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EXHIBIT 4.4
WARRANT AGREEMENT
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MULTI-LINK TELECOMMUNICATIONS, INC.
AND
AMERICAN SECURITIES TRANSFER & TRUST, INC.
WARRANT AGENT
_________________, 1999
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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 1,200,000 shares (the "Firm Shares") of Common Stock of the
Company ("Common Stock") and 1,200,000 warrants ("Firm Warrants"), two Warrants
entitling the Registered Owner thereof to purchase one share of Common Stock,
or an aggregate of 600,000 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 180,000 shares (the "Over-Allotment Shares") and 180,000 warrants
(the "Over-Allotment Warrants") exercisable to purchase up to an aggregate of
90,000 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;
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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 1,200,000 Warrants to purchase
600,000 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 180,000 Warrants to
purchase 90,000 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. 333-72889), 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
1,380,000 Warrants to purchase 690,000 authorized and unissued Shares
of Common Stock of the Company and, unless otherwise noted, shall
include 1,200,000 Firm Warrants and 180,000 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 690,000
authorized and unissued shares of Common Stock reserved for issuance
on exercise of the Warrants, and unless otherwise noted, shall include
600,000 shares of Common Stock issuable upon exercise of the Firm
Warrants and 90,000 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 1,200,000 Firm
Warrants and evidencing the right to purchase an aggregate of 600,000 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
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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 180,000
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 90,000 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.
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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.
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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
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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
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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 been 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 on 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.
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(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
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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
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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.
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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:
----------------------------------
Nigel Alexander, Managing Director
ATTEST:
- --------------------------------
- -------------------------------,
THE WARRANT AGENT:
AMERICAN SECURITIES TRANSFER & TRUST,
INC.
By:
----------------------------------
Title:
----------------------------------
ATTEST:
- --------------------------------
- ---------------------, Secretary
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