Exhibit 4.5
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of December 20,
2007, by and among Global Aircraft Solutions Inc., a Nevada corporation, (the
"Company"), and the investors listed on the Schedule of Buyers attached hereto
(each, a "Buyer" and collectively, the "Buyers").
WHEREAS:
A. In connection with that certain Securities Purchase Agreement dated as
of even date herewith, by and among the Company, ▇▇▇▇▇▇▇▇ Aerospace
Technologies, Inc., World Jet Corporation, ▇▇▇▇▇▇▇▇ Aerospace Mexico S.A. de
C.V. and the Buyers referred to therein (the "Securities Purchase Agreement"),
the Company has agreed, upon the terms and subject to the conditions of that
certain Securities Purchase Agreement, to issue and sell on the date hereof to
each Buyer certain Warrants (the "Warrants") exercisable to purchase shares of
the Company's Common Stock (the "Common Stock") par value $0.01 per share (as
exercised, the "Warrant Shares") in accordance with the terms of the Warrants.
B. To induce the Buyers to execute and deliver that certain Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Effective Date" means the date that the Registration Statement is
first declared effective by the SEC.
(b) "Effectiveness Deadline" means the date that is two hundred
seventy (270) days after the Filing Deadline.
(c) "Filing Deadline" means the date that is forty-five (45) days
after the date on which the Company receives a filing request from any Investor
provided that such request may only be made after the six-month anniversary of
the Closing Date.
(d) "Investor" means a Buyer, any permitted transferee of the Warrant
Shares, to whom a Buyer assigns its rights under this Agreement in accordance
with the provisions of this Agreement (including but not limited to Section 9)
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 and any transferee or assignee thereof to whom a transferee or
assignee of the Warrant Shares, as applicable, assigns its rights under this
Agreement in accordance with the provisions of this Agreement (including but not
limited to Section 9) and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.
(e) "register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415, and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.
(f) "Registrable Securities" means (i) 110% of the Warrant Shares
issued or issuable upon exercise of the Warrants and (iii) any shares of capital
stock issued or issuable with respect to the Warrant Shares as a result of any
stock split, stock dividend, recapitalization, exchange, adjustment or similar
event or otherwise, without regard to any limitations on exercise of the
Warrants.
(g) "Registration Statement" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.
(h) "Required Holders" means the holders of at least seventy percent
(70%) of the Registrable Securities.
(i) "Rule 415" means Rule 415 under the 1933 Act or any successor rule
providing for offering securities on a continuous or delayed basis.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in that certain Securities Purchase Agreement.
2. Registration.
(a) Mandatory Registration. Subject to its receipt of the Registration
Statement Questionnaire (as defined below) from each of the Investors, the
Company shall prepare, and, as soon as practicable but in no event later than
the Filing Deadline, file with the SEC the Registration Statement on Form SB-2
covering the resale of all of the Registrable Securities (the date of such
filing, the "Filing Date"). In the event that Form SB-2 is unavailable to the
Company for such a registration, the Company shall use such other form as is
available to the Company for such a registration on another appropriate form
reasonably acceptable to the Required Holders, subject to the provisions of
Section 2(d). The Registration Statement prepared pursuant hereto shall register
for resale that number of shares of Common Stock equal to the number of
Registrable Securities as of the trading day immediately preceding the date the
Registration Statement is initially filed with the SEC, subject to adjustment as
provided in Section 2(e), and shall contain the "Selling Stockholders" section
and "Plan of Distribution" in substantially the form attached hereto as Annex I
(except if otherwise required pursuant to written comments received from the SEC
upon a review of the Registration Statement). Subject to its receipt of the
Registration Statement Questionnaire from each of the Investors, the Company
shall use its reasonable best efforts to have the Registration Statement
declared effective by the SEC as soon as practicable, but in no event later than
the Effectiveness Deadline. By 9:30 am on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to such Registration Statement.
2
(b) Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor's Registrable Securities, each transferee that becomes an investor
shall be allocated a pro rata portion of the then remaining number of
Registrable Securities included in the Registration Statement for such
transferor. Any shares of Common Stock included in the Registration Statement
and which remain allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Investors, pro rata based on the number of Registrable Securities then
held by such Investors which are covered by such Registration Statement. In no
event shall the Company include any securities other than Registrable Securities
on any Registration Statement without the prior written consent of the Required
Holders.
(c) Legal Counsel. Subject to Section 5 hereof, the Buyers holding at
least a majority of the Registrable Securities shall have the right to select
legal counsel at the sole expense of the Buyers to review and oversee any
registration pursuant to this Section 2 ("Legal Counsel"), which shall be
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP or such other counsel as thereafter designated by the
holders of at least a majority of the Registrable Securities. The Company and
Legal Counsel shall reasonably cooperate with each other in performing the
Company's and the Investors' obligations under this Agreement.
(d) Ineligibility for Form SB-2. In the event that Form SB-2 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on Form S-1 or another appropriate form reasonably acceptable to the
Required Holders and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
(e) Sufficient Number of Shares Registered. In the event the number of
shares available under a Registration Statement filed pursuant to Section 2(a)
is insufficient to cover all of the Registrable Securities required to be
covered by such Registration Statement or an Investor's allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
100% of the number of such Registrable Securities as of the trading day
immediately preceding the date of the filing of such amendment or new or
additional Registration Statement, in each case, as soon as practicable, but in
any event not later than twenty (20) days after the Company becomes aware of the
necessity therefor. The Company shall use its reasonable best efforts to cause
3
such amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed "insufficient to cover all of the Registrable Securities" if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the number of Registrable Securities. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the exercise of the Warrants and such calculation shall
assume that the Warrants are then exercisable into shares of Common Stock.
(f) Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) a Registration Statement covering all the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the Filing Deadline (a "Filing Failure"), or (B) filed with the SEC but
not declared effective by the SEC on or before the Effectiveness Deadline (an
"Effectiveness Failure") or (ii) on any day after the Effective Date sales of
all of the Registrable Securities required to be included on such Registration
Statement cannot be made (other than during an Allowable Grace Period (as
defined in Section 3(q)) pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement, a suspension or delisting of the Common
Stock on its principal trading market or exchange, or to register a sufficient
number of shares of Common Stock) (a "Maintenance Failure"), then, as partial
relief for the damages to any holder by reason of any such delay in or reduction
of its ability to sell the underlying shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall become liable for payment to each holder of Registrable Securities
relating to such Registration Statement an amount in cash equal to two percent
(2%) of the aggregate Purchase Price (as such term is defined in that certain
Securities Purchase Agreement) of such Investor's Registrable Securities
included in such Registration Statement on each of the following dates: (i) the
day thirty (30) days after a Filing Failure and on every thirtieth day (pro
rated for periods totaling less than thirty (30) days) thereafter until such
Filing Failure is cured or until the date two (2) years after the Closing Date;
(ii) the day of an Effectiveness Failure and on every thirtieth day (pro rated
for periods totaling less than thirty (30) days) thereafter until such
Effectiveness Failure is cured or until the date two (2) years after the Closing
Date; and (iii) the initial day of a Maintenance Failure and on every thirtieth
day (pro rated for periods totaling less than thirty (30) days) thereafter until
such Maintenance Failure is cured or until the date two (2) years after the
Closing Date. The payments to which a holder shall be entitled pursuant to this
Section 2(f) are referred to herein as "Registration Delay Payments."
Registration Delay Payments shall be paid on the earlier of (I) the last day of
the calendar month during which such Registration Delay Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the
Registration Delay Payments is cured. In the event the Company fails to make
Registration Delay Payments in a timely manner, such Registration Delay Payments
shall bear interest at the rate of one and one-half percent (1.5%) per month
(prorated for partial months) until paid in full.
3. Related Obligations.
4
In connection with its obligations pursuant to Section 2, the Company shall
have the following obligations:
(a) The Company shall use its reasonable best efforts to respond to
written comments received from the SEC upon a review of the Registration
Statement within ten (10) Business Days. The Company shall submit to the SEC,
within three (3) Business Days after the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that
the staff of the SEC has no further comments on a particular Registration
Statement, as the case may be, a request for acceleration of effectiveness of
such Registration Statement to a time and date not later than two (2) Trading
Days after the submission of such request. Except for delays or circumstances
affecting registration that are beyond the control of the Company, the Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which all of the Investors may
sell all of the Registrable Securities covered by such Registration Statement
without restriction pursuant to Rule 144(k) (or successor thereto) promulgated
under the 1933 Act, or (ii) the date on which the Investors shall have sold all
of the Registrable Securities covered by such Registration Statement (the
"Registration Period"). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.
(b) Except for delays or circumstances that are beyond the control of
the Company, the Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period (except pursuant to
Sections 3(f) and 3(q)), and, during such period, comply with the provisions of
the 1933 Act with respect to the disposition of all Registrable Securities of
the Company covered by such Registration Statement until such time as all of
such Registrable Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as set forth in
such Registration Statement. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Company shall
have incorporated such report by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC as
expeditiously as practicable on or following the date on which the 1934 Act
report is filed which created the requirement for the Company to amend or
supplement such Registration Statement.
(c) The Company shall (A) permit Legal Counsel to review and comment
upon (i) a Registration Statement at least five (5) Business Days prior to its
filing with the SEC and (ii) all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K and any similar or successor reports)
within a reasonable number of days prior to their filing with the SEC, and (B)
not file any Registration Statement or amendment or supplement thereto in a form
to which Legal Counsel reasonably objects; provided, that, the failure of any
5
Investor or his, her or its counsel to respond to such proposed documents within
five (5) Business Days after receipt thereof shall be deemed approval of same.
The Company shall not submit a request for acceleration of the effectiveness of
a Registration Statement or any amendment or supplement thereto without the
prior approval of Legal Counsel, which consent shall not be unreasonably
withheld. The Company shall furnish to Legal Counsel, without charge, copies of
any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement (redacted to eliminate
material non-public information, if any, in such correspondence) The Company
shall reasonably cooperate with Legal Counsel in performing the Company's
obligations pursuant to this Section 3.
(d) The Company shall furnish to Legal Counsel and each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, if
requested by an Investor and not otherwise available on the ▇▇▇▇▇ system, at
least one copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, all exhibits and each preliminary prospectus (redacted to
eliminate material non-public information, if any, in any such exhibit or other
document) and (ii) upon the effectiveness of any Registration Statement, ten
(10) copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request).
(e) The Company shall use its reasonable best efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those jurisdictions
such amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction, (y) subject itself to general taxation in any
jurisdiction, or (z) file a general consent to service of process in any
jurisdiction in which it is not now so qualified or subject to general taxation
or has not currently so consented. The Company shall promptly notify Legal
Counsel and each Investor who holds Registrable Securities of the receipt by the
Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the
securities or "blue sky" laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for
such purpose.
(f) The Company shall notify Legal Counsel and each Investor in
writing (each such notice to Legal Counsel and the Investors, a "Suspension
Notice") of the happening of any of the following events, as promptly as
practicable after becoming aware of such event: (i) any request by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or supplements to a
6
Registration Statement or related prospectus or for additional information; (ii)
the issuance by the SEC or any other federal or state governmental authority of
any stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose; (iii) the receipt by the Company
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; or (iv) any event or circumstance which necessitates the making of any
changes in the Registration Statement or prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not include any untrue statement of
a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
nonpublic information), and, subject to Section 3(q), promptly prepare a
supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver a copy of such supplement or amendment to
Legal Counsel and each Investor (or such other number of copies as Legal Counsel
or such Investor may reasonably request). The Company shall also promptly notify
Legal Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and each
Investor by facsimile on the same day of such effectiveness and by overnight
mail) and (ii) of the Company's reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.
(g) The Company shall use its reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of the
Registration Statement (other than during an Allowable Grace Period), or the
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension as soon as reasonably practicable
consistent with the provisions of Section 3(f) and to notify Legal Counsel and
each Investor who holds Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
(h) If any Investor is required under applicable securities law to be
described in the Registration Statement as an underwriter, at the reasonable
request of such Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of the Registration Statement and thereafter from time
to time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.
(i) Upon the prior written request of any Investor in connection with
any Investor's due diligence requirements, if any, the Company shall make
available for inspection at reasonable times by (i) any Investor, (ii) Legal
7
Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the "Inspectors"), all pertinent financial, corporate
and other records (collectively, the "Records"), as shall be reasonably deemed
necessary by each Inspector to fulfill a due diligence obligation by an
Investor, and cause the Company's chief executive officer, chief financial
officer and executive vice president and secretary to be reasonably available to
the Inspectors for questions regarding the Records and to supply all information
which any Inspector may reasonably request; provided, however, that each
Inspector shall agree in writing to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (b) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other Transaction Document. Nothing
herein (or in any other confidentiality agreement between the Company and any
Investor) shall be deemed to limit the Investors' ability to sell Registrable
Securities in a manner which is otherwise consistent with this Agreement and the
other Transaction Documents, applicable laws and regulations.
(j) The Company shall hold in confidence and not make any disclosure
of information concerning an Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
(k) The Company shall use its reasonable best efforts to cause all the
Registrable Securities covered by the Registration Statement to be listed on
each securities exchange on which securities of the same class or series issued
by the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange. The Company shall
pay all fees and expenses in connection with satisfying its obligation under
this Section 3(k).
(l) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable pursuant to
the Transaction Documents, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and registered in such names as the Investors
may request.
8
(m) If requested by an Investor and if the Company's counsel deems
such inclusion not inconsistent with the 1933 Act or the 1934 Act or other
applicable law, the Company shall (i) as soon as practicable incorporate in a
prospectus supplement or post-effective amendment such information as an
Investor reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii) as soon
as practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon as
practicable, supplement or make amendments to any Registration Statement if
reasonably requested by an Investor holding any Registrable Securities.
(n) The Company shall make generally available to its security holders
as soon as practical, but not later than ninety (90) days after the close of the
period covered thereby, an earnings statement (in form complying with, and in
the manner provided by, the provisions of Rule 158 under the ▇▇▇▇ ▇▇▇) covering
a twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of a Registration Statement.
(o) The Company shall otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the SEC in connection with
any registration hereunder.
(p) Within two (2) Business Days after the Registration Statement
which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as Exhibit A.
(q) Notwithstanding anything to the contrary herein, at any time after
the Effective Date, upon any event or circumstance which necessitates the making
of any changes in the Registration Statement or prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not include any untrue statement of
a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the prospectus, it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, the suspension pursuant to the Company's Suspension Notice will not
trigger any payment or liability for payment by the Company of any Registration
Delay Payments otherwise payable or owing by the Company pursuant to Section
2(f) of this Agreement (a "Grace Period"); provided, that the Company shall
promptly (i) notify the Investors in writing of the existence of a Grace Period
in conformity with the provisions of this Section 3(q)(provided that in each
notice the Company will not disclose the content of such material, non-public
information to the Investors) and the date on which the Grace Period will begin,
and (ii) as soon as such date may be determined, promptly notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed thirty (30) consecutive days and during any
9
three hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of forty-five (45) days and the first day of any Grace Period must be
at least five (5) trading days after the last day of any prior Grace Period
(each, an "Allowable Grace Period"). For purposes of determining the length of a
Grace Period above, the Grace Period shall begin on and include the date the
Investors receive the notice referred to in clause (i) and shall end on and
include the later of the date the Investors receive the notice referred to in
clause (ii) and the date referred to in such notice. For the avoidance of doubt,
no Maintenance Failure shall occur during an Allowable Grace Period. The
provisions of Section 3(g) hereof shall not be applicable during the period of
any Allowable Grace Period. Upon expiration of the Grace Period, the Company
shall again be bound by the first sentence of Section 3(f) with respect to the
information giving rise thereto unless such material, non-public information is
no longer applicable. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor in accordance with the terms of that certain
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale, and delivered a copy of the prospectus included as part of the applicable
Registration Statement, in each case prior to the Investor's receipt of the
Suspension Notice related to the Grace Period and for which the Investor has not
yet settled.
4. Obligations and Covenants Of The Investors.
(a) The Investor has completed or caused to be completed the
Registration Statement Questionnaire (the "Registration Statement
Questionnaire") attached hereto as Annex II, for use in preparation of the
Registration Statement, and the answers thereto are true and correct as of the
date hereof and, as may be updated by an Investor in writing, will be true and
correct as of the effective date of the Registration Statement. At least five
(5) Business Days prior to the first anticipated filing date of the Registration
Statement, the Company shall notify each Investor in writing of any additional
information the Company requires from each such Investor. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.
(b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.
(c) Each Investor agrees that, upon receipt of any Suspension Notice
from the Company, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or receipt of
10
notice from the Company in writing that no supplement or amendment is required.
Notwithstanding anything to the contrary, the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an
Investor in accordance with the terms of that certain Securities Purchase
Agreement in connection with any sale of Registrable Securities under all of the
circumstances described in the last sentence of Section 3(q).
(d) Each Investor acknowledges that there may occasionally be times
when the Company must suspend the use of the prospectus forming a part of the
Registration Statement, and each Investor covenants and agrees that it will not
make any sale of Registrable Securities under the Registration Statement without
complying with the provisions of this Agreement (including but not limited to
the prohibition on sales after the Effective Date beginning with delivery of a
Suspension Notice to such Investor and ending at the time the Company gives such
Investor written notice that such Investor may thereafter effect sales pursuant
to said prospectus or an amended or supplemented prospectus forming part of a
Registration Statement) and each Investor covenants and agrees that it will
comply with any applicable prospectus delivery requirements of the 1933 Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement. Upon receipt of a Suspension Notice, each Investor
will refrain from selling any Registrable Securities pursuant to a Registration
Statement until the Investor's receipt of copies of a supplemented or amended
prospectus prepared and filed by the Company, or until it is advised in writing
by the Company that the current prospectus may be used.
(e) Upon a request by the Company, each Investor will, as soon as
practicable, but in no event later than two (2) Business Days after such
request, notify the Company whether such Investor continues to hold Registrable
Securities.
5. Expenses of Registration.
All reasonable expenses, other than underwriting discounts and commissions,
incurred in connection with registrations, filings or qualifications pursuant to
Sections 2 and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company shall be paid by the Company.
6. Indemnification.
In the event any Registrable Securities are included in the Registration
Statement (provided that for the purpose of this Section 6, the term
"Registration Statement" shall include any preliminary prospectus, final
prospectus, exhibit, supplement or amendment included in or relating to, and any
document incorporated by reference in, the Registration Statement as such term
is defined in Section 1) under this Agreement:
(a) The Company agrees to indemnify, hold harmless and defend each
Investor, the directors, officers, partners, members, employees, agents,
representatives of, and each Person, if any, who controls any Investor within
the meaning of the 1933 Act or the 1934 Act (each, an "Indemnified Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement (if such
11
settlement is effected with the written consent of the party from whom
indemnification is sought, which consent shall not be unreasonably withheld or
delayed) or expenses, joint or several (collectively, "Claims"), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened ("Indemnified Damages"), to which any of them
may become subject insofar as such Claims or Indemnified Damages arise out of or
are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in the Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material violation
of this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations"). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are reasonably
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply to
a Claim or Indemnified Damages sought by an Indemnified Person arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person for
such Indemnified Person expressly for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement thereto;
and (ii) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company, which
consent shall not be unreasonably withheld or delayed. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an Investor
is participating, each such Investor agrees to severally and not jointly
indemnify, hold harmless and defend the Company, each of its directors, each of
its officers who signs the Registration Statement and each Person, if any, who
controls the Company within the meaning of the 1933 Act (each, an "Indemnified
Party") to the same extent and in the same manner as is set forth in Section
6(a) with respect to the Indemnified Persons, against any Claim or Indemnified
Damages to which any of them may become subject insofar as such Claim or
Indemnified Damages arise out of or are based upon: any Violation, to the
extent, and only to the extent, that such Violation occurs in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such Investor expressly for use in connection with such Registration
Statement, including but not limited to the Registration Statement Questionnaire
12
attached hereto as Annex II; or (ii) the use by such Investor of an outdated or
defective prospectus after the Company has notified such Investor in writing
that the prospectus is outdated or defective; and, subject to Section 6(c), such
Investor will reimburse any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim or Indemnified Damages if such
settlement is effected without the prior written consent of such Investor, which
consent shall not be unreasonably withheld or delayed; provided, further,
however, that an Investor shall be liable under this Section 6(b) for only that
amount of a Claim or Indemnified Damages as does not exceed the net proceeds to
such Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement giving rise to such indemnification obligation. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.
(c) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of the written threat of or notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim or Indemnified Damages, such Indemnified Person or
Indemnified Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, promptly deliver to the indemnifying
party a written notice of the written threat of or notice of the commencement of
such action. In case any such action is brought against any Indemnified Party or
Indemnified Person and such Indemnified Party or Indemnified Person seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel mutually satisfactory to
the indemnifying party and the Indemnified Person or the Indemnified Party, as
the case may be; provided, however, that if the defendants in any such action
include both the Indemnified Party or Indemnified Person, on the one hand, and
the indemnifying party, on the other hand, and the Indemnified Party or
Indemnified Person shall have reasonably concluded, based on an opinion of
counsel reasonably satisfactory to the indemnifying party, that the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding and/or that there may
be legal defenses available to it and/or any other Indemnified Party or
Indemnified Person which are different from or additional to those available to
the indemnifying party; provided further, that the indemnifying party shall not
be responsible for the reasonable fees and expenses of more than one (1)
separate legal counsel for all such Indemnified Persons or Indemnified Parties.
In the case of an Indemnified Person, legal counsel referred to in the
immediately preceding sentence shall be selected by the Investors holding at
least 70% in interest of the Registrable Securities included in the Registration
Statement to which the Claim or Indemnified Damages relate. The Indemnified
Party or Indemnified Person shall reasonably cooperate with the indemnifying
party in connection with any negotiation or defense of any such action or Claim
or Indemnified Damages by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
13
or Indemnified Person which relates to such action or Claim or Indemnified
Damages. The indemnifying party shall keep the Indemnified Party or Indemnified
Person reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be
liable for any settlement of any action, claim, investigation, inquiry or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim, Indemnified Damages or litigation, and such settlement
shall not include any admission as to fault on the part of the Indemnified
Party. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or Indemnified
Person with respect to all third parties, firms or corporations relating to the
matter for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is materially prejudiced in its ability to
defend such action as a result of such failure.
(d) No Person involved in the sale of Registrable Securities who is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) in connection with such sale shall be entitled to
indemnification from any Person who is not guilty of such fraudulent
misrepresentation.
(e) The indemnification required by this Section 6 shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(f) The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law. Notwithstanding the
foregoing, in the event that any of the provisions of Section 9(k) of that
certain Securities Purchase Agreement and this Section 6 may be deemed to both
be applicable to any of the same losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, reasonable attorneys' fees, amounts
paid in settlement or expenses incurred in investigating, preparing or defending
any action, claim, suit, inquiry, proceeding, investigation or appeal taken from
the foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, the
provisions of this Section 6 shall control and such provisions of the Section
9(k) of that certain Securities Purchase Agreement shall be inoperative.
14
7. Contribution.
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to, in lieu of indemnifying such
Indemnified Person or Indemnified Party, as applicable, make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no contribution shall be made under circumstances where the maker would not
have been liable for indemnification under the fault standards set forth in
Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) in connection with such sale shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation; and (iii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.
8. Reports Under The 1934 Act.
With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration ("Rule 144"), at all times during which there
are Registrable Securities outstanding which have not been previously (a) sold
to or through a broker or dealer or underwriter in a public distribution, or (b)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act under Section 4(l) thereof, in the case of either
clause (a) or clause (b) in such a manner that, upon the consummation of such
sale, all transfer restrictions and restrictive legends with respect to such
shares are removed upon the consummation of such sale, the Company agrees to use
reasonable efforts to:
(a) make and keep public information available, as contemplated by
Rule 144(c) of the 1933 Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144(c), the
1933 Act and the 1934 Act, (ii) unless accessible to the Investor via the ▇▇▇▇▇
reporting system at the SEC, a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. Assignment of Registration Rights.
The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor's Registrable
Securities if: (i) the Investor agrees in writing with the transferee or
15
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the 1933 Act or applicable state securities laws; (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein and in each of the
other Transaction Documents; and (v) such transfer shall have been to a
permitted transferee and permitted and made in accordance with the applicable
requirements of that certain Securities Purchase Agreement, including but not
limited to those in Section 9(g) thereof.
10. Amendment of Registration Rights.
Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.
11. Miscellaneous.
(a) A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the such record owner of such Registrable Securities.
(b) Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Company:
Global Aircraft Solutions, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇. ▇▇▇, General Counsel
16
If to Legal Counsel:
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
17
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
(e) This Agreement, the other Transaction Documents (as defined in
that certain Securities Purchase Agreement) and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement, the other Transaction Documents and the
instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
(f) Subject to the requirements of Section 9, this Agreement shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.
(g) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(h) This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations required to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by the Required Holders.
(k) The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
(l) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
18
(m) The obligations of each Investor hereunder are several and not
joint with the obligations of any other Investor, and no provision of this
Agreement is intended to confer any obligations on any Investor vis-a-vis any
other Investor. Nothing contained herein, and no action taken by any Investor
pursuant hereto, shall be deemed to constitute the Investors as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated herein.
* * * * * *
19
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.
COMPANY:
GLOBAL AIRCRAFT SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
IN WITNESS WHEREOF, each Buyer and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.
BUYER:
VICTORY PARK MASTER FUND, LTD.
By: Victory Park Capital Advisors, LLC,
Its investment manager
By: Jacob Capital, LLC, Its Manager
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Sole Member
SCHEDULE OF BUYERS
Buyer Address Buyer's Representative's
Buyer and Facsimile Number Address and Facsimile Number
----- -------------------- ----------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
Victory Park Master Fund, Ltd. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: 312.701.0794 Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attention:
Re: Global Aircraft Solutions, Inc.
Ladies and Gentlemen:
[We are][I am] counsel to Global Aircraft Solutions, Inc., a Nevada
corporation (the "Company"), and have represented the Company in connection with
that certain Securities Purchase Agreement, dated as of December __, 2007 (the
"Securities Purchase Agreement"), entered into by and among the Company and the
buyers named therein (collectively, the "Holders") pursuant to which the Company
issued to the Holders warrants exercisable for shares of Common Stock (the
"Warrants"). Pursuant to that certain Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holders (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the resale of the Registrable Securities (as defined
in the Registration Rights Agreement), including the shares of Common Stock
issuable upon exercise of the Warrants under the Securities Act of 1933, as
amended (the "1933 Act"). In connection with the Company's obligations under the
Registration Rights Agreement, on ____________ ___, 2007, the Company filed a
Registration Statement on Form [S-1] (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
"SEC") relating to the Registrable Securities which names each of the Holders as
a selling stockholder thereunder.
In connection with the foregoing, [we][I] advise you that a member of the
SEC's staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
This letter shall serve as our standing advice to you that you may issue or
reissue shares of Common Stock without legend to the Holders as contemplated by
the Company's Irrevocable Transfer Agent Instructions dated December [ ], 2007
(the "Transfer Agent Instructions") and you need not require further letters
from us to effect any future legend-free issuance or reissuance of shares of
Common Stock to the Holders as contemplated by the Transfer Agent Instructions.
Very truly yours,
[ISSUER'S COUNSEL]
By:_____________________
CC: [LIST NAMES OF HOLDERS]
EXECUTION COPY
ANNEX I
-------
SELLING STOCKHOLDERS
The shares of common stock being offered by the selling stockholders are
those issuable to the Selling Stockholders upon exercise of the warrants. For
additional information regarding the issuances of the warrants, see "Private
Placement of Warrants" above. We are registering the shares of common stock in
order to permit the selling stockholders to offer the shares for resale from
time to time. Except for the ownership of the shares of common stock and the
warrants, the selling stockholders have not had any material relationship with
us within the past three years.
The table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of common stock by each of the
selling stockholders. The second column lists the number of shares of common
stock beneficially owned by each selling stockholder, based on its ownership of
the warrants, as of ________, 2007, assuming exercise of the warrants held by
the selling stockholders on that date, without regard to any limitations on
exercise.
In accordance with the terms of registration rights agreement with the
holders of the warrants, this prospectus generally covers the resale of that
number of shares of common stock issuable upon exercise of the warrants,
determined as if the outstanding warrants were exercised, as applicable, in
full, in each case, as of the trading day immediately preceding the date this
registration statement was initially filed with the SEC. The third column
assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.
Under the terms of the warrants, a selling stockholder may not exercise the
warrants, to the extent such exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such exercise, excluding for purposes of such determination shares of
common stock issuable upon exercise of the warrants which have not been
exercised. The number of shares in the second column does not reflect this
limitation. The selling stockholders may sell all, some or none of their shares
in this offering. See "Plan of Distribution."
Annex I-1
Maximum Number of Shares
Number of Shares of of Common Stock to be Number of Shares of
Common Stock Owned Prior Sold Pursuant to this Common Stock Owned
Name of Selling Stockholder to Offering Prospectus After Offering
--------------------------- ----------- ---------- --------------
Victory Park Master Fund, Ltd. (1) 0
(1) Victory Park Capital Advisors, LLC is the investment advisor of Victory Park
Master Fund, Ltd. and consequently has voting control and investment discretion
over securities held by Victory Park Master Fund, Ltd. Victory Park Capital
Advisors, LLC disclaims beneficial ownership of the securities held by Victory
Park Master Fund, Ltd. Jacob Capital, L.L.C. is the manager of Victory Park
Capital Advisors, LLC. ▇▇▇▇▇▇▇ ▇▇▇▇ is the sole member of Jacob Capital, L.L.C
and sole manager of Victory Park Capital Advisors, LLC. As a result, ▇▇. ▇▇▇▇
may be considered the beneficial owner of any shares deemed to be beneficially
owned by Victory Park Capital Advisors, LLC. ▇▇. ▇▇▇▇ disclaims beneficial
ownership of these shares.
Annex I-2
PLAN OF DISTRIBUTION
We are registering the shares of common stock issuable upon exercise of the
warrants to permit the resale of these shares of common stock by the holders of
the warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the
shares of common stock. We will bear all fees and expenses incident to our
obligation to register the shares of common stock.
The selling stockholders may sell all or a portion of the shares of common
stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent's commissions. The shares of common stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,
o on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
o in the over-the-counter market;
o in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;
o through the writing of options, whether such options are listed on an
options exchange or otherwise;
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o short sales;
o sales pursuant to Rule 144;
o broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;
Annex I-3
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of common stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of common stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of common
stock short and deliver shares of common stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers in connection with bona fide margin accounts secured by
the shares of common stock, which shares broker-dealers could in turn sell such
shares if the selling stockholders default in the performance of their secured
obligations.
The selling stockholders may pledge or grant a security interest in some or
all of the warrants or shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933, as amended, amending, if
necessary, the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer and donate the shares of common stock
in other circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The selling stockholders and any broker-dealer participating in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of common stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of common stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.
Under the securities laws of some states, the shares of common stock may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
Annex I-4
There can be no assurance that any selling stockholder will sell any or all
of the shares of common stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.
The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or "blue sky" laws; provided, however, that the selling
stockholders will pay all underwriting discounts and selling commissions, if
any. We will indemnify the selling stockholders against liabilities, including
some liabilities under the Securities Act, in accordance with the registration
rights agreements, or the selling stockholders will be entitled to contribution.
We may be indemnified by the selling stockholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling stockholder specifically for use in
this prospectus, in accordance with the related registration rights agreements,
or we may be entitled to contribution.
Once sold under the shelf registration statement, of which this prospectus
forms a part, the shares of common stock will be freely tradable in the hands of
persons other than our affiliates.
Annex I-5