Exhibit 10.4

 

 

 

CREDIT AGREEMENT

DATED AS OF NOVEMBER 16, 2011

by and among

GREAT LAKES AVIATION, LTD.

as Great Lakes,

GB MERCHANT PARTNERS, LLC,

as Collateral Agent

and

CRYSTAL FINANCIAL LLC,

as Administrative Agent

and

THE OTHER FINANCIAL INSTITUTIONS AND ENTITIES PARTY HERETO,

as Lenders

 

 

 

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TABLE OF CONTENTS

 

         Page  

SECTION 1. AMOUNTS AND TERMS OF LOANS

     1   

1.1

  Loans      1   

1.2

  Interest and Applicable Margins      7   

1.3

  Yield Enhancement; Fees      8   

1.4

  Payments      9   

1.5

  Prepayments      11   

1.6

  Maturity      12   

1.7

  Register      13   

1.8

  Reserved      13   

1.9

  Taxes      13   

SECTION 2. AFFIRMATIVE COVENANTS

     17   

2.1

  Compliance With Laws and Contractual Obligations      17   

2.2

  Insurance      17   

2.3

  Inspection; Appraisal; Lender Meeting      18   

2.4

  Maintenance of Existence and Conduct of Business      18   

2.5

  Environmental Matters      19   

2.6

  Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases      19   

2.7

  Further Assurances      19   

2.8

  Cash Management Systems      20   

2.9

  Collateral Reporting      21   

2.10

  Disclosure Updates      21   

2.11

  Payment of Charges and Taxes      21   

2.12

  Books and Records      22   

2.13

  Intellectual Property      22   

2.14

  Anti-Money Laundering and Terrorism Regulations      22   

2.15

  Essential Air Service Program      22   

2.16

  Post Closing      22   

SECTION 3. NEGATIVE COVENANTS

     23   

3.1

  Indebtedness      23   

3.2

  Liens and Related Matters      24   

3.3

  Investments      26   

3.4

  Contingent Obligations      26   

3.5

  Restricted Payments      27   

3.6

  Restriction on Fundamental Changes      27   

3.7

  Disposal of Assets or Subsidiary Stock      27   

3.8

  Transactions with Affiliates      27   

3.9

  Reserved      28   

 

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3.10

  Changes Relating to Indebtedness      28   

3.11

  Fiscal Periods      28   

3.12

  Press Release; Public Offering Materials      28   

3.13

  Subsidiaries      29   

3.14

  Bank Accounts; Lockboxes      29   

3.15

  Hazardous Materials      29   

3.16

  ERISA      29   

3.17

  Sale Leasebacks      29   

3.18

  Changes to Material Contracts      29   

3.19

  Prepayments of Subordinated Debt      30   

3.20

  Use of Loan Proceeds      30   

3.21

  Reserved      30   

3.22

  Cancellation of Indebtedness      30   

3.23

  Location of Aircraft, Etc.      30   

3.24

  Acquisition of Debt      30   

3.25

  Change of Corporate Name or Location      30   

3.26

  Lease of Aircraft      31   

3.27

  Essential Air Service Program      31   

SECTION 4. FINANCIAL COVENANTS/REPORTING

     31   

4.1

  Maximum Leverage Ratio      31   

4.2

  Capital Expenditure Limits      32   

4.3

  Financial Statements and Other Reports      32   

4.4

  Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement      35   

SECTION 5. REPRESENTATIONS AND WARRANTIES

     36   

5.1

  Disclosure      36   

5.2

  No Material Adverse Effect      36   

5.3

  No Conflict      36   

5.4

  Organization, Powers, Capitalization and Enforceable Obligations      36   

5.5

  Financial Statements and Projections      38   

5.6

  Intellectual Property      38   

5.7

  Investigations, Audits, Etc.      38   

5.8

  Employee Matters      38   

5.9

  Solvency      39   

5.10

  Litigation; Adverse Facts      39   

5.11

  Use of Proceeds; Margin Regulations      39   

5.12

  Ownership of Property; Liens      39   

5.13

  Environmental Matters      40   

5.14

  ERISA      41   

5.15

  Brokers      41   

5.16

  Deposit and Disbursement Accounts      41   

5.17

  Reserved      42   

5.18

  Insurance      42   

 

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5.19

  Anti-Terrorism Law      42   

5.20

  Compliance with Laws      42   

5.21

  Taxes and Tax Returns      43   

5.22

  Agreements and Other Documents      43   

5.23

  Eligible Accounts      44   

5.24

  Eligible Inventory      44   

5.25

  Government Contracts      44   

5.26

  Customer and Trade Relations      44   

5.27

  Bonding; Licenses      44   

5.28

  Reserved      44   

5.29

  Full Disclosure      44   

5.30

  Executive Offices, Collateral Locations, FEIN      44   

5.31

  Qualified Airports      45   

5.32

  Eligible Spare Engines      45   

5.33

  Eligible Aircraft      45   

SECTION 6. CONDITIONS TO LOANS

     45   

6.1

  Conditions to Initial Loans      45   

6.2

  Conditions to All Loans      48   

SECTION 7. DEFAULT, RIGHTS AND REMEDIES

     49   

7.1

  Event of Default      49   

7.2

  Suspension or Termination of Revolving Loan Commitments      51   

7.3

  Acceleration and other Remedies      51   

7.4

  Performance by Agents      52   

SECTION 8. ASSIGNMENT AND AGENTS

     52   

8.1

  Assignment and Participations      52   

8.2

  Agent      55   

8.3

  Set Off and Sharing of Payments      63   

SECTION 9. MISCELLANEOUS

     64   

9.1

  Indemnities      64   

9.2

  Amendments and Waivers      64   

9.3

  Notices; Effectiveness      65   

9.4

  Failure or Indulgence Not Waiver; Remedies Cumulative      67   

9.5

  Marshaling; Payments Set Aside      67   

9.6

  Severability      67   

9.7

  Lenders’ Obligations Several; Independent Nature of Lenders’ Rights      67   

9.8

  Headings      67   

9.9

  Applicable Law      67   

9.10

  Successors and Assigns      67   

9.11

  No Fiduciary Relationship; Limited Liability      68   

9.12

  Construction      68   

 

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9.13

  Confidentiality      68   

9.14

  CONSENT TO JURISDICTION      69   

9.15

  WAIVER OF JURY TRIAL      69   

9.16

  Survival of Warranties and Certain Agreements      69   

9.17

  Entire Agreement      69   

9.18

  Counterparts; Effectiveness      69   

9.19

  Replacement of Lenders      70   

9.20

  Delivery of Termination Statements and Mortgage Releases      71   

9.21

  Subordination Agreements      71   

INDEX OF APPENDICES

 

Annexes

     

Annex A

     -       Definitions

Annex B

     -       Commitments

Annex C

     -       Compliance Certificate

Annex D

     -       Borrowing Base Certificate

Annex E

     -       Collateral Reporting

Exhibits

     

Exhibit A

     -       Revolving Note

Exhibit B

     -       Notice of Revolving Loan

Exhibit C

     -       Term Note

Exhibit D

     -       Assignment Agreement

Schedules

     

Schedule A-1

     -       Authorized Persons

Schedule R-1

     -       Real Property Collateral

Schedule 2.4

     -       Corporate and Trade Names

Schedule 3.1

     -       Indebtedness

Schedule 3.2

     -       Liens

Schedule 3.3

     -       Investments

Schedule 3.4

     -       Contingent Obligations

Schedule 3.8

     -       Affiliate Transactions

Schedule 5.4(a)

     -       Jurisdictions of Organization and Qualifications

Schedule 5.4(b)

     -       Capitalization

Schedule 5.6

     -       Intellectual Property

Schedule 5.7

     -       Investigations and Audits

Schedule 5.8

     -       Employee Matters

Schedule 5.10

     -       Litigation

Schedule 5.12

     -       Real Estate

Schedule 5.13

     -       Environmental Matters

Schedule 5.14

     -       ERISA

Schedule 5.15

     -       Brokerage Fees

 

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Schedule 5.16

     -       Deposit and Disbursement Accounts

Schedule 5.18

     -       Insurance

Schedule 5.22

     -       Agreements and Other Documents

Schedule 5.25

     -       Government Contracts

Schedule 5.27

     -       Bonding; Licenses

Schedule 5.30

     -       Collateral Locations

Schedule 5.31

     -       Essential Air Service Program

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT is dated as of November 16, 2011 and is entered into by
and among Great Lakes Aviation, Ltd., an Iowa corporation (“Great Lakes”), the
financial institutions and other entities that are or hereafter become parties
to this Agreement as Lenders and Crystal Financial LLC (in its individual
capacity, “Crystal” or “Administrative Agent”) and GB Merchant Partners, LLC (in
its individual capacity “GB Merchant” or “Collateral Agent”, and together with
the Administrative Agent, the “Agents” and each individually an “Agent”).

R E C I T A L S:

WHEREAS, Great Lakes desires that Lenders extend a term credit facility and a
revolving credit facility to Great Lakes to fund the repayment of certain
indebtedness of Great Lakes owing to Raytheon Aircraft Credit Corp., to provide
working capital financing for Great Lakes and to provide funds for other general
corporate purposes of Great Lakes;

WHEREAS, Great Lakes desires to secure all of its Obligations (as hereinafter
defined) under the Loan Documents (as hereinafter defined) by granting to
Collateral Agent, for the benefit of the Lenders, a security interest in and
lien upon substantially all of its assets; and

WHEREAS, all capitalized terms herein shall have the meanings ascribed thereto
in Annex A hereto which is incorporated herein by reference.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Great Lakes, Lenders and each Agent agree as
follows:

SECTION 1.

AMOUNTS AND TERMS OF LOANS

1.1 Loans. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties and other agreements of Great Lakes
contained herein:

(a) Revolving Loans.

(i) Each Revolving Lender agrees, severally and not jointly, to make available
to Great Lakes from time to time until the Maturity Date its Pro Rata Share of
revolving loans (each a “Revolving Loan”) requested by Great Lakes hereunder.
All Revolving Loans must be in a minimum amount of $500,000 and an aggregate
amount that is an integral multiple of $100,000 and no more than one Borrowing
of Revolving Loans shall be made per month. The Revolving Loan of any Revolving
Lender shall not at any time exceed the lesser of (i) such Revolving Lender’s
Revolving Loan Commitment, or (ii) such Revolving Lender’s Pro Rata Share of an
amount equal to the lesser of (A) the Maximum Amount and (B) the Borrowing Base.

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Anything to the contrary in this Section 1.1(a) notwithstanding, each Agent
shall have the right (but not the obligation) to establish, increase, reduce,
eliminate, or otherwise adjust reserves from time to time against the Borrowing
Base and the Term Loan Formula in such amounts, and with respect to such
matters, as each Agent in its Permitted Discretion shall deem necessary or
appropriate, including reserves with respect to (A) sums that Great Lakes is
required to pay under this Agreement or any other Loan Document (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and has failed to pay when due, and
(B) amounts owing by Great Lakes or its Subsidiaries to any Person to the extent
secured by a Lien on, or trust over, any of the Collateral (other than a
Permitted Encumbrance which is a permitted purchase money Lien or the interest
of a lessor under a Capital Lease), which Lien or trust, in the Permitted
Discretion of each Agent likely would have a priority superior to Collateral
Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen,
carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for
ad valorem, excise, sales, or other taxes where given priority under applicable
law) in and to such item of the Collateral. If, at any time, either Agent
establishes or increases reserves against the Borrowing Base or the Term Loan
Formula, such Agent will give Great Lakes fifteen (15) days advance written
notice of such change, unless a Default or Event of Default then exists, in
which case such Agent will give Great Lakes contemporaneous oral or written
notice of such change.

(ii) Revolving Loans may be repaid and; provided, that each of the conditions
precedent in Section 6.2 hereof is satisfied, reborrowed. All Revolving Loans
shall be repaid in full on the Maturity Date (or sooner upon the acceleration of
the Loans as provided for in this Agreement). If so requested by a Revolving
Lender, Great Lakes shall execute and deliver to such Revolving Lender a note to
evidence the Revolving Loan Commitment of such Revolving Lender.

(iii) Each note shall be in the principal amount of the Revolving Loan
Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit A (each a “Revolving Note” and,
collectively, the “Revolving Notes”). Each Revolving Note shall represent the
obligation of Great Lakes to pay the amount of the applicable Revolving Lender’s
Revolving Loan, together with interest thereon.

(iv) Revolving Loans may be requested with three (3) Business Days prior written
notice to each Agent prior to 10:00 a.m. (Mountain time) and no more than one
Borrowing of Revolving Loans shall be requested per month. Written notices for
funding requests shall be in the form attached as Exhibit B (“Notice of
Revolving Loan”) and each Revolving Loan shall be made in accordance with this
Agreement.

(b) Term Loan.

(i) Each Term Loan Lender agrees, severally and not jointly, to lend to Great
Lakes a term loan on the Closing Date equal to such Term Loan Lender’s Pro Rata
Share of the Term Loan Commitment (such loan, the “Term Loan”). Each Term Loan
Lender’s Term Loan Commitment shall terminate in full upon the making of the
Term Loan on the Closing Date.

 

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(ii) In addition to any other required repayment of the Term Loan, Great Lakes
shall repay the Term Loan through periodic payments of principal (“Scheduled
Installments”) on the last day of each Fiscal Quarter as follows:

 

Payment Date

   Scheduled Installment  

March 31, 2012

   $ 750,000   

June 30, 2012

   $ 750,000   

September 30, 2012

   $ 750,000   

December 31, 2012

   $ 750,000   

March 31, 2013

   $ 875,000   

June 30, 2013

   $ 875,000   

September 30, 2013

   $ 875,000   

December 31, 2013

   $ 875,000   

March 31, 2014

   $ 1,000,000   

June 30, 2014

   $ 1,000,000   

September 30, 2014

   $ 1,000,000   

December 31, 2014

   $ 1,000,000   

March 31, 2015

   $ 1,125,000   

June 30, 2015

   $ 1,125,000   

September 30, 2015

   $ 1,125,000   

Notwithstanding the foregoing, the outstanding principal balance of the Term
Loan, shall be due and payable in full on the Maturity Date (or sooner upon the
acceleration of the Loans as provided for in this Agreement). Any amount of the
Term Loan that is repaid or prepaid may not be reborrowed. If so requested by a
Term Loan Lender, Great Lakes shall execute and deliver to such Term Loan Lender
a note to evidence the Term Loan held by such Term Loan Lender. Each note shall
be in the principal amount of the Term Loan of the applicable Term

 

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Loan Lender, dated the Closing Date and substantially in the form of Exhibit C
(each a “Term Note” and, collectively, the “Term Notes”). Each Term Note shall
represent the obligation of Great Lakes to pay the amount of the applicable Term
Loan Lender’s Term Loan, together with interest thereon.

(c) Borrowing Procedures.

(i) Notice to Lenders of Borrowing Request. Promptly following receipt by each
Agent of a Notice of Revolving Loan, Administrative Agent shall advise each
applicable Revolving Lender of such Notice of Revolving Loans and the amount of
such Revolving Lender’s Revolving Loan to be made as part of the applicable
Borrowing.

(ii) Making of Loans. Each Revolving Lender shall make the amount of such
Revolving Lender’s Pro Rata Share of the requested Borrowing available to the
Administrative Agent in immediately available funds, to Administrative Agent’s
Account, not later than 10:00 a.m. (Mountain time) on the Funding Date
applicable thereto. After Administrative Agent’s receipt of the proceeds of such
Revolving Loans, Administrative Agent shall make the proceeds thereof available
to Great Lakes on the applicable Funding Date by transferring immediately
available funds equal to such proceeds received by Administrative Agent to the
Disbursement Account; provided, however, that, Administrative Agent shall not
request any Revolving Lender to make any Revolving Loan, and no Revolving Lender
shall have the obligation to make any Revolving Loan, if (A) one or more of the
applicable conditions precedent set forth in Section 6 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (B) the requested Borrowing would exceed the Availability on
such Funding Date.

(iii) Unless the Administrative Agent receives notice from an applicable
Revolving Lender prior to 9:00 a.m. (Mountain time) on the date of a Borrowing,
that such Revolving Lender will not make available as and when required
hereunder to Administrative Agent for the account of Great Lakes the amount of
that Revolving Lender’s Pro Rata Share of the Borrowing, Administrative Agent
may assume that each Revolving Lender has made or will make such amount
available to Administrative Agent in immediately available funds on the Funding
Date and Administrative Agent may (but shall not be so required), in reliance
upon such assumption, make available to Great Lakes on such date a corresponding
amount. If any Revolving Lender shall not have made its full amount available to
Administrative Agent in immediately available funds and if Administrative Agent
in such circumstances has made available to Great Lakes such amount, that
Revolving Lender shall on the Business Day following such Funding Date make such
amount available to Administrative Agent. A notice submitted by Administrative
Agent to any Revolving Lender with respect to amounts owing under this Section
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to Administrative Agent shall constitute such Revolving Lender’s
Revolving Loan on the date of Borrowing for

 

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all purposes of this Agreement. If such amount is not made available to
Administrative Agent on the Business Day following the Funding Date,
Administrative Agent will notify Great Lakes of such failure to fund and, upon
demand by Administrative Agent, Great Lakes shall, within five (5) Business
Days, promptly pay such amount to the Administrative Agent for Administrative
Agent’s sole account, together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Revolving Loans.

(iv) Funding Authorization. The proceeds of all Loans made pursuant to this
Agreement on and subsequent to the Closing Date are to be funded by
Administrative Agent by wire transfer to the account designated by Great Lakes
below (the “Disbursement Account”):

Beneficiary Bank: Wells Fargo Bank, N.A.

420 Montgomery St

San Francisco, CA 94104

ABA #: 121000248 (Wires) Federal

Beneficiary Name: Great Lakes Aviation, LTD

Account # XXX

Reference:

Bank Contacts:

Rolfe Burgess 307-771-3785

Sylvania Rodriquez 307-771-3786

Great Lakes shall provide Administrative Agent with written notice of any change
in the foregoing instructions at least three (3) Business Days before the
desired effective date of such change.

(d) Protective Advances.

(i) Protective Advances. Any contrary provision of this Agreement or any other
Loan Document notwithstanding, Administrative Agent hereby is authorized by
Great Lakes and the Lenders, from time to time, with the consent of the
Collateral Agent, (A) after the occurrence and during the continuance of a
Default or an Event of Default, or (B) at any time that any of the other
applicable conditions precedent set forth in Section 6 are not satisfied, to
make Revolving Loans to, or for the benefit of, Great Lakes on behalf of the
Revolving Lenders (in an aggregate amount for all such Revolving Loans taken
together not exceeding the lesser of (i) $3,000,000 outstanding at any one time
and (ii) twenty percent (20.0%) of the Borrowing Base) that Administrative
Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve
or protect the Collateral,

 

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or any portion thereof, or (2) to enhance the likelihood of repayment of all or
any portion of the Obligations (any of the Revolving Loans described in this
Section 1.1(d)(i) shall be referred to as “Protective Advances”).

(ii) Each Protective Advance shall be deemed to be a Revolving Loan hereunder,
except that prior to Settlement therefor, all payments on the Protective
Advances shall be payable to Administrative Agent, as applicable, solely for its
own account. The Protective Advances shall be repayable on demand, secured by
Collateral Agent’s Liens and constitute Obligations hereunder, and bear interest
at the rate applicable from time to time to Revolving Loans. The provisions of
this Section 1.1(d) are for the exclusive benefit of Agents and the Lenders and
are not intended to benefit Great Lakes in any way.

(e) Settlement. It is agreed that each Revolving Lender’s funded portion of the
Revolving Loans is intended by the Revolving Lenders to equal, at all times,
such Revolving Lender’s Pro Rata Share of the outstanding Revolving Loans. Such
agreement notwithstanding, Administrative Agent and the other Lenders agree
(which agreement shall not be for the benefit of Great Lakes) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among the Revolving Lenders as to the Revolving Loans and the
Protective Advances shall take place on a periodic basis. Administrative Agent
shall request settlement (“Settlement”) with the Revolving Lenders on a weekly
basis, or on a more frequent basis if so determined by Administrative Agent
(1) for itself, with respect to the outstanding Protective Advances, and
(2) with respect to Great Lakes or its Subsidiaries’ Collections or payments
received, as to each by notifying the Revolving Lenders by, telecopy, telephone,
or other similar form of transmission, of such requested Settlement, no later
than 2:00 p.m. (Boston time) on the Business Day immediately prior to the date
of such requested Settlement (the date of such requested Settlement being the
“Settlement Date”). Subject to the terms and conditions contained herein, if the
amount of the Revolving Loans (including Protective Advances) made by a
Revolving Lender is less than such Revolving Lender’s Pro Rata Share of the
Revolving Loans (including Protective Advances) as of a Settlement Date, such
Revolving Lender shall no later than 12:00 p.m. (Boston time) on the Settlement
Date transfer in immediately available funds to the Administrative Agent’s
Account, an amount such that each such Revolving Lender shall, upon transfer of
such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving
Loans (including Protective Advances). Such amounts made available to
Administrative Agent under clause (z) of the immediately preceding sentence
shall be applied against the amounts of the applicable Protective Advance and,
together with the portion of such Protective Advance representing such Revolving
Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such
Revolving Lender. If any such amount is not made available to the Administrative
Agent by any Revolving Lender on the Settlement Date applicable thereto to the
extent required by the terms hereof, Administrative Agent shall be entitled to
recover for its account such amount on demand from such Revolving Lender
together with interest thereon.

(f) Independent Obligations. All Loans shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Loan (or other extension of credit)
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligations hereunder,
and (ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.

 

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1.2 Interest and Applicable Margins.

(a) Great Lakes shall pay interest to Administrative Agent, for the ratable
benefit of Lenders, in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to Revolving Loans the LIBOR Rate plus the Applicable
Revolver LIBOR Margin per annum, and (ii) with respect to the Term Loan, the
LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum.

(b) If any payment on any Loan becomes due and payable on a day other than a
Business Day, the maturity thereof will be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.

(c) All computations of Fees calculated on a per annum basis and interest shall
be made by Administrative Agent on the basis of a 360 day year, in each case for
the actual number of days occurring in the period for which such Fees and
interest are payable. Each determination by Administrative Agent of an interest
rate and Fees hereunder shall be final, binding and conclusive on Great Lakes,
absent manifest error.

(d) So long as an Event of Default has occurred and is continuing, the interest
rates applicable to the Loans shall be increased by two percentage points
(2%) per annum above the rates of interest otherwise applicable hereunder
(“Default Rate”) at the election of either Agent, (or upon the written request
of Requisite Lenders), and all outstanding Obligations shall bear interest at
the Default Rate applicable to such Obligations. Interest at the Default Rate
shall accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand, but in any event,
shall be payable on the next regularly scheduled payment date set forth herein
for such Obligation.

(e) Notwithstanding anything to the contrary set forth in this Section 1.2, if a
court of competent jurisdiction determines in a final order that the rate of
interest payable hereunder exceeds the highest rate of interest permissible
under law (the “Maximum Lawful Rate”), then so long as the Maximum Lawful Rate
would be so exceeded, the rate of interest payable hereunder shall be equal to
the Maximum Lawful Rate; provided, however, that if at any time thereafter the
rate of interest payable hereunder is less than the Maximum Lawful Rate, Great
Lakes shall continue to pay interest hereunder at the Maximum Lawful Rate until
such time as the total interest received by Administrative Agent, on behalf of
Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this clause) the
interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.2(a) through (d), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this clause shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this

 

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clause, such interest shall be calculated at a daily rate equal to the Maximum
Lawful Rate divided by the number of days in the year in which such calculation
is made. If, notwithstanding the provisions of this Section 1.2(e), a court of
competent jurisdiction shall determine by a final, non-appealable order that a
Lender has received interest hereunder in excess of the Maximum Lawful Rate,
Administrative Agent shall, to the extent permitted by applicable law, promptly
apply such excess as specified in Section 1.5(g) and thereafter shall refund any
excess to Great Lakes or as such court of competent jurisdiction may otherwise
order.

1.3 Yield Enhancement; Fees.

(a) Yield Enhancement. On or prior to the Closing Date, Great Lakes shall pay to
Administrative Agent, for the ratable benefit of each Lender, a yield
enhancement in an amount equal to 3.0% of the entire Commitment on the Closing
Date.

(b) Unused Line Fee. As additional compensation for the Revolving Lenders, Great
Lakes shall pay to Administrative Agent, for the ratable benefit of such
Revolving Lenders, in arrears, on the last Business Day of each month prior to
the Maturity Date and on the Maturity Date, a fee for Great Lakes’ non use of
available funds (the “Unused Line Fee”) in an amount equal to 1.00% per annum
multiplied by the difference between (x) the Maximum Amount (as it may be
reduced from time to time) and (y) the average daily balance of Revolving Loans
outstanding during the preceding calendar month (or portion thereof during which
this Agreement is in effect).

(c) Prepayment Fee. If Great Lakes pays or prepays all or any portion of the
Term Loan, whether voluntarily or involuntarily and whether before or after
acceleration of the Obligations, Great Lakes shall pay to Administrative Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder a fee (the “Prepayment Fee”)
in an amount equal to the Applicable Percentage (as defined below) multiplied by
the sum of the principal amount of the Term Loan paid. As used herein, the term
“Applicable Percentage” shall mean (i) 4.00% per annum, in the case of a
prepayment on or prior to the first anniversary of the Closing Date,
(ii) 3.00% per annum, in the case of a prepayment after the first anniversary of
the Closing Date but on or prior to the second anniversary of the Closing Date,
(iii) 2.00% per annum, in the case of a prepayment after the second anniversary
of the Closing Date but prior to the third anniversary of the Closing Date and
(iv) 0.00% per annum, in the case of a prepayment at anytime thereafter. Great
Lakes agrees that the Applicable Percentages are a reasonable calculation of
Lenders’ lost profits in view of the difficulties and impracticality of
determining actual damages resulting from prepayments of the Term Loan.
Notwithstanding the foregoing, no Prepayment Fee shall be payable by Great Lakes
upon a mandatory prepayment of Term Loan made pursuant to Section 1.5(b).

(d) Expenses and Attorneys’ Fees. Great Lakes agrees to promptly pay all
reasonable fees, charges, costs and expenses (including reasonable attorneys’
fees and expenses for one counsel (absent a conflict of interest) for the Agents
collectively) incurred by each Agent in connection with any matters contemplated
by or arising out of the Loan Documents, in connection with the examination,
review, due diligence investigation, documentation, negotiation, closing and
syndication of the transactions contemplated herein and in connection with the
continued administration of the Loan Documents including any amendments,
modifications, consents and

 

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waivers (whether or not consummated). Great Lakes agrees to promptly pay
reasonable documentation charges assessed by Agents for amendments, waivers,
consents and any of the documentation prepared Agents’ internal legal staff
(whether or not consummated). Great Lakes agrees to promptly pay all reasonable
fees, charges, costs and expenses (including fees, charges, costs and expenses
of attorneys, auditors (whether internal or external), appraisers, investment
bankers, consultants and advisors and the allocated cost of internal legal
staff) incurred by Agents in connection with any amendment, waiver, consent with
respect to the Loan Documents (whether or not consummated), Event of Default,
work-out or action to enforce any Loan Document or to collect any payments due
from Great Lakes. In addition, in connection with any work-out or action to
enforce any Loan Document or to collect any payments due from Great Lakes, Great
Lakes agrees to promptly pay all reasonable fees, charges, costs and expenses
incurred by Lenders for one legal counsel acting for all Lenders other than
Agents and appropriate local counsel and regulatory counsel. All fees, charges,
costs and expenses for which Great Lakes is responsible under this
Section 1.3(d) shall be deemed part of the Obligations when incurred, payable in
accordance with Section 1.4 and secured by the Collateral.

1.4 Payments.

(a) Payments by Great Lakes. All payments by Great Lakes of the Obligations
shall be without deduction, defense, setoff or counterclaim and shall be made in
same day funds and delivered to Administrative Agent for the benefit of
Administrative Agent and Lenders, as applicable, by wire transfer to the
applicable account set forth below for Administrative Agent or such other place
as Administrative Agent may from time to time designate in writing.

Administrative Agent’s Account:

Citibank, N.A.

ABA #021000089

Account name: Crystal Financial LLC

Account number: XXX

Ref: Great Lakes

Great Lakes shall receive credit on the first Business Day following the day of
receipt for funds received by Administrative Agent by 10:00 a.m. (Mountain
time). In the absence of timely receipt, such funds shall be deemed to have been
paid on the next Business Day. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, the payment may be made
on the next succeeding Business Day and such extension of time shall be included
in the computation of the amount of interest and Fees due hereunder.

(b) Apportionment and Application.

(i) So long as no Event of Default has occurred and is continuing, all principal
and interest payments received by Administrative Agent or Collateral Agent
(together with the proceeds of Collateral received by the Administrative Agent
or Collateral Agent) shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Obligations to which such

 

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payments relate held by each Lender) and all payments of fees and expenses
received by Administrative Agent or Collateral Agent (other than fees or
expenses that are for Administrative Agent’s or Collateral Agent’s separate
account) shall be apportioned ratably among the Lenders having a Pro Rata Share
of the type of Commitment or Obligation to which a particular fee or expense
relates.

(ii) At any time that an Event of Default has occurred and is continuing, all
payments remitted to Administrative Agent and all proceeds of Collateral
received by Administrative Agent or Collateral Agent shall be applied as
follows:

 

  (A) first, to pay any expenses (including cost or expense reimbursements) or
indemnities then due to each Agent under the Loan Documents until paid in full,

 

  (B) second, to pay any fees or premiums then due to each Agent under the Loan
Documents until paid in full,

 

  (C) third, ratably, to pay any expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan
Documents until paid in full,

 

  (D) fourth, ratably, to pay any fees or premiums then due to any of the
Lenders under the Loan Documents until paid in full,

 

  (E) fifth, ratably, to pay interest accrued in respect of the Revolving Loans
and the Term Loan until paid in full,

 

  (F) sixth, ratably to pay the principal of all Revolving Loans and Term Loan
until paid in full, and

 

  (G) seventh, to Great Lakes (to be wired to the Designated Account) or such
other Person entitled thereto under applicable law;

(c) Administrative Agent and Collateral Agent promptly shall each distribute to
each Lender, pursuant to the applicable wire instructions received from each
Lender in writing, such funds as it may be entitled to receive, subject to a
Settlement delay as provided in Section 1.1(e).

(d) In each instance, so long as no Event of Default has occurred and is
continuing, Section 1.4(b)(i) shall not apply to any payment made by Great Lakes
to Administrative Agent and specified by Great Lakes to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement or any other Loan Document.

(e) For purposes of this Agreement, “paid in full” of a type of Obligation (or
all Obligations) means (i) the indefeasible payment in cash or immediately
available funds of all amounts owing on account of such type of Obligation (or
all Obligations) (other than contingent indemnification obligations to the
extent no unsatisfied claim has been asserted), including interest accrued after
the commencement of any Insolvency Proceeding, default interest, interest on
interest, and expense reimbursements, irrespective of whether any of the
foregoing would be or is allowed or disallowed in whole or in part in any
Insolvency Proceeding and (ii) the termination of the Revolving Loan Commitment.

 

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(f) In the event of a direct conflict between the priority provisions of this
Section 1.4 and any other provision contained in this Agreement or any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, then the terms and provisions of this Section 1.4
shall control and govern.

1.5 Prepayments.

(a) Voluntary Prepayments.

(i) Voluntary Prepayments of Revolving Loans. Great Lakes may prepay the
principal amount of any Revolving Loan at any time in whole or in part, without
premium or penalty.

(ii) Prepayments of Term Loan. Great Lakes may, upon at least five (5) Business
Days prior written notice to each Agent, prepay the principal amount of the Term
Loan, in whole or in part, in minimum increments of $500,000 and integrals of
$100,000 in excess thereof, or, if less, the entire principal balance of the
Term Loan. Each prepayment made pursuant to this Section 1.5(a)(ii) shall be
accompanied by the payment of accrued interest to the date of such payment
(together with the Prepayment Fee, if applicable) on the amount prepaid. Any
prepayments of the Term Loan may not be reborrowed.

(b) Prepayments from Excess Cash Flow. Within 45 days after September 30 of each
year, commencing with September 30, 2012, Great Lakes shall prepay the Loans in
an amount equal to fifty percent (50.0%) of the Excess Cash Flow for the
applicable Excess Cash Flow Period. The calculation shall be based on the
Financial Statements (and any related reports from management of Great Lakes)
for Great Lakes and its Subsidiaries for such Excess Cash Flow Period.
Prepayments of the Loans under this Section 1.5(b) shall be applied in
accordance with Section 1.5(g).

(c) Prepayments from Extraordinary Receipts. Within one (1) Business Day of the
date of receipt by Great Lakes or any of its Subsidiaries of any Extraordinary
Receipts in excess of $250,000, Great Lakes shall prepay the Loans in an amount
equal to 100% of such Extraordinary Receipts, net of any reasonable expenses
incurred in collecting such Extraordinary Receipts which are paid to Persons who
are not Affiliates of Great Lakes. All prepayments made pursuant to this
Section 1.5(c) shall be applied in accordance with Section 1.5(g).

(d) Prepayments from Asset Dispositions; Casualty Events. Within one
(1) Business Day of the date of receipt of any Net Proceeds from an Asset
Disposition (except the Asset Dispositions permitted in Section 3.7) or from a
Casualty Event, in each case, in excess of an aggregate amount of $250,000 (the
“Threshold Amount”) for any Fiscal Year, Great Lakes shall prepay the Loans in
an amount equal to such Net Proceeds, except, so long as no Event of Default has
occurred and is continuing, that Great Lakes may reinvest all such Net Proceeds
of any such

 

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Asset Disposition or such Casualty Event within one hundred eighty (180) days,
in the replacement of the assets which were the subject to any such Asset
Disposition or Casualty Event with like-kind assets. Pending such reinvestment,
the Net Proceeds shall either (i) be delivered to the Administrative Agent, for
distribution to the Lenders, as a prepayment of the Loans or (ii) be retained by
Great Lakes and deposited in a deposit account of Great Lakes in which
Collateral Agent has a perfected first-priority security interest, and such Net
Proceeds shall remain on deposit therein until such reinvestment occurs in
accordance with the terms set forth above or such Net Proceeds are otherwise
applied to the Obligations as a prepayment thereof. If Great Lakes does not
intend to so reinvest such Net Proceeds or if the period set forth in the
immediately preceding sentence expires without Great Lakes having reinvested the
full amount of the Net Proceeds of any such Asset Disposition or such Casualty
Event, then Great Lakes shall apply all such remaining Net Proceeds of such
Asset Disposition or Casualty Event in excess of the Threshold Amount to payment
of the Loans in accordance with Section 1.5(g). Notwithstanding the foregoing,
fifty percent (50%) of any Net Proceeds with respect to an Asset Disposition or
Casualty Event involving an Aircraft that are in excess of the Aircraft NOLV of
such Aircraft shall be excluded from the requirements of this Section 1.5(d) and
may be retained by Great Lakes for use in the ordinary course of its business,
and the remaining fifty percent (50%) shall be applied to the payment of the
Loans in accordance with Section 1.5(g).

(e) Incurrence of Indebtedness. Immediately upon the receipt by Great Lakes or
any of its Subsidiaries of the proceeds of any incurrence of any Indebtedness
(other than Indebtedness permitted pursuant to Section 3.1), Great Lakes shall
prepay the Loans in an amount equal to 100% of the cash proceeds of such
incurrence, net of underwriting discounts and commissions and other reasonable
costs associated therewith that are paid to Persons who are not Affiliates of
Great Lakes. The payments made under this Section 1.5(e) shall be applied in
accordance with Section 1.5(g).

(f) Borrowing Base. If, at any time, (A) the amount of all outstanding Revolving
Loans on such date exceeds (B) the Borrowing Base (such excess being referred to
as the “Borrowing Base Excess Amount”), then Great Lakes shall promptly (and in
any event, within two (2) Business Days) prepay the Revolving Loans (for the Pro
Rata Share of each Revolving Lender) in an aggregate amount equal to the
Borrowing Base Excess Amount.

(g) Application of Proceeds. With respect to any prepayments made by Great Lakes
pursuant to Section 1.5(b), 1.5(c), 1.5(d), and 1.5(e) and so long as no Event
of Default shall have occurred and be continuing, such prepayments shall be
applied as follows: (A) first, in payment of the outstanding principal amount of
the Term Loan, but not to the reduction of any amortization payments, unless all
outstanding amounts of the Term Loan, other than with respect to amortization
payments, have been paid in full, then in such event, such prepayments shall be
applied to reduce the outstanding principal amount of the Term Loan in inverse
order of maturity, and second to the Revolving Loans outstanding until the same
has been repaid in full but not as a permanent reduction of the Revolving Loan
Commitment, and (B) if an Event of Default shall have occurred and be
continuing, be applied in the manner set forth in Section 1.4(b)(ii).

1.6 Maturity. All of the Obligations shall become due and payable as otherwise
set forth herein, but in any event all of the remaining Obligations shall become
due and payable upon the Maturity Date (or sooner upon the acceleration of the
Loans as provided for in this Agreement).

 

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Until all Obligations have been fully paid and satisfied (other than contingent
indemnification obligations to the extent no unsatisfied claim has been
asserted) and the Revolving Loan Commitment has been terminated, Collateral
Agent shall be entitled to retain the security interests in the Collateral
granted under the Collateral Documents on behalf of the Lenders, and each Agent
and Lenders shall be entitled to retain the ability to exercise all rights and
remedies available to them respectively under the Loan Documents and applicable
laws. Notwithstanding anything contained in this Agreement to the contrary, upon
any termination of the Revolving Loan Commitment, all of the Obligations shall
be due and payable.

1.7 Register. Administrative Agent shall maintain a register (the “Register”) on
its books to record the Loans, all payments made by Great Lakes with respect to
the Loans, and all other debits and credits as provided in this Agreement with
respect to the Loans and any other Obligations. Without limiting the foregoing,
Administrative Agent may, from time to time, at Administrative Agent’s Permitted
Discretion, charge the Register for any amounts due and owing by Great Lakes
under the Loan Documents whereupon the same shall be deemed added to the balance
of Obligations owing by Great Lakes. All entries in the Register shall be made
in accordance with the customary accounting practices of Administrative Agent as
in effect from time to time. The balance in the Register, as recorded on the
most recent printout or other written statement of Administrative Agent shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Administrative Agent, Collateral Agent and Lenders by Great Lakes; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect Great Lakes’ duty to pay the Obligations. Any Lender may elect
(which election may be revoked) to dispense with the issuance of Notes to that
Lender and may rely on the Register as evidence of the amount of Obligations
from time to time owing to it. Subject to Section 8.1, the Obligations and the
Notes evidencing such Obligations may be assigned or otherwise transferred in
whole or in part only by registration of such assignment or transfer in the
Register. Any assignment or transfer of the Obligations or the Notes evidencing
such Obligations shall be registered in the Register only upon delivery to each
Agent of a duly executed Assignment Agreement in accordance with Section 8.1.
This Section 1.7 shall be construed so that the Loans are at all times
maintained in “registered form” within the meaning of Section 163(f), 871(h)(2)
and 881(c)(2) of the IRC.

1.8 Reserved.

1.9 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of Great Lakes under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the Permitted Discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by Great Lakes shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section) the applicable Recipient receives
an amount equal to the sum it would have received had no such deduction or
withholding been made.

 

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(b) Payment of Other Taxes by Great Lakes. Great Lakes and its Subsidiaries
shall timely pay to the relevant Governmental Authority in accordance with
applicable law, or at the option of either Agent timely reimburse such Agent for
the payment of, any Other Taxes.

(c) Indemnification by Great Lakes. Great Lakes shall indemnify each Recipient,
within 10 days after demand therefor, for the full amount of any Indemnified
Taxes (including Indemnified Taxes imposed or asserted on or attributable to
amounts payable under this Section) payable or paid by such Recipient or
required to be withheld or deducted from a payment to such Recipient and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to Great Lakes by a Lender (with a copy to each Agent),
or by either Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

(d) Indemnification by the Lenders. Each Lender shall severally indemnify each
Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that Great Lakes has not
already indemnified the Agents for such Indemnified Taxes and without limiting
the obligation of Great Lakes to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 8.1(b) relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such Lender, in each case, that are payable or paid by the Administrative
Agent or the Collateral Agent in connection with any Loan Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent or Collateral
Agent shall be conclusive absent manifest error. Each Lender hereby authorizes
each Agent to set off and apply any and all amounts at any time owing to such
Lender under any Loan Document or otherwise payable by the either Agent to the
Lender from any other source against any amount due to either Agent under this
clause (d).

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by
Great Lakes or any of its Subsidiaries to a Governmental Authority pursuant to
this Section 1.9, Great Lakes shall deliver to each Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to each Agent.

(f) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to Great Lakes and each Agent, at the time or times
reasonably requested by Great Lakes or either Agent, such properly completed and
executed documentation reasonably requested by Great Lakes or either Agent as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by Great Lakes or
either Agent, shall deliver such other documentation prescribed by applicable
law or reasonably requested by Great Lakes or either Agent as will enable Great
Lakes or the Agents to determine

 

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whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Sections 1.9(ii)(A),
(ii)(B) and (ii)(D) below) shall not be required if in the Lender’s Permitted
Discretion such completion, execution or submission would subject such Lender to
any material unreimbursed cost or expense or would materially prejudice the
legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to Great Lakes and each Agent
on or prior to the date on which such Lender becomes a Lender under this
Agreement (and from time to time thereafter upon the reasonable request of Great
Lakes or the Administrative Agent), executed originals of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Great Lakes and each Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of Great Lakes or the Administrative Agent), whichever of the
following is applicable:

(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(ii) executed originals of IRS Form W-8ECI;

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the IRC, (x) a certificate to the
effect that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the IRC, a “10 percent shareholder” of Great Lakes
within the meaning of Section 881(c)(3)(B) of the IRC, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the IRC (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(iv) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate on behalf of each such
direct and indirect partner; and

 

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(C) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender
shall deliver to Great Lakes and each Agent at the time or times prescribed by
law and at such time or times reasonably requested by Great Lakes or either
Agent such documentation prescribed by applicable law (including as prescribed
by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by Great Lakes or either Agent as may be necessary for
Great Lakes and such Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (C), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify Great Lakes and each Agent in writing
of its legal inability to do so.

(g) Treatment of Certain Refunds. If any party determines, in its Permitted
Discretion, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 1.9 (including by the payment of additional
amounts pursuant to this Section 1.9), it shall pay to the indemnifying party an
amount equal to such refund (but only to the extent of indemnity payments made
under this Section with respect to the Taxes giving rise to such refund), net of
all out-of-pocket expenses (including Taxes) of such indemnified party and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund). Such indemnifying party, upon the
request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this clause (g) (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) in the event that
such indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this clause (g), in no
event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this clause (g) the payment of which would place
the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This clause
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

(h) Survival. Each party’s obligations under this Section 1.9 shall survive the
resignation or replacement of either Agent or any assignment of rights by, or
the replacement of, a Lender, the termination of the Revolving Loan Commitment
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

 

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SECTION 2.

AFFIRMATIVE COVENANTS

Great Lakes agrees as to itself and on behalf of its Subsidiaries that from and
after the date hereof and until the Obligations are paid in full (other than
indemnification Obligations as to which no claim has been asserted):

2.1 Compliance With Laws and Contractual Obligations. Great Lakes will
(a) comply with and shall cause each of its Subsidiaries to comply with (i) the
requirements of all applicable material laws, rules, regulations and orders of
any Governmental Authority (including, without limitation, laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety) as now in effect and which may be
imposed in the future in all jurisdictions in which Great Lakes or any of its
Subsidiaries is now doing business or may hereafter be doing business and
(ii) the obligations, covenants and conditions contained in all Contractual
Obligations of Great Lakes or any of its Subsidiaries other than those laws,
rules, regulations and orders and those provisions of such Contractual
Obligations the noncompliance with which could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(b) maintain or obtain and shall cause each of its Subsidiaries to maintain or
obtain all licenses, qualifications and permits now held or hereafter required
to be held by Great Lakes or any of its Subsidiaries, for which the loss,
suspension, revocation or failure to obtain or renew, could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. This Section 2.1 shall not preclude Great Lakes or its Subsidiaries from
contesting any taxes or other payments, if they are being diligently contested
in good faith in a manner which stays enforcement thereof and if appropriate
expense provisions have been recorded in conformity with GAAP, subject to
Section 3.2 and no Lien (other than a Permitted Encumbrance) in respect thereof
has been created.

2.2 Insurance. Great Lakes and each of its Subsidiaries will maintain or cause
to be maintained, with financially sound and reputable insurers, public
liability and property damage insurance with respect to its business and
properties and the business and properties of its Subsidiaries against loss or
damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in similar businesses and in amounts acceptable
to each Agent and will deliver evidence thereof to Collateral Agent. Great Lakes
shall, pursuant to endorsements and/or assignments in form and substance
reasonably satisfactory to each Agent, (i) cause Collateral Agent on behalf of
each Lender to be named as lender’s loss payee in the case of casualty insurance
and (ii) cause Collateral Agent on behalf of each Lender to be named as
additional insureds in the case of all liability insurance. Great Lakes
represents and warrants that it and each of its Subsidiaries currently maintains
all material properties as set forth above and maintains all insurance described
above. In the event Great Lakes fails to provide each Agent with evidence of the
insurance coverage required by this Agreement, Collateral Agent may purchase
insurance at Great Lakes’ expense to protect Collateral Agent’s interests in the
Collateral. This insurance may, but need not, protect Great Lakes’ interests.
The coverage purchased by Collateral Agent may not pay any claim made by Great
Lakes or any claim that is made against Great Lakes in connection with the
Collateral. Great Lakes may later cancel any insurance purchased by Collateral
Agent, but only after providing Collateral Agent with

 

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evidence that Great Lakes has obtained insurance as required by this Agreement.
If Collateral Agent purchases insurance for the Collateral, Great Lakes will be
responsible for the costs of that insurance, including interest and other
Charges imposed by Collateral Agent in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added by the Collateral Agent to
the Obligations. The costs of the insurance may be more than the cost of
insurance Great Lakes is able to obtain on its own.

2.3 Inspection; Appraisal; Lender Meeting. Great Lakes shall and shall cause its
Subsidiaries to permit any authorized representatives of each Agent to visit,
audit, inspect and appraise any of the properties and assets of Great Lakes and
its Subsidiaries, including its and their financial and accounting records,
Aircraft and Spare Engines, and to make copies and take extracts therefrom, and
to discuss its and their affairs, finances and business with its and their
officers and certified public accountants, at such reasonable times during
normal business hours and as often as may be reasonably requested. Great Lakes
shall pay all normal audit, appraisal and field examination fees and reasonable
out-of-pocket expenses of each Agent related to any such visit, audit and/or
field examination (“Examination Costs”) and to any such appraisal (“Appraisal
Costs”); provided that so long as no Event of Default shall have occurred and
remain continuing, Great Lakes shall not be obligated to pay Examination Costs
for more than two (2) field examinations by Agents (and their designees) each
calendar year and Appraisal Costs for more than two (2) desk-top appraisals on
Inventory and one (1) full appraisal on all assets, in each case by Agents (and
their designees) each calendar year. Without in any way limiting the foregoing,
Great Lakes will participate and will cause key management personnel of Great
Lakes and its Subsidiaries to participate in an in-person meeting with each
Agent and Lenders at least once during each year, which in-person meeting shall
be held at such time and such place as may be reasonably requested by each
Agent. Without limiting the foregoing, Great Lakes and its Subsidiaries, as
applicable, will store original Aircraft log books in a fire rated container and
will maintain electronic maintenance records in accordance with applicable FAA
requirements.

 

2.4 Maintenance of Existence and Conduct of Business. Great Lakes shall:

(a) do or cause to be done all things necessary to preserve and keep in full
force and effect its existence and its rights, permits, licenses, privileges and
franchises material to its business;

(b) continue to conduct its business substantially as now conducted or as
otherwise permitted hereunder;

(c) at all times maintain, preserve and protect all of its assets and properties
used or useful in the conduct of its business, and keep the same in good repair,
working order and condition in all material respects (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and

(d) transact business only in such corporate and trade names as are set forth in
Schedule 2.4.

 

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2.5 Environmental Matters. Great Lakes shall and shall cause each Person within
its control to promptly forward to each Agent a copy of any order, notice,
request for information or any communication or report received by Great Lakes
or any Person within its control in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities
in excess of $250,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter.

2.6 Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases. With respect to the corporate headquarters and in each Agent’s
Permitted Discretion, any other material locations of Great Lakes and its
Subsidiaries where Collateral in the aggregate in excess of $100,000 is or may
be located, Great Lakes shall and shall cause its Subsidiaries and, with respect
to all other locations, Great Lakes shall and shall cause its Subsidiaries to
use best efforts to, obtain a Collateral Access Agreement or Mortgagee
Agreements, as applicable, from the lessor of any Real Estate leased by Great
Lakes, the mortgagee of any Real Estate owned by Great Lakes or the bailee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, as applicable, which Collateral Access
Agreement or Mortgagee Agreement, as applicable, shall contain a waiver or
subordination of all Liens or claims that the landlord, bailee or mortgagee may
assert against the Collateral at that location, shall permit each Agent access
to the related premises and shall otherwise be reasonably satisfactory in form
and substance to each Agent. Great Lakes shall and shall cause its Subsidiaries
to timely and fully pay and perform their obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located.

 

2.7 Further Assurances.

(a) Great Lakes shall, from time to time, execute such financing statements,
documents, security agreements and reports as Administrative Agent, Collateral
Agent or Requisite Lenders at any time may reasonably request to evidence,
perfect or otherwise implement the guaranties and security for repayment of the
Obligations contemplated by the Loan Documents.

(b) In the event Great Lakes or any of its Subsidiaries acquires a fee ownership
interest in real property with a fair market value in excess of $250,000 after
the Closing Date, Great Lakes or such Subsidiary shall deliver to each Agent a
fully executed mortgage or deed of trust over such real property in form and
substance satisfactory to each Agent, together with such title insurance
policies, surveys, appraisals, evidence of insurance, legal opinions,
environmental assessments and other documents and certificates as shall be
required by either Agent.

(c) Great Lakes shall (i) cause each Person, upon its becoming a Subsidiary of
Great Lakes (provided that this shall not be construed to constitute consent by
any of the Lenders to any transaction not expressly permitted by the terms of
this Agreement), promptly to guaranty the Obligations and to grant to Collateral
Agent, for the benefit the Lenders, a security interest in the real, personal
and mixed property of such Person to secure the Obligations and (ii) pledge, or
cause to be pledged, to Collateral Agent, for the benefit of the Lenders, all of
the Stock of such

 

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Subsidiary to secure the Obligations; provided that only 65% of the total
outstanding voting Stock of any first tier Subsidiary of Great Lakes that is a
CFC (and none of the Stock of any Subsidiary of such CFC) shall be required to
be pledged if pledging a greater amount would result in adverse tax consequences
or the costs to Great Lakes of providing such pledge or perfecting the security
interests created thereby are unreasonably excessive (as determined by
Administrative Agent and Collateral Agent in consultation with Great Lakes) in
relation to the benefits of Collateral Agent and the Lenders of the security or
guarantee afforded thereby (which pledge, if reasonably requested by either
Agent, shall be governed by the laws of the jurisdiction of such Subsidiary).
The documentation for such guaranty, security and pledge shall be substantially
similar to the Loan Documents executed concurrently herewith with such
modifications as are reasonably requested by the Agents.

(d) Without limiting the generality of the foregoing, if ownership of any
Aircraft or Spare Engine is acquired by Great Lakes or any of its Subsidiaries
after the Closing Date, Great Lakes or such Subsidiary will, as soon as
reasonably practical after such acquisition, deliver to the Collateral Agent
each of the following, in form and substance satisfactory to each of the Agents
in their Permitted Discretion, all at the expense of Great Lakes:

(i) an Aircraft Security Agreement, satisfactory to each Agent;

(ii) evidence that a counterpart of such Aircraft Security Agreement has been
recorded in all places necessary, in the Agents’ judgment, to create a valid and
enforceable Lien in favor of the Collateral Agent for the benefit of the
Lenders, prior and superior in right to any other Person; and

(iii) such other information, documentation and certifications as may be
required by the Agents.

For the avoidance of doubt, and in addition to the foregoing, Great Lakes and
its Subsidiaries will cooperate with the Agents and execute such further
instruments and documents as the Agents may request prior to any Aircraft owned
by Great Lakes or any of its Subsidiaries being located in any foreign
jurisdiction that has not adopted and ratified the Cape Town Convention to
create, maintain and/or evidence a valid and enforceable Lien in favor of the
Collateral Agent, for the benefit of the Lenders, prior and superior in right to
any other Person in such jurisdiction; provided that the foregoing shall not be
deemed to be the Agents’ consent to such Aircraft being located outside of the
United States.

 

2.8 Cash Management Systems.

(a) Great Lakes shall enter into a Control Agreement with respect to Great
Lakes’ primary deposit accounts maintained by Great Lakes with Wells Fargo Bank,
N.A. and JPMorgan Chase Bank, N.A. (other than any payroll account and any
payroll tax and/or similar trust fund accounts) as of or after the Closing Date.
Such Control Agreement shall be in form and substance satisfactory to each Agent
and permit Collateral Agent to assume exclusive dominion and control of such
deposit account; provided that Collateral Agent shall not exercise its exclusive
dominion and control with respect to such deposit account so long as no Event of
Default has occurred and remains continuing; provided further, that once an
Event of Default has occurred and remains

 

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continuing (a “Funds Control Event”), unless Collateral Agent shall otherwise
elect, such Funds Control Event shall remain in effect until each Agent has
determined that no Event of Default has occurred and is continuing for a period
of two (2) consecutive calendar months. As used herein “Funds Control Event
Period” shall mean any period while a Funds Control Event has occurred and is
continuing. During any period which is not a Funds Control Event Period, Great
Lakes and its Subsidiaries shall have the right to make transfers and
withdrawals from and write checks against amounts in such deposit accounts.

(b) With respect to deposit accounts of Great Lakes that are not subject to a
Control Agreement (such accounts “Outstation Accounts”), the amount in all such
Outstation Accounts shall not exceed $250,000 in the aggregate and Great Lakes
shall sweep substantially all of the balance in such Outstation Accounts to a
deposit account which is subject to a Control Agreement (i) at anytime when the
aggregate balance in all Outstation Accounts exceeds $250,000 and (ii) no less
than once per Fiscal Quarter.

2.9 Collateral Reporting. Provide each Agent (and if so requested by an Agent,
with copies for each Lender) with each of the reports set forth on Annex E at
the times specified therein.

2.10 Disclosure Updates. Promptly and in no event later than five (5) Business
Days after obtaining knowledge thereof, notify each Agent if any written
information, exhibit, or report furnished to Administrative Agent, Collateral
Agent or the Lenders contained, at the time it was furnished, any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made. The foregoing to the contrary notwithstanding, any
notification pursuant to the foregoing provision will not cure or remedy the
effect of the prior untrue statement of a material fact or omission of any
material fact nor shall any such notification have the effect of amending or
modifying this Agreement or any of the Schedules hereto.

2.11 Payment of Charges and Taxes.

(a) Subject to Section 2.11(b), Great Lakes shall and shall cause each of its
Subsidiaries to pay and discharge or cause to be paid and discharged promptly
all Charges and Taxes payable by it, including (i) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed) and all
Taxes with respect to income, sales and use, and, social security and
unemployment withholding with respect to its employees, (ii) lawful claims for
labor, materials, supplies and services or otherwise, and (iii) all storage or
rental charges payable to warehousemen and bailees in possession of Collateral
(including, for the avoidance of doubt, any books and records of Great Lakes and
its Subsidiaries), in each case, before any thereof shall become past due,
except in the case of clauses (ii) and (iii) where the failure to pay or
discharge such Charges would not result in aggregate liabilities in excess of
$250,000. Great Lakes shall and shall cause each of its Subsidiaries to timely
and correctly, file Tax returns to be filed by it, except where the failure to
file could not be reasonably be expected to result in a Material Adverse Effect

(b) Great Lakes or any of its Subsidiaries may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges or claims
described in Section 2.11(a); provided, that (i) adequate reserves with respect
to such contest are maintained on the books of

 

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Great Lakes or such Subsidiary, in accordance with GAAP; (ii) no Lien shall be
imposed to secure payment of such Charges (other than payments to warehousemen
and/or bailees or property tax that have priority as a matter of applicable law)
that is superior to any of the Liens securing payment of the Obligations and
such contest is maintained and prosecuted continuously and with diligence,
(iii) none of the Collateral becomes subject to forfeiture or loss as a result
of such contest, and (iv) Great Lakes shall promptly pay or discharge such
contested Charges or claims and all additional charges, interest, penalties and
expenses, if any, and shall deliver to each Agent promptly upon request evidence
reasonably acceptable to each Agent of such compliance, payment or discharge, if
such contest is terminated or discontinued adversely to Great Lakes or such
Subsidiary or the conditions set forth in this Section 2.11(b) are no longer
met.

2.12 Books and Records. Great Lakes shall and shall cause each of its
Subsidiaries to keep adequate books and records with respect to its business
activities in which proper entries, reflecting all financial transactions, are
made in accordance with GAAP and on a basis consistent with the Financial
Statements.

2.13 Intellectual Property. Great Lakes will conduct and will cause each of its
Subsidiaries to conduct its business and affairs without infringement of or
interference with any intellectual property of any other Person in any material
respect and shall comply in all material respects with the terms of its
Licenses.

2.14 Anti-Money Laundering and Terrorism Regulations. Great Lakes agrees, and
shall cause its respective Subsidiaries, to comply with all applicable
anti-money laundering and terrorism laws, regulations and executive orders in
effect from time to time (including the USA Patriot Act (Pub. L. No. 107-56)).
Great Lakes also agrees, and shall cause its respective Subsidiaries, to ensure
that no person who owns a controlling interest in or otherwise controls Great
Lakes (or any of them) is a person designated under Section 1(b), (c) or (d) of
Executive Order No. 13224 (issued September 23, 2001) or any other similar
Executive Order. Great Lakes acknowledges that Agents’ and each Lender’s
performance hereunder is subject to compliance with all such laws, regulations
and executive orders, and in furtherance of the foregoing, Great Lakes agrees to
provide to each Agent and the Lenders all information about Great Lakes’
ownership, officers, directors, customers and business structure as
Administrative Agent, Collateral Agent and the Lenders reasonably may require to
comply with, such laws, regulations and executive orders.

2.15 Essential Air Service Program. Great Lakes and its Subsidiaries shall
conduct its business and affairs, and shall take all actions necessary, to
maintain its eligibility to receive Essential Air Service Subsidies for
providing Qualified Services to Qualified Airports, including, without
limitation, (i) at all times be fit, willing and able to perform Qualified
Services and (ii) maintain Aircraft to provide Qualified Services, and
operations related to such Qualified Services, which conform to the safety
standards prescribed by the FAA.

2.16 Post Closing. Within thirty (30) days of the Closing Date, each Agent shall
have received a certificate of good standing from the Kansas Secretary of State
with respect to Great Lakes.

 

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SECTION 3.

NEGATIVE COVENANTS

Great Lakes agrees as to itself and on behalf of each of its Subsidiaries that
from and after the date hereof until the Obligations are paid in full (other
than indemnification Obligations as to which no claim has been asserted):

3.1 Indebtedness. Great Lakes shall not and shall not cause or permit its
Subsidiaries directly or indirectly to create, incur, assume, suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness (other than pursuant to a Contingent Obligation permitted under
Section 3.4) except the following Indebtedness (collectively, “Permitted
Indebtedness”):

(a) Indebtedness described on Schedule 3.1;

(b) the Obligations;

(c) Reserved;

(d) unsecured Indebtedness of Great Lakes owing to former employees, officers,
or directors (or any spouses, ex-spouses, or estates of any of the foregoing)
incurred in connection with the repurchase by Great Lakes of the Stock of Great
Lakes that has been issued to such Persons;

(e) Indebtedness not to exceed $500,000 in the aggregate at any time outstanding
secured by purchase money Liens or incurred with respect to Capital Leases;

(f) Indebtedness owed to any Person providing property, casualty, liability, or
other insurance to Great Lakes or any of its Subsidiaries, so long as the amount
of such Indebtedness is not in excess of the amount of the unpaid cost of, and
shall be incurred only to defer the cost of, such insurance for the year in
which such Indebtedness is incurred and such Indebtedness is outstanding only
during such year;

(g) Indebtedness composing Investments to the extent permitted under
Section 3.3;

(h) Indebtedness in respect of taxes, assessments or governmental charges to the
extent that payment thereof shall not at the time be required to be made in
accordance with the provisions of this Agreement;

(i) Indebtedness in respect of judgments or awards which have been vacated,
discharged or stayed within thirty (30) days of the entry thereof or have been
in force for less than the applicable appeal period so long as execution is not
levied thereunder, or in respect of which (A) Great Lakes shall at the time in a
commercially reasonable manner be prosecuting an appeal or proceedings for
review and (B) a stay of execution shall have been obtained pending such appeal
or review;

(j) Indebtedness in respect of Liens permitted by Section 3.2;

 

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(k) Indebtedness not to exceed $250,000 in the aggregate with respect to the
purchase by Great Lakes of an interest rate cap or other similar agreement
designed to alter Great Lakes’ risk arising from fluctuations in interest rates,
in each case with respect to the Obligations; and

(l) any other unsecured Indebtedness not to exceed $500,000 in the aggregate at
any time outstanding.

3.2 Liens and Related Matters.

(a) No Liens. Great Lakes shall not and shall not cause or permit its
Subsidiaries to directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset of Great Lakes or any such
Subsidiary, whether now owned or hereafter acquired, or any income or profits
therefrom, except the following encumbrances: (collectively, “Permitted
Encumbrances”) (including, without limitation, those Liens constituting
Permitted Encumbrances existing on the date hereof and renewals and extensions
thereof, as set forth on Schedule 3.2):

(i) Liens for Taxes, assessments or governmental charges or levies not yet due
and payable or Liens for Taxes, assessments or governmental charges or levies
being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP so long as such Lien has
not been executed or enforced against Great Lakes, provided that Permitted
Encumbrances shall not include federal income tax Liens and Liens in favor of
the PBGC under ERISA;

(ii) Liens in respect of property or assets of Great Lakes or any of its
Subsidiaries imposed by law which were incurred in the ordinary course of
business and which have not arisen to secure Indebtedness for borrowed money,
such as carriers’, materialmen’s, warehousemen’s and mechanics’ Liens, statutory
and common law landlord’s Liens, and other similar Liens arising in the ordinary
course of business, and which either (1) do not in the aggregate materially
detract from the value of such property or assets or materially impair the use
thereof in the operation of the business of Great Lakes or any of its
Subsidiaries or (2) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property or asset subject to such Lien;

(iii) Liens created by or pursuant to this Agreement, the Collateral Documents
or the other Loan Documents;

(iv) Liens in existence on the Closing Date which are listed, and the property
subject thereto described, on Schedule 3.2;

(v) Liens arising from judgments, decrees, awards or attachments in
circumstances not constituting an Event of Default, provided that the amount of
cash and property (determined on a fair market value basis) deposited or
delivered to secure the respective judgment or decree or subject to attachment
shall not exceed $500,000 in the aggregate at any time;

 

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(vi) Liens (other than any Lien in favor of the PBGC imposed by ERISA)
(1) incurred or deposits made in the ordinary course of business in connection
with general insurance maintained by Great Lakes and its Subsidiaries,
(2) incurred or deposits made in the ordinary course of business of Great Lakes
and its Subsidiaries in connection with workers’ compensation, unemployment
insurance and other types of social security, (3) to secure the performance by
Great Lakes and its Subsidiaries of tenders, statutory obligations (other than
excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations for the payment of
borrowed money) to the extent incurred in the ordinary course of business, and
(4) on cash deposits or cash collateral to secure letters of credit issued on
behalf of Great Lakes and its Subsidiaries (including leases with airport
authorities) to secure the performance by Great Lakes and its Subsidiaries of
leases of Real Property, to the extent incurred or made in the ordinary course
of business consistent with past practices;

(vii) Liens created pursuant to or in connection with leases or Capital Leases
permitted pursuant to this Agreement, provided that (1) such Liens only serve to
secure the payment of rent or Indebtedness arising under such leases or Capital
Leases and (2) the Liens encumbering the assets leased or purported to be leased
under such leases or Capital Leases do not encumber any other assets of Great
Lakes or any of its Subsidiaries (other than letters of credit, payment
undertaking agreements, guaranteed investment contracts, deposits of cash or
Cash Equivalents and other credit support arrangements, in each case having an
aggregate value not exceeding the fair market value of the assets leased or
purported to be leased under such leases or Capital Leases (each of such values
determined at the time when the lease agreement relating to the relevant lease
or Capital Lease is signed and delivered), and the proceeds of or attributable
to the assets so leased or purported be leased);

(viii) (1) those liens, encumbrances, hypothecs and other matters affecting
title to any Real Property and found reasonably acceptable by each Agent or
insured against by title insurance, (2) as to any particular Real Property at
any time, such easements, encroachments, covenants, rights of way, minor
defects, irregularities or encumbrances on title which could not reasonably be
expected to materially impair such Real Property for the purpose for which it is
held by the mortgagor or grantor thereof, or the lien or hypothec held by the
Collateral Agent, (3) zoning and other municipal ordinances which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor or grantor thereof of the premises, (4) general real
estate taxes and assessments not yet delinquent, (5) any Lien that would be
disclosed on a true, correct and complete survey of the Real Property that does
not materially affect the use or enjoyment of the Real Property as it is
currently being used, and (6) such other similar items as the Agents may consent
to;

 

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(ix) Liens arising pursuant to purchase money security interests securing
Indebtedness representing the purchase price of assets acquired after the
Closing Date, provided that (1) any such Liens attach only to the assets so
purchased, upgrades thereon and, if the asset so purchased is an upgrade, the
original asset itself (and such other assets financed by the same financing
source) and to the proceeds of or attributable to the assets so purchased,
(2) the Indebtedness (other than Indebtedness incurred from the same financing
source to purchase other assets and excluding Indebtedness representing
obligations to pay installation and delivery charges for the property so
purchased) secured by any such Lien does not exceed 100% of the lesser of the
fair market value or the purchase price of the property being purchased at the
time of the incurrence of such Indebtedness and (3) the Indebtedness secured
thereby is permitted to be incurred pursuant to this Agreement; and

(x) Liens specifically permitted by the Agents from time to time.

(b) No Negative Pledges. Great Lakes shall not and shall not cause or permit its
Subsidiaries to directly or indirectly enter into or assume or permit to exist
any agreement (other than the Loan Documents) prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired.

(c) No Restrictions on Subsidiary Distributions to Great Lakes. Except as
provided herein or in any of the other Loan Documents, Great Lakes shall not and
shall not cause or permit its Subsidiaries to directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to:
(1) pay dividends or make any other distribution on any of such Subsidiary’s
Stock owned by Great Lakes or any other Subsidiary; (2) pay any Indebtedness
owed to Great Lakes or any other Subsidiary; (3) make loans or advances to Great
Lakes or any other Subsidiary; or (4) transfer any of its property or assets to
Great Lakes or any other Subsidiary.

3.3 Investments. Great Lakes shall not and shall not cause or permit its
Subsidiaries to directly or indirectly make or own any Investment in any Person
except:

(a) Great Lakes and its Subsidiaries may make and own Investments in Cash
Equivalents subject to Control Agreements in favor of Collateral Agent; provided
that such Cash Equivalents are not subject to setoff rights, except as provided
in such Control Agreements; and

(b) Investments existing on the Closing Date as set forth on Schedule 3.3.

3.4 Contingent Obligations. Great Lakes shall not and shall not cause or permit
its Subsidiaries to directly or indirectly create or become or be liable with
respect to any Contingent Obligation except:

(a) those resulting from endorsement of negotiable instruments for collection in
the ordinary course of business;

(b) those existing on the Closing Date and described in Schedule 3.4;

(c) those arising under indemnity agreements to title insurers to cause such
title insurers to issue to Collateral Agent mortgagee title insurance policies;

 

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(d) those arising with respect to customary indemnification obligations incurred
in connection with Asset Dispositions permitted hereunder; and

(e) those incurred in the ordinary course of business with respect to surety and
appeal bonds, performance and return-of-money bonds and other similar
obligations not exceeding at any time outstanding $500,000 in aggregate
liability.

3.5 Restricted Payments. Great Lakes shall not and shall not cause or permit its
Subsidiaries to directly or indirectly declare, order, pay, make or set apart
any sum for any Restricted Payment, other then amounts to be paid to Raytheon
Aircraft Credit Corp. and its Affiliates on the Closing Date pursuant to
Section 3.20(a)(i)–(ii).

3.6 Restriction on Fundamental Changes. Great Lakes shall not and shall not
cause or permit its Subsidiaries to directly or indirectly: (a) amend, modify or
waive any term or provision of its organizational documents, including its
articles of incorporation, certificates of designations pertaining to preferred
stock, by laws, partnership agreement or operating agreement in any manner
adverse to the Agents or Lenders; (b) enter into any transaction of merger or
consolidation except, upon not less than five (5) Business Days’ prior written
notice to each Agent, any wholly-owned Subsidiary of Great Lakes may be merged
with or into Great Lakes (provided that Great Lakes is the surviving entity) or
any other wholly-owned Subsidiary of Great Lakes; (c) liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution); and (d) acquire by
purchase or otherwise all or any substantial part of the business, Stock or
assets of any other Person.

3.7 Disposal of Assets or Subsidiary Stock. Great Lakes shall not and shall not
cause or permit its Subsidiaries to directly or indirectly convey, sell, lease,
sublease, transfer or otherwise dispose of, or grant any Person an option to
acquire, in one transaction or a series of related transactions, any of its
property, business or assets, whether now owned or hereafter acquired, except
for (a) sales of inventory to customers in the ordinary course of business and
dispositions of obsolete equipment not used or useful in the business; (b) Asset
Dispositions by Great Lakes and its Subsidiaries of assets other than Aircraft
if all of the following conditions are met: (i) the aggregate fair market value
of assets sold or otherwise disposed of in any Fiscal Year does not exceed
$250,000; (ii) the consideration received is at least equal to the fair market
value of such assets (as determined by the Board of Directors of Great Lakes in
good faith); (iii) 100% of the consideration received is cash; (iv) the Net
Proceeds of such Asset Disposition are applied as required by Section 1.5(d);
and (v) no Event of Default has occurred and is continuing or would result from
such Asset Disposition; and (c) Asset Dispositions by Great Lakes and its
Subsidiaries of Aircraft if all of the following conditions are met: (i) the
consideration received is at least equal to the Aircraft Fair Market Value of
such Aircraft; (ii) 100% of the consideration received is cash; (iii) the Net
Proceeds are applied as required by Section 1.5(d); (iv) no Event of Default has
occurred and is continuing or would result from such Asset Disposition; and
(v) no more than two (2) Asset Dispositions of Aircraft shall occur within any
Fiscal Year or more than five (5) Asset Dispositions of Aircraft shall occur
over the term of this Agreement.

3.8 Transactions with Affiliates. Great Lakes shall not and shall not cause or
permit its Subsidiaries to directly or indirectly enter into or permit to exist
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any management,

 

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consulting, investment banking, advisory or other similar services) with any
Affiliate or with any director, officer or employee of Great Lakes or any
Subsidiary of Great Lakes, except (a) as set forth on Schedule 3.8 and that are
in the ordinary course of and pursuant to the reasonable requirements of the
business of Great Lakes and upon fair and reasonable terms which are no less
favorable to Great Lakes than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate, (b) transactions in the
ordinary course of and pursuant to the reasonable requirements of the business
of Great Lakes or any of its Subsidiaries and upon fair and reasonable terms
which are fully disclosed to each Agent and are no less favorable to Great Lakes
or any of its Subsidiaries than would be obtained in a comparable arm’s length
transaction with a Person that is not an Affiliate, (c) payment of reasonable
compensation to officers, employees, directors and consultants, in each case,
for services actually rendered to Great Lakes or any of its Subsidiaries;
provided that consulting fees paid to directors shall not exceed $120,000 in the
aggregate during ay Fiscal Year and (d) Restricted Payments permitted in
Section 3.5 and the agreements pursuant to which such Restricted Payments are
required to be made.

3.9 Reserved.

3.10 Changes Relating to Indebtedness. Great Lakes shall not and shall not cause
or permit its Subsidiaries to directly or indirectly change or amend the terms
of any of its Indebtedness (excluding the Obligations) if the effect of such
amendment is to: (a) increase the interest rate by more than three percent
(3.00%) on such Indebtedness; (b) accelerate the dates upon which payments of
principal or interest are due; (c) increase the principal amount of such
Indebtedness; (d) change any event of default or add or make more restrictive
any covenant with respect to such Indebtedness; (e) change the redemption or
prepayment provisions of such Indebtedness; (f) change the subordination
provisions thereof (or the subordination terms of any guaranty thereof);
(g) change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner adverse to Great Lakes or Lenders;
or (h) increase the portion of interest payable in cash with respect to any
Indebtedness for which interest is payable by the issuance of payment-in-kind
notes or is permitted to accrue.

3.11 Fiscal Periods. Great Lakes shall not change its Fiscal Year or Fiscal
Quarters.

3.12 Press Release; Public Offering Materials. Great Lakes agrees that neither
it nor its Affiliates will in the future issue any press releases or other
public disclosure, including any prospectus, proxy statement or other materials
filed with any Governmental Authority relating to a public offering of the Stock
of Great Lakes, using the name of the Administrative Agent, Collateral Agent or
their affiliates or referring to this Agreement or the other Loan Documents
unless it is appropriate or is required under law (including any law or
requirement of the Securities and Exchange Commission), provided, that Great
Lakes or such Affiliate will use reasonable efforts to consult with each Agent
issuing such press release or other public disclosure. Great Lakes consents to
the publication by each Agent or any Lender of a tombstone or similar
advertising material relating to the financing transactions contemplated by this
Agreement. Administrative Agent, Collateral Agent or such Lender shall provide a
draft of any such tombstone or similar advertising material to Great Lakes for
review and comment prior to the publication thereof. Each Agent reserves the
right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.

 

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3.13 Subsidiaries. Unless in accordance with Section 2.7(c), Great Lakes shall
not and shall not cause or permit its Subsidiaries to directly or indirectly
establish, create or acquire any new Subsidiary.

3.14 Bank Accounts; Lockboxes. Other than with respect to Outstation Accounts,
Great Lakes shall not and shall not cause or permit its Subsidiaries to
establish any new bank accounts or lockboxes without prior written notice to
each Agent and, if such bank account is a deposit account, unless Collateral
Agent and the bank at which such deposit account is to be opened or lockbox is
to be administered to enter into a Control Agreement regarding such deposit
account and/or lockbox, as applicable, pursuant to which such bank acknowledges
the security interest of Collateral Agent in such deposit account and/or
lockbox, as applicable, agrees to comply with instructions originated by
Collateral Agent directing disposition of the funds in the deposit account
and/or lockbox, as applicable, without further consent from Great Lakes or
Subsidiary, and agrees to subordinate and limit any security interest the bank
may have in the deposit account and/or lockbox, as applicable, and waive all
rights of set-off with respect thereto on terms satisfactory to each Agent in
its Permitted Discretion and permitting Collateral Agent to assume exclusive
dominion and control over such deposit account and/or lockbox, as applicable;
provided that Collateral Agent may only exercise its exclusive dominion and
control with respect to such lockboxes and/or deposit accounts after the
occurrence of a Funds Control Event and while a Funds Control Event Period
remains in effect. During any period which is not a Funds Control Event Period,
Great Lakes shall have the right to make transfers and withdrawals from and
write checks against amounts in such deposit accounts.

3.15 Hazardous Materials. Great Lakes shall not and shall not cause or permit
its Subsidiaries to cause or permit a Release of any Hazardous Material on, at,
in, under, above, to, from or about any of the Real Estate where such Release
would (a) violate in any respect, or form the basis for any Environmental
Liabilities by Great Lakes or any of its Subsidiaries under, any Environmental
Laws or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.

3.16 ERISA. Great Lakes shall not and shall not cause or permit any ERISA
Affiliate to, cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.

3.17 Sale Leasebacks. Great Lakes shall not and shall not cause or permit any of
its Subsidiaries to engage in any sale leaseback, synthetic lease or similar
transaction involving any of its assets.

3.18 Changes to Material Contracts. Great Lakes shall not and shall not cause or
permit any of its Subsidiaries to change or amend the terms of any Material
Contract in a manner adverse to the rights or interests of Great Lakes which is
a party thereto or adverse to the rights or interests of the Agents and the
Lenders, except amendments that could not reasonably be expected to result in a
Material Adverse Effect.

 

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3.19 Prepayments of Subordinated Debt. Great Lakes shall not, directly or
indirectly, voluntarily purchase, redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any Subordinated
Debt.

3.20 Use of Loan Proceeds. Great Lakes shall not use proceeds of any Loans
provided by Lenders for any purpose other than (a) on the Closing Date, (i) to
repay, in full, the outstanding principal, accrued interest, and accrued fees
and expenses under or in connection with the Indebtedness that Great Lakes owes
to Raytheon Aircraft Credit Corp. or any of its Affiliates, (ii) repurchase one
hundred percent (100%) of the Stock of Great Lakes held by Raytheon Aircraft
Credit Corp. or any of its Affiliates, and (iii) to pay transactional fees,
costs, and expenses incurred in connection with this Agreement, the other Loan
Documents, and the transactions contemplated hereby and thereby, and
(b) thereafter, consistent with the terms and conditions hereof, for their
lawful and permitted purposes (including that no part of the proceeds of the
loans made to Great Lakes will be used to purchase or carry any such Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates the provisions of
Regulation T, U or X of the Board of Governors of the United States Federal
Reserve).

3.21 Reserved.

3.22 Cancellation of Indebtedness. Great Lakes shall not cancel any claim or
debt owing to it, except for reasonable consideration negotiated on an arm’s
length basis.

3.23 Location of Aircraft, Etc. Great Lakes shall not permit any Aircraft owned
by it to (i) land outside of the continental United States of America or Canada
without the prior written consent of each Agent, other than as may be
temporarily required by applicable safety or emergency circumstances or (ii) be
hangered or otherwise stored at any location other than a Qualified Airport or
such other Designated Location. Great Lakes shall not permit any Spare Engine,
Engine, Spare Propeller, Propeller or Spare Part to be shipped to, stored or
otherwise located at any location other than a Designated Location which is
subject to a Collateral Access Agreement or similar agreement in accordance with
Section 2.6.

3.24 Acquisition of Debt. Great Lakes will not (i) create or incur any
Indebtedness (other than the Obligations) which is subordinated or junior in
right of payment to any other Indebtedness of Great Lakes, unless such
Indebtedness is also subordinated or junior in right of payment, in the same
manner and to the same extent, to the Obligations, and (ii) Great Lakes shall
not have outstanding, create or incur any Indebtedness (other than Permitted
Indebtedness) owing to any Affiliate or employee of Great Lakes unless such
Indebtedness is expressly subordinated to the Loans and other Obligations in a
manner and on terms satisfactory to each Agent.

3.25 Change of Corporate Name or Location. Great Lakes shall not (a) change its
name as it appears in official filings in the state of its incorporation or
other organization, (b) change its chief executive office, principal place of
business, corporate offices or warehouses or locations at which Collateral is
held or stored, or the location of its records concerning the Collateral, (c)

 

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change the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization, or
(e) change its state of incorporation or organization, in each case without at
least thirty (30) days prior written notice to each Agent and after each Agent’s
written acknowledgment that any reasonable action requested by Administrative
Agent or Collateral Agent in connection therewith, including to continue the
perfection of any Liens in favor of Collateral Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States.

3.26 Lease of Aircraft. Great Lakes shall not lease any of its owned Aircraft to
any Person.

3.27 Essential Air Service Program. Neither Great Lakes nor any of its
Subsidiaries will take any action to terminate, suspend, reduce or not renew any
contract with the DOT for the provision of Qualified Services to any Qualified
Airport serviced by Great Lakes or any of its Subsidiaries pursuant to the
Essential Air Service Program, except as may be in the ordinary course of
business consistent with past practices of Great Lakes and its Subsidiaries.

SECTION 4.

FINANCIAL COVENANTS/REPORTING

Great Lakes agrees for itself and on behalf of its Subsidiaries that from and
after the date hereof until the Obligations are paid in full (other than
indemnification Obligations as to which no claim has been asserted), Great Lakes
shall perform and comply with, and shall cause each of its respective
Subsidiaries to perform and comply with, all covenants in this Section 4
applicable to such Person.

4.1 Maximum Leverage Ratio. Great Lakes and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, a Leverage
Ratio of not more than the following:

 

Period

   Leverage Ratio  

March 31, 2012

     3.10:1.00   

June 30, 2012

     3.10:1.00   

September 30, 2012

     3.50:1.00   

December 31, 2012

     3.00:1.00   

March 31, 2013

     2.75:1.00   

June 30, 2013

     2.50:1.00   

September 30, 2013

     2.50:1.00   

December 31, 2013 and the last day of each Fiscal Quarter thereafter

     2.25:1.00   

 

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4.2 Capital Expenditure Limits. Great Lakes and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during the following
periods that exceed in the aggregate the amounts set forth opposite each of such
periods (the “Capex Limit”):

 

Period

   Maximum Capital Expenditures per Period  

Fiscal Year 2011

   $ 360,000   

Fiscal Year 2012

   $ 360,000   

Fiscal Year 2013

   $ 360,000   

Fiscal Year 2014

   $ 360,000   

Fiscal Year 2015

   $ 360,000   

4.3 Financial Statements and Other Reports. Great Lakes will maintain, and cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of Financial Statements in conformity with GAAP (it being understood that
monthly Financial Statements are not required to have footnote disclosures and
may be subject to normal year-end adjustments). Great Lakes will deliver each of
the Financial Statements and other reports described below to each Agent (with
copies for each Lender).

(a) Monthly Financials. As soon as available and in any event within thirty
(30) days after the end of each month (including the last month of Great Lakes’
Fiscal Year), Great Lakes will deliver (1) the consolidated and consolidating
balance sheets of Great Lakes and its Subsidiaries, as at the end of such month,
and the related consolidated and consolidating statements of income,
stockholders’ equity and cash flow for such month and for the period from the
beginning of the then current Fiscal Year of Great Lakes to the end of such
month, (2) a report setting forth in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and the corresponding
figures from the most recent Projections for the current Fiscal Year delivered
pursuant to Section 4.3(f) and (3) year to date (together with comparisons to
the applicable month and year to date period for the previous year and
applicable month and year to date period set forth in the Projections).

(b) Quarterly Financials. As soon as available and in any event within
forty-five (45) days after the end of each quarter (including the last quarter
of Great Lakes’ Fiscal Year), Great Lakes will deliver (1) the consolidated and
consolidating balance sheets of Great Lakes and its Subsidiaries, as at the end
of such quarter, and the related consolidated and consolidating statements of
income, stockholders’ equity and cash flow for such month and for the period
from the beginning of the then current Fiscal Year of Great Lakes to the end of
such quarter, (2) a

 

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report setting forth in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the most recent Projections for the current Fiscal Year delivered pursuant
to Section 4.3(f), and (3) year to date (together with comparisons to the
applicable quarter and year to date period for the previous year and applicable
quarter and year to date period set forth in the Projections).

(c) Year-End Financials. As soon as available and in any event within ninety
(90) days after the end of each Fiscal Year of Great Lakes will deliver (1) the
consolidated and consolidating balance sheets of Great Lakes and its
Subsidiaries, as at the end of such year, and the related consolidated and
consolidating statements of income, stockholders’ equity and cash flow for such
Fiscal Year and (2) a report with respect to the consolidated Financial
Statements from a firm of Certified Public Accountants selected by Great Lakes
and reasonably acceptable to each Agent, which report shall be prepared in
accordance with Statement of Auditing Standards No. 58 (the “Statement”)
“Reports on Audited Financial Statements” which report may include a “going
concern” or like qualification; provided, however, in the event Great Lakes
receives a report in any Fiscal Year which is “Unqualified” (as such term is
defined in such Statement), then each subsequent year’s report shall be
“Unqualified” unless any such “going concern” or similar qualification could not
reasonably be expected to result in a Material Adverse Effect.

(d) Accountants’ Reports. Promptly upon receipt thereof, Great Lakes will
deliver copies of all significant reports submitted by Great Lakes’ firm of
certified public accountants in connection with each annual, interim or special
audit or review of any type of the Financial Statements or related internal
control systems of Great Lakes or its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their services.

(e) Management Report. Together with each delivery of Financial Statements of
Great Lakes and its Subsidiaries pursuant to Sections 4.3(a), (b) and (c), Great
Lakes will deliver a management report (1) describing the operations and
financial condition of Great Lakes and its Subsidiaries for the month then ended
and the portion of the current Fiscal Year then elapsed (or for the Fiscal Year
then ended in the case of year-end financials) and (2) discussing the reasons
for any significant variations. The information above shall be presented in
reasonable detail and shall be certified by the chief financial officer of Great
Lakes to the effect that such information fairly presents the results of
operations and financial condition of Great Lakes and its Subsidiaries as at the
dates and for the periods indicated.

(f) Projections and Operating Plan. As soon as available and in any event no
later than forty-five (45) days prior to the end of each of Great Lakes’ Fiscal
Years, Great Lakes will deliver Projections of Great Lakes and its Subsidiaries
for the following Fiscal Year on a month by month basis.

(g) Reserved.

(h) Events of Default, Etc. Promptly upon any officer of Great Lakes obtaining
knowledge of any of the following events or conditions, Great Lakes shall
deliver copies of all notices given or received by Great Lakes or any of its
Subsidiaries with respect to any such event or condition and a certificate of
Great Lakes’ chief executive officer specifying the nature and

 

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period of existence of such event or condition and what action Great Lakes or
any of its Subsidiaries has taken, is taking and proposes to take with respect
thereto: (1) any condition or event that constitutes, or which could reasonably
be expected to result in the occurrence of an Event of Default or Default that
any Person has given to Great Lakes or any of its Subsidiaries or any other
action taken with respect to a claimed default or event or condition of the type
referred to in Section 7.1(b); (2) any event or condition that could reasonably
be expected to result in any Material Adverse Effect; or (3) any default or
event of default with respect to any Indebtedness of Great Lakes or any of its
Subsidiaries.

(i) Litigation. Promptly upon any officer of Great Lakes obtaining knowledge of
(1) the institution of any action, charge, claim, demand, suit, proceeding,
petition, governmental investigation, tax audit or arbitration now pending or,
to the best knowledge of Great Lakes after due inquiry, threatened against or
affecting Great Lakes or any of its Subsidiaries or any property of Great Lakes
or any of its Subsidiaries (“Litigation”) not previously disclosed by Great
Lakes to each Agent, other than actions, charges, claims, demands, suits,
proceedings, petitions, governmental investigations, tax audits or arbitrations
that could not reasonably be expected to exceed $250,000 in liability or (2) any
material development in any action, suit, proceeding, governmental investigation
or arbitration at any time pending against or affecting Great Lakes or any of
its Subsidiaries or any property of Great Lakes or any of its Subsidiaries, in
each case, in excess of $250,000, Great Lakes will promptly give notice thereof
to each Agent and provide such other information as may be reasonably available
to them to enable each Agent and its counsel to evaluate such matter.

(j) Notice of Corporate and other Changes. Great Lakes shall provide prompt
written notice of (1) all jurisdictions in which Great Lakes becomes qualified
after the Closing Date to transact business, (2) any Subsidiary created or
acquired by Great Lakes or any of its Subsidiaries after the Closing Date to the
extent permitted hereunder, such notice, in each case, to identify the
applicable jurisdictions, capital structures or Subsidiaries, as applicable, and
(3) any other event that occurs after the Closing Date which would cause any of
the representations and warranties in Section 5 of this Agreement or in any
other Loan Document to be untrue or misleading in any material respect. The
foregoing notice requirement shall not be construed to constitute consent by any
of the Lenders to any transaction referred to above which is not expressly
permitted by the terms of this Agreement.

(k) Other Information. With reasonable promptness, Great Lakes will deliver such
other information and data with respect to Great Lakes or any of its
Subsidiaries as from time to time may be reasonably requested by Administrative
Agent or Collateral Agent.

(l) Compliance Certificate. Together with each delivery of Financial Statements
of Great Lakes and its Subsidiaries pursuant to Sections 4.3(b) and (c), Great
Lakes will deliver a fully and properly completed Compliance Certificate (in
substantially the same form as Annex C (the “Compliance Certificate”) signed by
Great Lakes’ chief executive officer or chief financial officer.

(m) Taxes. Great Lakes shall provide prompt written notice of (i) the execution
or filing with the IRS or any other Governmental Authority of any agreement or
other document extending, or having the effect of extending, the period for
assessment or collection of any

 

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Charges or Taxes by Great Lakes or any of its Subsidiaries and (ii) any
agreement by Great Lakes or any of its Subsidiaries or request directed to Great
Lakes or any of its Subsidiaries to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise.

(n) Aircraft Notices and Reports. Promptly (but in no event more than three
(3) Business Days after receipt by Great Lakes), Great Lakes will deliver to
each Agent copies of (i) any notices of the commencement of any investigation by
a Governmental Authority of Great Lakes or any of it Subsidiaries including,
without limitation, any non-routine FAA or DOT audit of Great Lakes or any of
its Subsidiaries which could reasonably be expected to result in a Material
Adverse Effect, (ii) any notice from the FAA or DOT ordering the grounding of
any Aircraft of Great Lakes or any of its Subsidiaries for any reason, (iii) any
notices by the DOT of the termination, suspension, offset, withholding,
recoupment or reduction of (or the intention to terminate, suspend, offset,
withhold, recoup or reduce) Essential Air Service Subsidies paid or payable to
Great Lakes or any of its Subsidiaries, (iv) any notice terminating or
suspending an airport serviced by Great Lakes or any of its Subsidiaries under
the provisions of the Essential Air Service Program as a Qualified Airport, and
(v) any notice from the DOT with respect to any other material modifications or
changes to the Essential Air Service Program. Promptly (but in no event more
than three (3) Business Days after delivery to the DOT), Great Lakes shall
delivery a copy of any notice to the DOT of Great Lakes’ or any of its
Subsidiary’s intention to terminate, suspend or reduce Qualified Services to any
Qualified Airport or not to renew Great Lakes’ or any of its Subsidiary’s
contract with the DOT for the provision of Qualified Services to any Qualified
Airport serviced by Great Lakes or any Subsidiary.

4.4 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement. For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to such terms in conformity with
GAAP. Financial statements and other information furnished to the Agents
pursuant to Sections 4.3 or any other section (unless specifically indicated
otherwise) shall be prepared in accordance with GAAP as in effect at the time of
such preparation; provided that no Accounting Change shall affect financial
covenants, standards or terms in this Agreement; provided further that Great
Lakes shall prepare footnotes to the Financial Statements required to be
delivered hereunder that show the differences between the Financial Statements
delivered (which reflect such Accounting Changes) and the basis for calculating
financial covenant compliance (without reflecting such Accounting Changes). All
such adjustments described in clause (c) of the definition of the term
Accounting Changes resulting from expenditures made subsequent to the Closing
Date (including capitalization of costs and expenses or payment of pre-Closing
Date liabilities) shall be treated as expenses in the period the expenditures
are made. Anything in this Agreement to the contrary notwithstanding, any
obligation of a Person under a lease (whether existing now or entered into in
the future) that is not (or would not be) required to be classified and
accounted for as a Capital Lease on the balance sheet of such Person under GAAP
as in effect at the time such lease is entered into shall not be treated as a
Capital Lease solely as a result of (x) the adoption of any changes in or
(y) changes in the application of, GAAP after such lease is entered into.
Notwithstanding any other provision contained herein, all terms of an accounting
or financial nature used herein shall be construed, and all computations of
amounts and ratios referred to herein shall be made, without giving effect to
any election under Accounting Standards Codification 825-10 (or any other
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of Great Lakes or any Subsidiary of Great
Lakes at “fair value”. A breach of a

 

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financial covenant contained in this Section 4 shall be deemed to have occurred
as of any date of determination by the Agents or as of the last day of any
specified measurement period, regardless of when the financial statements
reflecting such breach are delivered to the Agents.

SECTION 5.

REPRESENTATIONS AND WARRANTIES

To induce Agents and Lenders to enter into the Loan Documents, to make Loans and
other extensions of credit, Great Lakes represents, warrants and covenants for
itself and on behalf of its Subsidiaries to each Agent and each Lender that the
following statements are true, correct and complete with respect to Great Lakes
and its Subsidiaries:

5.1 Disclosure. No representation or warranty of Great Lakes contained in this
Agreement, the Financial Statements referred to in Section 5.5, the Loan
Documents or any other document, certificate or written statement furnished to
either Agent or any Lender by or on behalf of any such Person for use in
connection with the Loan Documents contains any untrue statement of a material
fact or omitted, omits or will omit to state a material fact necessary in order
to make the statements contained herein or therein not misleading in any
material respect in light of the circumstances in which the same were made.

5.2 No Material Adverse Effect. Since September 30, 2011 there have been no
events or changes in facts or circumstances affecting Great Lakes or any of its
Subsidiaries which individually or in the aggregate have had or could reasonably
be expected to have a Material Adverse Effect and that have not been disclosed
herein or in the attached Disclosure Schedules.

5.3 No Conflict. The consummation of the Loan Documents does not and will not
violate or conflict with any laws, rules, regulations or orders of any
Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any
Contractual Obligation (including, for avoidance of doubt, the Essential Air
Service Program) or organizational documents of Great Lakes or any of its
Subsidiaries except if such violations, conflicts, breaches or defaults could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

5.4 Organization, Powers, Capitalization and Enforceable Obligations.

(a) Organization and Powers. Great Lakes and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization or formation and qualified to do business in all
states where such qualification is required. The jurisdiction of organization or
formation and all jurisdictions in which Great Lakes and each of its
Subsidiaries is qualified to do business are set forth on Schedule 5.4(a). Great
Lakes and each of its Subsidiaries has all requisite organizational power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Loan Document to
which it is a party and to incur the Obligations, grant liens and security
interests in the Collateral and carry out the Loan Documents. Great Lakes is in
compliance with its charter and bylaws or partnership or operating agreement, as
applicable.

 

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(b) Capitalization. (i) The authorized Stock of Great Lakes is as set forth on
Schedule 5.4(b); (ii) all issued and outstanding Stock of Great Lakes is duly
authorized and validly issued, fully paid, nonassessable, free and clear of all
Liens, and such Stock was issued in compliance with all applicable state,
federal and foreign laws concerning the issuance of securities; (iii) the
identity of the holders of more than five percent (5%) of the Stock of Great
Lakes (prior to the redemption of the Stock of Great Lakes owned by Raytheon
Aircraft Credit Corp.) and the percentage of their fully diluted ownership of
the Stock of Great Lakes is set forth on Schedule 5.4(b); and (iv) no Stock of
Great Lakes, other than those described above, are issued and outstanding.
Except as provided in Schedule 5.4(b), there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from Great Lakes of any of its
Stock.

(c) Corporate Power, Authorization, Enforceable Obligations. The execution,
delivery and performance by Great Lakes of the Loan Documents and the creation
of all Liens provided for therein:

(i) are within Great Lakes’ power;

(ii) have been duly authorized by all necessary corporate, limited liability
company or limited partnership action;

(iii) do not contravene any provision of Great Lakes’ charter, bylaws or
partnership or operating agreement as applicable;

(iv) do not violate any law or regulation, or any order or decree of any court
or Governmental Authority;

(v) do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Great Lakes is a party or by which Great Lakes or any of its
property is bound;

(vi) do not result in the creation or imposition of any Lien upon any of the
property of Great Lakes other than those in favor of Collateral Agent, on behalf
of the Lenders, pursuant to the Loan Documents; and

(vii) do not require the consent or approval of any Governmental Authority or
any other Person, except those that have been duly obtained, made or complied
with and that are still in force and effect and except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
each Agent for failing or recordation.

Each of the Loan Documents shall be duly executed and delivered by Great Lakes
and each such Loan Document shall constitute a legal, valid and binding
obligation of Great Lakes enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability.

 

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5.5 Financial Statements and Projections. All Financial Statements concerning
Great Lakes and its Subsidiaries which have been or will hereafter be furnished
to each Agent pursuant to this Agreement have been or will be prepared in
accordance with GAAP consistently applied (except as disclosed therein) and do
or will present fairly in all material respects the financial condition of the
entities covered thereby as at the dates thereof and the results of their
operations for the periods then ended, subject to, in the case of unaudited
Financial Statements, the absence of footnotes and normal year end adjustments.
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.3(f) represent and will represent as
of the date thereof the good faith estimate of Great Lakes and its senior
management concerning the most probable course of their business.

5.6 Intellectual Property. Great Lakes and its Subsidiaries each owns, is
licensed to use or otherwise has the right to use, all material Intellectual
Property used in or necessary for the conduct of its business as currently
conducted that is material to the condition (financial or other), business or
operations of Great Lakes and its Subsidiaries and all such Intellectual
Property is identified on Schedule 5.6 and fully protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions
for such registrations, filings or issuances. Except as disclosed in Schedule
5.6, the use of such Intellectual Property by Great Lakes and its Subsidiaries
and the conduct of their businesses does not and has not been alleged by any
Person to infringe on the rights of any Person.

5.7 Investigations, Audits, Etc. Except as set forth on Schedule 5.7, neither
Great Lakes nor any of its Subsidiaries has received notice that it is the
subject of any review, audit, or investigation by any Governmental Authority
(other than the FAA or DOT consistent with past practices) concerning the
violation or possible violation of any Requirements of Law. Except as set forth
on Schedule 5.7, neither Great Lakes nor any of its Subsidiaries is subject to
(i) any non-routine FAA investigations or audits with respect to pilots or
maintenance or (ii) any non-routine DOT investigations or audits with respect to
its compliance with any rules or regulations governing its participation in the
Essential Air Service Program or Essential Air Service Subsidies received by or
owing to Great Lakes that, in all cases, could reasonably expected to result in
a Material Adverse Effect.

5.8 Employee Matters. Except as set forth on Schedule 5.8, (a) neither Great
Lakes nor any Subsidiary of Great Lakes nor any of their respective employees is
subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of
Great Lakes or any of its Subsidiaries and no union or collective bargaining
unit has sought such certification or recognition with respect to the employees
of Great Lakes or any of its Subsidiaries, (c) there are no picketing of any
nature, strikes, slowdowns, work stoppages, controversies or other concentrated
interference with normal operations pending or, to the best knowledge of Great
Lakes after due inquiry, threatened between Great Lakes or any of its
Subsidiaries and its respective employees, other than employee grievances
arising in the ordinary course of business which could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect and (d) hours worked by and payment made to employees of Great Lakes and
each of its Subsidiaries comply with the Fair Labor Standards Act, as
applicable, and each other federal, state, provincial, local or foreign law
applicable to such matters. Except as set forth on Schedule 5.8, neither Great
Lakes nor any of its Subsidiaries is party to an employment contract.

 

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5.9 Solvency. Both before and after giving effect to (a) the Loans outstanding
or to be made or incurred on the Closing Date or such other date as Loans
requested hereunder are made or incurred, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Great Lakes, and (c) the payment
and accrual of all transaction costs in connection with the foregoing, Great
Lakes and each of its Subsidiaries is and will be Solvent.

5.10 Litigation; Adverse Facts.

(a) Except as set forth on Schedule 5.10, there are no actions, suits,
proceedings, claims or disputes pending, or to the best knowledge of Great
Lakes, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against Great Lakes, any Subsidiary of Great Lakes
or any of their respective Properties which:

(i) purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby or thereby;

(ii) that would reasonably be expected to result in equitable relief or monetary
judgment(s), individually or in the aggregate, in excess of $500,000; or

(iii) would reasonably be expected to have a Material Adverse Effect.

(b) No injunction, writ, temporary restraining order or any order of any nature
has been issued by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery or performance of this Agreement or
any other Loan Document, or directing that the transactions provided for herein
or therein not be consummated as herein or therein provided.

5.11 Use of Proceeds; Margin Regulations.

(a) No part of the proceeds of any Loan will be used for “buying” or “carrying”
“margin stock” within the respective meanings of such terms under Regulation U
of the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect or for any other purpose that violates the provisions
of the regulations of the Board of Governors of the Federal Reserve System. If
requested by Administrative Agent or Collateral Agent, Great Lakes will furnish
to each Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form G 3 or FR Form 0 1, as applicable, referred to
in Regulation U.

(b) Neither Great Lakes nor any of its Subsidiaries is (i) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (ii) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935. The making of the Loans
by Lenders to Great Lakes, the application of the proceeds thereof and repayment
thereof and the consummation of the Loan Documents will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.

5.12 Ownership of Property; Liens. The real estate (“Real Estate”) listed in
Schedule 5.12 constitutes all of the real property owned, leased, subleased, or
used by Great Lakes or any of its Subsidiaries. Great Lakes and each of its
Subsidiaries owns good and marketable fee simple title

 

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to all of its owned Real Estate, and valid leasehold interests in all of its
leased Real Estate, all as described on Schedule 5.12, and copies of all such
leases or a summary of terms thereof reasonably satisfactory to each Agent have
been delivered to each Agent. Schedule 5.12 further describes any Real Estate
with respect to which Great Lakes or any of its Subsidiaries is a lessor,
sublessor or assignor. Great Lakes and each of its Subsidiaries also has good
and marketable title to, or valid leasehold interests in, all of its personal
property and assets. None of the properties and assets of Great Lakes or any of
its Subsidiaries are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to Great Lakes that are
reasonably likely to result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances against the properties or
assets of Great Lakes or any of its Subsidiaries. Great Lakes and each of its
Subsidiaries has received all deeds, assignments, waivers, consents,
nondisturbance and attornment or similar agreements, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect Great Lakes’ or Subsidiary’s right,
title and interest in and to all such Real Estate and other properties and
assets. Schedule 5.12 also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate. No
portion of Great Lakes’ or any of its Subsidiaries’ Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. All material permits required to have been issued or
appropriate to enable the Real Estate to be lawfully occupied and used for all
of the purposes for which it is currently occupied and used have been lawfully
issued and are in full force and effect.

5.13 Environmental Matters. Except as set forth in Schedule 5.13: (i) Great
Lakes and its Subsidiaries are and have been in compliance with all
Environmental Laws, except for such noncompliance that could not reasonably be
expected to result in Environmental Liabilities of Great Lakes or its
Subsidiaries in excess of $250,000 in the aggregate; (ii) Great Lakes and its
Subsidiaries have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits could not
reasonably be expected to result in Environmental Liabilities of Great Lakes or
its Subsidiaries in excess of $250,000 in the aggregate, and all such
Environmental Permits are valid, uncontested and in good standing; (iii) neither
Great Lakes nor any Subsidiary of Great Lakes is involved in operations or knows
of any facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of Great
Lakes or Subsidiary which could reasonably be expected to be in excess of
$250,000 in the aggregate, and neither Great Lakes nor Subsidiary of Great Lakes
has permitted any current or former tenant or occupant of the Real Estate to
engage in any such operations; and (iv) there is no Litigation arising under or
related to any Environmental Laws, Environmental Permits or Hazardous Material
that seeks damages, penalties, fines, costs or expenses in excess of $250,000 in
the aggregate or injunctive relief against, or that alleges criminal misconduct
by Great Lakes or any Subsidiary of Great Lakes.

 

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5.14 ERISA.

(a) Schedule 5.14 lists all Plans and separately identifies all Pension Plans,
including Title IV Plans, Multiemployer Plans, ESOPs and Welfare Plans,
including all Retiree Welfare Plans. Copies of all such listed Plans, together
with a copy of the latest form IRS/DOL 5500-series for each such Plan have been
delivered to each Agent. Except with respect to Multiemployer Plans, each
Qualified Plan has been determined by the IRS to qualify under Section 401 of
the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and nothing has
occurred that would cause the loss of such qualification or tax exempt status.
Each Plan is in compliance with the applicable provisions of ERISA and the IRC,
including the timely filing of all reports required under the IRC or ERISA,
including the statement required by 29 CFR Section 2520.104 23. Neither Great
Lakes nor ERISA Affiliate has failed to make any contribution or pay any amount
due as required by either Section 412 of the IRC or Section 302 of ERISA or the
terms of any such Plan. Neither Great Lakes nor ERISA Affiliate has engaged in a
“prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject Great Lakes to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.

(b) Except as set forth in Schedule 5.14: (i) no Title IV Plan has any Unfunded
Pension Liability; (ii) no ERISA Event or event described in Section 4062(e) of
ERISA with respect to any Title IV Plan has occurred or is reasonably expected
to occur; (iii) there are no pending, or to the knowledge of Great Lakes,
threatened claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) neither Great Lakes nor ERISA
Affiliate has incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan; (v) within the
last five years no Title IV Plan of Great Lakes or ERISA Affiliate has been
terminated, whether or not in a “standard termination” as that term is used in
Section 404(b)(1) of ERISA, nor has any Title IV Plan of Great Lakes or ERISA
Affiliate (determined at any time within the past five years) with Unfunded
Pension Liabilities been transferred outside of the “controlled group” (within
the meaning of Section 4001(a)(14) of ERISA) of Great Lakes or ERISA Affiliate;
(vi) except in the case of any ESOP, Stock of Great Lakes and its ERISA
Affiliates makes up, in the aggregate, no more than 10% of fair market value of
the assets of any Plan measured on the basis of fair market value as of the
latest valuation date of any Plan; and (vii) no liability under any Title IV
Plan has been satisfied with the purchase of a contract from an insurance
company that is not rated AAA by the S&P or an equivalent rating by another
nationally recognized rating agency.

5.15 Brokers. Except as disclosed in Schedule 5.15, no broker or finder acting
on behalf of Great Lakes or Affiliate thereof brought about the obtaining,
making or closing of the Loans, and neither Great Lakes nor Affiliate thereof
has any obligation to any Person in respect of any finder’s or brokerage fees in
connection therewith.

5.16 Deposit and Disbursement Accounts. Schedule 5.16 lists all banks and other
financial institutions at which Great Lakes maintains deposit or other accounts,
including the Disbursement Account, and Schedule 5.16 correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, the complete
account number therefore and listing of any lockboxes maintained through any
financial institutions for processing payments by account debtors and other
proceeds of Collateral.

 

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5.17 Reserved.

5.18 Insurance. Schedule 5.18 lists all insurance policies of any nature
maintained for current occurrences by Great Lakes.

5.19 Anti-Terrorism Law.

(a) Compliance with Law. Neither Great Lakes and, to the knowledge of Great
Lakes, none of its Affiliates is in violation of any laws relating to terrorism
or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the “Executive Order”),
and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

(b) Prohibited Lists. Neither Great Lakes and to the knowledge of Great Lakes,
nor any Affiliate or other agent of Great Lakes acting or benefiting in any
capacity in connection with the Loans is any of the following:

(i) a person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

(ii) a person owned or controlled by, or acting for or on behalf of, any person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;

(iii) a person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(iv) a person that commits, threatens or conspires to commit or support
“terrorism” as defined in the Executive Order; or

(v) a person that is named as a “specialty designated national and blocked
person” on the most current list published by the U.S. Treasury Department
Office of Foreign Assets Control (“OFAC”) at its official website or any
replacement website or other replacement official publication of such list.

(c) Relationships. Neither Great Lakes nor, to the best knowledge of Great
Lakes, any other agent of Great Lakes acting in any capacity in connection with
the Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in clause (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

5.20 Compliance with Laws. Great Lakes represents and warrants that it (i) is in
compliance and each of its Subsidiaries is in compliance with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority and the obligations, covenants and

 

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conditions contained in all Contractual Obligations other than those laws,
rules, regulations, orders and provisions of such Contractual Obligations the
noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (ii) maintains
and each of its Subsidiaries maintains all licenses, qualifications and permits
referred to above, other than those licenses, qualifications and permits where
the failure to maintain the same could not be reasonable expected to have a
Material Adverse Effect.

5.21 Taxes and Tax Returns.

(a)(i) All Tax returns required to be filed by Great Lakes have been timely and
properly filed and (ii) all Taxes (whether or not reflected on a Tax return)
have been paid. No Governmental Authority has asserted any claim for Taxes, or
to Great Lakes’ knowledge, has threatened to assert any claim for Taxes that
would, if paid by Great Lakes, have a Material Adverse Effect. All Taxes
required by law to be withheld or collected and remitted (including, without
limitation, income, tax, unemployment insurance and workman’s compensation
premiums) with respect to Great Lakes have been withheld or collected and paid
to the appropriate Governmental Authorities (or are properly being held for such
payment). Great Lakes has not (i) participated in a “reportable transaction”
within the meaning of Treasury Regulation Section 1.6011-4(b)(3), (b)(4) or
(b)(5) except to the extent such participation would not be reasonably expected
to result in a Material Adverse Effect, (ii) participated in a “listed
transaction” or a “transaction of interest” as described in Treasury Regulation
Section 1.6011-4(b)(2) or (b)(6), respectively, or (iii) been a member of an
affiliated, combined or unitary group.

(b) Great Lakes has not been notified that either the IRS or any other
Governmental Authority has raised any adjustments or intends to raise such
adjustments, in connection with any Taxes of Great Lakes.

(c) Great Lakes is not a party to, is bound by, or has any obligation under, any
Tax sharing agreement, Tax indemnification agreement or similar contract or
arrangement, whether oral or written, excluding leases entered into in the
ordinary course of business and sales contracts.

5.22 Agreements and Other Documents. Great Lakes has provided to each Agent or
its counsel, on behalf of Lenders, accurate and complete copies (or summaries)
of all of the following agreements or documents to which it is subject and each
of which is listed in Schedule 5.22: supply agreements and purchase agreements
not terminable by Great Lakes within sixty (60) days following written notice
issued by Great Lakes and involving transactions in excess of $1,000,000 per
annum; leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $500,000 per annum;
licenses and permits held by Great Lakes, the absence of which could reasonably
be expected to have a Material Adverse Effect; instruments and documents
evidencing any Indebtedness or Guaranteed Indebtedness of Great Lakes and any
Lien granted by Great Lakes with respect thereto; and instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of Great Lakes.

 

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5.23 Eligible Accounts. As to each Account that is identified by Great Lakes as
an Eligible Account in a Borrowing Base Certificate submitted to each Agent,
such Account is (a) a bona fide existing payment obligation of the applicable
Account Debtor created by the sale and delivery of Inventory or the rendition of
services to such Account Debtor in the ordinary course of Great Lakes’ business,
(b) owed to Great Lakes, and (c) not excluded as ineligible by virtue of one or
more of the excluding criteria (other than Agent-discretionary criteria) set
forth in the definition of Eligible Accounts.

5.24 Eligible Inventory. As to each item of Inventory that is identified by
Great Lakes as Eligible Inventory in a Borrowing Base Certificate submitted to
each Agent, such Inventory is (a) of good and merchantable quality, free from
known defects, and (b) not excluded as ineligible by virtue of one or more of
the excluding criteria (other than Agent-discretionary criteria) set forth in
the definition of Eligible Inventory.

5.25 Government Contracts. Except as set forth in Schedule 5.25, Great Lakes is
not a party to any contract or agreement with any Governmental Authority and
none of Great Lakes’ Accounts are subject to the Federal Assignment of Claims
Act (31 U.S.C. Section 3727) or any similar state or local law.

5.26 Customer and Trade Relations. There exists no actual or, to the knowledge
of Great Lakes, threatened termination or cancellation of, or any material
adverse modification or change in (a) the business relationship of Great Lakes
with any non-governmental customer or group of customers whose purchases during
the preceding 12 calendar months caused them to be ranked among the ten largest
customers of Great Lakes or (b) the business relationship of Great Lakes with
any non-governmental supplier essential to its operations.

5.27 Bonding; Licenses. Except as set forth in Schedule 5.27, Great Lakes is not
a party to or bound by any surety bond agreement, indemnification agreement
therefor or bonding requirement with respect to products or services sold by it.

5.28 Reserved.

5.29 Full Disclosure. None of the representations or warranties made by Great
Lakes or any of its Subsidiaries in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of Great Lakes or any of its Subsidiaries in connection with the
Loan Documents (including the offering and disclosure materials, if any,
delivered by or on behalf of Great Lakes to either the Administrative Agent,
Collateral Agent or the Lenders prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.

5.30 Executive Offices, Collateral Locations, FEIN. Great Lakes’ name as it
appears in official filings in its state of incorporation or organization, state
of incorporation or organization, organization type, organization number, if
any, issued by its state incorporation or organization, and the current location
of Great Lakes’ chief executive office and the warehouses and premises at which
any Collateral is located are set forth in Schedule 5.30, and none of such
locations has changed within four (4) months preceding the Closing Date. In
addition, Schedule 5.30 lists the federal employer identification number and
organizational identification number of Great Lakes.

 

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5.31 Qualified Airports. Schedule 5.31 lists each Qualified Airport for which
Great Lakes provides Qualified Services, and, with respect to each such
Qualified Airport, (a) the level of services (as characterized by the provisions
of the Essential Air Service Program) provided by Great Lakes, (b) the weekly
number of departures, (c) the Essential Air Service Program departure subsidy
rate and (d) the date of expiry of Great Lakes’ contract with the DOT in respect
to the provision of such Qualified Services.

5.32 Eligible Spare Engines. With respect to each Spare Engine that is
identified by Great Lakes as an Eligible Spare Engine in a Borrowing Base
Certificate submitted to each Agent, such Spare Engine meets the criteria for
eligibility (other than Agent-discretionary criteria of which Great Lakes is not
aware) set forth in the definition of Eligible Spare Engine.

5.33 Eligible Aircraft. With respect to each Aircraft that is identified by
Great Lakes as an Eligible Aircraft in the calculation of the Term Loan
Suppression Amount in a Borrowing Base Certificate submitted to each Agent, such
Aircraft meets the criteria eligibility (other than Agent-discretionary criteria
of which Great Lakes is not aware) set forth in the definition of Eligible
Aircraft.

SECTION 6.

CONDITIONS TO LOANS

The obligations of Lenders to make Loans are subject to satisfaction of all of
the applicable conditions set forth below.

6.1 Conditions to Initial Loans. The obligations of Lenders to make the initial
Loans on the Closing Date are subject to the following conditions precedent:

(a) Each Agent shall have received a letter duly executed by Great Lakes
authorizing each Agent to file appropriate financing statements in such office
or offices as may be necessary or, in the opinion of Agents, desirable to
perfect the security interests to be created by the Loan Documents;

(b) Each Agent shall have received each of the following documents, in form and
substance satisfactory to each Agent, duly executed, and each such document
shall be in full force and effect:

(i) this Agreement,

(ii) the Notes for each Lender requesting a Note,

(iii) the Control Agreements,

(iv) the Security Agreements, and

 

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(v) a letter, in form and substance satisfactory to each Agent, from Raytheon
Aircraft Credit Corp. (“Existing Lender”) to each Agent with respect to the
amount necessary to repay in full all of the obligations of Great Lakes and its
Subsidiaries owing to Existing Lender, obtain a release of all of the Liens
existing in favor of Existing Lender in and to the assets of Great Lakes and its
Subsidiaries, including discharging any existing International Interests on the
International Registry, together with termination statements and other
documentation evidencing the termination by Existing Lender of its Liens in and
to the properties and assets of Great Lakes and its Subsidiaries, and additional
documentation satisfactory to each Agent (in its sole discretion) evidencing
that one hundred percent (100%) of the Stock of Great Lakes and its Subsidiaries
held by Raytheon Aircraft Credit Corp. and its Affiliates is redeemed by Great
Lakes as of the Closing Date.

(c) Each Agent shall have received a certificate from the Secretary of Great
Lakes (i) attesting to the resolutions of Great Lakes’ Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents, (ii) authorizing specific officers of Great Lakes to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of Great Lakes;

(d) Each Agent shall have received copies of Great Lakes’ Governing Documents,
as amended, modified, or supplemented to the Closing Date, certified by the
Secretary of Great Lakes;

(e) Each Agent shall have received a certificate of status with respect to Great
Lakes, dated within a recent date (to each Agent’s satisfaction) of the Closing
Date, such certificate to be issued by the appropriate officer of the
jurisdiction of organization of Great Lakes, which certificate shall indicate
that Great Lakes is in good standing in such jurisdiction;

(f) Each Agent shall have received certificates of status with respect to Great
Lakes, each dated within a recent date (to each Agent’s satisfaction) of the
Closing Date, such certificates to be issued by the appropriate officer of the
jurisdictions (other than Kansas and the jurisdiction of organization of Great
Lakes) in which its failure to be duly qualified or licensed would constitute a
Material Adverse Effect, which certificates shall indicate that Great Lakes is
in good standing in such jurisdictions;

(g) Each Agent shall have received a certificate signed by an Authorized Person
certifying (a) all representations and warranties by Great Lakes contained in
the Agreement and the Loan Documents are true and correct in all material
respects (without duplication of any materiality qualifier contained therein) on
and as of the date hereof, except to the extent that such representation or
warranty expressly relates to an earlier date (in which event such
representations and warranties were true and correct in all material respects
(without duplication of any materiality qualifier contained therein) as of such
earlier date), (b) no Default or Event of Default has occurred and is continuing
as of the date hereof or would reasonably be expected to result after giving
effect to this Agreement.

(h) Each Agent shall have received certificates of insurance, together with the
endorsements thereto, as are required by Section 2.2, the form and substance
satisfactory to each Agent;

 

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(i) Each Agent shall have received Collateral Access Agreements with respect to
Great Lakes’ Collateral located at Cheyenne, Wyoming; Denver, Colorado;
Farmington, New Mexico; and Williston, North Dakota;

(j) Each Agent shall have received (i) an opinion of Great Lakes’ counsel in
form and substance satisfactory to each Agent and (ii) an opinion of McAfee &
Taft with respect to perfection of the Collateral Agent’s lien on the Collateral
consisting of Aircraft, in form and substance satisfactory to each Agent;

(k) On a pro forma basis, taking into consideration the Loans and fees and
expenses related thereto, Great Lakes shall have undrawn Availability plus
unrestricted cash on the Closing Date in an aggregate amount not less than
$10,000,000;

(l) Each Agent shall have completed its business, legal, and collateral due
diligence, including (i) a collateral audit and review of Great Lakes’ Aircraft,
books and records and verification of Great Lakes’ representations and
warranties, the results of which shall be satisfactory to each Agent; and
(ii) the opportunity to meet with Great Lakes’ management and advisors to
discuss Great Lakes’ business, collateral audit or appraisal issues or other
matters that may arise in connection with the Lender’s due diligence efforts;

(m) Each Agent shall have received completed reference checks with respect to
Great Lakes’ senior management, the results of which are satisfactory to each
Agent in its Permitted Discretion;

(n) Each Agent shall have received (i) a business plan which shall include a set
of Projections of Great Lakes for the two (2) year period following the Closing
Date (on a year by year basis, and for the 1 year period following the Closing
Date, on a month by month basis), in form and substance (including as to scope
and underlying assumptions) satisfactory to each Agent and (ii) any additional
financial and operational information as Administrative Agent or Collateral
Agent may reasonably request with respect to Great Lakes;

(o) Great Lakes shall have paid all expenses of the Agents incurred in
connection with the transactions evidenced by this Agreement (including, but not
limited do audit fees, attorneys’ fees, UCC search fees, appraisal fees,
documentation costs and expenses and filing fees and costs);

(p) Great Lakes shall have received all licenses, approvals or evidence of other
actions required by any Governmental Authority in connection with the execution
and delivery by Great Lakes of the Loan Documents or with the consummation of
the transactions contemplated thereby;

(q) Each Agent shall have received the results of searches with respect to the
FAA, the International Registry, tax and other Liens, and judgments and of the
UCC filings and filings with respect to Aircraft, Spare Engines and/or other
mobile equipment or aircraft equipment made with respect to Great Lakes in the
jurisdictions in which Great Lakes is doing business and/or in which any
Collateral is located;

 

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(r) Each Agent shall have received an appraisal of Great Lakes’ Aircraft by a
nationally-recognized appraisal firm with experience in such matters and such
appraisal shall be satisfactory to each Agent;

(s) All of Great Lakes’ accounts payable are within stated invoice terms as of
the Closing Date and or as permitted in the ordinary course of Great Lakes’
business consistent with past practice;

(t) each of the conditions precedent specified in Section 6.2 shall be
satisfied;

(u) Great Lakes shall have delivered evidence to the satisfaction of each Agent
demonstrating that the pro forma EBITDA (determined in a manner satisfactory to
each Agent) of Great Lakes for the trailing twelve month period ending
September 30, 2011 was greater than $10,000,000;

(v) each Agent shall have received a completed Borrowing Base Certificate as of
the Closing Date; and

(w) all other documents and legal matters in connection with the transactions
contemplated by this Agreement shall have been delivered, executed, or recorded
and shall be in form and substance satisfactory to each Agent.

6.2 Conditions to All Loans.

(a) Except as otherwise expressly provided herein, no Lender shall be obligated
to fund any Loan, if, as of the date thereof (the “Funding Date”):

(i) any representation or warranty by Great Lakes contained herein or in any
other Loan Document is untrue or incorrect as of such date, except to the extent
that such representation or warranty expressly relates to an earlier date;

(ii) any Default or Event of Default has occurred and is continuing or would
result after giving effect to any Loan;

(iii) with respect to the funding of Revolving Loans, after giving effect to any
Revolving Loan, the outstanding amount of the Revolving Loan would exceed the
Maximum Amount; or

(iv) with respect to the funding of Revolving Loans, the Administrative Agent
has not received a Notice of Revolving Loan in accordance with the terms of this
Agreement.

(b) The request and acceptance by Great Lakes of the proceeds of any Loan shall
be deemed to constitute, as of the date thereof, (i) a representation and
warranty by Great Lakes that the conditions in this Section 6.2, have been
satisfied and (ii) a reaffirmation by Great Lakes of the granting and
continuance of Collateral Agent’s Liens, on behalf of the Lenders, pursuant to
the Collateral Documents.

 

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SECTION 7.

DEFAULT, RIGHTS AND REMEDIES

7.1 Event of Default. “Event of Default” shall mean the occurrence or existence
of any one or more of the following:

(a) Payment. Failure to pay (i) when due any principal of any Loan, (ii) within
two Business Days after the due date thereof, any interest on any Loan or fees
payable pursuant to this Agreement or any other Loan Document or (iii) within
two (2) Business Days after demand, any other amount under this Agreement or any
of the other Loan Documents; or

(b) Default in Other Agreements. (1) Great Lakes or any of its Subsidiaries
fails to pay when due or within any applicable grace period any principal or
interest on Indebtedness (other than the Loans) or any Contingent Obligations or
(2) breach or default of Great Lakes or any of its Subsidiaries, or the
occurrence of any condition or event, with respect to any Indebtedness (other
than the Loans) or any Contingent Obligations, if the effect of such failure,
breach, default or occurrence is to cause or to permit the holder or holders to
cause, Indebtedness and/or Contingent Obligations having an aggregate principal
amount in excess of $250,000 to become or be declared due prior to their stated
maturity; or

(c) Breach of Certain Provisions. Failure of Great Lakes to perform or comply
with any term or condition contained in that portion of Section 2.2 relating to
Great Lakes’ obligation to maintain insurance, Section 2.3, Section 2.8,
Section 2.9, Section 2.15, Section 3 or Section 4; or

(d) Breach of Warranty. Any representation, warranty, certification or other
statement made by Great Lakes in any Loan Document or in any statement or
certificate at any time given by such Person in writing pursuant to or in
connection with any Loan Document is false in any material respect (without
duplication of materiality qualifiers contained therein) on the date made or
deemed made; or

(e) Other Defaults Under Loan Documents. Great Lakes defaults in the performance
of or compliance with any term contained in this Agreement or the other Loan
Documents (other than occurrences described in other provisions of this
Section 7.1 for which a different grace or cure period is specified, or for
which no cure or grace period is specified and which constitute immediate Events
of Default) and such default is not remedied or waived within twenty (20) days
after the earlier of (1) receipt by Great Lakes of notice from Administrative
Agent, Collateral Agent or Requisite Lenders of such default or (2) actual
knowledge of any officer of Great Lakes of such default; or

(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1) A court enters a
decree or order for relief with respect to Great Lakes or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (2) the continuance of any of the following events for
sixty (60) days unless dismissed, bonded or discharged: (a) an involuntary case
is commenced against Great Lakes or any of its Subsidiaries, under any
applicable bankruptcy,

 

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insolvency or other similar law now or hereafter in effect; or (b) a decree or
order of a court for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Great Lakes or
any of its Subsidiaries, or over all or a substantial part of its property, is
entered; or (c) a receiver, trustee or other custodian is appointed without the
consent of Great Lakes or any of its Subsidiaries, for all or a substantial part
of the property of Great Lakes or any of its Subsidiaries or; or

(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) Great Lakes or any
of its Subsidiaries commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the
conversion of an involuntary case to a voluntary case under any such law or
consents to the appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial part of its property; or (2) Great
Lakes or any of its Subsidiaries makes any assignment for the benefit of
creditors; or (3) the Board of Directors of Great Lakes or any of its
Subsidiaries adopts any resolution or otherwise authorizes action to approve any
of the actions referred to in this Section 7.1(g); or

(h) Judgments and Attachments. Any money judgment, writ or warrant of
attachment, or similar process (other than those described elsewhere in this
Section 7.1) in respect of any Litigation involving (1) an amount in any
individual case in excess of $250,000 or (2) an amount in the aggregate at any
time in excess of $500,000 (in either case to the extent not adequately covered
by insurance in Agents’ Permitted Discretion) is entered or filed against Great
Lakes or any of its Subsidiaries or any of their respective assets and remains
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days
or in any event later than five (5) Business Days prior to the date of any
proposed sale thereunder; or

(i) Dissolution. Any order, judgment or decree is entered against Great Lakes or
any of its Subsidiaries decreeing the dissolution or split up of Great Lakes or
any of its Subsidiaries and such order remains undischarged or unstayed for a
period in excess of ten (10) days; or

(j) Solvency. Great Lakes or any of its Subsidiaries ceases to be Solvent, fails
to pay its debts as they become due or admits in writing its present or
prospective inability to pay its debts as they become due; or

(k) Invalidity of Loan Documents. Any of the Loan Documents for any reason,
other than a partial or full release in accordance with the terms thereof,
ceases to be in full force and effect or is declared to be null and void, or
Great Lakes or any of its Subsidiaries denies that it has any further liability
under any Loan Documents to which it is party, or gives notice to such effect;
or

(l) Damage; Casualty; Revenue Reduction. Any event occurs, whether or not
insured or insurable, as a result of which revenue producing activities cease or
are substantially curtailed at any facility of Great Lakes or any of its
Subsidiaries generating more than 15% of the consolidated revenues of Great
Lakes and its Subsidiaries for the Fiscal Year preceding such event and such
cessation or curtailment continues for more than sixty (60) days; or

(m) Change of Control. A Change of Control occurs; or

 

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(n) Subordinated Indebtedness. The failure of Great Lakes or any creditor of
Great Lakes or any of its Subsidiaries to comply with the terms of any
Subordination Agreement, any other subordination or intercreditor agreement or
any subordination provisions of any note or other document running to the
benefit of Administrative Agent, Collateral Agent or Lenders, or if any such
document becomes null and void or any party denies further liability under any
such document or provides notice to that effect; or

(o) Raytheon Payoff. Great Lakes has tax liabilities in excess of $1,000,000 and
such liabilities arise in connection with or are attributable to the repayment
of debt and transfer of equity of Great Lakes held by Raytheon Aircraft Credit
Corp.; provided that it shall not be an Event of Default under this clause
(o) if Great Lakes is diligently contesting such liabilities in good faith and
in a manner which stays enforcement thereof and if appropriate expense
provisions have been recorded in conformity with GAAP; or

(p) Material Contracts. The termination, suspension or loss of any Material
Contract, except to the extent such termination, suspension or loss of such
Material Contract could not reasonably be expected to cause a Material Adverse
Effect; or

(q) Essential Air Service Program. (i) Any reduction in the annual funding for
the Essential Air Service Program which might reasonably be expected to have a
Material Adverse Effect, (ii) any amendment, modification, suspension or
termination of the Essential Air Service Program which might reasonably be
expected to result in a Material Adverse Effect, or (iii) any suspension,
reduction, non-renewal or termination by the DOT of any contract or contracts
with Great Lakes or any of its Subsidiaries in respect of the provision of
Qualified Services to any Qualified Airport which might reasonably be expected
to result in a Material Adverse Effect,

(r) FAA. Entry of any order by the FAA directed to Great Lakes or any of its
Subsidiaries, the pilots employed by Great Lakes or its Subsidiaries or
maintenance of Aircraft owned by Great Lakes or any of its Subsidiaries, which,
in any case, might reasonably be expected to result in a Material Adverse
Effect.

7.2 Suspension or Termination of Revolving Loan Commitments. Upon the occurrence
of any Default or Event of Default, Administrative Agent may, and at the request
of Requisite Revolving Lenders or the Collateral Agent shall, upon notice to
Great Lakes, immediately suspend or terminate all or any portion of Revolving
Lenders’ obligations to make additional Revolving Loans under the Revolving Loan
Commitment.

7.3 Acceleration and other Remedies. Upon the occurrence of any Event of Default
described in Sections 6.1(f) or 6.1(g), the Revolving Loan Commitments shall be
immediately terminated and all of the Obligations, including the Loans, shall
automatically become immediately due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other
requirements of any kind, all of which are hereby expressly waived by Great
Lakes. Upon the occurrence and during the continuance of any other Event of
Default, Administrative Agent may, and at the request of the Requisite Lenders
or the Collateral Agent shall, by written notice to Great Lakes (a) declare all
or any portion of the Loans and all or any portion of the other Obligations to
be, and the same shall forthwith become, immediately due and payable together
with accrued interest thereon (and any Prepayment Fee), (b) terminate all or any
portion of the obligations of Revolving Lenders to make Revolving Loans, or
(c) exercise any other remedies which may be available under the Loan Documents
or applicable law.

 

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7.4 Performance by Agents. If Great Lakes shall fail to perform any covenant,
duty or agreement contained in any of the Loan Documents, Administrative Agent
or Collateral Agent may perform or attempt to perform such covenant, duty or
agreement on behalf of Great Lakes after the expiration of any cure or grace
periods (if any) set forth herein. In such event, Great Lakes shall, at the
request of either the Administrative Agent or the Collateral Agent, promptly pay
any amount expended by Administrative Agent or Collateral Agent in such
performance or attempted performance to Administrative Agent or Collateral
Agent, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Section 1.2(d) from
the date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that no Agent shall have any liability or responsibility for
the performance of any obligation of Great Lakes under this Agreement or any
other Loan Document.

SECTION 8.

ASSIGNMENT AND AGENTS

8.1 Assignment and Participations.

(a) This Agreement shall be binding upon and inure to the benefit of Great
Lakes, each Agent, each Lender, all future holders of the Obligations and their
respective successors and assigns, except that Great Lakes may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Agent and each Lender.

(b) Any Lender may at any time sell to one or more banks or financial
institutions (a “Participant”) participating interests in all or any portion of
its Loan, its Commitment, and the other rights and interests of that Lender (the
“Originating Lender”) hereunder and under the other Loan Documents; provided,
however, that (i) the Originating Lender shall remain a “Lender” for all
purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Loan, the Commitments, and the other
rights and interests of the Originating Lender hereunder shall not constitute a
“Lender” hereunder or under the other Loan Documents and the Originating
Lender’s obligations under this Agreement shall remain unchanged, (ii) the
Originating Lender shall remain solely responsible for the performance of such
obligations, (iii) Great Lakes, Agents, and the Lenders shall continue to deal
solely and directly with the Originating Lender in connection with the
Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Loan hereunder in which such Participant is
participating, (B) reduce the interest rate (other than a waiver of default
interest) applicable to the Loan in which such Participant is participating,
(C) release all or substantially all of the Collateral or guaranties (except to
the extent expressly

 

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provided herein or in any of the Loan Documents) supporting the Loan hereunder
in which such Participant is participating, (D) postpone the date of payment of,
or reduce the amount of, the interest or fees payable to such Participant
through such Lender (other than a waiver of default interest), or (E) change the
amount or due dates of scheduled and mandatory principal repayments, and (v) all
amounts payable by Great Lakes hereunder shall be determined as if such Lender
had not sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating Lender with whom such Participant participates and no
Participant shall have any rights under this Agreement or any other Loan
Document or any direct rights as to the other Lenders, Agents, Great Lakes, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves. Each Lender that sells a participation shall, acting solely
for this purpose as an agent for Great Lakes, shall maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Loans or other
obligations under the Loan Documents (the “Participant Register”); provided,
that no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations.

(c) Any Lender, with the consent of each Agent (not to be unreasonably withheld,
conditioned or delayed) and, so long as no Default or Event of Default has
occurred and continuing, with the consent of Great Lakes (not to be unreasonably
withheld, conditioned or delayed), may sell, assign or transfer all or any part
of its rights and obligations under or relating to Loans and/or Commitments
under this Agreement and the other Loan Documents to one or more Permitted
Assignees (each a “Purchasing Lender”), in minimum amounts of not less than
$1,000,000, pursuant to a Assignment Agreement, executed by a Purchasing Lender,
the assigning Lender, and each Agent and delivered to the Administrative Agent
for recording; provided, however, that such minimum amount shall not apply, and
the consent of the Agents and Great Lakes shall not be required (but the
Purchasing Lender shall nevertheless provide each Agent with a fully executed
copy of the Assignment Agreement), if the Purchasing Lender is a Permitted
Assignee pursuant to clauses (a), (c), or (d) of the definition of Permitted
Assignee. Upon such execution, delivery, acceptance and recording, from and
after the assignment effective date determined pursuant to such Assignment
Agreement, (i) Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Assignment Agreement, have the rights and obligations of
a Lender hereunder and (ii) the assigning Lender thereunder shall, to the extent
provided in such Assignment Agreement, be released from its obligations under
this Agreement, the Assignment Agreement creating a novation for that purpose.
Such Assignment Agreement shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of the Revolving Loan Commitments arising
from the purchase by such Purchasing Lender of all or a portion of the

 

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rights and obligations of such assigning Revolving Lender under this Agreement
and the other Loan Documents. Great Lakes hereby consents to the addition of
such Purchasing Lender and the resulting adjustment of the Revolving Loan
Commitments arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such assigning Lender under this
Agreement and the other Loan Documents. Great Lakes shall execute and deliver
such further documents and do such further acts and things in order to
effectuate the foregoing.

(d) [Reserved].

(e) Great Lakes authorizes, subject to Section 9.13, each Lender to disclose to
any Purchasing Lender and Participant and any prospective Purchasing Lender and
prospective Participant any and all financial information in such Lender’s
possession concerning Great Lakes which has been delivered to such Lender by or
on behalf of Great Lakes pursuant to this Agreement or in connection with such
Lender’s credit evaluation of Great Lakes.

(f) Notwithstanding anything in this Agreement or the other Loan Documents,
(x) neither Crystal, GB Merchant, nor any of their respective Affiliates shall
be required to comply with Section 8.1 in connection with any transaction
involving any other Affiliate of Crystal or GB Merchant or any of its or their
lenders or funding or financing sources, none of the foregoing shall be
considered a Purchasing Lender, and neither Crystal, GB Merchant nor any of
their respective Affiliates shall have an obligation to disclose any such
transaction to any Person, and (y) there shall be no limitation or restriction
on (I) the ability of Crystal, GB Merchant or any of their respective Affiliates
to assign or otherwise transfer its rights and/or obligations under this
Agreement or any other Loan Document, any commitment, or any Obligation to any
other Affiliate of Crystal or GB Merchant or any lender or financing or funding
source of Crystal, GB Merchant or any of their respective Affiliates or (II) any
such lender’s or funding or financing source’s ability to assign or otherwise
transfer its rights and/or obligations under this Agreement or any other Loan
Document, any commitment, or any Obligation; provided, however, that Crystal or
GB Merchant, as applicable, shall continue to be liable as a “Lender” under this
Agreement and the other Loan Documents unless such other Person complies with
the provisions of this Agreement to become a “Lender.”

(g) Great Lakes shall not, and shall not permit any Subsidiary or Affiliate to
purchase, redeem, prepay, tender for or otherwise acquire, directly or
indirectly, any of the outstanding Loans except upon the full repurchase or
prepayment of the Loans in accordance with the other terms of this Agreement.
Great Lakes will promptly cancel all Loans acquired by it or any of its
Subsidiaries or Affiliates pursuant to any purchase, redemption, prepayment or
tender for the Loans pursuant to any provision of this Agreement or otherwise
and no Loans may be issued in substitution or exchange for any such Loans. For
the avoidance of doubt, this Section is not intended and shall not prevent Great
Lakes from making (a) regularly scheduled payments of principal and interest
with respect to the Loans, or (b) any prepayments of the Loans not otherwise
prohibited by this Agreement.

(h) Notwithstanding anything in this Agreement or the other Loan Documents to
the contrary, (i) a Lender may pledge, or grant a security interest in, all or
any portion of its rights and other obligations under or relating to Loans under
this Agreement and the other Loan Documents to a bank or other funding source or
any trustee or agent therefor in support of obligations owing

 

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by such Lender to such Persons and (ii) any Lender which is a fund may pledge,
or grant a security interest in, all or any portion of its rights and other
obligations under or relating to Loans under this Agreement and the other Loan
Documents to its trustee in support of its obligation to its trustee. No pledge
or grant of a security interest pursuant to this clause (h) shall release the
transferor Lender from any of its obligations hereunder.

(i) Notwithstanding anything in this Agreement or the other Loan Documents to
the contrary, GB Merchant and Crystal shall have a right of first offer with
respect to a proposed sale or assignment by another Lender of its portion of the
Loans regardless of whether before or after the occurrence of an Event of
Default (other than a sale or assignment to a Permitted Assignee pursuant to
clauses (a), (c) or (d) of such definition or an assignment pursuant to
Section 8.1(f)(I) or 8.1(f)(II)). Within five (5) Business Days of receipt by
the non-assigning Lenders of notice of a proposed sale or assignment of the
assigning Lender’s portion of the Loans, the non-assigning Lenders shall have
the right to purchase all, but not less than all, of the Loans on the same terms
and conditions set forth in Section 8.1; provided that if more than one
non-assigning Lender exercises its right to purchase such Loans, then such
Lenders shall purchase the Loans on a pro rata basis.

8.2 Agent.

(a) Appointment.

(i) Administrative Agent. Each Lender hereby designates and appoints Crystal as
its Administrative Agent under this Agreement and the other Loan Documents, and
each Lender hereby irrevocably authorizes Crystal, as Administrative Agent, to
take such action or to refrain from taking such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. In performing its functions and duties under
this Agreement, Administrative Agent shall act solely as agent of the applicable
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Great Lakes or
its Subsidiaries. Administrative Agent may perform any of its duties hereunder,
or under the Loan Documents, by or through its agents or employees.

(ii) Collateral Agent. Each Lender hereby designates and appoints GB Merchant as
its Collateral Agent under this Agreement and the other Loan Documents, and each
Lender hereby irrevocably authorizes GB Merchant, as Collateral Agent, to take
such action or to refrain from taking such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. In performing its functions and duties under
this Agreement, Collateral Agent shall act solely as agent of the applicable
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Great Lakes or
its Subsidiaries. Collateral Agent may perform any of its duties hereunder, or
under the Loan Documents, by or through its agents or employees.

 

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(iii) Agents are authorized and empowered to amend, modify, or waive any
provisions of this Agreement or the other Loan Documents on behalf of Lenders
subject to the requirement that certain of Lenders’ consent be obtained in
certain instances as provided in this Section 8.2 and Section 9.2. The
provisions of this Section 8.2 are solely for the benefit of Agents and Lenders
and neither Great Lakes nor any of its Subsidiaries shall have any rights as a
third-party beneficiary of any of the provisions hereof.

(b) Nature of Duties. The duties of each Agent shall be mechanical and
administrative in nature. Agents shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender. Nothing in this Agreement or
any of the Loan Documents, express or implied, is intended to or shall be
construed to impose upon Administrative Agent or Collateral Agent any
obligations in respect of this Agreement or any of the Loan Documents except as
expressly set forth herein or therein. Each Lender shall make its own
independent investigation of the financial condition and affairs of Great Lakes
in connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of Great Lakes and neither Administrative
Agent nor Collateral Agent shall have any duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto (other than as expressly required
herein). If either Agent seeks the consent or approval of any Lenders to the
taking or refraining from taking any action hereunder, then such Agent shall
send notice thereof to each applicable Lender. Agents shall notify each
applicable Lender any time that the Requisite Lenders and/or the Requisite
Revolving Lenders have instructed Agents to act or refrain from acting pursuant
hereto. Notwithstanding anything contained herein to the contrary, the
Collateral Agent agrees to consult with the Administrative Agent in the exercise
of any rights and remedies in respect of realizing upon the Collateral.

(c) Rights, Exculpation, Etc. Neither Agent nor any of their respective
officers, directors, employees or agents shall be liable to any Lender for any
action taken or omitted by them hereunder or under any of the Loan Documents, or
in connection herewith or therewith, except that Agents shall be liable to the
extent of their own gross negligence or willful misconduct as determined by a
final non-appealable order by a court of competent jurisdiction. Agents shall
not be liable for any apportionment or distribution of payments made in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them). In no event shall Agents be liable for punitive, special,
consequential, incidental, exemplary or other similar damages. In performing
their respective functions and duties hereunder, each Agent shall exercise
substantially the same care which it would in dealing with loans for its own
account, but neither Agent nor any of their respective agents or representatives
shall be responsible to any Lender for any recitals, statements, representations
or warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectability, or sufficiency of this Agreement or any of the
Loan Documents or the transactions contemplated thereby, or for the financial
condition of Great Lakes. Agents shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Loan Documents or the

 

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financial condition of Great Lakes, or the existence or possible existence of
any Default or Event of Default. Agents may at any time request instructions
from Requisite Lenders, Requisite Revolving Lenders or all affected Lenders with
respect to any actions or approvals which by the terms of this Agreement or of
any of the Loan Documents, Agents are permitted or required to take or to grant.
If such instructions are requested, Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from the Requisite Lenders, Requisite Revolving
Lenders, or all affected Lenders, as applicable. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against either Agent as a
result of such Agent acting or refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders, Requisite Revolving Lenders or all affected Lenders, as applicable;
and, notwithstanding the instructions of Requisite Lenders, Requisite Revolving
Lenders or all affected Lenders, as applicable, no Agent shall have any
obligation to take any action if it believes, in good faith, that such action is
deemed to be illegal by such Agent or exposes such Agent to any liability for
which it has not received satisfactory indemnification in accordance with
Section 8.2(e).

(d) Reliance. Each Agent shall be entitled to rely, and shall be fully protected
in relying, upon any written or oral notices, statements, certificates, orders
or other documents or any telephone message or other communication (including
any electronic communication, writing, or fax) believed by it in good faith to
be genuine and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Agreement or any of
the Loan Documents and its duties hereunder or thereunder. Each Agent shall be
entitled to rely upon the advice of legal counsel, independent accountants, and
other experts selected by such Agent in its Permitted Discretion.

(e) Indemnification. Lenders will reimburse and indemnify each Agent for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys’ fees and expenses), advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against
Administrative Agent or Collateral Agent in its capacity as such in any way
relating to or arising out of this Agreement or any of the Loan Documents or any
action taken or omitted by the Administrative Agent or the Collateral Agent in
its capacity as such in under this Agreement or any of the Loan Documents, in
proportion to each Lender’s Pro Rata Share; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements to the extent resulting from an Agent’s gross negligence or
willful misconduct as determined by a final non-appealable order by a court of
competent jurisdiction. If any indemnity furnished to an Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against even if so directed by the Requisite Lenders, the
Requisite Revolving Lenders or such other portion of the Lenders as shall be
prescribed by this Agreement until such additional indemnity is furnished. The
obligations of Lenders under this Section 8.2(e) shall survive the payment in
full of the Obligations and the termination of this Agreement.

 

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(f) Crystal (or any successor Administrative Agent); GB Merchant (or any
successor Collateral Agent).

(i) With respect to its Commitments and Loans hereunder, Crystal (or any
successor Administrative Agent) shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms “Lenders”,
“Requisite Lenders”, “Requisite Revolving Lenders”, or any similar terms shall,
unless the context clearly otherwise indicates, include Crystal (or any
successor Administrative Agent) in its individual capacity as a Lender, one of
the Requisite Lenders or one of the Requisite Revolving Lenders. Crystal (or any
successor Administrative Agent), either directly or through strategic
affiliations, may lend money to, acquire equity or other ownership interests in,
provide advisory services to and generally engage in any kind of banking, trust
or other business with Great Lakes or any of its Subsidiaries as if it were not
acting as Administrative Agent pursuant hereto and without any duty to account
therefor to Lenders. Crystal (or any successor Administrative Agent), either
directly or through strategic affiliations, may accept fees and other
consideration from Great Lakes or any of its Subsidiaries for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.

(ii) With respect to its Commitments and Loans hereunder, GB Merchant (or any
successor Collateral Agent) shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms “Lenders”,
“Requisite Lenders”, “Requisite Revolving Lenders”, or any similar terms shall,
unless the context clearly otherwise indicates, include GB Merchant (or any
successor Collateral Agent) in its individual capacity as a Lender, one of the
Requisite Lenders or one of the Requisite Revolving Lenders. GB Merchant (or any
successor Collateral Agent), either directly or through strategic affiliations,
may lend money to, acquire equity or other ownership interests in, provide
advisory services to and generally engage in any kind of banking, trust or other
business with Great Lakes or any of its Subsidiaries as if it were not acting as
Collateral Agent pursuant hereto and without any duty to account therefor to
Lenders. GB Merchant (or any successor Collateral Agent), either directly or
through strategic affiliations, may accept fees and other consideration from
Great Lakes or any of its Subsidiaries for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.

(g) Resignation; Successor Agents.

(i) Administrative Agent Resignation; Successor.

 

  (A) Resignation. Administrative Agent may resign from the performance of all
its agency functions and duties hereunder at any time by giving at least thirty
(30) days’ prior written notice to Collateral Agent, Great Lakes and Lenders.
Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to clause (ii) below or as
otherwise provided in clause (ii) below.

 

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  (B) Appointment of Successor. Upon any such applicable notice of resignation
pursuant to clause (i) above, the Collateral Agent shall have the right, in
Collateral Agent’s Permitted Discretion to assume the role of Administrative
Agent and if the Collateral Agent declines to assume such role as Administrative
Agent, the Requisite Lenders shall appoint a successor Administrative Agent,
which shall be reasonably acceptable to the Collateral Agent, and, unless an
Event of Default has occurred and is continuing, shall be reasonably acceptable
to Great Lakes. If a successor Administrative Agent shall not have been so
appointed within the thirty (30) day period referred to in clause (i) above, the
retiring Administrative Agent upon notice to Collateral Agent, and Great Lakes,
shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent until such time, if any, as Requisite Lenders appoint a
successor Administrative Agent in the manner as provided above; provided that if
the Administrative Agent has not appointed (or chooses not to appoint) a
successor Administrative Agent then the Requisite Lenders shall serve as the
successor Administrative Agent until such time when the Requisite Lenders
appoint a successor Administrative Agent.

 

  (C) Successor Agents. Upon the acceptance of any appointment as Administrative
Agent under the Loan Documents by a successor Administrative Agent (or the
assumption by the Requisite Lenders as successor Administrative Agent) such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall be discharged from its duties
and obligations under the Loan Documents. After any retiring Administrative
Agent’s resignation as Administrative Agent the provisions of this Section 8.2
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it in its capacity as Administrative Agent.

(ii) Collateral Agent Resignation; Successor.

 

  (A) Resignation. Collateral Agent may resign from the performance of all its
agency functions and duties hereunder at any time by giving at least thirty
(30) days’ prior written notice to Administrative Agent, Great Lakes and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Collateral Agent of appointment pursuant to clause (ii) below or as otherwise
provided in clause (ii) below.

 

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  (B) Appointment of Successor. Upon any such applicable notice of resignation
pursuant to clause (i) above, the Administrative Agent shall have the right, in
Administrative Agent’s Permitted Discretion, to assume the role of Collateral
Agent, and if the Administrative Agent declines to assume such role as
Collateral Agent, the Requisite Lenders shall appoint a successor Collateral
Agent, which shall be reasonably acceptable to the Administrative Agent, and,
unless an Event of Default has occurred and is continuing, shall be reasonably
acceptable to Great Lakes. If a successor Collateral Agent shall not have been
so appointed within the thirty (30) day period referred to in clause (i) above,
the retiring Collateral Agent upon notice to the Administrative Agent and Great
Lakes, shall then appoint a successor Collateral Agent who shall serve as
Collateral Agent until such time, if any, as Requisite Lenders appoint a
successor Collateral Agent in the manner as provided above; provided that if the
Collateral Agent has not appointed (or chooses not to appoint) a successor
Collateral Agent then the Requisite Lenders shall serve as the successor
Collateral Agent until such time when the Requisite Lenders appoint a successor
Collateral Agent.

 

  (C) Successor Agents. Upon the acceptance of any appointment as Collateral
Agent under the Loan Documents by a successor Collateral Agent (or the
assumption by the Requisite Lenders as successor Collateral Agent) such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent and
the retiring Collateral Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Collateral Agent’s
resignation as Collateral Agent the provisions of this Section 8.2 shall
continue to inure to its benefit as to any actions taken or omitted to be taken
by it in its capacity as Collateral Agent.

(h) Collateral Matters.

(i) Release of Collateral. Lenders hereby irrevocably authorize Collateral
Agent, at its option and in its Permitted Discretion, to release any Lien
granted to or held by Collateral Agent upon any Collateral (x) upon termination
of the Revolving Loan Commitments and payment and satisfaction of all
Obligations (other than contingent indemnification obligations to the extent no
claims giving rise thereto have been asserted), (y) constituting property being
sold or disposed of if Great Lakes (or any of them) certify to each Agent that
the sale or disposition is made in compliance with the provisions of this
Agreement (and each Agent may rely in good faith conclusively on any such
certificate, without further inquiry) or (z) in accordance with the provisions
of the next sentence. In addition, with the consent of Requisite Lenders and the
Administrative Agent, Collateral Agent may release any Lien granted to or held
by Collateral Agent upon any

 

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Collateral having a book value not greater than ten percent (10%) of the total
book value of all Collateral, either in a single transaction or in a series of
related transactions.

(ii) Confirmation of Authority; Execution of Releases. Without in any manner
limiting Collateral Agent’s authority to act without any specific or further
authorization or consent by Lenders (as set forth in Section 8.2(h)(i)), each
Lender agrees to confirm in writing, upon request by each Agent or Great Lakes,
the authority to release any Collateral conferred upon Collateral Agent under
clauses (x) and (y) of Section 8.2(h)(i). Upon receipt by Collateral Agent of
any required confirmation from the Administrative Agent and Requisite Lenders of
its authority to release any particular item or types of Collateral, and upon at
least ten (10) Business Days’ prior written request by Great Lakes, Collateral
Agent shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
Collateral Agent upon such Collateral; provided, however, that (x) Collateral
Agent shall not be required to execute any such document on terms which, in
Collateral Agent’s opinion, would expose Collateral Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
Great Lakes or any of its Subsidiaries, in respect of), all interests retained
by Great Lakes or any of its Subsidiaries, including the proceeds of any sale,
all of which shall continue to constitute part of the Collateral.

(iii) Absence of Duty. Collateral Agent shall have no obligation whatsoever to
any Lender or any other Person to assure that the property covered by the
Collateral Documents exists or is owned by Great Lakes or any of its
Subsidiaries or is cared for, protected or insured or has been encumbered or
that the Liens granted to Collateral Agent have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Collateral Agent in this
Section 8.2(h) or in any of the Loan Documents, it being understood and agreed
that in respect of the property covered by the Collateral Documents or any act,
omission or event related thereto, Collateral Agent may act in any manner it may
deem appropriate, in its Permitted Discretion, given Collateral Agent’s own
interest in property covered by the Collateral Documents as one of the Lenders
and that Collateral Agent shall have no duty or liability whatsoever to any of
the other Lenders, provided that Collateral Agent shall exercise the same care
which it would in dealing with loans for its own account.

(i) Agency for Perfection. Collateral Agent, Administrative Agent and each
Lender hereby appoint each other Lender as agent for the purpose of perfecting
Collateral Agent’s security interest in assets which, in accordance with the
Code in any applicable jurisdiction, can be perfected by possession or control.
Should any Lender (other than Collateral Agent) obtain

 

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possession or control of any such assets, such Lender shall notify Collateral
Agent thereof, and, promptly upon Collateral Agent’s request therefor, shall
deliver such assets to Collateral Agent or in accordance with Collateral Agent’s
instructions or transfer control to Collateral Agent in accordance with
Collateral Agent’s instructions. Each Lender agrees that it will not have any
right individually to enforce or seek to enforce any Collateral Document or to
realize upon any collateral security for the Loans unless instructed to do so by
Collateral Agent in writing, it being understood and agreed that such rights and
remedies may be exercised only by Collateral Agent.

(j) Notice of Default. No Agent shall be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default except with respect to
defaults in the payment of principal, interest and Fees required to be paid to
Administrative Agent for the account of Lenders, unless Agents shall have
received written notice from a Lender or Great Lakes referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”. Each Agent will use reasonable efforts to
notify each Lender of its receipt of any such notice. Agents shall take such
action with respect to such Default or Event of Default as may be requested by
Requisite Lenders in accordance with Section 7. Unless and until Agents have
received any such request, Agents may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interests of Lenders.

(k) Lender Actions Against Collateral. Each Lender agrees that it will not take
any enforcement action, nor institute any actions or proceedings, with respect
to the Loans, against Great Lakes or any of its Subsidiaries or under the other
Loan Documents or against any Collateral (including the exercise of any right of
set-off without the consent of each Agent and Requisite Lenders.) All such
enforcement actions and proceedings shall be taken in concert and at the
direction with the consent of each Agent or Requisite Lenders. Administrative
Agent is authorized to issue all notices to be issued by or on behalf of Lenders
with respect to any Subordinated Debt. With respect to any action by
Administrative Agent or Collateral Agent to enforce the rights and remedies of
Administrative Agent, Collateral Agent and the Lenders under this Agreement and
the other Loan Documents, each Lender hereby consents to the jurisdiction of the
court in which such action is maintained, and agrees to deliver its Notes to
each Agent to the extent necessary to enforce the rights and remedies of each
Agent for the benefit of the Agents and Lenders under the Mortgages in
accordance with the provisions hereof.

(l) Agent Reports. Each Lender may from time to time receive one or more reports
or other information (each, a “Report”) prepared by or on behalf of an Agent (or
one or more of such Agent’s Affiliates). With respect to each Report, each
Lender hereby agrees that:

(i) No Agent (nor such Agent’s Affiliates) shall have any duties or obligations
in connection with or as a result of a Lender receiving a copy of a Report,
which will be provided solely as a courtesy, without consideration. Each Lender
will perform its own diligence and will make its own independent investigation
of the operations, financial conditions and affairs of Great Lakes and its
Subsidiaries and will not rely on any Report or make any claim that it has done
so. In addition, each Lender releases, and agrees that it will not assert, any
claim against an Agent (or one or more of such Agent’s Affiliates) that in any
way relates to any Report or arises out of a Lender having access to any Report
or any

 

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discussion of its contents, and each Lender agrees to defend, indemnify and hold
harmless such Agent (and such Agent’s Affiliates) and their respective officers,
directors, employees, agents, representatives and attorneys from all claims,
liabilities and expenses relating to a breach by a Lender or any of its
personnel of this Section or otherwise arising out of a Lender’s access to any
Report or any discussion of its contents;

(ii) Each Report may not be complete and certain information and findings
obtained by an Agent (or one or more of such Agent’s Affiliates) regarding the
operations and condition of Great Lakes and its Subsidiaries may not be
reflected in each Report. Agents (and Agents’ Affiliates) make no
representations or warranties of any kind with respect to (i) any existing or
proposed financing; (ii) the accuracy or completeness of the information
contained in any Report or in any other related documentation; (iii) the scope
or adequacy of Agents’ (and Agents’ Affiliates’) due diligence, or the presence
or absence of any errors or omissions contained in any Report or in any other
related documentation; and (iv) any work performed by or on behalf of Agents (or
one or more of Agents’ Affiliates) in connection with or using any Report or any
related documentation; and

(iii) Each Lender agrees to safeguard each Report and any related documentation
with the same care which it uses with respect to information of its own which it
does not desire to disseminate or publish, and agrees not to reproduce or
distribute or provide copies of or disclose any Report or any other related
documentation or any related discussions to anyone.

8.3 Set Off and Sharing of Payments. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Lender is hereby authorized
by Great Lakes at any time or from time to time, with reasonably prompt
subsequent notice to Great Lakes (any prior or contemporaneous notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender at any of its offices for the account of Great
Lakes (regardless of whether such balances are then due to Great Lakes), and
(B) other property at any time held or owing by such Lender to or for the credit
or for the account of Great Lakes, against and on account of any of the
Obligations; except that no Lender shall exercise any such right without the
prior written consent of each Agent and the Requisite Lenders. Notwithstanding
anything herein to the contrary, the failure to give notice of any set off and
application made by such Lender to Great Lakes shall not affect the validity of
such set off and application. Any Lender exercising a right to set off shall
purchase for cash (and the other Lenders shall sell) interests in each of such
other Lender’s Pro Rata Share of the Obligations as would be necessary to cause
all Lenders to share the amount so set off with each other Lender entitled to
share in the amount so set off in accordance with their respective Pro Rata
Shares. Great Lakes agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and upon doing so shall deliver such
amount so set off to the Administrative Agent for the benefit of all Lenders
entitled to share in the amount so set off in accordance with their Pro Rata
Shares.

 

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SECTION 9.

MISCELLANEOUS

9.1 Indemnities. Great Lakes agrees, to indemnify, pay, and hold each Agent,
each Lender and their respective Affiliates, officers, directors, employees,
agents, and attorneys (the “Indemnitees”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs and expenses (including all reasonable fees and expenses of
counsel to such Indemnitees) of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Indemnitee as a result of such
Indemnitees being a party to this Agreement or the transactions consummated
pursuant to this Agreement or otherwise relating to any of the Loan Documents;
provided, that Great Lakes shall not have any obligation to an Indemnitee
hereunder with respect to liabilities to the extent resulting from the gross
negligence or willful misconduct of that Indemnitee as finally determined by a
court of competent jurisdiction. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, Great Lakes agrees to make the
maximum contribution to the payment and satisfaction thereof which is
permissible under applicable law.

9.2 Amendments and Waivers.

(a) Except for actions expressly permitted to be taken by Agents, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or any consent to any departure by Great Lakes therefrom,
shall in any event be effective unless the same shall be in writing and signed
by Great Lakes, and by Requisite Lenders, Requisite Revolving Lenders or all
affected Lenders, as applicable. Except as set forth in clauses (b) and
(c) below, all such amendments, modifications, terminations or waivers requiring
the consent of any Lenders shall require the written consent of Requisite
Lenders.

(b) No amendment, modification, termination or waiver of or consent with respect
to any provision of this Agreement that waives compliance with the conditions
precedent set forth in Section 6.2 to the making of any Loan shall be effective
unless the same shall be in writing and signed by each Agent, Requisite Lenders
and Great Lakes. Notwithstanding anything contained in this Agreement to the
contrary, no waiver or consent with respect to any Default or any Event of
Default shall be effective for purposes of the conditions precedent to the
making of Loans set forth in Section 6.2 unless the same shall be in writing and
signed by each Agent, Requisite Lenders and Great Lakes.

(c) No amendment, modification, termination or waiver shall, unless in writing
and signed by each Agent and each Lender directly affected thereby: (i) increase
the principal amount, or postpone or extend the scheduled date of expiration, of
any Lender’s Commitment (which action shall be deemed to directly affect all
Lenders); (ii) reduce the principal of, rate of interest on (other than any
determination or waiver to charge or not charge interest at the Default Rate) or
Fees payable with respect to any Loan of any affected Lender; (iii) extend any
scheduled payment date or final maturity date of the principal amount of any
Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees as to any affected Lender (which action shall be
deemed only to affect those Lenders to whom such payments are made); (v) release
all or substantially all of the Collateral, except as otherwise provided in this

 

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Agreement or the other Loan Documents; (vi) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans that shall
be required for Lenders or any of them to take any action hereunder (which
action shall be deemed to directly affect all Lenders); and (vii) amend or waive
this Section 9.2 or the definition of the terms “Requisite Lenders” or
“Requisite Revolving Lenders” insofar as such definition affects the substance
of this Section 9.2 or the term “Pro Rata Share” (which action shall be deemed
to directly affect all Lenders). Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of each Agent under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by each Agent in addition to Lenders required hereinabove to take such
action. Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given. No amendment, modification, termination or waiver shall be required for
either Agent to take additional Collateral pursuant to any Loan Document. No
amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on Great Lakes in any case shall entitle Great Lakes to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 9.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.

9.3 Notices; Effectiveness. Any Communication required shall be in writing
addressed to the respective party as set forth below and may be personally
served by telecopier transmission, by United States certified or registered mail
or by a nationally-recognized overnight courier. A Communication shall be deemed
to have been given: (i) upon receipt, if delivered in person; (ii) upon receipt
(confirmed by automatic answer back or like evidence of receipt), if sent by
telecopier during normal business hours at the office of the recipient on the
date of transmission if transmitted on a Business Day before 3:00 p.m. Boston
time; (iii) one (1) Business Day after delivery to the courier properly
addressed, if delivered by overnight courier; or (iv) four (4) Business Days
after deposit with postage prepaid and properly addressed, if delivered by
United States certified or registered mail.

In any such case, such Communication to any party shall, if made in writing, be
made to the address of such party indicated below for receiving Communications
in writing and, if made by telecopier, shall be made to such fax number as
indicated below. Any party may from time to time change its address for
receiving Communications in writing, or its fax number, by sending a notice to
the other parties hereto in writing.

While the parties may communicate by electronic means to the electronic
addresses set forth below, no Communication shall be deemed given unless and
until the same is deemed given in accordance with the first paragraph in this
Section 9.3.

 

If to Great Lakes:

  

Great Lakes Aviation, Ltd.

1022 Airport Parkway

Cheyenne, WY 82001

Attn: Lisa Reeb (307-432-7053) or Mike

Tuinstra (307-432-7150)

 

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With a copy to:

  

Briggs and Morgan, P.A.

2200 IDS Center

80 South 8th Street

Minneapolis, MN

Attention: Michael Gordon

Phone: (612) 977-8562

Fax: (612) 977-8650

Electronic address: mgordon@briggs.com

If to Administrative Agent:

  

Crystal Financial LLC

Two International Place

Boston, MA 02110

Attn: Josh Franklin, Managing Director

Phone: (617) 428-8708

Fax: (617) 428-8701

Electronic address: jfranklin@crystalfinco.com

With a copy to:

  

Proskauer Rose, LLP

One International Place

Boston, MA 02110

Attn: Peter J. Antoszyk

Fax: (617) 526-9899

Electronic address: pantoszyk@proskauer.com

If to Collateral Agent:

  

GB Merchant Partners, LLC

101 Huntington Avenue,

10th Floor

Boston, MA 02199

Attn: Lisa Galeota

Fax: (617) 210-7141

Electronic address: lgaleota@gordonbrothers.com

With a copy to:

  

Proskauer Rose, LLP

One International Place

Boston, MA 02110

Attn: Peter J. Antoszyk

Fax: (617) 526-9899

Electronic address: pantoszyk@proskauer.com

If to a Lender:    To the address or fax number set forth on the signature page
hereto or in the applicable Assignment Agreement

 

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9.4 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of Agents or any Lender to exercise, nor any partial exercise of,
any power, right or privilege hereunder or under any other Loan Documents shall
impair such power, right, or privilege or be construed to be a waiver of any
Default or Event of Default. All rights and remedies existing hereunder or under
any other Loan Document are cumulative to and not exclusive of any rights or
remedies otherwise available.

9.5 Marshaling; Payments Set Aside. Neither Agents nor any Lender shall be under
any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that Great Lakes makes payment(s) or Agents enforce
the Liens or Agents or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone (whether as a result of any demand, litigation,
settlement or otherwise), then to the extent of such recovery, the Obligations
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set-off had not occurred.

9.6 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.

9.7 Lenders’ Obligations Several; Independent Nature of Lenders’ Rights. The
obligation of each Lender hereunder is several and not joint and no Lender shall
be responsible for the obligation or commitment of any other Lender hereunder.
In the event that any Lender at any time should fail to make a Loan as herein
provided, the Lenders, or any of them, at their sole option, may make the Loan
that was to have been made by the Lender so failing to make such Loan. Nothing
contained in any Loan Document and no action taken by Administrative Agent or
Collateral Agent or any Lender pursuant hereto or thereto shall be deemed to
constitute Lenders to be a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt.

9.8 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.

9.9 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH
DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

9.10 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
except that Great Lakes may not assign its rights or obligations hereunder
without the written consent of all Lenders. GB Merchant and any of its
Affiliates, in its capacity as a Lender, may, without the written consent of
Great Lakes, grant a security interest in all or any of GB Merchant’s and any of
its Affiliates’ rights as a Lender under this Agreement and the other Loan
Documents to Regions Bank, an Alabama bank (“Regions”), in connection with the
financing arrangements entered into between GB Merchant and any of its
Affiliates and Regions. Upon request by Regions and subject to

 

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compliance by Regions with the terms of Section 8.1 hereof, Great Lakes and the
Administrative Agent hereby agree to recognize Regions as a “Lender” under this
Agreement and, upon Regions’ written request therefor, execute and deliver an
Assignment Agreement in order to cause Regions to become a “Lender” for all
purposes under this Agreement and the other Loan Documents.

9.11 No Fiduciary Relationship; Limited Liability. No provision in the Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty owing to Great Lakes by any Agent or any Lender. Great Lakes
agrees that no Agent nor any Lender shall have liability to Great Lakes (whether
sounding in tort, contract or otherwise) for losses suffered by Great Lakes in
connection with, arising out of, or in any way related to the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless and to the extent
that it is determined that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought as determined by a
final non-appealable order by a court of competent jurisdiction. No Agent nor
any Lender shall have any liability with respect to, and Great Lakes hereby
waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by Great Lakes in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.

9.12 Construction. Each Agent, each Lender and Great Lakes acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review the Loan Documents with its legal counsel and
that the Loan Documents shall be construed as if jointly drafted by each Agent,
each Lender and Great Lakes.

9.13 Confidentiality. Until the Maturity Date, each Agent and each Lender agrees
to exercise their best efforts to keep confidential any non-public information
delivered pursuant to the Loan Documents and identified as such by Great Lakes
and not to disclose such information to Persons other than to potential
assignees or participants or to any Affiliate of, or Persons employed by or
engaged, by an Agent, a Lender or any of their respective Affiliates or a
Lender’s assignees or participants including attorneys, auditors, funding and
funding sources, professional consultants, rating agencies, insurance industry
associations and portfolio management services, provided, that each Agent and
each Lender shall cause any potential assignees or participants to execute a
confidentiality agreement pursuant to which such potential assignee or
participant agrees to the confidentiality provisions contained in this
Section 9.13. The confidentiality provisions contained in this Section 9.13
shall not apply to disclosures (i) required to be made by either Agent or any
Lender to any regulatory or governmental agency or pursuant to law, rule,
regulations or legal process or (ii) consisting of general portfolio information
that does not specifically identify Great Lakes. Great Lakes consents to the
publication by each Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Such Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to Great Lakes for review and comment prior to the
publication thereof. Such Agent may provide to industry trade organizations
information with respect to the Credit Facility that is necessary and customary
for inclusion in league table measurements. The obligations of Agents and
Lenders under this Section 9.13 shall supersede and replace the obligations of
Agents and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agents or any Lender prior to the date
hereof.

 

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9.14 CONSENT TO JURISDICTION. GREAT LAKES CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO AGENTS’ ELECTION, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL
BE LITIGATED IN SUCH COURTS. GREAT LAKES EXPRESSLY SUBMITS AND CONSENTS TO THE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. GREAT LAKES HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON GREAT LAKES BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO GREAT
LAKES, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

9.15 WAIVER OF JURY TRIAL. GREAT LAKES, EACH AGENT AND EACH LENDER HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. GREAT LAKES,
EACH AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. GREAT LAKES,
EACH AGENT AND EACH LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

9.16 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans and the execution and
delivery of the Notes. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Great Lakes and any Subsidiary set forth
in Sections 1.3(d), 1.9 and 9.1 shall survive the repayment of the Obligations
and the termination of this Agreement.

9.17 Entire Agreement. This Agreement, the Notes and the other Loan Documents
embody the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether oral or
written, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto. All Exhibits, Schedules and Annexes referred
to herein are incorporated in this Agreement by reference and constitute a part
of this Agreement.

9.18 Counterparts; Effectiveness. This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an

 

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original, but all of which counterparts together shall constitute but one in the
same instrument. Signature pages to this Agreement and the other Loan Documents
may be detached from multiple separate counterparts and attached to the same
document and a telecopy or a PDF of any such executed signature page shall be
valid as an original. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto.

9.19 Replacement of Lenders.

(a) Within fifteen (15) days after receipt by Great Lakes of written notice and
demand from any Lender for payment pursuant to Section 1.9 or, as provided in
this Section 9.19(c), in the case of certain refusals by any Lender to consent
to certain proposed amendments, modifications, terminations or waivers with
respect to this Agreement that have been approved by Requisite Lenders,
Requisite Revolving Lenders or all affected Lenders, as applicable (any such
Lender demanding such payment or refusing to so consent being referred to herein
as an “Affected Lender”), Great Lakes may, at its option, notify each Agent and
such Affected Lender of its intention to do one of the following:

(i) Great Lakes may obtain, at Great Lakes’ expense, a replacement Lender
(“Replacement Lender”) for such Affected Lender, which Replacement Lender shall
be reasonably satisfactory to each Agent. In the event Great Lakes obtains a
Replacement Lender that will purchase all outstanding Obligations owed to such
Affected Lender and assume its Commitments hereunder within ninety (90) days
following notice of Great Lakes’ intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of
Section 8.1, provided that Great Lakes has reimbursed such Affected Lender for
any fee payable pursuant to Section 8.1 and, in any case where such replacement
occurs as the result of a demand for payment pursuant to Section 1.9, paid all
amounts required to be paid to such Affected Lender pursuant to Section 1.9
through the date of such sale and assignment; or

(ii) Great Lakes may, subject to Section 1.4, with each Agent’s consent, prepay
in full all outstanding Obligations owed to such Affected Lender and with
respect to any Revolving Lender who is an Affected Lender terminate such
Affected Lender’s Pro Rata Share of the Revolving Loan Commitment in which case
the Revolving Loan Commitment will be reduced by the amount of such Pro Rata
Share. Great Lakes shall, subject to Section 1.4, within ninety (90) days
following notice of its intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including, any Prepayment Fee) and, in
any case where such prepayment occurs as the result of a demand for payment for
increased costs, such Affected Lender’s increased costs for which it is entitled
to reimbursement under this Agreement through the date of such prepayment), and
with respect to any Revolving Lender who is an Affected Lender terminate such
Affected Lender’s obligations under the Revolving Loan Commitment.

 

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(b) In the case of a Defaulting Lender, at Great Lakes’ request, each Agent or a
Person acceptable to each Agent shall have the right with each Agent’s consent
and in each Agent’s Permitted Discretion (but shall have no obligation) to
purchase from any Defaulting Lender, and each Defaulting Lender agrees that it
shall, at Administrative Agent’s or Collateral Agent’s request, sell and assign
to such Agent or such Person, all of the Loans and Commitments of that
Defaulting Lender for an amount equal to the principal balance of all Loans held
by such Defaulting Lender and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.

(c) If, in connection with any proposed amendment, modification, waiver or
termination pursuant to Section 9.2 (a “Proposed Change”) requiring the consent
of all affected Lenders, the consent of Requisite Lenders is obtained, but the
consent of other Lenders whose consent is required is not obtained (any such
Lender whose consent is not obtained being referred to as a “Non-Consenting
Lender”); then, so long as no Agent is a Non-Consenting Lender, a Person
reasonably acceptable to each Agent shall have the right with each Agent’s
consent and in each Agent’s Permitted Discretion (but shall have no obligation)
to purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders
agree that they shall, upon such Agent’s request, sell and assign to such Agent
or such Person, all of the Loans and Commitments of such Non-Consenting Lenders
for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees and other Obligations
owing (including, any Prepayment Fee) with respect thereto through the date of
sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement; it being understood that an assignment pursuant to this
Section 9.19(c) shall not require the consent of Great Lakes.

9.20 Delivery of Termination Statements and Mortgage Releases. Upon payment in
full in cash and performance of all of the Obligations (other than
indemnification Obligations as to which no claim has been asserted), termination
of the Revolving Loan Commitments and a release of all claims against the Agents
and Lenders, and so long as no suits, actions proceedings, or claims are pending
or threatened against any Indemnitee asserting any damages, losses or
liabilities that are indemnified liabilities hereunder, each Agent shall deliver
to Great Lakes termination statements, mortgage releases, any releases,
instruments or documents necessary to release its Liens on any Aircraft, Engines
or other flight related assets and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.

9.21 Subordination Agreements. Each Lender hereby authorizes each Agent to enter
into the Subordination Agreements, to make the representations, warranties and
covenants on behalf of the Lenders therein contained, and to take such actions
as it is required or authorized to take thereunder (and such actions as are
reasonable incidental thereto). Each Lender agrees to be bound by the terms of
the Subordination Agreements.

[Signature Pages Follow]

 

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Witness the due execution hereof by the respective duly authorized officers of
the undersigned as of the date first written above.

 

Great Lakes:

GREAT LAKE AVIATION, LTD.,

as Great Lakes

By:   /s/ Michael Matthews Name:   Michael Matthews Title:   Chief Financial
Officer

[SIGNATURE PAGE TO CREDIT AGREEMENT]

--------------------------------------------------------------------------------

Administrative Agent: CRYSTAL FINANCIAL LLC, as Administrative Agent By:   /s/
Joshua B. Franklin Name:   Joshua B. Franklin Title:   Managing Director

[SIGNATURE PAGE TO CREDIT AGREEMENT]

--------------------------------------------------------------------------------

Collateral Agent GB MERCHANT PARTNERS, LLC., as Collateral Agent By:   /s/
Lawrence E. Klaff Name:   Lawrence E. Klaff Title:   Managing Director

[SIGNATURE PAGE TO CREDIT AGREEMENT]

--------------------------------------------------------------------------------

Lenders:

 

CRYSTAL FINANCIAL SPV LLC

  By:   /s/ Joshua B. Franklin   Name: Joshua B. Franklin   Title: Managing
Director

 

CRYSTAL FINANCIAL LLC   By:   /s/ Joshua B. Franklin   Name: Joshua B. Franklin
  Title: Managing Director

 

1903 ONSHORE FUNDING, LLC   By:   /s/ Lawrence E. Klaff   Name: Lawrence E.
Klaff   Title: Managing Director

 

2

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ANNEX A

to

CREDIT AGREEMENT

DEFINITIONS

Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all references to Sections, Exhibits, Schedules or Annexes in the following
definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:

“Account Debtor” means any Person who may become obligated to Great Lakes or any
of its Subsidiaries under, with respect to, or on account of, an Account,
Chattel Paper or General Intangibles (including a payment intangible).

“Accounting Changes” means: (a) changes in accounting principles required by
GAAP and implemented by Great Lakes; (b) changes in accounting principles
recommended by Great Lakes’ certified public accountants and implemented by
Great Lakes; and (c) changes in carrying value of Great Lakes’ or any of its
Subsidiaries’ assets, liabilities or equity accounts resulting from or as the
result of any other adjustments that, in each case, were applicable to, but not
included in, the Pro Forma.

“Accounts” means all “accounts,” as such term is defined in the Code, now owned
or hereafter acquired by Great Lakes or any of its Subsidiaries, including
(a) all accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of Great Lakes’ and its
Subsidiaries’ rights in, to and under all purchase orders or receipts for goods
or services, (c) all of Great Lakes’ and its Subsidiaries’ rights to any goods
represented by any of the foregoing (including unpaid sellers’ rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to
Great Lakes or its Subsidiaries for property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be issued, for a
secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by Great Lakes or its Subsidiaries or in connection with any
other transaction (whether or not yet earned by performance on the part of Great
Lakes or its Subsidiaries), (e) all healthcare insurance receivables, and
(f) all collateral security of any kind, now or hereafter in existence, given by
any Account Debtor or other Person with respect to any of the foregoing.

“ACH” means Airline Clearing House, Inc., an airline-owned not for profit
corporation that provides a facility for expediting clearance and net settlement
of interline accounts receivable with participating air carriers and airline
related companies worldwide.

“Administrative Agent” means Crystal and any successor Administrative Agent
appointed pursuant to Section 8.2.

 

Annex 1

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“Affected Lender” has the meaning ascribed to it in Section 9.19(a).

“Affiliate” means, with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, 5% or more of the Stock having ordinary voting power in the
election of directors of such Person, (b) each Person that controls, is
controlled by or is under common control with such Person, (c) each of such
Person’s officers, directors, joint venturers and partners and (d) in the case
of Great Lakes, the immediate family members, spouses and lineal descendants of
individuals who are Affiliates of Great Lakes. For the purposes of this
definition, “control” of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term “Affiliate” shall specifically
exclude each Agent and each Lender.

“Agent” means, individually and collectively, the Administrative Agent and the
Collateral Agent.

“Agreement” means this Credit Agreement (including all schedules, subschedules,
annexes and exhibits hereto), as the same may be amended, supplemented, restated
or otherwise modified from time to time.

“Aircraft” means (i) an engine-driven fixed-wing aircraft heavier than air, that
is supported in flight by the dynamic reaction of the air against its wings or
(ii) a rotorcraft that, for its horizontal motion, depends principally on its
engine-driven rotors. Aircraft shall include any item which is incorporated in,
attached to or specifically acquired by Great Lakes or any of its Subsidiaries
to be used in connection with a specific Aircraft.

“Aircraft Fair Market Value” means, with respect to each Aircraft of Great
Lakes, the fair market value of such Aircraft as set forth on the most recent
appraisal received by the Agents in accordance with this Agreement.

“Aircraft Law” means all applicable federal, state, local and foreign laws,
statutes, ordinances, codes, rules, standards and regulations, now or hereafter
in effect, and any applicable judicial or administrative interpretation thereof,
including any applicable judicial or administrative order, consent decree, order
or judgment, imposing liability or standards of conduct for or relating to the
regulation of Aircraft and related air transportation services.

“Aircraft NOLV” means, with respect to each Aircraft of Great Lakes, the net
orderly liquidation value of such Aircraft as set forth on the most recent
appraisal received by the Agents in accordance with this Agreement.

“Aircraft Security Agreement” means that Aircraft, Engines, Spare Engines,
Propellers, Spare Propellers and Spare Parts Security Agreement dated as of the
date hereof between Great Lakes and the Collateral Agent on behalf the Lenders,
and any supplements thereto.

“Anti-Terrorism Laws” has the meaning ascribed to it in Section 5.19.

 

Annex 2

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“Applicable Percentage” has the meaning ascribed to it in Section 1.3(c).

“Applicable Revolver LIBOR Margin” means the greater of (i) LIBOR Rate plus
8.00% per annum and (ii) 10.50% per annum.

“Applicable Term Loan LIBOR Margin” means the greater of (i) LIBOR Rate plus
11.00% per annum and (ii) 15.50% per annum.

“Asset Disposition” means the disposition whether by conveyance, sale, lease,
sublease, assignment, transfer or other disposition (including by way of merger
or consolidation and including any sale and leaseback transaction) of any of the
following:

(a) sales, abandonment, or other dispositions of Equipment that is substantially
worn, damaged, or obsolete in the ordinary course of business,

(b) sales of Inventory to buyers in the ordinary course of business,

(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents,

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business,

(e) the sale or discount, in each case without recourse, of Accounts arising in
the ordinary course of business, but only in connection with the compromise or
collection thereof,

(f) any involuntary loss, damage or destruction of property,

(g) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property,

(h) the leasing or subleasing of assets of Great Lakes or its Subsidiaries in
the ordinary course of business,

(i) the lapse of registered patents, trademarks and other intellectual property
of Great Lakes and its Subsidiaries to the extent not economically desirable in
the conduct of their business and so long as such lapse is not materially
adverse to the interests of the Lenders,

(j) the making of a Permitted Investment, and

(k) dispositions of assets (other than Accounts, intellectual property,
licenses, Stock of Subsidiaries of Great Lakes, or Material Contracts) not
otherwise permitted in clauses (a) through (j) above so long as made at fair
market value and the aggregate fair market value of all assets disposed of in
all such dispositions since the Closing Date (including the proposed
disposition) would not exceed $25,000.

 

Annex 3

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“Assignment Agreement” means an assignment agreement substantially in the form
of Exhibit D.

“Authorized Person” means any one of the individuals identified on Schedule A-1,
as such schedule is updated from time to time by written notice from Great Lakes
to Agents.

“Availability” means, as of any date of determination, the amount that Great
Lakes is entitled to borrow as Revolving Loans under Section 1.1(a) of the
Agreement (after giving effect to all then outstanding Obligations).

“Average Engine Value” means the average value of the engines as set forth on
the most recent appraisal received by the Agents in accordance with this
Agreement.

“Average Weekly Borrowing” means the sum of the aggregate weekly outstanding
principal amount of the Loans for each week during such Fiscal Quarter divided
by the actual numbers of weeks in such Fiscal Quarter (as determined based upon
Borrowing Base Certificates provided by Great Lakes during such Fiscal Quarter).

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11
U.S.C. §§ 101 et seq. or other applicable bankruptcy, insolvency or similar
laws.

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
Great Lakes or any of its Subsidiaries incurs or otherwise has any obligation or
liability, contingent or otherwise.

“Board of Directors” means the board of directors (or comparable managers) of a
Person or any committee thereof duly authorized to act on behalf of the board of
directors (or comparable managers).

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day
by the Lenders (or Administrative Agent on behalf thereof).

“Borrowing Base” means, as of any date of determination, the result of:

(a) 85% of amount of Eligible Accounts, less the amount, if any, of the Dilution
Reserve, plus

(b) 40% multiplied by the Net Liquidation Percentage of Eligible Inventory
(without duplication of any other asset included in the Borrowing Base), plus

(c) 65% multiplied by the Average Engine Value of Eligible Spare Engines
(without duplication of any other asset included in the Borrowing Base), minus

(d) the Term Loan Suppression Amount (for avoidance of doubt the Term Loan
Suppression Amount shall only be deducted from the Borrowing Base and can never
be applied to increase the Borrowing Base), minus

(e) $500,000, minus

 

Annex 4

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(f) reserves, if any, established by either Agent under Section 1.1(a).

“Borrowing Base Certificate” means a certificate in substantially the same form
as Annex D.

“Borrowing Base Excess Amount” has the meaning set forth in Section 1.5(f).

“Business Day” means any day that is not a Saturday, a Sunday or a day on which
banks are required or permitted to be closed in the State of New York and in
reference to LIBOR Loans shall mean any such day that is also a LIBOR Business
Day.

“Cape Town Convention” shall mean the official English language texts of the
Convention on International Interest in Mobile Equipment and the Protocol to the
Convention on International Interest in Mobile Equipment on Matters Specific to
Aircraft Equipment which were signed in Cape Town, South Africa, as in effect in
any applicable jurisdiction, as the same may be amended from time to time.

“Capex Limit” has the meaning ascribed to it in Section 4.2.

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed, provided, however it is
understood and agreed that Capital Expenditures do not include (i) any item
customarily charged directly to expense or depreciated over a useful life of
twelve (12) months or less in accordance with GAAP, (ii) any capitalizable
spares, rotables, aircraft parts, upgrades (software or hardware) or other
flight equipment related to any Aircraft, or (iii) an amount not to exceed
$250,000 with respect to the Raddix reservation system license upgrade.

“Capital Lease” means, with respect to any Person, any lease of any property
(whether real, personal or mixed) by such Person as lessee that, in accordance
with GAAP, would be required to be classified and accounted for as a capital
lease on a balance sheet of such Person.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP;
provided that any change in GAAP after the Closing Date that would result in a
lease that would have been characterized as an operating lease in accordance
with GAAP as in effect on the Closing Date being characterized as a capital
lease shall be disregarded for purposes hereof.

“Cash Equivalents” means: (i) marketable securities (A) issued or directly and
unconditionally guaranteed as to interest and principal by the United States
government or (B) issued by any agency of the United States government the
obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one (1) year after acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of

 

Annex 5

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America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of acquisition, a rating of at least A-1 from
S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) amounts on
deposit in a deposit account with or certificates of deposit or bankers’
acceptances issued or accepted by any Lender or by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia that is at least (A) “adequately capitalized” (as defined
in the regulations of its primary Federal banking regulator) and (B) has Tier 1
capital (as defined in such regulations) of not less than $250,000,000, in each
case maturing within one year after issuance or acceptance thereof; and
(v) shares of any money market mutual or similar funds that (A) has
substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, (B) has net assets of
not less than $500,000,000 and (C) has the highest rating obtainable from either
S&P or Moody’s.

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

“Casualty Event” means, with respect to any property (including Real Estate) of
any Person, any loss of title with respect to such property or any loss of or
damage to or destruction of, or any condemnation or other taking (including by
any Governmental Authority) of, such property for which such Person or any of
its Subsidiaries receives insurance proceeds or proceeds of a condemnation award
or other compensation. “Casualty Event” shall include but not be limited to any
taking of all or any part of any Real Property of any Person or any part
thereof, in or by condemnation or other eminent domain proceedings pursuant to
any law, or by reason of the temporary requisition of the use or occupancy of
all or any part of any Real Estate of any Person or any part thereof by any
Governmental Authority, civil or military.

“Certificate of Exemption” has the meaning ascribed to it in Section 1.9(c).

“CFC” means a controlled foreign corporation (as that term is defined in the
Internal Revenue Code of 1986, as in effect from time to time).

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

Annex 6

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“Change of Control” means any event, transaction or occurrence as a result of
which (a) Great Lakes ceases to own and control all of the economic and voting
rights associated with ownership of at least hundred percent (100)% of all
classes of the outstanding Stock of each of its Subsidiaries, (b) any “person”
or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act),
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of fifty-one percent (51)%, or more, of the Stock of
Great Lakes having the right to vote for the election of members of the Board of
Directors, (d) the replacement of a majority of the Board of Directors of Great
Lakes from the directors who constituted the Board of Directors of Great Lakes
on the Closing Date, and such replacement shall not have been approved by a vote
of at least a majority of the Board of Directors of Great Lakes then still in
office who either were members of such Board of Directors on the Closing Date or
whose election as a member of such Board of Directors was previously so
approved, or (e) any “Change of Control” shall occur (as such term is defined in
any agreement governing Subordinated Debt).

“Charges” means all federal, state, county, city, municipal, local, foreign or
other governmental premiums and other amounts (including premiums and other
amounts owed to the PBGC at the time due and payable), levies, assessments,
charges, liens, claims or encumbrances upon or relating to (a) the Collateral,
(b) the Obligations, (c) the employees, payroll, income or gross receipts of
Great Lakes, (d) Great Lakes’ ownership or use of any properties or other
assets, or (e) any other aspect of Great Lakes’ business.

“Chattel Paper” means any “chattel paper,” as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by Great
Lakes or any of its Subsidiaries, wherever located.

“Closing Date” means November 16, 2011.

“Code” means the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that to the extent
that the Code is used to define any term herein or in any Loan Document and such
term is defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Collateral Agent’s or any Lender’s Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.

“Collateral” means the property covered by the Security Agreements and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Collateral Agent, on
behalf of the Lenders, to secure the Obligations or any portion thereof.

 

Annex 7

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“Collateral Access Agreements” means each landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in Great Lakes’ or any of its Subsidiaries’ books and records, Equipment,
Inventory, Aircraft, Spare Engine, Engines, Spare Propeller, Propellers or Spare
Parts, in each case, in form and substance reasonably satisfactory to each
Agent.

“Collateral Agent” means GB Merchant and any successor Collateral Agent
appointed pursuant to Section 8.2.

“Collateral Documents” means the Security Agreements, each Collateral Access
Agreement, any Trademark Security Agreement, any Copyright Security Agreement,
any Patent Security Agreement, any Control Agreement and all other agreements
entered into guaranteeing payment of, or granting a Lien upon property as
security for payment of, the Obligations or any portion thereof.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds, and tax refunds).

“Commitments” means (a) as to any Lender, the aggregate of such Lender’s
Revolving Loan Commitment and Term Loan Commitment as set forth on Annex B to
this Agreement or in the most recent Assignment Agreement executed by such
Lender and (b) as to all Lenders, the aggregate of all Lenders’ Revolving Loan
Commitments and Term Loan Commitments, which aggregate commitment shall be
THIRTY FOUR MILLION DOLLARS ($34,000,000) on the Closing Date, as such
Commitments may be reduced, amortized or adjusted from time to time in
accordance with this Agreement.

“Compliance Certificate” has the meaning ascribed to it in Section 4.3(l).

“Communication” means any notice or other communication required or permitted to
be given or made under this Agreement.

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability of that Person: (i) with respect to Guaranteed Indebtedness and with
respect to any Indebtedness, lease, dividend or other obligation of another
Person if the purpose or intent of the Person incurring such liability, or the
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates,
(iv) any agreement, contract or transaction involving commodity options or
future contracts, (v) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement, or
(vi)

 

Annex 8

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pursuant to any agreement to purchase, repurchase or otherwise acquire any
obligation or any property constituting security therefor, to provide funds for
the payment or discharge of such obligation or to maintain the solvency,
financial condition or any balance sheet item or level of income of another. The
amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if not a fixed and
determined amount, the maximum amount so guaranteed.

“Contractual Obligations” means, as applied to any Person, any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject including the Loan Documents.

“Control Agreement” means tri-party deposit account, securities account or
commodities account control agreements by and among Great Lakes, Collateral
Agent and the bank, securities intermediary or commodities intermediary, and
each in form and substance satisfactory in all respects to Collateral Agent and
in any event proving to Collateral Agent “control” of such deposit account,
securities or commodities account within the meaning of Articles 8 and 9 of the
Code.

“Copyright License” means any and all rights now owned or hereafter acquired by
Great Lakes under any written agreement granting any right to use any Copyright
or Copyright registration.

“Copyright Security Agreements” means any Copyright Security Agreement made in
favor of Collateral Agent, on behalf of the Lenders, by Great Lakes.

“Copyrights” means all of the following now owned or hereafter adopted or
acquired by Great Lakes: (a) all copyrights and General Intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; and (b) all
reissues, extensions or renewals thereof.

“Crystal” means Crystal Financial LLC, a Delaware limited liability company.

“Default” means any event that, with the passage of time or notice or both,
would, unless cured or waived, become an Event of Default.

“Default Rate” has the meaning ascribed to it in Section 1.2(d).

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under this Agreement on the date that it is required
to do so under this Agreement, (b) notified Great Lakes, each Agent, or any
Lender in writing that it does not intend to comply with all or any portion of
its funding obligations under this Agreement, (c) has made a public statement to
the effect that it does not intend to comply with its funding obligations under
this Agreement or under other agreements generally under which it has committed
to extend credit, (d) failed, within one (1) Business Day after written request
by each Agent, to confirm

 

Annex 9

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that it will comply with the terms of this Agreement relating to its obligations
to fund any amounts required to be funded by it under this Agreement, or
(e) otherwise failed to pay over to Administrative Agent or any other Lender any
other amount required to be paid by it under this Agreement on the date that it
is required to do so under this Agreement, unless the subject of a good faith
dispute.

“Deposit Accounts” means all “deposit accounts” as such term is defined in the
Code.

“Designated Locations” means the locations designated from time to time by Great
Lakes to each Agent at which the Aircraft, Spare Parts, Spare Propellers and
Spare Engines may be maintained by or on behalf of Great Lakes.

“Dilution” means, as of any date of determination, an amount established by the
Agents in their Permitted Discretion based upon, among other things, the results
of periodic field examinations conducted by the Agents pursuant to Section 2.3.

“Dilution Reserve” means, as of any date of determination, an amount sufficient
to reduce the advance rate against Eligible Accounts by 1 percentage point for
each percentage point by which Dilution is in excess of 5%.

“Disbursement Account” has the meaning ascribed to it in Section 1.1(c).

“Disclosure Schedules” means the Schedules prepared by Great Lakes and
denominated as Schedules to this Agreement.

“Documents” means any “document,” as such term is defined in the Code, including
electronic documents, now owned or hereafter acquired by Great Lakes, wherever
located.

“Dollars” or “$” means lawful currency of the United States of America.

“DOT” means the Department of Transportation of the United States of America (or
any successor agency thereto).

“EBITDA” means, with respect to any fiscal period, Great Lakes and each of its
Subsidiaries consolidated net earnings (or loss), minus the sum of
(i) extraordinary gains and (ii) interest income, plus the sum of (i) non-cash
extraordinary losses, (ii) interest expense to the extent accrued or paid in
cash, (iii) income taxes to the extent accrued or paid in cash, and
(iv) depreciation and amortization for such period, in each case, determined on
a consolidated basis in accordance with GAAP.

“Eligible Accounts” means (i) those Accounts created by Great Lakes with the DOT
arising out of Great Lakes’ participation in the Essential Air Services Program
and (ii) those Accounts created by Great Lakes with the ACH, that in each case
arise in the ordinary course of business of Great Lakes and that comply with
each of the representations and warranties respecting Eligible Accounts made in
the Loan Documents, and that are not excluded as ineligible by virtue of one or
more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by either Agent in such Agent’s
Permitted Discretion to address the results of any audit performed by either
Agent from time to time after the Closing Date. In determining the amount to be
included, Eligible Accounts shall be calculated net of deposits, unapplied cash,
and all reserves established by such Account Debtor. Eligible Accounts shall not
include the following:

(a) Accounts that the Account Debtor has failed to pay within 60 days of
original invoice date or Accounts with selling terms of more than 45 days,

 

Annex 10

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(b) Accounts with respect to which the Account Debtor is either (i) the United
States or any department, agency, or instrumentality of the United States
(exclusive, however, of Accounts with respect to which Great Lakes has complied,
to the reasonable satisfaction of each Agent, with the Assignment of Claims Act,
31 USC §3727), or (ii) any state of the United States, provided, that for 60
days (or, so long as Great Lakes is diligently pursuing compliance with the
Assignment of Claims Act, 31 USC §3727 and such non-compliance is not
attributable to Great Lakes, such longer period of time as the Agents may grant
in their Permitted Discretion) after the Closing Date (but only for such period)
such Accounts will be included as Eligible Accounts, notwithstanding the fact
that such Accounts are not in compliance with the Assignment of Claims Act,

(c) Accounts that are not payable in Dollars,

(d) Accounts with respect to which the Account Debtor is a creditor of Great
Lakes, has or has asserted a right of chargeback, setoff, or has disputed its
obligation to pay all or any portion of the Account, to the extent of such
chargeback, claim, right of setoff, or dispute,

(e) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, suspends or has gone out of business,
makes a general assignment for the benefit of creditors, fails to pay its debts
generally as they come due, or as to which Great Lakes has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial
condition of such Account Debtor,

(f) Accounts, the collection of which, either Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account Debtor’s financial
condition,

(g) Accounts that are not subject to a valid and perfected first priority
Collateral Agent’s Lien,

(h) Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,

(i) Accounts with respect to which the Account Debtor is a Sanctioned Person or
Sanctioned Entity,

(j) Accounts that do not arise from the sale of goods or the performance of
services by Great Lakes in the ordinary course of its business,

 

Annex 11

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(k) Accounts that are not true and correct statements of bona fide indebtedness
incurred in the amount of such Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor,

(l) Accounts that are evidenced by a judgment, Instrument or Chattel Paper,

(m) Accounts to which an Account Debtor has objected to the quality or quantity
of goods or services of Great Lakes sold, or shall have rejected, returned, or
refused to accept such goods or services,

(n) Accounts that (i) are not owned by Great Lakes or (ii) are subject to any
Lien of any Person, other than Liens in favor of Collateral Agent, on behalf of
he Lenders,

(o) Accounts that exceed any credit limit established by either Agent, in its
reasonable credit judgment; provided that no such adjustment shall be effective
until 5 (five) Business Days after notice of such adjustment has been given by
such Agent to Great Lakes, or

(p) Accounts (i) upon which Great Lakes’ right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which Great Lakes is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process.

“Eligible Aircraft” means those Aircraft owned by Great Lakes or any of its
Subsidiaries in the ordinary course of its business, that comply with each of
the covenants, representations and warranties with respect to Aircraft made in
the Loan Documents, and that are not excluded as ineligible by virtue of one or
more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by either Agent in such Agent’s
Permitted Discretion to address the results of any audit performed by either
Agent from time to time after the Closing Date. An Aircraft shall not be
included as an Eligible Aircraft if:

(a) Great Lakes or such Subsidiary does not have good, valid, and marketable
title thereto,

(b) Great Lakes or such Subsidiary does not have actual and exclusive possession
thereof,

(c) it is not located in the continental United States or Canada at a Designated
Location (or en route between one such location and another such location),

(d) it is not subject to a valid and perfected first priority Collateral Agent’s
Lien,

(e) it is grounded for any reason, including, but not limited to by order of any
Governmental Authority, or due to a mechanical repair or maintenance (other than
routine mechanical repair or maintenance), or

 

Annex 12

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(f) it is subject to third-party trademark, licensing or other proprietary
rights, unless each Agent is satisfied that such Aircraft can be freely sold by
Agents on and after the occurrence of an Event of Default despite such third
party rights.

“Eligible Inventory” means Inventory consisting of first quality finished goods
held for sale in the ordinary course of Great Lakes’ or any of its Subsidiary’s
business, that complies with each of the representations and warranties
respecting Eligible Inventory made in the Loan Documents, and that is not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth below; provided, however, that such criteria may be revised from time to
time by either Agent in such Agent’s Permitted Discretion to address the results
of any audit or appraisal performed by either Agent from time to time after the
Closing Date. In determining the amount to be so included, Inventory shall be
valued at the lower of cost or market on a basis consistent with Great Lakes’ or
such Subsidiary’s historical accounting practices. An item of Inventory shall
not be included in Eligible Inventory if:

(a) Great Lakes or such Subsidiary does not have good, valid, and marketable
title thereto,

(b) Great Lakes or such Subsidiary does not have actual and exclusive possession
thereof (either directly or through a bailee or agent of Great Lakes or such
Subsidiary),

(c) it is not located at a location in the continental United States or Canada
(or in-transit from one such location to another such location),

(d) it is located on real property leased by Great Lakes or in a contract
warehouse, in each case, unless it is subject to a Collateral Access Agreement
executed by the lessor or warehouseman, as the case may be, and unless it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises,

(e) it is the subject of a bill of lading or other document of title,

(f) it is not subject to a valid and perfected first priority Collateral Agent’s
Lien,

(g) it consists of goods returned or rejected by Great Lakes’ or such
Subsidiary’s customers,

(h) it consists of goods that are obsolete or slow moving, restrictive or custom
items, work-in-process, raw materials, or goods that constitute spare parts,
packaging and shipping materials, supplies used or consumed in Great Lakes’ or
such Subsidiary’s business, bill and hold goods, defective goods, “seconds,” or
Inventory acquired on consignment, or

(i) it is subject to third-party trademark, licensing or other proprietary
rights, unless each Agent is satisfied that such Inventory can be freely sold by
Agents on and after the occurrence of an Event of a Default despite such third
party rights.

“Eligible Spare Engines” means those Spare Engines owned by Great Lakes or any
of its Subsidiaries in the ordinary course of its business, that comply with
each of the covenants, representations and warranties with respect to Spare
Engines made in the Loan Documents, and

 

Annex 13

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that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, however, that such criteria may be revised
from time to time by either Agent in such Agent’s Permitted Discretion to
address the results of any audit performed by either Agent from time to time
after the Closing Date. A Spare Engine shall not be included as an Eligible
Aircraft if:

(a) Great Lakes or such Subsidiary does not have good, valid, or marketable
title thereto,

(b) Great Lakes or such Subsidiary does not have actual and exclusive possession
thereof,

(c) it is not located as a location in the continental United States or Canada
(or in-transit from one such location to another such location),

(d) it is located on real property leased by Great Lakes or in a contract
warehouse, in each case, unless it is subject to a Collateral Access Agreement
executed by the lessor or warehouseman, as the case may be, and unless it is
segregated or otherwise separately identifiable from goods of others, if any,
stored on the premises,

(e) it is the subject of a bill of lading or other document of title,

(f) it is not subject to a valid and perfected first priority Collateral Agent’s
Lien,

(g) it consists of goods returned or rejected by Great Lakes’ or such
Subsidiary’s customers,

(h) it consists of goods that are obsolete or slow moving, restrictive or custom
items, work-in-process, raw materials, or goods that constitute spare parts,
packaging and shipping materials, supplies used or consumed in Great Lakes’ or
such Subsidiary’s business, bill and hold goods, defective goods, “seconds,” or
Inventory acquired on consignment,

(i) it is subject to third-party trademark, licensing or other proprietary
rights, unless each Agent is satisfied that such Inventory can be freely sold by
Agents on and after the occurrence of an Event of a Default despite such third
party rights, or

(j) it is not in good working order and not in compliance with all FAA
requirements and standards (for reasons other than routine mechanical repair or
maintenance).

“Engine” shall mean (i) each of the engines listed by manufacturer, model and
manufacturer’s serial numbers identified in the Aircraft Security Agreement, and
whether or not either initially or from time to time install on an Airframe or
any other airframe; (ii) any Replacement Engine which may from time to time be
substituted for any of such Engines pursuant to the terms hereof; and (iii) in
either case any and all parts which are from time to time incorporated or
installed in or attached to any such Engine (including, without limitation, the
portion of any quick engine change kits installed thereon).

 

Annex 14

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“Environmental Laws” means all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules, standards and regulations, now or
hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation Authorization
Act of 1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42
U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C. §§ 2601 et
seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water
Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. §§ 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. §§ 300(f) et seq.), and any and all regulations promulgated thereunder,
and all analogous state, local and foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.

“Environmental Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.

“Environmental Permits” means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

“Equipment” means all “equipment,” as such term is defined in the Code, now
owned or hereafter acquired by Great Lakes or any of its Subsidiaries, wherever
located and, in any event, including all of Great Lakes’ and its Subsidiaries’
machinery and equipment, including processing equipment, conveyors, machine
tools, data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
molds, dies, stamps, motor vehicles, rolling stock and other equipment of every
kind and nature, trade fixtures and fixtures not forming a part of real
property, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.

 

Annex 15

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“Equity Issuance” means (a) any issuance or sale by Great Lakes or any of its
Subsidiaries after the Closing Date of (i) any Stock of Great Lakes or such
Subsidiary, (ii) any warrants, options or other Stock exercisable in respect of
its Stock or (iii) any other security or instrument representing Stock (or the
right to obtain any Stock) in Great Lakes or any of its Subsidiaries or (b) the
receipt by Great Lakes or any of its Subsidiaries after the Closing Date of any
capital contribution (whether or not evidenced by any equity security issued by
the recipient of such contribution); provided that Equity Issuance shall not
include (1) any issuance or sale of any of Great Lakes’ Subsidiaries Stock to
Great Lakes or any Subsidiary thereof, (2) any issuance of directors’ qualifying
shares, (3) any warrants or options issued to directors, officers or employees
of Great Lakes or any of its Affiliates pursuant to employee benefit plans
established in the ordinary course of business and approved in writing by each
Agent and any Stock of Great Lakes issued upon the exercise of such warrants or
options, and (4) any capital contribution by any wholly-owned Subsidiary of
Great Lakes to Great Lakes.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to Great Lakes and its Subsidiaries, any
trade or business (whether or not incorporated) that, together with Great Lakes
or any of its Subsidiaries, are treated as a single employer within the meaning
of Sections 414(b), (c), (m) or (o) of the IRC.

“ERISA Event” means, with respect to Great Lakes or any of its Subsidiaries or
any ERISA Affiliate, any of the following: (a) a reportable event described in
Section 4043(b) of ERISA (or, unless the 30-day notice requirement has been duly
waived under the applicable regulations, Section 4043(c) of ERISA) with respect
to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer
Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of
reorganization, insolvency or termination (or treatment of a plan amendment as
termination) under Section 4041A of ERISA; (e) the filing of a notice of intent
to terminate a Title IV Plan (or treatment of a plan amendment as termination)
under Section 4041 of ERISA; (f) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any
required contribution to any Title IV Plan or Multiemployer Plan when due;
(h) the imposition of a lien under Section 412 of the Code or Section 302 or
4068 of ERISA on any property (or rights to property, whether real or personal)
of any ERISA Affiliate; (i) the failure of a Benefit Plan or any trust
thereunder intended to qualify for tax exempt status under Section 401 or 501 of
the Code or other Requirements of Law to qualify thereunder; and (j) any other
event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of any
liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC
premiums due but not delinquent.

“ESOP” means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.

 

Annex 16

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“Essential Air Service Program” means the Essential Air Service as codified in
49 U.S.C. §§ 41731–41748, as amended, together with such rules and regulations
issued in connection therewith.

“Essential Air Service Subsidies” means compensation to air carriers providing
Qualified Services to Qualified Airports pursuant to the Essential Air Service
Program.

“Event of Default” has the meaning ascribed to it in Section 7.1.

“Excess Cash Flow” means, with respect to any fiscal period and with respect to
Great Lakes determined on a consolidated basis in accordance with GAAP
(a) trailing twelve month EBITDA (or year to date EBITDA with respect to the
2012 Excess Cash Flow payment), minus (b) the sum of (i) the cash portion of
Interest Expense paid during such fiscal period, (ii) the cash portion of income
taxes paid during such period, (iii) all scheduled principal payments made in
respect of the Term Loan during such period, (iv) the cash portion of Capital
Expenditures made during such period and (v) solely to the extent included in
the calculation of trailing twelve month EBITDA (or year to date EBITDA with
respect to the 2012 Excess Cash Flow payment), proceeds from a Casualty Event or
Asset Disposition.

“Excess Cash Flow Period” means (i) January 1, 2012 through and including
September 30, 2012 with respect to the 2012 Excess Cash Flow payment required
pursuant to Section 1.5(b), (ii) October 1, 2012 through and including
September 30, 2013 with respect to the 2013 Excess Cash Flow payment required
pursuant to Section 1.5(b), (iii) October 1, 2013 through and including
September 30, 2014 with respect to the 2014 Excess Cash Flow payment required
pursuant to Section 1.5(b) and (iv) October 1, 2014 through and including
September 30, 2015 with respect to the 2015 Excess Cash Flow payment required
pursuant to Section 1.5(b).

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by Great
Lakes under this Agreement) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 1.9, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 1.9 and (d) any U.S. federal withholding Taxes imposed
under FATCA

“Executive Order” has the meaning ascribed to it in Section 5.19.

“Existing Lender” has the meaning ascribed to it in Section 6.1.

 

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“Extraordinary Receipts” means any cash received by Great Lakes or any
Subsidiary of Great Lakes not in the ordinary course of business, excluding
proceeds of an Asset Disposition or a Casualty Event, but including, without
limitation, (i) foreign, United States, state or local tax refunds, (ii) pension
plan reversions, (iii) proceeds of insurance (other than proceeds from a
Casualty Event), (iv) judgments, proceeds of settlements or other consideration
of any kind in connection with any cause of action, (v) indemnity payments and
(vi) any purchase price adjustment received in connection with any purchase
agreement.

“FAA” means the Federal Aviation Administration of the United States of America
(or any successor agency thereto).

“Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with) and any current or future
regulations or official interpretations thereof.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System.

“Fees” means any and all fees payable to either Agent or any Lender pursuant to
the Agreement or any of the other Loan Documents.

“Financial Statements” means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Great Lakes and its
Subsidiaries delivered in accordance with Section 4.3.

“Fiscal Quarter” means any of the quarterly accounting periods of Great Lakes
and its Subsidiaries, ending on March 31, June 30, September 30 and December 31
of each year.

“Fiscal Year” means any of the annual accounting periods of Great Lakes and its
Subsidiaries ending on December 31 of each year.

“Fixtures” means all “fixtures” as such term is defined in the Code, now owned
or hereafter acquired by Great Lakes.

“Foreign Lender” means (a) if Great Lakes is a U.S. Person, a Lender that is not
a U.S. Person, and (b) if Great Lakes is not a U.S. Person, a Lender that is
resident or organized under the laws of a jurisdiction other than that in which
Great Lakes is resident for tax purposes.

“Funded Debt” means, with respect to any Person, without duplication, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and that by its terms matures more than one
year from, or is directly or indirectly renewable or extendible at such Person’s
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of long term debt, revolving credit and short term debt extendible
beyond one year at the option of the debtor, and also including, in the case of
Great Lakes, the Obligations and, without duplication, Guaranteed Indebtedness
consisting of guaranties of Funded Debt of other Persons. For purposes of
calculating Funded Debt with respect to the Obligations, Funded Debt shall mean
the Average Weekly Borrowing during such Fiscal Quarter.

 

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“Funding Date” has the meaning ascribed to it in Section 6.2.

“Funds Control Event” has the meaning ascribed to it in Section 2.8.

“Funds Control Event Period” has the meaning ascribed to it in Section 2.8.

“GAAP” means generally accepted accounting principles in the United States of
America, consistently applied.

“GB Merchant” means GB Merchant Partners, LLC, a Delaware limited liability
company.

“General Intangibles” means “general intangibles,” as such term is defined in
the Code, now owned or hereafter acquired by Great Lakes or any of its
Subsidiaries, including all right, title and interest that Great Lakes or any of
its Subsidiaries may now or hereafter have in or under any Contractual
Obligation, all payment intangibles, customer lists, Licenses, Copyrights,
Trademarks, Patents, and all applications therefor and reissues, extensions or
renewals thereof, rights in Intellectual Property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark or Trademark License), all rights and
claims in or under insurance policies (including insurance for fire, damage,
loss and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, and business interruption
insurance, and all unearned premiums), uncertificated securities, chooses in
action, deposit, checking and other bank accounts, rights to receive tax refunds
and other payments, rights to receive dividends, distributions, cash,
Instruments and other property in respect of or in exchange for pledged Stock
and Investment Property, rights of indemnification, all books and records,
correspondence, credit files, invoices and other papers, including all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of Great Lakes or any of its Subsidiaries, or any computer bureau or
service company from time to time acting for Great Lakes or any of its
Subsidiaries.

“Goods” means any “goods,” as such term is defined in the Code, now owned or
hereafter acquired by Great Lakes or any of its Subsidiaries, wherever located,
including embedded software to the extent included in “goods” as defined in the
Code, manufactured homes, standing timber that is cut and removed for sale and
unborn young of animals.

“Governing Documents” means the certificate of formation, articles or
certificate of incorporation, by-laws, articles or certificate of organization,
partnership agreement, operating agreement, or other organizational or governing
documents of any Person.

 

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“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

“Great Lakes” has the meaning ascribed to such term in the preamble to the
Agreement.

“Guaranteed Indebtedness” means, as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation (“primary obligation”) of any other Person (the
“primary obligor”) in any manner, including any obligation or arrangement of
such Person to (a) purchase or repurchase any such primary obligation,
(b) advances or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.

“Hazardous Material” means any substance, material or waste that is regulated
by, or forms the basis of liability now or hereafter under, any Environmental
Laws, including any material or substance that is (a) defined as a “solid
waste,” “hazardous waste,” “hazardous material,” “hazardous substance,”
“dangerous goods,” “extremely hazardous waste,” “restricted hazardous waste,”
“pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic
substance” or other similar term or phrase under any Environmental Laws, or
(b) petroleum or any fraction or by product thereof, asbestos, polychlorinated
biphenyls (PCB’s), or any radioactive substance.

“Indebtedness” means, with respect to any Person, without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than six (6) months unless
being contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers’ acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value of future rental payments under all synthetic leases, (f) all obligations
of such Person under commodity purchase or option agreements or other commodity
price hedging arrangements, in each case whether

 

Annex 20

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contingent or matured, (g) all net payment obligations of such Person under any
foreign exchange contract, currency swap agreement, interest rate swap, cap or
collar agreement or other similar agreement or arrangement designed to alter the
risks of that Person arising from fluctuations in currency values or interest
rates, in each case whether contingent or matured, (h) all Indebtedness referred
to above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or in
property or other assets (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, (i) “earnouts” and similar payment obligations excluding
bonus, phantom stock or other similar compensation payments owed to employees,
or officers and incurred in the ordinary course of business, and (j) the
Obligations.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of Great
Lakes under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

“Indemnitees” has the meaning ascribed to it in Section 9.1.

“Instruments” means all “instruments,” as such term is defined in the Code, now
owned or hereafter acquired by Great Lakes or any of its Subsidiaries, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all promissory notes and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitute, Chattel Paper.

“Intellectual Property” means any and all Licenses, Patents, Copyrights,
Trademarks, and the goodwill associated with such Trademarks.

“International Interests” means “International Interests” as defined in the Cape
Town Convention.

“International Registry” means “International Registry” as defined in the Cape
Town Convention.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state or federal
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Interest Expense” means, for any period, the aggregate of the interest expense
of Great Lakes for such period, determined on a consolidated basis in accordance
with GAAP.

“Interest Payment Date” means the first Business Day of each month; provided,
that, each of (x) the date upon which the Revolving Loan Commitments have been
terminated and the Loans have been paid in full and (y) the Maturity Date shall
be deemed to be an “Interest Payment Date” with respect to any interest that has
then accrued under the Agreement.

 

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“Inventory” means any “inventory,” as such term is defined in the Code, now
owned or hereafter acquired by Great Lakes or any of its Subsidiaries, wherever
located, including inventory, merchandise, goods and other personal property
that are held by or on behalf of Great Lakes or its Subsidiaries for sale or
lease or are furnished or are to be furnished under a contract of service, or
that constitute raw materials, work in process, finished goods, returned goods,
supplies or materials of any kind, nature or description used or consumed or to
be used or consumed in Great Lakes’ or any of its Subsidiary’s business or in
the processing, production, packaging, promotion, delivery or shipping of the
same, including all supplies and embedded software.

“Investment” means (i) any direct or indirect purchase or other acquisition by
Great Lakes or any of its Subsidiaries of any Stock, or other ownership interest
in, any other Person, and (ii) any direct or indirect loan, advance or capital
contribution by Great Lakes or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business.

“Investment Property” means all “investment property,” as such term is defined
in the Code, now owned or hereafter acquired by Great Lakes or any of its
Subsidiaries, wherever located, including: (i) all securities, whether
certificated or uncertificated, including stocks, bonds, interests in limited
liability companies, partnership interests, treasuries, certificates of deposit,
and mutual fund shares; (ii) all securities entitlements of Great Lakes or any
of its Subsidiaries, including the rights of Great Lakes or any of its
Subsidiaries to any securities account and the financial assets held by a
securities intermediary in such securities account and any free credit balance
or other money owing by any securities intermediary with respect to that
account; (iii) all securities accounts of Great Lakes or any of its
Subsidiaries; (iv) all commodity contracts of Great Lakes or any of its
Subsidiaries; and (v) all commodity accounts held by Great Lakes or any of its
Subsidiaries.

“IRC” means the Internal Revenue Code of 1986, as amended, and all regulations
promulgated thereunder.

“IRS” means the United States Internal Revenue Service.

“Lenders” means Crystal, GB Merchant, and if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include any
assignee of such Lender.

“Leverage Ratio” means, as of any date of determination the result of (a) the
amount of Great Lakes’ and each of its Subsidiaries’ Funded Debt as of such
date, to (b) Great Lakes’ and each of its Subsidiaries’ EBITDA for the 12 month
period ended as of such date.

“LIBOR Business Day” means a Business Day on which banks in London, England are
generally open for interbank or foreign exchange transactions.

“LIBOR Loans” means a Loan or any portion thereof bearing interest by reference
to the LIBOR Rate.

 

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“LIBOR Rate” shall mean, subject to availability, a rate per annum equal to the
offered British Bankers’ Association interest settlement rates for deposits in
Dollars for a thirty (30) day period quoted by The Wall Street Journal two
(2) Business Days prior to the first day of each month (but if no such offered
rate exists, such rate will be the rate of interest per annum, as determined by
the Agents at which deposits of Dollars in immediately available funds are
offered at 11:00 A.M. (London, England time) two (2) Business Days prior to the
first day in each month by major financial institutions reasonably satisfactory
to the Agents in the London interbank market for the applicable principal amount
on such date of determination).

“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by Great
Lakes or any of its Subsidiaries.

“Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).

“Litigation” has the meaning ascribed to it in Section 4.3(i).

“Loan Documents” means the Agreement, the Notes, the Collateral Documents, the
Subordination Agreements, any other subordination provisions applicable to any
Subordinated Debt and intercreditor provisions applicable to any Indebtedness
that is pari passu in right of payment to the Obligations and all other
agreements, instruments, documents and certificates executed and delivered to,
or in favor of, each or both Agents or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of Great Lakes, or any employee of Great Lakes, and delivered to each
Agent or any Lender in connection with the Agreement or the transactions
contemplated thereby. Any reference in the Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to the Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.

“Loans” means the Revolving Loans and the Term Loan.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or financial or other condition of Great Lakes
considered as a whole, (b) Great Lakes’ ability to pay any of the Loans or any
of the other Obligations in accordance with the terms of the Agreement, (c) the
Collateral or Collateral Agent’s Liens on behalf of the Lenders, on the
Collateral or the priority of such Liens, or (d) Agents’ or any Lender’s rights
and remedies under the Agreement and the other Loan Documents.

 

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“Material Contract” means the (i) CodeShare Agreement, dated September 1, 2011,
between Great Lakes and United Air Lines, Inc., (ii) Code Share Agreement, dated
May 3, 2001, between Great Lakes and Frontier Airlines, Inc., (iii) agreements
between Great Lakes and Dash Group, Inc., and (iv) any other agreement or
contract of Great Lakes or any of its Subsidiaries the termination, cancellation
or suspension of which could reasonably be expected to have a Material Adverse
Effect.

“Maturity Date” means the earliest of (a) November 16, 2015, (b) the date of
termination of Revolving Lenders’ obligations to make Revolving Loans or permit
existing Loans to remain outstanding pursuant to Section 7.3, and (c) the date
of indefeasible prepayment in full by Great Lakes of the Obligations.

“Maximum Amount” means, as of any date of determination, an amount equal to the
Revolving Loan Commitment of all Revolving Lenders as of that date.

“Maximum Lawful Rate” has the meaning ascribed to it in Section 1.2(e).

“Moody’s” means Moody’s Investor’s Services, Inc.

“Mortgage” means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by Great Lakes in favor
of Collateral Agent, in form and substance reasonably satisfactory to each
Agent, that encumber the Real Property Collateral.

“Mortgagee Agreements” means each mortgagee agreement or acknowledgement
agreement of any mortgagee or other Person in possession of, having a Lien upon,
or having rights or interests in Great Lakes’ books and records, Equipment,
Inventory, Aircraft, Spare Engine, Engines, Spare Propeller, Propellers or Spare
Parts, in each case, in form and substance reasonably satisfactory to each
Agent.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, and to which Great Lakes or any of its Subsidiaries
or ERISA Affiliate is making, is obligated to make or has made or been obligated
to make, contributions on behalf of participants who are or were employed by any
of them.

“Net Liquidation Percentage” means the percentage of the book value of Great
Lakes’ Inventory, Aircraft and Spare Engines, as applicable, that is estimated
to be recoverable in an orderly liquidation of such Inventory, Aircraft and
Spare Engines, as applicable, net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by an
appraisal company selected by Agents.

“Net Proceeds” means (i) cash proceeds received by Great Lakes or any of its
Subsidiaries from any Asset Disposition or Casualty Event (including insurance
proceeds and awards of condemnation in connection with any Casualty Event and
payments under notes or other debt securities received in connection with any
Asset Disposition), net of (a) the costs of such Asset Disposition (including
taxes attributable to such sale, lease or transfer) and any commissions and
other reasonable customary transaction fees, costs and expenses, other than any
costs, fees or expenses payable to any Affiliate of Great Lakes (b) amounts
applied to repayment

 

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of Indebtedness (other than the Obligations) secured by a Lien permitted under
the Agreement on the asset or property disposed, and (c) any amounts required to
be held in escrow until such time as such amounts are released from escrow
whereupon such amounts shall be considered Net Proceeds and (ii) cash proceeds
received by Great Lakes or any of its Subsidiaries from any issuance or
incurrence of any Indebtedness, or the issuance by Great Lakes or any of its
Subsidiaries of any shares of their respective Stock net of the costs of such
incurrence or issuance (including taxes attributable to such incurrence or
issuance) and any commissions and other reasonable customary transaction fees,
costs and expenses, other than any costs, fees or expenses payable to any
Affiliate of Great Lakes.

“Non-Consenting Lender” has the meaning ascribed to it in Section 9.19(c).

“Notes” means, collectively, the Revolving Notes and the Term Notes.

“Notice of Revolving Loan” has the meaning ascribed to it in Section 1.1(a)(iv).

“Obligations” means all Loans, debts, liabilities and obligations, for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or such amounts
are liquidated or determinable), owing by Great Lakes to Agents or any Lender
(including any expenses reimbursable pursuant to the terms of the Loan
Documents), and all covenants and duties regarding such amounts, of any kind or
nature, present or future, whether or not evidenced by any note, agreement or
other instrument, arising under the Agreement or any of the other Loan
Documents. This term includes all principal, interest (including all interest
that accrues after the commencement of any case or proceeding by or against
Great Lakes in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys’ fees and any other sum chargeable to Great
Lakes under the Agreement or any of the other Loan Documents.

“OFAC” has the meaning ascribed to it in Section 5.19.

“Originating Lender” has the meaning ascribed to it in Section 8.1(b).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 9.19).

“Outstation Accounts” has the meaning ascribed to it in Section 2.8(b).

 

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“Participant” has the meaning ascribed to it in Section 8.1(b).

“Participant Register” has the meaning ascribed to it in Section 8.1(b).

“Patent License” means rights under any written agreement now owned or hereafter
acquired by Great Lakes granting any right with respect to any invention on
which a Patent is in existence.

“Patent Security Agreements” means any Patent Security Agreement made in favor
of Collateral Agent, on behalf of the Lenders, by Great Lakes.

“Patents” means all of the following in which Great Lakes now holds or hereafter
acquires any interest: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or of any other country, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State or any other country, and (b) all reissues, continuations, continuations
in part or extensions thereof.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means a Plan described in Section 3(2) of ERISA.

“Permit” means any permit, approval, authorization, license, registration,
certification, certificate of authority, variance, permission, franchise,
qualification, order, filing or consent required from a Governmental Authority
or other Person under an applicable Requirement of Law.

“Permitted Assignee” shall mean (a) an Agent, any Lender or any of their direct
or indirect Affiliates; (b) a federal or state chartered bank, a United States
branch of a foreign bank, an insurance company, or any finance company or fund
generally engaged in the business of making commercial loans; (c) any fund that
is administered or managed by any Agent or any Lender, an Affiliate of any Agent
or any Lender or a related entity; (d) any Person to whom any Agent or any
Lender assigns its rights and obligations under this Agreement as part of an
assignment and transfer of such Agent’s or Lender’s rights in and to a material
portion of such Agent’s or Lender’s portfolio of credit facilities; or (e) any
Person approved by the Agents.

“Permitted Discretion” means a determination made in the exercise of
commercially reasonable business judgment.

“Permitted Encumbrances” has the meaning ascribed to it in Section 3.2.

“Permitted Indebtedness” has the meaning ascribed to it in Section 3.1.

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

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“Plan” means, at any time, an “employee benefit plan,” as defined in
Section 3(3) of ERISA, that Great Lakes or any of its Subsidiaries or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by Great Lakes.

“Prepayment Fee” has the meaning ascribed to it in Section 1.3(c).

“Pro Forma” means the unaudited consolidated and consolidating balance sheets of
Great Lakes and its Subsidiaries prepared in accordance with GAAP as of the
Closing Date after giving effect to the Loans.

“Pro Rata Share” means with respect to all matters relating to any Lender
(a) with respect to the Revolving Loan, the percentage obtained by dividing
(i) the Revolving Loan Commitment of such Revolving Lender by (ii) the aggregate
Revolving Loan Commitments of all Revolving Lenders, (b) with respect to the
Term Loan, the percentage obtained by dividing (i) the Term Loan Commitment of
such Term Loan Lender by (ii) the aggregate Term Loan Commitments of all Term
Loan Lenders, (c) with respect to all Loans, the percentage obtained by dividing
(i) the aggregate Commitments of that Lender by (ii) the aggregate Commitments
of all Lenders, and (d) with respect to all Loans on and after the Maturity
Date, the percentage obtained by dividing (i) the aggregate outstanding
principal balance of the Loans held by that Lender, by (ii) the outstanding
principal balance of the Loans held by all Lenders, as any such percentages may
be adjusted by assignments pursuant to Section 8.1.

“Proceeds” means all “proceeds” as such term is defined in the Code.

“Projections” means Great Lakes’ and its Subsidiaries forecasted consolidated
and consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash
flow statements; and (d) capitalization statements, all prepared on a Subsidiary
by Subsidiary or division-by-division basis, if applicable, and otherwise
consistent with the historical Financial Statements of Great Lakes, together
with appropriate supporting details and a statement of underlying assumptions.

“Propeller” includes a part, appurtenance, and accessory of a propeller.

“Proposed Change” has the meaning ascribed to it in Section 9.19(c).

“Protective Advance” has the meaning ascribed to it in Section 1.1(d)(i).

“Purchasing Lender” has the meaning ascribed to it in Section 8.1(c).

“Qualified Airport” means an “eligible place” as defined pursuant to the
Essential Air Service Program, or such other term used to refer to an airport
which qualifies air carriers for Essential Air Service Subsidies for the
provision of Qualified Services.

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Great Lakes and its Subsidiaries that
is in Deposit Accounts or in Securities Accounts, or any combination thereof,
and which such Deposit Account or Securities Account is the subject of a Control
Agreement and is maintained by a branch office of the bank or securities
intermediary located within the United States.

 

Annex 27

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“Qualified Plan” means a Pension Plan that is intended to be tax-qualified under
Section 401(a) of the IRC.

“Qualified Services” means air transportation or other services to a Qualified
Airport at such levels as prescribed by the terms of the Essential Air Service
Program.

“Real Estate” has the meaning ascribed to it in Section 5.12.

“Real Property Collateral” means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by Great Lakes or its Subsidiaries.

“Recipient” means (a) either Agent or (b) any Lender, as applicable.

“Register” has the meaning ascribed to it in Section 1.7.

“Release” means any release, threatened release, spill, emission, leaking,
pumping, pouring, emitting, emptying, escape, injection, deposit, disposal,
discharge, dispersal, dumping, leaching or migration of Hazardous Material in
the indoor or outdoor environment, including the movement of Hazardous Material
through or in the air, soil, surface water, ground water or property.

“Replacement Engine” means any engine substituted for an Engine or Spare Engine.

“Replacement Lender” has the meaning ascribed to it in Section 9.19(a).

“Requirements of Law” means, as to any Person, the Governing Documents of such
Person, and any law, ordinance, policy, manual provision, guidance, principle of
common law, statute, rule or regulation, or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its assets or to which such Person or any of its
assets is subject including, without limitation, any Aircraft Law, the
Securities Act, the Securities Exchange Act, Regulations T, U and X of the
Federal Reserve Board, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, the Social Security Act, any Environmental Law, and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement or
Permit or environmental, labor, employment, occupational safety or health law,
rule or regulation.

“Requisite Lenders” means Lenders having (a) more than 50% of (i) the aggregate
principal amount of outstanding Loans plus (ii) the aggregate amount of undrawn
Revolving Loan Commitments, or (b) if the Revolving Loan Commitments have been
terminated, more than 50% of the aggregate outstanding amount of the Loans;
provided that, at anytime when there are solely two (2) Lenders (for avoidance
of doubt any Lender together with its Affiliates constituting a single Lender),
Requisite Lenders shall mean both such Lenders.

“Requisite Revolving Lenders” means Revolving Lenders having (a) more than 50%
of the Revolving Loan Commitments of all Revolving Lenders, or (b) if the
Revolving Loan Commitments have been terminated, more than 50% of the aggregate
outstanding amount of the Revolving Loan.

 

Annex 28

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“Revolving Lenders” means those Revolving Lenders having a Revolving Loan
Commitment.

“Revolving Loan Commitment” means (a) as to any Revolving Lender, the commitment
of such Revolving Lender to make its Pro Rata Share of Revolving Loans as set
forth on Annex B or in the most recent Assignment Agreement, if any, executed by
such Revolving Lender and (b) as to all Revolving Lenders, the aggregate
commitment of all Revolving Lenders to make the Revolving Loans, which aggregate
commitment shall be TEN MILLION DOLLARS ($10,000,000) on the Closing Date, as
such amount may be adjusted, if at all, from time to time in accordance with the
Agreement.

“Revolving Loans” has the meaning ascribed to it in Section 1.1(a).

“Revolving Notes” has the meaning ascribed to it in Section 1.1(a).

“Restricted Payment” means, with respect to Great Lakes (a) the declaration or
payment of any dividend or the incurrence of any liability to make any other
payment or distribution of cash or other property or assets in respect of Stock;
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of Great Lakes’ Stock or any other payment or distribution
made in respect thereof, either directly or indirectly, except payments made to
repurchase the Stock of Great Lakes held by Raytheon Aircraft Credit Corp. and
its affiliates, as permitted by Section 3.20(a)(ii); (c) any payment or
prepayment of principal of, premium, if any, or interest, fees or other charges
on or with respect to, and any redemption, purchase, retirement, defeasance,
sinking fund or similar payment and any claim for rescission with respect to,
any Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Stock of Great Lakes now or hereafter outstanding;
(e) any payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any shares of Great
Lakes’ Stock or of a claim for reimbursement, indemnification or contribution
arising out of or related to any such claim for damages or rescission; (f) any
payment, loan, contribution, or other transfer of funds or other property to any
Stockholder of Great Lakes other than payment of compensation in the ordinary
course of business to Stockholders who are employees of Great Lakes and other
payments permitted under Section 3.8; and (g) any payment of management fees (or
other fees of a similar nature) or out-of-pocket expenses in connection
therewith by Great Lakes to any Stockholder of Great Lakes or its Affiliates.

“Retiree Welfare Plan” means, at any time, a Welfare Plan that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant’s termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.

 

Annex 29

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“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.

“Scheduled Installments” has the meaning ascribed to it in Section 1.1(b).

“Security Agreements” means (i) the Security Agreement of even date herewith
entered into by and among Great Lakes and the Collateral Agent, on behalf of the
Lenders, and Great Lakes that is a signatory thereto and (ii) the Aircraft
Security Agreement.

“S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill
Companies, Inc.

“Settlement” has the meaning ascribed to it in Section 1.1(e).

“Settlement Date” has the meaning ascribed to it in Section 1.1(e).

“Software” means all “software” as such term is defined in the Code, now owned
or hereafter acquired by Great Lakes, other than software embedded in any
category of Goods, including all computer programs and all supporting
information provided in connection with a transaction related to any program.

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including subordinated and contingent liabilities, of
such Person; (b) the present fair saleable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts and liabilities, including subordinated and contingent
liabilities as they become absolute and matured; (c) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
Litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.

“Spare Engine” means (i) each of the engines listed by manufacturer, model and
manufacturer’s serial numbers in the Aircraft Security Agreement, and whether or
not either initially or from time to time installed on any Aircraft; (ii) any
Replacement Engine which may from time to time be substituted for any such Spare
Engines pursuant to the terms of the Aircraft Security Agreement; and (iii) in
either case, any and all parts which are from time to time incorporated or
installed in or attached to any such Spare Engine (including, without
limitation, the portion of any quick engine change kits installed thereon) and
any and all parts removed therefrom.

“Spare Part” means an accessory, appurtenance, or part of an aircraft (except an
Engine or Propeller), Engine (except a Propeller), Propeller, or Appliance, that
is to be installed at a later time in an Aircraft, Engine, Propeller or
Appliance.

 

Annex 30

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“Spare Propeller” means a part, appurtenance, and accessory of a propeller
installed from time to time on any Aircraft.

“Statement” has the meaning ascribed to it in Section 4.3(c).

“Stock” means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity whether voting or nonvoting, including common stock, preferred
stock or any other “equity security” (as such term is defined in Rule 3a11-1 of
the General Rules and Regulations promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934).

“Stockholder” means, with respect to any Person, each holder of Stock of such
Person.

“Subordination Agreements” means each subordination and intercreditor agreement
(or similar document) entered into by either or both of the Agents, Great Lakes
and a selling party or parties who have extended Subordinated Debt to Great
Lakes.

“Subordinated Debt” means Indebtedness of Great Lakes which has been
subordinated to the payment and performance of the Obligations on terms and
conditions acceptable to each Agent and Requisite Lenders.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than 100% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 100% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 100% or of which any such Person
is a general partner or may exercise the powers of a general partner.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholding (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Term Loan” has the meaning ascribed to it in Section 1.1(b).

“Term Loan Commitment” means (a) as to any Term Loan Lender, the commitment of
such Term Loan Lender to make its Pro Rata Share of the Term Loan (as set forth
on Annex B) or in the most recent Assignment Agreement, if any, executed by such
Term Loan Lender and (b) as to all Term Loan Lenders, the aggregate commitment
of all Term Loan Lenders to make the Term Loan, which aggregate commitment shall
be TWENTY FOUR MILLION DOLLARS ($24,000,000) on the Closing Date. The Term Loan
Commitment shall terminate in full upon the making of the Term Loan on the
Closing Date.

 

Annex 31

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“Term Loan Formula” means:

(i) the lesser of (a) $24,000,000 and (b) 65% of the Net Liquidation Percentage
of Eligible Aircraft of Great Lakes, minus

(ii) reserves, if any, established by either Agent under Section 1.1(a).

“Term Loan Lenders” means those Term Loan Lenders having Term Loan Commitments
and on and after the Closing Date hold any portion of the Term Loan.

“Term Loan Suppression Amount” means the outstanding principal amount of the
Term Loan minus the Term Loan Formula.

“Term Notes” has the meaning ascribed to it in Section 1.1(b)

“Threshold Amount” has the meaning ascribed to it in Section 1.5(d).

“Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is
covered by Title IV of ERISA, and that Great Lakes or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.

“Trademark License” means rights under any written agreement now owned or
hereafter acquired by Great Lakes granting any right to use any Trademark.

“Trademark Security Agreement(s)” means any Trademark Security Agreement(s) made
in favor of Collateral Agent, on behalf of the Lenders, by Great Lakes.

“Trademarks” means all of the following now owned or hereafter adopted or
acquired by Great Lakes: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, internet domain names, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), all registrations and recordings thereof, and all
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state or territory thereof, or any
other country or any political subdivision thereof; (b) all reissues, extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.

“Unfunded Pension Liability” means, at any time, the aggregate amount, if any,
of the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
all determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of 5 years following a transaction which might
reasonably be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by Great Lakes or any ERISA
Affiliate as a result of such transaction.

 

Annex 32

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“Unused Line Fee” has the meaning ascribed to it in Section 1.3(b).

“U.S. Person” means any Person that is a United States Person as defined in
Section 7701(a)(30) of the IRC.

“U.S. Tax Compliance Certificate” has the meaning ascribed to such term in
Section 1.9.

“Welfare Plan” means a Plan described in Section 3(l) of ERISA.

“Withholding Agent” means Great Lakes and each Agent.

Rules of construction with respect to accounting terms used in the Agreement or
the other Loan Documents shall be as set forth or referred to in this Annex A.
All other undefined terms contained in any of the Loan Documents shall, unless
the context indicates otherwise, have the meanings provided for by the Code to
the extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.

Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine and neuter genders. The words “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; the word “or”
is not exclusive; references to Persons include their respective successors and
assigns (to the extent and only to the extent permitted by the Loan Documents)
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of the same and any successor statutes
and regulations. Whenever any provision in any Loan Document refers to the
knowledge (or an analogous phrase) of Great Lakes, such words are intended to
signify that Great Lakes has actual knowledge or awareness of a particular fact
or circumstance or that Great Lakes, if it had exercised reasonable diligence,
would have known or been aware of such fact or circumstance.

 

Annex 33

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ANNEX B

COMMITMENTS

 

Lender

   Term Loan Commitment      Revolving Loan Commitment  

Crystal Financial SPV LLC

   $ 12,000,000       $ 0   

Crystal Financial LLC

   $ 0       $ 5,000,000   

1903 Onshore Funding, LLC

   $ 12,000,000       $ 5,000,000   

Total

   $ 24,000,000       $ 10,000,000   

 

Annex 1

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Annex C

TO

CREDIT AGREEMENT

COMPLIANCE CERTIFICATE

Date:                     ,             

This Certificate is given by Great Lakes Aviation, Ltd. (“Great Lakes”) pursuant
to Section 4.3(l) of that certain Credit Agreement dated as of November 16, 2011
among Great Lakes, the Lenders from time to time party thereto, GB Merchant
Partners, LLC, as Collateral Agent, and Crystal Financial LLC, as Administrative
Agent (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.

The undersigned is duly authorized to execute and deliver this Certificate on
behalf of Great Lakes. By executing this Certificate such officer hereby
certifies to each Agent and Lenders that:

(a) the financial statements delivered with this Certificate in accordance with
Section 4.3(a), 4.3(b) and/or 4.3(c) of the Credit Agreement fairly present in
all material respects the results of operations and financial condition of Great
Lakes and its Subsidiaries as of the dates of such financial statements;

(b) I have reviewed the terms of the Credit Agreement and have made, or caused
to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Great Lakes and its Subsidiaries during the
accounting period covered by such financial statements;

(c) such review has not disclosed the existence during or at the end of such
accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth on Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Great Lakes have taken, are taking and propose to take with respect
thereto;

(d) except as set forth on Schedule 1 hereto, Great Lakes and its Subsidiaries
are in compliance with the covenants contained in Sections 3 and Section 4 of
the Credit Agreement, as demonstrated on Schedule 1 hereto; and

(e) Excess Cash Flow, as demonstrated by the calculation on Schedule 2 hereto,
for the Fiscal Quarter ending                      equals $                .

 

Annex 1

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(f) except as set forth on Schedule 3 hereto, subsequent to the date of the most
recent Certificate submitted by Great Lakes pursuant to Section 4.3(l) of the
Credit Agreement, Great Lakes has not (i) changed its name as it appears in
official filings in the jurisdiction of its organization, (ii) changed its chief
executive office, principal place of business, corporate offices, warehouses or
locations at which Collateral is held or stored, or the location of its records
concerning Collateral, (iii) changed the type of entity that it is, (iv) changed
(or has had changed) its organization identification number, if any, issued by
its jurisdiction of organization, (v) changed its jurisdiction of organization,
(vi) changed the end of its Fiscal Year, or (vii) formed any new Subsidiary or
entered into any partnership or joint venture with any other Person; and

(g) except as set forth on Schedule 4 hereto, subsequent to the date of the most
recent Certificate submitted by Great Lakes pursuant to Section 4.3(l) of the
Credit Agreement, there has been no event which would alter any of the
disclosures set forth on Schedule 5.4(b) of the Credit Agreement.

IN WITNESS WHEREOF, Great Lakes has caused this Certificate to be executed by
its                          this          day of                 ,         .

 

Great Lakes Aviation, Ltd. By     Its    

 

Annex 2

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SCHEDULE 1

CONDITIONS OR EVENTS WHICH CONSTITUTE

A DEFAULT OR EVENT OF DEFAULT

[If any condition or event exists that constitutes a Default or Event of
Default, specify nature and period of existence and what action Great Lakes has
taken, is taking or proposes to take with respect thereto; if no condition or
event exists, state “None.”]

 

Annex 3

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SCHEDULE 1

MAXIMUM LEVERAGE RATIO

(Section 4.1)

 

For purposes of Section 4.1 of the Credit Agreement, Leverage Ratio is
calculated as follows:

     

(a) The sum of:

        ________   

Funded Debt other than with respect to the Obligations as of the date of
measurement

     ________      

The Average Weekly Borrowing for the measurement period

     ________      

Divided By:

     

(b) EBITDA for the twelve (12) month period ended as of such date:

        ________   

consolidated net earnings (or loss)

     ________      

Less the sum of:

     

extraordinary gains

     ________      

interest income

     ________      

Plus the sum of:

     

non-cash extraordinary losses

     ________      

interest expense to the extent accrued or paid in cash

     ________      

income taxes to the extent accrued or paid in cash

     ________      

depreciation and amortization for such period

     ________      

Leverage Ratio

        ________   

Maximum Leverage Ratio

        ________   

In Compliance

        Yes/No   

 

Annex 4

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SCHEDULE 1

CAPITAL EXPENDITURES

(Section 4.2)

 

For purposes of Section 4.2 of the Credit Agreement, Capital Expenditures are
calculated as follows:

   The aggregate of all expenditures by Great Lakes and its Subsidiaries during
the measurement period that are capital expenditures as determined in accordance
with GAAP, whether such expenditures are paid in cash or financed      ________
  

Less: any item customarily charged directly to expense or depreciated over a
usefully life of twelve (12) months or less in accordance with GAAP

     ________   

any capitalizable spares, rotables, upgrades (software or hardware) or other
flight equipment related to any Aircraft

     ________   

an amount not to exceed $250,000 with respect to the Raddix reservation system
license upgrade

  

Capital Expenditures

     ________   

Capital Expenditure Limit for such measurement period

     ________   

In Compliance

     Yes/No   

 

Annex 5

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SCHEDULE 2

EXCESS CASH FLOW

(Section 1.5)

 

For purposes of Section 1.5 of the Credit Agreement, Excess Cash Flow is
calculated as follows:

        ________    Trailing twelve month EBITDA (or year to date EBITDA with
respect to the 2012 Excess Cash Flow payment, each as calculated per Schedule
4.1) measured as of the measurement date      

Less the sum of:

        ________   

the cash portion of Interest Expense paid during such fiscal period

     ________      

the cash portion of income taxes paid during such period

     ________      

all scheduled principal payments made in respect of the Term Loan during such
period

     ________      

the cash portion of Capital Expenditures made during such period

     ________      

solely to the extent included in the calculation of trailing twelve month EBITDA
(or year to date EBITDA with regard to the 2012 Excess Cash Flow payment),
proceeds from a Casualty Event or Asset Disposition

     

Excess Cash Flow

        ________   

 

Annex 6

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SCHEDULE 3

ORGANIZATION/LOCATION CHANGES

[If Great Lakes has (i) changed its name as it appears in official filings in
the state of its organization, (ii) changed its chief executive office,
principal place of business, corporate offices, warehouses or locations at which
Collateral is held or stored, or the location of its records concerning
Collateral, (iii) changed the type of entity that it is, (iv) changed (or has
had changed) its organization identification number, if any, issued by its
jurisdiction or organization, (v) changed its jurisdiction of organization,
(vi) changed the end of its Fiscal Year, or (vii) formed any new Subsidiary or
entered into any partnership or joint venture with any Person, such change shall
be specified below; if no such change has been made, state “None.”]

 

Annex 7

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SCHEDULE 4

CAPITALIZATION CHANGES

[If with respect to Great Lakes there has been a change in authorized Stock,
issued and outstanding Stock or the identity of the holders of any Stock, or if
with respect to Great Lakes there has been a change pertaining to preemptive
rights or any other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition of any
Stock, such change shall be set forth below; if no such change has occurred,
state “None.”]

 

Annex 8

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ANNEX D

to

CREDIT AGREEMENT

BORROWING BASE CERTIFICATE

Date:                 ,         

This Borrowing Base Certificate is given by Great Lakes Aviation, Ltd. (“Great
Lakes”) pursuant to certain Credit Agreement dated as of November 16, 2011 among
Great Lakes, the Lenders from time to time party thereto, GB Merchant Partners,
LLC, as Collateral Agent, and Crystal Financial LLC, as Administrative Agent (as
such agreement may have been amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement.

The undersigned is duly authorized to execute and deliver this Borrowing Base
Certificate on behalf of Great Lakes. By executing this Borrowing Base
Certificate such officer hereby certifies to each Agent and Lenders that the
following items, calculated in accordance with the terms and definitions set
forth in the Credit Agreement for such items are true and correct, and that
Great Lakes and its Subsidiaries are in compliance with and, after giving effect
to any currently requested Revolving Loans, will be in compliance with, the
terms, conditions, and provisions of the Credit Agreement. The calculations of
the Borrowing Base are attached to this Borrowing Base Certificate.

All initially capitalized terms used in this Borrowing Base Certificate have the
meanings set forth in the Credit Agreement unless specifically defined herein.

[Remainder of page intentionally left blank.]

 

Annex 1

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Additionally, the undersigned hereby certifies and represents and warrants to
the Agents and Lenders on behalf of Great Lakes that (i) as of the date hereof,
each representation or warranty contained in or pursuant to any Loan Document,
any agreement, instrument, certificate, document or other writing furnished at
any time under or in connection with any Loan Document, and as of the effective
date of any Revolving Loan, continuation or conversion requested above is true
and correct in all material respects (except to the extent any representation or
warranty expressly related to an earlier date), (ii) each of the covenants and
agreements contained in any Loan Document have been performed (to the extent
required to be performed on or before the date hereof or each such effective
date), (iii) no Default or Event of Default has occurred and is continuing on
the date hereof, nor will any thereof occur after giving effect to the request
above, and (iv) all of the foregoing is true and correct as of the effective
date of the calculations set forth above and that such calculations have been
made in accordance with the requirements of the Credit Agreement.

 

Great Lakes Aviation, Ltd. By:     Title:    

 

ANNEX G-1

--------------------------------------------------------------------------------

Annex E

TO

CREDIT AGREEMENT

COLLATERAL REPORTS

Provide each Agent (and if so requested by Agents, with copies for each Lender)
with each of the documents set forth below at the following times in form
satisfactory to each Agent:

 

Daily    (a) A report of any and all Aircraft owned by Great Lakes and its
Subsidiaries which are grounded for any reason, including, but not limited to by
order of any Government Authority, or due to a mechanical repair or maintenance
(other than routine mechanical repair or maintenance) detailing the Aircraft
grounded and a description of the cause of the grounding and expected time to
remedy the issue. By the 20th day of each Month   

(a) A Borrowing Base Certificate with supporting worksheets as illustrated in
Annex D,

 

(b) a report of all claims, offsets, or disputes asserted by Account Debtors
with respect to Great Lakes’ and its Subsidiaries Accounts,

 

(c) a detailed aging, by total, of Great Lakes’ Accounts,

 

(d) detailed Dash System inventory report detailing the calculation of the month
end rotable and consumable inventory at book value,

 

(e) summary aging, by vendor, of Great Lakes’ and its Subsidiaries accounts
payable and any book overdraft, and an aging, by vendor, of any held checks,

 

(f) a detailed report regarding Great Lakes’ and its Subsidiaries’ cash and Cash
Equivalents, including an indication of which amounts constitute Qualified Cash,

 

(g) a report updating the information required to be provided pursuant to
Schedule 5.31 (EAS), and

 

(h) a report detailing the percentage of Inventory and Engines (at book value)
with green tags relative to the total book value of Inventory and Engines.

Quarterly    (a) A report regarding Great Lakes’ and its Subsidiaries’ accrued,
but unpaid, ad valorem taxes, excise taxes, and passenger facility charges. Upon
request by either Agent   

(a) Copies of purchase orders and invoices for Spare Engines, Engines, Spare
Parts, Propellers, Spare Propellers, Inventory and Equipment acquired by Great
Lakes or its Subsidiaries, and

 

(b) such other reports as to the Collateral or the financial condition of Great
Lakes and its Subsidiaries, as each Agent may reasonably request.

 

ANNEX G-2

--------------------------------------------------------------------------------

EXHIBIT A

to

CREDIT AGREEMENT

FORM OF REVOLVING NOTE

New York, New York

$            ,             ,            

                     ,             

FOR VALUE RECEIVED, the undersigned (“Great Lakes”), HEREBY PROMISES TO PAY to
the order of                              (“Lender”), at the offices of Crystal
Financial LLC, a                      limited liability company, as
Administrative Agent (“Administrative Agent”), at its address set forth in
Section 9.3 of the “Credit Agreement” (as hereinafter defined), or at such other
place as Administrative Agent may designate from time to time in writing, in
lawful money of the United States of America and in immediately available funds,
the amount of                                  DOLLARS AND              CENTS
($        ,        ,        ) or, if less, the aggregate unpaid amount of all
Revolving Loans made by Lender to the undersigned under the Credit Agreement.
All capitalized terms used but not otherwise defined herein have the meanings
given to them in the Credit Agreement or in Annex A thereto.

This Revolving Note is one of the Revolving Notes issued pursuant to that
certain Credit Agreement dated as of November 16, 2011 by and among Great Lakes,
Administrative Agent, GB Merchant Partners, LLC, as Collateral Agent, Lenders
and the other Persons signatory thereto from time to time as Lenders (including
all annexes, exhibits and schedules thereto, and as from time to time amended,
restated, supplemented or otherwise modified, the “Credit Agreement”), and is
entitled to the benefit and security of the Credit Agreement, the Security
Agreements and all of the other Loan Documents referred to therein. Reference is
hereby made to the Credit Agreement for a statement of all of the terms and
conditions under which the Loans evidenced hereby are made and are to be repaid.
The date and amount of each Revolving Loan made by Lenders to Great Lakes, the
rates of interest applicable thereto and each payment made on account of the
principal thereof, shall be recorded by Administrative Agent on its books;
provided that the failure of Administrative Agent to make any such recordation
shall not affect the obligations of Great Lakes to make a payment when due of
any amount owing under the Credit Agreement or this Revolving Note in respect of
the Revolving Loans made by Lender to Great Lakes.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement, the terms of
which are hereby incorporated herein by reference. Interest thereon shall be
paid until such principal amount is paid in full at such interest rates and at
such times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.

If any payment on this Revolving Note becomes due and payable on a day other
than a Business Day, the payment thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.

 

ANNEX G-1

--------------------------------------------------------------------------------

Upon and after the occurrence of any Event of Default, this Revolving Note may,
as provided in the Credit Agreement, and without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Great
Lakes), be declared, and immediately shall become, due and payable.

Time is of the essence of this Revolving Note.

Except as provided in the Credit Agreement, this Revolving Note may not be
assigned by Lender to any Person.

THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

 

By:     Name:     Title:    

 

EXHIBIT 1.1(b)(i)-2

--------------------------------------------------------------------------------

EXHIBIT B

to

CREDIT AGREEMENT

FORM OF NOTICE OF REVOLVING LOAN

                ,         

Crystal Financial LLC,

as Administrative Agent

Two International Place

Boston, MA 02110

Attention:                                              

                  Account Manager

Ladies and Gentlemen:

The undersigned, Great Lakes Aviation, Ltd. (“Great Lakes”) refers to the Credit
Agreement, dated as of November 16, 2011 (the “Credit Agreement,” the terms
defined therein being used herein as therein defined), by and among the
undersigned, GB Merchant Partners, LLC, as Collateral Agent, Crystal Financial
LLC, as Administrative Agent for Lenders and the Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 1.1(a) of the Credit Agreement, that
the undersigned hereby requests a Revolving Loan under the Credit Agreement, and
in that connection sets forth below the information relating to such Revolving
Loan as required by Section 1.1(a) of the Credit Agreement:

The date of the requested Revolving Loan is                 ,         .

The aggregate amount of the requested Revolving Loan is $                    .

The requested Revolving Loan is a LIBOR Loan.

The requested Revolving Loan is to be sent to:

[Name of Bank]

[City of Bank]

Beneficiary:

Account No.: [number]

ABA No.: [number]

Attn: [name]

The undersigned hereby certifies that all of the statements contained in
Section 6.2 of the Credit Agreement are true and correct in all material
respects on the date hereof, and will be true in all material respects on the
date of the requested Revolving Loan, before and after giving effect thereto and
to the application of the proceeds therefrom.

 

EXHIBIT 1.1(b)(ii)-1

--------------------------------------------------------------------------------

Great Lakes Aviation, Ltd. By:     Name:     Title:    

 

EXHIBIT 1.1(b)(ii)-2

--------------------------------------------------------------------------------

EXHIBIT C

to

CREDIT AGREEMENT

FORM OF TERM NOTE

New York, New York

$        ,        ,             

                     ,         

FOR VALUE RECEIVED, the undersigned (“Great Lakes”), HEREBY PROMISES TO PAY to
the order of                              (“Lender”) at the offices of Crystal
Financial LLC, a                      limited liability company, as
Administrative Agent for Lenders (“Administrative Agent”), at its address set
forth in Section 9.3 of the Credit Agreement, or at such other place as
Administrative Agent may designate from time to time in writing, in lawful money
of the United States of America and in immediately available funds, the amount
of                                      DOLLARS AND              CENTS
($        ,        ,        ). All capitalized terms used but not otherwise
defined herein have the meanings given to them in the “Credit Agreement” (as
hereinafter defined) or in Annex A thereto.

This Term Note is one of the Term Notes issued pursuant to that certain Credit
Agreement dated as of November 16, 2011 by and among Great Lakes, Administrative
Agent, GB Merchant Partners, LLC, as Collateral Agent, Lenders and the other
Persons signatory thereto from time to time as Lenders (including all annexes,
exhibits and schedules thereto and as from time to time amended, restated,
supplemented or otherwise modified, the “Credit Agreement”), and is entitled to
the benefit and security of the Credit Agreement, the Security Agreements and
all of the other Loan Documents referred to therein. Reference is hereby made to
the Credit Agreement for a statement of all of the terms and conditions under
which the Loans evidenced hereby are made and are to be repaid. The principal
balance of the Term Loan, the rates of interest applicable thereto and the date
and amount of each payment made on account of the principal thereof, shall be
recorded by Administrative Agent on its books; provided that the failure of
Administrative Agent to make any such recordation shall not affect the
obligations of Great Lakes to make a payment when due of any amount owing under
the Credit Agreement or this Term Note.

The principal amount of the indebtedness evidenced hereby shall be payable in
the amounts and on the dates specified in the Credit Agreement. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement. The terms of the Credit Agreement are hereby incorporated
herein by reference.

If any payment on this Term Note becomes due and payable on a day other than a
Business Day, the payment thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.

 

EXHIBIT 1.1(b)(ii)-1

--------------------------------------------------------------------------------

Upon and after the occurrence of any Event of Default, this Term Note may, as
provided in the Credit Agreement, and without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Great
Lakes), be declared, and immediately shall become, due and payable.

Time is of the essence of this Term Note.

Except as provided in the Credit Agreement, this Term Note may not be assigned
by Lender to any Person.

THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAW PRINCIPLES.

 

By:     Name:    

Title:

 

EXHIBIT 1.1(b)(ii)-2

--------------------------------------------------------------------------------

EXHIBIT D

to

CREDIT AGREEMENT

ASSIGNMENT AGREEMENT

THIS ASSIGNMENT AGREEMENT (this “Agreement”) is made as of                     ,
         by and between                              (“Assignor Lender”) and
                             (“Assignee Lender”) and acknowledged and consented
to by Crystal Financial LLC, as Administrative Agent (“Administrative Agent”)
and GB Merchant Partners, LLC, as Collateral Agent (the “Collateral Agent” and
together with the Administrative Agent, each an “Agent” and collectively the
“Agents”). All capitalized terms used in this Agreement and not otherwise
defined herein will have the respective meanings set forth in the Credit
Agreement as hereinafter defined.

RECITALS:

WHEREAS, Great Lakes Aviation, Ltd. (“Great Lakes”), each Agent, Assignor Lender
and other Persons signatory thereto as Lenders have entered into that certain
Credit Agreement dated as of November 16, 2011 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”)
pursuant to which Assignor Lender has agreed to make certain Loans to Great
Lakes;

WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a portion] of
its interest in the Loans (as described below) and the Collateral and to
delegate to Assignee Lender [all/a portion] of its Commitments and other duties
with respect to such Loans and Collateral;

WHEREAS, Assignee Lender desires to become a Lender under the Credit Agreement
and to accept such assignment and delegation from Assignor Lender; and

WHEREAS, Assignee Lender desires to appoint Administrative Agent to serve as
Administrative Agent for Assignee Lender and Collateral Agent to serve as
Collateral Agent for Assignee Lender under the Credit Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions,
and covenants herein contained, Assignor Lender and Assignee Lender agree as
follows:

1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE

1.1 Assignment. Assignor Lender hereby transfers and assigns to Assignee Lender,
without recourse and without representations or warranties of any kind (except
as set forth in Section 3.2), [all/such percentage] of Assignor Lender’s right,
title, and interest in [the Loans], [the Revolving Loan ], [the Term Loan ] the
Loan Documents and the Collateral as will result in Assignee Lender having as of
the Effective Date (as hereinafter defined) a Pro Rata Share thereof, as
follows:

 

EXHIBIT 8.1(a) 1

--------------------------------------------------------------------------------

Assignee Lender’s Loans

   Principal Amount      Pro Rata Share  

Revolving Loan

   $ ____________         ____ % 

Term Loan

   $ ____________         ____ % 

1.2 Delegation. Assignor Lender hereby irrevocably assigns and delegates to
Assignee Lender [all/a portion] of its Commitments and its other duties and
obligations as a Lender under the Loan Documents equivalent to the Pro Rata
Shares set forth above.

1.3 Acceptance by Assignee Lender. By its execution of this Agreement, Assignee
Lender irrevocably purchases, assumes and accepts such assignment and delegation
and agrees to be a Lender with respect to the delegated interest under the Loan
Documents and to be bound by the terms and conditions thereof. By its execution
of this Agreement, Assignor Lender agrees, to the extent provided herein, to
relinquish its rights and be released from its obligations and duties under the
Credit Agreement.

1.4 Effective Date. Such assignment and delegation by Assignor Lender and
acceptance by Assignee Lender will be effective and Assignee Lender will become
a Lender under the Loan Documents as of [the date of this
Agreement][                 ,             ] (“Effective Date”) and upon payment
of the Assigned Amount (as such term is defined below). [Interest and Fees
accrued prior to the Effective Date are for the account of Assignor Lender, and
Interest and Fees accrued from and after the Effective Date are for the account
of Assignee Lender.]

1.5 [Retained Interests. Notwithstanding anything in this Agreement to the
contrary, any interest assigned pursuant to this Agreement by Assignor Lender to
Assignee Lender shall not include any Retained Interests and such Retained
Interests are not being sold or assigned hereunder by the Assignor Lender to the
Assignee Lender. For purposes herein, “Retained Interests” means, with respect
to such assigned interests, the following interest, rights and obligations in
such assigned interests and under the Credit Agreement and the Note(s): (a) all
of the obligations, if any, to provide additional funding with respect to such
assigned interests or any other revolving commitment; and (b) any unused line
fees associated with the additional funding obligations that are being retained
in accordance with clause (a) above.]1

2. INITIAL PAYMENT AND DELIVERY OF NOTES

2.1 Payment of the Assigned Amount. Assignee Lender will pay to Assignor Lender,
in immediately available funds, not later than 11:00 a.m. (Eastern Standard Time
on the Effective Date, an amount equal to its Pro Rata Share of the then
outstanding principal amount of the Loans as set forth above in Section 1.1
[together with accrued interest, fees and other amounts as set forth on Schedule
2.1] (the “Assigned Amount”).

 

 

1 

Include this Section if assigned interests will be subject to Retained Interests

 

EXHIBIT 8.1(a) 2

--------------------------------------------------------------------------------

2.2 Execution and Delivery of Notes. Following payment of the Assigned Amount,
Assignor Lender will deliver to Administrative Agent the Notes (if any)
previously delivered to Assignor Lender for redelivery to Great Lakes and
Administrative Agent will obtain from Great Lakes for delivery to [Assignor
Lender and] Assignee Lender, new executed Notes evidencing Assignee Lender’s
[and Assignor Lender’s respective] Pro Rata Share[s] in the Loans after giving
effect to the assignment described in Section 1. Each new Note will be issued in
the aggregate maximum principal amount of the [applicable] Commitment [of the
Lender to whom such Note is issued] OR [the Assignee Lender].

3. REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1 Assignee Lender’s Representations, Warranties and Covenants. Assignee Lender
hereby represents, warrants, and covenants the following to Assignor Lender and
each Agent:

a) This Agreement is a legal, valid, and binding agreement of Assignee Lender,
enforceable according to its terms;

b) The execution and performance by Assignee Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to, or consent or approval by any Governmental
Authority;

c) Assignee Lender is familiar with transactions of the kind and scope reflected
in the Loan Documents and in this Agreement;

d) Assignee Lender has made its own independent investigation and appraisal of
the financial condition and affairs of Great Lakes and its Subsidiaries, has
conducted its own evaluation of the Loans, the Loan Documents and Great Lakes’
creditworthiness, has made its decision to become a Lender to Great Lakes under
the Credit Agreement independently and without reliance upon Assignor Lender or
either Agent, and will continue to do so;

e) Assignee Lender is entering into this Agreement in the ordinary course of its
business, and is acquiring its interest in the Loans for its own account and not
with a view to or for sale in connection with any subsequent distribution;
provided, however, that at all times the distribution of Assignee Lender’s
property shall, subject to the terms of the Credit Agreement, be and remain
within its control;

f) No future assignment or participation granted by Assignee Lender pursuant to
Section 8.1 of the Credit Agreement will require Assignor Lender, either Agent,
or Great Lakes to file any registration statement with the Securities and
Exchange Commission or to apply to qualify under the blue sky laws of any state;

g) Assignee Lender has no loans to, written or oral agreements with, or equity
or other ownership interest in Great Lakes or any of its Subsidiaries;

h) Assignee Lender will not enter into any written or oral agreement with, or
acquire any equity or other ownership interest in, Great Lakes or any of its
Subsidiaries without the prior written consent of each Agent; and

 

EXHIBIT 8.1(a) 3

--------------------------------------------------------------------------------

i) As of the Effective Date, Assignee Lender (i) is entitled to receive payments
of principal and interest in respect of the Obligations without deduction for or
on account of any taxes imposed by the United States of America or any political
subdivision thereof, and (ii) is not subject to capital adequacy or similar
requirements, and Assignee Lender will indemnify each Agent from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, or expenses that result from Assignee Lender’s failure to fulfill its
obligations under the terms of Section 1.9(c) of the Credit Agreement or from
any other inaccuracy in the foregoing.

3.2 Assignor Lender’s Representations, Warranties and Covenants. Assignor Lender
hereby represents, warrants and covenants the following to Assignee Lender:

a) Assignor Lender is the legal and beneficial owner of the Assigned Amount;

b) This Agreement is a legal, valid and binding agreement of Assignor Lender,
enforceable according to its terms;

c) The execution and performance by Assignor Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to or consent or approval by any Governmental
Authority;

d) Assignor Lender has full power and authority, and has taken all action
necessary to execute and deliver this Agreement and to fulfill the obligations
hereunder and to consummate the transactions contemplated hereby;

e) Assignor Lender is the legal and beneficial owner of the interests being
assigned hereby, free and clear of any adverse claim, lien, encumbrance,
security interest, restriction on transfer, purchase option, call or similar
right of a third party; and

f) This Assignment by Assignor Lender to Assignee Lender complies, in all
material respects, with the terms of the Loan Documents.

4. LIMITATIONS OF LIABILITY

Neither Assignor Lender (except as provided in Section 3.2) nor either Agent
makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans or
other Obligations, (b) the creation, validity, genuineness, enforceability,
sufficiency, value or collectability of any of them, (c) the amount, value or
existence of the Collateral, (d) the perfection or priority of any Lien upon the
Collateral, or (e) the financial condition of Great Lakes or other obligor or
the performance or observance by Great Lakes of its obligations under any of the
Loan Documents. Neither Assignor Lender nor either Agent has or will have any
duty, either initially or on a continuing basis, to make any investigation,
evaluation, appraisal of, or any responsibility or liability with respect to the
accuracy or completeness of, any information provided to Assignee Lender which
has been provided to Assignor Lender or either Agent by Great Lakes. Nothing in
this Agreement or in the Loan Documents shall impose upon the Assignor Lender or
either Agent any fiduciary relationship in respect of the Assignee Lender.

 

EXHIBIT 8.1(a) 4

--------------------------------------------------------------------------------

5. FAILURE TO ENFORCE

No failure or delay on the part of either Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.

6. NOTICES

Unless otherwise specifically provided herein, any notice or other communication
required or permitted to be given will be in writing and addressed to the
respective party as set forth below its signature hereunder, or to such other
address as the party may designate in writing to the other.

7. AMENDMENTS AND WAIVERS

No amendment, modification, termination, or waiver of any provision of this
Agreement will be effective without the written concurrence of Assignor Lender,
each Agent and Assignee Lender.

8. SEVERABILITY

Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law. In the event any
provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.

9. SECTION TITLES

Section and Subsection titles in this Agreement are included for convenience of
reference only, do not constitute a part of this Agreement for any other
purpose, and have no substantive effect.

10. SUCCESSORS AND ASSIGNS

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

 

EXHIBIT 8.1(a) 5

--------------------------------------------------------------------------------

11. APPLICABLE LAW

THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE.

12. COUNTERPARTS

This Agreement and any amendments, waivers, consents, or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.

[Signature page follows]

 

EXHIBIT 8.1(a) 6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.

 

ASSIGNEE LENDER:     ASSIGNOR LENDER:         By:         By:     Title:        
Title:     Notice Address:     Notice Address:                        

 

ACKNOWLEDGED AND CONSENTED TO: CRYSTAL FINANCIAL LLC, as Administrative Agent
By:     Title:     GB MERCHANT PARTNERS, LLC, as Collateral Agent By:     Title:
   

[Great Lakes Aviation, Ltd.]2

By:

Its:                     ]

 

 

2 

If required per the Credit Agreement.

 

EXHIBIT 8.1(a) 7

--------------------------------------------------------------------------------

SCHEDULE 2.1

 

Assignor Lender’s Loans

  

Principal Amount

      

Revolving Loan

   $                                    

 

 

 

Term Loan

   $        

 

 

 

Subtotal

   $        

 

 

 

Accrued Interest

   $        

 

 

 

Unused Line Fee

   $     

Other + or -$

   $        

 

 

 

Total

   $        

 

 

 

All determined as of the Effective Date.

 

1