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 of the 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 of potential 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 of Directors; 

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 9/10 
8/29/2012 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.2 
TENT_S 

NC. 

ONSIDERATIONS & TIMELINE 

PRIVATE EQUITY PARTNERS 

ENT PROPOSAL 

sed for any ather purpose without the prior written consent of Stephens Inc. This foregoing material has been presented solely for informative purposes as of its stated date and is not 

urity. It does not purport to be a complete description of the products, securities, markets or developments referred to in the material. Information included in the presentation was 

, but has not been independently verified and is not guaranteed to be accurate or complete. All expressions of opinion apply on the date of the presentation. No subsequent 

shall mean or imply that any such information or opinion is accurate or remains current at any time after the stated date of the presentation. You will not be advised of any changes in 

 its employees, officers, directors and/or affiliates may from time to time have a long or short position in the securities mentioned and may sell or buy such securities. Stephens does 

ase consult your legal or tax professional. The individuals principally responsible for preparation of this presentation have received compensation that is based upon, among other 

enues. Additional information available upon request. ©Stephens Inc. 2012 

I 2 
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•••••••••••••••••••••••••••••••••• 

 STEPHENS INTEGRATED __ B_USINESS 

hens Inc. 

ns Inc. is a full service investment 

ittle Rock, Arkansas 

, Chairman, President and CEO 

the New York Stock Exchange and 

oss 25 offices 

s serves as the private equity arm of 

es majority or minority stakes in its 

term value creation 

and industry agnostic 

nd Institutions include: 

ng 

ment 

g 

s and Trading 

Stephens 

Investment Banking 

• Corporate and Investment bank focused on the middle market 

"'median deal size of $71 MM 

• Capital Markets Products and Services: 

Mergers & Acquisitions 

- Equity Capital Markets - Debt Capital Markets 

• Over 120 bankers and analysts in 7 offices: Little Rock, New 

York, Dallas, Atlanta, Houston, Nashville and Washington D.C. 

• Bankers organized by industry focus and transaction expertise 

• 28 senior research analysts covering over 380 companies 

HEADQUARTERS Little Rock, AR 

(5 Arkansas Offices) 

• Corporate Finance Offices • Other Offices 

I 4 
•••••••••••••••••••••••••••••••••• 

LUE PROJ?OSJTION 

ghly differentiated, family-owned investment bank with a tradition of nurturing 

onships, providing unvarnished advice and leveraging our principal mentality 

"Principal Mentality" 

We Think and Act Like 

Owners 

Full Service 

Investment Bank 

Focused on the Middle 

Market 

Reputation for 

Underwriting Quality 

Offerings 

Over 120 industry bankers and analysts covering 9 industry verticals 

28 senior research analysts covering over 380 companies 

Middle market focused with selected large clients- in-depth industry knowledge 

Long-Term Strategic 

Advisors Built upon 

Quality, Independent 

Advice 

Not a commercial lender; no conflicts arising out of commercial lending relationships and prospects 

Stephens Ranks 3rd among non bulge bracket banks with $79.3 billion in publicly disclosed transaction since 

2004 

Senior level commitment during all phases of the transaction 

Substantial public I private deal volume valued in excess of $82 billion since 2004 

Participation in approximately $4.5 billion of high yield offerings in the past 12 months 

50 seasoned traders and sales staff, with average experience of 15 years per team member 

Expertise in working with middle-market companies to address their debt needs 

40 years of equity capital markets experience, including Wai-Mart IPO in 1970 40 IPOs totaling more than $9.9 billion since 2003 and 83 Follow-On Offerings totaling more than $10.9 

billion 

120 equity capital markets employees 

I s 
•••••••••••••••••••••••••••••••••• 

RTICALS 

CTICE 

ed expert advice 

an deal size of $71 MM- we find 

oesn't 

e and complicated transactions 

GROUP STATISTICS 

• Over 120 bankers and analysts in 7 offices across the U.S. 

• Since 2004, Stephens has advised on more than $78 billion in deals 

• Completed 12 advisory transactions >$1 billion since 2004 (most of 

middle market 1-Banks) 

• Industry coverage across 9 verticals 

INVESTMENT BANKING VERTICALS 

& 

Energy 

E&P 

Oilfield Services 

Midstream & 

Downstream 

Alternative & 

Renewable 

Energy 

Healthcare 

& 

Life Sciences 

Services 

Biotechnology & Life Sciences 

Devices & Diagnostics 

---------

Industrial 

Transportation 

Industrial 

Distribution & 

Services 

Basic Materials & 

Construction 

IT 

& 

Services 

Data Analytics Digital Marketing 

Financial Services 

IT 

Healthcare IT 

Financial 

Services 

Insurance 

Banking 

Broker/Dealers 

Specialty Finance 

CAPABILITIES 

INTERNATIONAL RESEARCH 

WEALTH MANAGEMENT PRIVATE CLIENT BROKERAGE 

EQUITY SALES & TRADING FIXED INCOME TRADING 

Power 

Power 

Electronics 

Resource 

Technologies 

Real Estate 

Office 

Retail 

Multi-Family 

Industrial 

Student Housing 

Self Storage 

land 

Development 

PRIVATE PLACEMENT 

INSURANCE 

PUBLIC FINANCE 

I 6 
•••••••••••••••••••••••••••••••••• 

AL REACH 

UP OVERVIEW 

nnovative investment banking solutions 

in accessing the international markets 

r M&A, capital flows, and capital raising 

and South America, Europe, North 

Regional transactions 

 alliances across the globe, with special 

and India to facilitate our reach and 

• 

• 

• • 

KEY DIFFERENTIATORS 

Decades of experience in the Emerging Markets 

Deep focus on three of the four BRICs-Brazil, India and China 

Uniquely positioned to assist mid-size companies across several 

industries 

Relationship-driven focus combined with the responsiveness and 

flexibility of an independent boutique firm with the 

infrastructure and support of Stephens 

• Hands on execution by Senior Bankers with a proven process 

and record of success 

KEY SELECTED RELATIONSHIPS 

dsor Private 

apital Inc. 

E. J. McKay & Co .. Inc. 

A AXIS BANK 

E. J. McKay & Co., Inc. 

Iii 

SMFG '>t.m""""'''"' 

I, 

ALLIER 

Capital 

CANACCORJ: tlenuity 

!!nw!tp•>ln! 

Ml 

M.M.WARBURG&CO 

179·'" 

METZLER 

lJ, ,'\fct:lcr sect Sohn & 

• DE ROTHSCHILD 

I 7 
•••••••••••••••••••••••••••••••••• 

ANS_PORTATIO_N GRO_UP 

TRANSPORTATION TEAM 

commitment to the capital and 

 transportation industry 

nsportation bankers 

nsportation industry experience at the 

arch analysts and associates 

mpanies with thematic, knowledge

eces 

ransportation for the past ten years 

ation conference 

 since 2002 

 

ON VOLUME 

2008 

$4.6 

Current 

.........,__ 

..... 

SECTOR COVERAGE 

LOGISTICS SERVICES 

• Contract Logistics • Freight Forwarding and Brokerage 

• Fuel Logistics 

• lntermodal 

• Same Day and Last Mile Logistics 

• Transportation Management 

TRANSPORTATION SERVICES 

• Airlines • Jones Act Shipping 

• Railroads • Trucking 

EQUIPMENT SUPPLIERS 

• Aftermarket Parts and Services 

• Ship and Barge Building and Repair • Transportation Equipment OEMs 

• Transportation Equipment Retail 

Dealerships 

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• • • • • • • • • • • • • • • • • • • • • • • • • • • 
•.••••••••••••••••••••••••••••••••••• 

EMENT:_ PROCESS & TIM ELINE 

ctives with 

nce request list 

and refine 

on information 

e 

e investors 

nd timetable for 

acement process 

ategy 

s 

• Contact with prospective investors 

• Review procedures and timetable with 

prospective investors for the 

presentation of investment proposals 

• Conduct informational calls I meeting(s) 

for prospective investors 

• Conduct Management Presentations • Investor due diligence conducted via 

online data site 

• Receive preliminary indications of 

interest 

_. 4-5 Weeks lit 

..... 

11-14 Weeks 

• Review investment proposals submitted 

by interested parties- select investor 

based on fit, valuation & terms for 

management team 

• Formulate negotiating strategy and 

communicate with interested parties 

• Finalize potential investors' remaining 

due diligence 

• Finalize negotiation of definitive 

agreement with selected investor(s) 

• Obtain necessary approvals and execute 

legal documentation necessary to 

consummate the transaction 

• Receive consideration and close 

transaction 

It 4-5 Weeks tit 

process can reduce time to market by 1-2 weeks and overall timing by 1 month+/-, but is very dependent on speed of the investor. Also note 

 conditions may extend the process beyond what is common. 

1 10 
•••••••••••••••••••••••••••••••••• 

-OVERVIEW 

THE HIGHEST IMPORTANCE FOR ANY SUCCESSFUL TRANSACTION; WE WANT TO ASSURE 

 AND WE ARE ADEQUATELY PREPARED IN ADVANCE OF MARKETING EFFORTS, BUSINESS 

DISCUSSIONS, PRESENTATIONS AND OTHER MEETINGS 

nt participation will include: 

education 

ment in process determination 

tion and description of Partners 

tion of Partner diligence process 

of management presentation 

igence will include: 

 discussions with key members of management 

 facility visits 

of Company information 

ancial 

ganizational 

arketing 

gal 

erational 

1 11 
•••••••••••••••••••••••••••••••••• 

N- MARKETI_NG_MATERIALS 

H MANAGEMENT TO PREPARE SEVERAL DOCUMENTS THAT WILL BE SENT TO PARTNERS 

TO REVIEW 

 Teaser (no names) 

age overview of the business that can be sent to potential Partners 

ude investment highlights and key financial stats 

Document- Confidential Information Memorandum ("CIM") 

ation format overview of the Company and its operations and financials 

ent Highlights 

y and Business Overview 

 Overview 

l Overview 

al Information Package 

 financial models 

studies 

1 12 
•••••••••••••••••••••••••••••••••• 

_OVERVLEW 

o a very select number of Partners pre-approved by Management 

nfidentiality Agreements 

easer and CIM 

w-up calls 

st with contacted parties 

agement Presentations with interested parties 

1 13 
•••••••••••••••••••••••••••••••••• 

_MANAGEMENT PRESENTATION 

ORK WITH MANAGEMENT TO ORGANIZE A LIMITED NUMBER OF VISITS BY POTENTIAL 

PARTNERS 

e determined 

articipants will be determined by Management and Stephens 

t will present to the Partners 

tions about all aspects of the business 

ns 

 Competition 

Strategy 

g 

ment & Employees 

d Financial Results 

-binding Indication of Interest ("101") 3 - 4 weeks following Management Presentations 

view IOI's 

hich bids to include in next phase of diligence 

1 14 
ENCE- DATA_ROOM 

y hosted site 

artner tracking- ability to see what Partners are viewing most 

de viewing capabilities 

 for document addition 

ormation on the Company 

ation 

s 

s 

Resources 

ory 

 

l assist Management in organizing the information in an efficient manner 

1 1s 
TION- LETTER OF INTENT 

provide a Letter of Intent (or mark-up of a Shareholders Agreement) 

ement will choose the preferred Partner 

siderations include: 

uation 

x Consequences 

ucture & Terms 

ancing & Certainty of Close 

st Performance 

ategic Fit 

elected Partner to conclude confirmatory and follow-up diligence as soon as 

1 16 
TION- DEFINITIVE AGREEMENT 

 will occur simultaneously as the Partner is concluding diligence 

es will take place with each party editing the document 

ith the preferred partner will occur once diligence is complete and all conditions are 

osal presented will include negotiating a definitive purchase agreement 

 take place simultaneously with signing in most cases (pending any abnormal 

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ACTIVI_TY 

edicated financial sponsor coverage group with deep relationships established through years of 

transactions. Over 80 financial sponsors have completed 95 M&A deals with the Stephens team 

ely $68.0 billion in transaction value. 

 current relationships with roughly 400 financial buyers 

hips - Negotiating tactics - Focus areas 

- Buyer behavior 

REPRESENTATIVE TRANSPORTATION FOCUSED SPONSOR RELATIONSHIPS 

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RBURG PINCUS 8 AustinVentures Ridgemont 

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THE CARLYLE GROUP 

General Atlantic. 

The Group"' 

Mmgan Stanley 

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Capital Partners 

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PRESENTATIVE TRANSPORTATION FOCUSED TIER 1 RELATIONSHIPS 

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Capital Partners 

A GENERAL 

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THE CARLYLE GROUP 

OAK HILL ENDURANCE 

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o act as Placement Agent in connection with a $150 million private equity capital raise

structure- no retainer 

ata and create marketing materials 

ancial model with returns and incentive structure analysis 

 private equity process 

FEE STRUCTURE 

Tranches of Equity Drawn 

$0 - $100,000,000 

Applicable Success Fee 

Percentage 

6.0% 

$100,000,001 Or greater 4.0% 

Fees are payable when drawn 

$750,000 payable upon closing, credited against the Success Fee 

Reimbursement of reasonable out-of-pocket expenses- not to exceed $20,000 

without prior consent 

1 22 
PROMISSORY 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 1 0 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:{, lu#- i: .. ~ ....... · .. Theodora L. Vallas, Preaoilent of Carlsbad-Palomar 

Airlines, Inc .. a California corporation 
Borrower: 

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 . 

~~: ~~en~~~~~:~~;~n °: :~fa~o"n"~at"!~Yd~a~~tr:;~~~~~n~~~u~ ~:~~~~i~rao~;~~~~~~~~ea~~ ~~~~=~~~: ~~~o~~~:~~!~~~=~tn~~~~dg v~'ftt~o~u~;:d~i 

~~~~?{?.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) 

·A via 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 of knowing 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 of passage". 

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.com 
October I 0, 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 of the 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 of his 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 8000 
1 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 2004 
DEAN 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 

PAGE2 
5/25/2012 

California Pacific Airlines 

Stock Ownership IS 
) 

) 

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 ( 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 §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 
) 

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I 

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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 
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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 
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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 
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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 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 (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 
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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 ( 1 0%) 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 - 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 

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