Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of November 23, 2004,
by and among Global Power Equipment Group Inc., a Delaware corporation, with
headquarters located at 6120 South Yale, Suite 1480, Tulsa, Oklahoma 74136 (the
“Company”), and the undersigned buyers (individually, a “Buyer”, and
collectively, the “Buyers”).

 

WHEREAS:

 

A. In connection with the Securities Purchase Agreement, by and among the
parties hereto of even date herewith (the “Securities Purchase Agreement”), the
Company has agreed, upon the terms and subject to the conditions set forth in
the Securities Purchase Agreement, to issue and sell to each Buyer convertible
senior subordinated notes of the Company (the “Notes”), which will be
convertible into the Company’s common stock, par value $.01 per share (the
“Common Stock”) (as converted, the “Conversion Shares”), in accordance with the
terms of the Notes.

 

B. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “1933 Act”), and
applicable state securities laws.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:

 

1. Definitions.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

a. “Affiliate” has the meaning ascribed to such term in the Securities Purchase
Agreement.

 

b. “Business Day” means any day other than Saturday, Sunday or any other day on
which commercial banks in The City of New York are authorized or required by law
to remain closed.

 

c. “Effective Date” means the date the Registration Statement has been declared
effective by the SEC.

 

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d. “Investor” means a Buyer or any transferee or assignee thereof to whom a
Buyer assigns its rights under this Agreement and who agrees to become bound by
the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee assigns its rights under
this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9.

 

e. “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.

 

f. “register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements (as defined below)
in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or
ordering of effectiveness of such Registration Statement(s) by the SEC.

 

g. “Registrable Securities” means (i) the Conversion Shares issued or issuable
upon conversion of the Notes and (ii) any share capital of the Company issued or
issuable with respect to the Conversion Shares or the Notes as a result of any
share split, share dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on conversions of the Notes.

 

h. “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable
Securities.

 

i. “Required Holders” means the holders of Notes representing at least a
majority of the aggregate principal amount of the Notes then outstanding;
provided however that if and for so long as one of the Buyers (as defined in the
Securities Purchase Agreement) together with its Affiliates holds more than 50%
of the aggregate principal amount of Notes outstanding then “Required Holders”
shall mean holders of Notes representing at least 66  2/3% of the principal
amount of Notes outstanding.

 

j. “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing
for offering securities on a continuous or delayed basis.

 

k. “SEC” means the United States Securities and Exchange Commission.

 

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Securities Purchase Agreement.

 

2. Registration.

 

a. Mandatory Registration. The Company shall prepare, and, as soon as
practicable but in no event later than 30 days after the Closing Date (as
defined in the Securities Purchase Agreement) (the “Filing Deadline”), file with
the SEC the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities. In the event that

 

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Form S-3 is unavailable for such a registration, the Company shall use such
other form as is available for such a registration, subject to the provisions of
Section 2(e). The Registration Statement prepared pursuant hereto shall register
for resale at least the number of Common Stock equal to 120% of the maximum
number of Registrable Securities issued or issuable as of the trading day
immediately preceding the date the Registration Statement is initially filed
with the SEC, subject to adjustment as provided in Section 2(e). The
Registration Statement shall contain (except if otherwise directed by the
Required Holders) the “Selling Shareholders” section in substantially the form
attached hereto as Exhibit B and the “Plan of Distribution” attached hereto as
Exhibit B. The Company shall use its commercially reasonable efforts to have the
Registration Statement declared effective by the SEC as promptly as reasonably
practicable, but in no event later than the date which is 120 days after the
Closing Date (the “Effectiveness Deadline”).

 

b. Allocation of Registrable Securities. The initial number of Registrable
Securities included in any Registration Statement and each increase in the
number of Registrable Securities included therein shall be allocated pro rata
among the Investors based on the number of Registrable Securities held by each
Investor at the time the Registration Statement covering such initial number of
Registrable Securities or increase thereof is declared effective by the SEC. In
the event that an Investor sells or otherwise transfers any of such Investor’s
Registrable Securities, each transferee shall be allocated a pro rata portion of
the then remaining number of Registrable Securities included in such
Registration Statement for such transferor. Any Common Stock included in a
Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be
allocated to the remaining Investors, pro rata based on the number of
Registrable Securities then held by such Investors which are covered by such
Registration Statement. In no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holders, other than any Registration
Statement on behalf of the Buyers that relates to an underwritten offering.

 

c. Legal Counsel. Subject to Section 5 hereof, the Buyers holding at least a
majority of the Registrable Securities shall have the right to select one legal
counsel to review and oversee any registration pursuant to this Section 2
(“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or such other counsel
as thereafter designated by the Required Holders. The Company and Legal Counsel
shall reasonably cooperate with each other in performing the Company’s
obligations under this Agreement.

 

d. Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on another
appropriate form reasonably acceptable to the Required Holders and (ii)
undertake to register the Registrable Securities on Form S-3 as soon as such
form is available, provided that the Company shall maintain the effectiveness of
the Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the SEC.

 

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e. Sufficient Number of Shares Registered. In the event the number of shares
available under a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities required to be covered
by such Registration Statement or an Investor’s allocated portion of the
Registrable Securities pursuant to Section 2(b), the Company shall amend the
applicable Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
120% of the number of such Registrable Securities as of the trading day
immediately preceding the date of the filing of such amendment or new
Registration Statement, in each case, as soon as practicable, but in any event
not later than thirty (30) days after the necessity therefor arises. The Company
shall use its reasonable best efforts to cause such amendment and/or new
Registration Statement to become effective as promptly as reasonably practicable
following the filing thereof. For purposes of the foregoing provision, the
number of shares available under a Registration Statement shall be deemed
“insufficient to cover all of the Registrable Securities” if at any time the
number of Registrable Securities issued or issuable upon conversion of the Notes
covered by such Registration Statement is greater than 105% of Common Stock
available for resale under the Registration Statement. The calculation set forth
in the foregoing sentence shall be made without regard to any limitations on the
conversion of the Notes and such calculation shall assume that the Notes are
then convertible into Common Stock at the then prevailing Conversion Rate (as
defined in the Notes).

 

f. Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) a Registration Statement covering all of the
Registrable Securities required to be covered thereby and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or
before the Filing Deadline (a “Filing Failure”) or (B) not declared effective by
the SEC on or before the Effectiveness Deadline (an “Effectiveness Failure”) or
(ii) on any day after the Effective Date sales of all of the Registrable
Securities required to be included on such Registration Statement cannot be made
(other than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such Registration
Statement or to register a sufficient number of shares of Common Stock) (a
“Maintenance Failure”) then, as partial relief for the damages to any holder by
reason of any such delay in or reduction of its ability to sell the underlying
shares of Common Stock (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each holder of
Registrable Securities relating to such Registration Statement an amount (the
“Liquidated Damages Amount”) in cash equal to (A) one-quarter of one percent
(0.25%) of the aggregate Purchase Price (as such term is defined in the
Securities Purchase Agreement) of the Notes relating to such Investor’s
Registrable Securities included in such Registration Statement for the first 90
day period following a Filing Failure, Effectiveness Failure or Maintenance
Failure, (B) one-half of one percent (0.50%) of the aggregate Purchase Price of
the Notes relating to such Investor’s Registrable Securities included in such
Registration Statement for the following 60 day period, and (C) three-quarters
of one percent (0.75%) of the aggregate Purchase Price of the Notes relating to
such Investor’s Registrable Securities included in such Registration Statement
for each subsequent 30 day period. Liquidated Damages Amounts will accrue for
each of the following dates: (i) the day of a Filing Failure and on every
thirtieth day (pro rated

 

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for periods totaling less than thirty days) thereafter until such Filing Failure
is cured; (ii) the day of an Effectiveness Failure and on every thirtieth day
(pro rated for periods totaling less than thirty days) thereafter until such
Effectiveness Failure is cured; (iii) the initial day of a Maintenance Failure
and on every thirtieth day (pro rated for periods totaling less than thirty
days) thereafter until such Maintenance Failure is cured. The rate of accrual of
the Liquidated Damages Amount with respect to any period will not exceed the
rate provided in this paragraph notwithstanding the occurrence of multiple
concurrent events giving rise to the Liquidated Damages Amount. The payments to
which a holder shall be entitled pursuant to this Section 2(f) are referred to
herein as “Registration Delay Payments.” Registration Delay Payments shall be
paid on the earlier of (I) the last day of the calendar month during which such
Registration Delay Payments are incurred and (II) the third Business Day after
the event or failure giving rise to the Registration Delay Payments is cured. In
the event the Company fails to make Registration Delay Payments in a timely
manner, such Registration Delay Payments shall bear interest at a rate per annum
equal to the default rate under the Notes until paid in full. Notwithstanding
anything to the foregoing, Liquidated Damages Amounts will not be payable by the
Company pursuant to the terms hereof to the extent that such delays are caused
by an Investor’s failure to provide the information required by Section 4(a).

 

3. Related Obligations.

 

At such time as the Company is obligated to file a Registration Statement with
the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof and,
pursuant thereto, the Company shall have the following obligations:

 

a. The Company shall submit to the SEC, within three (3) Business Days after the
Company learns that no review of a particular Registration Statement will be
made by the staff of the SEC or that the staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than 48 hours after the submission of such request. The Company shall
keep each Registration Statement effective pursuant to Rule 415 at all times
until the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under
the 1933 Act or (ii) the date on which the Investors shall have sold all of the
Registrable Securities covered by such Registration Statement (the “Registration
Period”). The Company shall ensure that each Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein) shall
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the statements therein
(in the case of prospectuses, in the light of the circumstances in which they
were made) not misleading.

 

b. The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement, which prospectus
is to

 

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be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be
reasonably necessary to keep such Registration Statement effective at all times
during the Registration Period, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-Q, Form 10-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the “1934 Act”),
the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.

 

c. The Company shall permit Legal Counsel to review and comment upon (i) a
Registration Statement at least three (3) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to all Registration Statements
(except for Annual Reports on Form 10-K, Reports on Form 10-Q and Reports on
Form 8-K and any similar or successor reports) within a reasonable number of
days prior to their filing with the SEC. The Company shall furnish to Legal
Counsel, without charge, (i) copies of any correspondence from the SEC or the
staff of the SEC to the Company or its representatives relating to any
Registration Statement, (ii) promptly after the same is prepared and filed with
the SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, if requested by an Investor, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 3(c).

 

d. The Company shall furnish to each Investor whose Registrable Securities are
included in any Registration Statement, without charge, (i) promptly after the
same is prepared and filed with the SEC, at least one copy of such Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an
Investor, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten (10) copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably request)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

 

e. The Company shall use its commercially reasonable efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be reasonably
necessary to maintain

 

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the effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(e), (y) subject itself to taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify Legal Counsel and each Investor
who holds Registrable Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or “blue sky”
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threatening of any proceeding for such purpose.

 

f. The Company shall notify Legal Counsel and each Investor in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, as a result of which the prospectus included in a Registration Statement,
as then in effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material, nonpublic information), and, subject to Section 3(r), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement or
amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the as promptly as practicable of such
effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

 

g. The Company shall use its commercially reasonable efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest as promptly as reasonably practicable and to notify Legal Counsel
and each Investor who holds Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

 

h. At the reasonable request of any Investor, the Company shall furnish to such
Investor, on the date of the effectiveness of the Registration Statement and
thereafter from time to time on such dates as the Required Holders may
reasonably request (but

 

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not more than once in any twelve month period) (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Investors.

 

i. Solely in connection with the need to establish a due diligence defense, the
Company shall make available for inspection by (i) any Investor, (ii) Legal
Counsel and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Records or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (a) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (b) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement or
obligation of which the Inspector has knowledge. Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors’ ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

 

j. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

k. The Company shall use its reasonable best efforts to cause all shares of
Common Stock issuable upon conversion of the Notes to be reserved for listing on
each securities exchange or quotation system on which the Common Stock is then
listed no later than

 

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the date the applicable Registration Statement is declared effective and, shall
cause all Common Stock to be so listed when issued, and, in connection
therewith, to make such filings as may be required under the 1934 Act and to
have such filings declared effective as and when required thereunder.

 

l. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered in
such names as the Investors may request.

 

m. If requested by an Investor and required by applicable securities laws, the
Company shall (i) as soon as reasonably practicable incorporate in a prospectus
supplement or post-effective amendment such information as an Investor
reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) as soon as reasonably
practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon as
reasonably practicable, supplement or make amendments to any Registration
Statement if reasonably requested by an Investor holding any Registrable
Securities.

 

n. The Company shall use its commercially reasonable efforts to cause the
Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

 

o. The Company shall make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with, and in the
manner provided by, the provisions of Rule 158 under the 1933 Act) covering a
twelve-month period beginning not later than the first day of the Company’s
fiscal quarter next following the effective date of a Registration Statement.

 

p. Within two (2) Business Days after a Registration Statement which covers
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

 

q. Notwithstanding anything to the contrary herein, at any time after the
Registration Statement has been declared effective by the SEC, the Company may
delay the

 

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disclosure of material, non-public information concerning the Company the
disclosure of which at the time is not, in the good faith opinion of the Board
of Directors of the Company in the best interest of the Company and, in the
opinion of counsel to the Company, otherwise required (a “Grace Period”);
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided further, that no Grace Period shall
exceed thirty (30) consecutive days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of sixty (60)
days and the first day of any Grace Period must be at least two (2) trading days
after the last day of any prior Grace Period (each, an “Allowable Grace
Period”); provided that in the case of a Grace Period caused by an acquisition
or probable acquisition or financing, recapitalization, business combination
with similar transaction, the Company may upon a second notice to Investors
extend the Grace Period by an additional thirty (30) days without incurring
liquidated damages pursuant to Section 2(f). For purposes of determining the
length of a Grace Period above, the Grace Period shall begin on and include the
date the Investors receive the notice referred to in clause (i) and shall end on
and include the latter of the date the Investors receive the notice referred to
in clause (ii) and the date referred to in such notice. The provisions of
Section 3(g) hereof shall not be applicable during the period of any Allowable
Grace Period. Upon expiration of the Grace Period, the Company shall again be
bound by the first sentence of Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer
applicable. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended Common Stock to a transferee of an
Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale, and delivered a copy of the
prospectus included as part of the applicable Registration Statement, prior to
the Investor’s receipt of the notice of a Grace Period and for which the
Investor has not yet settled.

 

4. Obligations of the Investors.

 

a. At least ten (10) Business Days prior to the first anticipated filing date of
a Registration Statement, the Company shall notify each Investor in writing of
the information the Company requires from each such Investor if such Investor
elects to have any of such Investor’s Registrable Securities included in such
Registration Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall
furnish to the Company at least two (2) Business Days prior to the filing of a
Regulation Statement (or any amendment or supplement thereto) such information
regarding itself, the Registrable Securities held by it and to be sold and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.

 

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b. Each Investor, by such Investor’s acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.

 

c. Each Investor agrees promptly to furnish to the Company, to the extent
required by applicable law, all information required to be disclosed in order to
make the information previously furnished to the Company by such Investor not
misleading and any other information regarding such Investor and the
distribution of such Registrable Securities as the Company may from time to time
reasonably request.

 

d. Each Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(g), the first sentence
of 3(f) or 3(q), such Investor will immediately discontinue the disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g), the first
sentence of 3(f) or 3(q) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended Common Stock to a transferee of an Investor
in accordance with the terms of the Securities Purchase Agreement in connection
with any sale of Registrable Securities with respect to which an Investor has
entered into a contract for sale prior to the Investor’s receipt of a notice
from the Company of the happening of any event of the kind described in Section
3(g), the first sentence of 3(f) or 3(q) and for which the Investor has not yet
settled.

 

5. Expenses of Registration.

 

All reasonable expenses, other than as set forth below, incurred in connection
with registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, (i) all registration and filing fees, (ii)
printing expenses, (iii) fees and disbursements of counsel for the Company and
Legal Counsel in accordance with the provisions of Section 2(c) hereof (plus up
to one local counsel agreed upon by a majority in amount of the Registrable
Securities), (iv) fees and disbursements of the Company’s independent certified
public accountants, (v) fees and expenses incurred in connection with the
listing of the securities on the New York Stock Exchange, and (vi) fees and
expenses of all other persons retained by the Company. Notwithstanding the
foregoing or anything in this Agreement to the contrary, each holder of the
Registrable Securities being registered shall pay all commissions, placement
agent fees and underwriting discounts and commissions with respect to any
Registrable Securities sold by it and the fees and disbursements of any counsel
or other advisors or experts retained by such holders, other than fees of Legal
Counsel set forth in the preceding sentence.

 

11

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6. Indemnification.

 

In the event any Registrable Securities are included in a Registration Statement
under this Agreement:

 

a. To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend each Investor, the directors, officers,
members, partners, employees, agents, representatives of, and each Person, if
any, who controls any Investor within the meaning of the 1933 Act or the 1934
Act (each, an “Indemnified Person”) and each Affiliate of any Holder, against
any losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint
or several, (collectively, “Claims”) incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
caused by: (i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”), or the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in the light of the circumstances under which the statements therein
were made, not misleading, (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a
Registration Statement or (iv) any material violation of this Agreement (the
matters in the foregoing clauses (i) through (iv) (together, the “Violations”).
Subject to Section 6(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees of one counsel for all Indemnified Persons or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); (ii) with respect to any
preliminary prospectus, shall not inure to the benefit of any such Person from
whom the Person asserting any such Claim purchased the Registrable Securities
that are the subject thereof (or to the benefit of

 

12

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any Person controlling such Person) if the untrue statement or omission of
material fact contained in the preliminary prospectus was corrected in the
prospectus, as then amended or supplemented, if such prospectus was timely made
available by the Company pursuant to Section 3(d), and the Indemnified Person
was promptly advised in writing not to use the incorrect prospectus prior to the
use giving rise to a Violation and such Indemnified Person, notwithstanding such
advice, used it or failed to deliver the correct prospectus as required by the
1933 Act and such correct prospectus was timely made available pursuant to
Section 3(d); (iii) shall not be available to the extent such Claim is based on
a failure of the Investor to deliver or to cause to be delivered the prospectus
made available by the Company, including a corrected prospectus, if such
prospectus or corrected prospectus was timely made available by the Company
pursuant to Section 3(d); and (iv) shall not apply to amounts paid in settlement
of any Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investors pursuant to Section 9.

 

b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, its officers and each
Person, if any, who controls the Company within the meaning of the 1933 Act or
the 1934 Act and each Affiliate of the Company (each, an “Indemnified Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of 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 to the Company by such
Investor expressly for use in connection with such Registration Statement; and,
subject to Section 6(c), such Investor will reimburse any legal fees of one
counsel for all Indemnified Persons or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.

 

13

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c. Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof; provided, however,
that an Indemnified Person or Indemnified Party shall have the right to retain
its own counsel with the fees and expenses of not more than one counsel for all
such Indemnified Persons or Indemnified Parties to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Persons or
Indemnified Parties and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. In the case of an Indemnified Person, legal counsel referred to in
the immediately preceding sentence shall be selected by the Investors holding at
least a majority in interest of the Registrable Securities included in the
Registration Statement to which the Claim relates. The Indemnified Party or
Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent; provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

 

d. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

 

e. The indemnity agreements contained herein shall be in addition to (i) any
cause of action or similar right of the Indemnified Party or Indemnified Person
against the

 

14

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indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law.

 

7. Contribution.

 

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no Person
involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) in connection with such sale shall be entitled to contribution from any
Person involved in such sale of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

 

8. Reports Under the 1934 Act.

 

With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration (“Rule 144”), the Company agrees to:

 

a. make and keep public information available, as those terms are understood and
defined in Rule 144;

 

b. file with the SEC in a timely manner all reports and other documents required
of the Company under the 1933 Act and the 1934 Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

 

c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting requirements of Rule 144, the 1933
Act and the 1934 Act, (ii) a copy of the most recent annual report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Investors to
sell such securities pursuant to Rule 144 without registration.

 

9. Assignment of Registration Rights.

 

The rights under this Agreement shall be automatically assignable by the
Investors to any transferee of all or any portion of such Investor’s Registrable
Securities if: (i) the Investor notifies the Company after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or

 

15

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assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act and applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

 

10. Amendment of Registration Rights.

 

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

 

11. Miscellaneous.

 

a. A Person is deemed to be a holder of Registrable Securities whenever such
Person owns or is deemed to own of record such Registrable Securities. If the
Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act
upon the basis of instructions, notice or election received from the such record
owner of such Registrable Securities.

 

b. Any notices, consents, waivers or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

 

Global Power Equipment Group Inc.

6120 South Yale, Suite 1480

Tulsa, Oklahoma 74136

Telephone:

   (918) 488-0828

Facsimile:

   (918) 274-2367

Attention:

   General Counsel

 

16

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If to Legal Counsel:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:

   (212) 756-2000

Facsimile:

   (212) 593-5955

Attention:

   Christian H. Mittweg, Esq.

 

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer’s representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

c. Failure of any party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy, shall not
operate as a waiver thereof.

 

d. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION

 

17

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HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

e. This Agreement, the other Transaction Documents (as defined in the Securities
Purchase Agreement) and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein. This
Agreement, the other Transaction Documents and the instruments referenced herein
and therein supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

 

f. Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and assigns of each of
the parties hereto.

 

g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

 

h. This Agreement may be executed in identical counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
agreement. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

 

i. Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as any other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

 

j. All consents and other determinations required to be made by the Investors
pursuant to this Agreement shall be made, unless otherwise specified in this
Agreement, by Investors holding at least a majority of the Registrable
Securities, determined as if all of the Notes held by Investors then outstanding
have been converted into Registrable Securities without regard to any
limitations on conversion of the Notes.

 

k. The language used in this Agreement will be deemed to be the language chosen
by the parties to express their mutual intent and no rules of strict
construction will be applied against any party.

 

l. This Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

 

* * * * * *

 

18

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IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

COMPANY: GLOBAL POWER EQUIPMENT GROUP INC.

By:

 

/s/ James P. Wilson

   

Name: James P. Wilson

   

Title: CFO and V.P. of Finance

 

19

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IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

BUYERS: KINGS ROAD INVESTMENTS LTD.

By:

 

/s/ Alexander E. Jackson

Name:

 

Alexander E. Jackson

Title:

 

Principal

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

BUYERS: STEELHEAD INVESTMENTS LTD. By:   HBK Investments L.P.

Title:   Investment Advisor

By:

 

/s/ David C. Haley

Name:

 

David C. Haley

Title:

 

Authorized Signatory

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

BUYERS: D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, L.P. By: D.B. Zwirn and Co., LP

By:

 

/s/ Perry A. Gruss

Name:

 

Perry A. Gruss

Title:

 

Chief Financial Officer

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

BUYERS: D.B. ZWIRN SPECIAL OPPORTUNITIES FUND, LTD. By: D.B. Zwirn and Co., LP
By:  

/s/ Perry A. Gruss

Name:

 

Perry A. Gruss

Title:

 

Chief Financial Officer

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Buyer and the Company have caused this Registration
Rights Agreement to be duly executed as of the date first written above.

 

BUYERS: HCM/Z SPECIAL OPPORTUNITIES LLC By: D.B. Zwirn and Co., LP By:  

/s/ Perry A. Gruss

Name:

 

Perry A. Gruss

Title:

 

Authorized Signatory

 

--------------------------------------------------------------------------------

SCHEDULE OF BUYERS*

 

* Omitted. The Registrant agrees to furnish supplementally a copy of such
omitted schedule to the Securities and Exchange Commission upon its request.

 

--------------------------------------------------------------------------------

EXHIBIT A to

Registration Rights Agreement

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

EquiServe Trust Company, N.A.

250 Royall Street

Canton, MA 02021

Attention: Monique Hughes

Facsimile: 781-575-4812

 

  Re: Global Power Equipment Group Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to Global Power Equipment Group Inc., a Delaware
corporation (the “Company”), and have represented the Company in connection with
that certain Securities Purchase Agreement (the “Securities Purchase Agreement”)
entered into by and among the Company and the buyers named therein
(collectively, the “Holders”) pursuant to which the Company issued to the
Holders convertible notes (the “Notes”) convertible into the Company’s common
stock, par value $.01 per share (the “Common Stock”). Pursuant to the Securities
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement with the Holders (the “Registration Rights Agreement”) pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
Common Stock issuable upon conversion of the Notes, under the Securities Act of
1933, as amended (the “1933 Act”). In connection with the Company’s obligations
under the Registration Rights Agreement, on                     ,     200  , the
Company filed a Registration Statement on Form S-3 (File No.
333-                    ) (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) relating to the Registrable Securities which
names each of the Holders as a selling shareholder thereunder.

 

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, that any
stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

 

This letter shall serve as our standing opinion to you that the Common Stock are
freely transferable by the Holders pursuant to the Registration Statement. You
need not require further letters from us to effect any future legend-free
issuance or reissuance of Common Stock to the Holders as contemplated by the
Company’s Irrevocable Transfer Agent Instructions dated November 23, 2004. This
letter shall serve as our standing opinion with regard to this matter.

 

--------------------------------------------------------------------------------

Very truly yours,

[ISSUER’S COUNSEL]

By:    

 

CC: [LIST NAMES OF HOLDERS]

 

--------------------------------------------------------------------------------

EXHIBIT B to

Registration Rights Agreement

 

SELLING SHAREHOLDERS

 

The shares of Common Stock being offered by the selling shareholders are
issuable upon conversion of the convertible notes. For additional information
regarding the convertible notes, see “Private Placement of Convertible Notes “
above. We are registering the shares of Common Stock in order to permit the
selling shareholders to offer the shares for resale from time to time. Except
for the ownership of the convertible notes, the selling shareholders have not
had any material relationship with us within the past three years.

 

The table below lists the selling shareholders and other information regarding
the beneficial ownership of the shares of Common Stock by each of the selling
shareholders. The second column lists the number of shares of Common Stock
beneficially owned by each selling shareholder, based on its ownership of the
convertible notes, as of                     , 200  , assuming conversion of all
convertible notes held by the selling shareholders on that date, without regard
to any limitations on conversions or exercise.

 

The third column lists the shares of Common Stock being offered by this
prospectus by the selling shareholders.

 

In accordance with the terms of registration rights agreements with the holders
of the convertible notes, this prospectus generally covers the resale of at
least 120% of that number of shares of Common Stock equal to the number of
shares of Common Stock issuable upon conversion of the convertible notes,
determined as if the outstanding convertible notes were converted or exercised,
as applicable, in full, in each case, as of the trading day immediately
preceding the date this registration statement was initially filed with the SEC.
Because the conversion price of the convertible notes may be adjusted, the
number of shares that will actually be issued may be more or less than the
number of shares being offered by this prospectus. The fourth column assumes the
sale of all of the shares offered by the selling shareholders pursuant to this
prospectus.

 

Under the terms of the convertible notes, a selling shareholder may not convert
the convertible notes, to the extent such conversion or exercise would cause
such selling shareholder, together with its Affiliates, to beneficially own a
number of shares of Common Stock which would exceed 4.99% of our then
outstanding shares of Common Stock following such conversion or exercise,
excluding for purposes of such determination shares of Common Stock issuable
upon conversion of the convertible notes which have not been converted. The
number of shares in the second column does not reflect this limitation. The
selling shareholders may sell all, some or none of their shares in this
offering. See “Plan of Distribution.”

 

--------------------------------------------------------------------------------

Name of Selling Shareholder

--------------------------------------------------------------------------------

   Number of Shares Owned
Prior to Offering

--------------------------------------------------------------------------------

  Maximum Number of Shares
to be Sold Pursuant to this
Prospectus

--------------------------------------------------------------------------------

  Number of Shares Owned
After Offering

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Kings Road Investments Ltd. (1)    [___]   [___]   [0] Steelhead Investments
Ltd. (2)    [___]   [___]   [0] D.B. Zwirn Special Opportunities Fund, L.P. (3)
             D.B. Zwirn Special Opportunities Fund, Ltd. (4)              HCM/Z
Special Opportunities LLC (5)             

 

(1)

 

(2)

 

(3)

 

(4)

 

(5)

 

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PLAN OF DISTRIBUTION

 

We are registering the shares of Common Stock issuable upon conversion of the
convertible notes to permit the resale of these shares of Common Stock by the
holders of the convertible notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
shareholders of the shares of Common Stock. We will bear all fees and expenses
incident to our obligation to register the shares of Common Stock.

 

The selling shareholders may sell all or a portion of the shares of Common Stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents. If the shares of
Common Stock are sold through underwriters or broker-dealers, the selling
shareholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of Common Stock may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

 

  • on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

 

  • in the over-the-counter market;

 

  • in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

  • through the writing of options, whether such options are listed on an
options exchange or otherwise;

 

  • ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

  • block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  • purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  • an exchange distribution in accordance with the rules of the applicable
exchange;

 

  • privately negotiated transactions;

 

  • short sales;

 

  • broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;

 

  • a combination of any such methods of sale; and

 

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  • any other method permitted pursuant to applicable law.

 

If the selling shareholders effect such transactions by selling shares of Common
Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholders or commissions from
purchasers of the shares of Common Stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of Common Stock or otherwise, the selling shareholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of Common Stock in the course of hedging in positions they
assume. The selling shareholders may also sell shares of Common Stock short and
deliver shares of Common Stock covered by this prospectus to close out short
positions. The selling shareholders may also loan or pledge shares of Common
Stock to broker-dealers that in turn may sell such shares.

 

The selling shareholders may pledge or grant a security interest in some or all
of the convertible notes or shares of Common Stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of Common Stock from time to time pursuant
to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as amended, amending,
if necessary, the list of selling shareholders to include the pledgee,
transferee or other successors in interest as selling shareholders under this
prospectus. The selling shareholders also may transfer and donate the shares of
Common Stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

 

The selling shareholders and any broker-dealer participating in the distribution
of the shares of Common Stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of Common Stock is made, a prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
shares of Common Stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling shareholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.

 

Under the securities laws of some states, the shares of Common Stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of Common Stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

 

There can be no assurance that any selling shareholder will sell any or all of
the shares of Common Stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.

 

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The selling shareholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of Common Stock by the selling
shareholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.

 

We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration rights agreement, estimated to be $[            ]
in total, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that a selling shareholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
shareholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling shareholders will be entitled to contribution. We may be indemnified by
the selling shareholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling shareholder specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.

 

Once sold under the shelf registration statement, of which this prospectus forms
a part, the shares of Common Stock will be freely tradable in the hands of
persons other than our affiliates.