STOCK PURCHASE AGREEMENT

Exhibit 10.50

STOCK PURCHASE AGREEMENT

dated as of

January 18, 2007

by and among

THE NAMED SELLERS,

COLGAN AIR, INC.

and

PINNACLE AIRLINES CORP.

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STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (this “Agreement”) is made and entered into as of January 18, 2007, by and among the Persons named as Sellers on the signature pages hereof (“Sellers”); Colgan Air, Inc., a Virginia corporation (“Company”); and Pinnacle Airlines Corp., a Delaware corporation (“Buyer”). The capitalized terms used in this Agreement are listed in Section 14 and are defined therein when they are not defined elsewhere in this Agreement.

      Introduction . Sellers desire to sell, and Buyer desires to purchase, all outstanding shares of capital stock of Company (the “Shares”) for the consideration, on the terms, and subject to the conditions set forth in this Agreement. Company has joined in this Agreement for the specific purposes stated herein and is an indispensable party hereto, as Buyer would not purchase the Shares from Sellers but for the participation of Company in the Transactions, and Company hereby acknowledges the receipt, adequacy and legal sufficiency of good and valuable consideration for its participation, including the benefits inuring to it from the consummation of the Transactions. Based on the foregoing, the parties hereto, intending to be legally bound, hereby agree as follows:

     1.  Sale and Transfer of Shares . On the terms and subject to the conditions set forth in this Agreement, Sellers shall sell and transfer the Shares to Buyer, and Buyer shall purchase the Shares from Sellers, at the Closing.

     2.  Purchase Price . On the terms and subject to the conditions set forth in this Agreement, the purchase price for the Shares (the “Purchase Price”) shall be $20,000,000 adjusted by the Adjustment Amount. The Purchase Price, without regard to the Adjustment Amount or any Net Seller’s Debt as contemplated in Sections 3 and 4(mm), respectively, shall consist of the following:

          (a) a total of $10,000,000 in cash (the “Cash Consideration”) payable by Buyer to Paying Agent (for the benefit of each of Sellers in the respective amounts set forth in Schedule 2) by wire transfer of immediately available federal funds to an account specified by Sellers’ Representative in writing to Buyer at least two Business Days before the Closing Date; and

          (b) a total of $10,000,000 in original principal amount of a non-negotiable promissory note delivered to Sellers’ Representative payable by Buyer to Sellers (with payment deliverable to Paying Agent in accordance with the terms of the Paying Agent Agreement) in substantially the form of Exhibit 2(b) (the “Promissory Note”), with the Promissory Note being secured by a pledge of all the Shares sold by Sellers.

Each of Sellers acknowledges that (i) payment of the Cash Consideration to Paying Agent, (ii) the delivery of the Promissory Note to Sellers’ Representative, and (iii) payment to Paying Agent of all amounts due under the Promissory Note, constitutes full payment of the consideration due to each of Sellers for their respective Shares for the benefit of all Sellers.

     3.  Adjustment of Purchase Price .

          (a)  Adjustment Amount . As used in this Agreement, the “Adjustment Amount,” which may be a positive or negative number, shall be determined in accordance with the following equation:

AA = $25,000 x OI — $10,600,000

$100,000

where —

AA = the Adjustment Amount; and

OI = the aggregate ordinary income to Sellers for federal
income Tax purposes from the sale of the Shares to Buyer based
on the reporting of such transaction as a deemed asset sale
under Section 338(h)(10) of the Code.

          (b) Determination of Adjustment Amount . As soon as practicable after the Closing Date, and in any event not later than 90 days after the Closing Date, Company shall prepare and submit to Sellers (1) unaudited financial statements of Company (the “Closing Date Financial Statements”) consisting of a balance sheet as of the Closing Date (the “Closing Date Balance Sheet”) and a statement of operations for the year ended December 31, 2006 and the short period ending with the Closing Date in 2007, which shall be certified by an officer of Company as fairly representing the financial condition of Company as of the Closing Date and the results of operations of Company for the period then ended, subject to any infirmities in the Financial Statements and in the methodology used to produce them which are also used to produce the Closing Date Financial Statements, and (2) a valuation of the assets of Company as of the Closing Date (the “Closing Date Asset Valuation”), which shall be prepared by an independent third party and shall be certified by an officer of Company as fairly representing the value of Company’s assets as of the Closing Date. As soon as practicable after receipt of both the Closing Date Financial Statements and Closing Date Asset Valuation, but in any event not later than 90 days after the receipt thereof, Sellers shall prepare and submit to Buyer a written statement, including supporting work papers, setting forth in reasonable detail Sellers’ calculation of the Adjustment Amount (the “Sellers’ Statement”). If, within 30 days after Buyer’s receipt of Sellers’ Statement, Buyer has not given Sellers a written notice of its objection to the calculation of the Adjustment Amount set forth in Sellers’ Statement, then the Adjustment Amount set forth in Sellers’ Statement shall be final, binding and conclusive on Sellers and Buyer and shall be used by the parties to adjust the Purchase Price pursuant to Section 3(c). If, however, within 30 days after Buyer’s receipt of Sellers’ Statement, Buyer gives Sellers a written notice of its objection to the calculation of the Adjustment Amount set forth in Sellers’ Statement (the “Buyer’s Objection Notice”), which shall include a statement setting forth in reasonable detail the basis for Buyer’s objection, then Sellers and Buyer shall attempt in good faith to resolve the disputed issues with respect to the calculation of the Adjustment Amount. Buyer and Sellers shall provide each other, after the Closing, with access to any information necessary to calculate the Adjustment Amount or reasonably necessary to resolve disputed issues. If, within 30 days after Sellers’ receipt of Buyer’s Objection Notice, Sellers and Buyer resolve all of the disputed issues with respect to the calculation of the Adjustment Amount, then the Adjustment Amount, as agreed upon by Sellers and Buyer, shall be final, binding and conclusive on the parties and shall be used by them to adjust the Purchase Price pursuant to Section 3(c). If, however, within 30 days after Sellers’ receipt of Buyer’s Objection Notice, Sellers and Buyer fail to resolve all of the disputed issues with respect to the calculation of the Adjustment Amount, then Sellers and Buyer shall jointly submit the remaining disputed issues to the Neutral Accounting Firm (the “Joint Submission”) for resolution. In such event, Sellers and Buyer shall furnish or cause to be furnished to the Neutral Accounting Firm such documents, Records, work papers and other information relating to the disputed issues as the parties may choose or as the Neutral Accounting Firm may request. Sellers and Buyer shall use their respective Best Efforts to cause the Neutral Accounting Firm, after giving due consideration to the disputed issues, to prepare and deliver to Sellers and Buyer a written report setting forth and explaining its determination of each disputed issue and the resulting calculation of the Adjustment Amount within 60 days after the Neutral Accounting Firm’s receipt of the Joint Submission. The Neutral Accounting Firm’s determination of each disputed issue and its calculation of the Adjustment Amount shall be final, binding and conclusive on Sellers and Buyer and shall be used by

the parties to adjust the Purchase Price pursuant to Section 3(c). Sellers and Buyer each shall be responsible for the payment of 50% of the fees and expenses of the Neutral Accounting Firm in performing such services.

          (c)  Purchase Price Adjustment; Payment or Deduction of Adjustment Amount . Upon the final determination of the Adjustment Amount pursuant to Section 3(b), the Purchase Price shall be increased by the Adjustment Amount if it is a positive number and shall be decreased by the Adjustment Amount if it is a negative number. Sellers and Buyer shall use and report for all accounting, Tax and other purposes the Purchase Price as so adjusted by the Adjustment Amount. If the Adjustment Amount, as finally determined pursuant to Section 3(b), is a positive number, then within five Business Days after receipt of such final determination, Buyer shall pay the Adjustment Amount (together with interest thereon at the rate set forth in the Promissory Note for the period from the Closing Date through the date of payment) in cash to the Paying Agent. If the Adjustment Amount, as finally determined pursuant to Section 3(b), is a negative number, then within ten (10) Business Days after receipt of such final determination, Buyer shall, if the Promissory Note remains outstanding, (1) set-off and deduct the Adjustment Amount (together with interest thereon at the rate set forth in the Promissory Note for the period from the Closing Date through the last Business Day prior to the date of such set-off by Buyer) from the next maturing and (if necessary) any succeeding installments of the unpaid principal and interest of the Promissory Note, and (2) give a written notice to Paying Agent and Seller’s Representative of the effect of the set-off (both as to the set-off of the Adjustment Amount and interest) on the Promissory Note.

     4.  Representations and Warranties of Sellers and Company . Sellers and Company jointly and severally represent and warrant to Buyer that, to the Knowledge of Sellers and Company:

          (a)  Organization and Good Standing . Company is a corporation duly organized, validly existing, and in good standing under the laws of the Commonwealth of Virginia. Company is duly qualified to do business as a foreign corporation and is in good standing under the laws of the states and other jurisdictions listed in Schedule 4(a)-1 , which comprise all of the states and other jurisdictions in which either the ownership or use of the assets and properties owned or used by Company, or the nature of the activities conducted by Company, requires such qualification. Company has no Subsidiaries and does not own any equity securities or other securities of any other Person. Schedule 4(a)-2 contains complete and accurate copies of the Governing Documents of Company as currently in effect. Neither Company nor its board of directors or shareholders has taken any action with respect to the dissolution of Company or the liquidation of its assets.

          (b)  Power, Authority and Capacity . Sellers have the absolute and unrestricted right, power, authority and capacity to execute and deliver this Agreement and all other documents to be executed and delivered by Sellers pursuant to this Agreement (this Agreement and such other documents are referred to collectively as the “Sellers’ Documents”) and to perform their obligations thereunder. Except as described in Section 4(w)(ii), Company has the absolute and unrestricted right, power and authority, in compliance with applicable Governmental Authorizations and Legal Requirements, to conduct its business as it is now being conducted, to own or use the assets and properties that it purports to own or use, to execute and deliver this Agreement and all other documents to be executed and delivered by Company pursuant to this Agreement (this Agreement and such other documents are referred to collectively as the “Company’s Documents”), and to perform its obligations thereunder.

          (c)  Authorization . Sellers have taken any and all actions necessary to authorize the execution and delivery of Sellers’ Documents, the performance of their obligations thereunder, and the consummation of the Transactions. Company has taken or will have taken prior to Closing all actions

necessary to authorize the execution and delivery of Company’s Documents, the performance of its obligations thereunder, and the consummation of the Transactions.

          (d)  Enforceability . This Agreement has been executed and delivered by or on behalf of Sellers, constitutes a legal, valid and binding obligation of Sellers, and is enforceable against Sellers in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium and similar Legal Requirements affecting the enforceability of creditors’ rights in general or by general principles of equity. As of the Closing Date, the other Sellers’ Documents will be executed and delivered by or on behalf of Sellers, will constitute legal, valid and binding obligations of Sellers, and will be enforceable against Sellers in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium and similar Legal Requirements affecting the enforceability of creditors’ rights in general or by general principles of equity. This Agreement has been executed and delivered by a duly authorized officer of Company, constitutes a legal, valid and binding obligation of Company, and is enforceable against Company in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium and similar Legal Requirements affecting the enforceability of creditors’ rights in general or by general principles of equity. As of the Closing Date, the other Company’s Documents will be executed and delivered by a duly authorized officer of Company, will constitute legal, valid and binding obligations of Company, and will be enforceable against Company in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium and similar Legal Requirements affecting the enforceability of creditors’ rights in general or by general principles of equity.

          (e)  Impediments . Neither the execution, delivery or performance of any of Sellers’ Documents or Company’s Documents nor the consummation of any of the Transactions will, directly or indirectly, with or without notice or lapse of time, (1) Breach any Governing Document of any Seller or Company or any resolution adopted by the board of directors or other governing body or the shareholders or other interest owners of any Seller or Company; (2) Breach, or give any Governmental Body or other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or Order to which any Seller or Company is or may be subject; (3) Breach, or, subject to Section 4(f) below, give any Governmental Body the right to cancel, terminate, revoke, withdraw, suspend or modify, any Governmental Authorization that is held by Company or otherwise relates to its business or any of its assets and properties; (4) Breach any Company Contract; (5) cause Buyer or Company to become subject to, or liable for the payment of, any Tax other than due to the termination of Company’s election under Subchapter S of the Code as a result of the consummation of the Transactions; (6) result in the imposition or creation of any Encumbrance on or with respect to any of Company’s assets and properties; or (7) result in any shareholder of Company having the right to exercise dissenters’ appraisal rights or other similar rights.

          (f)  Notices, Filings and Consents . Except as described in Schedule 4(f) , Sellers and Company are not required to give any notice to, make any filing with, or obtain any Consent from, any Governmental Body, any other party to a Company Contract, or any other Person in connection with the execution, delivery and performance of any of Sellers’ Documents or Company’s Documents or the consummation of any of the Transactions (including, without limitation, the purchase and sale of the Facilities contemplated by Section 6 hereof) All such notices and filings as to which the failure to have made prior to Closing would have a material adverse effect on the operations, financial condition or prospects of Company or on its legal standing (“Material Notices”) have been made, and all Consents as to which the failure to have obtained prior to Closing would have a material adverse effect on the operations, financial condition or prospects of Company or on its legal standing (“Material Consents”) have been obtained.

          (g)  Capitalization . The authorized capital stock of Company consists of only 1,000 shares of common stock, no par value, of which only 600 shares are outstanding and constitute the Shares. Sellers are the record holders and beneficial owners of the Shares, free and clear of all Encumbrances. Schedule 4(g) contains a complete and accurate list of the names of Sellers and the respective numbers of Shares that they own. There are no outstanding (1) securities of Company other than the Shares, (2) options, warrants or other rights to acquire any capital stock or other securities of Company, or (3) securities that are convertible into or exchangeable for any capital stock or other securities of Company. Except for this Agreement, there are no Contracts or commitments relating to the issuance, sale or transfer of the Shares or any other capital stock or other securities of Company. The Shares have been duly authorized and validly issued and are fully paid and nonassessable. None of the Shares was issued in Breach of the Securities Act or any other Legal Requirement or the preemptive rights or other similar rights of any shareholder of Company. Except for a Securities Act restrictive legend, no legend or other reference to any purported Encumbrance appears on any certificate representing the Shares. Company has not granted, and no Person has, any registration rights with respect to any of the Shares. Company does not own, or have any right or obligation to acquire, any capital stock or other securities of any Person or any direct or indirect equity or ownership interest in any other business. Except for dividends and distributions to Sellers to permit Sellers to pay when due the Tax owed by Sellers attributable to the operation of Company resulting from Company’s election to be taxed under Subchapter S of the Code, since December 31, 2005, Company has not (1) declared or paid any dividend or other distribution in respect of any capital stock of Company, (2) purchased, redeemed, retired or otherwise acquired any capital stock of Company, or (3) committed to, or taken any other action with respect to, any of the foregoing actions.

          (h)  Financial Statements . Schedule 4(h) sets forth (1) audited financial statements of Company consisting of the balance sheets as of December 31, 2004 and 2005, the statements of operations, statements of shareholders’ equity, and statements of cash flows for the years then ended, the notes thereto, and the Accounting Firm’s unqualified audit report thereon (collectively, the “Audited Financial Statements”), and (2) unaudited financial statements of Company, prepared in accordance with GAAP and consisting of the balance sheet as of June 30, 2006 (the “Interim Balance Sheet”), the statement of operations, statement of shareholders’ equity, and statement of cash flows for the six months then ended (collectively, the “Interim Financial Statements” and together with the Audited Financial Statements, the “Financial Statements”). The Financial Statements fairly present the financial condition of Company as of the respective dates thereof and the results of operations and cash flows of Company for the respective periods then ended, all in accordance with GAAP, subject only, in the case of the unaudited financial statements, to normal recurring year-end adjustments (the effect of which will not, individually or in the aggregate, be materially adverse) and the absence of notes (which, if presented, would not differ materially from those included with the audited financial statements). The Financial Statements reflect the consistent application of GAAP throughout the periods involved, subject only to the foregoing qualifications for the unaudited financial statements. The Financial Statements were prepared from and are in accordance with the books of account and other accounting and financial Company Records. The Accounting Firm are independent certified public accountants within the meaning of Regulation S-X under the Exchange Act. Company had a net loss of $3,913,744 for the year ended December 31, 2005.

          (i)  No Undisclosed Liabilities . Except as disclosed on Schedule 4(i), Company has no Liability except for the Liabilities reflected or reserved against in the Interim Balance Sheet and current Liabilities incurred in the Ordinary Course of Business of Company since the date of the Interim Balance Sheet (the “Interim Balance Sheet Date”), and has paid or otherwise satisfied all of such current Liabilities as are due in the Ordinary Course of Business of Company; provided however (without limiting Sellers’ indemnification obligation due to any noncompliance or Breach), that (1) Company is

from time to time noncompliant with payment terms of Material Company Contracts, but (2) Company has not been declared in breach of, nor has Company received written notice of any intention by another party to any Material Company Contract to declare Company in Breach of, any Material Company Contract as a result of such noncompliance.

          (j)  Company Records . The books of account, minute books, stock record books, and other Company Records, all of which Company has made available to Buyer, are complete and correct and have been maintained in accordance with sound business practices. The books of account and other Company Records accurately and fairly reflect, in reasonable detail, the transactions and dispositions of the assets of Company. The minute books of Company contain accurate and complete Records of all meetings held of, and corporate actions taken by, the board of directors, its committees (if any), and the shareholders of Company, provided that certain corporate resolutions relating to financing matters are maintained with the corporate records of such financings, and (not by way of limiting Sellers’ obligation to disclose to Buyer all existing financing arrangements of Company) subject to the limitation that corporate resolutions were adopted only when required by Lenders. Company is in possession of all of Company Records.

          (k)  Internal Accounting Controls . Company maintains a system of internal accounting controls that it reasonably believes is sufficient to provide reasonable assurances that (1) transactions are executed in accordance with management’s general or specific authorization; (2) transactions are recorded as necessary to permit the preparation of annual financial statements in conformity with GAAP or any other criteria applicable to such financial statements and to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; and (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals, and appropriate action is taken with respect to any differences.

          (l)  Sufficiency of Assets . Except for assets and properties disposed of after the date of this Agreement in the Ordinary Course of Business of Company, Company will own or have the right to use after the Closing all of the assets and properties that it owns or has the right to use on the date of this Agreement. Company’s assets and properties are sufficient for the continued conduct of Company’s business after the Closing in the same manner as it is conducted before the Closing.

          (m)  Title and Encumbrances . Company owns good and, except as to the Non-Titled Assets, transferable title to all of the assets and properties of every kind, character and description, whether tangible or intangible, real, personal or mixed, and known or unknown, and wherever located, that it purports to own or are reflected as being owned in Company Records, including all of the assets and properties reflected in the Interim Balance Sheet other than those that have been disposed of in the Ordinary Course of Business of Company since the Interim Balance Sheet Date or as otherwise permitted by this Agreement, free and clear of all Encumbrances other than those described in Schedule 4(m) .

          (n)  Real Property . Company has delivered to Buyer complete and accurate copies of all purchase Contracts, Leases, warranty deeds, title abstracts, title opinions, surveys, mortgages, deeds of trust, and warranties in its possession relating to the Real Property. Schedule 4(n) contains a complete and accurate list and summary description of all of the Real Property, including the legal description, street address or location, and tax parcel identification number of each parcel of land (however, as to leased property, only to the extent such tax parcel identification information is available to Company without undue effort), and a designation as to whether such parcel is owned or leased by Company. Each building, structure, fixture and improvement included in the Real Property is in good operating condition and repair, and adequate for the use to which it is being put by Company. No building, structure, fixture or improvement included in the Real Property is in need of maintenance or repair, except for ordinary,

routine maintenance and repairs in the Ordinary Course of Business of Company that, individually and in the aggregate, are not material in nature or cost. Company is in possession of all of the Real Property.

          (o)  Tangible Personal Property . Except as described in Schedule 4(o)-1 , Company has delivered to Buyer complete and accurate copies of all purchase Contracts, Leases, bills of sale, certificates of registration, certificates of title, and warranties in its possession relating to the Tangible Personal Property. Schedule 4(o)-2 contains complete and accurate lists and summary descriptions of the following items of Tangible Personal Property, including a designation as to whether each such item is owned or leased by Company: (A) all aircraft and related engines and propellers; (B) all motor vehicles, whether or not certificated; and (C) all spare parts (limited to those spare parts as to which information is contained in Company’s books and records on an individual part basis) with an individual value reflected on the Interim Balance Sheet and elsewhere in Company Records in excess of $10,000. Each item of Tangible Personal Property is in good operating condition and repair, and adequate for the use to which it is being put by Company, other than those items that are not functional and are held by Company solely for the purpose of providing spare parts. None of the Tangible Personal Property is in need of maintenance or repair, except for ordinary, routine maintenance and repairs in the Ordinary Course of Business of Company that, individually and in the aggregate, are not material in nature or cost. Company is in possession of all of the Tangible Personal Property, except for (A) ground support equipment in the possession of other aircraft carriers or Third-Party ground support contractors and (B) such items of Tangible Personal Property (including, without limitation, aircraft engines, propellers and other aircraft parts) as are in the possession of Company’s vendors for overhaul or repair, for which records of such Third-Party possession are maintained by Company.

          (p)  Inventory . Except for (1) Inventory acquired by Company in a Bankruptcy Acquisition, (2) Inventory relating to aircraft that are no longer used by Company, and (3) Inventory identified as obsolete by Company with the written Consent of Buyer attached hereto, the Inventory is of a quality and quantity usable and saleable in the Ordinary Course of Business of Company. The Inventory has been valued on the Interim Balance Sheet and elsewhere in Company Records in accordance with GAAP applied on a consistent basis. The Inventory purchased by Company since the Interim Balance Sheet Date was purchased in the Ordinary Course of Business of Company at a cost not exceeding the market prices thereof prevailing at the time of purchase. Other than Inventory purchased from Capital Aviation, Company has not purchased any Inventory from any Seller or any Related Person of Sellers or of Company. Company is in possession of all of the Inventory, except for such items of Inventory (including, without limitation, aircraft engines, propellers and other aircraft parts) as are in the possession of Company’s vendors for overhaul or repair, for which records of such Third-Party possession are maintained by Company.

          (q)  Accounts Receivable . Schedule 4(q)-1 contains a complete and accurate list of the aggregate dollar amounts of all Accounts Receivable in each of the following aging categories (current, 1-30, 31-60, 61-90, 91-180, 181-365, and more than 365 days past due) as of the Interim Balance Sheet Date and a summary description of each Account Receivable that was more than 90 days past due as of the Interim Balance Sheet Date. All Accounts Receivable represent valid obligations arising from sales actually made or services actually performed by Company in the Ordinary Course of Business. Except for the Accounts Receivable from Company’s pilots who have not fulfilled their training Contracts, all Accounts Receivable are fully collectible, net of the respective reserves reflected in the Interim Balance Sheet or Company Records; provided, however, that the payors listed on Schedule 4(q)-2 are currently engaged in ongoing bankruptcy proceedings and collection of the Accounts Receivable from such payors is subject to the terms of the applicable bankruptcy proceedings and such payors’ continuing ability to pay their obligations. The reserves against the Accounts Receivable as of the Interim Balance Sheet Date are adequate and were calculated in a manner consistent with Company’s past practice. There is no contest,

claim, defense or right of set-off under any Contract with any obligor of an Account Receivable relating to the amount or validity thereof.

          (r)  Material Company Contracts . Company has delivered to Buyer complete and accurate copies of all Material Company Contracts. Schedule 4(r)-1 contains a complete and accurate list (with adequate contract-identifying information) of all Company Contracts (1) under which the remaining commitment or Liability by or to Company was in excess of $50,000 as of the Interim Balance Sheet Date, (2) that may not be terminated by Company, without penalty or other cost to Company, upon giving 90 days or less notice to the other party, (3) that were entered into or incurred other than in the Ordinary Course of Business of Company, (4) that by their terms require the other party’s Consent or are void or subject to termination upon a change in control of Company, (5) to which any shareholder, director, officer or employee of Company or any Related Person of any of the foregoing Persons is a party or under which any such Person has or may acquire any right or benefit or has or may become subject to any commitment or Liability, or (6) relating to any of the Intellectual Property (all of Company Contracts described in this sentence are referred to collectively as the “Material Company Contracts”). Each Material Company Contract is in full force and effect and is valid and enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium and similar laws affecting the enforceability of creditors’ rights in general or by general principles of equity. Except as described in Schedule 4(r)-2 , Company is, and, subject to the following proviso, at all times has been, in full compliance with all applicable terms and requirements of each Material Company Contract; provided, however, that (1) Company is from time to time noncompliant with payment terms of Material Company Contracts, but (2) Company has not been declared in Breach of, nor has Company received written notice of any intention by another party to any Material Company Contract to declare Company in Breach of, any Material Company Contract as a result of such noncompliance. Each other Person that has any commitment or Liability under any Material Company Contract is, subject to the following proviso, in full compliance with all applicable terms and requirements of such Material Company Contract; provided, however, that other parties to Material Company Contracts may be noncompliant with payment terms of such Material Company Contracts as reflected in the Accounts Receivable. No event has occurred or circumstance exists that, with or without notice or lapse of time, would reasonably be expected to result in a Breach of any Material Company Contract. Company has not given to or received from any other Person any notice or other communication regarding any actual, alleged, possible or potential Breach of any Material Company Contract. No event has occurred or circumstance exists under or by virtue of any Material Company Contract that, with or without notice or lapse of time, may cause the imposition or creation of any Encumbrance on or with respect to any of Company’s assets and properties. Except as described in Schedule 4(r)-3 , there are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate, any of the terms or conditions of any Material Company Contract. Each Material Company Contract was entered into in the Ordinary Course of Business of Company and without the commission of any act (alone or in concert with any other Person), or any consideration having been paid or promised, that is or would be in Breach of any Legal Requirement.

          (s)  Intellectual Property . Schedule 4(s)-1 contains a complete and accurate list and summary description of all of the Intellectual Property. The Intellectual Property constitutes all of the intellectual property necessary for the continued conduct of Company’s business after the Closing in the same manner as it is conducted before the Closing. Except as described in Schedule 4(s)-2 , Company has the right to use, without any payment to any other Person, all of the Intellectual Property. All of the Intellectual Property is valid and enforceable and is in compliance with all applicable Legal Requirements. None of the Intellectual Property (1) is infringed or has been challenged in any way; (2) infringes or is alleged to infringe any other intellectual property; or (3) has been or is now involved in any interference, infringement, opposition, invalidation or cancellation Proceeding, and no such action is Threatened with respect to any of the Intellectual Property.

          (t)  Taxes . Company has made a valid election to be taxed under Subchapter S of the Code, and such election remains in full force and effect. Except as described in Schedule 4(t)-1 , Company has filed or caused to be filed on a timely basis all material Tax Returns and all material reports with respect to Taxes that are or were required to be filed pursuant to all applicable Legal Requirements. Except as described in Schedule 4(t)-2 , Company currently is not the beneficiary of any extension of time within which to file any Tax Return or report with respect to Taxes. All Tax Returns and reports with respect to Taxes filed by Company are true, correct and complete. Except as described in Schedule 4(t)-3 , Company has paid, or made adequate provision for the payment of, all Taxes that have or may become due for all periods covered by the Tax Returns or otherwise (including with respect to those periods and jurisdictions set forth on Schedule 4(t)) or pursuant to any assessment received by Company with respect thereto. The charges, accruals and reserves with respect to Taxes not yet due that are reflected in the Interim Balance Sheet and elsewhere in Company Records are adequate as determined in accordance with GAAP and are at least equal to Company’s liability for such Taxes. There is no Tax-sharing agreement that will require any payment by Company after the date of this Agreement. All Taxes that Company is or was required by any Legal Requirement to withhold or collect have been duly withheld or collected and, to the extent so required, have been paid to the proper Governmental Body or other Person. Except as described in Schedule 4(t)-4 , none of the Tax Returns of Company has been audited by any Governmental Body. Company has not given or been requested to give any waiver or extension of any statute of limitations relating to the payment of Taxes of Company or for which Company may be liable. There exists no proposed Tax assessment or deficiency against Company. There is no claim by, dispute with, or Proceeding involving any Governmental Body with respect to any Taxes payable by Company. No claim has been, is expected to be, made by any Governmental Body in a jurisdiction where Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There is no Encumbrance on or with respect to any of Company’s assets and properties that arose in connection with any failure or alleged failure to pay any Tax, and there is no basis for the assertion of any claim attributable to Taxes which, if adversely determined, would result in any such Encumbrance.

          (u)  Employee Benefits . Company has delivered to Buyer complete and accurate copies of all Employee Plan documents and summary descriptions of the Employee Plans. Schedule 4(u)-1 contains a complete and accurate list of all Employee Plans. Each Employee Plan document is in full compliance with all applicable Legal Requirements. Each Employee Plan is, and at all times has been, operated in full compliance with all applicable Legal Requirements and its Employee Plan document. Company is, and at all times has been, in full compliance with all Legal Requirements applicable to the Employee Plans. Except as described in Schedule 4(u)-2 , full payment has been made of all amounts that are required under the terms of each Employee Plan to be paid as contributions with respect to all periods ending on or before the date hereof, and no accumulated funding deficiency or liquidity shortfall has been incurred with respect to any such Employee Plan. Except as described in Schedule 4(u)-3 , there is no pending or Threatened Proceeding relating to any Employee Plan, nor is there any basis for any such Proceeding. The reserve reflected in the Interim Balance Sheet with respect to any Proceeding relating to any Employee Plan was adequate as of the Interim Balance Sheet Date, and there is no basis for any increase in such reserve as of the date hereof. The Transactions will not result in a Breach of, the assessment of any Tax or penalty under, or the imposition of any other Liability under, any Legal Requirement applicable to any Employee Plan.

          (v)  Insurance . Company has delivered to Buyer complete and accurate copies, and Schedule 4(v)-1 contains a complete and accurate list, of all (1) insurance policies (i) to which Company is a party or under which Company has been covered at any time since December 31, 2001 or (ii) that are or have been maintained by Company and under which any of its directors, officers or employees is or has been covered at any time since December 31, 2001, and (2) pending applications by Company for an insurance policy, and (3) written statements (if any) by Company’s auditor, risk management advisor,

insurance broker, or any other contractor with regard to the adequacy of the insurance coverage maintained by Company or its reserves for uninsured claims. Schedule 4(v)-2 contains a complete and accurate list and summary description of each self-insurance, risk-transferring or risk-sharing arrangement by or affecting Company. Schedule 4(v)-3 sets forth, by policy and policy year, for each policy year or portion thereof since December 31, 2000, a complete and accurate (1) summary of the loss experience under each insurance policy; (2) statement describing each claim under an insurance policy in an amount in excess of $10,000, which sets forth the name of the claimant, a description of the policy by insurer, type of insurance, and period of coverage, and the amount and a brief description of the claim; and (3) statement describing the loss experience for all claims that were self-insured, including the number and aggregate cost of such claims. All insurance policies (i) to which Company is a party or that provide coverage to Company or (ii) that are maintained by Company and that provide coverage to any of its directors, officers or employees (1) are valid, outstanding and enforceable; (2) are issued by an insurer that is financially sound and reputable; (3) taken together, provide adequate insurance coverage for the assets and properties and the operations of Company and for Company’s directors, officers and employees for all risks to which Company and its directors, officers and employees normally are exposed; (4) are sufficient for compliance with all Legal Requirements and Company Contracts; (5) will continue in full force and effect following the consummation of the Transactions; and (6) except as described in Schedule 4(v)-4 , do not provide for any retrospective premium adjustment or other experience-based Liability on the part of Company. Company has not received any (1) refusal of coverage, (2) notice that a defense will be afforded with a reservation of rights, or (3) except as described in Schedule 4(v)-5 , notice of cancellation or other indication that any insurance policy is no longer in full force and effect or will not be renewed or that the issuer of any insurance policy is not willing or able to perform its obligations thereunder. Except as described in Schedule 4(v)-6 , Company has paid all premiums due in the Ordinary Course of Business, and has otherwise performed all of its obligations, under each insurance policy to which it is a party or that provides coverage to Company or any of its directors, officers and employees. Company has given notice to the issuer of each insurance policy of all claims that may be insured thereby.

          (w)  Governmental Authorizations .

               (i) Company has delivered to Buyer complete and accurate copies, and Schedule 4(w)-1 contains a complete and accurate list, of all Governmental Authorizations that are held by Company or otherwise relate to its business or any of its assets and properties. Each such Governmental Authorization is valid and in full force and effect. Except as described in Schedule 4(w)-2 , Company is, and at all times has been, in full compliance with all applicable terms and requirements of each such Governmental Authorization. No event has occurred or circumstance exists that, with or without notice or lapse of time, would reasonably be expected to constitute or result in a Breach of any such Governmental Authorization by Company or result in the revocation, withdrawal, suspension, cancellation, termination or modification of any such Governmental Authorization. Subject to Section 4(y), Company has not received any notice or other communication from any Governmental Body or other Person regarding any actual, alleged, possible or potential Breach of any such Governmental Authorization by Company or any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination or modification of any such Governmental Authorization that would reasonably be expected to have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole. All applications required to have been filed for the continuation or renewal of such Governmental Authorizations have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings and communications required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies. Except as described in Section 4(w)(ii), such Governmental Authorizations constitute all of the Governmental Authorizations necessary to permit Company to lawfully conduct its business in the manner that it currently conducts

such business and to lawfully own and use its assets and properties in the manner that it currently owns and uses them.

               (ii) The Company currently conducts its business under and pursuant to the terms of that certain Franchise Agreement effective June 22, 2005 issued under Ordinance No. O-2005-35, as the same is recorded among the land records of Prince William County, Virginia as Instrument No. 200509200162007, pursuant to which the City of Manassas has issued to Colgan Associates a license to operate an aircraft related business at the Manassas Regional Airport (the “Airport”). Unless and until the Company obtains a franchise from the City of Manassas to operate its business at the Airport, the Company cannot operate its business at the Airport other than as a tenant of the holder of such a franchise.

          (x)  Legal Requirements . Except as described in Schedule 4(x) , and subject to Section 4(y), Company is, and at all times has been, in full compliance with all Legal Requirements that are or were applicable to Company, the conduct of its business, and the ownership or use of any of its assets and properties. No event has occurred or circumstance exists that, with or without notice or lapse of time, would reasonably be expected to constitute or result in a Breach of any Legal Requirement by Company or would reasonably be expected to give rise to any obligation on the part of Company to undertake or bear any or all of the costs of any remedial action of any nature under any Legal Requirement. Subject to Section 4(y), Company has not received any notice or other communication from any Governmental Body or other Person regarding any actual, alleged, possible or potential Breach of any Legal Requirement by Company or any actual, alleged, possible or potential obligation on the part of Company to undertake or bear any or all of the costs of any remedial action of any nature under any Legal Requirement that would reasonably be expected to have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole.

          (y)  Inspections and Investigations . Company is subject to periodic inspections, investigations, audits, monitoring and reviews by Governmental Bodies and other Persons (“Inspections and Investigations”). There are no pending Inspections and Investigations with respect to Company, and there are no results or findings from any past Inspections and Investigations, that would reasonably be expected to have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole. Company has not received any notice or other communication from any Governmental Body or other Person regarding any Inspections and Investigations with respect to Company based upon any alleged illegal or improper activity on the part of Company that is planned or contemplated by such Governmental Body or other Person.

          (z)  Proceedings . Except as described in Schedule 4(z) , there is no pending Proceeding that (1) has been commenced by or against Company or otherwise relates to or would reasonably be expected to affect Company’s business or any of its assets and properties or (2) challenges, or would reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions. No such Proceeding has been Threatened and no event has occurred or circumstance exists that would reasonably be expected to give rise to or serve as a basis for the commencement of any such Proceeding. Company has made available to Buyer complete and accurate copies of all pleadings, other documents and correspondence relating to each Proceeding described in Schedule 4(z) . No Proceeding described in Schedule 4(z) would reasonably be expected to have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole.

          (aa)  Orders . Except (i) as disclosed on Schedule 4(aa) and (ii) for Orders that are generally applicable to companies engaged in the Business, Company is not subject to any Order that relates to Company’s business or any of its assets and properties. No director, officer, employee, contractor, consultant or agent of Company is subject to any Order that prohibits such Person from engaging in or continuing any conduct, activity, duty or practice relating to the business of Company.

          (bb)  Employees . Schedule 4(bb)-1 contains a complete and accurate list of the following information for each employee of Company, including each employee on leave of absence or layoff status, as of December 31, 2006: name; job title; commencement date of employment; rate of compensation as of December 31, 2006; accrued but unused vacation, sick and personal leave as of December 31, 2006; and credited length of service as of December 31, 2006, for purposes of determining eligibility to participate and vesting under any Employee Plan. Schedule 4(bb)-2 contains a complete and accurate list of the following information for each former employee of Company as of December 31, 2006, who is receiving or will receive any post-employment benefits from Company: name; former job title; termination date of employment; and post-employment benefits. The employment of each employee of Company is “at will” and may be terminated by Company or such employee at any time for any or no reason, subject to applicable Legal Requirements. No director, officer, employee, contractor, consultant or agent of Company is a party to, or is otherwise bound by, any Contract (including any confidentiality, non-competition, non-solicitation or proprietary rights agreement) that in any way adversely affects or will affect the performance of such Person’s duties for Company or the ability of Company to conduct its business. No director, officer, employee, contractor, consultant or agent of Company intends to terminate such Person’s employment or service with Company. Except as described in Schedule 4(bb)-3 , neither Company nor any Related Person of Company has made, directly or indirectly, any written or oral representation to any former or current employee of Company promising or guaranteeing or otherwise concerning any employment, offer of employment, or terms of employment (including salary, wages and employee benefits) by Company after the Closing Date.

          (cc)  Labor Relations . Company is not, and has not been, a party to any collective bargaining agreement or other labor Contract. No application or petition for an election of or for certification of a collective bargaining agent is pending or Threatened. Except as described in Schedule 4(cc) , there is no pending or Threatened (1) strike, slowdown, picketing, work stoppage or employee grievance process by Company’s employees affecting Company or its premises, and no event has occurred or circumstance exists that would reasonably be expected to provide the basis for any such labor dispute; (2) union organizational activity involving any of Company’s employees; (3) except as set forth on Schedule 4(z) , charge of discrimination against Company filed with the U.S. or any state Equal Employment Opportunity Commission or any comparable Governmental Body; or (4) except as set forth on Schedule 4(z) , Proceeding against or affecting Company relating to any actual or alleged Breach by Company of any Legal Requirement pertaining to labor relations or employment matters. There is no lockout of any employees by Company, and no such action is contemplated by Company. Company is, and at all times has been, in full compliance with all applicable Legal Requirements relating to employment, employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of Social Security and similar Taxes, occupational safety and health, plant closings, and other labor relations or employment matters. Except as described in Schedule 4(cc), Company has no Liability for the payment of any compensation (other than unemployment compensation in the Ordinary Course of Business), Damages, Taxes or other amounts, however designated, for the failure to comply with any of the foregoing Legal Requirements, nor is any Proceeding described in Schedule 4(z) relating to labor relations matters reasonably likely to result, in the event of a finding adverse to Company, in any material Liability to Company.

          (dd)  Certain Relationships . Except as described in Schedule 4(dd) , none of Sellers, their respective Related Persons nor any Related Persons of Company (1) has any direct or indirect interest in Company’s business or any of its assets and properties (other than any indirect interest arising from such Person’s ownership interest in Company (if any)), (2) has any direct or indirect business dealing or financial interest in any transaction with Company, (3) is a party to or is bound by any Company Contract, (4) is engaged in competition with Company with respect to Company’s business in any market served by Company, or (5) has any claim or right against Company.

          (ee)  Certain Payments . None of Sellers, Company, and their respective Related Persons has, directly or indirectly, in connection with Company’s business, (1) made any contribution, gift in excess of $150, bribe, rebate, payoff, influence payment, kickback or other payment to any Person (private or public), regardless of form, whether in money, property or services, (A) to obtain favorable treatment in securing business, (B) to pay for favorable treatment for business secured, (C) to obtain special concessions or pay for special concessions already obtained for or in respect of Company, or (D) in Breach of any Legal Requirement; or (2) established or maintained any fund or asset that has not been recorded in Company Records.

          (ff)  Absence of Certain Changes and Events . Since the Interim Balance Sheet Date, Company has conducted its business only in the Ordinary Course of Business, and, except as described in Schedule 4(ff) , there has not been any:

               (1) material adverse change in the business, assets, properties, personnel, operations, performance, financial condition or, except for general market conditions, prospects of Company, taken as a whole, and no event has occurred or circumstance exists that would reasonably be expected to result in such a material adverse change;

               (2) extension, renewal, discontinuance, termination or other material adverse change in Company’s relationship with any provider of products or services to Company for use in its business other than in the Ordinary Course of Business, or any indication to Company that any such change is Threatened or forthcoming;

               (3) change in the authorized or issued capital stock of Company; change in the ownership of any such outstanding capital stock; grant of any option, warrant or other right to purchase any such capital stock; issuance of any security convertible into or exchangeable for any such capital stock; grant of any registration rights with respect to any such capital stock; declaration or payment of any dividend or other distribution in respect of any such capital stock; or purchase, redemption, retirement or other acquisition by Company of any such capital stock;

               (4) amendment of any Governing Document of Company, or corporate action taken by the board of directors or the shareholders with respect to any such amendment;

               (5) payment or provision by Company of any salary, bonus, benefits or other compensation for any director, officer or employee of Company other than in the Ordinary Course of Business, or increase in any such compensation other than salary adjustments made in the Ordinary Course of Business and consistent with past practices;

               (6) adoption, amendment or termination of, or increase in the benefits provided under, any Employee Plan other than in the Ordinary Course of Business;

               (7) entry into, or amendment or termination (or receipt of any notice of termination) of, any Company Contract or transaction involving a remaining commitment or Liability by or to Company in excess of $50,000;

               (8) entry into, or amendment or termination (or receipt of any notice of termination) of, any Company Contract or transaction other than in the Ordinary Course of Business of Company;

               (9) entry into, amendment or termination (or receipt of any notice of termination) of, or increase in the remaining commitment or Liability by Company under, any Company Contract to which any shareholder, director or officer of Company or, to the Knowledge of Sellers, Senator Colgan and Company, any employee, contractor, consultant or agent of Company or any Related Person of any shareholder, director or officer of Company is a party or under which any such Person has or may acquire any right or benefit or has or may become subject to any commitment or Liability;

               (10) sale, lease or other disposition of any of Company’s assets and properties other than in the Ordinary Course of Business of Company;

               (11) imposition or creation of any Encumbrance on or with respect to, any of Company’s assets and properties, other than Permitted Encumbrances;

               (12) damage to or destruction of any assets or properties of Company with an value reflected on the Interim Balance Sheet and elsewhere in Company Records in excess of $50,000, other than routine wear and tear;

               (13) claim asserted or, except as described in Schedule 4(z) , Proceeding commenced against Company which, if determined adversely to Company, will, or would reasonably be expected to, have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole;

               (14) cancellation or waiver of any claims or rights with an value to Company in excess of $50,000;

               (15) change in any of the accounting methods, significant accounting policies, or critical accounting estimates used by Company in the preparation of its financial statements other than Company’s transitioning of its accounting, recordkeeping and parts inventory processes to a new software system (the “Accounting System Transition”);

               (16) disbursements (whether for goods or services or otherwise) and distributions to Sellers except as consistent with its prior practice and necessary for the conduct of its business or as contemplated by this Agreement;

               (17) failure to use its Best Efforts to (A) preserve its current business organization, (B) keep available the services of its employees, contractors, consultants and agents, and (C) maintain its relations and goodwill with its suppliers, customers, landlords, creditors, employees, contractors, consultants, agents and other Persons having business relationships with Company;

               (18) failure to maintain its assets and properties in a condition and state of repair consistent with the Ordinary Course of Business of Company; or

               (19) any decision made or any action taken that will, or would reasonably be expected to, have a material adverse effect on Company or its business, assets, properties, personnel, operations, performance, financial condition or prospects that has not been disclosed to Buyer in writing prior to Closing.

          (gg)  No Brokers or Finders . None of Sellers, Company, and their respective Related Persons has incurred any Liability for any brokerage or finder’s fee, agent’s commission, or other similar payment in connection with any of the Transactions, other than in the Ordinary Course of Business.

          (hh)  Securities Legal Requirements . Each Seller is acquiring such Seller’s interest in the Promissory Note for such Seller’s own account for investment purposes and not with a view to the distribution of the Promissory Note, as contemplated in Section 2(11) of the Securities Act, in Breach of applicable Legal Requirements relating to the offer and sale of securities. No Seller has any present intention of selling or otherwise disposing of such Seller’s interest in the Promissory Note except in accordance with applicable Legal Requirements. Each Seller is aware that no Governmental Body has made any finding or determination as to the fairness of an investment in the Promissory Note or any recommendation or endorsement with respect thereto. Each Seller recognizes that an investment in the Promissory Note involves a high degree of risk. Each Seller has had an opportunity to ask Buyer questions concerning Buyer and the Promissory Note and has received satisfactory answers to such questions. Each Seller has had an opportunity to obtain and review all information concerning Buyer and the Promissory Note that such Seller has requested. Each Seller acknowledges, understands and agrees that the Promissory Note has not been registered under the Securities Act or applicable state securities laws and will be subject to certain restrictions on its transferability in order to comply with applicable Legal Requirements relating to the offer and sale of securities.

          (ii)  Nondisclosure Agreements . Company from time to time receives inquiries and offers from Persons seeking to establish a business relationship with Company. Company may be or become a party to confidentiality or nondisclosure agreements with such Persons that prohibit Company from disclosing the existence or terms of such inquiries or offers or the identity of such inquiring or offering Persons to other Persons, including, without limitation, Buyer (the “Nondisclosure Agreements”). Company has not incurred, and will not incur, any monetary Liability to any Person in connection with the inquiries and offers giving rise to the Nondisclosure Agreements. The Nondisclosure Agreements do not and will not interfere with Company’s conduct of its business and do not provide for the imposition of any monetary Liability (including, without limitation, any Liability for the payment of a termination or break-up fee, expense reimbursement, or any other amount) upon Company as a consequence of the negotiation of or entry into this Agreement, the consummation of the Transactions, or any other action by Company or any of its Related Persons relating to any of the foregoing.

          (jj)  Disclosure . No representation or warranty or other statement made by Sellers and Company in this Agreement or otherwise in connection with the Transactions contains any untrue statement or omits to state a material fact necessary to make any such statement, in light of the circumstances in which it was made, not misleading. Except as described in Schedule 4(jj) , none of Sellers or Company has any Knowledge of any fact or circumstance that will, or would reasonably be expected to, have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Company, taken as a whole, that has not been set forth in this Agreement or its schedules.

          (kk)  Actual or Potential Breaches by Buyer . Except as described in Schedule 4(kk) , Sellers and Company have no Knowledge of (1) any Breach of any representation, warranty or covenant made by Buyer in this Agreement or (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach.

          (ll)  Review and Certification by Reviewing Personnel.

               (1) Subject to Section 4(ll)(2) below, prior to the Closing Date, (i) Company caused, and Sellers have caused Company to cause, the Persons listed on Schedule 4(ll) (the “Reviewing Personnel”) to review the representations and warranties of Sellers and Company contained in this Section 4, together with the schedules to this Section 4 as they existed at the time of their review, and (ii) Company requested, and Sellers have caused Company to request, each of the Reviewing Personnel to execute and deliver to Company, which Company is delivering to Buyer at the Closing, a certificate stating whether or not such Reviewing Personnel has Knowledge, and disclosing any such Knowledge, of (A) any Breach of any such representation or warranty made by Sellers and Company, (B) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach, or (C) any other fact or circumstance that would give rise to an indemnity claim by Buyer under Section 13 (collectively, the “Reviewing Personnel Certificates”). Each of the Reviewing Personnel had adequate time (at least three days) to conduct such review and contemplate the implications of the representations and warranties, and none of the Reviewing Personnel Certificates was executed more than one day prior to the Closing Date.

               (2) If any Reviewing Personnel has failed or refused to execute and deliver a Reviewing Personnel Certificate, Sellers and Company have authorized such Reviewing Personnel to communicate fully and accurately with Buyer prior to Closing about the reasons for the individual’s refusal to deliver such certificate.

          (mm)  Payment of Amounts Owed by or to Certain Persons . Except with respect to Senator Colgan’s Debt, which shall be satisfied after Closing in accordance with Section 12(j) hereof, Sellers have paid, and Sellers and Company have caused their respective Related Persons to have paid, in full to Company before the Closing Date any and all amounts that such Persons owe to Company, and Company has paid in full to Sellers and such Related Persons before the Closing Date any and all amounts that Company owes to Sellers and such Related Persons for goods and services actually received by Company, pursuant to complete and accurate documentation timely provided to Buyer prior to Closing, in each case whether representing indebtedness or accounts payable or otherwise, whether or not reduced to writing in notes or other Contracts, and whether or not then due (other than amounts owed by Company on agreements, leases and open accounts established and incurred in the Ordinary Course of Business which, by their terms, are not then due). Notwithstanding the foregoing, if on the Closing Date a Seller owes a net amount to Company which should have been paid pursuant to this Section 4(mm) (the “Net Seller’s Debt”), at the Closing Buyer shall set off and deduct the Net Seller’s Debt from such Seller’s portion of the Cash Consideration payable pursuant to Section 2(a) and shall apply the amount of such set-off against and in satisfaction of the Net Seller’s Debt.

          (nn)  Distributions to Sellers for Payment of Taxes . Prior to the Closing Date, Company has developed (in good faith and in consultation with Buyer) and timely delivered to Buyer a reasonable estimate of Sellers’ aggregate Liability for Taxes attributable to the operations of Company for the period beginning on January 1, 2006, and ending on the Closing Date caused by the flow through of income and deductions to Sellers from Company due to Company’s election to be taxed under Subchapter S of the Code, which aggregate Tax Liability was calculated assuming a Tax rate of approximately 41%. On or before the Closing Date, Company has distributed to each Seller a sum equal to each Seller’s prorata (based on Share holdings) amount of such estimated aggregate Tax Liability (which, as to some Sellers, may exceed, but shall in no event be less than, such Seller’s actual Tax liability) attributable to the operations of Company for such period.

     5.  Representations and Warranties of Buyer . Buyer represents and warrants to Sellers and Company that, to the Knowledge of Buyer:

          (a)  Organization . Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.

          (b)  Power and Authority . Buyer has the absolute and unrestricted right, power and authority to execute and deliver this Agreement and all other documents to be executed and delivered by Buyer pursuant to this Agreement (this Agreement and such other documents are referred to collectively as the “Buyer’s Documents”) and to perform its obligations thereunder.

          (c)  Authorization . Buyer has taken all actions necessary to authorize the execution and delivery of Buyer’s Documents, the performance of its obligations thereunder, and the consummation of the Transactions.

          (d)  Enforceability . This Agreement has been executed and delivered by a duly authorized officer of Buyer, constitutes a legal, valid and binding obligation of Buyer, and is enforceable against Buyer in accordance with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, moratorium and similar laws affecting the enforceability of creditors’ rights in general or by general principles of equity. As of the Closing Date, the other Buyer’s Documents will be executed and delivered by a duly authorized officer of Buyer, will constitute legal, valid and binding obligations of Buyer, and will be enforceable against Buyer in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium and similar laws affecting the enforceability of creditors’ rights in general or by general principles of equity.

          (e)  Impediments . Neither the execution, delivery or performance of any of Buyer’s Documents nor the consummation of any of the Transactions will, directly or indirectly, with or without notice or lapse of time, (1) Breach any Governing Document of Buyer or any resolution adopted by the board of directors or the shareholder of Buyer; (2) Breach, or give any Governmental Body or other Person the right to challenge any of the Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or Order to which Buyer is or may be subject; (3) Breach, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by Buyer or otherwise relates to Buyer’s business or any of its assets and properties; or (4) Breach any Contract to which Buyer is a party or by which it is bound.

          (f)  Notices, Filings and Consents . Except as described in Schedule 5(f) , Buyer is not required to give any notice to, make any filing with, or obtain any Consent from, any Governmental Body, any other party to a Contract to which Buyer is a party or by which it is bound, or any other Person in connection with the execution, delivery and performance of Buyer’s Documents or the consummation of the Transactions.

          (g)  Securities Legal Requirements . Buyer is acquiring the Shares for its own account for investment purposes and not with a view to the distribution of the Shares, as contemplated in Section 2(11) of the Securities Act, in Breach of applicable Legal Requirements relating to the offer and sale of securities. Buyer has no present intention of selling or otherwise disposing of the Shares except in accordance with applicable law. Buyer is aware that no Governmental Body has made any finding or determination as to the fairness of an investment in the Shares or any recommendation or endorsement with respect thereto. Buyer recognizes that an investment in the Shares involves a high degree of risk. Buyer is an “accredited investor” as defined in Rule 501(a) under the Securities Act. Buyer has such knowledge and experience in financial and business matters as to be capable of evaluating the risks and merits of an investment in the Shares and protecting Buyer’s interests in connection with such investment. Buyer is able to bear the economic risk of an investment in the Shares, including the risk of total loss of such investment. Buyer acknowledges, understands and agrees that the Shares have not been registered under the Securities Act or applicable state securities laws and will be subject to certain restrictions on

their transferability in order to comply with applicable Legal Requirements relating to the offer and sale of securities.

          (h)  Proceedings . There is no pending Proceeding that has been commenced against Buyer and challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Transactions. To the Knowledge of Buyer, (1) no such Proceeding has been Threatened, and (2) no event has occurred or circumstance exists that would reasonably be expected to give rise to or serve as a basis for the commencement of any such Proceeding.

          (i)  No Brokers or Finders . Neither Buyer nor any of its Related Persons has incurred any Liability for any brokerage or finder’s fee, agent’s commission, or other similar payment in connection with any of the Transactions.

          (j)  Absence of Certain Changes and Events . Since the date of Buyer’s most recent filing with the SEC, and except as disclosed in its SEC filings or as described in Schedule 5(j) , there has not been any:

               (1) material adverse change in the business, assets, properties, personnel, operations, performance, financial condition or, except for general market conditions, prospects of Buyer, taken as a whole, and no event has occurred or circumstance exists that would reasonably be expected to result in such a material adverse change; or

               (2) claim asserted or Proceeding commenced against Buyer which, if determined adversely to Buyer, will, or would reasonably be expected to, have a material adverse effect on the business, assets, properties, personnel, operations, performance, financial condition or prospects of Buyer, taken as a whole.

          (k)  Financial Capacity . Buyer has the financial capacity to consummate the Transactions and to perform all of its obligations hereunder and under the Promissory Note (including, without limitation, making all required payments of principal and interest under the Promissory Note) without incurring, or causing Company to incur, any Third-Party indebtedness other than as evidenced by the Promissory Note.

          (l)  Knowledge of the Business . Buyer is generally knowledgeable concerning the business of providing air transportation of passengers and freight on a commercial or charter basis in the United States of America (the “Business”). Buyer is generally aware that Company, like others engaged in the Business, is subject to substantial risks, including, without limitation, the risks that there may be (1) financial instability among Company’s code-share partners; (2) an inability of Company to obtain all of the aircraft, engines, parts or related maintenance and support services that it may require from Third-Party suppliers; (3) adverse effects on Company’s prospects in the event of an accident or incident involving its aircraft; (4) increased competition in the national or regional airline industries; (5) changes in the Legal Requirements applicable to Company; and (6) adverse effects on the airline industry generally as a result of world events.

          (m)  Accounting Matters . Sellers and Company have informed Buyer that Company does not customarily prepare unaudited interim financial statements that are reviewed by independent certified public accountants, and that, accordingly, Company’s preparation of the Interim Balance Sheet and related interim financial statements in form and substance suitable for review by the Accounting Firm for purposes of issuing its review report thereon has required and will require that Company employ certain accounting methods and practices designed to ensure proper, thorough, accurate results which are not

ordinarily employed in the preparation of Company’s interim financial statements. Sellers and Company have informed Buyer that Company is engaged in the Accounting System Transition.

          (n)  Certain Tangible Personal Property . Sellers and Company have informed Buyer that certain unspecified items of Tangible Personal Property (1) have been acquired by Company in bulk-purchase transactions and may not have been individually titled, (2) are motor vehicles that Company maintains solely for use off the public roadways, for which the Department of Motor Vehicles has not issued title documents, or (3) have been acquired by Company through Third-Party bankruptcy proceedings (a “Bankruptcy Acquisition”), for which the only evidence of title is an Order of a bankruptcy court (the items of Tangible Personal Property described in clauses (1), (2) and (3) are referred to collectively as the “Non-Titled Assets”). Sellers and Company have informed Buyer that certain unspecified items of Tangible Personal Property have been acquired and/or are retained by Company solely for use as spare parts inventory or may represent non-usable property acquired through a Bankruptcy Acquisition.

          (o)  Certain Employee Plans . Sellers and Company have informed Buyer that certain unspecified retrospective premium adjustments or other experience-based Liabilities relating to periods prior to the Closing Date may be imposed on Company after the Closing Date under its self-insured medical plan and workmen’s compensation insurance.

          (p)  Promissory Note . Issuance of the Promissory Note will not constitute a Breach of the Securities Act, any other applicable Legal Requirement, or the preemptive rights or other similar rights of any shareholder of Buyer.

          (q)  Disclosure . No representation or warranty or other statement made by Buyer in this Agreement or otherwise in connection with the Transactions contains any untrue statement or omits to state a material fact necessary to make any such statement, in light of the circumstances in which it was made, not misleading.

          (r)  Actual or Potential Breaches by Sellers and Company . Except as described in Schedule 5(r) , Buyer has no Knowledge of (1) any Breach of any representation, warranty or covenant made by Sellers and Company in this Agreement or (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach (including, without limitation, any Breach of Seller’s and Company’s representations in Section 4(jj)).

          (s)  Payment of Certain Charitable Contributions . Sellers and Company have informed Buyer that Company may have made charitable contributions prior to the Closing to the Persons and in the amounts set forth in Schedule 5(s) .

     6. Purchase of Facilities.

          (a)  Facilities Purchase Agreement . Simultaneously herewith, Buyer and Colgan Associates have executed a contract (the “Facilities Purchase Agreement”), providing for the purchase by Buyer or its nominee (the “Facility Purchaser”) from Colgan Associates of Hangar 1 and Company’s headquarters complex located at 10677 Aviation Lane in Manassas, Virginia (the “Hangar 1 and Headquarters Facility”), Hangar 2 located at 10677 Aviation Lane in Manassas, Virginia (the “Hangar 2 Facility”), and a 20,000-gallon jet fuel tank located at the Manassas Regional Airport (the “Fuel Tank”) (individually a “Facility” and collectively the “Facilities”).

          (b)  Closing of Facilities Purchases . The purchases of the Facilities shall close as soon as practicable after the satisfaction of all closing conditions set forth in the Facilities Purchase Agreement,

all in accordance with the terms and provisions thereof, but in no event later than the outside closing date set forth therein (the “Outside Closing Date”). Subject to Section 6(c), during the period prior to the closing of the Facilities purchases and in the event that a closing condition cannot ultimately be met, Buyer shall cause Company to ratify and fully perform the existing leases with Colgan Associates (collectively, the “Company Leases”).

          (c)  Failure to Close . In the event that (i) Buyer and Colgan Associates, after reasonable and good faith attempt and of no fault of Buyer or Colgan Associates, are unable by the Outside Settlement Date (as defined in the Facilities Purchase Agreement) to satisfy all conditions to the closing of the purchases of the Facilities or (ii) any defect in the Facilities (as further explicated in the Facilities Purchase Agreement) or the title thereto exists which Colgan Associates cannot cure for reasons beyond the control of Colgan Associates, the Facilities Purchase Agreement shall terminate and Buyer and Colgan Associates shall cause Company to ratify and fully perform the Company Leases; provided, however, that the Company Leases so ratified shall have been amended to provide for a remaining term of seven (7) years from and after the Closing Date, and for Company’s right to sublet the premises subject to the approval of the sublessee by the lessor, not to be unreasonably withheld, all as provided by the terms of the Facilities Purchase Agreement.

          (d)  No Breach . Notwithstanding anything herein to the contrary, the negotiation, execution and delivery of the Facilities Purchase Agreement and the consummation of the sale and purchase of the Facilities shall not be deemed to be a Breach by Buyer or by the principals of Colgan Associates who are Sellers of any representation, warranty, covenant or obligation contained in this Agreement.

     7.  Effect of Waiver of Condition Precedent to Obligation to Close .

          (a)  When Remedy May be Asserted Against Sellers and Company . If, at any time before the completion of the Closing on the Closing Date, Buyer obtains Knowledge, from any source, of any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to give Buyer the right to seek any remedy against Sellers (including, without limitation, (1) any Breach of any representation, warranty or covenant made by Sellers and Company in this Agreement and (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach), Buyer shall promptly disclose the matter to Sellers and Company. Sellers and Company shall be entitled to take any and all actions to correct the disclosed matter, or any other remediable matter of which Sellers and Company otherwise obtain Knowledge, for a period not to exceed 30 days after the Closing Deadline. If such matter has not been corrected as of the Closing Date as so extended, then either (1) the parties shall agree that they will consummate the Transactions and that Buyer will be entitled to seek indemnification under Section 13 for the matter, in which case the matter will be disclosed in Part 1 of Schedule 7(a) ; (2) the parties shall agree that they will consummate the Transactions and that Buyer will waive any right to seek any remedy for the matter, in which case the matter will be disclosed in Part 2 of Schedule 7(a) ; or (3) if the parties do not reach an agreement as provided in clause (1) or (2), each of Buyer, on the one hand, and Sellers, on the other hand, shall be entitled to terminate this Agreement.

          (b)  When Remedy May be Asserted Against Buyer . If, at any time before the completion of the Closing on the Closing Date, any Seller or Company obtains Knowledge, from any source, of any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to give Sellers the right to seek any remedy against Buyer (including, without limitation, (1) any Breach of any representation, warranty or covenant made by Buyer in this Agreement and (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in

any such Breach), Sellers and Company shall promptly disclose the matter to Buyer. Buyer shall be entitled to take any and all actions to correct the disclosed matter, or any other remediable matter of which Buyer otherwise obtain Knowledge, for a period not to exceed 30 days after the Closing Deadline. If such matter has not been corrected as of the Closing Date as so extended, then either (1) the parties shall agree that they will consummate the Transactions and that Sellers will be entitled to seek indemnification under Section 13 for the matter, in which case the matter will be disclosed in Part 1 of Schedule 7(b) ; (2) the parties shall agree that they will consummate the Transactions and that Sellers will waive any right to seek any remedy for the matter, in which case the matter will be disclosed in Part 2 of Schedule 7(b) ; or (3) if the parties do not reach an agreement as provided in clause (1) or (2), each of Buyer, on the one hand, and Sellers, on the other hand, shall be entitled to terminate this Agreement.

     8.  Conditions Precedent to Sellers’ Obligation to Close . Sellers’ obligation to sell the Shares to Buyer and to take the other actions required to be taken by Sellers at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions, any of which may be waived by Sellers in whole or in part:

          (a)  Representations and Warranties . All representations and warranties made by Buyer in this Agreement (considered collectively), and each such representation and warranty (considered individually), shall have been accurate in all material respects as of the date of this Agreement and, except as disclosed on Schedule 7(b), shall be accurate in all material respects as of the Closing Date as if then made, without giving effect to any qualifier as to Knowledge, belief, reasonable expectation or adverse effect or to any supplemental disclosure made after the date of this Agreement. Each of Buyer’s Fundamental Representations and Warranties shall have been accurate in all respects as of the date of this Agreement and, except as disclosed on Schedule 7(b), shall be accurate in all respects as of the Closing Date as if then made, without giving effect to any qualifier as to Knowledge, belief or adverse effect or to any supplemental disclosure made after the date of this Agreement.

          (b)  Covenants and Obligations . All covenants and obligations that Buyer is required to perform and comply with pursuant to this Agreement at or before the Closing (considered collectively), and each such covenant and obligation (considered individually), shall have been performed and complied with in all material respects.

          (c)  Closing Deliveries . Buyer shall have caused the documents required by Section 10(f) to be executed and delivered or tendered for delivery subject only to Closing.

          (d)  No Proceeding . There shall not have been commenced or Threatened against any Seller, Company, or any of their respective Related Persons any Proceeding that (1) challenges or seeks Damages or other relief in connection with any of the Transactions or (2) may have the effect of preventing, delaying, making illegal, imposing limitations or conditions on, or otherwise interfering with any of the Transactions.

          (e)  No Conflict . Neither Sellers’ performance of their respective obligations under the Seller’s Documents, Company’s performance of its obligations under Company’s Documents, nor the consummation of the Transactions shall, directly or indirectly, with or without notice or lapse of time, constitute or result in a Breach of, or cause any Seller, Company, or any of their respective Related Persons to suffer any adverse consequence under, (1) any applicable Legal Requirement or Order or (2) any Legal Requirement or Order that has been published, introduced or otherwise proposed by or before any Governmental Body.

          (f)  Notices and Consents . Each notice and Consent described in Schedule 5(f) shall have been given and obtained, respectively, and each such Consent shall be in full force and effect, and a

copy of each such notice and Consent shall have been delivered to Sellers. Each Consent described in Schedule 4(f) shall have been obtained and shall be in full force and effect, except for any such Consent for which the failure to obtain such Consent will not result in any Liability to Sellers or Company.

          (g) Release of Personal Guaranties.

               (1) Subject to Section 8(g)(2) below, with respect to each Seller or Seller Related Person who has given a personal guaranty of Company’s indebtedness and obligations described in Schedule 8(g) (each, a “Guarantor”), (i) Company shall have obtained the release of such Guarantor’s personal guaranty (other than any guaranty relating to the Facilities, as to which Colgan Guaranties there must be a release only as a condition to the Facilities Purchase) by the Persons in whose favor such guaranty was given or (i) if (but only if) Buyer has been unable to obtain such release despite its commercially reasonable efforts to do so, then, in lieu of such release, Company and such Guarantor shall have entered into a mutually acceptable alternative reimbursement, indemnity and/or security agreements for the protection of such Guarantor’s interests and against personal liability arising from enforcement of such Guarantor’s guaranty (each, an “Alternative Protective Agreement”).

               (2) With respect to the personal guaranties (the “Colgan Guaranties”) by Michael J. Colgan, Sr. and Julie Colgan (the “Colgan Guarantors”) of Company’s indebtedness described on Schedule 8(g) (the “Guaranteed Indebtedness”), (i) Company shall have obtained the release of the Colgan Guaranties or (ii) if (but only if) Buyer has been unable to obtain such release despite its commercially reasonable efforts to do so, Company shall have granted to the Colgan Guarantors a second-lien-priority security interest in the engines and spare parts which serve as collateral securing Company’s payment of the Guaranteed Indebtedness to the lender or (iii) if (but only if) the lender shall have neither provided the release of the Colgan Guaranty nor permitted the grant of such security interest, Company and the Colgan Guarantors shall have entered into a mutually acceptable Alternative Protective Agreement.

               (3) In connection with Company’s efforts to obtain the release of the present Guaranties (including but not limited to those of the Colgan Guarantors) the Buyer agrees to offer in good faith to the lender guarantees by suitable alternate Guarantors.

     9.  Conditions Precedent to Buyer’s Obligation to Close . Buyer’s obligation to purchase the Shares from Sellers and to take the other actions required to be taken by Buyer at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions, any of which may be waived by Buyer in whole or in part:

          (a)  Representations and Warranties . All representations and warranties made by Sellers and Company in this Agreement (considered collectively), and each such representation and warranty (considered individually), shall have been accurate in all material respects as of the date of this Agreement and, except as disclosed on Schedule 7(a), shall be accurate in all material respects as of the Closing Date as if then made, without giving effect to any qualifier as to Knowledge, belief, reasonable expectation or adverse effect or to any supplemental disclosure made after the date of this Agreement. Each of Sellers’ and Company’s Fundamental Representations and Warranties shall have been accurate in all respects as of the date of this Agreement and, except as disclosed on Schedule 7(a), shall be accurate in all respects as of the Closing Date as if then made, without giving effect to any qualifier as to Knowledge, belief or adverse effect or to any supplemental disclosure made after the date of this Agreement.

          (b)  Covenants and Obligations . All covenants and obligations that Sellers and Company are required to perform and comply with pursuant to this Agreement at or before the Closing (considered

collectively), and each such covenant and obligation (considered individually), shall have been performed and complied with in all material respects.

          (c)  Due Diligence . Buyer shall have completed its due diligence investigation and review of Company (including its business, assets, properties, personnel, operations, performance, financial condition, prospects and shareholders) and the Shares, and shall have notified Sellers and Company in writing that the results thereof are satisfactory to Buyer in its sole and absolute discretion.

          (d)  Closing Deliveries . Sellers shall have caused the documents required by Section 10(d), and Company shall have caused the documents required by Section 10(e), to be executed and delivered or tendered for delivery subject only to Closing.

          (e)  Title . Company shall own good and, except as to the Non-Titled Assets, transferable title to all of the assets and properties that it purports to own or are reflected as being owned in Company Records, free and clear of all Encumbrances other than the Permitted Encumbrances.

          (f)  Notices and Consents . Each Material Notice and Material Consent shall have been given and obtained, respectively, and each such Material Consent shall be in full force and effect, and a copy of each such Material Notice and Material Consent shall have been delivered to Buyer. Each Consent described in Schedule 5(f) shall have been obtained and shall be in full force and effect.

          (g)  No Proceeding . There shall not have been commenced or Threatened against Buyer or any of its Related Persons any Proceeding that (1) challenges or seeks Damages or other relief in connection with any of the Transactions or (2) may have the effect of preventing, delaying, making illegal, imposing limitations or conditions on, or otherwise interfering with any of the Transactions.

          (h)  No Conflict . Neither Buyer’s performance of its obligations under Buyer’s Documents nor the consummation of the Transactions shall, directly or indirectly, with or without notice or lapse of time, constitute or result in a Breach of, or cause Buyer or any of its Related Persons to suffer any adverse consequence under, (1) any applicable Legal Requirement or Order or (2) any Legal Requirement or Order that has been published, introduced or otherwise proposed by or before any Governmental Body.

          (i)  No Adverse Claim . There shall not have been made or Threatened by any Person other than Sellers any claim asserting that such Person (1) is the holder or beneficial owner, or has the right to acquire or obtain beneficial ownership, of any capital stock or other security of, or any ownership, profits, voting or other interest in, Company, or (2) is entitled to all or part of the Purchase Price.

          (j)  Access and Investigation . Upon reasonable advance notice received from Buyer prior to the Closing Date, Company shall have, and Sellers shall have caused Company to, (1) afford Buyer and its Representatives (collectively, the “Buyer Group”) full and free access to Company’s business, assets, properties and personnel, with such right of access exercised during regular business hours and in a manner that did not unreasonably interfere with Company’s operations or Buyer’s obligations regarding Company’s employees and confidentiality requirements; (2) furnish Buyer Group with copies of all Material Company Contracts, Governmental Authorizations, Company Records, and such other existing information and data relating to Company (including its business, assets, properties, personnel, operations, performance, financial condition, prospects and shareholders) and the Shares as Buyer Group reasonably requested (including, without limitation, the Principal Due Diligence Materials); (3) furnish Buyer Group with such additional information as Buyer Group reasonably requested for the purposes of the Transactions; and (4) otherwise cooperate and assist, to the extent reasonably requested by Buyer, with Buyer Group’s investigation of Company and the Shares.

          (k)  Notices, Filings and Consents . Sellers and Company shall have given all notices to, made all filings with, and used their Best Efforts to obtain all Consents from, all Governmental Bodies, other parties to Company Contracts, and other Persons that they are required to give, make and obtain in connection with the execution, delivery and performance of Sellers’ Documents and Company’s Documents and the consummation of the Transactions. Sellers and Company shall have cooperated with Buyer with respect to all notices, filings and Consents that Buyer gives to, makes with and seeks to obtain from, all Governmental Bodies, other parties to Contracts to which Buyer is a party or by which it is bound, and other Persons in connection with the execution, delivery and performance of Buyer’s Documents and the consummation of the Transactions.

          (l)  Revision of Certain Business Relationships . Sellers and Company shall have used their Best Efforts prior to Closing, in consultation and cooperation with Buyer, to negotiate and agree on certain revised terms and conditions for Company’s business relationships with the Persons named in Schedule 9(l) and/or their Related Persons. This Section 9(l) shall not be apply to any Company Contract with any Seller.

          (m)  Best Efforts . Colgan Associates and Buyer shall have used their respective Best Efforts to cause Fauquier Bank to consent to the assumption of the loans by the Facility Purchaser and the City of Manassas to consent to the assignment to the Facility Purchaser of the ground leases for the Hangar 1 and Headquarters Facility, the Hangar 2 Facility and the Fuel Tank.

     10.  Closing .

          (a)  Place, Date and Time . The consummation of the Transactions (the “Closing”) shall be conducted by delivery of documents in escrow with Buyer’s counsel, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., located at 165 Madison Avenue, Suite 2000, Memphis, Tennessee, and shall be held on a date that is not later than January 31, 2007 (the “Closing Deadline”), unless (1) the Closing Date is extended pursuant to Section 7 or (2) Sellers, Company and Buyer otherwise agree. Subject to Section 11, the failure to consummate the Transactions at the place and on the date and time determined pursuant to this Section 10(a) shall not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement; in such a situation, the Closing shall occur as soon as practicable, subject to Section 11. The date and time at which the Closing actually takes place and is completed is referred to as the “Closing Date.” All documents to be executed and delivered and all actions to be taken at the Closing shall be deemed to have been executed, delivered and taken simultaneously, and no document shall be deemed executed or delivered and no action shall be deemed taken until all have been executed, delivered and taken.

          (b)  Title and Possession . The title to, and possession of, the Shares shall pass from Sellers to Buyer as of the Closing Date subject only to the lien of Sellers evidenced by the Security and Pledge Agreement. Notwithstanding the foregoing, this Section 10(b) shall not diminish, limit or otherwise impair the rights and obligations of the parties under this Agreement, any other document that apportions liability between them with respect to events occurring or circumstances existing before and/or after the Closing Date, or any applicable Legal Requirement.

          (c)  Closing Documents and Actions . At the Closing, Sellers, Company, and Buyer shall deliver the documents and take the actions set forth in the remainder of this Section 10. All documents that Sellers and Company deliver at the Closing shall be reasonably satisfactory in form and substance to Buyer and its counsel. All documents that Buyer delivers at the Closing shall be reasonably satisfactory in form and substance to Sellers and Company and their counsel.

          (d)  Closing Deliveries by Sellers . In addition to any other document to be delivered under any other provision of this Agreement, Sellers shall deliver or cause to be delivered at the Closing:

               (1) stock certificates representing the Shares, accompanied by duly executed stock powers, with signatures guaranteed by a commercial bank or by a member of the New York Stock Exchange, for transfer to the Shares Escrow Agent in accordance with the terms of the Security and Pledge Agreement;

               (2) the Release and Covenant in substantially the form of Exhibit 10(d)(2) , executed by each Seller;

               (3) a stock pledge and security agreement among Sellers, Sellers’ Representative, Buyer and LaSalle Bank National Association, a national banking association (“LaSalle”), as escrow agent (the “Shares Escrow Agent”), in substantially the form of Exhibit 10(d)(3) (the “Security and Pledge Agreement”), executed by each Seller and Sellers’ Representative;

               (4) Section 338(h)(10) Election Forms 8023, executed by all Sellers;

               (5) acknowledgement and disclaimer instruments, in substantially the form of Exhibit 10(d)(5) , executed by each Seller’s spouse (if any);

               (6) a certificate of Sellers certifying as to the fulfillment of the conditions specified in Sections 9(a) and 9(b);

               (7) a certificate of Sellers certifying that, except as described in Schedule 7(b) , Sellers have no Knowledge of (1) any Breach of any representation, warranty or covenant made by Buyer in this Agreement or (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach;

               (8) the ratifications and amendments required by Section 10(e)(9) executed by Colgan Associates and Company;

               (9) such other documents as Buyer may reasonably request for the purpose of facilitating and evidencing the consummation of the Transactions.

          (e)  Closing Deliveries by Company . In addition to any other document to be delivered under any other provision of this Agreement, Company shall deliver or cause to be delivered at the Closing:

               (1) a letter from Buyer and Company to LaSalle, as escrow agent (the “Deposit Escrow Agent”), pursuant to Section 5(c) of the Escrow Agreement dated June 2, 2006, as amended (the “Deposit Escrow Agreement”), among Buyer, Company and the Deposit Escrow Agent, directing that the funds held in escrow by the Deposit Escrow Agent be delivered to Company as a capital contribution by Buyer (the “Escrow Payment Letter”), executed by Company;

               (2) copies of all releases of all Non-Permitted Encumbrances on Company’s assets and properties, as recorded;

               (3) a consulting agreement between Company and Senator Colgan, in substantially the form of Exhibit 10(e)(3) , executed by Company and Senator Colgan;

               (4) employment agreements between Company and each of Michael J. Colgan, Jr., Dorothy C. Chaplin, and Mary C. Finnigan, in substantially the form of Exhibit 10(e)(4) , executed by Company and such Persons (the “Employment Agreements”);

               (5) non-competition agreements among Company and each of Senator Colgan and Michael J. Colgan, Sr., in substantially the form of Exhibit 10(e)(5) (the “Noncompetition Agreements”), executed by Company and such Persons;

               (6) an amendment to the following Company Contract to provide that each party thereto shall have the right to terminate such Company Contract upon giving not less than 180 days prior written notice of termination to the other party, executed by Company and such other party: the Commercial Lease dated as of December 15, 2003, between Colgan Group LLC, as landlord, and Company, as tenant, relating to office space in the Capital Aviation building located at 10662 Aviation Lane in Manassas, Virginia;

               (7) amendments to each of the following Company Contracts to provide that each party thereto shall have the right to terminate such Company Contract upon giving not less than 90 days prior written notice of termination to the other party, executed by Company and such other parties:

                    (A) the Lease Agreement dated as of May 1, 2002, between Michael J. Colgan and Julie A. Colgan, as landlord, and Company, as tenant, relating to the training center located at 7220 New Market Court in Manassas, Virginia;

                    (B) the Deed of Lease dated as of October 25, 2004, between Michael J. Colgan, Sr. and Michael J. Colgan, Jr., as tenant, and Company, as landlord, relating to condominium unit #201 located at 9260 Niki Court in Manassas, Virginia;

                    (C) the Deed of Lease dated as of October 30, 2005, between Patrick and Mary Finnigan, as landlord, and Company, as tenant, relating to condominium unit #101 located at 9250 Nicki Street in Manassas, Virginia;

                    (D) the Deed of Lease dated as of October 31, 2005, between Patrick and Mary Finnigan, as landlord, and Company, as tenant, relating to condominium unit #102 located at 9550 Battery Height Boulevard in Manassas, Virginia;

                    (E) the Car Lease dated as of July 15, 2005, between Michael Colgan, as lessor, and Company, as lessee, relating to a 2003 Volkswagen Passat;

                    (F) the Pre-Employment Background Investigation Agreement dated February 2, 2006, between Aviation Employment Solutions, Inc., a Virginia corporation, and Company, relating to the provision of pre-employment background checks and drug and alcohol history checks; and

                    (G) the Services Contract dated as of June 1, 2004, between Company and Capital Aviation, relating to the performance by Company of payroll processing services for Capital Aviation, executed by Company and Capital Aviation;

               (8) the Facilities Purchase Agreement, executed by Colgan Associates;

               (9) each Other Facilities Purchase Document required to be executed by any Person other than the Facilities Purchaser (or any affiliate or Related Person of the Facilities Purchaser), executed by such Person;

               (10) ratifications of each of the following Company Contracts to provide that Company shall not have the right to terminate such Company Contract prior to the date (if any) on which the Facility Purchaser acquires the applicable Facility pursuant to Section 6, except as provided in Section 6(d), and amending said Company Contracts to provide for such termination, executed by Company and Colgan Associates:

                    (A) the Deed of Lease Agreement dated as of September 30, 2003, between Colgan Associates, as landlord, and Company, as tenant, relating to the Hangar 1 and Headquarters Facility;

                    (B) the Deed of Lease Agreement dated September 12, 2006, between Colgan Associates, as Landlord, and Company, as Tenant, relating to the Hangar 2 Facility;

                    (C) the Fuel Tank Lease dated March 16, 2006, between Colgan Associates, as Lessor, and Company, as Lessee, relating to the Fuel Tank;

               (11) ratifications of each of the following Company Contracts executed by Company and Global Aircraft Leasing, LLC:

                    (A) Aircraft Lease Agreement dated as of February 28, 2006, between Global Aircraft Leasing, LLC, as lessor, and Company, as lessee, relating to that certain aircraft having registration number N339CJ; and

                    (B) Aircraft Lease Agreement dated as of February 28, 2006, between Global Aircraft Leasing, LLC, as lessor, and Company, as lessee, relating to that certain aircraft having registration number N356CJ;

               (12) [reserved]

               (13) (if available at Closing) an assignment from Company to Senator Colgan of the life insurance policy (including the current cash value thereof) owned by Company issued by various issuers and covering Senator Colgan, executed by Company and Senator Colgan;

               (14) (if available at Closing) an assignment from Company to Michael J. Colgan, Sr., of the life insurance policy (including the current cash value thereof) owned by Company issued by various issuers and covering Michael J. Colgan, Sr., executed by Company and Michael J. Colgan, Sr.;

               (15) the Reviewing Personnel Certificates, executed by each of the Reviewing Personnel;

               (16) a certificate of Company certifying, to Company’s Knowledge:

                    (A) as to the fulfillment of the conditions specified in Sections 9(a) and 9(b);

                    (B) that except for the Accounts Receivable from Company’s pilots who have not fulfilled their training Contracts, the reserves against the Accounts Receivable as of the Closing Date are not greater on a percentage basis than the reserves against the Accounts Receivable as of the Interim Balance Sheet Date;

                    (C) that there has been no material adverse change in the aging of the Accounts Receivable from the Interim Balance Sheet Date to the Closing Date;

                    (D) that Company’s election to be taxed under Subchapter S of the Code remains valid and in full force and effect, and has been valid and in full force and effect at all times since the date of this Agreement, subject to the automatic termination of such election upon the Closing as provided under the Code; and

                    (E) that full payment has been made of all amounts that are required to be paid under the terms of each Employee Plan as contributions with respect to all periods ending on or before the Closing Date and are due on or before the Closing Date, and that (to the extent required by GAAP) full accrual of all such amounts that are due at any time after the Closing Date has been made for the applicable accrual period; and

                    (F) that, except as disclosed in such certificate, there is no basis for any increase in the reserve reflected in the Interim Balance Sheet with respect to any Proceeding relating to any Employee Plan;

               (17) a certificate of Company certifying that, except as described in Schedule 7(b) , Company has no Knowledge of (1) any Breach of any representation, warranty or covenant made by Buyer in this Agreement or (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach;

               (18) the Release and Covenant, executed by Company;

               (19) resignations of each director of Company effective immediately after the Closing, executed by such directors;

               (20) a copy of the articles of incorporation of Company, including any and all amendments thereto and restatements thereof, obtained from the Virginia State Corporation Commission not earlier than three Business Days before the Closing Date;

               (21) a certificate or certificates as to the existence and good standing of Company duly executed by the Virginia State Corporation Commission as of a date not earlier than three Business Days before the Closing Date;

               (22) a certificate of the Secretary of Company certifying as to (A) the Governing Documents of Company, (B) the resolutions adopted by the board of directors of Company authorizing the execution, delivery and performance of Company’s Documents, and (C) the incumbency and specimen signature(s) of the officer(s) of Company executing Company’s Documents on its behalf; and

               (23) such other documents as Buyer may reasonably request for the purpose of facilitating or evidencing the consummation of the Transactions.

          (f)  Closing Deliveries by Buyer . In addition to any other document to be delivered under any other provision of this Agreement, Buyer shall deliver or cause to be delivered at the Closing:

               (1) the Escrow Payment Letter, executed by Buyer;

               (2) wire transfers pursuant to Section 2(a), in payment of the Cash Consideration less, with respect to each Seller, the amount, if any, of the Net Seller’s Debt of such Seller determined pursuant to Section 4(mm);

               (3) the Promissory Note, executed by Buyer;

               (4) the Security and Pledge Agreement, executed by Buyer and the Shares Escrow Agent, together with standby stock powers as provided in the Security and Pledge Agreement;

               (5) (if available for the Closing) the Facilities Purchase Agreement, executed by Buyer;

               (6) (if available for the Closing) each Other Facilities Purchase Document required to be executed by the Facilities Purchaser (or any affiliate or Related Person of the Facilities Purchaser), executed by such Person;

               (7) a capital contribution to Company in the aggregate amount of $6,000,000 (the “Capital Contribution”), which shall be made in the form of two wire transfers, one from Buyer and the other from the Deposit Escrow Agent, of immediately available federal funds to an account which shall have been specified by Company in writing to Buyer at least five Business Days before the Closing Date;

               (8) a certificate of Buyer certifying as to the fulfillment of the conditions specified in Sections 8(a) and 8(b);

               (9) a certificate of Buyer certifying that, except as described in Schedule 7(a) , Buyer has no Knowledge of (1) any Breach of any representation, warranty or covenant made by Sellers and Company in this Agreement or (2) any fact or circumstance that, with or without notice or the passage of time, would reasonably be expected to constitute or result in any such Breach;

               (10) the Release and Covenant, executed by Buyer;

               (11) a copy of the certificate of incorporation of Buyer, including any and all amendments thereto and restatements thereof, duly certified by the Secretary of State of the State of Delaware as of a date not earlier than three Business Days before the Closing Date;

               (12) a certificate or certificates as to the existence and good standing of Buyer duly executed by the Secretary of State of the State of Delaware as of a date not earlier than three Business Days before the Closing Date;

               (13) a certificate of the Secretary of Buyer certifying as to (A) the Governing Documents of Buyer, (B) the resolutions adopted by the board of directors of Buyer authorizing the execution, delivery and performance of Buyer’s Documents, and (C) the incumbency and specimen signature(s) of the officer(s) of Buyer executing Buyer’s Documents on its behalf; and

               (14) such other documents as Sellers and Company may reasonably request for the purpose of facilitating or evidencing the consummation of the Transactions.

     11.  Termination .

          (a)  Termination Events . Subject to Section 11(b), this Agreement may be terminated only as follows by notice given before or at the Closing:

               (1) by the written agreement of Sellers and Buyer;

               (2) by Buyer or Sellers in accordance with Section 7(b);

               (3) by Buyer or Sellers in accordance with Section 7(a);

               (4) by Sellers if (A) (i) any condition in Section 8 has not been satisfied as of the date specified for the Closing in the first sentence of Section 10(a) or (ii) the satisfaction of any such condition by the specified date is or becomes impossible other than through the failure of Sellers to perform and comply with any of their covenants and obligations under this Agreement, and (B) Sellers have not waived such condition on or before the specified date;

               (5) by Buyer if (A) (i) any condition in Section 9 has not been satisfied as of the date specified for the Closing in the first sentence of Section 10(a) or (ii) the satisfaction of any such condition by the specified date is or becomes impossible other than through the failure of Buyer to perform and comply with any of its covenants and obligations under this Agreement, and (B) Buyer has not waived such condition on or before the specified date;

               (6) by Sellers if the Closing has not occurred on or before January 31, 2007, or such later date as the parties may agree upon, unless any Seller has committed a material Breach of any provision of this Agreement and Buyer has not waived such Breach; or

               (7) by Buyer if the Closing has not occurred on or before January 31, 2007, or such later date as the parties may agree upon, unless Buyer has committed a material Breach of any provision of this Agreement and Sellers have not waived such Breach.

          (b)  Effect of Termination . If this Agreement is terminated pursuant to Section 11(a), all obligations of the parties under this Agreement shall terminate, except that the obligations of the parties in this Section 11(b) and Section 15 (except for those in Section 15(d)) shall survive. In the event this Agreement is terminated for any reason other than Closing, each of the parties (upon written request of any party that furnished the subject information) shall return to the furnishing party all information in the requested party’s possession and control concerning the furnishing party (including its business, assets, properties, personnel, operations, performance, financial condition, prospects and shareholders) and shall continue to keep in confidence (unless required by law or other governmental requirement to make disclosure) the fact that this Agreement existed, any such information provided or disclosed to such requested party and the reason this Agreement was terminated.

     12.  Covenants After Closing Date .

          (a)  Section 338(h)(10) Elections . Sellers shall have joined Buyer in making an election to have the provisions of Section 338(h)(10) of the Code apply to Buyer’s purchase of the Shares from Sellers (the “Section 338(h)(10) Elections”) by delivery to Buyer at the Closing of Seller-executed Form 8023 Elections under Section 338. Buyer shall be responsible for, and Buyer and Sellers shall render one another their reasonable cooperation in the preparation and filing of the Section 338(h)(10) Elections. The Purchase Price (adjusted by the Adjustment Amount) and all Liabilities of Company shall be allocated among Company’s assets and properties for all purposes (including Tax and financial accounting) in accordance with Sections 338 and 1060 of the Code and any comparable provisions of applicable state law, and shall be consistent with the third party appraisals, modified as necessary to reflect capital versus operating leases, etc. Sellers shall accept Buyer’s determination of the Purchase Price (adjusted by the Adjustment Amount) allocations and shall report, act and file (including Section 338(h)(10) Forms) in all respects and for all purposes in a manner consistent with such allocations if, but

only if, such determination by Buyer is consistent with, and does not result in additional tax to Sellers in excess of the amount provided in, the parties’ mutual binding determination of the Adjustment Amount as provided in Section 3. Sellers shall execute and deliver to Buyer all such additional documents and forms prepared by Buyer, including Section 338(h)(10) Forms, as Buyer may reasonably request or as are required by the Code and any other applicable Legal Requirement (provided Buyer furnishes all such documents to Sellers for review at least 15 business days prior to their due date, Sellers will retu