THE REPRESENTATIVE'S OPTIONS REPRESENTED BY THIS CERTIFICATE AND THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES UNDER THE
SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER, NEITHER THE
REPRESENTATIVE'S OPTIONS NOR SUCH SECURITIES MAY BE SOLD, TRANSFERRED,
PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT
TO SUCH REGISTRATION STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT
UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
UNDER THE APPLICABLE BLUE SKY LAWS.
THIS REPRESENTATIVE'S OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
EXCEPT AS OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS REPRESENTATIVE'S
OPTION, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR
ASSIGN THIS REPRESENTATIVE'S OPTION EXCEPT AS OTHERWISE PROVIDED HEREIN.
MULTI-LINK TELECOMMUNICATIONS, INC.
Representative's Option for the Purchase of Units
No. UWW-001 115,000 Representative's Options
THIS CERTIFIES that, for receipt in hand of $100 and other value received,,
SCHNEIDER SECURITIES, INC. (the "Holder"), is entitled to subscribe for and
purchase from MULTI-LINK TELECOMMUNICATIONS, INC., a Colorado corporation (the
"Company"), upon the terms and conditions set forth herein, at any time, or from
time to time, after __________, 2000 (12 months from the Effective Date, as
defined below) and before 5:00 p.m. Mountain time on _____, 2004 (the "Exercise
Period"), 115,000 Units (a "Unit" or the "Units") of the Company at an exercise
price of $_____ per Representative's Option or 120% of the offering price (the
"Purchase Price") of Units sold by the Company in the Public Offering
(hereinafter defined). Each Unit shall be identical to the Units sold in the
public offering to be underwritten by the Holder (the "Public Offering") and
shall consist of one share of Common Stock ("Common Stock") and one warrant
("Warrant"). Two Warrants shall be exercisable to purchase one share of Common
Stock (a "Warrant Share") at a price of $9.00 (150% of the exercise price of the
Units sold in the Public Offering; the "Exercise Price") until ______, 2002,
which is three years from the date on which the Company's Registration Statement
on Form SB-2, Registration No. 333-______ (the "Registration Statement") was
declared effective by the Securities and Exchange Commission (the "Effective
Date"). The terms and provisions of the Warrants, except with respect to
redemption, shall be governed by a warrant agreement between the Company and its
transfer agent (the "Warrant Agreement"). The term the "Holder" as used herein
shall include any transferee to whom this Representative's Option has been
transferred in accordance with the above. As used herein the term "this
Representative's Option" shall mean and include this Representative's Option and
any Representative's Option or Representative's Options hereafter issued as a
consequence of the exercise or transfer of this Representative's Option in whole
or in part, and the term "Common Stock" shall mean and include the Company's
Common Stock with ordinary voting power, which class at the date hereof is
publicly traded.
1. This Representative's Option may not be sold, transferred, assigned,
pledged or hypothecated until _______, 2000 (12 months from the Effective Date
of the Registration Statement) except that it may be transferred, in whole or in
part, (i) to one or more officers, employees or partners of the Holder (or the
officers, employees or partners of any such partner); (ii) to a member of the
underwriting syndicate and/or its officers, employees or partners; or (iii) by
operation of law. Notwithstanding any language to the contrary elsewhere herein,
in the event of transfer of this Representative's Warrant, the transferee agrees
that he, she or it will, upon receipt hereof, exercise this Representative's
Warrant not more than 72 hours after completion of such transfer. After ____,
2000, this Representative's Option may be sold, transferred, assigned or
hypothecated in accordance with applicable law.
2. a. This Representative's Option may be exercised during the
Exercise Period as to the whole or any lesser number of Units, by the
surrender of this Representative's Option (with the election attached
hereto duly executed) to the Company at its office at 811 Lincoln
Street, Fifth Floor, Denver, Colorado 80203, or such other place as is
designated in writing by the Company, together with a certified or
bank cashier's check payable to the order of the Company in an amount
equal to the Purchase Price.
b. Upon written request of the Holder, and in lieu of payment
for the Units by check in accordance with paragraph 2(a) hereof, the
Holder may exercise this Representative's Option (or any portion
thereof) for and receive the number of Units equal to a fraction, the
numerator of which equals: (i) the amount by which the combined average
closing bid price of the Common Stock and the Warrants (or the closing
bid price of the Units if quoted as such) for the ten (10) trading days
preceding the date of exercise (the "Current Market Price" as further
defined below) exceeds the Purchase Price per Unit multiplied by, (ii)
the number of Units to be purchased; the denominator of which equals
the Current Market Price. Following exercise of this Representative's
Option, and at anytime thereafter through and until expiration of the
Warrants, the Holder may exercise the Warrants underlying this
Representative's Option by tendering a notice of exercise, together
with a certified or bank cashier's check payable to the order of the
Company, in an amount equal to the Exercise Price multiplied by the
number of Warrant Shares as to which such exercise relates.
c. Upon written request of the Holder, and in lieu of payment
of the Exercise Price of the Warrants by check in accordance with
paragraph 2(b) hereof, the Holder may exercise the Warrants (or any
portion thereof) for and receive the number of Warrants equal to a
fraction, the numerator of which equals (i) the amount by which the
Current Market Price of the Common Stock for the ten (10) trading days
preceding the date of exercise exceeds the Exercise Price per Warrant,
multiplied by (ii) the number of Warrant Shares to be purchased; the
denominator of which equals the Current Market Price.
d. For the purposes of any computation under this
Representative's Option, the "Current Market Price" at any date shall
be the closing price of the Common Stock and/or Warrants, as the case
may be, on the business day next preceding the event requiring an
adjustment or calculation hereunder. If the principal trading market
for such securities is an exchange, the closing price shall be the
reported last sale price on such exchange on such day provided if
trading of such Common Stock and/or Warrants, as the case may be, is
listed on any consolidated tape, the closing price shall be the
reported last sale price set forth on such consolidated tape. If the
principal trading market for such securities is the over-the-counter
market, the closing price shall be the last reported sale price on such
date as set forth by The Nasdaq Stock Market, Inc., or, if the security
is not quoted on such market, the average closing bid and asked prices
as set forth in the National Quotation Bureau pink sheets or the
Electronic Bulletin Board System for such day. Notwithstanding the
foregoing, if there is no reported last sale price or average closing
bid and asked prices, as the case may be, on a date prior to the event
requiring an adjustment or calculation hereunder, then the Current
Market Price shall be determined as of the latest date prior to such
day for which such last sale price or average closing bid and asked
price is available.
2
3. Upon each exercise of this Representative's Option, the Holder shall be
deemed to be the holder of record of the Common Stock and Warrants comprising
the Units issuable upon such exercise, notwithstanding that the transfer books
of the Company shall then be closed or certificates representing such Warrants
shall not then have been actually delivered to the Holder. As soon as
practicable after each such exercise of this Representative's Option, the
Company shall issue and deliver to the Holder a certificate or certificates for
the Common Stock and Warrants issuable upon such exercise, registered in the
name of the Holder or its designee. If this Representative's Option should be
exercised in part only, the Company shall, upon surrender of this
Representative's Option for cancellation, execute and deliver a new
Representative's Option evidencing the right of the Holder to purchase the
balance of the Units (or portions thereof) subject to purchase hereunder.
4. Any options issued upon the transfer or exercise in part of this
Representative's Option (together with this Representative's Option, the
"Representative's Options") shall be numbered and shall be registered in a
Representative's Option Register as they are issued. The Company shall be
entitled to treat the registered holder of any Representative's Option on the
Representative's Option Register as the owner in fact thereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in such Representative's Option on the part of any other person. The
Representative's Options shall be transferable only on the books of the Company
upon delivery thereof duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer. In all cases of transfer by an attorney,
executor, administrator, guardian or other legal representative, duly
authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Representative's
Option or Representative's Options to the person entitled thereto. The
Representative's Options may be exchanged, at the option of the Holder thereof,
for another Representative's Option, or other Representative's Options of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Units (or portions thereof) upon surrender to
the Company or its duly authorized agent. Notwithstanding the foregoing, the
Company shall have no obligation to cause Representative's Options to be
transferred on its books to any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
of 1933, as amended (the "Act"), or applicable state blue sky laws and the rules
and regulations thereunder.
5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of this Representative's Option and the Common Stock and Warrants
comprising the Units purchasable upon exercise of this Representative's Option,
such number of shares of Common Stock as shall, from time to time, be sufficient
therefor. The Company covenants that all shares of Common Stock issuable upon
exercise of this Representative's Option and the Warrants underlying this
Representative's Option shall be validly issued, fully paid, nonassessable, and
free of preemptive rights.
6. a. In case the Company shall sell or issue hereafter either its Common
Stock or any rights, options, warrants or obligations or securities containing
the right to subscribe for or purchase any Common Stock ("Options") or
exchangeable for or convertible into Common Stock ("Convertible Securities"), at
a price per share, as determined pursuant to paragraph (b) of this section, less
than the Purchase Price then in effect on the date of such sale or issuance,
then the number of Units thereafter purchasable upon exercise of this
Representative's Option shall be determined by multiplying the number of Units
theretofore purchasable upon exercise of this Representative's Option by a
fraction, (i) the numerator of which shall be the number of shares of Common
Stock outstanding on the date of issuance of such Common Stock, Options or
Convertible Securities and (ii) the denominator of which shall be the number of
shares of Common Stock outstanding on the date prior to the date of issuance of
such Common Stock or Convertible Securities plus the number of shares of Common
Stock which the aggregate consideration received by the Company upon such
issuance would purchase on such date at the Purchase Price then in effect.
3
b. The following provisions, in addition to other provisions of this
section shall be applicable in determining any adjustment under (a) above:
i. In case of the issuance or sale of Common Stock part or all of
which shall be for cash, the cash consideration received by the
Company therefor shall be deemed to be the amount of cash proceeds of
such sale of shares less any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers
or others performing similar services or any expenses incurred in
connection therewith, plus the amounts, if any, determined as provided
in (b)(ii) below.
ii. In case of the issuance or sale of Common Stock wholly or
partly for a consideration other than cash, the amount of the
consideration other than cash received by the Company for such Common
Stock shall be deemed to be the fair value of such consideration as
determined by a resolution adopted by the Board of Directors of the
Company acting in good faith, less any compensation paid or incurred
by the Company for any underwriting of, or otherwise in connection
with such issuance, provided, however, the amount of such
consideration other than cash shall in no event exceed the cost
thereof as recorded on the books of the Company. In case of the
issuance or sale of Common Stock (otherwise than upon conversion or
exchange) together with other stock or securities or other assets of
the Company for a consideration which is received for both such Common
Stock and other securities or assets, the Board of Directors of the
Company acting in good faith shall determine what part of the
consideration so received is to be deemed to be the consideration for
the issuance of such Common Stock, less any compensation paid or
incurred by the Company for any underwriting of, or otherwise in
connection with such issuance, provided, however, the amount of such
consideration other than cash shall in no event exceed the cost
thereof as recorded on the books of the Company. In case at any time
the Company shall declare a dividend or make any other distribution
upon any stock of the Company payable in Common Stock then such Common
Stock issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
iii. The price per share of any Common Stock sold or issued by
the Company (other than pursuant to Options or Convertible Securities)
shall be equal to a price calculated by dividing (A) the amount of the
consideration received by the Company, as determined pursuant to
(b)(i) and (b)(ii) above, upon such sale or issuance by (B) the number
of shares of Common Stock sold or issued.
iv. In case the Company shall at any time after the date hereof
issue any Options or Convertible Securities, the following provisions
shall apply in making any adjustment:
(A) The price per share for which Common Stock is issuable
upon the exercise of the Options or upon conversion or exchange
of the Convertible Securities shall be determined by (1) dividing
the total amount, if any, received or receivable by the Company
as consideration for the issuance of such Options or Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon exercise of
such Options or the conversion or exchange of such Convertible
Securities, by (2) the aggregate maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon
the conversion or exchange of such Convertible Securities.
4
(B) In determining the price per share for which Common
Stock is issuable upon exercise of the Options or conversion or
exchange of the Convertible Securities as set forth above and in
computing any adjustment pursuant to (a) above: the aggregate
maximum number of shares of Common Stock issuable upon the
exercise of such Convertible Securities shall be considered to be
outstanding at the time such Options or Convertible Securities
were issued and to have been issued for such price per share as
determined pursuant to (b)(iv)(A), and the consideration for the
issuance of such Options or Convertible Securities and the amount
of additional consideration payable to the Company upon exercise
of such Options or upon the conversion or exchange of such
Convertible Securities shall be determined in the same manner as
the consideration received upon the issuance or sale of Common
Stock as provided in paragraphs (b)(i) and (b)(ii).
(C) On the expiration of such Options or the termination of
any right to convert or exchange any Convertible Securities, the
number of Units subject to this Representative's Option shall
forthwith be readjusted to such number of Units as would have
been obtained had the adjustments made upon the issuance of such
Options or Convertible Securities been made upon the basis of the
delivery of only the number of shares of Common Stock actually
delivered upon the exercise of such Options or upon conversion or
exchange of such Convertible Securities.
(D) If the minimum purchase price per share of Common Stock
provided for in any Option, or the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock,
shall change or a different purchase price or rate shall become
effective at any time or from time to time (other than pursuant
to any anti-dilution provisions of such Options or Convertible
Securities) then upon such change becoming effective, the number
of Units subject to this Representative's Option shall forthwith
be increased or decreased to such number of Units as would have
been obtained had the adjustments made upon the granting or
issuance of such Options or Convertible Securities been made upon
the basis of (1) the issuance of the number of shares of Common
Stock theretofore actually delivered upon the exercise of such
Options or upon the conversion or exchange of such Convertible
Securities, and the total consideration received therefor, and
(2) the granting or issuance at the time of such change of any
such Options or Convertible Securities then still outstanding for
the consideration, if any, received by the Company therefor and
to be received on the basis of such changed price or rate of
exchange or conversion.
v. Except as otherwise specifically provided herein, the date of
issuance or sale of Common Stock shall be deemed to be the date the
Company is legally obligated to issue such Common Stock or the date
the Company is legally obligated to issue any Option or Convertible
Security. If the Company shall take a record date for the purpose of
determining holders of Common Stock entitled to (A) receive a dividend
or other distribution payable in Common Stock or in Options or
Convertible Securities or (B) subscribe for or purchase Common Stock,
Options or Convertible Securities, such record date shall be deemed to
be the date of issue or sale of the Common Stock, Options or
Convertible Securities.
vi. The number of shares of Common Stock outstanding at any given
time shall not include treasury shares but the disposition of any such
treasury shares shall be considered an issue or sale of Common Stock
for the purposes of this section.
5
vii. Anything hereinabove to the contrary notwithstanding, no
adjustment shall be made pursuant to (a) above to the Purchase Price
or to the number of Units purchasable upon:
(A) The issuance or sale by the Company of any Units, Common
Stock or Warrants pursuant to the Public Offering, the exercise
of any Warrants, the issuance or sale by the Company of any
Units, Common Stock or Warrants pursuant to the Representative's
Option, the issuance or sale of Units, Common Stock or Warrants
on exercise of a separate Representative's Option to purchase
Warrants, any securities offered in a public offering
underwritten by Schneider Securities, Inc., any shares, Options
or Convertible Securities issued and outstanding at the effective
date of such public offering, any shares issuable pursuant to the
Company's stock option plan currently in effect, provided the
total number of shares issuable pursuant to such plan does not
exceed 300,000 shares.
(B) The issuance or sale by the Company of any Common Stock
pursuant to any Options or Convertible Securities issued and
outstanding prior to the date of Effective Date of the
Registration Statement.
(C) The issuance or sale of Common Stock pursuant to the
exercise of Options or conversion or exchange of Convertible
Securities hereinafter issued for which an adjustment has been
made (or was not required to be made) pursuant to the provisions
hereof.
(D) The increase in the number of shares of Common Stock
subject to any Option or Convertible Security referred to in
subsections (A), (B) or (C) hereof pursuant to the provisions of
such Option or Convertible Securities designed to protect against
dilution.
c. If the Company shall at any time subdivide its outstanding Common
Stock by recapitalization, reclassification or split-up thereof, the number
of Units subject to this Representative's Option immediately prior to such
subdivision shall be proportionately increased, and if the Company shall at
any time combine the outstanding Common Stock by recapitalization,
reclassification or combination thereof, the number of Units subject to
this Representative's Option immediately prior to such combination shall be
proportionately decreased. Any corresponding adjustment to the Purchase
Price shall become effective at the close of business on the record date
for such subdivision or combination.
d. If the Company after the date hereof shall distribute to the
holders of its Common Stock any securities or other assets (other than a
distribution of Common Stock or a cash distribution made as a dividend
payable out of earnings or out of any earned surplus legally available for
dividends under the laws of the jurisdiction of incorporation of the
Company), the Board of Directors shall be required to make such equitable
adjustment in the Purchase Price in effect immediately prior to the record
date of such distribution as may be necessary to preserve the rights
substantially proportionate to those enjoyed hereunder by the Holder
immediately prior to such distribution. Any such adjustment made in good
faith by the Board of Directors shall be final and binding upon the Holder
and shall become effective as of the record date for such distribution.
e. No adjustment in the number of Units subject to this
Representative's Option shall be required unless such adjustment would
require an increase or decrease in such number of Units of at least 1%
of the then adjusted number of Units issuable upon exercise of this
Representative's Option, provided, however, that any adjustments which
by reason of the foregoing are not required at the time to be made
shall be carried forward and taken into account and included in
determining the amount of any subsequent adjustment; and provided
further, however, that in case the Company shall at any time subdivide
or combine the outstanding Common Stock or issue any additional Common
Stock as a dividend, said percentage shall forthwith be proportionately
increased in the case of a combination or decreased in the case of a
subdivision or dividend of Common Stock so as to appropriately reflect
the same. If the Company shall make a record of the holders of its
Common Stock for the purpose of entitling them to receive any dividend
or distribution and legally abandon its plan to pay or deliver such
dividend or distribution then no adjustment in the number of Units
subject to this Representative's Option shall be required by reason of
the making of such record.
f. Whenever the number of Units purchasable upon the exercise
of this Representative's Option is adjusted as provided herein, the
Purchase Price shall be adjusted (to the nearest one tenth of a cent)
by respectively multiplying such Purchase Price immediately prior to
such adjustment by a fraction, the numerator of which shall be the
number of Units purchasable upon the exercise of this Representative's
Option immediately prior to such adjustment, and the denominator of
which shall be the number of Units purchasable immediately thereafter.
g. In case of any reclassification of the outstanding Common
Stock (other than a change covered by (c) hereof or which solely
affects the par value of such Common Stock) or in the case of any
merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any
reclassification or capital reorganization of the outstanding Common
Stock), or in the case of any sale or conveyance to another corporation
of the property of the Company as an entirety or substantially as an
entirety in connection with which the Company is dissolved, the Holder
of this Representative's Option shall have the right thereafter (until
the expiration of the right of exercise of this Representative's
Option) to receive upon the exercise hereof, for the same aggregate
Purchase Price payable hereunder immediately prior to such event, the
kind and amount of shares of stock or other securities or property
receivable upon such reclassification, capital reorganization, merger
or consolidation, or upon the dissolution following any sale or other
transfer, by a holder of the number of Units obtainable upon the
exercise of this Representative's Option immediately prior to such
event; and if any reclassification also results in a change in Common
Stock covered by (c) above, then such adjustment shall be made pursuant
to both this paragraph (g) and paragraph (c). The provisions of this
paragraph (g) shall similarly apply to successive re-classifications,
or capital reorganizations, mergers or consolidations, sales or other
transfers.
If the Company after the date hereof shall issue or agree to
issue Common Stock, Options or Convertible Securities, other than as
described herein and other than excluded herein, and such issuance or
agreement would in the opinion of the Board of Directors of the Company
materially affect the rights of the Holders of the Representative's
Option, the Purchase Price and the number of Units purchasable upon
exercise of the Representative's Option shall be adjusted in such
matter, if any, and at such time as the Board of Directors of the
Company, in good faith, may determine to be equitable in the circumstances.
The minutes or unanimous consent approving such action shall set forth the
Board of Director's determination as to whether an adjustment is warranted
and the manner of such adjustment. In the absence of such determination,
any Holder may request in writing that the Board of Directors make such
determination. Any such determination made in good faith by the Board of
Directors shall be final and binding upon the Holders. If the Board fails,
however, to make such determination within sixty (60) days after such
request, such failure shall be deemed a determination that an adjustment is
required.
h. i. Upon occurrence of each event requiring an adjustment of
the Purchase Price and of the number of Units purchasable upon
exercise of this Representative's Option in accordance with, and as
required by, the terms hereof, the Company shall forthwith employ a
firm of certified public accountants (who may be the regular
accountants for the Company) who shall compute the adjusted Purchase
Price and the adjusted number of Units purchasable at such adjusted
Purchase Price by reason of such event in accordance herewith. The
Company shall give to each Holder of the Representative's Options a
copy of such computation which shall be conclusive and shall be
binding upon such Holders unless contested by Holders by written
notice to the Company within thirty (30) days after receipt thereof.
ii. In case the Company after the date hereof shall propose (A)
to pay any dividend payable in stock to the holders of its Common
Stock or to make any other distribution (other than cash dividends) to
the holders of its Common Stock or to grant rights to subscribe to or
purchase any additional shares of any class or any other rights or
options, (B) to effect any reclassification involving merely the
subdivision or combination of outstanding Common Stock, or (C) any
capital reorganization or any consolidation or merger, or any sale,
transfer or other disposition of its property, assets and business
substantially as an entirety, or the liquidation, dissolution or
winding up of the Company, then in each such case, the Company shall
obtain the computation described above and if an adjustment to the
Purchase Price is required, the Company shall notify the Holders of
the Representative's Options of such proposed action, which shall
specify the record date for any such action or if no record date is
established with respect thereto, the date on which such action shall
occur or commence, or the date of participation therein by the holders
of Common Stock if any such date is to be fixed, and shall also set
forth such facts with respect thereto as shall be reasonably necessary
to indicate the effect of such action on the Purchase Price and the
number, or kind, or class of shares or other securities or property
obtainable upon exercise of this Representative's Option after giving
effect to any adjustment which will be required as a result of such
action. Such notice shall be given at least twenty (20) days prior to
the record date for determining holders of the Common Stock for
purposes of any such action, and in the case of any action for which a
record date is not established then such notice shall be mailed at
least twenty (20) days prior to the taking of such proposed action.
iii. Failure to file any certificate or notice or to give any
notice, or any defect in any certificate or notice, shall not effect
the legality or validity of the adjustment in the Purchase Price or in
the number, or kind, or class of shares or other securities or
property obtainable upon exercise of the Representative's Options or
of any transaction giving rise thereto.
i. The Company shall not be required to issue fractional Units upon
any exercise of the Representative's Options. As to any final fraction of a
Unit which the Holder of a Representative's Option would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash
adjustment in respect of such final fraction in an amount equal to the same
fraction of the combined market price of such share of Common Stock and
Warrant on the business day preceding the day of exercise. The Holder of a
Representative's Option, by his acceptance of a Representative's Option,
expressly waives any right to receive any fractional Units.
j. Regardless of any adjustments pursuant to this section in the
Purchase Price or in the number, or kind, or class of shares or other
securities or other property obtainable upon exercise of a Representative's
Option, a Representative's Option may continue to express the Purchase
Price and the number of Units obtainable upon exercise at the same price
and number of Units as are stated herein.
k. The number of Units, the Purchase Price and all other terms and
provisions of the Company's agreement with the Holder of this
Representative's Option shall be determined exclusively pursuant to the
provisions hereof.
l. The above provisions of this section 6 shall similarly apply to
successive transactions which require adjustments.
m. Notwithstanding any other language to the contrary herein, (i) the
anti-dilution terms of this Representative's Option will not be enforced so
as to provide the Holder the right to receive, or for the accrual of, cash
dividends prior to the exercise of this Representative's Option, and (ii)
the anti-dilution terms of this Representative's Option will not be
enforced in such a manner as to provide the Holder with disproportionate
rights, privileges and economic benefits not provided to purchasers of the
Units in the Public Offering.
7. The rights and privileges of the Warrants issuable on exercise of this
Representative's Option shall be as provided in the warrant certificate (the
"Warrant Certificate") to be delivered to the Holder on exercise of this
Representative's Option. All anti-dilution and other rights shall be as provided
for in the Warrant Certificate and as set forth in the warrant agreement by and
between the Company and the Warrant Agent for the Company (the "Warrant
Agreement"). The provisions of the Warrant Agreement relating to anti-dilution
rights and any other rights and privileges granted to holders of publicly traded
Warrants are incorporated by reference herein as if more fully set forth herein.
Notwithstanding any other language to the contrary herein or in the Warrant
Agreement by and between the Company and the Warrant Agent, in the event, prior
to the exercise of this Warrant, Holders of publicly-traded Warrants shall be
entitled to the benefit of any anti-dilution provisions of the Warrant Agreement
or the Warrant Certificate then, in such event, the Warrants issuable upon
exercise of this Representative's Option shall be adjusted in accordance with
the provisions of the anti-dilution provisions of the Warrant Certificate and
the Warrant Agreement in a manner identical to the adjustments made pursuant to
the anti-dilution provisions and other rights and privileges applicable to
publicly-traded warrants. Any such adjustment may be made at or immediately
prior to the date of exercise hereof. Notwithstanding any other language to the
contrary herein, (i) the anti-dilution terms of this Representative's Option
will not be enforced so as to provide the Holder the right to receive, or for
the accrual of, cash dividends prior to the exercise of this Representative's
Option, and (ii) the anti-dilution terms of this Representative's Option will
not be enforced in such a manner as to provide the Holder with disproportionate
rights, privileges and economic benefits not provided to purchasers of Warrants
in the Public Offering.
8. The issuance of any Units or other securities upon the exercise of this
Representative's Option or any Warrant Shares upon the exercise of the Warrants,
and the delivery of certificates or other instruments representing such
securities, or other securities, shall be made without charge to the Holder for
any tax or other charge in respect of such issuance. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of any certificate in a name other
than that of the Holder and the Company shall not be required to issue or
deliver any such certificate unless and until the person or persons requesting
the issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
9. a. If, at any time after ______, 1999 (the Effective Date of the
Registration Statement), and ending _______, 2006 (seven years after the
Effective Date of the Registration Statement), the Company shall file a
registration statement (other than on Form S-4, Form S-8, or any successor form)
with the Securities and Exchange Commission (the "Commission") while Units are
available for purchase upon exercise of this Representative's Option or while
any Common Stock, Warrants or Units (collectively, the "Representative's
Securities") are outstanding, the Company shall, on two occasions only, give the
Holder and all the then holders of such Representative's Options and
Representative's Securities at least 30 days prior written notice of the filing
of such registration statement. If requested by the Holder or by any such holder
in writing within 20 days after receipt of any such notice, the Company shall,
at the Company's sole expense (other than the fees and disbursements of counsel
for the Holder or such holder and the underwriting discounts and non-accountable
expenses, if any, payable in respect of the securities sold by the Holder or any
such holder), register or qualify the Common Stock included in the
Representative's Securities and underlying the Warrants that are included in the
Representative's Securities of the Holder or any such holders who shall have
made such request concurrently with the registration of such other securities,
all to the extent requisite to permit the public offering and sale of such
securities, and will use its best efforts through its officers, directors,
auditors and counsel to cause such registration statement to become effective as
promptly as practicable. The Common Stock to be registered is hereinafter
referred to as "Registrable Securities." Notwithstanding the foregoing, if the
managing underwriter of any such offering shall advise the Company in writing
that, in its opinion, the distribution of all or a portion of the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would materially adversely affect the
distribution of such securities by the Company for its own account, then the
Holder or any such holder who shall have requested registration of his or its
Registrable Securities shall delay the offering and sale of such Registrable
Securities (or the portions thereof so designated by such managing underwriter)
for such period, not to exceed 90 days, as the managing underwriter shall
request, provided that no such delay shall be required as to any Registrable
Securities if any securities of the Company are included in such registration
statement for the account of any person other than the Company and the Holder
unless the securities included in such registration statement for such other
person shall have been reduced pro rata to the reduction of the Registrable
Securities which were requested to be included in such registration.
b. If at any time after ________, 1999 (the Effective Date of the
Registration Statement), and before _________, 2004 (five years after the
Effective Date of the Registration Statement), the Company shall receive a
written request from holders of Representative's Securities who, in the
aggregate, own (or upon exercise of all Representative's Options will own)
a majority of the total number of Units issuable upon exercise of the
Representative's Options, the Company shall, as promptly as practicable,
prepare and file with the Commission a registration statement sufficient to
permit the public offering and sale of the Registrable Securities, and will
use its best efforts through its officers, directors, auditors and counsel
to cause such registration statement to become effective as promptly as
practicable; provided, however, that the Company shall only be obligated to
file and obtain effectiveness of one such registration statement for which
all expenses incurred in connection with such registration (other than the
fees and disbursements of counsel for the Holder or such holders and
underwriting discounts and non-accountable expenses, if any, payable in
respect of the Registrable Securities sold by the Holder or any such
holder) shall be borne by the Company. In addition to the one demand
registration provided for herein above, the holders of the Registrable
Securities who, in the aggregate, own (or upon exercise of all
Representative's Options will own) a majority of the total number of Units
issued or issuable upon exercise of the Representative's Options may
request that the Company prepare and file a registration statement to
permit the public offering and sale of the Registrable Securities on two
additional occasions only, but the costs of preparation and filing of such
additional registration statements shall be at the then holders' cost and
expense unless the Company elects to register additional shares of Common
Stock, in which case the cost and expense of such registration statements
will be prorated between the Company and the holders of the Registrable
Securities according to the aggregate sales price of the securities being
issued.
c. In the event of a registration pursuant to the provisions of this
paragraph 9, the Company shall use its best efforts to cause the
Registrable Securities so registered to be registered or qualified for sale
under the securities or blue sky laws of such jurisdictions as the Holder
or such holders may reasonably request; provided, however, that the Company
shall not be required to qualify to do business in any state by reason of
this paragraph 9(c) in which it is not otherwise required to qualify to do
business and provided further, that the Company has no obligation to
qualify the Registrable Securities where such qualification would cause any
unreasonable delay or expenditure by the Company.
d. The Company shall keep effective any registration or qualification
contemplated by this paragraph 9 and shall from time to time amend or
supplement each applicable registration statement, preliminary prospectus,
final prospectus, application, document and communication for such period
of time as shall be required to permit the Holder or such holders to
complete the offer and sale of the Registrable Securities covered thereby.
The Company shall in no event be required to keep any such registration or
qualification in effect for a period in excess of nine months from the date
on which the Holder and such holders are first free to sell such
Registrable Securities; provided, however, that if the Company is required
to keep any such registration or qualification in effect with respect to
securities other than the Registrable Securities beyond such period, the
Company shall keep such registration or qualification in effect as it
relates to the Registrable Securities for so long as such registration or
qualification remains or is required to remain in effect in respect of such
other securities.
e. In the event of a registration pursuant to the provisions of this
paragraph 9, the Company shall furnish to the Holder and to each such
holder such reasonable number of copies of the registration statement and
of each amendment and supplement thereto (in each case, including all
exhibits), such reasonable number of copies of each prospectus contained in
such registration statement and each supplement or amendment thereto
(including each preliminary prospectus), all of which shall conform to the
requirements of the Act and the rules and regulations thereunder, and such
other documents as the Holder or such holders may reasonably request in
order to facilitate the disposition of the Registrable Securities included
in such registration.
f. In the event of a registration pursuant to the provisions of this
paragraph 9, the Company shall furnish the Holder and each holder of any
Registrable Securities so registered with an opinion of its counsel to the
effect that (i) the registration statement has become effective under the
Act and no order suspending the effectiveness of the registration
statement, preventing or suspending the use of the registration statement,
any preliminary prospectus, any final prospectus, or any amendment or
supplement thereto has been issued, nor to such counsel's actual knowledge
has the Securities and Exchange Commission or any securities or blue sky
authority of any jurisdiction instituted or threatened to institute any
proceedings with respect to such an order and (ii) the registration
statement and each prospectus forming a part thereof (including each
preliminary prospectus), and any amendment or supplement thereto, complies
as to form with the Act and the rules and regulations thereunder. Such
counsel shall also provide a Blue Sky Memorandum setting forth the
jurisdictions in which the Registrable Securities have been registered or
qualified for sale pursuant to the provisions of paragraph 9(c).
g. The Company agrees that until all the Registrable Securities have
been sold under a registration statement or pursuant to Rule 144 under the
Act, it shall keep current in filing all reports, statements and other
materials required to be filed with the Commission to permit holders of the
Registrable Securities to sell such securities under Rule 144.
h. The Holder and any holders who propose to register their
Registrable Securities under the Act shall execute and deliver to the
Company a selling stockholder questionnaire on a form to be provided by the
Company.
i. In addition to the rights above provided, the Company will
cooperate with the then holders of the Representative's Options and
underlying Registrable Securities in preparing and signing a registration
statement, on two occasions only in addition to the registration statements
discussed above, required in order to sell or transfer the Registrable
Securities and will supply all information required therefor, but such
additional registration statements shall be at the then Holders' cost and
expense unless the Company elects to register additional shares of the
Company's Common Stock in which case the cost and expense of such
registration statements will be prorated between the Company and the
Holders of the Representative's Options and Registrable Securities
according to the aggregate sales prices of the securities being sold.
10. a. Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless the Holder, any holder of any of the
Registrable Securities, their officers, directors, partners, employees,
agents and counsel, and each person, if any, who controls any such person
within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all loss, liability, charge, claim, damage and expense
whatsoever (which shall include, for all purposes of this Section 10, but
not be limited to, attorneys' fees and any and all expense whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts
paid in settlement of any claim or litigation), as and when incurred,
arising out of, based upon, or in connection with (i) any untrue statement
or alleged untrue statement of a material fact contained (A) in any
registration statement, preliminary prospectus or final prospectus (as from
time to time amended and supplemented), or any amendment or supplement
thereto, or (B) in any application or other document or communication (in
this Section 10 collectively called an "application") executed by or on
behalf of the Company or based upon written information furnished by or on
behalf of the Company filed in any jurisdiction in order to register or
qualify any of the Registrable Securities under the securities or blue sky
laws thereof or filed with the Commission or any securities exchange; or
any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company with respect
to the Holder or any holder of any of the Registrable Securities by or on
behalf of such person expressly for inclusion in any registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, as the case may be, or (ii) any
breach of any representation, warranty, covenant or agreement of the
Company contained in this Representative's Option. The foregoing agreement
to indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this Representative's
Option.
If any action is brought against the Holder or any holder of any of
the Registrable Securities or any of its officers, directors, partners,
employees, agents or counsel, or any controlling persons of such person (an
"indemnified party") in respect of which indemnity may be sought against
the Company pursuant to the foregoing paragraph, such indemnified party or
parties shall promptly notify the Company in writing of the institution of
such action (but the failure so to notify shall not relieve the Company
from any liability it may otherwise have to Holder or any holder of any of
the Registrable Securities) and the Company shall promptly assume the
defense of such action, including the employment of counsel (reasonably
satisfactory to such indemnified party or parties) and payment of expenses.
Such indemnified party or parties shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the
Company in connection with the defense of such action or the Company shall
not have promptly employed counsel reasonably satisfactory to such
indemnified party or parties to have charge of the defense of such action
or such indemnified party or parties shall have reasonably concluded that
there may be one or more legal defenses available to it or them or to other
indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses
shall be borne by the Company and the Company shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties. Anything in this paragraph to the contrary notwithstanding, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent.
b. The Holder and each holder agrees to indemnify and hold harmless
the Company, each director of the Company, each officer of the Company who
shall have signed any registration statement covering the Registrable
Securities held by the Holder and each holder and each other person, if
any, who controls the Company within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Holder and each holder in paragraph
10(a), but only with respect to statements or omissions, if any, made in
any registration statement, preliminary prospectus, or final prospectus (as
from time to time amended and supplemented), or any amendment or supplement
thereto, or in any application, in reliance upon and in conformity with
written information furnished to the Company with respect to the Holder and
each holder by or on behalf of the Holder and each holder expressly for
inclusion in any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any
application, as the case may be. If any action shall be brought against the
Company or any other person so indemnified based on any such registration
statement, preliminary prospectus, or final prospectus, or any amendment or
supplement thereto, or in any application, and in respect of which
indemnity may be sought against the Holder and each holder pursuant to this
paragraph 10(b), the Holder and each holder shall have the rights and
duties given to the Company, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of paragraph 10(a).
c. To provide for just and equitable contribution, if (i) an
indemnified party makes a claim for indemnification pursuant to paragraph
10(a) or 10(b) (subject to the limitations thereof) but it is found in a
final judicial determination, not subject to further appeal, that such
indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the Act, the
Exchange Act or otherwise because the indemnification provided for in this
Section 10 is for any reason held to be unenforceable by the Company and
the Holder and any holder, then the Company (including for this purpose any
contribution made by or on behalf of any director of the Company, any
officer of the Company who signed any such registration statement and any
controlling person of the Company), as one entity, and the Holder and any
holder of any of the Registrable Securities included in such registration
in the aggregate (including for this purpose any contribution by or on
behalf of the Holder or any holder), as a second entity, shall contribute
to the losses, liabilities, claims, damages and expenses whatsoever to
which any of them may be subject, on the basis of relevant equitable
considerations such as the relative fault of the Company and the Holder or
any such holder in connection with the facts which resulted in such losses,
liabilities, claims, damages and expenses. The relative fault, in the case
of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such
statement, alleged statement, omission or alleged omission relates to
information supplied by the Company, by the Holder or by any holder of
Registrable Securities included in such registration, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, alleged statement, omission or alleged
omission. The Company and the Holder agree that it would be unjust and
inequitable if the respective obligations of the Company and the Holder for
contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the
Holder and the other indemnified parties were treated as one entity for
such purpose) or by any other method of allocation that does not reflect
the equitable considerations referred to in this paragraph 10(c). No person
guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who is
not guilty of such fraudulent misrepresentation. For purposes of this
paragraph 10(c), each person, if any, who controls the Holder or any holder
of any of the Registrable Securities within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and each officer, director,
partner, employee, agent and counsel of each such person, shall have the
same rights to contribution as such person and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to the provisions of this paragraph 10(c). Anything in this paragraph
10(c) to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This paragraph 10(c) is intended to supersede
any right to contribution under the Act, the Exchange Act or otherwise.
11. The securities issued upon exercise of the Representative's Options
shall be subject to a stop transfer order and the certificate or certificates
evidencing any such securities shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF CERTAIN STATES
UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES. HOWEVER,
NEITHER THE REPRESENTATIVE'S OPTIONS NOR SUCH SECURITIES MAY BE SOLD,
TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (i) A
POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (ii) A
SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY
LAWS.
12. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Representative's Option (and upon
surrender of any Representative's Option if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Option of like date, tenor
and denomination.
13. The Holder of any Representative's Option shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representative's Option.
14. This Representative's Option shall be construed in accordance with the
laws of the State of Colorado, without giving effect to conflict of laws.
Dated: _____________, 1999
MULTI-LINK TELECOMMUNICATIONS, INC.
By:
-------------------------------------
Nigel V. Alexander,
Chief Executive Officer
By:
-------------------------------------
Shawn B. Stickle,
President and Chief Operating Officer
[SEAL]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
attached Representative's Option.)
FOR VALUE RECEIVED, ___________________________________ hereby sells,
assigns and transfers unto ________________________ Representative's Option to
purchase __________ Units of Multi-Link Telecommunications, Inc. (the
"Company"), together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ____________________________ attorney to
transfer such Representative's Option on the books of the Company, with full
power of substitution.
Dated:
-------------------------------------------
Signature:
---------------------------------------
Signature Guaranteed:
----------------------------
NOTICE
The signature on the foregoing Assignment must correspond to the name as
written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.
ELECTION TO EXERCISE
(To be executed by the holder if such holder desires to
exercise the attached Representative's Option)
The undersigned hereby exercises his or its rights to subscribe for
__________ Units covered by the within Representative's Option (each as defined
in the within Representative's Option) and tenders payment herewith in the
amount of $__________ in accordance with the terms thereof, and requests that
certificates for such Units be issued in the name of, and delivered to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print Name, Address and Social Security or
Tax Identification Number)
and, if such number of Units (or portions thereof) shall not be all the Units
covered by the within Representative's Option, that a new Representative's
Option for the balance of the Representative's Option (or portions thereof)
covered by the within Representative's Option be registered in the name of, and
delivered to, the undersigned at the address stated below.
Name:
--------------------------------------------------------------------------
(Print)
Address:
----------------------------------------------------------------------
- -----------------------------------------------
(Signature)
Dated: Signature Guaranteed:
--------------- ------------------
NOTICE
The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.