Exhibit
10.4


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT
BE SOLD OR OFFERED FOR SALE UNLESS REGISTERED UNDER SAID ACT OR LAWS OR UNLESS
AN EXEMPTION IS AVAILABLE UNDER SAID ACT OR LAWS.


 


TRANSFER OF THIS NOTE IS RESTRICTED IN THE
MANNER SPECIFIED IN SECTION 2.07 OF THE MORTGAGE.


 


 


SKYWEST AIRLINES, INC.,


a Utah corporation


 


NOTE DUE MARCH 21, 2006, ISSUED IN CONNECTION
WITH A LOAN TO SKYWEST AIRLINES, INC. AND SECURED BY FOUR BOMBARDIER REGIONAL
JET MODEL CL-600-2B19 AIRCRAFT WITH MANUFACTURER’S SERIAL NUMBER 7799, 7801,
7850 AND 7852 AND INITIALLY BEARING CORRESPONDING UNITED STATES FEDERAL
AVIATION ADMINISTRATION REGISTRATION NO. N698BR, N699BR, N709BR AND N710BR AND
TWO GENERAL ELECTRIC CF34-3B1 ENGINES ATTACHED TO EACH AIRCRAFT.


 


No.
R-1


 


	
  US $60,000,000

  	
  September
  21, 2005

  



 


SKYWEST AIRLINES, INC., a
Utah corporation (“Borrower”), hereby promises to pay to C.I. T. Leasing
Corporation, a Delaware corporation, or its registered transferees, in
accordance with that certain Aircraft Mortgage and Security Agreement dated as
of September 21, 2005 (the “Mortgage”), the principal sum of SIXTY
MILLION AND 00/100 DOLLARS ($60,000,000), to be due and payable on the Final
Maturity Date.  Interest on the unpaid
principal amount hereof from time to time outstanding from and including the
date hereof until such principal amount is paid in full shall accrue at the
Floating Rate as provided for in Sections 2.02 and 2.03 of the Mortgage, and
shall be payable in arrears on each Payment Date and on the Final Maturity Date.  A schedule of the Payment Dates is set for on
Annex A hereto. Notwithstanding the foregoing, the final payment shall be an
amount sufficient to discharge in full the unpaid principal amount, accrued and
unpaid interest and all other amounts due and owing to the Note Holder under
the Operative Documents.


 


This Note shall bear
interest at the Past Due Rate on any principal hereof, interest and other
amounts due hereunder, not paid when due (whether at stated maturity, by
acceleration or otherwise), for any period during which the same shall be
overdue, payable on demand by the holder hereof given through Security
Trustee.  Interest on past-due amounts
shall be calculated on the basis of a year of 360 days and the actual days
elapsed.  In the event the principal of
or interest on this Note or other amount payable hereunder is not paid in full
when due (whether at stated maturity, by acceleration or otherwise), the period
applicable to the Past Due Rate if and so long as the Applicable Rate for this
Note is based on LIBOR shall be either (i) a period commencing on the due date
of such principal, interest or other amount and ending on the next succeeding
Business Day and thereafter each period commencing on the last day of the
preceding period and ending on the next succeeding Business Day, or (ii) such
other period or periods (not greater than six months) as the Security Trustee
may, at any time and from time to time during the period the same remains
past-due, select in its sole discretion for the purpose of determining the Past
Due Rate.


 





















 


Interest shall be calculated
as provided for in Sections 2.02 and 2.03 of the Mortgage.  If any sum payable hereunder falls due on a
day that is not a Business Day, then such sum shall be payable on the next
succeeding Business Day together with interest thereon at the Applicable Rate
from and including the scheduled due date to but excluding such next succeeding
Business Day; provided, that if such succeeding Business Day falls in
the next calendar month, such payment shall be made on the preceding Business
Day.


 


Principal and interest and
other amounts due hereon shall be payable in Dollars in immediately available
funds prior to 11:15 a.m., New York City time, on the due date thereof, to
Security Trustee at it offices, and Security Trustee shall, subject to the
terms and conditions of the Mortgage, promptly remit all such amounts so
received by it to the Note Holder holding this Note in accordance with the
terms of the Mortgage at such account or accounts at such financial institution
or institutions as such Note Holder shall have designated to Security Trustee
in writing, in immediately available funds, such payment to be made, in the
case of any such designated account in New York City, New York prior to 2:00
p.m. New York City time, on the due date thereof.  If Security Trustee, through negligence or
willful misconduct, shall fail to make any such payment as provided in the
immediately foregoing sentence after its receipt of funds at the place and
prior to the time specified above, Security Trustee, in its individual capacity
and not as trustee, agrees to compensate the Note Holder holding this Note for
loss of use of funds in a commercially reasonable manner, and Borrower shall
have no liability for, and the Mortgage Estate shall not secure, any such loss
or any overdue interest on this Note in connection with any such failure of
Security Trustee to timely distribute funds. 
All such payments by Borrower and Security Trustee shall be made free
and clear of and without reduction for or on account of all wire or other like
charges.


 


 


The Note Holder holding this
Note, by its acceptance hereof, agrees that, except as otherwise expressly
provided in the Mortgage, each payment received by it in respect hereof shall
be applied, first, to the payment of any amount (other than the
principal of or the Breakage Amount (if any) or interest on this Note) due in
respect of this Note, second, to the payment of the Breakage Amount, if
any, and interest hereon (as well as any interest on overdue principal and, to
the extent permitted by law, interest and other amounts payable hereunder) due
and payable hereunder, third, to the payment of the principal of this
Note then due and fourth, the balance, if any, remaining thereafter, to
the payment of the principal of this Note remaining unpaid, in the manner set
forth in the “fourth” clause of Section 2.05 of the Mortgage.


 


This Note is one of the
Notes referred to in the Mortgage that have been or are to be issued by
Borrower pursuant to the terms of the Mortgage. 
Reference is hereby made to the Mortgage and the Operative Documents
referred to therein for a statement of the rights and obligations of the Note
Holder holding this Note, and the nature and extent of the security for this
Note and of the rights and obligations of the other Note Holders, and the
nature and extent of the security for the other Notes, to all of which terms
and conditions in the Mortgage and such Operative Documents the Note Holder
holding this Note agrees by its acceptance hereof.


 


There shall be maintained a
Note Register for the purpose of registering transfers and exchanges of this
and other Notes at the offices of the Security Trustee in the manner provided
in Section 2.07 of the Mortgage.  Subject
to the Operative Documents and the next following paragraphs, this Note or any
interest herein may be assigned or transferred, and the Notes are exchangeable
for a like aggregate original principal amount of Notes of any authorized
denomination, as requested by the Note Holder surrendering the same; provided
that no such transfer shall be effective until recorded in the Note Register.


 


Prior to the due presentment
for registration of transfer of this Note, Borrower and Security Trustee may
deem and treat the person in whose name this Note is registered on the Note
Register as the


 





















 


absolute owner of this Note and the Note Holder for
the purpose of receiving payment of all amounts payable with respect to this
Note and for all other purposes whether or not this Note is overdue, and
neither Borrower nor Security Trustee shall be affected by notices to the
contrary.


 


This Note is subject to
prepayment only as permitted by Sections 2.10 and 2.11 of the Mortgage and such
Note Holder, by its acceptance of this Note, agrees to be bound by said
provisions.


 


This Note shall not be
secured by or be entitled to any benefit under the Mortgage or be valid or
obligatory for any purpose, unless authenticated by the Security Trustee as
evidenced by the manual signature of one of its authorized signatories on the
certificate below.


 


Capitalized terms used
herein and not otherwise defined shall have the meaning assigned such terms in
Appendix A to the Mortgage.


 


THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.


 


 


[Remainder of Page Intentionally
Blank – Signature Page Follows]


 





















 


IN WITNESS WHEREOF, Borrower
has caused this Note to be executed in its corporate name by its officer thereunto
duly authorized, as of the day and year first above written.


 


	
   

  	
  SKYWEST
  AIRLINES, INC.,

  
	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael J. Kraupp

  	
   

  
	
   

  	
  Name:
  

  	
  Michael
  J. Kraupp

  
	
   

  	
  Title:

  	
  Vice
  President Finance and Assistant Treasurer

  
					



 


[Signature
page to Note]


 





















 


ANNEX
A


TO


NOTE


 


SCHEDULED
PAYMENT DATES 


 




	
  Payment Date

  	
   

  	
  Principal

  	
   

  	
  Outstanding Principal

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21-Oct-2005

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  
	
  21-Nov-2005

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  
	
  21-Dec-2005

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  
	
  21-Jan-2006

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  
	
  21-Feb-2006

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  
	
  21-Mar-2006

  	
   

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  	
  $

  	
  —

  	
   

  






 





















 


RECEIPT


 


I,                                 ,
as special counsel to CIT Leasing Corporation, a Delaware corporation (“Lender”),
hereby acknowledge receipt of the original Note No. R-1 dated September      ,
2005, executed by Borrower in favor of Lender.


 


 


	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  September        ,
  2005