AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

BASIC ENERGY SERVICES, INC.,

JS ACQUISITION LLC

AND

JETSTAR CONSOLIDATED HOLDINGS, INC.

DATED AS OF JANUARY 8, 2007

TABLE OF CONTENTS

AGREEMENT AND PLAN OF MERGER

     THIS AGREEMENT AND PLAN OF MERGER (this “ Agreement ”), dated as of January 8, 2007, is among BASIC ENERGY SERVICES, INC., a Delaware corporation (“ Basic ”), JS ACQUISITION LLC, a Delaware limited liability company and an indirect and wholly-owned subsidiary of Basic (“ Merger Sub ”), and JETSTAR CONSOLIDATED HOLDINGS, INC., a Delaware corporation (“ JetStar ”). An index of defined terms used in this Agreement can be found on Annex I. Additionally, certain defined terms used in this Agreement can be found in Section 2.1 (with respect to the consideration to be paid in connection with the Merger (as defined below) and in Section 2.5(d) (with respect to the calculation of Net Working Capital and Net Debt (as such terms are defined below)).

RECITALS

     WHEREAS, the respective Boards of Directors of each of Basic and JetStar and the managing member of Merger Sub have determined that the merger of JetStar with and into Merger Sub (the “ Merger ”), in the manner contemplated herein, is advisable and in the best interests of their respective entities and security holders, and, by resolutions duly adopted, have approved this Agreement and the transactions contemplated hereby, including the Merger upon the terms and subject to the conditions set forth in this Agreement;

     WHEREAS, for federal income tax purposes, it is intended by the parties hereto that the Merger qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the rules and regulations promulgated thereunder (the “ Treasury Regulations ”), and that this Agreement constitute a plan of reorganization within the meaning of Section 368 of the Code and such Treasury Regulations;

     WHEREAS, in connection with the Merger and as an inducement to Basic to enter into this Agreement, certain of JetStar’s principal stockholders have granted irrevocable proxies to Clark R. Crosnoe agreeing to vote the shares of capital stock of JetStar held or to be held by such stockholders in favor of the Merger and the approval of this Agreement and against any other transaction, and the holder of the JetStar Warrants (as defined in Section 3.3 ) has agreed to exercise such warrants prior to the Closing (as defined in Section 1.2(a) );

     WHEREAS, JetStar, Basic and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with this Agreement and the transactions contemplated hereby.

     NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties, covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE 1
THE MERGER

     SECTION 1.1 THE MERGER; EFFECTS OF THE MERGER . At the Effective Time (as defined in Section 1.3 ) and upon the terms and conditions of this Agreement and in accordance with the Delaware General Corporation Law (the “ DGCL ”) JetStar shall be merged

with and into Merger Sub. Following the Merger, Merger Sub (sometimes hereinafter referred to as the “ Surviving Entity ”) shall be the surviving entity in the Merger and the separate corporate existence of JetStar shall cease. From and after the Effective Time, the Surviving Entity shall possess all the property, rights, privileges, immunities, powers and franchises, and be subject to all of the debts, liabilities, obligations, restrictions, disabilities and duties of, Merger Sub and JetStar, all as provided under the DGCL.

     SECTION 1.2 THE CLOSING; DELIVERIES .

     (a)  Closing Date . Subject to the terms and conditions of this Agreement, the closing of the Merger (the “ Closing ”) shall take place (i) at the offices of Andrews Kurth LLP, 600 Travis, Suite 4200, Houston, Texas 77002, at 9:00 a.m., local time, on the later of February 20, 2007 or the second Business Day immediately following the day on which the last to be fulfilled or waived of the conditions set forth in Article 6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to fulfillment or waiver of those conditions) shall be fulfilled or waived in accordance herewith or (ii) at such other time, date or place as Basic and JetStar may agree in writing. The date on which the Closing occurs is hereinafter referred to as the “ Closing Date .”

     (b)  Deliveries at the Closing .

          (i) At the Closing, JetStar will deliver or cause to be delivered to Basic:

(A) the signature pages to the Registration Rights Agreement (as defined below), received prior to the Closing Date by JetStar from the former holders of JetStar Shares;

(B) the Escrow Agreement among Basic, the JetStar Stockholders’ Representative and the escrow agent named therein (the “ Escrow Agent ”) substantially in the form attached hereto as Exhibit A (the “ Escrow Agreement ”), duly executed by the JetStar Stockholders’ Representative;

(C) executed copies of the consents and approvals referred to in Schedule 3.6(c) of the JetStar Disclosure Letter, other than consents noted therein that will not be obtained;

(D) a pay-off letter with respect to all indebtedness and other obligations owed by JetStar and its Subsidiaries under (1) the Amended and Restated Credit Agreement dated as of February 16, 2006, by and among JetStar and its Subsidiaries, ORIX Finance Corp. (“ ORIX ”) as Agent and Lender, and the other lenders, and (2) the Subordinated Secured Promissory Note, dated as of May 12, 2005, as amended by the First Amendment dated as of February 17, 2006, by and between JetStar Holdings, Inc. and JetStar Investment LLC, as set forth on Schedule 3.18(b) of the JetStar Disclosure Letter; and

(E) the certificate referred to in Section 6.3(a) .

          (ii) At the Closing, Basic or Merger Sub will deliver or cause to be delivered to the JetStar Stockholders’ Representative (or to such other party as is set forth below):

(A) the Registration Rights Agreement, duly executed by Basic;

(B) the Escrow Agreement, duly executed by Basic; and

(C) the certificate referred to in Section 6.2(a) .

     SECTION 1.3 EFFECTIVE TIME . If all the conditions to the Merger set forth in Article 6 shall have been fulfilled or waived in accordance herewith and this Agreement shall not have been terminated as provided in Article 7, on the Closing Date Merger Sub and JetStar shall file a properly executed certificate of merger (the “ Certificate of Merger ”) meeting the requirements of Section 251 of the DGCL with the Secretary of State of the State of Delaware. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL, or at such later time as JetStar and Basic shall have agreed upon and designated in such filing as the effective time of the Merger (the “ Effective Time ”).

     SECTION 1.4 SURVIVING ENTITY . The Merger shall not result in any amendment to the certificate of formation or limited liability company agreement of Merger Sub, and, at the Effective Time, the certificate of formation and limited liability company agreement of Merger Sub shall continue to be the certificate of formation and limited liability company agreement of the Surviving Entity. The managers of Merger Sub immediately prior to the Effective Time shall be the managers of the Surviving Entity, each to hold office in accordance with the certificate of formation and limited liability company agreement of the Surviving Entity, and the officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Entity, in each case to hold office until their respective successors are duly elected or appointed and qualified.

ARTICLE 2
TREATMENT OF JETSTAR SHARES, WARRANTS AND OPTIONS; ESCROW PROVISIONS

     SECTION 2.1 CERTAIN DEFINED TERMS . For purposes of this Agreement, the following terms shall have the meanings set forth in this Section 2.1 :

     (a) “ Base Price ” means $87,000,000.

     (b) “ Aggregate Option Exercise Price ” means the total exercise price for all of the Cashed-Out Options.

     (c) “ Cashed-Out Options ” means the outstanding JetStar Options (vested and unvested) not exercised prior to the Effective Time.

     (d) “ Estimated Total Merger Consideration ” means the Base Price, plus or minus (as the case may be) the Estimated Closing Adjustment.

     (e) “ Preliminary Total Stock Portion ” means 50% of the Estimated Total Merger Consideration.

     (f) “ Preliminary Total Cash Portion ” means 50% of the Estimated Total Merger Consideration.

     (g) “ Fully-Diluted JetStar Shares ” means the number of JetStar Common Shares outstanding as of the Effective Time, determined by (i) treating all JetStar Preferred Shares outstanding, as of the Effective Time on an as-converted basis into JetStar Common Shares, (ii) treating all Cashed-Out Options on an as-exercised basis into JetStar Common Shares and (iii) excluding all Excluded JetStar Shares.

     (h) “ Partially-Diluted JetStar Shares ” means the Fully-Diluted JetStar Shares excluding all JetStar Common Shares relating to the Cashed-Out Options.

     (i) “ Reallocated Total Cash Portion ” means the Preliminary Total Cash Portion decreased by an amount equal to the amount substituted for all Cashed-Out Options under Section 5.12 .

     (j) “ Basic Common Shares ” shall mean the shares of common stock, par value $0.01 per share, of Basic.

     (k) “ Basic Share Price ” shall mean the volume-weighted average of the daily closing sales prices per share of the Basic Common Stock on the New York Stock Exchange for each trading day from and including November 30, 2006 through and including the fourth Business Day prior to the Effective Date; provided that in no event shall the Basic Share Price be less than $23.00 per share or greater than $27.00 per share.

     SECTION 2.2 CONVERSION OF SHARES AND LIMITED LIABILITY COMPANY INTERESTS; TREATMENT OF OPTIONS AND WARRANTS .

     (a) At the Effective Time, each share of JetStar common stock, par value $0.0001 per share (each a “ JetStar Common Share ” and collectively the “ JetStar Common Shares ”), and each share of JetStar Series A Convertible Preferred Stock, par value $0.0001 per share (each, a “ JetStar Preferred Share ”, collectively, the “ JetStar Preferred Shares ” and, together with the JetStar Common Shares, the “ JetStar Shares ”), issued and outstanding immediately prior to the Effective Time shall, except as provided in Section 2.6 (with respect to Dissenting JetStar Shares), by virtue of the Merger and without any action on the part of Basic, Merger Sub, JetStar or any holder thereof, be converted into (i) the right to receive the cash and Basic Common Shares specified in Section 2.2(c)(i) and Section 2.2(c)(ii) and (ii) certain other rights and benefits provided to former holders of JetStar Shares under this Agreement (including under Article 8).

     (b)  JetStar Options; Cashed-Out Options . Prior to or concurrently with the Closing, as provided in this Section and in Section 5.12 , all warrants, options and other rights to acquire JetStar Shares, other than conversion rights under outstanding JetStar Preferred Shares, shall either be exercised or cancelled, or, in the case of unexercised options under the JetStar Option Plan, other property shall be substituted for the JetStar Common Shares issuable upon the

exercise thereof as set forth in the following sentence. Prior to the Closing, JetStar will take appropriate action to elect to substitute the right to receive cash payment provided under Section 5.12 instead of the right to purchase JetStar Common Shares with respect to all Cashed-Out Options. Each Cashed-Out Option will be cashed out rather than exercised, and the holder thereof (a “ Remaining Option Holder ”) will be entitled to receive the cash payment provided under Section 5.12 as to that number of shares potentially acquirable under the Cashed-Out Option and less any applicable tax withholdings. Additionally, JetStar will take appropriate action to terminate the JetStar Option Plan as of the Effective Time. In addition, certain holders of JetStar Options have agreed, prior to or contemporaneously with the execution of this Agreement, to exercise their JetStar Options prior to the Effective Time. Each such holder (an “ Exercising Holder ”) may pay the exercise price for his JetStar Options by delivering a promissory note to JetStar, in a principal amount equal to the aggregate exercise price for the JetStar Options being exercise (such amount, an “ Option Loan ”), which amount shall be due and payable no later than the Effective Time and which promissory note shall otherwise be in a form reasonably satisfactory to Basic. As a result, as of the Effective Time no JetStar Options will be outstanding and no such JetStar Options will be assumed by Basic.

     (c) Conversion of JetStar Common and Preferred Shares.

          (i) JetStar Common Shares . Each JetStar Common Share issued and outstanding immediately prior to the Effective Time, other than any Excluded JetStar Common Shares (as defined in Section 2.2(e)(i) ) or any Dissenting JetStar Shares (as defined in Section 2.6 ) shall be converted at the Effective Time into the right to receive (in addition to the other rights under this Agreement (including under Article 8)):

(A) at the Effective Time (x) as consideration (together with any Basic Common Shares specified in Section 2.2(c)(i)(B) ) for one-half of each such JetStar Common Share, a number of Basic Common Shares equal to (1) the Preliminary Total Stock Portion divided by the Basic Share Price, divided by (2) the Partially-Diluted JetStar Shares, and (y) as consideration (together with any cash specified in Section 2.2(c)(i)(B) ) for the other one-half of each such JetStar Common Share, cash in an amount equal to (1) the Reallocated Total Cash Portion minus the Escrow Deposit, divided by (2) the Partially-Diluted JetStar Shares (which cash amount, in the case of an Exercising Optionholder, may be offset and used to repay any amounts outstanding and unpaid under the Exercising Optionholder’s Option Loan); and

(B) after the Effective Time, any amounts (x) distributable to a former holder of JetStar Common Shares as provided in Section 2.4(b)(i) , Section 2.4(b)(ii) , Section 2.4(b)(iii) and the Escrow Agreement and (y) payable to a former holder of JetStar Common Shares by Basic after the Effective Time as provided in Section 2.5(c)(iii) .

          (ii) JetStar Preferred Shares . Each JetStar Preferred Share issued and outstanding as of the Effective Time, other than any Excluded JetStar Preferred Shares (as defined in Section 2.2(e)(ii) ) or any Dissenting JetStar Shares, shall be converted at the Effective

     (f)  Merger Sub . At the Effective Time, the limited liability company interests of Merger Sub issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding and shall be the issued and outstanding limited liability company interests of the Surviving Entity.

     SECTION 2.3 EXCHANGE AGENT; EXCHANGE OF CERTIFICATES; PAYMENTS TO REMAINING OPTION HOLDERS .

     (a)  Exchange Agent . At or prior to the Closing, Basic shall deposit, in trust for the benefit of the former holders of JetStar Shares, the cash and Basic Common Shares required to make the payments required to be made under Section 2.2(c)(i)(A) and Section 2.2(c)(ii)(A) with American Stock Transfer and Trust Company (or another bank or trust company that is organized and doing business under the laws of the United States or any state thereof that shall be appointed to act as exchange agent hereunder and approved in advance by JetStar in writing) (the “ Exchange Agent ”) pursuant to an agreement in form and substance reasonably satisfactory to Basic and JetStar. Such cash and Basic Common Shares will not be used by the Exchange Agent for any other purpose. For purposes of determining the amount of cash and the number of Basic Common Shares to be deposited with the Exchange Agent, Basic shall assume that the only Dissenting JetStar Shares will be those held by holders of JetStar Shares who have perfected appraisal rights prior to the time the deposit is made.

     (b)  Exchange Procedures .

          (i) Promptly after the Effective Time, but in no event later than five Business Days thereafter, Basic shall cause the Exchange Agent to mail to each record holder of JetStar Shares as of the Effective Time (other than holders of Excluded JetStar Shares or Dissenting JetStar Shares) (i) a letter of transmittal specifying that delivery of the Certificates shall be effected, and that risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent, such letter of transmittal to be in such form and to have such other provisions as Basic and JetStar reasonably agree (including representations from the former holders of the JetStar Shares acknowledging the restrictions applicable to the Basic Common Shares issuable in connection with the Merger), and (ii) instructions for exchanging the Certificates and receiving the cash and Basic Common Shares which such holder shall be entitled to receive pursuant to Section 2.2(c)(i)(A) or Section 2.2(c)(ii)(A) , as applicable and (iii) a signature page for the Registration Rights Agreement. Upon surrender of a Certificate for cancellation to the Exchange Agent together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor (x) a certificate representing that number of Basic Common Shares that such holder is entitled to receive pursuant to Section 2.2(c)(i)(A) or Section 2.2(c)(ii)(A) , as applicable and (y) a check in the aggregate amount of cash that such holder is entitled to receive pursuant to Section 2.2(c)(i)(A) or Section 2.2(c)(ii)(A) , as applicable. Basic and the Company shall also use their commercially reasonable efforts to establish procedures with the Exchange Agent so that any holder of JetStar Shares who delivers such materials, duly executed, on or prior to the Closing Date, may receive payment no later than the Business Day immediately succeeding the day on which the Effective Time occurs. The Certificate so surrendered shall forthwith be canceled.

          (ii) In the event of a transfer of ownership of JetStar Shares (other than Excluded JetStar Shares or Dissenting JetStar Shares) that occurred prior to the Effective Time, but that is not registered in the transfer records of JetStar, the cash and Basic Common Shares that the transferee would have been entitled to receive under Section 2.2(c)(i)(A) or Section 2.2(c)(ii)(A) , as applicable, if such transferee had been the record holder of such JetStar Shares as of the Effective Time, may be issued and/or paid to such a transferee if the Certificate formerly representing such JetStar Shares is presented to the Exchange Agent, accompanied by all documents reasonably required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid.

          (iii) If any certificate for Basic Common Shares is to be issued in a name other than that in which the Certificate surrendered in exchange therefor is registered, it shall be a condition of such exchange that the Person requesting such exchange shall pay any transfer or other Taxes required by reason of the issuance of certificates for Basic Common Shares in a name other than that of the registered holder of the surrendered Certificate, or shall establish to the reasonable satisfaction of Basic and the Exchange Agent that such Tax has been paid or is not applicable.

     (c)  Distributions with Respect to Unexchanged Shares . Whenever a dividend or other distribution is declared by Basic in respect of Basic Common Shares, the record date for which is at or after the Effective Time, that declaration shall include dividends or other distributions in respect of all Basic Common Shares payable to the former holders of JetStar Shares (other than Dissenting JetStar Shares) pursuant to this Agreement. No dividends or other distributions so declared in respect of such Basic Common Shares shall be paid to any holder of any unsurrendered Certificate until such Certificate is surrendered for exchange in accordance with Section 2.3(b) . Subject to the effect of applicable laws, following surrender of any such Certificate, Basic shall issue or pay to the holder of the certificates representing whole Basic Common Shares issued in exchange for such Certificate (i) at the time of such surrender, the dividends or other distributions with a record date that is at or after the Effective Time and a payment date on or prior to the date of surrender of such Certificate and not previously paid to such holder and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to such Basic Common Shares with a record date at or after the Effective Time but with a payment date subsequent to surrender. For purposes of dividends or other distributions in respect of Basic Common Shares, all Basic Common Shares issued pursuant to the Merger shall be deemed to have been issued and outstanding as of the Effective Time.

     (d)  Transfers after the Effective Time . After the Effective Time, there shall be no transfers on the stock transfer books of JetStar of JetStar Shares that were outstanding immediately prior to the Effective Time.

     (e)  Fractional Shares . Notwithstanding any other provision of this Agreement, no certificates or scrip for fractional Basic Common Shares shall be issued in the Merger and no Basic Common Shares dividend, stock split, subdivision or interest shall relate to any fractional security, and such fractional interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of Basic. In lieu of any such fractional share (after aggregating all fractional Basic Common Shares to be received by such holder), each holder of JetStar Shares (other than Dissenting JetStar Shares) who would otherwise have been entitled to receive a

fraction of a Basic Common Share upon surrender of a Certificate for exchange shall be entitled to receive a cash payment from Basic equal to such fraction multiplied by the Basic Share Price. No interest shall be payable with respect to any amounts to be paid under this Section 2.3(e) .

     (f)  Termination of Exchange Period; Unclaimed Property . At any time following the first anniversary of the Effective Time, Basic shall be entitled to require the Exchange Agent to deliver to it any remaining portion of the cash and Basic Common Shares deposited with the Exchange Agent, and holders of Certificates shall be entitled to look only to Basic (subject to abandoned property, escheat or other similar laws) with respect to the cash or Basic Common Shares payable pursuant to Section 2.2(c)(i) or Section 2.2(c)(ii) upon due surrender of their Certificates, without any interest thereon. Notwithstanding the foregoing, none of Basic, the Surviving Entity, the Exchange Agent or any other person shall be liable to any holder of a Certificate with regard to Basic Common Shares (or dividends or distributions with respect thereto) delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.

     (g)  Lost, Stolen or Destroyed Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed, and if Basic believes that the Person providing the indemnity is sufficiently creditworthy, the making of a reasonable undertaking to indemnify Basic or JetStar, or, if Basic does not so believe, the posting by such Person of a bond in the form customarily required by Basic to indemnify against any claim that may be made against it with respect to such Certificate, the Exchange Agent will distribute such cash, Basic Common Shares, dividends and other distributions in respect thereof issuable or payable in exchange for such lost, stolen or destroyed Certificate pursuant to Section 2.2(c)(i) , Section 2.2(c)(ii) , Section 2.3(c) or Section 2.3(e) , as applicable, in each case without interest.

     (h)  Payments to Remaining Option Holders . At the Effective Time, Basic or Merger Sub will pay the amounts required under Section 5.12 to the Remaining Option Holders, by check or wire transfer, pursuant to a schedule of Remaining Option Holders to be delivered to Basic by JetStar no later than 3 Business Days before the Closing and to be updated by JetStar at the Closing and at the Effective Time.

     (i)  Withholding . Basic or the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable to any holder of JetStar Shares or Cashed-Out Options pursuant to this Agreement such amounts as Basic or the Exchange Agent is required to deduct and withhold with respect to the making of such payment under the Code, the Treasury Regulations or under any provision of state, local or foreign Tax law. To the extent that amounts are so withheld by Basic or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the JetStar Shares or Cashed-Out Options in respect of when such deduction and withholding was made by Basic or the Exchange Agent.

     SECTION 2.4 ESCROW .

     (a)  Escrow Deposit . At the Closing, Basic or Merger Sub will deliver Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000) (the “ Escrow Deposit ”) to be received, held

and disbursed pursuant to the terms of the Escrow Agreement and according to the provisions of Section 2.4(b) . The Escrow Deposit will serve as the sole source of payment and remedy for Basic to the extent Basic is owed any amounts in respect of the Final Net Debt and Final Net Working Capital as provided in Section 2.5(c)(iii) . In addition, up to $7,500,000 of the Escrow Deposit (plus any Escrow Earnings on such amount as described below) will serve as the sole source of payment and remedy for Basic to the extent Basic is owed any amounts in respect of Indemnified Buyer Losses as provided in Section 8.1 and Section 8.2 . Any fees and expenses of the Escrow Agent under the Escrow Agreement shall be paid one half by Basic and one half from the Escrow Deposit. During the period in which the Escrow Deposit is retained in the escrow account established pursuant to the Escrow Agreement, all interest or other income earned from the investment (and reinvestment) of such deposit (the “ Escrow Earnings ”) shall be retained in such escrow account and added to the Escrow Deposit.

     (b)  Release of Escrow Deposit .

          (i) On the first Business Day of each calendar quarter after the Effective Time and until the final distribution of the remainder of the Escrow Deposit is made pursuant to paragraph (iii) below, and immediately prior to the final distribution of the remainder of the Escrow Deposit pursuant to paragraph (iii) below, Basic and the JetStar Stockholders’ Representative shall instruct the Escrow Agent to distribute an amount equal to 40% of the Escrow Earnings accruing during the immediately preceding calendar quarter (or, in the case of the final distribution, any period since the last such tax distribution) to the former holders of JetStar Shares (other than Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby, in order to provide funds for such former holders of JetStar Shares to pay income taxes in connection with such Escrow Earnings.

          (ii) Promptly following the delivery of the Final Closing Statement, but no later than two Business Days thereafter, Basic and the JetStar Stockholders’ Representative shall instruct the Escrow Agent to distribute to the former holders of JetStar Shares (other than Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby, any amounts of the Escrow Deposit in excess of the sum of (A) $7,500,000 plus (B) any amount payable to Basic pursuant to Section 2.5(c)(iii) (to the extent not already paid to Basic from the Escrow Deposit) plus (C) any expenses of the JetStar Stockholders’ Representative incurred in connection with any matters regarding the Final Closing Statement (whether under Section 9.7 or otherwise) (to the extent not already paid from the Escrow Deposit) plus (D) any amounts distributable by the Escrow Agent to the former holders of JetStar Shares (other than Dissenting JetStar Shares) in accordance with paragraph (i) above, plus (E) Escrow Earnings applicable to the amount described in clause (A).

          (iii) The remainder of the Escrow Deposit after the distributions described in paragraphs (i) and (ii) above shall be maintained in the escrow account established under the Escrow Agreement and distributed from time to time to Basic in satisfaction of Indemnified Buyer Losses to the extent permitted under Section 8.5(d) ; provided that (A) on the six-month anniversary of the Effective Time, the Escrow Agent shall distribute to the former holders of JetStar Shares (other than Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby, an amount equal to the excess, if any, of (1) 50% of (x) the remaining Escrow Deposit plus (y) any Escrow Earnings over (2) the amount of

bona fide pending claims for Indemnified Buyer Losses, (B) on the one year anniversary of the Effective Time, the Escrow Agent shall distribute to the former holders of JetStar Shares (other than Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby, an amount equal to the excess, if any, of (1) the remaining Escrow Deposit plus any Escrow Earnings not paid pursuant to clause (A) of this proviso over (2) the amount of bona fide pending claims for Indemnified Buyer Losses, and (C) upon resolution and payment to Basic, if applicable, of pending claims for Indemnified Buyer Losses outstanding as of the one year anniversary of the Effective Time that are resolved after the one year anniversary of the Effective Time, the Escrow Agent shall distribute to the former holders of JetStar Shares (other than Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby, any remaining portion of the Escrow Deposit plus any Escrow Earnings not previously distributed pursuant to clauses (A) and (B) of this proviso.

     SECTION 2.5 POST-CLOSING ADJUSTMENTS .

     (a)  Estimated Closing Statement . At least five (5) Business Days prior to the Closing Date, JetStar will deliver to Basic a statement (the “ Estimated Closing Statement ”) setting forth, in reasonable detail, JetStar’s good faith estimate of Net Working Capital (as defined below) and Net Debt (as defined below), in each case as of the last day of the month immediately preceding the month in which the Closing occurs or such more recent practicable date prior to the Closing. Such estimates are referred to in this Agreement as the “ Estimated Net Working Capital ” and the “ Estimated Net Debt ”, respectively. For illustrative purposes only, attached hereto as Schedule I is a format to be used in determining the Estimated Net Working Capital and Estimated Net Debt. JetStar will make available to Basic all work papers and other books and records utilized in calculating Estimated Net Working Capital and Estimated Net Debt. The amount, if any, by which Estimated Net Working Capital is less than $5,000,000 (the “ Target Net Working Capital ”) is the “ Estimated Net Working Capital Deficit ”, and the amount, if any, by which the Estimated Net Working Capital exceeds the Target Net Working Capital is the “ Estimated Net Working Capital Excess .” The amount, if any, by which the Estimated Net Debt exceeds $38,000,000 (the “ Target Net Debt ”) is the “ Estimated Net Debt Deficit ”, and the amount, if any, by which the Estimated Net Debt is less than the Target Net Debt is the “ Estimated Net Debt Excess .” At the Effective Time the Base Price shall be adjusted by the Estimated Closing Adjustment (as defined in Section 2.5(d) ).

     (b)  Post-Closing Statement . As promptly as practicable but in any event within 90 days after the Closing, Basic will prepare a statement (the “ Post-Closing Statement ”) setting forth, in reasonable detail, Basic’s calculation of the actual Net Working Capital as of the Closing and the actual Net Debt as of the Closing. The methodology used to calculate Net Working Capital and Net Debt on the Post-Closing Statement shall be the same as those on the Estimated Closing Statement. Basic shall deliver the Post-Closing Statement to the JetStar Stockholders’ Representative, and will also make available to the JetStar Stockholders’ Representative copies of all work papers and other books and records utilized in the preparation of the Post-Closing Statement. The JetStar Stockholders’ Representative will have 20 days after receipt of the Post-Closing Statement to review such calculations and to reasonably object to same. Basic and the JetStar Stockholders’ Representative will resolve any dispute regarding such calculations as provided in Section 9.7 . The Post-Closing Statement, either as prepared by

Basic or as determined pursuant to the dispute resolution provisions of Section 9.7 , is the “ Final Closing Statement .”

     (c)  Final Adjustments . The consideration paid by Basic in connection with this Agreement will be adjusted based on the Final Closing Statement as follows:

          (i)  Net Debt Adjustment . If the Net Debt shown on the Final Closing Statement (the “ Final Net Debt ”) is greater than the Estimated Net Debt the consideration payable by Basic in connection with this Agreement shall be reduced by an amount equal to the Final Net Debt minus the Estimated Net Debt. If the Final Net Debt is less than the Estimated Net Debt the consideration payable by Basic in connection with this Agreement shall be increased by an amount equal to the Estimated Net Debt minus the Final Net Debt.

          (ii)  Working Capital Adjustment . If the Net Working Capital shown on the Final Closing Statement (the “ Final Net Working Capital ”) is greater than the Estimated Net Working Capital, the consideration payable by Basic in connection with this Agreement shall be increased by an amount equal to the Final Net Working Capital minus the Estimated Net Working Capital. If the Final Net Working Capital is less than the Estimated Net Working Capital, the consideration payable by Basic under this Agreement shall be reduced by an amount equal to the Estimated Net Working Capital minus the Final Net Working Capital.

          (iii)  Netting . The increases or decreases in the consideration payable by Basic determined under clauses (i) and (ii) above shall be netted against each other. Any net reduction in the consideration payable by Basic in connection with this Agreement after application of Section 2.5(c)(i) and Section 2.5(c)(ii) shall be deducted from the Escrow Account and paid to Basic by the Escrow Agent at the time of delivery of the Final Closing Statement. Any net increase in the consideration payable by Basic in connection with this Agreement after application of Section 2.5(c)(i) and Section 2.5(c)(ii) will be paid to the former holders of JetStar Shares (excluding Dissenting JetStar Shares), pro rata according to the number of Partially-Diluted JetStar Shares represented thereby. Any such payments will be made to the former holders of JetStar Shares (other than Dissenting JetStar Shares) in cash and Basic Common Shares. The cash and Basic Common Shares payable pursuant to the immediately preceding sentence shall be allocated among the recipients thereof in the same manner as the right to receive payments of cash and Basic Common Shares was allocated among the holders of JetStar Shares (other than Dissenting JetStar Shares) as of the Effective Time. Any payments made to Basic out of the Escrow Deposit shall be treated as a reduction in the consideration paid by Basic in connection with the Merger. Any payments made by Basic pursuant to this Section 2.5(c)(iii) shall be treated as an increase in the consideration paid by Basic in connection with the Merger.

     (d)  Certain Defined Terms . For purposes of this Agreement:

          (i) “ Estimated Closing Adjustment ” equals the Estimated Net Debt Excess, if any, plus the Estimated Net Working Capital Excess, if any, minus the Estimated Net Debt Deficit, if any, minus the Estimated Net Working Capital Deficit, if any.

          (ii) “ GAAP ” means generally accepted accounting principles in the United States, consistently applied. In preparing the Post-Closing Statement, Basic shall not change the

accounting principles used in preparing the Estimated Closing Statement unless a change is required to make the accounting principles in accordance with GAAP.

          (iii) “ Net Debt ” means (A) the consolidated non-current liabilities of JetStar and its Subsidiaries as defined by GAAP and set forth on JetStar’s consolidated balance sheet, and including both the current and non-current portion of indebtedness for borrowed money (including any prepayment fees associated with the prepayment of the indebtedness described in Section 1.2(b)(i)(D) as of the Effective Time) and capitalized equipment lease obligations but excluding (1) up to $1,500,000 of deferred tax liabilities (net of deferred tax assets), (2) any sales, use or transfer Taxes accrued, or required to be accrued, by JetStar in connection with the Merger, and (3) any liabilities related to the obligations to make payments to Remaining Option Holders), minus (B) the consolidated cash of Jet Star and its Subsidiaries.

          (iv) “ Net Working Capital ” means the consolidated total current assets (as defined by GAAP but excluding cash) of JetStar and its Subsidiaries plus the HSR Fees paid by JetStar, plus amounts expended by JetStar or its Subsidiaries between the date hereof and the Closing for capital expenditures in accordance with the budget and capital expenditure schedule set forth on Schedule 5.1(b)(xii) of the JetStar Disclosure Letter or otherwise with the written consent of Basic, plus any cash amounts to be withheld from the merger consideration in accordance with Section 2.2(c)(i)(A) as an offset for the satisfaction of the Option Loans minus total current liabilities (as defined by GAAP but (x) including (1) fees, expenses and disbursements of JetStar and its representatives incurred in connection with the transactions contemplated by this Agreement that are not paid prior to or concurrently with the Effective Time, (2) the effect of the Merger on any liabilities of JetStar, including severance costs and change of control payments associated with employment or other contracts that are not paid prior to or concurrently with the Effective Time and (3) JetStar’s federal, state, local and other income, franchise, margin and other tax obligations due for tax periods ending on or before the Effective Date, and (y) excluding (1) the current portion of any indebtedness for borrowed money and capitalized lease obligations, (2) any sales, use or transfer Taxes accrued, or required to be accrued, by JetStar in connection with the Merger, and (3) any liabilities related to the obligations to make payments to Remaining Option Holders) of JetStar and its Subsidiaries.

     SECTION 2.6 APPRAISAL RIGHTS . JetStar Shares outstanding immediately prior to the Effective Time and held by a holder who has not voted in favor of the Merger and has not consented thereto in writing and who shall have demanded appraisal for such shares in accordance with the DGCL are referred to herein as “ Dissenting JetStar Shares ”. Dissenting JetStar Shares shall not be converted into a right to receive the cash or Basic Common Shares under this Agreement, unless such holder fails to perfect, withdraws or otherwise loses his right to appraisal. If, after the Effective Time, such holder fails to perfect, withdraws or loses his right to appraisal, such shares shall be treated as if they had been converted at the Effective Time into the right to receive the cash and Basic Common Shares such holder would have received in connection with the Merger and the other transactions contemplated by this Agreement, and Basic shall promptly provide to the Exchange Agent the cash and Basic Common Shares to which such former holder of Dissenting JetStar Shares shall be entitled to receive pursuant to the terms of this Agreement. JetStar shall give Basic prompt notice of any demands received by JetStar for appraisal of JetStar Shares. Except as required by applicable law or with the prior written consent of Basic, JetStar shall not make any payment with respect to, or settle or offer to

settle, any such demands. Basic and Merger Sub agree that payments to any holder of Dissenting JetStar Shares as a result of such holder’s exercise of appraisal rights pursuant to Section 262 of the DGCL shall be made from the assets of the Surviving Entity and not from the assets of Basic or assets provided by Basic.

     SECTION 2.7 ENVIRONMENTAL DEFECTS . Prior to the Closing, Basic may notify JetStar in writing of any Environmental Claims or other non-compliance with Environmental Laws by JetStar or any Subsidiary of JetStar, or any Person whose liability for an Environmental Claim JetStar or any Subsidiary of JetStar has retained, assumed or indemnified either contractually or by operation of law (including any such matters set forth on Schedule 3.13(b)(iv) of the JetStar Disclosure Letter) (an “ Environmental Defect ”). Each such notice asserting Environmental Defects shall include a report of an independent, third-party environmental consultant identifying and describing the Environmental Defect in reasonable detail, together with any other available supporting documentation, and the estimated amount necessary to remediate, remove, repair, clean, and settle damages and claims associated with the Environmental Defect (collectively, “ Environmental Remediation Costs ”). “ Environmental Claim ” means any claim, demand, suit, action, cause of action, proceeding, investigation or notice to JetStar or any of its Subsidiaries by any Person or entity alleging any potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, personal injuries, or penalties) arising out of, based on, or resulting from (i) the presence, or Release into the environment, of any Hazardous Materials at any location, whether or not owned, leased, operated or used by JetStar or any of its Subsidiaries, and (ii) circumstances forming the basis of any violation, or alleged violation, of any applicable Environmental Law.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF JETSTAR

     Except as set forth in the disclosure letter delivered to Basic concurrently with the execution hereof (the “ JetStar Disclosure Letter ”), JetStar represents and warrants to Basic that:

     SECTION 3.1 EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY . JetStar is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. JetStar is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction in which the character of the properties owned or leased by it therein or in which the transaction of its business makes such qualification necessary, except where the failure to be so qualified has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. JetStar has all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as now conducted. The copies of JetStar’s certificate of incorporation and bylaws previously made available to Basic are true and correct and contain all amendments as of the date hereof.

     SECTION 3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS . JetStar has the requisite corporate power and authority to execute and deliver this Agreement and all other agreements and documents contemplated hereby to which it is a party. The consummation by JetStar of the transactions contemplated hereby has been duly

authorized by all requisite corporate action, other than, with respect to the Merger, the adoption of this Agreement by JetStar’s stockholders. This Agreement constitutes the valid and legally binding obligation of JetStar, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws now or hereafter in effect relating to or limiting creditors’ rights generally and general principles of equity (regardless of whether in equity or at law).

     SECTION 3.3 CAPITALIZATION . The authorized capital stock of JetStar consists of 30,000,000 JetStar Common Shares and 20,000,000 JetStar Preferred Shares. As of the date hereof, there were (a) 783,453 JetStar Common Shares issued and outstanding, (b) 12,802,624 JetStar Preferred Shares issued and outstanding (c) 771,728 JetStar Common Shares subject to outstanding employee and director stock options (the “ JetStar Options ”) issued to employees and directors and to consultants who are natural persons, who provide bona fide services to JetStar (which services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for JetStar’s securities) pursuant to the JetStar 2005 Management Incentive Plan, as amended (the “ JetStar Option Plan ”), and (d) 1,273,112 JetStar Common Shares subject to outstanding purchase warrants (the “ JetStar Warrants ”). All issued and outstanding JetStar Shares (i) are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights, (ii) were not issued in violation of the terms of any agreement or other understanding binding upon JetStar and (iii) were issued in compliance with all applicable charter documents of JetStar and all applicable federal and state securities laws, rules and regulations. Except (x) as set forth in this Section 3.3 and (y) for any JetStar Common Shares issued pursuant to the exercise of the JetStar Options referred to in subsection (c) above or the JetStar Warrants referred to in subsection (d) above, there are no outstanding shares of capital stock and there are no options, warrants, calls, subscriptions, stockholder rights plan or similar instruments, convertible securities, or other rights, agreements or commitments which obligate JetStar or any of its Subsidiaries to issue, transfer or sell any shares of capital stock or other voting securities of JetStar or any of its Subsidiaries. Neither JetStar nor any of its Subsidiaries have any outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of JetStar or any Subsidiary on any matter.

     SECTION 3.4 SUBSIDIARIES . Each of JetStar’s Subsidiaries is a corporation, limited liability company or partnership duly organized, validly existing and in good standing (where applicable) under the laws of its jurisdiction of incorporation or organization, has the corporate, limited liability company or partnership power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted, and is duly qualified to do business and is in good standing (where applicable) in each jurisdiction in which the ownership, operation or lease of its property or the conduct of its business requires such qualification, except for jurisdictions in which such failure to be so qualified or to be in good standing has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. All of the outstanding shares of capital stock of, or other ownership interests in, each of JetStar’s Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and is owned, directly or indirectly (as specified on Schedule 3.4 of the JetStar Disclosure Letter), by JetStar free and clear of all liens, pledges, security interests, claims, preferential purchase rights or other rights, interests or

encumbrances (“ Liens ”), except to the extent of any third-party minority ownership or Liens set forth on Schedule 3.4 or Schedule 3.18 of the JetStar Disclosure Letter. Schedule 3.4 of the JetStar Disclosure Letter sets forth, for each Subsidiary of JetStar, its name and jurisdiction of incorporation or organization. Except as set forth on Schedule 3.4 of the JetStar Disclosure Letter, no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights (whether by law, pre-emptive or contractual) to convert any obligations into or otherwise acquire shares of capital stock or ownership interests in any of the Subsidiaries of JetStar are outstanding or will come into existence as a result of the execution of this Agreement or consummation of the transactions contemplated hereby.

     SECTION 3.5 NO VIOLATION . Neither JetStar nor any of its Subsidiaries is, or has received notice that it would be with the passage of time, in violation of any term, condition or provision of (a) its charter documents or bylaws, operating agreement or partnership agreement, as applicable, (b) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease, license or other instrument, or (c) any order of any court, governmental authority or arbitration board or tribunal, or any law, ordinance, governmental rule or regulation to which JetStar or any of its Subsidiaries or any of their respective properties or assets is subject, or is delinquent with respect to any report required to be filed with any governmental entity, except, in the case of matters described in clause (b) or (c), as has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. Except as has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate, (i) JetStar and its Subsidiaries hold all permits, licenses, variances, exemptions, orders, franchises and approvals of all governmental authorities necessary for the lawful conduct of their respective businesses as presently conducted (the “ JetStar Permits ”) and (ii) JetStar and its Subsidiaries are in compliance with the terms of JetStar Permits. No investigation by any governmental authority with respect to JetStar or any of its Subsidiaries is pending or, to the knowledge of JetStar, threatened.

     SECTION 3.6 NO CONFLICT .

     (a) Assuming all of the consents and approvals identified in Section 3.6(b) or in Schedule 3.6(c) of the JetStar Disclosure Letter, neither the execution and delivery by JetStar of this Agreement nor the consummation by JetStar of the transactions contemplated hereby in accordance with the terms hereof will: (i) conflict with or result in a breach of any provisions of the certificate of incorporation or bylaws of JetStar; (ii) violate, or conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or in a right of termination or cancellation of, or give rise to a right of purchase under, or accelerate the performance required by, or result in the creation of any Lien upon any of the properties of JetStar or its Subsidiaries under, or result in being declared void, voidable, or without further binding effect, or otherwise result in a detriment to JetStar or any of its Subsidiaries under any of the terms, conditions or provisions of, any note, bond, mortgage, indenture, deed of trust, JetStar Permit, lease, contract, agreement, joint venture or other instrument or obligation to which JetStar or any of its Subsidiaries is a party, or by which JetStar or any of its Subsidiaries or any of their properties is bound or affected; or (iii) contravene or conflict with or constitute a violation of any provision of any law, rule, regulation, judgment, order or decree binding upon or applicable to

JetStar or any of its Subsidiaries, except, in the case of matters described in clause (ii) or (iii), as has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate.

     (b) Neither the execution and delivery by JetStar of this Agreement nor the consummation by JetStar of the transactions contemplated hereby in accordance with the terms hereof will require any consent, approval or authorization of, or filing or registration with, any governmental or regulatory authority, other than (i) the filings required under the DGCL, and (ii) filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”), the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the Securities Act of 1933, as amended (the “ Securities Act ”) or applicable state securities and “ Blue Sky ” laws, applicable foreign competition or antitrust laws ((i) and (ii), collectively, the “ Regulatory Filings ”), except for any consent, approval or authorization the failure of which to obtain and for any filing or registration the failure of which to make has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate.

     (c) Other than as contemplated by Section 3.6(b) , no consents, assignments, waivers, authorizations or other certificates are necessary in connection with the transactions contemplated hereby to provide for the continuation in full force and effect of all of the JetStar Permits or JetStar Material Contracts or for JetStar to consummate the transactions contemplated hereby, except where the failure to receive such consents or other certificates has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate.

     (d) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (i) result in any payment from JetStar or its Subsidiaries (including severance, unemployment compensation, parachute payment, bonus or otherwise) becoming due to any director, employee or independent contractor of JetStar or any of its Subsidiaries under any JetStar Plan (as defined in Section 3.11 ) or otherwise; (ii) increase any benefits otherwise payable under any JetStar Plan or otherwise; or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

     SECTION 3.7 FINANCIAL STATEMENTS .

     (a) The audited consolidated balance sheet of JetStar as of April 30, 2006, and the audited consolidated statements of operations, cash flows and stockholders’ equity for the period from inception to April 30, 2006, in each case, as audited by Grant Thornton LLP, and the unaudited consolidated balance sheets of JetStar as of October 31, 2006, and the unaudited consolidated statements of operations, cash flows and stockholders’ equity for the six months ended October 31, 2006, as delivered by JetStar to Basic as Schedule 3.7(a) of the JetStar Disclosure Letter are collectively referred to herein as the “ JetStar Financial Statements ”. Each of the consolidated balance sheets included (i) in the JetStar Financial Statements (including any related notes and schedules) do, and (ii) in the Additional Financial Statements (including any related notes and schedules) when delivered to Basic will, fairly present in all material respects the consolidated financial position of JetStar and its Subsidiaries as of its date, and each of the consolidated statements of operations, cash flows and stockholders’ equity included (i) in the

JetStar Financial Statements (including any related notes and schedules) do, and (ii) in the Additional Financial Statements (including any related notes and schedules) when delivered to Basic will, fairly present in all material respects the results of operations, cash flows or changes in stockholders’ equity, as the case may be, of JetStar and its Subsidiaries for the periods set forth therein, in each case in accordance with GAAP, except, in the case of unaudited interim financial statements, for year-end audit adjustments, the absence of footnotes, and as otherwise may be noted therein.

     (b) JetStar and its Subsidiaries (i) make and keep accurate books and records and (ii) maintain a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s authorization, (B) transactions are recorded as necessary to permit preparation of the JetStar Financial Statements in conformity with GAAP and to maintain accountability for its assets, (C) access to assets is permitted only in accordance with management’s authorization and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

     (c) (i) JetStar and each of its Subsidiaries have established and maintain internal controls; (ii) since the date of the most recent balance sheet of JetStar and its Subsidiaries reviewed or audited by its independent auditors, JetStar has not been advised of (A) any significant deficiencies in the design or operation of its internal controls which could adversely affect the ability of JetStar and its Subsidiaries to record, process, summarize and report financial data, (B) any material weaknesses in its internal controls, or (C) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of JetStar and its Subsidiaries; and (iii) since the date of the most recent balance sheet of JetStar and its Subsidiaries reviewed or audited by its independent auditors, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls.

     SECTION 3.8 LITIGATION AND LIABILITIES . There are no actions, suits or proceedings pending against JetStar or any of its Subsidiaries or, to JetStar’s knowledge, threatened against JetStar or any of its Subsidiaries, at law or in equity, or before or by any federal, state or foreign commission, court, board, bureau, agency or instrumentality, other than those that have not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. There are no outstanding judgments, decrees, injunctions, awards or orders against JetStar or any of its Subsidiaries, other than those that have not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. There are no obligations or liabilities of any nature, whether accrued, absolute, contingent or otherwise, of JetStar or any of its Subsidiaries that are required in accordance with GAAP to be disclosed in the JetStar Financial Statements, other than those liabilities and obligations (a) that are disclosed in the JetStar Financial Statements or in the notes thereto, (b) that have been incurred in the ordinary course of business since April 30, 2006, (c) related to expenses associated with the transactions contemplated by this Agreement or (d) that would not have or reasonably be expected to have a JetStar Material Adverse Effect. JetStar has previously provided to Basic a full and complete list describing and quantifying all

amounts, contingent or otherwise, payable by JetStar or any of its Subsidiaries at any time after the Effective Time in respect of prior acquisitions of businesses or assets.

     SECTION 3.9 ABSENCE OF CERTAIN CHANGES . Since April 30, 2006, except as contemplated by this Agreement, JetStar has conducted its business only in the ordinary and usual course of business and, during such period, there has not been (i) any event, condition, action or occurrence that has had or would reasonably be expected to have a JetStar Material Adverse Effect; (ii) any material change by JetStar or any of its Subsidiaries (viewed on a consolidated basis) in any of its accounting methods, principles or practices, except for changes required by GAAP, or any of its Tax methods, practices or elections except as required by applicable law; (iii) any material damage, destruction, or loss to the business or properties of JetStar and its Subsidiaries, taken as a whole, not covered by insurance; (iv) any declaration, setting aside or payment of any dividend or other distribution in respect of the capital stock of JetStar, or any direct or indirect redemption, purchase or any other acquisition by JetStar of any such stock; or (v) any increase in or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option, stock purchase or other employee benefit plan for the benefit of any directors, officers or key employee of JetStar and its Subsidiaries.

     SECTION 3.10 TAXES .

     (a) Each of JetStar and its Subsidiaries and any affiliated, combined or unitary group of which any such entity is or was a member has: (i) timely filed all Tax Returns required to be filed by it with respect to any Taxes (and all such Tax Returns are true, complete and accurate in all material respects), (ii) timely paid all Taxes that are due and payable or established adequate reserves for such Taxes, (iii) complied with all applicable laws, rules and regulations relating to the payment and withholding of Taxes, and (iv) timely withheld from employee wages and paid over to the proper Governmental Authorities all amounts required to be so withheld and paid over, except where the failure to file, pay, comply with or withhold has not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate.

     (b) No extension of time has been requested for JetStar to file any Tax Return that has not yet been filed or to pay any Tax that has not yet been paid. JetStar has not granted a power of attorney that remains outstanding with regard to any Tax matter.

     (c) There is no pending or, to the knowledge of JetStar, threatened examination, investigation, audit, suit, action, claim or proceeding relating to Taxes (a “ Tax Audit ”) of JetStar.

     (d) JetStar has not within the last five years received notice of a determination by a Tax Authority that Taxes are owed by it (a “ Tax Deficiency ”) and, to the knowledge of JetStar, no such Tax Deficiency is proposed or threatened.

     (e) There are no Liens arising from or related to Taxes on or pending against JetStar or any of its assets or properties except for Permitted Liens.

     (f) There are no presently outstanding waivers or extensions, or requests for waiver or extension, of the time within which a Tax Deficiency may be asserted or assessed.

     (g) JetStar would not be required to include in income in future years any amount as a result of (i) any change in method of accounting for a taxable period ending prior to the Closing Date, (ii) any closing agreement under Section 7121 of the Code, (iii) any installment sale or open transaction made prior to the Closing Date, or (iv) any prepaid amount received on or before the Closing Date.

     (h) JetStar is not a party to any arrangement to which Section 280G of the Code could under any circumstances apply.

     (i) JetStar is not now and has never been (i) an includable member of an “affiliated group” within the meaning of Section 1504(a) of the Code or otherwise liable for the Taxes of a Person other than JetStar pursuant to Treasury Regulation Section 1.1502-6 or any similar provision of state, local or foreign law, whether as a transferee, as a successor, by operation of law, by contract or otherwise, (ii) a member of any consolidated, combined or unitary Tax Return filing group, or (iii) a party to any Tax sharing agreement, Tax indemnity agreement or similar agreement, arrangement or practice relating to Taxes, including an agreement that obligates it to make any payment computed by reference to the Taxes, Taxable income or Tax losses of any other Person, except in each case for any group for which it is the common parent.

     (j) JetStar has never participated, directly or indirectly, in a transaction which is described in Treasury Regulation Sections 1.6011-4(b)(2) or 1.6011-4(b)(3), and JetStar has never held “an interest” in a “tax shelter,” as those terms are defined in Treasury Regulation Section 301.6112-1.

     (k) JetStar has never been a “distributing corporation” or a “controlled corporation” in connection with a distribution described in Section 355 of the Code.

     (l) The net operating losses, alternative minimum tax net operating losses, net capital losses, alternative minimum tax net capital losses, Tax credits, alternative minimum tax credits and other Tax attributes of JetStar are not subject to any consolidated return limitation, limitation under Section 382 of the Code or any other limitation on their use, allowance or availability.

     (m) JetStar and its Subsidiaries have properly withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to employees, independent contractors, creditors, stockholders and other third parties.

Each reference to a provision in this Section 3.10 shall be treated for state, local and foreign Tax purposes as a reference to analogous or similar provisions of state, local and foreign law.

     SECTION 3.11 EMPLOYEE BENEFIT PLANS .

     (a) For purposes of this Section 3.11 , “ ERISA Affiliate ” means any Subsidiary of JetStar which, with JetStar, forms or formed a controlled group of corporations, a group of trades or business under common control or an affiliated service group, within the meaning of Section 414(b), (c) or (m) of the Code.

     (b) All employee benefit plans, programs, arrangements and agreements (whether or not described in Section 3(3) of the Employee Retirement Income Security Act of 1974, as

amended (“ ERISA ”)), and trusts, whether or not written or oral, covering active, former or retired employees of JetStar or any ERISA Affiliate which provide material benefits to such employees, or as to which JetStar or any ERISA Affiliate has any material liability or material contingent liability, are listed on Schedule 3.11(b) of the JetStar Disclosure Letter (the “ JetStar Plans ”).

     (c) JetStar has made available to Basic a true, correct and complete copy of each of the JetStar Plans, and all material contracts relating thereto, or to the funding thereof, including, without limitation, all trust agreements, insurance contracts, administration contracts, investment management agreements, subscription and participation agreements, and record-keeping agreements, each as in effect on the date hereof. In the case of any JetStar Plan that is not in written form, Basic has been supplied with an accurate description of such JetStar Plan as in effect on the date hereof. A true, correct and complete copy of the most recent annual report (Form 5500), actuarial report, accountant’s opinion of the plan’s financial statements, summary plan description and IRS determination or opinion letter with respect to each JetStar Plan, to the extent applicable, and the most recently prepared schedule of assets held with respect to any funded JetStar Plan have been made available to Basic.

     (d) All JetStar Plans comply in form and have been administered in operation in all material respects with all applicable requirements of law, excluding any deficiencies that have not resulted in and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate, no event has occurred which will or would be reasonably likely to cause any such JetStar Plan to fail to comply with such requirements, excluding any deficiencies that have not resulted in and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate, and no notice has been issued by any governmental authority questioning or challenging such compliance.

     (e) All required employer contributions under any JetStar Plans have been made or will be timely made as of the Effective Time or properly reflected in the JetStar Financial Statements in accordance with GAAP, except for any deficiencies that have not resulted in and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate. No changes in contributions or benefit levels with respect to any of the JetStar Plans are scheduled to occur after the date of this Agreement other than in the ordinary course of business.

     (f) Each JetStar Plan intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the IRS that such JetStar Plan is in compliance with “ GUST ,” all amendments required to have been made to such JetStar Plan after the issuance of the “GUST” determination letter have been timely made and no amendment has been made or action taken that would reasonably be expected to cause the loss of such qualified status.

     (g) There are no pending or, to JetStar’s knowledge, threatened or anticipated, claims against or otherwise involving any of the JetStar Plans and no suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of the JetStar Plan activities) has been brought against or with respect to any JetStar Plan.

     (h) Neither JetStar nor any of its Subsidiaries has incurred or reasonably expects to incur any liability under Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA.

     (i) None of the assets of any JetStar Plan is invested in employer securities (as defined in Section 407(d)(1) of ERISA) or employer real property (as defined in Section 407(d)(2) of ERISA).

     (j) Neither JetStar nor any of its Subsidiaries has any liability or contingent liability for providing, under any JetStar Plan or otherwise, any post-retirement medical or life insurance benefits, other than statutory liability for providing group health plan continuation coverage under Part 6 of Title I of ERISA and Section 4980B of the Code.

     (k) There has been no act or omission that would impair the ability of the sponsor of each JetStar Plan to amend or terminate any such JetStar Plan without the prior consent of any person or persons.

Neither JetStar nor its Subsidiaries make any representation or warranty regarding compliance or failure to comply with, or any actual or contingent liability under, any law, rule or regulation applicable to any JetStar Plan, except as expressly set forth in the JetStar Financial Statements or in this Section 3.11 .

     SECTION 3.12 LABOR MATTERS .

     (a) Neither JetStar nor any of its Subsidiaries is a party to, or bound by, any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization.

     (b) Neither JetStar nor any of its Subsidiaries is subject to any employment related dispute, strike or work stoppage that would have or reasonably be expected to have a JetStar Material Adverse Effect.

     (c) To JetStar’s knowledge, there are no organizational efforts with respect to the formation of a collective bargaining unit presently being made or threatened involving employees of JetStar or any of its Subsidiaries.

     SECTION 3.13 ENVIRONMENTAL MATTERS .

     (a) As used in this Agreement:

          (i) “ Environmental Laws ” means any and all applicable laws, statutes, regulations, rules, orders, ordinances, legally enforceable directives, and rules of common law of any governmental entity pertaining to protection of human health (to the extent arising from exposure to Hazardous Materials) or the environment (including, without limitation, any natural resource damages or any generation, use, storage, treatment, disposal, release, threatened release, discharge, or emission of Hazardous Materials into the indoor or outdoor environment) in effect at the time of Closing;

          (ii) “ Hazardous Materials ” means any (1) chemical, product, substance, waste, pollutant, or contaminant that is defined or listed as hazardous or toxic or that is otherwise regulated under any Environmental Law; (2) asbestos containing materials, whether in a friable or non-friable condition, polychlorinated biphenyls, naturally occurring radioactive materials or radon; and (3) any petroleum hydrocarbons, petroleum products, petroleum substances, crude oil, natural gas, and any components, fractions, or derivatives thereof;

          (iii) “ Environmental Permits ” means any and all permits, registrations, licenses, consents, exemptions, variances, authorizations, and similar approvals required under Environmental Laws;

          (iv) “ Release ” means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating, injecting, escaping, leaching, dumping, or disposing into the air, surface water, ground water, or onto the ground, ground surface, or onto or into man-made structures;

          (v) “ JetStar Real Properties ” means those real properties owned, leased, or otherwise operated by JetStar or its Subsidiaries in connection with the performance of their respective businesses; and

          (vi) “ Offsite Non-JetStar Real Properties ” means any real properties other than JetStar Real Properties

     (b) Except as have not resulted and would not reasonably be expected to result in exposure to JetStar or its Subsidiaries of losses, damages or liabilities in excess of $100,000 in the aggregate:

          (i) JetStar and its Subsidiaries and their respective operations, assets, businesses and JetStar Real Properties are in compliance with all Environmental Laws and Environmental Permits and have been in compliance with all Environmental Laws, and Environmental Permits except where the failure to comply could not give rise to any loss, damage or liability after the Effective Time;

          (ii) All Environmental Permits required under Environmental Laws for operating JetStar’s and its Subsidiaries’ assets, businesses, and JetStar Real Properties as they are currently being operated have been obtained and are currently in full force and effect, and, if subject to renewal or modification, all submittals required under Environmental Laws in connection with Environmental Permits have been timely submitted to the respective governmental entity, do not contain any material inaccuracy and, to JetStar’s knowledge, there are no conditions or circumstances that would limit or preclude it or its Subsidiaries from renewing such Environmental Permits;

          (iii) JetStar and its Subsidiaries are not subject to any pending or, to JetStar’s knowledge, threatened claims, demands, actions, suits, investigations, inquiries, information requests or proceedings under Environmental Laws and neither JetStar nor its Subsidiaries have received written notice of alleged violations under applicable Environmental Laws with respect to their respective operations, assets, businesses, or JetStar Real Properties;

          (iv) There have been no Releases of Hazardous Materials on, under or from JetStar Real Properties and there are no investigations, remediations, removals, or monitorings of Hazardous Materials required under Environmental Laws at such properties;

          (v) Neither JetStar nor its Subsidiaries have received any written notice asserting an alleged liability or obligation, or requesting information, under any Environmental Laws with respect to the investigation, remediation, removal, or monitoring of any Hazardous Materials at, under, or Released or threatened to be Released from any Offsite Non-JetStar Real Properties and, to the knowledge of JetStar, there are no conditions or circumstances that would reasonably be expected to result in the receipt of such written notice;

          (vi) There has been no exposure of any person or property to Hazardous Materials in connection with JetStar’s or its Subsidiaries’ operations, assets, businesses, or JetStar Real Properties that would reason