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EXHIBIT 4.8
WARRANT EXERCISE FEE AGREEMENT
AGREEMENT dated as of the ______ day of _____________, 1999, by and
among Schneider Securities, Inc. ("Schneider"), Multi-Link Telecommunications,
Inc. (the "Company") and American Securities Transfer & Trust, Inc. (the
"Warrant Agent").
W I T N E S S E T H:
WHEREAS, in connection with a public offering of 1,2000,000 Units (or
up to 1,380,000 Units including the over-allotment option), the Company
proposes to issue, in accordance with an agreement dated as of , 1999, by and
between the Company and the Warrant Agent (the "Warrant Agreement"), Warrants
to purchase shares of Common Stock; and
WHEREAS, the parties hereto wish to provide Schneider, a member of the
National Association of Securities Dealers, Inc. ("NASD"), with certain rights
on an exclusive basis in connection with the exercise of the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
SECTION 1. DESCRIPTION OF THE WARRANTS. The Company's Warrants may be
exercised on or after , 1999 and expire at 5:00 p.m. Colorado time on , 2002
(the "Expiration Date"), subject to redemption rights commencing on or after ,
2000. In accordance with the provisions of the Warrant Agreement, the holder of
each Warrant shall have the right to purchase from the Company, and the Company
shall issue and sell to such holders of Warrants, one fully paid and
non-assessable share of the Company's Common Stock for every two Warrants
exercised at an exercise price of $9.00 per share (the "Exercise Price"),
subject to adjustment as provided in the Warrant Agreement.
SECTION 2. NOTIFICATION OF EXERCISE. Within ten (10) days of the last
day of each month commencing one year from the date of the Company's
Prospectus, the Warrant Agent or the Company will notify Schneider of each
Warrant certificate which has been properly completed and delivered for
exercise by holders of Warrants during each such month, the determination of
the proper completion to be in the sole and absolute reasonable discretion of
the Company and the Warrant Agent. The Company or the Warrant Agent will
provide Schneider with such information, in connection with the exercise of
each Warrant, as Schneider shall reasonably request.
SECTION 3. PAYMENT TO SCHNEIDER. The Company hereby agrees to pay to
Schneider an amount equal to five (5%) percent of the exercise price (i.e.
,$.45 per share based on the initial Exercise Price of the Warrants which is
$9.00 per share) for each Warrant exercised (the "Exercise Fee") a portion of
which may be allowed by Schneider to the dealer who solicited the exercise
(which may also be Schneider) provided that:
(a) such Warrant is exercised on or after , 2000, which is
one year from the effective date of the Company's Registration
Statement;
(b) at the time of exercise, the market price of the
Company's Common Stock is higher than the applicable Exercise Price of
the Warrant being exercised;
(c) the holders of Warrants being exercised have specifically
indicated in writing, either in the Form of Election contained on the
specimen Warrant Certificate or by written documents signed and dated
by the holders that the exercise of such Warrants was solicited by
Schneider or another member of the NASD; and
(d) Schneider and/or the member of the NASD which solicited
the exercise of Warrants delivers a certificate to the Company within
five (5) business days of receipt of information relating to such
exercised Warrants from the Company or the Warrant Agent in the form
attached hereto as Exhibit A, stating that:
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(1) The Warrants exercised were not held in a
discretionary account;
(2) The member which solicited the exercise of
Warrants did not (unless granted an exemption by the
Securities and Exchange Commission ("the Commission") from
the provisions thereof), within the applicable number of
business days under Regulation M immediately preceding the
date of exercise of the Warrant bid for or purchase the
Common Stock of the Company or any securities of the Company
immediately convertible into or exchangeable for the Common
Stock (including the Warrants) or otherwise engage in any
activity that would be prohibited by Regulation M under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to a broker-dealer engaged in a distribution of the
Company's securities; and
(3) In connection with the solicitation, it
disclosed the compensation it would receive upon exercise of
the Warrant.
SECTION 4. PAYMENT OF THE EXERCISE FEE. The Company hereby agrees to
pay over to Schneider within two (2) business days after receipt by the Company
of the certificate described in Section 3(d) above, the Exercise Fee out of the
proceeds it received from the applicable Exercise Price paid for the Warrants
to which the certificate relates.
SECTION 5. INSPECTION OF RECORDS. Schneider may at any time during
business hours, at its expense, examine the records of the Company and the
Warrant Agent which relate to the exercise of the Warrants.
SECTION 6. TERMINATION. Schneider shall be entitled to terminate this
Agreement prior to the exercise of all Warrants at any time upon five (5)
business days' prior notice to the Company and the Warrant Agent.
Notwithstanding any such termination notice, Schneider shall be entitled to
receive an Exercise Fee for the exercise of any Warrant for which it has
already delivered to the Company prior to any such termination the certificate
required by Section 3(d) of this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF SCHNEIDER. At the date of
execution hereof and at the time of solicitation of exercise of Warrants,
Schneider represents that it is, and will, (i) be registered as a broker-dealer
under the Exchange Act, (ii) be a member in good standing of the NASD, and
(iii) maintain its registration, qualification and membership in full force and
effect and in good standing throughout the term of this Agreement. Schneider
acknowledges and agrees that it will not solicit the exercise of Warrants, or
offer or sell the underlying Common Stock, in any state or jurisdiction except
those in which the Common Stock underlying the Warrants has been qualified or
qualification is not required. Further, Schneider agrees to comply with the
laws of the states in which it may solicit exercise of the Warrants or in which
the Common Stock underlying the Warrants may be offered or sold by it, with the
applicable rules and regulations of the NASD, and will comply with federal laws
including, but not limited to, the Securities Act of 1933, as amended (the
"Act"), the Exchange Act and the rules and regulations of the Commission
thereunder.
SECTION 8. INDEMNIFICATION.
a. Subject to the conditions set forth below, the Company
agrees to indemnify and hold harmless any and all statutory or
designated underwriters (the "Underwriters"), the representative of
the Underwriters, if any (the "Representative"), and each of their
officers, directors, partners, employees, agents, and counsel, and
each person, if any, who controls the Representative or any one of the
Underwriters within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against
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any and all loss, liability, claim, damage, and expense whatsoever
(which shall include, for all purposes of this Section 8, but not be
limited to, attorneys' fees and any and all expense whatsoever
incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever and any
and all amounts paid in settlement of any claim or litigation) as and
when incurred arising out of, based upon, or in connection with (i)
any untrue statement or alleged untrue statement of a material fact
contained (A) in any preliminary prospectus, the registration
statement, or any post-effective amendment thereto, or the prospectus
(as from time to time amended and supplemented), or any amendment or
supplement thereto, relating to the offer or sale of Common Stock
underlying the Warrants or the solicitation of exercise of the
Warrants (such preliminary prospectus, registration statement,
post-effective amendment or prospectus hereinafter collectively, the
"Offering Documents") or (B) in any application or other document or
communication (in this Section 8 collectively called an "application")
in any jurisdiction in order to qualify the Common Stock and Warrants
under the "blue sky" or securities laws thereof or filed with the
Commission or any securities exchange; or any omission or alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any
breach of any representation, warranty, covenant, or agreement of the
Company contained in this Agreement. The foregoing agreement to
indemnify shall be in addition to any liability the Company may
otherwise have, including liabilities arising under this Agreement;
however, the Company shall have no liability under this Section 8 if
such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company as stated in Section
8(b) with respect to the Underwriters by or on behalf of the
Underwriters expressly for inclusion in any of the Offering Documents,
or in any application, as the case may be.
If any action is brought against the Underwriters, the
Representative or any of their officers, directors, partners,
employees, agents, or counsel, or any controlling persons of an
Underwriter or the Representative (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 have other than pursuant to this Section 8(a)) and
the Company shall promptly assume the defense of such action,
including the employment of counsel (satisfactory to such indemnified
party or parties) and payment of expenses. Such indemnified party or
parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless the employment of
such counsel shall have been authorized in writing by the Company in
connection with the defense of such action or the Company shall not
have promptly employed counsel 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. 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. The Company agrees promptly to notify the Underwriters and
the Representative of the commencement of any litigation or
proceedings against the Company or against any of its officers or
directors in connection with the sale of the Common Stock underlying
the Warrants, any Offering Documents, or any application.
b. The Underwriters agree to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who
shall have signed the Registration Statement, each other person, if
any, who controls the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Underwriters in Section
8(a), but only with respect to statements or omissions, if any, made
in any of the Offering Documents, or in any application, in reliance
upon and in conformity with written information furnished to the
Company as stated in this Section 8(b) with respect to the
Underwriters by or on behalf
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of the Underwriters expressly for inclusion in any of the Offering
Documents, or in any application, as the case may be; provided,
however, that the obligation of the Underwriters to provide indemnity
under the provisions of this Section 8(b) shall be limited to the
amount which represents the product of the number of shares of Common
Stock issued on exercise of Warrants and the Warrant Exercise Price.
For all purposes of this Agreement, the amounts of the Exercise Fee
set forth in the Offering Documents, the information under "Plan of
Distribution" and the identification of counsel to the Representative
under "Legal Matters" constitute the only information furnished in
writing by or on behalf of the Underwriters expressly for inclusion in
any of the Offering Documents, 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 of the Offering Documents, or any
application, and in respect of which indemnity may be sought against
the Underwriters pursuant to this Section 8(b), the Underwriters 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 Section 8(a).
c. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this
Section 8 is for any reason held to be unavailable to the Underwriters
or the Company, then the Company shall contribute to the damages paid
by the several Underwriters, and the several Underwriters shall
contribute to the damages paid by the Company; provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. In
determining the amount of contribution to which the respective parties
are entitled, there shall be considered the relative benefits received
by each party from the sale of the Common Stock underlying the
Warrants (taking into account the portion of the proceeds of the
offering realized by each), the parties' relative knowledge and access
to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company and the Underwriters agree that it would
not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose). No Underwriter or person
controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the total Exercise Price of
the Warrants, exercise of which was solicited by such Underwriter
under this Agreement, less the aggregate amount of any damages which
such Underwriter and its controlling persons have otherwise been
required to pay in respect of the same or any substantially similar
claim. The Underwriters' obligations to contribute hereunder are
several in proportion to their respective underwriting obligations and
not joint. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Act
shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed
the Offering Documents, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act, shall have the
same rights to contribution as the Company. Anything in this Section
8(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 Section 8(c) is intended to
supersede any right to contribution under the Act, the Exchange Act,
or otherwise.
SECTION 9. NOTICES. Any notice or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed sufficiently given if sent by first class certified mail, return
receipt requested, postage prepaid, addressed as follows:
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if to the Company: Shawn B. Stickle, President and Chief Operating Officer
Nigel V. Alexander, Chief Executive Officer
Multi-Link Telecommunications, Inc.
811 Lincoln Street
Fifth Floor
Denver, Colorado 80203
With a copy to: Thomas S. Smith, Esq.
Smith McCullough, P.C.
4643 South Ulster Street
Suite 900
Denver, Colorado 80237
If to Schneider: Keith Koch, Director of Corporate Finance
Schneider Securities, Inc.
1120 Lincoln Street, Suite 900
Denver, Colorado 80203
With a copy to: Robert W. Walter, Esq.
Berliner Zisser Walter & Gallegos, P.C.
1700 Lincoln Street, Suite 4700
Denver, Colorado 80203
and if to the Warrant Administrative Services
Agent: American Securities Transfer & Trust, Inc.
938 Quail Street, Suite 101
Lakewood, Colorado 80215
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or such other address as such party shall have given notice to other parties
hereto in accordance with this Section. All such notices or other
communications shall be deemed given three (3) business days after mailing, as
aforesaid.
SECTION 10. SUPPLEMENTS AND AMENDMENTS. The Company, the Warrant Agent
and Schneider may from time-to-time supplement or amend this Agreement by a
written instrument signed by the party to be charged, without the approval of
any holders of Warrants in order to cure any ambiguity or to correct or
supplement any provisions contained herein or to make any other provisions in
regard to matters or questions arising hereunder which the Company, the Warrant
Agent and Schneider may deem necessary or desirable and which do not adversely
affect the interest of the holders of Warrants.
SECTION 11. ASSIGNMENT. This Agreement may not be assigned by any
party without the express written approval of all other parties, except that
Schneider may assign this Agreement to its successors, if any.
SECTION 12. GOVERNING LAW. This Agreement will be deemed made under
the laws of the State of Colorado with respect to matters of contract law and
for all purposes shall be governed by and construed in accordance with the
internal laws of said State, without regard to the conflicts of laws provisions
thereof.
SECTION 13. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give any person or corporation other than the Company,
the Warrant Agent and Schneider any legal or equitable right, remedy or claim
under this Agreement; and this Agreement shall be for the sole and exclusive
benefit of, and be binding upon, the Company, the Warrant Agent and Schneider
and their respective successors and permitted assigns.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of the
sections of this Agreement are inserted for convenience only and shall not
control or affect the meanings or construction of any of the provisions hereof.
SECTION 15. SUPERSEDING AGREEMENT. This Agreement supersedes any and
all prior agreements between the parties with respect to the subject matter
hereof.
SECTION 16. EXCLUSIVE AGREEMENT. It is understood that this Agreement
is on an exclusive basis to solicit the exercise of the Warrants and that the
Company shall not engage other broker-dealers to solicit the exercise of
Warrants without the consent of Schneider.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MULTI-LINK TELECOMMUNICATIONS, INC.
By:
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Nigel V. Alexander,
Chief Executive Officer
By:
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Shawn B. Stickle,
President and Chief Executive Officer
SCHNEIDER SECURITIES, INC.
By:
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Thomas Schneider, President
AMERICAN SECURITIES TRANSFER & TRUST, INC.
By:
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Gregory Tubbs, Senior Vice President
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EXHIBIT A
CERTIFICATE
The undersigned, being the _______________ of
_________________________ (the "NASD Member") pursuant to Section 3(d) of the
Warrant Exercise Fee Agreement relating to the exercise of Warrants dated ,
1999 among Multi-Link Telecommunications, Inc. (the "Company"), Schneider
Securities, Inc. and American Securities Transfer & Trust, Inc. (the "Warrant
Agent") hereby certifies that:
1. The Company or the Warrant Agent has notified the NASD Member that
____________ Warrants (as defined in the Agreement) have been exercised during
_______________.
2. The exercise of _________ of such Warrants was solicited by the
NASD Member.
3. Such Warrants were not held in a discretionary account.
4. The NASD Member did not, within _____ business days immediately
preceding _______________, bid for or purchase the Common Stock of the Company
or any securities of the Company immediately convertible into or exchangeable
for the Common Stock (including Warrants) or otherwise engage in any activity
that would be prohibited by Regulation M under the Securities Exchange Act of
1934, as amended, to one engaged in a distribution of the Company's securities.
5. In connection with the solicitation of the exercise of the
Warrants, the NASD Member disclosed to holders of the Warrants the compensation
it will receive.
DATED:
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(Firm Name)
By:
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Title:
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