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EXHIBIT 4.7
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 1,200,000 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"), 120,000 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. 333-72889 (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
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"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
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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.
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
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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
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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.
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
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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
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exercise of such Options or upon the conversion or exchange of
such Convertible Securities.
(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
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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.
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
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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
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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
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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
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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.
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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
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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,
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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.
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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
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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
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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
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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
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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
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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
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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.
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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]
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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.
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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.
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