Document:

Exhibit 4.9

 

EXECUTION COPY

 

SECURITY AGREEMENT

PLEDGE AND ASSIGNMENT OF MEMBERSHIP INTEREST

 

THIS
SECURITY AGREEMENT PLEDGE AND ASSIGNMENT OF MEMBERSHIP INTEREST (“Assignment”)
is made and entered into as of May 28, 2004, by and between AirNet
Systems, Inc., an Ohio corporation (“Grantor”), and The Huntington
National Bank, a national banking association (“Agent”), for itself and on
behalf of the lenders (the “Lenders”) from time to time party to the Credit
Agreement described below.  Grantor and
Agent are sometimes referenced herein as the “Party(ies)”.

 

Background Information

 

On the date hereof, Agent, Grantor and the Lenders
have entered into a certain Amended and Restated Credit Agreement (as it may be
amended, modified, supplemented, extended, restated or replaced from time to
time, the “Credit Agreement”), pursuant to which Agent and the Lenders have
agreed to extend credit (herein, collectively, the “Loan”) to Grantor on
certain terms and conditions, including, without limitation, that Grantor execute
and deliver this Assignment, pursuant to which Grantor is granting a security
interest in its “Membership Interest” (hereinafter defined) in Fast Forward
Solutions, LLC, an Ohio limited liability company (“Fast Forward”).

 

Agreement

 

NOW, THEREFORE, for and
in consideration of the mutual promises set forth in this Assignment and to
induce Agent and the Lenders to enter into and extend credit to Grantor
pursuant to the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the Parties hereby agree as follows:

 

Section 1.              Definitions.  All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.  In addition to the
words and terms defined elsewhere in this Assignment, the following words and
terms shall have the following meanings:

 

“Collateral” shall mean, collectively,
the Membership Interest and all Proceeds.

 

“Event
of Default” shall mean the occurrence of a Default as defined in
the Credit Agreement.

 

“Lender” and “Lenders” shall be as
defined in the preamble of this Assignment, provided, however,
that each such reference to Lender and Lenders shall include, to the extent the
context permits or requires, the LC Issuer and the Swingline Lender, as each
such term is defined in the Credit Agreement.

 

 

“Membership
Interest” shall mean, collectively, Grantor’s interests as a
member (now owned or hereinafter acquired) in Fast Forward, together with all proceeds,
rents, income, increases, profits and related rights, all sums or distributions
(whether made in cash, tangible or intangible property of any kind or
character, or otherwise) due or to become due to Grantor including all profits
and income, and the accounts thereof, all surplus and capital, and the accounts
thereof, all rights (if and only to the extent provided in the Operating
Agreement as hereinafter defined) in specific property of Fast Forward,
including, if applicable, the equal right with the other members to possess the
same for Fast Forward’s business purposes, the rights, but not the duty, to
participate in the management and administration of Fast Forward’s business and
affairs, to require any information and account of Fast Forward’s transactions
and all other matters relating to the business and financial condition of Fast
Forward, to inspect Fast Forward’s books and records, including federal, state
and local income tax returns, during the continuance of Fast Forward’s business
and to receive all allocations of loss, deduction, credit and other tax
benefits allocable to Grantor from Fast Forward, and any and all other right,
title and interest of Grantor in Fast Forward and under the Operating
Agreement, whether now existing or hereafter acquired or created, together with
all products, proceeds, substitutions and additions of or to any of the
foregoing.

 

“Operating
Agreement” means the Operating Agreement of Fast Forward dated
August 4, 2003, as the same may be amended, modified, supplemented, restated or
replaced from time to time.

 

“Proceeds” shall mean whatever cash or
other property is received when a Membership Interest or Proceeds are sold,
exchanged, collected or otherwise disposed of, both cash and non-cash, and all
payments or distributions paid or payable on account of the Membership
Interest.

 

Section
2.               Security Interest. 
As security for the prompt and full payment and performance of the
Obligations, Grantor hereby pledges, assigns and grants to Agent, for itself
and for the benefit of the Lenders, a security interest (under the Ohio Uniform
Commercial Code, as in effect on the date hereof and as amended from time to
time hereafter, the “Code”), in all of Grantor’s right, title and interest,
whether now existing or hereafter arising, created or acquired in, to and under
the Collateral.  In connection with the
granting of such security interest, Grantor hereby collaterally assigns,
transfers and sets over unto Agent all of Grantor’s right, title and interest,
whether now existing or hereafter arising, created or acquired in, to and under
the Collateral.

 

Section
3.               Perfection of Security Interest. 
Grantor hereby authorizes Agent to file such financing statements or any
additional financing statements or continuation statements, as may be necessary
or desirable in order to perfect the security interests created herein.

 

Section 4.               Agent Has Rights
and Remedies of a Secured Party.  In
addition to all rights and remedies given to Agent by this Assignment or any
other Loan Document, Agent shall have all the rights and remedies of a secured
party under the Code.

 

Section 5.               Limitations on
Obligations of Agent Under the Operating Agreement.  Grantor acknowledges and agrees that, until
such time as Agent or its successors or assigns

 

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acquires title to the Membership Interest, this Assignment shall not in
any way obligate Agent or any of its successors or assigns to perform any of
the now existing or hereafter accruing obligations of Grantor under the
Operating Agreement, whether heretofore or hereafter accruing or arising, all
with the same effect as though this Assignment had not been executed or
delivered by Grantor.

 

Section 6.               Representations and Warranties.  Grantor represents and warrants to Agent as
follows:

 

(a)           Grantor
has and will have good and marketable title to the Collateral from time to time
owned or acquired by it, free and clear of any Liens or adverse claims thereon
or affecting the title thereto, except as permitted under the Credit Agreement
or for the security interest created by this Assignment and the other Security
Documents, and is entitled to the rights and benefits thereof, as set forth in
the Operating Agreement and otherwise. 
Except as provided in the Operating Agreement, the Collateral is not
subject to any defenses, sets-offs or counterclaims of any kind.  Neither Grantor nor Fast Forward has made
any assignment for the benefit of creditors and there has not been filed any
petition in bankruptcy (or any other commencement of a bankruptcy or similar
proceeding) by or against Grantor or Fast Forward under any applicable
bankruptcy, insolvency, reorganization or similar law.

 

(b)           Grantor
has the right and requisite authority to pledge, assign, transfer, deliver,
deposit and set over the Collateral to Agent as provided herein, and no
provision of the Operating Agreement, or other agreement or instrument to which
Grantor or Fast Forward is a party conflicts with this Assignment or limits the
right and power of Grantor to do so. There is no agreement in effect with
respect to either Grantor or Fast Forward, other than any agreement with Agent,
which would in any manner impair or prohibit the terms of this Assignment or
the assignment of the Collateral as provided hereunder.

 

(c)           The
pledge, assignment and delivery of, and the filing of the financing statements
with respect to, the Collateral pursuant to this Assignment will create a valid
first priority lien on and a perfected security interest in the Collateral
securing the payment and performance of the Obligations.

 

(d)           Grantor
has full right, power and authority to enter into this Assignment and this
Assignment has been duly executed and delivered by Grantor and constitutes the
legal, valid and binding obligation of Grantor, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally and
general principles of equity.

 

(e)           Neither
the execution or the delivery of this Assignment, nor compliance with the terms
and provisions hereof on the part of Grantor or Fast Forward will violate any
statute, license or regulation of any governmental authority or will breach,
conflict with, or result in a breach of any of the terms, conditions or
provisions of any agreement or instrument, other than any agreement with Agent
to which Grantor or Fast Forward is a party or may be bound, or constitute a
default thereunder, or result in the creation or imposition of any Lien of any
nature whatsoever upon, or give to others any interest or right, including the
right of termination or

 

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cancellation, in or with
respect to, any of Grantor’s or Fast Forward’s property, assets, contracts,
licenses or business.

 

(f)            The Membership Interest being pledged and assigned
hereunder constitutes one hundred percent (100%) of all the membership
interests in Fast Forward and Grantor is the owner, and is entitled to the
rights and benefits, thereof as set forth in the Operating Agreement.

 

(g)           Fast
Forward is a valid and subsisting limited liability company and is duly
organized and existing under the laws of the State of Ohio, the Operating
Agreement is and remains in full force and effect, and a true, complete and
correct copy of the Operating Agreement has been delivered to Agent.

 

The representations and warranties set forth in this Section shall
survive the execution, delivery and performance of this Assignment.

 

Section 7.               Provisions Applicable to the
Collateral.  The Parties agree that,
at all times during the term of this Assignment, the following provisions shall
be applicable to the Collateral:

 

(a)           Grantor
shall keep accurate and complete books and records concerning the Collateral.

 

(b)           Agent shall have the
right, with prior notice at any time during which no Event of Default has
occurred and is continuing (it being understood and agreed that no such notice
shall be required at any time after the occurrence and during the continuance
of an Event of Default), to review the books and records of Grantor pertaining
to the Collateral and to copy the same and make excerpts therefrom all at such
reasonable times and as often as Agent may reasonably request.

 

(c)           In
connection with any change of the name, identity or structure of the Grantor
that might make any UCC financing statements filed in connection with the
transactions contemplated hereby, seriously misleading within the meaning of
the UCC or any change in the state of incorporation of the Grantor, the Grantor
shall (i) authorize, if Agent deems the same reasonably necessary or desirable,
the filing of appropriate financing statements in appropriate filing offices
prior to such change and (ii) give the Agent notice of such change at least
fifteen (15) Business Days prior to such change.

 

(d)           Promptly
upon request of Agent from time to time, Grantor shall furnish Agent with such
material information concerning the Collateral as Agent may reasonably request,
including copies of all material notices and communications with respect to
Fast Forward or its respective properties, assets, operations or business which
may be sent by Grantor to, or received from, Fast Forward or any other member
of Fast Forward.

 

(e)           As
long as Grantor retains title to the Membership Interest, Grantor shall have
the right to exercise all voting and other rights under or pertaining to the
Collateral;

 

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provided, however, all such
rights and privileges shall be exercised in a manner which is not inconsistent
with the provisions of this Assignment or the other Loan Documents.

 

(f)            Grantor
will not authorize or consent to any amendment, revision or modification of the
Operating Agreement without the prior written consent of Agent, which consent
shall not be unreasonably withheld.

 

(g)           Grantor
and Fast Forward shall not permit, without the prior written consent of Agent:
(i) any new member to be admitted to Fast Forward, or (ii) any transaction
which would have the effect of diluting Grantor’s Membership Interest.

 

(h)           Except
as permitted under the Credit Agreement, Grantor shall not (i) create, incur,
assume or suffer to exist any Lien or pledge or conditional sale or other title
retention agreement with respect to any of, the Collateral, (ii) sell, assign,
transfer, pledge, or otherwise encumber any rights in or to the Collateral, or
any distributions or payments with respect thereto, (iii) permit any levy or
attachment to be made against any of the Collateral, or (iv) permit any
financing statement to be filed or on file with respect to any of the
Collateral, except in favor of Agent.

 

(i)            Grantor
shall defend Agent’s security interest in the Collateral and shall, at its own
cost and expense, cause (providing that Agent shall file financing statements)
said security interest to be perfected and to continue to be perfected, and for
such purpose Grantor will from time to time at the request of Agent execute and
file or record, or cause to be filed or recorded, such instruments, documents
and notices, including, without limitation, financing statements and
continuation statements, as Agent may deem reasonably necessary or advisable
from time to time in order to perfect and continue perfected said security
interest. Grantor will do all such other acts and things and execute and
deliver all such other instruments and documents, including without limitation,
further security agreements, pledges and assignments, as Agent may reasonably
deem necessary or advisable from time to time in order to perfect, preserve and
continue as perfected the priority of said security interest as a security
interest in the Collateral prior to the rights of all other persons therein or
thereto except for Agent.

 

(j)            Grantor
shall defend the title to the Collateral and the lien on and security interest
of Agent therein against the claim of any person or entity and will maintain
and preserve and protect such lien and security interest in the Collateral,
until such time as the Obligations have been indefeasibly paid and performed in
full and Agent and the Lenders shall have no obligation to extend any credit
under the Credit Agreement or the other Loan Documents.

 

(k)           Grantor
hereby irrevocably authorizes Fast Forward to (after receipt by Fast Forward of
notice and/or upon actual knowledge of an Event of Default) rely upon and
comply with any written notice or demand by Agent for the collection of any
distributions under the Operating Agreement or otherwise with respect to the
Membership Interest or the Collateral. 
Fast Forward is hereby authorized to rely upon the written statement of
Agent with respect to the existence of an Event of Default and Fast Forward
shall have no liability to Grantor for Fast Forward’s reliance upon Agent’s
written notice of the existence of an Event of Default.  Without in any way limiting the
effectiveness of the aforesaid authorization, if after an Event of Default

 

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has occurred and is
continuing, Grantor shall receive all or any portion of any distribution which
under this Assignment is payable to Agent, then Grantor will hold the same in
trust for, and shall immediately remit the same to, Agent.

 

(l)            Agent
shall have no responsibility to enforce collection of any distribution hereby
assigned and Agent shall not have any other responsibility in connection
therewith, except the responsibility to account for funds actually
received.  Neither this Assignment nor
any action or inaction on the part of Agent prior to the acquisition by Agent
of title to the Membership Interest hereunder shall constitute an assumption on
the part of Agent of any duty or obligation with respect to the Membership
Interest or the Operating Agreement, nor shall Agent have any duty or
obligation to make any payment to be made by Grantor under the Operating
Agreement, or to present or file any claim, or to take any other action to
collect or enforce the payment of any amounts or the performance of any
obligations which have been assigned to Agent or to which it may be entitled
hereunder at any time or times.  No
action or inaction on the part of Agent shall adversely affect or limit in any
way the rights of Agent hereunder.

 

(m)          If,
upon the exercise of its remedies under this Assignment, Agent becomes a substitute
member of Fast Forward, Agent shall automatically assume all of Grantor’s
obligations under the Operating Agreement, incurred on or after the date of
assumption, except that Agent shall not be required to pay any capital
contributions or other assessments to Fast Forward with respect to the
Collateral.

 

(n)           Grantor
will not change its name or identity in any manner unless it shall have given
Agent at least 30 days’ prior written notice thereof and shall have taken all
action (or made arrangements to take such action substantially simultaneously
with such change if it is impossible to take such action in advance) necessary
or reasonably requested by Agent to amend any financing statement or
continuation statement as required by Agent. Grantor will not amend, modify or
otherwise affect its organizational documents, including, without limitation,
its articles of incorporation and code of regulations, without the prior
written consent of Agent.

 

(o)           Promptly
upon request of Agent from time to time, Grantor shall furnish to Agent such
information concerning the Collateral as Agent may reasonably request,
including, without limitation, copies of all notices and communications with
respect to Fast Forward or its properties, assets, operations or business, which
may be sent by Grantor to, or received from, 
or any other member of Fast Forward.

 

(p)           Grantor
does hereby irrevocably constitute and appoint Agent as its true and lawful
attorney, coupled with an interest, with full power of substitution, for
Grantor, in its name, place and stead, at any time after the occurrence and
during the continuance of an Event of Default, to ask for, demand, collect,
receive, receipt for, sue for, compound and give acquittance for any and all
sums or properties which may be or become due, payable or distributable in
connection with or with respect to the Collateral, with full power to settle,
adjust or compromise any claim thereunder or therefor as fully as Grantor could
itself do, and to endorse or sign the name of Grantor on all negotiable
instruments and any other commercial paper given in payment or in part payment
thereof, and all documents of satisfaction, discharge or receipt required or

 

6

 

requested in connection
therewith, and in its discretion to file any claim or take any other action or
proceeding, either in its own name or in the name of Grantor, or otherwise,
which Agent may deem necessary or appropriate to collect or otherwise realize
upon any and all of the Collateral, or which may be necessary or appropriate to
protect and preserve the right, title and interest of Agent in and to such
Collateral and the security intended to be afforded hereby.

 

Section 8.               Rights with Respect to Collateral.  As long as no Event of Default shall have
occurred and be continuing and until written notice shall be given to Fast
Forward and Grantor by Agent, Grantor shall have the right, from time to time,
to receive all cash flow and other proceeds, enjoy all rights and benefits of,
and exercise all powers with respect to the Collateral or any part thereof for
all purposes not inconsistent with the provisions of this Assignment, the
Credit Agreement, the Loan Documents and any other agreement given by Grantor
or any other party obligated with respect to the Loan Documents to Agent; provided,
however, that no consent shall be given or action taken in Grantor’s
capacity as member of Fast Forward which would have the effect of impairing the
position or interest of Agent in respect of the Collateral, result in an Event
of Default hereunder or under the Loan Documents, or, except as permitted under
the Credit Agreement, which would (without the prior written consent of Agent)
authorize or effect (i) the dissolution or liquidation, in whole or in part, of
Fast Forward, (ii) the consolidation or merger of Fast Forward with any other
person or entity other than Grantor or its wholly owned Subsidiaries, (iii) the
sale, disposition or encumbrance of all or substantially all of the assets of
Fast Forward other than to Grantor or any Guarantor, any change in the members
of Fast Forward or their membership interests in Fast Forward which results in
the dilution of Grantor’s Membership Interest except that Grantor may transfer
ownership of its Membership Interest to any Guarantor subject to the Liens and
interests therein granted hereunder in favor of Agent and provided that said
Guarantor assumes all of the obligations of Grantor hereunder and becomes a
party to this Assignment, pursuant to a written agreement in form and substance
satisfactory to Agent.

 

Section
9.               Remedies upon Default.

 

(a)           Upon the occurrence and during the continuance of an
Event of Default, Agent shall have such rights and remedies with respect to the
Collateral which it may have at law, in equity, or under this Assignment,
including, without limitation, the right to acquire Grantor’s Membership
Interest in Fast Forward pursuant to this Assignment, and, in such event, Agent
shall have the right, but not the obligation, to be admitted as a member of
Fast Forward with respect to the Membership Interest, and thereupon Agent shall
enjoy all of the rights and privileges and be responsible for all obligations
of Grantor to operate, manage and control Fast Forward, all as if Agent was a
member of Fast Forward in lieu of Grantor; and/or Agent shall have the right to
take possession of the Collateral and cause the transfer and register in its
name or in the name of its designee the whole or any part (including, without
limitation, the economic benefits only of the Membership Interest) of the
Collateral, exercise any rights or powers with respect thereto, collect and
receive all distributions made thereon, sell in one or more sales, after 10
days’ notice of the time and place of any public sale or of the time after
which a private sale is to take place (which notice Grantor agrees is
commercially reasonable), but without any previous notice or advertisement, the
whole or any part (including, without limitation, the economic benefits only of
the Membership Interest) of the Collateral, and otherwise act with respect to
the Collateral as though Agent was the outright owner thereof.  Grantor hereby irrevocably

 

7

 

constitutes and appoints Agent as its attorney-in-fact, with full power
of substitution, to, upon the occurrence and during the continuance of an Event
of Default, sign any document or take any action in order to do any of the
foregoing, provided, however, that Agent shall not have any duty
to exercise any such right or to preserve the same and shall not be liable for
any failure to do so or for any delay in doing so.

 

Any
sale shall be made at a public or private sale at any place to be named in the
notice of sale, either for cash or upon credit or for future delivery as Agent
decides, and Agent may be the purchaser of the whole or any part (including,
without limitation, the economic benefits only of the Membership Interest) of
the Collateral so sold by public sale and hold the same thereafter in its own
right free from any claim of Grantor. Any purchaser or any agent of such
purchaser (a “Purchaser”) of the Collateral, at such Purchaser’s election, may
become a substitute member of Fast Forward. Demands of performance, except as
otherwise herein specifically provided for, notices of sale, advertisements and
the presence of property at sale are hereby waived and any sale hereunder may
be conducted by an auctioneer or any officer or agent of Agent.  Agent shall apply the proceeds of any sale
and any other proceeds of the Collateral first to the payment of the reasonable
costs and expenses incurred by Agent in connection with such sale or
collection, including, without limitation, reasonable attorneys’ fees and legal
expenses, then to the payment of the Obligations, on account of principal or
interest or otherwise, as Agent in its sole discretion may elect.

 

(b)           Grantor agrees that following the occurrence and
during the continuance of an Event of Default, it will not at any time plead,
claim or take the benefit of any appraisal, valuation, stay, extension or
moratorium law now or hereafter in force in order to prevent or delay the
enforcement of this Assignment, or the absolute sale of the whole or any part
(including, without limitation, the economic benefits only of the Membership
Interest) of the Collateral or the possession thereof by any Purchaser at any
sale hereunder, and Grantor waives the benefit of all such laws to the extent
it lawfully may do so.

 

In addition to all the rights and remedies given to
Agent by this Assignment and the Loan Documents, Agent shall have all the
rights and remedies of a secured party under the Code.  If an Event of Default has occurred and is
continuing, Grantor agrees that it will not interfere with any right, power or
remedy of Agent provided for in this Assignment or now or hereafter existing at
law or in equity or by statute or otherwise, or the exercise or commencement of
the exercise by Agent of any one or more of such rights, powers or remedies.  No failure or delay on the part of Agent to
exercise any such right, power or remedy and no notice or demand which may be
given to or made upon Grantor by Agent with respect to any such remedies shall
operate as a waiver thereof, or limit or impair Agent’s right to take any action
or to exercise any power or remedy hereunder, without notice or demand, or
prejudice its rights as against Grantor in any respect.

 

(c)           If
an Event of Default has occurred and is continuing, Grantor shall cause all
proceeds of the Collateral to be paid directly to Agent, and any such proceeds
collected by Grantor with respect to the Collateral shall be delivered to Agent
forthwith upon receipt, in the original form in which received, bearing such
endorsements or assignments by Grantor as may be necessary to permit collection
thereof by Agent and for such purpose. Grantor hereby irrevocably authorizes
and employs Agent, its officers, employees and authorized agents to endorse and
sign the name of Grantor on all checks, drafts, money orders or other media of

 

8

 

payment so delivered and
such endorsements or assignments shall, for all purposes, be deemed to have
been made by Grantor prior to any endorsement or assignment thereof by
Agent.  Agent may use any convenient or
customary means for the purpose of collecting such checks, drafts, money orders
or other media of payment.

 

(d)           Grantor
further agrees that a breach of any of the covenants and agreements contained
in this Assignment will cause irreparable injury to Agent and that Agent shall
have no adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant and agreement contained in this Assignment
shall be specifically enforceable against Grantor and Grantor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants and/or agreements except for a defense that the Obligations are
not then due and payable in accordance with the agreements and instruments governing
and evidencing such obligations.

 

(e)           Agent may pursue its rights and remedies without first
proceeding under any of the other remedies available under any other documents
or agreements held by Agent and Agent may resort to any remedies, at the same
or different times, as Agent may deem advisable in its sole discretion.

 

Section
10.             Waiver. 
Except as required under the Credit Agreement, Grantor waives demand,
presentment and protest.  No delay or
omission or forbearance by Agent in exercising any rights under this
Assignment, the Credit Agreement, or any of the other Loan Documents, or the
Operating Agreement shall operate as a waiver of the rights of Agent under any
of those documents or of any other rights and shall not affect, discharge,
diminish or impair Grantor’s obligations hereunder.  Waiver on any one occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.  All of the rights and remedies of Agent, whether evidenced hereby
or by any of the other Loan Documents or any other agreement, promissory note,
or other evidence of indebtedness, shall be cumulative and may be exercised
singularly or concurrently.  Nothing
herein contained shall be construed as constituting a waiver or suspension by
Agent of the right to enforce payment of the Obligations.

 

Section
11.             [Intentionally omitted]

 

Section
12.             No Challenge to Exercise of Rights
under Assignment.  As an inducement to Agent and the Lenders to
enter into the Credit Agreement, Grantor has assured Agent that, upon the
occurrence of an Event of Default hereunder, one of the remedies available
under this Assignment to Agent, at its election, would be to retain the
Membership Interest, or any part thereof (including, without limitation, the
economic benefits only of the Membership Interest), and to become a substitute
member of Fast Forward, in application against the Obligations.  Accordingly, Grantor hereby acknowledges
that any such election to retain the Membership Interest or any part thereof is
reasonable under the circumstances and Grantor hereby waives and releases any
right it may have to demand a sale of the Membership Interest or to otherwise
oppose the retention of the Membership Interest or any part thereof by Agent if
an Event of Default has occurred and is continuing and if Agent makes such an
election following such Event of Default. 
Furthermore, Grantor covenants and agrees to fully cooperate, to the
fullest extent permitted under applicable law, in any action or measure taken
by Agent to implement such an election of remedies, and if an Event of Default
has occurred and is continuing to not

 

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challenge the exercise of the rights of Agent granted hereunder.
Notwithstanding the foregoing, any waiver or release contained in this Section
12 shall be ineffective to the extent the same is prohibited by Ohio law or
other applicable law.

 

Section
13.             Release. 
Grantor consents and agrees that Agent may at any time, or from time to
time, in its discretion, exchange, release and/or surrender all or any of the
Collateral, or any other property given as collateral security for the
Obligations, or any part thereof, by whomsoever deposited or granted, which is
now or may hereafter be held by Agent in connection with all or any of the
Obligations, all in such manner and upon such terms as Agent may deem proper,
and without notice to or further assent from Grantor; it being hereby agreed
that Grantor shall be and remain bound upon this Assignment, irrespective of the
existence, value or condition of any of the Collateral or such other property
given as collateral security for the Obligations, notwithstanding any such
exchange, surrender or release. Except as required under the Credit Agreement,
Grantor hereby waives notice of acceptance of this Assignment, and promptness
in commencing suit against Grantor or on the Obligations, and in giving any
notice to or of making any claim or demand hereunder upon Grantor or any other
party liable with respect to the Obligations.

 

Section
14.             Indemnification. 
Grantor shall indemnify and hold Agent, the Lenders, and their
respective agents, officers, directors, employees, representatives, successors
and assigns harmless from and against any and all liabilities and claims of any
kind, including reasonable attorney’s fees, which any of them may incur by
reason of this Assignment, or which may be asserted against any of them: (i) by
reason of any alleged obligations to be performed or discharged by Grantor by
reason of this Assignment; and (ii) arising by reason of Agent’s taking or
failure to take any action, in respect of any transaction effected under this
Assignment or in connection with the lien and security interest provided for
herein, including, without limitation, any such liabilities and claims of any
kind arising by virtue of Agent becoming a substitute member of Fast Forward; provided,
however, that Grantor shall not be liable for such indemnification to
the extent that such indemnified liability results from the gross negligence or
willful misconduct of the indemnified party. 
Grantor agrees to pay to Agent all reasonable out-of-pocket costs and
expenses, including reasonable fees and disbursements of counsel, reasonably
incurred by Agent in connection with the enforcement or interpretation by Agent
of the provisions of this Assignment, and of any transactions effected pursuant
to this Assignment. The obligations of Grantor under this Section 14 shall
survive the termination of this Assignment.

 

Section
15.             Limitation on Liability of Agent. 
Neither Agent, the Lenders, nor any of their respective officers,
directors, employees, or agents shall be liable for any action lawfully taken
or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their gross negligence or willful misconduct.

 

Section 16.             Termination. This Assignment shall
terminate upon the payment in full of the Obligations and the termination of
all obligations of Agent and the Lenders to extend further credit to Grantor or
any other party under the Credit Agreement or the other Loan Documents.  The satisfaction, or discharge, of any part
of the Obligations shall not in any way satisfy or discharge this Assignment
and Grantor acknowledges and agrees that, although the Obligations may from
time to time be reduced to zero, this Assignment shall remain in full force and
effect

 

10

 

until such time as it is terminated pursuant to this Section 16. Upon
termination, Agent shall cooperate with Grantor to secure the release of the
security interest, assignment and pledge created hereby, including the release
and return of all pledged items of Collateral and the release of financing
statements reasonably requested by Grantor, all at Grantor’s expense.

 

Section
17.             Miscellaneous.

 

(a)           Entire
Agreement.  This Assignment and the
other Loan Documents constitute the entire agreement relating to the subject
matter hereof among the Parties hereto. 
Each Party hereto acknowledges that no representation, inducement,
promise or agreement has been made orally or otherwise, by any other Party, or
anyone acting on behalf of any other Party, unless such representation,
inducement, promise or agreement is embodied in this Assignment expressly or by
incorporation.  In the event of any
inconsistency between the terms of this Agreement and the other Loan
Agreements, this Agreement shall control.

 

(b)           Amendments
and Waivers.  No waiver, amendment or other variation of the terms,
conditions or provisions of this Assignment whatsoever shall be valid unless in
writing signed by Agent as provided in the Credit Agreement and then only to
the extent in such writing specifically set forth.

 

(c)           Governing
Law.  This
Assignment shall be construed in accordance with the internal laws (but without
regard to the conflict of laws principles) of the State of Ohio, but giving
effect to federal laws applicable to national banks.

 

(d)           Severability.  In the event any one or more of the
provisions contained in this Assignment shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such provision shall be
deemed replaced by the valid and enforceable provision that is as substantially
similar as is possible to such invalid or unenforceable provision, but the remaining
provisions shall not be affected thereby.

 

(e)           Third
Party Beneficiaries.  The
obligations of Agent under this Assignment shall inure solely to the benefit of
Grantor, and no other person or entity shall be a third party beneficiary with
respect to said obligations contained in this Assignment, and the obligations
of Grantor under this Assignment shall inure solely to the benefit of Agent and
the Lenders, and no other person or entity shall be a third party beneficiary
with respect to said obligations contained in this Assignment.

 

(f)            Rules
of Construction.  Unless otherwise
specified, the following rules shall be applied in construing the provisions of
this Assignment:

 

(i)            Terms that imply
gender shall be construed to imply all genders.

 

(ii)           References to Sections
refer to the numbered Sections of this Assignment.

 

11

 

(iii)          Headings to the various
Sections of this Assignment are included solely for purposes of reference and
shall be ignored in construing the provisions of this Assignment.

 

(iv)          “Herein”, “hereto”,
“hereof” and words of similar import refer to this Assignment.

 

(v)           The word “including”
connotes “including without limitation”.

 

(vi)          Any reference to any law
or regulation refers to that law or regulation as amended from time to time
after the date of this Assignment and to the corresponding provision of any
successor law or regulation.

 

(vii)         Any reference to any
agreement or other document in this Assignment refers to that agreement or other
document as amended from time to time after the date of this Assignment.

 

(g)           Notices.  Any notice required or permitted to be given
under this Assignment shall be sent (and deemed received) in the manner and to
addresses set forth in Section 12.14 of the Credit Agreement.

 

(h)           Assignment.  Neither
this Assignment nor any of the rights or duties hereunder may be assigned by
Grantor or Agent except as permitted under the Credit Agreement.

 

(i)            Agent
in Possession.  This Assignment
itself (notwithstanding the occurrence and continuance of an Event of Default),
without further action on the part of Agent, shall not operate to constitute
Agent or any Lender as a member or substitute member of Fast Forward, as a
mortgagee in possession of Fast Forward’s real or personal property, or to
place responsibility for the control, care, management or repair of any
improvements thereon upon Agent or any Lender, nor shall it operate to make
Agent or any Lender responsible or liable for any waste committed with respect to
such property by any party, or for any hazardous material placed upon or found
at the property, or for any dangerous or defective condition or operation of
any such property or improvements or for any strict liability or liability for
negligence in the management, upkeep, repair, control, operation or other use
of any property or improvements resulting in loss, injury, death or damage to
any contractor, subcontractor, licensee, invitee, employee or other party, or
for any other thing or matter whatsoever, including, without limitation, any
obligation of Grantor as a member of Fast Forward or otherwise under the
Operating Agreement, until such time that Agent elects, in accordance with the
terms hereof, to become as a substitute member of Fast Forward, or otherwise
assumes the obligations of Grantor thereunder and then only as the same might
properly result under law and only to matters thereafter arising.

 

(j)            Further
Acts and Documents.  Grantor agrees
to execute and deliver such further instruments and to do such further acts and
things as may be reasonably necessary or desirable to perfect the Liens granted
pursuant to the terms of this Assignment.

 

12

 

(k)           Enforcement.  This Assignment may be enforced in accordance
with law from time to time by Agent, in its discretion, with or without order
of any court, as Agent shall determine in its sole discretion.  Any failure on the part of Agent to promptly
exercise any option hereby given or reserved shall not prevent the exercise of
any such option at any time thereafter. Agent may pursue and enforce any remedy
or remedies accorded it hereunder independently or, in conjunction or
concurrently with, or subsequent to its pursuing enforcement of, any remedy or
remedies that it may have under the Loan Documents.

 

(l)            No
Agency with respect to Grantor.  
Nothing herein shall be construed as constituting Agent as an agent,
partner or member of Grantor unless Agent elects in accordance with the terms
hereof, to become as a substitute member of Fast Forward, or otherwise, in a
writing signed by Agent, specifically assumes the obligations of Grantor as
member of Fast Forward.

 

(m)          Counterparts.  This Assignment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the Parties hereto may execute this Assignment by signing
such counterpart.

 

(n)           No
Waiver.  No delay or failure on the
part of Agent in exercising any right, remedy, power or privilege hereunder
shall operate as a waiver thereof or of any other right, remedy, power or
privilege of Agent hereunder or under the Loan Documents, now or hereafter
evidencing the credit extended thereunder; nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights and remedies of Agent under this Assignment are
cumulative and not exclusive of any rights or remedies which Agent might
otherwise have.

 

Section 18.             Consent
To Jurisdiction.  Grantor hereby irrevocably submits to the
non-exclusive jurisdiction of any United States federal or Ohio state court
sitting in Columbus, Ohio in any action or proceeding arising out of this Assignment
and Grantor hereby irrevocably agrees that all claims in respect of such action
or proceeding may be heard and determined in any such court and irrevocably
waives any objection it may now or hereafter have as to the venue of any such
suit, action or proceeding brought in such a court or that such court is an
inconvenient forum.  Nothing herein
shall limit the right of Agent to bring proceedings against Grantor in the
courts of any other jurisdiction.  Any
judicial proceeding by Grantor against Agent, or any affiliate of Agent,
involving, directly or indirectly, any matter in any way arising out of,
related to, or connected with this Assignment shall be brought only in a court
in Columbus, Ohio.

 

Section
19.             WAIVER OF JURY TRIAL. GRANTOR AND AGENT HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS ASSIGNMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.

 

The Parties have caused this Assignment to be executed
and delivered effective as of the date first written above.

 

13

 

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  AIRNET SYSTEMS, INC.,

  an Ohio corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Gary
  W. Qualmann

  	
   

  
	
   

  	
   

  	
  Gary W. Qualmann

  
	
   

  	
  Title: 

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGENT:

  
	
   

  	
   

  
	
   

  	
  THE HUNTINGTON NATIONAL
  BANK,

  
	
   

  	
  a national banking
  association, individually and as

  Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John M.
  Luehmann

  
	
   

  	
   

  	
  John M. Luehmann, Vice
  President

  
								

 

14

 

Notice of Pledge

 

TO:  
[                                                                ]

 

[                                                                          ]

                                                                            

                                                                            

 

RE:  Pledge of Membership
Interest of Fast Forward Solutions, LLC (the “Company”)

 

Gentlemen:

 

You are hereby
notified that the undersigned has pledged all of its membership interests owned
by it on the books and records of the Company to The Huntington National Bank,
a national banking association (“Agent”), for itself and as agent for the
lenders (the “Lenders”) from time to time party to that certain Amended and
Restated Credit Agreement dated May 28, 2004, by and among Agent, AirNet
Systems, Inc., an Ohio corporation (“Grantor”) and said Lenders (as the same
may be amended, modified, supplemented, extended, restated or replaced from
time to time, the “Credit Agreement”), pursuant to the terms and conditions of
that certain Security Agreement, Pledge and Assignment of Membership Interests
executed by the undersigned in favor of Agent, dated as of May 28, 2004.

 

Please deem any
instructions by Agent which you receive regarding the exercise of any rights
with respect to the shares as if such instructions were made by the undersigned
to you, until further instruction from Agent.

 

	
   

  	
  Very truly yours,

  
	
   

  	
  AirNet Systems, Inc.,

  an Ohio corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  
				

 

 

EXHIBIT “A”

 

Percentage of Membership
Interests 

in Fast Forward
Solutions, LLC

 

 

AirNet Systems,
Inc.,  — 100%

an Ohio corporationExhibit 4.10

 

EXECUTION COPY

 

MORTGAGE, SECURITY AGREEMENT 

AND ASSIGNMENT

 

THIS MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT (“Agreement”), dated as of May 28, 2004, is between AirNet Systems,
Inc., an Ohio corporation (“Grantor”), and The Huntington National Bank, a
national banking association (hereinafter referred to as the “Agent”), for
itself and on behalf of the lenders (hereinafter individually and collectively
referred to as the “Lenders”) from time to time party to that certain Amended
and Restated Credit Agreement by and among the Agent, the Grantor, and the
Lenders dated of even date herewith (as the same may be amended, modified,
supplemented, extended, restated or replaced from time to time, hereinafter
referred to as the “Credit Agreement”).

 

Background Information

 

The Agent and the Lenders have agreed
to extend credit to the Grantor (hereinafter, collectively, the “Loans”), under
the Credit Agreement, on certain terms and conditions, including, without
limitation, that the Grantor execute and deliver this Agreement.

 

Agreement

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in order to
induce the Agent and the Lenders to extend the Loans pursuant to the Credit
Agreement, the Grantor agrees, for the benefit of the Agent and the Lenders, as
follows:

 

ARTICLE 1

 

Definitions

 

Section 1.1            Definitions.  In this Agreement, unless the context
otherwise requires, the terms defined herein and in any agreement executed in
connection herewith include, where appropriate, the plural as well as the
singular and the singular as well as the plural.  Except as otherwise indicated, all agreements defined herein
refer to the same as from time to time amended, supplemented or modified in
accordance herewith and therewith. 
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings given to them in the Credit Agreement.  The following terms shall have the
respective meanings set forth below:

 

“Act” means the Federal Aviation Act of
1958, as amended from time to time and recodified in Subtitle V11 of Title 49
of the United States Code.

 

“Agreement”, “this Agreement”, “hereby”, “herein”,
“hereof”, “hereunder” or other like words means this
Mortgage, Security Agreement and Assignment, as it may be amended, modified,
supplemented, extended, restated or replaced from time to time.

 

 

“Aircraft” means, separately and
collectively, the Airframes, together with the Engines installed on such
Airframe (or any replacement Engine substituted for any of such Engines
hereunder), whether or not any such initial or replacement Engines may from
time to time thereafter be installed on such Airframe or may be installed on
any other airframe or on any other aircraft, and all Parts, including avionics
and related equipment, manuals and logs.

 

“Airframe” means, separately and
collectively, aircraft referenced on the attached Exhibits A-1 and A-2
(excluding the Engines or engines from time to time installed thereon) bearing
the United States Federal Aviation Administration Registration Numbers and
manufacturer’s serial numbers set forth on Exhibit A-1 and A-2, and (ii) any
and all Parts so long as the same shall be incorporated in such aircraft and
any and all Parts removed from such aircraft so long as such Parts shall remain
subject to this Agreement and the Lien hereof in accordance with the terms of
Section 3.5.

 

“Collateral” shall have the meaning set
forth in Section 2.1 hereof.

 

“Engine” means (i) the engines bearing the
manufacturers’ serial numbers set forth on Exhibits B-1 and B-2 which engines
were either originally installed or from time to time thereafter installed on
the Aircraft or installed on any other airframe or on any other aircraft, and
(ii) any engine which shall have been substituted for an engine described in
preceding clause (i), whether or not from time to time thereafter installed on
the Aircraft or any other airframe or on any other aircraft, together in each
case with any and all Parts incorporated in such Engine and any and all Parts
removed from such Engine so long as the Grantor has an interest in such Parts.

 

“Equipment” means any or all of the
Airframes, Engines and Parts.

 

“Event of Loss” means, with respect to any
Aircraft, Airframe or Engine, any of the following events with respect to such
item of Equipment.

 

(a)           such item of Equipment shall be
lost, stolen, destroyed, rendered permanently unfit for its intended use, or
irreparably damaged, from any cause whatsoever;

 

(b)           such item of Equipment shall be
returned to the manufacturer or seller or either of their agents or nominees
pursuant to any warranty settlement or patent indemnity settlement;

 

(c)           such item of Equipment shall be
damaged to the extent that an insurance settlement is made on the basis of a
total loss or a constructive or compromised total loss;

 

(d)           such item of Equipment shall be
prohibited from use for air transportation by any agency of the Government for
a period of six months or more; or

 

(e)           such item of Equipment shall be
taken or requisitioned by condemnation or otherwise by any Governmental
Authority, including a foreign government and the Government, resulting in loss
of possession by the Grantor for a period of six months or more.

 

2

 

An
Event of Loss with respect to any Aircraft shall be deemed to have occurred if
an Event of Loss occurs with respect to an Airframe or the Engine which
constitutes a part of the Aircraft.

 

“Excluded Aircraft” shall mean any aircraft,
engines or parts or components relating thereto or installed therein which are
acquired with the proceeds of Permitted Indebtedness and secured by a Lien
referenced in Section 6.15(viii) of the Credit Agreement.

 

“FAA” shall mean the Federal Aviation
Administration or any Governmental Authority, agency or other authority
succeeding to the functions of the Federal Aviation Administration.

 

“Government” shall mean the federal
government of the United States of America or any instrumentality or agency
thereof.

 

“incorporated in” shall mean incorporated,
installed in or attached to or otherwise made a part of.

 

“Indemnified Parties” shall mean the Agent, the
Lenders and their respective successors, assigns, transferees, directors,
officers, employees, shareholders, representatives, servants and agents.

 

“Lender” and “Lenders” shall be as
defined in the preamble of this Agreement, provided, however, that each such
reference to Lender and Lenders shall include, to the extent the context
permits or requires, the LC Issuer and the Swingline Lender, as each such term
is defined in the Credit Agreement.

 

“Parts” means all appliances, parts,
components, instruments, appurtenances, accessories, furnishings and other
equipment of whatever nature (other than complete Engines or engines) whether now
owned or hereafter acquired which may from time to time be incorporated in an
Airframe or any Engine (and “Part” means any of the foregoing) or, after
removal therefrom, so long as such Parts remain subject to the Lien of this
Agreement in accordance with Section 3.5 or 3.6 hereof.

 

“Permitted Lien” means any Lien referred to in
clauses (i) and (ii) of Section 3.1.

 

“Records” means the records, logs and
other material described in Section 3.3.

 

“UCC” or “Uniform Commercial Code” means the
Uniform Commercial Code as in effect in any applicable jurisdiction.

 

ARTICLE 2

 

Grant of Security Interest

 

Section 2.1            Grant
of Security Interest. 
The Grantor, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, and in

 

3

 

order to secure the payment and
performance of all Obligations, does hereby convey, warrant, mortgage, assign,
pledge, and grant a security interest to the Agent, for itself and for the
benefit of the Lenders, their respective successors and assigns, in all and
singular of the Grantor’s right, title and interest in and to the properties,
rights, interests and privileges described below and all proceeds thereof (all
of which properties, rights, interests and privileges hereby mortgaged,
assigned, pledged and granted or intended so to be, together with all proceeds
thereof, are hereinafter collectively referred to as the “Collateral”):

 

(a)           all of the Grantor’s right,
title and interest in the Equipment (including the Airframes, the Engines and
the Parts) and substitutions and replacements of any of the foregoing;

 

(b)           any and all service and warranty
rights related to the Equipment, including the, Engines, and claims under any
thereof; and

 

(c)           all proceeds of any or all of
the foregoing, whenever acquired, including, but not limited to, the proceeds
of any insurance maintained with respect to any of the foregoing and all
proceeds payable or received with respect to any condemnation, expropriation,
requisition or other Event of Loss, or the proceeds of any warranty.

 

The conveyance, warranty, mortgage,
assignment, pledge and security interest created hereunder in all of the
foregoing Collateral is effective and operative immediately, and shall continue
in full force and effect until the Grantor shall have made such payments and
shall have duly, fully and indefeasibly paid, performed and observed all of its
liabilities, agreements and covenants when required hereunder and under the other
Loan Documents and the Agent and the Lenders shall have no further obligation
to extend credit to the Grantor or any other party pursuant to the Credit
Agreement and/or the other Loan Documents.

 

Notwithstanding the foregoing or
anything else in this Agreement to the contrary, nothing hereunder constitutes
or shall be deemed to constitute the grant of a security interest in favor of
the Agent with respect to AirNet’s interest in any Excluded Aircraft.

 

Section 2.2            Filing
of Financing Statements and Continuation Statements.  The Grantor and the Agent will execute and
the Grantor will deliver to the Agent for filing, if not already filed, such
financing statements or other documents and such continuation statements with
respect to financing statements previously filed relating to the conveyance,
warranty, mortgage, assignment, pledge and security interest created under this
Agreement in the Collateral and any other applicable law or as may be specified
from time to time by the Agent.

 

ARTICLE 3

 

Covenants

 

Section 3.1            Ownership
and Liens.  The Grantor will
not sell, lease, assign or transfer its interest in the Aircraft, the Airframes
or any Engine or directly or indirectly create, incur, assume or suffer to
exist any Lien on or with respect to its interest in the Aircraft, the
Airframes or any

 

4

 

Engine, except for:  (i) Liens in favor of the Agent for the
benefit of the Lenders; (ii) mechanics’ or other like Liens arising in the
ordinary course of business and the payment of which is either not yet due or
is being contested in good faith by appropriate proceedings (provided that, if
any such proceeding might reasonably be expected to result in or involve any
material danger of the attachment, sale, forfeiture or loss of any item of
Equipment or any interest therein (including the Lien of the Agent) then the
Grantor shall exclude such Equipment from the Borrowing Base); (iii) the
disposition or transfer of obsolete and/or worn out Equipment in the ordinary
course of business provided that if the proceeds thereof exceed $250,000, they
shall be used by Grantor to acquire replacement Equipment which shall or may
become subject to the security interest of this Agreement pursuant to Section
3.12; (iv) transfers by or among Grantor and any Guarantor other than Fast
Forward, and (v) other Permitted Liens. 
The Grantor will promptly, and in any event within thirty (30) days,
take (or cause to be taken) such action as may be necessary duly to discharge
any such Lien not permitted above if the same shall arise at any time.

 

Section 3.2            Registration
and Operation.

 

(a)           The Grantor shall cause the
Aircraft to be duly registered, and at all times thereafter to remain duly
registered, in the name of the Grantor with the FAA pursuant to the Act.  The Grantor agrees that it will not utilize
any item of Equipment in violation of any law or any rule, regulation or order
(including, without limitation, concerning alcoholic beverages or prohibited
substances) of any Governmental Authority having jurisdiction (domestic or
foreign) or in violation of any airworthiness certificate, license or
registration relating to any item of Equipment issued by any such authority,
except to the extent the validity or application of any such laws, rule, regulation
or order is being contested in good faith and by appropriate proceedings
(provided that, if any such proceeding might reasonably be expected to result
in or involve any material danger of the attachment, sale, forfeiture or loss
of any item of Equipment, or any interest therein (including the Lien of the
Agent), then the Grantor shall exclude such Equipment from the Borrowing
Base).  In the event that any such law,
rule, regulation or order requires alteration of any item of Equipment, unless
the validity thereof is being contested in good faith and by appropriate
proceedings (provided that, if any such proceeding might reasonably be expected
to result in or involve any material danger of the attachment, sale, forfeiture
or loss of any item of Equipment or any interest therein (including the Lien of
the Agent), then the Grantor shall exclude such Equipment from the Borrowing
Base), the Grantor will obtain conformance therewith at no expense to the Agent
or the Lenders and will cause such item of Equipment to be maintained in proper
operating condition under such laws, rules, regulations and orders.

 

(b)           The Grantor shall not include
any Airframes in the calculation of the Borrowing Base if any of the same land
in countries other than the United States of America, Canada, Mexico or the
Caribbean.

 

(c)           The Grantor agrees that it will
not utilize any item of Equipment in any area excluded from coverage by the
insurance required by the terms of Article 5.

 

5

 

(d)           The Equipment is not, and will
not, be registered under the laws of any foreign country.

 

(e)           The Equipment is and shall
remain at all times eligible for registration under the Act.

 

(f)            The Equipment included
by Grantor in the calculation of the Borrowing Base         shall be based in the United States of America
and Canada.

 

(g)           The Equipment will not be used
in violation of any law, regulation, ordinance or policy of insurance affecting
the maintenance, use or flight of the Equipment.

 

(h)           The Grantor qualifies as a
citizen of the United States of America as defined in the Act, and will
continue to qualify as a United States of America citizen in all respects.

 

Section 3.3            Records
and Reports.  The Grantor shall
cause all records, logs and other materials required by the FAA and any other
Governmental Authority having jurisdiction to be maintained in respect of each
item of Equipment.  Grantor shall
promptly furnish or cause to be furnished to the Agent such information as may
be required to enable the Agent to file any reports required to be filed by the
Agent or any Lender with any Governmental Authority because of the Agent’s or
such Lender’s Liens in any item of Equipment.

 

Section 3.4            Maintenance
and Use.  The Grantor, at
its own cost and expense, shall cause each item of Equipment included by
Grantor in the calculation of the Borrowing Base to be maintained, serviced,
repaired, overhauled, altered, modified, added to and tested in accordance with
standard practices for similar equipment (including, without limitation, the
maintenance program for such item of Equipment as from time to time in effect
and approved by the manufacturer thereof, and to the extent required by law, by
the FAA), which practices shall at all times be at or above the standard of the
industry for maintenance of similar equipment; and, additionally, in the case
of the Aircraft included by Grantor in the calculation of the Borrowing Base,
cause such Aircraft to be maintained, serviced, repaired and overhauled so as
to keep such Aircraft in such condition as may be necessary to enable the
airworthiness certification of such Aircraft to be maintained in good standing
at all times under the Act.  The Grantor
agrees that the Aircraft, Airframes and Engines will not be maintained in
violation of any law or rule, regulation or order of any government or
Governmental Authority (domestic or foreign) having jurisdiction, in violation
of any warranty with respect to any item of Equipment or in violation of any
airworthiness certificate, license or registration relating to the Aircraft,
Airframes or any Engine issued by any such government or Governmental
Authority, except to the extent the validity or application of any such
directive, instruction, law, rule, regulation or order is being contested in
good faith and by appropriate proceedings (provided that, if any such
proceeding might reasonably be expected to result in or involve any material
danger of the attachment, sale, forfeiture or loss of any item of Equipment or
any interest therein (including the Lien of the Agent), then the Grantor shall
exclude such Equipment from the Borrowing Base).  The Grantor shall use and operate the Equipment included by
Grantor in the calculation of the Borrowing Base in a careful manner in the
normal course of its business and only for the purposes for which it was
designed in accordance with the manufacturers warranty requirements and comply
with all laws and regulations relating to

 

6

 

the Equipment; obtain all permits
or licenses necessary to install, use or operate such Equipment; inspect,
service and repair, overhaul and test such Equipment in accordance with the FAA
approved maintenance program, manufacturer’s approved maintenance program, FAA
airworthiness directives, and the manufacturer’s alert bulletins and urgently
recommended service bulletins and procedures, and perform all duties and tasks
which would be required to maintain such Equipment, including the engines, in
full compliance with the manufacturers specification.

 

Section 3.5            Replacement
of Parts.  The Grantor, at
its own cost and expense, will promptly cause the replacement of all Parts
which are related to Airframes and/or Engines which are included by Grantor in
the calculation of the Borrowing Base and which may from time to time become
worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair
or permanently rendered unfit for use for any reason whatsoever.  Notwithstanding anything contained herein to
the contrary, the Grantor, at its own cost and expense, may permit the removal
for purposes of the sale in the ordinary course of Grantor’s business, or the
maintenance, service, repair, overhaul or testing in the ordinary course, of
any Parts, whether or not related to Airframes and/or Engines included by
Grantor in the calculation of the Borrowing Base or worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use; provided, however, that the Grantor, at its own
cost and expense, will cause such Parts to be replaced as promptly as possible.
All replacement Parts relating to or installed upon Airframes or Engines
included by Grantor in the calculation of the Borrowing Base shall be free and
clear of all Liens (except for Permitted Liens described in Section 3.1), shall
be in as good operating condition as, and shall have a value and utility at
least substantially equal to, the Parts replaced, assuming such replaced Parts
were in the condition and repair required to be maintained by the terms
hereof.  The Grantor’s right, title and
interest in all Parts at any time removed from any item of Equipment included
by Grantor in the calculation of the Borrowing Base shall remain subject to the
Lien granted pursuant to this Agreement no matter where located, until such
time as such Parts shall be replaced by Parts which have been incorporated in
such item of Equipment and which meet the requirements for replacement Parts
specified above.  Immediately upon any
replacement Part becoming incorporated or installed in or attached to any item
of Equipment included by Grantor in the calculation of the Borrowing Base as
above provided, without further act, (i) the Grantor’s right, title and
interest in such replacement Part shall become subject to the Lien of this
Agreement, and such replacement Part shall be deemed part of such item of
Equipment for all purposes hereof to the same extent as the Parts originally
incorporated in such item of Equipment, and (ii) the Grantors right, title and
interest in the replaced Part shall be released from the Lien of this Agreement
and the replaced Part shall no longer be deemed a Part hereunder. The Grantor
shall, upon Agent’s reasonable request, provide to the Agent written
confirmation, in form and content acceptable to Agent, that the Grantor has
complied with the provisions of this Section 3.5.

 

Section 3.6            Alterations,
Modifications and Additions. 
The Grantor, at its own cost and expense, shall cause such alterations
and modifications in and additions to the Equipment included by Grantor in the
calculation of the Borrowing Base to be made as may be required from time to
time to meet the standards of the FAA and of any other Governmental Authority
having jurisdiction and to maintain the certificate of airworthiness for the
Aircraft; provided, however, that the validity or application of
any such law, rule, regulation or order may be contested in good faith by
appropriate proceedings (provided that, if any such proceeding might reasonably
be expected to result in or involve any material danger of the attachment,
sale, forfeiture or loss of any item of

 

7

 

Equipment, or any interest
therein (including the Lien of the Agent), then the Grantor shall exclude such
Equipment from the Borrowing Base).  In
addition, the Grantor, at no cost or expense to the Agent or the Lenders, may,
from time to time, cause such alterations and modifications in and additions to
any item of Equipment to be made as the Grantor may deem desirable; provided,
that each such alteration, modification and addition is readily removable from
such item of Equipment which is included by Grantor in the calculation of the
Borrowing Base; and provided, further that no such alteration,
modification or addition shall (i) materially diminish the value, utility or
condition of such item of Equipment included by Grantor in the calculation of
the Borrowing Base below the value, utility or condition thereof immediately
prior to such alteration, modification or addition, assuming such item of
Equipment was then of the value and utility and in the condition required to be
maintained by the terms of this Agreement, or (ii) cause the airworthiness
certification of the related Aircraft to cease to be in good standing under the
Act.  The Grantor’s right, title and
interest in all Parts added to any Airframe or Engine included by Grantor in
the calculation of the Borrowing Base as the result of such alteration,
modification or addition shall, without further act, be subject to the Lien of
this Agreement.  Notwithstanding the
foregoing sentence of this Section 3.6, so long as no Unmatured Default or
Default shall have occurred and be continuing, the Grantor may remove any Part
if (i) such Part is in addition to, and not in replacement of or substitution
for any such Part; (ii) such Part is not required to be incorporated or
installed in or attached or added to such item of Equipment pursuant to the
terms of this Article 3, and (iii) such Part can be removed from such item of
Equipment without causing any material damage thereto.  Upon the removal of any Part as provided,
the Grantor’s right, title and interest in such Part shall be released from the
Lien of this Agreement.

 

Section 3.7            Maintenance
of Other Engines.  Each aircraft
engine which does not constitute an Engine, but which is installed on an
Airframe included at any time by Grantor in the calculation of the Borrowing
Base, shall be maintained, operated, serviced, repaired, overhauled, altered,
modified and tested in accordance with Section 3.4 to the same extent as if it
were an Engine.

 

Section 3.8            Payment
of Obligations.  The Grantor hereby
agrees that it will promptly pay or cause to be paid when due all taxes,
assessments and other governmental charges imposed with respect to the
Collateral.

 

Section 3.9            Change
of Name or Location. 
In connection with any change of the name, identity or structure of the
Grantor that might make any UCC financing statements filed in connection with
the transactions contemplated hereby seriously misleading within the meaning of
the UCC or any change the State of incorporation of the Grantor, whether by
“reorganization” in another state or otherwise, the Grantor shall (i)
authorize, if Agent deems the same necessary or desirable, the filing of
appropriate financing statements in an an appropriate filing offices prior to
such change and (ii) give the Agent notice of such change at least fifteen (15)
Business Days prior to such change.

 

Section  3.10        Inspection.  The Grantor shall permit, at its expense,
the Agent, or any Person designated by Agent, to inspect, with prior reasonable
notice at any time during which no Default has occurred or is continuing (it
being understood and agreed that no such notice shall be required at any time after
the occurrence and during the continuance of a Default) (i) the Aircraft;

 

8

 

provided, however, that as long
as no Default or Unmatured Default has occurred and is continuing, neither the
Agent nor the Lenders shall exercise such inspection rights in such a way so as
to unreasonably interfere with Grantor’s use of the Aircraft and (ii) the logs,
maintenance records and other records maintained with respect to the Aircraft.

 

Section 3.11         Personal
Property.  The Grantor represents
and agrees that the Equipment is, and shall at all times remain, separately
identifiable personal property.  The
Grantor shall use commercially reasonable efforts to furnish the Agent a
landlord’s and/or mortgagee’s waiver and consent with respect to Equipment in
the possession or control of any Person other than Grantor (to remove such
Equipment and for other purposes) which shall be in form and content
satisfactory to the Agent. The Agent may display notice of its interest in such
Equipment by any reasonable identification and the Grantor shall not alter or
deface any such indicia of the Agent’s interest.

 

Section
3.12         New Aircraft.
AirNet shall (i) give Agent notice of its acquisition after the date hereof of
any property described generally herein as aircraft, airframes and engines
(“After-Acquired Aircraft”), and (ii) deliver to the Agent upon its request a
description of any After-Acquired Aircraft, including the registration number,
manufacturer, serial number and such other information requested by Agent and
(iii) do all things reasonably necessary to have such After-Acquired Aircraft
(except Excluded Aircraft), together with all parts or components related
thereto or installed thereon, subjected to the Lien of the Agent by modification
or addendum to this Agreement in form and content reasonably satisfactory to
Agent.  Agent shall, in its reasonable
discretion, cooperate to subject any After-Acquired Aircraft (except to the
extent it is subject to a Permitted Lien described in Section 6.15(viii)),
together with all parts and components related thereto or installed thereon, to
the Lien of Agent by modification or addendum to this Agreement in form and
content reasonably satisfactory to Agent, if AirNet at any time requests the same
for purposes of increasing the Borrowing Base.

 

ARTICLE 4

 

Events of Loss

 

Section 4.1            Event
of Loss with Respect to Aircraft.  The Grantor bears the entire risk of loss, theft, damage or
destruction of the Equipment, in whole or in part for any reason
whatsoever.  No Event of Loss shall
relieve the Grantor from its agreement and liability to pay the Obligations or
from any other obligation hereunder or under the other Loan Documents.  Upon the occurrence of an Event of Loss in
excess of $250,000 with respect to any Aircraft, the Grantor shall give the
Agent prompt written notice thereof (and in any event within three Business
Days after such occurrence), and the Grantor shall, on the next Business Day
following the receipt of insurance proceeds with respect to such occurrence,
pay to the Agent, for the benefit of the Lenders, the full amount of such
insurance proceeds, which shall be applied by Agent to the Revolving Loans, if
any, then outstanding under the Credit Agreement (it being understood and agreed
that (i) such amounts shall be available for reborrowing on the terms provided
in the Credit Agreement, and (ii) in the event such insurance proceeds do not
represent the full value attributed to such Aircraft in the calculation of the
Borrowing Base, Grantor may be required under the Credit Agreement to pay
additional sums to reduce the outstanding balance of the Revolving Loans in
order to maintain compliance with the Borrowing Base provisions of the Credit
Agreement).

 

9

 

Section 4.2            Application
of Payments from Governmental Authorities or other Persons.  Provided that no Default has occurred and is
continuing, any payments (other than insurance proceeds, the application of
which is provided for in Article 5 or Section 4.1), received at any time by the
Agent or Grantor from any Governmental Authority or other Person with respect
to any Event of Loss, or from a Governmental Authority with respect to an event
which does not constitute an Event of Loss (collectively, “Governmental
Payments”), shall be applied as follows:

 

(a)           If such Governmental Payments
are in an amount in excess of $250,000, to repay the Revolving Loans (it being
understood and agreed that such amounts shall be available for reborrowing under
the terms of the Credit Agreement);

 

(b)           If such Governmental Payments
are in an amount equal to or less than $250,000, such payments may be retained
by the Grantor.

 

(c)           Payments
During Default.  Notwithstanding
the foregoing provisions of this Section 4.2, any payments (other than
insurance proceeds, the application of which is provided for in Article 5)
received at any time by the Agent from any Governmental Authority or other
Person which are otherwise payable to the Grantor, shall not be paid to the
Grantor if at the time of such payment a Default shall have occurred and be
continuing, in which event all such amounts shall be paid to and held by the
Agent as security for the Obligations or, at the Agent’s option, applied by the
Agent toward the payment of such Obligations at the time due in such order of
application as the Agent may from time to time elect.

 

In
furtherance of the foregoing and for the foregoing purposes, the Grantor hereby
irrevocably assigns, transfers and sets over to the Agent, for the benefit of
the Lenders, all rights of the Grantor to any Governmental Payments received by
or payable to the Grantor.

 

ARTICLE 5

 

Insurance

 

Section 5.1            Insurance.  The Grantor shall at all times, at its own
cost and expense, cause policies of insurance in such form, of such type and
with insurers of recognized responsibility reasonably satisfactory to the
Agent, to be procured and maintained on or in respect of the Aircraft, as
follows:

 

(a)           Liability.  The Grantor will cause liability insurance
to be carried and maintained at all times with respect to the Aircraft and any
other type of insurance required under applicable laws and regulations of the
United States of America with respect to the Aircraft, but in any event not
less than $50,000,000 combined single limit for any one occurrence.

 

10

 

(b)           Property.  The Grantor shall cause all-risk aircraft
hull insurance covering the Aircraft, including all-risk coverage with respect
to any Engine or Part while not installed on the Aircraft, to be maintained in
effect.  Insurance required under this
Section 5.1(b) shall at all times while any Obligations are outstanding be for
an amount not less than the fair market value of the Aircraft.

 

Any policies maintained in accordance
with this Section 5.1 shall (i) name Agent, for the benefit of each Lender, as
an additional insured, as its interests may appear (but without imposing upon
the Agent, the Lenders or any other Indemnified Party any obligation imposed upon
the insured, including, without limitation, the liability to pay the premiums
for such policies), (ii) in the case of the insurance described in clause (b),
provide that any loss shall be payable to the Agent for the benefit of the
Lenders (as their respective interests may appear), (iii) provide that, in
respect of the interest of each Indemnified Party in such policies, the
insurance shall not be invalidated by any action or inaction directly or
indirectly by, for or on behalf of any Person other than such Indemnified
Party, and shall insure each Indemnified Party as its interest may appear
regardless of any breach or violation of any warranty, declaration or condition
contained in such policies by Grantor or any other Persons, (iv) provide that
as against each Indemnified Party, the insurers shall waive any rights of
subrogation to the extent that the Grantor has waived such rights (and the
Grantor hereby irrevocably and unconditionally waives any right of subrogation
against any Indemnified Party, except for claims arising out of the gross
negligence or willful misconduct of such Indemnified Party), and (v) provide
that if such insurance is cancelled for any reason whatever, or is changed in
any material respect, or if such insurance is allowed to lapse for nonpayment
of premium, such cancellation, change or lapse shall not be effective as to the
Lenders or any other Indemnified Party, for 30 days after receipt by Agent of
written notice by such insurers of such cancellation, change or lapse.  Each insurance policy required under this
Section 5.1 shall be primary without right of contribution from any other
insurance which is carried by the Grantor or any Indemnified Party with respect
to its interest in the Aircraft. 
Nothing contained herein shall prevent any Indemnified Party from
maintaining additional insurance for its own account and at its own expense, provided
that the maintaining of such insurance shall not prejudice the Grantor’s
ability to obtain, or recover under, the insurance required to be maintained
hereunder at the direction of the Grantor or any reinsurance thereof.

 

In the event that the Grantor shall
fail to cause insurance to be maintained as herein provided, the Agent or any
Indemnified Party may at its option (but shall not be obligated to) provide
such insurance and in such event, the Grantor shall, upon demand, reimburse
such Person for the cost thereof, together with interest thereon at the rate in
effect under the Credit Agreement after a Default, which reimbursement
obligation shall be secured by the Collateral. 
No such payment, performance or compliance shall be deemed to cure any
Default hereunder or otherwise relieve the Grantor of its obligations with
respect thereto.

 

Section 5.2            Certificate
of Insurance.  The Grantor agrees
to furnish the Agent on the Closing Date, and promptly after the terms have
been fixed for any renewal of, or changes in any material respect with respect
to, the insurance required to be maintained pursuant to this Article 5 (but in
no event less frequently than annually), until the Obligations secured hereby
are paid in full, an insurance certificate signed by an independent insurance
broker reasonably acceptable to the Agent describing in reasonable detail the
insurance then carried (or to be carried) on each item of

 

11

 

Equipment.  The Grantor shall cause such broker to agree
to advise the Agent in writing at its address set forth in this Agreement, at
least thirty days prior to the expiration or termination date of any insurance
carried and maintained on any item of Equipment pursuant to this Article
5.  The Grantor shall advise the Lenders
of any act or omission which might render insurance unenforceable in whole or
in part.

 

Section 5.3            Proceeds
of Insurance.  Except as provided
in Section 4.1 hereof, and as provided in the following sentence, so long as no
Default has occurred and is continuing, Grantor shall be permitted to make
proof of loss, to adjust and compromise any claim under all insurance policies,
to appear in and prosecute any action arising from such insurance policies, and
to collect and receive insurance proceeds and to use such proceeds as Grantor
determines, provided that said proceeds shall be used for the repair,
restoration or replacement of the relevant Aircraft to the extent the same is
included by AirNet in the calculation of the Borrowing Base.  Notwithstanding the foregoing, if Grantor
receives proceeds of insurance in excess of $250,000 as a result of any loss or
damage which does not constitute an Event of Loss, the Grantor shall give the
Agent prompt written notice thereof (and in any event within three Business Day
after such occurrence) and the Grantor shall, on the next Business Day
following the receipt of insurance proceeds with respect to such occurrence,
pay to the Agent, for the benefit of the Lenders, the amount of such insurance
proceeds, such proceeds to be applied to the Revolving Loans, if any, then
outstanding under the Credit Agreement (and such amounts shall be available for
reborrowing on the terms provided in the Credit Agreement).  Notwithstanding anything contained in this
Agreement to the contrary, if a Default has occurred and is continuing, (i)
Agent shall be entitled to make proof of loss, to adjust and compromise any
claim under insurance policies, to appear in and prosecute any action arising
from such insurance policies, to collect and receive insurance proceeds, and to
deduct therefrom the Agent’s reasonable expenses incurred in the collection of
such proceeds; provided, however, that nothing contained in this Section 5.3
shall require Agent to incur any expense or take any action hereunder, and (ii)
Agent, at its option, shall have the right to (x) have the balance of such
insurance proceeds used for the purpose of reimbursing Grantor for the cost of
restoration, repair or replacement of the Collateral, or (y) apply the balance
of such proceeds to the payment of the Obligations, whether or not then due, in
such order of application as determined by the Agent.  Grantor hereby assigns to the Agent all rights of Grantor in and
to any insurance proceeds paid or to be paid as a result of any such loss or
damage for purposes of the foregoing.

 

ARTICLE 6

 

Remedies Upon Occurrence of a Default

 

Section 6.1            Action
upon Default.  If one or more
Defaults shall have occurred and be continuing, the Agent may immediately
exercise and pursue any remedy described herein or otherwise available to it in
any Loan Document, at law, in equity or by statute (subject always to compliance
with any mandatory requirements of applicable law).

 

Section 6.2            Remedies.  The Grantor agrees, to the full extent that
it lawfully may, that if one or more Defaults shall have occurred and be
continuing, then in every such case the Agent may exercise any or all of the
rights and powers and pursue any and all of the remedies available to it
hereunder or in any other Loan Document or available to a secured party under
the Uniform

 

12

 

Commercial Code or any other
provision of law or equity; the Agent may, to the extent permitted by law,
exclude the Grantor from the Collateral; and the Agent may sell, assign,
transfer and deliver, to the extent permitted by law, the Collateral or any
interest therein, whether or not the Collateral is in the constructive
possession of the Agent, any Lender, or the Person conducting the sale, at any
private sale or public auction with or without demand, advertisement or notice
(except as may be required by law) of the date, time and place of sale and any
adjournment thereof; for cash or credit or other property, for immediate or
future delivery and for such price or prices and on such terms and to such
Persons as the Agent in its discretion may determine or as may be required by
law; and the Agent may otherwise dispose of, hold or use the Collateral, or any
part thereof, as the Agent in its sole discretion may determine, in each case
free and clear of any rights of the Grantor and without any duty to the Grantor
with respect to any such action or inaction or for any proceeds with respect
thereto.  It is agreed that 10 days’
prior written notice to the Grantor of the date, time and place (and terms, in
the case of a private sale) of any proposed sale of the Collateral or any part
thereof or interest therein is reasonable.

 

The Agent may proceed to enforce its
rights by directing payment to it of all monies payable under any agreement
relating to the Collateral, by proceedings in any court of competent
jurisdiction for an appointment of a receiver or for the sale of all or any
part of the Collateral possession to which the Agent shall at the time be
entitled hereunder or for foreclosure of such Collateral, or by any other
action, suit, remedy or proceeding authorized or permitted by this Agreement or
at law or by equity, and may file such proofs of claim or other papers or
documents as necessary or advisable in order to have the claims of the Agent
and the Lenders asserted or upheld in any bankruptcy, receivership or other
judicial case or proceeding.

 

In addition to the foregoing remedies,
the Grantor shall be liable for any and all unpaid amounts due hereunder and
under the other Loan Documents before, during and after the exercise of any of
the foregoing remedies and for all reasonable fees and other costs and expenses
of the Agent and/or the Lenders, including, without limitation, reasonable
attorneys’ fees and legal expenses, incurred by reason of the occurrence of any
Default or the exercise of any remedies with respect thereto.

 

Section 6.3            Remedies
Cumulative.  Each and every
right, power and remedy herein specifically given to the Agent or otherwise in
this Agreement and/or the other Loan Documents shall be cumulative and shall be
in addition to every other right, power and remedy herein or therein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
or therein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Agent, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. 
No delay or omission by the Agent in the exercise of any right, power or
remedy or in the pursuit of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any Default on the part of the
Grantor.

 

Section 6.4            Grantor’s
Waiver of Rights.  To the extent
permitted by applicable law, the Grantor hereby waives any rights, now or
hereafter conferred by statute or otherwise, which might

 

13

 

limit or modify any of the rights
or remedies of the Agent and/or any Lender under or in connection with this
Article 6.

 

Section 6.5            Power
of Attorney.  The Grantor hereby
appoints the Agent or its designated agent as such Grantor’s attorney-in-fact,
irrevocably, with full power of substitution, to, (i) after the occurrence and
during the continuance of any Default and in all circumstances (regardless of
whether or not any Default has occurred or then exists) which, pursuant to this
Agreement, Agent is entitled to do so, collect all payments with respect to the
Collateral due and to become due under or arising out of this Agreement or any
other Loan Document, to receive all moneys (including, but not limited to,
proceeds of insurance) which may become due under any policy insuring the
Collateral and all awards payable in connection with the condemnation,
requisition or seizure of the Collateral, or any part thereof, to execute
proofs of claim, to endorse drafts, checks and other instruments for the
payment of money payable to the Grantor in payment of such insurance moneys and
(ii) do all other acts, things, take any actions (including the filing of
financing statements or other documents) or institute any proceedings which the
Agent may reasonably deem to be necessary or appropriate at any time to protect
and preserve the interest of the Agent and the Lenders in the Collateral, or in
this Agreement or the other Loan Documents.

 

Section 6.6            Distribution
of Amounts Received after a Default.  Subject to applicable law, all payments received and amounts
realized by the Agent with respect to the Collateral after a Default shall have
occurred and be continuing (whether realized from the exercise of any remedies
pursuant to this Article 6 or otherwise), as well as payments of amounts then
held by the Lenders as part of the Collateral, shall be distributed by the
Agent in the following order of priority:

 

First, so
much of such payments and amounts as shall be required to pay the expenses paid
by the Agent pursuant to this Article 6 (to the extent not previously
reimbursed) shall be paid to Agent, as applicable;

 

Second, so
much of such payments or amounts as shall be required to pay the amounts
payable to any Indemnified Party (to the extent not previously reimbursed)
shall be paid to such Indemnified Party;

 

Third, so
much of such payments or amounts remaining as shall be required to pay in full
the aggregate unpaid principal amount of the Loans, the accrued but unpaid
interest thereon to the date of distribution, indemnification for funding losses,
if any, and all other Obligations, shall be paid to the Agent for the pro rata
benefit of the Lenders; such payments or amounts to be applied to the amounts
so due, owing or unpaid in such order of application as the Agent may from time
to time elect; and

 

Fourth, the
balance, if any, of such payments or amounts remaining thereafter shall be paid
to the Grantor.

 

Section 6.7            Suits
for Enforcement.  In case of any
Default, then, regardless of whether or not the Loans have then been
accelerated, the Agent may proceed to enforce the payment of the Loans.  The Grantor agrees that, in the case of any
Default, it will pay to the Agent such further

 

14

 

amount as shall be sufficient
to pay the costs and reasonable expenses of collection, including reasonable
attorneys’ fees and expenses.

 

ARTICLE 7

 

Amendments

 

Section 7.1            Amendments.  Neither this Agreement, nor any of the terms
hereof, may be terminated, amended, supplemented, waived or modified orally,
but only by an instrument in writing which is signed by the party against whom
the enforcement of the termination, amendment, supplement, waiver or
modification is sought.

 

ARTICLE 8

 

Miscellaneous

 

Section 8.1            Choice
of Law.  This Agreement
shall be construed in accordance with the internal laws (but without regard to
the conflict of law principles) of the State of Ohio, but giving effect to
federal laws applicable to national banks.

 

Section 8.2            Notices.  Any notice required or permitted to be given
under this Agreement shall be sent (and deemed received) in the manner and to
the addresses set forth in Section 12.14 of the Credit Agreement

 

Section 8.3            Limitation
as to Enforcement of Rights, Remedies and Claims.  Nothing in this Agreement, whether express
or implied, shall be construed to give to any Person other than the Grantor and
the Agent and the Lenders any legal or equitable right, remedy or claim under
or in respect of this Agreement or any other Loan Document.

 

Section 8.4            Severability
of Invalid Provisions. 
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such provision, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

Section 8.5            Benefit
of Parties, Successors and Assigns; Entire Agreement.  All representations, warranties, covenants
and agreements contained herein or delivered in connection herewith shall be
binding upon, and inure to the benefit of the Grantor and the Agent and the
Lenders and their respective permitted successors and assigns; provided,
however, that the Grantor may not assign its obligations hereunder,
except as permitted under the Credit Agreement. This Agreement, together with
the other Loan Documents, constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior
understandings and agreements of such parties.

 

Section 8.6            Counterpart
Execution.  This Agreement may
be executed in any number of counterparts, all of which taken together
constitute one agreement, all of which taken together shall

 

15

 

constitute one agreement, and
any of the parties may execute this Agreement by signing such counterpart.

 

Section 8.7            Further
Assurances.  At any time and
from time to time, upon the request of the Agent, the Grantor shall promptly
and duly execute and deliver any and all such further instruments and documents
as may be reasonably requested by the Agent, and as are necessary or desirable
to perfect, preserve or protect the security interests and assignments created
or intended to be created hereby, or to obtain for the Agent for the benefit of
the Lenders the full benefit of the specific rights and powers herein granted,
including, without limitation, the execution and delivery of Uniform Commercial
Code financing statements and continuation statements with respect thereto, or
similar instruments relating to the perfection of the mortgage, security
interests or assignments created or intended to be created herby.

 

Section 8.8            Performance
by Agent.  In its discretion,
the Agent may (but shall not be obligated to), at any time and from time to
time (regardless of whether or not any Default has occurred), for the account
of the Grantor, pay any amount or do any act required of the Grantor hereunder
and which the Grantor fails to pay or do at the time required hereunder, and
any such payment shall be repayable by the Grantor on demand to the Agent,
shall bear interest at the rate in effect under the Credit Agreement after a
Default and shall be secured by the Collateral.

 

Section
8.9            Indemnity.  The Grantor agrees to indemnify the Agent
and the Lenders, and their respective employees, agents, representatives,
directors, officers, successors and assigns, from and against any and all
claims, losses and liabilities arising out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), in any way
relating to or arising out of the manufacture, purchase, acceptance, rejection,
ownership, possession, use, selection, delivery, operation, condition, sale,
return or other disposition of the Equipment or any part thereof (including,
without limitation, any claim for patent or other defects, whether or not
discoverable by the Grantor or any other Person, any claim of negligence, tort
or strict liability, any claim under any environmental protection or hazardous
waste law and any claim for patent, trademark or copyright infringement),
except claims, losses or liabilities resulting from such indemnified party’s
gross negligence or willful misconduct.

 

Section 8.10         Consent
to Jurisdiction.  The Grantor hereby irrevocably submits to the
non-exclusive jurisdiction of any United States federal or Ohio state court
sitting in Columbus, Ohio in any action or proceeding arising out of or
relating to this Agreement and the Grantor hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
any such court and irrevocably waives any objection it may now or hereafter
have as to the venue of any such suit, action or proceeding brought in such a
court or that such court is an inconvenient forum.  Nothing herein shall limit the right of the Agent to bring
proceedings against the Grantor in the courts of any other jurisdiction.  Any judicial proceeding by the Grantor
against the Agent or any affiliate of the Agent, involving, directly or
indirectly, any matter in any way arising out of, related to, or connected with
this Agreement shall be brought only in a court in Columbus, Ohio.

 

Section 8.11         WAIVER
OF JURY TRIAL.  THE GRANTOR AND
THE AGENT HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,

 

16

 

DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.

 

IN WITNESS WHEREOF, the parties have each
executed this Agreement, as of the date set forth above.

 

 

	
   

  	
  Grantor:

  
	
   

  	
   

  
	
   

  	
  AIRNET
  SYSTEMS, INC.,

  an Ohio Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Gary
  W. Qualmann

  
	
   

  	
   

  	
  Gary W.
  Qualmann, Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Agent:

  
	
   

  	
   

  
	
   

  	
  THE
  HUNTINGTON NATIONAL BANK,

  a national banking association, individually and

  as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ John M. Luehmann

  
	
   

  	
   

  	
  John M.
  Luehmann, Vice President

  
				

 

17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00068-of-00352.parquet"}]]