CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, dated as of July 1, 2003 (the "Agreement"),
by and between SkyWay Communications Holding Corp., a Florida Corporation (the
"Company"), with offices located at 0000-000xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX, and
Xxxxx Xxxxx, an individual residing in the State of Florida (the "Consultant")
(individually, a "Party", collectively, the "Parties").
RECITALS
WHEREAS, the Company has requested of Consultant and the Consultant has
agreed to provide certain strategic, financial and other general corporate
consulting services to the Company.
WHEREAS, in connection with and in consideration for such services, the
Company has agreed to compensate Consultant with warrants to purchase common
stock of the Company in lieu of cash payment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Parties agree as follows:
1. Services. Consultant agrees to familiarize itself to
the extent it deems appropriate and feasible with the business, operations,
properties, financial condition and prospects of the Company and to perform and
provide, as the Company reasonably and specifically requests, certain strategic,
financial, and other general corporate consulting services to the Company
("Services"), including but not limited to: (i) identifying prospective
strategic partners and strategic alliances (except reverse mergers designed to
take a private company public); (ii) planning, strategizing and negotiating with
potential strategic business partners; (iii) assisting with business
development; (iv) reporting as to developments concerning the industry which may
be relevant or of interest or concern to the Company or the Company's business;
(v) developing strategic planning issues; (vi) providing management consulting
services including: analyzing historical operational performance, reviewing
operational performance of the Company, making recommendations to enhance the
operational efficiency of the Company; and (vii) consulting on alternatives to
enhance the growth of the Company. NONE OF THE SERVICES PROVIDED BY CONSULTANT
HEREIN SHALL INVOLVE THE RAISING OF DEBT OR EQUITY CAPITAL, AND NOTHING IN THIS
AGREEMENT SHALL BE CONSTRUED AS TO OBLIGATE OR REQUIRE THE CONSULTANT TO RAISE
DEBT OR EQUITY CAPITAL.
2. Compensation. In consideration of the Services to be
provided by the Consultant, and in lieu of a cash payment, the Company agrees to
issue to Consultant (x) 1,000,000 shares of common stock of the Company, and (y)
warrants (the "Warrants") to purchase 2,000,000 shares of the Company's common
stock with an exercise price of equal to 80% of the last sale price for the
Company's Common Stock for a period of ten (10) consecutive trading days prior
to the Exercise Date, but in no event less than $.20 per share, to purchase
1,000,000 shares of the Company's common stock with an exercise price of equal
to 85% of the last sale price for the Company's Common Stock for a period of ten
(10) consecutive trading days prior to the Exercise Date, but in no event less
than $.20 per share, to purchase 1,000,000 shares of the Company's common stock
with an exercise price of equal to 90% of the last sale price for the Company's
Common Stock for a period of ten (10) consecutive trading days prior to the
Exercise Date, but in no event less than $.20 per share subject to adjustment
pursuant to Sections 7 and 8 below. The Warrants shall be set forth in three (3)
agreements (the "Warrant Agreements"), which are attached hereto and made a part
hereof.
(ii) The Company hereby agrees to register the
Shares by filing a Form S-8 Registration Statement covering the Shares within
five (5) business days of the date of this Agreement. Consultant shall take any
action reasonably requested by the Company in connection with registration or
qualification of the Warrants and Shares under federal or state securities laws
(iii) In addition to the foregoing, the Company
shall reimburse the Consultant for such business expenses which the Consultant
incurs solely in connection with the performance of the Services hereunder. The
Consultant shall obtain the prior written approval of the Company before
incurring any expenses for which the Consultant will seek reimbursement from the
Company. The Consultant must submit receipts for all expenses and otherwise
comply with all of the Company's general policies for expense reimbursement in
order to receive payment therefor. The Company shall reimburse the Consultant
for expenses within fifteen (15) days following submission of all required
documentation.
(iv) It is expressly understood and agreed that
in connection with the Services to be performed by the Consultant, the
Consultant shall be solely responsible for any and all taxes arising from the
consulting fees paid to the Consultant hereinafter.
3. Term. Consultant's engagement shall be for a period
of Six (6) months ("Term"). Thereafter, the agreement may be terminated by
either the Company or Consultant at any time, with or without cause, upon
written notice to that effect to the other party.
4. Information. The Company shall furnish Consultant
such information as Consultant reasonably requests in connection with the
performance of its services hereunder (all such information so furnished is
referred to herein as the "Information"). The Company understands and agrees
that Consultant, in performing its services hereunder, will use and rely upon
the Information as well as publicly available information regarding the Company
and any potential partners and that Consultant shall not assume responsibility
for independent verification of any information, whether publicly available or
otherwise furnished to it, concerning the Company or any potential partner,
including, without limitation, any financial information, forecasts or
projections, considered by Consultant in connection with the rendering of its
services. Accordingly, Consultant shall be entitled to assume and rely upon the
accuracy and completeness of all such information and is not required to conduct
a physical inspection of any of the properties or assets, or to prepare or
obtain any independent evaluation or appraisal of any of the assets or
liabilities, of the Company or any potential partner. With respect to any
financial forecasts and projections made available to Consultant by the Company
or any potential partners and used by Consultant in its analysis, Consultant
shall be entitled to assume that such forecasts and projections have been
reasonably prepared on bases reflecting the best currently available estimates
and judgments of the management of the Company or any potential partner, as the
case may be, as to the matters covered thereby.
5. Timely Appraisals. The Company hereby agrees to use
its commercially reasonable efforts to keep Consultant up to date and apprised
of all business, market and legal developments related to the Company and its
operations and management. Accordingly:
(i) the Company shall provide Consultant with
copies of all amendments, revisions and changes to its business and marketing
plans, bylaws, articles of incorporation, private placement memoranda, key
contracts, employment and consulting agreements and other operational
agreements;
(ii) the Company shall promptly notify
Consultant of all new contracts agreements, joint ventures or filings with any
state, federal or local administrative agency, including without limitation the
SEC, NASD or any state agency, and shall provide all related documents,
including copies of the exact documents filed, to Consultant, including without
limitation, all annual reports, quarterly reports and notices of change of
events, and registration statements filed with the SEC and any state agency,
directly to Consultant;
(iii) the Company shall also provide directly to
Consultant current financial statements, including balance sheets, income
statements, cash flows and all other documents provided or generated by the
Company in the normal course of its business and requested by Consultant from
time to time; and
(iv) Consultant shall keep all documents and
information supplied to it hereunder confidential.
6. Representations and Warranties. The Consultant hereby
represents and warrants to the Company that:
(i) he has full legal capacity to enter into
this Agreement and to provide the Services hereunder without violation or
conflict with any other agreement or instrument to which the Consultant is a
party or may be bound;
(ii) in the course of performing the Services
hereunder, the Consultant will not infringe the patent, trademark or copyright
(collectively, "Intellectual Property") of any third party;
(iii) the execution, delivery and performance of
this Agreement does not and will not conflict with, violate or breach its
constituent documents or any agreement (including, without limitation, any other
distribution agreement), decree, order or judgment or any law or regulation to
which it is a party or subject or by which it or any of its properties or assets
is bound.
7. Relationship of the Parties. The Consultant shall be
an independent contractor and the Consultant shall not be considered in any
manner an employee of the Company and the relationship of the Company and the
Consultant shall not in any manner create an employer-employee relationship
between the parties.
8. Reliance on Others. The Company confirms that it will
rely on its own counsel, accountants and other similar expert advisors for
legal, accounting, tax and other similar advice.
9. No Rights in Shareholders, etc. The Company
recognizes that Consultant has been engaged only by the Company, and that the
Company's engagement of Consultant is not deemed to be on behalf of and is not
intended to confer rights upon any shareholder, partner or other owner of the
Company or any other person not a party hereto as against Consultant or any of
its affiliates or any of their respective directors, officers, agents, employees
or representatives. Unless otherwise expressly agreed, no one other than the
Company is authorized to rely upon the Company's engagement of Consultant or any
statements, advice, opinions or conduct by Consultant. Without limiting the
foregoing, any opinions or advice rendered to the Company's Board of Directors
or management in the course of the Company's engagement of Consultant are for
the purpose of assisting the Board or management, as the case may be, in
evaluating the Transaction and do not constitute a recommendation to any
shareholder of the Company concerning action that such shareholder might or
should take in connection with the Transaction. Consultant's role herein is that
of an independent contractor; nothing herein is intended to create or shall be
construed as creating a fiduciary relationship between the Company and
Consultant.
10. No Waiver. The failure of any of the parties hereto
to enforce any provision hereof on any occasion shall not be deemed to be a
waiver of any preceding or succeeding breach of such provision or of any other
provision.
11. Entire Agreement. This Agreement constitutes the
entire Agreement and understanding of the parties hereto.
12. Amendments. No amendment, modification or waiver of
any provision herein shall be effective unless in writing, executed by each of
the parties hereto.
13. Governing Law; Jurisdiction. This Agreement shall be
construed, interpreted and enforced in accordance with and shall be governed by
the laws of the State of Florida applicable to agreements made and to be
performed entirely therein. In the event that either Party hereto shall take
legal action to enforce any of the provisions of this Agreement, the Parties
agree that the exclusive jurisdiction for such legal action shall be the state
courts of New York or the federal courts residing in the State of Florida.
14. Binding Effect. This Agreement shall bind and inure
to the benefit of the Parties, their successors and assigns.
15. Notices. Any notice under the provisions of this
Agreement shall be deemed given when received and shall be given by hand,
reputable overnight courier service or by registered or certified mail, return
receipt requested, directed to the addresses set forth above, unless notice of a
new address has been sent pursuant to the terms of this section.
16. Unenforceability;Severability. If any provision of
this Agreement is found to be void or unenforceable by a court of competent
jurisdiction, the remaining provisions of this Agreement shall, nevertheless, be
binding upon the Parties with the same force and effect as though the
unenforceable part had been severed and deleted.
17. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the Parties hereto have executed this instrument
the date first above written.
SKYWAY COMMUNICATIONS HOLDING CORP.
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Chief Executive Officer
CONSULTANT
By: /s/ Xxxxx Xxxxx
Xxxxx Xxxxx
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
IS AVAILABLE WITH RESPECT THERETO.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK OF
SKYWAY COMMUNICATIONS HOLDING CORP.
Issue Date: July 2, 2003
Warrant No. CW-__ 2,000,000 Shares of Common Stock
1. Issuance. This Warrant is issued to Xxxxx Xxxxx (the "Holder"), by
SKYWAY COMMUNICATIONS HOLDING CORP., a Florida corporation (hereinafter with its
successors called the "Company") pursuant to the Subscription Agreement of even
date herewith (the "Purchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
2. Purchase Price; Number of Shares. This Warrant certifies that, for
value received, the Holder of this Warrant is entitled upon surrender of this
Warrant with the subscription form annexed hereto as Appendix 1 duly executed,
at the principal office of the Company, to purchase from the Company 2,000,000
fully paid and nonassessable shares of Common Stock of the Company (the "Common
Stock") at a price per share (the "Purchase Price") equal to 80% of the last
sale price for the Company's Common Stock for a period of ten (10) consecutive
trading days prior to the Exercise Date, but in no event less than $.20 per
share, subject to adjustment pursuant to Sections 7 and 8 below.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in cash
or by certified check or wire transfer, (ii) by the cancellation, surrender or
forgiveness by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or
(iii) by any combination of the foregoing.
4. Fractional Shares. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Purchase Price.
5. Exercise.
(a) Expiration Date. Subject to Section 5 (b) below, Holder's rights under
this Warrant expire at 5:00 p.m. Eastern Time on the second anniversary of the
date of this Warrant (the "Expiration Date") and shall be void thereafter. At
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value. Subject to Section 5(b) below, the
Company may not call or redeem all or any portion of this Warrant without the
prior written consent of the Holder.
(b) Company's Call Option. Notwithstanding anything herein to the contrary,
in the event the last sale price for the Company's Common Stock is in excess of
175% of the Exercise Price for a period of ten (10) consecutive trading days,
and this Warrant and the Common Stock underlying this Warrant have been
registered, the Company may, in its sole discretion, elect to change the
Expiration Date to 5:00 P.M., Eastern Time on the date fourteen (14) days after
written notice thereof is given to the Holder at the address last shown on the
records of the Company for the Holder or given by the Holder to the Company for
the purpose of notice.
(c) Delivery. To effect conversions hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate shares
represented by this Warrant are being exercised. Upon delivery of the Form of
Election to Purchase to the Company (with the attached Shares Exercise Log) at
its address for notice set forth herein and upon payment of the Purchase Price
multiplied by the number of shares of Common Stock that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three
business days after the date of exercise) issue and deliver to the Holder, a
certificate for the shares of Common Stock issuable upon such exercise, which,
unless otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the shares of Common Stock has been declared effective by the Securities and
Exchange Commission, deliver shares of Common Stock electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that, the Company may, but
will not be required to change its transfer agent if its current transfer agent
cannot deliver such shares electronically through the Depository Trust
Corporation.
(d) Failure to Deliver. If by the third business day after a exercise of
the warrant, the Company fails to deliver the required number of shares of
Common Stock in the manner required pursuant to Section 5(c), and if after such
third business day and prior to the receipt of such shares, the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the shares of Common Stock issuable
upon exercise of the Warrant ("Warrant Share") which the Holder anticipated
receiving upon such exercise (a "Buy In"), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common
Stock at the time of the obligation giving rise to such purchase obligation and
(2) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy In.
(e) Remedies. The Company's obligations to issue and deliver Warrant Shares
in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
6. Reserved Shares; Valid Issuance. The Company covenants that it will at
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock of the Company, free from all
preemptive or similar rights therein, as will be sufficient to permit the
exercise of this Warrant in full. If at any time between the date hereof and the
Expiration Date, the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes. The Company further covenants that such shares as may be
issued pursuant to such exercise will, upon issuance, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof.
7. Stock Splits and Dividends. If after the date hereof the Company shall
subdivide the Common Stock, by stock split or otherwise, or combine the Common
Stock, or issue additional shares of Common Stock in payment of a stock dividend
on the Common Stock, the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.
8. Mergers and Reclassifications. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder) shall thereafter be applicable in relation to any shares of stock or
other securities and property thereafter deliverable upon exercise hereof. For
the purposes of this Section 8, the term "Reorganization" shall include without
limitation any reclassification, capital reorganization or change of the Common
Stock (other than as a result of a subdivision, combination or stock dividend
provided for in Section 7 hereof), or any consolidation of the Company with, or
merger of the Company into, another corporation or other business organization
(other than a merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding Common
Stock), or any sale or conveyance to another corporation or other business
organization of all or substantially all of the assets of the Company.
9. No Voting or Dividend Rights. Nothing contained in this Warrant shall
be construed as conferring upon the Holder hereof the right to vote or to
consent or to receive notice as a shareholder of the Company or any other
matters or any rights whatsoever as a shareholder of the Company prior to the
exercise of the Holder's rights to purchase shares of Common Stock as provided
for herein. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised.
10. Amendment. The terms of this Warrant may be amended, modified or waived
only with the written consent of the Holder.
11. Notices, Etc. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given (i) upon receipt if personally delivered, (ii) three (3) days after being
mailed by registered or certified mail, postage prepaid, or (iii) one day after
being sent by recognized overnight courier or by facsimile, if to Holder, at
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxxx, or at such other address or
number as Holder shall have furnished to Company in writing, or if to Company,
at 0000-000xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 or at such other address or
number as Company shall have furnished to Holder in writing.
12. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant and all actions
arising out of or in connection with this Warrant shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
the conflicts of law provisions of the State of Florida.
13. Successors and Assigns. Holder may not sell, transfer or otherwise
dispose of the Securities except in accordance with the restrictions set out in
the Purchase Agreement. The rights and obligations of Company and Holder shall
be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
Dated July 2, 2003 SKYWAY COMMUNICATIONS HOLDING CORP.
Name:
Title:
FORM OF ELECTION TO PURCHASE
Date: _____________
SKYWAY COMMUNICATIONS HOLDING CORP.
0000-000xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby elects:
____ to exercise the warrant issued to it by SKYWAY COMMUNICATIONS
HOLDING CORP. (the "Company") and dated June 27, 2003 (the "Warrant")
and to purchase ____________ shares of the Common Stock of the Company
(the "Shares") purchasable thereunder at a purchase price of
_______________ ($____) per Share (the "Purchase Price") pursuant to
the terms of the Warrant and the undersigned delivers the Purchase
Price herewith in full in cash or by certified check or wire transfer
or as otherwise permitted pursuant to Section 3 of the Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
Very truly yours,
__________________________
Exercise Log
_______________________ _______________________ _______________________ _______________________
Date Number of Warrant Shares Number of Warrant Shares Number of Warrant Shares
Available to be Exercised Exercised Remaining to be Exercised
_______________________ _______________________ _______________________ _______________________
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
IS AVAILABLE WITH RESPECT THERETO.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK OF
SKYWAY COMMUNICATIONS HOLDING CORP.
Issue Date: July 2, 2003
Warrant No. CW-__ 1,000,000 Shares of Common Stock
1. Issuance. This Warrant is issued to Xxxxx Xxxxx (the "Holder"), by
SKYWAY COMMUNICATIONS HOLDING CORP., a Florida corporation (hereinafter with its
successors called the "Company") pursuant to the Subscription Agreement of even
date herewith (the "Purchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
2. Purchase Price; Number of Shares. This Warrant certifies that, for value
received, the Holder of this Warrant is entitled upon surrender of this Warrant
with the subscription form annexed hereto as Appendix 1 duly executed, at the
principal office of the Company, to purchase from the Company 1,000,000 fully
paid and nonassessable shares of Common Stock of the Company (the "Common
Stock") at a price per share (the "Purchase Price") equal to 85% of the last
sale price for the Company's Common Stock for a period of ten (10) consecutive
trading days prior to the Exercise Date, but in no event less than $.20 per
share, subject to adjustment pursuant to Sections 7 and 8 below.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in cash or
by certified check or wire transfer, (ii) by the cancellation, surrender or
forgiveness by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or
(iii) by any combination of the foregoing.
4. Fractional Shares. No fractional shares shall be issued upon exercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Purchase Price.
5. Exercise.
(a) Expiration Date. Subject to Section 5 (b) below, Holder's rights under
this Warrant expire at 5:00 p.m. Eastern Time on the second anniversary of the
date of this Warrant (the "Expiration Date") and shall be void thereafter. At
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value. Subject to Section 5(b) below, the
Company may not call or redeem all or any portion of this Warrant without the
prior written consent of the Holder.
(b) Company's Call Option. Notwithstanding anything herein to the contrary,
in the event the last sale price for the Company's Common Stock is in excess of
175% of the Exercise Price for a period of ten (10) consecutive trading days,
and this Warrant and the Common Stock underlying this Warrant have been
registered, the Company may, in its sole discretion, elect to change the
Expiration Date to 5:00 P.M., Eastern Time on the date fourteen (14) days after
written notice thereof is given to the Holder at the address last shown on the
records of the Company for the Holder or given by the Holder to the Company for
the purpose of notice.
(c) Delivery. To effect conversions hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate shares
represented by this Warrant are being exercised. Upon delivery of the Form of
Election to Purchase to the Company (with the attached Shares Exercise Log) at
its address for notice set forth herein and upon payment of the Purchase Price
multiplied by the number of shares of Common Stock that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three
business days after the date of exercise) issue and deliver to the Holder, a
certificate for the shares of Common Stock issuable upon such exercise, which,
unless otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the shares of Common Stock has been declared effective by the Securities and
Exchange Commission, deliver shares of Common Stock electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that, the Company may, but
will not be required to change its transfer agent if its current transfer agent
cannot deliver such shares electronically through the Depository Trust
Corporation.
(d) Failure to Deliver. If by the third business day after a exercise of
the warrant, the Company fails to deliver the required number of shares of
Common Stock in the manner required pursuant to Section 5(c), and if after such
third business day and prior to the receipt of such shares, the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the shares of Common Stock issuable
upon exercise of the Warrant ("Warrant Share") which the Holder anticipated
receiving upon such exercise (a "Buy In"), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common
Stock at the time of the obligation giving rise to such purchase obligation and
(2) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy In.
e) Remedies. The Company's obligations to issue and deliver Warrant Shares
in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
6. Reserved Shares; Valid Issuance. The Company covenants that it will at
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock of the Company, free from all
preemptive or similar rights therein, as will be sufficient to permit the
exercise of this Warrant in full. If at any time between the date hereof and the
Expiration Date, the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes. The Company further covenants that such shares as may be
issued pursuant to such exercise will, upon issuance, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof.
7. Stock Splits and Dividends. If after the date hereof the Company shall
subdivide the Common Stock, by stock split or otherwise, or combine the Common
Stock, or issue additional shares of Common Stock in payment of a stock dividend
on the Common Stock, the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.
8. Mergers and Reclassifications. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder) shall thereafter be applicable in relation to any shares of stock or
other securities and property thereafter deliverable upon exercise hereof. For
the purposes of this Section 8, the term "Reorganization" shall include without
limitation any reclassification, capital reorganization or change of the Common
Stock (other than as a result of a subdivision, combination or stock dividend
provided for in Section 7 hereof), or any consolidation of the Company with, or
merger of the Company into, another corporation or other business organization
(other than a merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding Common
Stock), or any sale or conveyance to another corporation or other business
organization of all or substantially all of the assets of the Company.
9. No Voting or Dividend Rights. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder of the Company or any other matters or any
rights whatsoever as a shareholder of the Company prior to the exercise of the
Holder's rights to purchase shares of Common Stock as provided for herein. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised.
10. Amendment. The terms of this Warrant may be amended, modified or waived
only with the written consent of the Holder.
11. Notices, Etc. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given (i) upon receipt if personally delivered, (ii) three (3) days after being
mailed by registered or certified mail, postage prepaid, or (iii) one day after
being sent by recognized overnight courier or by facsimile, if to Holder, at
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxxx, or at such other address or
number as Holder shall have furnished to Company in writing, or if to Company,
at 0000-000xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 or at such other address or
number as Company shall have furnished to Holder in writing.
12. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant and all actions
arising out of or in connection with this Warrant shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
the conflicts of law provisions of the State of Florida.
13. Successors and Assigns. Holder may not sell, transfer or otherwise
dispose of the Securities except in accordance with the restrictions set out in
the Purchase Agreement. The rights and obligations of Company and Holder shall
be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
Dated July 2, 2003 SKYWAY COMMUNICATIONS HOLDING CORP.
Name:
Title:
FORM OF ELECTION TO PURCHASE
Date: _____________
SKYWAY COMMUNICATIONS HOLDING CORP.
0000-000xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby elects:
____ to exercise the warrant issued to it by SKYWAY COMMUNICATIONS
HOLDING CORP. (the "Company") and dated June 27, 2003 (the "Warrant")
and to purchase ____________ shares of the Common Stock of the Company
(the "Shares") purchasable thereunder at a purchase price of
_______________ ($____) per Share (the "Purchase Price") pursuant to
the terms of the Warrant and the undersigned delivers the Purchase
Price herewith in full in cash or by certified check or wire transfer
or as otherwise permitted pursuant to Section 3 of the Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
Very truly yours,
_________________________________
Exercise Log
_______________________ _______________________ _______________________ _______________________
Date Number of Warrant Shares Number of Warrant Shares Number of Warrant Shares
Available to be Exercised Exercised Remaining to be Exercised
_______________________ _______________________ _______________________ _______________________
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
IS AVAILABLE WITH RESPECT THERETO.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK OF
SKYWAY COMMUNICATIONS HOLDING CORP.
Issue Date: July 2, 2003
Warrant No. CW-__ 1,000,000 Shares of Common Stock
1. Issuance. This Warrant is issued to Xxxxx Xxxxx (the "Holder"), by
SKYWAY COMMUNICATIONS HOLDING CORP., a Florida corporation (hereinafter with its
successors called the "Company") pursuant to the Subscription Agreement of even
date herewith (the "Purchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
2. Purchase Price; Number of Shares. This Warrant certifies that, for value
received, the Holder of this Warrant is entitled upon surrender of this Warrant
with the subscription form annexed hereto as Appendix 1 duly executed, at the
principal office of the Company, to purchase from the Company 1,000,000 fully
paid and nonassessable shares of Common Stock of the Company (the "Common
Stock") at a price per share (the "Purchase Price") equal to 90% of the last
sale price for the Company's Common Stock for a period of ten (10) consecutive
trading days prior to the Exercise Date, but in no event less than $.20 per
share, subject to adjustment pursuant to Sections 7 and 8 below.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in cash or
by certified check or wire transfer, (ii) by the cancellation, surrender or
forgiveness by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to the
principal amount thereof plus accrued interest to the date of surrender, or
(iii) by any combination of the foregoing.
4. Fractional Shares. No fractional shares shall be issued uponexercise of
this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Purchase Price.
5. Exercise.
(a) Expiration Date. Subject to Section 5 (b) below, Holder's rights under
this Warrant expire at 5:00 p.m. Eastern Time on the second anniversary of the
date of this Warrant (the "Expiration Date") and shall be void thereafter. At
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value. Subject to Section 5(b) below, the
Company may not call or redeem all or any portion of this Warrant without the
prior written consent of the Holder.
(b) Company's Call Option. Notwithstanding anything herein to the contrary,
in the event the last sale price for the Company's Common Stock is in excess of
175% of the Exercise Price for a period of ten (10) consecutive trading days,
and this Warrant and the Common Stock underlying this Warrant have been
registered, the Company may, in its sole discretion, elect to change the
Expiration Date to 5:00 P.M., Eastern Time on the date fourteen (14) days after
written notice thereof is given to the Holder at the address last shown on the
records of the Company for the Holder or given by the Holder to the Company for
the purpose of notice.
(c) Delivery. To effect conversions hereunder, the Holder shall not be
required to physically surrender this Warrant unless the aggregate shares
represented by this Warrant are being exercised. Upon delivery of the Form of
Election to Purchase to the Company (with the attached Shares Exercise Log) at
its address for notice set forth herein and upon payment of the Purchase Price
multiplied by the number of shares of Common Stock that the Holder intends to
purchase hereunder, the Company shall promptly (but in no event later than three
business days after the date of exercise) issue and deliver to the Holder, a
certificate for the shares of Common Stock issuable upon such exercise, which,
unless otherwise required by the Purchase Agreement, shall be free of
restrictive legends. The Company shall, upon request of the Holder and
subsequent to the date on which a registration statement covering the resale of
the shares of Common Stock has been declared effective by the Securities and
Exchange Commission, deliver shares of Common Stock electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions, if available, provided, that, the Company may, but
will not be required to change its transfer agent if its current transfer agent
cannot deliver such shares electronically through the Depository Trust
Corporation.
(d) Failure to Deliver. If by the third business day after a exercise of
the warrant, the Company fails to deliver the required number of shares of
Common Stock in the manner required pursuant to Section 5(c), and if after such
third business day and prior to the receipt of such shares, the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the shares of Common Stock issuable
upon exercise of the Warrant ("Warrant Share") which the Holder anticipated
receiving upon such exercise (a "Buy In"), then the Company shall (1) pay in
cash to the Holder the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the exercise at issue by (B) the closing bid price of the Common
Stock at the time of the obligation giving rise to such purchase obligation and
(2) at the option of the Holder, either reinstate the portion of the Warrant and
equivalent number of Warrant Shares for which such exercise was not honored or
deliver to the Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and delivery
obligations hereunder. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy In.
(e) Remedies. The Company's obligations to issue and deliver Warrant Shares
in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company's failure to timely deliver certificates representing
shares of Common Stock upon exercise of the Warrant as required pursuant to the
terms hereof.
6. Reserved Shares; Valid Issuance. The Company covenants that it will at
all times from and after the date hereof reserve and keep available such number
of its authorized shares of Common Stock of the Company, free from all
preemptive or similar rights therein, as will be sufficient to permit the
exercise of this Warrant in full. If at any time between the date hereof and the
Expiration Date, the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes. The Company further covenants that such shares as may be
issued pursuant to such exercise will, upon issuance, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof.
7. Stock Splits and Dividends. If after the date hereof the Company shall
subdivide the Common Stock, by stock split or otherwise, or combine the Common
Stock, or issue additional shares of Common Stock in payment of a stock dividend
on the Common Stock, the number of shares of Common Stock issuable on the
exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.
8. Mergers and Reclassifications. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
to the end that the provisions hereof (including without limitation, provisions
for the adjustment of the Purchase Price and the number of shares issuable
hereunder) shall thereafter be applicable in relation to any shares of stock or
other securities and property thereafter deliverable upon exercise hereof. For
the purposes of this Section 8, the term "Reorganization" shall include without
limitation any reclassification, capital reorganization or change of the Common
Stock (other than as a result of a subdivision, combination or stock dividend
provided for in Section 7 hereof), or any consolidation of the Company with, or
merger of the Company into, another corporation or other business organization
(other than a merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding Common
Stock), or any sale or conveyance to another corporation or other business
organization of all or substantially all of the assets of the Company.
9. No Voting or Dividend Rights. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof the right to vote or to consent
or to receive notice as a shareholder of the Company or any other matters or any
rights whatsoever as a shareholder of the Company prior to the exercise of the
Holder's rights to purchase shares of Common Stock as provided for herein. No
dividends or interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder until, and
only to the extent that, this Warrant shall have been exercised.
10. Amendment. The terms of this Warrant may be amended, modified or waived
only with the written consent of the Holder.
11. Notices, Etc. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given (i) upon receipt if personally delivered, (ii) three (3) days after being
mailed by registered or certified mail, postage prepaid, or (iii) one day after
being sent by recognized overnight courier or by facsimile, if to Holder, at
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxxx, or at such other address or
number as Holder shall have furnished to Company in writing, or if to Company,
at 0000-000xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 or at such other address or
number as Company shall have furnished to Holder in writing.
12. Descriptive Headings and Governing Law. The descriptive headings of the
several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant and all actions
arising out of or in connection with this Warrant shall be governed by and
construed in accordance with the laws of the State of Florida, without regard to
the conflicts of law provisions of the State of Florida.
13. Successors and Assigns. Holder may not sell, transfer or otherwise
dispose of the Securities except in accordance with the restrictions set out in
the Purchase Agreement. The rights and obligations of Company and Holder shall
be binding upon and benefit the successors, assigns, heirs, administrators and
transferees of the parties.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer.
Dated July 2, 2003 SKYWAY COMMUNICATIONS HOLDING CORP.
Name:
Title:
FORM OF ELECTION TO PURCHASE
Date: _____________
SKYWAY COMMUNICATIONS HOLDING CORP.
0000-000xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned hereby elects:
____ to exercise the warrant issued to it by SKYWAY COMMUNICATIONS
HOLDING CORP. (the "Company") and dated June 27, 2003 (the "Warrant")
and to purchase ____________ shares of the Common Stock of the Company
(the "Shares") purchasable thereunder at a purchase price of
_______________ ($____) per Share (the "Purchase Price") pursuant to
the terms of the Warrant and the undersigned delivers the Purchase
Price herewith in full in cash or by certified check or wire transfer
or as otherwise permitted pursuant to Section 3 of the Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
Very truly yours,
_________________________________
Exercise Log
_______________________ _______________________ _______________________ _______________________
Date Number of Warrant Shares Number of Warrant Shares Number of Warrant Shares
Available to be Exercised Exercised Remaining to be Exercised
_______________________ _______________________ _______________________ _______________________
