance with such notice, statement, instruction,
request, direction, order or demand.
The Company agrees to pay the Warrant Agent reasonable compensation for its
services hereunder and to reimburse the Warrant Agent for its reasonable
expenses. The Company further agrees to indemnify the Warrant Agent against any
and all losses, expenses and liabilities, including judgments, costs and counsel
fees, for any action taken or omitted by the Warrant Agent in the execution of
its duties and powers hereunder, excepting losses, expenses and liabilities
arising as a result of the Warrant Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may terminate the
Warrant Agent and the Warrant Agent shall be discharged from all further duties
and liabilities hereunder (except liabilities arising as a result of the Warrant
Agent's own negligence or willful misconduct) on 30 days' prior written notice
to the other party. Upon notice by the Company to the Warrant Agent, the Warrant
Agent shall cause a copy of such notice of resignation to be mailed to the
Registered Owner of each Warrant Certificate. The expenses the Warrant Agent
incurs in mailing such notice shall be paid by the Company. On such resignation
or termination, the Company shall appoint a new Warrant Agent. If the Company
shall fail to make such appointment within a period of 30 days after it has been
notified in writing of the resignation by the Warrant Agent, then the Registered
Owner of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. Any new Warrant Agent,
whether appointed by the Company or by such court, shall be a bank or trust
company having a capital and surplus, as shown by its last published report to
its shareholders, of not less than $1,000,000, and having its principal office
in the United States.
After acceptance in writing of an appointment of a new Warrant Agent is
received by the Company, such new Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance, conveyance, act or
deed; provided, however, if it shall be necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Company and shall be legally and validly executed. The
Company shall file a notice of appointment of a new Warrant Agent with the
resigning Warrant Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Owner of each Warrant Certificate.
Any corporation into which the Warrant Agent or any new Warrant Agent may
be converted or merged, or any corporation resulting from any consolidation to
which the Warrant Agent or any new Warrant Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Warrant Agent
shall be a successor Warrant Agent under this Agreement, provided that such
corporation is eligible for appointment as a successor to the Warrant Agent. Any
such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed to the Company and to the Registered Owner of each
Warrant Certificate. No further action shall be required for establishment and
authorization of such successor Warrant Agent.
The Warrant Agent, its officers or directors and it subsidiaries or
affiliates may buy, hold or sell Warrants or other securities of the Company and
otherwise deal with the Company in the same manner and to the same extent and
with like effect as though it were not the Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for the Company.
11. Modification of Agreement. The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in this Agreement they
shall deem appropriate to cure any ambiguity or to correct any defective or
inconsistent provision or mistake or error herein contained. Additionally, the
parties may make any changes or corrections deemed necessary which shall not
adversely affect the interests of the Registered Owners of Warrant Certificates;
provided, however, this Agreement shall not otherwise be modified, supplemented
or altered in any respect except with the consent in writing of the Registered
Owners of Warrant Certificates representing not less than a majority of the
Warrants outstanding. Additionally, no change in the number or nature of the
Warrant Shares purchasable on exercise of a Warrant or the Exercise Price
therefor shall be made without the consent in writing of the Registered Owner of
the Warrant Certificate representing such Warrant, other than such changes as
are specifically prescribed by this Agreement.
12. Notices. All notices, demands, elections, opinions or requests (however
characterized or described) required or authorized hereunder shall be deemed
given sufficiently in writing and sent by registered or certified mail, return
receipt requested and postage prepaid, or by tested telex, telegram or cable to:
in the case of the Company:
Multi-Link Telecommunications, Inc.
and in the case of the Warrant Agent:
American Securities Transfer & Trust, Inc.
1825 Lawrence Street, Suite 444
Denver, Colorado 80202
with a copy to:
Thomas S. Smith, Esq.
Smith McCullough, P.C.
4643 South Ulster Street, Suite 900
Denver, Colorado 80237
and, if requested by the Company to the Registered Owner of a Warrant
Certificate, at the address of such Registered Owner as set forth on the books
maintained by the Warrant Agent.
13. Persons Benefiting. This Agreement shall be binding upon and inure to
the benefit of the Company, the Warrant Agent and their respective successors
and assigns, and the Registered Owners and beneficial owners from time to time
of the Warrant Certificates. Nothing in this Agreement is intended or shall be
construed to confer on any other person any right, remedy or claim or to impose
on any other person any duty, liability or obligation.
14. Further Instruments. The parties shall execute and deliver any and all
such other instruments and shall take any and all such other actions as may be
reasonable or necessary to carry out the intention of this Agreement.
15. Severability. If any provision of this Agreement shall be held,
declared or pronounced void, voidable, invalid, unenforceable or inoperative for
any reason by any court of competent jurisdiction, government authority or
otherwise, such holding, declaration or pronouncement shall not affect adversely
any other provision of this Agreement, which shall otherwise remain in full
force and effect and be enforced in accordance with its terms, and the effect of
such holding, declaration or pronouncement shall be limited to the territory or
jurisdiction in which made.
16. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and remedies as
provided by law. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to any act or
occurrence shall not be deemed to be a consent to any other action or
occurrence.
17. General Provisions. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Colorado. Except as
otherwise expressly stated herein, time is of the essence in performing
hereunder. This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof, and this Agreement may not be modified or
amended or any term or provision hereof waived or discharged except in writing
signed by the party against whom such amendment, modification, waiver or
discharge is sought to be enforced. The headings of this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning thereof. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above mentioned.
THE COMPANY:
MULTI-LINK TELECOMMUNICATIONS, INC.
(CORPORATE SEAL)
By: /s/ Nigel Alexander
-----------------------------------
Nigel Alexander, Managing Director
ATTEST:
/s/
- ---------------------------------------
, Secretary
THE WARRANT AGENT:
AMERICAN SECURITIES TRANSFER & TRUST,
INC.
By: /s/
------------------------------------
Title: /s/
----------------------------------
ATTEST:
/s/
- ----------------------------------------
, Secretary