Exhibit 10.5
GULFSTREAM INTERNATIONAL GROUP,
INC.
PUT OPTION AGREEMENT
Issue Date: August 31, 2008
Gulfstream International Group, Inc., a
corporation organized under the laws of the State of Delaware
(“Company”), hereby agrees that, for value received,
Shelter Island Opportunity Fund, LLC, its successors or assigns
(the “Holder”), is entitled, subject to the terms set
forth below, to require the Company (as defined herein) from and
after the earlier of (i) the repayment in full of all amounts
owed to the Holder under the Company’s $5,100,000 Secured
Original Issue Discount Debenture issued to the initial Holder on
the date hereof (the “Debenture”) or (ii) the date that
is 36 months after the Closing Date (as such term is defined in the
Securities Purchase Agreement dated as of even date herewith
between the Company and the Holder) (the “Put Commencement
Date”), until August 31, 2014 (the “Put Termination
Date”), to repurchase from Holder at the Exercise Price (as
defined herein) up to the maximum number of shares (the “Put
Shares”) of Common Stock (as defined herein) that are
issuable, but not yet issued, pursuant to the Common Stock Purchase
Warrant attached hereto (the “Warrant”) that was issued
by the Company. The number and character of the Put Shares and the
Exercise Price per share are subject to the adjustment mechanisms
under the Warrants.
As used herein the following terms,
unless the context otherwise requires, have the following
respective meanings:
(a)
The term “Company” shall
include Company and any corporation which shall succeed, or assume
the obligations of, Company hereunder.
(b)
The term “Common Stock”
includes (i) the Company’s Common Stock, $0.01 par value per
share; and (ii) any other class of securities into which such
securities may be reclassified, converted or exchanged into,
whether pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
1.
Right to Require Repurchase
. At any one or more times after
the Put Commencement Date until the Put Termination Date, Holder
may require that the Company repurchase all or any portion of the
Put Shares at a price equal to the Exercise Price, and such
repurchase shall reduce the number of shares of Common Stock, if
any, that are issuable, but not yet issued, pursuant to the
Warrant. The “Exercise Price” applicable for all
the Put Shares under this Put Option shall be equal to $3,000,000,
or $5.18 per share.
2.
Exercise of the Put Option
. If the Holder wishes to exercise
its Put Option rights, it shall submit to the Company, in writing,
a notice indicating the number of Put Shares it wishes the Company
to repurchase (an “Exercise Notice”). The Exercise
Notice may be submitted to the Company at any time beginning 30
days prior to the Put Commencement
Date and ending on the Put Termination
Date. Upon receipt of the Exercise Notice, the Company will have
thirty (30) days from its receip
