**Exhibit 4.20**

 

**AIRNET SYSTEMS, INC.**

**Loan and Security Agreement**

 

Loan Number: **1000119774**

 

ThisAgreement is dated as of July 12, 2004 and is executed by and between BANC ONELEASING CORPORATION (“Lender”), with Lender’s principal office located at 1111Polaris Parkway, Suite A3 (OH1-1085), Columbus, Ohio 43240 and the borroweridentified below (“Borrower”):

 

Borrower:JETRIDE, INC. dba AIRNET PRIVATE CHARTERS

 

Borrower’sAddress: 3939 International Gateway, Columbus, Ohio 43219

 

**1.  GRANT OF SECURITY INTEREST.** Borrower grants, pledges and assigns to Lender a security interest inall of Borrower’s respective right, title and interest in and to the propertydescribed on the **attached Schedule A-1**,now or hereafter arising or acquired, wherever located, together with any andall additions, accessions, parts, accessories, substitutions and replacementsthereof, now or hereafter installed in, affixed to or used in connection withsaid property (the “Equipment”), in all proceeds thereof, cash and non-cash,including, but not limited to, proceeds of notes, checks, instruments,indemnity proceeds, or any insurance on such and any refund or rebate ofpremiums on such (“Collateral”).  ThisAgreement secures the prompt payment and complete performance in full when due,whether at the stated maturity, by acceleration or otherwise, of all paymentand other obligations of Borrower under or in connection with this Agreement,and the Business Purpose Promissory Note executed in connection with the LoanNumber referenced above with the Borrower as the maker (the “Note”), and anyand all renewals, extensions or substitutions therefor (“Obligations”).  Borrower is and will continue to be (or, withrespect to after acquired property that constitutes Equipment under thisAgreement, will be when acquired) the legal and beneficial owner of theCollateral free and clear of any Lien except for the security interest createdby this Agreement and/or any other prior security agreement delivered byBorrower to Lender.  Except as previouslydisclosed to Lender in writing, no effective Uniform Commercial Code (“UCC”)financing statement or other instrument covering all or any part of theCollateral is on file in any recording office, except those in favor ofLender.  At its sole expense, Borrowershall protect and defend Lender’s first priority security interest in theCollateral against all claims and demands whatsoever.

 

**2.**  **MAINTENANCE AND USE**.  At its sole expense, Borrower shall (a)repair and maintain the Equipment in good condition and working order andsupply and install all replacement parts or other devices when required to somaintain the Equipment or when required by applicable law or regulation, whichparts or devices shall automatically become part of the Equipment; (b) use andoperate the Equipment in a careful manner in the normal course of its businessand only for the purposes for which it was designed in accordance with themanufacturer’s warranty requirements, and comply with all laws and regulationsrelating to the Equipment, and obtain all permits or licenses necessary toinstall, use or operate the Equipment; (c) except as provided in clause (d) below, make no alterations,additions, subtractions, upgrades or improvements to the Equipment withoutLender’s prior written consent, which consent will not be unreasonablywithheld, but any such alterations, additions, upgrades or improvements shallautomatically become part of the Equipment; (d) maintain, inspect, service andrepair, overhaul and test the Equipment in accordance with the FAA approvedmaintenance program, manufacturer’s approved maintenance program, FAAairworthiness directives, and the manufacturer’s alert bulletins and urgentlyrecommended service bulletins and procedures, and perform all duties and taskswhich would be required to maintain the Equipment, including the engines, infull compliance with the manufacturer’s specification (i) so as to keep theEquipment in as good operating condition as when delivered to the Borrowerhereunder, ordinary wear and tear excepted, and (ii) so as to keep theEquipment in such operating condition as may be necessary to enable theairworthiness certification of such Equipment to be maintained in good standingat all times under the Act (as defined in Section 20 hereof); and (e) maintainall records, logs and other materials required by the FAA to be maintained inrespect of the Equipment. The Equipment will not be based outside of the UnitedStates, provided, however, that the Equipment shall not be outside of theUnited States for more than ninety (90) days in any calendar year.  The Equipment shall not be operated within,over or into any jurisdiction not covered by the insurance policies requiredherein nor shall the Equipment be operated in any jurisdiction that does nothave diplomatic relations with the United States.  Lender has the right upon reasonable noticeto Borrower to inspect the Equipment wherever located.  The Equipment shall be based at the locationspecified on Schedule A-1.  The Equipmentmay be repositioned by Borrower, from time to time, to other locations withinthe United States in the normal course of the Borrower’s business.  Borrower shall notify Lender in writing ofany new location where the Equipment is based within five (5) days of anyrepositioning of the Equipment.

 

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**3.  INSURANCE.**  Atits sole expense, Borrower at all times shall keep each item of Equipmentinsured against all risks of loss or damage from every cause whatsoever for anamount not less than the greater of the full replacement value or the FinancedAmount (as defined in Section 20 hereof). All insurers shall be reasonably satisfactory to Lender.  Borrower shall deliver to Lender satisfactoryevidence of such coverage.  Proceeds ofany insurance covering damage or loss of the Equipment in excess of $250,000.00shall be payable to Lender as loss payee and shall, at Lender’s option, beapplied toward (a) the replacement, restoration or repair of the Equipment, or(b) payment of the obligations of Borrower under this Agreement.   If an event of default occurs and iscontinuing, then Borrower automatically appoints Lender as Borrower’sattorney-in-fact with full power and authority in the place of Borrower and inthe name of Borrower or Lender to make claim for, receive payment of, and signand endorse all documents, checks or drafts for loss or damage under any suchpolicy.  Each insurance policy willrequire that the insurer give Lender at least 30 days prior written notice ofany cancellation of such policy and will require that Lender’s interests remaininsured regardless of any act, error, omission, neglect or misrepresentation ofBorrower, and will contain those other requirements outlined in Schedule 3hereof.  The insurance maintained by Borrowershall be primary without any right of contribution from insurance which may bemaintained by Lender.

 

**4.  LOSS OR DAMAGE.** Borrower bears the entire risk of loss, theft, damage or destruction ofEquipment in whole or in part from any reason whatsoever (“Casualty Loss”).  No Casualty Loss to Equipment shall relieveBorrower from the obligation to pay the installment payments or from any otherobligation under this Agreement.  In theevent of Casualty Loss to any item of Equipment, Borrower shall immediatelynotify Lender of the same and Borrower shall, if so directed by Lender,immediately repair the same.  If Lenderdetermines that any item of Equipment has suffered a Casualty Loss beyondrepair (“Lost Equipment”), then Borrower, at the option of Lender, shall:  (1) upon receipt of any insurance proceedsfor the Lost Equipment replace the Lost Equipment with similar equipment ingood repair, condition and working order free and clear of any Liens anddeliver to Lender a bill of sale covering the replacement equipment, in whichevent such replacement equipment shall automatically be Equipment under thisAgreement; or (2) upon receipt of any insurance proceeds for the Lost Equipmentbut no more than 180 days after the date of the Casualty Loss, pay to Lenderall amounts then due and payable by Borrower under this Agreement for the LostEquipment plus the remaining principal balance for such Lost Equipment as ofthe date of the Casualty Loss as determined by Lender’s records.  Upon payment by Borrower of all amounts dueunder the above clause (2), the security interest of the Lender in the LostEquipment will terminate.

 

**5.  TAXES.** Borrower will pay promptly when due all taxes, assessments andgovernmental charges upon or against Borrower, the Collateral or the propertyor operations of Borrower, in each case before same becomes delinquent andbefore penalties accrue thereon, unless and to the extent that same are beingcontested in good faith by appropriate proceedings.

 

**6.  GENERAL INDEMNITY.** Borrower assumes all risk and liability for, and shall defend, indemnifyand keep Lender harmless on an after-tax basis from, any and all liabilities,obligations, losses, damages, penalties, claims, actions, suits, costs andexpenses, including reasonable attorney fees and expenses, of whatsoever kindand nature imposed on, incurred by or asserted against Lender, in any wayrelating to or arising out of the manufacture, purchase, acceptance, rejection,ownership, possession, use, selection, delivery,  operation, condition, sale, return or otherdisposition of the Equipment or any part thereof (including, withoutlimitation, any claim for latent or other defects, whether or not discoverableby Borrower or any other person, any claim for negligence, tort or strict liability,any claim under any environmental protection or hazardous waste law and anyclaim for patent, trademark or copyright infringement).  Borrower will not indemnify Lender under thissection for loss or liability caused directly and solely by the negligence orwillful misconduct of Lender.  In thissection, “Lender” also includes any director, officer, employee, agent,successor or assign of Lender.  Borrower’sobligations under this section shall survive the expiration, cancellation ortermination of this Agreement.

 

**7.  PERSONAL PROPERTY.** Borrower represents and agrees that the Equipment is, and shall at alltimes remain, separately identifiable personal property.  Upon Lender’s request, Borrower shall usecommercially reasonable efforts to furnish Lender a landlord’s and/or mortgagee’swaiver and consent to remove all Equipment. Lender may display notice of itsinterest in the Equipment by any reasonable identification.  Borrower shall not alter or deface any suchindicia of Lender’s interest.

 

**8.  FINANCIAL REPORTS.** Borrower agrees to furnish to Lender: (a) annual financial statements setting forth the financial conditionand results of operation of Borrower (financial statements shall includebalance sheet, income statement and changes in financial position and all notesthereto) within 120 days of the end of each fiscal year of Borrower; (b)quarterly financial statements setting forth the financial condition andresults of operation of Borrower within 60 days of the end of each of the firstthree fiscal quarters of Borrower; and (c) such other financial information asLender may from time to time reasonably request including, without limitation,financial reports filed by Borrower with federal or state regulatory agenciesto the extent Borrower may disclose such other financial information withoutviolating the Securities Exchange Act of 1934 or any rule or regulation of theSecurities and

 

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Exchange Commission.  All such financial information shall beprepared in accordance with generally accepted accounting principles.  If Borrower fails to furnish the annualfinancial statements to Lender within 30 days of Lender’s written request, thenLender may, at its option, charge Borrower a non-performance fee equal to allthe installment payments due under this Agreement for the then current month(unless otherwise prohibited by law) and such fees shall be payable by Borroweron demand.

 

**9.  NO CHANGES IN BORROWER**. Borrower shall not:  (a)liquidate, dissolve or suspend business; (b) sell, transfer or otherwisedispose of all or a majority of its assets, except that Borrower may sell itsinventory in the ordinary course of its business; (c) enter into any merger,consolidation or similar reorganization unless it is the surviving corporation;(d) transfer all, or any substantial part of, its operations or assets outsideof the United States of America; or (e) without 15 days advance written noticeto Lender, change its name or chief place of business.

 

**10.  REPRESENTATIONS.** Borrower represents and warrants that: (a) Borrower is organized, validly existing, and in good standing underthe laws of one of the states of the United States; (b) Borrower is qualifiedto do business in, and is in good standing under the laws of, each other statein which it conducts its business and in which the Equipment is located, exceptto the extent such failure would not have a material adverse effect on theBorrower’s business or the Collateral; (c) Borrower has the power, and is dulyauthorized to enter into, this Agreement and the Note and to execute anddeliver to Lender, now and from time to time hereafter, additional instruments,resolutions, agreements and other instruments or documents relating to theObligation owed to Lender; (d) Borrower has, by proper action, authorized andempowered those persons whose signatures appear in this Agreement, the Note,and any instruments, documents and exhibits that have been delivered inconnection herewith, to execute the same for and on its behalf; (e)  this Agreement, the Note, and each relateddocument constitute a legal, valid, and binding obligation of Borrowerenforceable in accordance with its terms, except as enforceability may belimited by bankruptcy, insolvency or similar laws affecting the enforcement ofcreditors’ rights generally and general principles of equity; (f) thisAgreement and the Note evidence a loan made primarily for business, commercialor agricultural purposes and not primarily for personal, family, or household purposes;(g) the Equipment is not, and will not, be registered under the laws of anyforeign country; (h) the Equipment is, and shall remain at all times, eligiblefor registration under the Act (as defined in Section 20 hereof); (i) theEquipment shall be based in, and primarily used in, the United States all asrequired by the Act; and (j) the Equipment will not be used in violation of anylaw, regulation, ordinance or policy of insurance affecting the maintenance,use or flight of the Equipment; and (k) Borrower qualifies as a citizen of theUnited States as defined in the Act and will continue to qualify as a UnitedStates citizen in all respects.

 

**11.  OTHER DOCUMENTS; EXPENSES;APPOINTMENT OF ATTORNEY-IN-FACT**.  Borrower hereby irrevocablyappoints Lender or its designee as Borrower’s attorney in fact, with fullauthority in the place instead of Borrower, from time to time in Lender’sdiscretion upon, during, and after an event of default, to take any action andto execute any instrument which Lender may deem necessary or advisable toaccomplish the purposes of this Agreement, including without limitation, (a) toperfect and continue to perfect the security interests created by thisAgreement, including without limitation to prepare, sign, amend, file, orrecord a Uniform Commercial Code financing statement in the place of Borrowerand in the name of Borrower; (b) to ask, demand, collect or sue for, recover,compound, receive and give acquittance in receipts for any monies due or becomedue under or in respect for any Collateral; (c) to receive, endorse and collectany drafts or other instruments, documents and chattel paper, in connectionwith the Collateral; and (d) to file any claims or take any action or instituteany proceeding which Lender may deem necessary or desirable for the collectionof any Collateral or otherwise to enforce the rights of Lender in theCollateral.  Borrower agrees to sign anddeliver to Lender any additional documents deemed desirable by Lender to effectthe perfection of Lender’s security interest in the Collateral.  Borrower shall pay upon Lender’s request anyout-of-pocket costs and expense paid or incurred by Lender in connection withthe above terms of this Agreement or the funding and closing of this Agreement.

 

**12.**** EVENTS OF DEFAULT.** Each of the following events shall constitutean event of default under this Agreement and the Note:  (a) Borrower fails to pay any installmentpayment or other amount due under this Agreement or the Note within ten days ofits due date; or (b) Borrower fails to perform or observe any of itsobligations in Sections 3, 9, or 18 hereof; or (c) Borrower fails to perform orobserve any of its other obligations in this Agreement or the Note within 30days after Lender notifies Borrower of such failure; or (d) any statement,representation or warranty made by Borrower in this Agreement or in anydocument, certificate or financial statement in connection with this Agreementproves at any time to have been untrue or misleading in any material respect asof the time when made; or (e) Borrower becomes insolvent or bankrupt, orBorrower admits its inability to pay its debts as they mature, or Borrowermakes an assignment for the benefit of creditors, or Borrower applies for,institutes or consents to the appointment of a receiver, trustee or similarofficial for Borrower or any substantial part of its property or any suchofficial is appointed without Borrower’s consent, or Borrower applies for,institutes or consents to any bankruptcy, insolvency, reorganization, debtmoratorium, liquidation or similar proceeding relating to Borrower or anysubstantial part of its property under the laws of any jurisdiction or any suchproceeding is instituted against Borrower without stay or dismissal for morethan 60 days, or Borrower commences a winding up of its affairs, or

 

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Borrower ceases to do businessas a going concern; or (f) with respect to any guaranty, letter of credit,pledge agreement, security agreement, mortgage, deed of trust, debtsubordination agreement or other credit enhancement or credit support agreement(whether now existing or hereafter arising) signed or issued by any party inconnection with all or any part of Borrower’s obligations under this Agreement,the party signing or issuing any such agreement defaults in its obligationsthereunder or any such agreement shall cease to be in full force and effect orshall be declared to be null, void, invalid or unenforceable by the partysigning or issuing it.

 

Asused in this section 12, the term “Borrower” also includes any guarantor(whether now existing or hereafter arising) of all or any part of Borrower’sobligations under this Agreement and/or any issuer of a letter of credit(whether now existing or hereafter arising) relating to all or any part ofBorrower’s obligations under this Agreement, and the term “Agreement” alsoincludes any guaranty or letter of credit (whether now existing or hereafterarising) relating to all or any part of Borrower’s obligations under thisAgreement.

 

**13.**** RIGHTS UPON DEFAULT.**  If any event of default exists, Lender mayexercise in any order one or more of the remedies described in the letteredsubparagraphs of this section, and Borrower shall perform its obligations imposedthereby:

 

(a)  Lender may require Borrower to turnover anyand all Collateral to Lender.

 

(b)  Lender or its agent may repossess any or allCollateral wherever found, may enter the premises where the Collateral islocated and disconnect, render unusable and remove it, and may use suchpremises without charge to store or show the Collateral for sale.

 

(c)  Lender may sell any or all Collateral atpublic or private sale, with or without advertisement or publication, may leaseor otherwise dispose of it or may use, hold or keep it.

 

(d)  Lender may require Borrower to pay to Lenderon a date specified by Lender,  (i) allaccrued and unpaid interest, late charges and other amounts due under the Noteor this Agreement as of such date, plus (ii) the remaining principal balance ofthe Note as of such date, plus (iii) interest at the Overdue Rate on the totalof the foregoing (“Overdue Rate” means an interest rate per annum equal to thehigher of 12% or 2% over the Prime Rate, but not to exceed the highest rate permittedby applicable law).  If an event ofdefault under section 12(f) of this Agreement exists, then Borrower will beautomatically liable to pay Lender the foregoing amounts as of the nextinstallment payment date under the Note unless Lender otherwise elects inwriting.

 

(e)  Borrower shall pay all reasonable costs,expenses and damages incurred by Lender because of the event of default or itsactions under this section, including, without limitation any collection agencyand/or attorney fees and expenses, any costs related to the repossession,safekeeping, storage, repair, reconditioning or disposition of the Collateral.

 

(f)  Lender may sue to enforce Borrower’sperformance of its obligations under the Note and this Agreement and/or mayexercise any other right or remedy then available to Lender at law or inequity.

 

Lenderis not required to take any legal process or give Borrower any notice beforeexercising any of the above remedies.  IfLender is required to give notice, 10 calendar days advanced notice isreasonable notification.  None of theabove remedies is exclusive, but each is cumulative and in addition to anyother remedy available to Lender.  Lender’sexercise of one or more remedies shall not preclude its exercise of any otherremedy.  No action taken by Lender shallrelease Borrower from any of its obligations to Lender.  No delay or failure on the part of Lender toexercise any right hereunder shall operate as a waiver thereof nor as anacquiescence in any default, nor shall any single or partial exercise of anyright preclude any other exercise thereof or the exercise of any otherright.  After any default, Lender’sacceptance of any payment by Borrower under the Note or this Agreement shallnot constitute a waiver by Lender of such default, regardless of Lender’sknowledge or lack of knowledge at the time of such payment, and shall notconstitute a reinstatement of the Note or this Agreement if this Agreement hasbeen declared in default by Lender, unless Lender has agreed in writing to reinstatethis Agreement and to waive the default. With respect to any Collateral or anyObligation, Borrower assents to all extensions or postponements to the time ofpayment thereof or any other indulgence in connection therewith, to eachsubstitution, exchange or release of Collateral, to the release of any partyprimarily or secondarily liable, to the acceptance of partial payment thereofor to the settlement or compromise thereof, all in such matter and such time ortimes as Lender may deem advisable.

 

IfLender actually repossesses any Collateral, then it will use commerciallyreasonable efforts under the then current circumstances to attempt to mitigateits damages; provided, that Lender shall not be required to sell, lease orotherwise dispose of any Collateral prior to Lender enforcing any of theremedies described above.  Lender maysell or lease the Collateral in any manner it chooses, free and clear of anyclaims or rights of Borrower and without any duty to account to Borrower withrespect thereto except as provided below. If Lender actually sells or

 

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leases the Collateral, it willcredit the net proceeds of any sale of the Collateral, or the net present value(discounted at the then current Prime Rate) of the rents payable under any newlease of the Collateral, against the amounts Borrower owes Lender.  The term “net” as used above shall mean suchamount after deducting the costs and expenses described in clause (e) above ofthis section. Borrower shall remain liable for any deficiency if the netproceeds are insufficient to pay all amounts to which Lender is entitledhereunder.

 

**14.**  **LATE CHARGES.**  If any installment payment or other amountpayable under the Note or this Agreement is not paid when due, then ascompensation for the administration and enforcement of Borrower’s obligation tomake timely payments, Borrower shall pay with respect to each overdue paymenton demand an amount equal to the greater of fifteen dollars ($15.00) or fivepercent (5%) of the each overdue payment (but not to exceed the highest latecharge permitted by applicable law) plus any collection agency fees andexpenses**.**

 

**15.  LENDER’S RIGHT TO PERFORM**.  IfBorrower fails to make any payment under this Agreement or fails to perform anyof its other obligations in this Agreement (including, without limitation, itsagreement to provide insurance coverage), Lender may itself make such paymentor perform such obligation, and the amount of such payment and the amount ofthe expenses of Lender incurred in connection with such payment or performanceshall be deemed to be additional principal under the Note which is payable byBorrower on demand.

 

**16.**** NOTICES; POWER OF ATTORNEY.**  (a) Service of all notices under thisAgreement shall be sufficient if given personally or couriered or mailed to theparty involved at its respective address set forth herein or at such otheraddress as such party may provide in writing from time to time.  Any such notice mailed to such address shallbe effective three days after deposit in the United States mail with postageprepaid.  (b) With respect to any powerof attorney covered by this Agreement, the powers conferred on Lender thereby:  are powers coupled with an interest; areirrevocable; are solely to protect Lender’s interests under this Agreement; anddo not impose any duty on Lender to exercise such powers.  Lender shall be accountable solely foramounts it actually receives as a result of its exercise of such powers.

 

**17.**  **ASSIGNMENT BY LENDER.**  Lenderand any assignee of Lender, * *may, upon ten (10) days’ priorwritten notice to Borrower, with or without consent of Borrower, sell, assign,transfer or grant a security interest in all or any part of Lender’s rights,obligations, title or interest in the Collateral, the Note, this Agreement, orthe amounts payable under the Note or this Agreement to any entity (“transferee”).  The transferee shall succeed to all of Lender’srights in respect to this Agreement (including, without limitation, all rights toinsurance and indemnity protection described in this Agreement).  Borrower agrees to sign any acknowledgmentand other documents reasonably requested by Lender or the transferee inconnection with any such transfer transaction. Borrower, upon receiving notice of any such transfer transaction, shallcomply with the terms and conditions thereof. Borrower agrees that it shall not assert against any transferee anyclaim, defense, setoff, deduction or counterclaim which Borrower may now orhereafter be entitled to assert against Lender.

 

**18.  NO ASSIGNMENT OR LEASING BYBORROWER. **BORROWER SHALL NOT, DIRECTLY OR INDIRECTLY,(a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF INTEREST IN THISAGREEMENT OR THE COLLATERAL OR ANY PART THEREOF, OR (b) LEASE, RENT, LEND ORTRANSFER POSSESSION OR USE (OTHER THAN USE IN THE ORDINARY COURSE OF BORROWER’SBUSINESS) OF THE EQUIPMENT OR ANY PART THEREOF TO ANY PARTY, OR (c) CREATE,INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY LIEN ON ITS INTEREST IN THISAGREEMENT, THE COLLATERAL OR ANY PART THEREOF.

 

**19.****TERMINATION**. This Agreement shallcontinue in effect until the Obligations have been indefeasibly paid andperformed in full.  Upon termination ofthis Agreement, Lender shall, at Borrower’s expense, take such actions and filesuch documents as may be necessary or desirable to release the Collateral fromthis Agreement.

 

**20.  CERTAIN DEFINITIONS. **“Act” means subtitle VII of Title 49 of the United States Code. “FinancedAmount” for any item of Equipment shall mean the amount set forth on theSchedule A-1 that corresponds to that item of Equipment.  “Lien” means any security interest, lien,mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ,levy, other judicial process or claim of any nature whatsoever by or of anyperson.  “Prime Rate” means the primerate of interest announced from time to time as the prime rate by Bank One, NA(or its successors or assigns); provided, that the parties acknowledge that thePrime Rate is not intended to be the lowest rate of interest charged by saidbank in connection with extensions of credit. All terms defined herein are equally applicable to both the singular andplural form of such terms.

 

**21.  CONDITIONS. **Lender is not obligated to make any loan or disburse any principalhereunder unless: (a)  Lender hasreceived the Note signed by the Borrower; (b) Lender has received evidence ofall required insurance; (c) in Lender’s sole judgment, there has been nomaterial adverse change in the financial condition or

 

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business of Borrower or anyguarantor; (d) Borrower has signed and delivered to Lender this Agreement andLender has signed and accepted this Agreement; (e) Lender has received thedocuments and instruments and evidence as to satisfaction of the mattersspecified in any **Schedule 2**which may be attached hereto, each of which shall be satisfactory to Lender inform and substance and each document or instrument to be duly authorized,executed and delivered and in full force and effect;  (f) Lender has received, in form andsubstance satisfactory to Lender, such other documents and information asLender shall reasonably request; and (g) Borrower has satisfied all other reasonable conditions established byLender.

 

**22.  USURY.**  It isnot the intention of the parties to this Agreement to make an agreementviolative of the laws of any applicable jurisdiction relating to usury (“UsuryLaws”).  Regardless of any provision inthis Agreement, the Note, or any document in connection therewith, Lender shallnot be entitled to receive, collect or apply, as interest on any Obligation,any amount in excess of the Maximum Amount (the “Excess”).  As used herein, “Maximum Amount” shall meanthe maximum amount of interest which would have accrued if the unpaid principalamount of the Obligation outstanding from time to time had borne interest eachday at the maximum amount of interest which lender is permitted to charge onthe Obligation under the Usury Laws.  IfLender ever receives, collects or applies as interest any Excess, such Excessshall be deemed a partial repayment of principal and treated hereunder as such;and if principal is paid in full, any remaining Excess shall be paid toBorrower.  In determining whether or notthe interest paid or payable under any specific contingency exceeds the MaximumAmount, Borrower and Lender shall, to the maximum extent permitted under theUsury Laws, (a) characterize any nonprincipal payment as an expense, fee orpremium rather than as interest, (b) exclude voluntary prepayments and theeffect thereof, and (c) amortize, prorate, allocate and spread in equal parts,the total amount of interest throughout the entire contemplated term of theObligation so that the interest rate is uniform throughout the entire term ofthe Obligation; provided that if the Obligation is paid and performed in fullprior to the full contemplated term thereof, and if the interest received forthe actual period of existence thereof exceeds the Maximum Amount, Lender shallrefund to Borrower the Excess, and, such event shall not be subject to anypenalties provided by the Usury Laws.

 

**23.  GOVERNING LAW.**  THEINTERPRETATION, CONSTRUCTION AND VALIDITY OF THIS AGREEMENT AND THE NOTE SHALLBE GOVERNED BY THE LAWS OF THE STATE OF OHIO.

 

**24.  MISCELLANEOUS.** (a)Subject to the limitations herein, this Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective heirs,administrators, successors and assigns. (b) This Agreement may be executed in any number of counterparts, whichtogether shall constitute a single instrument. (c) Section and paragraph headings in this Agreement are for convenienceonly and have no independent meaning. (d) The terms of this Agreement shall be severable and if any termthereof is declared unconscionable, invalid, illegal or void, in whole or inpart, the decision so holding shall not be construed as impairing the otherterms of this Agreement and this Agreement shall continue in full force and effectas if such invalid, illegal, void or unconscionable term were not originallyincluded herein.  (e) All indemnityobligations of Borrower under this Agreement and all rights, benefits andprotections provided to Lender by warranty disclaimers shall survive thecancellation, expiration or termination of this Agreement.  (f) Lender shall not be liable to Borrowerfor any indirect, consequential or special damages for any reason whatsoever.  (g) This Agreement may be amended, but onlyby a written amendment signed by Lender and Borrower.  (h) If this Agreement is signed by more thanone Borrower, each of such Borrowers shall be jointly and severally liable forpayment and performance of all of Borrower’s obligations under this Agreement.(i) This Agreement represents the final, complete and entire agreement betweenthe parties hereto, and there are no oral or unwritten agreements orunderstandings affecting this Agreement or the Collateral.  (j) Borrower agrees that Lender is not theagent of any manufacturer or supplier, that no manufacturer or supplier is anagent of Lender, and that any representation, warranty or agreement made bymanufacturer, supplier or by their employees, sales representatives or agentsshall not be binding on Lender.

 

**25**.  **GOVERNMENT REGULATION**.  Borrower shall not (a) be or become subject, at any time, to any law,regulation, or list of any government agency (including, without limitation,the U.S. Office of Foreign Asset Control list) that prohibits or limits Lenderfrom making any advance or extension of credit to Borrower or from otherwiseconducting business with Borrower or (b) fail to provide documentary and otherevidence of Borrower’s identity as may be requested by Lender at any time toenable Lender to verify Borrower’s identity or to comply with any applicablelaw or regulation, including, without limitation, Section 326 of the USAPatriot Act of 2001, 31 U.S.C. Section 5318.

 

**26**. **USA PATRIOT ACTNOTIFICATION**.  The followingnotification is provided to Borrower pursuant to Section 326 of the USA PatriotAct of 2001, 31 U.S.C. Section 5318:

 

IMPORTANTINFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the governmentfight the funding of terrorism and money laundering activities, Federal lawrequires all financial institutions to obtain, verify, and record informationthat identifies each person or entity that opens an account, including anydeposit account, treasury management account, loan, other extension of credit,or

 

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otherfinancial services product. What this means for Borrower: When Borrower opensan account, if Borrower is an individual, Lender will ask for Borrower’s name,tax payer identification number, residential address, date of birth, and otherinformation that will allow Lender to identify Borrower, and if Borrower is notan individual, Lender will ask for Borrower’s name, taxpayer identificationnumber, business address, and other information that will allow Lender toidentify Borrower.  Lender may also ask,if Borrower is an individual, to see Borrower’s driver’s license or otheridentifying documents, and if Borrower is not an individual, to see Borrower’slegal organizational documents or other identifying documents.

 

**ALLPARTIES TO THIS AGREEMENT, INCLUDING LENDER AND THE UNDERSIGNED, IRREVOCABLYCONSENT TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT IN OHIO,AND WAIVE ALL RIGHTS TO TRIAL BY JURY, IN ANY ACTION, PROCEEDING ORCOUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ON ANY MATTERWHATSOEVER ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY RELATED TO THE NOTEOR THIS AGREEMENT.**

 
| **JETRIDE, INC. dba AIRNET PRIVATE CHARTERS** | ** **                    | Accepted  By:            |
|-----------------------------------------------|-------------------------------|--------------------------|
| (Borrower)                                    | BANC  ONE LEASING CORPORATION |
|                                          |                          |
|                                          | By:                           | /s/  Jaqueline M. Walls  |   |
| By:                                           | /s/  Gary W. Qualmann         |                     |   |
|                                          | Title:                        |  Financing  Manager |   |
| Title:                                        | CFO                           |                     |   |
|                                          | Acceptance  Date:             |  July 12, 2004      |   |
| Witness:                                      | /s/  John Gordon              |                     |   |
|                                               |                               |                          |  |  |  |  |  |  |  |  |  |  |  |  |

 

7

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SCHEDULE A-1

 

LoanNo. 1000119774

 

FinancedAmount: $5,000,000.00

 

DESCRIPTION OF EQUIPMENT

 

| Airframe  Make/Model:        | LEARJET  INC. MODEL 60      |
|------------------------------|-----------------------------|
|                         |                        |
| Airframe  Serial No.:        | 138                         |
|                         |
| U.S.  Identification No.:    | N560AN                      |
|                         |
| Engine  Quantity/Make/Model: | 2  PRATT & WHITNEY 305A |
|                         |                        |
| Engine  Serial No(s).:       | CA0114  AND CA0111          |
|                              |                             |  |

 

Togetherwith all engines, propellers, avionics, communication equipment, navigationequipment, instruments, accessories, attachments, parts, appurtenances,accessions, furnishings and other equipment attached to, installed in orrelating to any of the foregoing property and all maintenance and service logsand records relating to the foregoing property.

 

Eachengine has 750 or more rated takeoff horsepower or the equivalent of suchhorsepower.

 

TheEquipment shall be based at the following location:

 

# ***Dallas Love Airport, 8008 Cedar Springs Road LB16, Dallas, Dallas, Texas 75235***

Nameof Airport and Street Address                             City                  County      State

 

ThisSchedule A-1 is attached to, and made a part of, the Loan and SecurityAgreement with the Loan Number referenced above and contains a true andaccurate description of the Equipment.

 
| **JETRIDE, INC. dba AIRNET PRIVATE CHARTERS** |                        |
|-----------------------------------------------|-----------------------------|
| (Borrower)                                    |
|                                          |
| By:                                           |  /s/  Gary W. Qualmann |   |
|                                          |
| Title:                                        |  CFO                   |   |
|                                               |                             |  |  |  |  |

 

8

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SCHEDULE 2

 

 

Attached to Loan andSecurity Agreement for Loan No. **1000119774**

 

 

ADDITIONAL CONDITIONS TOFUNDING THE LOAN*

 

 

1.             Airnet Systems, Inc. shallexecute and deliver to Lender an absolute and unconditional guarantee of allobligations of Borrower under the Loan and Security Agreement and the Note.

 

2.             Lender shall receive and findacceptable the maintenance and service logs and records relating to theCollateral.

 

3.             Lender shall receive terminationsor releases of liens in a form recordable with the Federal Aviation Administrationfrom all creditors with a lien on any part of the Collateral as shown in theFAA lien records.

 

4.             Lender shall receive UCC-3terminations or release of liens in recordable form from all creditors with alien on any part of the Collateral as shown in state or local lien records.

 

 

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*The inclusion of additional funding conditions in this Schedule 2 shall notlimit the generality of the conditions set forth in the Agreement.

 

 
| **JETRIDE, INC. dba AIRNET PRIVATE CHARTERS** |                        |
|-----------------------------------------------|-----------------------------|
| (Borrower)                                    |
|                                          |
| By:                                           |  /s/  Gary W. Qualmann |   |
|                                          |
| Title:                                        |  CFO                   |   |
|                                               |                             |  |  |  |  |

 

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SCHEDULE 3

**AIRCRAFT****LOAN****INSURANCE REQUEST LETTER**

 
|                |   |
|---------------------|--------|
| (Date)              |   |
|                |   |
| (Agent)             |   |
|                |   |
| (Street  Address)   |   |
|                |   |
| (City,  State, Zip) |   |
|                |   |
| (Telephone  Number) |   |

 

Dear Agent:

 

BancOne Leasing Corporation (“BOLC”) requires proof of acceptable insurancecoverage before the loan transaction can close. The requirements identified below must stay in full effect throughoutthe term of the transaction.

 

1.               The certificate of insurance must be issueddirectly to Banc One Leasing Corporation and shall be issued by a companyhaving an A.M. Best Rating of at least A with a Financial Size Category of atleast VII.

2.               The certificate of insurance must beexecuted.

3.               The insurance must be primary and any insurancemaintained by BOLC or any other loss payee will be in excess andnon-contributory.

4.               Policies must include a Waiver of Subrogationin favor of “Banc One Leasing Corporation, its parent and affiliates,successors or assigns”.

5.               Policies must include a thirty (30) day priorwritten Notice of Cancellation to the Certificate Holder.  Such notice must be directed by certifiedmail to: Banc One Leasing Corporation, 1111 Polaris Parkway, Suite A3,Columbus, Ohio 43240, Attn:  InsuranceDept.

6.               PHYSICAL DAMAGE

a.               Replacement cost coverage for the equipmentidentified on the attached Schedule A-1, which is estimated to be $5,000,000.00.

b.              “Banc One Leasing Corporation, its parent andaffiliates, successors or assigns” shall be named as Loss Payee.

c.               Breach of Warranty in favor “Banc One LeasingCorporation, its parent and affiliates, successors or assigns”.

d.              War Risk Endorsement, which shall includehijacking and terrorism, in favor of “Banc One Leasing Corporation, its parentand affiliates, successors or assigns” for the amount identified in 6a.

7.  The certificate of insuranceshall evidence liability coverage in the minimum amount of $50 million.

 

Please immediately send proof of the above insurance requirements **VIA FACSIMILE TRANSMITTAL 614-213-0748**.

 

**PLEASE REFERENCE THE COMPLETE LOAN NUMBER AS LISTED BELOW FOR TRACKINGPURPOSES.**

**THANK YOU.**

 
| Sincerely,                                 |
|--------------------------------------------|
| JETRIDE,  INC. dba AIRNET PRIVATE CHARTERS |   |
|                                       |
| /s/  Gary W. Qualmann                      |   |
| (By)                                       |
| 1000119774                                 |   |
| (Loan  Number)                             |
|                                            |  |  |  |

 

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