Exhibit 10.4

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS
REGISTERED UNDER SAID ACT OR LAWS OR UNLESS AN EXEMPTION IS AVAILABLE UNDER SAID
ACT OR LAWS.

 

TRANSFER OF THIS NOTE IS RESTRICTED IN THE MANNER SPECIFIED IN SECTION 2.07 OF
THE MORTGAGE.

 

 

SKYWEST AIRLINES, INC.,

a Utah corporation

 

NOTE DUE MARCH 21, 2006, ISSUED IN CONNECTION WITH A LOAN TO SKYWEST AIRLINES,
INC. AND SECURED BY FOUR BOMBARDIER REGIONAL JET MODEL CL-600-2B19 AIRCRAFT WITH
MANUFACTURER’S SERIAL NUMBER 7799, 7801, 7850 AND 7852 AND INITIALLY BEARING
CORRESPONDING UNITED STATES FEDERAL AVIATION ADMINISTRATION REGISTRATION NO.
N698BR, N699BR, N709BR AND N710BR AND TWO GENERAL ELECTRIC CF34-3B1 ENGINES
ATTACHED TO EACH AIRCRAFT.

 

No. R-1

 

US $60,000,000

September 21, 2005

 

SKYWEST AIRLINES, INC., a Utah corporation (“Borrower”), hereby promises to pay
to C.I. T. Leasing Corporation, a Delaware corporation, or its registered
transferees, in accordance with that certain Aircraft Mortgage and Security
Agreement dated as of September 21, 2005 (the “Mortgage”), the principal sum of
SIXTY MILLION AND 00/100 DOLLARS ($60,000,000), to be due and payable on the
Final Maturity Date.  Interest on the unpaid principal amount hereof from time
to time outstanding from and including the date hereof until such principal
amount is paid in full shall accrue at the Floating Rate as provided for in
Sections 2.02 and 2.03 of the Mortgage, and shall be payable in arrears on each
Payment Date and on the Final Maturity Date.  A schedule of the Payment Dates is
set for on Annex A hereto. Notwithstanding the foregoing, the final payment
shall be an amount sufficient to discharge in full the unpaid principal amount,
accrued and unpaid interest and all other amounts due and owing to the Note
Holder under the Operative Documents.

 

This Note shall bear interest at the Past Due Rate on any principal hereof,
interest and other amounts due hereunder, not paid when due (whether at stated
maturity, by acceleration or otherwise), for any period during which the same
shall be overdue, payable on demand by the holder hereof given through Security
Trustee.  Interest on past-due amounts shall be calculated on the basis of a
year of 360 days and the actual days elapsed.  In the event the principal of or
interest on this Note or other amount payable hereunder is not paid in full when
due (whether at stated maturity, by acceleration or otherwise), the period
applicable to the Past Due Rate if and so long as the Applicable Rate for this
Note is based on LIBOR shall be either (i) a period commencing on the due date
of such principal, interest or other amount and ending on the next succeeding
Business Day and thereafter each period commencing on the last day of the
preceding period and ending on the next succeeding Business Day, or (ii) such
other period or periods (not greater than six months) as the Security Trustee
may, at any time and from time to time during the period the same remains
past-due, select in its sole discretion for the purpose of determining the Past
Due Rate.

 

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Interest shall be calculated as provided for in Sections 2.02 and 2.03 of the
Mortgage.  If any sum payable hereunder falls due on a day that is not a
Business Day, then such sum shall be payable on the next succeeding Business Day
together with interest thereon at the Applicable Rate from and including the
scheduled due date to but excluding such next succeeding Business Day; provided,
that if such succeeding Business Day falls in the next calendar month, such
payment shall be made on the preceding Business Day.

 

Principal and interest and other amounts due hereon shall be payable in Dollars
in immediately available funds prior to 11:15 a.m., New York City time, on the
due date thereof, to Security Trustee at it offices, and Security Trustee shall,
subject to the terms and conditions of the Mortgage, promptly remit all such
amounts so received by it to the Note Holder holding this Note in accordance
with the terms of the Mortgage at such account or accounts at such financial
institution or institutions as such Note Holder shall have designated to
Security Trustee in writing, in immediately available funds, such payment to be
made, in the case of any such designated account in New York City, New York
prior to 2:00 p.m. New York City time, on the due date thereof.  If Security
Trustee, through negligence or willful misconduct, shall fail to make any such
payment as provided in the immediately foregoing sentence after its receipt of
funds at the place and prior to the time specified above, Security Trustee, in
its individual capacity and not as trustee, agrees to compensate the Note Holder
holding this Note for loss of use of funds in a commercially reasonable manner,
and Borrower shall have no liability for, and the Mortgage Estate shall not
secure, any such loss or any overdue interest on this Note in connection with
any such failure of Security Trustee to timely distribute funds.  All such
payments by Borrower and Security Trustee shall be made free and clear of and
without reduction for or on account of all wire or other like charges.

 

 

The Note Holder holding this Note, by its acceptance hereof, agrees that, except
as otherwise expressly provided in the Mortgage, each payment received by it in
respect hereof shall be applied, first, to the payment of any amount (other than
the principal of or the Breakage Amount (if any) or interest on this Note) due
in respect of this Note, second, to the payment of the Breakage Amount, if any,
and interest hereon (as well as any interest on overdue principal and, to the
extent permitted by law, interest and other amounts payable hereunder) due and
payable hereunder, third, to the payment of the principal of this Note then due
and fourth, the balance, if any, remaining thereafter, to the payment of the
principal of this Note remaining unpaid, in the manner set forth in the “fourth”
clause of Section 2.05 of the Mortgage.

 

This Note is one of the Notes referred to in the Mortgage that have been or are
to be issued by Borrower pursuant to the terms of the Mortgage.  Reference is
hereby made to the Mortgage and the Operative Documents referred to therein for
a statement of the rights and obligations of the Note Holder holding this Note,
and the nature and extent of the security for this Note and of the rights and
obligations of the other Note Holders, and the nature and extent of the security
for the other Notes, to all of which terms and conditions in the Mortgage and
such Operative Documents the Note Holder holding this Note agrees by its
acceptance hereof.

 

There shall be maintained a Note Register for the purpose of registering
transfers and exchanges of this and other Notes at the offices of the Security
Trustee in the manner provided in Section 2.07 of the Mortgage.  Subject to the
Operative Documents and the next following paragraphs, this Note or any interest
herein may be assigned or transferred, and the Notes are exchangeable for a like
aggregate original principal amount of Notes of any authorized denomination, as
requested by the Note Holder surrendering the same; provided that no such
transfer shall be effective until recorded in the Note Register.

 

Prior to the due presentment for registration of transfer of this Note, Borrower
and Security Trustee may deem and treat the person in whose name this Note is
registered on the Note Register as the

 

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absolute owner of this Note and the Note Holder for the purpose of receiving
payment of all amounts payable with respect to this Note and for all other
purposes whether or not this Note is overdue, and neither Borrower nor Security
Trustee shall be affected by notices to the contrary.

 

This Note is subject to prepayment only as permitted by Sections 2.10 and 2.11
of the Mortgage and such Note Holder, by its acceptance of this Note, agrees to
be bound by said provisions.

 

This Note shall not be secured by or be entitled to any benefit under the
Mortgage or be valid or obligatory for any purpose, unless authenticated by the
Security Trustee as evidenced by the manual signature of one of its authorized
signatories on the certificate below.

 

Capitalized terms used herein and not otherwise defined shall have the meaning
assigned such terms in Appendix A to the Mortgage.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK.

 

 

[Remainder of Page Intentionally Blank – Signature Page Follows]

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be executed in its
corporate name by its officer thereunto duly authorized, as of the day and year
first above written.

 

 

SKYWEST AIRLINES, INC.,

 

Borrower

 

 

 

 

 

By:

/s/ Michael J. Kraupp

 

 

Name:

Michael J. Kraupp

 

Title:

Vice President Finance and Assistant Treasurer

 

[Signature page to Note]

 

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ANNEX A

TO

NOTE

 

SCHEDULED PAYMENT DATES

 

Payment Date

 

Principal

 

Outstanding Principal

 

 

 

 

 

 

 

21-Oct-2005

 

 

$

—

 

$

60,000,000.00

 

21-Nov-2005

 

 

$

—

 

$

60,000,000.00

 

21-Dec-2005

 

 

$

—

 

$

60,000,000.00

 

21-Jan-2006

 

 

$

—

 

$

60,000,000.00

 

21-Feb-2006

 

 

$

—

 

$

60,000,000.00

 

21-Mar-2006

 

 

$

60,000,000.00

 

$

—

 

 

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RECEIPT

 

I,                                 , as special counsel to CIT Leasing
Corporation, a Delaware corporation (“Lender”), hereby acknowledge receipt of
the original Note No. R-1 dated September      , 2005, executed by Borrower in
favor of Lender.

 

 

 

 

 

 

 

 

September        , 2005

 

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