Document:

Unassociated Document

    Exhibit
      4.4

     

    THIS
      WARRANT AND ANY SHARES OF COMMON STOCK ISSUED UPON EXERCISE HEREOF HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED
      FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE AFFECTED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL THAT
      SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED.

     

    FBO
      AIR, INC.

     

    WARRANT
      TO PURCHASE 

    ____________
      SHARES

    OF
      COMMON STOCK

    (SUBJECT
      TO ADJUSTMENT)

    (Void
      after ______, 2011)

    

    No:
      I6W-__

     

    This
      certifies that for value, _______________________________, or registered assigns
      (the “Holder”),
      is
      entitled, subject to the terms set forth below, at any time from and after
      ______ _, 2006 (the “Original Issuance
      Date”)
      and
      before 5:00 p.m., Eastern Time, on ________, 2011 (the “Expiration
      Date”),
      to
      purchase from FBO
      Air, Inc.,
      a
      Nevada corporation (the “Company”),
      __________________________ (______) shares (subject to adjustment as described
      herein), of common stock, par value $0.001 per share, of the Company (the
“Common
      Stock”),
      upon
      surrender hereof, at the principal office of the Company referred to below,
      with
      a duly executed subscription form in the form attached hereto as Exhibit A
      and
      simultaneous payment therefor in lawful, immediately available money of the
      United States or otherwise as hereinafter provided, at an initial exercise
      price
      per share of $1.00
      (the
“Purchase
      Price”)
      The
      Purchase Price is subject to further adjustment as provided below, and the
      term
“Common
      Stock”
shall
      include, unless the context otherwise requires, the stock and other securities
      and property at the time receivable upon the exercise of this Warrant. The
      term
“Warrant,”
as
      used herein, shall mean this Warrant and any other Warrants delivered in
      substitution or exchange therefor as provided herein. The term “Warrants”
as
      used
      herein, shall mean the Warrant and any other Warrants issued in the Offering
      (as
      such term is defined in the succeeding paragraph).

     

    This
      Warrant was issued in connection with the Company’s private placement offering
      (the “Offering”)
      of its
      units (the “Units”),
      as
      described in greater detail in the Company’s Confidential Information
      Memorandum, dated July 24, 2006, as
      amended or supplemented from time to time
      (the
“Memorandum”).
      In
      the Offering, the Company sold its securities to “accredited investors” pursuant
      to Subscription Agreements (the “Subscription
      Agreements”).

     

    
      
        
        

      

      
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    1.  Exercise.
      This
      Warrant may be exercised at any time or from time to time from and after the
      Original Issuance Date and before 5:00 p.m., Eastern Time, on the Expiration
      Date, on any Business
      Day (as
      hereinafter defined), for the full number of shares of the Common Stock called
      for hereby, by surrendering it at the principal office of the Company (currently
      101 Hangar Road, Wilkes-Barre/Scranton International Airport, Avoca,
      Pennsylvania 18641) with the subscription form duly executed, together with
      payment in an amount equal to (a) the number of shares of the Common Stock
      called for on the face of this Warrant, as adjusted in accordance with Section
      4
      of this Warrant (without giving effect to any further adjustment herein),
      multiplied (b) by the Purchase Price. Payment of the Purchase Price shall
      be made by payment in immediately available funds. This Warrant may be exercised
      for less than the full number of shares of the Common Stock at the time called
      for hereby, except that the number of shares of the Common Stock receivable
      upon
      the exercise of this Warrant as a whole, and the sum payable upon the exercise
      of this Warrant as a whole, shall be proportionately reduced. Upon a partial
      exercise of this Warrant in accordance with the terms hereof, this Warrant
      shall
      be surrendered, and a new Warrant of the same tenor and for the purchase of
      the
      number of such shares not purchased upon such exercise shall be issued by the
      Company to Holder without any charge therefor. A 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, and the person entitled to receive
      the
      shares of the Common Stock issuable upon such exercise shall be treated for
      all
      purposes as the holder of such shares of record as of the close of business
      on
      such date. Within three (3) Business Days after such date, the Company shall
      issue and deliver to the person or persons entitled to receive the same a
      certificate or certificates for the number of full shares of the Common Stock
      issuable upon such exercise, together with cash, in lieu of any fraction of
      a
      share, equal to such fraction of the then Market Price during the five (5)
      consecutive Trading Days preceding the date of exercise of one (1) full share
      of
      the Common Stock. 

     

    For
      purposes of this Warrant, “Business
      Day”
shall
      mean any day other than Saturday, Sunday or any day on which state chartered
      banks are not obligated to open in Avoca, Pennsylvania or such other place
      in
      which the Company’s headquarters office may then be located. 

     

    For
      purposes of this Warrant, (i) “Market
      Price”
is
      defined as the Closing Price per share of the Common Stock on the principal
      Trading Market on which the Common Stock is included for trading; provided,
      that if
      there is no trading in the Common Stock on a particular Trading Day on the
      relevant principal Trading Market, the Market Price for that day shall be the
      Market Price on the last preceding Trading Day on which there was trading in
      the
      Common Stock on the principal Trading Market, (ii) “Closing
      Price”
means
      on any particular date (a) the last reported closing price per share of the
      Common Stock on such date on the Trading Market (as reported by Bloomberg L.P.
      at 4:15 p.m. (New York time) as the last reported closing price for regular
      session trading on such day), or (b) if there is no such price on such
      date, then the closing price on the Trading Market on the date nearest preceding
      such date (as reported by Bloomberg L.P. at 4:15 p.m. (New York time) as
      the closing price for regular session trading on such day), or (c) if the
      Common Stock is not then listed or quoted on the Trading Market and if prices
      for the Common Stock are then reported in the “pink sheets” published by the
      Pink Sheets LLC (or a similar organization or agency succeeding to its functions
      of reporting prices), the most recent price per share of the Common Stock so
      reported, or (d) if the shares of Common Stock are not then publicly traded
      the fair market value of a share of Common Stock as determined in good faith
      by
      the Board of Directors of the Company; (iii) “Trading
      Day”
means
      (a) a day on which the Common Stock is traded on a Trading Market, or
      (b) if the Common Stock is not quoted on a Trading Market, a day on which
      the Common Stock is quoted in the over-the-counter market as reported by the
      Pink Sheets LLC (or any similar organization or agency succeeding to its
      functions of reporting price); provided, that in the event that the Common
      Stock
      is not listed or quoted as set forth in (a), and (b) hereof, then Trading
      Day shall mean a Business Day; and (iv) “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 OTC Bulletin Board, the American Stock
      Exchange, the New York Stock Exchange, the Nasdaq National Market or the Nasdaq
      SmallCap Market.

     

    
      
        
        

      

      
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    2.  Shares
      Fully Paid; Payment of Taxes.
      All
      shares of the Common Stock issued upon the exercise of this Warrant shall be
      validly issued, fully paid and non-assessable, and the Company shall pay all
      taxes and other governmental charges (other than income taxes to the Holder)
      that may be imposed in respect of the issue or delivery thereof.

     

    3.  Transfer
      and Exchange.
      This
      Warrant and all rights hereunder are transferable, in whole or in part, on
      the
      books of the Company maintained for such purpose at its principal office
      referred to above by Holder in person or by duly authorized attorney, upon
      surrender of this Warrant together with a completed and executed assignment
      form
      in the form attached as Exhibit B,
      payment
      of any necessary transfer tax or other governmental charge imposed upon such
      transfer and an opinion of counsel reasonably acceptable to the Company stating
      that such transfer is exempt from the registration requirements of the
      Securities Act of 1933, as amended (the “1933
      Act”).
      Upon
      any partial transfer, the Company will issue and deliver to Holder a new Warrant
      or Warrants with respect to the shares of the Common Stock not so transferred.
      Each taker and holder of this Warrant, by taking or holding the same, consents
      and agrees that this Warrant when endorsed in blank shall be deemed negotiable
      and that, when this Warrant shall have been so endorsed, the holder hereof
      may
      be treated by the Company and all other persons dealing with this Warrant as
      the
      absolute owner hereof for any purpose and as the person entitled to exercise
      the
      rights represented hereby, or to the transfer hereof on the books of the
      Company, any notice to the contrary notwithstanding; but until such transfer
      on
      such books, the Company may treat the registered Holder hereof as the owner
      for
      all purposes.

     

    This
      Warrant is exchangeable at such office for Warrants for the same aggregate
      number of shares of the Common Stock, each new Warrant to represent the right
      to
      purchase such number of shares as the Holder shall designate at the time of
      such
      exchange.

     

    4.  Anti-Dilution
      Provisions.
      

     

    A.  Adjustment
      for Dividends in Other Stock and Property Reclassifications.
      In case
      at any time or from time to time the holders of the Common Stock (or any shares
      of stock or other securities at the time receivable upon the exercise of this
      Warrant) shall have received, or, on or after the record date fixed for the
      determination of eligible stockholders, shall have become entitled to receive,
      without payment therefor,

     

    
      
        
        

      

      
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    (1)  other
      or
      additional stock or other securities or property (other than cash) by way of
      dividend,

     

    (2)  any
      cash
      or other property paid or payable out of any source other than retained earnings
      (determined in accordance with generally accepted accounting principles),
      or

     

    (3)  other
      or
      additional stock or other securities or property (including cash) by way of
      stock-split, spin-off, reclassification, combination of shares or similar
      corporate rearrangement (other than (x) additional shares of the Common Stock
      or
      any other stock or securities into which such Common Stock shall have been
      changed, (y) any other stock or securities convertible into or exchangeable
      for
      such Common Stock or such other stock or securities or (z) any stock purchase
      rights, issued as a stock dividend or stock-split, adjustments in respect of
      which shall be covered by the terms of Section 4.C,
      Section
      4.D
      or Section
      4.E,
      then
      and in each such case, the Holder, upon the exercise hereof as provided in
      Section 1,
      shall
      be entitled to receive the amount of stock and other securities and property
      (including cash in the cases referred to in clauses (2) and (3) above) which
      such Holder would hold on the date of such exercise if, on the Original Issuance
      Date, the Holder had been the holder of record of the number of shares of the
      Common Stock called for on the face of this Warrant, as adjusted in accordance
      with the first paragraph of this Warrant, and had thereafter, during the period
      from the Original Issuance Date to and including the date of such exercise,
      retained such shares and/or all other or additional stock and other securities
      and property (including cash in the cases referred to in clause (2) and (3)
      above) receivable by it as aforesaid during such period, giving effect to all
      adjustments called for during such period by Section
      4.A
      and
Section
      4.B.

     

    B.  Adjustment
      for Reorganization, Consolidation and Merger.
      In case
      of any reorganization of the Company (or any other corporation the stock or
      other securities of which are at the time receivable on the exercise of this
      Warrant) after the Original Issuance Date, or in case, after such date, the
      Company (or any such other corporation) shall consolidate with or merge into
      another corporation or entity or convey all or substantially all its assets
      to
      another corporation or entity, then and in each such case the Holder, upon
      the
      exercise hereof as provided in Section
      1
      at any
      time after the consummation of such reorganization, consolidation, merger or
      conveyance, shall be entitled to receive, in lieu of the stock or other
      securities and property receivable upon the exercise of this Warrant prior
      to
      such consummation, the stock or other securities or property to which such
      Holder would have been entitled upon such consummation if Holder had exercised
      this Warrant immediately prior thereto, all subject to further adjustment as
      provided in Section
      4.A, Section
      4.B, Section
      4.C,
      Section
      4.D and
      Section
      4.E;
      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.

     

    C.  Sale
      of Shares below Purchase Price.

     

    (1)  Subject
      to the exceptions set forth in Section
      4.C(5),
      if the
      Company issues or sells, or is deemed by the express provisions of this
Section
      4.C
      to have
      issued or sold, Additional
      Shares of Common Stock
      (as
      hereinafter defined), other than as a dividend or other distribution on any
      class of stock as provided in Section
      4.D
      and
      other than upon a subdivision or combination of shares of the Common Stock
      as
      provided in Section
      4.E,
      for an
      Effective Price (as hereinafter defined) less than the then existing Purchase
      Price, then and in each such case:

     

    
      
        
        

      

      
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    (A)  the
      then
      existing Purchase Price shall be reduced, as of the opening of business on
      the
      date of such issue or sale, such that it is equal to the lowest Effective Price
      at which any Additional Shares of Common Stock are issued; and 

     

    (2)  For
      the
      purpose of making any adjustment required under this Section
      4.C,
      the
      consideration received by the Company for any issue or sale of securities shall
      (i) to the extent it consists of cash be computed at the amount of cash received
      by the Company, (ii) to the extent it consists of property other than cash,
      be
      computed at the fair value of that property as determined in good faith by
      the
      Board, (iii) if Additional Shares of Common Stock, Convertible Securities (as
      hereinafter defined) or rights or options to purchase either Additional Shares
      of Common Stock or Convertible Securities are issued or sold together with
      other
      stock or securities or other assets of the Company for a consideration which
      covers both, be computed as the portion of the consideration so received that
      may be reasonably determined in good faith by the Board to be allocable to
      such
      Additional Shares of Common Stock, Convertible Securities or rights or options,
      and (iv) be computed after reduction for all expenses payable by the Company
      in
      connection with such issue or sale.

     

    (3)  For
      the
      purpose of the adjustment required under this Section
      4.C,
      if the
      Company issues or sells any rights or options for the purchase of, or stock
      or
      other securities convertible into or exchangeable for, Additional Shares of
      Common Stock (such convertible or exchangeable stock or securities being
      hereinafter referred to as “Convertible
      Securities”)
      and if
      the Effective Price of such Additional Shares of Common Stock is less than
      the
      Purchase Price then in effect, then the Company shall be deemed to have issued
      at the time of the issuance of such rights or options or Convertible Securities
      the maximum number of Additional Shares of Common Stock issuable upon exercise,
      conversion or exchange thereof and to have received as consideration for the
      issuance of such shares an amount equal to the total amount of the
      consideration, if any, received by the Company for the issuance of such rights
      or options or Convertible Securities, plus, in the case of such rights or
      options, the minimum amounts of consideration, if any, payable to the Company
      upon the exercise of such rights or options, plus, in the case of Convertible
      Securities, the minimum amounts of consideration, if any, payable to the Company
      (other than by cancellation of liabilities or obligations evidenced by such
      Convertible Securities) upon the conversion or exchange thereof. No further
      adjustment of the Purchase Price, adjusted upon the issuance of such rights,
      options or Convertible Securities, shall be made as a result of the actual
      issuance of Additional Shares of Common Stock on the exercise of any such rights
      or options or the conversion or exchange of any such Convertible Securities.
      If
      any such rights or options or the conversion or exchange privilege represented
      by any such Convertible Securities shall expire without having been exercised,
      the Purchase Price adjusted upon the issuance of such rights, options or
      Convertible Securities shall be readjusted to the Purchase Price which would
      have been in effect had an adjustment been made on the basis that the only
      Additional Shares of Common Stock so issued were the Additional Shares of Common
      Stock, if any, actually issued or sold on the exercise of such rights or options
      or rights of conversion or exchange of such Convertible Securities, and such
      Additional Shares of Common Stock, if any, were issued or sold for the
      consideration actually received by the Company upon such exercise, plus the
      consideration, if any, actually received by the Company for the granting of
      all
      such rights or options, whether or not exercised, plus the consideration
      received for issuing or selling the Convertible Securities actually converted
      or
      exchanged, plus the consideration, if any, actually received by the Company
      (other than by cancellation of liabilities or obligations evidenced by such
      Convertible Securities) on the conversion or exchange of such Convertible
      Securities.

     

    
      
        
        

      

      
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    (4)  For
      the
      purpose of the adjustment required under this Section 4.C,
      if the
      Company issues or sells, or is deemed by the express provisions of this
      subsection to have issued or sold, any rights or options for the purchase of
      Convertible Securities and if the Effective Price of the Additional Shares
      of
      Common Stock underlying such Convertible Securities is less than the Purchase
      Price then in effect, then in each such case the Company shall be deemed to
      have
      issued at the time of the issuance of such rights or options the maximum number
      of Additional Shares of Common Stock issuable upon conversion or exchange of
      the
      total amount of Convertible Securities covered by such rights or options and
      to
      have received as consideration for the issuance of such Additional Shares of
      Common Stock an amount equal to the amount of consideration, if any, received
      by
      the Company for the issuance of such rights or options, plus the minimum amounts
      of consideration, if any, payable to the Company upon the exercise of such
      rights or options and plus the minimum amount of consideration, if any, payable
      to the Company (other than by cancellation of liabilities or obligations
      evidenced by such Convertible Securities) upon the conversion or exchange of
      such Convertible Securities. No further adjustment of the Purchase Price,
      adjusted upon the issuance of such rights or options, shall be made as a result
      of the actual issuance of the Convertible Securities upon the exercise of such
      rights or options or upon the actual issuance of Additional Shares of Common
      Stock upon the conversion or exchange of such Convertible Securities. The
      provisions of paragraph (3) above for the readjustment of the Purchase
      Price upon the expiration of rights or options or the rights of conversion
      or
      exchange of Convertible Securities shall apply mutatis mutandis
      to the
      rights, options and Convertible Securities referred to in this paragraph
      (4).

     

    (5)  “Additional
      Shares of Common Stock”
shall
      mean all shares of Common Stock issued by the Company on or after the Original
      Issuance Date, whether or not subsequently reacquired or retired by the Company,
      other than (i) shares of the Common Stock issuable upon exercise of the
      Warrants, (ii) shares of the Common Stock issuable upon conversion of the
      Series A Preferred Stock, $.001 par value (the “Series A Preferred Stock”),
      (iii) shares of the Common Stock issuable upon exercise of warrants and options
      to purchase shares of the Common Stock issued and outstanding as of the Original
      Issuance Date, (iv) shares of the Common Stock issued to non-affiliated third
      parties in connection with any bona fide mergers, acquisitions and business
      combinations, (v) shares of the Common Stock or options issued to employees,
      officers, directors, consultants, vendors or agents of the Company (except
      that,
      if to consultants, vendors or agents, only up to a maximum of 2,500,000 shares
      of the Common Stock in any 12-month period) pursuant to any stock or option
      plan
      duly adopted by, or any employment agreement approved by, a majority of the
      non-employee members of the Board of Directors of the Company or a majority
      of
      the members of a committee of non-employee directors established for such
      purpose, and in the case of a plan also approved by the Company’s stockholders,
      (vi) shares of the Common Stock issued as dividend payments in lieu of cash
      payments on the Series A Preferred Stock, and (vii) shares of the Common Stock
      issued in connection with public offerings of the Company's securities. The
      “Effective
      Price”
of
      Additional Shares of Common Stock shall mean the quotient determined by dividing
      the total number of Additional Shares of Common Stock issued or sold, or deemed
      to have been issued or sold by the Company under this Section 4.C,
      into
      the aggregate consideration received, or deemed to have been received, by the
      Company for such issue under this Section 4.C,
      for
      such Additional Shares of Common Stock. “Other
      Securities”
with
      respect to an issue or sale of Additional Shares of Common Stock shall mean
      Convertible Securities; “the
      number of shares of Common Stock underlying Other
      Securities”
on
      a
      particular date shall mean the number of shares of the Common Stock issuable
      upon the exercise, conversion or exchange, as the case may be, of such Other
      Securities at the close of business on such date.

     

    
      
        
        

      

      
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    (6)  Other
      than a reduction pursuant to its applicable anti-dilution provisions, any
      reduction in the conversion price of any Convertible Security, whether
      outstanding on the Original Issuance Date or thereafter, or the subscription
      price of any option, warrant or right to purchase the Common Stock or any
      Convertible Security (whether such option, warrant or right is outstanding
      on
      the Original Issuance Date or thereafter), to an Effective Price less than
      the
      Fair Market Value or the then Purchase Price shall be deemed to be an issuance
      of such Convertible Security and the issuance of all such options, warrants
      or subscription rights, and the provisions of Sections
      4.C.(3), (4) and (5)
      shall
      apply thereto mutatis
      mutandis.
      

     

    (7)  In
      case
      any shares of stock or other securities, other than the Common Stock, shall
      at
      the time be receivable upon the exercise of this Warrant, and in case any
      additional shares of such stock or any additional such securities (or any stock
      or other securities convertible into or exchangeable for any such stock or
      securities) shall be issued or sold for a consideration per share such as to
      dilute the purchase rights evidenced by this Warrant, then and in each such
      case
      the Purchase Price shall forthwith be adjusted, substantially in the manner
      provided for above in this Section
      4.C,
      so as
      to protect the Holder of this Warrant against the effect of such
      dilution.

     

    (8)  In
      case
      the Company shall take a record of the holders of shares of its stock of any
      class for the purpose of entitling them (a) to receive a dividend or a
      distribution payable in shares of the Common Stock or in Convertible Securities,
      or (b) to subscribe for, purchase or otherwise acquire shares of the Common
      Stock or Convertible Securities, then such record date shall be deemed to be
      the
      date of the issue or sale of the Additional Shares of Common Stock issued or
      sold or deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution, or the date of the granting of such
      rights of subscription, purchase or other acquisition, as the case may
      be.

     

    (9)  No
      adjustment in the Purchase Price shall be required unless such adjustment would
      require an increase or decrease of at least one cent ($0.01) in such price;
      provided,
      however,
      that
      any adjustments which by reason of this Section
      4
      are not
      required to be made shall be carried forward and taken into account in any
      subsequent adjustment required to be made hereunder. All calculations under
      this
Section 4
      shall be
      made to the nearest cent or to the nearest one-hundredth of a share, as the
      case
      may be.

     

    D.  Adjustment
      for Certain Dividends and Distributions.
      If the
      Company at any time or from time to time makes, or fixes a record date for
      the
      determination of holders of the Common Stock entitled to receive, a dividend
      or
      other distribution payable in additional shares of the Common Stock, then and
      in
      each such event:

     

    
      
        
        

      

      
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    (1)  the
      Purchase Price then in effect shall be decreased as of the time of such issuance
      or, in the event such record date is fixed, as of the close of business on
      such
      record date, by multiplying the Purchase Price then in effect by a fraction
      (A) the numerator of which is the total number of shares of the Common
      Stock issued and outstanding immediately prior to the time of such issuance
      or
      the close of business on such record date, and (B) the denominator of which
      shall be the total number of shares of the Common Stock issued and outstanding
      immediately prior to the time of such issuance or the close of business on
      such
      record date as the case may be, plus the number of shares of the Common Stock
      issuable in payment of such dividend or distribution; provided,
      however,
      that if
      such record date is fixed and such dividend is not fully paid or if such
      distribution is not fully made on the date fixed therefor, the Purchase Price
      shall be recomputed accordingly as of the close of business on such record date,
      and thereafter the Purchase Price shall be adjusted pursuant to this
Section 4.D
      as of
      the time of actual payment of such dividends or distributions; and

     

    (2)  the
      number of shares of the Common Stock theretofore receivable upon the exercise
      of
      this Warrant shall be increased, as of the time of such issuance or, in the
      event such record date is fixed, as of the close of business on such record
      date, in inverse proportion to the decrease in the Purchase Price.

     

    E.  Stock
      Split and Reverse Stock Split.
      If the
      Company at any time or from time to time effects a stock split or subdivision
      of
      the outstanding shares of the Common Stock, the Purchase Price then in effect
      immediately before that stock split or subdivision shall be proportionately
      decreased and the number of shares of the Common Stock theretofore receivable
      upon the exercise of this Warrant shall be proportionately increased. If the
      Company at any time or from time to time effects a reverse stock split or
      combines the outstanding shares of the Common Stock into a smaller number of
      shares, the Purchase Price then in effect immediately before that reverse stock
      split or combination shall be proportionately increased and the number of shares
      of the Common Stock theretofore receivable upon the exercise of this Warrant
      shall be proportionately decreased. Each adjustment under this Section
      4.E
      shall
      become effective at the close of business on the date the stock split,
      subdivision, reverse stock split or combination becomes effective.

     

    F.  Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Conversion Price
      pursuant to this Section
      4,
      the
      Company at its expense shall promptly compute such adjustment or readjustment
      in
      accordance with the terms hereof and furnish to each holder of a Warrant a
      certificate setting forth such adjustment or readjustment and showing in detail
      the facts upon which such adjustment or readjustment is based. The Company
      shall, upon the written request at any time of any holder of a Warrant, furnish
      or cause to be furnished to such holder a like certificate setting forth (i)
      such adjustments and readjustments, (ii) Purchase Price at the time in effect,
      and (iii) the number of shares of the Common Stock and the amount, if any,
      of
      other property which at the time would be received upon the exercise of the
      Warrant.

     

    
      
        
        

      

      
        E-8

        
          

        

      

      
        
        

      

    

     

    G. Corresponding
      Share Adjustment.
      Any time
      an adjustment is made to the Purchase Price pursuant to Section
      4
      of this
      Warrant, a corresponding proportionate change shall be made to the number of
      shares of the Common Stock issuable upon such exercise.

     

    5.  Notices
      of Record Date.
      In
      case:

     

    A.  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 the Warrants) for
      the
      purpose of entitling them to receive any dividend 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, or

     

    B.  of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation or merger of the Company with or into another
      corporation, or any conveyance of all or substantially all of the assets of
      the
      Company to another corporation, or

     

    C.  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 each holder
      of
      a Warrant at the time outstanding a notice specifying, as the case may be,
      (a)
      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 (b) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up is expected to take place, and the time, if any is to be fixed,
      as of
      which the holders of record of the Common Stock (or such stock or securities
      at
      the time receivable upon the exercise of the Warrants) shall be entitled to
      exchange their shares of the 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 ten (10) days prior to the
      date
      therein specified.

     

    6.  Loss
      or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it (in the exercise of
      reasonable discretion) of the ownership of and the loss, theft, destruction
      or
      mutilation of any Warrant and (in the case of loss, theft or destruction) of
      indemnity satisfactory to it (in the exercise of reasonable discretion), and
      (in
      the case of mutilation) upon surrender and cancellation thereof, the Company
      will execute and deliver in lieu thereof a new Warrant of like
      tenor.

     

    7.  Reservation
      of Common Stock.
      The
      Company shall at all times reserve and keep available for issue upon the
      exercise of Warrants such number of its authorized but unissued shares of the
      Common Stock as will be sufficient to permit the exercise in full of all
      outstanding Warrants. All of the shares of the Common Stock issuable upon the
      exercise of the rights represented by this Warrant will, upon issuance and
      receipt of the Purchase Price therefor, be fully paid and nonassessable, and
      free from all preemptive rights, rights of first refusal or first offer, taxes,
      liens and charges of whatever nature, with respect to the issuance thereof.
      

     

    8.  Registration
      Rights.
      The
      Holder of this Warrant is entitled to have the shares of the Common Stock
      issuable upon exercise of this Warrant registered for resale under the 1933
      Act
      pursuant to, and in accordance with, the Subscription Agreement by and between
      the Holder and the Company.

     

    
      
        
        

      

      
        E-9

        
          

        

      

      
        
        

      

    

     

    9.  Notices.
      All
      notices and other communications from the Company to the Holder of this Warrant
      shall be mailed by first class, registered or certified mail, postage prepaid,
      to the address furnished to the Company in writing by the Holder. All notices
      to
      the Company shall be sent in the same manner to FBO Air, Inc., 100 Hangar Road,
      Wilkes-Barre/Scranton International Airport, Avoca, Pennsylvania 18641,
      Attention: President. Either the Company or the Holder may change the address
      by
      notice to the other sent in the manner provided in this Section
      9.

     

    10.  Change;
      Modifications; Waiver.
      No
      terms of this Warrant may be amended, waived or modified except by the express
      written consent of the Company and the holders of not less than 50.1% of the
      then outstanding Warrants.

     

    11.  Headings.
      The
      headings in this Warrant are for purposes of convenience in reference only,
      and
      shall not be deemed to constitute a part hereof.

     

    12.  Governing
      Law, Etc.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York without regard to the conflicts of laws principles
      thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
      arising directly and/or indirectly pursuant to or under this Agreement shall
      be
      brought solely in a federal or state court located in the City, County and
      State
      of New York. By its execution hereof, the parties hereby covenant and
      irrevocably submit to the in personam
      jurisdiction of the federal and state courts located in the City, County and
      State of New York and agree that any process in any such action may be served
      upon any of them personally, or by certified mail or registered mail upon them
      or their agent, return receipt requested, with the same full force and effect
      as
      if personally served upon them in New York City. The parties hereto waive any
      claim that any such jurisdiction is not a convenient forum for any such suit
      or
      proceeding and any defense or lack of in personam
      jurisdiction with respect thereto. In the event of any such action or
      proceeding, the party prevailing therein shall be entitled to payment from
      the
      other party hereto of all of its reasonable legal fees and
      expenses.

     

    13.  Redemption
      of Warrants.

     

    A.  At
      any
      time on not less than ten (10) days’ prior written notice (the “Redemption
      Notice”)
      to all
      of the Holders, all issued and outstanding Warrants issued in the Offering
      may
      be redeemed, in whole but not in part, at the option of the Company, at a
      redemption price of $0.01 per Warrant (the “Redemption
      Price”),
      provided that: (i) the Market Price (as defined below) for a share of the
      Common Stock equals or exceeds 250% of the then current Purchase Price for
      a
      period of 20 consecutive Trading Days (as defined below) ending on the
      2nd
      Trading
      Day prior to the date of the Redemption Notice (the “Marking
      Date”);
      (ii)
      if a registration statement covering the Warrant Shares filed under the 1933
      Act
      is declared effective by the Commission and remains effective on and through
      the
      date fixed for redemption of the Warrants (the “Redemption
      Date”),
      and
      (iii) the average daily trading volume of the Common Stock for the 20
      consecutive Trading Days on the Trading Market is no less than 20,000 shares
      of
      the Common Stock for each such Trading Day through the Marking Date.

     

    
      
        
        

      

      
        E-10

        
          

        

      

      
        
        

      

    

     

    B.  The
      Redemption Notice shall specify (i) the Redemption Price, (ii) the Redemption
      Date, (iii) the place where the Warrant certificates shall be delivered and
      the
      redemption price paid, and (iv) that the right to exercise this Warrant shall
      terminate at 5:00 p.m. (New York time) on the Business Day immediately
      preceding the Redemption Date. 

     

    C.  Any
      right
      to exercise a Warrant shall terminate at 5:00 p.m. (New York time) on the
      Business Day immediately preceding the Redemption Date. On and after the
      Redemption Date, the holder of this Warrant shall have no further rights except
      to receive, upon surrender of this Warrant, the Redemption Price.

     

    D.  From
      and
      after the Redemption Date, the Company shall, at the place specified in the
      Redemption Notice, upon presentation and surrender to the Company by or on
      behalf of the holder thereof the warrant certificates evidencing this Warrant
      being redeemed, deliver, or cause to be delivered to or upon the written order
      of such holder, a sum in cash equal to the Redemption Price of this Warrant.
      From and after the Redemption Date, this Warrant shall expire and become void
      and all rights hereunder and under the warrant certificates, except the right
      to
      receive payment of the Redemption Price, shall cease.

     

    14. Counterparts.
      This
      Agreement may be signed in counterparts.

     

    
      	 	 	 
	 	FBO
              AIR,
              INC.
	 
 	 
 	 
 
	Dated:
              ___________	By:  	_________________________
	 	Name:
	 	Title 

     

         

     

    

    
      
        
        

      

      
        E-11

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    SUBSCRIPTION
      FORM

     

    (To
      be
      executed only upon exercise of Warrant)

    

     

     

    The
      undersigned registered owner of this Warrant irrevocably exercises this Warrant
      and purchases _______ of the number of shares of the Common Stock of FBO Air,
      Inc. purchasable with this Warrant, and herewith makes payment therefor, all
      at
      the price and on the terms and conditions specified in this
      Warrant.

    

     

    Dated:_____________

     

    
      	 	 	_______________________ 
	 	 	(Signature of Registered
              Owner) 
	 	 	 
	 	 	_______________________ 
	 	 	(Street Address) 
	 	 	 
	 	 	_______________________ 
	 	 	(City / State / Zip Code) 
	 	 	 

    

    

     

    

     

     

     

    
      
        
        

      

      
        E-12

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

     

    FORM
      OF ASSIGNMENT

     

     

    

     

     

    FOR
      VALUE RECEIVED
      the
      undersigned registered owner of this Warrant hereby sells, assigns and transfers
      unto the Assignee named below all of the rights of the undersigned under the
      within Warrant, with respect to the number of shares of the Common Stock set
      forth below:

     

    
      	
              Name
                of Assignee

            	
               Address

            	
               Number
                of Shares

            
	 	 	 

    

          

    and
      does
      hereby irrevocably constitute and appoint __________________________ Attorney
      to
      make such transfer on the books of FBO Air, Inc., maintained for the purpose,
      with full power of substitution in the premises.

     

    
      Dated:_____________

       

      
        	 	 	_______________________ 
	 	 	(Signature)
	 	 	 
	 	 	_______________________ 
	 	 	(Witness)

      

      
 

    

    

    The
      undersigned Assignee of the Warrant hereby makes to FBO Air, Inc., as of the
      date hereof, with respect to the Assignee, all of the representations and
      warranties made by the Holder, and the undersigned Assignee agrees to be bound
      by all the terms and conditions of the Warrant and the FBO Air, Inc.
      Subscription Agreement by and between FBO Air, Inc. and the Holder.

    

    

    Dated:_____________

    

    

    
      	 	 
	(Signature) 	_______________________ 
	 	 

    

    

     

     

    

     

    
      
        
        

      

      
        E-13Unassociated Document

    Exhibit
      10.1

    

    FBO
      AIR, INC. CLOSES PRIVATE PLACEMENT

    

    

    Avoca,
      Pennsylvania - September 5, 2006. FBO
      Air,
      Inc. (FBOR OTC:BB) announced today that it has raised $5 million through a
      private placement of common stock and warrants. Net proceeds from the offering
      will be used to retire debt, fund future acquisitions and for general corporate
      purposes. In addition, closing the offering triggers the obligation of holders
      of the Company’s Series A Preferred Stock to convert their preferred stock into
      common stock of the Company.

    

    “We
      are
      extremely pleased to close this offering,” stated William B. Wachtel, chairman
      of FBO Air, Inc. “It is a significant milestone in the development of the
      company. The retirement of approximately $3 million in debt and conversion
      of
      about $3 million of our preferred stock to common stock makes us a debt-free
      company with a substantially strengthened balance sheet, which positions us
      for
      future growth in our three core business areas - the management and charter
      of
      private jet aircraft, aviation fixed base operations, as well as aircraft
      maintenance.”

     

    The
      lead
      investors in the offering were the Company’s senior management and members of
      its Board of Directors, who collectively subscribed for almost 60% of the
      offering. Each Unit of the Offering was priced at $100,000 and consisted of
      166,700 shares of common stock, a per share price of $0.60, plus a warrant
      to
      purchase 100,000 additional shares at $1.00 per share. Mr. Wachtel commented
      further, “the fact that our management team and board of directors participated
      heavily in the offering, and purchased restricted stock in the Company at
      approximately a 50% premium to our average trading price over the past several
      months, is a testament to the faith we have in our business model.”

    

    "Completing
      the offering will also facilitate future developments, several of which we
      hope
      will reach a status where more definitive announcements may be made in the
      coming weeks, possibly including one strategic acquisition that we have
      targeted" said Mr. Wachtel. 

    ...............................

    

    FBO
      Air is an aviation services company. Our operations are conducted in three
      core
      functions - aircraft charter management activities, aircraft maintenance, and
      the fixed based operations (an “FBO”) business. Charter management is the
      business of providing on-call passenger air transportation. At 17 aircraft,
      our
      fleet size ranks in the top 5 largest in the Northeast and top 30 in the United
      States. An FBO is the primary provider of services such as the fueling,
      hangaring, maintenance and repair to private/general aviation aircraft
      operators.

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