**Exhibit4.16**

 

**AIRNETSYSTEMS, INC.**

**Loan andSecurity Agreement**

 

Loan Number: **1000119771**

 

This Agreement is datedas of July 12, 2004 and is executed by and between BANC ONE LEASING CORPORATION(“Lender”), with Lender’s principal 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: 3939International 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 theEquipment in good condition and working order and supply and install allreplacement parts or other devices when required to so maintain the Equipmentor when required by applicable law or regulation, which parts or devices shallautomatically become part of the Equipment; (b) use and operate the Equipmentin a careful manner in the normal course of its business and only for thepurposes for which it was designed in accordance with the manufacturer’swarranty requirements, and comply with all laws and regulations relating to theEquipment, and obtain all permits or licenses necessary to install, use oroperate the Equipment;  (c) except asprovided in clause (d) below, make no alterations, additions, subtractions,upgrades or improvements to the Equipment without Lender’s prior written consent,which consent will not be unreasonably withheld, but any such alterations,additions, upgrades or improvements shall automatically become part of theEquipment; (d) maintain, inspect, service and repair, overhaul and test theEquipment in accordance with the FAA approved maintenance program, manufacturer’sapproved maintenance program, FAA airworthiness directives, and themanufacturer’s alert bulletins and urgently recommended service bulletins andprocedures, and perform all duties and tasks which would be required tomaintain the Equipment, including the engines, in full compliance with themanufacturer’s specification (i) so as to keep the Equipment in as goodoperating condition as when delivered to the Borrower hereunder, ordinary wearand tear excepted, and (ii) so as to keep the Equipment in such operatingcondition as may be necessary to enable the airworthiness certification of suchEquipment to be maintained in good standing at all times under the Act (asdefined in Section 20 hereof); and (e) maintain all records, logs and othermaterials required by the FAA to be maintained in respect of the Equipment. TheEquipment will not be based outside of the United States, provided, however,that the Equipment shall not be outside of the United States for more thanninety (90) days in any calendar year. The Equipment shall not be operated within, over or into anyjurisdiction not covered by the insurance policies required herein nor shallthe Equipment be operated in any jurisdiction that does not have diplomaticrelations with the United States.  Lenderhas the right upon reasonable notice to Borrower to inspect the Equipmentwherever located.  The Equipment shall bebased at the location specified on Schedule A-1.  The Equipment may be repositioned by Borrower,from time to time, to other locations within the United States in the normalcourse of the Borrower’s business. Borrower shall notify Lender in writing of any new location where theEquipment is based within five (5) days of any repositioning of the Equipment.

 

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**3.  INSURANCE.**  At its soleexpense, 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).  Allinsurers 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 willpay promptly when due all taxes, assessments and governmental charges upon oragainst Borrower, the Collateral or the property or operations of Borrower, ineach case before same becomes delinquent and before penalties accrue thereon,unless and to the extent that same are being contested in good faith byappropriate 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 OFATTORNEY-IN-FACT**.  Borrower hereby irrevocably appoints Lenderor its designee as Borrower’s attorney in fact, with full authority in theplace instead of Borrower, from time to time in Lender’s discretion upon,during, and after an event of default, to take any action and to execute anyinstrument which Lender may deem necessary or advisable to accomplish thepurposes of this Agreement, including without limitation, (a) to perfect andcontinue to perfect the security interests created by this Agreement, includingwithout limitation to prepare, sign, amend, file, or record a UniformCommercial Code financing statement in the place of Borrower and in the name ofBorrower; (b) to ask, demand, collect or sue for, recover, compound, receiveand give acquittance in receipts for any monies due or become due under or in respectfor any Collateral; (c) to receive, endorse and collect any drafts or otherinstruments, documents and chattel paper, in connection with the Collateral;and (d) to file any claims or take any action or institute any proceeding whichLender may deem necessary or desirable for the collection of any Collateral orotherwise to enforce the rights of Lender in the Collateral.  Borrower agrees to sign and deliver to Lenderany additional documents deemed desirable by Lender to effect the perfection ofLender’s security interest in the Collateral. Borrower shall pay upon Lender’s request any out-of-pocket costs andexpense paid or incurred by Lender in connection with the above terms of thisAgreement 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 business as a goingconcern; or (f) with respect to any guaranty, letter of credit, pledgeagreement, security agreement, mortgage, deed of trust, debt subordinationagreement or other credit enhancement or credit support agreement (whether nowexisting or hereafter arising) signed or issued by any party in connection withall or any part of Borrower’s obligations under this Agreement, the partysigning or issuing any such agreement defaults in its obligations thereunder orany such agreement shall cease to be in full force and effect or shall bedeclared to be null, void, invalid or unenforceable by the party signing orissuing it.

 

As used in this section12, the term “Borrower” also includes any guarantor (whether now existing orhereafter arising) of all or any part of Borrower’s obligations under thisAgreement and/or any issuer of a letter of credit (whether now existing or hereafterarising) relating to all or any part of Borrower’s obligations under thisAgreement, and the term “Agreement” also includes any guaranty or letter ofcredit (whether now existing or hereafter arising) relating to all or any partof Borrower’s obligations under this 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 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.

 

Lender is not required totake any legal process or give Borrower any notice before exercising any of theabove remedies.  If Lender is required togive notice, 10 calendar 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 actuallyrepossesses any Collateral, then it will use commercially reasonable effortsunder the then current circumstances to attempt to mitigate its damages;provided, that Lender shall not be required to sell, lease or otherwise disposeof any Collateral prior to Lender enforcing any of the remedies describedabove.  Lender may sell or lease theCollateral in any manner it chooses, free and clear of any claims or rights ofBorrower and without any duty to account to Borrower with respect thereto exceptas provided below.  If Lender actuallysells or

 

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leases the Collateral, it will credit the netproceeds of any sale of the Collateral, or the net present value (discounted atthe then current Prime Rate) of the rents payable under any new lease of theCollateral, 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 anyinstallment payment or other amount payable under the Note or this Agreement isnot paid when due, then as compensation for the administration and enforcementof Borrower’s obligation to make timely payments, Borrower shall pay withrespect to each overdue payment on demand an amount equal to the greater offifteen dollars ($15.00) or five percent (5%) of the each overdue payment (butnot to exceed the highest late charge permitted by applicable law) plus anycollection agency fees and expenses**.**

 

**15.  LENDER’S RIGHT TO PERFORM**. If Borrower fails to make any payment under this Agreement or fails to performany of its other obligations in this Agreement (including, without limitation,its agreement to provide insurance coverage), Lender may itself make suchpayment or perform such obligation, and the amount of such payment and theamount of the expenses of Lender incurred in connection with such payment orperformance shall be deemed to be additional principal under the Note which ispayable by Borrower 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 BY BORROWER. **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 UnitedStates Code. “Financed Amount” for any item of Equipment shall mean the amountset forth on the Schedule 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 isnot obligated to make any loan or disburse any principal hereunder unless:(a)  Lender has received the Note signedby the Borrower; (b) Lender has received evidence of all required insurance;(c) in Lender’s sole judgment, there has been no material adverse change in thefinancial condition or

 

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business of Borrower or any guarantor; (d)Borrower has signed and delivered to Lender this Agreement and Lender 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 be attachedhereto, each of which shall be satisfactory to Lender in form and substance andeach document or instrument to be duly authorized, executed and delivered andin full force and effect;  (f) Lender hasreceived, in form and substance satisfactory to Lender, such other documentsand information as Lender shall reasonably request; and (g)  Borrower has satisfied all other reasonableconditions established by Lender.

 

**22.  USURY.**  It is not theintention of the parties to this Agreement to make an agreement violative ofthe laws of any applicable jurisdiction relating to usury (“Usury Laws”).  Regardless of any provision in thisAgreement, the Note, or any document in connection therewith, Lender shall notbe entitled to receive, collect or apply, as interest on any Obligation, anyamount 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, thisAgreement shall be binding upon and inure to the benefit of the parties heretoand their respective heirs, administrators, successors and assigns.  (b) This Agreement may be executed in anynumber of counterparts, which together shall constitute a singleinstrument.  (c) Section and paragraphheadings in this Agreement are for convenience only and have no independentmeaning.  (d) The terms of this Agreementshall be severable and if any term thereof is declared unconscionable, invalid,illegal or void, in whole or in part, the decision so holding shall not beconstrued as impairing the other terms of this Agreement and this Agreementshall continue in full force and effect as if such invalid, illegal, void orunconscionable term were not originally included herein.  (e) All indemnity obligations of Borrowerunder this Agreement and all rights, benefits and protections provided to Lenderby warranty disclaimers shall survive the cancellation, expiration ortermination of this Agreement.  (f)Lender shall not be liable to Borrower for any indirect, consequential orspecial damages for any reason whatsoever. (g) This Agreement may be amended, but only by a written amendmentsigned by Lender and Borrower.  (h) Ifthis Agreement is signed by more than one Borrower, each of such Borrowersshall be jointly and severally liable for payment and performance of all ofBorrower’s obligations under this Agreement. (i) This Agreement represents thefinal, complete and entire agreement between the parties hereto, and there areno oral or unwritten agreements or understandings affecting this Agreement orthe Collateral.  (j) Borrower agrees thatLender is not the agent of any manufacturer or supplier, that no manufactureror supplier is an agent of Lender, and that any representation, warranty oragreement made by manufacturer, supplier or by their employees, salesrepresentatives or agents shall 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:

 

IMPORTANT INFORMATIONABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight thefunding of terrorism and money laundering activities, Federal law requires allfinancial institutions to obtain, verify, and record information thatidentifies each person or entity that opens an account, including any depositaccount, treasury management account, loan, other extension of credit, or

 

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other financial servicesproduct. What this means for Borrower: When Borrower opens an account, ifBorrower is an individual, Lender will ask for Borrower’s name, tax payeridentification number, residential address, date of birth, and other informationthat will allow Lender to identify Borrower, and if Borrower is not anindividual, 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.

 

 

**ALL PARTIES TO THIS AGREEMENT,INCLUDING LENDER AND THE UNDERSIGNED, IRREVOCABLY CONSENT TO THE JURISDICTIONAND VENUE OF ANY STATE OR FEDERAL COURT IN OHIO, AND WAIVE ALL RIGHTS TO TRIALBY JURY, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINSTANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN CONNECTION WITH ORIN ANY WAY RELATED TO THE NOTE OR 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

 

Loan No. 1000119771

 

Financed Amount:$5,000,000.00

 

DESCRIPTION OF EQUIPMENT

 
| Airframe Make/Model:         | LEARJET INC. MODEL 60       |
|------------------------------|-----------------------------|
|                         |                        |
| Airframe Serial No.:         | 127                         |
|                         |                        |
| U.S. Identification  No.:    | N460AN                      |
|                         |                        |
| Engine  Quantity/Make/Model: | 2 PRATT & WHITNEY  305A |
|                         |                        |
| Engine Serial No(s).:        | CA0185 AND CA0056           |
|                              |                             |  |

 

Together with allengines, propellers, avionics, communication equipment, navigation equipment,instruments, accessories, attachments, parts, appurtenances, accessions,furnishings and other equipment attached to, installed in or relating to any ofthe foregoing property and all maintenance and service logs and recordsrelating to the foregoing property.

 

Each engine has 750 ormore rated takeoff horsepower or the equivalent of such horsepower.

 

The Equipment shall bebased at the following location:

 

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

Name of Airport andStreet Address                            City                  County      State

 

This Schedule A-1 isattached to, and made a part of, the Loan and Security Agreement with the LoanNumber referenced above and contains a true and accurate description of theEquipment.

 
| **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 for Loan No. **1000119771**

 

 

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 acceptablethe maintenance and service logs and records relating to the Collateral.

 

3.                                       Lender shall receive terminations orreleases 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-3 terminationsor release of liens in recordable form from all creditors with a lien on anypart of the Collateral as shown in state or local lien records.

 

 

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* The inclusion ofadditional funding conditions in this Schedule 2 shall not limit the generalityof 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 anyinsurance maintained by BOLC or any other loss payee will be in excess andnon-contributory.

4.               Policies must include a Waiver ofSubrogation in favor of “Banc One Leasing Corporation, its parent andaffiliates, successors or assigns”.

5.               Policies must include a thirty (30) dayprior written 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 theequipment identified on the attached Schedule A-1, which is estimated to be $5,000,000.00.

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

c.               Breach of Warranty in favor “Banc OneLeasing Corporation, 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 insurance shall evidenceliability coverage in the minimum amount of $50 million.

 

Please immediately sendproof of the above insurance requirements **VIA FACSIMILE TRANSMITTAL614-213-0748**.

 

**PLEASEREFERENCE THE COMPLETE LOAN NUMBER AS LISTED BELOW FOR TRACKING PURPOSES.**

**THANKYOU.**

 
| Sincerely,                                 |
|--------------------------------------------|
| JETRIDE, INC. dba AIRNET  PRIVATE CHARTERS |   |
|                                       |
| /s/ Gary W. Qualmann                       |   |
| (By)                                       |
| 1000119771                                 |   |
| (Loan Number)                              |
|                                            |  |  |  |

 

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