**Exhibit4.8**

 

**AIRNET SYSTEMS, INC.**

**Loan and Security Agreement**

 

Loan Number: **1000119649**

 

This Agreement is dated as of June 29, 2004 andis executed by and between BANC ONE LEASING CORPORATION (“Lender”), with Lender’sprincipal office located at 1111 Polaris Parkway, Suite A3 (OH1-1085),Columbus, Ohio 43240 and the borrower identified below (“Borrower”):

 

Borrower: JETRIDE, INC. dba AIRNET PRIVATE CHARTERS

 

Borrower’s Address: 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.  TheEquipment may be repositioned by Borrower, from time to time, to otherlocations within the United States in the normal course of the Borrower’sbusiness.  Borrower shall notify Lenderin writing of any new location where the Equipment is based within five (5)days of any repositioning of the Equipment.

 

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**3.  INSURANCE.**  At itssole expense, Borrower at all times shall keep each item of Equipment insuredagainst all risks of loss or damage from every cause whatsoever for an amountnot less than the greater of the full replacement value or the Financed Amount(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 negligenceor willful 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, cancellationor termination 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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ExchangeCommission.  All such financialinformation shall be prepared in accordance with generally accepted accountingprinciples.  If Borrower fails to furnishthe annual financial statements to Lender within 30 days of Lender’s writtenrequest, then Lender may, at its option, charge Borrower a non-performance feeequal to all the installment payments due under this Agreement for the thencurrent month (unless otherwise prohibited by law) and such fees shall bepayable by Borrower on 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 householdpurposes; (g) the Equipment is not, and will not, be registered under the lawsof any foreign country; (h) the Equipment is, and shall remain at all times,eligible for registration under the Act (as defined in Section 20 hereof);(i) the Equipment shall be based in, and primarily used in, the United Statesall as required by the Act; and (j) the Equipment will not be used in violationof any law, regulation, ordinance or policy of insurance affecting themaintenance, use or flight of the Equipment; and (k) Borrower qualifies as acitizen of the United States as defined in the Act and will continue to qualifyas a United States 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, or recorda Uniform Commercial Code financing statement in the place of Borrower and inthe 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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Borrowerceases to do business as a going concern; or (f) with respect to any guaranty,letter of credit, pledge agreement, security agreement, mortgage, deed oftrust, debt subordination agreement or other credit enhancement or creditsupport agreement (whether now existing or hereafter arising) signed or issuedby any party in connection with all or any part of Borrower’s obligations underthis Agreement, the party signing or issuing any such agreement defaults in itsobligations thereunder or any such agreement shall cease to be in full forceand effect or shall be declared to be null, void, invalid or unenforceable bythe party signing or issuing it.

 

As used in this section 12, the term “Borrower”also includes any guarantor (whether now existing or hereafter arising) of allor any part of Borrower’s obligations under this Agreement and/or any issuer ofa letter of credit (whether now existing or hereafter arising) relating to allor any part of Borrower’s obligations under this Agreement, and the term “Agreement”also includes any guaranty or letter of credit (whether now existing orhereafter arising) relating to all or any part of Borrower’s obligations underthis Agreement.

 

**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 obligationsimposed thereby:

 

(a)  Lender mayrequire Borrower to turnover any and all Collateral to Lender.

 

(b)  Lender orits agent may repossess any or all Collateral wherever found, may enter thepremises where the Collateral is located and disconnect, render unusable andremove it, and may use such premises without charge to store or show theCollateral for sale.

 

(c)  Lender maysell any or all Collateral at public or private sale, with or withoutadvertisement or publication, may lease or otherwise dispose of it or may use,hold or keep it.

 

(d)  Lender mayrequire Borrower to pay to Lender on a date specified by Lender,  (i) all accrued and unpaid interest, latecharges and other amounts due under the Note or this Agreement as of such date,plus (ii) the remaining principal balance of the Note as of such date, plus(iii) interest at the Overdue Rate on the total of the foregoing (“Overdue Rate”means an interest rate per annum equal to the higher of 12% or 2% over thePrime Rate, but not to exceed the highest rate permitted by applicablelaw).  If an event of default under section 12(f)of this Agreement exists, then Borrower will be automatically liable to payLender the foregoing amounts as of the next installment payment date under theNote unless Lender otherwise elects in writing.

 

(e)  Borrowershall pay all reasonable costs, expenses and damages incurred by Lender becauseof the event of default or its actions under this section, including, withoutlimitation any collection agency and/or attorney fees and expenses, any costsrelated to the repossession, safekeeping, storage, repair, reconditioning ordisposition of the Collateral.

 

(f)  Lender maysue to enforce Borrower’s performance of its obligations under the Note andthis Agreement and/or may exercise any other right or remedy then available toLender at law or in equity.

 

Lender is not required to take any legal process orgive Borrower any notice before exercising any of the above remedies.  If Lender is required to give notice, 10calendar days advanced notice is reasonable notification.  None of the above remedies is exclusive, buteach is cumulative and in addition to any other remedy available toLender.  Lender’s exercise of one or moreremedies shall not preclude its exercise of any other remedy.  No action taken by Lender shall releaseBorrower from any of its obligations to Lender. No delay or failure on the part of Lender to exercise any righthereunder shall operate as a waiver thereof nor as an acquiescence in anydefault, nor shall any single or partial exercise of any right preclude anyother exercise thereof or the exercise of any other right.  After any default, Lender’s acceptance of anypayment by Borrower under the Note or this Agreement shall not constitute awaiver by Lender of such default, regardless of Lender’s knowledge or lack ofknowledge at the time of such payment, and shall not constitute a reinstatementof the Note or this Agreement if this Agreement has been declared in default byLender, unless Lender has agreed in writing to reinstate this Agreement and towaive the default. With respect to any Collateral or any Obligation, Borrowerassents to all extensions or postponements to the time of payment thereof orany other indulgence in connection therewith, to each substitution, exchange orrelease of Collateral, to the release of any party primarily or secondarilyliable, to the acceptance of partial payment thereof or to the settlement orcompromise thereof, all in such matter and such time or times as Lender maydeem advisable.

 

If Lender actually repossesses any Collateral, thenit will use commercially reasonable efforts under the then currentcircumstances to attempt to mitigate its damages; provided, that Lender shallnot be required to sell, lease or otherwise dispose of any Collateral prior toLender enforcing any of the remedies described above.  Lender may sell or lease the Collateral inany manner it chooses, free and clear of any claims or rights of Borrower andwithout any duty to account to Borrower with respect thereto except as providedbelow.  If Lender actually sells or

 

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leasesthe Collateral, it will credit the net proceeds of any sale of the Collateral,or the net present value (discounted at the then current Prime Rate) of therents payable under any new lease of the Collateral, against the amountsBorrower owes Lender.  The term “net” asused above shall mean such amount after deducting the costs and expensesdescribed in clause (e) above of this section. Borrower shall remain liable forany deficiency if the net proceeds are insufficient to pay all amounts to whichLender is entitled hereunder.

 

**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.**  Lender and any assignee of Lender, * *may,upon ten (10) days’ prior written notice to Borrower, with or without consentof Borrower, sell, assign, transfer or grant a security interest in all or anypart of Lender’s rights, obligations, title or interest in the Collateral, theNote, this Agreement, or the amounts payable under the Note or this Agreementto any entity (“transferee”).  Thetransferee shall succeed to all of Lender’s rights in respect to this Agreement(including, without limitation, all rights to insurance and indemnityprotection described in this Agreement). Borrower agrees to sign any acknowledgment and other documentsreasonably requested by Lender or the transferee in connection with any suchtransfer transaction.  Borrower, uponreceiving notice of any such transfer transaction, shall comply with the termsand conditions thereof.  Borrower agreesthat it shall not assert against any transferee any claim, defense, setoff,deduction or counterclaim which Borrower may now or hereafter be entitled toassert 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 shall continue in effect until the Obligations have beenindefeasibly paid and performed in full. Upon termination of this Agreement, Lender shall, at Borrower’s expense,take such actions and file such documents as may be necessary or desirable torelease the Collateral from this 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 the Schedule A-1that corresponds to that item of Equipment. “Lien” means any security interest, lien, mortgage, pledge, encumbrance,judgment, execution, attachment, warrant, writ, levy, other judicial process orclaim of any nature whatsoever by or of any person.  “Prime Rate” means the prime rate of interestannounced from time to time as the prime rate by Bank One, NA (or itssuccessors or assigns); provided, that the parties acknowledge that the PrimeRate is not intended to be the lowest rate of interest charged by said bank inconnection 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 business of Borrower orany guarantor; (d) Borrower has signed and delivered to Lender this Agreementand Lender

 

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hassigned and accepted this Agreement; (e) Lender has received the documents andinstruments and evidence as to satisfaction of the matters specified in any **Schedule 2** which may beattached hereto, each of which shall be satisfactory to Lender in form andsubstance and each document or instrument to be duly authorized, executed anddelivered and in full force and effect; (f) Lender has received, in form and substance satisfactory to Lender,such other documents and information as Lender shall reasonably request; and(g)  Borrower has satisfied all otherreasonable conditions established by Lender.

 

**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 forconvenience only and have no independent meaning.  (d) The terms of this Agreement shall be severableand if any term thereof is declared unconscionable, invalid, illegal or void,in whole or in part, the decision so holding shall not be construed asimpairing the other terms of this Agreement and this Agreement shall continuein full force and effect as if such invalid, illegal, void or unconscionableterm were not originally included herein. (e) All indemnity obligations of Borrower under this Agreement and allrights, benefits and protections provided to Lender by warranty disclaimersshall survive the cancellation, expiration or termination of thisAgreement.  (f) Lender shall not beliable to Borrower for any indirect, consequential or special damages for anyreason whatsoever.  (g) This Agreementmay be amended, but only by a written amendment signed by Lender andBorrower.  (h) If this Agreement issigned by more than one Borrower, each of such Borrowers shall be jointly andseverally liable for payment and performance of all of Borrower’s obligationsunder this Agreement. (i) This Agreement represents the final, complete andentire agreement between the parties hereto, and there are no oral or unwrittenagreements or understandings 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.

 

**24**.  **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 Lender from making any advance or extension of creditto Borrower or from otherwise conducting business with Borrower or (b) fail toprovide documentary and other evidence of Borrower’s identity as may berequested by Lender at any time to enable Lender to verify Borrower’s identityor to comply with any applicable law or regulation, including, withoutlimitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318.

 

**25**. **USA PATRIOT ACT NOTIFICATION**.  The following notification is provided toBorrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C.Section 5318:

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING ANEW ACCOUNT. To help the government fight the funding of terrorism and moneylaundering activities, Federal law requires all financial institutions toobtain, verify, and record information that identifies each person or entitythat opens an account, including any deposit account, treasury managementaccount, loan, other extension of credit, or other financial services product.What this means for Borrower: When Borrower opens an account, if

 

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Borrower is an individual, Lender will ask forBorrower’s name, tax payer identification number, residential address, date ofbirth, and other information that will allow Lender to identify Borrower, andif Borrower is not an individual, Lender will ask for Borrower’s name, taxpayeridentification number, business address, and other information that will allowLender to identify Borrower.  Lender mayalso ask, if Borrower is an individual, to see Borrower’s driver’s license orother identifying documents, and if Borrower is not an individual, to seeBorrower’s legal organizational documents or other identifying documents.

 

**ALL PARTIES TO THIS AGREEMENT, INCLUDING LENDER AND THE UNDERSIGNED,IRREVOCABLY CONSENT TO THE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURTIN 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** | Accepted By:                 |
|--------------------------------------|------------------------------|
| **CHARTERS**                         | BANC ONE LEASING CORPORATION |
| (Borrower)                           |                         |
|                                 | By:                          | /s/ Stacy R. Roth |   |
| By:                                  | /s/ Gary W. Qualmann         |   |   |
|                                 | Title:                       | Financing Manager |   |
| Title:                               | CFO                          |   |   |
|                                 | Acceptance Date:             | June 29, 2004 |   |
| Witness:                             | /s/ John Gordon              |   |   |
|                                      |                              |  |  |  |  |  |  |  |  |  |  |  |

 

7

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SCHEDULE A-1

 

LoanNo. 1000119649

 

FinancedAmount: $5,000,000.00

 

DESCRIPTION OF EQUIPMENT

 
| Airframe Make/Model:        |   | LEARJET INC. MODEL 60      |
|-----------------------------|--------|----------------------------|
|                        |   |                       |
| Airframe Serial No.:        |   | 137                        |
|                        |   |                       |
| U.S. Identification No.:    |   | N360AN                     |
|                        |   |                       |
| Engine Quantity/Make/Model: |   | 2 PRATT & WHITNEY 305A |
|                        |   |                       |
| Engine Serial No(s).:       |   | CA0109 AND CA0110          |

 

Together with all engines, propellers, avionics,communication equipment, navigation equipment, instruments, accessories,attachments, parts, appurtenances, accessions, furnishings and other equipmentattached to, installed in or relating to any of the foregoing property and allmaintenance and service logs and 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:

 

# ***Spiritof St. Louis Airport, 18270 Edison Avenue, Chesterfield, St. Louis, Missouri63005***

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 and Security Agreement forLoan No. **1000119649**

 

ADDITIONAL CONDITIONS TO FUNDING THE LOAN*

 

1.                                       Airnet Systems, Inc. shall execute and deliver to Lender anabsolute and unconditional guarantee of all obligations of Borrower under theLoan and Security Agreement and the Note.

 

2.                                       Lender shall receive and find acceptable themaintenance and service logs and records relating to the Collateral.

 

3.                                       Lender shall receive terminations or releasesof liens in a form recordable with the Federal Aviation Administration from allcreditors with a lien on any part of the Collateral as shown in the FAA lienrecords.

 

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

 

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*The inclusion of additional funding conditions in this Schedule 2 shallnot limit 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) |   |

 

DearAgent:

 

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.               Thecertificate of insurance must be issued directly to Banc One LeasingCorporation and shall be issued by a company having an A.M. Best Rating of atleast A with a Financial Size Category of at least VII.

 

2.               Thecertificate of insurance must be executed.

 

3.               Theinsurance must be primary and any insurance maintained by BOLC or any otherloss payee will be in excess and non-contributory.

 

4.               Policiesmust include a Waiver of Subrogation in favor of “Banc One Leasing Corporation,its parent and affiliates, successors or assigns”.

 

5.               Policiesmust include a thirty (30) day prior written Notice of Cancellation to theCertificate Holder.  Such notice must bedirected by certified mail to: Banc One Leasing Corporation, 1111 PolarisParkway, Suite A3, Columbus, Ohio 43240, Attn: Insurance Dept.

 

6.               PHYSICALDAMAGE

 

a.               Replacementcost coverage for the equipment identified on the attached Schedule A-1,which is estimated to be $5,000,000.00.

 

b.              “BancOne Leasing Corporation, its parent and affiliates, successors or assigns”shall be named as Loss Payee.

 

c.               Breachof Warranty in favor “Banc One Leasing Corporation, its parent and affiliates,successors or assigns”.

 

d.              WarRisk Endorsement, which shall include hijacking and terrorism, in favor of “BancOne Leasing Corporation, its parent and affiliates, successors or assigns” forthe amount identified in 6a.

 

7.               Thecertificate of insurance shall evidence liability coverage in the minimumamount of $50 million.

 

Pleaseimmediately send proof of the above insurance requirements **VIAFACSIMILE 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)           |
| 1000119649           |   |
| (Loan Number)        |
|                      |        |  |

 

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