Exhibit
4.3


 


Execution Copy


 


AAR
CORP.


 


 


2.875% Convertible Notes due February 1, 2024


 


Registration Rights Agreement


 


	
   

  	
  February 3, 2004

  
	
  Goldman, Sachs & Co.,

  
	
  As representative of
  the several Purchasers

  named in Schedule I to the Purchase Agreement

  
	
  c/o Goldman, Sachs
  & Co.

  
	
  85 Broad Street

  
	
  New York, New York 10004

  



 


Ladies and Gentlemen:


 


AAR
CORP., a Delaware corporation (the “Company”), proposes to issue and sell to
the Purchasers (as defined herein) upon the terms set forth in the Purchase
Agreement (as defined herein) its 2.875% Convertible Notes due February 1, 2024
(the “Securities”).  As an inducement to
the Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Company agrees
with the Purchasers for the benefit of Holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:


 


1.             Definitions.


 


(a)           Capitalized terms used herein without definition
shall have the meanings ascribed to them in the Purchase Agreement.  As used in this Agreement, the following
defined terms shall have the following meanings:


 


“Affiliate” of any specified person means any other person
which, directly or indirectly, 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,
direct or indirect, to direct or cause the direction of the management and
policies of such person whether by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.


 


“Closing Date” means the First Time of Delivery as defined in
the Purchase Agreement.


 


“Commission” means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.


 


“Common Stock” means the Company’s common stock, par value $1.00
per share together with any associated share purchase rights.


 


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“DTC” means The Depository Trust Company.


 


“Effective
Date” has the meaning
assigned thereto in Section 2(b)(i) hereof.


 


“Effective
Failure” has the meaning
assigned thereto in Section 7(b) hereof.


 


“Effectiveness
Period” has the meaning
assigned thereto in Section 2(b)(i) hereof.


 


“Effective
Time” means the time at
which the Commission declares the Shelf Registration Statement effec­tive or at
which the Shelf Registration Statement otherwise becomes effective.


 


“Electing
Holder” has the meaning
assigned thereto in Section 3(a)(iii) hereof.


 


“Exchange Act” means the United States Securities Exchange Act
of 1934, as amended.


 


“Holder” means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).


 


“Indenture” means the Indenture, dated as of February 3, 2004,
between the Company and U.S. Bank National Association, as amended and supplemented
from time to time in accordance with its terms.


 


“Liquidated
Damages” has the meaning
assigned thereto in Section 7(a) hereof.


 


“Managing
Underwriters” means the
investment banker or investment bankers and manager or managers that shall administer
an underwritten offering, if any, conducted pursuant to Section 6 hereof.


 


“NASD Rules” means the Rules of the National Association of
Securities Dealers, Inc., as amended from time to time.


 


“Notice and
Questionnaire” means a
Notice of Registration Statement and Selling Securityholder Questionnaire
substantially in the form of Appendix A hereto.


 


The
term “person”
means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.


 


“Prospectus” means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under
the Securities Act) included in the Shelf 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 Shelf
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.


 


“Purchase
Agreement” means the
purchase agreement, dated as of January 29, 2004, between the Purchasers and
the Company relating to the Securities.


 


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“Purchasers” means the Purchasers named in Schedule I to
the Purchase Agreement.


 


“Registrable
Securities” means all or
any portion of the Securities issued from time to time under the Indenture in
registered form and the shares of Common Stock issuable upon conversion of such
Securities; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.


 


“Registration
Default” has the meaning
assigned thereto in Section 7(a) hereof.


 


“Restricted
Security” means any
Security or share of Common Stock issuable upon conversion thereof except any
such Security or share of Common Stock that (i) has been effectively
registered under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement, (ii) has been transferred in compliance with
Rule 144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto) or (iii) has otherwise been transferred and a new
Security or share of Common Stock not subject to transfer restrictions under
the Securities Act has been delivered by or on behalf of the Company in
accordance with Section 2.1 of the Indenture.


 


“Rules and
Regulations” means the
published rules and regulations of the Commission promulgated under the
Securities Act or the Exchange Act, as in effect at any relevant time.


 


“Securities
Act” means the United
States Securities Act of 1933, as amended.


 


“Shelf
Registration” means a
registration effected pursuant to Section 2 hereof.


 


“Shelf
Registration Statement”
means a “shelf” registration statement filed 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 and/or any similar rule that may be adopted by the Commission,
filed by the Company pursuant to the provisions of Section 2 of this
Agreement, including the Prospectus contained therein, any amendments and
supplements to such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.


 


“Suspension
Period” has the meaning assigned thereto in Section 2(c) hereof.


 


“Trust
Indenture Act” means the
Trust Indenture Act of 1939, or any successor thereto, and the rules,
regulations and forms promulgated thereunder, as the same shall be amended from
time to time.


 


The
term “underwriter”
means any underwriter of Registrable Securities in connection with an offering
thereof under a Shelf Registration Statement.


 


(b)           Wherever there is a reference in this Agreement to
a percentage of the “principal amount” of Registrable Securities or to a
percentage of Registrable Securities, Common Stock shall be treated as
representing the principal amount of Securities that was surrendered for
conversion or exchange in order to receive such number of shares of Common
Stock.


 


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2.             Shelf Registration.


 


(a)           The Company shall, no later than 90 calendar days
following the Closing Date, file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement and,
there­after, shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act no
later than 180 calendar days following the Closing Date;  provided,
however,
that the Company may, upon written notice to all Holders, postpone having the
Shelf Registration Statement declared effective for a reasonable period not to
exceed 90 days if the Company possesses material non-public information, the
disclosure of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole, if a pending transaction that would be material
to the Company and its subsidiaries, taken as a whole, could be materially
adversely affected as a result, or if the Company is unable to file financial
statements required to be included in a shelf registration statement as a
result of a pending litigation; provided, further, however, that no Holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement or to use the Prospectus forming a part thereof for
resales of Registrable Securities unless such Holder is an Electing Holder.


 


(b)           The Company shall use its reasonable best efforts:


 


(i)            to keep the Shelf Registration Statement con­tinuously
effective under the Securities Act in order to permit the Prospectus forming a
part thereof to be usable by Holders until the earliest of (1) the sale of all
Registrable Securities registered under the Shelf Registration Statement; (2)
the expiration of the period referred to in Rule 144(k) of the Securities Act
with respect to all Registrable Securities held by Persons that are not
Affiliates of the Company; and (3) two years from the date (the “Effective
Date”) such Shelf Registration Statement is declared effective (such period
being referred to herein as the “Effectiveness Period”);


 


(ii)           after the Effective Time of the Shelf Registration
Statement, promptly upon the request of any Holder of Registrable Securities
that is not then an Electing Holder, to take any action reasonably necessary to
enable such Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities, including, without limitation, any action necessary to
identify such Holder as a selling securityholder in the Shelf Registration
Statement; provided,
however, that nothing in this subparagraph shall relieve such Holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a)(ii) hereof; and


 


(iii)          if at any time the Securities, pursuant to Article
4.2 of the Indenture, are convertible into securities other than Common Stock,
to cause, or to cause any successor under the Indenture to cause, such
securities to be included in the Shelf Registration Statement no later than the
date on which the Securities may then be convertible into such securities.


 


The
Company shall be deemed not to have used its reasonable best efforts to keep
the Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell any of
such Registrable Securities during that period, unless such action is (A)


 


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required
by applicable law and the Company there­after promptly complies with the
requirements of paragraph 3(j) below or (B) permitted pursuant to Section 2(c)
below.


 


(c)           The Company may suspend the use of the Prospectus
for a period not to exceed 30 days in any 90-day period or an aggregate of 90
days in any 12-month period (each, a “Suspension Period”) if the Board of
Directors of the Company shall have determined in good faith that because of
valid business reasons (not including avoidance of the Company’s obligations
hereunder), including the acquisition or divestiture of assets, pending
corporate developments, public filings with the Commission and similar events,
it is in the best interests of the Company to suspend such use, and prior to
suspending such use the Company provides the Holders with written notice of
such suspension, which notice need not specify the nature of the event giving rise
to such suspension.


 


3.             Registration Procedures.  In connection with the Shelf
Registration Statement, the following provisions shall apply:


 


(a)           (i)            Not less
than 30 calendar days prior to the Effective Time of the Shelf Registration
Statement, the Company shall mail the Notice and Questionnaire to the Holders
of Registrable Securities.  No Holder
shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Holder has returned a completed and signed
Notice and Questionnaire to the Company; provided, however, to be included in the
Registration Statement as of the Effective Time, Holders of Registrable
Securities shall have at least 28 calendar days from the date on which the
Notice and Questionnaire is first mailed to such Holders to return a completed
and signed Notice and Questionnaire to the Company.


 


(ii)           After the Effective Time of the Shelf Registration
Statement, the Company shall, upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, promptly send a Notice and
Questionnaire to such Holder.  From and
after the Effective Time of the Shelf Registration Statement, the Company shall
(A) as promptly as is practicable after the date a completed and signed
Notice and Questionnaire is delivered to the Company, and in any event within
ten Business Days after such date, prepare and file with the Commission (x) a
supplement to the Prospectus or, if required by applicable law, a
post-effective amendment to the Shelf Registration Statement and (y) any other
document required by applicable law, so that the Holder delivering such Notice
and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and is permitted to deliver the Prospectus to purchasers
of such Holder’s Registrable Securities in accordance with applicable law, and
(B) if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its reasonable best efforts to cause such
post-effective amendment to become effective under the Securities Act as
promptly as is practicable;  provided,
however, that if a Notice and Questionnaire is delivered to the
Company during a Suspension Period, the Company shall not be obligated to take
the actions set forth in this clause (ii) until the termination of such
Suspension Period.


 


(iii)          The term “Electing Holder” shall mean any Holder
of Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii)
hereof.


 


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(b)           The Company shall furnish to each Electing Holder,
prior to the Effective Time, a copy of the Shelf Registration Statement
initially filed with the Commission, and shall furnish to such Holders, prior
to the filing thereof with the Commission, copies of each amendment thereto and
each amend­ment or supplement, if any, to the Prospectus included therein, and
shall use its reasonable best efforts to reflect in each such docu­ment, at the
Effective Time or when so filed with the Commis­sion, as the case may be,
such  comments as such Holders and their
respective counsel reasonably may propose.


 


(c)           The Company shall promptly take such action as may
be necessary so that (i) each of the Shelf Registration Statement and any
amendment thereto and the Prospectus forming a part thereof and any amendment
or supplement thereto (and each report or other docu­ment incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and regulations
thereunder, (ii) each of the Shelf 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 (iii) each of the
Prospectus forming a part of the Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not at any time during the
Effectiveness Period include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.


 


(d)           The Company shall promptly advise each
Electing Holder, and shall confirm such advice in writing if so requested by
any such Electing Holder:


 


(i)            when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when a Shelf
Registration State­ment or any post-effective amendment thereto has become
effective, in each case making a public announcement thereof by release made to
Reuters Economic Services and Bloomberg Business News;


 


(ii)           of any request by the Commission for amendments or
supplements to the Shelf Registra­tion Statement or the Prospectus included
therein or for additional information;


 


(iii)          of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for such purpose;


 


(iv)          of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the securities included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and





(v)           of the occurrence of
any event or the existence of any state of facts that requires the making of
any changes in the Shelf Registra­tion Statement or the Prospectus included
therein so that, as of such date, such Shelf Registration Statement and
Prospectus do not contain an untrue statement of a material fact and do not
omit to state a material fact required to be stated therein or necessary to
make the statements


 


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therein (in the case of the Prospectus, in light of the circum­stances
under which they were made) not misleading (which advice shall be accompanied
by an instruc­tion to such Holders to suspend the use of the Prospectus until
the requisite changes have been made).


 


(e)           The Company shall use its reasonable best efforts
to prevent the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of the Shelf
Registration Statement.


 


(f)            The Company shall furnish to each Electing Holder,
with­out charge, at least one copy of the Shelf Registra­tion Statement and all
post-effective amendments thereto, including financial statements and
schedules, and, if such Electing Holder so requests in writing, all reports,
other documents and exhibits that are filed with or incorpor­ated by reference
in the Shelf Registration Statement.


 


(g)           The Company shall, during the Effectiveness
Period, deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each prelim­inary Prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the periods
specified in Section 2(c) above or during the continuance of any event or the
existence of any state of facts described in Section 3(d)(v) above) to the use
of the Prospec­tus and any amend­ment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supple­ment thereto
during the Effectiveness Period.


 


(h)           Prior to any offering of Registrable Securities
pursuant to the Shelf Registration Statement, the Company shall (i) register or
qualify or cooperate with the Electing Holders and their respective counsel in
connection with the registration or quali­fication of such Registrable
Securities for offer and sale under the securities or “blue sky” laws of such
jurisdictions within the United States as any Electing Holder may reasonably
request, (ii) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Electing Holder or
underwriter, if any, to complete its distribution of Registrable Securities
pursuant to the Shelf Registration Statement, and (iii) take any and all other
actions necessary or advisable to enable the 
disposition in such jurisdictions of such Registrable Securities; provided,
however,
that in no event shall the Company be obligated to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Sec­tion 3(h) or (B) file any
general consent to service of process in any jurisdiction where it is not as of
the date hereof so subject.


 


(i)            Unless any Registrable Securities shall be in
book-entry only form, the Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold pursuant to the Shelf Registration Statement,
which certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved,
or produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Electing Holders may
request in connection with the sale of Registrable Securities pursuant to the
Shelf Registration Statement.


 


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(j)            Upon the occurrence of any event or the existence
of any state of facts contemplated by paragraph 3(d)(v) above, the C­ompany
shall promptly prepare a post-effective amend­ment to any Shelf Registration
Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. 
If the Company notifies the Electing Holders of the occurrence of any
event or the existence of any state of facts contemplated by paragraph 3(d)(v)
above, the Electing Holder shall suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made.


 


(k)           Not later than the Effective Time of the Shelf
Registration Statement, the Company shall provide a CUSIP number for the
Registrable Securi­ties that are debt securities.


 


(l)            The Company shall use its reasonable best efforts
to comply with all applicable Rules and Regulations, and to make generally
available to its secu­rityholders as soon as practicable, but in any event not
later than eighteen months after (i) the effective date (as defined in Rule
158(c) under the Securities Act) of the Shelf Registration Statement,
(ii) the effective date of each post-effective amendment to the Shelf
Regis­tration Statement, and (iii) the date of each filing by the Company with
the Commission of an Annual Report on Form 10-K that is incor­porated by
reference in the Shelf Registration Statement, an earning 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).


 


(m)          Not later than the Effective Time of the Shelf
Registration Statement, the Company shall cause the Indenture to be qualified
under the Trust Indenture Act; in connection with such qualification, the
Company shall cooperate with the Trustee under the Indenture and the Holders
(as defined in the Indenture) to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the Trust Indenture Act; and the Company shall execute, and shall use all
reasonable efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents required to
be filed with the Commission to enable such Indenture to be so qualified in a
timely manner.  In the event that any
such amendment or modification referred to in this Section 3(m) involves
the appointment of a new trustee under the Indenture, the Company shall appoint
a new trustee thereunder pursuant to the applicable provisions of the
Indenture.


 


(n)           In the event of an underwritten offering conducted
pursuant to Section 6 hereof, the Company shall, if requested, promptly include
or incorporate in a Prospectus supplement or post-effective amendment to the
Shelf Registration Statement such information as the Managing Underwriters
reasonably agree should be included therein and to which the Company does not
reasonably object and shall 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.


 


(o)           The Company shall enter into such customary
agreements (including an underwriting agreement in customary form in the event
of an underwritten offering conducted pursuant to Section 6 hereof) and take
all other appropriate action in order to expedite and facilitate the
registration and disposition of the Registrable Securities, and in connection


 


8

















 


therewith, if an under­writing agreement is
entered into, cause the same to contain indemnification provisions and
procedures substantially identical to those set forth in Section 5 hereof with
respect to all parties to be indemnified pursuant to Section 5 hereof.


 


(p)           The Company shall:


 


(i)(A)      make reasonably available
for inspection by the Electing Holders, any underwriter participating in any
disposition pursuant to the Shelf Registration Statement, and any attorney, accountant
or other agent retained by such Electing Holders or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and (B) cause the Company’s
officers, directors and employees to supply all information reasonably
requested by such Electing Holders or any such underwriter, attorney,
accountant or agent in connection with the Shelf Registration Statement, in
each case, as is customary for similar due diligence exam­inations; provided,
however,
that all records, information and documents that are designated in writing by
the Company, in good faith, as confidential shall be kept confi­dential by such
Electing Holders and any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such records, information or documents become available to
the public generally or through a third party without an accompanying
obligation of confidentiality; and provided further that, if the foregoing
inspection and information gathering would otherwise disrupt the Company’s
conduct of its business, such inspection and information gathering shall, to
the great­est extent possible, be coordinated on behalf of the Electing Holders
and the other parties entitled thereto by one counsel designated by and on
behalf of the Electing Holders and other parties;


 


(ii)           in connection with any
underwritten offering conducted pursuant to Section 6 hereof, make such
representations and warranties to the Electing Holders participating in such
underwritten offering and to the Managing Underwriters, in form, substance and
scope as are customarily made by the Company to underwriters in primary
underwritten offerings of equity and convertible debt securities and covering
matters including, but not limited to, those set forth in the Purchase
Agreement;


 


(iii)          in connection with any
underwritten offering conducted pursuant to Section 6 hereof, obtain opinions
of counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters)
addressed to each Electing Holder participating in such underwritten offering
and the underwriters, covering such matters as are customarily covered in
opinions requested in primary underwritten offerings of equity and convertible
debt securities and such other matters as may be reasonably requested by such
Electing Holders and underwriters (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 Effective Time of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Shelf Registration Statement and the Prospectus, including the
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 not misleading;


 


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(iv)          in connection with any
underwritten offering conducted pursuant to Section 6 hereof, 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 for which
financial statements and financial data are, or are required to be, included in
the Shelf Registration Statement), addressed to each Electing Holder
participating in such underwritten offering (if such Electing Holder has
provided such letter, representations or documentation, if any, required for
such cold comfort letter to be so addressed) and the underwriters, in customary
form and covering matters of the type customarily covered in “cold comfort”
letters in connection with primary underwritten offerings;


 


(v)           in connection with any
underwritten offering conducted pursuant to Section 6 hereof, deliver such
documents and certificates as may be reasonably requested by any Electing
Holders participating in such underwritten offering and the Managing
Underwriters, if any, including, without limitation, certificates to evidence
compliance with Section 3(j) hereof and with any conditions contained in the
underwriting agreement or other agreements entered into by the Company.


 


(q)           The Company will use its reasonable best efforts
to cause the Common Stock issuable upon conversion of the Securities to be
listed on the New York Stock Exchange or other stock exchange or trading system
on which the Common Stock primarily trades on or prior to the Effective Time of
the Shelf Registration Statement hereunder.


 


(r)            In the event that any broker-dealer
registered under the Exchange Act shall be an “affiliate” (as defined in
Rule 2720(b)(1) of the NASD Rules (or any successor provision thereto)) of
the Company or has a “conflict of interest” (as defined in Rule 2720(b)(7)
of the NASD Rules (or any successor provision thereto)) and such broker-dealer
shall underwrite, participate as a member of an underwriting syndicate or
selling group or assist in the distribution of any Registrable Securities
covered by the Shelf Registration Statement, whether as a Holder of such
Registrable Securities or as an underwriter, a placement or sales agent or a
broker or dealer in respect thereof, or otherwise, the Company shall assist
such broker-dealer in complying with the requirements of the NASD Rules,
including, without limitation, by (A) engaging a “qualified independent
underwriter” (as defined in Rule 2720(b)(15) of the NASD Rules (or any
successor provision thereto)) to participate in the preparation of the
registration statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereto and to recommend the public
offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof, and (C) providing such information to such broker-dealer
as may be required in order for such broker-dealer to comply with the
requirements of the NASD Rules.


 


(s)           The Company shall use its reasonable best efforts
to take all other steps necessary to effect the registration, offering and sale
of the Registrable Securities covered by the Shelf Registra­tion Statement
contem­plated hereby.


 


4.             Registration Expenses.  Except as otherwise provided in
Section 3, the Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2, 3 and 6 hereof and
shall bear or reimburse the Electing Holders for the reasonable fees and
disbursements of a single counsel selected by a plurality of all


 


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Electing Holders who own an aggregate of not less
than 25% of the Registrable Securities covered by the Shelf Registration
Statement to act as counsel therefore in connection therewith or if no counsel
is designated by such Electing Holders, one designated by the Purchasers.  Each Electing Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Electing Holder’s Registrable Securities
pursuant to the Shelf Registration Statement.


 


5.             Indemnification and Contribution.


 


(a)           Indemnification by the Company. Upon the registration of the Registrable
Securities pursuant to Section 2 hereof, the Company shall indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or other
securities professional within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each such person being sometimes referred to
as an “Indemnified Person”) against any losses, claims, damages 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 Shelf Registration Statement under which such Registrable Securities are to
be registered under the Securities Act, or any Prospectus contained therein or
furnished by the Company to any Indemnified Person, or any amendment or
supplement thereto, 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 not misleading, and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as 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 an untrue statement or alleged untrue statement or omission or
alleged omission made in such Shelf Registration Statement or Prospectus, or
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Person expressly for
use therein.


 


(b)           Indemnification by the Electing Holders and any Agents and
Underwriters.  Each Electing Holder agrees, as a
consequence of the inclusion of any of such Electing Holder’s Registrable
Securities in such Shelf Registration Statement, and each underwriter, selling
agent or other securities professional, 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,
officers who sign any Shelf Registration Statement 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
an untrue statement or alleged untrue statement of a material fact contained in
such Shelf Registration Statement or Prospectus, or any amendment or
supplement, 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 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


 


11

















 


made in reliance upon and in conformity with
written information furnished to the Company by such Electing Holder,
underwriter, selling agent or other securities professional expressly for use
therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.


 


(c)           Notices of Claims, Etc.  Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5,
notify such indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under the
indemnification provisions of or contemplated by subsection (a) or (b)
above.  In case any such action shall be
brought against any indemnified party and it shall notify an indemnifying party
of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its election
so to assume the defense thereof, such indemnifying party shall not be liable
to such indemnified party under this Section 5 for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.


 


(d)           Contribution.  If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party 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
contribution pursuant to this Section 5(d) were determined by pro rata
allocation (even if the Electing Holders or any underwriters, selling agents or
other securities professionals or all of them 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 5(d).  The


 


12

















 


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 Electing Holders and
any underwriters, selling agents or other securities professionals in this
Section 5(d) to contribute shall be several in proportion to the percentage of
principal amount of Registrable Securities registered or underwritten, as the
case may be, by them and not joint.


 


(e)           Notwithstanding any other provision of this
Section 5, in no event will any (i) Electing Holder be required to
undertake liability to any person under this Section 5 for any amounts in
excess of the dollar amount of the proceeds to be received by such Holder from
the sale of such Holder’s Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) pursuant to any Shelf
Registration Statement under which such Registrable Securities are to be
registered under the Securities Act and (ii) underwriter, selling agent or
other securities professional be required to undertake liability to any person
hereunder for any amounts in excess of the discount, commission or other
compensation payable to such underwriter, selling agent or other securities
professional with respect to the Registrable Securities underwritten by it and
distributed to the public.


 


(f)            The obligations of the Company under this Section
5 shall be in addition to any liability which the Company may otherwise have to
any Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified
Person may otherwise have to the Company. 
The remedies provided in this Section 5 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity.


 


6.             Underwritten Offering.  Any Holder of Registrable
Securities who desires to do so may sell Registrable Securities (in whole or in
part) in an underwritten offering; provided that  (i) the Electing Holders of at least 33-1/3% in aggregate
principal amount of the Registrable Securities then covered by the Shelf
Registration Statement shall request such an offering and (ii) at least such
aggregate principal amount of such Registrable Securities shall be included in
such offering; and provided further that the Company shall
not be obligated to cooperate with more than one underwritten offering during
the Effectiveness Period.  Upon receipt
of such a request, the Company shall provide all Holders of Registrable
Securities written notice of the request, which notice shall inform such Holders
that they have the opportunity to participate in the offering.  In any such under­written offering, the
investment banker or bankers and manager or managers that will administer the
offering will be selected by, and the underwriting arrangements with respect
thereto (including the size of the offering) will be approved by, the holders
of a majority of the Registrable Securities to be included in such offering; provided,
however,
that such investment bankers and managers and underwriting arrangements must be
reasonably satisfactory to the Company. 
No Holder may participate in any underwritten offering contemplated
hereby unless (a) such Holder agrees to sell such Holder’s Registrable
Securities to be included in the underwritten offering in accordance with any
approved underwriting arrangements, (b) such Holder completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of
such approved underwriting arrangements, and (c) if such Holder is not then an
Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to


 


13

















 


the Company in accordance with Section 3(a)(ii)
hereof within a reasonable amount of time before such underwritten
offering.  The Holders participating in
any underwritten offering shall be responsible for any underwriting discounts
and commissions and fees and, subject to Section 4 hereof, expenses of their
own counsel.  The Company shall pay all
expenses customarily borne by issuers in an underwritten offering, including
but not limited to filing fees, the fees and disburse­ments of its counsel and
independent public accountants and any printing expenses incurred in connection
with such underwritten offering. 
Notwithstanding the foregoing or the provisions of Section 3(n) hereof,
upon receipt of a request from the Managing Underwriter or a representative of
holders of a majority of the Registrable Securities to be included in an
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connec­tion with an underwritten
offering, the Company may delay the filing of any such amend­ment or supplement
for up to 90 days if the Board of Directors of the Company shall have
determined in good faith that the Company has a bona fide business reason for
such delay.


 


7.             Liquidated Damages.


 


(a)           Notwithstanding any postponement of effectiveness
permitted by Section 2(a) hereof, if (i) on or prior to the 90th day following
the Closing Date, a Shelf Registration Statement has not been filed with the
Commission or (ii) on or prior to the 180th day following the Closing Date,
such Shelf Registration Statement is not declared effective by the Commission
(each, a “Registration Default”), the Company shall be required to pay
liquidated damages (“Liquidated Damages”), from and including the day following
such Registration Default until such Shelf Registration Statement is either so
filed or so filed and subsequently declared effective, as applicable, at a rate
per annum equal to an additional one-quarter of one percent (0.25%) of the
principal amount of Registrable Securities, to and including the 90th day
following such Registration Default and one-half of one percent (0.50%) thereof
from and after the 91st day following such Registration Default.


 


(b)           In the event that (i) the Shelf Registration
Statement ceases to be effective, (ii) the Company suspends the use of the Prospectus
pursuant to Section 2(c) or 3(j) hereof, (iii) the Holders are not authorized
to use the Prospectus pursuant to Section 3(g) hereto or (iv) the Holders are
otherwise prevented or restricted by the Company from effecting sales pursuant
to the Shelf Registration Statement (an “Effective Failure”) for more than 30
days, whether or not consecutive, in any 90-day period, or for more than 90
days, whether or not consecutive, during any 12-month period, then the Company
shall pay Liquidated Damages at a rate per annum equal to an additional
one-half of one percent (0.50%) of the principal amount of Registrable
Securities from the 31st day of the applicable 90-day period or the
91st day of the applicable 12-month period, as the case may be, that any such
Effective Failure has existed until the earlier of (1) the time the Holders of
Registrable Securities are again able to make sales under the Shelf
Registration Statement or (2) the expiration of the Effectiveness Period.


 


(c)           Any amounts to be paid as Liquidated Damages
pursuant to paragraphs (a) or (b) of this Section 7 shall be paid in cash
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date (as defined in the Indenture), as applicable, following
the date of such Registration Default or Effective Failure, as applicable.  Such Liquidated Damages will accrue
(1) in respect of the Securities at the rates set forth in paragraphs (a)
or (b) of this Section 7, as applicable, on the principal amount of the
Securities and (2) in respect of the Common Stock issued upon conversion
of the Securities, at the rates


 


14

















 


set forth in paragraphs (a) or
(b) of this Section 7, as applicable, applied to the Conversion Price (as defined
in the Indenture) at that time.


 


(d)           Except as provided in Section 8(b) hereof,
the Liquidated Damages as set forth in this Section 7 shall be the exclusive
monetary remedy available to the Holders of Registrable Securities for such
Registration Default or Effective Failure. In no event shall the Company be
required to pay Liquidated Damages in excess of the applicable maximum amount
of one-half of one percent (0.50%) set forth above, regardless of whether one
or multiple Registration Defaults or Effective Failures exist.


 


8.             Miscellaneous.


 


(a)           Other Registration Rights.  The Company may grant
registration rights that would permit any person that is a third party the
right to piggy-back on any Shelf Registration  Statement, provided that if the Managing Underwriter
of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back
rights intend to include in any Shelf Regis­tration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be
reduced to the extent necessary to reduce the total amount of securities to be
included in such offering to the amount, number and kind recommended by the Man­aging
Underwriter prior to any reduction in the amount of Registrable Securities to
be included in such Shelf Registration Statement.


 


(b)           Specific Performance.  The parties hereto acknowledge
that there would be no adequate remedy at law if the Company fails to perform
any of its obligations hereunder and that the Purchasers and the Holders from
time to time may be irreparably harmed by any such failure, and accordingly
agree that the Purchasers and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity and without limiting the
remedies available to the Electing Holders under Section 7 hereof, shall be
entitled to compel specific performance of the obligations of the Company under
this Registration Rights Agreement in accordance with the terms and conditions
of this Registration Rights Agreement, in any court of the United States or any
State thereof having jurisdiction.


 


(c)           Amendments and Waivers.  This Agreement, including this
Section 8(c), may be amended, and waivers or consents to departures from the
provisions hereof may be given, only by a written instrument duly executed by
the Company and the holders of a majority in aggregate principal amount of
Registrable Securities then outstanding. 
Each Holder of Registrable Securities outstanding at the time of any
such amendment, waiver or consent or thereafter shall be bound by any
amendment, waiver or consent effected pursuant to this Section 8(c), whether or
not any notice, writing or marking indicating such amendment, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.


 


(d)           Notices.  All notices and other communications
provided for or permitted hereunder shall be given as provided in the
Indenture.


 


(e)           Parties in Interest.  The parties to this Agreement
intend that all Holders of Registrable Securities shall be entitled to receive
the benefits of this Agreement and that any Electing Holder shall be bound by
the terms and provisions of this Agreement by reason of such


 


15

















 


election with respect to the Registrable
Securities which are included in a Shelf Registration Statement.  All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the respective successors and assigns of the parties hereto and
any Holder from time to time of the Registrable Securities to the aforesaid
extent.  In the event that any
transferee of any Holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase, operation of law
or otherwise, such transferee shall, without any further writing or action of
any kind, be entitled to receive the benefits of and, if an Electing Holder, be
conclusively deemed to have agreed to be bound by and to perform all of the terms
and provisions of this Agreement to the aforesaid extent.


 


(f)            Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


 


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


 


(h)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.


 


(i)            Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by law.


 


(j)            Survival.  The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such Holder, any
agent or underwriter, any director, officer or partner of such agent or
underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Registrable Securities of such
Holder.


 


16

















 


Please
confirm that the foregoing correctly sets forth the agreement between the
Company and you.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  AAR CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ TIMOTHY J. ROMENESKO

  
	
   

  	
   

  	
  Name:

  	
  Timothy J. Romenesko

  
	
   

  	
   

  	
  Title: 

  	
  Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Accepted as of the date hereof:

  	
   

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ GOLDMAN, SACHS
  & CO

  	
   

  
	
   

  	
  (Goldman, Sachs &
  Co.)

  	
   

  
	
   

  	
  On behalf of each of
  the Purchasers

  	
   

  
						



 


17

















 


Appendix A


 


AAR CORP.


Notice of
Registration Statement


and


Selling
Securityholder Questionnaire


 


 


[Date]


 


 


AAR CORP. (the “Company”) has filed with the United States
Securities and Exchange Commission (the “Commission”) a registration statement
on Form S-3 (the “Shelf Registration Statement”) for the registration
and resale under Rule 415 of the United States Securities Act of 1933, as
amended (the “Securities Act”), of the Company’s 2.875% Convertible Senior
Notes due February 1, 2024 (the “Securities”) and the shares of common
stock, par value $1.00 per share (the “Common Stock”), issuable upon conversion
thereof, in accordance with the Registration Rights Agreement, dated as of
February 3, 2004 (the “Registration Rights Agreement”), between
the Company and the purchasers named therein. 
A copy of the Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.


 


In order to have Registrable Securities included in the Shelf Registration
Statement (or a supplement or amendment thereto), this Notice of Registration
Statement and Selling Securityholder Questionnaire (“Notice and Questionnaire”)
must be completed, executed and delivered to the Company at the address set
forth herein for receipt ON OR BEFORE [DEADLINE FOR  RESPONSE].  Beneficial owners of Registrable Securities
who do not complete, execute and return this Notice and Questionnaire by such
date (i) will not be named as selling securityholders in the Shelf
Registration Statement and (ii) may not use the Prospectus forming a part
thereof for resales of Registrable Securities.


 


Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners
of Registrable Securities are advised to consult their own securities law
counsel regarding the consequences of being named or not being named as a
selling securityholder in the Shelf Registration Statement and related
Prospectus.


 


18

















 


The term “Registrable Securities” is defined in the Registration
Rights Agreement to mean all or any portion of the Securities issued from time
to time under the Indenture in registered form and the shares of Common Stock
issuable upon conversion of such Securities; provided, however,
that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.


 


The term “Restricted Security” is defined in the Registration
Rights Agreement to mean any Security or share of Common Stock issuable upon
conversion thereof except any such Security or share of Common Stock that
(i) has been effectively registered under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, or (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k)
of such Rule 144 (or any successor provision thereto), or (iii) has
otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in 
accordance with the Indenture.


 


ELECTION


 


The
undersigned holder (the “Selling Securityholder”) of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3).  The undersigned, by signing and returning
this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 6 of the Registration Rights Agreement, as if the undersigned
Selling Securityholder were an original party thereto.


 


Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the
Company and the Trustee the Notice of Transfer (completed and signed) set forth
in Exhibit 1 to this Notice and Questionnaire.


 


The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:


 


19

















 


QUESTIONNAIRE


 


	
  (1)

  	
  (a)

  	
  Full
  Legal Name of Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Full
  Legal Name of Registered Holder (if not the same as in (a) above) of
  Registrable Securities Listed in Item (3) Below:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Full
  Legal Name of DTC Participant (if applicable and if not the same as (b)
  above) Through Which Registrable Securities Listed in Item (3) Below are
  Held:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  Address
  for Notices to Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  
	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
  Contact
  Person:

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  Beneficial
  Ownership of the Securities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below in this
  Item (3), the undersigned Selling Securityholder does not beneficially
  own any Securities or shares of Common Stock issued upon conversion, repurchase
  or redemption of any Securities.

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Principal
  amount of Registrable Securities (as defined in the Registration Rights
  Agreement) beneficially owned:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such Registrable Securities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion, repurchase or
  redemption of Registrable Securities:

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Principal
  amount of Securities other than Registrable Securities beneficially owned:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such other Securities:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion of such other
  Securities:

  
	
   

  	
   

  	
   

  



 


20

















 


	
   

  	
  (c)

  	
  Principal
  amount of Registrable Securities which the undersigned wishes to be included
  in the Shelf Registration Statement:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CUSIP
  No(s). of such Registrable Securities to be included in the Shelf
  Registration Statement:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of shares of Common Stock (if any) issued upon conversion of Registrable
  Securities which are to be included in the Shelf Registration Statement:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  Beneficial
  Ownership of Other Securities of the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below in this
  Item (4), the undersigned Selling Securityholder is not the beneficial
  or registered owner of any shares of Common Stock or any other securities of
  the Company, other than the Securities and shares of Common Stock listed
  above in Item (3).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  Relationships
  with the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, neither
  the Selling Securityholder nor any of its affiliates, officers, directors or
  principal equity holders (5% or more) has held any position or office or has
  had any other material relationship with the Company (or its predecessors or
  affiliates) during the past three years.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  Nature
  of the Selling Securityholder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
  Is
  the selling Securityholder a reporting company under the Securities Exchange
  Act, a majority owned subsidiary of a reporting company under the Securities
  Exchange Act or a registered investment company under the Investment Company
  Act?  If so, please state which one.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If
  the entity is a majority owned subsidiary of a reporting company, identify
  the majority stockholder that is a reporting company.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  If
  the entity is not any of the above, identify the natural person or persons
  having voting and investment control over the Company’s securities that the
  entity owns.

  



 


21

















 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Is
  the Selling Securityholder a registered broker-dealer?   Yes   o   No   o

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  whether the Selling Securityholder received the Registrable Securities as
  compensation for underwriting activities and, if so, provide a brief
  description of the transaction(s) involved.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  whether the Selling Securityholder is an affiliate of a broker-dealer and if
  so, list the name(s) of the broker-dealer affiliate(s).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yes    o        No    o

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If the answer
  is “Yes,” you must answer the following:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  the Selling Securityholder is an affiliate of a registered broker-dealer, the
  Selling Securityholder purchased, the Registrable Securities (i) in the
  ordinary course of business and (ii) at the time of the purchase of the
  Registrable Securities, had no agreements or understandings, directly or
  indirectly, with any person to distribute the Registrable Securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yes    o        No    o

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If
  the answer is “No”, state any exceptions here:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If the answer
  is “No,” this may affect your ability to be included in the registration
  statement.

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  Plan
  of Distribution:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Except as set forth below, the
  undersigned Selling Securityholder intends to distribute the Registrable
  Securities listed above in Item (3) only as follows (if at all):  Such Registrable Securities may be sold
  from time to time directly by the undersigned Selling Securityholder or,
  alternatively, through underwriters, broker-dealers or agents.  Such Registrable Securities may be sold in
  one or more transactions at fixed prices, at prevailing market prices at the
  time of sale, at varying prices determined at the time of sale or at
  negotiated prices.  Such sales may be
  effected in transactions (which may involve crosses or block transactions)
  (i) on any national securities exchange or quotation service on which the
  Registrable Securities may be listed or quoted at the time of sale, (ii) in
  the over-the-counter market, (iii) in transactions otherwise than on such
  exchanges or services or in the over-the-counter market or (iv) through the
  writing of options.  In connection
  with sales of the Registrable Securities or otherwise, the Selling
  Securityholder may enter into transactions with broker-dealers, which may in
  turn engage in short sales of the Registrable Securities in the course of
  hedging the positions they assume. 
  The Selling Securityholder may also sell Registrable Securities short
  and deliver Registrable Securities to close out such short positions, or loan
  or pledge Registrable Securities to broker-dealers that in turn may sell such
  securities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  State
  any exceptions here:

  



 


22

















 


By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
prospectus delivery and other provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder, particularly Regulation M.


 


In the event that the Selling Securityholder transfers all or any portion
of the Registrable Securities listed in Item (3) above after the date on
which such information is provided to the Company, the Selling Securityholder
agrees to notify the transferee(s) at the time of the transfer of its rights
and obligations under this Notice and Questionnaire and the Registration Rights
Agreement.


 


By signing below, the Selling Securityholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (6)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus.  The Selling
Securityholder understands that such information will be relied upon by the
Company in connection with the preparation of the Shelf Registration Statement
and related Prospectus.


 


In accordance with the Selling Securityholder’s obligation under
Section 3(a) of the Registration Rights Agreement to provide such
information as may be required by law for inclusion in the Shelf Registration
Statement, the Selling Securityholder agrees to promptly notify the Company of
any inaccuracies or changes in the information provided herein which may occur
subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect.  All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing, by hand-delivery, first-class mail or air courier guaranteeing
overnight delivery as follows:


 


	
  (i)  To the Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Timothy
  J. Romenesko

  
	
   

  	
   

  	
  Vice
  President & Chief Financial Officer

  
	
   

  	
   

  	
  AAR
  CORP.

  
	
   

  	
   

  	
  One
  AAR Place

  
	
   

  	
   

  	
  1100
  North Wood Dale Road

  
	
   

  	
   

  	
  Wood
  Dale, IL  60191

  
	
   

  	
   

  	
   

  
	
  (ii)  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Howard
  A. Pulsifer

  
	
   

  	
   

  	
  Vice
  President, General Counsel & Secretary

  
	
   

  	
   

  	
  AAR
  CORP.

  
	
   

  	
   

  	
  One
  AAR Place

  
	
   

  	
   

  	
  1100
  North Wood Dale Road

  
	
   

  	
   

  	
  Wood
  Dale, IL  60191

  



 


 


Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall
be binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above).  This Agreement shall be
governed in all respects by the laws of the State of New York.


 


23

















 


IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.


 


	
  Dated:

  	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Selling
  Securityholder

  	
   

  
	
   

  	
  (Print/type
  full legal name of beneficial owner of Registrable Securities)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 


 


PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR
BEFORE [DEADLINE
FOR RESPONSE] TO THE COMPANY AT:


 


Timothy J. Romenesko


Vice President & Chief Financial Officer


AAR CORP.


One AAR Place


1100 North Wood Dale Road


Wood Dale, IL  60191


 


24

















 


Exhibit 1


to Appendix A


 


 


NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT


 


AAR
Corp.


One
AAR Place


1100
N. Wood Dale Road


Wood
Dale, Illinois 60191


 


Attention:  Howard A. Pulsifer


 


U.S.
Bank National Association


60
Livingston Avenue


St.
Paul, MN  55107


 


Attention:  Corporate Trust Services


 


Re:          AAR Corp. (the “Company”)


2.875% Convertible Notes due February 1, 2024 (the
“Notes”)


 


Dear
Sirs:


 


Please
be advised that
                             
has transferred $                      aggregate
principal amount of the above-referenced Notes or shares of the Company’s
common stock, issued upon conversion, repurchase or redemption of Notes,
pursuant to an effective Registration Statement on Form S-3 (File No. 333-            )
filed by the Company.


 


We
hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus dated [date],
or in amendments or supplements thereto, and that the aggregate principal
amount of the Notes or number of shares of common stock transferred are a
portion of the Notes or shares of common stock listed in such Prospectus as
amended or supplemented opposite such owner’s name.


 


Dated:


 


	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Authorized
  Signature)

  



 


25