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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
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redemption; 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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Exhibit "A"
WARRANT NUMBER OF
CERTIFICATE NUMBER WARRANTS
- ------------------
CUSIP NO. SEE REVERSE FOR CERTAIN DEFINITIONS
COMMON STOCK PURCHASE WARRANT FOR THE
PURCHASE OF SHARES OF COMMON STOCK OF
MULTI-LINK TELECOMMUNICATIONS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF COLORADO
THIS CERTIFIES THAT, for value received
as registered owner (the "Registered Owner) of this Common Stock Purchase
Warrant (the "Warrant") is entitled at any time commencing on __________, 1999
(the Effective Date"), and before 5:00 P.M. Mountain Time, on ____________,
2002, which is the last day of the three year period commencing on the Effective
Date, (the "Expiration Date") to subscribe for, purchase and receive for each
two Warrants specified above one fully paid and nonassessable share of common
stock (a "Warrant Share"), of Multi-Link Telecommunications, Inc. (the
"Company"), at the price of $9.00 per share (the "Exercise Price"), upon
presentation and surrender of this Warrant, together with payment of the
Exercise Price for the Warrant Shares to be purchased, to the Company at its
principal office or to the Company's warrant agent at the warrant agent's
principal office in the manner described in the Warrant Agreement (the "Warrant
Agreement") between the Company and American Securities Transfer & Trust, Inc.;
provided, however, that upon the occurrence of any of the events specified in
such Warrant Agreement, the rights granted by this Warrant shall be adjusted as
specified therein. This Certificate and the Warrant represented hereby are
issued pursuant to and are subject in all respects to the terms and conditions
set forth in the Warrant Agreement.
Upon exercise of this Warrant, the form of Election to Purchase
hereinafter provided must be duly executed, the Exercise Price must be paid in
lawful money of the United States of America in cash, certified check, bank
draft or wire transfer and the instructions for registration of the Warrant
Shares acquired by such exercise must be completed. At or before 5:00 P.M.
Mountain Time on the Expiration Date, this Warrant shall become null and void
without further force or effect, and all rights represented hereby shall cease
and expire.
Commencing one year from the Effective Date, the Company may, at its
option, redeem this Warrant in whole for a redemption price of $.05 per Warrant,
on 30 days' prior written notice to the Registered Owner, provided, however, the
right to redeem this Warrant may be exercised by the Company only in the event
(1) the closing bid price for the Company's Common Stock equals or exceeds
$11.25 for 20 consecutive trading days immediately preceding any notice of
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the call for redemption, and the notice is given within five business days of
the conclusion of the 20 day trading period, and (2) 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. In the event the Company exercises its right to redeem this
Warrant, the Expiration Date will be deemed to be, and this Warrant will be
exercisable until the close of business on, the date fixed for redemption in
such notice. If the Warrant has been called for redemption and is not exercised
by such time, the Warrant will cease to be exercisable and the Registered Owner
hereof will be entitled only to the redemption price.
Subject to the terms contained herein and in the Warrant Agreement,
this Warrant may be assigned or exercised by the Registered Owner in whole or in
part by execution by the Registered Owner of the form of Assignment or Election
to Purchase, as appropriate, appearing on the reverse side hereof. If the
assignment is in whole, the Company shall execute and deliver a new Warrant or
Warrants of like tenor to the appropriate assignee expressly evidencing the
right to purchase the aggregate number of Warrant Shares purchasable hereunder,
and if the assignment be in part, the Company shall execute and deliver to the
appropriate assignee a new Warrant or Warrants of like tenor expressly
evidencing the right to purchase the portion of the aggregate number of Warrant
Shares as shall be contemplated by any such assignment, and shall concurrently
execute and deliver to the Registered Owner a new Warrant of like tenor
evidencing the right to purchase the remaining portion of Warrant Shares
purchasable hereunder which has not been transferred to the assignee.
In the event this Warrant is exercised in part only, the Company shall
cause to be delivered to the Registered Owner a new Warrant of like tenor
evidencing the right of the Registered Owner to purchase the number of Warrant
Shares purchasable hereunder as to which the Warrant has not been exercised. No
fractional shares will be issued upon exercise of the Warrant.
In no event shall this Warrant (or the Warrant Shares issuable upon
full or partial exercise hereof) be offered or sold except in conformity with
all applicable state and Federal securities laws.
The Company and the Warrant Agent may deem and treat the Registered
Owner hereof as the absolute owner of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone) for all
purposes and neither the Company nor the Warrant Agent shall be affected by any
notice to the contrary. The Registered Owner of this Warrant, as such, shall not
have any rights of a shareholder of the Company, either at law or at equity, and
the rights of the Registered Owner, as such, are limited to those rights
expressly provided in this Warrant Certificate and in the Warrant Agreement.
This certificate is not valid unless countersigned by the Warrant Agent.
The Company has agreed to pay a warrant solicitation fee of 5% of the
Exercise Price to broker-dealers under specified conditions upon the exercise of
the Warrants represented hereby.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
Dated: MULTI-LINK TELECOMMUNICATIONS, INC.
By:
Nigel Alexander, Managing Director
[SEAL]
COUNTERSIGNED AND REGISTERED:
American Securities Transfer & Trust, Inc.
P.O. Box 1596
Denver, Colorado 80201
By:
Warrant Agent and Registrar Authorized
Signature
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MULTI-LINK TELECOMMUNICATIONS, INC.
ELECTION TO PURCHASE
The undersigned hereby elects irrevocably to exercise the within
Warrant and to purchase _______ shares of Common Stock of Multi-Link
Telecommunications, Inc. and hereby makes payment of $_______ (at the rate of
$_____________ per share) in payment of the Exercise Price pursuant hereto. The
undersigned acknowledges that two Warrants must be exercised to purchase one
share of Common Stock. Please issue the shares as to which this Warrant is
exercised in accordance with the instructions given below. The undersigned
represents that the exercise of the within Warrant was solicited by the member
firm of the National Association of Securities Dealers, Inc. ("NASD") listed
below. If not solicited by an NASD member, the undersigned has written
"unsolicited" in the space below. If neither the name of another member firm or
"unsolicited" in entered, it will be assumed that exercise was unsolicited.
(Insert Name of NASD Member or "Unsolicited")
Dated:
----------------------
Signature:
INSTRUCTIONS FOR REGISTRATION OF SHARES
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF OWNER
Name
(Print in Block Letters)
Address
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ASSIGNMENT
FOR VALUE RECEIVED, ________________________________ does hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF OWNER
(Please print or Typewrite Name and Address Including Zip Code, of Assignee)
the right to purchase __________ shares of Common Stock of Multi-Link
Telecommunications, Inc. evidenced by the within Warrant, and does hereby
irrevocable constitute and appoint ________________________________________
Attorney to transfer such right on the books of Multi-Link Telecommunications,
Inc. with full power of substitution in the premises.
Dated:
Signature:
Signature(s) Guaranteed:
The signature(s) must be guaranteed by an eligible guarantor
institution (Banks, Stockbrokers, Savings and Loan Associations and Credit
Unions with membership in an approved signature guarantee Medallion Program),
pursuant to S.E.C. Rule 17Ad-15.
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