Exhibit 10.1




 




STOCK PURCHASE AGREEMENT


(Standard Form)




 




This Stock Purchase

Agreement(this “Agreement”) is made as of December 26, 2002, by and

between Gerald G. Mercer (“Seller”), and Gryphon Master Fund.  In addition, AirNet Systems, Inc., an Ohio

corporation (the “Company”) is a party to this Agreement for the limited

purpose of being subject and bound by the provisions of Section 7 below and Exhibit

III attached hereto.




 




RECITALS:




 




WHEREAS, Seller desires

to sell (the “Offering”), on or before December 26, 2002, up to an aggregate of

733,200 shares (the “Offered Shares”) of the common shares, par value

$0.01 per share (the “Common Stock”), of the Company, in one or more blocks of

stock; and




 




WHEREAS, Buyer desires

to purchase from Seller, 33,200 of the Offered Shares (the “Purchased

Shares”) on the terms and conditions set forth below;




 




NOW, THEREFORE, IT IS AGREED AS

FOLLOWS:




 




1.                                       Subject to the

terms and conditions hereof, Buyer agrees to purchase from Seller, and Seller

agrees to sell to Buyer, the Purchased Shares, with such Purchased Shares being

sold by Seller to Buyer free and clear of all claims, liens, or encumbrances of

any kind, except as described in Section 5 below.




 




2.                                       The purchase

price for the Purchased Shares shall be $4.25 per share ($141,100.00 in

the aggregate (the “Purchase Price”)). 

Stonegate Securities, Inc. a Texas corporation (“Stonegate”), is acting

as selling agent for Seller in connection with the offer and sale of the

Offered Shares.  Stonegate has

established an escrow arrangement with Bank of Texas, NA (“Escrow Agent”),

pursuant to an Escrow Agreement, in substantially the form attached hereto as Exhibit

I (the “Escrow Agreement”). 

Simultaneously with the execution and delivery of this Agreement: (i)

Buyer, Stonegate and Escrow Agent shall each execute and deliver to each other

the Escrow Agreement; and (ii) Buyer shall deliver to Stonegate an executed

copy of the Selling Stockholder Questionnaire, a copy of which is attached

hereto as Exhibit II (collectively, the “Buyer Items”).  Upon receipt of satisfactory evidence that a

certificate for the Purchased Shares has been issued to Buyer (which evidence

may consist of a facsimile transmission of a copy of such certificate), Buyer

shall wire transfer the Purchase Price to Escrow Agent at the account specified

in writing by Escrow Agent.




 




In connection with the sale

of the Purchased Shares to Buyer (including Escrow Agent’s receipt of the Buyer

Items), Seller shall deliver certificates representing the Purchased Shares

(duly endorsed for transfer with Medallion signature guarantees) to the

Company’s transfer agent, together with an instruction letter which instructs

the transfer agent to deliver the Purchased Shares to Buyer, and Seller shall

deliver a copy of such instruction letter to Buyer.  The transfer agent shall cause such transfer to occur and will

inform Stonegate in writing that a certificate for the Purchased Shares has

been delivered to Buyer, and upon written notice from Buyer that it has

received such certificate, Stonegate shall inform Escrow Agent in writing of




 





























 




such occurrence and Escrow Agent shall

deliver the Purchase Price to Seller, less fees payable to Stonegate, as

provided in the Escrow Agreement.




 




3.                                       Seller

represents and warrants to Buyer that (a) Seller is not in possession of

material, non-public information about the Company; (b) Seller is the sole

record and beneficial owner of all right, title and interest in and to the

Purchased Shares and has good and valid title to the Purchased Shares and

Seller has complete and unrestricted power and the unqualified right to sell,

assign, transfer and deliver the Purchased Shares to Buyer, and upon

consummation of the transactions contemplated by this Agreement, Buyer will

acquire good and valid title to the Purchased Shares, free and clear of all

liens and encumbrances, other than those imposed by the Securities Act of 1933,

as amended (the “Securities Act”) and any applicable state securities laws; (c)

the offer and sale of the Purchased Shares do not violate, conflict with or

breach any agreement, order or decree to which Seller may be a party; (d) there

are no legal or governmental actions, suits or proceedings pending or, to

Seller’s knowledge, threatened which might prevent or might reasonably be

expected to have a material adverse effect on the offer and sale of the

Purchased Shares to Buyer; and (e) the offer and sale of the Purchased Shares

to Buyer comply with the requirements of the Securities Act and applicable

state securities laws (assuming the accuracy of Buyer’s representations and

warranties set forth in Section 4 below); (f) this Agreement has been

authorized by all necessary action on the part of Seller and represents the

legal, valid and binding obligation of Seller, enforceable against Seller in accordance

with its terms; and (g) Seller is able to pay Seller’s debts and obligations as

they become due and Seller is not insolvent or the subject of bankruptcy or any

similar proceeding.




 




4.                                       Buyer hereby

represents and warrants that Buyer is: (a) acquiring the Purchased Shares for

its own account for investment and not with a view to, or for sale or other

disposition in connection with, any distribution of all or any part thereof,

except (i) in an offering covered by a registration statement filed with the

Securities and Exchange Commission under the Securities Act, covering the

Purchased Shares, or (ii) pursuant to an applicable exemption under the

Securities Act; and (b) Buyer is an “accredited investor” as that term is

defined in Section 501(a) of Regulation D promulgated under the Securities Act.




 




5.                                       Buyer

understands that Seller may be an affiliate of the Company under Federal

securities laws, that the Purchased Shares will not have been registered

pursuant to the Securities Act or any applicable state securities laws, that

the Purchased Shares will be considered “restricted securities” under federal

securities laws, and that under such laws and applicable regulations the

Purchased Shares cannot be sold or otherwise disposed of without registration under

the Securities Act or an exemption therefrom. 

In this connection, Buyer represents that it is familiar with Rule 144

promulgated under the Securities Act, as currently in effect, and understands

the resale limitations imposed thereby and by the Securities Act.  Stop transfer instructions may be issued to

the transfer agent for securities of the Company (or a notation may be made in

the appropriate records of the Company) in connection with the Purchased

Shares.




 




6.                                       It is agreed

and understood by Buyer that the certificates representing the Purchased Shares

shall conspicuously contain on the face or back thereof a legend in

substantially the following form until the Purchased Shares are sold pursuant

to an effective registration statement under the Securities Act or in a

transaction involving a public offering, including a sale pursuant to Rule 144

under the Securities Act:




 




2





























 




THESE SECURITIES HAVE NOT

BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR  HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE

REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN

OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT

REQUIRED.




 




7.                                       The Company has

an interest in maintaining an orderly market for the purchase and sale of

Common Stock.  Accordingly, in

connection with the purchase and sale of the Offered Shares, the Company hereby

grants to Buyer, the registration rights set forth in Exhibit III

attached hereto.  It is an express

condition to Buyer’s obligations under this Agreement that the Company grant

such rights to Buyer, and Seller and the Company acknowledge that Buyer would

not purchase the Purchased Shares without the rights granted herein.  The Company intends to grant to other

purchasers of Offered Shares identical registration rights.  The Company is eligible to register the

offer and resale of the Purchased Shares by Buyer on a registration statement

on Form S-3, and the Company meets the requirements for continued listing on

the New York Stock Exchange.




 




8.                                       The closing of

the purchase and sale of the Purchased Shares 

(the “Closing”) shall take place at the offices of Stonegate, 5950

Sherry Lane, Suite 410, Dallas, Texas 

75225, at such time as all of the Closing Items have been delivered as

provided in Section 2 above.




 




9.                                       This Agreement

and its application shall be governed under the laws of the State of Ohio,

without regard to the conflict of laws provisions thereof.  Any and all disputes and controversies of

every kind and nature between the parties hereto arising out of or relating to

this Agreement relating to the existence, construction, validity,

interpretation or meaning, performance, non-performance, enforcement,

operation, breach, continuance or termination thereof shall be subject to a

non-binding arbitration mutually agreeable to the parties or, in the absence of

such mutual agreement, then subject to arbitration in accordance with the rules

of the American Arbitration Association, which arbitration shall be held in a

major city which is as close to both parties as possible.  It is the intent of the parties hereto and

the purpose of this provision to make the submission to arbitration of any

dispute or controversy arising hereunder an express condition precedent to any

legal or equitable action or proceeding of any nature whatsoever.




 




10.                                 This Agreement

may be executed in one or more counterparts, each of which shall be deemed an

original but all of which taken together shall constitute but one and the same

document. For purposes of executing this Agreement, a document signed and

transmitted by facsimile machine or telecopier is to be treated as an original

document.




 




11.                                 This Agreement

shall be binding upon, and inure to the benefit of, the parties hereto and

their respective heirs, representatives, successors, and assigns.




 




3





























 




IN WITNESS WHEREOF, the parties

hereto have executed and delivered this Agreement as of the date first above

written.




 




	

   


  	

  BUYER:  Gryphon

  Master Fund, L.P.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ E. B. Lyon IV


  
	

   


  	

  Printed:


  	

  E. B. Lyon IV


  
	

   


  	

   


  	

  Authorized Agent


  
				





 




 




	

   


  	

  SELLER:


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ Gerald G. Mercer


  
	

   


  	

  Printed:


  	

  Gerald G. Mercer


  
				





 




The undersigned, AirNet

Systems, Inc., has executed this Agreement for the limited purpose of being

bound by and subject to the provisions of Section 7 above and Exhibit III

attached hereto.




 




	

   


  	

  AIRNET SYSTEMS, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

  /s/ William R. Sumser


  
	

   


  	

  Title:


  	

  CFO


  
				





 




4





























 




EXHIBIT I




 




Form of Escrow Agreement




 




[See attached document]




 




 




I-1





























 




ESCROW AGREEMENT




 




This Escrow Agreement (the

“Agreement”) is made as of Dec. 26, 2002, by and among the persons and entities

who have executed signature pages hereto as “Buyers” (each, a “Buyer” and

collectively, the “Buyers”), Bank of Texas, NA (the “Escrow Agent”) and

Stonegate Securities, Inc. (“Stonegate”).




 




Recitals




 




1.                                       The Escrow

Agent has been advised that Stonegate is organized under the laws of the State

of Texas.




 




2.                                       Gerald G.

Mercer (“Seller”) has engaged Stonegate in connection with Seller’s proposed

sale (the “Offering”) of up to 733,200 shares (the “Offered Shares”) of

the common shares, par value $0.01 per share (the “Common Stock”), of AirNet

Systems, Inc., an Ohio corporation (the Company”).  The Offering will be made pursuant to Stock Purchase Agreements

between Seller and each Buyer, the form of which is attached hereto as Exhibit

A for reference.




 




3.                                       The Escrow

Agent has been advised that Stonegate, which is a member of the National

Association of Securities Dealers, Inc. proposes to offer the Offered Shares,

as agent of Seller.




 




4.                                       In compliance

with Rule 240.15c2-4 of the General Rules and Regulations under the Securities

Exchange Act of 1934, as amended, Stonegate proposes to establish an escrow

account (the “Escrow Account”) with the Escrow Agent.




 




5.                                       The Escrow

Agent is willing to establish the Escrow Account on the terms and subject to

the conditions hereinafter set forth.




 




Agreement




 




NOW, THEREFORE, in

consideration of the premises and mutual covenants contained herein, the

parties hereby agree as follows:




 




1.                                       Establishment

of Escrow Account. On or prior to the date of the commencement of the

Offering (the “Commencement Date”), Stonegate and the Escrow Agent shall

establish, and by execution of this Agreement hereby agree to establish, the

Escrow Account with the trust department of the Escrow Agent, which account

shall be entitled “Bank of Texas, NA as Escrow Agent for Gerald G. Mercer

[Insert Seller’s Name]”.




 




2.                                       Escrow Period.  The escrow (the “Escrow Period”) shall begin

on the Commencement Date and shall terminate on December 31, 2002, unless the

Escrow Agent is notified in writing by Stonegate that the Offering has been

terminated, at which time the Escrow Period shall terminate; provided, however,

that the Escrow Period shall not terminate until all Proceeds have been

disbursed or paid to a successor escrow agent pursuant to the terms of this Agreement.




 





























 




3.                                       Deposits in the

Escrow Account.




 




(a)                                  The gross

proceeds from the sale of the Offered Shares (the “Proceeds”) will be deposited

in the Escrow Account by Buyers with the Escrow Agent on the terms and

conditions hereinafter set forth.




 




(b)                                 The Offered

Shares are being offered and sold at a purchase price of $4.25 per share (the

“Purchase Price”).  The aggregate

Purchase Price for the Offered Shares shall be payable to the Escrow Agent

through wire transfers.  Upon request,

Stonegate will furnish the Escrow Agent with confirmation of a Buyer’s name,

address and amount of Offered Shares purchased.




 




(c)                                  The Proceeds

are to be held in escrow until disbursed in accordance with Section 4 below.




 




4.                                       Disbursements

from the Escrow Account.




 




(a)                                  The Escrow

Agent shall hold all the Proceeds in the Escrow Account until given instruments

in writing by Stonegate (with a copy to the Buyers) as to the disposition

thereof. A closing shall occur (a “Closing”), as to the purchase of any Offered

Shares by a Buyer, when the following occurs: (i) Stonegate advises the Escrow

Agent in writing that Stonegate has received: (1) a Purchase Agreement executed

by such Buyer, Seller and the Company; (2) a signature page of such Buyer to

this Agreement; (3) an executed Selling Stockholder Questionnaire (in the form

attached to the Purchase Agreement) from such Buyer; and (4) a written notice

from Buyer that Buyer has received a certificate representing the Offered

Shares purchased by such Buyer; and (ii) the Escrow Agent has received a wire

transfer from such Buyer equal to the aggregate Purchase Price for the Offered

Shares being purchased by such Buyer. 

Upon a Closing of the Offering, Escrow Agent will remit to Seller the

aggregate Purchase Price for the Offered Shares being purchased by such Buyer

less a placement agency fee to Stonegate as agreed to by Stonegate and Seller,

and as provided in writing to Escrow Agent by Stonegate, which fee shall be

remitted to Stonegate.




 




(b)                                 Notwithstanding

the provisions set forth in paragraph (a) above, at any time prior to the

expiration of the Escrow Period, Stonegate by written request, may direct the

Escrow Agent to refund to any prospective Buyer all or any portion of the

Proceeds received by the Escrow Agent from such potential Buyer (unless such

funds have been previously released in accordance with paragraph (a) above),

and the Escrow Agent shall, upon receipt of such written request, make such a

refund; provided, however, that in no event shall the Escrow Agent be obligated

to refund any amount to any prospective Buyer unless and until such amount is,

to the Escrow Agent’s satisfaction, available in cleared funds.




 




(c)                                  Upon the

disbursement of any Proceeds held in the Escrow Account pursuant to any of (a)

or (b) above, the Escrow Agent will be under no further responsibility with

respect to this Agreement. In this regard it expressly is agreed and understood

that in no event shall the aggregate amount of payments made by the Escrow

Agent exceed the amount of collected funds received by the Escrow Agent.




 




2





























 




5.                                       Rights, Duties,

and Responsibilities of Escrow Agent.




 




It is understood and agreed

that the duties of the Escrow Agent are purely ministerial in nature. It is

further agreed that:




 




(a)                                  The Escrow

Agent is not a party to, and is not bound by, or charged with notice of, any

agreement out of which this escrow may arise. The Escrow Agent shall not be

bound by any modification, amendment or revision of this Agreement unless the

same shall be in writing and signed by the parties hereto.




 




(b)                                 The Escrow

Agent acts hereunder as a depository only, and is not responsible or liable in

any manner whatever for the sufficiency, correctness, genuineness or validity

of the subject matter of the escrow, or any part thereof. Further, the Escrow

Agent shall not be responsible for determining (i) the accuracy of any notices

or instructions delivered hereunder, or the form of execution thereof, or (ii)

the identity or authority of any person executing or delivering this Agreement,

any property delivered hereunder, or any instructions delivered in connection

herewith.




 




(c)                                  In the event

the Escrow Agent becomes involved in any claim, controversies or legal

proceedings in connection with this escrow, Stonegate and Seller agree to

indemnify and save the Escrow Agent harmless from all loss, cost, damages,

expenses, including attorneys’ fees suffered or incurred by the Escrow Agent as

a result thereof.  Payment of such

costs, damages, expenses, or fees shall be paid by Seller or Stonegate within a

reasonable period of time not to exceed 30 days after billing. In the event

that payment is not received by the Escrow Agent within 30 days after billing,

the Escrow Agent’s costs, damages, expenses and fees may be deducted from the

amounts deposited in the Escrow Account. The obligations of Stonegate and

Seller under this paragraph shall be performable at the office of the Escrow

Agent in Dallas, Texas, and shall survive the termination of this Agreement for

any reason whatsoever.




 




(d)                                 The Escrow

Agent shall be protected in acting upon any written notice, request, waiver,

consent, certificate, receipt, authorization, power of attorney or other paper

or document which the Escrow Agent in good faith believes to be genuine and

what it purports to be.




 




(e)                                  The Escrow

Agent shall not be liable for anything that it may do or refrain from doing in

connection herewith, except its own gross negligence or willful misconduct.




 




(f)                                    The Escrow

Agent may, at its sole discretion, consult with legal counsel in the event of

any dispute or question as to the construction of any of the provisions hereof

or its duties hereunder, and it shall incur no liability and shall be fully

protected in acting in accordance with the opinion and instructions of such

counsel.  Seller and Stonegate agree to

reimburse the Escrow Agent for any legal fees incurred by the Escrow Agent in

connection with its serving as Escrow Agent hereunder.




 




(g)                                 In the event of

any disagreement between any of the parties to this Agreement, or between them

or any of them and any other person, resulting in adverse claims or demands

being made in connection with the subject matter of the escrow, or in the event

that the Escrow Agent, in good faith, is in doubt as to what action it should

take hereunder, the Escrow




 




3





























 




Agent may, at its option, refuse to comply

with any claims or demands on it, or refuse to take any other action hereunder,

so long as such disagreement continues or such doubt exists, and in any event,

the Escrow Agent shall not be or become liable in any way or to any person for

its failure or refusal to act, and the Escrow Agent shall be entitled to

continue so to refrain from acting until (i) the rights of all parties shall

have been fully and finally adjudicated by a court of competent jurisdiction,

or (ii) all differences shall have been settled and all doubt resolved by

agreement among all of the interested persons, and the Escrow Agent shall have

been notified thereof in writing signed by all such persons. The rights of the

Escrow Agent under this paragraph are cumulative of all other rights which it

may have by law or otherwise.




 




(h)                                 Notwithstanding

any other provision of this Agreement, should any controversy arise between the

undersigned with respect to this Agreement or with respect to the right to

receive the property or funds held by the Escrow Agent under this Agreement,

the Escrow Agent shall have the right to institute a bill of interpleader in a

court of competent jurisdiction to determine the rights of the parties and to

deposit such property or funds into the registry of the court.




 




(i)                                     Seller will pay

the Escrow Agent a set up fee of $2,000 for the normal services hereunder. In

addition, Seller will pay all reasonable legal fees, expenses, disbursements

and advances incurred or made by the Escrow Agent in the performance of its

services, provided, however, such expenses shall not exceed $2,500.




 




6.                                       Amendment;

Resignation.




 




(a)                                  This Agreement

and/or the terms of the Offering to the extent it affects this Agreement, may

be altered or amended only with the written consent of all of the parties

hereto.




 




(b)                                 Should

Stonegate attempt to change this Agreement and/or the terms of the Offering in

a manner which, in the Escrow Agent’s sole opinion, is undesirable, the Escrow

Agent may resign as escrow agent upon three days’ written notice to Stonegate,

Seller and the Buyers; otherwise, it may resign as escrow agent at any time

upon five days’ written notice to Stonegate, Seller and the Buyers.  In the case of the Escrow Agent’s

resignation, its only duty shall be to hold and dispose of the Escrow Account

in accordance with the original provisions of this Agreement until a successor

escrow agent shall be appointed, and written notice of the name and address of

such successor escrow agent shall be given to the Escrow Agent by Stonegate,

whereupon the Escrow Agent’s only duty shall be to pay over to the successor

escrow agent the Escrow Account, less any portion thereof previously paid out

in accordance with the Agreement.




 




7.                                       Investments.  The Escrow Agent will invest the escrowed

funds only as directed by Stonegate in writing. Stonegate acknowledges that any

investment instructions received by the Escrow Agent after 10:00 AM, Dallas,

Texas time, may not be effected until the next business day, and only to the

extent of escrowed funds actually received and collected at such time. It is

agreed that the Escrow Agent or one of its affiliate, may retain any such fees

which either are received with respect to the assets of the Escrow Account so

invested, and any conflict of interest which might arise from such investment

is waived.




 




4





























 




8.                                       Governing Law

and Assignment.  This Agreement

shall be construed in accordance with and governed by the laws of the State of

Texas, without regard to the conflict of laws provisions thereof, and shall be

binding upon the parties hereto and their respective successors and assigns;

provided, however, that any assignment or transfer by any party of its rights

under this Agreement or with respect to the Escrow Account shall be void as to

the Escrow Agent unless: a) written notice thereof shall be given to the Escrow

Agent, and b) the Escrow Agent shall have consented in writing to such

assignment or transfer.




 




9.                                       Notices.  Any notice, authorization, request or demand

required or permitted to be given hereunder shall be in writing. The Escrow

Agent shall be deemed to have delivered and given any notice or other item

required to be delivered under this Agreement upon the deposit thereof by the

Escrow Agent in the U.S. mail by registered or certified mail, postage prepaid

or sent by overnight delivery, local delivery, or by facsimile and addressed as

follows:




 








	

  Broker:


  	

  Stonegate Securities, Inc.


  
	

   


  	

  Attn: Jesse Shelmire


  
	

   


  	

  5950 Sherry Lane, Suite

  410


  
	

   


  	

  Dallas, Texas  75225


  
	

   


  	

  Telephone:


  	

  214-987-4121


  
	

   


  	

  Facsimile:


  	

  214-987-1981


  










 




 








	

  Copy to:


  	

  Richard F. Dahlson


  
	

   


  	

  Jackson Walker L.L.P.


  
	

   


  	

  2435 N. Central

  Expressway, Suite 600


  
	

   


  	

  Richardson, Texas  75080


  










 




 








	

  Buyers:


  	

  At the addresses listed on

  each Buyer’s signature page to this Agreement 


  










 




Any notice, instruction or other item to the

Escrow Agent shall be deemed to have been given only when received by the

Escrow Agent. Such notice may be given by any accepted means of communication

including but not limited to in person, by telegram or by U.S. mail or sent by

overnight delivery, local delivery service or by facsimile transmission at the

following address:




 








	

  Escrow Agent:


  	

  Bank of Texas, NA


  
	

   


  	

  Attn: Mr. John E. Wyne


  
	

   


  	

  5956 Sherry Lane, Suite

  1100


  
	

   


  	

  Dallas, Texas 75225


  
	

   


  	

  Telephone:


  	

  214 987-8833


  
	

   


  	

  Facsimile:


  	

  214 987-8890


  










 




A U.S. post office registered or certified

mail receipt showing delivery as aforesaid, or delivery service receipt showing

delivery as aforesaid shall be conclusive evidence of the date and fact of

delivery. Any party hereto may change the address to which notices are to be

delivered by giving to the other parties not less than ten days’ written notice

thereof.




 




5





























 




10.                                 Severability.  If any provision of the Agreement or the

application thereof to any person or circumstance shall be determined to be

invalid or unenforceable, the remaining provisions of this Agreement or the

application of such provision to persons or circumstances other than those to

which it is held invalid or unenforceable shall not be affected thereby and

shall be valid and enforceable to the fullest extent permitted by law.




 




11.                                 Execution in

Counterparts.  This

Agreement may be executed in counterparts or by separate instruments, and all

of such counterparts and instruments shall constitute one agreement, binding on

all of the parties hereto.




 




12.                                 Pronouns.  All pronouns and any variations thereof

shall be deemed to refer to the masculine, feminine, neuter, singular or plural

as the context may require.




 




13.                                 Captions.  All captions are for convenience only and

shall not limit or define the text thereof.




 




14.                                 Entire

Agreement.  This

Agreement constitutes the entire agreement among the parties hereto with

respect to the subject matter hereof and supersedes all prior agreement and

understandings (written or oral) of the parties in connection herewith.




 




IN WITNESS WHEREOF, the

undersigned have executed this Agreement as of the day first above written.




 




	

   


  	

  STONEGATE SECURITIES, INC.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Printed Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
					





 




 




	

   


  	

  BANK OF TEXAS, N.A.


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Printed Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
					





 




 




	

   


  	

  Buyers:


  
	

   


  	

   


  
	

   


  	

  [See attached signature

  pages]


  





 




6





























 




SIGNATURE PAGE OF




BUYER




TO ESCROW AGREEMENT




 




This Signature Page to the

Escrow Agreement, by and among Gerald G. Mercer [Seller’s name], Gryphon

Master Fund [Buyer’s name], the other persons and entities who have

executed signature pages hereto as “Buyers”, Bank of Texas, NA and Stonegate

Securities, Inc., is hereby executed by the undersigned, as a “Buyer”, as of

the date of the Escrow Agreement.




 




	

   


  	

  If an individual:


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Printed Name:


  	

   


  
	

   


  	

   


  
	

   


  	

  If a legal entity:  Gryphon Master Fund, LP


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  (type

  in name):


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  Address:


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
					





 




7





























 




EXHIBIT II




 




Selling Stockholder Questionnaire




 




[See attached document]




 




 




II-1





























 




SELLING STOCKHOLDER QUESTIONNAIRE




 




Information Required for




Registration of Shares of Airnet Systems, Inc.




 




The following information is

required in order to register the common stock of AirNet Systems, Inc. (the

“Company”) that you recently purchased or are in the process of purchasing from

Gerald G. Mercer (“Seller”). 

Under the terms of that purchase, the Company has granted to you certain

registration rights.  In order to

conduct such a registration, please provide the information requested below to

the Company.  Terms set forth in bold

are defined below.




 




I.                                         Please list the

Equity

Securities of the Company or any of its subsidiaries which you or

any Associate

of yours owned on the date hereof either of record or Beneficially. Please list

separately the Equity Securities you beneficially owned before the current

private placement, and the Equity Securities you purchased or are

purchasing in the current private placement. 

Please name each Associate owning any such securities.




 




ANSWER:




 




On the date hereof such ownership was as

follows:




 




	

  Issuer and

  Description of Security


  	

   


  	

  Number of shares (or


  principal amount)


  registered on the


  books of the Company


  in my name of which I


  am the beneficial


  owner


  	

   


  	

  Number of shares (or


  principal amount)


  registered on the books


  of the Company in my


  name of which I am not


  the beneficial owner


  	

   


  	

  Number of shares (or


  principal amount)


  beneficially owned by


  me but not registered in


  my name


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Company Common Stock

  (shares owned before current private placement)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Company Common Stock

  (shares being purchased in current private placement)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Other:


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




Equity Securities Beneficially Owned by the

following Associates:




 




	

  Name of

  Associate


  	

   


  	

  Issuer and

  Description of Security


  	

   


  	

  Number of

  Shares (or Principal Amount)


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




For the shares listed above please provide

the names and titles of any person who shares voting and/or investment power

and indicate the number of shares covered.




 





























 




	

  Name of

  Person


  	

   


  	

  Issuer and

  Description


  	

   


  	

  Number of

  Shares (or Principal


  Amount)


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




Associate is defined as:




 




a.                                       Any corporation

or organization of which you are an executive officer, director, a nominee for

election as director or partner or in which you are, directly or indirectly,

the beneficial owner of 10% or more of any class of equity securities;




 




b.                                      Any trust or

other estate in which you have a substantial beneficial interest or as to which

you serve as a trustee or in a similar fiduciary capacity; and 




 




c.                                       Your immediate

family, including your spouse, parents, children, siblings, mothers and

fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law.




 




Beneficially Owned securities

include, in general, the following:




 




a.                                       securities held

by you for your own benefit, whether in bearer form, registered in your own

name, or otherwise;




 




b.                                      securities held

by another for your benefit (regardless of how they were registered), such as,

for example, securities held for you by custodians, brokers, relatives,

trustees (including trusts in which you have only a remainder interest),

securities held for your account by pledgees, shares owned by a partnership in

which you are a partner, and shares owned by a corporation controlled by you; 




 




c.                                       securities from

which you obtain benefits substantially equivalent to the benefits of

ownership, such as, for example, securities held by your spouse, your minor

children, or by your relatives or relatives of your spouse with whom you share

your home, if income from the securities is applied to maintain the common

home, is used to meet expenses which you would otherwise meet from other

sources, or in any other way results in your obtaining benefits substantially

equivalent to ownership; and




 




d.                                      securities as

to which you have investment or voting power; but would not ordinarily include:




 




(i)                                     securities held

by you for the benefit of someone else; or




 




(ii)                                  securities held

by your relatives or relatives of your spouse other than those listed in (c)

above, unless by reason of a contract, understanding, relationship, agreement,

or other arrangement you have benefits substantially equivalent to ownership or

have the power to revest full legal or other title to yourself without payment

of other than a nominal consideration.




 




II.                                     State whether

some or all of the shares legally or beneficially owned by you or an Associate

have, directly or indirectly, been sold, offered for sale, contracted for sale,

or are subject to any purchase option or other method of transfer or disposition.  If such a sale, transfer, or disposition has

been made with respect to any of the Shares, provide a written agreement

evidencing the sale, transfer or other disposition.




 




2





























 




III.                                 Describe your intended

method of disposition of the shares after registration.




 




IV.                                List any

position, office, or other material relationship which you have had within the

past three years with the Company.




 




V.                                    Pursuant to the

“Selling Stockholder” section of any registration statement, please state your

or your organization’s name exactly as it should appear in such registration

statement:




 




 




 




The foregoing statements are

true and accurate to the best of my information and belief, and I will notify

the Company of any change in the foregoing answers.




 




	

  FOR INDIVIDUAL(S)


  	

   


  	

  FOR CORPORATIONS, PARTNERSHIP OR


  TRUSTS 


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

  Gryphon Master Fund, L.P.


  
	

  (A)


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Name

  of Buyer [Please Print]


  	

   


  	

  Name

  of Buyer [Please Print]


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  Signature


  	

   


  	

  Title:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  (B)


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  Name

  of Buyer [Please Print]


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  Signature


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  FOR ALL

  BUYERS:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Date and Place of

  Execution:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Date:


  	

   


  	

   


  	

   


  	

  Place:


  	

   


  	

   


  
										





 




3





























 




EXHIBIT III




 




Registration Rights




 




1.                                       Definitions.




 




(a)                           As used in this

Exhibit III, the following terms shall have the meanings specified

below:




 




(i)                          “Affiliate,” of any specified Person means any other Person who

directly, or indirectly through one or more intermediaries, is in control of,

is controlled by, or is under common control with, such specified Person.  For purposes of this definition, control of

a Person means the power, directly or indirectly, to direct or cause the

direction of the management and policies of such Person whether by contract,

securities ownership or otherwise; and the terms “controlling” and “controlled”

have the respective meanings correlative to the foregoing.




 




(ii)                       “Commission” means the Securities and Exchange Commission.




 




(iii)                    “Exchange Act”

means the Securities Exchange Act of 1934, as amended, and the rules and

regulations of the Commission thereunder, or any similar successor statute.




 




(iv)                   “Investors” means all persons and entities purchasing Offered

Shares from Seller pursuant to the terms and conditions of the Agreement or

Stock Purchase Agreements in form and substance substantially similar to the

Agreement and any permitted transferee or assignee of Registrable Securities

who agrees to become bound by all of the terms and provisions of this Exhibit

III and the applicable Stock Purchase Agreement.




 




(v)                      “Person” means any individual, partnership, corporation,

limited liability company, joint stock company, association, trust,

unincorporated organization, or a government agency or political subdivision

thereof.




 




(vi)                   “Prospectus” means the prospectus (including any preliminary

prospectus and/or any final prospectus filed pursuant to Rule 424(b) under the

Securities Act and any prospectus that discloses information previously omitted

from a prospectus filed as part of an effective registration statement in

reliance on Rule 430A under the Securities Act) included in the Registration

Statement, as amended or supplemented by any prospectus supplement with respect

to the terms of the offering of any portion of the Registrable Securities covered

by the Registration Statement and by all other amendments and supplements to

such prospectus, including all material incorporated by reference in such

prospectus and all documents filed after the date of such prospectus by the

Company under the Exchange Act and incorporated by reference therein.




 




III-1





























 




(vii)                “Public Offering” means a firm commitment underwritten

offering registered with the Commission and the appropriate state securities

commissions by the Company of its Common Stock and made pursuant to the

Securities Act.




 




(viii)             “Registrable Securities” means the Offered Shares

purchased by Investors; provided, however, a share of Common Stock shall cease

to be a Registrable Security for purposes of this Exhibit III when it no

longer is a Restricted Security.




 




(ix)                     “Registration Statement” means a registration

statement of the Company filed on Form S-3 under the Securities Act providing

for the registration of, and the sale on a continuous or delayed basis by the

holders of, all of the Registrable Securities pursuant to Rule 415 under the

Securities Act, including the Prospectus contained therein and forming a part

thereof, any amendments to such registration statement and supplements to such

Prospectus, and all exhibits and other material incorporated by reference in

such registration statement and Prospectus. 

In the event that Form S-3 is unavailable for such a registration, the

Company shall use such other form as is available for such a registration.




 




(x)                        “Restricted Security” means any share of Common

Stock except any that (i) has been registered pursuant to an effective

registration statement under the Securities Act and sold in a manner

contemplated by the prospectus included in such registration statement, (ii)

has been transferred in compliance with the resale provisions of Rule 144 under

the Securities Act (or any successor provision thereto) or is transferable

pursuant to paragraph (k) of Rule 144 under the Securities Act (or any

successor provision thereto), or (iii) otherwise has been transferred and a new

share of Common Stock not subject to transfer restrictions under the Securities

Act has been delivered by or on behalf of the Company.




 




(xi)                     “Securities Act” means the Securities Act of 1933, as

amended, and the rules and regulations of the Commission thereunder, or any

similar successor statute.




 




(xii)                  “Stock Purchase Agreements” means the Stock Purchase

Agreement to which this Exhibit III is attached and the other stock purchase

agreements executed as part of the Offering (as defined in the Stock Purchase

Agreement).




 




(b)                       All capitalized

terms used and not defined herein have the respective meaning assigned to them

in the Agreement to which this Exhibit III is attached.




 




2.                                       Registration.




 




(a)                                  Filing and

Effectiveness of Registration Statement.  The Company shall prepare and file with the Commission not later

than thirty business days following the final closing (the “Final Closing”) of

sales of Offered Shares under the Offering (the “Filing Deadline”) a

Registration Statement relating to the offer and sale of the Registrable

Securities by the Investors and shall use all commercially reasonable efforts

to cause the Commission to declare such Registration Statement effective under

the Securities Act as promptly as practicable, but not later than 90 days after

the Final Closing.  If the Final Closing

has not occurred by December 26, 2002, then it shall be deemed to have

otherwise occurred on December 26, 2002. 

All of the




 




III-2





























 




shares of Common Stock sold in the Offering

shall be included in such Registration Statement; provided, however, that the

Company shall not be required to include in the Registration Statement

Registrable Securities of any Investor who has failed to provide the Company

with the information pertaining to such Investor that is required to be

included in such Registration Statement pursuant to Item 507 and/or Item 508 of

Regulation S-K.  The Company shall

notify the Investors in writing by telecopy or e-mail notice that such

Registration Statement has been declared effective by the Commission on the

date of such declaration by the Commission. 

The Company agrees to keep such Registration Statement effective until

the earlier of: (i) the passage of thirty months from the effective date of

such Registration Statement; or (ii) the date on which all Registrable

Securities may be resold by all Investors by reason of Rule 144(k) under the

Securities Act or any other rule of similar effect.




 




(b)                                 Piggyback

Registration Rights.  (i)

Without limiting the obligations of the Company pursuant to Section 2(a) above,

until such date as the Registration Statement to be filed in accordance with

Section 2(a) is declared effective by the Commission, if the Company proposes

to register any of its Common Stock or any other shares of common stock of the

Company under the Securities Act (other than a registration (A) on Form S-8 or

S-4 or any successor or similar forms, (B) relating to Common Stock or any

other shares of common stock of the Company issuable upon exercise of employee

or consultant share options or in connection with any employee benefit or

similar plan of the Company or (C) in connection with a direct or indirect

acquisition by the Company of another Person or any transaction with respect to

which Rule 145 (or any successor provision) under the Securities Act applies),

whether or not for sale for its own account, it will each such time, give

prompt written notice at least 20 days prior to the anticipated filing date of

the registration statement relating to such registration to the Investors,

which notice shall set forth such Investors’ rights under this Section 2(c) and

shall offer the Investors the opportunity to include in such registration

statement such number of Registrable Securities as the Investors may

request.  Upon the written request of an

Investor made within 10 days after the receipt of notice from the Company

(which request shall specify the number of Registrable Securities intended to

be disposed of by such Investors), the Company will use all reasonable

commercial efforts to effect the registration under the Securities Act of all

Registrable Securities that the Company has been so requested to register by

the Investors, to the extent requisite to permit the disposition of the

Registrable Securities to be so registered; provided, however, that (A) if such

registration involves a Public Offering, the Investors must sell their

Registrable Securities to the underwriters on the same terms and conditions as

apply to the Company and (B) if, at any time after giving written notice of its

intention to register any Common Stock pursuant to this Section 2(b) 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

such Common Stock, the Company shall give written notice to the Investors and,

thereupon, shall be relieved of its obligation to register any Registrable

Securities in connection with such registration.  The Company’s obligations under this Section 2(b) shall terminate

on the date that the Registration

Statement to be filed in accordance with Section 2(a)

is declared effective by the Commission. (ii) If a registration pursuant to

this Section 2(b) involves a Public Offering and the managing underwriter

thereof advises the Company that, in its view, the number of shares of Common

Stock, if any, or other shares of Common Stock that the Company and the

Investors intend to include in such registration exceeds the largest number of

shares of Common Stock (including any other shares of Common Stock or warrants

of the Company) that can be sold without having a material adverse effect on

such Public Offering (the “Maximum




 




III-3





























 




Offering Size”), the Company will include in

such registration only that number of shares of Common Stock which does not

exceed the Maximum Offering Size, in the following order of priorities: (1)

first, all securities the Company proposes to sell for its own account, (2)

second, up to the full number of securities proposed to be registered for the

account of the holders of securities entitled to inclusion of their securities

in the Registration Statement by reason of demand registration rights, and (3)

third, the securities requested to be registered by other holders of securities

entitled to participate in the registration, drawn from them pro-rata based on

the number of shares each has requested to be included in such registration and

the Investors pursuant to this Exhibit III.




 




If as a result of the

proration provisions of this Section 2(b), the Investors

are not entitled to include all such Registrable Securities in such

registration, such Investors may elect to withdraw their request to include any

Registrable Securities in such registration.




 




Notwithstanding the

foregoing, the Company shall have no obligations under this Section 2(b) hereof

at any time that such Registrable Securities are the subject of an effective

registration statement.




 




3.                                       Obligations of the Company.  In connection with the registration of the

Registrable Securities, the Company shall use all commercially  reasonable efforts to:




 




(a)                                  Subject to the

provisions of Section 3(q) hereof, promptly (i) prepare and file with the

Commission such amendments (including post-effective amendments) to the

Registration Statement and supplements to the Prospectus as may be necessary to

keep the Registration Statement continuously effective and in compliance with

the provisions of the Securities Act applicable thereto so as to permit the

Prospectus forming part thereof to be current and useable by Investors for

resales of the Registrable Securities for a period of thirty months from the

date the Registration Statement is first declared effective by the Commission

(the “Effective Time”) or such shorter period that will terminate when all the

Registrable Securities covered by the Registration Statement have been sold

pursuant thereto in accordance with the plan of distribution provided in the

Prospectus or otherwise cease to be Registrable Securities (the “Registration

Period”) and (ii) take all lawful action such that each of (A) the Registration

Statement and any amendment thereto does not, when it becomes effective,

contain an 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, not

misleading and (B) the Prospectus forming part of the Registration Statement,

and any amendment or supplement thereto, does not at any time during the

Registration Period include an 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 light of the circumstances under which they were made,

not misleading.  Notwithstanding the

foregoing, the Company’s obligations hereunder shall terminate as to any

investor at such time as that Investor’s Registrable Securities can be sold

under Rule 144(k);




 




(b)                                 During the

Registration Period, comply with the provisions of the Securities Act with

respect to the Registrable Securities of the Company covered by the

Registration Statement until such time as all of such Registrable Securities

have been disposed of in accordance with the intended methods of disposition by

the Investors as set forth in the Prospectus forming part of the Registration

Statement;




 




III-4





























 




(c)                                  (i) Prior to

the filing with the Commission of any Registration Statement (including any

amendments thereto) and the distribution or delivery of any Prospectus

(including any supplements thereto), provide draft copies thereof (including a

copy of the accountant’s consent letter to be included in the filing) to the

Investors and Stonegate Securities, Inc. (“Stonegate”) and reflect in such

documents all such comments as the Investors and Stonegate reasonably may

propose (including comments as to the Investors’ plans of distribution); and

(ii) furnish to Stonegate for delivery to each Investor whose Registrable

Securities are included in the Registration Statement, (A) promptly after the

same is prepared and publicly distributed, filed with the Commission, or

received by the Company, one copy of the Registration Statement, each

Prospectus, and each amendment or supplement thereto, and (B) such number of

copies of the Prospectus and all amendments and supplements thereto and such

other documents, as such Investor may reasonably request in order to facilitate

the disposition of the Registrable Securities owned by such Investor;




 




(d)                                 (i) Register or

qualify the Registrable Securities covered by the Registration Statement under

such securities or “blue sky” laws of all jurisdictions requiring blue sky

registration or qualification, (ii) prepare and file in such jurisdictions such

amendments (including post-effective amendments) and supplements to such

registrations and qualifications as may be reasonably necessary to maintain the

effectiveness thereof at all times during the Registration Period, (iii) take

all such other lawful actions as may be reasonably necessary to maintain such

registrations and qualifications in effect at all times during the Registration

Period, and (iv) take all such other lawful 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 with any of its obligations under this Section 3(d) to (A) qualify to do business in any jurisdiction where it

would not otherwise be required to qualify but for this Section 3(d), (B)

subject itself to general taxation in any such jurisdiction or (C) file a

general consent to service of process in any such jurisdiction;




 




(e)                                  As promptly as

practicable after becoming aware of such event, notify each Investor of the

occurrence of any event, as a result of which the Prospectus included in the

Registration Statement, as then in effect, includes an untrue statement of a

material fact or omits to state a material fact required to be stated therein

or necessary to make the statements therein, in light of the circumstances

under which they were made, not misleading, and promptly prepare an amendment

to the Registration Statement and supplement to the Prospectus to correct such

untrue statement or omission, and deliver a number of copies of such supplement

and amendment to each Investor as such Investor may reasonably request;




 




(f)                                    Notify each

Investor who holds Registrable Securities being sold (or, in the event of an

underwritten offering, the managing underwriters) of the issuance by the

Commission of any stop order or other suspension of the effectiveness of the

Registration Statement on the date of receipt of any such stop order or other

suspension, and take all lawful action to effect the withdrawal, recession or

removal of such stop order or other suspension;




 




(g)                                 Cause all the

Registrable Securities covered by the Registration Statement to be listed, not

later than the date that Registration Statement is declared effective by the

Commission, on a principal national

securities exchange, or included in an inter-dealer quotation system of a

registered national securities association, on or in which securities of the

same class




 




III-5





























 




or series issued by the Company are then

listed or included; deliver to the New York Stock Exchange copies of the

Prospectus that constitute part of the effective Registration Statement in

satisfaction of Rule 153 under the Securities Act; and use reasonable best

efforts during the Registration Period to continue to meet the requirements for

use of Form S-3 for registration of its shares;




 




(h)                                 Maintain a

transfer agent and registrar, which may be a single entity, for the Registrable

Securities not later than the effective date of the Registration Statement;




 




(i)                                     Reasonably

cooperate with the Investors who hold Registrable Securities being offered to

facilitate the timely preparation and delivery of certificates for the

Registrable Securities to be offered pursuant to the Registration

Statement and enable such

certificates for the Registrable Securities to be in such denominations or

amounts, as the case may be, as the Investors reasonably may request and

registered in such names as the Investors

may request; and, within three business days after a registration statement

which includes Registrable Securities is declared effective by the Commission,

deliver and cause legal counsel selected by the Company to deliver to the

transfer agent for the Registrable Securities (with copies to the Investors

whose Registrable Securities are included in such registration statement) an

appropriate instruction and, to the extent necessary, an opinion of such

counsel;




 




(j)                                     Take all such

other lawful actions reasonably necessary to expedite and facilitate the

disposition by the Investors of their Registrable Securities in accordance with

the intended methods therefor provided in the Prospectus which are customary

under the circumstances;




 




(k)                                  Make generally

available to its security holders as soon as practicable, but in any event not

later than three (3) months after (i) the effective date (as defined in Rule

158(c) under the Securities Act) of the Registration Statement, and (ii) the

effective date of each post-effective amendment to the Registration Statement,

as the case may be, an earnings statement of the Company and its subsidiaries

complying with Section 11(a) of the Securities Act and the rules and

regulations of the Commission thereunder (including, at the option of the

Company, Rule 158);




 




(l)                                     In the event of

an underwritten offering, promptly include or incorporate in a Prospectus

supplement or post-effective amendment to the Registration Statement such

information as the managers reasonably agree should be included therein and to

which the Company does not reasonably object and make all required filings of

such Prospectus supplement or post-effective amendment as soon as practicable

after it is notified of the matters to be included or incorporated in such

Prospectus supplement or post-effective amendment;




 




(m)                               In connection

with any underwritten offering, make such representations and warranties to the

Investors participating in such underwritten offering and to the managers, in

form, substance and scope as are customarily made by the Company to

underwriters in secondary underwritten offerings;




 




(n)                                 In connection

with any underwritten offering, obtain opinions of counsel to the Company

(which counsel and opinions (in form, scope and substance) shall be reasonably

satisfactory to the managers) addressed to the underwriters, covering such

matters as are




 




III-6





























 




customarily covered in opinions requested in

secondary underwritten offerings (it being agreed that the matters to be

covered by such opinions shall include, without limitation, as of the date of

the opinion and as of the date the Registration Statement is first declared

effective or most recent post- effective amendment

thereto, as the case may be, the absence from the Registration Statement and

the Prospectus, including any documents incorporated by reference therein, of

an untrue statement of a material fact or the omission of a material fact

required to be stated therein or necessary to make the statements therein (in

the case of the Prospectus, in light of the circumstances under which they were

made) not misleading, subject to customary limitations);




 




(o)                                 In connection

with any underwritten offering, obtain “cold comfort” letters and updates

thereof from the independent public accountants of the Company (and, if

necessary, from the independent public accountants of any subsidiary of the

Company or of any business acquired by the Company, in each case for which

financial statements and financial data are, or are required to be, included in

the Registration Statement), addressed to each underwriter participating in

such underwritten offering (if such underwriter has provided such letter,

representations or documentation, if any, required for such cold comfort letter

to be so addressed), in customary form and covering matters of the type

customarily covered in “cold comfort” letters in connection with secondary

underwritten offerings;




 




(p)                                 In connection

with any underwritten offering, deliver such documents and certificates as may

be reasonably required by the managers, if any;




 




(q)                                 Notwithstanding

anything to the contrary in Section 3, at any time after the Registration

Statement has been declared effective, the Company may delay the 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 and its counsel, in the best interest of the Company (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 and the date on which the Grace Period will begin, and (ii) notify

the Investors in writing in advance of, or on the same date on which, the Grace

Period ends; and, provided further, that during the Registration Period, there

shall be only three Grace Periods (not to exceed 30 days each) nor more than

one Grace Period (not to exceed 30 days each) in any six-month period.  For purposes of determining the length of a

Grace Period above, the Grace Period shall begin on and include the date the

holders receive the notice referred to in clause (i) and shall end on and

include the date specified as the Grace Period ending date in the notice

referred to in clause (ii).




 




Notwithstanding the

foregoing, the Company shall have no obligations under Section 3(l) through (p)

unless it is effecting an underwritten offering pursuant to Section 2(b).




 




4.                                       Obligations of the Investors.  In connection with the registration of the

Registrable Securities, the Investors shall have the following obligations,

which obligations shall be several and not joint:




 




(a)                                  It shall be a

condition precedent to the obligations of the Company to complete the

registration pursuant to this Exhibit III with respect to the

Registrable Securities of a particular Investor that such Investor shall

furnish to the Company such information regarding




 




III-7





























 




itself, the Registrable Securities held by it

and the intended method of disposition of the Registrable Securities held by it

as shall be reasonably required to effect the registration of such Registrable

Securities and shall execute such documents in connection with such

registration as the Company may reasonably request.  At least ten business days prior to the first anticipated filing

date of the Registration Statement, the Company shall notify each Investor of

the information the Company requires from each such Investor (the “Requested

Information”) if such Investor elects to have any of its Registrable Securities

included in the Registration Statement.




 




(b)                                 Each Investor

by its acceptance of the Registrable Securities agrees to cooperate in all

reasonable respects with the Company in connection with the preparation and

filing of the Registration Statement hereunder, unless such Investor has

notified the Company in writing of its election to exclude all of its

Registrable Securities from the Registration Statement;




 




(c)                                  As promptly as

practicable after becoming aware of such event, notify the Company of the

occurrence of any event, as a result of which the Prospectus included in the

Registration Statement, as then in effect, includes an untrue statement of a

material fact or omits to state a material fact required to be stated therein

or necessary to make the statements therein, in light of the circumstances

under which they were made, not misleading; and




 




(d)                                 Each Investor

agrees that, upon receipt of any notice from the Company of the occurrence of

any event of the kind described in Section 3(e) or 3(f), it shall immediately

discontinue its disposition of Registrable Securities pursuant to the

Registration Statement covering such Registrable Securities until such Investor’s

receipt of the copies of the supplemented or amended Prospectus contemplated by

Section 3(e) and, if so directed by the Company, such Investor shall deliver to

the Company (at the expense of the Company) or destroy (and deliver to the

Company a certificate of destruction) all copies in such Investor’s possession,

of the Prospectus covering such Registrable Securities current at the time of

receipt of such notice.




 




5.                                       Expenses of Registration.  All expenses, other than underwriting

discounts and commissions arising from sales of Registrable Securities,

incurred in connection with registrations, filings or qualifications pursuant

to Section 3, but including, without limitation, all registration, listing, and

qualifications fees, printing and engraving fees, accounting fees, and the fees

and disbursements of counsel for the Company, and the reasonable fees, not to

exceed $5,000.00, of one legal counsel, who will represent all of the

holders of the Registrable Securities shall be borne by the Company (as

selected by holders of a majority of the Registrable Securities being

registered pursuant to Section 3).




 




6.                                       Indemnification and

Contribution.




 




(a)                                  The Company

shall indemnify and hold harmless each Investor and each underwriter, if any,

which facilitates the disposition of Registrable Securities, and each of their

respective officers and directors, trustees, employees, advisors, legal counsel

and accountants and each person who controls such Investor or underwriter

within the meaning of Section 15 of the Securities Act or Section 20 of the

Exchange Act (each such person being sometimes hereinafter referred to as an

“Indemnified Person”) from and against any losses, claims, damages




 




III-8





























 




or liabilities, joint or several, to which

such Indemnified Person may become subject under the Securities Act or

otherwise, insofar as such losses, claims, damages or liabilities (or actions

in respect thereof) arise out of or are based upon an untrue statement or alleged

untrue statement of a material fact contained in any Registration Statement or

an omission or alleged omission to state therein a material fact required to be

stated therein or necessary to make the statements therein, not misleading, or

arise out of or are based upon an untrue statement or alleged untrue statement

of a material fact contained in any Prospectus or an omission or alleged

omission to state therein 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; and the Company hereby agrees to

reimburse such Indemnified Person for all reasonable legal and other expenses

incurred by them in connection with investigating or defending any such action

or claim as and when such expenses are incurred; provided, however, that the

Company shall not be liable to any such Indemnified Person in any such case to

the extent that any such loss, claim, damage or liability arises out of or is

based upon (i) an untrue statement or alleged untrue statement made in, or an

omission or alleged omission from, such Registration Statement or Prospectus in

reliance upon and in conformity with written information furnished to the

Company by such Indemnified Person expressly for use therein or (ii) in the

case of the occurrence of an event of the type specified in Section 3(e), the

use by the Indemnified Person of an outdated or defective Prospectus after the

Company has provided to such Indemnified Person written notice that such

Prospectus is outdated or defective.




 




(b)                                 Indemnification

by the Investors and Underwriters.  Each Investor agrees, as a consequence of the inclusion of any of

its Registrable Securities in a Registration Statement, and each underwriter,

if any, which facilitates the disposition of Registrable Securities shall

agree, as a consequence of facilitating such disposition of Registrable

Securities, severally and not jointly, to (i) indemnify and hold harmless the

Company, its directors (including any person who, with his or her consent, is

named in the Registration Statement as a director nominee of the Company), its

officers, employees, advisors, legal counsel and accountants and each person,

if any, who controls the Company within the meaning of either Section 15 of the

Securities Act or Section 20 of the Exchange Act, against any losses, claims,

damages or liabilities to which the Company or such other persons may become

subject, under the Securities Act or otherwise, insofar as such losses, claims,

damages or liabilities (or actions in respect thereof) arise out of or are

based upon: (y) an untrue statement or alleged untrue statement of a material

fact contained in such Registration Statement or Prospectus or arise out of or

are based upon the omission or alleged omission to state therein a material

fact required to be stated therein or necessary to make the statements therein

(in light of the circumstances under which they were made, in the case of the

Prospectus), not misleading, in each case to the extent, but only to the

extent, that such untrue statement or alleged untrue statement or omission or

alleged omission was made in reliance upon and in conformity with written

information furnished to the Company by such Investor or underwriter expressly

for use therein; or (z) in the case of the occurrence of an event of the type

specified in Section 3(e) above, the use by the Indemnified Person of an

outdated or defective Prospectus after the Indemnified Person has received from

the Company written notice that such Prospectus is outdated or defective;

provided, however, that no Investor or underwriter shall be liable under this

Section 6(b) for any amount in excess of the net proceeds paid to such Investor

or underwriter in respect of shares sold by it; and (ii)

reimburse the Company for any reasonable legal or other expenses incurred by

the Company in connection with investigating or defending any such action or

claim as such expenses are incurred.




 




III-9





























 




(c)                                  Notice of

Claims, Etc.  Promptly

after receipt by a party seeking indemnification pursuant to this Section 6 (an

“Indemnified Party”) of written notice of any investigation, claim, proceeding

or other action in respect of which indemnification is being sought (each, a

“Claim”), the Indemnified Party shall notify the party against whom

indemnification pursuant to this Section 6 is being sought (the “Indemnifying

Party”) of the commencement thereof; but the omission to so notify the

Indemnifying Party shall not relieve it from any liability that it otherwise

may have to the Indemnified Party, except to the extent that the Indemnifying

Party is materially prejudiced and forfeits substantive rights and defenses by

reason of such failure.  In connection

with any Claim as to which both the Indemnifying Party and the Indemnified

Party are parties, the Indemnifying Party shall be entitled to assume the

defense thereof.  Notwithstanding the

assumption of the defense of any Claim by the Indemnifying Party, the Indemnified

Party shall have the right to employ one separate legal counsel and to

participate in the defense of such Claim, and the Indemnifying Party shall bear

the reasonable fees, out-of-pocket costs and expenses of such separate legal

counsel to the Indemnified Party if (and only if): (i) the Indemnifying Party shall have agreed to pay such fees,

costs and expenses, (ii)  counsel

to the Indemnified Party shall reasonably have concluded that representation of

the Indemnified Party and the Indemnifying Party by the same legal counsel

would not be appropriate due to actual or, as reasonably determined by legal

counsel to the Indemnified Party, potentially differing interests between such

parties in the conduct of the defense of such Claim, or if there may be legal

defenses available to the Indemnified Party that are in addition to or

disparate from those available to the Indemnifying Party, or (iii) the Indemnifying Party shall have failed to employ legal

counsel reasonably satisfactory to the Indemnified Party within a reasonable

period of time after notice of the commencement of such Claim.  If the Indemnified Party employs separate

legal counsel in circumstances other than as described in clauses (i), (ii) or (iii)

above, the fees, costs and expenses of such legal counsel shall be borne

exclusively by the Indemnified Party. 

Except as provided above, the Indemnifying Party shall not, in

connection with any Claim in the same jurisdiction, be liable for the fees and

expenses of more than one firm of counsel for the Indemnified Party (together

with appropriate local counsel).  The

Indemnified Party shall not, without the prior written consent of the

Indemnifying Party (which consent shall not unreasonably be withheld), settle

or compromise any Claim or consent to the entry of any judgment that does not

include an unconditional release of the Indemnifying Party from all liabilities

with respect to such Claim or judgment.




 




(d)                                 Contribution.  If the indemnification provided for in this

Section 6 is unavailable to or insufficient to hold harmless an Indemnified

Person under subsection (a) or (b) above in respect of any losses, claims,

damages or liabilities (or actions in respect thereof) referred to therein,

then each Indemnifying Party shall contribute to the amount paid or payable by

such Indemnified Party as a result of such losses, claims, damages or

liabilities (or actions in respect thereof) in such proportion as is

appropriate to reflect the relative fault of the Indemnifying Party and the

Indemnified Party in connection with the statements or omissions which resulted

in such losses, claims, damages or liabilities (or actions in respect thereof),

as well as any other relevant equitable considerations.  The relative fault of such Indemnifying

Party and Indemnified Party shall be determined by reference to, among other

things, whether the untrue or alleged untrue statement of a material fact or

omission or alleged omission to state a material fact relates to information

supplied by such Indemnifying Party or by such Indemnified Party, and the

parties’ relative intent, knowledge, access to information and opportunity to

correct or prevent such statement or omission. 

The parties hereto agree that it would not be just and equitable if




 




III-10





























 




contribution pursuant to this Section 6(d)

were determined by pro rata allocation (even if the Investors or any

underwriters were treated as one entity for such purpose) or by any other

method of allocation which does not take account of the equitable

considerations referred to in this Section 6(d).  The amount paid or payable by an Indemnified Party as a result of

the losses, claims, damages or liabilities (or actions in respect thereof)

referred to above shall be deemed to include any legal or other fees or

expenses reasonably incurred by such Indemnified Party in connection with

investigating or defending any such action or claim.  No person guilty of fraudulent misrepresentation (within the meaning

of Section 11(f) of the Securities Act) shall be entitled to contribution from

any person who was not guilty of such fraudulent misrepresentation.  The obligations of the Investors and any

underwriters in this Section 6(d) to contribute shall be several in proportion

to the percentage of Registrable Securities registered or underwritten, as the

case may be, by them and not joint.




 




(e)                                  Notwithstanding

any other provision of this Section 6, in no event shall any (i) Investor be

required to undertake liability to any person under this Section 6 for any

amounts in excess of the dollar amount of the net proceeds to be received by

such Investor from the sale of such Investor’s Registrable Securities pursuant

to any Registration Statement under which such Registrable Securities are to be

registered under the Securities Act.




 




(f)                                    The obligations

of the Company under this Section 6 shall be in addition to any liability that

the Company may otherwise have to any Indemnified Person and the obligations of

any Indemnified Person under this Section 6 shall be in addition to any

liability that such Indemnified Person may otherwise have to the Company.  The remedies provided in this Section 6 are

not exclusive and shall not limit any rights or remedies that may otherwise be

available to an indemnified party at law or in equity.




 




7.                                       Rule 144.  With a view to making available to the

Investors the benefits of Rule 144 under the Securities Act or any other

similar rule or regulation of the Commission 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)                                  comply with the

provisions of paragraph (c) (1) of Rule 144; and 




 




(b)                                 use all

commercially reasonable efforts to file with the Commission in a timely manner

all reports and other documents required to be filed by the Company pursuant to

Section 13 or 15(d) under the Exchange Act; and, if at any time it is not

required to file such reports but in the past had been required to or did file

such reports, it will, upon the request of any Investor, make available other

information as required by, and so long as necessary to permit sales of, its

Registrable Securities pursuant to Rule 144. 




 




8.                                       Assignment.  The rights to have the Company register

Registrable Securities pursuant to this Exhibit III may be assigned or

transferred only with the prior written consent of the Company (which consent

shall not be unreasonably withheld or delayed), and any such assignment or

transfer without such consent shall be void and of no effect.  Notwithstanding the foregoing, such consent

of the Company shall not be required with respect to: (i) any assignment or

transfer of Registrable Securities to an Affiliate of Investor,

including for this purpose if Investor

is an investment company, any fund or account advised by Investor’s investment adviser




 




III-11





























 




or any Affiliate thereof; or (ii) any assignment or transfer of all of the

Registrable Securities owned by an Investor. 

In the event of any such permitted assignment or transfer by the

Investors to any permitted transferee of all or any portion of such Registrable

Securities such transfer will be allowed only if: (a) the Investor agrees in

writing with the transferee or assignee to assign such rights, and a copy of

such agreement is furnished to the Company within a reasonable time after such

assignment, (b) the Company is, within a reasonable time after such transfer or

assignment, furnished with written notice of (i) the name and address of such

transferee or assignee and (ii) the securities with respect to which such

registration rights are being transferred or assigned, (c) immediately

following such transfer or assignment, the securities so transferred or

assigned to the transferee or assignee constitute Restricted Securities, (d) at or before the time the Company received the written

notice contemplated by clause (b) of this sentence the transferee or assignee

agrees in writing with the Company to be bound by all of the provisions

contained herein, and (e) the Company is furnished with an

opinion of counsel, which counsel and opinion shall be reasonably satisfactory

to the Company, to the effect that the permitted assignment would be in

compliance with the Securities Act and State Acts.




 




9.                                       Amendment and Waiver.  Any provision of this Exhibit III 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 Investors who hold a majority interest of

the Registrable Securities.  Any

amendment or waiver effected in accordance with this Section 9 shall be binding

upon each Investor and the Company.




 




10.                                 Miscellaneous.




 




(a)                                  A person or

entity shall be deemed to be a holder of Registrable Securities whenever such

person or entity owns of record such Registrable Securities.  If the Company receives conflicting

instructions, notices or elections from two or more persons or entities with

respect to the same Registrable Securities, the Company shall act upon the

basis of instructions, notice or election received from the registered owner of

such Registrable Securities.




 




(b)                                 Except as may

be otherwise provided herein, any notice or other communication or delivery

required or permitted hereunder shall be in writing and shall be delivered

personally or sent by certified mail, postage prepaid, or by a nationally

recognized overnight courier service as follows, and shall be deemed given

three days following the date of mailing, in the case of a notice sent by

certified mail, or, in all other cases, when actually received.




 








	

  If to the Company, to:


  	

   


  	

  AirNet Systems, Inc. 


  
	

   


  	

   


  	

  3939 International Gateway

  


  
	

   


  	

   


  	

  Columbus, Ohio  43219 


  
	

   


  	

   


  	

  Attention:


  	

  Joel Biggerstaff


  
	

   


  	

   


  	

   


  	

  President and Chief Executive

  Officer


  
	

   


  	

   


  	

   


  
	

  If to the Investors, to:


  	

   


  	

  Each Investor at the

  address provided in its executed Stock Purchase Agreement


  










 




III-12





























 




The Company or any Investor

may change the foregoing address by notice given pursuant to this Section

10(b).




 




(c)                                  Failure of any

party to exercise any right or remedy under this Exhibit III or

otherwise, or delay by a party in exercising such right or remedy, shall not

operate as a waiver thereof.




 




(d)                                 This Exhibit

III shall be governed by and interpreted in accordance with the laws of the

State of Ohio, without regard to the conflict of laws provisions thereof.




 




(e)                                  If any term,

provision, covenant or restriction of this Exhibit III is held by a

court of competent jurisdiction to be invalid, illegal, void or unenforceable,

the remainder of the terms, provisions, covenants and restrictions set forth

herein shall remain in full force and effect and shall in no way be affected,

impaired or invalidated, and the parties hereto shall use their best efforts to

find and employ an alternative means to achieve the same or substantially the

same result as that contemplated by such term, provision, covenant or

restriction.  It is hereby stipulated

and declared to be the intention of the parties that they would have executed

the remaining terms, provisions, covenants and restrictions without including

any of such that may be hereafter declared invalid, illegal, void or

unenforceable.




 




(f)                                    The Company

shall not enter into any agreement with respect to its securities that is

inconsistent with the rights granted to the holders of Registrable Securities

in this Exhibit III or otherwise conflicts with the provisions hereof.  The restrictions on

the Company’s rights to grant registration rights under this paragraph shall

terminate on the date all Registrable

Securities have been registered pursuant to a Registration Statement that has

been declared effective by the Commission.




 




(g)                                 This Exhibit

III and the various Stock Purchase Agreements constitute the entire

agreement among the parties hereto with respect to the subject matter

hereof.  There are no restrictions,

promises, warranties or undertakings, other than those set forth or referred to

herein.  This Exhibit III and

such Stock Purchase Agreements supersede all prior agreements and undertakings

among the parties hereto with respect to the subject matter hereof.




 




(h)                                 Subject to the

requirements of Section 8 hereof, this Exhibit III shall inure to the

benefit of and be binding upon the successors and assigns of each of the

parties hereto.




 




(i)                                     All pronouns

and any variations thereof refer to the masculine, feminine or neuter, singular

or plural, as the context may require.




 




(j)                                     The headings in

this Exhibit III are for convenience of reference only and shall not

limit or otherwise affect the meaning thereof. 




 




III-13





























 




Schedule A to Exhibit 10.1




 




Gerald G. Mercer and AirNet

Systems, Inc. are parties to Stock Purchase Agreements with the investors

identified below which are substantially identical to the Stock Purchase

Agreement, dated as of December 26, 2002, between Gerald G. Mercer and Gryphon

Master Fund, L.P. with AirNet Systems, Inc. as a party for purposes of the

registration rights provisions contained in Section 7 thereof and Exhibit III

attached thereto: 




 




	

  Name of


  Investor


  	

   


  	

  Date of


  Stock Purchase Agreement


  	

   


  	

  Number of


  Common


  Shares


  Purchased


  	

   


  	

  Aggregate


  Purchase


  Price for


  Common Shares


  Purchased


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  MidSouth Investor Fund, L.P.


  	

   


  	

  12/23/02


  	

   


  	

  50,000


  	

   


  	

  $


  	

  212,500


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  BFS US Special Opportunities Trust PLC


  	

   


  	

  12/26/02


  	

   


  	

  150,000


  	

   


  	

  $


  	

  637,500


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  SBL Fund, Series V


  	

   


  	

  12/26/02


  	

   


  	

  182,000


  	

   


  	

  $


  	

  773,500


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Security Equity Fund, Mid Cap Value Series


  	

   


  	

  12/26/02


  	

   


  	

  168,000


  	

   


  	

  $


  	

  714,000


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Renaissance US Growth Investment Trust PLC


  	

   


  	

  12/26/02


  	

   


  	

  75,000


  	

   


  	

  $


  	

  318,750


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Renaissance Capital Growth & Income Fund III, Inc.


  	

   


  	

  12/26/02


  	

   


  	

  75,000


  	

   


  	

  $


  	

  318,750


  	

   


  





 




Each of the foregoing Stock

Purchase Agreements has been omitted in reliance upon Instruction 2 to Item 601

of Regulation S-K.