FLOOR PLAN FINANCE AGREEMENT

This Floor Plan Finance Agreement (“Agreement”) is between AVANTAIR, INC., 4311
General Howard Drive, Clearwater, FL 33762, Telephone: 727-539-0071, Fax:
727-539-7007, hereinafter referred to as the "Borrower," and MIDSOUTH SERVICES,
INC., or assigns, 800 Druid Road West, Clearwater, FL 33756, Telephone:
727-461-0635, Fax: 727-461-0734, hereinafter referred to as the "Lender." Escrow
agent will be INSURED AIRCRAFT TITLE SERVICE, 4848 S.W. 36th Street, Oklahoma
City, OK 73179, Telephone: 800-654-4882, Fax: 405-681-9299, hereinafter referred
to as the "Escrow Agent."
 
 
WHEREAS, the Borrower has certain Piaggio P-180 aircraft beginning with Serial
Number 1150 and U.S. Registration Number N176SL (Avantair Aircraft #40) that
they elect to finance or remain financed pursuant to this Agreement beginning on
August 1, 2008 (“Delivery Date”). The Net Purchase Price for the Aircraft is
attached as “Attachment A”;

WHEREAS, Lender shall loan or have loaned Borrower the Net Purchase Price on the
actual delivery date of each aircraft listed on Attachment A (“Delivery Date”)
pursuant to the terms and conditions of this Agreement.

Now therefore, in consideration of the terms and conditions herein contained,
the parties agree as follows:

 
1.
Term. The term of this Agreement shall commence on the Delivery Date and shall
terminate three (3) months thereafter (“Initial Term”). Borrower shall have the
sole option at the end of the Initial Term to renew this Agreement monthly for
up to three (3) consecutive one (1) month Terms (“Monthly Renewal Option”).
Borrower shall provide Lender with written notice at least fifteen (15) days in
advance (with e-mail as an acceptable format) of its intent to extend the
Agreement for each Monthly Renewal Option. It is expressly agreed that the terms
of this Agreement shall apply to all Monthly Renewal Options.

 

 
2.
Purchase Price. On or before each Actual Delivery Date, Lender agrees to pay the
Net Purchase Price as specified on Attachment A for the applicable aircraft via
direct wire transfer to the Escrow account. Borrower shall notify Lender at
least ten (10) days prior to the Actual Delivery Date of their intention to have
Lender loan the Net Purchase Price for an aircraft. In addition, it is agreed
between the parties that Lender shall only be required to loan the Net Purchase
Price for one aircraft at a time. However, Lender agrees to loan the Net
Purchase Price for each aircraft listed on Attachment A assuming that Borrower
relinquishes the debt for the prior aircraft prior to Lender loaning the Net
Purchase Price for the subsequent aircraft.

 
3.
Transaction Fee. As consideration for Lender providing the Net Purchase Price
for any aircraft during the Term of this Agreement, Borrower agrees to pay
Lender a monthly fee in the amount of Seventy Five Thousand US Dollars
($75,000.00) (“Transaction Fee”). The initial Transaction Fee shall be due in
arrears one month after the Actual Delivery Date, which shall be on or about
September 1, 2008 and shall not be contingent on whether Lender provides
Borrower with the Net Purchase Price for any aircraft during the preceding
month. In the event that Borrower does not elect to exercise the Monthly Renewal
Option, Borrower shall not be responsible for the Transaction Fee following the
expiration of the Initial Term. Borrower shall remit the Transaction Fee to
Lender via wire transfer.

 
4.
Insurance. Borrower shall maintain adequate insurance on the Aircraft and
provide Lender and Auburn Bank of Opelika with a Certificate of Insurance
listing Auburn Bank of Opelika as lien holder and Lender as an additional
insured 

 
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5.
Title and Liens. Borrower agrees that on the Actual Delivery Date, Lender shall
be permitted to file a lien on the aircraft securing the amount of the Net
Purchase Price paid to manufacturer. On the Actual Delivery Date, Borrower and
Lender may agree to allow title to transfer from Piaggio America to Avantair,
Inc, instead of from Piaggio America to MidSouth Services, Inc. All liens
imposed on the aircraft by Lender must be removed on or before the date that
Borrower repays the Net Purchase Price to Lender so that Borrower has free and
clear title to the aircraft, unless Borrower is in default by not paying the
Transaction Fee after given a ten (10) day period to cure the default as set
forth in Section 6 below.

 
6.
Release of Liens. Prior to the date that Borrower repays the Net Purchase Price
to Lender (“Avantair Actual Delivery Date”), Lender will place any required
Release(s) of Lien with Escrow Agent. Borrower will place the funds due to
Lender with Escrow Agent, along with the escrow closing fees. Lender shall be
notified at least seven (7) days prior to the Avantair Actual Delivery Date.
Lender hereby agrees to fully cooperate with Borrower and Escrow Agent to
effect, amend, discharge and/or consent to registrations with respect to the
Aircraft on the International Registry for the benefit of Borrower and/or their
fractional owners. Lender also shall provide a letter of instruction to the
Escrow Agent or any other person designated by Lender granting the person
authority to release any and all liens on the aircraft that were imposed by
Lender in the event of Lender’s death or incapacity which could preclude such
release of liens.

        7.
Default. Upon failure of Lender, without default by Borrower, to comply with the
terms and conditions of this Agreement, Borrower may elect to cancel this
agreement upon written notice to Lender, however, no breach shall be deemed to
have occurred until Lender has ten (10) days to cure, which shall run from the
date of receipt of written notice (e-mail or facsimile acceptable). Borrower
retains the right to retain any Transaction Fees owed to Lender, not as
forfeiture, but as liquidated damages for Borrower’s breach of this Agreement.

   
Upon failure of the Borrower, without default of Lender, to comply with the
terms and conditions of this Agreement, Lender may elect to cancel this
agreement upon written notice to Borrower, however, no breach shall be deemed to
have occurred until Borrower has ten (10) days to cure, which shall run from the
date of receipt of written notice (e-mail or facsimile acceptable). In the event
of a breach by Borrower, Lender shall be permitted to use any adequate remedy at
law to recover damages caused by the breach. Borrower also shall position blank
bills of sale with the Escrow Agent so that title in the aircraft may be
transferred to Lender in the event of Borrower’s material default of this
Agreement.

8.
Excusable Delay. Neither Lender nor Borrower shall be liable to each other for
any failure or delay in performing any of their obligations hereunder caused by
an act of God, the public enemy, strike or labor dispute, governmental
regulation or priorities and force majeure not involving the fault or negligence
of either party.

9.
Assignability. This Agreement shall not be modified or amended except by the
 mutual consent of the parties in writing.

 
10.
Partial Illegality. If any one or more provisions of this Agreement shall be
found to be illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.

 
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11.
Notification. For the purposes of negotiating and finalizing this Agreement, any
document, including this Agreement, transmitted by facsimile or e-mail, shall be
treated in all manner and respects as an original document. The signature of any
party on such document shall be considered for these purposes as an original
signature. Any such document shall be considered to have the same binding legal
effect as an original document. At the request of either party, any such
document shall be re-executed by both parties in the original form. In
consideration of the promises made and value received hereunder, the undersigned
parties hereby agree that, after a document has been executed and transmitted by
facsimile or e-mail, neither party shall raise the use of a facsimile or e-mail,
or the lack of a document bearing an original signature, as a defense to this
Agreement and forever waive such defense.

12.
International Registry. Borrower and Lender shall comply with the Cape Town
Convention Protocol for International Registry Regulations and Procedures
regarding the International Registration of the Aircraft prior to closing. Each
party shall bear the cost for registration of their company with the
International Registry and any fees associated therewith.

13.
General.

A.
In all respects, time shall be of the essence in this Agreement.

 

B.
This agreement shall bind and inure to the benefit of the parties hereto and
their executors, administrators, heirs and assigns.

 
C.
This agreement may be executed in two or more counterparts, each of which shall
be deemed an original and shall be effective when executed by both parties.

 
D.
This agreement supersedes all previous agreements, if any, including but not
limited to the Floor Plan Finance Agreement dated by the parties on February 21,
2008, which is hereby terminated.

Signed, sealed and delivered this 31st day of July, 2008.

BORROWER:
 
LENDER:
AVANTAIR, INC.
 
MIDSOUTH SERVICES, INC.
     
/s/ Kevin Beitzel
 
/s/ Hugh Fuller
Signature
 
Signature
     
Chief Operating Officer
 
President
Title
 
Title
     
July 31, 2008
 
July 31, 2008
Date
 
Date

 
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