Document:

Exhibit 10.2

 

No.           

THE SECURITIES REPRESENTED BY
THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT
AND/OR APPLICABLE STATE SECURITIES LAWS, OR UNLESS THE CORPORATION HAS RECEIVED
AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

KEYON
COMMUNICATIONS HOLDINGS, INC.

FORM
OF

PROMISSORY NOTE

(non-negotiable)

$                                                                                                                                                                               Omaha,
Nebraska
                                                                                                                                                                                                 
     , 2007

FOR VALUE RECEIVED KeyOn
Communications Holdings, Inc., a Delaware corporation (the “Company”),
promises to pay to [                     ]
(the “Holder”), the principal amount of                       
dollars ($                ),
or so much thereof as shall have been advanced by the Holder to the Company,
payable in arrears, from the date of this Note on the unpaid principal balance
at a rate equal to five percent (5%) per annum, computed on the basis of the
actual number of days elapsed and a year of 365 days. All unpaid principal,
together with any then accrued but unpaid interest and any other amounts
payable hereunder, shall be due and payable on the earlier of (i) the closing
of a Subsequent Offering (as hereinafter defined) or (ii) November     ,
2008 (the “Maturity Date”). This Note is one of a series of up to
$750,000 aggregate principal amount of notes of like tenor (the “Notes”)
that may be issued pursuant to a Bridge Note Purchase Agreement, dated as of
November     , 2007, between the Company and each of the
lenders thereunder (the “Note Purchase Agreement”).

The following is a
statement of the rights of the Holder of this Note and the conditions to which
this Note is subject, and to which the Holder, by the acceptance of this Note,
agrees:

1.          Principal Amount; Grid Notation.
The unpaid principal of this Note at any time shall be the total amount
advanced by the Holder to the Company, less the total amount of principal
payments made hereon by the Company, subject to adjustment as provided in
Section 2 below. The date and amount of each such advance and each payment of
account of principal of this Note may be endorsed by the Holder on the grid
attached hereto as Exhibit A and made part 

 

of this Note, and when so
stated shall represent evidence thereof in the absence of manifest error. Any
failure by the Holder to so endorse shall in no way mitigate or discharge the
obligation of the Company to repay any advances actually made. 

2.          Principal and Interest Adjustment.  Notwithstanding anything to the contrary
contained herein, if all outstanding principal and accrued interest under the
Notes is not repaid in full by the Company on or before February     ,
2008, then the principal amount due hereunder at such time shall equal the sum
of (i) the then current outstanding principal amount hereunder (the “Principal
Amount”) and (ii) the product of (A) a fraction, the numerator of which is
the Principal Amount and the denominator of which is the aggregate principal
amount advanced to the Company under all of the Notes and (B) $50,000.
Furthermore, any principal, accrued interest and other amounts payable under
this Note that remain unpaid after February      ,
2008 shall bear interest, in arrears, at a rate per annum equal to ten percent
(10%).

3.          Certain Definitions.

(a)           “Default” means:

(i)            the Company shall default in the
payment of interest and/or principal on this Note and such default shall
continue for ten (10) business days after written notice from the Holder of
such failure;

(ii)           any of the representations or
warranties made by the Company herein (the “Representations”) or in any
certificate or financial or other statements heretofore or hereafter furnished
by or on behalf of the Company to Holder in connection with the execution and
delivery of this Note or such other documents shall be false or misleading in
any material respect at the time made;

(iii)          the Company shall fail to materially
perform any covenant, term, provision, condition, agreement or obligation of
the Company under this Note or the Representations (other than for non-payment)
and such failure shall continue uncured for a period of ten (10) business days
after written notice from the Holder of such failure;

(iv)          the Company shall (1) become
insolvent; (2) admit in writing its inability to pay its debts generally as
they mature; (3) make an assignment for the benefit of creditors or commence
proceedings for its dissolution or (4) apply for or consent to the appointment
of a trustee, liquidator or receiver for it or for a substantial part of its
property or business;

(v)           a trustee, liquidator or receiver
shall be appointed for the Company or for a substantial part of its property or
business without its consent and shall not be discharged within thirty (30)
days after such appointment;

(vi)          any governmental agency or any court
of competent jurisdiction at the insistence of any governmental agency shall
assume custody or control of the whole or any substantial portion of the
properties or assets of the Company and shall not be dismissed within thirty
(30) days thereafter;

 

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(vii)         without the prior written approval of
the Holder, the Company shall sell or otherwise transfer all or substantially
all of its assets;

(viii)        bankruptcy, reorganization, insolvency
or liquidation proceedings or other proceedings, or relief under any bankruptcy
law or any law for the relief of debt shall be instituted by or against the
Company and, if instituted against the Company shall not be dismissed within
thirty (30) days after such institution, or the Company shall by any action or
answer approve of, consent to, or acquiesce in any such proceedings or admit to
any material allegations of, or default in answering a petition filed in any
such proceeding; or

(ix)           the Company shall be in material
default of any of its indebtedness that gives the holder thereof the right to
accelerate such indebtedness.

(b)           “Subsequent Offering” means
any transaction (or series of related transactions) in which the Company issues
and sells shares of its capital stock or securities convertible into shares of
capital stock in exchange for aggregate gross proceeds of not less than $5
million that occur while any Notes are outstanding.

4.          Prepayment.  The Company may prepay this Note at any time,
in whole or in part, provided any such prepayment will be applied first to the
payment of expenses due under this Note, second to interest accrued on this
Note and third, if the amount of prepayment exceeds the amount of all such
expenses and accrued interest, to the payment of principal of this Note.

5.          Miscellaneous.

(a)           Loss, Theft, Destruction or
Mutilation of Note.  Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note and, in the case of loss, theft or destruction,
delivery of an indemnity agreement reasonably satisfactory in form and substance
to the Company or, in the case of mutilation, on surrender and cancellation of
this Note, the Company shall execute and deliver, in lieu of this Note, a new
note executed in the same manner as this Note, in the same principal amount as
the unpaid principal amount of this Note and dated the date to which interest
shall have been paid on this Note or, if no interest shall have yet been so
paid, dated the date of this Note.

(b)           Payment.  All payments under this Note shall be made in
lawful tender of the United States.

(c)           Usury.  In the event that any interest paid on this
Note is deemed to be in excess of the then legal maximum rate, then that
portion of the interest payment representing an amount in excess of the then
legal maximum rate shall be deemed a payment of principal and applied against
the principal of this Note.

(d)           Waiver and Amendment.  Any provision of this Note may be amended,
waived or modified only by an instrument in writing signed by the party against
which enforcement of the same is sought.

 

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(e)           Notices.  Any notice, request or other communication
required or permitted hereunder shall be given in accordance with the Note
Purchase Agreement.

(f)            Expenses; Attorneys’ Fees.  If action is instituted to enforce or collect
this Note, the Company promises to pay all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ fees and costs, incurred
in connection with such action.

(g)           Successors and Assigns.  This Note may be assigned or transferred by
the Holder.  Subject to the preceding
sentence, the rights and obligations of the Company and the Holder of this Note
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.

(h)           Governing Law.  THIS NOTE SHALL BE GOVERNED IN ALL RESPECTS
BY THE INTERNAL LAWS OF THE STATE OF NEVADA WITHOUT REFERENCE TO PRINCIPLES OF
CONFLICTS OF LAWS.

IN WITNESS WHEREOF, the Company has caused this Note
to be executed as of the date first above written by its duly authorized
officer.

	
   

  	
  KEYON
  COMMUNICATIONS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Jonathan
  Snyder

  	 

	
   

  	
  Title: Chief
  Executive Officer

  	 

				

 

 

4

 

Exhibit A

Advances and Payments of Principal

	
  DATE

  	
   

  	
  ADVANCE AMOUNT

  	
   

  	
  PRINCIPAL BALANCE

  	
   

  	
  NOTATION MADE BYExhibit
10.3

WARRANT

	
  KEYON
  COMMUNICATIONS HOLDINGS, INC.

  
	
  No. 1

  	
   

  	
  Shares

  

 

WARRANT TO PURCHASE COMMON STOCK

VOID AFTER 5:30 P.M., EASTERN 

TIME, ON THE EXPIRATION DATE

THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY
NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

FOR
VALUE RECEIVED, KEYON COMMUNICATIONS HOLDINGS, INC., a Delaware corporation
(the “Company”), hereby agrees to sell upon the terms and on the
conditions hereinafter set forth, but no later than 5:30 p.m., Pacific Time, on
the Expiration Date (as hereinafter defined), to                          ,
or registered assigns (the “Holder”), under the terms as hereinafter set
forth,                  
fully paid and non-assessable shares of the Company’s common stock, par value
$0.001 per share (the “Warrant Shares”), at a purchase price equal to
the greater of (i) $6.70 per share or (ii) the price per share of Common Stock
sold to investors in any transaction (or series of related transactions) in
which the Company issues shares of its capital stock or securities convertible
into shares of capital stock on or before December 31, 2007 in exchange for
aggregate gross proceeds of not less than $5 million (the “Warrant Price”),
pursuant to this warrant (this “Warrant”). The number of Warrant Shares
to be so issued and the Warrant Price are subject to adjustment in certain
events as hereinafter set forth. The term “Common Stock” shall mean,
when used herein, unless the context otherwise requires, the stock and other
securities and property at the time receivable upon the exercise of this
Warrant.

1.             Exercise of Warrant.

(a)           The Holder may exercise this Warrant according to its
terms by surrendering this Warrant to the Company at the address set forth in
Section 10, together with the form of exercise attached hereto duly executed by
the Holder, accompanied by cash, certified check or bank draft in payment of
the Warrant Price, in lawful money of the United States of America, for the
number of Warrant Shares specified in such form of exercise, or as otherwise
provided in this Warrant, prior to 5:30 p.m., Pacific Time, on                      ,
2012 (the “Expiration Date”).

(b)           In lieu of exercising this Warrant by payment of cash,
this Warrant may also be exercised at such time by means of a “cashless
exercise” in which the Holder shall be 

 

entitled to receive a certificate for
the number of Warrant Shares equal to the quotient obtained by dividing [(A-B)
(X)] by (A), where:

(A)
=                  VWAP (as
defined below) on the business day immediately preceding the date of such
election;

(B)
=                      the Warrant
Price of this Warrant, as adjusted; and

(X)
=                   the number of
Warrant Shares issuable upon exercise of this Warrant in accordance with the
terms of this Warrant by means of a cash exercise rather than a cashless
exercise.

For
purposes of this Warrant, “VWAP” means, for any date, the price
determined by the first of the following clauses that applies: (a) if the
Common Stock is then listed or quoted on a Trading Market (as defined below),
the daily volume weighted average price of the Common Stock for the ten (10)
trading days prior to such date (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by
Bloomberg L.P. (based on a Trading Day from 9:30 a.m. New York City time to
4:02 p.m. New York City time); (b)  if
the OTC Bulletin Board is not a Trading Market, the volume weighted average
price of the Common Stock for the ten (10) trading days prior to such date (or
the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock
is not then listed or quoted on the OTC Bulletin Board and if prices for the
Common Stock are then reported in the “Pink Sheets” published by Pink Sheets,
LLC (or a similar organization or agency succeeding to its functions of
reporting prices), the average bid price per share of the Common Stock so
reported for the twenty (20) trading days prior to such date; or (d) in all
other cases, the fair market value of a share of Common Stock as determined in
good faith by the Company’s board of directors. For purposes of this Warrant, “Trading
Market” means the following markets or exchanges on which the Common Stock
is listed or quoted for trading on the date in question: the American Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange or the OTC Bulletin Board.

(c)           This Warrant may be exercised in whole or in part so long
as any exercise in part hereof would not involve the issuance of fractional
shares of Common Stock.  If exercised in
part, the Company shall deliver to the Holder a new Warrant, identical in form,
in the name of the Holder, evidencing the right to purchase the number of
Warrant Shares as to which this Warrant has not been exercised, which new
Warrant shall be signed by the Chairman, Chief Executive Officer, President or
any Vice President of the Company.  The
term Warrant as used herein shall include any subsequent Warrant issued as
provided herein.

(d)           No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. The Company shall pay
cash in lieu of fractions with respect to the Warrants based upon the fair
market value of such fractional shares of Common Stock (which shall be the
closing price of such shares on the exchange or market on which the Common
Stock is then traded) at the time of exercise of this Warrant.

(e)           In the event of any exercise of the rights represented by
this Warrant, a certificate or certificates for the Warrant Shares so
purchased, registered in the name of the 

 

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Holder, shall be delivered to the
Holder within a reasonable time after such rights shall have been so exercised.
The person or entity in whose name any certificate for the Warrant Shares is
issued upon exercise of the rights represented by this Warrant shall for all
purposes be deemed to have become the holder of record of such shares
immediately prior to the close of business on the date on which the Warrant was
surrendered and payment of the Warrant Price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder
of such shares at the opening of business on the next succeeding date on which
the stock transfer books are open. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this Warrant; provided,
however, that the Company shall not be required to pay any tax that may
be payable in respect of any issuance and delivery of Warrant Shares to any
Person other than the Holder or with respect to any income tax due by the
Holder with respect to any Warrant Shares. “Person” shall mean any
natural person, corporation, division of a corporation, partnership, limited
liability company, trust, joint venture, association, company, estate,
unincorporated organization or government or any agency or political
subdivision thereof.

2.             Disposition of Warrant Shares and Warrant.

(a)           The Holder hereby acknowledges that this Warrant and any
Warrant Shares purchased pursuant hereto are, as of the date hereof, not
registered: (i) under the Act on the ground that the issuance of this Warrant
is exempt from registration under Section 4(2) of the Act as not involving any
public offering or (ii) under any applicable state securities law because the
issuance of this Warrant does not involve any public offering; and that the
Company’s reliance on the Section 4(2) exemption of the Act and under
applicable state securities laws is predicated in part on the representations
hereby made to the Company by the Holder that it is acquiring this Warrant and
will acquire the Warrant Shares for investment for its own account, with no
present intention of dividing its participation with others or reselling or
otherwise distributing the same, subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be within its
control.

The Holder hereby agrees that it will not sell or transfer all or any
part of this Warrant and/or the Warrant Shares, except pursuant to an effective
registration statement under the Act, unless and until it shall first have
given notice to the Company describing such sale or transfer and furnished to
the Company either (i) an opinion of counsel for the Company, which the Company
shall obtain at its own expense, to the effect that the proposed sale or
transfer may be made without registration under the Act and without
registration or qualification under any state law, or (ii) an interpretative letter
from the Securities and Exchange Commission to the effect that no enforcement
action will be recommended if the proposed sale or transfer is made without
registration under the Act.

(b)           If, at the time of issuance of the shares issuable upon
exercise of this Warrant, no registration statement is in effect with respect
to such shares under applicable provisions of the Act, the Company may at its
election require that the Holder provide the Company with written
reconfirmation of the Holder’s investment intent and that any stock 

 

3

 

certificate delivered to the Holder of
a surrendered Warrant shall bear a legend reading substantially as follows:

“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

In
addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

3.             Reservation of Shares.  The Company hereby agrees that at all times
there shall be reserved for issuance upon the exercise of this Warrant such
number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant. The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the Warrant
Price therefor, be validly issued, fully paid and non assessable, free from all
taxes, liens, charges and preemptive rights with respect to the issuance
thereof, other than taxes, if any, in respect of any transfer occurring
contemporaneously with such issuance and other than transfer restrictions
imposed by federal and state securities laws.

4.             Exchange, Transfer or Assignment of Warrant.  This Warrant is exchangeable, without expense,
at the option of the Holder, upon presentation and surrender hereof to the
Company or at the office of its stock transfer agent, if any, for other
Warrants of different denominations, entitling the Holder or Holders thereof to
purchase in the aggregate the same number of shares of Common Stock purchasable
hereunder. Upon surrender of this Warrant to the Company or at the office of
its stock transfer agent, if any, with an appropriate instrument of assignment
duly executed and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant in the name of the assignee
named in such instrument of assignment and this Warrant shall promptly be
canceled. This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof.

5.             Capital Adjustments.  This Warrant is subject to the following
further provisions:

(a)           If any recapitalization of the Company or reclassification
of its Common Stock or any merger or consolidation of the Company into or with
a Person, or the sale or transfer of all or substantially all of the Company’s
assets or of any successor corporation’s assets to any Person (any such Person
being included within the meaning of the term “successor corporation”) shall be
effected, at any time while this Warrant remains outstanding and 

 

4

 

unexpired, then, as a condition of such
recapitalization, reclassification, merger, consolidation, sale or transfer,
lawful and adequate provision shall be made whereby the Holder of this Warrant
thereafter shall have the right to receive upon the exercise hereof as provided
in Section 1 and in lieu of the shares of Common Stock immediately theretofore
issuable upon the exercise of this Warrant, such shares of capital stock,
securities or other property as may be issued or payable with respect to or in
exchange for a number of outstanding shares of Common Stock equal to the number
of shares of Common Stock immediately theretofore issuable upon the exercise of
this Warrant had such recapitalization, reclassification, merger,
consolidation, sale or transfer not taken place, and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.

(b)           If the Company at any time while this Warrant remains
outstanding and unexpired shall subdivide or combine its Common Stock, the
number of Warrant Shares purchasable upon exercise of this Warrant and the
Warrant Price shall be proportionately adjusted.

(c)           If the Company at any time while this Warrant is
outstanding and unexpired shall issue or pay the holders of its Common Stock,
or take a record of the holders of its Common Stock for the purpose of entitling
them to receive, a dividend payable in, or other distribution of, Common Stock,
then (i) the Warrant Price shall be adjusted in accordance with Section 5(e)
and (ii) the number of Warrant Shares purchasable upon exercise of this Warrant
shall be adjusted to the number of Warrant Shares that the Holder would have
owned immediately following such action had this Warrant been exercised
immediately prior thereto.

(d)           If the Company shall at any time after the date of
issuance of this Warrant distribute to all holders of its Common Stock any
shares of capital stock of the Company (other than Common Stock) or evidences
of its indebtedness or assets (excluding cash dividends or distributions paid
from retained earnings or current year’s or prior year’s earnings of the
Company) or rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in the immediately preceding paragraph)
(any of the foregoing being hereinafter in this paragraph called the “Securities”),
then in each such case, the Company shall reserve shares or other units of such
Securities for distribution to the Holder upon exercise of this Warrant so
that, in addition to the shares of the Common Stock to which such Holder is
entitled, such Holder will receive upon such exercise the amount and kind of
such Securities which such Holder would have received if the Holder had,
immediately prior to the record date for the distribution of the Securities,
exercised this Warrant.

(e)           Whenever the number of Warrant Shares purchasable upon
exercise of this Warrant is adjusted, as herein provided, the Warrant Price
payable upon the exercise of this Warrant shall be adjusted to that price
determined by multiplying the Warrant Price immediately prior to such
adjustment by a fraction (i) the numerator of which shall be the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior to
such adjustment, and (ii) the denominator of which shall be the number of
Warrant Shares purchasable upon exercise of this Warrant immediately
thereafter.

 

5

 

(f)            The number of shares of Common Stock outstanding at any
given time for purposes of the adjustments set forth in this Section 5 shall
exclude any shares then directly or indirectly held in the treasury of the
Company.

(g)           The Company shall not be required to make any adjustment
pursuant to this Section 5 if the amount of such adjustment would be less than
one percent (1%) of the Warrant Price in effect immediately before the event
that would otherwise have given rise to such adjustment. In such case, however,
any adjustment that would otherwise have been required to be made shall be made
at the time of and together with the next subsequent adjustment which, together
with any adjustment or adjustments so carried forward, shall amount to not less
than one percent (1%) of the Warrant Price in effect immediately before the
event giving rise to such next subsequent adjustment.

(h)           Following each computation or readjustment as provided in
this Section 5, the new adjusted Warrant Price and number of Warrant Shares
purchasable upon exercise of this Warrant shall remain in effect until a
further computation or readjustment thereof is required.

6.             Registration Rights.

(a)           If, at any time during the 2 year period commencing on the
date hereof, the Company proposes to file a resale registration statement under
the Act with respect to an offering of equity securities or securities
exercisable or exchangeable for, or convertible into, equity securities, by the
Company solely for the account of stockholders of the Company, other than a
registration statement (i) filed in connection with any employee stock option
or other benefit plan, (ii) for an exchange offer or offering of securities solely
to the Company’s existing stockholders, (iii) for an offering of debt that is
convertible into equity securities of the Company or (iv) for a dividend
reinvestment plan, then the Company shall (x) give written notice of such
proposed filing to the Holder as soon as practicable but in no event less than
twenty (20) days before the anticipated filing date, which notice shall
describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing
underwriter or underwriters, if any, of the offering, and (y) subject to
Section 6(b) below, offer to the Holder in such notice the opportunity to
register the sale of such number of Warrant Shares (the “Registrable
Securities”) as the Holder may request in writing within five (5) days
following receipt of such notice (a “Resale Registration Statement”).
Subject to Section 6(b) below, the Company shall cause such Registrable
Securities to be included in such registration and shall use commercially
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Securities requested
to be included in a Resale Registration Statement, on the same terms and
conditions as any similar securities of the Company to be sold by stockholders
of the Company, and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof.
If the Holder proposes to distribute any Registrable Securities through a
Resale Registration Statement that involves an underwriter or underwriters, the
Holder shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such Resale Registration Statement.

(b)           Notwithstanding the foregoing, if (i) the managing
underwriter of a proposed underwritten offering, (ii) a placement agent or
(iii) the Company determines that the 

 

6

 

inclusion of all Registrable Securities
requested to be included in a Resale Registration Statement would adversely
affect such offering, the Company may, in its discretion, limit the number of
Registrable Securities to be included in such offering. Furthermore, in the event
the Company is advised by the Securities and Exchange Commission, or any
applicable self-regulatory or state securities agency, that the inclusion of
any Registrable Securities will prevent, preclude or materially delay the
effectiveness of a registration statement filed, the Company may amend such
registration statement to exclude the Registrable Securities without thereby
incurring any liability to the Holder.

7.             Notice to Holder.

(a)           In case:

(i)            the Company shall take a record of the holders of its Common
Stock (or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend (other
than a cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right;

(ii)           of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation with or
merger of the Company into another Person, or any conveyance of all or
substantially all of the assets of the Company to another Person; or

(iii)          of any voluntary dissolution, liquidation or winding-up of
the Company;

then,
and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up.  Such notice shall be mailed at least twenty
(20) days prior to the record date therein specified, or if no record date
shall have been specified therein, at least twenty (20) days prior to the date
of such action, provided, however, failure to provide any such notice shall not
affect the validity of such transaction.

(b)           Whenever any adjustment shall be made pursuant to Section
5 hereof, the Company shall promptly make a certificate signed by its Chairman,
Chief Executive Officer, President, Vice President, Chief Financial Officer or
Treasurer, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Warrant Price and number of Warrant Shares purchasable
upon exercise of this Warrant after giving effect to such adjustment, and shall
promptly cause 

 

7

 

copies of such certificate to be mailed
(by first class mail, postage prepaid) to the Holder of this Warrant.

8.             Loss, Theft, Destruction or Mutilation.  Upon receipt by the Company of evidence
satisfactory to it, in the exercise of its reasonable discretion, of the
ownership and the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company and, in the case of mutilation, upon surrender and cancellation
hereof, the Company will execute and deliver in lieu hereof, without expense to
the Holder, a new Warrant of like tenor dated the date hereof.

9.             Warrant Holder Not a Stockholder.  The Holder of this Warrant, as such, shall
not be entitled by reason of this Warrant to any rights whatsoever as a
stockholder of the Company.

10.           Notices.  Any
notice required or contemplated by this Warrant shall be deemed to have been
duly given if transmitted by registered or certified mail, return receipt requested,
postage prepaid, or nationally recognized overnight delivery service, to the
Company at its principal executive offices: 11742 Stonegate Circle, Omaha,
Nebraska 68164, Attention: Chief Executive Officer, or to the Holder at the
name and address set forth in the Warrant Register maintained by the Company.

11.           Choice of Law. THIS WARRANT IS ISSUED UNDER AND
SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW.

12.           Jurisdiction and Venue.  The Company and the Holder, by its acceptance
hereof, hereby agree that any dispute which may arise between them arising out
of or in connection with this Warrant shall be adjudicated before a court
located in Las Vegas, Nevada, and they hereby submit to the exclusive
jurisdiction of the federal and state courts of the State of Nevada located in
Las Vegas with respect to any action or legal proceeding commenced by any
party, and irrevocably waive any objection they now or hereafter may have
respecting the venue of any such action or proceeding brought in such a court
or respecting the fact that such court is an inconvenient forum, relating to or
arising out of this Warrant or any acts or omissions relating to the sale of
the securities hereunder, and consent to the service of process in any such
action or legal proceeding by means of registered or certified mail, return
receipt requested, postage prepaid, in care of the address set forth herein or
such other address as either party shall furnish in writing to the other.

[Signature Page Follows]

 

 

8

 

 

IN
WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officer, as of this      
day of November, 2007.

	
   

  	
  KEYON
  COMMUNICATIONS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Jonathan Snyder

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  

 

 

FORM OF EXERCISE

(to be executed by the registered holder hereof)

1.             The undersigned hereby elects to
purchase             
Warrant Shares pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

2.             Payment shall take the form of
(check applicable box):

                o in lawful
money of the United States; or

                o the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 1(b), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 1(b).

3.             Please issue a certificate or
certificates representing said Warrant Shares in the name of the undersigned or
in such other name as is specified below:

	
   

  	
   

  	
   

  	
   

  	
   

  

 

4.             The
Warrant Shares shall be delivered by physical delivery of a certificate to:

	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  

 

5.             The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended.

[SIGNATURE OF HOLDER]

	
  Name
  of Investing Entity or Person:

  	
   

  
	
  Signature of Authorized Signatory of Investing
  Entity:

  	
   

  
	
  Name of Authorized Signatory:

  	
   

  
	
  Title of Authorized Signatory:

  	
   

  
	
  Date:

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