Document:

exv4w1

 

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS

OF

SERIES B CONVERTIBLE PREFERRED STOCK

OF

KITTY HAWK, INC.

     Kitty Hawk, Inc., a Delaware corporation, DOES HEREBY CERTIFY:

     That, pursuant to the authority conferred upon the Board of Directors of said corporation by
virtue of its certificate of incorporation as amended and in accordance with Section 151 of the
General Company Law of the State of Delaware (the “DGCL”), said Board of Directors has duly adopted
a resolution by unanimous consent providing for the issuance of a series of preferred stock, par
value $0.01 per share, designated as Series B Convertible Preferred Stock, which resolution reads
as follows:

     BE IT RESOLVED, that the Board of Directors (the “Board”) of Kitty Hawk, Inc. (the “Company”)
hereby authorizes the issuance of a series of preferred stock and fixes its designation, powers,
preferences and relative, participating, optional or other special rights, and qualifications,
limitations and restrictions thereof, as follows:

     Section 1. Designation. The distinctive serial designation of said series shall be
“Series B Convertible Preferred Stock” (hereinafter called “Series B Preferred Stock”). Each share
of Series B Preferred Stock shall be identical in all respects with all other shares of Series B
Preferred Stock.

     Section 2. Number of Shares. The number of authorized shares of Series B Preferred
Stock shall be, in aggregate, 15,000 shares, which each share of Series B Preferred Stock having a
stated value of $1,000.00 per share (“Stated Value”). The number of authorized shares of Series B
Preferred Stock may be increased or reduced by the Board by the filing of a certificate pursuant to
the provisions of the DGCL stating that the change has been so authorized. When shares of Series B
Preferred Stock are purchased or otherwise acquired by the Company or converted into Common Stock,
par value $0.000001 per share, of the Company (the “Common Stock”), the Company shall take all
necessary action to cause the shares of Series B Preferred Stock so purchased or acquired to be
canceled and reverted to authorized but unissued shares of preferred stock undesignated as to
series.

     Section 3. Rank. The Series B Preferred Stock shall, with respect to rights on
liquidation, winding-up or dissolution, rank (a) junior to all claims of creditors, including the
holders of the Company’s outstanding debt securities, (b) senior to all classes of Common Stock and
to any class of preferred stock established hereafter by the Board, the terms of which expressly
provide that it ranks junior to the Series B Preferred Stock as to rights on liquidation,
winding-up or dissolution of the Company (collectively referred to, together with all classes of
Common Stock of the Company, as “Junior Stock”), (c) on parity with any class of preferred stock
established hereafter by the Board, the terms of which expressly provide that it ranks on a

 

 

parity with the Series B Preferred Stock as to rights on liquidation, winding-up or
dissolution (collectively referred to as “Parity Stock”), and (d) junior to the Series A Preferred
Stock of the Company, $0.01 par value, any other class of preferred stock established hereafter by
the Board, the terms of which expressly provide that it ranks senior to the Series B Preferred
Stock as to rights on liquidation, winding-up or dissolution (collectively referred to as “Senior
Stock”), provided, however, that the Company may not create any class of Senior Stock without the
consent of a majority of the Holders of Series B Preferred Stock.

     Section 4. Preference on Liquidation.

     (a) Subject to the liquidation rights of the holders of any Senior Stock and any Parity Stock,
upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, holders of
Series B Preferred Stock (each, a “Holder” and collectively, the “Holders”) shall be entitled to be
paid, out of the assets of the Company available for distribution to stockholders, the liquidation
preference equal to the Stated Value per share of Series B Preferred Stock and all accrued and
unpaid dividends thereon, before any distribution is made on any Junior Stock, including, without
limitation, any class of Common Stock of the Company.

     (b) If, upon any voluntary or involuntary liquidation, winding-up or dissolution of the
Company, the assets of the Company available for distribution are not sufficient to pay in full the
liquidation preference payments payable to the holders of Series B Preferred Stock and all Parity
Stock, then the assets of the Company available for distribution among the Holders of the Series B
Preferred Stock and any Parity Stock shall bear to each other the ratio that the aggregate Stated
Value of the Series B Preferred Stock and the aggregate liquidation preference of any Parity Stock
bear to each other.

     (c) For the purposes of this Certificate of Designations, neither the sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Company nor the consolidation, merger, share
exchange or similar transaction with one or more entities shall be deemed to constitute a
liquidation, winding-up or dissolution of the Company.

     (d) Written notice of any payment to the Holders of Series B Preferred Stock as a result of a
liquidation, winding-up or dissolution of the Company, stating the payment date or dates when and
the place or places where the amounts distributable in such circumstances shall be payable, shall
be given by first-class mail, postage prepaid, not less than 30 days prior to any payment date
stated therein, to the Holders of record of shares of Series B Preferred Stock at their respective
addresses as the same shall appear on the books of the transfer agent for the Series B Preferred
Stock.

     (e) After payment of the full amount of the liquidation preference, the Holders of shares of
Series B Preferred Stock shall not be entitled to any further participation in any distribution of
assets of the Company.

     Section 5. Voting Rights. On all matters presented to the holders of Common Stock,
except as expressly provided herein or as otherwise required by law, the holders of Series B
Preferred Stock shall vote as a single class with the holders of Common Stock and shall be

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entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company.
Each holder of Series B Preferred Stock shall have one vote for each share of Common Stock issuable
upon conversion of its shares of Series B Preferred Stock on the record date for the vote.

     Section 6. Dividends.

     (a) The Holders shall be entitled to receive out of the assets of the Company legally
available for that purpose, cumulative preferential dividends at a rate per annum of 8.00% of the
Stated Value for each share of Series B Preferred Stock, and, except as provided in Section 6(b),
no more, to be paid in accordance with the terms of this Section 6. Such dividends shall be
cumulative from the original date of issuance of such shares of Series B Preferred Stock (the
"Issue Date”) and shall be payable in arrears, when and as declared by the Board, on March 31, June
30, September 30 and December 31 of each year (each such date being herein referred to as a
"Dividend Payment Date”), commencing on the first such Dividend Payment Date following the Issue
Date; provided that if any Dividend Payment Date shall not be a business day, then the Dividend
Payment Date shall be on the next succeeding day that is a business day; further provided that any
amounts that would be payable hereunder on the first or second Dividend Payment Date after the
Issue Date shall be not be paid on such date, and shall be accrued and paid in four equal quarterly
installments without interest on the third, fourth, fifth and sixth Dividend Payment Dates after
the Issue Date, respectively, in addition to any other amounts payable on such dates in accordance
with this Section 6(a). The period from the Issue Date to the next Dividend Payment Date and each
quarterly period between consecutive Dividend Payment Dates shall hereinafter be referred to as
"Dividend Periods.” Dividends for the initial Dividend Period shall be pro rated on a daily basis
commencing on and including the Issue Date on the basis of a 360-day year, consisting of twelve
30-day months. Each such dividend shall be paid to the holders of record of the Series B Preferred
Stock as their names appear on the share register of the Company on the corresponding Record Date.
As used above, the term “Record Date” means, with respect to the dividend payable on any Dividend
Payment Date, the 15th day of the calendar month in which such Dividend Payment Date
occurs, or such other record date designated by the Board with respect to the dividend payable on
such respective Dividend Payment Date not exceeding 30 days preceding such Dividend Payment Date.
Dividends on account of arrears for any past Dividend Periods may be declared and paid, at any
time, without reference to any Dividend Payment Date, to holders of record on a date designated by
the Board, not exceeding 30 days preceding the payment date thereof, as may be fixed by the Board.

     (b) If, on any Dividend Payment Date after March 31, 2006, the Company fails to pay dividends,
then until the dividends that were scheduled to be paid on such date are paid, such dividends shall
cumulate with interest at 8.00% per annum. Dividends for any period less than a full quarterly
Dividend Period or for a period commencing on a Dividend Payment Date and ending on a date the
Series B Preferred Stock is converted to Common Stock shall cumulate on a day-to-day basis and
shall be computed on the basis of a 360-day year, consisting of twelve 30-day months.

     Section 7. Conversion Rights. Each Holder of shares of Series B Preferred Stock shall
have the right, subject as provided herein and to any applicable laws and regulations, at any time,
at the Holder’s option, to convert each share of Series B Preferred Stock into such number

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of fully paid and nonassessable shares of Common Stock as is determined by dividing the Stated
Value by $0.9604 (as adjusted pursuant to Section 8, the “Conversion Price”).

     (a) In order to exercise the conversion right, the Holder of each share of Series B Preferred
Stock to be converted shall surrender that certificate representing such share, duly endorsed or
assigned to the Company or in blank, at the office of the transfer agent for the Series B Preferred
Stock and shall give written notice to the Company in the form of Exhibit A attached
hereto. Such notice shall also state the name or names (with address) in which the certificate or
certificates for the shares of Common Stock which shall be issuable upon such conversion shall be
issued, and shall be accompanied by funds in an amount sufficient to pay any transfer or similar
tax required by the provisions of Section 7(c) below. Each share surrendered for conversion shall,
unless the shares issuable on conversion are to be issued in the same name as the name in which
such share of the Series B Preferred Stock is registered, be duly endorsed by, or be accompanied
by, instruments of transfer (in each case, in form reasonably satisfactory to the Company), duly
executed by the Holder or such Holder’s duly authorized attorney-in-fact.

     (b) Within five business days following the surrender of certificates for shares of the Series
B Preferred Stock for conversion and the receipt of such notice and funds, if any, as aforesaid,
the Company shall issue and deliver to such Holder, or on such Holder’s written order, a
certificate or certificates for the number of shares of Common Stock issuable upon the conversion
of such shares of the Series B Preferred Stock in accordance with the provisions of this Section 7.
Each conversion with respect to such shares of the Series B Preferred Stock shall be deemed to
have been effected immediately prior to the close of business on the date on which the certificates
for shares of the Series B Preferred Stock shall have been surrendered and such notice shall have
been received by the Company as aforesaid, and the individual or entity entitled to receive the
Common Stock issuable upon such conversion shall be deemed for all purposes to be the record Holder
or Holders of such Common Stock upon that date.

     (c) If a Holder converts shares of the Series B Preferred Stock, the Company shall pay any and
all documentary, stamp or similar issue or transfer tax payable in respect of the issue or delivery
of the shares of the Series B Preferred Stock (or any other securities issued on account thereof
pursuant hereto) or Common Stock upon the conversion; provided, however, the Company shall not be
required to pay any such tax that may be payable because any such shares are issued in a name other
than the name of the Holder. In the event that the shares are to be issued in a name other than
that of the Holder, the Holder shall provide the funds necessary to pay any and all of the
foregoing taxes.

     (d) The Company shall reserve out of its authorized but unissued Common Stock or its Common
Stock held in treasury enough shares of Common Stock to permit the conversion of all of the
outstanding shares of the Series B Preferred Stock. The Company shall from time to time, in
accordance with the DGCL, increase the authorized amount of its Common Stock if at any time the
authorized amount of its Common Stock remaining unissued shall not be sufficient to permit the
conversion of the shares of the Series B Preferred Stock at the time outstanding, subject to the
foregoing restriction on conversion. All shares of Common Stock delivered upon conversion of the
shares of the Series B Preferred Stock will, upon delivery, be duly authorized and validly issued,
fully paid and nonassessable, free from all taxes, liens and charges with respect to the issue
thereof.

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     (e) If any conversion of Series B Preferred Stock would create a fractional share of Common
Stock, such fractional share of Common Stock shall be disregarded and the Company shall pay cash to
the Holder in an amount calculated by multiplying the amount of the fractional share by the
Conversion Price.

     Section 8. Conversion Price Adjustments. The Conversion Price shall be subject to
adjustment from time to time upon the happening of certain events as follows:

     (a) If at any time or from time to time after the date hereof, the Company shall subdivide (by
way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock, the
Conversion Price in effect immediately prior to such subdivision shall be reduced proportionately,
and conversely, in the event the outstanding shares of Common Stock shall be combined (whether by
stock combination, reverse stock split or otherwise) into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be increased
proportionately. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon
the happening of any successive event or events described in this Section 8(a).

     (b) If at any time after the date hereof, the Company shall declare a dividend or make any
other distribution upon any class or series of stock of the Company payable in shares of Common
Stock or securities convertible into shares of Common Stock, the Conversion Price shall be adjusted
proportionately to reflect the issuance of any shares of Common Stock or convertible securities, as
the case may be, issuable in payment of such dividend or distribution. The Conversion Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any successive event or
events described in this Section 8(b).

     (c) If the Common Stock shall be changed into the same or a different number of shares of any
class(es) or series of stock, whether by reclassification or otherwise (other than an adjustment
under Section 8(a) and Section 8(b) or a merger, consolidation, or sale of assets provided for
under Section 8(d)), then and in each such event, the Holder hereof shall have the right thereafter
to convert each share of Series B Preferred Stock into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification, or other change by holders of
the number of shares of Common Stock into which such share of Series B Preferred Stock would have
been convertible immediately prior to such reclassification or change, all subject to successive
adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this
Section 8(c).

     (d) In the event that, at any time or from time to time after the date hereof, the Company
shall (i) effect a reorganization, (ii) consolidate with or merge into any other entity, or (iii)
sell or transfer all or substantially all of its properties or assets, or more than 50% of the
voting capital stock of the Company (whether issued and outstanding, newly issued, from treasury,
or any combination thereof), to any other individual or entity under any plan or arrangement
contemplating the consolidation or merger, sale or transfer, or dissolution of the Company, then,
in each such case, the Holder, upon the conversion of its Series B Preferred Stock as provided in
herein at any time or from time to time after the consummation of such reorganization,
consolidation, merger or sale or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock issuable on such conversion immediately prior to such
consummation or such effective date, as the case may be, the stock and property

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(including cash) to which the Holder would have been entitled upon the consummation of such
consolidation or merger, or sale or transfer, or in connection with such dissolution, as the case
may be, if the Holder had so converted its Series B Preferred Stock immediately prior thereto
(assuming the payment by the Holder of the Conversion Price therefor as required hereby in a form
permitted hereby, which payment shall be included in the assets of the Company for the purposes of
determining the amount available for distribution), all subject to successive adjustments
thereafter from time to time pursuant to, and in accordance with, the provisions of this Section 8.
The Company shall not effect any such consolidation, merger or sale unless prior to the
consummation thereof the successor entity (if other than the Company) resulting from such
consolidation or merger or the entity purchasing such assets assumes by written instrument (in form
and substance reasonably satisfactory to the Holder) the obligation to deliver the stock or
property (including cash) as, in accordance with the foregoing provisions, the Holder may be
entitled to acquire.

     Section 9. Holder Redemption Rights.

     (a) Any time on or after November 14, 2010, any Holder of any Series B Preferred Stock shall
have the right to cause the Company to redeem, in whole or in part (but only in whole-number
amounts), such Holder’s Series B Preferred Stock (a “Holder Redemption”) by payment to the Holder
of an amount equal to the Stated Value of such shares of Series B Preferred Stock and all accrued
and unpaid dividends thereon (the “Redemption Price”), to the extent permitted by applicable law
and so long as the Holder shall have delivered to the Company at least 10 business days prior
written notice specifying the date on which such Holder Redemption is to be effected.

     (b) Upon a Holder Redemption, payment of the Redemption Price with respect to each share of
Series B Preferred Stock redeemed, which shall be in the form of a Company check representing
immediately available funds, to such Holder will be effected simultaneously with the return of such
share by such Holder to the Company. In addition, to the extent a Holder wants to redeem less than
all of such Holder’s Series B Preferred Stock, the Company shall also deliver a certificate
evidencing the Holder’s unredeemed Series B Preferred Stock. To the extent that the Company fails
to pay the full amount of the Redemption Price upon a Holder Redemption, the unpaid amount shall
accrue interest at a rate of 8.00% per annum.

     Section 10. Company Redemption Rights.

     (a) Upon at least 30 days’ written notice (the “Company Redemption Notice”), any time on or
after November 14, 2006, if the VWAP (defined below) is equal to at least 200% of the Conversion
Price, the Company shall have the right to redeem, in whole or in part, the Series B Preferred
Stock outstanding at the Redemption Price (a “Company Redemption”), to the extent permitted by
applicable law and so long as the Company shall have identified in the Company Redemption Notice
the date on which such Company Redemption is to be effected (the “Company Redemption Date”). If
the Company should elect to redeem less than all of the Series B Preferred Stock outstanding, the
Company shall select those shares of Series B Preferred Stock to be redeemed by lot. Nothing
contained herein shall limit a Holder’s right to convert such Holder’s Series B Preferred Stock at
any time prior to the Company Redemption Date. As used herein, “VWAP” means the volume weighted
average closing price of the

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Common Stock on any national securities exchange or quotation service upon which the Common
Stock is listed or quoted, measured over a period of 30 consecutive trading days ending one such
day prior to the date of the Company Redemption Notice.

     (b) Upon the Company Redemption Date, dividends on the shares of Series B Preferred Stock
subject to such Company Redemption Notice (the “Redeemed Shares”) shall cease to accrue, the
Redeemed Shares shall no longer be deemed to be outstanding and shall not have the status of shares
of Series B Preferred Stock, and all rights of the Holders as shareholders of the Company with
respect to such Redeemed Shares (except the right to receive the Redemption Price for the Redeemed
Shares) shall cease. Upon surrender of the certificates for the Redeemed Shares in accordance with
Company Redemption Notice (properly endorsed or assigned for transfer if the Company shall so
require and the Company Redemption Notice shall so state), the Redeemed Shares shall be redeemed by
the Company at the Redemption Price. To the extent that the Company fails to pay the full amount
of the Redemption Price on the Company Redemption Date, the unpaid amount shall accrue interest at
a rate of 8.00% per annum.

     (c) To the extent the Company shall redeem less than all of the Series B Preferred Stock
outstanding, the Company shall also deliver certificates evidencing the unredeemed Series B
Preferred Stock.

     Section 11. Preemptive Rights. For so long as a Holder continues to beneficially own
(as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended and then in effect) at least 20% of the Series B Preferred Stock
purchased by such Holder on or before November 14, 2005, such Holder shall have the right to
participate pro rata in future issuances of shares of capital stock of the Company for the purpose
of raising additional funds for use by the Company, in an amount not to exceed the proportion that
the number of shares of capital stock of the Company beneficially owned by such Holder bears to the
fully-diluted number of shares of capital stock outstanding immediately prior to such issuance.
Notwithstanding the foregoing, the preemptive rights of the Holders shall not apply to or include
the issuance of Common Stock (i) pursuant to a subdivision of the outstanding shares of Common
Stock into a larger number of shares of Common Stock, including stock dividends and stock splits,
(ii) pursuant to the conversion, exchange or exercise of any instrument convertible, exchangeable
or exercisable into shares of Common Stock, provided that the issuance of such instrument was
authorized by the Board of Directors of the Company on or prior to November 14, 2005, (iii)
pursuant to the exercise or conversion of warrants, options or restricted stock units granted by
the Company, including warrants issued by the Company in connection with the issuance of debt
instruments by the Company, (iv) pursuant to any compensation or incentive plan, arrangement or
award adopted, issued or granted by the Company for its employees, members of its Board of
Directors or its consultants, (v) in consideration of the acquisition of another entity that is
approved by the Board of Directors of the Company, or (vi) in connection with any corporate
partnering transaction, strategic alliance, or other similar agreement approved by the Board of
Directors. The Holders shall have 10 days following delivery of written notice from the Company of
its intention to issue additional capital stock to exercise these preemptive rights by written
notice to the Company exercising such rights and specifying the number of shares of such capital
stock that it intends to purchase. These preemptive rights shall terminate (i) with respect to all
Holders upon a merger, consolidation, or

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sale of assets provided for under Section 8(d), and (ii) with respect to any Holder and the
future issuance of capital stock with respect to which such Holder delivered its notice of exercise
of its preemptive rights, upon the failure of such Holder to deliver to the Company, on or before
the date of such future issuance of capital stock, the consideration for the number of shares of
capital stock specified by such Holder in its notice of exercise of its preemptive rights. Company
shall not be obligated to deliver to any Holder any additional shares of capital stock pursuant to
such Holder’s exercise of preemptive rights unless it has timely received notice of exercise and
the required consideration therefor from such Holder.

* * * * *

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     IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed on its behalf
by its undersigned Chief Executive Officer and attested to by its Chief Financial Officer this
14th day of November, 2005.

	 	 	 	 	 
	 	KITTY HAWK, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Robert W. Zoller, Jr.
 	 
	 	 	Name:  	Robert W. Zoller, Jr. 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

	 	 	 
	ATTEST:
	 
	 	 
	By:

	 	/s/ Steven E. Markhoff
	 

	 	 
	Name:

	 	Steven E. Markhoff
	Title:

	 	Vice President of Strategic Planning,
	 

	 	General Counsel and Secretary

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EXHIBIT A

HOLDER’S CONVERSION NOTICE

	 	 	 
	To:

	 	Kitty Hawk, Inc.
	 

	 	1515 West 20th Street
	 

	 	P. O. Box 612787
	 

	 	DFW International Airport, Texas 75261

     The undersigned Holder of the Series B Convertible Preferred Stock, par value $0.01 (the
"Series B Preferred Stock”), of Kitty Hawk, Inc. (the “Company”), in the aggregate number of 15,000
shares of Series B Preferred Stock irrevocably exercises the option to convert such number of
shares of Series B Preferred Stock into shares of Common Stock of the Company, par value U.S.
$0.000001 (the “Common Stock”), in accordance with the terms of the Certificate of Designations
relating to the issuance by the Company of the Preferred Stock, and directs that the Common Stock
issuable and deliverable upon such conversion be issued and delivered to the undersigned in the
name and at the address set forth below.

     If the Common Stock is to be issued in the name of an individual or entity other than the
undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith funds in an amount sufficient to pay any such taxes.

     All terms used and not otherwise defined herein shall have the respective meanings set forth
in the Certificate of Designations.

	 	 	 	 	 	 	 
	DATE:
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Name of Holder
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature(s) of Holder
	 
	 	 	 	 	 	 
	Address for Delivery of Shares:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name for Registration of Shares (if different
than Holder):	 	 	 	 
	 

	 	 	 	 	 	 

A-1exv4w2

 

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

by and among

KITTY HAWK, INC.,

and

CERTAIN PURCHASERS

IDENTIFIED HEREIN

Dated as of November 14, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I. Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II. Registration Rights	 	 	3	 
	 
	 	 	 	 	 	 
	2.1
	 	Required Registration	 	 	3	 
	2.2
	 	Current Public Information	 	 	4	 
	2.3
	 	Demand Registration	 	 	4	 
	2.4
	 	Piggyback Registration	 	 	6	 
	2.5
	 	Holdback Agreements	 	 	8	 
	2.6
	 	Registration Procedures	 	 	9	 
	2.7
	 	Conditions Precedent to Company’s Obligations Pursuant to this Agreement	 	 	11	 
	2.8
	 	Fees and Expenses	 	 	11	 
	2.9
	 	Indemnification	 	 	12	 
	2.10
	 	Participation in Registrations	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE III. Transfers of Certain Rights	 	 	16	 
	 
	 	 	 	 	 	 
	3.1
	 	Transfer	 	 	16	 
	3.2
	 	Transferees	 	 	16	 
	3.3
	 	Subsequent Transferees	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE IV. Miscellaneous	 	 	16	 
	 
	 	 	 	 	 	 
	4.1
	 	Recapitalizations, Exchanges, etc.	 	 	16	 
	4.2
	 	Injunctive Relief	 	 	17	 
	4.3
	 	Successors and Assigns, Third Party Beneficiaries	 	 	17	 
	4.4
	 	Notices	 	 	17	 
	4.5
	 	Choice of Law	 	 	18	 
	4.6
	 	Entire Agreement; Amendments and Waivers	 	 	18	 
	4.7
	 	Counterparts	 	 	18	 
	4.8
	 	Invalidity	 	 	18	 
	4.9
	 	Headings	 	 	19	 
	4.10
	 	Forum; Service of Process	 	 	19	 
	4.11
	 	No Prejudice	 	 	19	 
	4.12
	 	Termination of Rights	 	 	19	 

 

 

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of November 14, 2005, is entered into by and
among KITTY HAWK, INC., a Delaware corporation (the “Company”), and those individuals and entities
identified on the signature page(s) to this Agreement (each a “Purchaser,” and together, the
“Purchasers”).

RECITALS

     A. The Company desires to issue and sell 15,000 shares of its Series B Convertible Preferred
Stock, par value $0.01 (the “Preferred Stock”), and warrants to acquire 3,536,585 shares of its
Common Stock, par value $0.000001 (the “Common Stock”), to the Purchasers as set forth in the
Securities Purchase Agreement dated as of November 9, 2005 entered into by and between the Company
and the Purchasers (the “Securities Purchase Agreement”); and

     B. It is a condition precedent to the consummation of the transactions contemplated by the
Securities Purchase Agreement that the Company provide for the rights set forth in this Agreement;

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and
agreements hereinafter contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto
hereby agree as follows:

ARTICLE I.

DEFINITIONS

     “Affiliate” means any entity controlling, controlled by or under common control with the
Company. For the purposes of this definition, “control” shall have the meaning presently specified
for that word in Rule 405 promulgated by the Commission under the Securities Act.

     “Business Day” means a day other than a Saturday or Sunday or any federal or New York holiday.

     “Certificate of Designations” means the Certificate of Designations of the Preferred Stock.

     “Closing Date” has the meaning ascribed to such term in the Securities Purchase Agreement.

     “Commission” means the United States Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.

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     “Common Stock” has the meaning set forth in the Recitals.

     “Company” has the meaning set forth in the preamble.

     “Designated Holder” means a holder of Registrable Securities.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

     “Indemnified Party” has the meaning set forth in Section 2.9.

     “Losses” has the meaning set forth in Section 2.9.

     “Majority Holders” means holders of a majority of the Registrable Securities.

     “Person” means any individual, company, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental body or other entity.

     “Piggyback Registration” has the meaning set forth in Section 2.4.

     “Preferred Stock” has the meaning set forth in the Recitals.

     “Purchaser(s)” has the meaning set forth in the preamble.

     “Registrable Securities” means, subject to the immediately following sentences, (i) shares of
Common Stock issued or issuable upon conversion of the shares of Preferred Stock acquired by the
applicable Purchaser from the Company pursuant to the Securities Purchase Agreement, (ii) shares of
Common Stock issued or issuable upon exercise of the Warrants acquired by the applicable Purchaser
from the Company pursuant to the Securities Purchase Agreement, and (iii) any shares of Common
Stock beneficially owned (as defined in Rule 13d-3 adopted by the Commission under the Exchange
Act) by Lloyd I. Miller III as of November 9, 2005, and (iv) any shares of Common Stock issued or
issuable, directly or indirectly, with respect to the securities referred to in clauses (i), (ii)
or (iii) by way of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any particular shares of
Common Stock constituting Registrable Securities, if the Company has complied with the requirements
of the second paragraph of Section 2.1, such shares of Common Stock will cease to be
Registrable Securities for purposes of Section 2.1 and Section 2.3 following the
expiration of the Registration Period. In addition, any particular shares of Common Stock
constituting Registrable Securities will cease to be Registrable Securities when they (x) have been
effectively registered under the Securities Act and disposed of in accordance with a Registration
Statement covering them, (y) have been sold to the public pursuant to Rule 144 (or by similar
provision under the Securities Act), or (z) are eligible for resale under Rule 144(k) (or by
similar provision under the Securities Act) without any limitation on the amount of securities that
may be sold under paragraph (e) thereof.

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     “Registration Statement” means a registration statement on Form S-3 (or, if the Company is not
eligible to use Form S-3, such other appropriate registration form of the Commission pursuant to
which the Company is eligible to register the resale of Registrable Securities) filed by the
Company under the Securities Act which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such registration statement, which shall permit the Designated Holders
to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
the Registrable Securities.

     “Registration Period” means the two years, plus any additional periods required by the second
paragraph of Section 2.1, during which the Registration Statement contemplated by
Section 2.1 is required to remain effective.

     “Representatives” has the meaning set forth in Section 2.9.

     “Required Registration Statement” has the meaning set forth in Section 2.1.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder.

     “Securities Purchase Agreement” has the meaning set forth in the recitals.

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

ARTICLE
II.

REGISTRATION RIGHTS

     2.1 Required Registration. 

     The Company shall use its commercially reasonable efforts to prepare and file, not later than
60 days from the Closing Date (or, if such 60th day is not a Business Day, by the first
Business Day thereafter), a Registration Statement with the Commission (the “Required Registration
Statement”). The Company agrees to include in the Required Registration Statement all information
that the Designated Holders shall reasonably request.

     The Company shall use its commercially reasonable efforts to keep the Required Registration
Statement continuously effective for a period of two years after the Registration Statement first
becomes effective, plus the number of days during which such Registration Statement was not
effective or usable pursuant to Sections 2.5(b), 2.6(e) or 2.6(i), or such
shorter period as will terminate when all of the Registrable Securities covered by the Required
Registration Statement have been disposed of in accordance with the Required Registration
Statement or have otherwise ceased to be Registrable
Securities. In the event the Company shall give any notice pursuant to Sections 2.6(e) or
(i), the additional time period mentioned in this Section 2.1 during which the
Required Registration Statement is to remain effective shall be

3

 

extended by the number of days
during the period from and including the date of the giving of such notice pursuant to Sections
2.6(e) or 2.6(i) to and including the date when each seller of a Registrable Security
covered by the Registration Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Sections 2.6(e).

     2.2 Current Public Information. 

     The Company covenants that it will use its commercially reasonable efforts to file all reports
required to be filed by it under the Exchange Act and the rules and regulations adopted by the
Commission thereunder, and will use its commercially reasonable efforts to take such further action
as the Designated Holders may reasonably request, all to the extent required to enable the holders
of Registrable Securities to sell Registrable Securities pursuant to Rule 144 adopted by the
Commission under the Securities Act or any similar rule or regulation hereafter adopted by the
Commission. The Company shall, upon the request of a Designated Holder, deliver to such Designated
Holder a written statement as to whether it has complied with such requirements during the 12-month
period immediately preceding the date of such request.

     2.3 Demand Registration

     (a) Subject to Section 2.3(g), upon the written request of the Majority
Holders, requesting that the Company effect the registration under the Securities Act of all
or part of such Designated Holders’ Registrable Securities and specifying the intended
method of disposition thereof, the Company will promptly give written notice of such
requested registration to all Designated Holders, and thereupon the Company will use its
commercially reasonable efforts to effect as expeditiously as possible the registration
under the Securities Act of the following:

     (i) the Registrable Securities that the Company has been so requested to be
registered by such Designated Holders for disposition in accordance with the
intended method of disposition stated in such request;

     (ii) all other Registrable Securities the holders of which shall have made a
written request to the Company for registration thereof within 30 days after the
giving of such written notice by the Company (which request shall specify the
intended method of disposition of such Registrable Securities); and

     (iii) all shares of Common Stock which the Company or Persons entitled to
exercise “piggy-back” registration rights pursuant to contractual commitments of
the Company may elect to register in connection with the offering of Registrable
Securities pursuant to this Section 2.3;

all to the extent requisite to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities and the additional shares of
Common Stock, if any, so to be registered; provided, that, the provisions of this
Section 2.3 shall not require the Company to effect more than one registration of
Registrable Securities in addition to the Required Registration Statement contemplated by
Section 2.1.

4

 

     (b) The registrations under this Section 2.3 shall be on an appropriate
Registration Statement that permits the disposition of such Registrable Securities in
accordance with the intended methods of distribution specified by the Majority Holders in
their request for registration. The Company agrees to include in any such Registration
Statement all information that Designated Holders of Registrable Securities being registered
shall reasonably request.

     (c) A registration requested pursuant to this Section 2.3 shall not be deemed
to have been effected (i) unless a Registration Statement with respect thereto has become
effective; provided, that a Registration Statement which does not become effective after the
Company has filed a Registration Statement with respect thereto solely by reason of the
refusal to proceed of the Majority Holders shall be deemed to have been effected by the
Company at the request of the Majority Holders unless the Designated Holders electing to
have Registrable Securities registered pursuant to such Registration Statement shall have
elected to pay all fees and expenses otherwise payable by the Company in connection with
such registration pursuant to Section 2.8, (ii) if, after it has become effective,
such registration is withdrawn by the Company (other than at the request of the Majority
Holders) or interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason prior to the expiration
of a 180 day period following such Registration Statement’s effectiveness, or (iii) if the
conditions to closing specified in any purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied, other than due to an act or
omission by the Designated Holders electing to have Registrable Securities registered
pursuant to such Registration Statement.

     (d) If a requested registration pursuant to this Section 2.3 involves an
underwritten offering, the underwriter or underwriters thereof shall be selected by the
holders of a majority (by number of shares) of the Registrable Securities requested to be
included in such Registration Statement and shall be reasonably acceptable to the Company.

     (e) If a requested registration pursuant to this Section 2.3 involves an
underwritten offering, and the managing underwriter shall advise the Company in writing
(with a copy to each Designated Holder of Registrable Securities requesting registration)
that, in its opinion, the number of securities requested to be included in such registration
(including securities of the Company which are not Registrable Securities) exceeds the
number which can be sold in such offering within a price range reasonably acceptable to the
Company and to the holders of a majority (by number of shares) of the Registrable Securities
requested to be included in such Registration Statement, the Company will include in such
registration, to the extent of the
number which the Company is so advised can be sold in such offering, (i) first, the
Registrable Securities which have been requested to be included in such registration by the
Designated Holders pursuant to this Agreement (pro rata based on the amount of Registrable
Securities sought to be registered by such persons), (ii) second, provided that no
securities sought to be included by the Designated Holders have been excluded from such
registration, the securities of other persons entitled to exercise “piggy-back” registration
rights pursuant to contractual commitments of the Company (pro rata based on the amount of
securities sought to be registered by such persons) and (iii) third, securities the Company
proposes to register.

5

 

     (f) The Company shall use its commercially reasonable efforts to keep any Registration
Statement filed pursuant to this Section 2.3 continuously effective (i) for a period
of two years after the Registration Statement first becomes effective, plus the number of
days during which such Registration Statement was not effective or usable pursuant to
Sections 2.5(b), 2.6(e) or 2.6(i); (ii) if such Registration
Statement related to an underwritten offering, for such period as in the opinion of counsel
for the underwriters a prospectus is required by law to be delivered in connection with
sales of Registrable Securities by an underwriter or dealer, or (iii) for such shorter
period as will terminate when all of the Registrable Securities covered by the Required
Registration Statement have been disposed of in accordance with the Required Registration
Statement or have otherwise ceased to be Registrable Securities. In the event the Company
shall give any notice pursuant to Sections 2.6(e) or (i), the additional
time period mentioned in Section 2.3(f)(i) during which the Required Registration
Statement is to remain effective shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to Sections 2.6(e)
or (i) to and including the date when each seller of a Registrable Security covered
by the Registration Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Sections 2.6(e).

     (g) The right of Designated Holders to register Registrable Securities pursuant to this
Section 2.3 is only exercisable if (i) prior to the expiration of the Registration
Period, the Company becomes ineligible to register the Registrable Securities on the
Registration Statement contemplated by Section 2.1 or such Registration Statement
otherwise becomes unusable or ineffective and the Company is not able to correct the
misstatements, have the applicable stop order rescinded or otherwise restore the
effectiveness of the Registration Statement as contemplated by this Agreement, and (ii) the
Designated Holders desiring to dispose of Registrable Securities pursuant to the
Registration Statement to be filed in accordance with this Section 2.3 furnish to the
Company such information regarding such Designated Holders, the Registrable Securities held
by such Designated Holders, and the method of disposition of such Registrable Securities as
shall be required by the Securities Act to effect the registration demanded under this
Section 2.3.

     2.4 Piggyback Registration

     (a) Whenever the Company proposes to register any of its securities under the
Securities Act (other than pursuant to a registration pursuant to Section 2.3 or a
registration on Form S-4 or S-8 or any successor or similar forms) and the registration form
to be used may be used for the registration of Registrable Securities, whether or not for
sale for its own account, the Company will give prompt written notice (but in no event less
than 20 days before the anticipated filing date) to all Designated Holders, and such notice
shall describe the proposed registration and distribution and offer to all Designated
Holders the opportunity to register the number of Registrable Securities as each such
Designated Holder may request. Subject to Section 2.4(f), the Company will include in such
registration statement all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within 15 days after the Designated Holders’
receipt of the Company’s notice (a “Piggyback Registration”).

6

 

     (b) The Company shall use its commercially reasonable efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggyback Registration to be included on the same
terms and conditions as any similar securities of the Company or any other security holder
included therein and to permit the sale or other disposition of such Registrable Securities
in accordance with the intended method of distribution thereof.

     (c) Any Designated Holder shall have the right to withdraw its request for inclusion of
its Registrable Securities in any Registration Statement pursuant to this Section
2.4 by giving written notice to the Company of its request to withdraw; provided, that
in the event of such withdrawal (other than pursuant to Section 2.4(e) hereof), the
Company shall not be required to reimburse such holder for the fees and expenses referred to
in Section 2.8 hereof incurred by such Designated Holder prior to such withdrawal.
The Company may withdraw a Piggyback Registration at any time prior to the time it becomes
effective.

     (d) If (i) a Piggyback Registration involves an underwritten offering of the securities
being registered, whether or not for sale for the account of the Company, to be distributed
(on a firm commitment basis) by or through one or more underwriters of recognized standing
under underwriting terms appropriate for such a transaction, and (ii) the managing
underwriter of such underwritten offering shall inform the Company and Designated Holders
requesting such registration by letter of its belief that the distribution of all or a
specified number of such Registrable Securities concurrently with the securities being
distributed by such underwriters would interfere with the successful marketing of the
securities being distributed by such underwriters (such writing to state the basis of such
belief and the approximate number of such Registrable Securities which may be distributed
without such effect), then the Company will be required to include in such registration only
the amount of securities which it is so advised should be included in such registration. In
such event: (x) in cases initially involving the registration for sale of securities for the
Company’s own account, securities shall be registered in such offering in the following
order of priority: (i) first, the securities which the Company proposes to register, (ii)
second, Registrable Securities and securities which have been requested to be included in
such registration by Persons entitled to exercise “piggy-back” registration rights
pursuant to contractual commitments of the Company (pro rata based on the amount of
securities sought to be registered by Designated Holders and such other Persons); and (y) in
cases not initially involving the registration for sale of securities for the Company’s own
account, securities shall be registered in such offering in the following order of priority:
(i) first, the securities of any Person whose exercise of a “demand” registration right
pursuant to a contractual commitment of the Company is the basis for the registration, (ii)
second, Registrable Securities and securities which have been requested to be included in
such registration by Persons entitled to exercise “piggy-back” registration rights pursuant
to contractual commitments of the Company (pro rata based on the amount of securities sought
to be registered by Designated Holders and such other Persons), (iii) third, the securities
which the Company proposes to register.

     (e) If, as a result of the proration provisions of this Section 2.4, any
Designated Holders shall not be entitled to include all Registrable Securities in a
Piggyback

7

 

Registration that such Designated Holders has requested to be included, such
holder may elect to withdraw his request to include Registrable Securities in such
registration.

     (f) The right of Designated Holders to register Registrable Securities pursuant to this
Section 2.4 is only exercisable if (i) prior to the expiration of the Registration
Period, the Company becomes ineligible to register the Registrable Securities on the
Registration Statement contemplated by Section 2.1 or such Registration Statement
otherwise becomes unusable or ineffective and the Company is not able to correct the
misstatements, have the applicable stop order rescinded or otherwise restore the
effectiveness of the Registration Statement as contemplated by this Agreement, and (ii) the
Designated Holders desiring to dispose of Registrable Securities pursuant to the
Registration Statement to be filed in accordance with this Section 2.4 furnish to
the Company such information regarding such Designated Holders, the Registrable Securities
held by such Designated Holders, and the method of disposition of such Registrable
Securities as shall be required by the Securities Act to effect the registration demanded
under this Section 2.4.

     2.5 Holdback Agreements.

     (a) To the extent not inconsistent with applicable law, in connection with a public
offering of securities of the Company, upon the request of the Company or the underwriter
(such request to be made only upon terms equally applicable in length of duration and all
other respects to the Designated Holders, the Company, its affiliates and any officers (at
the vice president or more senior level) or directors of the Company or any of their
affiliates), in the case of an underwritten public offering of the Company’s securities,
each Designated Holder who beneficially owns (as defined in Rule 13d-3 adopted by the
Commission under the Exchange Act) at least 5% of the outstanding capital stock of the
Company will not effect any public sale or distribution (other than those included in the
registration statement being filed with respect to such public offering) of any securities
of the Company, or any securities, options or rights convertible into or
exchangeable or exercisable for such securities during the 14 days prior to and the
90-day period beginning on such effective date, unless (in the case of an underwritten
public offering) the managing underwriters otherwise agree to a shorter period of time.
Neither the Company nor the underwriter shall amend, terminate or waive a “lock up”
agreement unless each “lock up” agreement with a Designated Holder is also amended or waived
in a similar manner or terminated, as the case may be.

     (b) The Company shall have the right at any time, to suspend the filing of a
Registration Statement under Section 2.3 or require that the Designated Holders of
Registrable Securities suspend further open market offers and sales of Registrable
Securities pursuant to a Registration Statement filed hereunder (i) for a period not to
exceed an aggregate of 30 days in any six month period or an aggregate of 60 days in any
twelve-month period for valid business reasons (not including avoidance of their obligations
hereunder) to avoid premature public disclosure of a pending corporate transaction,
including pending acquisitions or divestitures of assets, mergers and combinations and
similar events; and (ii) upon the occurrence of any of the events specified in Sections
2.6(e) or (i).

8

 

     2.6 Registration Procedures. 

     The Company will use its commercially reasonable efforts to effect the registration of
Registrable Securities pursuant to this Agreement in accordance with the intended methods of
disposition thereof, and pursuant thereto the Company will:

     (a) before filing the Registration Statement, furnish to the counsel selected by the
holders of a majority of the Registrable Securities a copy of such Registration Statement,
and will provided such counsel with all correspondence with the Commission regarding the
Registration Statement;

     (b) prepare and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may be necessary
to keep such Registration Statement effective for the period provided for in Section
2.1 or Section 2.3, or the periods contemplated by the Company or the Persons
requesting any Registration Statement filed pursuant to Section 2.4;

     (c) furnish to each seller of Registrable Securities such number of copies of such
Registration Statement, each amendment and supplement thereto, the prospectus included in
the Registration Statement (including each preliminary prospectus) and such other documents
as such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;

     (d) use its commercially reasonable efforts to register or qualify such Registrable
Securities under such other state securities or blue sky laws as any seller reasonably
requests and do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller and to keep each such
registration or qualification (or exemption therefrom) effective during the period which the
Registration Statement is required to be kept effective (provided, that the Company will not
be required to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation
in any such jurisdiction or (iii) consent to general service of process in any such
jurisdiction);

     (e) notify each seller of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the happening of
any event as a result of which the prospectus included in the Registration Statement
contains an untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading in the light of the circumstances under which they were
made, and, at the request of any such seller, the Company will as soon as possible prepare
and furnish to such seller a reasonable number of copies of a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading in the light of
the circumstances under which they were made;

9

 

     (f) cause all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed and, if not so listed, to be
approved for trading on any automated quotation system of a national securities association
on which similar securities of the Company are quoted;

     (g) provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such Registration Statement;

     (h) enter into such customary agreements (including underwriting agreements) and take
all other customary and appropriate actions as the holders of a majority of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order to expedite
or facilitate the disposition of such Registrable Securities;

     (i) notify each Designated Holder of any stop order issued by the Commission;

     (j) otherwise comply with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months beginning with the first day of the
Company’s first full calendar quarter after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;

     (k) in the event of the issuance of any stop order suspending the effectiveness of a
Registration Statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any securities included in such Registration
Statement for sale in any jurisdiction, the Company will use its commercially reasonable
efforts to promptly obtain the withdrawal of such order;

     (l) if requested by a Designated Holder, obtain one or more comfort letters, dated the
effective date of the Registration Statement (and, if such registration includes an
underwritten offering, dated the date of the closing under the underwriting agreement),
signed by the Company’s independent public accountants in customary form and covering such
matter of the type customarily covered by comfort letters as the holders of a majority of
the Registrable Securities being sold reasonably request;

     (m) subject to execution and delivery of mutually satisfactory confidentiality
agreements, make available at reasonable times for inspection by any seller of Registrable
Securities, any managing underwriter participating in any disposition of such Registrable
Securities pursuant to the Registration Statement, and any attorney, accountant or other
agent retained by such seller or any managing underwriter, during normal business hours of
the Company at the Company’s corporate office in DFW Airport, Texas and without unreasonable
disruption of the Company’s business or unreasonable expense to Company and solely for the
purpose of due diligence with respect to the Registration Statement, non-confidential,
legally disclosable, financial and other records and pertinent corporate documents of the
Company and its subsidiaries reasonable requested by such persons, and cause the Company’s
employees and

10

 

independent accountants to supply all similar information reasonably requested
by any such seller, managing underwriter, attorney, accountant or agent in connection with
the Registration Statement, as shall be reasonably necessary to enable them to exercise
their due diligence responsibility;

     (n) cooperate with each seller of Registrable Securities and each underwriter
participating in the disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the National Association of
Securities Dealers; and

     (o) take all other steps reasonably necessary to effect the registration of the.
Registrable Securities contemplated hereby.

     2.7 Conditions Precedent to Company’s Obligations Pursuant to this Agreement. 

     It shall be a condition precedent to the obligations of the Company to take any action
pursuant to this Agreement that each of the Designated Holders whose Registrable Securities are to
be registered pursuant to this Agreement shall furnish such Designated Holder’s written agreement
to be bound by the terms and conditions of this Agreement prior to performance by the Company of
its obligations under this Agreement. By executing and delivering this Agreement, each Designated
Holder represents and warrants that the information concerning, and representations and warranties
by, such Designated Holder, including information concerning the securities of the Company held,
beneficially or of record, by such Designated Holder, furnished to the Company pursuant to the
Securities Purchase Agreement or otherwise, are true and correct as if the same were represented
and warranted on the date any Registration Statement required pursuant to this Agreement is filed
with the Commission or the date of filing with the Commission of any amendment thereto, and each
Designated Holder covenants to
immediately notify the Company in writing of any change in any such information,
representation or warranty and to refrain from offering or disposing of any securities pursuant to
any Registration Statement until the Company has reflected such change in such Registration
Statement. By executing and delivering this Agreement, each Designated Holder further agrees to
furnish any additional information as the Company may reasonably request in connection with any
action to be taken by the Company pursuant to this Agreement, and to pay such Designated Holder’s
expenses which are not required to be paid by the Company pursuant to this Agreement.

     2.8 Fees and Expenses. 

     All expenses incident to the Company’s performance of or compliance with this Agreement
including, without limitation, all registration and filing fees payable by the Company, fees and
expenses of compliance by the Company with securities or blue sky laws, printing expenses of the
Company, messenger and delivery expenses of the Company, and fees and disbursements of counsel for
the Company and all independent certified public accountants of the Company, and other Persons
retained by the Company will be borne by the Company, and the Company will pay its internal
expenses (including, without limitation, all salaries and expenses of the Company’s employees
performing legal or accounting duties), the expense of

11

 

any annual audit or quarterly review, the
expense of any liability insurance of the Company and the expenses and fees for listing or approval
for trading of the securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on any automated quotation system of a national
securities association on which similar securities of the Company are quoted. The Company shall
have no obligation to pay any underwriting discounts or commissions attributable to the sale of
Registrable Securities and any of the expenses incurred by any Designated Holder which are not
payable by the Company, such costs to be borne by such Designated Holder or Holders, including,
without limitation, underwriting fees, discounts and expenses, if any, applicable to any Designated
Holder’s Registrable Securities; fees and disbursements of counsel or other professionals that any
Designated Holder may choose to retain in connection with the Registration Statement filed pursuant
to this Agreement; selling commissions or stock transfer taxes applicable to the Registrable
Securities registered on behalf of any Designated Holder; any other expenses incurred by or on
behalf of such Designated Holder in connection with the offer and sale of such Designated Holder’s
Registrable Securities other than expenses which the Company is expressly obligated to pay pursuant
to this Agreement.

     2.9 Indemnification. 

     (a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted
by law, each Designated Holder and its general or limited partners, officers, directors,
members, managers, employees, advisors, representatives, agents and Affiliates
(collectively, the “Representatives”) from and against any loss, claim, damage, liability,
attorney’s fees, cost or expense and costs and expenses of investigating and defending any
such claim (collectively, the “Losses”), joint or several, and any action in respect thereof
to which such Designated Holder or its Representatives may become subject under the
Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether
commenced or threatened, in respect thereto) arise out of or are
based upon (i) any untrue
or alleged untrue statement of a material fact contained in any Registration Statement,
prospectus or preliminary or summary prospectus or any amendment or supplement thereto or
(ii) any 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 shall
reimburse each such Designated Holder and its Representatives for any legal or any other
expenses incurred by them in connection with investigating or defending or preparing to
defend against any such Loss, action or proceeding; provided, however, that the Company
shall not be liable to any such Designated Holder or other indemnitee in any such case to
the extent that any such Loss (or action or proceeding, whether commenced or threatened, in
respect thereof) arises out of or is based upon (x) an untrue statement or alleged untrue
statement or omission or alleged omission, made in such Registration Statement, any such
prospectus or preliminary or summary prospectus or any amendment or supplement thereto, in
reliance upon, and in conformity with, information prepared and furnished to the Company by
any Designated Holder or its Representatives for use therein and, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any preliminary
prospectus relating to the Registration Statement, to the extent that a prospectus relating
to the Registrable Securities was required to be delivered by such Designated Holder under
the Securities Act in connection with such purchase, there was not sent or given to such
person, at or prior to the written confirmation of the sale of such

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Registrable Securities
to such person, a copy of the final prospectus that corrects such untrue statement or
alleged untrue statement or omission or alleged omission if the Company had previously
furnished copies thereof to such Designated Holder or (y) use of a Registration Statement or
the related prospectus during a period when a stop order has been issued in respect of such
Registration Statement or any proceedings for that purpose have been initiated or use of a
prospectus when use of such prospectus has been suspended pursuant to Sections
2.5(b), 2.6(e) or (i); provided that in each case, that such Designated Holder
received notice of such stop order, initiation of proceedings or suspension from the
Company. In connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided above with respect
to the indemnification of the Designated Holders.

     (b) In connection with the filing of the Registration Statement by the Company pursuant
to this Agreement, the Designated Holders will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with such Registration
Statement and the related prospectus and, to the fullest extent permitted by law, each such
Designated Holder will indemnify and hold harmless the Company and its Representatives from
and against any Losses, severally but not jointly, and any action in respect thereof to
which the Company and its Representatives may become subject under the Securities Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon (i) the purchase or sale of
Registrable Securities during a suspension as set forth in Sections 2.5(b),
2.6(e) or (i) in each case after receipt of written notice of such suspension, (ii)
any untrue or alleged untrue statement of a material fact contained in the Registration
Statement, prospectus or
preliminary or summary prospectus or any amendment or supplement thereto, or (iii) any
omission or alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but, with respect to clauses (ii) and (iii)
above, only to the extent that such untrue statement or omission is made in such
Registration Statement, any such prospectus or preliminary or summary prospectus or any
amendment or supplement thereto, in reliance upon and in conformity with information
prepared and furnished to the Company by such Designated Holder for use therein or by
failure of such Designated Holder to deliver a copy of the Registration Statement or
prospectus or any amendments or supplements thereto, and such Designated Holder will
reimburse the Company and each Representative for any legal or any other expenses incurred
by them in connection with investigating or defending or preparing to defend against any
such Loss, action or proceeding; provided, however, that such Designated Holder shall not be
liable in any such case to the extent that prior to the filing of any such Registration
Statement or prospectus or amendment or supplement thereto, such Designated Holder has
furnished in writing to the Company information expressly for use in such Registration
Statement or prospectus or any amendment or supplement thereto which corrected or made not
misleading information previously furnished to the Company.

     (c) Promptly after receipt by any Person in respect of which indemnity may be sought
pursuant to Section 2.9(a) or 2.9(b) (an “Indemnified Party”) of notice of
any claim or the commencement of any action, the Indemnified Party shall, if a claim in
respect

13

 

thereof is to be made against the Person against whom such indemnity may be sought
(an “Indemnifying Party”), promptly notify the Indemnifying Party in writing of the claim or
the commencement of such action; provided, that the failure to notify the Indemnifying Party
shall not relieve the Indemnifying Party from any liability which it may have to an
Indemnified Party under Section 2.9(a) or 2.9 (b) except to the extent of
any actual prejudice resulting therefrom. If any such claim or action shall be brought
against an Indemnified Party, and it shall notify the Indemnifying Party thereof, the
Indemnifying Party shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume the defense of such
claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any
legal or other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation; provided, that the
Indemnified Party shall have the right to employ separate counsel to represent the
Indemnified Party and its Representatives who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall
have mutually agreed to the retention of such counsel or (ii) in the written opinion of
counsel to such Indemnified Party, representation of both parties by the same counsel would
be inappropriate due to actual or potential conflicts of interest between them, it being
understood, however, that the Indemnifying Party shall not, in connection with any one such
claim or action or separate but substantially similar or related claims or actions in the
same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local counsel) at any time
for all Indemnified Parties. No Indemnifying Party shall, without the prior written consent
of the Indemnified Party, effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding other than the payment of monetary damages by the Indemnifying
Party on behalf of the Indemnified Party. Whether or not the defense of any claim or action
is assumed by the Indemnifying Party, such Indemnifying Party will not be subject to any
liability for any settlement made without its consent, which consent will not be
unreasonably withheld.

     (d) If the indemnification provided for in this Section 2.9 is unavailable to
the Indemnified Parties in respect of any Losses referred to herein, then each Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand and the
Designated Holders on the other from the offering of the Registrable Securities, or if such
allocation is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits but also the relative fault of the Company on the one
hand and the Designated Holders on the other in connection with the statements or

14

 

omissions
which resulted in such Losses, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of each Designated Holder on the other
shall be determined by reference to, among other things, whether any action taken, including
any untrue or alleged untrue statement of a material fact, or the omission or alleged
omission to state a material fact relates to information supplied by such party, and the
parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

     The Company and the Designated Holders agree that it would not be just and equitable if
contribution pursuant to this Section 2.9(d) were determined by pro rata allocation
or by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Party as a result of the Losses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 2.9, no Designated Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable Securities of such
Designated Holder were offered to the public exceeds the amount of any Losses which such
Designated Holder has otherwise paid by reason of such untrue or alleged untrue statement or
omission or alleged omission. 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. Each Designated Holder’s
obligations to contribute pursuant to this
Section 2.9 is several in the proportion that the proceeds of the offering
received by such Designated Holder bears to the total proceeds of the offering received by
all the Designated Holders.

     2.10 Participation in Registrations.

     (a) No Person may participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and this Agreement.

     (b) Each Person that is participating in any registration under this Agreement agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind
described in Section 2.6(e) or (i) above, such Person will forthwith
discontinue the disposition of its Registrable Securities pursuant to the Registration
Statement and all use of the Registration Statement or any prospectus or related document
until such Person’s receipt of the copies of a supplemented or amended prospectus as
contemplated by such Section 2.6(e) and, if so directed by the Company, will deliver
to the Company (at the Company’s expense) all copies, other than permanent file copies, then
in such Designated Holder’s possession of such documents at the time of

15

 

receipt of such notice.Furthermore, each Designated Holder agrees that if such
Designated Holder uses a prospectus in connection with the offering and sale of any of the
Registrable Securities, the Designated Holder will use only the latest version of such
prospectus provided by Company.

ARTICLE III.

TRANSFERS OF CERTAIN RIGHTS

     3.1 Transfer. 

     The rights granted to the Purchasers under this Agreement are transferable only in
connection with the transfer by any such Purchaser, to a single Person, of the greater of (a) 50%
of the Registrable Securities acquired by such Purchaser or (b) 10% of the outstanding Registrable
Securities. Any such transfer shall be subject to the provisions of Sections 3.2 and
3.3; provided that nothing contained herein shall be deemed to permit an assignment,
transfer or disposition of the Registrable Securities in violation of the terms and conditions of
the Securities Purchase Agreement, or applicable law.

     3.2 Transferees. 

     Any permitted transferee to whom rights under this Agreement are transferred shall, as a
condition to such transfer, deliver to the Company a written instrument by which such transferee
agrees to be bound by the obligations imposed upon the Purchasers under this Agreement to the same
extent as if such transferee were a Purchaser hereunder.

     3.3 Subsequent Transferees. 

     A transferee to whom rights are transferred pursuant to this ARTICLE III may not again
transfer such rights to any other person or entity, other than as provided in Sections 3.1
or 3.2 above.

ARTICLE IV.

MISCELLANEOUS

     4.1 Recapitalizations, Exchanges, etc. 

     The provisions of this Agreement shall apply to the full extent set forth herein with
respect to (i) the Registrable Securities, (ii) any and all shares of Common Stock into which the
Registrable Securities are converted, exchanged or substituted in any recapitalization or other
capital reorganization by the Company and (iii) any and all equity securities of the Company or any
successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise)
which may be issued in respect of, in conversion of, in exchange for or in substitution of, the
Registrable Securities and shall be appropriately adjusted for any stock dividends, splits, reverse
splits, combinations, recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise)
to enter into a new registration rights agreement with the Designated Holders on terms
substantially the same as this Agreement as a condition of any such transaction.

16

 

     4.2 Injunctive Relief. 

     The parties hereto acknowledge and agree that irreparable damage would occur in the event
any of the provisions of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an
injunction or injunctions to prevent breaches of the provisions of this Agreement to enforce
specifically the provisions of this Agreement, in any court of the United States or any state
thereof having jurisdiction, without the need to pass a bond or other security, in addition to any
other remedy to which the parties may be entitled under this Agreement or at law or in equity.

     4.3 Successors and Assigns, Third Party Beneficiaries. 

     This Agreement and all of the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto, each assignee of the Designated Holders permitted pursuant to
ARTICLE III and their respective permitted successors and assigns and executors, administrators and
heirs. Designated Holders are intended third party beneficiaries of this Agreement and this
Agreement may be enforced by such Designated Holders.

     4.4 Notices. 

     Unless otherwise provided herein, any notice, request, instruction or other document to
be given hereunder by any party to the other shall be in writing and delivered by hand-delivery,
registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery, as
follows:

     If to the Company, to:

Kitty Hawk, Inc.

1515 West 20th Street 

P. O. Box 612787

DFW International Airport, Texas 75261

Telephone: (972) 456-2200

Facsimile: (972) 456-2249

Attn: Steven E. Markhoff, Esq.

     With copy to:

Haynes and Boone, LLP

901 Main Street

Dallas, Texas 75214

Telephone: (214) 651-5000

Facsimile: (214) 200-0428

Attn: Garrett A. DeVries

17

 

     If to a Purchaser, to:

The address or facsimile number of each Purchaser set forth on the signature
page of this Agreement.

or to such other place and with such other copies as either party may designate as to itself by
written notice to the other.

     All such notices, requests, instructions or other documents shall be deemed to have been duly
given; at the time delivered by hand, if personally delivered; four Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged by addressee, if by telecopier transmission; and on the next business day if timely
delivered to an air courier guaranteeing overnight delivery.

     4.5 Choice of Law. 

     This Agreement shall be construed, interpreted and the rights of the parties determined
in accordance with the internal laws of the State of Texas, without regard to the conflict of law
principles thereof, except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement, and as to those
matters the law of the jurisdiction under which the respective entity derives its powers shall
govern.

     4.6 Entire Agreement; Amendments and Waivers. 

     This Agreement, including all schedules attached hereto, the exhibits attached hereto,
the Confidentiality Agreement between each Purchaser and the Company, the Securities Purchase
Agreement, the Standstill Agreement (as defined in the Securities Purchase Agreement), the
Certificate of Designations, and the Warrants, constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, including the written
summary of proposed terms between the Company and the Purchasers.

     4.7 Counterparts. 

     This Agreement may be executed in one or more counterparts each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument.

     4.8 Invalidity. 

     In the event that any one or more of the provisions contained in this Agreement or in any
other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument.

18

 

     4.9 Headings. 

     The headings of the Articles and Sections herein are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or interpretation of
this Agreement.

     4.10 Forum; Service of Process. 

     Any legal suit, action or proceeding brought by any party or any of its Affiliates
arising out of or based upon this Agreement shall be instituted in any federal or state court in
Dallas County, Texas, and each party waives any objection which it may now or hereafter have to the
laying of venue or any such proceeding, and irrevocably submits to the jurisdiction of such courts
in any such suit, action or proceeding.

     4.11 No Prejudice. 

     The terms of this Agreement shall not be construed in favor of or against any party on
account of its participation in the preparation hereof.

     4.12 Termination of Rights. 

     Upon the expiration of the Registration Period all rights of Designated Holders under
this Agreement will terminate.

[Signature Page Follows]

19

 

     IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be
duly executed as of the date and year first written above.

	 	 	 	 	 	 	 
	 	 	KITTY HAWK, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/
	 	Robert W. Zoller, Jr.
	 	 	 	 	 
	 	 	Name:	 	Robert W. Zoller, Jr.
	 	 	Title:	 	 President and Chief Executive Officer

{Signature Page to the Registration Rights Agreement}

 

 

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement
to be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 
	 

	 	PURCHASERS:	 	 
	 
	 	 	 	 
	 	 	LLOYD I. MILLER, III
	 
	 	 	 	 
	 	 	/s/ Lloyd I. Miller, III
	 	 	 
	 	 	Lloyd I. Miller, III
	 
	 	 	 	 
	 	 	JURISDICTION:
	 

	 	 	 	 
	 

	 	ADDRESS:
	 	4550 Gordon Drive
	 

	 	 	 	Naples, Florida 34102
	 

	 	 	 	Telephone: (239) 263-8860
	AGGREGATE SUBSCRIPTION AMOUNT:

	 	 	 	Facsimile: (239) 262-8025
	Aggregate Number of
Shares of Preferred Stock: 3000	 	 

	 	 	 	 	 	 	 	 	 
	 	 	MILFAM II L.P.,
	 	 	a Georgia limited partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By: Milfam LLC, an Ohio limited

liability company, as general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Lloyd I. Miller, III
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Lloyd I. Miller, III, Managing Member
	 
	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:
	 

	 	 	 	 	 	 	 	 
	 	 	ADDRESS: 4550 Gordon Drive
	 	 	 	 	 	 	Naples, Florida 34102
	 	 	 	 	 	 	Telephone: (239) 263-8860
	 	 	 	 	 	 	Facsimile: (239) 262-8025
	 
	 	 	 	 	 	 	 	 
	AGGREGATE SUBSCRIPTION AMOUNT:
	 	 	 	 	 	 	 	 
	Aggregate Number of
Shares of Preferred Stock: 2000	 	 

{Signature Page to the Registration Rights Agreement}

 

 

     IN WITNESS WHEREOF, the undersigned Purchaser has caused this Registration Rights Agreement to
be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BONANZA MASTER FUND, LTD.,
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: Bonanza Capital, Ltd., a Texas limited

partnership, as its general partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Bonanza Fund Management, Inc., a Texas

corporation, as its general partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ Bernay Box
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Bernay Box, President
	 	 	 	 	JURISDICTION:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ADDRESS:	 	300 Crescent Court
	 	 	 	 	 	 	 	 	 	 	Suite 1740
	 	 	 	 	 	 	 	 	 	 	Dallas, Texas 75201
	 	 	 	 	 	 	 	 	 	 	Telephone: (214) 987-4962
	 	 	 	 	 	 	 	 	 	 	Facsimile: (214) 987-4342
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	AGGREGATE SUBSCRIPTION AMOUNT:
	 	 	 	 	 	 	 	 	 	 	 	 
	Aggregate Number of Shares of Preferred
Stock: 3000	 	 	 	 

{Signature Page to the Registration Rights Agreement}

 

 

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights
Agreement to be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	POTOMAC CAPITAL PARTNERS, L.P.,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Potomac Capital Management,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	/s/ Paul J. Solit
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Paul J. Solit, Managing Member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	c/o Potomac Capital Management
	 

	 	 	 	 	 	 	 	 	 	825 Third Avenue
	 

	 	 	 	 	 	 	 	 	 	33rd Floor
	 

	 	 	 	 	 	 	 	 	 	New York, New York 10022
	 

	 	 	 	 	 	 	 	 	 	Telephone: (212) 521-5115
	 

	 	 	 	 	 	 	 	 	 	Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1742

	 	 	 	 	 	 	 	 	 	 	 
	 	 	PLEIADES INVESTMENT PARTNERS-R, LP,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Potomac Capital Management,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	/s/ Paul J. Solit
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Paul J. Solit, Managing Member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	c/o Potomac Capital Management
	 

	 	 	 	 	 	 	 	 	 	825 Third Avenue
	 

	 	 	 	 	 	 	 	 	 	33rd Floor
	 

	 	 	 	 	 	 	 	 	 	New York, New York 10022
	 

	 	 	 	 	 	 	 	 	 	Telephone: (212) 521-5115
	 

	 	 	 	 	 	 	 	 	 	Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1180

{Signature
Page to the Registration Rights Agreement}

 

 

	 	 	 	 	 	 	 
	 	 	POTOMAC CAPITAL INTERNATIONAL
	 	 	LTD., a British Virgin Islands corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Paul J. Solit
	 	 	 	 
	 	 	 	Paul J. Solit, Managing Member
	 
	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 

	 	 	 	 	 	 
	 	 	ADDRESS:	 	c/o Potomac Capital Management
	 

	 	 	 	 	 	825 Third Avenue
	 

	 	 	 	 	 	33rd Floor
	 

	 	 	 	 	 	New York, New York 10022
	 

	 	 	 	 	 	Telephone: (212) 521-5115
	 

	 	 	 	 	 	Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1078

{Signature
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     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement
to be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	SACC PARTNERS, L.P.,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	 	 	/s/ Bryant Riley
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Bryant Riley, Managing Partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By: Riley Investment Management, Inc.,
	 	 	 	 	 	 	 	 	 	 	Investment Advisor
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	 	 	/s/ Bryant Riley
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Bryant Riley, President
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	11100 Santa Monica
	 	 	 	 	 	 	 	 	 	 	Suite 800
	 	 	 	 	 	 	 	 	 	 	Los Angeles, California 90025
	 	 	 	 	 	 	 	 	 	 	Telephone: (310) 966-1444
	 	 	 	 	 	 	 	 	 	 	Facsimile: (310) 966-1448

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1750

	 	 	 	 	 	 	 	 	 
	 	 	B. RILEY & CO. RETIREMENT TRUST
	 	 	DATED 1/1/99
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	 	 	/s/ Bryant Riley
	 	 	 	 	 
	 	 	 	 	Bryant Riley, Trustee
	 
	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	11100 Santa Monica
	 

	 	 	 	 	 	 	 	Suite 800
	 

	 	 	 	 	 	 	 	Los Angeles, California 90025
	 

	 	 	 	 	 	 	 	Telephone: (310) 966-1444
	 

	 	 	 	 	 	 	 	Facsimile: (310) 966-1448

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 250

{Signature
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     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement
to be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	CORKY AND RICK STEINER FAMILY L.P.,
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: Richard Steiner, as general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	/s/ Richard Steiner
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Richard Steiner
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	4044 Rose Hill Avenue
	 

	 	 	 	 	 	 	 	 	 	Cincinnati, Ohio 45229
	 

	 	 	 	 	 	 	 	 	 	Telephone: (513) 281-9989
	 

	 	 	 	 	 	 	 	 	 	Facsimile:

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 150

	 	 	 	 	 	 	 	 	 
	 	 	RICHARD STEINER
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Richard Steiner
	 	 	 
	 	 	Richard Steiner
	 
	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	4044 Rose Hill Avenue
	 	 	 	 	Cincinnati, Ohio 45229
	 	 	 	 	Telephone: (513) 281-9989
	 	 	 	 	Facsimile:	 	 
	 

	 	 	 	 	 	 	 	 

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 200

{Signature
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	 	 	PHILIP H. STEINER
	 
	 	 	 	 	 	 	 	 
	 	 	/s/ Philip H. Steiner
	 	 	 
	 	 	Philip H. Steiner
	 
	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 
	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	4044 Rose Hill Avenue
	 	 	 	 	Cincinnati, Ohio 45229
	 	 	 	 	Telephone: (513) 281-9989
	 	 	 	 	Facsimile:	 	 
	 

	 	 	 	 	 	 	 	 

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 200

{Signature
Page to the Registration Rights Agreement}

 

 

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement
to be duly executed as of the date and year first above written and to be bound hereby.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BLUEGRASS GROWTH FUND, L.P.
	 	 	a Delaware limited partnership
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Bluegrass Growth Fund Partners, LLC
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	 	 	/s/ Brian Shatz
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Brian Shatz, Managing Member
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	JURISDICTION:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS:	 	122 East 42nd Street
	 	 	 	 	 	 	 	 	 	 	Suite 2606
	 	 	 	 	 	 	 	 	 	 	New York, NY 10168
	 	 	 	 	 	 	 	 	 	 	Telephone: (212)-682-2392
	 

	 	 	 	 	 	 	 	 	 	Facsimile:	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 250

{Signature
Page to the Registration Rights Agreement}

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