Exhibit 10.1

 

THE SECURITIES OFFERED INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT IN THE LOSS
OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE PURCHASE OF THESE
SECURITIES SHOULD CONSULT WITH HIS, HER OR ITS LEGAL, TAX AND FINANCIAL ADVISORS
PRIOR TO MAKING AN INVESTMENT IN SECURITIES. THE SECURITIES SHOULD ONLY BE
PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR INVESTMENT.

 

SUBSCRIPTION AGREEMENT

 

The undersigned (hereinafter “Subscriber”) hereby confirms his/her/its
subscription for the purchase shares of Series C Preferred Stock, par value
$0.01 per share (the “Preferred Shares”), of Baltia Air Lines, Inc., a New York
corporation (the “Company”), on the terms described below.

 

WHEREAS, the Company is conducting a “best efforts” offering (the “Offering”) to
sell up to $1,000,000 (the “Offering Amount”) of Preferred Shares. The Preferred
Shares and the underlying shares of Common Stock issuable upon conversion of the
Preferred Shares (the “Conversion Shares”) are sometimes collectively referred
to herein as the “Securities”; and

 

WHEREAS, Subscriber desires to purchase the Preferred Shares for the Purchase
Price (as defined below), and the Company desires to sell the Preferred Shares
to the Subscriber for the Purchase Price.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Subscriber and the Company agree as follows:

 

In connection with this subscription, Subscriber and the Company agree as
follows:

 

1.          Purchase and Sale of the Preferred Shares.

 

(a)          The Company hereby agrees to issue and to sell to Subscriber, and
Subscriber hereby agrees to purchase from the Company, Preferred Shares for the
aggregate subscription amount set forth on the signature page hereto. The
Subscriber understands that this subscription is not binding upon the Company
until the Company accepts it. The Subscriber acknowledges and understands that
acceptance of this Subscription will be made only by a duly authorized
representative of the Company executing and mailing or otherwise delivering to
the Subscriber at the Subscriber’s address set forth herein, a counterpart copy
of the signature page to this Subscription Agreement indicating the Company’s
acceptance of this Subscription. The Company reserves the right, in its sole
discretion for any reason whatsoever, to accept or reject this subscription in
whole or in part. Following the acceptance of this Subscription Agreement by the
Company, the Company shall issue and deliver to Subscriber the Preferred Shares
subscribed for hereunder against payment in U.S. Dollars of the Purchase Price
(as defined below). If this subscription is rejected, the Company and the
Subscriber shall thereafter have no further rights or obligations to each other
under or in connection with this Subscription Agreement. If this subscription is
not accepted by the Company on or before the last day of the Offering Period,
this subscription shall be deemed rejected.

 

 1 

 

 

(b)          Subscriber has hereby delivered and paid concurrently herewith the
aggregate purchase price for the Preferred Shares set forth on the signature
page hereof in an amount required to purchase and pay for the Preferred Shares
subscribed for hereunder (the “Purchase Price”), which amount has been paid in
U.S. Dollars by wire transfer or check, subject to collection, to the order of
“Baltia Air Lines, Inc.”

 

(c)          Subscriber understands and acknowledges that this subscription is
part of a private placement by the Company of up to $1,000,000 in Preferred
Shares, which offering is being made on a “best efforts” basis. The subscription
amounts paid by the Subscriber to the Company will be deposited in the Company’s
operating account. Subscriber understands that Company must not sell any minimum
amount before it receives, and has the right to expend, the net proceeds from
the sale of any Preferred Shares.

 

2.          Representations and Warranties of Subscriber. Subscriber represents
and warrants to the Company as follows:

 

(a)          Subscriber is an “accredited investor” as defined by Rule 501 under
the Securities Act of 1933, as amended (the “Act”), and Subscriber is capable of
evaluating the merits and risks of Subscriber’s investment in the Securities and
has the ability and capacity to protect Subscriber’s interests.

 

(b)         Subscriber understands that the Securities have not been registered.
Subscriber understands that the Securities will not be registered under the Act
on the ground that the issuance thereof is exempt under Section 4(a)(2) and Rule
506(b) of the Act and as a transaction by an issuer not involving any public
offering and that, in the view of the United States Securities and Exchange
Commission (the “SEC”), the statutory basis for the exception claimed would not
be present if any of the representations and warranties of Subscriber contained
in this Subscription Agreement or those of other purchasers of the Preferred
Shares are untrue or, notwithstanding the Subscriber’s representations and
warranties, the Subscriber currently has in mind acquiring any of the Preferred
Shares for resale upon the occurrence or non-occurrence of some predetermined
event.

 

(c)          Subscriber is purchasing the Preferred Shares subscribed for hereby
for investment purposes and not with a view to distribution or resale, nor with
the intention of selling, transferring or otherwise disposing of all or any part
thereof for any particular price, or at any particular time, or upon the
happening of any particular event or circumstance, except selling, transferring,
or disposing of the Securities in full compliance with all applicable provisions
of the Act, the rules and regulations promulgated by the SEC thereunder, and
applicable state securities laws; and that an investment in the Securities is
not a liquid investment.

 

 2 

 

 

(d)          Subscriber acknowledges that Subscriber has had the opportunity to
ask questions of, and receive answers from, the Company or any authorized person
acting on its behalf concerning the Company and its business and to obtain any
additional information, to the extent possessed by the Company (or to the extent
it could have been acquired by the Company without unreasonable effort or
expense) necessary to verify the accuracy of the information received by
Subscriber. In connection therewith, Subscriber acknowledges that Subscriber has
had the opportunity to discuss the Company’s business, management and financial
affairs with the Company’s management or any authorized person acting on its
behalf. Subscriber has received and reviewed the Subscription Booklet, and all
the information concerning the Company and the Securities, both written and
oral, that Subscriber desires. Without limiting the generality of the foregoing,
Subscriber has been furnished with or has had the opportunity to acquire, and to
review: (i) copies of all of the Company’s publicly available documents, the
Subscription Booklet, and (ii) all information, both written and oral, that
Subscriber desires with respect to the Company’s business, management, financial
affairs and prospects. In determining whether to make this investment,
Subscriber has relied solely on (i) Subscriber’s own knowledge and understanding
of the Company and its business based upon Subscriber’s own due diligence
investigations and the information furnished pursuant to this paragraph, and
(ii) the information described in subparagraph 2(g) below. Subscriber
understands that no person has been authorized to give any information or to
make any representations which were not contained in the Subscription Booklet
and Subscriber has not relied on any other representations or information.

 

(e)          Subscriber has all requisite legal and other power and authority to
execute and deliver this Subscription Agreement and to carry out and perform
Subscriber’s obligations under the terms of this Subscription Agreement. This
Subscription Agreement constitutes a valid and legally binding obligation of
Subscriber, enforceable in accordance with its terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other general
principles of equity, whether such enforcement is considered in a proceeding in
equity or law.

 

(f)          Subscriber has carefully considered and has discussed with the
Subscriber’s legal, tax, accounting and financial advisors, to the extent the
Subscriber has deemed necessary, the suitability of this investment and the
transactions contemplated by this Subscription Agreement for the Subscriber’s
particular federal, state, local and foreign tax and financial situation and has
independently determined that this investment and the transactions contemplated
by this Subscription Agreement are a suitable investment for the Subscriber.
Subscriber has relied solely on such advisors and not on any statements or
representations of the Company or any of its agents. Subscriber understands that
Subscriber (and not the Company) shall be responsible for Subscriber’s own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Subscription Agreement.

 

(g)          This Subscription Agreement and the Accredited Investor
Questionnaire accompanying this Subscription Agreement do not contain any untrue
statement of a material fact or omit any material fact concerning Subscriber.

 

(h)          There are no actions, suits, proceedings or investigations pending
against Subscriber or Subscriber’s assets before any court or governmental
agency (nor, to Subscriber’s knowledge, is there any threat thereof) which would
impair in any way Subscriber’s ability to enter into and fully perform
Subscriber’s commitments and obligations under this Subscription Agreement or
the transactions contemplated hereby.

 

 3 

 

 

(i)          The execution, delivery and performance of and compliance with this
Subscription Agreement and the issuance of the Preferred Shares constituting the
components of the Preferred Shares will not result in any violation of, or
conflict with, or constitute a default under, any of Subscriber’s articles of
incorporation or by-laws, or equivalent limited liability company, trust or
partnership documents, if applicable, or any agreement to which Subscriber is a
party or by which it is bound, nor result in the creation of any mortgage,
pledge, lien, encumbrance or charge against any of the assets or properties of
Subscriber or the Preferred Shares.

 

(j)          Subscriber acknowledges that an investment in the Securities is
speculative and involves a high degree of risk and that Subscriber can bear the
economic risk of the purchase of the Securities, including a total loss of
his/her/its investment.

 

(k)         Subscriber acknowledges that he/she/it has carefully reviewed and
considered the risk factors discussed in the “Risk Factors” section of the
Subscription Booklet.

 

(l)          Subscriber recognizes that no federal, state or foreign agency has
recommended or endorsed the purchase of the Securities.

 

(m)        Subscriber is aware that the Preferred Shares are, and the Common
Stock issuable upon conversion of the Preferred Shares will be, when issued,
“restricted securities” as that term is defined in Rule 144 of the general rules
and regulations under the Act.

 

(n)         Subscriber understands that the Preferred Shares shall bear the
following legend or one substantially similar thereto, which Subscriber has read
and understands:

 

NEITHER THIS SECURITY NOR ANY SECURITY INTO WHICH IT MAY BE CONVERTED HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR APPLICABLE STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY SECURITY INTO
WHICH IT MAY BE CONVERTED NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF AT ANY TIME IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION.

 

(o)          Because of the legal restrictions imposed on resale, Subscriber
understands that the Company shall have the right to note stop-transfer
instructions in its stock transfer records, and Subscriber has been informed of
the Company’s intention to do so. Any sales, transfers, or other dispositions of
the Preferred Shares by Subscriber, if any, will be made in compliance with the
Act and all applicable rules and regulations promulgated thereunder.

 

 4 

 

 

(p)          Subscriber acknowledges that Subscriber has such knowledge and
experience in financial and business matters that Subscriber is capable of
evaluating the merits and risks of an investment in the Securities and of making
an informed investment decision with respect thereto.

 

(q)          Subscriber represents that: (i) Subscriber is able to bear the
economic risks of an investment in the Securities and to afford a complete loss
of the investment, and (ii) (A) Subscriber could be reasonably assumed to have
the ability and capacity to protect his/her/its interests in connection with
this subscription; or (B) Subscriber has a pre-existing personal or business
relationship with either the Company or any affiliate thereof of such duration
and nature as would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the Company or such affiliate and is otherwise personally qualified to evaluate
and assess the risks, nature and other aspects of this subscription.

 

(r)          Subscriber further represents that the address of Subscriber set
forth below is his/her principal residence (or, if Subscriber is a company,
partnership or other entity, the address of its principal place of business);
that Subscriber is purchasing the Securities for Subscriber’s own account and
not, in whole or in part, for the account of any other person; Subscriber is
purchasing the Securities for investment and not with a view to the resale or
distribution thereof; and that Subscriber has not formed any entity, and is not
an entity formed, for the purpose of purchasing the Securities.

 

(s)          Subscriber understands that the Company shall have the
unconditional right to accept or reject this subscription, in whole or in part,
for any reason or without a specific reason, in the sole and absolute discretion
of the Company (even after receipt and clearance of Subscriber’s funds). This
Subscription Agreement is not binding upon the Company until accepted in writing
by an authorized officer of the Company. In the event that this subscription is
rejected, then Subscriber’s subscription funds (to the extent of such rejection)
will be promptly returned in full without interest thereon or deduction
therefrom.

 

(t)          Subscriber has not been furnished with any oral representation or
oral information in connection with the offering of the Securities that is not
contained in, or is in any way contrary to or inconsistent with, statements made
in the Subscription Booklet and this Subscription Agreement.

 

(u)          Subscriber represents that Subscriber is not subscribing for the
Securities as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over the Internet, television or radio or presented at any seminar or
meeting or any public announcement or filing of or by the Company.

 

(v)         Subscriber has carefully read this Subscription Agreement and the
Subscription Booklet, and Subscriber has accurately completed the Accredited
Investor Questionnaire which accompanies this Subscription Agreement.

 

 5 

 

 

(w)          No representations or warranties have been made to Subscriber by
the Company, or any officer, employee, agent, affiliate or subsidiary of the
Company, other than the representations of the Company contained herein, and in
subscribing for the Securities the Subscriber is not relying upon any
representations other than those contained in the Subscription Booklet or in
this Subscription Agreement.

 

(x)          Subscriber represents and warrants, to the best of Subscriber’s
knowledge, that no finder, broker, agent, financial advisor or other
intermediary, nor any purchaser representative or any broker-dealer acting as a
broker, is entitled to any compensation in connection with the transactions
contemplated by this Subscription Agreement.

 

(y)          Subscriber represents and warrants that Subscriber has: (i) not
distributed or reproduced the Subscription Booklet, in whole or in part, at any
time, without the prior written consent of the Company, (ii) kept confidential
the existence of the Subscription Booklet and the information contained therein
or made available in connection with any further investigation of the Company
and (iii) refrained and shall refrain from trading in the publicly-traded
securities of the Company for so long as such recipient has been in possession
of any material non-public information contained in the Subscription Booklet.

 

(z)          If the Subscriber is a corporation, partnership, limited liability
company, trust, or other entity, the person executing this Subscription
Agreement hereby represents and warrants that the above representations and
warranties shall be deemed to have been made on behalf of such entity and the
Subscriber has made the same after due inquiry to determine the truthfulness of
such representations and warranties.

 

(aa)        If the Subscriber is a corporation, partnership, limited liability
company, trust, or other entity, it represents that: (i) it is duly organized,
validly existing and in good standing in its jurisdiction of incorporation or
organization and has all requisite power and authority to execute and deliver
this Subscription Agreement and purchase the Securities as provided herein; (ii)
its purchase of the Securities will not result in any violation of, or conflict
with, any term or provision of the charter, by-laws or other organizational
documents of Subscriber or any other instrument or agreement to which the
Subscriber is a party or is subject; (iii) the execution and delivery of this
Subscription Agreement and Subscriber’s purchase of the Securities has been duly
authorized by all necessary action on behalf of the Subscriber; and (iv) all of
the documents relating to the Subscriber’s subscription to the Securities have
been duly executed and delivered on behalf of the Subscriber and constitute a
legal, valid and binding agreement of the Subscriber.

 

(bb)        The Subscriber should check the Office of Foreign Assets Control
(“OFAC”) website at <http://www.treas.gov/ofac> before making the following
representations. The Subscriber represents that the amounts invested by it in
the Company in the Offering were not and are not directly or indirectly derived
from activities that contravene federal, state or international laws and
regulations, including anti-money laundering laws and regulations. Federal
regulations and Executive Orders administered by OFAC prohibit, among other
things, the engagement in transactions with, and the provision of services to,
certain foreign countries, territories, entities and individuals. The lists of
OFAC prohibited countries, territories, persons and entities can be found on the
OFAC website at <http://www.treas.gov/ofac>. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with individuals or
entities in certain countries regardless of whether such individuals or entities
appear on the OFAC lists;

 

 6 

 

 

To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any
person controlling or controlled by the Subscriber; (3) if the Subscriber is a
privately-held entity, any person having a beneficial interest in the
Subscriber; or (4) any person for whom the Subscriber is acting as agent or
nominee in connection with this investment is a country, territory, individual
or entity named on an OFAC list, or a person or entity prohibited under the OFAC
Programs. Please be advised that the Company may not accept any amounts from a
prospective investor if such prospective investor cannot make the representation
set forth in the preceding paragraph. The Subscriber agrees to promptly notify
the Company should the Subscriber become aware of any change in the information
set forth in these representations. The Subscriber understands and acknowledges
that, by law, the Company may be obligated to “freeze the account” of the
Subscriber, either by prohibiting additional subscriptions from the Subscriber,
declining any redemption requests and/or segregating the assets in the account
in compliance with governmental regulations. The Subscriber further acknowledges
that the Company may, by written notice to the Subscriber, suspend the
redemption rights, if any, of the Subscriber if the Company reasonably deems it
necessary to do so to comply with anti-money laundering regulations applicable
to the Company or any of the Company’s service providers. These individuals
include specially designated nationals, specially designated narcotics
traffickers and other parties subject to OFAC sanctions and embargo programs;

 

To the best of the Subscriber’s knowledge, none of: (1) the Subscriber; (2) any
person controlling or controlled by the Subscriber; (3) if the Subscriber is a
privately-held entity, any person having a beneficial interest in the
Subscriber; or (4) any person for whom the Subscriber is acting as agent or
nominee in connection with this investment is a senior foreign political figure,
or any immediate family member or close associate of a senior foreign political
figure; and

 

If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if the Subscriber receives deposits from, makes payments on behalf
of, or handles other financial transactions related to a Foreign Bank, the
Subscriber represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

(cc)         The Subscriber is aware that the Company is delinquent in its
reporting requirements pursuant to the Securities Exchange Act of 1934 as a
result of its failure to file Forms 10-Q for the quarterly periods ended June
30, 2016 and September 2016.

 

(dd)         The Subscriber is aware that the Company is party to certain legal
proceedings in connection with an aggregate of approximately $127,000 of
outstanding payables and $655,000 in outstanding promissory notes.

 

 7 

 

 

(ee)         The Subscriber understands that the Series C Preferred Shares
purchased under this Subscription Agreement may be junior in rights and
preferences to future classes of preferred stock that the Company may designate
from time to time.

 

3.          Representations and Warranties of the Company. The Company
represents and warrants to Subscriber as follows:

 

(a)          Due Organization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of New York and has the
requisite power and authority to own its properties and to carry on its business
as presently conducted. The Company is qualified to transact business as a
foreign corporation and is in good standing under the laws of each jurisdiction
where the location of its properties or the conduct of its business makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not have a material and adverse effect on the business, condition
(financial or otherwise), operations, prospects or property of the Company or
any of its subsidiaries, taken as a whole (“Material Adverse Effect”).

 

(b)          Due Authorization; Enforceability. Each transaction document has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors’ rights
generally and to general principles of equity. The Company has full corporate
power and authority necessary to conduct its business as presently conducted and
to enter into and deliver the transaction documents and to perform its
obligations thereunder.

 

(c)          Non-Contravention. None of the execution and delivery of, or
performance by the Company under, any of the transaction documents or the
consummation of the transactions herein or therein contemplated conflicts with
or violates, or will result in the creation or imposition of any lien, charge or
other encumbrance upon any of the assets of the Company under, any agreement or
other instrument to which the Company is a party or by which the Company or its
assets may be bound, any term of the certificate of incorporation or by-laws of
the Company, or any license, permit, judgment, decree, order, statute, rule or
regulation applicable to the Company or any of its assets, except where such
conflict, violation or creation

 

(d)          Conduct of Business. The conduct of business by the Company as
presently conducted is not subject to continuing oversight, supervision,
regulation or examination by any governmental official or body of the United
States or any other jurisdiction wherein the Company conducts or proposes to
conduct such business, except as such regulation as is applicable to commercial
enterprises generally. The Company has obtained all requisite licenses, permits
and other governmental authorization necessary to conduct its business as
presently, and as proposed to be, conducted, except where the failure to obtain
such license, permit or other governmental authorization would result in a
Material Adverse Effect.

 

 8 

 

 

(e)          Consents. No consent, approval, authorization or order of any
court, governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its affiliates, is required for the execution by the Company
of the transaction documents and compliance and performance by the Company of
its obligations under the transaction documents, including, without limitation,
the issuance and sale of the Securities, other than such consents, approvals and
authorizations as shall have been received by the Company as of the closing
date.

 

(f)          The Securities. The Securities upon issuance:

 

(i)          are, or will be, free and clear of any security interests, liens,
claims or other encumbrances, subject to restrictions upon transfer under the
Act and any applicable state securities laws;

 

(ii)         have been, or will be, duly and validly authorized and on the date
of issuance of the Securities, such Securities will be duly and validly issued,
fully paid and non-assessable;

 

(iii)        will not have been issued or sold in violation of any preemptive or
other similar rights of the holders of any securities of the Company;

 

(iv)        will have been issued in reliance upon an exemption from the
registration requirements of and, assuming the representations and warranties of
the Subscriber herein is true and accurate, will have been issued in compliance
with Section 5 under the Act.

 

4.          Right of Participation.

 

(a)          For as long as Subscriber owns Preferred Shares, each such
Subscriber shall have a right of participation (the “Right of Participation”)
with respect to all future equity or equity-linked capital raising transactions
of the Company (each, a “Subsequent Financing”) in an amount equal to
Subscriber’s pro rata purchase of Preferred Shares in this Offering up to an
aggregate of twenty percent (20%) of the Subsequent Financing, subject to
certain customary exceptions described below (each an “Excluded Issuance”). The
Company shall give advance written notice to Subscriber prior to any Subsequent
Financing. Subscriber shall have five (5) business days from receipt of such
notice to deliver a written notice to the Company that Subscriber elects to
exercise its Right of Participation in the Subsequent Financing.

 

(b)          To the extent that Subscriber elects to exercise its Right of
Participation and any other subscriber in this Offering does not exercise their
Right of Participation (each, a “Declining Holder”), Subscriber shall have the
right to purchase the shares offered to the Declining Holders pro rata.

 

(c)          If, subsequent to the Company giving notice to Subscriber, the
terms and conditions of the Subsequent Financing are changed in any material
way, the Company shall be required to provide a new notice to Subscriber and
Subscriber shall have the Right of Participation again to purchase all or a
portion of the securities in such offering on such changed terms and conditions.

 

 9 

 

 

(d)          For purposes of this Section 4, “Excluded Issuance” shall mean the
issuance of (a) shares of Common Stock or options to consultants, employees,
officers or directors of the Company pursuant to any stock or option plan duly
adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities exercisable or
exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Subscription Agreement, provided that such
securities have not been amended since the date of this Subscription Agreement
to increase the number of such securities or to decrease the exercise price,
exchange price or conversion price of such securities, (c) shares of Common
Stock issued or issuable as a dividend on Common Stock or Preferred Stock, (d)
securities issued pursuant to acquisitions or strategic transactions approved by
a majority of the disinterested directors of the Company, and (e) securities
issuable in exchange for assets, not cash or any other issuance where the
primary reason is not to raise money for the Company.

 

5.          Registration Rights of Shares.

 

(a)          Piggy-Back Rights. If at any time the Company proposes to file a
registration statement under the Act with respect to an offering of equity
securities, or securities or other obligations exercisable or exchangeable for,
or convertible into, equity securities, by the Company for its own account or
for security holders of the Company for their account (or by the Company and by
security holders of the Company), other than a registration statement (i) filed
in connection with an offering of securities to employees or directors of the
Company pursuant to any employee stock option or other benefit plan, (ii) filed
on Form S-4 or S-8 or any successor to such forms, (iii) for an exchange offer
or offering of securities solely to the Company’s existing security holders,
(iv)  for a dividend reinvestment plan, or (v) solely in connection with a
merger, share capital exchange, asset acquisition, share purchase,
reorganization, amalgamation, subsequent liquidation, or other similar business
transaction that results in all of the Company’s shareholders having the right
to exchange their Common Stock for cash, securities or other property of a
non-capital raising bona fide business transaction, then the Company shall
(x) give written notice of such proposed filing to the holders of the Conversion
Shares as soon as practicable but in no event less than five (5) business days
before the anticipated filing date, which notice shall describe the amount and
type of securities to be included in such offering, the intended method(s) of
distribution, and the name of the proposed managing underwriter or underwriters,
if any, of the offering, and (y) offer to the holder of Conversion Shares in
such notice the opportunity to register the sale of such number of Conversion
Shares as such holders may request in writing within three (3) business days
following receipt by such holder of such notice (a “Piggy-Back Registration”),
provided, however, the holder of the Conversion Shares shall only be entitled to
one Piggy-Back Registration right that shall be selected by a majority of the
holders of Conversion Shares. At such time as the Conversion Shares become
eligible for resale pursuant to Rule 144, the holders’ rights to Piggy-Back
Registration shall expire. The Company shall include in such registration
statement such Conversion Shares that are requested to be included therein
within three (3) business days after the receipt by such holder of any such
notice, on the same terms and conditions as any similar securities of the
Company. If at any time after giving written notice of its intention to register
any securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each holder
of, the Conversion Shares, and (x) in the case of a determination not to
register, shall be relieved of its obligation to register any Conversion Shares
in connection with such registration, and (y) in the case of a determination to
delay registering, shall be permitted to delay registering any Conversion Shares
for the same period as the delay in registering such other securities. If the
offering pursuant to a Piggy-Back Registration is to be an underwritten
offering, then the holder making a request for its Conversion Shares to be
included therein must permit the sale or other disposition of such Conversion
Shares in accordance with the intended method(s) of distribution thereof. The
holder of the Conversion Shares proposing to distribute their securities through
a Piggy-Back Registration that involves an underwriter or underwriters shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such Piggy-Back Registration and the holder of the
Conversion Shares shall be responsible for any fees or commissions due to such
underwriters in connection with the sale of such Conversion Shares.

 

 10 

 

 

(b)          Reduction of Offering. If the managing underwriter or underwriters
for a Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holder of the Conversion Shares in writing that the dollar
amount or number of the Common Stock which the Company desires to sell, as to
which registration has been demanded pursuant to written contractual
arrangements with persons other than the holders of the Conversion Shares as to
which registration has been requested under this section and the securities as
to which registration has been requested pursuant to the written contractual
piggy-back registration rights of other security holders of the Company exceeds
the maximum dollar amount or maximum number of securities that can be sold in
such offering without adversely affecting the proposed offering price, the
timing, the distribution method, or the probability of success of such offering
(such maximum dollar amount or maximum number of securities, as applicable, the
“Maximum Number of Securities”), then the Company shall include in any such
registration:

 

(i)          If the registration is undertaken for the Company’s account: (A)
first, the shares of Common Stock that the Company desires to sell; and (B) to
the extent of the Maximum Number of Securities, the shares of Common Stock,
pro-rata among holders, for the account of any persons, including investors in
this Offering for which the Company is obligated to register pursuant to
contractual piggy-back registration rights such as in this Agreement.

 

(ii)         Withdrawal. Any holder of the Conversion Shares may elect to
withdraw such holder’s request for inclusion of the Conversion Shares in any
Piggy-Back Registration by giving written notice to the Company of such request
to withdraw prior to the effectiveness of the registration statement. The
Company (whether on its own determination or as the result of a withdrawal by
persons making a demand pursuant to written contractual obligations) may
withdraw a registration statement at any time prior to the effectiveness of the
registration statement. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of a majority of the Conversion Shares
in connection with such Piggy-Back Registration, excluding any customary
expenses and commissions incurred.

 

(iii)        Limitations on Piggy-Back Registration Rights.  The Company has the
right to exclude the holder of the Conversion Shares from any registration
statement in the event the Company is contractually obligated to exclude such
securities. Furthermore, in the event that the registration statement covers
shares of the Company, the Company, or the underwriter shall have a right to
require the holders to a six (6) month lock-up period from the date of
effectiveness of the registration statement.

 

 11 

 

 

6.          Indemnification. Subscriber agrees to indemnify and hold harmless
the Company and its officers, directors, employees, shareholders, agents,
attorneys, representatives and affiliates, and any person acting for or on
behalf of the Company, from and against any and all damage, loss, liability,
cost and expense (including reasonable attorneys’ fees and disbursements) which
any of them may incur by reason of the failure by Subscriber to fulfill any of
the terms and conditions of this Subscription Agreement, or by reason of any
breach of the representations and warranties made by Subscriber herein, or in
any other document provided by Subscriber to the Company in connection with this
investment. All representations, warranties and covenants of each of Subscriber
and the Company contained herein shall survive the acceptance of this
subscription and the closings.

 

7.          Miscellaneous.

 

(a)          Subscriber agrees not to transfer or assign this Subscription
Agreement or any of Subscriber’s interest herein and further agrees that the
transfer or assignment of the Securities acquired pursuant hereto shall be made
only in accordance with all applicable laws.

 

(b)          Subscriber agrees that Subscriber cannot cancel, terminate, or
revoke this Subscription Agreement or any agreement of Subscriber made
hereunder, and this Subscription Agreement shall survive the death or legal
disability of Subscriber and shall be binding upon Subscriber’s heirs,
executors, administrators, successors, and permitted assigns.

 

(c)          Subscriber has read and has accurately completed this entire
Subscription Agreement.

 

(d)          This Subscription Agreement, the Accredited Investor Questionnaire
and the Preferred Shares constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended or waived
only by a written instrument signed by all parties.

 

(e)          Subscriber acknowledges that it has been advised and has had the
opportunity to consult with Subscriber’s own attorney regarding this
subscription and Subscriber has done so to the extent that Subscriber deems
appropriate.

 

(f)          Any notice or other document required or permitted to be given or
delivered to the parties hereto shall be in writing and sent: (i) by fax if the
sender on the same day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered or certified
mail with return receipt requested (postage prepaid) or (c) by a recognized
overnight delivery service (with charges prepaid).

 

 12 

 

 

If to the Company, at:

 

Baltia Air Lines, Inc.

10 East 40th Street, 10th Floor

New York, NY 10016-0201

Attention: Anthony Koulouris, President

Tel:

Fax:

 

With a copy to:

 

Richard I. Anslow, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105

Tel: (212) 370-1300

Fax: (212) 370-7889

 

If to the Subscriber, at its address set forth on the signature page to this
Subscription Agreement, or such other address as Subscriber shall have specified
to the Company in writing.

 

(g)          Failure of the Company to exercise any right or remedy under this
Subscription Agreement or any other agreement between the Company and the
Subscriber, or otherwise, or any delay by the Company in exercising such right
or remedy, will not operate as a waiver thereof. No waiver by the Company will
be effective unless and until it is in writing and signed by the Company.

 

(h)          This Subscription Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
as such laws are applied by the New York courts except with respect to the
conflicts of law provisions thereof, and shall be binding upon the Subscriber
and the Subscriber’s heirs, estate, legal representatives, successors and
permitted assigns and shall inure to the benefit of the Company, and its
successors and assigns.

 

(i)          Any legal suit, action or proceeding arising out of or relating to
this Subscription Agreement or the transactions contemplated hereby shall be
instituted exclusively in New York Supreme Court, County of New York, or in the
United States District Court for the Southern District of New York. The parties
hereto hereby: (i) waive any objection which they may now have or hereafter have
to the venue of any such suit, action or proceeding, and (ii) irrevocably
consent to the jurisdiction of the New York Supreme Court, County of New York,
and the United States District Court for the Southern District of New York in
any such suit, action or proceeding. The parties further agree to accept and
acknowledge service of any and all process which may be served in any such suit,
action or proceeding in the New York Supreme Court, County of New York, or in
the United States District Court for the Southern District of New York and agree
that service of process upon a party which is mailed by certified mail to such
party’s address shall be deemed in every respect effective service of process
upon such party in any such suit, action or proceeding.

 

 13 

 

 

(j)          If any provision of this Subscription Agreement is held to be
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed modified to conform with such statute or rule of law.
Any provision hereof that may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provisions hereof.

 

(k)          The parties understand and agree that money damages would not be a
sufficient remedy for any breach of this Subscription Agreement by the Company
or the Subscriber and that the party against which such breach is committed
shall be entitled to equitable relief, including an injunction and specific
performance, as a remedy for any such breach, without the necessity of
establishing irreparable harm or posting a bond therefor. Such remedies shall
not be deemed to be the exclusive remedies for a breach by either party of this
Subscription Agreement but shall be in addition to all other remedies available
at law or equity to the party against which such breach is committed.

 

(l)          All pronouns and any variations thereof used herein shall be deemed
to refer to the masculine, feminine, singular or plural, as identity of the
person or persons may require.

 

(m)          This Subscription Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

[Signature Pages Follow]

 

 14 

 

  

Signature Page for Individuals:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

$       Purchase Price   Aggregate Amount of Investment             Print or
Type Name   Print or Type Name (Joint-owner)             Signature   Signature
(Joint-owner)             Date   Date (Joint-owner)             Social Security
Number   Social Security Number (Joint-owner)                         Address  
Address (Joint-owner)       _______ Joint Tenancy   ______ Tenants in Common

 

 S-1 

 

 

Signature Page for Partnerships Corporations or Other Entities:

 

IN WITNESS WHEREOF, Subscriber has caused this Subscription Agreement to be
executed as of the date indicated below.

 

$     $   Total Purchase Price   Aggregate Amount of Investment            
Print or Type Name of Entity                 Address                 Taxpayer
I.D. No. (if applicable)   Date              Signature   Print or Type Name and
Indicate     Title or Position with Entity             Signature (other
authorized signatory)   Print or Type Name and Indicate     Title or Position
with Entity

 

 S-2 

 

 

Acceptance:

 

IN WITNESS WHEREOF, the Company has caused this Subscription Agreement to be
executed, and the foregoing subscription accepted, as of the date indicated
below.

 

  BALTIA AIR LINES, INC.       By:       Name: Anthony D. Koulouris   Title:
President

 

Date:__________________________, 2017

 

 S-3