Exhibit 10.5(c)
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE THEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR THE AVAILABILITY OF AN EXEMPTION THEREFROM UNDER THE
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
OF
CHAUTAUQUA AIRLINES, INC.
Date: June 11, 2001 (the "EXECUTION DATE")
THIS IS TO CERTIFY THAT, for value received, AMERICAN AIRLINES, INC., a
Delaware corporation ("AA"), is entitled, subject to the terms herein, to
purchase from CHAUTAUQUA AIRLINES, INC., a New York corporation (the "COMPANY"),
at any time, or from time to time, fully paid and nonassessable shares of the
Company's common stock, [$.001] par value (the "COMMON STOCK"), at the Exercise
Price (as defined below), all on the terms and conditions and pursuant to the
provisions hereinafter set forth. The term "WARRANT SHARES," as used herein,
refers to the shares of Common Stock purchasable hereunder. As used herein, the
term "HOLDER" shall initially mean AA, and shall subsequently mean each person
or entity to whom this Warrant is duly assigned.
1. VESTING AND EXERCISE OF WARRANT. This Warrant shall be exercisable for
vested Warrant Shares commencing on the closing date (the "EFFECTIVE DATE") of
the Company's initial public offering of shares of Common Stock registered under
the Securities Act (the "IPO"). Warrant Shares constituting three and three
quarters percent (3.75%), subject to increase as provided herein, of the Number
of IPO Shares (as defined below) shall vest over a ten-year period (at the rate
of 10% on each anniversary of the Execution Date), beginning on the first
anniversary of the Execution Date (the "TEN-YEAR VESTING PERIOD"). Warrant
Shares constituting five percent (5%) of the Number of IPO Shares shall vest
over a five-year period (at the rate of 20% on each anniversary of the Execution
Date), beginning on the fifth anniversary of the Execution Date (the "FIVE-YEAR
VESTING PERIOD" and collectively with the Ten-Year Vesting Period, the "VESTING
PERIODS") (for any Warrant Share the Holder elects to purchase hereunder, the
date upon which such Warrant Share vests is referred to herein as its "VESTING
DATE"). A Warrant Share that has vested may be purchased pursuant to this
Warrant at the option of the Holder, in whole or part, at any time between the
Effective Date and the later of the fifth anniversary of (a) the Effective Date
or (b) its Vesting Date (with respect to a Warrant Share, such time period is
referred to herein as its "EXERCISE PERIOD"). Notwithstanding the foregoing and
notwithstanding anything contained in this Warrant to the contrary, no unvested
Warrant Share shall continue to vest and the option to purchase unvested Warrant
Shares shall
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automatically expire upon the date that the Holder issues notice to the Company
to terminate that certain Air Services Agreement, dated of even date herewith,
by and between AA and the Company, as amended from time to time (the "AIR
SERVICES AGREEMENT"). To the extent an increase in the Number of Committed
Aircraft (as defined below) after the Effective Date results in a corresponding
increase in the Applicable Percentage Shares (as defined below) and, thereby,
Warrant Shares, pursuant to SECTION 2 hereof, such additional Warrant Shares
shall be deemed to have been issuable on the Execution Date for purposes of
vesting, and shall vest over a ten-year period (at the rate of 10% on each
anniversary of the Execution Date), beginning on the first anniversary of the
Execution Date.
2. NUMBER OF WARRANT SHARES ISSUABLE. At any given time, the total number
of Warrant Shares issuable pursuant to this Warrant shall be determined by
multiplying the Applicable Percentage of IPO Shares (as defined below) by the
Number of IPO Shares (as defined below). The "NUMBER OF IPO SHARES" shall equal
the greater of (a) the number of shares of Common Stock registered under the
Securities Act, including any over allotment option granted to the underwriters
whether or not exercised, pursuant to the IPO or (b) sixty percent (60%) of the
number of shares of Common Stock outstanding immediately prior to the closing of
the IPO (such number of shares of Common Stock to be computed on a fully diluted
basis assuming the conversion or exchange of all securities of the Company
convertible or exchangeable, either directly or indirectly, into Common Stock
and the exercise of all options, warrants and rights exercisable, either
directly or indirectly, for Common Stock). The "APPLICABLE PERCENTAGE OF IPO
SHARES" shall be equal to the percentage of IPO Shares corresponding to the
Number of Committed Aircraft (as defined below) as set forth on SCHEDULE A
attached hereto. The Number of Committed Aircraft means the number of aircraft
at any given time committed to Feeder Air Service (as defined in the Air
Services Agreement), pursuant to the Air Services Agreement, including Firm
Approved Aircraft and Option Aircraft (as those terms are defined in the Air
Services Agreement) that AA and any Affiliate (as defined in Rule 144
promulgated under the Securities Act) have committed to engage in Feeder Air
Service but that are not then in service.
3. EXERCISE PRICE. The per share price at which the Warrant Shares may be
purchased shall equal ninety-three percent (93%) of the public offering price
per share of Common Stock as set forth on the cover page of the final prospectus
delivered in connection with the IPO (the "EXERCISE PRICE").
4. MANNER OF EXERCISE; PAYMENT FOR SHARES; ISSUANCE OF CERTIFICATES;
DEFINITIONS.
(a) MANNER OF EXERCISE. Subject to the provisions of this Warrant,
the Warrant Shares may be purchased by the Holder, in whole or in part, by
the surrender of this Warrant together with a completed election to
purchase agreement in the form attached to this Warrant (the "ELECTION
AGREEMENT"), to the Company during normal business hours on any business
day, during the Exercise Period, at the Company's principal executive
offices (or such other office or agency of the Company as it may
reasonably designate by notice to the Holder), and upon payment to the
Company of an
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amount of consideration equal to the aggregate Exercise Price of the
purchased Warrant Shares ("TOTAL PURCHASE PRICE").
(b) PAYMENT FOR SHARES. The Total Purchase Price may be paid (a) in cash,
by certified or official bank check or by wire transfer for the account of
the Company (the "CASH EXERCISE"); (b) notwithstanding (a), if the Fair
Market Value (as defined below) of the Company's Common Stock is greater
than the Exercise Price, in lieu of exercising this Warrant by payment of
cash, the Holder may elect to receive shares of Common Stock (the
"CASHLESS EXERCISE") computed as of the date of such calculation using the
following formula:
X= Y(A-B)
------
A
Where X = the number of shares of Common Stock to be issued to the Holder
Y = the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised and canceled
A = the Fair Market Value of one share of the Company's Common Stock
B = the Exercise Price
or (c) in any combination of the foregoing.
(c) Definitions.
(i) "FAIR MARKET VALUE" shall mean, as of any date of determination,
with respect to any Common Stock, (x) if there is a Qualified Public
Market (as defined below) for such Common Stock, the value per share
determined pursuant to clause (i) or (ii) below of this definition
or (y) if there is no such Qualified Public Market, the value
determined pursuant to clause (iii) below of this definition:
(i) if such Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such an
exchange, the average last reported sale price (as reported in
THE WALL STREET JOURNAL) of a share of such Common Stock over
the 21 trading day period immediately prior to the date of
determination or if no such sale is made on any such day, the
mean of the closing bid and asked prices for such Common Stock
on such day on such exchange; or
(ii) if such Common Stock is not so listed or admitted to
unlisted trading privileges, the average mean of the last bid
and asked prices reported for a share of such Common Stock
over the 21 trading day period immediately prior to the date
of determination (A) by the National Association of Securities
Dealers Automatic Quotation System or (B) if
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reports are unavailable under clause (a) above by the National
Quotation Bureau Incorporated; or
(iii) if such Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not
so reported, then the Company shall give prompt written notice
to the Holder of the need to determine the Fair Market Value
of such Common Stock, as well as a statement of the fair
market value of such Common Stock determined by the Board of
Directors of the Company. In such event, the Fair Market Value
of such Common Stock shall be the fair market value per share
agreed to by the Board of Directors of the Company and the
Holder; PROVIDED, HOWEVER, if no such agreement is reached
within thirty (30) days of the date on which the event for
which the Fair Market Value is required to be determined
occurs, then the Fair Market Value shall be determined as
follows: the Company and the Holder shall each designate
promptly in a written notice to the other its determination of
the fair market value of such Common Stock as of the
applicable reference date, and the Fair Market Value of such
Common Stock as of the applicable reference date shall then be
determined by a nationally recognized independent appraiser
(the "INDEPENDENT FINANCIAL EXPERT") selected by the Holder
from a group of three appraisers chosen by the Company (with
whom the Company does not have an existing business
relationship) and the Holder assuming an arm's-length private
sale between a willing buyer and a willing seller, neither
acting under compulsion. The determination by the Independent
Financial Expert of the Fair Market Value shall be final and
binding on the Company and the Holder. The costs and expenses
of any such Independent Financial Expert making such valuation
shall be paid by the Company, except that such expenses shall
be borne solely by the Holder to the extent that the
Independent Financial Expert concludes that the valuation of
such Common Stock made by the Board of Directors of the
Company is within ten percent (10%) of the Fair Market Value.
(ii) "QUALIFIED PUBLIC MARKET" shall mean with respect to the Common
Stock of the Company, an active trading market on a national
securities exchange or over-the-counter market which consists of
such publicly held Common Stock in the Company, with a minimum
market value of $10,000,000 for such Common Stock. A "Qualified
Public Market" shall be deemed to exist if the financial parameters
set forth in the immediately preceding sentence have been met for
the Common Stock for a period of 21 consecutive days.
(d) ISSUANCE OF CERTIFICATES. The Warrant Shares so purchased shall be
deemed to be issued to the Holder, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Election Agreement shall have been delivered,
and payment of the Total Purchase Price shall have been made as set forth
above. Certificates for the Warrant Shares so purchased shall be delivered
to the Holder within a reasonable time, not to exceed three (3) business
days
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after this Warrant shall have been so exercised. The certificates so
delivered shall be in such denominations as may be requested by the Holder
and shall be registered in the name of the Holder. If this Warrant should
be exercised in part only, the Company shall, upon surrender of this
Warrant, execute and deliver a new Warrant evidencing the rights of the
Holder thereof to purchase the balance of the Warrant Shares issuable
hereunder.
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:
(a) SHARES TO BE FULLY PAID. All Warrant Shares will, upon issuance
in accordance with the terms of this Warrant, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof.
(b) RESERVATION OF SHARES. During the Exercise Period, the Company
shall at all times have authorized, and reserved for the purpose of
issuance upon exercise of this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of this Warrant.
(c) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation or acquisition
of all or substantially all of the Company's assets.
6. ADJUSTMENT TO THE NUMBER OF WARRANT SHARES. During the Exercise Period,
the number of Warrant Shares and the Exercise Price shall be subject to
adjustment from time to time as provided in this SECTION 6.
(a) SUBDIVISION OF COMMON STOCK. During the Exercise Period, if the
Company subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) any shares of Common Stock
into a greater number of shares, then, after the date of record for
effecting such subdivision, the number of shares of Common Stock issuable
upon exercise of this Warrant shall be proportionally increased so that
the percentage of Warrant Shares, after the subdivision, of the total
number of shares of Common Stock will be equal to the percentage of
Warrant Shares, immediately prior to such subdivision, of the total number
of shares of Common Stock immediately prior to such subdivision. In
addition, the Exercise Price shall be proportionally decreased to
appropriately reflect such subdivision.
(b) CONSOLIDATION, MERGER OR SALE. During the Exercise Period, in
case of any consolidation of the Company with, or merger of the Company
into any other corporation, or in case of any sale or conveyance of all or
substantially all of the assets of the Company other than in connection
with a plan of complete liquidation of the Company, then as a condition of
such consolidation, merger or sale or conveyance, adequate provision will
be made whereby the Holder of this Warrant will have the right to acquire
and receive upon exercise of this Warrant in lieu of the shares of Common
Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange
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for the number of shares of Common Stock immediately theretofore
acquirable and receivable upon exercise of this Warrant had such
consolidation, merger or sale or conveyance taken place. In any such case,
the Company will make appropriate provision to insure that the provisions
of this SECTION 6 will thereafter be applicable as nearly as may be in
relation to any shares of stock or securities thereafter deliverable upon
the exercise of this Warrant.
(c) NOTICE OF ADJUSTMENT. Upon the occurrence of any event that
requires any adjustment of the number of Warrant Shares and Exercise
Price, then, and in each such case, the Company shall give notice thereof
to the Holder, which notice shall state the increase or decrease in the
number of Warrant Shares purchasable and Exercise Price, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
7. NO FRACTIONAL SHARES. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant. In lieu of delivering any fractional
shares to which the Holder would otherwise be entitled, the number of shares of
Common Stock shall be rounded to the nearest whole number.
8. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the Holder or such
shares for any issuance tax or other costs in respect thereof.
9. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the Holder to purchase Warrant Shares, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Exercise Price or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.
10. TRANSFER AND REPLACEMENT OF WARRANT.
(a) RESTRICTION ON TRANSFER. This Warrant and the rights granted to
the Holder are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office of the Company referred to in SECTION 11 below;
PROVIDED, that any transfer or assignment shall be subject to the
conditions set forth in SUBSECTION 10(e). Until due presentment for
registration of transfer on the books of the Company, the Company may
treat the registered Holder as the owner and Holder of this Warrant for
all purposes, and the Company shall not be affected by any notice to the
contrary.
(b) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation
of this Warrant and, in the case of any such loss, theft, or destruction,
upon delivery of an indemnity agreement reasonably satisfactory in form
and amount to the Company, or, in the case of
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any such mutilation, upon surrender and cancellation of this Warrant, the
Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor.
(c) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer or replacement as provided in this
SECTION 10, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes and all other expenses (other than legal
expenses, if any, incurred by the Holder) in connection with the
preparation, execution, and delivery of Warrants pursuant to this SECTION
10.
(d) REGISTER. The Company shall maintain, at its principal executive
offices (or such other office of the Company as it may designate by notice
to the Holder), a register for this Warrant, in which the Company shall
record the name and address of the person or business entity in whose name
this Warrant has been issued, as well as the name and address of each
transferee and each prior owner of this Warrant.
(e) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of
the surrender of this Warrant in connection with any exercise, transfer,
or exchange of this Warrant, this Warrant (or in the case of any exercise,
the Warrant Shares issuable hereunder) shall not be registered under the
Securities Act, and under applicable state securities or blue sky laws,
the Company may require, as a condition of allowing such exercise,
transfer, or exchange (i) that the Holder or transferee of this Warrant,
as the case may be, furnish to the Company a written opinion of counsel,
which opinion and counsel shall be reasonably acceptable to the Company,
to the effect that such exercise, transfer or exchange may be made without
registration under said Act and under applicable state securities or blue
sky laws, and (ii) that the Holder or transferee execute and deliver to
the Company an investment intent representation letter in form and
substance acceptable to the Company. AA, as the initial Holder of this
Warrant, by taking and holding the same, represents to the Company that
such Holder is acquiring this Warrant for investment and not with a view
to the distribution thereof. Notwithstanding anything in this SUBSECTION
10(e) to the contrary, the Company may transfer this Warrant to any
Affiliate of the Company without compliance with CLAUSE (i) of this
SUBSECTION 10(e).
(g) LEGENDS.
(i) Each Warrant Share (and each Warrant Share issued to
transferees of the Warrant), unless and until such time as the
same is no longer required under the applicable requirements
of the Securities Act, or any applicable state securities
laws, shall bear the following legend:
"NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON
EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, TRANSFERRED
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OR OTHERWISE DISPOSED OF IN THE ABSENCE OF REGISTRATION UNDER
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS,
OR THE AVAILABILITY OF AN EXEMPTION THEREFROM UNDER THE
PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS."
(ii) Each certificate or instrument (if any) representing any
Warrant Shares issued upon the exercise of this Warrant (and
each certificate or instrument representing any Warrant Shares
issued to transferees of this Warrant or such certificate or
instrument), unless and until such time as the same is no
longer required under the applicable requirements of the
Securities Act, or any applicable state securities laws, shall
bear substantially the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS."
11. NOTICES. All notices, requests and other communications required or
permitted to be given or delivered hereunder to the Holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such Holder at the address shown for such Holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such Holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed to the office of the Company at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: President, or at such other address as
shall have been furnished to the Holder of this Warrant by notice from the
Company. Any such notice, request or other communication may be sent by
facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this SECTION 10 or, if mailed by registered or
certified mail or with a recognized overnight mail
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courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.
12. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT
REGARD TO THE CONFLICTS OF LAW.
13. MISCELLANEOUS.
(a) AMENDMENTS. This Warrant may only be amended by an instrument
signed by the Company and the Holder.
(b) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only,
and shall not affect the meaning or construction of any of the provisions
of this Warrant.
(c) SEVERABILITY AND SAVINGS CLAUSE. If any one or more of the
provisions contained in this Agreement is for any reason (i) objected to,
contested or challenged by any court, government authority, agency,
department, commission or instrumentality of the United States or any
state or political subdivision thereof, or any securities industry
self-regulatory organization (collectively, "GOVERNMENTAL AUTHORITY"), or
(ii) held to be invalid, illegal or unenforceable in any respect, the
Company and the Holder agree to negotiate in good faith to modify such
objected to, contested, challenged, invalid, illegal or unenforceable
provision. It is the intention of the Company and the Holder that there
shall be substituted for such objected to, contested, challenged, invalid,
illegal or unenforceable provision a provision as similar to such
provision as may be possible and yet be acceptable to any objecting
Governmental Authority and be valid, legal and enforceable. Further,
should any provisions of this Agreement ever be reformed or rewritten by a
judicial body, those provisions as rewritten will be binding, but only in
that jurisdiction, on the Holder and the Company as if contained in the
original Agreement. The invalidity, illegality or unenforceability of any
one or more provisions of this Warrant will not affect the validity and
enforceability of any other provisions of this Warrant.
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WITNESS the signature of a proper officer of the Company as of the date
first above written.
CHAUTAUQUA AIRLINES, INC.
A NEW YORK CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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SCHEDULE A
NUMBER OF COMMITTED
AIRCRAFT PERCENTAGE OF IPO SHARES
-------------------------------------------------------------
Less than 15 0%
-------------------------------------------------------------
15 8.75%
-------------------------------------------------------------
16 9.00%
-------------------------------------------------------------
17 9.25%
-------------------------------------------------------------
18 9.50%
-------------------------------------------------------------
19 9.75%
-------------------------------------------------------------
20 10.00%
-------------------------------------------------------------
21 10.25%
-------------------------------------------------------------
22 10.50%
-------------------------------------------------------------
23 10.75%
-------------------------------------------------------------
24 11.00%
-------------------------------------------------------------
25 11.25%
-------------------------------------------------------------
26 11.50%
-------------------------------------------------------------
27 11.75%
-------------------------------------------------------------
28 12.00%
-------------------------------------------------------------
29 12.25%
-------------------------------------------------------------
30 12.50%
-------------------------------------------------------------
31 12.75%
-------------------------------------------------------------
32 13.00%
-------------------------------------------------------------
33 13.25%
-------------------------------------------------------------
34 13.50%
-------------------------------------------------------------
35 13.75%
-------------------------------------------------------------
For purposes of calculating the Applicable Percentage of IPO Shares, the Number
of Committed Aircraft after the expiration of the term of the Air Services
Agreement shall equal the Number of Committed Aircraft on the last day of the
term of the Air Services Agreement.
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[FORM OF ASSIGNMENT]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO TRANSFER THE WARRANT)
FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers unto
________________________________________________________________________________
(Please print name, address and taxpayer identification number or social
security number of transferee.)
the accompanying Warrant, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint:
________________________________________________________________________________
attorney, to transfer the accompanying Warrant on the books of the Company, with
full power of substitution. The transferee's tax identification or social
security number is ___________________.
Dated:__________________, 20___.
[HOLDER]
By: _________________________________
Name: _________________________________
Title:_________________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the accompanying Warrant or any prior assignment
thereof in every particular, without alteration or enlargement or any change
whatsoever.
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[FORM OF ELECTION TO PURCHASE AGREEMENT ]
(TO BE EXECUTED BY THE REGISTERED HOLDER IF
SUCH HOLDER DESIRES TO EXERCISE THE WARRANT)
To:____________________:
The undersigned hereby irrevocably elects to (i) purchase [INSERT NUMBER OF
SHARES IN WORDS] ([INSERT NUMBER OF SHARES IN numbers]] of the shares of common
stock of Chautauqua Airlines, Inc. ,[ ] par value, ("COMMON STOCK"), pursuant to
the provisions of SECTION 4(a) of the accompanying warrant (the "WARRANT"), and
tenders herewith payment of the aggregate purchase price for such Warrant Shares
in full; (ii) elects to exercise the Warrant for the purchase of [INSERT NUMBER
OF SHARES IN WORDS] ([INSERT NUMBER OF SHARES IN NUMBERS]] of the shares of
Common Stock pursuant to the provisions of SECTION 4(b) (the "CASHLESS EXERCISE"
provision) of the attached Warrant; or (iii) elects to exercise this Warrant for
the purchase of [INSERT NUMBER OF SHARES IN WORDS] ([INSERT NUMBER OF SHARES IN
NUMBERS]] of the shares of Common Stock pursuant to the provisions of SECTION
4(c) (the "COMBINATION EXERCISE" provision) of the attached Warrant. The
undersigned requests that certificates for such shares of Common Stock be issued
in the name of:
________________________________________________________________________________
(Please print name and address.)
________________________________________________________________________________
(Please insert social security or other identifying number.)
The undersigned hereby confirms and acknowledges that it is acquiring the shares
of Common Stock solely for investment for its own account and not with a view to
distribution, and it will not offer, sell or otherwise dispose of any such
shares of Common Stock except in compliance with the Securities Act of 1933, as
amended, or any applicable state securities laws.
If such number of shares of Common Stock shall not be all of the shares of
Common Stock evidenced by the accompanying Warrant, the undersigned requests
that a new Warrant for the balance remaining of such Warrant Shares shall be
issued to, registered in the name of, and delivered to:
________________________________________________________________________________
(Please print name and address.)
________________________________________________________________________________
(Please insert social security or other identifying number.)
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Dated:__________________, _____. [HOLDER]
By: _________________________________
Name: _________________________________
Title:_________________________________
NOTICE
The signature to the foregoing Election to Purchase Agreement must
correspond to the name as written upon the face of the accompanying Warrant or
any prior assignment thereof in every particular, without alteration or
enlargement or any change whatsoever.
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