r 8/29/2012 14:04 Stephens Inc. Stephens Inc.

August 30, 2012

Mr. Ted Vallas CP Air, Inc. 5670 El Camino Real Ste. D Carlsbad, CA 92008

Dear Ted: 

# Stephens

Jackson T. Stephens, 1923-2005 Chairman Emeritus in Perpetuity

Enclosed is an engagement letter for your review. Please let us know if you have any questions or comments on the letter. In case you need this today, I will also send a copy via facsimile.

We remain excited about working with you and look forward to getting started.

Michael Miller

Enclosure

cc: Maximo Blandon Peter Pappas

Stephens Inc. 300 Crescent Court Investment Banking Suite 600 Dallas. TX 75201 214-258-2700 t 

# I www.stephens.com 214-258-2750 f 877-749-9991 D 3/10, 8/29/,2012 14: 04 Stephens Inc. Stephe.ns Inc.

August 30, 2012

Carlsbad-Palomar Airlines, Inc. 

### 5670 El Camino Real Ste. D Carlsbad, CA 

### 92008 Attn: Ted Vallas, Chainnan

Dear Ted, 

# Stephens

Jackson T. Stephens, 1923-2005 Chairman Emeritus in Perpetuity

Stephens Inc. is pleased to be engaged by Carlsbad-Palomar Airlines, Inc. (the "Company") to provide investment banking services to the Company on the terms set forth in this letter. We understand that the Company 

### is engaging Stephens Inc. ("Stephens") to assist the Company in evaluating and pursuing a private offering (the "Offering") of securities. 

### An Offering includes the private placement of equity securities or equity-related or equity-linked securities or debt securities or debt facilities (the "Securities"). In the event of a private placement by the Company or any of its affiliates, Stephens 

### will assist the Company in placing the Securities 

### with prospective investors. Stephens will not have any obligation to purchase any of the Securities as principal for resale. The tenns of a private placement 

### will be subject to the approval of the Company, and Stephens 

### is not authorized to make any agreement or commitment

on behalf ofthe Company.

Services:

In c01mection with the Offering, if requested by the Company, Stephens 

### will assist the Company with:

1) preparing an information memorandum or other materials describing the Company, the Securities, if applicable, and other relevant matters;

2) developing a list ofpotential investors;

3) contacting prospective investors or their representatives with regard to the Offering;

4) conducting due diligence, responding to due diligence requests and conducting negotiations with prospective investors or their representatives;

5) preparing and making presentations to the Company's Board ofDirectors;

6) determining the timing, structure and pricing of the Offering and coordinating the closing of the Offering; and

Stephens Inc. 65 East 55th Street 212.891. 1700 

### t www.stephens.com 22nd Floor 212.891 • 1730 f New York, NY 10022 

### D 4/10

# -------------------------------- 8/29(2012 14:04 Stephens Inc. Stephens Inc.

August 30, 2012 Page 2 of5

7) provide such other investment banking services as may be mutually agreed upon by Stephens and the Company.

Transaction Fees:

In consideration of the services to be rendered by Stephens pursuant to this agreement, the Company agrees to pay Stephens the following fees:

(i) A one-time fee ("Closing Fee") of $750,000 upon the initial closing of an Offering.

(ii) Upon closing of any Offering, the Company 

### will pay Stephens a success fee ("Success Fee'') in the amount of 6.00% on the portion of the gross proceeds of the Offering up to and including $100,000,000 and 4.00% of the gross proceeds of the Offering in excess of $100,000,000; provided that the Success Fee shall be reduced by the amount of the fees previously paid pursuant to subsection 

### (i) immediately above. If more 

### than one closing is held to complete the Offering, then only the portion of the Success Fee applicable to each closing shall be payable at such closing. The Company agrees that during the term of the engagement hereunder, all inquiries, whether direct or indirect, from prospective investors will be referred to Stephens.

Indemnification:

The Company agrees to indemnify and hold Stephens harmless as provided in Exhibit A attached hereto. This agreement (including its exhibits) incorporates the entire understanding of the parties with respect to this engagement of Stephens by the Company and supersedes all previous agreements regarding such engagement should they exist.

General:

The term of Stephens' engagement under this letter agreement (the "Engagement Period',) will be for twelve months, unless extended by mutual written consent. All provisions of the indemnification and contribution rider attached hereto as Exhibit A ("Rider") shall survive the expiration or termination of this engagement agreement, and, 

### in the event that an Offering is completed during the Engagement Period or within one year after the Engagement Period, then Stephens shall be entitled to receive the transaction fees described herein. Additionally, the Company 

### will grant Stephens a right of :first refusal to act as the Company's exclusive agent in connection with any private placement, merger or acquisition, and as lead manager 

### with respect to any public offering or other financing that may be undertaken by the Company during the Engagement Period and for a period of 12 months thereafter.

The Company recognizes and confirms that Stephens, acting pursuant to this engagement, 

### (i) will use and rely on infonnation in reports and other information provided by D 5i10,**8/29~2012** 14:04 Stephens Inc. Stephens Inc.

August 30,2012 Page 3 of5

others, including, without limitation, information provided by or on behalf of the Company or potential transaction counterparties and information available from subscription services or other public sources; (ii) does not assume responsibility for the accuracy, reliability or completeness of such information and does not undertake to independently verify such information; (iii) will
not perform any audit (financial or otherwise) or forensic accounting services; (iv) will not make

an appraisal of any assets or liabilities of the Company or of any potential transaction counterparties or otherwise assess the solvency for bankruptcy law purposes of the Company or of any potential transaction counterparties; and (v) with respect to any financial forecasts (including cost savings and synergies) that may be furnished to or discussed with us by the Company or any other person in connection with any proposed transaction, will assume that such forecasts have been reasonably prepared and reflect the best then currently available estimates and judgment of the Company's or such other person's management. The Company hereby
warrants and**cove~ts** that any informational memorandum relating to a potential offering or other transaction involving the Company ("Memorandum") and other offering materials, and any other information relating to the Company or the Offering (the "Offering Materials"), will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained therein, in the light of circumstances under which they were made, not misleading.

The Company agrees to provide Stephens with (i) prompt notice of any material development affecting the Company or the occurrence of any event or other change known to the Company that could result in the Memorandum or other Offering Materials containing an untrue
statement of a material fact or omitting to state any material fact necessary to make the
statements contained therein, in the light of the circumstances lUlder which they were made, not misleading, (ii) copies of any financial reports as soon as reasonably practicable, (iii) copies of all communications sent to investors 

### in the Offering for a period of three (3) years following the last closing of the Offering, and (iv) such other information concerning the business and financial condition of the Company as Stephens may from time to time reasonably request. Stephens will have the right to approve all Offering Materials and other written communications furnished by or on behalf of the Company in connection with the Offering, and the Company 

### will cause to be furnished to Stephens and the purchasers of the Securities, on the closing date of the Offering, copies of such opinions of counsel and such other documents, letters, certificates and opinions as Stephens or the purchasers may reasonably request in form and substance reasonably satisfactory to Stephens and its counsel or the purchasers and their counsel.

The Company agrees that any information or advice rendered by Stephens or its representatives 

### in connection with this engagement is for the internal use of the Company only. The Company represents and warrants that no person or organization other than Stephen.s is, as a result of any action by the Company, entitled to compensation for services as a finder, broker, financial adviser, placement agent or investment banker in connection 

### with an Offering. The form and content of the Memorandum, and any amendments or supplements thereto, used in connection with the Offering of the Securities shall be approved by the Company and shall be the property of the Company.

In the event of an Offering, the Company agrees to retain experienced securities counsel with approval by Stephens, not to be unreasonably withheld and to require such counsel to render customary opinions that may be relied upon by the Company and Stephens regarding compliance with applicable federal and state securities laws. 

### D 6/10**,8/29/~012** 14:04 Stephens Inc. Stephens Inc.

August 30, 2012 Page 4 of5

If an Offering is completed and becomes a matter of public record, Stephens shall be entitled, at its expense, to place announcements, which may contain the Company's corporate logo, in such newspapers**an~** other media as it may choose stating that Stephens acted as placement agent for the Offering.

Please note that 

### in the ordinary course of business Stephens and its affiliates at any time
may hold long or short positions, and may trade or otherwise effect transactions as principal or for the accounts of customers, in debt or equity securities or options on securities of any party that may be involved in the Offering. The Company recognizes and consents that (i) Stephens acts, and may act, as a finder, placement agent, underwriter, financial adviser, investment banker

or in other capacities for other persons who wish to raise equity or debt capital or to buy, sell or finance businesses or engage in other transactions, and Stephens contacts, and may contact, the

same potential investors or transaction counterparties on behalf of multiple persons, and (ii) potential conflicts of interest arise for Stephens, or may arise, as a result of such other activities and relationships; however, Stephens 

### will not serve as an investment banker in connection with the Offering for any participant in the Offering other than the Company or its affiliates.

This agreement has been and is made solely for the benefit of Stephens, the Company and the persons, agents, employees, officers, directors and controlling persons referred to in Exhibit A and their respective successors, assigns and heirs, and no other person shall acquire or have
any right under or by virtue of this agreement. Stephens shall act as an independent contractor under this engagement agreement and shall be deemed not to be a fiduciary. Any duties arising
out of Stephens' engagement hereunder shall be owed solely to the Company. 

### D 7/10.8/29/2012 14:04 Stephens Inc. Stephens Inc.

August 30, 2012 Page 5 of5

If this letter correctly states our agreement, please so indicate by signing below and returning a signed copy to us. Upon receipt of 

### a signed copy of this letter, the 

### terms of such letter shall constitute a binding agreement between Stephens and the Company.

Very 

### truly yours,



### STEPHENS INC.

By:,

__________ _ Title:,

___________ _

ACCEPTED THIS DAY OF

___ , 2012



### CARLSBAD-PALOMAR AIRLINES, INC.

By:

By: Ted Vallas Chairman

Peter Pappas Strategic Advisor to the Chairman D 8/10• 8/29/2012 14:04 Stephens Inc. Stephens Inc.

Carlsbad-Palomar Airlines, Inc. August 30, 2012

EXHIBIT A



### INDEMNIFICATION AND CONTRIBUTION

(a) The Company will indenmify and hold harmless Stephens Inc. ("Stephens") and its affiliates, and their respective officers, directors, advisors, representatives, agents, employees, and each other person controlling Stephens or any of its affiliates within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended (each such party, including Stephens, an "Indemnified Person'), from and against any and all losses, claims, damages and liabilities, joint or several (collectively, "Damages"), related to or arising out of any matter referred to in the engagement letter to which this Exhibit is appended (the "Agreement"), including an Indemnified Person's services thereunder, except to the extent such Damages are finally, judicially detennined to have resulted directly and primarily from the gross negligence or willful misconduct of an Indemnified Person.

(b) The Company will also reimburse each Indemnified Person immediately upon request for all expenses (including without limitation reasonable fees and disbursements of legal counsel, and usual and customary expenses for an Indemnified Person's involvement in discovery proceedings or testimony) incurred in connection with any threatened or commenced inquiry, investigation, action or legal, administrative or judicial proceeding**(collectively~** "Proceedings"), related to or arising out of any matter referred to in the Agreement, including an Indemnified Person's services thereunder. The reimbursement obligations contained herein shall apply whether or not Stephens or any other Indemnified Person is a formal party to any Proceeding and are intended to cover, among other things, reimbursement of expenses incurred for reviewing, investigating or responding to, or otherwise in connection with, any claims, demands, allegations, discovery requests, depositions, investigative testimony, hearings, arbitrations, trials, appeals or other proceedings related to or arising out of any matter referred to in the Agreement, including an Indemnified Person's services thereunder. To the extent that any expenses reimbursed under this paragraph are finally, judicially determined to have resulted directly and primarily from such Indemnified Person's gross negligence or willful misconduct in performing the services which are the subject of the Agreement, Stephens shall promptly refund
to the Company the portion of amounts advanced under this paragraph in respect of reimbursement of expenses which is attributable to expenses incurred in relation to the act or omission of such Indemnified Person who is the subject of such determination.

(c) The Company and Stephens agree that if, for any reason, any indemnification or reimbursement sought pursuant to this Exhibit is unavailable or is insufficient to hold any Indemnified Person harmless as and to the extent provided in this Exhibit, then, whether or not Stephens is the person entitled to indemnification, the Company and Stephens shall each contribute to amounts paid or payable by the Indemnified Person in respect of the Damages and expenses (including all legal and other fees and expenses incurred 

### in defending any action or claim) for which such indemnification or reimbursement is unavailable or insufficient, 

### in such proportion as is appropriate 

### (i) to reflect the relative benefits received (or anticipated to be received) by the Company and its stockholders, on the one hand, and Stephens, on the other, in connection with the transaction(s) contemplated 

### in the Agreement and (ii) 

### if the allocation on that basis is not pennitted by applicable law, to reflect not only the relative benefits referred to in 

### D 9/108/29/2012 14:04 Stephens Inc. Stephens Inc.**~** ' 

# .

Carlsbad-Palomar Airlines, Inc. August 30,2012

clause (i) above but also such parties' relative fault in connection with the matters as to which such Damages relate, as well as any relevant equitable considerations; provided that in no event shall the amount to be contributed by Stephens exceed the amount of fees actually received by Stephens under the Agreement (excluding any amounts received by Stephens as reimbursement of expenses). It is hereby agreed that the relative benefits to the Company and its stockholders,

on the one hand, and Stephens, on the other hand, with respect to the Agreement shall be deemed
to be 

### in the same proportion as (x) the total value paid, transferred, exchanged or received or proposed to be paid, transferred, exchanged or received by the Company or its stockholders, as the case may be, in connection with any transaction (whether or not consummated) bears to (y) the fee(s) paid or payable to Stephens in connection 

### with the Agreement. The Company and Stephens agree that it would not be just and equitable 

### if contribution pursuant to this paragraph

were determined by pro rata allocation or by any other method which does not take into account the equitable considerations and other criteria referred to in this paragraph.

(d) The Company also agrees that no Indemnified Person shall have any liability to the Company for or in connection with the Agreement, except for liability for Damages which

are finally, judicially determined to have resulted directly and primarily from the gross negligence or willful misconduct of the Indemnified Person. fn no event shall any Indemnified Person be responsible for any indirect, special or consequential damages, even if the Indemnified Person is advised of the possibility thereof.

(e) The Company will promptly notify an Indemnified Person of the assertion against the Indemnified Person or any other person of any claim or the commencement of any inquiry, investigation, action or proceeding, of which the Company has knowledge, relating to or arising
out of any matter referred to 

### in the Agreement, including an Indemnified Person's services under the Agreement.

(f) The Company and Stephens agree to consult in advance with one another with respect to the terms of any proposed waiver, release or settlement of any Proceeding to which the Company or an Indemnified Person may be subject as a result of the matters contemplated by the Agreement and further agree not to enter into any such waiver, release or settlement without the prior written consent of one another (which consent shall not be unreasonably withheld), unless such waiver, release or settlement includes an unconditional release of the Company or such Indemnified Person, as the case may be, from all liability arising out of such Proceeding.

(g) The agreements of the Company under this Exhibit shall be in addition to any liabilities or obligations the Company may have under the Agreement or otherwise, shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company or any Indemnified Person, and shall apply whether or not Stephens or any other Indemnified Person is a formal party to any Proceeding.

(h) Any right to trial by jury with respect to any dispute as to the respective rights and obligations of the Company and any Indemnified Person is hereby waived.

(i) The foregoing agreements shall apply to any modification or extension of the Agreement, and shall remain in full force and effect following the termination of the Agreement, whether as a result of the completion of services or otherwise. D 10110'3/11/2012 12:03 Stephens Inc. Stephens Inc.

Sep 10 12 02;35p Peter

Ot/10/!0ll ION 11:!1 lAX 

### 2121sno54

AU&UI' 30,1012 PageStlfS 

### lf 

### this let1m'

## ~tly 8\ates 

### our

## a~ please so indicate by 

### signlag below and

## ~ a siped copy 

### to 

### us. Upon teeeipt 

### of a signed 

### copy of tlds letter1 the tenDS 

### of

### such letter shall 

### constitute a binding apeotent \xtWCea Stephens 

### and tM 

### Company. 

### D 3/3

p.2TABLEOFCONTENT_SI.STEPHENSINC.II.PROCESSCONSIDERATIONS&TIMELINEIll.TARGETEDPRIVATEEQUITYPARTNERSIV.ENGAGEMENTPROPOSALThecontentsofthispresentationmaynotbeusedforanyatherpurposewithoutthepriorwrittenconsentofStephensInc.Thisforegoingmaterialhasbeenpresentedsolelyforinformativepurposesasofitsstateddateandisnotasolicitation,oranoffer,tobuyorsellanysecurity.Itdoesnotpurport tobeacompletedescriptionoftheproducts,securities,marketsordevelopmentsreferredtointhematerial.Informationincludedinthepresentationwasobtainedfromsourcesconsideredtobereliable,buthasnotbeenindependentlyverifiedandisnotguaranteedtobeaccurateorcomplete.Allexpressionsofopinionapplyonthedateofthepresentation.Nosubsequentpublicationordistributionofthispresentationshallmeanorimplythatanysuchinformationoropinionisaccurateorremainscurrentatanytimeafterthestateddateofthepresentation.Youwillnotbeadvisedofanychangesinanysuchinformationoropinion.StephensInc.,itsemployees,officers,directorsand/oraffiliatesmayfromtimetotimehavealongorshortpositioninthesecuritiesmentionedandmaysellorbuysuchsecurities.Stephensdoesnotprovidelegal,taxoraccountingadvice;pleaseconsultyourlegalortaxprofessional.Theindividualsprincipallyresponsibleforpreparationofthispresentationhavereceivedcompensationthatisbasedupon,amongotherfactors,StephensInc.'sinvestmentbankingrevenues.Additionalinformationavailableuponrequest.©StephensInc.2012StephensI2

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•••••••••••••••••••••••••••••••••••••••••••••OVERVIEW_QFSTEPHENSINTEGRATED__B_USINESSStephensInc.•Foundedin1933,StephensInc.isafullserviceinvestmentbankingfirmlocatedinLittleRock,Arkansas-WarrenStephens,Chairman,PresidentandCEO•ThefirmisamemberoftheNewYorkStockExchangeandSIPC•Over700employeesacross25offices•StephensCapitalPartnersservesastheprivateequityarmofStephensInc.andacquiresmajorityorminoritystakesinitsportfoliocompanies-Focusedonlong-termvaluecreation-Passiveinvestorandindustryagnostic•ServicesforBusinessesandInstitutionsinclude:-InvestmentBankingWealthManagement-PrincipallnvestingInstitutionalSalesandTradingPublicFinance-Insurance-ResearchStephensStephensInvestmentBanking•CorporateandInvestmentbankfocusedonthemiddlemarket"'mediandealsizeof$71MM•CapitalMarketsProductsandServices:Mergers&Acquisitions-EquityCapitalMarkets-DebtCapitalMarkets•Over120bankersandanalystsin7offices:LittleRock,NewYork,Dallas,Atlanta,Houston,NashvilleandWashingtonD.C.•Bankersorganizedbyindustryfocusandtransactionexpertise•28seniorresearchanalystscoveringover380companiesHEADQUARTERSLittleRock,AR(5ArkansasOffices)•CorporateFinanceOffices•OtherOfficesI4••••••••••••••••••••••••••••••••••••••••••••STEPHENSVALUEPROJ?OSJTIONStephensisahighlydifferentiated,family-ownedinvestmentbankwithatraditionofnurturingenduringrelationships,providingunvarnishedadviceandleveragingourprincipalmentalityStephens"PrincipalMentality"WeThinkandActLikeOwnersFullServiceInvestmentBankFocusedontheMiddleMarketReputationforUnderwritingQualityOfferings•Over120industrybankersandanalystscovering9industryverticals•28seniorresearchanalystscoveringover380companies•Middlemarketfocusedwithselectedlargeclients-in-depthindustryknowledgeLong-TermStrategicAdvisorsBuiltuponQuality,IndependentAdvice•Notacommerciallender;noconflictsarisingoutofcommerciallendingrelationshipsandprospects•StephensRanks3rdamongnonbulgebracketbankswith$79.3billioninpubliclydisclosedtransactionsince2004•Seniorlevelcommitmentduringallphasesofthetransaction•SubstantialpublicIprivatedealvolumevaluedinexcessof$82billionsince2004•Participationinapproximately$4.5billionofhighyieldofferingsinthepast12months•50seasonedtradersandsalesstaff,withaverageexperienceof15yearsperteammember•Expertiseinworkingwithmiddle-marketcompaniestoaddresstheirdebtneeds•40yearsofequitycapitalmarketsexperience,includingWai-MartIPOin1970•40IPOstotalingmorethan$9.9billionsince2003and83Follow-OnOfferingstotalingmorethan$10.9billion•120equitycapitalmarketsemployeesIs••••••••••••••••••••••••••••••••••••••••••••INDl!STRY_VERTICALSWHATDRIVESTHEPRACTICE•Independentindustry-focusedexpertadvice•Middlemarketfocus-mediandealsizeof$71MM-wefindopportunitiesWallStreetdoesn't•ExperiencecompletinglargeandcomplicatedtransactionsGROUPSTATISTICS•Over120bankersandanalystsin7officesacrosstheU.S.•Since2004,Stephenshasadvisedonmorethan$78billionindeals•Completed12advisorytransactions>$1billionsince2004(mostofmiddlemarket1-Banks)•Industrycoverageacross9verticalsINVESTMENTBANKINGVERTICALSCommunications&MediaServices&EquipmentSecurity&DefenseMedia&EntertainmentConsumerSpecialtyRetail&ManufacturingRestaurantsFood&AgribusinessConsumerProductsPUBLICEQUITYINVESTMENTGRADEDEBTHIGHYIELDDEBTStephensEnergyE&POilfieldServicesMidstream&DownstreamAlternative&RenewableEnergyHealthcare&LifeSciencesServicesBiotechnology&LifeSciencesDevices&Diagnostics---------IndustrialTransportationIndustrialDistribution&ServicesBasicMaterials&ConstructionIT&ServicesDataAnalyticsDigitalMarketingFinancialServicesITHealthcareITFinancialServicesInsuranceBankingBroker/DealersSpecialtyFinanceCAPABILITIESINTERNATIONALRESEARCHWEALTHMANAGEMENTPRIVATECLIENTBROKERAGEEQUITYSALES&TRADINGFIXEDINCOMETRADINGPowerPowerElectronicsResourceTechnologiesRealEstateOfficeRetailMulti-FamilyIndustrialStudentHousingSelfStoragelandDevelopmentPRIVATEPLACEMENTINSURANCEPUBLICFINANCEI6••••••••••••••••••••••••••••••••••••••••••••INTERNATIQ_NALREACH•••GROUPOVERVIEWWedelivercreativeandinnovativeinvestmentbankingsolutionstocompaniesinterestedinaccessingtheinternationalmarketsWefacilitatecross-borderM&A,capitalflows,andcapitalraisingbetweenAsiaandNorthandSouthAmerica,Europe,NorthAmerica,aswellasPan-RegionaltransactionsWehavestrongstrategicalliancesacrosstheglobe,withspecialemphasisinBrazil,ChinaandIndiatofacilitateourreachandservicesforourclients••••KEYDIFFERENTIATORSDecadesofexperienceintheEmergingMarketsDeep focusonthreeofthefourBRICs-Brazil,IndiaandChinaUniquelypositionedtoassistmid-sizecompaniesacrossseveralindustriesRelationship-drivenfocuscombinedwiththeresponsivenessandflexibilityofanindependentboutiquefirmwiththeinfrastructureandsupportofStephens•Handsonexecution bySeniorBankerswithaprovenprocessandrecordofsuccessKEYSELECTEDRELATIONSHIPSWindsorPrivateCapitalInc.E.J.McKay&Co..Inc.AAXISBANKE.J.McKay&Co.,Inc.IiiSMFG'>t.m""""'''"'I,ALLIERCapitalCANACCORJ:tlenuity!!nw!tp•>ln!MlM.M.WARBURG&CO179·'"METZLERlJ,,'\fct:lcrsectSohn&•DEROTHSCHILDStephensI7••••••••••••••••••••••••••••••••••••••••••••STEPHENS'TRANS_PORTATIO_NGRO_UPEXPERIENCEDTRANSPORTATIONTEAM•Unwavering25+yearcommitmenttothecapitalandadvisoryneedsofthetransportationindustry•Dedicatedteamoftransportationbankers-Over10yearstransportationindustryexperienceattheseniorlevel•Sevendedicatedresearchanalystsandassociates-Coverover40companieswiththematic,knowledgebasedresearchpieces-Leadingtraderintransportationforthepasttenyears-AnnualtransportationconferenceKEYSTATISTICS$4.6billionAggregateTransactionVolumesince200239TransactionsClosedsince2002$118millionAverageTransactionSizeAGGREGATETRANSACTIONVOLUME(DollarsinBillions)$5.0$4.0$3.0$2.0$1.0I$0.3-$-2002Stephens20052008$4.6Current.........,__.....SECTORCOVERAGELOGISTICSSERVICES•ContractLogistics•FreightForwardingandBrokerage•FuelLogistics•lntermodal•SameDayandLastMileLogistics•TransportationManagementTRANSPORTATIONSERVICES•Airlines•JonesActShipping•Railroads•TruckingEQUIPMENTSUPPLIERS•AftermarketPartsandServices•ShipandBargeBuildingandRepair•TransportationEquipmentOEMs•TransportationEquipmentRetailDealershipsI8

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# •__..,>,.,.......,.••••.•••••••••••••••••••••••••••••••••••PRIVATEPLACEMENT:_PROCESS&TIMELINE•Identifycompany'sobjectiveswithrespecttotheprocess•Submissionofduediligencerequestlisttocompany•Prepareforecastmodelandrefinevaluationanalysisbasedoninformationgatheredinduediligence•Preparelistofprospectiveinvestors•Determineproceduresandtimetableforcompletionofprivateplacementprocess•Formulatemarketingstrategy•PrepareteaserandCIM•Preparedataroom11113-4Weeks.....•Contactwithprospectiveinvestors•Reviewproceduresandtimetablewithprospectiveinvestorsforthepresentationofinvestmentproposals•ConductinformationalcallsImeeting(s)forprospectiveinvestors•ConductManagementPresentations•Investorduediligenceconductedviaonlinedata site•Receivepreliminaryindicationsofinterest_.4-5Weekslit.....11-14Weeks•Reviewinvestmentproposalssubmittedbyinterestedparties-selectinvestorbasedonfit,valuation&termsformanagementteam•Formulatenegotiatingstrategyandcommunicatewithinterestedparties•Finalizepotentialinvestors'remainingduediligence•Finalizenegotiationofdefinitiveagreementwithselectedinvestor(s)•Obtainnecessaryapprovalsandexecutelegaldocumentationnecessarytoconsummatethetransaction•ReceiveconsiderationandclosetransactionIt4-5WeekstitStephens*Targetedprocesscanreducetimetomarketby1-2weeksandoveralltimingby1month+/-,butisverydependentonspeedoftheinvestor.Alsonotethatmarketconditionsmayextendtheprocessbeyondwhatiscommon.110••••••••••••••••••••••••••••••••••••••••••••PREPARATION-OVERVIEWPREPARATIONISOFTHEHIGHESTIMPORTANCEFORANYSUCCESSFULTRANSACTION;WEWANTTOASSURETHATMANAGEMENTANDWEAREADEQUATELYPREPAREDINADVANCEOFMARKETINGEFFORTS,BUSINESSDISCUSSIONS,PRESENTATIONSANDOTHERMEETINGS•Managementparticipationwillinclude:-Processeducation-Involvementinprocessdetermination-ExplanationanddescriptionofPartners-ExplanationofPartnerdiligenceprocess-Dryrunofmanagementpresentation•Stephensdiligencewillinclude:-Ongoingdiscussionswithkeymembersofmanagement-Siteandfacilityvisits-ReceiptofCompanyinformation•Financial•Organizational•Marketing•legal•OperationalStephens111••••••••••••••••••••••••••••••••••••••••••••PREPARATION-MARKETI_NG_MATERIALSWEWILLWORKWITHMANAGEMENTTOPREPARESEVERALDOCUMENTSTHATWILLBESENTTOPARTNERSTOREVIEW•ConfidentialTeaser(nonames)- 1to2pageoverviewofthebusinessthatcanbesenttopotentialPartners-Willincludeinvestmenthighlightsandkeyfinancialstats•MarketingDocument-ConfidentialInformationMemorandum("CIM")-PresentationformatoverviewoftheCompanyanditsoperationsandfinancials-InvestmentHighlights-CompanyandBusinessOverview-IndustryOverview-FinancialOverview•SupplementalInformationPackage-Detailedfinancialmodels-MarketstudiesStephens112••••••••••••••••••••••••••••••••••••••••••••MARKETING__-:_OVERVLEW•MakecallstoaveryselectnumberofPartnerspre-approvedbyManagement•ExecuteConfidentialityAgreements•DistributeTeaserandCIM•Makefollow-upcalls•Gageinterestwithcontactedparties•SetupManagementPresentationswithinterestedpartiesStephens113••••••••••••••••••••••••••••••••••••••••••••BIDDER_MANAGEMENTPRESENTATIONSTEPHENSWILLWORKWITHMANAGEMENTTOORGANIZEALIMITEDNUMBEROFVISITSBYPOTENTIALPARTNERS•Locationtobedetermined•NumberofparticipantswillbedeterminedbyManagementandStephens•ManagementwillpresenttothePartners•Answerquestionsaboutallaspectsofthebusiness-Operations-MarketICompetition-GrowthStrategy-Services-Marketing-Management&Employees-ProjectedFinancialResults•Requestnon-bindingIndicationofInterest("101")3- 4weeksfollowingManagementPresentations•Receive&reviewIOI's•DeterminewhichbidstoincludeinnextphaseofdiligenceStephens114BIDDEILDILIG_ENCE-DATA_ROOM•Electronicallyhostedsite-AllowsPartnertracking-abilitytoseewhatPartnersareviewingmost-Worldwideviewingcapabilities-Efficientfordocumentaddition•DetailedinformationontheCompany-Organization-Financials-Contracts-HumanResources-Regulatory-Manuals•StephenswillassistManagementinorganizingtheinformationinanefficientmannerStephens11sDOCUMENTATION-LETTEROFINTENT•PartnerstoprovideaLetterofIntent(ormark-upofaShareholdersAgreement)•TheManagementwillchoosethepreferredPartner-Keyconsiderationsinclude:•Valuation•TaxConsequences•Structure&Terms•Financing&CertaintyofClose•PastPerformance•StrategicFit•InformtheselectedPartnertoconcludeconfirmatoryandfollow-updiligenceassoonaspossibleStephens116DOCUMENTATION-DEFINITIVEAGREEMENT•NegotiationwilloccursimultaneouslyasthePartnerisconcludingdiligence•Severalcycleswilltakeplacewitheachpartyeditingthedocument•Executionwiththepreferredpartnerwilloccuroncediligenceiscompleteandallconditionsaresufficient•Afinalproposalpresentedwillincludenegotiatingadefinitivepurchaseagreement•Closingmaytakeplacesimultaneouslywithsigninginmostcases(pendinganyabnormalapprovals)Stephens111

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# • •_,.,............................................SPONSORACTIVI_TY•Stephenshasadedicatedfinancialsponsorcoveragegroupwithdeeprelationshipsestablishedthroughyearsofexecutingmultipletransactions.Over80financialsponsorshavecompleted95M&AdealswiththeStephensteamtotalingapproximately$68.0billionintransactionvalue.•Stephensmaintainscurrentrelationshipswithroughly400financialbuyers-Seniorrelationships-Negotiatingtactics-Focusareas-Fundstyle-BuyerbehaviorREPRESENTATIVETRANSPORTATIONFOCUSEDSPONSORRELATIONSHIPSN•wMovJI'!l'AJll'CAmAJ.ucCCMPCAPITALJefferiesCapitalPartnersaFFLGREENBRIARF(l.__l.:l!t)FLCEos\\'J-:r.sH,('.\J<St)."';..THEGoRESGRoUPCICA.PITl\LPARTNERSODYSSEYiNVESTMENTPARINERS.LLC\'«c\RBURGPINCUS8AustinVenturesRidgemontQoAKTREETPGStephensl!!Jjjid]THECARLYLEGROUPGeneralAtlantic.TheGroup"'MmganStanleyeveCapitalPartners119,___..,.,,.,..,.....................................TIERliNVESTORSREPRESENTATIVETRANSPORTATIONFOCUSEDTIER1RELATIONSHIPSTHEGoREsGRoUPWARBURGPINCUSGREENBRIARFlJI T'(GR0ULL CQoAK.TREEStephenseveCapitalPartnersAGENERAL"'#ATLANTICCCMJ?CAPITAlTHECARLYLEGROUPOAKHILLENDURANCE;,\r1tA1.t'H11120

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# • •FEEPROEOSAL••••EngageStephenstoactasPlacementAgentinconnectionwitha$150millionprivateequitycapitalraisesuccess-drivenfeestructure-noretainerGatherIorganizedataandcreatemarketingmaterialsCreatedetailedfinancialmodelwithreturnsandincentivestructureanalysisConductatargetedprivateequityprocessFEESTRUCTURETranchesofEquityDrawn$0-$100,000,000ApplicableSuccessFeePercentage6.0%'.'$100,000,001Orgreater4.0%CSUCCESS·.FEEL,.·.-.·-...Feesarepayablewhendrawn$750,000payableuponclosing,creditedagainsttheSuccessFeeReimbursementofreasonableout-of-pocketexpenses-nottoexceed$20,000withoutpriorconsentStephens122PROMISSORY NOTE

Borrower: Carlsbad-Palomar Airlines. Inc

.. a California corporation 5670 El Camino Real, Suite 0 Carlsbad, CA 92008

Principal Amount: $1,000,000.00 Lender: Torrey Pines Sank Carlsbad Office 2760 Gateway Road Carlsbad, CA 92009 1760) 444-8400

Date of Note: August 8, 2012
PROMISE TO PAY. Carlsbad-Palomar Airlines. Inc., a California corporation ("Borrower") promises to pay to Torrey Pines Bank ("Lender"). or order, In lawful money of the United States of America, the principal amount of One Million & 00/100 Dollars {$1,000,000.00) or so much as may be outstanding. together with Interest on the unpaid outstanding principal balance of each advance. Interest shall ba calculated from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on August 8, 2013. In addition, Borrower will pay regular monthly payments of all accrued unpaid Interest due as of each payment date. beginning September 8. 2012. with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will ba applied to Finance Charges first; then to unpaid principal; then to late charges and other charges. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate In writing.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes In an Index which is the Torrey Pines Bank Prime Rate (the "Index"}. The Index Is not necessarily the lowest rate charged by Lender on Its loans and Is set by Lender in Its sole discretion. If the Index becomes unavailable during the· term of this loan, Lender may designate a substitute Index after notifying Borrower. Lender will tell Borrower the current Index rate upon Borrower's request. The Interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently Is 3.250% par annum. Interest
on the unpaid principal balance of this Note will be calculated as described In the "INTEREST CALCULATION METHOD" paragraph using a rate of 0.750 percentage points over the Index, adjusted If necessary for any minimum and maximum rate limitations described below, resulting In an initial rate of 4.000%. NOTICE: Under no circumstances will the Interest rate on this Note be less than 4.000% per annum or more than the maximum rate allowed by applicable law.
INTEREST CALCULATION METHOD. Interest on this Note Is computed on a 365/360 basis; that Is, by applying the ratio of tha interest rate
over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance Is outstanding. All interest payable under this Note Is computed usln!!.· ,Yt·

..**JJ~~.· _!!Ql!j~.''**  This calculation method results In a higher effective Interest rate than the numeric Interest rata stated In this Note. (Initial Hera**c;'~.:iti!\7!itV'ii~t:N:};;** I
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than It Is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid Interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid In full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay a('ly further amount owed to Lender. All written communications concerning disputed amounts, Including any check
or other payment lnsirulnent that)ndlgates that the payment constitutes "payment In full" of the amount owed or that Is tendered with other conditions or limitations or as full' satisfaction of a disputed amount must be mailed or delivered to: Torrey Pines Bank, Carlsbad Office, 2760 Gateway Road, Carlsbad, CA 9200g,
LATE CHARGE. If a payment Is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $10.00, whichever is greater. INTEREST AFTER DEFAULT. Upon default, the interest rate on this Note shall, if permitted under applicable law, Immediately increase by adding
an additional 5.000 percentage point margin !"Default Rate Margin"}. The Default Rate Margin shall also apply to each succeeding Interest rate change that would have applied had there been no default.
DEFAULT. Each of the following shall constitute an event of default ("Event of Default') under this Note: Payment Default. Borrower fails to make any payment when due under this Note.
Other Defaults. Borrower tails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained In any other agreement between Lender and Borrower.
False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading In any material respect, either now or at the time made or furnished or becomes false

or misleading at any time thereafter. Insolvency. The dissolution or termination of Borrower's existence as a going**business~** the insolvency of Borrower, the appointment of a receiver tor any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or Insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This Includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which Is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond tor the creditor or forfeiture proceeding, In an amount determined by Lender, In Its sole discretion, es being an adequate
reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, eny guaranty of the indebtedness evidenced by this Note. Changa In Ownership. Any change In ownership of twenty·five percent (25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs In Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired. '
Cure Provisions. If any default, other than a default In payment Is curable and If Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve 1121 months, It may be cured If Borrower, after Lender sends written notice to Borrower demanding cure of such default: (1} cures the default within fifteen (15} days; or (2) If the cure requires more than fifteen (15) days, immediately Initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid Interest immediataly due, and then Borrower will pay that amount. ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note If Borrower does not pay. Borrower will pay Lender that amount. This Includes, subject to any limits under applicable law, Lender's attorneys' tees and Lender's legal expenses, whether or not there Is a lawsuit, including attorneys' tees, expenses for bankruptcy proceadlngs (Including efforts to modify or vacate any automatic stay
or injunction), and appeals. Borrower also will pay any court costs, in addition to all other sums provided by law.
GOVERNING LAW. This Nota will be governed by fadarellaw applicable to Lender and, to the extant not preempted by federal law, the laws of the State of California without regard to Its conflicta of law provisions. This Note has bean accepted by Lender In the State of California.
CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of San Diego County, State of California.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances un(!er this Note, as well as directions for payment from Borrower's accounts, may be requested orally or in writing by Borrower or by an authorized person. Lender may, but need not, require that all oral requests be confirmed In writing. Borrower agrees to be liable for all sums either: (A} advanced in accordance with the Instructions of an authorized person or IBI credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's Internal records, including daily computer print-outs.Loan No: 0709129481 PROMISSORY NOTE (Continued) Page 2

DISHONORED ITEM FEE. I may be charged a fee if I make a payment on my loan and the check or preauthorized charge with which I pay is later dishonored.
FINANCIAL STATEMENT CERTIFICATIONS • The undersigned hereby certifies to Torrey Pines Bank ("Lender") that all financial information submitted to Lender now and et all times during the term of this loan does, and will, fairly and accurately represent the financial condition of the undersigned, all Borrowers and Guarantors. Financial information includes, but is not limited to all Business Financial Statements (including interim and Year-End financial statements that are company prepared and/or CPA prepared), Business Income Tax Returns, Borrowing Base Certificates, Accounts Receivable and Accounts Payable Agings, Personal Financial Statements and Personal Income Tax Returns. The undersigned understands that Lender will rely on all financial information, whenever provided, and that such Information is a material Inducement to Lender to make, to continue to make, or otherwise extend credit accommodations to the undersigned. The undersigned covenants and agrees to notify Lender of any adverse material changes In her/his/its financial condition In the future. The undersigned further understands and acknowledges that there are criminal penalties tor giving false financial information to federally Insured financial institutions.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.
GENERAL PROVISIONS. if any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Nota, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's ·security Interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note ere joint and several.
PRIOR TO SIGNING THIS NOTE. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

CARLSBAD-PALOMAR AIRLINES, INC

.. A CALIFORNIA CORPORATION

By:{, 

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## ....... · .. Theodora L. Vallas, Preaoilent of Carlsbad-Palomar Airlines, Inc

.. a California corporationBorrower: COMMERCIAL GUARANTY

Carlsbad-Palomar Airlines, Inc., a California corporation 5670 El Camino Real. Suite 0 Carlsbad, CA 92008 Lender: Torrey Pines Bank Carlsbad Office 2760 Gateway Road Carlsbad, CA 92009 (7601 444-8400 Guarantor: Theodore L. Vallas 5670 El Camino Real. Suite D Carlsbad, CA 92008

CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment end satisfaction of the Indebtedness of Borrower to Lender, and the performance end discharge of all Borrower's obligations under the Note and the Related Documents. This Is a guarantY of payment and performance and not of collection, so Lender can enforce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to pay the Indebtedness or against any collateral securing the Indebtedness, this Guaranty or any other guaranty of the Indebtedness. Guarantor wilt make any payments to Lender or its order, on demand, in legal tender of the United States of America, In same-day funds, without set-off or deduction or counterclaim, and will otherwise perform Borrower's obligations under the Note and Related Documents. Under this Guaranty, Guarantor's liability is unlimited and Guarantor's obligations are continuing. · INDEBTEDNESS. The word "Indebtedness• as used in this Guaranty means sll of the principal amount outstanding from time to time and at any one or more times, accrued unpaid interest thereon and all collection costs and legal expenses related thereto permitted by law, attorneys' fees, arising from any and all debts, liabilities and obligations of every nature or form, now existing or hereafter arising or acquired, that Borrower individually or collectively or interchangeably with others, owes or will owe Lender. "Indebtedness" includes, without limitation, loans, advances, debts, overdraft indebtedness, credit card Indebtedness, lease obligations, liabilities and obligations under any Interest rate protection agreements or foreign currency exchange agreements or commoditY price protection agreements, other obligations, and liabilities of Borrower, and any present or future judgments against Borrower, future advances, loans or transactions that renew, extend, modify, refinance, consolidate
or substitute these debts, liabilities and obligations whether: voluntarily or involuntarily Incurred; due or to become due by their terms or acceleration; absolute or contingent; liquidated or unliquidated; determined or undetermined; direct or Indirect; primary or secondary in nature or arising from a guarantY or surety; secured or unsecured; joint or several or joint and several; evidenced by a negotiable or non-negotiable instrument or writing; originated by Lender or another or others; barred or unenforceable against Borrower for any reason whatsoever; for any transactions that may be voidable for any reason (such as infancy, Insanity, ultra vires or otherwise); and originated then reduced or extinguished and then afterwards Increased or reinatated.
If Lender presently holds one or more guaranties, or hereafter receives additional guaranties from Guarantor, Lender's rights under all guaranties shall be cumulative. This Guaranty shall not (unless specifically provided below to the contrary) affect or invalidate any such other guaranties. Guarantor's liability will be Guarantor's aggregate liability under the terms of this GuarantY and any such other unterminated guaranties.
CONTINUING GUARANTY. THIS IS A "CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN .OPEN AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME. DURATION OF GUARANTY. This Guaranty will take effect when received by Lender without the necessity of any acceptance by Lender, or any notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all of Guarantor's other obligations under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written notice of revocation must be mailed to Lender, by certified mall, at Lender's address listed above or such other place as Lender may designate In writing. Written revocation of this Guaranty will apply only to new Indebtedness created after actual receipt by Lender of Guarantor's written revocation. For this purpose and without limitation, the term "new Indebtedness' does not include the Indebtedness which at the time of notice of revocation is contingent, unliquidated, undetermined or not due and which later becomes absolute, liquidated, determined or due. For this purpose and without limitation, "new Indebtedness" does not include all or part of the Indebtedness that is: incurred by Borrower prior to revocation; incurred under a commitment that became binding before revocation; any renewals, extensions, substitutions, and modifications of the Indebtedness. This Guaranty shall bind Guarantor's estate as to the Indebtedness created both before and after Guarantor's death or incapacity, regardless of Lender's actual notice of Guarantor's death. Subject to the foregoing, Guarantor's executor or administrator or other legal representative may terminate this Guaranty in the same manner In which Guarantor might have terminated It end with the same effect. Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liabilitY of Guarantor under this Guaranty. A revocation Lender receives from any one or more Guarantors shall not affect the liability of any remaining Guarantors under this Guaranty. Guarantor's obligations under this Guaranty shall be In addition to any of Guarantor's obligations, or any of them, under any other guaranties of the Indebtedness or any other person heretofore or hereafter given to Lender unless such other guaranties are modified or revoked in writing; and this Guarantor shall not, unless provided In this Guaranty, affect, invalidete, or supersede any such other guarantY. It is anticipated that fluctuations may occur in the aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor specifically acknowledges and agrees that reductions In the amount of the Indebtedness, even to zero dollars ( $0.001. shall not constitute a termination of this Guaranty. This GuarantY is binding upon Guarantor and Guarantor's heirs, successors and assigns so long as any of the Indebtedness remains unpaid and evan though the Indebtedness may from time to time ba zero dollars ($0.00).
OBLIGATIONS OF MARRIED PERSONS. Any married person who signa this Guaranty hereby expressly agrees that recourse under this Guaranty may be had against both his or her aeparate property and communitY property.
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorize• Lender, either before or after any revocation hereof, without notice or demand and without lessening Guarantor's liability under this Guaranty, from time to time: (AI prior to revocation as set forth above, to make
one. ?' more additional secured or unsecured loans to Borrower, to lease equipment or other goods to Borrower, or otherwise to extend add1t1onal credit to Borrower; IBI to alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment
or other terms of the Indebtedness or any part of the Indebtedness, Including Increases and decreases of the rate of interest on the**ln~ebtedness;** extensions may be repeated and may be for longer than the original loan term; (C) to take and hold security for the payment of th1s**~uarantY** or the Indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to perfect, and release any such security, with
or Without the substitution of new collateral; (D) to release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or In any manner Lender may choose; (E) to determine how, when and what application of payments and _credits shall be. made on the Indebtedness; IF) to apply such security and direct the order or manner of sale thereof, Including without limitation, any nonjudicial sale permitted by the terms of the controlling securitY agreement or deed of trust as Lender in its discretion may**dete~mlne;** IG) .to sell, transfer, assign or grant participations in all or any part of the Indebtedness· and (Hl to assign or transfer this Guaranty 1n whole or m part. '

GUARANTOR'S**RE~RESENTATIONS** AND WARRANTIES. Guarantor represents and warrants to Lender that (A) no representations or**agraem~nts** of any**k1~d** have been made to Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty is execute at Borrower s request and not at the request of Lender; (Cl Guarantor has full power, right and authorit to enter into this Guaran

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# ~~~~?{?.l~~~~~~~~E¥J~~~E~~~~§l.~~E&!§ nanc1a statements provided to Lender end no event has occurred hi h 1 ly a e o . e most recent no litigation, claim, Investigation, administratlvs procsiuJin(j or**simi/a~**,;,_10 

## ';? 'J'':Jj' alh**adv~ersely** affect Guarantor's financial condition; (HI**!~~~a~=~:~e!%s ~~n~b;a::::·**  mre no representation to Guarantor as to the**c:z;i~w:~hf~~:: o~'** :r,npold**t~X~8)** ogolnNt auoromor /6 Plinding or keep adequately Informed**f~~m '~:Ch** **~~~~:'** fn a continuing basts information regarding**Borrower~~o~ne:~ ~n~** **(J~**

### 1 G 1 uarsntor has established Guaranty, end Guarantor further a o any facts, events, or circumstances which mi ht I c a con ton. Guarantor agrees to Information or documents acquired**~;t~ t~at,_** **ab~ent** a**reque~t** for information, Lender shall ghav; any**~.av ~fleet**  Guarantor's risks under this
n ar In t e course of Its relationship with Borrower. no o IQat,on to disclose to Guarantor any

# ..

Loan No: 0709129481 COMMERCIAL GUARANTY (Continued) Page 2

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives any right to require Lender to (A) make any presentment, protest, demand, or notice of any kind, including notice of change of any terms of repayment of the Indebtedness, default by Borrower or any other guarantor or surety, any action or nonaction taken by Borrower, Lender, or any other guarantor or suretY of Borrower, or the creation of
new or addltlonallndabtedness; !B} proceed against any person, Including Borrower, before proceeding against Guarantor; (C} proceed against any collateral for the Indebtedness, Including Borrower's collateral, before proceeding against Guarantor; (D) apply any payments or proceeds received against the Indebtedness in any order; (E} give notice of the terms, time, and place of any sale of the collateral pursuant to the Uniform Commercial Code or any other law governing such sale; !FI disclose any information about the Indebtedness, the Borrower, the collateral, or any other guarantor or surety, or about any action or nonaction of Lender; or (GI pursue any remedy or course of action In Lender's power whatsoever.
Guarantor also waives any and all rights or defenses arising by raason of !H) any disability or other defense of Borrower, any other guarantor or suretY or any other person; (I) the cessation from any cause whatsoever, other than payment In full, of the Indebtedness; (J} the application of proceeds of the Indebtedness by Borrower for purposes other than the purposes understood and intended by Guarantor and Lender; (KI any act of omission or commission by Lender which directly or Indirectly results In or contributes to the discharge of Borrower or any other guarantor
or surety, or the Indebtedness, or the loss or release of any collateral by operation of law 'or otherwise; ILl any statuto of limitations in any action under this Guaranty or on the Indebtedness; or (M} any modification or change In terms of the Indebtedness, whatsoever, Including without limitation, the renewal, extension, acceleration, or other change In the time payment of the Indebtedness Is due and any change In the interest rate, and including any such modification or change In terms after revocation of this Guaranty on the Indebtedness Incurred prior to such revocation. Guarantor waives all rights of subrogation, reimbursement, indemnification, and contribution and any other rights and defenses that are or may become available to Guarantor by reason of California Civil Code Sections 2787 to 2866, inclusive.
Guarantor waives all rights and any defenses arising out of an election of remedies by Lender even though that the election of remedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor's rights of subrogation and reimbursement against Borrower by operation of Section 680d of the California Code of Civil Procedure or otherwise.
Guarantor waives all rights and defenses that Guarantor may have because Borrower's obligation Is secured by real property. This means among other things: INI Lender may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower. (0} If Lender forecloses on any real property collateral pledged by Borrower: (1} the amount of Borrowar's obligation may be reduced only by the price for which the collateral Is sold at the foreclosure sale, even If the collateral is worth more than tho sale price. 121 Lender may collect from Guarantor even If Lender, by foreclosing on the reel property collateral, has destroyed any right Guarantor may have to collect from Borrower. This Is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because Borrower's obligation is secured by real property. These rights and defenses include, but are not limited to, any rights and defenses based upon Section 6BOa, 6BOb, 580d, or 726 of the Code of Civil Procedure. Guarantor understands and agrees that the foregoing waivers are unconditional and irrevocable waivers of substantive rights and defenses to which Guarantor might otherwise be entitled under state and federal law. The rights and defenses waived include, without limitation, those provided by California laws of suretyship and guaranty, anti-deficiency laws, and the Uniform Commercial Code. Guarantor acknowledges that Guarantor has provided these waivers of rights and defenses with the intention that they be tully relied upon by Lender. Guarantor further understands end agrees that this Guaranty is a separate and Independent contract between Guarantor and Lender, given for full and ample consideration, and is enforceable on its own terms. Until all of the Indebtedness is paid In full, Guarantor waives any right to enforce any remedy Guarantor may have against the Borrower or any other guarantor, surety, or other person, and further, Guarantor waives any right to participate in any collateral for the Indebtedness now or hereafter held by Lender.
Guarantor's Understanding With Respect To Waivers. Guarantor warrants and agrees that each of the waivers set forth above Is made with Guarantor's full knowledge of its significance and consequences and that, under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any such waiver Is determined to be contrary to any applicable law or public policy, such waiver shall be effective only to the extent permitted by law or public policy. Subordination of Borrower's Debts to Guarantor. Guarantor agrees that the Indebtedness, whether now existing or hereafter created, shall be superior to any claim that Guarantor may now have or hereafter acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Borrower, upon any account whatsoever, to any claim that Lender may now or hereafter have against Borrower. In the evant of insolvency and consequent liquidation of the assets of Borrower, through bankruptcy, by an assignment for the benefit of creditors, by voluntary liquidation, or otherwise, the assets of Borrower applicable to the payment of the claims of both Lender and Guarantor shall be paid to Lender and shall be first applied by Lender to the Indebtedness. Guarantor does hereby assign to Lender all claims which it may have or acquire against Borrower or against eny assignee or trustee in bankruptcy of Borrower; provided however, that such assignment shall be effective only for the purpose of assuring to Lender full payment In legal tender of the Indebtedness. If Lender so requests, any notes or credit agreements now or hereafter evidencing any debts or obligations of Borrower to Guarantor shall be marked with a legend that the same are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is hereby authorized, In the name of Guarantor, from time to time to fila financing statements and continuation statements and to execute documents and to take such other actions as Lender deems necessary or appropriate to perfect, preserve and enforce Its rights under this Guaranty.
Miscellaneous Provisions. The following miscellaneous provisions are a part of this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters sat forth In this Guaranty. No alteration of or amendment to this Guaranty shall be effective unless given In writing and signed by the party or parties sought to ba charged or bound by the alteration or amendment.
ATTORNEYS' FEES: EXPENSES. Guarantor agrees to pay upon demand all of Lender's costs and expenses, Including Lender's attorneys' fees and Lender's legal expenses, Incurred In connection with the enforcement of this Guaranty. Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement. Costs and expenses Include Lender's attorneys' fees and legal expenses whether or not there Is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (Including efforts to modify or vacate any automatic stay or Injunction), appeals, and any anticipated post-judgment collection services. Guarantor also shall pay all court costs and such additional tees as may be directed by the court. CAPTION HEADINGS. Caption headings in this Guaranty are for convenience purposes only and are not to be used to interpret or define the provisions of this Guaranty.
GOVERNING LAW. This Guaranty will be governed by federal law applicable to Lander and, to the extent not preempted by federal law, the laws of the State of California whhout regard to its conflicts of law provisions.
CHOICE OF VENUE. If there Is a lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of the courts of San Diego County, State of California.
INTEGRA;TION.**Guar~ntor** further agrees that Guarantor has read and fully understands the terms of this Guaranty; Guarantor has had the**opportum~y** to be adv1sed by Guarantor's attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol evidence IS not required to Interpret the terms of this Guaranty. Guarantor hereby Indemnifies and holds Lender harmless from all losses claims damages, and costs !Including Lender's attorneys' fees) suffered or Incurred by Lender as a result of any breech by Guarantor of the wa'rranties' representations and agreements ot this paragraph. '**~NT:RPREJAT~ON.** In all**case~** where there is more than one Borrower or Guarantor, then all words used in this Guaranty In tho singular shall t:.**~eme** to aveh been used 1n the plural where the context and construction so require; and where there is more than one Borrower named in**~~ a~;r~~!Y**  ;:,r :::or":**:~~:~~era~~~** Is**ex:u;~d** by**mor~ t~an**  one**G~aranto;.** the w.ords "Borrower" and "Guarantor" respectively shall mean all each of h

. . wor uarantor,

. Borrower, and Lender Include the hairs, successors assigns and transferees of rest of**t~i:~~al:a~t~o~~l ~~~~sb~h~~~~~~:'~~~:;~ndof** **}~s** Gfuarenty is not**~alid** or should not be enforced, that fact by Itself wlll not mean that the of this Guaranty may be found to be in al"d e . :'a**or~j** a**c~urt** wll enforce the rest of the provisions of this Guaranty even if a provision

# ~]~~!:~!~~~~~~:fi~~;:.::;:~~~~~:l~~~;i}~;l:~~~~~:,~i~;:~~~~::iiF~~~~~fb~~~r.~~~::~~~Jii:~~n:;:~~~!nFE~~ff~ri~ NOTICES. Any notice required to be given under this Guara t h 11 b 1 · · be effective when actually delivered when

- n v s a e g ven.'" writing, and, except for revocation notices by Guarantor, shall nationally ;ecognlzed overnight courie;, or, it**m~~~~:~~~::~e~~~~s~~dtf~ef~cs~m!le dl~nless** **ot~rw/s~** required by ISW}, when deposited with 8**bee::::~t~~e~~:~ t~e:t:** **ad~re~se~** shown near the beginning of this**Gu~r:ntv""~u r~~~:a:~·**  n:· first**:la~s,** certified or registered mail postage its address for notices**~~de~ t~~** **~ru:~a~;ov~dedi i~**  the section of this**Guaran~** entitled**"DURATI~~s ~** **G~:.r~1~~~h.all** be in writing and shall change the party's address. For notice**pu~po:e~ v~g**  formal written notice to the other parties, specifying that th

. Any party**ma~ ch~nge**  ' uarantor agrees to keep Lender informed at II tl f e purpose of the notiCe IS to a mas o Guarantor's current address. Unless

## ,



# .. '

Loan No: 0709129481 COMMERCIAL GUARANTY (Continued) Page 3

otherwise provided or required by law, If there is more than one Guarantor, any notice given by Lender to any Guarantor is deemed to be notice given to all Guarantors.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights under this Guaranty unless such waiver is given in writing and signed by Lender. No delay or omission on the pert of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Guaranty shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Guaranty. No prior waiver by Lender, nor any course of dealing between Lender and Guarantor, shall constitute a waiver of any of Lender's rights or of any of Guarantor's obligations as to any future transactions. Whenever the consent of Lender Is required under this Guaranty, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent Instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Guaranty on transfer of Guarantor',s Interest, this Guaranty shall be binding upon and inure to the benefit of the parties, their successors and assigns.
Definitions. The following capitalized words and terms shall have the following meanings when used in this Guaranty. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts In lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall Include the singular, as the context may require. Words and terms not otherwise defined in this Guaranty shall have the meanings attributed to such terms in the Uniform Commercial Code:
BORROWER. The word "Borrower" means Carlsbad-Palomar Airlines, Inc

.. a California corporation and includes all co-signers and co-makers signing the Note and all their successors and assigns.
GUARANTOR. The word "Guarantor• means everyone signing this Guaranty, including without limitation Theodore L. Vallas, and In each case, eny signer's successors and assigns.
GUARANTY. The word "Guaranty" means this guaranty from Guarantor to Lender.
INDEBTEDNESS. The word "Indebtedness" means Borrower's indebtedness to Lender as more particularly described in this Guaranty.
LENDER. The word "Lender• means Torrey Pines Bank, Its successors and assigns.
NOTE. The word "Note" means and Includes without limitation all of Borrower's promissory notes and/or credit agreements evidencing Borrower's loan obligations in favor of Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of and substitutions for promissory notes or credit agreements.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mo"gages, deeds of trust, security deeds, collateral mo"geges, and all other Instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED AUGUST 8, 2012•.

l.A$1!1!. 1'1!.0 I.Md1111, Vet. 12.2.0.003 Copr. H.,

... d ftl.,clal Sollllb>nt,lno. 19!U, 2012, At**lilt'\~** ,._..,v.d, • CA G:\t.ASERPRO\CfiUPL\UO.FC TW-4713 f'ft-1

### CURRICULUM VITAE

PAUL WILLIAM JOHN HOOK

2320 Via Clemente, 

### # V Carlsbad, California 92008

Telephone: (469) 879-1716

E-mail: Paul.Hook@FlyCPAir.com

### PAUL WILLIAM .JOHN HOOK

Date of Birth: February 13, 1947 US/UK Citizen

Dual Nationality

EDUCATION: 

### U.S. and British Passports

Private Boarding School

Burford Grammar School

OXFORD UNIVERSITY English Language General Science Agricultural Science (Major) B.O.T. Mathematics Right to work in U.S.A. and Europe

1952-58

1959-64

1964-68

Western Air Training 1968- 69

Meacham School of Aviation 1976

British Aerospace, Hatfield 1980

Flight Safety Hawker School 1980

Phase II HS-125, King Air 200 1990 Simulator Instructor

Simuflite Gulfstream II & 

### III 1993

F.T.I. Boeing 737 Rating 1996 (Captain Rating)

·Avia Flight Engineer Rating 1997 (Turbojet Powered)

F.T.I. Boeing 727 Rating 1997 (Captain Rating 100/200) 

# ....QUALIFICATIONS: 

### (No longer active as pilot)

FAA Airline Transport Pilot 2259971 RVSM Qualified (Part 121 Multiengine Land) Boeing 727 Captain, Boeing 737 Captain. Gulfstream 1159a Captain, HS125 Captain

Flight Engineer 2259971 Turbo-jet Powered

FAR Part 135 Check Airman HS-125 and Beech King Air BE.90/BE.200

ICAO Airline Transport Pilot (Part 121 Saudi Arabia Cert #. TA-1530

OPERATIONAL EXPERIENCE: Cayman Islands Validation (Boeing 727 Captain)

World Wide: Europe, Eastern Block, Saudi Arabia, United Arab Emirates, Africa, Pacific Ocean, India, Far East.

North Atlantic Routes, Arctic, North America, Central, South America, Mexico and the Islands of the Caribbean.

Specialist in short fields "Hot and high" type operations.

LANGUAGES: English, Welsh, Conversational Arabic, Korean, French and German.

BUSINESS EXPERIENCE:

06/05/2012- Present DIRECTOR OF SAFETY & SECURITY CALIFORNIA PACIFIC AIRLINES PART 121 DOMESTIC CARRIER, CARLSBAD, CALIFORNIA

Responsible for all aspects of safety and security for the airline. Air Carrier Operations Security Coordinator. Ground Security Coordinator and In Flight Security Coordinator Trainer. Produced HAZMAT Training manuals and Power Point presentations. Coordinating EAPIS and background checks with the TSNFBI. Instructor for Various Ground Subjects.

01/2001 to 06/2012 PRESIDENT OF BUSINESS EXECUTIVE AIR SERVICE, BEAS.

BEAS is a successful company serving in all aspects of the aviation world. The production of manuals acceptable to the FAA and overseas aviation governing bodies has been the core business since start up. Operations and maintenance manuals have been written to satisfy 14CFR Parts 121, 125, 145 and the**overse~** equivalents, including IBAC IS-BAO acceptance. Experience as Director of Operations, Chief Pilot and Maintenance Controller has allowed me to accumulate a wealth of knowledge that few are fortunate to be

### exposed to. My international work has enabled me to understand the protocols of various nationalities leadinJ high levels of trust when working with their flight and maintenance departments. 12/08-10/11 DIRECTOR OF OPERATIONS FOR CAPITAL AIRWAYS, LLC. FAR PART 125 BOEING 727/737 and MD83. WORLD WIDE CHARTER, ORLANDO CM0-29.

Responsible for all Operations including hiring and training crews, maintenance planning. Just completed change from MSG-2 to MSG-3 program for MD83, Miami Florida including cabin refurbishment. Overseeing ground and simulator training for crew and flight attendants. Now directing certification under CFR14 Part 121 Supplemental (ATOS/SMS) under the nam of "Orange Air, LLC." Air Carrier Security Trainer and Coordinator.

Reason for leaving: Relocation to Las Vegas

12/07-07/08 DIRECTOR OF OPERATIONS FOR JET DOMAIN, FAR PART 135 (10 or more). WORLD WIDE VIP CHARTER, DALLAS FSDO.

Responsible for all Operations. Start Up company. Responsible for writing all company manuals, liaison with FAA for certification under FAR Part 135 using Global Express, Gulfstream V, Falcon 900 equipment. Air Carrier Security Coordinator. Overseeing ground and simulator training and flight standards.
I



### Reason for leaving: Company closed due to unending fight between FAA and DOT regarding foreign ownership issues, Jet Aviation.

04/05-12/07 DIRECTOR OF OPERATIONS FOR ENTERPRISE AVIATION, FAR PART 125 BOEING SUPER 727. WORLD WIDE VIP CHARTER, GRAND RAPIDS FSDO.

Responsible for all Operations including hiring and training crews also maintenance planning. Completed change from MSG-2 to MSG-3 program San Antonio Texas. Interior and avionics refurbishment and upgrade. Working with Grand Rapids FSDO. Overseeing ground and simulator training, flight standards and rewrite of all manuals to
meet FSDO requirements.

Reason for leaving: Chance to use my knowledge and skills to their full extent.

03/01-04/05 DIRECTOR OF OPERATIONS, CENTURY AVIATION/LYNXXJET DALLAS EXECUTIVE AIRPORT/McKINNEY AIRPORT, TEXAS.

FBO Director/Director of Operations for FAR Part 135 Charter Operations. Responsible for all aspects relating to operating a full service FBO. Responsible for all polices and procedures associated with fueling, maintenance and line service personnel. Procure all required equipment and supplies. Plan and execute all marketing strategies. Responsible for all aspects of FAR Part 135 charter operations including writing training and operations manuals, instructing ground and flight subjects, simulator checks and working with FAA on all compliance related tasks. Overseeing all refurbishment and repairs to company aircraft and equipment.Reason for leaving: Better career options 08/00-02/01 

### CHIEF PILOT/DIRECTOR OF FLIGHT OPERATIONS 

### Trans-Gulf Corporation, Las Vegas, Nevada. (Part 125, Boeing 727) 

### (Based in J 

### eddah, Kingdom of Saudi Arabia)

Responsible for all aspects of operations involving Boeing 727-100 Corporate aircraft. Responsible for a multi-million-dollar budget and all flights, including International, Trans-Atlantic and Far East. Completed pre-buy inspection of
company aircraft, oversaw heavy C checks to bring from Saudi register to US register. Scheduling all maintenance and spare part procurement and all operational and training programs.

Reason for Leaving: Resigned, reasons will be disclosed at time of interview.

12/99-06/00 

### CHIEF PILOT/DIRECTOR OF OPERATIONS (Part 125, Boeing 737) 

### Basic Capital Management, Inc. Addison, Texas.

Responsible for all aspects of operations involving Boeing 737-205 Advanced aircraft. Responsible for a multi-million-dollar budget and all flights, including International, Trans-Atlantic and Eastern Block operations. Conducted all
company training including production of training manuals.

Reason for leaving: Flight Department was closed, aircraft for sale.

09/92-12/99 

### CHIEF PILOT/DIRECTOR OF OPERATIONS (Part 125, Boeing 727) 

### Marbyia Investments, Ltd. Kingdom of Saudi Arabia.

Responsible for all aspects of operations involving Hawker 125, Gulfstream 1159A and Boeing 727equipment. Control over and responsible for a multimillion-dollar budget. Conducted pre-buy inspections on all company aircraft. Worked with Associated Air Center in Dallas to do a complete restoration, interior redesign and completion with new paint of company Boeing. Responsible for all flights, International, Trans-Atlantic, and internal. Personally flying members of the Saudi Royal Family, ministers and visiting YIP's to worldwide destinations. Scheduled and oversaw all maintenance and ensured strict adherence to company budgets. Conducted crew training both ground and simulator based to maintain highest flight standards. Responsible for all purchases for the department, including company aircraft. Preparation and revision of all operations and maintenance manuals.

Reason for leaving: Wished to return home to USA for R & R.

### 10/87- 08/92 CHIEF PILOT/DIRECTOR OPERATIONS/CHECK AIRMAN (Partl35) 

### American Air Ambulance/Allied Aviation, Red Bird, Texas.

Responsible for 12 aircraft and 30 pilots. Set up all crew and aircraft schedules. Performed all F.A.R. Part 135 check rides, HS.125, King Air 200, King Air B.90 and E.90. Wrote new operations manual and training manuals, re-certificated operation on change of ownership. Certified "Texas Airlift Helicopters" from scratch, including writing all manuals and statement of compliance. The training
program I produced accepted by USAIG as the same as attending Flight Safety.

Reason for leaving: Resigned, reasons will be disclosed at time of interview.

10/85

- 10/87 VICE PRESIDENT/DIRECTOR OF OPERATIONS/CHIEF PILOT (Part135) FAA APPROVED CHECKAIRMAN. 

### Aero Med International, Savannah, GA.

Reason for leaving: Base of operations moved, aircraft sold.

09/83

- 10/87 AIR AMBULANCE CHIEF PILOT (Part135) 

### Care Flight Unlimited, St. Augustine, FL.

Reason for leaving: Career development, Director of Operations.

06/79

- 09/83 TRAINING CAPTAIN

01/78- 06/79

1973- 1977

1970- 1973

1967- 1970 

### Dallah Avco Training Captain for Royal Commission, Saudi Arabia

Reason for leaving: Saudization of flight department as planned.

CHIEF PILOT 

### Northrop Wilcox, Inc., Jeddah, Saudi Arabia.

Reason for leaving: Invitation to join Saudi Royal Commission Flight.

PILOT/MANAGER 

### E. Brooksbank, Ltd., Wantage, U.K.

Reason for leaving: Business and aircraft sold.

AIR TRAFFIC CONTROLLER 

### Thruxton Airport, Andover, U.K.

Reason for leaving: Got married, needed more income.

RESEARCH TECHNICIAN

### U.K. Atomic Energy Authority, U.K.A.E.A. U.K.

ENGINEERING EXPERIENCE:

Research and survey of multiple heavy aircraft for prospective purchasers and sellers. Services provided to various U.S., British and Saudi clients. (Confidential list available.) Personally overseeing heavy maintenance checks and completions for several operators.

NORTHROP WILCOX, SAUDI ARABIA

Performance of maintenance on company aircraft: electrical, mechanical, engine and airframe. Carrying out required inspections, trouble shooting of systems, working from technical manuals. Using lathe, drill press, swaging machine, hand tools avionics test sets, electronic meters, etc. My work was then inspected and signed off by an I. A. 

### Programming computer to keep track of rotables (time-life items) and inspections on company aircraft.

PERSONAL ENGINEERING

Repair of Amateur radio/television equipment (WlJET), calibration, alignment, installation, S.W.R. adjustment, etc. I hold an FCC Extra Class license and VE (Examiner) status. Repair of
most household mechanical and electrical equipment. Service, maintenance and repair of automobiles. Last project was overhaul and rebuild of 1961 Jaguar XKE type engine, twin overhead cam with triple 2" S.U. carburetors. Road tested to 151 miles per hour.

Excellent understanding of mechanical, hydraulic and electrical systems.



### COMPUTER LITERACY:

Very familiar with IBM PC's. Windows all versions, GW Basic, Q-Basic (Written many programs for pilot testing, Charter Price Quotes etc). Built several personal computers for myself and family. Performed memory upgrades, installation of disk drives, fax/modems. Installation and commissioning of LAN's and many software packages including MS Office Suite 2010, including MS Publisher, OneNote and PowerPoint. I provide computer and software technical support to several companies. I am very fortunate to possess a semi photographic memory and ' am usually able to sort out most problems over the telephone without the need for the computer

to be in front of me.REFERENCES

Inspector Richard Rogers 

### Principal Operations Inspector Department of Transportation Federal Aviation Administration Certificate Management Office 29 5950 Hazeltine National Drive Citadel International, Suite 500 Orlando, Florida 32822

Phone: (407) 812-3043

Inspector Charles Bleiberg 

### Principal Maintenance Inspector Department of Transportation Flight Standards District Office- 05 Certificate Management Office 29 5950 Hazeltine National Drive Citadel International, Suite 500 Orlando, Florida 32822

Phone: (407) 812-3040

Inspector Jay Stiles 

### Principal Operations Inspector Department of Transportation 

### Flight Standards District Office

- 05 7701 North Stemmons Freeway Lock Box No. 5. Dallas, Texas 75237

Phone: (972) 582-1800**Tuesday,~berl6,2007**

To Whom It May Concern:

I have had the pleasure ofknowing Capt Paul Hook since September of 1988 when he hired me
as co•pilot on the King Air B90.

Paul Hook was Director of Operations at American Air Ambulance when we started the Teddy Bear Transport fixed wing EMS Program for Cook Children's Medical Center in Fort Worth, Texas.

Our program's spotless safety record is due, in large part, to policies and practices originally put in place by Capt. Hook. When conducting training and check rides, Capt Hook always made

sure his pilots were able to safely operate our aircraft under the worst possible circumstances. In fact, I still refer to my PIC up-grade check ride as a "rite ofpassage".

Capt. Hook's character and judgment have never been in question and he has always conducted himself in the most professional manner. He will be a valuable asset to any organization fortunate enough to have his services.

Sincerely,

Fixed Wing Manager Teddy Bear Transport/CJ Systems Aviation Cook Children's Medical Center Spinks Airport, Fort Worth, Texas 817-447·2327 ray.crain@gmail.comOctober I0, 2007

To Whom It May Concern:

Anyone who is considering hiring Paul Hook for an aviation related position should know that they have tbund a very talented candidate.

Prior to my current employment as a Pilot at American Airlines, my experience with Paul started at a Dallas based, FAR Part 135 Charter Company. 

### r have flown with Paul on several aircraft, starting with a King Air, the HS125, a Olll, and later had the opportunity to enjoy some time \Vith Paul on the Boeing 727 as well.

Working as a crew with Paul always felt like you had flown with a natural pilot and true professional. More then just being able to "fly the airplane", Paul had a fantastic knowledge of aircraft systems, company operations, regulations, and safety. It was not just that Paul knew all the information, but he took pride in educating those around him.

It's hard to match the worldwide experience that Paul Hook has in several corners of aviation, but anyone who has met Paul would soon know he is an expert in the industry. I've seen his skills first hand, and 1 give him my highest recommendation.

P.O. Box 101147 Fort Worth, Texas 76185 817-994-4321

# . ' 

# --------

Friday, October 05, 2007

To whomever it may concern.

This letter is to inform you of the capabilities of Paul Hook. who was our Chief Pilot/Director of Operations for many years.

Paul was hired by "Marbyia Investments" to fly our HS 125-600 in Saudi Arabia. He soon demonstrated to us that we had the wrong aircraft for our missions and with his guidance, purchased an HS 125-700 which proved to be very successful and did everything he told us it would. This was to be the pattern as the years went by, we would give him our requirements and he would give absolutely the correct solution, from Gulfstream III, right up to the Boeing aircraft we eventually purchased.

With his natural talent for summing a pilot up in just a few minutes, he put together what we still consider to be the best flight department any company could ever have. Paul was always instructing the crews personally and readily shared the wealth of information he possessed. If a pilot was having troubles related to systems or flying, Paul just had the ability to give them different perspectives until the problem was overcome and thoroughly understood. His knowledge ofthe aircraft inside and out was on many occasions the thing that prevented mechanical failures from becoming very expensive repairs by doing the right thing at the right time.

As the president ofMarbyia Investments when Paul was there, I speak from first hand experience ofhis capabilities. He will make a valuable contribution to any type of aviation project and you will be fortunate to have employed him.

Yours truly,

Robert Friedrich

President ofMarbyia Investments Ltd. (Ret.)

120 Bayberry Cove Road
Sylva, NC 28779 USA

828 226 80001 0035 Shadow Road La Mesa, CA 91941

OBJECTIVE:

QUALIFICATIONS:

FLIGHT TIME:

,

WORK HISTORY:

3-0o I 11-02

11-02 I 7-12

1994 I 3-00

7-12 I Present

1994 I 3-00

1985-Present {Adjunct Faculty)

EDUCATION:

1979 ROBERT W. HEMBURY

Director of Operations Home (619) 465-3116 Cell {619) 540-2647

Airline Transport Pilot: Airplane, MEL Type Ratings: C500; C650; 8737; DA-50; LRJET; HS125; C525S FAA Designated Pilot Examiner, Pilot Proficiency Examiner: CE500; CE525 FAA Part 135 Check Airman: CE-550; CE-650, DA-501900 Flight Instructor: ASEL, MEL, Instrument Ground Instructor: Advanced, Instrument FAA Class I Medical Aircraft: 8-757; C550; C650; DA-50; CE-525; LR24-35, HS125, IA24; 8737; 8200

Total PIC SIC 13156 Jet 9287 Turboprop 2883 Multiengine

Airline Pilot 8796 Turbine PIC 671 Instrument 10449 Night 7159 3193 3496

National Airlines Pilot: 8757; Systems Instructor 6020 Spencer St Las Vegas, NV Corporate/Charter Pilot

Jet Air Systems 681 Kenney Street El Cajon, CA

Schubach Aviation 2006 Palomar Airport Rd. Carlsbad, CA D/0 for a global Part 135 turbojet operation. Direct training and all 135 activities. Captain: CE-650, DA-50/900

Captain: HS125, C501, 8200. Part 135 passenger transport operations. Check airman.

Director of Operations

California Pacific Airlines 5670 El Camino Real Carslbad, CA

Tango Air Inc. 2006 Palomar Airport Rd. Carlsbad, CA DIO for a Part 121 scheduled operator. Airline start up responsibilities and FAA liaison and compliance duties.

Direct all aspects of a Part 135 turbojet I turboprop charter and 

### NC management operation.
College Aviation Instructor

SD Community College Mesa 

### I Miramar College San Diego, CA Instruct aviation courses through ATP, aviation mgt., CAM, flight physiology and simulator plans.

B.A. in Business Management

National University I SDSU San Diego, CA Graduated Cum Laude Emphasis: Operations Mgt.
TECHNICAL TRAINING:

2008-2012 2003-2012 2002-2003 2000-2002

PERSONAL DATA: DA-50/900; Simuflite Part 135 Checks Citation 650 Simuflite Part 135 Checks Hawker 800XP Recurrent-Simuflite Part 135 Checks National Airlines, 8757 Training, Recurrent 4-01, 4-02

Married, 008:09-17-51

### Dean Sinerius 

### 6860 Briarwood Drive

Carlsbad, CA 92011 

### 480-586-4206 deansinerius@ gmail.com

SUMMARY Over 30 years, I've propelled my career from a Flight Engineer for the USN to the creation and implementation of world-class automation in the maintenance, reliability and planning programs for aircraft and engines. I offer

a unique blend of technical expertise enhanced with a Business Degree and a Mini-MBA in Technical Management. I've excelled in start-up and turn-around situations by identifying weak areas and initiating change to drive costs down and productivity up while developing the core competencies of a new team. My diverse background has created an extensive network that would be beneficial to any employer with a large outsourced portfolio where cost and turn-times are critical. Other areas of expertise include:



### • Project Management 

### • Product Development


### • Public Speaking 

### • Business Development


### • Marketing Research 

### • Budget Management and Analysis 

### • Certified Six Sigma Green Belt 

### • FAA Liaison


### • A+ Certified 

### • Business & Technical Degree

PROFESSIONAL EXPERIENCE California Pacific Airlines, Carlsbad, CA January 2011

- Present Vice President of Technical Operations & Director of Maintenance I was asked to work with the certification team in an effort to obtain initial FAA approval for revenue passenger operations and ultimately grow the airline into the preferred choice for passengers with-in our route structure, specifically the residents of North County San Diego

The Mesa Air Group, Phoenix, AZ 2006-January 2011 Director of Programs, Planning, Engineering, Powerplant Management & MRO Services I was asked to take over a struggling planning department (line and heavy maintenance) and identify the critical business metrics that drive organizational performance and initiate corrective action. Those actions include:

• A reduction in the airframe maintenance budget of $10M through a program change moving work from

a heavy maintenance environment into the line maintenance environment

• Identified potential program savings of up $750K annually that would drive an increase in reliability and reduce check cycle time.

o Reduced APU overhaul costs by 40% through a competitive bid process.

• Designed changes to the aircraft routing tracking computer system that will create the applicable business metrics allowing identification of problem areas requiring action.

• Created automation to extract data for reporting and analysis of planned maintenance and trained employees on the automation which reduced the time required in the planning and analysis process.

• Implemented the Omega software planning system which drives maintenance costs down by 18% annually while increasing a/c reliability.

• Responsible for the budget & operational performance of 187 aircraft & engines, 30 maintenance stations & a $108M annual maintenance budget.

Frontier Airlines, Denver, CO 2006-2006 Sr. Manager of Maintenance Control & Technical Services I was hired to stabilize a maintenance control organization that had been without leadership for nearly 6 months. With-in my first 2 weeks, I was able to identify and act upon the following areas of opportunity.DEAN SINERIUS PAGE2



### •

• Identified,**p~opos~~ ~nd**  implemented the**structur~** and communication mechanism for the morning launch meetmg utlhzmg the forum as an opportumty to communicate organizational performance from the previous day and the areas of concern for the coming day.

o The implementation drove maintenance costs down by 3% while increasing performance by 1.5%. Created a business metric to identify planned vs. actual workload and adopted the metric as a shared goal between Planning, Maintenance Control, Line Maintenance and Material Control.

o The implementation immediately increased overnight workload completion by 10% which also reduced delays.

America West Airlines, Phoenix, AZ 2003-2006 Manager of Maintenance Control I was hired to manage the B737 maintenance program and have exceeded these expectations in my first 6 months by identifying and acting upon several areas of opportunity, listed below and my efforts have been recognized by the executive leadership team as I have been awarded the Technical Operations MVP of the Quarter. With-n the first 8 months, I was recruited to assume the position as Manager of Maintenance Control.



### •



### •

•



### • Identified, proposed and implemented $425K in annual savings though the elimination of maintenance
program duplication between the "B" Check and "C" Check programs. Identified proposed and in the process of implementing $1.2 Million in annual savings driven by integration of the corrosion, zonal and structures programs. Designed and implemented a maintenance program requirements database that will provide an automated tool to house all program requirements and further identify inefficiencies. With-in the first 5 months as the Manager of Maintenance Operations Control, I implemented processes that allowed the airline to meet exceed to goal for "broken trips" for the first time since the business metric

was created. Achieving this goal drove costs down by as much as 25% while increasing on-time performance and contributing to an increase in dispatch reliability.

GE INSPECTION TECHNOLOGIES, Cincinnati, Ohio 2001-2002 Director of Aircraft Programs I was hired to act as a liaison between GE, the FAA and the launch customer. I exceeded those expectations by proactively expanding the GE customer base as I secured new and profitable relationships having identified new inspection solutions for several customers on the airframe and engine FAA mandated requirements. Also identified a new technology as a development product with the potential to save the airline industry $300 Million annually in delays and cancellations.

• Increased operating margin by 40% as the Team Leader of the USAF Digital Radiography Insertion Program. The successful bid & implementation of the project increased revenue by $2 Million.

• Researched and created the value story for the digital radiography component system, which demonstrated a cost benefit of 72% IRR and 1.6-year payback.

• Led the feasibility study of an airframe overhaul business with the Business Development Group for

new potential product offerings.

• Restored the relationship with British Airways on a project that demonstrated immediate labor savings of 68% and potential labor savings of 95% through the use of a new inspection technology.

CHAMPION AIRLINES, Eagan, Minnesota 1999-2001 Director, Technical Programs and Planning I was asked to join the senior management team to re-launch a faltering new airline. I was successful in developing the quality processes and procedures that culminated in FAA approval of the Champion Air reliability program which is still in use today. I set-up, wrote and obtained regulatory approval for the champion air maintenance program which reduced costs and increased reliability. Additional responsibilities included operation, budget, policies and standards for engine and aircraft planning, reliability, maintenance programs, technical operations information services, training and engineering. 

# ...DEAN SINERIUS PAGE2



### •

•

•



### • As Chairman of the Reliability Control Board, drove changes to the maintenance program resulting in improved mechanical reliability from 80% to 97.3%. Developed the financial package for purchase & led the implementation for a new computer software system completed on time and under budget. Proactively formalized a vendor selection process for engine and aircraft lesors and repair facilities that drove repair & overhaul costs down, decreased inventory and turn-times. Entrusted with and consistently found a way to successfully manage a $10 million budget for aircraft & engine maintenance.

NORTHWEST AIRLINES, Eagan, Minnesota 1982-1999

Boeing 727 Maintenance Program Manager I held several positions over 17 ·years at NWA, too numerous to list here. In my last position, I developed and maintained a technically sound and economically efficient maintenance program for the B727 fleet. I exceeded expectations by becoming a recognized industry expert and representing NWA on several MFG program development efforts.

• Reduced B727 maintenance program costs by $7 million annually by consolidating new regulatory corrosion and aging aircraft requirements with the manufacturer's maintenance program.

• Reduced line maintenance costs on the B747 by $6 million annually by converting the maintenance
program from an older format to a more efficient "A" check format.

• Set-up and implemented the initial planning model for the Pacific Rim centralized line station management and planning which provided NW A with additional overnight repair options.

• Developed an automated data collection and reporting system (FAA compliant with mandated C.P.C.P. program) that saved NWA over $200,000 annually.

THE GARRET CORPORATION, Phoenix, Arizona Development Engineering Test Technician

US NAVY, Moffett Field, California P-3 Flight Engineer

EDUCATION 1980-1982

1976-1980

Mini-MBA for Technical Professionals (Continuing Education Certificate, not a degree program) St. Thomas University, Minneapolis, MN Bachelor Degree in Aviation Maintenance Management Embry Riddle School Of Aeronautics (Expect to graduate in May of 2013) Applied Sciences Degree in Aviation Business Management Inver Hills Community College, Inver Groove Heights, MN Licensed Airframes & Powerplant Mechanic

AWARDS Congressional Humanitarian Medal of Honor from the US Navy

Letter of Commendation from the commanding officer of VP-9 Good Conduct Medal upon discharge from active duty Letter of Commendation from Northwest Airlines Executive Management MVP of the Quarter (2003) for America West Technical Operations Chairman's Award from Doug Parker for my contributions during 2004DEAN SINERIUS

PROFESSIONAL DEVELOPMENT Six Sigma Certification Project Management Certification Corporate Entrepreneurship Seminar Advanced Computer User Relational Data Base Design and Maintenance in MS Access Speaking and Thinking On Your Feet Seminar PAGE25/25/2012CaliforniaPacificAirlinesStockOwnershipISStockOwnership

## )

) 

## By-Laws for Carlsbad-Palomar Airlines, Inc.

OFFICES

ARTICLE ONE- §1

- PRINCIPAL OFFICE The original office of the corporation was located in San Diego County at:

5670 El Camino Real, Suite D Carlsbad, California 92008

ARTICLE ONE

- §2

- CHANGE OF ADDRESS The designation of the county or state of the corporation's principal office may be changed by amendment of these Bylaws. The Board of Directors may change the principal office from one location to another within the named county by noting the changed address and effective date below, and such changes of address shall not be deemed, nor require, an amendment of these Bylaws

ARTICLE ONE- §3- OTHER OFFICES

· The corporation may also have offices at such other places, within or without its state of incorporation, where it is qualified to do business, as its business and activities may require, and as the Board of Directors may, from time to time, designate.

ARTICLE ONE- §4- GENERAL PURPOSE OF CORPORATION The general purposes of Carlsbad-Palomar Airlines, Inc., shall be those set forth in the Articles. The Corporation may, as provided in the Articles and the By-Laws, exercise all of the powers described in the Act as it may be amended from time to time.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE ONE

- Page 1

## DIRECTORS

ARTICLE TWO

- 

### § 1

- Definition of "Board" As used in these Bylaws, the word "Board" means the Board of Directors of the corporation.

ARTICLE TWO- §2- RESPONSIBILITY OF BOARD Subject to the provisions of the General Corporation Law and to any limitations in the Articles of Incorporation relating to actions required to be approved by the shareholders,. as the term is defined in California Corporation Code §153, or by the outstanding shares, as that term is defined in California Code §152, .the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board may delegate the management of the day-to-day operation of the business of the corporation to Management/Officers or to other persons, provided the business and affairs of the corporation shall be exercised under the ultimate direction of the Board.

ARTICLE TWO

- §3

- NUMBER OF DIRECTORS The number of directors of the corporation shall be Nine (9) provided, however, that before shares are issued, the number of directors shall be One (1).

ARTICLE TWO

- §4

- ELECTION AND TERMS OF OFFICE The directors shall be divided into two classes, designated Class I and Class II.

Class I, shall consist of Five (5) directors to be elected as follows: "Series A Common Stock" shall elect Two (2) directors "Series B Common Stock" shall elect Three (3) directors

Class II, shall consist of Four (4) directors to be elected as follows: "Series A Common Stock" shall elect One ( 1) director "Series B Common Stock" shall elect Three (3) directors

The initial term of office of the directors of Class I shall expire at the annual meeting to be held during fiscal year 2010 and the initial term of office of the directors of Class II shall expire at the annual meeting to be held during the fiscal year 2011. At each annual meeting, commencing with the annual meeting held during the fiscal year 2010, each of the successor directors of the class whose term shall have expired at such annual meeting shall be elected for a term running until the second annual meeting next succeeding his or her election and until his successor shall have been duly elected and qualified.

ARTICLE TWO- §5- NO CUMULATIVE VOTING There shall be no right with respect to shares of stock of this corporation to cumulate ) votes in the election of directors and any other vote.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 2

### ARTICLE TWO- §6- DUTIES It shall be the duty of the directors to: (a) Perform any and all duties imposed on them collectively or individually by law, by the Articles of Incorporation, or by these Bylaws; (b) Appoint and remove, employ and discharge, and, except as otherwise provided in these Bylaws, prescribe the duties and fix the compensation, if any, of all officers, agents and employees of the corporation; (c) Supervise all officers, agents and employees of the corporation to assure that their duties are performed properly; (d) Meet at such times and places as required by these Bylaws; (e) Register correct addresses with the President of the corporation, so that notices of meetings sent to them at such addresses shall be valid notices thereof.

ARTICLE TWO

- §7- COMPENSATION Directors shall receive such compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board.

ARTICLE TWO

- §8

- PLACE OF MEETING Meetings shall be held wherever the Board of Directors designates

ARTICLE TWO

- §9

- REGULAR MEETINGS There shall be one regular meeting of the Board of Directors no less than once a quarter at a place fixed by the Board of Directors.

ARTICLE TWO- §10- SPECIAL MEETINGS The President or the Board of Directors may call special meetings. Directors may unite in a petition to call for such a meeting, or individually address written requests to the President. Upon receipt of such petitions or written requests from the required Directors, the President shall notify each Director in writing (both written or electronic) of such meeting, fixing the time and place thereof not less than ten (1 0) nor more than thirty (30) days from the date of said notice.

ARTICLE TWO- §11 -NOTICE OF MEETINGS Unless otherwise provided by the Articles of Incorporation, these Bylaws, or provisions of law, the following provisions shall govern the giving of notice for meetings of the Board of Directors: (a) Regular Meeting A ten-day oral notice of meeting shall be given by the President. (b) Special Meetings At least ten days prior notice shall be given by the President or Secretary of the corporation to each Director of each special meeting of the board. Such notice may be oral or written, may be given personally, by first class mail, by telephone, e-mail, or by ·facsimile machine, and shall state the place, date and time of the meeting and the matters proposed to be acted upon at the meeting. Directors are required to acknowledge receipt of the notice whenever it is received.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 3

# )

) (c) Waiver of Notice

. .

### Whenev~r**~ny** notice

### of~ meeting is required to be given to any director of th1s corporation under prov1s1ons of the Articles of Incorporation, these Bylaws, or the law of this state, a waiver of notice in writing signed by the director, whether before or after the time of the meeting, shall be equivalent to the giving of such notice.

ARTICLE TWO- 

### §12- QUORUM FOR MEETINGS A quorum after shares of stock have been issued shall consist of no less than Five (5) of the Board of Directors, except as otherwise provided under the Articles of Incorporation, these Bylaws, or provisions of law. Every aQt or decision done or made by the majority of the directors present at a duly held meeting at which a quorum is present is an act of the Board, provided, however, that any meeting at which a quorum was initially present may continue to transact business notwithstanding the withdrawal of directors if any action taken is approved by at least a majority of the required quorum for the meeting. No business shall be considered by the board at any meeting at which the required quorum is not present, and the only motion which the Chair shall entertain at such meeting is a motion to adjourn.

ARTICLE TWO

- 

### § 13

- MAJORITY ACTION AS BOARD ACTION Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the Board of Directors, unless the Articles of Incorporation, these Bylaws, or provisions of law require a greater percentage or different voting rules for approval of a matter by the board.

ARTICLE TWO- 

### §14- CONDUCT OF MEETINGS Meetings of the Board of Directors shall be presided over by the President of the corporation or, in his/her absence, by the Treasurer of the corporation. The Secretary of the corporation shall record all decisions of the board at all meetings. In his absence, the presiding officer shall appoint another person to act as Secretary of the meeting. Participation in a meeting through use of a conference telephone call or electronic video screen, pursuant to this Paragraph, constitutes presence in person at the meeting as long as all members participating in the meeting are able to hear and communicate with one another.

ARTICLE TWO- 

### §15- VACANCIES Vacancies on the Board of Directors shall exist: 

### (1) On the death, resignation or removal of any director, and (2) Whenever the number of authorized directors is increased. Any director may resign effective upon giving written notice to the President or the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. No director may resign if the corporation would then be left without a duly elected director or directors in charge of its affairs, except upon notice to the Office of the Attorney General or other appropriate agency of this state. Directors may be removed from office, with or without cause, as permitted by and in accordance with the laws of this state.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 4

### Unless**~therwise** 

### prohibited by**the~rticles** 

### of Incorporation, these Bylaws or provisions of law, vacanctes on the board may be ftlled by approval of the Board of Directors. If the 

### number of directors then in office is less than a quorum, a vacancy on the board may be filled by approval of a majority of the directors then in office or by a sole remaining director. A person elected to fill a vacancy on the board shall hold office until the next election of the Board of Directors or until his or her death, resignation or removal from office.

ARTICLE TWO- §16- NON-LIABILITY OF DIRECTORS The directors shall not be personally liable for the debts, liabilities, or other obligations of the corporation.

ARTICLE TWO- §17- INDEMNIFICATION BY CORPORATION OF DIRECTORS AND OFFICERS The corporation has power to indemnify any person who is or was director, officer, employee, or other agent of this corporation against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any threatened, pending,

or completed action or proceeding, whether civil, criminal, administrative, or investigative, as provided in Section 317 of the California Corporation Code, as that section now exists or may from time to time be amended to provide.

ARTICLE TWO- §18 -INSURANCE FOR CORPORATE AGENTS Except as may be otherwise provided under provisions of law, the Board of Directors may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the corporation (including a director, officer, employee or other agent of the corporation) against liabilities asserted against such liability under the Articles of Incorporation, these Bylaws or provisions of law.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 5

## OFFICERS

ARTICLE THREE- §1

- DESIGNATION OF OFFICERS The officers of the corporation shall be a Board Chairman and a President, VicePresident, a Secretary, and a Chief Financial Officer who may be called a Treasurer. The corporation may also have other officers as may be determined from time to time by the Board of Directors. All officers shall be chosen by, and hold office at the pleasure of, the Board. The Board shall fix each officer's compensation.

ARTICLE THREE

- §2

- QUALIFICATIONS Any Director may serve as an officer of this corporation.

ARTICLE THREE

- §3

- ELECTION AND TERM OF OFFICE The annual election of officers shall be the first order of business at a regular Board of Directors Meeting following the Annual Meeting Board of Directors each year. All officers shall serve at the pleasure of the Board of Directors.

ARTICLE THREE

- §4

- REMOVAL AND RESIGNATION Any officer may be removed, either with or without cause, by the President at any time. Any officer may resign at any time by giving written notice to the President or Treasurer of the corporation. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The above provisions of this section shall be superseded by any conflicting terms of any contract which has been approved or ratified by the Board of Directors relating to the employment of any officer of the corporation.

ARTICLE THREE

- §5 -VACANCIES Any vacancy caused by the death, resignation, removal, disqualification, or otherwise, of any officer shall be filled by the Board of Directors. In the event of a vacancy in any office other than President, such vacancy may be filled temporarily by appointment by the President of either the Vice President or Chief Financial Officer until such time as the board shall fill the vacancy.

ARTICLE THREE

- §6

- DUTIES OF PRESIDENT Subject to any supervisory powers that may be given by the Board of Directors to the Board Chairperson, if there is such an officer, the President shall be the Chief Executive Officer of the corporation and shall perform all the duties of commonly incident to that office. The President shall preside at all meetings of the shareholders and, if there is no Board Chairperson, at all meetings of the Board.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE THREE

- Page 6

## )

) 

# ------------------

ARTICLE THREE

- §7

- DUTIES OF VICE-PRESIDENT The Vice-President may assume and perform the duties of the President in the event of his/her absence or disability and shall have such other duties as prescribed by the Board of Directors, or President shall from time to time designate. The Vice-President shall serve in the office of the President at the pleasure of the Board President.

ARTICLE THREE

- §8

- DUTIES OF BOARD CHAIRPERSON The Board Chairperson, if there is such an officer, shall, if present, preside at all meetings of the Board and perform any other powers and duties that may from time to time be assigned by the Board or prescribed by law or by these Bylaws.

ARTICLE THREE

- §9

- DUTIES OF SECRETARY The Secretary shall ensure that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; shall keep the records, minutes and seal of the Corporation and perform such other duties as are customary to the office, including acting

as Secretary for the Board of Directors and all shareholder proceedings; and shall perform any other duties that are assigned from time to time by the Board or by the President.

ARTICLE THREE- §10- DUTIES OF TREASURER The Treasurer shall be the custodian of the funds and securities, and the collecting and disbursing officer. He/she shall deposit the funds and securities in such depositories and in such manner as the Board may designate and direct, and shall be relieved of responsibility while they are in the custody of such depository, subject, however, to any liability under his/ her surety bond.

ARTICLE THREE- §11 -COMPENSATION The salaries of the officers, if any, shall be fixed from time to time by resolution of the Board of Directors. In all cases, any salaries received by officers of this corporation shall be reasonable and given in return for services actually rendered to or for the corporation.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE THREE

- Page 7

# ------------------··

DETERMINING SHAREHOLDERS OF RECORD

ARTICLE FOUR- §1

- RECORD DATE FIXED BY BOARD In order that the corporation may determine the shareholders entitled to notice of any meeting or to vote, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights regarding any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of the meeting nor more than sixty (60) days before any of the other aforementioned actions.

ARTICLE FOUR- §2

- RECORD DATE NOT FIXED If no record date is fixed: (1) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. (2) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given. (3) The record date for determining shareholders for any other purpose shall be the close of business on the day on which the Board adopts the resolution relating to the record date, or the sixtieth (60th) day before the date of the other action, whichever is later.

ARTICLE FOUR- §3- RECORD DATE FOR ADJOURNED MEETING A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board must fix a new record date, however, if the meeting is adjourned for more than forty-five (45) days from the date set for the original meeting.

ARTICLE FOUR

- §4

- RIGHTS OF SHAREHOLDERS OF RECORD Shareholders at the close of business on the record date are entitled to notice and to vote or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the Articles or by agreement or in the General Corporation Law.

ARTICLE FOUR

- §5

- NOTICE OF MEETINGS Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given to each shareholder entitled to vote at the meeting, subject to the provisions of §1 0- Waiver of Notice and Other Defects.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 8

# --------------------

ARTICLE FOUR

- §6

- METHOD OF GIVING NOTICE OF MEETINGS Notice of a shareholders' meeting shall be given personally, or by electronic transmission by the corporation, or by first-class mail, postage prepaid, or other means of written communication, addressed to the shareholder at the address of the shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. The notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. If any notice addressed to the shareholder at the address of the shareholder appearing

on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it to the shareholder at the address, all future notices shall be deemed to have been duly given without further mailing if the notices are available to the shareholder on written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice to all other shareholders.

ARTICLE FOUR

- §7 -TIME OF NOTICE Notice of any meeting of the shareholders will be sent by first class mail to each shareholder entitled to the notice not less than ten ( 10) nor more than sixty (60) days before the date of the meeting; provided, however, that at any time that this corporation has outstanding shares held of record by five hundred (500) or more persons (determined as provided in California Corporations Code §605) on the record date for the shareholders' meeting, notice may be sent by third class mail if sent not less than thirty (30) days before the date of the meeting.

,

ARTICLE FOUR

- §8

- CONTENTS OF NOTICE The notice of any meeting of the shareholders shall state the place, date, and hour of the meeting, any means of electronic transmission by and to the corporation or electronic video screen communication by which shareholders may participate at the meeting, and: (1) in the case of a special meeting, the general nature of the business to be transacted, and tat

no other business may be transacted; or (2) in the case of the annual meeting, those matters that the Board, at the time of the mailing of the notice, intends to present for action by the shareholders, but any proper matter may be presented at the meeting for the action, provided, however, that any shareholder approval at a meeting, other than unanimous approval by those entitled to vote, pursuant to Corporations Code §310 (relating to contracts and transactions between the corporation and any director or legal entity in which a director has a material financial interest), §902 (relating to amendment of the articles), §1152 (relating to corporate conversions), §1201 (relating to reorganizations), §1900 (relating to voluntary dissolution), or §2007 (relating to distribution plans on dissolution), shall be valid only if the general nature of the proposal so approved was stated in the notice of meeting or in any written waiver of notice. The notice of any meeting at which directors are to be elected must include the names of nominees intended at the time of the notice to be presented by management for election.

Carlsbad-Palomar Airlines, Inc,

- ARTICLE FOUR

- Page 9

## ) 

# ------------------ 

# ..

ARTICLE FOUR

- §9

- NOTICE OF ADJOURNED MEETING When a shareholders' meeting is adjourned to another 

### time or place, notice need not be given of the adjourned meeting 

### if the time and place of the adjourned 

### meeting (or any means of electronic transmission by and to the corporation or electronic video screen communication by which shareholders may participate at the meeting) are announced at the meeting at which the adjournment 

### is taken, provided, however, that 

### if the adjournment 

### if for more than forty-five (45) days or 

### if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each shareholder of record entitled to vote at the meeting. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting.

ARTICLE FOUR- §1 0- WAIVER OF NOTICE AND OTHER DEFECTS The transactions of any meeting of shareholders, however called and noticed and wherever held, are as valid as though made at a meeting duly held after regular call and notice, 

### if a quorum (see §13 of these Bylaws) 

### is present either 

### in person or by proxy and 

### if, either before or after the meeting, each of the persons entitled to vote, not present in person
or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes of the meeting. All waivers, consents, and approvals must be filed with the corporate records or made a part of the minutes of the 

### meeting. Except as provided in §8 and unless otherwise provided in the Articles, neither the business to be transacted

nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting, or approval of the minutes of the meeting. Attendance by a person at any meeting also constitutes a waiver of notice to that person if he or she fails to object at the beginning of the meeting to the transaction of business because the meeting was not lawfully called or convened, but attendance does not constitute

a waiver of the right to object to the consideration of matters required to be included 

### in the notice but not so included if the objection is expressly made at the 

### meeting.

ARTICLE FOUR- §11 -CALLING OF SPECIAL MEETINGS On request 

### in writing to the corporation addressed to the 

### attention of the Board Chairperson, or the President, or a Vice-President, or the Secretary of the corporation by any person (other than the Board) entitled to call a special 

### meeting of shareholders (see 

### § 12), the officer immediately shall cause notice to be given to the shareholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than 

### sixty (60) days after receipt of the request. If the notice is not given 

### within twenty (20) days after receipt of the request, the persons entitled to call the meeting may give the notice or they may apply to the superior court of the county 

### in which the principal executive office of the corporation is located or an order, after 

### notice to the corporation giving it an opportunity to be heard, summarily ordering the 

### giving of the notice.

ARTICLE FOUR- §12- PERSONS ENTITLED TO CALL SPECIAL MEETINGS Special meetings of the shareholders may be called by the Board of Directors, the Board Chairperson, the President, or the holders of shares entitled to cast not less than ten percent (10%) of the votes at the 

### meeting.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 10

## )

')

I 

# ----------------·--

ARTICLE FOUR- §13- QUORUM OF SHAREHOLDERS A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders, provided, however, that whenever shares

are disqualified by the General Corporation Law from voting on any matter, they shall not be considered outstanding for the determination of a quorum at any meeting to act on that matter under any other provision of the General Corporation Law or the Articles or these Bylaws.

ARTICLE FOUR- §14- LOSS OF QUORUM The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment despite the withdrawal of enough shareholders to leave less than a quorum, if any action is taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum, or the vote of any greater number or voting by classes as required by law or the articles of incorporation.

ARTICLE FOUR- §15- EFFECT OF VOTE If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the General Corporation Law or the Articles, and except as provided in 

### § 13 of these Bylaws, provided, however, that whenever shares are disqualified by the General Corporation Law from voting on any matter, they shall not be considered outstanding for the determination ofthe required vote to approve action on that matter under any other provision of the General Corporation Law or the Articles

or these Bylaws.

ARTICLE FOUR- §16- ELECTION OF DIRECTORS Elections for directors need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins. In any election of directors, the candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by the shares they are elected. Votes against the director and votes withheld shall have no legal effect.

ARTICLE FOUR- §17 -VOTES PER SHARE VOTING OF FRACTIONAL SHARES Except as may otherwise be provided in the Articles, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of shareholders. A certificate for a fractional share shall, but scrip or warrants shall not unless otherwise provided in the scrip or warrant, entitle the holder to exercise voting rights.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 11

## AUTHORIZED SHARES AND VOTING RIGHTS

ARTICLE FIVE- §1- CLASSES OF STOCK This corporation is authorized to issue two classes of stock to be designated, respectively, Common Stock and Preferred Stock.

The total number of shares of Common Stock this corporation is authorized to issue is Thirty-Two Million (32,000,000), of which:

Twenty Million (20,000,000) are designated "Series A Common Stock" Twelve Million (12,000,000) are designated "Series B Common Stock"

The total number of Preferred Stock this corporation is authorized to issue is:

Ten Million (10,000,000) shares

ARTICLE FIVE

- §2 -VOTING RIGHTS The Common Stock is entitled to one vote per share and Preferred Stock is entitled to vote only upon conversion to Series A Common Stock.

Series A Common Stock is entitled to elect: Two (2) Directors during the election of Class I Board of Directors One (1) Director in the election of Class II Board of Directors

Series B Common Stock is entitled to elect: Three (3) Directors during the election of Class I Board of Directors Three (3) Directors during the election of Class II Board of Directors

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FIVE- Page 12

## EXECUTION OF INSTRUMENTS 

## ' DEPOSITS, AND FUNDS

ARTICLE SIX- §1 -EXECUTION OF INSTRUMENTS The President, except as otherwise provided in these Bylaws, may by Board resolution authorize any officer or agent of the corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized, no officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable monetarily for any purpose or in any amount.

ARTICLE SIX

- §2

- CHECKS AND NOTES Except as otherwise specifically determined by the President of the corporation, or as otherwise required by law, checks, drafts, promissory notes, orders for the payment of money, and other evidence of indebtedness of the corporation shall be signed by the President and Chief Financial Officer of the corporation.

ARTICLE SIX

- §3

- DEPOSITS All funds of the corporation shall be deposited from time to time to the credit of the corporation in the designated account.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE SIX

- Page 13

## CORPORATE RECORDS, REPORTS AND SEAL

ARTICLE SEVEN

- §1

- MAINTENANCE OF CORPORATE RECORDS The corporation shall keep at its principal office:

(a) Minutes of all meetings of directors and committees, indicating time and place of holding such meetings, whether regular or special, how called, the notice given, and the names of those present and the proceedings thereof;

(b) Adequate and correct books and records of account, including accounts of its properties and business transactions and accounts of its assets, liabilities, receipts, disbursements, gains and losses;

(c) A record of its Board of Directors, indicating their names and addresses and, if applicable, the termination of their appointment.

(d) A copy of the corporation's Articles of Incorporation and Bylaws as amended to date.

ARTICLE SEVEN- §2- CORPORATE SEAL The Board of Directors may adopt, use, and at will alter, a corporate seal. Such seal shall be kept at the principal office of the corporation. Failure to affix the seal to corporate instruments, however, shall not affect the validity of any such instrument.

ARTICLE SEVEN

- §3

- DIRECTORS' INSPECTION RIGHTS Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation and shall have such other rights as may be required under the Articles of Incorporation, other provisions of these Bylaws, and provisions of law

.

. ARTICLE SEVEN

- §4

- PERIODIC REPORT The board shall cause any annual or periodic report required under law to be prepared and delivered to an office of this state, to be so prepared and delivered within the time limits set by law.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE SEVEN

- Page 14------------

\ 

### ) 

## AMENDMENT OF BYLAWS

ARTICLE EIGHT

- 

### § 1 These Bylaws may, from time to time and at any time, be amended or repealed, and

new additional bylaws adopted, by approval of the outstanding shares, as that term is defined in California Corporation Codes 

### § 152, or, subject to any restriction imposed by the Articles of Incorporation on the power of the Board of Directors to adopt, amend or repeal Bylaws, by approval of the Board; provided, however, that such Bylaws may not contain any provision in conflict with law or with the Articles of Incorporation, and, provided further, that: (1) after shares are issued a Bylaw changing the number of directors or from a fixed to variable Board

can be adopted only on approval of the outstanding shares; and (2) any such Bylaw reducing the number of directors below five cannot be adopted if the votes cast against its adoption at

a shareholders' meeting, or the share not consenting in the case of action by written consent,

are equal to more than 16 2/3 percent of the outstanding share entitled to vote.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE EIGHT

- Page 15

## CONSTRUCTION AND TERMS

) ARTICLE NINE- §1



# J If there is any conflict between the provisions of these Bylaws and the Articles of Incorporation of this corporation, the provisions of the Articles of Incorporation shall govern. Should any of the provisions of portions of these Bylaws be held unenforceable or invalid for any reason, the remaining provisions and portions of these Bylaws shall be unaffected by such holdings. All references in these Bylaws to the Articles of Incorporation shall be to the Articles of Incorporation, Articles of Organization, Certificate of Incorporation, Organizational Charter, Corporate Charter, or other founding document of this corporation filed with an office of this state and used to establish the legal existence of this corporation.



## CERTIFICATE OF SECRETARY

I certify that:

1. I am the Secretary of Carlsbad-Palomar Airlines, Inc.

2. The attached Bylaws are the Bylaws of the corporation approved by the Board of Directors**o~** 

### ;?&, d.IYIO
, at a meeting duly held.

Dated:

### lob~ 

## /;a

# ~L~ Se re ary

Carlsbad-Palomar Airlines, Inc.

- ARTICLE NINE

- Page 16

### } 

## By-Laws for Carlsbad-Palomar Airlines, Inc.

OFFICES

ARTICLE ONE- §1

- PRINCIPAL OFFICE The original office of the corporation was located in San Diego County at:

5670 El Camino Real, Suite D Carlsbad, California 92008

ARTICLE ONE

- §2

- CHANGE OF ADDRESS The designation of the county or state of the corporation's principal office may be changed by amendment of these Bylaws. The Board of Directors may change the principal office from one location to another within the named county by noting the changed address and effective date below, and such changes of address shall not be deemed, nor require, an amendment of these Bylaws

ARTICLE ONE- §3- OTHER OFFICES

· The corporation may also have offices at such other places, within or without its state of incorporation, where it is qualified tq 

### do business, as its business and activities may require, and as the Board of Directors may, from time to time, designate.

ARTICLE ONE- §4- GENERAL PURPOSE OF CORPORATION The general purposes of Carlsbad-Palomar Airlines, Inc., shall be those set forth in the Articles. The Corporation may, as provided in the Articles and the By-Laws, exercise all of the powers described in the Act as it may be amended from time to time.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE ONE

- Page 1

## DIRECTORS

ARTICLE TWO

- 

### § 1

- Definition of "Board" As used in these Bylaws, the word "Board" means the Board of Directors of the corporation.

ARTICLE TWO- §2- RESPONSIBILITY OF BOARD Subject to the provisions of the General Corporation Law and to any limitations in the Articles of Incorporation relating to actions required to be approved by the shareholders,. as the term is defined in California Corporation Code §153, or by the outstanding shares, as that term is defined in California Code §152, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. The Board may delegate the management of the day-to-day operation of the business of the corporation to Management/Officers or to other persons, provided the business and affairs of the corporation shall be exercised under the ultimate direction of the Board.

ARTICLE TWO

- §3

- NUMBER OF DIRECTORS The number of directors of the corporation shall be Nine (9) provided, however, that before shares are issued, the number of directors shall be One ( 1).

ARTICLE TWO

- §4

- ELECTION AND TERMS OF OFFICE The directors shall be divided into two Glasses, designated Class I and Class II.

Class I, shall consist of Five (5) directors to be elected as follows: "Series A Common Stock" shall elect Two (2) directors "Series B Common Stock" shall elect Three (3) directors

Class II, shall consist of Four (4) directors to be elected as follows:**"S~ries** 

### A Common Stock" shall elect One (1) director "Series B Common Stock" shall elect Three (3) directors

The initial term of office of the directors of Class I shall expire at the annual meeting to be held during fiscal year 2010 and the initial term of office of the directors of Class II shall expire at the annual meeting to be held during the fiscal year 2011. At each annual meeting, commencing with the annual meeting held during the fiscal year 2010, each of the successor directors of the class whose term shall have expired at such annual meeting shall be elected for a term running until the second annual meeting next succeeding his or her election and until his successor shall have been duly elected and qualified.

ARTICLE TWO- §5- NO CUMULATIVE VOTING There shall be no right with respect to shares of stock of this corporation to cumulate ) votes in the election of directors and any other vote.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 2\ .\ / 

### ARTICLE TWO- §6- DUTIES It shall be the duty of the directors to: (a) Perform any and all dutie$ imposed on them collectively or individually by law, by the Articles of Incorporation, or by these Bylaws; (b) Appoint and remove, employ and discharge, and, except as otherwise provided in these Bylaws, prescribe the duties and fix the compensation, if any, of all officers, agents and employees of the corporation; (c) Supervise all officers, agents and employee's of the corporation to assure that their duties are performed properly; (d) Meet at such times and places as required by these Bylaws; (e) Register correct addresses with the President of the corporation, so that notices of meetings sent to them at such addresses shall be valid notices thereof.

ARTICLE TWO

- §7

- COMPENSATION Directors shall receive such compensation for their services and reimbursement for their expenses as shall be determined from time to time by resolution of the Board.

ARTICLE TWO- §8- PLACE OF MEETING Meetings shall be held wherever the Board of Directors designates

ARTICLE TWO- §9- REGULAR MEETINGS There shall be one regular meeting of the Board of Directors no less than once a quarter at a place fixed by the Board of Directors.

ARTICLE TWO- §10- SPECIAL MEETINGS The President or the Board of Directors may call special meetings. Directors may unite in a petition to call for such a meeting, or individually address written requests to the President. Upon receipt of such petitions or written requests from the required Directors, the President shall notify each Director in writing (both written or electronic) of such meeting, fixing the time and place thereof not less than ten (1 0) nor more than thirty (30) days from the date of said notice.

ARTICLE TWO- §11- NOTICE OF MEETINGS Unless otherwise provided by the Articles of Incorporation, these Bylaws, or provisions of law, the following provisions shall govern the giving of notice for meetings of the Board of Directors: (a) Regular Meeting A ten-day oral notice of meeting shall be given by the President. (b) Special Meetings At least ten days prior notice shall be given by the President or Secretary of the corporation to each Director of each special meeting of the board. Such notice may be oral or written, may be given personally, by first class mail, by telephone, e-mail, or by facsimile machine, and shall state the place, date and time of the meeting and the matters proposed to be acted upon at the meeting. Directors are required to acknowledge receipt of the notice whenever it is received.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 3(c) Waiver of Notice Whenever any notice of a meeting is required to be given to any director of this corporation under provisions of the Articles of Incorporation, these Bylaws, or the law of this state, a waiver of notice in writing signed by the director, whether before or after the time of the meeting, shall be equivalent to the giving of such notice.

ARTICLE TWO- §12- QUORUM FOR MEETINGS A quorum after shares of stock have been issued shall consist of no less than Five (5) of the Board of Directors, except as otherwise provided under the Articles of Incorporation, these Bylaws, or provisions of law. Every act or decision done or made by the majority of the directors present at a duly held meeting at which a quorum is present is an act of the Board, · provided, however, that any meeting at which a quorum was initially present may continue to transact business notwithstanding the withdrawal of directors if any action taken is approved by at least a majority of the required quorum for the meeting. No business shall be considered by the board at any meeting at which the required quorum is not present, and the only motion which the Chair shall entertain at such meeting is a motion to adjourn.

ARTICLE TWO- §13- MAJORITY ACTION AS BOARD ACTION Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the Board of Directors, unless the Articles of Incorporation, these Bylaws, or provisions of law require a greater percentage or different voting rules for approval of a matter by the board.

ARTICLE TWO- §14- CONDUCT OF MEETINGS Meetings of the Board of Directors shall be presided over by the President of the corporation or, in his/her absence, by the Treasurer of the corporation. The Secretary of the corporation shall record all decisions of the board at all meetings. In his absence, the presiding officer shall appoint another person to act as Secretary ofthe meeting. Participation in a meeting through use of a conference telephone call or electronic video screen, pursuant to this Paragraph, constitutes presence in person at the meeting as long as all members participating in the meeting are able to hear and communicate with one another.

ARTICLE TWO

- §15- VACANCIES Vacancies on the Board of Directors shall exist: (1) On the death, resignation or removal of any director, and (2) Whenever the number of authorized directors is increased. Any director may resign effective upon giving written notice to the President or the Board of Directors, unless the notice specifies a later time for the effectiveness of such resignation. No director may resign if the corporation would then be left without a duly elected director or directors in charge of its affairs, except upon notice to the Office of the Attorney General or other appropriate agency of this state. Directors may be removed from office, with or without cause, as permitted by and in accordance with the laws of this state.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 4

## ) Unless otherwise prohibited by the Articles of Incorporation, these Bylaws or provisions of law, vacancies on the board may be filled by approval of the Board of Directors. If the number of directors then in office is less than a quorum, a vacancy on the board may be filled by approval of a majority of the directors then in office or by a sole remaining director. A person elected to fill a vacancy on the board shall hold office until the next election of the Board of Directors or until his or her death, resignation or removal from office.

ARTICLE TWO- §16- NON-LIABILITY OF DIRECTORS The directors shall not be personally liable for the debts, liabilities, or other obligations of the corporation.

ARTICLE TWO- §17- INDEMNIFICATION BY CORPORATION OF DIRECTORS AND OFFICERS The corporation has power to indemnify any person who is or was director, officer, employee, or other agent of this corporation against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any threatened, pending,

or completed action or proceeding, whether civil, criminal, administrative, or investigative, as provided in Section 317 of the California Corporation Code, as that section now exists or may from time to time be amended to provide.

ARTICLE TWO- §18 -INSURANCE FOR CORPORATE AGENTS Except as may be otherwise provided under provisions of law, the Board of Directors may adopt a resolution authorizing the purchase and maintenance of insurance on behalf of any agent of the corporation (including a director, officer, employee or other agent of the corporation) against liabilities asserted against such liability under the Articles of Incorporation, these Bylaws or provisions of law.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE TWO

- Page 5

## } 

## OFFICERS

ARTICLE THREE- §1

- DESIGNATION OF OFFICERS The officers of the corporation shall be a Board Chairman and a President, VicePresident, a Secretary, and a Chief Financial Officer who may be called a Treasurer. The corporation may also have other officers as may be determined from time to time by the Board of Directors. All officers shall be chosen by, and hold office at the pleasure of, the Board. The Board shall fix each officer's compensation.

ARTICLE THREE

- §2

- QUALIFICATIONS Any Director may serve as an officer of this corporation.

ARTICLE THREE

- §3

- ELECTION AND TERM OF OFFICE The annual election of officers shall be the first order of business at a regular Board of Directors Meeting following the Annual Meeting Board of Directors each year. All officers shall serve at the pleasure of the Board of Directors.

ARTICLE THREE

- §4

- REMOVAL AND RESIGNATION Any officer may be removed, either with or without cause, by the President at any time. Any officer may resign at any time by giving written notice to the President or Treasurer of the corporation. Any such resignation shall take effect at the date of receipt of such notice or at any later date specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The above provisions of this section shall be superseded by any conflicting terms of any contract which has been approved or ratified by the Board of Directors relating to the employment of any officer of the corporation.

ARTICLE THREE- §5- VACANCIES Any vacancy caused by the death, resignation, removal, disqualification, or otherwise, of any officer shall be filled by the Board of Directors. In the event of a vacancy in any office other than President, such vacancy may be filled temporarily by appointment by the President of either the Vice President or Chief Financial Officer until such time as the board shall fill the vacancy.

ARTICLE THREE- §6- DUTIES OF PRESIDENT Subject to any supervisory powers that may be given by the Board of Directors to the Board Chairperson, if there is such an officer, the President shall be the Chief Executive Officer of the corporation and shall perform all the duties of commonly incident to that office. The President shall preside at all meetings of the shareholders and, if there is no Board Chairperson, at all meetings of the Board.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE THREE

- Page 6

### ' ) 

### ARTICLE THREE- §7- DUTIES OF VICE-PRESIDENT The Vice-President may assume and perform the duties of the President in the event of his/her absence or disability and shall have such other duties as prescribed by the Board of Directors, or President shall from time to time designate. The Vice-President shall serve in the office of the President at the pleasure of the Board President.

ARTICLE THREE

- §8- DUTIES OF BOARD CHAIRPERSON The Board Chairperson, if there is such an officer, shall, if present, preside at all meetings of the Board and perform any other powers and duties that may from time to time be assigned by the Board or prescribed by law or by these Bylaws.

ARTICLE THREE

- §9

- DUTIES OF SECRETARY The Secretary shall ensure that all notices are duly given in accordance with the provisions of these Bylaws or as required by law; shall keep the records, minutes and seal of

. the Corporation and perform such other duties as are customary to the office, including acting

as Secretary for the Board of Directors and all shareholder proceedings; and shall perform any other duties that are assigned from time to time by the Board or by the President.

ARTICLE THREE- §10- DUTIES OF TREASURER The Treasurer shall be the custodian of the funds and securities, and the collecting and disbursing officer. He/she shall deposit the funds and securities in such depositories and in such manner as the Board may designate and direct, and shall be relieved of responsibility while they are in the custody of such depository, subject, however, to any liability under his/ her surety bond.

ARTICLE THREE- §11- COMPENSATION The salaries of the officers, if any, shall be fixed from time to time by resolution of the Board of Directors. In all cases, any salaries received by officers of this corporation shall be reasonable and given in return for services actually rendered to or for the corporation.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE THREE

- Page 7

## DETERMINING SHAREHOLDERS OF RECORD

ARTICLE FOUR- §1

- RECORD DATE FIXED BY BOARD In order that the corporation may determine the shareholders entitled to notice of any meeting or to vote, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights regarding any other lawful action, the Board may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten ( 1 0) days before the date of the meeting nor more than sixty (60) days before any of the other aforementioned actions.

ARTICLE FOUR

- §2

- RECORD DATE NOT FIXED If no record date is fixed: (1) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. (2) The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is giyen. (3) The record date for determining shareholders for any other purpose shall be the close of business on the day on which the Board adopts the resolution relating to the record date, or the sixtieth (60th) day before the date of the other action, whichever is later.

ARTICLE FOUR- §3- RECORD DATE FOR ADJOURNED MEETING A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board must fix a new record date, however, if the meeting is adjourned for more than forty-five (45) days from the date set for the original meeting.

ARTICLE FOUR

- §4

- RIGHTS OF SHAREHOLDERS OF RECORD Shareholders at the close of business on the record date are entitled to notice and to vote or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the Articles or by agreement or in the General Corporation Law.

ARTICLE FOUR- §5- NOTICE OF MEETINGS Whenever shareholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given to each shareholder entitled to vote at the meeting, subject to the provisions of §1 0- Waiver of Notice and Other Defects.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 8ARTICLE FOUR

- §6

- METHOD OF GIVING NOTICE OF MEETINGS Notice of a shareholders' meeting shall be given personally, or by electronic transmission by the corporation, or by first-class mail, postage prepaid, or other means of written communication, addressed to the shareholder at the address of the shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. The notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication. If any notice addressed to the shareholder at the address of the shareholder appearing

on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it to the shareholder at the address, all future notices shall be deemed to have been duly given without further mailing if the notices are available to the shareholder on written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice to all other shareholders.

ARTICLE FOUR- §7- TIME OF NOTICE Notice of any meeting of the shareholders will be sent by first class mail to each shareholder entitled to the notice not less than ten (1 0) nor more than sixty (60) days before the date of the meeting; provided, however, that at any time that this corporation has outstanding shares held of record by five hundred (500) or more persons (determined as provided in California Corporations Code §605) on the record date for the shareholders' meeting, notice may be sent by third class mail if sent not less than thirty (30) days before the date of the meeting.

ARTICLE FOUR- §8- CONTENTS OF NOTICE The notice of any meeting of the shareholders shall state the place, date, and hour of the meeting, any means of electronic transmission by and to the corporation or electronic video screen communication by which shareholders may participate at the meeting, and: (1) in the case of a special meeting, the general nature of the business to be transacted, and tat

no other business may be transacted; or (2) in the case of the annual meeting, those matters that the Board, at the time of the mailing of the notice, intends to present for action by the shareholders, but any proper matter may be presented at the meeting for the action, provided, however, that any shareholder approval at a meeting, other than unanimous approval by those entitled to vote, pursuant to Corporations Code §31 0 (relating to contracts and transactions between the corporation and any director or legal entity in which a director has a material financial interest), §902 (relating to amendment of the articles), §1152 (relating to corporate conversions), §1201 (relating to reorganizations), §1900 (relating to voluntary dissolution), or §2007 (relating to distribution plans on dissolution), shall be valid only if the general nature of the proposal so approved was stated in the notice of meeting or in any written waiver of notice. The notice of any meeting at which directors are to be elected must include the names of nominees intended at the time of the notice to be presented by management for election.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 9) 

### ARTICLE FOUR- 

### §9- NOTICE OF ADJOURNED MEETING When a shareholders' meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place of the adjourned meeting (or any means of electronic transmission by and to the corporation or electronic video screen communication by which shareholders may participate at the meeting) are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment iffor more than forty-five (45) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting must be given to each shareholder of record entitled to vote at the meeting. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting.

ARTICLE FOUR- §1 0- WAIVER OF NOTICE AND OTHER DEFECTS The transactions of any meeting of shareholders, however called and noticed and wherever held, are as valid as though made at a meeting duly held after regular call and notice, if a quorum (see §13 of these Bylaws) is present either in person or by proxy and if, either before or after the meeting, each of the persons entitled to vote, not present in person
or by proxy, signs a written waiver of notice, or a consent to the holding of the meeting, or an approval of the minutes of the meeting. All waivers, consents, and approvals must be filed with the corporate records or made a part of the minutes of the meeting. Except as provided in §8 and unless otherwise provided in the Articles, neither the business to be transacted

nor the, purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting, or approval of the minutes of the meeting. Attendance by a person at any meeting also constitutes a waiver of notice to that person if he or she fails to object at the beginning of the meeting to the transaction of business because the meeting was not lawfully called or convened, but attendance does not constitute

a waiver of the right to object to the consideration of matters required to be included in the notice but not so included if the objection is expressly made at the meeting.

ARTICLE FOUR- §11- CALLING OF SPECIAL MEETINGS On request in writing to the corporation addressed to the attention of the Board Chairperson, or the President, or a Vice-President, or the Secretary of the corporation by any person (other than the Board) entitled to call a special meeting of shareholders (see §12), the officer immediately shall cause notice to be given to the shareholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, the persons entitled to call the meeting may give the notice or they may apply to the superior court of the county in which the principal executive office of the corporation is located or an order, after notice to the corporation giving it an opportunity to be heard, summarily ordering the giving of the notice.

ARTICLE FOUR- §12- PERSONS ENTITLED TO CALL SPECIAL MEETINGS Special meetings of the shareholders may be called by the Board of Directors, the Board Chairperson, the President, or the holders of shares entitled to cast not less than ten percent ( 10%) of the votes at the meeting.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR

- Page 1 0

### ) ARTICLE FOUR- §13- QUORUM OF SHAREHOLDERS A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders, provided, however, that whenever shares

are disqualified by the General Corporation Law from voting on any matter, they shall not be considered outstanding for the determination of a quorum at any meeting to act on that matter under any other provision of the General Corporation Law or the Articles or these Bylaws.

ARTICLE FOUR- §14- LOSS OF QUORUM The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment despite the withdrawal of enough shareholders to leave less than a quorum, if any action is taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum, or the vote of any greater number or voting by classes as required by law or the articles of incorporation.

ARTICLE FOUR- §15- EFFECT OF VOTE If a quorum is present, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the General Corporation Law or the Articles, and except as provided in §13 of these Bylaws, provided, however, that whenever shares are disqualified by the General Corporation Law from voting on any matter, they shall not be considered outstanding for the determination of the required vote to approve action on that matter under any other provision of the General Corporation Law or the Articles

or these Bylaws.

ARTICLE FOUR- §16- ELECTION OF DIRECTORS Elections for directors need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins. In any election of directors, the candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by the shares they are elected. Votes against the director and votes withheld shall have no legal effect.

ARTICLE FOUR- §17- VOTES PER SHARE VOTING OF FRACTIONAL SHARES Except as may otherwise be provided in the Articles, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of shareholders. A certificate for a fractional share shall, but scrip or warrants shall not unless otherwise provided in the scrip or warrant, entitle the holder to exercise voting rights.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FOUR- Page 11

## AUTHORIZED SHARES AND VOTING RIGHTS

ARTICLE FIVE- §1 -CLASSES OF STOCK This corporation is authorized to issue two classes of stock to be designated, respectively, Common Stock and Preferred Stock.

The total number of shares of Common Stock this corporation is authorized to issue is Thirty-Two Million (32,000,000), of which:

Twenty Million (20,000,000) are designated "Series A Common Stock" Twelve Million (12,000,000) are designated "Series B Common Stock"

The total number of Preferred Stock this corporation is authorized to issue is:

Ten Million (1 0,000,000) shares

ARTICLE FIVE

- §2 -VOTING RIGHTS The Common Stock is entitled to one vote per share and Preferred Stock is entitled to vote only upon conversion to Series A Common Stock.

Series A Common Stock is entitled to elect: Two (2) Directors during the election of Class I Board of Directors One (1) Director in the election of Class II Board of Directors

Series B Common Stock is entitled to elect: Three (3) Directors during the election of Class I Board of Directors Three (3) Directors during the election of Class II Board of Directors

Carlsbad-Palomar Airlines, Inc.

- ARTICLE FIVE

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## )

) EXECUTION OF INSTRUMENTS, DEPOSITS, AND FUNDS

ARTICLE SIX- §1

- EXECUTION OF INSTRUMENTS The President, except as otherwise provided in these Bylaws, may by Board resolution authorize any officer or agent of the corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized, no officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable monetarily for any purpose or in any amount.

ARTICLE SIX

- §2

- CHECKS AND NOTES Except as otherwise specifically determined by the President of the corporation, or as otherwise required by law, checks, drafts, promissory notes, orders for the payment of money, and other evidence of indebtedness of the corporation shall be signed by the President and Chief Financial Officer of the corporation.

ARTICLE SIX

- §3

- DEPOSITS All funds of the corporation shall be deposited from time to time to the credit of the corporation in the designated account.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE SIX

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## CORPORATE RECORDS, REPORTS AND SEAL

ARTICLE SEVEN- §1 -MAINTENANCE OF CORPORATE RECORDS The corporation shall keep at its principal office:

(a) Minutes of all meetings of directors and committees, indicating time and place of holding such meetings, whether regular or special, how called, the notice given, and the names of those present and the proceedings thereof;

(b) Adequate and correct books and records of account, including accounts of its properties and business transactions and accounts of its assets, liabilities, receipts, disbursements, gains and losses;

(c) A record of its Board of Directors, indicating their names and addresses and, if applicable, the termination of their appointment.

(d) A copy of the corporation's Articles of Incorporation and Bylaws as amended to date.

ARTICLE SEVEN

- §2

- CORPORATE SEAL The Board of Directors may adopt, use, and at will alter, a corporate seal. Such seal shall be kept at the principal office of the corporation. Failure to affix the seal to corporate instruments, however, shall not affect the validity of any such instrument.

ARTICLE SEVEN

- §3- DIRECTORS' INSPECTION RIGHTS Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation and shall have such other rights as may be required under the Articles of Incorporation, other provisions of these Bylaws, and provisions of law.

ARTICLE SEVEN

- §4

- PERIODIC REPORT The board shall cause any annual or periodic report required under law to be prepared and delivered to an office of this state, to be so prepared and delivered within the time limits set 

### by law.

Carlsbad-Palomar Airlines, Inc.

- ARTICLE SEVEN

- Page 14

## ) 

## AMENDMENT OF BYLAWS

ARTICLE EIGHT- 

### § 1 These Bylaws may, from time to time and at any time, be amended or repealed, and

new additional bylaws adopted, by approval of the outstanding shares, as that term is defined in California Corporation Codes §152, or, subject to any restriction imposed by the Articles of Incorporation on the power of the Board of Directors to adopt, amend or repeal Bylaws, by approval of the Board; provided, however, that such Bylaws may not contain any provision in conflict with law or with the Articles of Incorporation, and, provided further, that: (1) after shares are issued a Bylaw changing the number of directors or from a fixed to variable Board

can be adopted only on approval of the outstanding shares; and (2) any such Bylaw reducing the number of directors below five cannot be adopted if the votes cast against its adoption at

a shareholders' meeting, or the share not consenting in the case of action by written consent,

are equal to more than 16 2/3 percent of the outstanding share entitled to vote.

Carlsbad-Palomar Airlines, Inc.**~** ARTICLE EIGHT**~** Page 15

## CONSTRUCTION AND TERMS

) ARTICLE NINE- §1 If there is any conflict between the provisions of these Bylaws and the Articles of Incorporation of this corporation, the provisions of the Articles of Incorporation shall govern. Should any of the provisions of portions of these Bylaws be held unenforceable or invalid for any reason, the remaining provisions and portions of these Bylaws shall be unaffected by such holdings. All references in these Bylaws to the Articles of Incorporation shall be to the Articles of Incorporation, Articles of Organization, Certificate of Incorporation, Organizational Charter, Corporate Charter, or other founding document of this corporation filed with an office of this state and used to establish the legal existence of this corporation.



## CERTIFICATE OF SECRETARY

I certify that:

1. I am the Secretary of Carlsbad-Palomar Airlines, Inc.

2. The attached Bylaws are the Bylaws of the corporation approved by the Board of Directors**o~** 

### ;?/.?,**~ID** 

### , at a meeting duly held.

Dated:

### lo/!~ /;a

Carlsbad-Palomar Airlines, Inc.

- ARTICLE NINE

- Page 16