Exhibit 4.4
EXECUTION COPY
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM (IF AN OPINION OF COUNSEL IS
REQUESTED BY THE COMPANY), THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: ___________
Number of Shares of Common Stock: 1,500,000
Date of Issuance: December 20, 2007 ("Issuance Date")
GLOBAL AIRCRAFT SOLUTIONS INC., a Nevada corporation (the "Parent"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, VICTORY PARK MASTER FUND, LTD., the registered
holder hereof or its permitted assigns (the "Holder"), is entitled, subject to
the terms set forth below, to purchase from the Parent, at the Exercise Price
(as defined below) then in effect, upon exercise of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, the "Warrant"), at any time or times
on or after the Issuance Date, but not after 11:59 p.m., New York time, on the
Expiration Date (as defined below), 1,500,000 fully paid and nonassessable
shares of Common Stock (as defined below) (the "Warrant Shares"). This Warrant
is one of the Warrants to purchase Common Stock (the "SPA Warrants") issued on
even date herewith pursuant to Section 1 of that certain Securities Purchase
Agreement, dated as of even date herewith (the "Subscription Date"), by and
among the Parent, Hamilton Aerospace Technologies, Inc., World Jet Corporation,
Hamilton Aerospace Mexico S.A. de C.V. and the Buyers referred to therein (the
"Securities Purchase Agreement"). Except as otherwise defined herein,
capitalized terms in this Warrant shall have the meanings set forth in Section
16. Capitalized terms not defined herein, shall have the meanings set forth on
the Securities Purchase Agreement.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof
(including, without limitation, the limitations set forth in Section 1(f)), this
Warrant may be exercised by the Holder on any day on or after the Issuance Date,
in whole or in part, by (i) delivery of a written notice, in the form attached
hereto as Exhibit A (the "Exercise Notice"), of the Holder's election to
exercise this Warrant and (ii) (A) payment to the Parent of an amount equal to
the then-applicable Exercise Price multiplied by the number of Warrant Shares as
to which this Warrant is being exercised (the "Aggregate Exercise Price") in
cash or wire transfer of immediately available funds or (B) by notifying the
Parent that this Warrant is being exercised pursuant to a Cashless Exercise (as
defined in Section 1(d)). The Holder shall not be required to deliver the
original of this Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original of this
Warrant and issuance of a new Warrant evidencing the right to purchase the
remaining number of Warrant Shares. Execution and delivery of the Exercise
Notice for all of the Warrant Shares shall have the same effect as cancellation
of the original of this Warrant after delivery of the Warrant Shares in
accordance with the terms hereof. On or before the first (1st) Business Day
following the date on which the Parent has received each of the Exercise Notice
and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the
"Exercise Delivery Documents"), the Parent shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Delivery Documents to
the Holder and the Parent's transfer agent (the "Transfer Agent"). On or before
the third (3rd) Business Day following the date on which the Parent has received
all of the Exercise Delivery Documents (the "Share Delivery Date"), the Parent
shall (X) provided that the Transfer Agent is participating in The Depository
Trust Parent ("DTC") Fast Automated Securities Transfer Program, upon the
request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder's or its
designee's balance account with DTC through its Deposit Withdrawal Agent
Commission system, or (Y) if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver to the Holder or,
at Holder's instruction pursuant to the Exercise Notice, Holder's agent or
designee, in each case, sent by reputable overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Parent's
share register in the name of the Holder or its designee (as indicated in the
Exercise Notice), for the number of shares of Common Stock to which the Holder
is entitled pursuant to such exercise. Upon delivery of the Exercise Delivery
Documents, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited to
the Holder's DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater
than the number of Warrant Shares being acquired upon an exercise, then the
Parent shall as soon as practicable and in no event later than three (3)
Business Days after any exercise and at its own expense, issue and deliver to
the Holder (or its designee) a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but
rather the number of shares of Common Stock to be issued shall be rounded up to
the nearest whole number. The Parent shall pay any and all taxes which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.
(b) Exercise Price. For purposes of this Warrant, "Exercise Price" means
Zero Dollars and Forty-Five Cents ($0.45), subject to adjustment as provided
herein.
(c) Parent's Failure to Timely Deliver Securities. If the Parent shall
fail, for any reason or for no reason, to issue and deliver to the Holder,
within three (3) Business Days of receipt of the Exercise Delivery Documents, a
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certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Parent's share register
or to credit the Holder's balance account with DTC for such number of shares of
Common Stock to which the Holder is entitled upon the Holder's exercise of this
Warrant (as the case may be), and if on or after such third (3rd) Business Day
the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Holder of shares of
Common Stock issuable upon such exercise that the Holder anticipated receiving
from the Parent (a "Buy-In"), then, in addition to all other remedies available
to the Holder, the Parent shall, within three (3) Business Days after the
Holder's request and in the Holder's discretion, either (i) pay cash to the
Holder in an amount equal to the Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased (the
"Buy-In Price"), at which point the Parent's obligation to deliver such
certificate (and to issue such shares of Common Stock) resulting from such
exercise shall terminate, or (ii) promptly honor its obligation to deliver to
the Holder a certificate or certificates representing such shares of Common
Stock or credit the Holder's balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon such Holder's exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock times (B) the Closing Bid Price on the date of exercise.
(d) Cashless Exercise. The Holder may, in its sole discretion, exercise
this Warrant in whole or in part and, in lieu of making the cash payment
otherwise contemplated to be made to the Parent upon such exercise in payment of
the Aggregate Exercise Price, elect instead to receive upon such exercise the
"Net Number" of shares of Common Stock determined according to the following
formula (a "Cashless Exercise"):
Net Number = (A x B) - (A x C)
-----------------
B
For purposes of the foregoing formula:
A= the total number of shares with respect to which this Warrant
is then being exercised.
B= the average of the Closing Bid Price of the Common Stock for
the five (5) Trading Days immediately preceding the date of the
Exercise Notice.
C= the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.
(e) Disputes. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the number of Warrant Shares to
be issued pursuant to the terms hereof, the Parent shall promptly issue to the
Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with Section 13.
(f) Limitations on Exercises. The Parent shall not effect the exercise of
this Warrant, and the Holder shall not have the right to exercise this Warrant,
to the extent that after giving effect to such exercise, such Person (together
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with such Person's affiliates) would beneficially own in excess of 4.99% of the
shares of Common Stock outstanding immediately after giving effect to such
exercise (the "Maximum Amount"). For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by such Person and
its affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Parent beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein. Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (1) the Parent's most recent Form 10-K, Form
10-Q, Current Report on Form 8-K or other public filing with the Securities and
Exchange Commission, as the case may be, (2) a more recent public announcement
by the Parent or (3) any other written notice by the Parent setting forth the
number of shares of Common Stock outstanding. For any reason at any time, upon
the written or oral request of the Holder, the Parent shall within two (2)
Business Days confirm orally and in writing or by electronic mail to the Holder
the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Parent, including the SPA
Warrants, by the Holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. By written notice to
the Parent, the Holder may from time to time increase or decrease the Maximum
Percentage to any other percentage not in excess of 9.99% specified in such
notice; provided that (i) any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the Parent, and (ii)
any such increase or decrease will apply only to the Holder and not to any other
holder of SPA Warrants.
(g) Insufficient Authorized Shares. The Parent shall at all times keep
reserved for issuance under this Warrant a number of shares of Common Stock as
shall be necessary to satisfy the Parent's obligation to issue shares of Common
Stock hereunder (without regard to any limitation otherwise contained herein
with respect to the number of shares of Common Stock that may be acquirable upon
exercise of this Warrant). If at any time while any of the Warrants remain
outstanding the Parent does not have a sufficient number of authorized and
unreserved shares of Common Stock to satisfy its obligation to reserve for
issuance upon exercise of the Warrants at least a number of shares of Common
Stock equal to 110% (the "Required Reserve Amount") of the number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of
all of the Warrants then outstanding (an "Authorized Share Failure"), then the
Parent shall as promptly as practicable take all reasonable action necessary to
increase the Parent's authorized shares of Common Stock to an amount sufficient
to allow the Parent to reserve the Required Reserve Amount for the Warrants then
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outstanding. Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized Share Failure,
but in no event later than sixty (60) days after the occurrence of such
Authorized Share Failure, the Parent shall hold a meeting of its stockholders
for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Parent shall provide each
stockholder with a proxy statement and shall use its best efforts to solicit its
stockholders' approval of such increase in authorized shares of Common Stock and
to cause its board of directors to recommend to the stockholders that they
approve such proposal.
(h) Forced Exercise by the Parent. The Parent may force the Holder to
exercise this Warrant, in whole or in part, at any time all of the Exercise
Conditions are satisfied. Provided the Exercise Conditions have all been
satisfied, the Parent may provide notice (the "Parent Exercise Notice") to the
Holder at any time within seven (7) Business Days after the occurrence of such
events, indicating the Parent's desire to have the Warrant exercised. The Holder
shall have five (5) Business Days after receipt of such Parent Exercise Notice
to exercise the Warrants with the payment of the Aggregate Exercise Price. The
Parent shall promptly deliver the Warrant Shares issued on exercise of this
Warrant to the Holder (without further action by the Holder being required).
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price
and number of Warrant Shares issuable upon exercise of this Warrant are subject
to adjustment from time to time as set forth in this Section 2.
(a) Adjustment upon Issuance of shares of Common Stock. Except for Excluded
Issuances, if and whenever on or after the Subscription Date the Parent issues
or sells, or in accordance with this Section 2 and Section 3 is deemed to have
issued or sold, any shares of Common Stock (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the Parent, but
excluding shares of Common Stock deemed to have been issued by the Parent in
connection with any Excluded Issuance), for a consideration per share (the "New
Issuance Price") less than a price (the "Applicable Price") equal to the
Exercise Price in effect immediately prior to such issue or sale or deemed
issuance or sale (the foregoing a "Dilutive Issuance"), then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an
amount equal to the product of (A) the Exercise Price in effect immediately
prior to such Dilutive Issuance and (B) the quotient determined by dividing (1)
the sum of (I) the product derived by multiplying the Exercise Price in effect
immediately prior to such Dilutive Issuance and the number of shares of Common
Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (II)
the consideration, if any, received by the Parent upon such Dilutive Issuance,
by (2) the product derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of shares of
Common Stock Deemed Outstanding immediately after such Dilutive Issuance. Upon
each such adjustment of the Exercise Price hereunder, the number of Warrant
Shares shall be adjusted to the number of shares of Common Stock determined by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares acquirable upon exercise of this Warrant
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment. For purposes of determining the
adjusted Exercise Price under this Section 2(a), the following shall be
applicable:
(i) Issuance of Options. Except for Excluded Issuances, if the Parent
in any manner grants any Options, whether or not immediately exercisable, and
the lowest price per share for which one share of Common Stock is issuable upon
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the exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Parent at the time of the
granting or sale of such Option for such price per share. For purposes of this
Section 2(a)(i), the "lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such
Option" shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable (but excluding any contingent amounts) by the Parent
with respect to any one share of Common Stock upon the granting or sale of the
Option, upon exercise of the Option and upon conversion, exercise or exchange of
any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities.
(ii) Issuance of Convertible Securities. Except for Excluded
Issuances, if the Parent in any manner issues or sells any Convertible
Securities, whether or not immediately convertible, and the lowest price per
share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof is less than the Applicable Price, then such share
of Common Stock shall be deemed to be outstanding and to have been issued and
sold by the Parent at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this Section 2(a)(ii),
the "lowest price per share for which one share of Common Stock is issuable upon
the conversion, exercise or exchange" shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable (but excluding any
contingent amounts) by the Parent with respect to one share of Common Stock upon
the issuance or sale of the Convertible Security and upon conversion, exercise
or exchange of such Convertible Security. No further adjustment of the Exercise
Price or number of Warrant Shares shall be made upon the actual issuance of such
shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of this Warrant has been or is
to be made pursuant to other provisions of this Section 2(a), no further
adjustment of the Exercise Price or number of Warrant Shares shall be made by
reason of such issue or sale.
(iii) Change in Option Price or Rate of Conversion. If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the issue, conversion, exercise or exchange of any Convertible Securities,
or the rate at which any Convertible Securities are convertible into or
exercisable or exchangeable for shares of Common Stock increases or decreases at
any time, the Exercise Price and the number of Warrant Shares in effect at the
time of such increase or decrease shall be adjusted to the Exercise Price and
the number of Warrant Shares which would have been in effect at such time had
such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion
rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(a)(iii), if the terms of any Option or Convertible
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Security that was outstanding as of the date of issuance of this Warrant are
increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect or a decrease in the
number of Warrant Shares.
(iv) Calculation of Consideration Received. In case any Option is
issued in connection with the issue or sale of other securities of the Parent,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for no consideration. If any shares of Common
Stock, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed
to be the net amount received by the Parent therefor, after deduction of all
underwriting discounts or allowances in connection with such issuance or sale.
If any shares of Common Stock, Options or Convertible Securities are issued or
sold for a consideration other than cash, the amount of such consideration
received by the Parent will be the fair value of such consideration, except
where such consideration consists of securities, in which case the amount of
consideration received by the Parent will be the Closing Sale Price of such
security on the date of receipt. If any shares of Common Stock, Options or
Convertible Securities are issued to the owners of the non-surviving entity in
connection with any merger in which the Parent is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving entity as is
attributable to such shares of Common Stock, Options or Convertible Securities,
as the case may be. The fair value of any consideration other than cash or
securities will be determined jointly by the Parent and the Required Holders. If
such parties are unable to reach agreement within 10 days after the occurrence
of an event requiring valuation (the "Valuation Event"), the fair value of such
consideration will be determined within five Business Days after the tenth day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Parent and the Required Holders. The determination of such
appraiser shall be final and binding upon all parties absent manifest error and
the fees and expenses of such appraiser shall be borne by the Parent.
(v) Record Date. If the Parent takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible
Securities or (B) to subscribe for or purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(b) Adjustment upon Subdivision or Combination of Common Stock. If the
Parent at any time on or after the Subscription Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately increased. If
the Parent at any time on or after the Subscription Date combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination will be proportionately
increased and the number of Warrant Shares will be proportionately decreased.
Any adjustment under this Section 2(b) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
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(c) Other Events. In the event that the Parent (or any direct or indirect
subsidiary thereof) shall take any action to which the provisions hereof are not
strictly applicable, or, if applicable, would not operate to protect the Holder
from dilution or if any event occurs of the type contemplated by the provisions
of this Section 2 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Parent's Board of
Directors shall in good faith determine and implement an appropriate adjustment
in the Exercise Price and the number of Warrant Shares (if applicable) so as to
protect the rights of the Holder; provided that no such adjustment pursuant to
this Section 2(c) will increase the Exercise Price or decrease the number of
Warrant Shares as otherwise determined pursuant to this Section 2, provided
further that if the Holder does not accept such adjustments as appropriately
protecting its interests hereunder against such dilution, then the Parent's
Board of Directors and the Holder shall agree, in good faith, upon an
independent investment bank of nationally recognized standing to make such
appropriate adjustments, whose determination shall be final and binding and
whose fees and expenses shall be borne by the Parent.
(d) Calculations. All calculations under this Section 2 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Parent, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS. If the Parent shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities not addressed by Section 2, property or options not addressed by
Section 2 by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a
"Distribution"), at any time after the issuance of this Warrant, then, in each
such case:
(a) any Exercise Price in effect immediately prior to the close of business
on the record date fixed for the determination of holders of shares of Common
Stock entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid
Price of a share of Common Stock on the trading day immediately preceding such
record date minus the value of the Distribution (as determined in good faith by
the Parent's Board of Directors) applicable to one share of Common Stock, and
(ii) the denominator shall be the Closing Bid Price of the shares of Common
Stock on the trading day immediately preceding such record date; and
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(b) the number of Warrant Shares shall be increased to a number of shares
equal to the number of shares of Common Stock obtainable immediately prior to
the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution multiplied by the
reciprocal of the fraction set forth in the immediately preceding paragraph (a);
provided that in the event that the Distribution is of shares of Common Stock
(or common stock) ("Other Shares of Common Stock") of a company whose common
shares are traded on a national securities exchange or a national automated
quotation system, then the Holder may elect to receive a warrant to purchase
Other Shares of Common Stock in lieu of an increase in the number of Warrant
Shares, the terms of which shall be identical to those of this Warrant, except
that such warrant shall be exercisable into the number of shares of Other Shares
of Common Stock that would have been payable to the Holder pursuant to the
Distribution had the Holder exercised this Warrant immediately prior to such
record date and with an aggregate exercise price equal to the product of the
amount by which the exercise price of this Warrant was decreased with respect to
the Distribution pursuant to the terms of the immediately preceding paragraph
(a) and the number of Warrant Shares calculated in accordance with the first
part of this paragraph (b).
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any adjustments pursuant to Sections 2
and 3 above, if at any time the Parent grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the "Purchase Rights"), then, upon exercise of this Warrant, the Holder
will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights which the Holder could have acquired if the Holder
had held the proportionate number of shares of Common Stock acquirable upon
exercise of this Warrant (without regard to any limitations on the exercise of
this Warrant) immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be
determined for the grant, issue or sale of such Purchase Rights.
(b) Fundamental Transactions. The Parent shall not enter into or be party
to a Fundamental Transaction unless the Successor Entity assumes in writing all
of the obligations of the Parent under this Warrant and the other Transaction
Documents in accordance with the provisions of this Section (4)(b) pursuant to
written agreements, including agreements to deliver to each holder of Warrants
in exchange for such Warrants a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant,
including, without limitation, an adjusted exercise price equal to the value for
the shares of Common Stock reflected by the terms of such Fundamental
Transaction, and exercisable for a corresponding number of shares of capital
stock or other equity interest equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to or concurrently with the
consummation of such Fundamental Transaction. Upon the occurrence of any
Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the "Parent" shall
refer instead to the Successor Entity), and may exercise every right and power
of the Parent and shall assume all of the obligations of the Parent under this
Warrant with the same effect as if such Successor Entity had been named as the
Parent herein. Upon consummation of the Fundamental Transaction, the Successor
Entity shall deliver to the Holder confirmation that there shall be issued upon
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exercise of this Warrant at any time after the consummation of the Fundamental
Transaction, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property) issuable upon the exercise of the Warrant prior
to such Fundamental Transaction, such shares of the common stock (or its
equivalent) of the Successor Entity (or its Parent Entity, as applicable), as
adjusted in accordance with the provisions of this Warrant. In addition to and
not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a "Corporate Event"), the Parent shall make
appropriate provision to insure that the Holder will thereafter have the right
to receive upon an exercise of this Warrant at any time after the consummation
of the Fundamental Transaction but prior to the Expiration Date, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
issuable upon the exercise of the Warrant prior to such Fundamental Transaction,
such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder
would have been entitled to receive upon the happening of such Fundamental
Transaction had the Warrant been exercised immediately prior to such Fundamental
Transaction. The provisions of this Section shall apply similarly and equally to
successive Fundamental Transactions and Corporate Events prior to the Expiration
Date and shall be applied without regard to any limitations on the exercise of
this Warrant.
4A. INCREASE IN WARRANT SHARES BASED ON TRADING PRICE. On the one-year
anniversary of the Issuance Date, if the (a) difference between the Volume
Weighted Average Price of the Common Stock over the twenty (20) Trading Days
prior to such date and the Exercise Price (the "Positive Spread") multiplied by
(b) the number of Warrant Shares (such amount being the "Warrant Value") is not
at least equal to $750,000 (the "Target Value"), then the number of Warrant
Shares shall be increased as follows:
(i) If the Warrant Value is less than zero, then the number of Warrant
Shares shall be increased by 500,000.
(ii) If the Warrant Value is greater than zero, then the number of
Warrant Shares shall be increased by an amount equal to the lesser of (A)
500,000 and (B) the difference between (1) the Target Value and (2) the Warrant
Value divided by (3) the Positive Spread.
5. NONCIRCUMVENTION. The Parent hereby covenants and agrees that the Parent will
not, by amendment of its Certificate of Incorporation, Bylaws or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, dissolution, issue or sale of securities, or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the
Parent (i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
10
effect, (ii) shall take all such actions as may be necessary or appropriate in
order that the Parent may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so
long as this Warrant is outstanding, take all action necessary to reserve and
keep available out of its authorized and unissued shares of Common Stock, solely
for the purpose of effecting the exercise of this Warrant, the maximum number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of this Warrant (without regard to any limitations on exercise).
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically
provided herein, the Holder, solely in such Person's capacity as a holder of
this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Parent for any purpose, nor shall anything
contained in this Warrant be construed to confer upon the Holder, solely in such
Person's capacity as the Holder of this Warrant, any of the rights of a
stockholder of the Parent or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification
of stock, consolidation, merger, conveyance or otherwise), receive notice of
meetings, receive dividends or subscription rights, or otherwise, prior to the
issuance to the Holder of the Warrant Shares which such Person is then entitled
to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Parent, whether such liabilities are asserted by the Parent
or by creditors of the Parent. Notwithstanding this Section 6, the Parent shall
provide the Holder with copies of the same notices and other information given
to the stockholders of the Parent generally, contemporaneously with the giving
thereof to the stockholders.
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder
shall surrender this Warrant to the Parent, whereupon the Parent will forthwith
issue and deliver upon the order of the Holder a new Warrant (in accordance with
Section 7(d)), registered as the Holder may request, representing the right to
purchase the number of Warrant Shares being transferred by the Holder and, if
less than the total number of Warrant Shares then underlying this Warrant is
being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being
transferred.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Parent of
evidence reasonably satisfactory to the Parent of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the
indemnification contemplated below shall suffice as such evidence), and, in the
case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Parent in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Warrant, the Parent shall
execute and deliver to the Holder a new Warrant (in accordance with Section
7(d)) representing the right to purchase the Warrant Shares then underlying this
Warrant.
(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon
the surrender hereof by the Holder at the principal office of the Parent, for a
new Warrant or Warrants (in accordance with Section 7(d)) representing in the
aggregate the right to purchase the number of Warrant Shares then underlying
this Warrant, and each such new Warrant will represent the right to purchase
such portion of such Warrant Shares as is designated by the Holder at the time
of such surrender; provided, however, that no warrants for fractional shares of
Common Stock shall be given.
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(d) Issuance of New Warrants. Whenever the Parent is required to issue a
new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be
of like tenor with this Warrant, (ii) shall represent, as indicated on the face
of such new Warrant, the right to purchase the Warrant Shares then underlying
this Warrant (or in the case of a new Warrant being issued pursuant to Section
7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when
added to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant
Shares then underlying this Warrant), (iii) shall have an issuance date, as
indicated on the face of such new Warrant which is the same as the Issuance
Date, and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required to be given under this Warrant, it 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 (1) Business Day after deposit
with an overnight courier service with next day delivery specified, 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 Parent:
Global Aircraft Solutions Inc.
6451 S. Country Club, Suite 111
Tuscon, AZ 85706
Facsimile: (520) 547-8638
Attention: J. Fry, General Counsel
If to Holder:
Victory Park Master Fund, Ltd.
227 W. Monroe Street
Suite 3900
Chicago, IL 60606
Facsimile: (312) 701-0794
Attention: Matthew Ray
with a copy (for informational purposes only) to:
McDermott Will & Emery LLP
340 Madison Avenue
New York, NY 10173
Facsimile: (212) 547-5444
Attention: Joel L. Rubinstein, Esq.
Meir A. Lewittes, Esq.
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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. The
Parent shall provide the Holder with prompt written notice of all actions taken
pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefor. Without limiting the generality of the
foregoing, the Parent will give written notice to the Holder (i) immediately
upon each adjustment of the Exercise Price and the number of Warrant Shares,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the
Parent closes its books or takes a record (A) with respect to any dividend or
distribution upon the shares of Common Stock, (B) with respect to any grants,
issuances or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to holders of shares of Common
Stock or (C) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to the Holder and (iii) at least ten (10) Trading
Days prior to the consummation of any Fundamental Transaction. To the extent
that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Parent or any of its subsidiaries, the
Parent shall simultaneously file such notice with the Securities and Exchange
Commission pursuant to a Current Report on Form 8-K.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Parent may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Parent has obtained the written consent of the Required Holders;
provided that no such action may increase the exercise price of any SPA Warrants
or decrease the number of shares or class of stock obtainable upon exercise of
any SPA Warrants without the written consent of the Holder. No such amendment
shall be effective to the extent that it applies to less than all of the holders
of the SPA Warrants then outstanding.
10. SEVERABILITY. If any provision of this Warrant or the application thereof
becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of the terms of this Warrant will continue in
full force and effect.
11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced
in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant 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.
12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted
by the Parent and the Holder and shall not be construed against any Person as
the drafter hereof. The headings of this Warrant are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Warrant.
13
13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price or fair market value or the arithmetic calculation of the Warrant
Shares, the Parent or the Holder (as the case may be) shall submit the disputed
determinations or arithmetic calculations (as the case may be) via facsimile
within two (2) Business Days of receipt of the applicable notice giving rise to
such dispute to the Parent or the Holder (as the case may be). If the Holder and
the Parent are unable to agree upon such determination or calculation of the
Exercise Price or fair market value or the number of Warrant Shares (as the case
may be) within three (3) Business Days of such disputed determination or
arithmetic calculation being submitted to the Parent or the Holder (as the case
may be), then the Parent shall, within two (2) Business Days submit via
facsimile (a) the disputed determination of the Exercise Price or fair market
value to an independent, reputable investment bank selected by the Parent and
approved by the Holder or (b) the disputed arithmetic calculation of the Warrant
Shares to the Parent's independent, outside accountant. The Parent shall cause
at its expense the investment bank or the accountant (as the case may be) to
perform the determinations or calculations (as the case may be) and notify the
Parent and the Holder of the results no later than ten (10) Business Days from
the time it receives such disputed determinations or calculations (as the case
may be). Such investment bank's or accountant's determination or calculation (as
the case may be) shall be binding upon all parties absent demonstrable error.
14. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to pursue actual damages for any failure by
the Parent to comply with the terms of this Warrant. The Parent acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The
Parent therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
15. TRANSFER. This Warrant may be offered for sale, sold, transferred or
assigned without the consent of the Parent in compliance with applicable
securities laws.
16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
have the following meanings:
(a) "Approved Stock Plan" means any employee benefit plan which has been
approved by the Board of Directors of the Parent, pursuant to which the Parent's
securities may be issued to any employee (as that term is defined in such plan),
officer or director for services provided to the Parent.
(b) "Bloomberg" means Bloomberg Financial Markets.
(c) "Closing Bid Price" and "Closing Sale Price" means, for any security as
of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
14
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Parent and the Holder. If
the Parent and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved pursuant to Section 12. All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.
(d) "Eligible Market" means The New York Stock Exchange, Inc., the Nasdaq
Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the
American Stock Exchange or the Principal Market.
(e) "Excluded Issuance" means any Common Stock issued or issuable or deemed
issued or issuable: (i) in connection with any Approved Stock Plan, (ii) upon
the exercise of the Warrants or (iii) upon a one-time automatic adjustment to
the exercise price of any warrant outstanding on the date hereof in accordance
with the terms of such warrant as in effect on the date hereof (without regard
to any amendments subsequent to the date hereof).
(f) "Exercise Conditions" means all of the following conditions: (i) for
any 10-day period, the average Closing Sale Price per share of Common Stock is
greater than or equal to 200% of the Exercise Price then in effect (as adjusted
for additional issuances, splits, recapitalization and the like), (ii) the total
daily trading volume for the shares of Common Stock over the same 10 day period
referenced in (i) above equals or exceeds 750,000 shares, and (iii) all of the
Warrant Shares have been registered for resale pursuant to the Securities Act of
1933, as amended and such registration statement is effective, or may be sold
pursuant to an exemption from the registration requirements of Securities Act of
1933, as amended.
(g) "Expiration Date" means the date that is the fifth (5th) anniversary of
the Issuance Date or, if such date falls on a day other than a Business Day or
on which trading does not take place on the Principal Market (a "Holiday"), the
next date that is not a Holiday.
(h) "Fundamental Transaction" means that the Parent shall, directly or
indirectly, in one or more related transactions, (i) consolidate or merge with
or into (whether or not the Parent is the surviving corporation) another Person,
(ii) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of the Parent to another Person, (iii) allow
another Person to make a purchase, tender or exchange offer that is accepted by
the holders of more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons making or
15
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), (iv) consummate a stock purchase agreement
or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common
Stock, (v) reorganize, recapitalize or reclassify its Common Stock, or (vi) any
"person" or "group" (as these terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act) is or shall become the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the
aggregate ordinary voting power represented by issued and outstanding Common
Stock.
(i) "Parent Entity" of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more
than one such Person or Parent Entity, the Person or Parent Entity with the
largest public market capitalization as of the date of consummation of the
Fundamental Transaction.
(j) "Registration Rights Agreement" means that certain registration rights
agreement, dated as of even date herewith, by and among the Parent and the
Buyers.
(k) "Required Holders" means the holders of the SPA Warrants representing
at least 70% of shares of Common Stock underlying the SPA Warrants then
outstanding.
(l) "Successor Entity" means the Person (or, if so elected by the Holder,
the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity)
with which such Fundamental Transaction shall have been entered into.
(m) "Trading Day" means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded; provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York time).
(n) "Volume Weighted Average Price" means, for the Common Stock as of any
date or dates, the dollar volume-weighted average price of the Common Stock on
the Principal Market during the period beginning at 9:30 a.m., New York Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) on such date or
dates as reported by Bloomberg, or, if no dollar volume-weighted average price
is reported for the Common Stock by Bloomberg for such hours, the average of the
highest closing bid price and the lowest closing ask price of the Common Stock
16
on the Principal Market or, if applicable, of any of the market makers for the
Common Stock as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for the Common Stock on a particular date on any of the foregoing
bases, the Weighted Average Price of the Common Stock on such date shall be the
fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of the
Common Stock, then such dispute shall be resolved pursuant to Section 13. All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the Parent has caused this Warrant to Purchase Common
Stock to be duly executed as of the Issuance Date set out above.
GLOBAL AIRCRAFT SOLUTIONS INC.
By: /s/ John B. Sawyer
---------------------------------
Name: John B. Sawyer
Title: President
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
GLOBAL AIRCRAFT SOLUTIONS INC.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of Global
Aircraft Solutions Inc., a Nevada corporation (the "Parent"), evidenced by the
Warrant to Purchase Common Stock issued to the undersigned holder (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise
Price shall be made as:
____________ a "Cash Exercise" with respect to _________________
Warrant Shares; and/or
____________ a "Cashless Exercise" with respect to _______________
Warrant Shares.
2. Payment of Exercise Price. In the event that the holder has elected a
Cash Exercise with respect to some or all of the Warrant Shares to be issued
pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of
$___________________ to the Parent in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Parent shall deliver to holder, or its
designee or agent as specified below, __________ Warrant Shares in accordance
with the terms of the Warrant. Delivery shall be made to holder, or for its
benefit, to the following address:
___________________________
___________________________
___________________________
___________________________
Date: _______________ __, ______
___________________________________________
Name of Registered Holder
By: _____________________________
Name:
Title:
ACKNOWLEDGMENT
The Parent hereby acknowledges this Exercise Notice and hereby directs
[TRANSFER AGENT] to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated December __, 2007 from
the Parent and acknowledged and agreed to by [TRANSFER AGENT].
GLOBAL AIRCRAFT SOLUTIONS INC.
By:_________________________________
Name:
Title: