1
EXHIBIT 10.29
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") which shall
be effective as of February 21, 1997, is made and entered into by and among
First Aviation Services Inc., a Delaware corporation (the "COMPANY"), and
Canpartners Investments IV, LLC, a California limited liability company (the
"INVESTOR").
RECITALS
WHEREAS, the Investor is a substantial holder of equity in the
Company; and
WHEREAS, the Company contemplates conducting an initial public
offering and in connection therewith, the Investor desires to have future
registration rights covering the "REGISTRABLE SECURITIES" (as such term is
defined in Section 1) of the Investor;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements herein contained, the parties, intending to be
legally bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement:
(a) the term "BONA FIDE PUBLIC OFFERING" means an underwritten
public offering pursuant to an effective registration statement under
the Securities Act of 1933, as amended ("1933 ACT"), covering the offer
and sale of Common Stock of the Company in which aggregate proceeds to
the Company and the Investor exceed $10,000,000;
(b) the term "COMMON STOCK" means the Company's authorized
voting common stock, $.01 par value, and any class of securities issued
in exchange for the Common Stock or into which the Common Stock is
converted;
(c) the term "HOLDER" means any person owning of record
Registrable Securities or any permitted assignee thereof in accordance
with Section 11 hereof;
(d) the term "INITIATING HOLDERS" means the Holders of 15% or
more of the Registrable Securities then outstanding;
2
(e) the term "REGISTRABLE SECURITIES" means: (i) the shares
issuable upon exercise of the 200,364 (1,293,335 after taking into
account the 6.454927306-for-1 stock split authorized by the Company's
Board of Directors with a Record Date of February 20, 1997) warrants to
purchase Common Stock of the Company owned by the Investor as of the
date hereof, and (ii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with
respect to, or in exchange for or in replacement of, such shares
described in clause (i), excluding in all cases, however, any shares of
Common Stock that are sold by a Holder in a transaction in which its
rights under this Agreement are not assigned;
(f) the term "REGISTRATION EXPENSES" means all reasonable fees
and disbursements of one counsel to the Holders (selected by those
holding a majority of the shares being registered) and all expenses
incurred by the Company in complying with Sections 2, 3 and 14 hereof,
including, without limitation, all registration and filing fees,
underwriters' expense allowances, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by any
such registration (but not including the compensation of regular
employees of the Company which shall be paid in any event by the
Company);
(g) the terms "REGISTER," "REGISTERED" and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with 1933 Act, and the
declaration or ordering of the effectiveness of such registration
statement or document by the Securities and Exchange Commission;
(h) the term "SELLING EXPENSES" means all underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities and the fees and disbursements of any counsel, other than
the primary counsel to the Holders, engaged by the Holders; and
(i) the number of shares of Registrable Securities "THEN
OUTSTANDING" shall be the number of shares of Common Stock outstanding
which are, and the number of shares of Common Stock which upon issuance
of then exercisable or convertible securities will be, Registrable
Securities.
2
3
2. DEMAND REGISTRATION RIGHTS.
(a) If the Company shall receive, at any time more than 180
days after the consummation of the Company's initial bona fide public
offering, a written request from the Initiating Holders with respect to
the Registrable Securities, that the Company file a registration
statement under the 1933 Act covering the registration of at least 15%
of the Registrable Securities then outstanding (or any lesser
percentage if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would exceed $5,000,000, the
Company shall promptly give written notice of such request (together
with a list of the jurisdictions in which the Initiating Holders intend
to attempt to qualify such securities under applicable state securities
laws) to all Holders and shall as soon as practicable, subject to the
limitations of this Section 2, effect the registration under the 1933
Act of all such Registrable Securities which the Initiating Holders
request to be registered, together with all of the Registrable
Securities of any other Holder or Holders who so request by notice to
the Company which is given within 30 days after the notice from the
Company described above. Notwithstanding the foregoing, if the Company
shall furnish to the Initiating Holders a certificate signed by the
Chief Financial Officer of the Company stating that in the good faith
judgment of the Board of Directors it would be seriously detrimental to
the Company for a registration statement to be filed in the near future
(based on the disclosure of non-public information material to the
Company that would be required by such registration statement), then
the Company's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed 60 days;
provided, however, that the Company shall not obtain such a deferral
more than once in any 12-month period.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their
request made pursuant to this Section 2 and the Company shall include
such information in the written notice referred to in Section 2(a). In
such event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders, by the
underwriter, by the Company, and by such Holder) to the extent provided
herein.
3
4
(c) All Holders proposing to distribute their securities
through such underwriting (together with the Company as provided in
Section 4(e)) shall enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters
selected for such underwriting by a majority in interest of the
Initiating Holders and reasonably acceptable to the Company.
Notwithstanding any other provisions of this Section 2, if the
underwriter advises the Company in writing that marketing factors
require a limitation of the number of shares to be underwritten, the
Company shall so advise all Holders of Registrable Securities, and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders
thereof pro rata based on the number of shares for which registration
was requested. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included
in such registration. If any Holder of Registrable Securities
disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the underwriter
and, unless otherwise provided, the Initiating Holders. The securities
so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities to be
underwritten, the Company may include its securities for its own
account in such registration if the underwriter so agrees and if the
number of Registrable Securities which would otherwise have been
included in such registration and underwriting will not thereby be
limited.
(d) The Company is obligated to effect only two demand
registrations for the Holders pursuant to this Section 2.
3. PIGGY-BACK REGISTRATION RIGHTS. If, at any time the Company
proposes to register (including for this purpose a registration effected by the
Company for shareholders other than the Holders) any of its securities under the
1933 Act in connection with the public offering of such securities solely for
cash (other than a registration form relating to: (a) the Company's initial bona
fide public offering; (b) a registration of a stock option, stock purchase or
compensation or incentive plan or of stock issued or issuable pursuant to any
such plan, or a dividend investment plan; (c) a registration of securities
proposed to be issued in exchange for securities or assets of or in connection
with a merger or consolidation with, another corporation; or (d) a registration
of securities proposed to be issued in exchange for other securities of the
Company),
4
5
the Company shall, each such time, promptly give each Holder written notice of
such registration together with a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under applicable state securities
laws. Upon the written request of any Holder given within 30 days after receipt
of such written notice from the Company in accordance with Section 18, the
Company shall, subject to the provisions of Section 7 (in the case of an
underwritten offering), cause to be registered under the 1933 Act all of the
Registrable Securities that each such Holder has requested to be registered.
4. OBLIGATIONS OF THE COMPANY. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to such
Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 180
days;
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by such registration statement;
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under the securities
laws of such jurisdictions as the Company believes shall be reasonably
appropriate for the distribution of the securities covered by the
registration statement and such jurisdictions as the Holders
participating in the offering shall reasonably request, provided that
the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such jurisdiction; and
5
6
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement with
terms generally satisfactory to the managing underwriter of such
offering. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement.
5. FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities. In that connection, each selling Holder shall
be required to represent to the Company that all such information which is given
is both complete and accurate in all material respects.
6. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of shares so registered.
7. UNDERWRITING REQUIREMENTS. The right of any Holder to
"piggyback" in an underwritten public offering of the Company's securities
pursuant to Section 3 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and any other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of Section 3 and this Section 7, if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may exclude some or all of the
Registrable Securities from such registration and underwriting, provided, that
the Holders are allowed to participate in the offering in the same proportion
(based on the total number of securities requested to be registered) as any
other shareholder or warrant holder of the Company existing as of the date of
this Agreement participating in the offering. Any reduction in the number of
Registrable Securities included in such registration shall be borne equally by
the Holders as a group pro rata based on the number of shares for which
registration was requested. If any Holder disapproves of
6
7
the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
8. DELAY OF REGISTRATION. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
9. INDEMNIFICATION. If any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers, directors, partners and
representatives of each Holder, any underwriter (as defined in the ▇▇▇▇
▇▇▇) for such Holder and each person, if any, who controls such Holder
or underwriter within the meaning of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 ACT"), against any losses,
claims, damages, or liabilities (joint or several) to which they or any
of them may become subject under the 1933 Act, the 1934 Act or any
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise from or are based
upon any of the following statements, omissions or violations
(collectively a "VIOLATION") (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement
filed by the Company with the SEC and by which Registrable Securities
are registered for sale under the 1933 Act, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto; (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or (iii) any violation or
alleged violation by the Company of the 1933 Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the
1933 Act, the 1934 Act or any state securities law; and the Company
will reimburse each such Holder, officer, director or partner,
underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 9 shall
not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if
7
8
such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or
action to the extent that it arises from or is based upon a violation
which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of
its officers who have signed the registration statement, each person,
if any, who controls the Company within the meaning of the 1933 Act,
any underwriter (within the meaning of the ▇▇▇▇ ▇▇▇) for the Company,
any person who controls such underwriter, any other Holder selling
securities in such registration statement or any of its directors or
officers or any person who controls such Holder against any losses,
claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, or underwriter or
other such Holder or director, officer or controlling person may become
subject, under the 1933 Act, the 1934 Act or any other federal or state
law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise from or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such
registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director,
officer, controlling person, underwriter or controlling person, other
Holder, officer, director or controlling person in connection with
investigation or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in
this Section 9 shall not apply to amounts paid in settlement of any
such loss, claim damage, liability or action if such settlement is
effected without the consent of the Holder which consent shall not be
unreasonably withheld; provided, that in no event shall any indemnity
under this Section 9(b) exceed the gross proceeds from the offering
received by the Holder.
(c) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section
9 is applicable but for any reason is held to be unavailable from the
Company or any Holder, the Company and the
8
9
Holders participating in the registration shall contribute to the
aggregate losses, claims, damages and liabilities (including any
investigation, legal and other expenses incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted) to which the Company and the participating Holders
may be subject in such proportion so that the participating Holders are
responsible for that portion of the foregoing amount represented by the
ratio of the proceeds received by the participating Holders in the
offering to the total proceeds received from the offering by the
Company and all selling shareholders (other than participating Holders)
and the Company shall be responsible for the portion represented by the
ratio of proceeds received by the Company to the total proceeds
received by the Company and all selling shareholders (other than
participating Holders); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 9(c), each person, if any, who controls the Company or
any Holder within the meaning of the Securities Act, each officer of
the Company who shall have signed the registration statement and each
director of the Company shall have the same rights to contribution as
the Company.
(d) No settlement shall be effected without the prior written
consent of the Holders participating in a registration unless (i) the
obligations of the Company for indemnification or contribution pursuant
to this Agreement survive and are not extinguished by reason of the
settlement and remain in full force and effect under applicable federal
and state laws, rules, regulations and orders or (ii) all claims and
actions against the participating Holders and each person who controls
a participating holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act are extinguished by
the settlement and the indemnifying party obtains a full release of all
claims and actions against the participating Holders and each such
control person, which release shall be to the reasonable satisfaction
of the participating Holders.
(e) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement
thereof and the indemni-
9
10
fying 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 the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be, in the reasonable judgment of counsel to
the indemnified party, inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to notify
an indemnifying party within a reasonable time of the commencement of
any such action, to the extent prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 9, but the omission so to
notify the indemnifying party will not relieve it of any liability that
it may have to any indemnified party otherwise than under this Section
9.
(f) The obligations of the Company and the Holders under this
Section 9 shall survive through the completion of any offering of
Registrable Securities in a registration statement made under the terms
of this Agreement and otherwise.
10. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view
toward making available to the Holders the benefits of Rule 144 promulgated
under the 1933 Act and any other rule or regulation of the SEC that may at any
time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in SEC Rule 144,
at all times beginning 90 days after the effective date of the first
underwritten public offering of equity securities of the Company;
(b) use its best efforts to 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;
(c) furnish to any Holder so long as the Holder owns any
Registrable Securities, forthwith upon request: (i) a written statement
by the Company that
10
11
it has complied with the reporting requirements of Rule 144 (at any
time beginning 90 days after the effective date of the first
underwritten public offering of equity securities of the Company), the
1933 Act and the 1934 Act (at any time after it has become subject to
such reporting requirements) or that it qualifies as a Registrant where
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies); (ii) a copy of the most recent annual or quarterly report
of the Company and all other reports and documents filed by the Company
with the SEC; and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration;
and
(d) take such action, including the voluntary registration of
its common stock under Section 12 of the 1934 Act, as is necessary to
enable the Holders to use Form S-3 for the sale of their Registrable
Securities, such action to be taken as soon as practicable after the
end of the fiscal year in which the first registration statement filed
by the Company for the offering of its equity securities to the general
public is declared effective.
11. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned by a Holder to a transferee or assignee of such securities to the
extent such transferee or assignee acquires at least 10% of the shares (as
presently constituted) of Registrable Securities held by the transferor provided
the Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
provided, however, that no such assignment shall be effective if, immediately
following the transfer, the transferee is free to dispose of all of such
securities without regard to any restrictions imposed under the 1933 Act
(including, without limitation, the volume limitations of Rule 144 promulgated
under the 1933 Act).
12. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of at least a majority of the then outstanding
Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company which would: (a) allow such holder or
prospective holder to include such securities in any registration filed under
Section 2 hereof if such inclusion would adversely
11
12
affect the rights of any Holder of Registrable Securities hereunder; or (b)
permit such holder or prospective holder to require the Company to initiate any
registration of any securities of the Company prior to the earliest date upon
which the Holders may demand registration pursuant to Section 2.
13. "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that it
shall not, to the extent requested by the Company and an underwriter of Common
Stock (or other securities) of the Company, sell or otherwise transfer or
dispose of any Registrable Securities in a market transaction during the 180-day
period following the effective date of a registration statement of the Company
filed under the 1933 Act; provided, however, that:
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be
sold on its behalf to the public in an underwritten offering and to any
registration in which any of the Holders of Registrable Securities have
rights to participate under the terms of this Agreement (provided that
such agreement shall not apply to any shares which are included in any
such registration); and
(b) all officers, directors and significant shareholders
(i.e., those shareholders who beneficially own greater than 5% of the
Company's outstanding stock) of the Company and all other persons with
registration rights (whether or not pursuant to this agreement) enter
into similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such 180-day period.
14. FORM S-3 REGISTRATION. In case the Company shall receive
request or requests from the Initiating Holders that the Company effect a
registration on Form S-3 (or any similar successor form) and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliance as
12
13
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder's or Holders'
Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder
or Holders joining in such as are specified in a written request given
within 15 days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this
Section 14: (i) if the Company is not qualified as a registrant
entitled to use Form S-3 (or the applicable successor form); or (ii) if
the Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration, propose to sell
Registrable Securities and any other securities at an aggregate price
to the public of less than $300,000; or (iii) if the Company has,
within the 12-month period preceding the date of such request, already
effected two registrations on Form S-3 (or applicable successor form)
for the Holders pursuant to this Section 14; or (iv) in any particular
jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders. Registrations effected pursuant to this Section 14
shall not be counted as demands for registration effected pursuant to Section 2.
15. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will
not take any action with respect to the Registrable Securities which would
adversely affect the ability of the Holders of Registrable Securities to include
such Registrable Securities in a registration undertaken pursuant to this
Agreement or which would adversely affect the marketability of such Registrable
Securities in any such registration, except when such adjustments are otherwise
required by law, including disclosure obligations under federal securities laws.
16. REMEDIES. Each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a
13
14
breach by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy of law would be
adequate.
17. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority of the then outstanding Registrable Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof with respect to a matter which relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a registration statement and which does not directly or indirectly
affect the rights of other holders of Registrable Securities may be given by the
holders of a majority of the Registrable Securities being sold; provided,
however, that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
18. NOTICES. All notices, demands and requests required by this
Agreement shall be in writing and shall be deemed to have been given for all
purposes (a) upon personal delivery, (b) one business day after being sent, when
sent by professional overnight courier service from and to locations within the
continental United States, or (c) five days after posting when sent by
registered or certified mail (return receipt requested), addressed to the
Company or an Investor at his, her or its address set forth on the signature
pages hereof. Any party hereto may from time to time by notice in writing served
upon the others as provided herein, designate a different mailing address or a
different person to which such notices or demands are thereafter to be addressed
or delivered.
19. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties, including, without limitation and without
the need for an express assignment, subsequent holders of Registrable Securities
to which the registration rights granted by this Agreement have been assigned as
permitted herein.
20. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed to be an original, and when
executed, separately or together, shall constitute a single original instrument,
effective in the same manner as if the parties hereto had executed one and the
same instrument.
14
15
21. CAPTIONS. Captions are provided herein for convenience only and
they are not to serve as a basis for interpretation or construction of this
Agreement, nor as evidence of the intention of the parties hereto.
22. CROSS-REFERENCES. All cross-references in this Agreement,
unless specifically directed to another agreement or document, refer to
provisions within this Agreement.
23. GOVERNING LAW. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of Delaware
applicable to agreements made and to be performed wholly within the State of
Delaware.
24. SEVERABILITY. The provisions of this Agreement are severable.
The invalidity, in whole or in part, of any provision of this Agreement shall
not affect the validity or enforceability of any other of its provisions. If one
or more provisions hereof shall be declared invalid or unenforceable, the
remaining provisions shall remain in full force and effect and shall be
construed in the broadest possible manner to effectuate the purposes hereof. The
parties further agree to replace such void or unenforceable provisions of this
Agreement with valid and enforceable provisions which will achieve, to the
extent possible, the economic, business and other purposes of the void or
unenforceable provisions.
25. ENTIRE AGREEMENT; EFFECTIVENESS. This Agreement contains the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior written and oral agreements, understandings,
commitments and practices between the parties, including that certain Warrant
Agreement of National Airmotive Corporation dated as of June 1, 1995, as amended
by that certain First Amendment to Warrant Agreement dated June 13, 1996, and
that certain Second Amendment to Warrant Agreement dated as of December 20,
1996, and all other prior agreements with respect to registration rights.
Notwithstanding anything to the contrary herein, this Agreement shall be
effective only upon the consummation of the Company's bona fide public offering.
26. ATTORNEYS' FEES.
(a) In the event any party to this Agreement initiates any
action, suit, motion, application or other proceeding which concerns
the interpretation or enforcement of this Agreement, the prevailing
party in such action, suit, motion, application or proceeding,
15
16
or judgment creditor, shall be entitled to recover its costs and
attorneys' fees from the non-prevailing party or judgment debtor,
including costs and fees on appeal, if any.
(b) Attorneys' fees and costs incurred by a prevailing party
in enforcing and collecting a judgment resulting from a suit concerning
this Agreement are also recoverable from the judgment debtor as a
separate item of recovery. Such post-judgment attorneys' fees are a
separate and distinct item of recovery, severable from all other
provisions of this Agreement, including the right to prejudgment
attorneys' fees as provided above in this Agreement, and this provision
shall survive any judgment and not be deemed merged into any judgment.
27. CONSIDERATION FOR APPROVALS OR WAIVERS. No consideration shall
be paid to any Holder to obtain such Holder's approval for or waiver of any
amendment of this Agreement or any matter requiring the approval or consent of
the Holders hereunder unless such consideration is also offered to all Holders,
pro rata based upon the number of Registerable Securities held by the Holders.
16
17
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement with the intent and agreement that the same shall
be effective as of the day and year first above written.
THE COMPANY:
FIRST AVIATION SERVICES INC.,
a Delaware corporation
By:___________________________
Name: ________________________
Title:________________________
Address: ____________________________
____________________________
____________________________
THE INVESTOR:
CANPARTNERS INVESTMENTS IV, LLC
a California limited liability company
By:___________________________
Name: ________________________
Title:________________________
Address: ____________________________
____________________________
____________________________
17
