EXHIBIT 4(iii)
SKYGIVERS, INC.
WARRANT TO PURCHASE
COMMON STOCK
No.: W-___ March __, 2001
THIS WARRANT, AND ALL SHARES OF COMMON STOCK ISSUABLE UNDER THIS WARRANT, HAVE
BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("THE ACT"). SUCH SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM.
THIS CERTIFIES THAT, for value received, _____ (the "Investor"), or its
permitted assigns is entitled, subject to the terms and conditions of this
Warrant, at any time after the Effective Date and before 5:30 P.M. New York City
time on the Expiration Date, to purchase from Skygivers, Inc., a Nevada
corporation (the "Company"), ____ shares of Common Stock ("Warrant Stock"), at
an initial exercise price per share of five cents ($0.05), subject to adjustment
as provided in Section 4 hereof. The Purchase Price is subject to adjustment
and change as provided herein.
1. DEFINITIONS. As used in this Warrant, the following terms shall have the
following respective meanings:
"Affiliate" when used with respect to any Person, shall mean (a) any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person, and (b) any executive officer or director of
such Person and any executive officer, director or general partner of the other
Person which controls such Person. For the purposes of this definition,
"control" (including the correlative meanings of the terms "controlling",
controlled by" and "under common control with"), with respect to any Person,
shall mean possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Common Stock" shall mean the Company's Common Stock, par value $0.0001.
"Effective Date" shall mean the date on which this Warrant is executed by
the Company and the Investor.
"Expiration Date" shall mean February 1, 2003.
"Fair Market Value" of a share of Warrant Stock as of a particular date
shall mean:
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(a) If traded on a securities exchange or the Nasdaq National
Market, the Fair Market Value shall be deemed to be the average of the
closing prices of the Common Stock on such exchange or market over the
five (5) business days ending on the day immediately prior to the
applicable date of valuation;
(b) If actively traded over-the-counter, the Fair Market Value shall
be deemed to be the average of the closing bid prices over the 30-day
period ending on the day immediately prior to the applicable date of
valuation; and
(c) If there is no active public market, the Fair Market Value shall
be the value thereof, as agreed upon by the Company and the Holder;
provided, however, that if the Company and the Holder cannot agree on such
value, such value shall be determined by an independent valuation firm
experienced in valuing businesses such as the Company and jointly selected
in good faith by the Company and the Holder. Fees and expenses of the
valuation firms shall be paid solely by the Company.
"Holder" shall mean the Investor or its permitted registered assigns.
"IPO" shall mean the Company's first firm commitment underwritten public
offering of Common Stock pursuant to a registration statement under the
Securities Act of 1933, as amended, filed with the SEC.
"Person" shall mean any individual, corporation, partnership, limited
liability company, trust or other entity or organization, including any
governmental authority or political subdivision thereof.
"Purchase Price" shall mean, for each share of Common Stock, fifty cents
($0.50), subject to adjustment as provided for herein.
"Registered Holder" shall mean any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.
"SEC" shall mean the United States Securities and Exchange Commission.
"Warrant" shall mean this Warrant and any warrant delivered in
substitution or exchange therefor as provided herein.
"Warrant Stock" shall mean the Common Stock and any other securities at
any time issued, receivable or issuable upon exercise of this Warrant.
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associated with the IPO, the Holder shall promptly notify the Company whether or
not the Holder will exercise this Warrant pursuant to this Section 2.2 prior to
consummation of the IPO. Notwithstanding whether or not an IPO Notice has been
delivered to the Holder or any other provision of this Warrant to the contrary,
if the Holder decides to exercise this Warrant while a registration statement is
on file with the SEC in connection with the IPO, this Warrant shall be deemed
exercised on the consummation of the IPO and the Fair Market Value of a share of
Warrant Stock will be the price at which one share of Common Stock was sold to
the public in the IPO. If the Holder has elected to exercise this Warrant
pursuant to this Section 2.2 while a registration statement is on file with the
SEC in connection with an IPO and the IPO is not consummated, then the Holder's
exercise of this Warrant shall not be effective unless the Holder confirms in
writing the Holder's intention to go forward with the exercise of this Warrant.
2.3 "Easy Sale" Exercise. In lieu of the payment methods set forth in
Section 2.1(b) above, when permitted by law and applicable regulations
(including exchange, Nasdaq and NASD rules and including that all shares so
issued will be deemed to be fully paid, non-assessable and properly listed or
admitted for trading), the Holder may pay the Purchase Price through a "same day
sale" commitment from the Holder (and if applicable a broker-dealer that is a
member of the National Association of Securities Dealers (a "NASD Dealer"),
whereby the Holder irrevocably elects to exercise this Warrant and to sell a
portion of the shares so purchased to pay for the Purchase Price and the Holder
(or, if applicable, the NASD Dealer) commits upon sale (or, in the case of the
NASD Dealer, upon receipt) of such shares to forward the Purchase Price directly
to the Company.
2.4 Stock Certificates; Fractional Shares. As soon as practicable on or
after any date of exercise of this Warrant pursuant to this Section 2, the
Company shall issue and deliver to the Person or Persons entitled to receive the
same a certificate or certificates for the number of whole shares of Warrant
Stock issuable upon such exercise, together with cash in lieu of any fraction of
a share equal to such fraction of the current Fair Market Value of one whole
share of Warrant Stock as of the date of exercise of this Warrant. No fractional
shares or scrip representing fractional shares shall be issued upon an exercise
of this Warrant.
2.5 Partial Exercise; Effective Date of Exercise. In case of any partial
exercise of this Warrant, the Company shall cancel this Warrant upon surrender
hereof and shall execute and deliver a new Warrant of like tenor and date for
the balance of the shares of Warrant Stock purchasable hereunder. This Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. The Person
entitled to receive the shares of Warrant Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of such shares
as of the close of business on the date the Holder is deemed to have exercised
this Warrant.
3. VALID ISSUANCE; TAXES. All shares of Warrant Stock issued upon the exercise
of this Warrant shall be validly issued, fully paid and non-assessable; provided
that the Company shall pay all taxes and other governmental charges that may be
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imposed in respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for shares of Warrant Stock in any
name other than that of the Registered Holder of this Warrant, and in such case
the Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company's reasonable satisfaction that no tax or other charge
is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares of
Warrant Stock issuable upon exercise of this Warrant (or any shares of stock or
other securities or property receivable or issuable upon exercise of this
Warrant) and the Purchase Price are subject to adjustment upon occurrence of any
of the following events:
4.1 Adjustment for Stock Splits, Stock Subdivisions or Combinations of
Shares. The Purchase Price of this Warrant shall be proportionally decreased and
the number of shares of Warrant Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities at the time issuable upon exercise of
this Warrant) shall be proportionally increased to reflect any stock split or
subdivisions of the Warrant Stock. The Purchase Price of this Warrant shall be
proportionally increased and the number of shares of Warrant Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities at the time
issuable upon exercise of this Warrant) shall be proportionally decreased to
reflect any combination of the Warrant Stock.
4.2 Reclassification. If the Company, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Purchase Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 4.
4.3 Adjustment for Capital Reorganization, Merger or Consolidation. In
case of any reorganization of the capital stock of the Company (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or any merger or consolidation of the Company with or into
another Person, or the sale of all or substantially all of the assets of the
Company, then, and in each case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the
Holder of this Warrant shall thereafter be entitled to receive upon exercise of
this Warrant, during the period specified herein and upon payment of the
Purchase Price then in effect, the number of shares of stock or other securities
or property of the successor Person resulting from such reorganization, merger,
consolidation, sale or transfer that a holder of the shares deliverable upon
exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant had been
exercised immediately before such reorganization, merger,
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consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 4. The foregoing provisions of this Section 4.4 shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other Person that are at the
time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Purchase
Price, or number or type of shares issuable upon exercise of this Warrant, the
Chief Financial Officer or Controller of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant and of indemnity reasonably satisfactory to it, and, (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company
shall execute and deliver in lieu thereof a new Warrant of like tenor as the
lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF WARRANT STOCK. The Company hereby covenants that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of shares of Warrant Stock. Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Articles of Incorporation to provide sufficient reserves of shares of Warrant
Stock issuable upon exercise of this Warrant. All such shares shall be duly
authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests,
charges and other encumbrances or restrictions on sale and free and clear of all
preemptive rights, except encumbrances or restrictions arising under federal or
state securities laws. Issuance of this Warrant shall constitute full authority
to the Company's officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Warrant Stock upon the exercise of this Warrant.
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8. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the SEC under the
Securities Act of 1933, as amended (the "Securities Act"), covering the
disposition or sale of this Warrant or the Warrant Stock issued or issuable upon
exercise hereof, as the case may be, and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer, pledge,
or hypothecate any or all such Warrants or Warrant Stock, as the case may be,
unless either (a) the Company has received an opinion of counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition or (b) the sale
of such securities is made pursuant to SEC Rule 144.
9. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant the Holder
hereby represents, warrants and covenants: (a) that any shares of stock
purchased upon exercise of the Warrant shall be acquired for investment only and
not with a view to or for sale in connection with, any distribution thereof; (b)
that the Holder has had such opportunity as such Holder has deemed adequate to
obtain from representatives of the Company such information as is necessary to
permit the Holder to evaluate the merits and risks of its investment in the
Company; (c) that the Holder is able to bear the economic risk of holding such
shares as may be acquired pursuant to the exercise of this Warrant for an
indefinite period; (d) that the Holder understands that the shares of stock
acquired pursuant to the exercise of this Warrant will not be registered under
the Securities Act (unless otherwise required pursuant to exercise by the Holder
of the registration rights, if any, previously granted to the Registered Holder)
and will be "restricted securities" within the meaning of SEC Rule 144 and that
the exemption from registration under Rule 144 will not be available for at
least one year from the date of exercise of this Warrant, subject to any special
treatment by the SEC for exercise of this Warrant pursuant to Section 2.2, and
even then will not be available unless a public market then exists for the
stock, adequate information concerning the Company is then available to the
public, and other terms and conditions of Rule 144 are complied with; (e) that
all stock certificates representing shares of stock issued to the Holder upon
exercise of this Warrant or upon conversion of such shares may have affixed
thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND
MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PREMITTED UNDER THE ACT AND THE
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.
10. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle the
Holder to any voting rights or other rights as a stockholder of the Company. In
the absence of affirmative action by such Holder to purchase Warrant Stock by
exercise of this Warrant, no provisions of this Warrant, and no enumeration
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herein of the rights or privileges of the Holder hereof shall cause such Holder
hereof to be a stockholder of the Company for any purpose.
11. NOTICE. All notices and other communications from the Company to the Holder
shall be given in accordance with the Consulting Agreement.
12. HEADINGS, SECTION REFERENCE. The headings in this Warrant are for purposes
of convenience in reference only, and shall not be deemed to constitute a part
hereof. All Section references herein are references to Sections of this Warrant
unless specified otherwise.
13. LAW GOVERNING. This Warrant shall be construed and enforced in accordance
with, and governed by, the internal laws of the State of New York, without
regard to its conflict of laws rules. The Company hereby consents to the
jurisdiction of any state or federal court located within the County of Nassau,
State of New York, and irrevocably agrees that all actions or proceedings
relating to this Warrant may be litigated in such courts and the Company waives
any objection which it may have based on improper cause or forum non-conveniens
to the conduct of any proceeding in any such court.
14. NO IMPAIRMENT. The Company will not by amendment of its Articles of
incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Registered Holder of this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock issuable
upon the exercise of this Warrant above the amount payable therefor upon such
exercise and (b) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Warrant Stock upon exercise of this Warrant.
15. SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
16. COUNTERPARTS. For the convenience of the parties, any number of counterparts
of this Warrant may be executed by the parties hereto and each such executed
counterpart shall be, and shall be deemed to be, an original instrument.
17. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of
this Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holder or otherwise conflicts with
the provisions hereof.
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18. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a Saturday,
Sunday or legal holiday, the Expiration Date shall automatically be extended
until 5:00 P.M. the next business day.
[The signature page follows.]
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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
set forth above.
THE COMPANY
SKYGIVERS, INC.
By: __________________________
Name:
Title:
[Signature Page to Warrant]
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EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
SKYGIVERS, INC.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of SKYGIVERS, INC. as provided for therein, and (check the
applicable box):
1. Tenders herewith payment of the exercise price in full in the form
of cash or a certified or official bank check in same-day funds in
the amount of $______ for _________ such securities.
2. Elects the Net Issue Exercise option pursuant to Section 2.2 of the
Warrant, and accordingly requests delivery of a net of ___________
of such securities, according to the following calculation:
X = Y (A-B) ( ) = ( ) [( ) - ( )]
------- -----------------------------------
A ( )
Where:
X = the number of shares of Warrant Stock to be issued to
Holder;
Y = the total number of shares of Warrant Stock as to which
this Warrant is being exercised;
A = the Fair Market Value of one share of the Warrant Stock;
and
B = the Purchase Price of one share of Warrant Stock.
3. Elects the Easy Sale Exercise option pursuant to Section 2.3 of the
Warrant, and accordingly requests delivery of a net of __________
of such securities.
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name: ___________________________________________
Address: ___________________________________________
Signature: ___________________________________________
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Note: The above signatured should correspond exactly with the name on the first
page of this Warrant Certificate or with the name of the assignee appearing in
the assignment form below.
If said number of shares shall not be all the shares purchasable under within
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the shares purchaseable thereunder
rounded up to the next higher whole number of shares.
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EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant or a portion thereof)
WARRANT NO. ____
For value received, the undersigned hereby sells, assigns and transfers unto
__________________ the within Warrant or a portion thereof, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint Secretary and/or Treasurer of the Company as attorney, to transfer said
Warrant or such portion thereof on the books of the within-named Company with
respect to the number of shares of Warrants Stock set forth below, with full
power of substitution in the premises:
And if said number of shares of Warrant Stock shall not be all the shares of
Warrant Stock represented by the Warrant, a new Warrant is to be issued in the
name of said undersigned for the balance remaining of the shares of Warrant
Stock registered represented by said Xxxxxxx.
Dated: _______________________________
Signature: ___________________________
Notice: The signature to the foregoing Assignment must correspond to the name as
written upon the face of this security in every particular, without alteration
or any change whatsoever, signature(s) must be guaranteed by an eligible
guarantor institution (banks, stock brokers, savings and loan associations and
credit unions with membership in an approved signature guarantee medallion
program) pursuant to SEC Rule 17Ad-15.
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