SELECTED DEALERS AGREEMENT
Public Offering of
1,150,000 Units
Offering Price: $6.00 per Unit
MULTI-LINK TELECOMMUNICATIONS, INC.
________, 1999
Schneider Securities, Inc., on behalf of itself and other underwriters (the
"Underwriters") for which it is the representative (the "Representative"), has
severally agreed with Multi-Link Telecommunications, Inc., a Colorado
corporation (the "Company"), to purchase 1,150,000 Units (the "Firm Units"),
each Unit consisting of one share of common stock (the "Common Stock") and one
redeemable warrant (the "Warrant") of the Company, and the Representative has
been granted the right to purchase up to an additional 172,500 Units and/or
warrants (the "Additional Securities") at its option for the sole purpose of
covering over-allotments in the sale of the Firm Units (the Firm Units and
Additional Securities being collectively referred to as the "Securities" or a
"Security"). The Underwriters are offering the Securities to the public at an
offering price of $6.00 per Unit. Certain other capitalized terms used herein
are defined in the Underwriting Agreement and are used herein as therein
defined.
The Representative is offering the Securities to certain selected dealers
(the "Selected Dealers"), when, as and if accepted by the Representative and
subject to withdrawal, cancellation or modification of the offer without notice
and further subject to the terms of (i) the Company's current Prospectus, (ii)
the Underwriting Agreement, (iii) this Agreement, and (iv) the Representative's
instructions which may be forwarded to the Selected Dealer from time to time. A
copy of the Underwriting Agreement will be delivered to you forthwith for
inspection or copying or both, upon your request therefor. This invitation is
made by the Representative only if the Securities may be offered lawfully to
dealers in your state.
The further terms and conditions of this invitation are as follows:
1. Acceptance of Orders. Orders received by the Representative from the
Selected Dealer will be accepted only at the price, in the amounts and on the
terms which are set forth in the Company's current Prospectus, subject to
allotment in the Representative's uncontrolled discretion. The Representative
reserves the right to reject any orders, in whole or in part.
2. Selling Concession. As a Selected Dealer, you will be allowed on all
Securities purchased by you, which the Underwriters have not repurchased or
contracted to repurchase prior to termination of this Agreement at or below the
public offering price, a concession of ___% of the full 10% Underwriting
discount, i.e., $___ per Security as shown in the Company's current Prospectus.
No selling concession will be allowed to any domestic broker-dealer who is not a
member of the National Association of Securities Dealers, Inc. (the
"Association"), or to any foreign broker-dealer eligible for membership in the
Association who is not a member of the Association. Payment of such selling
concession to you will be made only as provided in Section 4 hereof. After the
Securities are released for sale to the public, the Representative is authorized
to, and may, change the public offering price and the selling concession.
3. Reoffer of Securities. Securities purchased by you are to be bona fide
reoffered by you in conformity with this Agreement and the terms of offering set
forth in the Prospectus. You agree that you will not bid for, purchase, attempt
to induce others to purchase, or sell, directly or indirectly, any Securities
except as contemplated by this Agreement and except as a broker pursuant to
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unsolicited orders. You confirm that you have complied and agree that you will
at all times comply with the provisions of Regulation M of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") applicable to this
offering. In respect of Securities sold by you and thereafter purchased by the
Representative at or below the public offering price prior to the termination of
this Agreement as described hereinafter (or such longer period as may be
necessary to cover any short position with respect to the offering), you agree
at the Representative's option either to repurchase the Securities at a price
equal to the cost thereof to the Representative, including commissions and
transfer taxes on redelivery, or to repay the Representative such part of your
Selected Dealers' concessions on such Securities as the Representative
designates.
4. Payment for Securities. Payment for the Securities purchased by you is
to be made at the net Selected Dealers' price of $_____ per Security, at the
offices of Schneider Securities, Inc., Suite 900, 1120 Lincoln Street, Denver,
Colorado 80203, Attention: Syndicate Department, at such time and on such date
as the Representative may designate, by certified or official bank check,
payable in clearing house funds to the order of the Representative, against
delivery of certificates for the Securities so purchased. If such payment is not
made at such time and on such date, you agree to pay the Representative interest
on such funds at the current interest rate. The Representative may in its
discretion deliver the Securities purchased by you through the facilities of the
Depository Trust Company or, if you are not a member, through your ordinary
correspondent who is a member unless you promptly give the Representative
written instructions otherwise.
5. Offering Representations. The Representative has been informed that a
Registration Statement in respect of the Securities is expected to become
effective under the Securities Act of 1933, as amended (the "Act"). You are not
authorized to give any information or to make any representations other than
those contained in the Prospectus or to act as agent for the Company or for the
undersigned when offering the Securities to the public or otherwise.
6. Blue Sky. Neither the Representative nor the Underwriters assume any
responsibility or obligations as to your right to sell the Securities in any
jurisdiction, notwithstanding any information furnished in that connection. The
Selected Dealer shall report in writing to the Representative the number of
Securities which have been sold by it in each state and the number of
transactions made in each such state. This state report shall be submitted to
the Representative as soon as possible after completion of billing, but in any
event not more than three days after the closing.
7. Dealer Undertakings. By accepting this Agreement, the Selected Dealer in
offering and selling the Securities in the Public Offering (i) acknowledges its
understanding of (a) the Conduct Rules (the "Rules") of the Association and the
interpretations of such Rules promulgated by the Board of Governors of the
Association (the "Interpretations") including, but not limited to the Rule and
Interpretation with respect to "Free-Riding and Withholding" defined therein,
(b) Rule 174 of the rules and regulations promulgated under the Act, (c)
Regulation M promulgated under the Exchange Act, (d) Release No. 3907 under the
Act, (e) Release No. 4150 under the Act, and (f) Sections 2730, 2740, 2420 and
2750 of the Rules and Interpretations thereunder, and (ii) represents, warrants,
covenants and agrees that it shall comply with all applicable requirements of
the Act and the Exchange Act in addition to the specific provisions cited in
subparagraph (i) above and that it shall not violate, directly or indirectly,
any provision of applicable law in connection with its participation in the
Public Offering of the Securities.
8. Conditions of Public Offering. All sales shall be subject to delivery by
the Company of certificates evidencing the Securities against payment therefor.
9. Failure of Order. If an order is rejected or if a payment is received
which proves insufficient or worthless, any compensation paid to the Selected
Dealer shall be returned by (i) restoration by the Representative to the
Selected Dealer of the latter's remittance or (ii) a charge against the account
of the Selected Dealer with the Representative, as the latter may elect without
notice being given of such election.
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10. Additional Representations, Covenants and Warranties of Selected
Dealer. By accepting this Agreement, the Selected Dealer represents that it is
registered as a broker-dealer under the Exchange Act; is qualified to act as a
dealer in the states or the jurisdictions in which it shall offer the
Securities; is a member in good standing of the Association; and shall maintain
such registrations, qualifications and membership in full force and effect and
in good standing throughout the term of this Agreement. If the Selected Dealer
is not a member of the Association, it represents that it is a foreign dealer
not registered under the Exchange Act and agrees to make no sales within the
United States, its territories or its possessions or to persons who are citizens
thereof or residents therein, and in making any sales to comply with the
Association's Rules and Interpretations with respect to Free-Riding and
Withholding. Further, the Selected Dealer agrees to comply with all applicable
federal laws including, but not limited to, the Act and Exchange Act and the
rules and regulations of the Commission thereunder; the laws of the states or
other jurisdictions in which Securities may be offered or sold by it; and the
Constitution, Bylaws, and rules of the Association. Further, the Selected Dealer
agrees that it will not offer or sell the Securities in any state or
jurisdiction except those in which the Securities have been qualified or
qualification is not required. The Selected Dealer acknowledges its
understanding that it shall not be entitled to any compensation hereunder for
any period during which it has been suspended or expelled from membership in the
Association.
11. Employees and other Agents of the Selected Dealer. By accepting this
Agreement, the Selected Dealer assumes full responsibility for thorough and
proper training of its employees and other agents and representatives concerning
the selling methods to be used in connection with the Public Offering of the
Securities, giving special emphasis to the principles of full and fair
disclosure to prospective investors and the prohibitions against "Free-Riding
and Withholding" as set forth in Section 2110 of the Rules and the
Interpretations thereunder.
12. Indemnification by the Company. The Company has agreed in Section 8 of
the Underwriting Agreement to indemnify and hold harmless the Underwriters, the
Representative and each person if any, who controls the Representative or any of
the Underwriters within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act against any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of Section 8 of the
Underwriting Agreement, 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 Preliminary
Prospectus, the Registration Statement, or the 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 the Underwriting Agreement
collectively called an "application") in any jurisdiction in order to qualify
the Securities under the "blue sky" or securities 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, or (ii) any breach of any representation,
warranty, covenant, or agreement of the Company contained in the Underwriting
Agreement. The Representative has agreed to give the Company an opportunity and
the right to participate in the defense or preparation of the defense of any
action brought against the Representative, any Underwriter or any controlling
person thereof to enforce any such loss, claim, demand, liability or expense.
The agreement of the Company under this indemnity is conditioned upon notice of
any such action having been promptly given by the indemnified party to the
Company. Failure to notify the Company as provided in the Underwriting Agreement
shall not relieve the Company of its liability which it may have to the
Representative, the Underwriters, or any controlling person thereof other than
pursuant to Section 8(a) of the Underwriting Agreement. This agreement is
subject in all respects, especially insofar as the foregoing description of the
indemnification provisions set forth in the Underwriting Agreement is concerned,
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to the terms and provisions of the Underwriting Agreement, a copy of which will
be made available for inspection or copying or both to the Selected Dealer upon
written request to the Representative therefor. The Selected Dealer acknowledges
and confirms that, by signing a counterpart of this Agreement, it shall be
deemed an agent of the Underwriters or a "Representative" for all purposes of
Section 8 of the Underwriting Agreement, as expressly set forth therein.
13. Indemnification by the Selected Dealer. The Selected Dealer shall
indemnify and hold harmless the Company, each director of the Company, each
officer of the Company who shall have signed the Registration Statement, 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
indemnity from the Company to the Underwriters in Section 8(a) of the
Underwriting Agreement, but only with respect to statements or omissions, if
any, made in any Preliminary Prospectus, the Registration Statement, or the
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 information furnished to the Representative or the Company with respect to
the Selected Dealer by or on behalf of the Selected Dealer expressly for
inclusion in any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto, or in any application, as
the case may be, or are based upon alleged misrepresentations or omissions to
state material facts in connection with statements made by the Selected Dealer
or the Selected Dealer's employees or other agents to the Company or the
Representative orally or by any other means; provided, however, that the
obligation of the Selected Dealer to provide indemnity hereunder shall be
limited to the amount which represents the product of the number of Firm Units
and Additional Securities sold and the initial public offering price per
Security set forth on the cover page of the Prospectus. If any action shall be
brought against the Company or any other person so indemnified in respect of
which indemnity may be sought against the Selected Dealer pursuant to this
provision, the Selected Dealer shall have the rights and duties given to the
Company in the Underwriting Agreement, and the Company and each other person so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 8(a) of the Underwriting Agreement; and the
Selected Dealer shall reimburse the Company and the Representative for any legal
or other expenses reasonably incurred by them in connection with the
investigation of or the defense of any such action or claim. The Representative
shall, after receiving the first summons or other legal process disclosing the
nature of the action being brought against it or the Company in any proceeding
with respect to which indemnity may be sought by the Company or the
Representative hereunder, notify promptly the Selected Dealer in writing of the
commencement thereof; and the Selected Dealer shall be entitled to participate
in (and, to the extent the Selected Dealer shall wish, to direct) the defense
thereof at the expense of the Selected Dealer, but such defense shall be
conducted by counsel satisfactory to the Company and the Representative. If the
Selected Dealer shall fail to provide such defense, the Company or the
Representative may defend such action at the cost and expense of the Selected
Dealer. The Selected Dealer's obligation under this Section 13 shall survive any
termination of this Agreement, the Underwriting Agreement and the delivery of
and payment for the Securities under the Underwriting Agreement, and shall
remain in full force and effect regardless of the investigation made by or on
behalf of any Representative within the meaning of Section 15 of the Act.
14. No Authority to Act as Partner or Agent. Nothing herein shall
constitute the Selected Dealers as an association or other separate entity or
partners with or agents of the Representative or with each other, but each
Selected Dealer shall be responsible for its pro rata share of any liability or
expense based upon any claims to the contrary. The Representative shall not be
under any liability for or in respect of the value, validity or form of the
Securities, or the delivery of certificates for the Securities or the
performance by any person of any agreement on its part, or the qualification of
the Securities for sale under the laws of any jurisdiction, or for or in respect
of any matter in connection with this Agreement, except for lack of good faith
and for obligations expressly assumed by the Representative in this Agreement.
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15. Expenses. No expenses incurred in connection with offers and sales of
the Securities under the Public Offering will be chargeable to the Selected
Dealers. A single transfer tax, if any, on the sale of Securities by the
Selected Dealer to its customers will be paid when such Securities are delivered
to the Selected Dealer for delivery to its customers. Notwithstanding the
foregoing, the Selected Dealer shall pay its proportionate share of any transfer
tax or any other tax (other than the single transfer tax described above) if any
such tax shall at any time be assessed against the Representative and other
Selected Dealers.
16. Notices. All notices, demands or requests required or authorized
hereunder shall be deemed given sufficiently if in writing and sent by
registered or certified mail, return receipt requested and postage prepaid, or
by tested telex, telegram, cable or facsimile to, in the case of the
Representative, the address set forth above directed to the attention of the
President of the Representative, and in the case of the Selected Dealer, to the
address provided below by the Selected Dealer, directed to the attention of the
President.
17. Termination. This Agreement may be terminated by the Representative
with or without cause upon written notice to Selected Dealer to such effect; and
such notice having been given, this Agreement shall terminate at the time
specified therein. Additionally, this Agreement shall terminate upon the earlier
of the termination of the Underwriting Agreement, or at the close of business
thirty days after the Securities are released by the Representative for sale to
the public.
18. General Provisions. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Colorado. This
Agreement embodies the entire agreement and understanding between the
Representative and the Selected Dealer and supersedes all prior agreements and
understandings related 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. All the terms of this Agreement,
whether so expressed or not, shall be binding upon, and shall inure to the
benefit of, the respective successors, legal representatives and assigns of the
parties hereto; provided, however, that none of the parties hereto can assign
this Agreement or any of its rights hereunder without the prior written consent
of the other party hereto, and any such attempted assignment or transfer without
the other party's prior written consent shall be void and without force or
effect. The headings of this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof. 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.
If the foregoing correctly sets forth the terms and conditions of your
agreement to purchase the Securities allotted to you, please indicate your
acceptance thereof by signing and returning to Schneider Securities, Inc. the
duplicate copy of this Agreement, whereupon this letter and your acceptance
shall become and evidence a binding contract between you and the Representative.
SCHNEIDER SECURITIES, INC.
By:
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Title:
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Gentlemen:
The undersigned confirms its agreement to purchase __________ Units of
Multi-Link Telecommunications, Inc., upon the terms and subject to the
conditions of the foregoing Selected Dealers Agreement, and further agrees that
any agreement by it to purchase Additional Securities during the life of such
Agreement will be upon the same terms and subject to the same conditions. The
undersigned acknowledges receipt of the Prospectus relating to the public
offering of the Securities and confirms that in agreeing to purchase such
Securities it has relied on such Prospectus and not on any other statement
whatsoever written or oral.
Firm Name:
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(Print or Type name of Firm)
By:
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(Authorized Agent)
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(Print or Type Name and Title of
Authorized Agent)
Address:
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Telephone No.
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IRS Employer Identification No.:
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Dated: , 1999
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