Document:

exv10w22

 

Exhibit 10.22

LOAN AGREEMENT

dated as of December 29, 2005

between

GULFSTREAM INTERNATIONAL AIRLINES, INC.,

as Borrower,

and

IRWIN UNION BANK AND TRUST COMPANY,

as Lender

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1.	 	DEFINITIONS	 	 	1	 
	 	 	1.1	 	Defined Terms
	 	 	1	 
	 	 	1.2	 	Interpretation
	 	 	6	 
	2.	 	THE LOAN	 	 	6	 
	 	 	2.1	 	General
	 	 	6	 
	 	 	2.2	 	Note
	 	 	6	 
	 	 	2.3	 	Prepayments
	 	 	7	 
	 	 	2.4	 	Interest Rates and Payment Dates
	 	 	7	 
	 	 	2.5	 	Payments
	 	 	8	 
	 	 	2.6	 	Mutilation, Destruction, Loss or Theft
	 	 	8	 
	 	 	2.7	 	General Indemnity
	 	 	9	 
	 	 	2.8	 	General Tax Indemnity
	 	 	10	 
	3.	 	CONDITIONS PRECEDENT TO LOAN	 	 	12	 
	 	 	3.1	 	Payment of Fees
	 	 	12	 
	 	 	3.2	 	Basic Agreements
	 	 	12	 
	 	 	3.3	 	Incumbency Certificate
	 	 	12	 
	 	 	3.4	 	Insurance Certificates
	 	 	13	 
	 	 	3.5	 	Undertakings
	 	 	13	 
	 	 	3.6	 	Due Authorizations
	 	 	13	 
	 	 	3.7	 	Organizational Documents
	 	 	13	 
	 	 	3.8	 	No Conflict
	 	 	13	 
	 	 	3.9	 	Opinions of Counsel
	 	 	13	 
	 	 	3.10	 	Approvals and Consents
	 	 	13	 
	 	 	3.11	 	No Security Interests
	 	 	13	 
	 	 	3.12	 	No Actions or Proceedings
	 	 	13	 
	 	 	3.13	 	Representations and Warranties
	 	 	14	 
	 	 	3.14	 	Guaranty
	 	 	14	 
	 	 	3.15	 	Additional Documents
	 	 	14	 
	4.	 	REPRESENTATIONS AND WARRANTIES	 	 	14	 
	 	 	4.1	 	Representations and Warranties of the Borrower
	 	 	16	 
	5	 	GENERAL COVENANTS	 	 	16	 
	 	 	5.1	 	Notices
	 	 	16	 
	 	 	5.2	 	No Security Interest
	 	 	16	 
	 	 	5.3	 	No Transfers
	 	 	16	 
	 	 	5.4	 	Further Assurances
	 	 	16	 
	 	 	5.5	 	Payment of Obligations
	 	 	16	 
	 	 	5.6	 	Compliance with Laws
	 	 	17	 
	 	 	5.7	 	Citizenship of Borrower; Aircraft Registration
	 	 	17	 
	 	 	5.8	 	Financial Covenant
	 	 	17	 
	 	 	5.9	 	Financial Reporting
	 	 	17	 
	 	 	5.10	 	Operations
	 	 	18	 
	6.	 	EVENTS OF DEFAULT	 	 	18	 
	7.	 	MISCELLANEOUS	 	 	19	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	7.1	 	Amendments and Waivers
	 	 	19	 
	 	 	7.2	 	Notices and Accounts
	 	 	20	 
	 	 	7.3	 	No Waiver; Cumulative Remedies
	 	 	21	 
	 	 	7.4	 	Survival or Representations and Warranties
	 	 	21	 
	 	 	7.5	 	Payment of Expenses and Taxes
	 	 	21	 
	 	 	7.6	 	Successor and Assigns
	 	 	22	 
	 	 	7.7	 	Counterparts
	 	 	22	 
	 	 	7.8	 	Severability
	 	 	22	 
	 	 	7.9	 	Integration
	 	 	22	 
	 	 	7.10	 	GOVERNING LAW
	 	 	22	 
	 	 	7.11	 	SUBMISSION TO JURISDICTION; WAIVERS
	 	 	22	 
	 	 	7.12	 	Acknowledgments
	 	 	23	 
	 	 	7.13	 	Performance by Lender of the Borrower’s Obligations
	 	 	23	 
	8.	 	BROKER’S COMMISSION	 	 	23	 
	9.	 	GUARANTY	 	 	23	 

EXHIBITS AND ATTACHMENTS

	 	 	 	 	 
	 	 	Page
	ATTACHMENT 1 Description of Aircraft
	 	 	1	 
	ATTACHMENT 2 Borrower and Principal Loan Amount
	 	 	4	 
	ATTACHMENT 3 Basic Agreements
	 	 	5	 

ii

 

LOAN AGREEMENT

     THIS LOAN AGREEMENT, dated as of December 29, 2005, is by and between Gulfstream International
Airlines, Inc., a Florida corporation, as borrower (the “Borrower”), and Irwin Union Bank
and Trust Company, as Lender (together with its successors and assigns, the “Lender”).

     The parties hereto hereby agree as follows:

1. DEFINITIONS.

     1.1 Defined Terms. As used in this Loan Agreement, the following terms will have the following
meanings:

     (a) “Act” means those portions of Title 49 of the United States Code formerly known as
the Federal Aviation Act.

     (b) “Affiliate” means, with respect to any Person, any other Person who, directly or
indirectly, controls or is controlled by or is under common control with, such Person. For
purposes of this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.

     (c) “Agreement” or “Loan Agreement” means this Loan Agreement, as amended, supplemented
or otherwise modified from time to time.

     (d) “Aircraft” means, collectively, the Airframe, the Engines, the Propellers and the
Parts. Unless otherwise indicated by the context, the term “Aircraft” will include the
Aircraft Documents.

     (e) “Aircraft Documents” means all books, manuals, logs, records, writings, data,
information and other like property relating to the Aircraft, Engines, Propellers or any
Part thereof (including, without limitation, any warranties).

     (f) “Airframe” means, collectively, the seven Embraer Brasilia EMB-120ER Turboprop
airframes described in Attachment 1 hereto.

     (g) “After-Tax Basis” means, with respect to any payment to be received or accrued by
an Indemnitee, the amount of such payment supplemented by a further payment or payments
(which shall be payable either simultaneously or, in the event that Taxes resulting from the
receipt or accrual of such payment are not actually payable in the year of receipt or
accrual, at the time or times such Taxes are actually payable) so that the sum of all such
payments, after deduction of all Taxes actually payable to any Governmental Authority as a
result of the receipt or accrual of such payments (which, in the case of the Lender, shall
be computed using the highest marginal federal income tax

Page 1 

 

rate generally applicable to corporations and the Lender’s actual composite state and
local income tax rate), and after taking into account all tax savings realized or to be
realized by such Indemnitee as a result of the event giving rise to such payment, shall be
equal to the payment due to be received or accrued by such Indemnitee.

     (h) “Basic Agreements” means this Loan Agreement, the Note and the Security Agreements
identified on Attachment 3 hereto, together with all notices, consents, certificates
and other documents from time to time issued or entered into by the Borrower or the Lender
pursuant to or in connection with any thereof.

     (i) “Business Day” means any day other than a Saturday or Sunday or a day on which
banks in Utah or Florida are required or authorized to be closed.

     (j) “Citizen of the United States” is defined in Section 40102(a)(15) of Title 49 of
the United States Code.

     (k) “Collateral” means the “Mortgaged Property” as defined in the Security Agreement
(which will in any event include the Aircraft, the Aircraft Documents, the rights of the
Borrower under all policies of insurance relating to the Aircraft and all other property
purportedly subject to a Security Interest pursuant to the Security Agreement).

     (l) “Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is bound.

     (m) “Default” means any of the events specified in Section 6, whether or not any
requirement for the giving of notice, the passage of time, or both, or any other condition,
has been satisfied.

     (n) “Default Rate” means Four Percent (4%) per annum above the Interest Rate, computed
on the basis of a three hundred sixty (360) day year in equal months of thirty (30) days.

     (o) “Engine” or “Engines” means (i) each of the engines specified in Attachment
1 hereto whether or not from time to time installed on the Airframe or installed on any
other airframe or on any other aircraft, and (ii) any Replacement Engine whether or not from
time to time installed on the Airframe 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 title to such Parts will remain vested in the
Borrower. At such time as a Replacement Engine will be substituted hereunder and the Engine
for which the substitution is made will be released, such replaced Engine will cease to be
an Engine hereunder.

     (p) “Event of Default” means any of the events mentioned in Section 6, provided that
any requirement for the giving of notice, the passage of time, or both, or any other
condition, has been satisfied.

Page 2 

 

     (q) “Event of Loss” with respect to any Airframe, Engine or Propeller means any of the
following events: (i) the loss thereof or the loss of the use thereof due to destruction or
damage beyond repair which renders repair uneconomic or which renders such Airframe, Engine
or Propeller permanently unfit for normal use from any reason whatsoever; (ii) any damage
thereto (including any requiring the completion of an FAA Form 337, “Major Repair And
Alteration Statement”) which results in an insurance settlement with respect to such
Airframe, Engine or Propeller on the basis of total loss; (iii) the theft, disappearance,
condemnation, confiscation, attachment, sequestration, distraint or seizure thereof, or
requisition of title to or use or possession thereof, for a period of sixty (60) consecutive
days (or, if earlier, extending through the Maturity Date of the Note); (iv) the operation
or location of any Aircraft, while under condemnation, confiscation, seizure or requisition
by a government other than the United States government or subdivision thereof, for a
continuous period of at least 60 days (or, if earlier, extending through the Maturity Date
of the Note) or otherwise in any area excluded from coverage by any insurance policy in
effect with respect to such Aircraft required by the provisions of this Agreement or the
Security Agreement; or (v) in the event any Aircraft is requisitioned by the United States
Government or subdivision thereof and such requisition extends beyond the maturity date of
the Note or during the period of requisition Borrower fails to make payment as scheduled
under the Note. The date of such Event of Loss shall be the date of such loss, damage,
condemnation, taking or requisition.

     (r) “Event of Loss Payment” means the proceeds of any insurance, or any compensation,
requisition, or similar payment, arising in respect of an Event of Loss.

     (s) “Expense” means any and all liabilities, obligations, losses, damages, penalties,
claims (including, but not limited to, negligence, strict or absolute liability, liability
in tort and liabilities arising out of violation of laws or regulatory requirements of any
kind), actions, suits, out-of-pocket costs, expenses and disbursements (including reasonable
legal fees, costs of investigation of whatsoever kind and nature and expenses and all costs
and expenses relating to amendments, supplements, waivers and consents to and under the
Basic Agreements, but excluding internal costs and expenses such as salaries and overhead).

     (t) “FAA” means the Federal Aviation Administration, or any successor governmental
agency acting in a substantially similar capacity.

     (u) “FAR” means the Federal Aviation Regulations issued by the FAA, in effect from time
to time.

     (v) “Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.

     (w) “Guarantor” means SkyWest, Inc., a Utah corporation.

Page 3 

 

     (x) “Guaranty” means the Guaranty, dated as of the Loan Date, executed by the Guarantor
in favor of the Lender in which the Guarantor guarantees the payment and performance of the
Borrower’s Obligations.

     (y) “Indemnitee” has the meaning assigned thereto in Section 2.8 hereof.

     (z) “Interest Rate” means 6.95% per annum computed on the basis of a three hundred
sixty (360) day year in equal months of thirty (30) days or, if applicable, the Default
Rate.

     (aa) “Lender” means Irwin Union Bank and Trust Company, the address of which is 224
South 200 West, Suite 100, Salt Lake City, Utah 84101, and its respective successors and
assigns.

     (bb) “Loan” has the meaning assigned thereto in Section 2.1.

     (cc) “Loan Amount” means the principal balance of the Loan together with any amounts
specified in this Loan Agreement recoverable against the Borrower with respect thereto. The
principal amount of the Loan is set forth on Attachment 2 hereto.

     (dd) “Loan and Security Documents” means, collectively, the Security Agreements, this
Loan Agreement, and the Promissory Note from the Borrower in favor of the Lender.

     (ee) “Loan Date” means the date of this Loan Agreement, or if different, the date of
the advance of the Loan under this Loan Agreement.

     (ff) “Maturity Date” means the Maturity Date set forth in the Note, substantially in
the form of Exhibit A hereto.

     (gg) “Maximum Aggregate Loan Amount” means $8,568,000.00.

     (hh) “Note” or “Notes” has the meaning assigned thereto in Section 2.2, and any Note or
Notes issued in exchange or replacement therefor pursuant to the provisions hereof.

     (ii) “Obligations” has the meaning of “Secured Obligations” specified in the Security
Agreement.

     (jj) “Parts” means all appliances, parts, instruments, appurtenances, accessories,
furnishings and other equipment of whatever nature (other than complete Engines or engines
or complete Propellers or propellers), which are from time to time incorporated or installed
in or attached to any Airframe, Engine or Propeller and all such items which are
subsequently removed therefrom so long as title thereto shall not vest in the Borrower.

     (kk) “Payment Date” has the meaning specified in the Note.

Page 4 

 

     (ll) “Person” means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.

     (mm) “Prepayment Fee” has the meaning assigned thereto in Section 2.3(b)

     hereof.

     (nn) “Propeller” or “Propellers” means (i) each of the propellers specified in
Attachment 1 hereto whether or not from time to time installed on an Airframe or
installed on any other airframe or on any other aircraft, and (ii) any Replacement Propeller
whether or not from time to time installed on an Airframe or any other airframe or on any
other aircraft, together in each case with any and all Parts incorporated in such Propeller
and any and all Parts removed from such Propeller so long as title to such Parts will remain
vested in the Borrower. At such time as a Replacement Propeller will be substituted
hereunder and the Propeller for which the substitution is made will be released, such
replaced Propeller will cease to be a Propeller hereunder.

     (oo) “Replacement Engine” means any engine substituted for an Engine

     pursuant to the applicable Security Agreement.

     (pp) “Replacement Propeller” means any propeller substituted for a Propeller pursuant
to the applicable Security Agreement.

     (qq) “Requirement of Law” means as to any Person, the organizational or governing
documents of such Person, and any law, treaty, rule or regulation or determination of an
arbitrator, court, or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its property is
subject.

     (rr) “Responsible Officer” means the chief executive officer, the president, or a vice
president of a Person and any other officer of a Person that the Lender and the Borrower
agree to in writing.

     (ss) “Security Agreements” means, collectively, the Aircraft Mortgage and Security
Agreements, dated as of the date hereof, by and between the Borrower and the Lender in favor
of the Lender, as supplemented, relating to the Aircraft identified in Attachment 1
hereto and substantially in the form of Exhibit B hereto.

     (tt) “Security Interest” means any mortgage, security interest, charge, pledge,
hypothecation, assignment, right of possession or detention, encumbrance, claim, lease, lien
(statutory or other), preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement).

     (uu) “Taxes” income, property, ad valorem, value added, stamp, documentary or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority.

Page 5 

 

     (vv) “US$”, “$”, “Dollars” and “dollars” means the lawful currency of the United States
of America.

     1.2 Interpretation. References in this Loan Agreement to:

     (a) sections, subsections or schedules are, unless otherwise specified, references to
sections or subsections of, and schedules to, this Loan Agreement;

     (b) any statutory or other legislative provisions, or the rules and regulations
thereunder, will be construed as including any statutory or legislative modification or
reenactment or repromulgation thereof, or any provision enacted or promulgated in
substitution therefor;

     (c) any agreement or instrument will include such agreement or instrument as it may
from time to time be amended, modified, supplemented or substituted;

     (d) an “agreement” will also include a concession, contract, deed, franchise, license,
treaty or undertaking (in each case, whether oral or written);

     (e) unless otherwise defined in Section 1.1, defined terms used herein will have the
meanings set forth in the Security Agreements;

     (f) headings are for ease of reference only and, unless otherwise indicated by the
context, words importing the singular number only will include the plural and vice versa,
and words importing neuter gender will include the masculine and feminine gender; and

     (g) the words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Loan Agreement will refer to this Loan Agreement as a whole and not to any
particular provision of this Loan Agreement, and Section, subsection, Schedule and Exhibit
references are to this Loan Agreement unless otherwise specified.

2. THE LOAN.

     2.1 General. Subject to the terms and conditions hereof, the Lender agrees to make a loan (the
“Loan”) to the Borrower in the Loan Amount with respect to the Aircraft, in a single
advance upon the Loan Date.

     2.2 Note. The Loan will be evidenced by a promissory note of the Borrower dated the Loan Date,
maturing December 29, 2010 and otherwise in the form of Exhibit A hereto (the
“Note”), payable to the Lender or its assigns, in an aggregate principal amount not to
exceed the Maximum Aggregate Loan Amount. Interest under the Note will be payable as set forth in
Section 2.4 hereof. The Lender may record the amount of each payment of principal and interest on
the Loan on a schedule annexed to and constituting a part of the Note, and any such recordation
will constitute prima facie (but not conclusive) evidence of the accuracy of the information so
recorded. No failure to make any such notations will affect the validity of the Borrower’s
obligations to repay the full unpaid principal amount of the Loan or the duties of Borrower
hereunder or thereunder. The Note will (a) refer to this Loan Agreement, (b) refer to

Page 6 

 

the Aircraft; and (c) be stated to be repaid in installments on each Payment Date in
accordance with Section 2.4 hereof, with a final installment on the Maturity Date of all remaining
principal, accrued interest, and any Prepayment Fee.

     2.3 Prepayments.

     (a) Mandatory Prepayment Upon Event of Loss.

     (i) Upon the occurrence of an Event of Loss, the Borrower will forthwith (and
in any event immediately after obtaining knowledge of such occurrence) give to the
Lender written notice of such Event of Loss.

     (ii) Borrower shall make take all other actions and make all payments with
respect to that Event of Loss as required by Section 3.3 of the applicable Security
Agreement.

     (b) Other Prepayments. Except as set forth herein, prepayments of the Note will
not be permitted. Borrower may prepay all but not any part of the principal amount of the
Loan before final maturity upon payment to the Lender of a prepayment fee (“Prepayment
Fee”) in accordance with the following schedule: (a) during the first 12 months of the
term of the Note, a prepayment fee equal to four percent (4%) of the remaining principal
amount of the Note to be prepaid; (b) during the second 12 months of the term of the Note, a
prepayment fee equal to three percent (3%) of the remaining principal amount of the Note to
be prepaid; (c) during the third 12 months of the term of the Note, a prepayment fee equal
to two percent (2%) of the remaining principal amount of the Note to be prepaid; (d) during
the fourth 12 months of the term of the Note, a prepayment fee equal to one percent (1%) of
the remaining principal amount of the Note to be prepaid; and (e) during the fifth 12 months
of the term of the Note, a prepayment fee equal to one percent (1%) of the remaining
principal amount of the Note to be prepaid.

     (c) No Reborrowing. Amounts paid or prepaid on account of the Loan may not be
reborrowed.

     (d) Allocation. Allocation and distribution of all amounts received by the
Lender pursuant to this Section 2.3 will be made in the order set forth in Section 2.4.

     2.4 Interest Rates and Payment Dates.

     (a) The Loan will bear interest at the Interest Rate (calculated on a year of three
hundred sixty (360) days on a daily basis for the actual number of days the unpaid principal
balance is outstanding) on the unpaid principal amount thereof from time to time
outstanding, payable in arrears on each Payment Date until maturity. The Loan will mature on
the Maturity Date. The principal amount of the Loan will be payable on the dates and in the
installments specified in the Note. Notwithstanding the foregoing, the final payment made
under the Note will be in an amount sufficient to discharge in full the unpaid principal
amount, and all accrued and unpaid interest on, and any other amounts (including any
Prepayment Fee) due under, the Note, this Loan Agreement and the

Page 7 

 

Security Agreements. The Borrower will pay the Lender, on demand, interest at the
Default Rate on any part of the principal amount, and to the extent permitted by applicable
law, interest, any Prepayment Fee and any other amounts payable hereunder or under the Note
not paid when due for any period during which the same will be overdue, in each case for the
period the same is overdue. Amounts will be overdue if not paid when due (whether at stated
maturity, by acceleration or otherwise).

     (b) Each Loan Payment will be applied to the Loan and distributed by the Lender as
follows:

          First, so much of such funds as is required for the purpose will be retained by the
Lender to pay any fees (including any Prepayment Fee), costs, charges, or expenses, if any
(including, without limitation, interest on overdue amounts), due and payable to the Lender
hereunder or under any other Basic Agreement;

          Second, if any amounts remain after satisfying the amounts specified in clause First
above, so much of such funds as required for the purpose will be applied to pay in full the
aggregate amount of interest then due under the Note;

          Third, if any amounts remain after satisfying the amounts specified in clauses First
through Second above, such remaining amounts will be applied to pay the then due and owing
principal payments;

          Fourth, if any amounts will remain after satisfying the amounts specified in clauses
First through Third above, so much of such funds as will be required for the purpose will be
retained by the Lender to pay in full all other amounts due and owing to it hereunder or
under any other Basic Agreement; and

          Fifth, if any amounts remain after satisfying the amounts specified in clauses First
through Fourth above, the balance, if any, will be remitted by the Lender to the Borrower.

     2.5 Payments. All payments (including any prepayments) to be made by the Borrower hereunder,
under the Note and under any other Basic Agreement, whether on account of principal, interest,
Prepayment Fee, other fees or otherwise, will be made without deduction, set-off or counterclaim
and will be made prior to 2:00 p.m., Mountain Standard time, on the due date therefor to the Lender
in accordance with the payment instructions specified in Section 7.2, in Dollars and by wire
transfer of immediately available funds. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment will be due and payable on the immediately succeeding
Business Day.

     2.6 Mutilation, Destruction, Loss or Theft. If the Note is mutilated, destroyed, lost or
stolen, the Borrower will, upon the written request and at the expense of the Lender execute and
deliver to the Lender, in replacement thereof, a new Note in the same face amount, with the same
designation and dated the same date as the Note so mutilated, destroyed, lost or stolen. If the
Note being replaced has become mutilated, such Note will be surrendered to the Borrower. If the
Note being replaced has been destroyed, lost or stolen, the holder of such Note will furnish to the
Borrower such indemnity as may reasonably be required by the Borrower to save it harmless

Page 8 

 

and evidence reasonably satisfactory to the Borrower of the destruction, loss or theft of such
Note and the ownership thereof.

     2.7 General Indemnity. The Borrower hereby agrees to defend, indemnify, save and keep
harmless, on an After-Tax Basis, the Lender together with its officers, directors, agents,
employees and affiliates (each, an “Indemnitee”) against, and agrees to protect, save and
keep harmless each Indemnitee from (whether or not the transactions contemplated herein or in any
of the other Basic Agreements are consummated), any and all Expenses imposed on, incurred by or
asserted against the Indemnitee, in any way relating to or arising out of or which would not have
occurred but for:

     (a) the Basic Agreements, the consummation of the transactions contemplated thereby,
the failure of Borrower to perform its obligations under the Basic Agreements, or the
enforcement of any of the terms thereof;

     (b) the manufacture, design, purchase, resale, lease, acceptance or rejection of any
Airframe, Engine, Propeller or Part;

     (c) an Aircraft (or any portion thereof) or any engine or propeller installed on any
Airframe or any airframe on which an Engine or a Propeller is installed whether or not
arising out of the manufacture, purchase, registration, re-registration, refinancing,
financing, ownership, delivery, nondelivery, lease, sublease, possession, use or non-use,
operation, maintenance, modification, alteration, condition, replacement, repair,
substitution, sale, return or other disposition of such Aircraft (or any portion thereof),
including, without limitation, latent or other defects, whether or not discoverable, strict
tort liability and any claim for patent, trademark or copyright infringement.

          If a claim is made against an Indemnitee involving one or more Expenses and such
Indemnitee has notice thereof, such Indemnitee will promptly after receiving such notice
give notice of such claim to the Borrower provided that the failure to provide such notice
will not release the Borrower from any of its obligations to indemnify hereunder, except to
the extent such failure results in an increase in the Expenses payable hereunder, but only
to the extent of such increase; and no payment by the Borrower to such Indemnitee pursuant
to this Section 2.7 will be deemed to constitute a waiver or release of any right or remedy
which the Borrower may have against such Indemnitee for any actual damages as a result of
the failure by such Indemnitee to give the Borrower such notice. The Borrower will be
entitled, at its sole cost and expense (and acting through counsel reasonably acceptable to
such Indemnitee):

     (1) (so long as the Borrower has agreed in a writing reasonably
acceptable to such Indemnitee that the Borrower is liable to such Indemnitee
for such Expense, if any) in any judicial or administrative proceeding that
involves solely a claim for one or more Expenses, to assume responsibility
for and control thereof;

     (2) (so long as the Borrower has agreed in a writing reasonably
acceptable to such Indemnitee for such Indemnitee that the Borrower is

Page 9 

 

liable to such Indemnitee for such Expense, if any) in any judicial or
administrative proceeding involving a claim for one or more Expenses and
other claims related or unrelated to the transactions contemplated by the
Basic Agreements, to assume responsibility for and control of such claim for
Expenses to the extent that the same may be and is severed from such other
claims (and such Indemnitee will use its best efforts to obtain such
severance); and

     (3) in any other case, to be consulted by such Indemnitee with respect
to judicial proceedings subject to the control of such Indemnitee and to be
allowed, at the Borrower’s sole expense, to participate therein.

          Such Indemnitee will supply the Borrower with such information reasonably requested by the
Borrower as is necessary or advisable for the Borrower to control or participate in any proceeding
to the extent permitted by this Section 2.7. Such Indemnitee will not (unless such Indemnitee
waives its right to be indemnified with respect to such Expense under this Section 2.7) enter into
a settlement or other compromise with respect to any Expense without the prior written consent of
the Borrower.

          Upon payment of any Expense pursuant to this Section 2.7, the Borrower, without any further
action, will be subrogated to any claims such Indemnitee may have relating thereto. Such Indemnitee
at the Borrower’s expense agrees to give such further assurances or agreements and to cooperate
with the Borrower to permit the Borrower to pursue such claims, if any, to the extent reasonably
requested by the Borrower.

          The Borrower agrees to pay each Expense within five (5) Business Days of demand therefor;
provided that such amount shall not be due in the event such Indemnitee has failed to
provide reasonably adequate information to the Borrower regarding such demand; and
provided, further, that the Borrower shall be entitled to contest such Expense as
provided for in this Section 2.7. In the event the Borrower contests such Expense, such Expense
shall be payable at the time such Expense is due as set forth herein. To the extent permitted by
applicable law, interest at the Interest Rate will be paid, on demand, on any Expense or other
amount or indemnity not paid when due pursuant to this Section 2.7 until the same will be paid.
Such interest will be paid in the same manner as the unpaid amount in respect of which such
interest is due.

     2.8 General Tax Indemnity.

     (a) Indemnity. Except as provided in this Section 2.8, the Borrower hereby
agrees to pay or cause to be paid when due, and will indemnify and hold harmless the
Indemnitee on an After-Tax Basis, from and against, any and all Taxes howsoever imposed or
levied on or asserted against, from time to time, the Indemnitee, the Borrower, the
Aircraft, any Airframe, any Engine, any Propeller or any Part or any interest therein by any
Governmental Authority on, with respect to, based on or measured by: (A) the Aircraft, any
Airframe, any Engine, any Propeller or any Part thereof or interest therein whether or not
arising out of the manufacture, purchase, acceptance, delivery, redelivery, transport,
registration, reregistration, deregistration, possession,

Page 10 

 

operation, location, use, presence, condition, alteration, maintenance, repair, return,
storage, repossession, disposition, abandonment, installation, charter, leasing, subleasing,
modification, transfer, importation, exportation or other disposition of, or the imposition
of any lien on, the Aircraft, any Airframe, any Engine, any Propeller or any Part or
interest therein; (B) any payments made pursuant to any of the Basic Agreements; or (C)
otherwise with respect to or in connection with the execution, delivery, enforcement,
amendment or supplement to the Basic Agreements or the transactions contemplated by the
Basic Agreements.

     (b) Exclusions from Indemnity. The provisions of this Section 2.8 will not
apply to: (A) Taxes imposed upon or measured by the net income, profits or gains of the
Indemnitee by any Governmental Authority (other than net income, profits or gains Taxes
imposed by any Governmental Authority which the Indemnitee would not have been subject to
but for: (i) the use, operation, presence or registration of the Aircraft, any Airframe, any
Engine, any Propeller or any Part in the jurisdiction imposing the Tax or (ii) any payment
by or on behalf of the Borrower in the jurisdiction imposing such Tax; (B) Taxes caused
solely by the gross negligence or willful misconduct of the Indemnitee; (C) penalties,
additions to Taxes, charges or interest to the extent arising out of the failure of the
Indemnitee to pay Taxes (other than Taxes which the Borrower is obligated to pay pursuant to
this Section 2.8 and not paid to the Indemnitee pursuant to Section 2.8(d)); (D) Taxes
arising out of the assignment, sale or other transfer of the Loan or any part thereof by the
Indemnitee; and (E) Taxes which are greater by reason of the assignment, sale or other
transfer of the Loan or any part thereof by the Indemnitee.

     (c) Reports. The Borrower will provide, promptly upon request, such information
as may be reasonably requested by the Indemnitee or required to enable the Indemnitee to
timely and properly fulfill its tax filing requirements with respect to the transactions
contemplated by the Basic Agreements. If any report, return or statement is required to be
filed with respect to any Tax which is subject to indemnification under this Section 2.8,
the Borrower will notify the Indemnitee and timely file the same (except for any such
report, return or statement which the Indemnitee intends to file itself (and so notifies the
Borrower in writing) or for income tax returns or any other return, report or statement
which the Indemnitee is required by law to file in its own name). The Borrower will either
file such report, return or statement and send a copy of such report, return or statement to
the Indemnitee or, where the Borrower is not permitted to file such report, return or
statement or the Indemnitee otherwise intends to file such report return or statement
itself, the Borrower will prepare and deliver such report, return or statement to the
Indemnitee no later than thirty (30) Business Days prior to the time such report, return or
statement is to be filed.

     (d) Payment. The Borrower will pay any Tax for which it is liable pursuant to
this Section 2.8 in immediately available funds directly to the appropriate Governmental
Authority or, upon written demand of the Indemnitee, to such Indemnitee, but in no event
will such payment be required more than five (5) Business Days prior to the date such Tax is
due. The Indemnitee will promptly forward to the Borrower any notice, bill or advice in the
nature of a notice or bill received by it concerning any Tax; provided, however, failure to
provide any such notice or bill will not relieve the Borrower of its

Page 11 

 

obligations hereunder. As soon as practical after each payment of any Tax by the
Borrower directly to any Governmental Authority, the Borrower will furnish the Indemnitee
with the original or a certified copy of a receipt for the Borrower’s payment of such Tax or
such other evidence of payment of such Tax as is reasonably acceptable to the Indemnitee.

     (e) Tax Contests. If any Governmental Authority proposes to impose a Tax for
which the Borrower would be required to make an indemnity payment to the Indemnitee under
this Section 2.8, the Borrower may, at its own cost and expense, contest by: (i) resisting
payment thereof, if practicable; (ii) not paying the same except under protest, if protest
will be necessary and proper; and (iii) if payment is made, using reasonable efforts to
obtain a refund thereof in appropriate administrative proceedings.

          Notwithstanding anything to the contrary in this Section 2.8, no contest will be
required or permitted unless: (i) the Borrower is permitted under applicable law to make
such claim; (ii) no Event of Default will have occurred and be continuing; and (iii) the
Indemnitee will have reasonably determined that the contest will not create a material risk
of a sale, forfeiture or loss of, or creation of any lien on the Aircraft, or any portion
thereof or interest therein.

          All indemnities, obligations and payments contemplated in this Section 2.8 will survive
and remain in full force and effect, notwithstanding the expiration or termination of this
Loan Agreement and the payment of the Note and all other amounts payable hereunder.

3. CONDITIONS PRECEDENT TO LOAN.

     The agreement and obligation of the Lender to make the Loan to the Borrower are subject to the
satisfaction (or waiver by the Lender, which waiver will be in writing and signed by the Lender) of
the following conditions precedent:

     3.1 Payment of Fees. The Borrower has deposited $15,000 to be applied to the closing costs
incurred by the Lender. In the event the costs of closing exceed that deposit, the resulting
shortfall, together with the origination fee quoted by the Lender to the Borrower, shall be paid
with proceeds from the Loan, which closing costs include without limitation the reasonable fees and
expenses of the Lender’s counsel, Ray Quinney & Nebeker P.C., and the reasonable fees and expenses
of special FAA counsel, Daugherty, Fowler, Peregrin, Haught & Jenson. Any remaining portion of the
deposit not used to pay obligations owed to the Lender shall be returned to the Borrower.

     3.2 Basic Agreements. The Lender will have received each of the Basic Agreements with respect
to the Aircraft, duly authorized, executed and delivered by each of the parties thereto, in each
case in form and substance satisfactory to the Lender;

     3.3 Incumbency Certificate. The Lender will have received a duly executed officer’s incumbency
certificate of each of the Borrower and the Guarantor, in form and substance satisfactory to the
Lender;

Page 12 

 

     3.4 Insurance Certificates. The Lender will have received independent insurance broker’s
certificates, in form and substance satisfactory to the Lender, with respect to the Aircraft
(including, without limitation, the Engines and Propellers), evidencing maintenance of insurance in
compliance with the Security Agreements, and naming the Lender as an additional insured and as loss
payee;

     3.5 Undertakings. The Lender will have received an insurance broker’s letter of undertaking,
in form and substance satisfactory to the Lender;

     3.6 Due Authorization. The Lender will have received a copy of the resolutions of the Board of
Directors or other competent authority of each of the Borrower and the Guarantor with respect to
the due authorization of the transactions contemplated by this Loan Agreement, the other Basic
Agreements and, in the case of the Guarantor, the Guaranty, certified by each such entity;

     3.7 Organizational Documents. The Lender will have received true and complete copies,
certified by an officer of each of the Borrower and the Guarantor, as appropriate of (i) the
organizational documents of the Borrower and the Guarantor; (ii) the articles of incorporation and
bylaws of the Borrower and the Guarantor and (iii) a good standing certificate for the Borrower and
the Guarantor;

     3.8 No Conflict. The consummation of the transactions contemplated hereby will not contravene,
violate or conflict with, nor involve the Lender in any violation of, any Requirement of Law or
Contractual Obligation of the Borrower or the Guarantor;

     3.9 Opinions of Counsel. The Lender will have received, at the Borrower’s expense, the legal
opinion of Thomas P. Cooper, in-house counsel to the Borrower (which shall include an opinion that
the Lender is entitled to the protection of Section 1110 of the United States Bankruptcy Code in
connection with its right to take possession of the Aircraft in the event of a proceeding under
Chapter 11 of the United States Bankruptcy Code in which the Borrower is a debtor), and the legal
opinion of Daugherty Fowler Peregrin Haught and Jenson, special FAA counsel;

     3.10 Approvals and Consents. The Lender will have received a copy, certified as true and
correct by an officer of each of the Borrower and the Guarantor, of each approval and consent, if
any, of any governmental or other regulatory authorities in the United States, which are necessary
for the execution, performance and delivery of each of the Basic Agreements by each of the parties
thereto;

     3.11 No Security Interests. The Lender will have received evidence satisfactory to the Lender
that the Aircraft and all other Collateral is the property of the Borrower free and clear of any
and all Security Interests and adverse claims or rights (other than the Security Interest granted
by the Borrower in favor of the Lender pursuant to the Security Agreements, and Permitted Liens as
defined in and allowed by the Security Agreements), and that the Lender has, or will on the closing
date hereof have, a first priority perfected Security Interest therein;

     3.12 No Actions or Proceedings. No action or proceeding will have been instituted nor will any
governmental action be threatened before any Governmental Authority, nor will any

Page 13 

 

order, judgment or decree have been issued or proposed to be issued by any Governmental
Authority pertaining in any way to the Aircraft, any Engine, any Propeller, any Part, or the
transactions contemplated by this Loan Agreement;

     3.13 Representations and Warranties. The representations and warranties made by each of (1)
the Borrower in this Loan Agreement and/or each other Basic Agreement to which it is a party and
(2) the Guarantor in the Guaranty, will be true and correct on and as of the date hereof (and the
Lender will have received a certificate of an officer of each of the Borrower and the Guarantor to
such effect);

     3.14 Guaranty. The Lender will have received a Guaranty, dated as of the Loan Date, in the
form of Exhibit C hereto, executed by the Guarantor in favor of the Lender in which the Guarantor
guarantees the payment and performance of the Borrower’s Obligations.

     3.15 Additional Documents. The Lender will have received such further documents, instruments,
certificates and agreements as the Lender will reasonably require in connection with the
transactions contemplated by the Basic Agreements (and any such document, instrument, certificate
or agreement will be in form and substance satisfactory to the Lender).

     3.16 Section 1110 Protection. The Lender shall be entitled to the protection of Section 1110
of the United States Bankruptcy Code in connection with its right to take possession of the
Aircraft in the event of a proceeding under Chapter 11 of the United States Bankruptcy Code in
which the Borrower is a debtor.

4. REPRESENTATIONS AND WARRANTIES.

     4.1 Representations and Warranties of the Borrower. In order to induce the Lender to enter
into this Loan Agreement and to make the Loan hereunder, the Borrower hereby represents and
warrants to the Lender, as of the date hereof, that:

     (a) No Default or Event of Loss. No event has occurred which constitutes, or with the
giving of notice and/or the passage of time and/or a relevant determination would
constitute, a contravention of, or default under, any agreement or instrument by which the
Borrower or any of its assets is bound or affected, including but not limited to the Loan
and Security Documents. No Default or Event of Default has occurred or will occur solely as
a result of the consummation of the transactions contemplated hereby. To the best of the
Borrower’s knowledge, no Event of Loss or event which, with the passage of time, would
become an Event of Loss, has occurred.

     (b) Litigation. No litigation, arbitration or administrative proceeding or claim is
presently in progress or pending or, to the best of the Borrower’s knowledge, threatened
against (or involving) the Borrower which could have an adverse effect on the ability of the
Borrower to perform its obligations under any of the Basic Agreements. No litigation,
arbitration or administrative proceeding or claim is presently in progress or pending or
threatened against (or involving) any of the Aircraft, any of the other Collateral or the
transactions contemplated hereby or by any of the other Basic Agreements.

Page 14 

 

     (c) State of Organization. The full and correct name of the Borrower is set forth on
Attachment 2 hereto, the Borrower is a Florida corporation, the chief executive
office and chief executive place of business of the Borrower is located at 1815 Griffin
Road, Suite 400, Dania, Florida 33004, and the Borrower will not change its name or the
jurisdiction of its organization or in any event be “located” (for purposes of the Uniform
Commercial Code in effect in the State of Florida) in any jurisdiction other than the one in
which it is located in as of the date of this Loan Agreement without the prior written
consent of the Lender (which consent will not be unreasonably withheld).

     (d) Security Documents. Except for (i) the timely filing of financing statements (and
continuation statements at periodic intervals) with respect to the Security Interests
created by the Security Agreements, (ii) the timely filing of the Security Agreements with
the FAA, and (iii) the taking of possession by the Lender of the original counterparts of
the Basic Agreements, no further action is necessary upon making the Loan hereunder in order
to establish and perfect (to the extent such establishment and perfection is governed by the
laws of the United States and the constituent states) the Lender’s first priority security
interest in the Aircraft and the other Collateral as against any creditors (other than as to
creditors mandatorily preferred by law) of and purchasers from the Borrower.

     (e) Title to Aircraft. The Borrower represents and warrants that it has, and on the
Loan Date will have, good and marketable title to the Aircraft free and clear of any and all
Security Interests and claims of Persons (other than the Security Interests granted by the
Borrower in favor of the Lender pursuant to the Security Agreements and Permitted Liens as
defined in and allowed by the Security Agreements).

     (f) Existence; Compliance with Law. The Borrower has the power and authority, and the
legal right, to conduct the business in which it is currently engaged, is in compliance with
its organizational documents, and is in compliance in all material respects with all
Requirements of Law applicable to it.

     (g) Powers and Authorizations. The Borrower has the power and authority to make,
deliver and perform the transactions contemplated in the Basic Agreements to which it is a
party. No consent or authorization of, filing with or other act by or in respect of any
Governmental Authority is required in connection with the borrowing hereunder or with the
execution, delivery, or performance by the Borrower, or the validity or enforceability
against the Borrower of the Basic Agreements to which the Borrower is a party, except
filings in order to perfect the Security Interests created by the Security Agreements. This
Loan Agreement has been, and each other Basic Agreement to which the Borrower is or is to be
a party will be, duly authorized, executed and delivered on behalf of the Borrower. This
Loan Agreement constitutes, and each other Basic Agreement to which the Borrower is a party
when executed and delivered will constitute, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles (whether enforcement is sought by proceedings in equity or at
law).

Page 15 

 

     (h) No Legal Bar. The execution, delivery and performance of this Loan Agreement, the
other Basic Agreements, the borrowings hereunder and the use of the proceeds thereof and the
creation of the liens under certain of the other Basic Agreements will not violate any
Requirement of Law or Contractual Obligation of the Borrower or the organizational documents
of the Borrower and will not result in, or require, the creation or imposition of any
Security Interest on any of its other properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.

     (i) Citizenship. The Borrower is a Citizen of the United States.

5. GENERAL COVENANTS.

     So long as any Note remains outstanding and unpaid or any other amount is owing to the Lender
hereunder or under any other Basic Agreement, the Borrower hereby agrees that:

     5.1 Notices. The Borrower will furnish to the Lender:

     (a) promptly upon a Responsible Officer of the Borrower having actual knowledge of the
same, notice of the occurrence of any Default, Event of Default or Event of Loss; and

     (b) promptly upon a Responsible Officer of the Borrower having actual knowledge that
the same is threatened or pending and immediately after so having actual knowledge of the
commencement thereof, notice of all litigation or administrative or arbitration proceedings
before or of any Governmental Authority or of any other event adversely affecting any of the
Aircraft or any of the other Collateral.

     5.2 No Security Interest. The Borrower agrees not to create, incur, assume or suffer to exist
any Security Interest on the Aircraft or any of the other Collateral (other than the Security
Interests constituted by the Security Agreements or Permitted Liens as defined in and allowed by
the Security Agreements), and will promptly take any and all necessary action, at its own expense,
to remove and release any such Security Interest and will promptly reimburse and indemnify the
Collateral and the Lender for any loss incurred as a result of any such Security Interest.

     5.3 No Transfers. The Borrower will not assign or otherwise transfer or sell the Aircraft or
any other part of the Collateral without the prior written consent of the Lender, which, provided
there is no Event of Default, shall not be unreasonably withheld.

     5.4 Further Assurances. From time to time the Borrower agrees that it will perform all such
acts, execute, acknowledge and deliver all such instruments and make all filings and recordings in
all jurisdictions as it will be reasonably requested by the Lender to do or execute for the purpose
of fully carrying out and effectuating this Loan Agreement and the other Basic Agreements and the
intent hereof and thereof and reasonably assuring the title to and the validity, perfection and
first priority of the Security Interest on the Collateral created thereby.

     5.5 Payment of Obligations. To the extent the Borrower has not paid (or cause to be
paid) its indebtedness or obligations relating to the Collateral and payment is necessary or

Page 16 

 

desirable for the Lender to obtain the benefits of its Collateral, the Borrower will pay,
discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case
may be, all of its indebtedness and obligations relating to the Collateral, excluding principal of,
interest on and any Prepayment Fee on the Loan, but including taxes, duties, assessments,
governmental charges and the like.

     5.6 Compliance with Laws. The Borrower will comply with all Requirements of Law of which it is
aware in connection with the ownership and use of the Aircraft and its other properties and assets.
The Borrower will at all times (i) preserve and maintain in full force and effect its qualification
to do business in each jurisdiction in which the conduct of its business requires such
qualification, and (ii) obtain and maintain in full force and effect all consents, approvals,
licenses and franchises required at any time in connection with the registration, ownership, use
and maintenance of the Aircraft and its other properties and businesses.

     5.7 Citizenship of Borrower; Aircraft Registration. The Borrower will keep the Aircraft
registered in the United States at all times during the term of the Loan. In addition, Borrower
will maintain its status as a Citizen of the United States during the term of the Loan. Without
limiting the foregoing, the Borrower agrees that if (i) it will not be a Citizen of the United
States (without regard to limitations on control or other voting trust arrangements) and (ii) the
Aircraft will be, or would therefore become, ineligible for registration in the name of the
Borrower under Title 49 of the United States Code (otherwise known as the Transportation Code) and
regulations then applicable thereunder as a result thereof, then the Borrower will (at its own
expense) as soon as is reasonably practicable but in any event within sixty (60) days after
obtaining actual knowledge of such ineligibility and of such loss of citizenship, effect voting
trust or other similar arrangements or take any other action as may be necessary to prevent any
deregistration or to maintain the United States registration of the Aircraft. If the Borrower fails
to effect appropriate arrangements within such sixty (60) day period, then the Borrower will (at
its own expense and without any reimbursement or indemnification) forthwith take such other action
as may be necessary to prevent the deregistration of such Aircraft under Title 49 of the United
States Code or to maintain such registration of the Aircraft or to make possible such registration
of such Aircraft in the United States. It is understood that the Borrower will be liable to the
Lender for any damages which may be incurred by the Lender as a result of the Borrower’s failure to
comply with its obligations pursuant to this Section 5.7.

     5.8 Financial Covenant. The Borrower shall maintain a ratio (the “Fixed Charge Coverage
Ratio”) greater than 1.00 to 1.00, which is defined as the sum of each four trailing calendar
quarters’ earning before depreciation, interest, and operating lease expense divided by the sum of
interest expense and operating leases and current maturities of long term debt.

     5.9 Financial Reporting. The Borrower shall provide to Lender audited financial statements for
the Borrower (with an unqualified opinion from an accounting firm acceptable to Lender with 120
days of their respective fiscal year-ends). The Borrower shall also provide to Lender quarterly
financial statements for Borrower within 60 days of each quarter, which shall include a calculation
of the Fixed Charge Coverage Ratio and a compliance certificate stating that the Borrower is in
compliance with this Agreement.

Page 17 

 

     5.10 Operations. The Borrower shall not engage in any business activities, or operations
substantially different from or unrelated to its present business activities and operations.

6. EVENTS OF DEFAULT. If any of the following events will occur and be continuing:

     (a) the Borrower fails to pay to the Lender any amount due hereunder (including,
without limitation, the expenses of the Lender payable pursuant to Section 7.5 hereof, under
the Note or under any of the other Basic Agreements) on the due date therefor and in any
case such amount remains outstanding for five (5) Business Days after such due date; or

     (b) the Borrower fails to observe or perform any of its obligations or covenants set
forth in Section 5.2 or 5.3 hereof or the Borrower; or

     (c) the Borrower fails to observe or perform any of its obligations or covenants (other
than the obligations mentioned in Sections 6(a) and 6(b)) under this Loan Agreement or under
any of the other Basic Agreements and (except with respect to the obligations and covenants
set forth in Sections 5.2 and 5.3 hereof with respect to which there is no grace period)
such failure, if capable of being remedied, is not remedied to the Lender’s satisfaction
within twenty (20) days after notice from the Lender to the Borrower requiring such remedy;
or

     (d) any representation, warranty or statement which is made by the Borrower in or in
connection with this Loan Agreement or any of the other Basic Agreements to which it is a
party or the Borrower in this Loan Agreement or any other of the Basic Agreements to which
it is a party, or the Guarantor in the Guaranty, proves to have been incorrect in any
material respect as and when made and, in the reasonable opinion of Lender, Borrower’s
ability to perform its obligations under any of the Basic Agreements is or will be
materially and adversely affected as a result thereof; or

     (e) (i) the Borrower or the Guarantor will commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official for it or for all or
any substantial part of its assets, or the Borrower, the Borrower or the Guarantor will make
a general assignment for the benefit of its creditors; or (ii) there will be commenced
against the Borrower or the Guarantor any case, proceeding or other action of a nature
referred to in subsection (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of sixty (60) days; or (iii) there will be commenced against the Borrower or
the Guarantor any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which will not

Page 18 

 

have been vacated, discharged, or stayed or bonded pending appeal within sixty (60)
days from the entry thereof; or (iv) the Borrower or the Guarantor will take any action in
furtherance of, or indicating its consent to, approval of or acquiescence in, any of the
acts set forth in subsection (i), (ii), or (iii) above; or (v) the Borrower or the Guarantor
will generally not, or will be unable to, or will admit in writing its inability to, pay its
debts as they become due; or

     (f) any of the Security Agreements ceases to constitute a valid and duly perfected
first priority Security Interest on the Collateral therein identified, or any event of
default will have occurred under any of the Security Agreements; or

     (g) the Borrower will not have good and marketable title to any Aircraft (other than as
such title may be affected by the Security Interest of the Security Agreements in favor of
the Lender and other Permitted Liens); or

     (h) the Borrower shall fail to carry and maintain on or with respect to the Aircraft
insurance required to be maintained in accordance with the provisions of the Security
Agreements; or

     (i) the Borrower shall fail to maintain the Aircraft in accordance with the provisions
of the Security Agreements, which failure shall cause the Aircraft to be grounded, whether
temporarily or permanently;

     (j) a default or event of default shall have occurred under any of the Loan and
Security Documents, and such default or event of default shall not have been cured within
the time period, if any, allowed for such cure; or

     (k) the occurrence of an Event of Default under that certain Credit Enhancement
Agreement between Borrower and Guarantor.

then, and in any such event, (A) if such event is an Event of Default specified in clause (e)
above, automatically the Loan hereunder (with accrued interest thereon) and all other amounts owing
under this Loan Agreement (including the Prepayment Fee), the Note and the other Basic Agreements
will immediately become due and payable and (B) if such event is any other Event of Default, the
Lender may declare the Loan hereunder (with accrued interest thereon) and all other amounts owing
under this Loan Agreement (including the Prepayment Fee), the Note and the other Basic Agreements,
to be due and payable whereupon the same will immediately become due and payable. In addition to
the foregoing, if any Event of Default will occur, the Lender may exercise all rights and remedies
provided for under the Security Agreements and the other Basic Agreements and applicable law.
Except as expressly provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.

7. MISCELLANEOUS.

     7.1 Amendments and Waivers. Neither this Loan Agreement, the Note, nor any other Basic
Agreement, nor any terms hereof or thereof may be amended, supplemented, waived or modified except
in accordance with the provisions of this subsection. Any such waiver and any such amendment,
supplement or modification will be in writing and executed by the

Page 19 

 

Borrower and the Lender and will be binding upon the Borrower, the Guarantor and the Lender.
In the case of any written waiver, the Borrower and the Lender will be restored to their former
position and rights hereunder and under the outstanding Note and any other Basic Agreements, and
any Default or Event of Default waived in writing will be deemed to be cured and not continuing;
but no such waiver will extend to any subsequent or other Default or Event of Default, or impair
any right consequent thereon. No previous course of dealing between the parties hereto will serve
to waive or prejudice the rights of the Lender hereunder or under any of the Basic Agreements.

     7.2 Notices and Accounts. All notices, requests and demands to or upon the respective parties
hereto to be effective will be in writing (including telecopy) and sent by personal delivery,
reputable overnight courier or telecopy (any such telecopied notice to be followed within twenty
four (24) hours by written notice by personal delivery or reputable overnight courier), and, unless
otherwise expressly provided herein, will be deemed to have been duly given or made upon receipt
thereof (which, in the case of a telecopy, will be deemed to be the time of receipt by the sender
of a confirmation report that all pages of the telecopy transmission were properly transmitted;
provided, however, that if the telecopy was transmitted later than 5:00 p.m., the recipient’s local
time, the telecopy will be deemed to have been received on the succeeding Business Day), addressed
as follows, or to such other address as may be hereafter notified by the respective parties hereto
and any future holders of the Note:

     The Borrower:

Gulfstream International Airlines, Inc.

1815 Griffin Road

Dania, Florida 33004

Telephone: (954) 359-8286

Facsimile: (954) 266-3030

     The Lender:

Irwin Union Bank and Trust Company

224 South 200 West, Suite 100

Salt Lake City, Utah 84101

Telephone: (801) 532-3383

Facsimile: (801) 532-6966

Page 20 

 

     with a copy to:

Kevin G. Glade

Ellen J.D. Toscano

Ray Quinney & Nebeker P.C.

36 South State Street, Suite 1400

Salt Lake City, Utah 84111

Telephone: (801) 532-1500

Facsimile: (801) 532-7543

Payment Instructions for the Borrower:

	 	 	 	 	 	 	 
	 

	 	Bank: Irwin Union Bank and Trust Company

	 

	 	 	 	 	 	 
	 

	 	ABA No.:  074902341	 
	 

	 	For Credit to:  Irwin Union Bank and Trust Company

	 

	 	 	 	 	 	 
	 

	 	Account Name: Irwin Union Commercial Loans

	 

	 	Reference:
Gulfstream International Airlines, Inc.

     7.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the
part of the Lender, any right, remedy, power or privilege hereunder will operate as a waiver
thereof; nor will any single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

     7.4 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any document, certificate or statement delivered pursuant hereto or in connection
herewith will survive the execution and delivery of this Loan Agreement and the Note.

     7.5 Payment of Expenses and Taxes. Regardless of whether or not the transactions contemplated
hereby are consummated, the Borrower agrees (a) to pay or reimburse the Lender for all of its
out-of-pocket costs and expenses incurred in connection with the development, negotiation,
preparation and execution of this Loan Agreement, the Note, the Guaranty, and the other Basic
Agreements and any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to the Lender and of special FAA counsel,
approval/inspection/appraisals of the Aircraft, and any and all filing, recordation, stamp or
documentary fees, (b) to pay or reimburse the Lender for all of its out-of-pocket costs and
expenses incurred in connection with any amendment, supplement or modification to this Loan
Agreement, the Note, the Guaranty and the other Basic Documents, including without limitation, the
reasonable fees and disbursements of counsel to the Lender and of special FAA counsel, (c) to pay
or reimburse the Lender for all its costs and expenses incurred in connection with the enforcement
or preservation of any rights under this Loan Agreement, the Note, the Guaranty, the other Basic
Agreements and any such other documents, including, without limitation,

Page 21 

 

reasonable fees and disbursements of counsel to the Lender, and (d) to pay, indemnify, and
hold the Lender harmless for, from and against any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp, documentary, excise
and other taxes, if any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in respect of, this
Loan Agreement, the Note, the Guaranty, the other Basic Agreements and any such other documents.
Unless otherwise specifically provided herein, such expenses shall be paid by wire transfer of
immediately available funds to the Lender’s account specified in Section 7.2 hereof within five (5)
Business Days after the Lender’s request for such reimbursement or payment.

     7.6 Successors and Assigns. This Loan Agreement will be binding upon and inure to the benefit
of the Borrower, the Lender, all future holders of the Note and their respective successors and
assigns; provided, however, that the Borrower may not assign or transfer any of its rights or
obligations under this Loan Agreement and the other Basic Agreements without the prior written
consent of the Lender, which consent may be granted or withheld in the Lender’s sole discretion. It
is understood and agreed that the Lender may, without the consent (prior or otherwise) of the
Borrower, assign or otherwise transfer or participate all or any portion of its right, title and
interest in and to this Loan Agreement (including the Loan and the Note) and any of the other Basic
Agreements and the Collateral. The Borrower will comply, at the Lender’s expense, with all
reasonable requests of the Lender in connection with any such assignment or other transfer or
participation including, without limitation, the execution of all consents and amendments in a form
reasonably acceptable to the Borrower and the other party or parties thereto and the making of any
and all filings reasonably required by the Lender.

     7.7 Counterparts. This Loan Agreement may be executed in multiple counterparts, which when
any, but not necessarily the same, counterpart is executed by all of the parties will constitute
the binding agreement of each.

     7.8 Severability. Any provision of this Loan Agreement which is prohibited or unenforceable in
any jurisdiction will, as to such jurisdiction, 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 will not invalidate or render unenforceable such provision in
any other jurisdiction.

     7.9 Integration. This Loan Agreement represents the agreement of the Borrower and the Lender
with respect to the subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Lender relative to subject matter hereof not expressly set forth or referred
to herein or in the other Basic Agreements.

     7.10 GOVERNING LAW. THIS LOAN AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS LOAN AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF UTAH WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Page 22 

 

     7.11 SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE PARTIES HERETO HEREBY (I) WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO
THIS LOAN AGREEMENT; (II) IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED IN SALT LAKE COUNTY, UTAH, OVER ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY MATTER ARISING FROM OR RELATED TO THIS LOAN AGREEMENT; (III) IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY
SUCH ACTION OR PROCEEDING; AND (IV) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
WILL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS PARAGRAPH WILL AFFECT OR IMPAIR ANY PARTY’S RIGHT TO
SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW OR ANY PARTY’S RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OTHER PARTY OR ITS RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER
JURISDICTION.

     7.12 Acknowledgments. The Borrower hereby acknowledges that:

     (a) it has been advised by counsel in the negotiation, execution and delivery of this
Loan Agreement, the Note and the other Basic Agreements; and

     (b) the Lender has no fiduciary relationship to the Borrower, and the relationship
between the Lender, on one hand, and the Borrower, on the other hand, is solely that of
debtor and creditor.

     7.13 Performance by the Lender of the Borrower’s Obligations. If the Borrower fails to perform
or comply with any of its agreements contained herein, the Lender may, but will have no obligation
or duty to, itself perform or comply, or otherwise cause performance or compliance, with such
agreement, and any and all expenses of the Lender incurred in connection with such performance or
compliance, together with interest thereon at the Default Rate, will be payable by the Borrower to
the Lender on demand and will constitute Obligations secured by the Security Agreements.

8. BROKER’S COMMISSION.

     The transaction contemplated hereby is being entered into without benefit of a broker. Should
any Person assert any claim against the Borrower or the Lender for fees or commissions by reason of
any alleged employment to act as a broker for either the Borrower or the Lender in regard to this
transaction, the party for which said person claims to have acted will defend, indemnify, and hold
harmless the other party from and against all claims, demands, liabilities, damages, losses,
judgments and expenses of every kind (including reasonable attorneys’ fees) incurred by, arising
out of or relating to said claim.

9. GUARANTY. The Borrower hereby acknowledges that the Borrower has read and understands the terms
of the Guaranty and the rights and remedies provided to the Lender and

Page 23 

 

the Guarantor therein. The Borrower hereby agrees that compliance by the Lender with the rights
given to the Guarantor shall not waive, affect or limit the rights of the Lender under the Basic
Agreement. A determination by Lender to pursue one or more of the courses of action recommended by
Guarantor with respect to one or more of the Aircraft shall not be a basis for (i) a claim or
defense that Lender was not commercially reasonable in its disposition of one or more of the
Aircraft under Section 70A-9a-609 of the Utah Uniform Commercial Code or (ii) a claim or defense
under Section 70A-9a-626 of the Utah Uniform Commercial Code that Lender failed to comply with the
requirements of Part 6 the Utah Uniform Commercial Code.

[signatures follow on next page]

Page 24 

 

     IN WITNESS WHEREOF, each of the parties hereto has caused this Loan Agreement to be duly
executed and delivered by its duly authorized representative as of the day and year first above
written.

	 	 	 	 	 	 	 
	 	 	GULFSTREAM INTERNATIONAL AIRLINES, INC.,
	 	 	as Borrower
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas P. Cooper	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Thomas P. Cooper	 	 
	 

	 	Title:
	 	Senior Vice President – Legal Affairs	 	 
	 
	 	 	 	 	 	 
	 	 	IRWIN UNION BANK AND
TRUST COMPANY,
as Lender
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Rick Stevenson	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Rick Stevenson	 	 
	 

	 	Title:
	 	Market Presidentexv10w23

 

Exhibit 10.23

GULFSTREAM ACQUISITION GROUP, INC.

STOCK INCENTIVE PLAN

 

 

GULFSTREAM ACQUISITION GROUP, INC.

STOCK INCENTIVE PLAN

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	1.	 	Purpose of the Plan	 	 	1	 
	2.	 	Definitions	 	 	1	 
	 	 	A.	 	“Act”
	 	 	1	 
	 	 	B.	 	“Award”
	 	 	1	 
	 	 	C.	 	“Award Agreement”
	 	 	1	 
	 	 	D.	 	“Board”
	 	 	1	 
	 	 	E.	 	“Cash-Based Award”
	 	 	1	 
	 	 	F.	 	“Change in Control”
	 	 	1	 
	 	 	G.	 	“Code”
	 	 	2	 
	 	 	H.	 	“Committee”
	 	 	2	 
	 	 	I.	 	“Company”
	 	 	2	 
	 	 	J.	 	“Fair Market Value”
	 	 	2	 
	 	 	K.	 	“Incentive Stock Option”
	 	 	2	 
	 	 	L.	 	“Non-qualified Stock Option”
	 	 	2	 
	 	 	M.	 	“Option”
	 	 	2	 
	 	 	N.	 	“Other Stock-Based Award”
	 	 	2	 
	 	 	O.	 	“Parent”
	 	 	2	 
	 	 	P.	 	“Participant”
	 	 	2	 
	 	 	Q.	 	“Plan”
	 	 	2	 
	 	 	S.	 	“Stock”
	 	 	2	 
	 	 	T.	 	“Stock Appreciation Right”
	 	 	2	 
	 	 	U.	 	“Subsidiary”
	 	 	3	 
	3.	 	Stock Subject to the Plan.	 	 	3	 
	4.	 	Administration	 	 	3	 
	5.	 	Committee	 	 	3	 
	6.	 	Options	 	 	3	 
	 	 	A.	 	Type of Option
	 	 	3	 
	 	 	C.	 	Exercise – Elections and Restrictions
	 	 	4	 
	 	 	D.	 	Option Terms
	 	 	4	 
	 	 	E.	 	Successive Option Grants.
	 	 	5	 
	 	 	F.	 	Additional Incentive Stock Option Requirements
	 	 	5	 
	 	 	G.	 	Deferral of Gain on a Non-qualified Stock Option
	 	 	5	 
	7.	 	Stock Appreciation Rights	 	 	5	 
	8.	 	Other Stock-Based Awards and Cash-Based Awards	 	 	5	 
	9.	 	Performance-Based Awards	 	 	6	 
	10.	 	Nontransferability of Awards	 	 	6	 
	11.	 	Investment Purpose	 	 	6	 
	 	 	A.	 	Right of First Refusal
	 	 	7	 
	 	 	B.	 	Take-Along Rights
	 	 	8	 
	 	 	C.	 	Effect of Prohibited Transfer
	 	 	8	 
	 	 	D.	 	Buy-Back Rights
	 	 	8	 
	 	 	E.	 	Exceptions to Transfer Restrictions
	 	 	8	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	F.	 	Termination of Transfer Restrictions.
	 	 	8	 
	12.	 	Adjustments Upon Changes in Capitalization or Corporation Acquisitions	 	 	8	 
	13.	 	Amendment and Termination	 	 	9	 
	14.	 	Effectiveness of the Plan	 	 	9	 
	15.	 	Time of Granting of an Award	 	 	9	 
	16.	 	Term of Plan	 	 	9	 
	17.	 	No Right To Continued Employment	 	 	9	 

ii

 

GULFSTREAM ACQUISITION GROUP, INC.

STOCK INCENTIVE PLAN

1. Purpose of the Plan. The purpose of the Plan is to provide the Company with a means to
assist in recruiting, retaining and rewarding certain employees, directors and consultants and to
motivate such individuals to exert their best efforts on behalf of the Company by providing
incentives through the granting of Awards. By granting Awards to such individuals, the Company
expects that the interests of the recipients will be better aligned with those of the Company.

2. Definitions. Unless the context clearly indicates otherwise, the following capitalized
terms shall have the meanings set forth below:

	 	A.	 	“Act” means the Securities Exchange Act of 1934, as amended, or any successor
thereto.
	 
	 	B.	 	“Award” means a grant under the Plan of an Option, Stock Appreciation
Right, Cash-Based Award or Other Stock-Based Award.
	 
	 	C.	 	“Award Agreement” means an agreement entered into between the Company and a
Participant setting forth the terms and provisions applicable to Awards granted under
the Plan.
	 
	 	D.	 	“Board” means the Board of Directors of the Company.
	 
	 	E.	 	“Cash-Based Award” means an Award described in Section 8 as a Cash-Based Award.
	 
	 	F.	 	“Change in Control” means (i) the purchase or other acquisition after the date
hereof (other than from the Company) by any person, entity or group of persons, within
the meaning of §13(d) or §14(d) of the Act (excluding, for this purpose, the Company or
its subsidiaries or any employee benefit plan of the Company or its subsidiaries), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of
51% or more of either the then-outstanding shares of common stock of the Company or the
combined voting power of the Company’s then-outstanding voting securities entitled to
vote generally in the election of directors; or (ii) individuals who, as of the date
hereof, constitute the Board (and, as of the date hereof, the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board, provided that any person
who becomes a director subsequent to
the date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to
the election of directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Act) shall be, for purposes of this section,
considered as though such person were a member of the Incumbent Board; or (iii)
approval by the stockholders of the Company of a reorganization, merger or
consolidation, in each case with respect to which persons who were the stockholders
of the Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50% of, respectively, the common stock
and the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated corporation’s then-outstanding
voting securities, or of a liquidation or dissolution of the Company or of the sale
of all or substantially all of the assets of the Company.

1

 

	 	G.	 	“Code” means the Internal Revenue Code of 1986, as amended, or any successor
thereto.
	 
	 	H.	 	“Committee” means the committee described in Section 5.
	 
	 	I.	 	“Company” means Gulfstream Acquisition Group, Inc., a Delaware corporation.
	 
	 	J.	 	“Fair Market Value” means (i) if there should be a public market for the
relevant Stock on the determination date, the arithmetic mean between the high and low
of prices of such Stock as reported on such date on the Composite Tape of the principal
national securities exchange or, if applicable, the NASDAQ National Market on which
such Stock is listed or admitted to trading, or, if such Stock is not listed or
admitted on any national securities exchange or the NASDAQ National Market, the
arithmetic mean of the per share closing bid price and per share closing asked price on
such date as quoted on the National Association of Securities Dealers Automated
Quotation System (or such market in which such prices are regularly quoted) (“NASDAQ”),
or if no sale of such shares shall have been reported on the Composite Tape of any
national securities exchange or the NASDAQ National Market or quoted on the NASDAQ on
such date, then the immediately preceding date on which sales of such shares have been
so reported or quoted shall be used, and (ii) if there should not be a public market
for the Stock on such date, the value established by the Committee in good faith.
	 
	 	K.	 	“Incentive Stock Option” means a stock option which is an incentive stock
option within the meaning of Code §422.
	 
	 	L.	 	“Non-qualified Stock Option” means a stock option which is not an Incentive
Stock Option.
	 
	 	M.	 	“Option” means both an Incentive Stock Option and a Non-Qualified Stock Option.
	 
	 	N.	 	“Other Stock-Based Award” means an Award granted pursuant to Section 8 and
described as an Other Stock-Based Award.
	 
	 	O.	 	“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the Option,
each of the corporations other than the Company owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain, or such other meaning as may be hereafter ascribed to it in
Code §424.
	 
	 	P.	 	“Participant” means an employee, director or consultant of the Company who is
selected by the Committee to receive an Award.
	 
	 	Q.	 	“Plan” means the Gulfstream Acquisition Group, Inc. 2006 Stock Incentive Plan.
	 
	 	R.	 	“Public Offering” means the creation of an active trading market in Common Stock by the sale
of Common Stock to the public pursuant to a registration statement under the Securities Act of
1933.
	 
	 	S.	 	“Stock” means the common stock of the Company.
	 
	 	T.	 	“Stock Appreciation Right” means a stock appreciation right described in
Section 7.

2

 

	 	U.	 	“Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of granting an Award,
each of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain, or such other meaning as may be
hereafter ascribed to it in Code §424.

3. Stock Subject to the Plan. One hundred thirteen thousand one hundred thirty eight
(113,138) shares of Stock have been allocated to the Plan and will be reserved to satisfy Awards
under the Plan. The Company may, in its discretion, use shares held in the treasury in lieu of
authorized but unissued shares. If any Award shall expire or terminate for any reason, the shares
subject to the Award shall again be available for the purposes of the Plan. Any shares of Stock
which are used by a Participant as full or partial payment to the Company to
satisfy a purchase price related to an Award shall again be available for the purposes of the Plan.
To the extent any shares subject to an Award are not delivered to a Participant because such
shares are used to satisfy an applicable tax-withholding obligation, such withheld shares shall
again be available for the purposes of the Plan.

4. Administration. The Plan shall be administered by the Committee. Subject to the
express provisions of the Plan, the Committee shall have plenary authority, in its discretion, to
determine the individuals to whom, and the time or times at which, Awards shall be granted and the
number of shares, if applicable, to be subject to each Award. In making such determinations, the
Committee may take into account the nature of services rendered by the respective individuals,
their present and potential contributions to the Company’s success and such other factors as the
Committee, in its discretion, shall deem relevant. Subject to the express provisions of the Plan,
the Committee shall also have plenary discretionary authority to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it, to determine the terms and provisions of
the respective Award Agreements (which need not be identical) and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee’s determinations on the
matters referred to in this Section 4 shall be conclusive.

5. Committee. When and if formed, the Committee shall be comprised of directors on the
compensation committee of the Board. A majority of its members shall constitute quorum. All
determinations of the Committee shall be made by a majority of its members present at any meeting
at which there is a quorum. Any decision or determination reduced to writing and signed by all of
the members shall as effective as if it had been made by a majority vote at a meeting duly called
and held. The Committee may appoint a secretary, shall keep minutes of its meetings and shall make
such rules and regulations for the conduct of its business as it shall deem advisable. The
Committee may, to the extent permitted by law, delegate its responsibilities and authority
hereunder to an officer of the Company.

          When and if formed, the Committee shall be appointed by the Board, which may from time to time
appoint members of the Committee in substitution for members previously appointed and may fill
vacancies, however caused, in the Committee. Before the Committee is formed, the term “Committee”
as used herein means the entire Board.

6. Options. The Committee, in its discretion, may grant Options which are Incentive
Stock Options or Non-qualified Stock Options, as evidenced by the Award Agreement, and shall be
subject to the foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:

	 	A.	 	Type of Option. Incentive Stock Options may be granted to any
individual classified by the Committee as an employee of the Company, a Parent or a
Subsidiary. A Non-Qualified Stock Option may be granted to any individual selected by
the Committee.

3

 

	 	B.	 	Option Prices. The purchase price of the Stock under each Incentive
Stock Option shall not be less than 100% of the Fair Market Value of the Stock at
the time of the granting of the Option; provided that, in
the case of a Participant who owns more than 10% of the total combined voting power
of all classes of stock of the Company, a Parent or a Subsidiary, the purchase price
of the Stock under each Incentive Stock Option shall not be less than 110% of the
Fair Market Value of the Stock on the date such Option is granted. The purchase
price of the Stock under each Non-qualified Stock Option shall be determined from
time to time by the Committee, which need not be uniform for all Participants, and
shall not be less than 100% of Fair Market Value.
	 
	 	C.	 	Exercise – Elections and Restrictions. The purchase price for an Option
is to be paid in full upon the exercise of the Option, either (i) in cash, (ii) in
the discretion of the Committee, by the tender to the Company (either actual or by
attestation) of shares of Stock already owned by the Participant for a period of at
least six months as of the date of tender and registered in his or her name, having
a Fair Market Value equal to the cash exercise price of the Option being exercised,
or (iii) in the discretion of the Committee, by any combination of the payment
methods specified in clauses (i) and (ii) hereof; provided that, no shares of Stock
may be tendered in exercise of an Incentive Stock Option if such shares were
acquired by the Participant through the exercise of an Incentive Stock Option unless
(a) such shares have been held by the Participant for at least one year and (b) at
least two years have elapsed since such prior Incentive Stock Option was granted;
and provided further that, unless otherwise specifically provided in an Award
Agreement, until such time as a Public Offering shall occur, the only method of
payment of the purchase price for an Option shall be cash. The Committee may
provide in an Award Agreement that payment in full of the option price need not
accompany the written notice of exercise provided that the notice of exercise
directs that the certificate or certificates for the shares of Stock for which the
Option is exercised be delivered to a licensed broker acceptable to the Company as
the agent for the individual exercising the Option and, at the time such certificate
or certificates are delivered, the broker tenders to the Company cash (or cash
equivalents acceptable to the Company) equal to the option price for the shares of
Stock purchased pursuant to the exercise of the Option plus the amount (if any) of
any withholding obligations on the part of the Company. The proceeds of sale of
Stock subject to the Option are to be added to the general funds of the Company or
to the shares of the Stock held in its Treasury, and used for its corporate purposes
as the Board shall determine.
	 
	 	D.	 	Option Terms. The term of each Option shall not be more than ten years
from the date of granting thereof or such shorter period as is prescribed in the
Award Agreement; provided that, in the case of a Participant who owns more than 10%
of the total combined voting power of all classes of stock of the Company, a Parent
or a Subsidiary, the term of any Incentive Stock Option shall not be more than five
years from the date of granting thereof or such shorter period as prescribed in the
Award Agreement. Within such limit, Options will be exercisable at such time or
times, and subject to such restrictions and conditions, as the Committee shall, in
each instance, approve, which need not be uniform for all Participants. The holder
of an Option shall have none of the rights of a stockholder with respect to the
shares subject to Option until such shares shall be issued to him or her upon the
exercise of his or her Option. Upon exercise of an Option, the Committee shall
withhold a sufficient number of shares to satisfy the Company’s minimum required
statutory withholding obligations for any taxes incurred as a result of such
exercise (based on the minimum statutory withholding rates for federal and state tax
purposes, including payroll
taxes); provided that, in lieu of all or part of such

4

 

	 	 	 	withholding, the Participant
may pay an equivalent amount of cash to the Company.
	 
	 	E.	 	Successive Option Grants. As determined by the Committee, successive
option grants may be made to any Participant under the Plan.
	 
	 	F.	 	Additional Incentive Stock Option Requirements. The maximum aggregate
Fair Market Value (determined at the time an Option is granted) of the Stock with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under all plans of the Company, a Parent and a
Subsidiary) shall not exceed $100,000. A Participant who disposes of Stock acquired
upon the exercise of an Incentive Stock Option either (i) within two years after the
date of grant of such Incentive Stock Option or (ii) within one year after the
transfer of such shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition.
	 
	 	G.	 	Deferral of Gain on a Non-qualified Stock Option. In accordance with
the terms of the applicable non-qualified deferred compensation plan, if any, in which
a Participant is eligible to participate, a Participant may elect to defer any gain
realized upon the exercise of a Non-qualified Stock Option. The election to defer the
gain must be made in accordance with the applicable non-qualified deferred compensation
plan, if any.

7. Stock Appreciation Rights.

	 	A.	 	Grant Terms. The Committee may grant a Stock Appreciation Right
independent of an Option or in connection with an Option or a portion thereof. A
Stock Appreciation Right granted in connection with an Option or a portion thereof
shall cover the same shares of Stock covered by the Option, or a lesser number as
the Committee may determine. A Stock Appreciation Right shall be subject to the
same terms and conditions as an Option, and any additional limitations set forth in
this Section 7 or the Award Agreement.
	 
	 	B.	 	Exercise Terms. The exercise price per share of Stock of a Stock
Appreciation Right shall be an amount determined by the Committee and shall not be
less than 100% of Fair Market Value. A Stock Appreciation Right granted independent
of an Option shall entitle the Participant upon exercise to a payment from the
Company in an amount equal to the excess of the Fair Market Value on the exercise
date of a share of Stock over the exercise price per share, times the number of
Stock Appreciation Rights exercised. A Stock Appreciation Right granted in
connection with an Option shall entitle the Participant to surrender an unexercised
Option (or portion thereof) and to receive in exchange an amount equal to the excess
of the Fair Market Value on the exercise date of a share of Stock over the exercise
price per share for the Option, times the number of shares covered by the Option (or
portion thereof) which is surrendered. Payment may be made, in the discretion of
the Committee, in (i) Stock, (ii) cash or (iii) any combination of Stock and cash. Cash
shall be paid for fractional shares of Stock upon the exercise of a Stock
Appreciation Right.
	 
	 	C.	 	Limitations. The Committee may impose such conditions upon the
exercisability or transferability of Stock Appreciation Rights as it determines in
its sole discretion.

8. Other Stock-Based Awards and Cash-Based Awards. The Committee may, in its sole
discretion, grant Awards of Stock, restricted Stock and other Awards that are valued in whole or in
part by reference to the Fair Market Value of Stock. These Awards shall collectively be referred
to herein as Other Stock-Based Awards. The Committee may also, in its sole discretion, grant
Cash-Based Awards, which shall have a value as may be determined by the Committee. Other
Stock-Based Awards shall be in

5

 

such form, and dependent on such conditions, as the Committee shall
determine, including, but not limited to, the right to receive one or more shares of Stock (or the
cash-equivalent thereof) upon the completion of a specified period of service, the occurrence of an
event or the attainment of performance objectives. Other Stock-Based Awards and Cash-Based Awards
may be granted with or in addition to other Awards. Subject to the other terms of the Plan, Other
Stock-Based Awards and Cash-Based Awards may be granted to such Participants in such amounts and
upon such terms, and at any time and from time to time, as shall be determined by the Committee and
set forth in an Award Agreement.

9. Performance-Based Awards. To the extent applicable, the Committee may, in its sole and
absolute discretion, determine that certain Other Stock-Based Awards and/or Cash-Based Awards
should be subject to such requirements so that they are deductible by the Company under Code
§162(m). If the Committee so determines, such Awards shall be considered Performance-Based Awards
subject to the terms of this Section 9, as provided in the Award Agreement. A Performance-Based
Award shall be granted by the Committee in a manner to satisfy the requirements of Code §162(m) and
the regulations thereunder. The performance measures to be used for purposes of a
Performance-Based Award shall be chosen by the Committee, in its sole and absolute discretion, from
among the following: earnings per share of Stock; book value per share of Stock; net income (before
or after taxes); operating income; return on invested capital, assets or equity; cash flow return
on investments which equals net cash flows divided by owners’ equity; earnings before interest or
taxes; gross revenues or revenue growth; market share; expense management; improvements in capital
structure; profit margins; Stock price; total stockholder return; free cash flow; or working
capital. The performance measures may relate to the Company, a Parent, a Subsidiary, or one or
more units of such an entity.

          The Committee shall determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to an Award and, if they have, to so certify and
ascertain the amount of the applicable Performance-Based Award. The Committee shall have the
discretion to adjust Performance-Based Awards downward.

          For calendar years beginning after the “reliance period” defined in Treas. Reg.
§1.162-27(f)(2) or any successor thereto with respect to the Company, an Award shall be a
Performance-Based Award only if the Committee consists solely of two or more Outside Directors
within the meaning of Treas. Reg. §1.162-27(e)(3) or any successor thereto.

10. Nontransferability of Awards. Unless otherwise determined by the Committee and
expressly set forth in an Award Agreement, an
Award granted under the Plan shall, by its terms, be non-transferable otherwise than by will or the
laws or descent and distribution and an Award may be exercised, if applicable, during the lifetime
of the Participant thereof, only by the Participant or his or her guardian or legal representative.
Notwithstanding the above, the Committee may not provide in an Award Agreement that an Incentive
Stock Option is transferable.

11. Investment Purpose. Each Award under the Plan shall be awarded only on the condition
that all purchases of Stock thereunder shall be for investment purposes, and not with a view to
resale or distribution, except that the Committee may make such provision with respect to Awards
granted under this Plan as it deems necessary or advisable for the release of such condition upon
the registration with the Securities and Exchange Commission of Stock subject to the Award, or upon
the happening of any other contingency warranting the release of such condition.

          If deemed advisable by the Committee, the certificates evidencing the shares acquired by the
Participant pursuant to this Plan may bear a restrictive legend, if appropriate, indicating that
the shares have not been registered under said Act and are subject to restrictions on the transfer
thereof, which legend may be in the following form (or such other form as the Company shall
determine to be proper), to-wit:

6

 

	 	 	 	“The shares represented by this certificate have not been registered under
the Securities Act of 1933, but have been issued or transferred to the
registered owner pursuant to the exemption afforded by Section 4(2) of said
Act. No transfer or assignment of these shares by the registered owner
shall be valid or effective, and the issuer of these shares shall not be
required to give any effect to any transfer or attempted transfer of these
shares, including without limitation, a transfer by operation of law, unless
(a) the issuer shall have received an opinion of its counsel that the shares
may be transferred without requirement of registration under said Act, or
(b) there shall have been delivered to the issuer a ‘no-action’ letter from
the staff of the Securities and Exchange Commission, or (c) the shares are
registered under said Act.”

          In addition to the restrictions described above, the Participant may not sell, pledge,
transfer, donate, assign or otherwise dispose of (collectively, “transfer”), whether voluntarily or
by operation of law, any shares of Stock acquired pursuant to the Plan except as provided in this
Section 11.

	 	A.	 	Right of First Refusal.

	 	i.	 	If the Participant intends to transfer any shares of Stock
pursuant to a bona fide purchase offer of an offeror who has agreed to be bound
by transfer and buy/sell restrictions identical to those to which the
Participant is subject (“Offeror”), the Participant shall deliver to the
Company a written notice (“Notice”) of such intention to transfer such shares,
setting forth in reasonable detail: (A) the proposed price, (B) the number of
shares proposed to be transferred, (C) the other terms and conditions of the
proposed transfer of such shares, (D) an offer to sell the shares to the
Company as provided herein and (E) the identity of the Offeror. The shares
proposed to be transferred are hereinafter referred to as the “Offered Shares.”
	 
	 	ii.	 	The Company may elect to purchase all (but not less than all)
of the Offered Shares at any time during the 30-day period following its
receipt of the Notice. The Company shall be entitled to purchase the Offered
Shares from the Participant at the same price and on the same terms and conditions as those
pursuant to which the Participant proposes to transfer the Offered Shares,
as described in the Notice. If the Company fails to respond to such offer
within the 30-day period, it shall be deemed to have rejected the offer.
	 
	 	iii.	 	Unless the Participant and the Company otherwise agree, the
closing of the purchase of the Offered Shares shall take place at the principal
offices of the Company at 10:00 a.m. on the tenth day (or if such day is not a
business day on the next business day) after the expiration of the 30-day
period. At the closing, the Participant shall tender the Offered Shares,
together with appropriate instruments of transfer endorsed to the Company, and
the Company shall tender a certified check, cashier’s check or a wire transfer
of immediately available funds in the amount of the purchase price therefore.
	 
	 	iv.	 	If the Offered Shares are not purchased by the Company pursuant
to this Section 11, the Participant shall be entitled to sell all of the
Offered Shares to the Offeror at the price and on the terms and conditions
specified in the Notice, provided that such sale is consummated within 120 days
from the date the Notice is delivered to the Company. For any sale of shares
after such 120-day period,

7

 

	 	 	 	the Participant shall give a new notice which shall
reinstate the rights of the Company set forth in this Section 11 to purchase
the Offered Shares.

	 	B.	 	Take-Along Rights. If an Offeror desires to purchase all of the
outstanding shares of Stock and if the owners of at least 50% of the outstanding shares
desire to make such sale, the Participant agrees to sell all of his or her shares to
such Offeror on the terms and conditions approved by the owners of at least 50% of the
outstanding shares.
	 
	 	C.	 	Effect of Prohibited Transfer. If any transfer of shares is made or
attempted by a Participant other than in accordance with the terms of this Plan and the
Award Agreement, the Company may refuse for any purpose to recognize any transferee who
receives shares and any such transferee shall have no right to claim or retain any
dividends on such shares which were paid or become payable subsequent to the date on
which the prohibited transfer was made or attempted. In addition to any other legal or
equitable rights that it may have, the Company may enforce its rights by specific
performance to the extent permitted by law.
	 
	 	D.	 	Buy-Back Rights. If the Participant terminates employment for any
reason, the Participant must, upon request by the Committee, sell his or her shares of
Stock to the Company at a price equal to the Fair Market Value, as defined in the Plan,
of such shares of Stock on the date of such sale. The Company shall exercise the
buy-back right with respect to a Participant no later than 12 months after the date the
Participant terminates employment.
	 
	 	E.	 	Exceptions to Transfer Restrictions. Notwithstanding anything to the
contrary in this Plan and Award Agreement, the restrictions upon transfer set forth in
this Section 11 shall not apply to a transfer of shares of Stock
by a Participant to any of (i) the Participant’s heirs, executors, administrators or
other personal representative upon death of the Participant or (ii) the
Participant’s spouse, children or grandchildren, or a trust for their or the
Participant’s benefit; provided that, the restrictions on transfer in this Section
11 shall continue to apply to the shares received by any such permitted transferee,
including without limitation that such permitted transferee shall not again transfer
such shares except in accordance with this Section 11.
	 
	 	F.	 	Termination of Transfer Restrictions. The restrictions described in
Sections 11(A) through 11(E) shall apply except as provided otherwise in the Award
Agreement and shall terminate on the earlier of a Public Offering of shares of Stock
or mutual agreement of the parties to an Award Agreement.

12. Adjustments Upon Changes in Capitalization or Corporation Acquisitions.
Notwithstanding any other provisions of the Plan, the Award Agreements may contain such provisions
as the Committee shall determine to be appropriate for the adjustment of the number and class of
shares subject to each outstanding Award and the exercise prices, if applicable, in the event of
changes in the outstanding Stock by reason of stock dividends, recapitalization, mergers,
consolidations, split-ups, combinations or exchanges of shares and the like, and, in the event of
any such change in the outstanding Stock, the aggregate number and class of shares available under
the Plan and the maximum number of shares as to which Awards may be granted to an individual shall
be appropriately adjusted by the Committee, whose determination shall be conclusive. In the event
the Company, a Parent or a Subsidiary enters into a transaction described in §424(a) of the Code
with any other corporation, the Committee may grant options to employees or former employees of
such corporation in substitution of options previously granted to them upon such terms and
conditions as shall be necessary to qualify such grant as a substitution

8

 

described in §424(a) of the Code.

          In the event of a Change in Control, notwithstanding any other provisions of the Plan or an
Award Agreement to the contrary, the Committee may, in its sole discretion, provide for:

     A. Accelerated vesting of any outstanding Awards that are otherwise unexercisable or
unvested as of a date selected by the Committee;

     B. Issuance of substitute Awards to substantially preserve the terms of any Awards
previously granted under the Plan.

13. Amendment and Termination. The Board may at any time terminate the Plan, or make such
modifications to the Plan as it shall deem advisable; provided, however, that the Board may not,
without further approval by the holders of Stock, increase the maximum number of shares as to which
Awards may be granted under the Plan (except under the anti-dilution provisions of Section 12), or
change the class of employees to whom Incentive Stock Options may be granted, or withdraw the
authority to administer the Plan from a committee whose members satisfy the requirements of Section
5. No termination or amendment of the Plan may, without the consent of the Participant to whom any
Award shall theretofore have been granted, adversely affect the rights of such Participant under
such Award.

14. Effectiveness of the Plan. The Plan shall become effective upon adoption by the Board subject, however, to its further
approval by the stockholders of the Company given within 12 months of the date the Plan is adopted
by the Board at a regular meeting of the stockholders or at a special meeting duly called and held
for such purpose. Grants of Awards may be made prior to such stockholder approval but all Award
grants made prior to stockholder approval shall be subject to the obtaining of such approval and if
such approval is not obtained, such Awards shall not be effective for any purpose.

15. Time of Granting of an Award. An Award grant under the Plan shall be deemed to be made
on the date on which the Committee, by formal action of its members duly recorded in the records
thereof, makes an Award to a Participant (but in no event prior to the adoption of the Plan by the
Board); provided that, such Award is evidenced by a written Award Agreement duly executed on behalf
of the Company and on behalf of the Participant within a reasonable time after the date of the
Committee action.

16. Term of Plan. This Plan shall terminate ten years after the date on which it is
approved and adopted by the Board and no Award shall be granted hereunder after the expiration of
such ten-year period. Awards outstanding at the termination of the Plan shall continue in
accordance with their terms and shall not be affected by such termination.

17. No Right To Continued Employment. Nothing in the Plan or in any Award granted pursuant
to the Plan shall confer on any individual any right to continue in the employ of the Company or
interfere in any way with the right of the Company to terminate his or her employment at any time.

18. Choice of Law. The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware without regard to conflicts of law.

The foregoing Plan was approved and adopted by the Board on March 14, 2006,

effective as of February 28, 2006.

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]