Exhibit 4.1


 


THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED
THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.


 


THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1)
TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS
OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.


 


THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY
SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED
SECURITIES GENERALLY.  THE HOLDER OF
THIS NOTE AND SUCH SHARES OF COMMON STOCK SHALL BE DEEMED BY THE ACCEPTANCE OF
THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.


 


THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DEPOSITARY”), OR A NOMINEE OF THE


 

















 


DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND ANY
AGENT THEREOF AS THE OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.


 

















 


 


	
  No. 1

  	
   

  	
  Principal Amount
  $75,000,000,

  as revised by the Schedule of Increases

  and Decreases in the Global Note attached hereto

  



 


CUSIP NO. 000361 AE 5


 


AAR CORP.


 


2.875% Convertible
Senior Notes due February 1, 2024


 


AAR
CORP., a Delaware corporation, promises to pay to Cede & Co., or registered
assigns, the principal sum of Seventy-Five Million Dollars, as revised by the
Schedule of Increases and Decreases in the Global Note attached hereto, on
February 1, 2024.


 


Interest
Payment Dates:  February 1, and August
1.


 


Record
Dates:  January 15 and July 15.


 


Additional
provisions of this Note are set forth on the other side of this Note.


 


	
   

  	
  AAR CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ TIMOTHY
  J. ROMENESKO

  
	
   

  	
   

  
	
  TRUSTEE’S
  CERTIFICATE OF

  AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
  U.S. BANK NATIONAL
  ASSOCIATION,

  	
   

  
	
  as Trustee, certifies
  that this is one of

  the Notes referred to in the within-mentioned Indenture.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ BENJAMIN J. KRUEGER

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
						



 

















 


[FORM OF REVERSE
SIDE OF NOTE]


 


2.875% Convertible
Senior Notes due February 1, 2024


 


1.             Interest


 


AAR CORP., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the “Company”), promises to pay interest on the principal
amount of this Note at the rate per annum shown above.  The Company will pay interest semiannually
on February 1 and August 1 of each year. 
Interest on the Notes will accrue from the most recent date to which
interest has been paid on the Notes or, if no interest has been paid, from
February 3, 2004.  The Company shall, to
the fullest extent permitted by law, pay interest on overdue principal and
overdue installments of interest, if any (plus interest on such interest to the
extent lawful), at the rate borne by the Notes, which interest shall be payable
upon demand.  Interest will be computed
on the basis of a 360-day year of twelve 30-day months.


 


2.             Method of Payment


 


By no later than 11:00 a.m. (New York City time) on
the date on which any principal of or interest on any Note is due and payable,
the Company shall irrevocably deposit with the Trustee or the Paying Agent
money sufficient to pay such principal and/or interest.  The Company will pay interest (except
Defaulted Interest) on the principal amount of the Notes on each February 1 and
August 1 to the Persons who are registered Holders of Notes at the close of
business on the January 15 and July 15 next preceding the Interest Payment Date
even if Notes are canceled or repurchased after the Record Date and on or
before the Interest Payment Date. 
Holders must surrender Notes to a Paying Agent to collect principal
payments.  The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts.  The Company will make all payments in
respect of a Definitive Note (including principal and interest) in U.S. dollars
at the office of the Trustee.  At the
Company’s option, however, the Company may make such payments by mailing a check
to the registered address of each Holder thereof as such address shall appear
on the Note Register or, with respect to Notes represented by a Global Note, by
wire transfer of immediately available funds to the accounts specified by the
Depositary.


 


3.             Paying Agent,
Conversion Agent and Registrar


 


Initially, U.S. Bank National Association (“Trustee”)
will act as Paying Agent, Conversion Agent and Registrar.  The Company may appoint and change any
Paying Agent, Conversion Agent, Registrar or co-registrar without notice to any
Holder.  The Company or any of its
domestically incorporated Subsidiaries may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.


 


4.             Indenture


 


The Company issued the Notes under an Indenture dated
as of February 3, 2004 (as it may be amended or supplemented from time to time
in accordance with the terms thereof, the “Indenture”), among the Company and
the Trustee.  The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of


 


1

















 


1939 (15 U.S.C.
§§ 77aaa-77bbbb) as in effect from time to time (the “Act”).  Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, and
Holders are referred to the Indenture and the Act for a statement of those
terms.  To the extent permitted by applicable
law, in the event of any inconsistency between the terms of this Note and the
terms of the Indenture, the terms of the Indenture shall control.


 


The Notes are senior unsecured obligations of the
Company limited to $90,000,000 aggregate principal amount.


 


5.             Redemption at the
Option of the Company


 


No sinking fund is provided for the Notes.  The Notes are redeemable for cash in whole,
or in part, at any time on or after February 1, 2008 at the option of the
Company at a redemption price (“Redemption Price”) equal to the following plus
any accrued and unpaid interest (including Liquidated Damages, if any) to, but
not including, the Redemption Date:


 


•      Beginning February 1, 2008
through January 31, 2009:  100.958% of
the principal amount;


 


•      Beginning February 1, 2009
through January 31, 2010: 100.479% of the principal amount;


 


•      On or after February 1,
2010: 100.000% of the principal amount.


 


6.             Notice of
Redemption at the Option of the Company


 


Notice of redemption at the option of the Company
shall be mailed at least 30 days but not more than 60 days before a Redemption
Date to the Trustee, the Paying Agent and each Holder of Notes to be redeemed
at the Holder’s registered address.  If
money sufficient to pay the Redemption Price of all Notes (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on and after the Redemption Date, interest
(including Liquidated Damages, if any), if any, shall cease to accrue on such
Notes or portions thereof.  Notes in
denominations larger than $1,000 principal amount may be redeemed in part but
only in integral multiples of $1,000 principal amount.


 


7.             Purchase
by the Company at the Option of the Holder; Purchase at the Option of the
Holder Upon a Designated Event


 


Subject to the terms and
conditions of the Indenture, a Holder shall have the option to require the
Company to purchase the Notes held by such Holder on February 1, 2010, February
1, 2014 and February 1, 2019 (each, a “Repurchase Date”) at a purchase price
(the “Purchase Price”) equal to 100% of the principal amount of the Notes to be
purchased plus any accrued and unpaid interest, if any (including Liquidated
Damages, if any), to but not including such Repurchase Date, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, from the
opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the Business Day immediately
prior to such Repurchase Date and upon delivery of the Notes to the Paying
Agent by the Holder as set forth


 


2

















 


in the Indenture.  The Company
will pay the Purchase Price in cash with respect each Repurchase Date.


 


Notes
in denominations larger than $1,000 principal amount may be purchased in part,
but only in integral multiples of $1,000 principal amount.


 


If a Designated Event shall
occur, each Holder shall have the right, at such Holder’s option and subject to
the terms and conditions of the Indenture, to require the Company to purchase
any or all of such Holder’s Notes or any portion of the principal amount
thereof that is equal to $1,000 or an integral multiple of $1,000 on the day
that is 45 days after the date of the Company Notice of the occurrence of the
Designated Event (subject to extension to comply with applicable law) for a
Designated Event Purchase Price equal to 100% of the principal amount of Notes
purchased plus accrued and unpaid interest (including Liquidated Damages, if
any) to but not including the Designated Event Purchase Date, which Designated
Event Purchase Price shall be paid in cash.


 


Holders have the right to
withdraw any Purchase Notice or Designated Event Purchase Notice, as the case
may be, by delivery to the Paying Agent of a written notice of withdrawal in
accordance with the provisions of the Indenture.


 


8.             Conversion


 


Subject to the procedures set forth in the Indenture,
a Holder may convert Notes into Common Stock on or before the close of business
on January 31, 2024 during the periods and upon satisfaction of the conditions
set forth in the Indenture.


 


Notes in respect of which a Holder has delivered a
notice of exercise of the option to require the Company to purchase such Notes
pursuant to Article VI or VII of the Indenture may be converted only if the
notice of exercise is withdrawn in accordance with the terms of the Indenture.


 


The initial Conversion Rate is 53.7924 shares of
Common Stock per $1,000 principal amount, subject to adjustment in certain
events described in the Indenture.  The
Company may, at its option, deliver in lieu of shares of Common Stock, cash or
a combination of cash and shares of Common Stock.


 


To convert the Notes a Holder must (1) complete and
manually sign the irrevocable conversion notice on the back of the Notes (or
complete and manually sign a facsimile of such notice) and deliver such notice
to the Conversion Agent at the office maintained by the Conversion Agent for
such purpose, (2) surrender the Notes to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if
required.


 


9.             Denominations;
Transfer; Exchange


 


The Notes are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000.  A Holder may transfer or exchange Notes
in  accordance with the Indenture.  The Registrar may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture.  The Registrar need not register the transfer
of or exchange


 


3

















 


any Notes (A) for
a period beginning at the opening of business 15 days before any selection of
Notes for redemption or repurchase and ending at the close of business on the
day notice of such redemption or repurchase is deemed to have been given to all
Holders of Notes to be so redeemed or repurchased or (B) selected for
redemption or repurchase in whole or in part, except for the transfer of the
unredeemed portion of any Note being redeemed in part.


 


10.           Persons Deemed
Owners


 


The registered Holder of this Note may be treated as
the owner of this Note for all purposes.


 


11.           Unclaimed Money


 


If money for the payment of the principal of, or
interest on the Note remains unclaimed for two years, the Trustee or Paying
Agent shall pay the money back to the Company at its written request unless an
abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.


 


12.           Amendment, Waiver


 


Subject to certain exceptions set forth in the
Indenture, (i) the Indenture and the Notes may be amended with the written
consent of the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes)
and (ii) any default (other than with respect to nonpayment) or noncompliance
with any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).  Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder, the Company and the Trustee may amend the Indenture
or the Notes.


 


13.           Defaulted Interest


 


Except as otherwise specified with respect to the
Notes, any Defaulted Interest on any Note shall forthwith cease to be payable
to the registered Holder thereof on the relevant Record Date or accrual date,
as the case may be, by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company as provided for in Section 2.12 of the Indenture.


 


14.           No Recourse Against
Others


 


No recourse for the payment of the principal of or
interest (or including Liquidated Damages, if any) on this Note and no recourse
under or upon any obligation, covenant or agreement of the Company in the
Indenture, this Note or in any supplemental indenture, or because of the
creation of any Indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director, or subsidiary,
past, present or future, of the Company or of any successor corporation or
entity, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise, it being understood
that all such liability is hereby waived and released as a condition


 


4

















 


to, and as a
consideration for, the execution and delivery of the Indenture and the issue of
this Note.


 


15.           Authentication


 


This Note shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent acting on its behalf)
manually signs the certificate of authentication on the other side of this
Note.


 


16.           Abbreviations


 


Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors
Act).


 


16.           CUSIP Numbers


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures the Company has caused
CUSIP numbers to be printed on the Notes. 
No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification
numbers placed thereon.


 


17.           Governing Law


 


This Note shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts made
and to be performed entirely in such state, without regard to principles of
conflicts of law.


 


The Company will furnish to any Holder upon written
request and without charge to the Holder a copy of the Indenture which has in
it the text of this Note.  Requests may
be made to:


 


	
  AAR CORP.

  
	
  One AAR
  Place

  
	
  1100 Wood
  Dale Road

  
	
  Wood Dale,
  Illinois 60191

  
	
  Attention:  General Counsel

  
	
  Facsimile
  No.:  630-227-2059

  



 


 


	
  EXHIBIT A:

  	
   

  	
  ASSIGNMENT FORM

  
	
  EXHIBIT B:

  	
   

  	
  SCHEDULE OF INCREASES
  OR DECREASES IN GLOBAL SECURITY

  
	
  EXHIBIT C:

  	
   

  	
  OPTION OF HOLDER TO
  ELECT PURCHASE

  
	
  EXHIBIT D:

  	
   

  	
  FORM OF CERTIFICATE TO
  BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF SECURITIES

  



 


5

















 


EXHIBIT A


 


ASSIGNMENT FORM


 


To assign this Note, fill in
the form below:


 


I or we assign and transfer
this Note to


 


	
   

  	
   

  	
   

  
	
   

  	
  (Print or type
  assignee’s name, address and zip code)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Insert
  assignee’s soc. sec. or tax I.D. No.)

  	
   

  



 


and irrevocably appoint
                    
agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.


 


	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must
  be guaranteed)

  	
   

  	
   

  
									



 


 


Sign exactly as your name
appears on the other side of this Note.


 


The signature(s) should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


In connection with any
transfer or exchange of any of the Notes evidenced by this certificate occurring
prior to the date that is two years after the later of the date of original
issuance of such Notes and the last date, if any, on which such Notes were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Notes are being:


 


CHECK ONE BOX BELOW:


 


	
  1.

  	
  o

  	
   

  	
  acquired for the
  undersigned’s own account, without transfer; or

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  o

  	
   

  	
  transferred to the
  Company; or

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  o

  	
   

  	
  transferred pursuant to
  and in compliance with Rule 144A under the Securities Act of 1933, as amended
  (the “Securities Act”); or

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  o

  	
   

  	
  transferred pursuant to
  an effective registration statement under the Securities Act; or

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  o

  	
   

  	
  transferred to an
  institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or
  (7) under the Securities Act), that has furnished to the Trustee a signed
  letter containing certain representations and agreements (the form of which
  letter appears as Section 2.7 of the Indenture); or

  



 


A-1

















 


	
  6.

  	
  o

  	
   

  	
  transferred pursuant to
  another available exemption from the registration requirements of the
  Securities Act of 1933.

  



 


Unless one of the boxes is
checked, the Trustee will refuse to register any of the Notes evidenced by this
certificate in the name of any person other than the registered Holder thereof;
provided,
however,
that if box (5) or (6) is checked, the Trustee or the Company may require,
prior to registering any such transfer of the Notes, in their sole discretion,
such legal opinions, certifications and other information as the Trustee or the
Company may reasonably request to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, such as the exemption provided
by Rule 144 under such Act.


 


	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature must be
  guaranteed)

  	
  Signature

  
			



 


The signature(s) should
be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


TO BE COMPLETED BY PURCHASER
IF (1) OR (3) ABOVE IS CHECKED.


 


The
undersigned represents and warrants that it is purchasing this Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a qualified institutional buyer
within the meaning of Rule 144A under the Securities Act, as amended, and is
aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.


 


 


	
  Dated:

  	
  NOTICE:  To be executed by an executive officer

  
	
   

  	
   

  
	
   

  	
  [INSERT NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


A-2

















 


EXHIBIT B


 


SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY


 


The following
increases or decreases in this Global Note have been made:


 


	
  Date of

  Exchange

  	
   

  	
  Amount of
  decrease in

  Principal Amount of this

  Global Note

  	
   

  	
  Amount of
  increase in

  Principal Amount of this

  Global Note

  	
   

  	
  Principal
  Amount of this

  Global Note following such

  decrease or increase

  	
   

  	
  Signature
  of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-1

















 


EXHIBIT C


 


OPTION OF HOLDER
TO ELECT PURCHASE


 


If you
want to elect to have this Note purchased by the Company pursuant to Section
7.1 or Article VI of the Indenture, check the box:  o


 


If you
want to elect to have only part of this Note purchased by the Company pursuant
to Section 7.1 or Article VI of the Indenture, state the amount in principal
amount (must be an integral multiple of $1,000): 
$                     .


 


 


	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your
  name appears

  on the other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature must
  be guaranteed)

  	
   

  
									



 


The signature(s) should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


C-1

















 


EXHIBIT D


 


FORM OF CERTIFICATE TO BE DELIVERED UPON
EXCHANGE

OR REGISTRATION OF TRANSFER OF SECURITIES


 


Re:          2.875% Convertible
Senior Notes due February 1, 2024 of AAR CORP. (the “Company”).


 


This
Certificate relates to $
                                 
principal amount of Notes held in
*            book-entry
or
*              
definitive form by                                           
(the “Transferor”).


 


The
Transferor has requested the Trustee by written order to exchange or register
the transfer of a Note or Notes.


 


In
connection with such request and in respect of each such Note, the Transferor
does hereby certify that the Transferor is familiar with the Indenture, dated
as of February 3, 2004 (as amended or supplemented to date, the “Indenture”),
between the Company and U.S. Bank National Association, as trustee (the
“Trustee”), relating to the above-captioned Notes and that the transfer of this
Note does not require registration under the Securities Act (as defined below)
because:*


 


o            Such
Note is being acquired for the Transferor’s own account without transfer.


 


o            Such
Note is being transferred to a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”)),
in accordance with Rule 144A under the Securities Act.


 


o            Such
Note is being transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act (and based upon an opinion of
counsel if the Company or the Trustee so requests) or (ii) pursuant to an
effective registration statement under the Securities Act.


 


o            Such
Note is being transferred in reliance on and in compliance with another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company or the Trustee so requests).


 












*              Fill in blank or check appropriate box, as applicable.


 


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You
are entitled to rely upon this certificate and you are irrevocably authorized
to produce this certificate or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.


 


	
   

  	
  [INSERT NAME
  OF TRANSFEROR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Date:

  
					



 


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