Document:

exhibit103.htm

    
      

    

     

    
      Exhibit
10.3

      
        
          	
                  Name
      of Grantee:

                	 
      
	 
      	 
      
	
                  Grant
      Date:

                	 
      

        

         

        	
                Total
      Number of Performance-Based Restricted Stock Units:

              	 
      

      

      

      

      RESTRICTED
STOCK UNIT AGREEMENT

      (PERFORMANCE-BASED)

      

      RESTRICTED
STOCK UNIT AGREEMENT (the “Agreement”), dated as of the Grant Date (as stated
above), by and between Cabela’s Incorporated, a Delaware corporation (the
“Company”), and the undersigned employee of the Company or one of its
Subsidiaries (the “Grantee”).

      

      W I T N E
S S E T H:

      

      WHEREAS,
to motivate key employees, consultants and non-employee directors of the Company
and the Subsidiaries by providing them an ownership interest in the Company, the
Board of Directors of the Company (the “Board”) has established and the
stockholders of the Company have approved, the Cabela’s Incorporated 2004 Stock
Plan, as the same may be amended from time to time (the “Plan”);
and

      

      WHEREAS,
pursuant to the Plan, the Compensation Committee of the Board has authorized the
grant to the Grantee of Restricted Stock Units in accordance with the terms and
conditions of this Agreement; and

      

      WHEREAS,
the Grantee and the Company desire to enter into an agreement to evidence and
confirm the grant of such Restricted Stock Units on the terms and conditions set
forth herein.

      

      NOW,
THEREFORE, to evidence the Restricted Stock Units so granted, and to set forth
the terms and conditions governing such Restricted Stock Units, the Company and
the Grantee hereby agree as follows:

      

      1.           Grant of Performance-Based
Restricted Stock Units.  The Company hereby
evidences and confirms its grant to the Grantee, effective as of the Grant Date,
of the number of Restricted Stock Units specified above, subject to the
restrictions contained herein.  The Restricted Stock Units granted
hereunder are grouped into subdivisions referred to herein as “Tranches,” and
each Tranche constitutes [     ] of the Restricted
Stock Units granted hereunder.  Subject to the terms, conditions and
Section 162(m) performance-based vesting requirements set forth herein, one
Tranche will vest on each of the [     ] anniversary
dates, respectively, of the Grant Date (any such anniversary date being a
“Scheduled Vesting Date”).  This Agreement is subordinate to, and the
terms and conditions of the Restricted Stock Units granted hereunder are subject
to, the terms and conditions of the Plan, which are incorporated by reference
herein. If there is any inconsistency between the terms hereof and the terms of
the Plan, the terms of the Plan shall govern. Any capitalized terms used herein
without definition shall have the meanings set forth in the Plan.

      

      2.           Vesting
Requirements.  The vesting of the Restricted Stock Units (other
than pursuant to accelerated vesting in certain circumstances as provided in
Section 3(b) below) shall be subject to the satisfaction of the conditions
set forth in subsections (a) and (b) of this Section 2:

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (a)           Section 162(m) Vesting
Requirement.  The Restricted Stock Units awarded hereunder are
subject to performance vesting requirements under this Section 2(a) based
upon the achievement of the performance criteria applicable to the Performance
Period.  The achievement of such performance criteria shall be
certified by the Committee pursuant to Section 6.2 of the Plan prior to the
payment of any amount to the Grantee under this Agreement.  The
respective performance criteria shall be established by the Committee by no
later than 90 days following the beginning of the Performance
Period.  If the performance criteria for the Performance Period are
not satisfied, all of the Restricted Stock Units which would have vested if the
performance criteria were satisfied shall be immediately forfeited.

      

      (b)           Service Vesting
Requirement.  In addition to the performance vesting
requirements of Section 2(a), the right of the Grantee to receive payment
of any Tranche shall become vested only if the Grantee remains continuously
employed by the Company or a Subsidiary from the date hereof until the Scheduled
Vesting Date of such Tranche; provided, however, that nothing set forth herein
shall be deemed to modify, qualify or otherwise derogate from the requirement of
Section 6.2 of the Plan that the Committee certify in writing that the
applicable performance criteria of Section 2(a) have been satisfied prior
to the payment of any amount to the Grantee under this Agreement.

      

      All
Restricted Stock Units for which all of the requirements of this Section 2
have been satisfied shall become vested and shall thereafter be payable in
accordance with Section 3 hereof.

      

      3.           Settlement; Termination of
Employment; Proprietary Matters.    

      

      (a)           Settlement of Vested
Restricted Stock Units.    As promptly and reasonably
practicable after the later of (but no later than 60 days following the later
of) (i) the date as of which all of the applicable vesting requirements under
Section 2 hereof shall have been satisfied for the applicable Tranche; or
(ii) the date of certification of achievement of the applicable performance
criteria by the Committee, as required under Sections 2(a) hereof, the
Company shall transfer and deliver to the Grantee, in book-position or
certificate form, one share of Common Stock for each Restricted Stock Unit
becoming vested at such time; provided, however, the Company may withhold shares
of Common Stock otherwise transferable to the Grantee to the extent necessary to
satisfy withholding taxes in accordance with Section 7(f) below.

      

      (b)           Termination of
Employment.    Notwithstanding anything contained in
this Agreement to the contrary, (i) subject to the provisions of Article 8
of the Plan, if the Grantee separates from service due to his death or
Disability during the Restriction Period, a pro rata portion of the shares of
Common Stock underlying the Restricted Stock Units then held by Grantee shall
vest as of the separation of service and no longer be subject to the Restriction
Period and all Restricted Stock Units for which the Restriction Period has not
then lapsed shall be forfeited and canceled as of the date of such separation of
service, and (ii) if the Grantee’s employment is terminated for any other reason
during the Restriction Period, any Restricted Stock Units held by the Grantee
which have not vested shall be forfeited and canceled as of the date of such
termination.  If Restricted Stock Units become vested pursuant to
Section 3(b)(i) above, then, as promptly and reasonably practicable after such
vesting, but no later than 60 days following such vesting, the Company shall
transfer and deliver to the Grantee or the Grantee’s estate or personal
representative, in book-position or certificate form, one share of Common Stock
for each Restricted Stock Unit becoming vested at such time.  Subject
to the terms of any employment agreement with the Company, nothing in the
Agreement shall be deemed to confer on the Grantee any right to continue in the
employ of the Company or any Subsidiary, or to interfere with or limit in any
way the right of the Company or Subsidiary to terminate such employment at any
time.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (c)           Proprietary Matters
Agreement.  The Grantee acknowledges that, as a condition to
granting the Restricted Stock Units, the Company has required the Grantee to
enter into a Proprietary Matters Agreement with the Company pursuant to Section
3.2 of the Plan.  If a substantially similar agreement has been
executed in connection with the prior grant of Awards, the Grantee hereby
affirms such agreement; provided, if the Company requires the Grantee to execute
a new Proprietary Matters Agreement (the “New Agreement”), the Grantee
acknowledges that the New Agreement shall constitute a complete amendment and
restatement of any such previously executed agreement.

      

      4.           Grantee’s Representations,
Warranties and Covenants; Investment Intent.  The Grantee
represents and warrants that the Restricted Stock Units have been, and any
shares of Common Stock will be, acquired by the Grantee solely for the Grantee’s
own account for investment and not with a view to or for sale in connection with
any distribution thereof. The Grantee further understands, acknowledges and
agrees that the Restricted Stock Units, and any shares of Common Stock, may not
be transferred, sold, pledged, hypothecated or otherwise disposed of except to
the extent expressly permitted hereby and at all times in compliance with the
U.S. Securities Act of 1933, as amended, and the rules and regulations of the
Securities Exchange Commission thereunder, and in compliance with applicable
state securities or “blue sky” laws.

      

      5.           Grantee’s Rights with
Respect to Performance-Based Restricted Stock
Units.    

      

      (a)           Restrictions on
Transferability.  Except as provided in the Plan,
the  Restricted Stock Units granted hereby are not assignable or
transferable, in whole or in part, and may not, directly or indirectly, be
offered, transferred, sold, pledged, assigned, alienated, hypothecated or
otherwise disposed of or encumbered (including without limitation by gift,
operation of law or otherwise) other than by will or by the laws of descent and
distribution to the estate of the Grantee upon the Grantee’s death; provided
that the deceased Grantee’s beneficiary or representative of the Grantee’s
estate shall acknowledge and agree in writing, in a form reasonably acceptable
to the Company, to be bound by the provisions of this Agreement and the Plan as
if such beneficiary or the estate were the Grantee.

      

      (b)           Rights as
Stockholder.  Except as otherwise provided herein, the Grantee
shall have no rights as a stockholder with respect to the Restricted Stock Units
awarded hereunder prior to the date of issuance to the Grantee of a certificate
or certificates for such shares of Common Stock.  Any securities
issued to or received by the Grantee with respect to Restricted Stock Units as a
result of a stock split, a dividend payable in capital stock or other
securities, a combination of shares or any other change or exchange of the
Restricted Stock Units for other securities, by reclassification,
reorganization, distribution, liquidation, merger, consolidation, or otherwise,
shall have the same status as the  Restricted Stock Units and shall be
held by the Company if the  Restricted Stock Units are being so held,
unless otherwise determined by the Committee.

      

      6.           Adjustment Event/Change in
Control.  In the event of an Adjustment Event or a Change in
Control of the Company, the Grantee’s rights with respect to any Restricted
Stock Units granted pursuant to this Agreement shall be governed by the terms
and conditions of the Plan.

      

      
        
           

        

        
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      7.           Miscellaneous.

      

      (a)           Notices.  All
notices and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given if
delivered personally or sent by certified or express mail, return receipt
requested, postage prepaid, or by any recognized international equivalent of
such delivery, to the Company or the Grantee, as the case may be, at the
following addresses or to such other address as the Company or the Grantee, as
the case may be, shall specify by notice to the others:

      

      i.           if
to the Company, to:

      

      
        	 
      	
                  Cabela’s
      Incorporated

              
	 
      	
                 
      One Cabela Drive

              
	 
      	
                 
      Sidney, NE  69160

              
	 
      	
                 
      Attention:  Legal
Department

              

      

      

      ii.           if
to the Grantee, to the Grantee at the address then appearing in the personnel
records of the Company for the Grantee.  All such notices and
communications shall be deemed to have been received on the date of delivery if
delivered personally or on the third business day after the mailing thereof,
provided that the party giving such notice or communication shall have attempted
to telephone the party or parties to which notice is being given during regular
business hours on or before the day such notice or communication is being sent,
to advise such party or parties that such notice is being sent.

      

      (b)           Effect of Employment
Agreement. If the Grantee is employed pursuant to an employment agreement
with the Company, any provisions thereof relating to the effect of a termination
of the Grantee’s employment upon Grantee’s rights with respect to the Restricted
Stock Units granted hereunder, including, without limitation, any provisions
regarding acceleration of vesting and/or payment of the Restricted Stock Units
granted hereunder in the event of termination of employment, shall be fully
applicable and supersede any provisions hereof with respect to the same subject
matter; provided, however, that the vesting of the Restricted Stock Units
granted hereunder shall be prorated to the date of separation and paid on actual
performance at the end of the Performance Period (and in all events not later
than March 15th following the end of the Performance Period).

      

      (c)           Binding Effect;
Benefits.  This Agreement shall be binding upon and inure to
the benefit of the parties to this Agreement and their respective successors and
assigns.  Nothing in this Agreement, express or implied, is intended
or shall be construed to give any person other than the parties to this
Agreement or their respective successors or assigns any legal or equitable
right, remedy or claim under or in respect of any agreement or any provision
contained herein.

      

      (d)           Waiver;
Amendment.

      

      i.           Waiver.  Any
party hereto or beneficiary hereof may by written notice to the other parties
(A) extend the time for the performance of any of the obligations or other
actions of the other parties under this Agreement, (B) waive compliance with any
of the conditions or covenants of the other parties contained in this Agreement
and (C) waive or modify performance of any of the obligations of the other
parties under this Agreement.  Except as provided in the preceding
sentence, no action taken pursuant to this Agreement, including, without
limitation, any investigation by or on behalf of any party or beneficiary, shall
be deemed to constitute a waiver by the party or beneficiary taking such action
of compliance with any representations, warranties, covenants or agreements
contained herein.  The waiver by any party hereto or beneficiary
hereof of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any preceding or succeeding breach and no failure by a
party or beneficiary to exercise any right or privilege hereunder shall be
deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder
or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise
the same at any subsequent time or times hereunder.

      
        
           

        

        
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      ii.           Amendment.  This
Agreement may not be amended, modified or supplemented orally, but only by a
written instrument executed by the Grantee and the Company.

      

      (e)           Assignability.  Neither
this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by the Company or the Grantee without
the prior written consent of the other party; provided that the Company may
assign all or any portion of its rights hereunder to one or more persons or
other entities designated by it in connection with a Change in Control of the
Company.

      

      (f)           Tax
Withholding.    The Company may require the recipient
of the shares of Common Stock to remit to the Company an amount in cash
sufficient to satisfy the statutory minimum U.S. federal, state and local tax
withholding requirements as a condition to the issuance of such shares of Common
Stock. In the event any cash is paid to the Grantee or the Grantee’s estate or
beneficiary pursuant to Section 6 hereof or Article 8 of the Plan, the
Company shall have the right to withhold an amount from such payment sufficient
to satisfy the statutory minimum U.S. federal, state and local tax withholding
requirements. The Committee may, in its discretion, require or permit the
Grantee to elect, subject to such conditions as the Committee shall impose, to
meet such obligations by having the Company withhold the least number of shares
of Restricted Stock Units having a Fair Market Value sufficient to satisfy all
or part of the Grantee’s estimated total statutory minimum U.S. federal, state
and local tax obligation with respect to the issuance of or lapse of
restrictions on the shares of Common Stock.

      

      (g)           Section
409A.   It is the intention of the Company that the
Restricted Stock Units shall either (a) not constitute “nonqualified
deferred compensation” as defined under Section 409A of the Code or
(b) comply in all respects with the requirements of Section 409A of
the Code and the regulations promulgated thereunder, such that no delivery of
Shares pursuant to this Agreement will result in the imposition of taxation or
penalties as a consequence of the application of Section 409A of the Code.
Shares in respect of any  Restricted Stock Units that
(i) constitute “nonqualified deferred compensation” as defined under
Section 409A of the Code and (ii) vest as a consequence of the
Grantee’s termination of employment shall not be delivered until the date that
the Grantee incurs a “separation from service” within the meaning of
Section 409A of the Code (or, if the Grantee is a “specified employee”
within the meaning of Section 409A of the Code and the regulations
promulgated thereunder, the date that is six months following the date of such
“separation from service”). If the Company determines after the Grant Date that
an amendment to this Agreement is necessary to ensure the foregoing, it may,
notwithstanding Section 7(d), make such an amendment, effective as of the
Grant Date or any later date, without the consent of the Grantee.
Notwithstanding any provision of this Agreement or the Plan, in the event that
any taxes or penalties are imposed on the Grantee by reason of Section 409A
of the Code, the Grantee acknowledges and agrees that such taxes or penalties
shall be the exclusive obligation of the Grantee, and the Company shall have no
liability therefor.

      

      (h)           Applicable
Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEBRASKA, EXCEPT TO THE EXTENT THAT THE CORPORATE LAW OF THE STATE OF
DELAWARE SPECIFICALLY AND MANDATORILY APPLIES.

      

      (i)           Consent to Electronic
Delivery.  By executing this Agreement, Grantee hereby consents
to the delivery of information (including, without limitation, information
required to be delivered to the Grantee pursuant to applicable securities laws)
regarding the Company and the Subsidiaries, the Plan, the Restricted Stock Units
and the shares of Common Stock via Company web site or other electronic
delivery.

      
        
           

        

        
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      (j)           Severability; Blue
Pencil.  In the event that any one or more of the provisions of
this Agreement shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.  Grantee and the
Company agree that the covenants contained in this Agreement are reasonable
covenants under the circumstances, and further agree that if, in the opinion of
any court of competent jurisdiction such covenants are not reasonable in any
respect, such court shall have the right, power and authority to excise or
modify such provision or provisions of these covenants as to the court shall
appear not reasonable and to enforce the remainder of these covenants as so
amended.

      

      (k)           Section and Other Headings,
etc.  The section and other headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

      

      (l)           Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.

      

      (m)           Delegation.  All
of the powers, duties and responsibilities of the Committee specified in this
Agreement may, to the full extent permitted by applicable law, be exercised and
performed by the Board or any duly constituted committee thereof to the extent
authorized by the Board or the Committee to exercise and perform such powers,
duties and responsibilities.

      

      (n)           Gender and
Number.  Except when otherwise indicated by the context, words
in the masculine gender used herein shall include the feminine gender, the
singular shall include the plural, and the plural shall include the
singular.

      

      IN
WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of
the Grant Date.

      

      
        	 
      	
                CABELA’S
      INCORPORATED

              
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	
                Its:

              	 
      
	 
      	 
      	 
      
	 
      	 
      
	 
      	 
      	 
      	
                ,
      Grantee

              

      

       

      6

      Back to Form 8-Kgia_ex105.htm

     

    Exhibit 10.5

     

    WAIVER, CONSENT AND
INTERCREDITOR AGREEMENT

     

    THIS
WAIVER, CONSENT, AND INTERCREDITOR AGREEMENT is entered into the 26th day
of February 2010 (this “Agreement”) by and among TAGLICH BROTHERS, INC., as
collateral agent (the “Collateral Agent”) for the Purchasers listed on Exhibit A to the
“Taglich Debt Documents” (as hereinafter defined), with an address of 275
Madison Avenue, Suite 1618, New York, NY 10016 (with the Collateral Agent,
individually and collectively, the “Senior Creditor”); SHELTER ISLAND
OPPORTUNITY FUND, LLC, a Delaware limited liability company with a place of
business, c/o RAM Capital Resources, LLC, at 535 Fifth Avenue, 25th
floor, New York, NY 10017 (“Shelter Island”), and GULFSTREAM INTERNATIONAL
GROUP, INC., a Delaware corporation with a place of business at 3201 Griffin
Road, Ft. Lauderdale, Florida 33312 (“Gulfstream” or the “Debtor”).

     

    RECITALS

     

    WHEREAS,
Gulfstream is currently indebted to Shelter Island in the aggregate amount of
$3,659,000 (the “Shelter Island Debt”) pursuant to an amended and restated loan
agreement dated of even date herewith (the “Shelter Island Loan Agreement”);
and

     

    WHEREAS,
the obligations of Gulfstream to retire the Shelter Island Debt owed to Shelter
Island under the Shelter Island Loan Agreement is secured by a first priority
lien and security interest (the “Shelter Island Lien”) in and to all of the
assets and properties of Gulfstream and its Subsidiaries whether now owned or
hereafter acquired and any and all additions and accessions to any of the
foregoing, and any and all replacements, products, proceeds (including insurance
proceeds) and substitutions of any of the foregoing wherever located
(collectively, the “Collateral”); and

     

    WHEREAS,
Gulfstream and the Senior Creditor have entered into a purchase agreement, dated
as of February 26, 2010 (the “Purchase Agreement”) pursuant to which the Senior
Creditor has agreed to lend $1,000,000 to Gulfstream (the “Senior Loan”); which
Senior Loan is evidenced by Gulfstream’s senior secured notes in the aggregate
principal amount of $1,000,000 which is guaranteed by each Subsidiary of
Gulfstream (individually and collectively, the “Senior Note”); and

     

    WHEREAS,
pursuant to the transactions contemplated by the Purchase Agreement, Gulfstream
has agreed to grant to the Senior Creditor a first priority lien and security
interest (the “Senior Creditor Lien”) in the “Accounts” (as that term is defined
in the Security Agreement annexed as an exhibit to the Purchase Agreement) of
Gulfstream and its Subsidiaries whether now owned or hereafter acquired and any
and all additions and accessions to any of the foregoing, and any and all
replacements, proceeds (including credit insurance proceeds of such Accounts)
and substitutions of any of the foregoing wherever located (collectively, the
“Senior Creditor Collateral”); and

     

    WHEREAS,
the Senior Creditor would not agree to make the Senior Loan unless Shelter
Island also agrees to subordinate the Shelter Island Lien to the Senior Creditor
Lien on the Senior Creditor Collateral, all pursuant to the terms and conditions
of this Agreement.

     

    NOW
THEREFORE, the parties hereto agree as follows:

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    1. Definitions.  As
used herein, the following terms shall be defined as follows:

     

    A. “Proceeding”
shall mean any voluntary or involuntary insolvency, bankruptcy, receivership,
custodianship, liquidation, dissolution, reorganization, assignment for the
benefit of creditors, appointment of a custodian, receiver, trustee or other
officer with similar powers or any other proceeding for the liquidation,
dissolution or other winding up of Gulfstream or any Subsidiary.

     

    B. “Priority
Senior Debt” shall mean the obligations of Gulfstream and its Subsidiaries to
the Senior Creditor under the Purchase Agreement and the Note; provided,
however, that in no event shall Priority Senior Debt (as defined herein)
exceed the principal amount of $1,000,000 plus accrued and unpaid interest
thereon pursuant to the Note and the Purchase Agreement.

     

    C. “Priority
Senior Debt Default” shall mean a default in the payment of the Priority Senior
Debt or in the performance of any term, covenant or condition contained in the
Purchase Agreement or any other occurrence permitting the Senior Creditor to
accelerate the payment of all or any portion of the Priority Senior Debt, and
shall also include any Shelter Island Debt Default.

     

    D. “Shelter
Island Debt Default” shall mean a default in the payment of the Shelter Island
Debt or in the performance of any term, covenant or condition contained in the
Shelter Island Debt Documents or any other occurrence permitting Shelter Island
to accelerate the payment of all or any portion of the Shelter Island
Debt.

     

    E. “Shelter
Island Debt Documents” shall mean the collective reference to (a) the loan and
security agreement and related documents in effect as of the date hereof, and
(b) the contemplated restructuring of the Shelter Island Debt in accordance with
the proposed restructuring term sheet in the form of Exhibit A annexed
hereto and made a part hereof, and any and all amendments, modifications or
restatements hereof entered into.

     

    F. “Shelter
Island Enforcement Action” shall mean (a) to take from or for the account of
Gulfstream or any co-obligor or guarantor of the Shelter Island Debt, by set-off
or in any other manner, except acceptance of regularly scheduled payments in
accordance with the terms of the Shelter Island Debt Documents, the whole or any
part of any moneys which may now or hereafter be owing by Gulfstream or any such
co-obligor or guarantor with respect to the Shelter Island Debt, (b) except as
otherwise provided in Section 4A hereof, accept or retain any payment of any
amount with respect to the Shelter Island Debt, except regularly scheduled
payments in accordance with the terms of the Shelter Island Debt Documents, (c)
to sue for payment of, or to initiate or participate with others in any suit,
action or proceeding against Gulfstream or any such co-obligor or guarantor to
(i) enforce payment of or to collect the whole or any part of the Shelter Island
Debt or (ii) commence judicial enforcement of any of the rights and remedies
under the Shelter Island Debt Documents or applicable law with respect to the
Shelter Island Debt, (d) to accelerate the Shelter Island Debt, or (e) to take
any action under the provisions of any state or federal law, including, without
limitation, the Uniform Commercial Code, or under any contract or agreement, to
enforce, foreclose upon, take possession of or sell any property or assets of
Gulfstream or any such co-obligor or guarantor, including the Senior Creditor
Collateral.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    G. “Subsidiaries”
shall mean the collective reference to Gulfstream International Airlines, Inc.,
a Florida corporation, Gulfstream Training Academy, Inc., a Florida corporation,
Gulfstream Connection, Inc., a Florida corporation and GIA Holdings Corp., Inc.,
a Delaware corporation, all of which are wholly-owned subsidiaries of the
Debtor.

     

    H. “Taglich
Debt Documents” shall mean the collective reference to (a) the Purchase
Agreement among Gulfstream, its Subsidiaries and the persons listed as
“Purchasers” of the Note on Exhibit A thereto, and (b) all exhibits to such
Purchase Agreement; a true copy of which has been furnished to RAM Capital
Resources LLC.

     

    2. Waiver and Consent;
Confirmation of Lien.  Subject to the terms of this
Agreement:

     

    (a)           Shelter
Island hereby (i) consents to the granting of a first priority lien and security
interest in the Senior Creditor Collateral in favor of the Senior Creditor to
secure the Priority Senior Debt, (ii) subordinates the Shelter Island Lien to
the first priority Senior Credit Lien in the Senior Creditor Collateral, and
(iii) consents to the filing of UCC Financing Statements related to the Priority
Senior Debt;

     

    (b)           the
Senior Creditor hereby (i) consents to and affirms the existing security
interest in the Collateral in favor of Shelter Island, (ii) acknowledges that,
except for the Senior Creditor Collateral, the Shelter Island Lien represents a
first priority lien and security interest in and to all of the Collateral, and
(iii) consents to the filing of UCC Financing Statements related to the Shelter
Island Debt; and

     

    (c)           Gulfstream
does hereby represent, warrant and covenant that, except for the Senior Creditor
Lien securing the Priority Senior Debt, the Shelter Island Lien securing the
Shelter Island Debt represents a first priority lien and security interest on
all of the Collateral which has priority over all liens and security interest in
the Collateral, other than the Senior Creditor Lien.

     

    3. Notice of
Default.  Shelter Island further agrees to give the Senior
Creditor notice of receipt of any payment on or applied by Shelter Island in
respect of the Shelter Island Debt if such payment is proceeds of the
Senior Creditor Collateral or is not permitted by Section 4A, after receipt by
Senior Creditor of a Shelter Island Debt Default; provided, that the failure to
provide any such notice shall not affect the rights of any party under this
Agreement.  The Senior Creditor also agrees to give Shelter Island
notice of receipt of any payment on or applied by the Senior Creditor in respect
of the Priority Senior Debt if such payment is proceeds of the Collateral, other
than the Senior Creditor Collateral, or is not permitted by Section 4A, after
receipt by Senior Creditor of a Shelter Island Debt Default; provided, that the
failure to provide any such notice shall not affect the rights of any party
under this Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4. Prepayments; Payments in
Respect of Senior Creditor Collateral and the Collateral.

     

    A.           Except
as otherwise set forth in this Section 4A, neither the Debtor nor any Subsidiary
shall prepay, in whole or in part, any indebtedness or other obligations in
respect of either the Shelter Island Debt or the Senior Loan without, in each
instance, the prior written consent of both Shelter Island and the Senior
Creditor.  Notwithstanding the foregoing:

     

    (i)           Shelter
Island shall have the absolute right to demand and receive prepayments of the
Shelter Island Debt out of any cash proceeds received by the Debtor from the
sale or liquidation of any of the Collateral, other than the Senior Creditor
Collateral; provided, however, that following payment in full of the Priority
Senior Debt, Shelter Island shall have the absolute right to demand and receive
prepayments of the Shelter Island Debt out of any cash proceeds received by the
Debtor from the sale or liquidation of any Accounts; provided, that, absent the
liquidation or sale of Accounts, no prepayment of Shelter Island Debt shall be
permitted in connection with cash proceeds received by Debtor from the
collection of Accounts in the ordinary course of business of the
Debtor;

     

    (ii)           the
Senior Creditor shall have the absolute right to demand and receive prepayments
of the Priority Senior Debt out of any cash proceeds received by the Debtor from
the sale or liquidation of any of the Senior Creditor Collateral; provided,
that, absent the liquidation or sale of Accounts, no prepayment of Senior
Creditor Debt shall be permitted in connection with cash proceeds received by
Debtor from the collection of Accounts in the ordinary course of business of the
Debtor; and

     

    (iii)           in
the event of any public or private offering of equity securities of Gulfstream
or any debt securities of Gulfstream that are convertible into or exchangeable
for equity securities of Gulfstream (each an “Equity Type Financing”), the net
proceeds (defined as gross proceeds less sales commissions, underwriting
discounts and other customary offering expenses) received by Gulfstream shall be
applied as follows:

     

    (1)           first
to the purchase of aircraft currently under lease;

     

    (2)           second,
to provide Gulfstream and its Subsidiaries with working capital in such amounts
as shall be reasonably acceptable to Gulfstream and reasonably acceptable to the
Senior Creditor and Shelter Island; and

     

    (3)           third,
to each of the Shelter Island and the Senior Creditor, in pro-rata amounts, as
the then outstanding amount of each of the Shelter Island Debt and the Priority
Senior Creditor Debt bear to aggregate indebtedness then owed to both Shelter
Island and the Senior Creditors.

     

    B.           Except
for regularly scheduled payments in accordance with the terms of the Shelter
Island Debt Documents, in the event that, following a Shelter Island Debt
Default or a Priority Senior Debt Default, Shelter Island shall receive any cash
payments from the Debtor or any Subsidiary that represent proceeds derived from
the sale or collection of the Senior Creditor Collateral, Shelter Island shall
hold such payments in trust for the benefit of the Senior Creditor until such
time all the Senior Note, together with all accrued and unpaid interest thereon,
shall have been paid in full.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    C.           Except
for regularly scheduled payments in accordance with the terms of the Taglich
Debt Documents and the Note, in the event that, following a Shelter Island Debt
Default or a Priority Senior Debt Default, the Senior Creditor, or any of them,
shall receive any cash payments from the Debtor or any Subsidiary that represent
proceeds derived from the sale or collection of any of the Collateral (other
than from the proceeds of the specific Senior Creditor Collateral), the Senior
Creditor shall hold such payments in trust for the benefit of the Shelter
Island.

     

    5. Subordination of
Liens.  Until the Priority Senior Debt has been indefeasibly
paid in full in cash, any liens and security interests of Shelter Island in the
Collateral shall be and hereby are subordinated for all purposes and in all
respects to the liens and security interests of Senior Creditor in the Senior
Creditor Collateral, regardless of the time, manner or order of perfection of
any such liens and security interests.  The Senior Creditor and
Shelter Island agree that neither of them will at any time contest the validity,
perfection, priority or enforceability of the Priority Senior Debt, the Shelter
Island Debt the Priority Senior Debt Documents, the Shelter Island Debt
Documents or the liens and security interests of Senior Creditor or Shelter
Island in the Collateral securing the Priority Senior Debt and the Shelter
Island Debt.

     

    6. Intentionally
Omitted.

     

    7. Covenant to Provide Notice
to Shelter Island and to Senior Creditor.

     

    A.           Gulfstream
covenants that it will provide (i) notice of an impending or incipient Priority
Senior Debt Default to Shelter Island and (ii) evidence that such notice has
been provided by Debtor to Shelter Island, concurrently with providing notice of
such impending or incipient Priority Senior Debt Default to the Senior
Lender.  Gulfstream covenants further to provide Shelter Island with
notice of any payment on or applied to the Priority Senior Debt following a
Shelter Island Debt Default.

     

    B.           Gulfstream
covenants that it will provide Senior Creditor with (i) notice of an impending
or incipient Shelter Island Default, and (ii) evidence that such notice has been
provided by Debtor to the Senior Creditor, concurrently with providing notice of
such impending or incipient Shelter Island Debt Default to Shelter
Island.  Gulfstream covenants further to provide Senior Creditor with
notice of any payment on or applied to the Shelter Island Debt following a
Priority Senior Debt Default.

     

    C.           Gulfstream
covenants that it will provide Shelter Island with (i) notice of an impending or
incipient Priority Senior Debt Default, and (ii) evidence that such notice has
been provided by Debtor to the Shelter Island, concurrently with providing
notice of such impending or incipient Priority Senior Debt Default to Senior
Creditor.  Gulfstream covenants further to provide Shelter Island with
notice of any payment on or applied to the Priority Senior Debt following a
Shelter Island Debt Default.

     

    8. Representations and
Warranties.

     

    A.   Shelter
Island hereby represents and warrants to Senior Creditor that as of the date
hereof: (a) Shelter Island is duly formed and validly existing under the laws
governing its formation; (b) Shelter Island has the power and authority to enter
into, execute, deliver and carry out the terms of this Agreement, all of which
have been duly authorized by all proper and necessary action; (c) the execution
of this Agreement by Shelter Island will not violate or conflict with the
organizational documents of Shelter Island, any material agreement binding upon
Shelter Island or any law, regulation or order or require any consent or
approval which has not been obtained; (d) this Agreement is the legal, valid and
binding obligation of Shelter Island, enforceable against Shelter Island in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by equitable
principles; and (e) Shelter Island is the sole owner, beneficially and of
record, of the Shelter Island Debt Documents and the Shelter Island
Debt.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    B.   The
Collateral Agent hereby represents and warrants to Shelter Island that as of the
date hereof: (a) the Collateral Agent is duly formed and validly existing under
the laws governing its formation; (b) the Collateral Agent has the power and
authority to enter into, execute, deliver and carry out the terms of this
Agreement, all of which have been duly authorized by all proper and necessary
action of the holders of the Priority Senior Debt; (c) the execution of this
Agreement by Collateral Agent will not violate or conflict with the
organizational documents of Collateral Agent, including, without limitation the
Purchase Agreement, any material agreement binding upon Collateral Agent or any
law, regulation or order or require any consent or approval which has not been
obtained; (d) this Agreement is the legal, valid and binding obligation of
Collateral Agent, enforceable against it in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles; and (e) the Purchasers
of the Senior Debt are the sole owners, beneficially and of record, of the
Senior Debt and the Notes.

     

    C.   Gulfstream
hereby represents and warrants to the Senior Creditor and Shelter Island that as
of the date hereof: (a) Gulfstream is duly formed and validly existing under the
laws of the State of Delaware; (b) Gulfstream has the power and authority to
enter into, execute, deliver and carry out the terms of this Agreement, all of
which have been duly authorized by all proper and necessary action; (c) the
execution of this Agreement by Gulfstream will not violate or conflict with the
organizational documents of Gulfstream, any material agreement binding upon
Gulfstream or any law, regulation or order or require any consent or approval
which has not been obtained; and (d) this Agreement is the legal, valid and
binding obligation of Gulfstream, enforceable against Gulfstream in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally or by equitable
principles.

     

    9. Subrogation.

     

    A.           Subject
to the indefeasible payment in full in cash of the Priority Senior Debt, Shelter
Island shall be subrogated to the rights of Senior Creditor to receive
distributions or proceeds from, or in connection with, the Senior Creditor
Collateral with respect to the Priority Senior Debt until the Shelter Island
Debt is paid in full. Shelter Island agrees that in the event that all or any
part of a distribution or payment, from or in connection with the Senior
Creditor Collateral (including any distribution or payment in respect of the
Accounts included in the Collateral) is recovered from the holders of the
Priority Senior Debt in a Proceeding or otherwise, any such distribution or
payment received by Shelter Island with respect to the Shelter Island Debt at
any time after the date of the payment that is so recovered, whether pursuant to
the right of subrogation provided for in this Agreement or otherwise, shall be
deemed to have been received by Shelter Island in trust as property of the
holders of the Priority Senior Debt and Shelter Island shall forthwith deliver
the same to the Senior Creditor for application to the Priority Senior Debt
until the Priority Senior Debt is paid in full.  A distribution made
pursuant to this Agreement to Senior Creditor which otherwise would have been
made to Shelter Island is not, as between Gulfstream and Shelter Island, a
payment by Gulfstream to or on account of the Priority Senior Debt.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    B.           Subject
to the indefeasible payment in full in cash of the Shelter Island Debt, Senior
Creditor shall be subrogated to the rights of Shelter Island to receive
distributions or proceeds from, or in connection with, the Collateral, other
than the Senior Creditor Collateral, with respect to the Shelter Island Debt
until the Priority Senior Debt is paid in full. Senior Creditor agrees that in
the event that all or any part of a distribution or payment, from or in
connection with the Collateral, other than the Senior Creditor Collateral, is
recovered from the holders of the Shelter Island Debt in a Proceeding or
otherwise, any such distribution or payment received by the Senior Creditor with
respect to the Senior Creditor Debt at any time after the date of the payment
that is so recovered, whether pursuant to the right of subrogation provided for
in this Agreement or otherwise, shall be deemed to have been received by the
Senior Creditor in trust as property of the holders of the Shelter Island Debt
and the Senior Creditor shall forthwith deliver the same to Shelter Island for
application to the Shelter Island Debt until the Shelter Island Debt is paid in
full.

     

    10. Modification.  Any
modification or waiver of any provision of this Agreement, or any consent to any
departure by any party from the terms hereof, shall not be effective in any
event unless the same is in writing and signed by Senior Creditor and Shelter
Island, and then such modification, waiver or consent shall be effective only in
the specific instance and for the specific purpose given. Any notice to or
demand on any party hereto in any event not specifically required hereunder
shall not entitle the party receiving such notice or demand to any other or
further notice or demand in the same, similar or other circumstances unless
specifically required hereunder.

     

    11. Further
Assurances.  Each party to this Agreement promptly will execute
and deliver such further instruments and agreements and do such further acts and
things as may be reasonably requested in writing by any other party hereto that
may be necessary or desirable in order to effect fully the purposes of this
Agreement.

     

    12. Notices.  Unless
otherwise specifically provided herein, any notice delivered under this
Agreement shall be in writing addressed to the respective party as set forth in
the Recitals and may be personally served, telecopied or sent by overnight
courier service or certified or registered United States mail and shall be
deemed to have been given (a) if delivered in person, when delivered; (b) if
delivered by telecopy, on the date of transmission if transmitted on a business
day before 12:00 noon (New York time) or, if not, on the next succeeding
business day; (c) if delivered by overnight courier, one business day after
delivery to such courier properly addressed; or (d) if by United States mail,
four business days after deposit in the United States mail, postage prepaid and
properly addressed.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    13. Successors and
Assigns.  This Agreement shall inure to the benefit of, and
shall be binding upon, the respective successors and assigns of Senior Creditor,
Shelter Island and Gulfstream. To the extent permitted under their respective
debt documents, either lender may, from time to time, without notice to is the
other lender, assign or transfer any or all of their debt or any interest
therein to any person or entity and, notwithstanding any such assignment or
transfer, or any subsequent assignment or transfer, the assigned debt shall,
subject to the terms hereof, be and remain subject to the terms and conditions
of this Agreement, and every permitted assignee or transferee of any of the
assigned debt or of any interest therein shall, to the extent of the interest of
such permitted assignee or transferee in the assigned debt, be entitled to rely
upon and be the third party beneficiary of the subordination provided under this
Agreement and shall be entitled to enforce the terms and provisions hereof to
the same extent as if such assignee or transferee were initially a party
hereto.

     

    14. Relative
Rights.  This Agreement shall define the relative rights of
Senior Creditor and Shelter Island. Nothing in this Agreement shall (a) impair,
as among Gulfstream and Senior Creditor and as between Gulfstream and Shelter
Island, the obligation of Gulfstream with respect to the payment of the Priority
Senior Debt and the Shelter Island Debt in accordance with their respective
terms or (b) affect the relative rights of Senior Creditor or Shelter Island
with respect to any other creditors of Gulfstream.

     

    15. Conflict.  In
the event of any conflict between any term, covenant or condition of this
Agreement and any term, covenant or condition of any of the Shelter Island Debt
Documents, the provisions of this Agreement shall control and
govern.

     

    16. Headings.  The
paragraph headings used in this Agreement are for convenience only and shall not
affect the interpretation of any of the provisions hereof.

     

    17. Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

     

    18. Severability.  In
the event that any provision of this Agreement is deemed to be invalid, illegal
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court or governmental authority, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby, and the affected
provision shall be modified to the minimum extent permitted by law so as most
fully to achieve the intention of this Agreement.

     

    19. Continuation of
Subordination; Termination of Agreement.  This Agreement shall
remain in full force and effect until the indefeasible payment in full in cash
of the Priority Senior Debt and the termination of all lending commitments under
the Loan Agreement after which this Agreement shall terminate without further
action on the part of the parties hereto.  The liability of Shelter
Island hereunder shall be reinstated and revived, and the rights of the Senior
Creditor shall continue, with respect to any amount at any time paid on account
of the Priority Senior Debt which shall thereafter be required to be restored or
returned by the Senior Creditor in any Proceeding, all as though such amount had
not been paid, provided, however, that Shelter Island shall not be required to
disgorge any payments received during the period after the Senior Creditor was
paid in full and before such restoration or return.  The liability of
the Senior Creditor hereunder shall be reinstated and revived, and the rights of
Shelter Island shall continue, with respect to any amount at any time paid on
account of the Shelter Island Debt which shall thereafter be required to be
restored or returned by the Shelter Island in any Proceeding, all as though such
amount had not been paid, provided, however, that the Senior Creditor shall not
be required to disgorge any payments received during the period after Shelter
Island was paid in full and before such restoration or return.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    20. Applicable
Law.  This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of the State of New
York, without regard to conflicts of law principles.

     

    21. CONSENT TO
JURISDICTION.  EACH OF THE PARTIES HERETO HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW
YORK AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH OF THE
PARTIES HERETO EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT, EACH PARTY WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO
COMPLY WITH DISCOVERY REQUIREMENTS AND SCHEDULES AS SET BY THE COURT OR OTHER
DULY APPOINTED ARBITER OF SUCH PROCEEDING.

     

    22. WAIVER OF JURY TRIAL.
SHELTER ISLAND, GULFSTREAM AND SENIOR SECURED PARTY HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE SUBORDINATED DEBT DOCUMENTS OR ANY OF
THE SENIOR DEBT DOCUMENTS. EACH OF SHELTER ISLAND, GULFSTREAM AND SENIOR SECURED
PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE SENIOR DEBT DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON
THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH OF SHELTER ISLAND, GULFSTREAM
AND SENIOR SECURED PARTY WARRANTS AND REPRESENTS THAT EACH HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

     

    [The
remainder of this page intentionally left blank – signature page
follows.]

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed the within as of the date
first above written.

     

     

    
      
        	 	
                TAGLICH
      BROTHERS, INC.,

                as
      collateral agent (for the Purchasers):

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Robert C.
      Schroeder	 
	 	 	Name: Robert
      C. Schroeder	 
	 	 	Title: Vice
      President	 
	 	 	 	 

      

    

     

    
      
        	 	SHELTER
      ISLAND OPPORTUNITY FUND, LLC,	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Michael
Coiley	 
	 	 	Name: Michael
      Coiley	 
	 	 	Title: Authorized
      Signor	 
	 	 	 	 

      

    

     

    
      
        	 	
                GULFSTREAM
      INTERNATIONAL GROUP, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David F.
    Hackett	 
	 	 	Name: David
      F. Hackett	 
	 	 	Title: President	 
	 	 	 	 

      

    

     

    
      
        	GIA
      HOLDINGS CORP., INC.	 	
                ACCEPTED
      AND AGREED TO:

                 

                GULFSTREAM
      INTERNATIONAL AIRLINES, INC.

              	 
	 	 	 	 	 	 
	By:
      	
                /s/David F.
      Hackett

              	 	
                By:
      

              	/s/ David F.
    Hackett	 
	 	
                Name:
      David F. Hackett

              	 	 	Name: David
      F. Hackett	 
	 	
                Title:  President

              	 	 	Title: President	 
	 	 	 	 	 	 

      

    

     

    
      
        	 	GULFSTREAM
      TRAINING ACADEMY, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David F.
    Hackett	 
	 	 	Name: David
      F. Hackett	 
	 	 	Title: President	 
	 	 	 	 

      

    

    
       

      
        	 	GULFSTREAM
      CONNECTION, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ David F.
    Hackett	 
	 	 	Name: David
      F. Hackett	 
	 	 	Title: President	 
	 	 	 	 

      

    

     

    
    

    
    

    

      
        
           

        

        
          10

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