Helicopter Lease Agreement Coast Flight Academy, LLC

 

This Helicopter Lease Agreement (this “Agreement”) is made and effective this
1st day of January, 2014 (the "Effective Date") by and between General Aircraft,
Inc. (“Lessor”) and Coast Flight Academy LLC (“Lessee”). Each of Lessor and
Lessee is sometimes hereinafter referred to as a "Party" and as collectively the
“Parties” as the context requires.

 

WHEREAS, Lessor owns that certain tangible personal property commonly known as a
Robinson R44 Raven II helicopter, registry N88IKE Serial# 10031 (the
"Helicopter");

 

WHEREAS, Lessee is in the business of operating and maintaining aircraft and has
the appropriate state and federal licenses, personnel and facilities to operate
and maintain the Helicopter in compliance with state and federal law;

 

WHEREAS, Lessor wishes to lease the Helicopter to Lessee and Lessee wishes to
lease the Helicopter from Lessor;

 

NOW THEREFORE, in consideration of the mutual covenants and promises hereinafter
set forth, the parties agree as follow:

 

1.                   Grant of Lease; Term. Subject to the terms and conditions
set forth herein, Lessor grants Lessee a leasehold interest in the Helicopter as
of the Effective Date, through and including the sooner of (a) December 31,
2015; (b) when the Hobbs register on the Helicopter reaches a total time of 2200
hours; (c) upon termination of this Lease per paragraph 11, below; or (d) upon
either party terminating the agreement by delivering to the other party
one-hundred and twenty (120) days prior written notice of termination.

 

2.                   Condition. Lessee acknowledges and agrees that the
Helicopter has been delivered to Lessee in an AIRWORTHY CONDITION with a current
“Annual Inspection” or “100 Hour Inspection,” as applicable, with a beginning
Hobbs time of 0.0 and an airframe "Total Time" of

. Upon the termination of this Agreement for any reason, Lessee shall return the
Helicopter to Lessor in the same or better condition as received, save and
except only reasonable and ordinary wear and tear.

 

3.                   Use. Lessee shall use the Helicopter in a safe and
appropriate manner and shall comply with and conform to all national, state,
municipal, and other laws ordinances and regulations in any way relating to the
possession, use or maintenance of the Helicopter. Lessor understands that the
Helicopter is to be used for "rental" and "flight training", which is a high
risk activity. Lessee shall be solely responsible for any damage to the
Helicopter that may be experienced during the term of this lease and must
provide appropriate insurance on the Helicopter for all uses.

 

4.                   Maintenance and Repair. Lessee shall, at its own cost and
expense, repair and maintain the Helicopter so as to keep it in good working
order and operating condition. In this regard, Lessee shall pay for all
inspections, routine and non-routine maintenance and all related labor.

 

 

 

Lessee shall be responsible for any damage or repair to the Helicopter which is
caused by any negligence or misuse by Lessee or its authorized users. Lessor
shall be responsible only for the cost of parts to comply with mandatory AD’s
and SB’s and the replacement of any timed components where replacement is not
due to the actions of Lessee or its authorized users.

 

5.                   Rental Rate. Lessee shall pay to Lessor on a monthly basis
at the end of each month beginning on February 28, 2014 a rental rate of $200.00
per Hobbs hour, with a minimum of 40 hours each month (beginning in March 2014),
regardless of actual usage and regardless of the use made by Lessee of the
Helicopter. The minimum 40 hours of usage charge shall not accrue until the
Helicopter is certified for flight following its overhaul, but in no case before
March 1, 2014.

 

Hobbs usage will be documented and provided to Lessor by Lessee along with each
payment within 10 days of the end of each month.

 

6.                   Responsibilities & Fees. Lessor shall be responsible only
for the following expenses related to the use of the Helicopter:

 

•        Payment of all debt service, license and registration fees;

•Any applicable property taxes due for the operation of the Helicopter; and

•        Payment of any mandatory AD’s and SB’s and the replacement of any timed
components where replacement is not due to the actions of Lessee or its
authorized users.

 

Lessee shall be responsible for all other expenses, including but not limited to
the following:

 

•Hangar Parking (the Helicopter must be hangered when not in use);

•Insurance on the Helicopter;

•Fuel and regular operating oil; and

•        Regular Maintenance and Repairs on the Helicopter, including annual, 50
and 100 hour inspections.

 

7.                   Rental Payments. Rental payments shall be calculated and
made on a calendar month. Lessee shall remit to Lessor the gross rental revenues
for each month within ten (10 ) business days after the end of each month.
Rental payments shall be calculated by multiplying the number of Hobbs hours
used by $200.00, with a minimum of 40 hours, as provided above. Lessee will
provide monthly rental reports with each payment showing the Hobbs usage and
calculation of payment.

 

8.                   Surrender. Upon the expiration or earlier termination of
this Agreement, Lessee shall return the Helicopter to Lessor in good repair,
condition and working order and shall pay for all parts, mechanisms, devices, or
materials required to make it so at the time of surrender, keeping the
Helicopter in good mechanical working order and current in all of its regularly
scheduled inspections, ordinary wear & tear resulting from proper use thereof
excepted, by delivering the Helicopter at Lessee's cost and expense to such
place as Lessor shall specify within the city or county in which the same was
delivered to Lessee.

 

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9.                   Insurance. Lessee shall procure and continuously maintain
insurance for all risk against loss of, or damage to, the Helicopter, naming the
Lessor and the Security Holder on the Helicopter as loss payee, and liability
and property damage insurance with limits as approved by Lessor, naming the
Lessor and the Security Holder on the Helicopter as additionally named insured
and a loss payee. Lessee shall provide Lessor with an original policy or
certificate evidencing such insurance. Hull value for this Helicopter shall be
$380,000.

 

Unless· otherwise arranged in advance, down payments for any required insurance
premiums shall be paid upon Helicopter acceptance into the insurance policy.
Premium refunds can only be made at the end of the insurance policy period in
the event of early termination of this Agreement unless otherwise allowed by the
insurance policy.

 

10.                Reserve for Taxes. Lessor must supply all corporate reporting
information, including a Federal Tax Id or Social Security Number, to comply
with Federal vendor tax reporting (1099).

 

11.                Default. If Lessee fails to make rental payments as described
herein within ten (10) business days after the same is due and payable, or if,
Lessee fails to observe, keep or perform any other provision of this Agreement
required to be observed, kept or performed by Lessee, Lessor shall have the
right to exercise any one or more of the following remedies: (i) take possession
of the Helicopter, without demand or notice, wherever it may be located, without
court order or other process of law;

(ii) terminate this Agreement.

 

12.                Ownership and Rights. The Helicopter is, and shall at all
times be and remain, the sole and exclusive property of the Lessor. Lessee shall
have no right, title or interest therein or thereto except as expressly set
forth in this Agreement.

 

13.                Entire Agreement. This Agreement constitutes the entire
agreement between the parties on the subject matter hereof and it shall not be
amended, altered or changed except by a further writing signed by the parties
hereto.

 

14.                Notices. Service of all notices under this Agreement shall be
sufficient if given personally or by certified mail, return receipt requested,
postage prepaid, at the address hereinafter set forth, or to such address as
such party may provide in writing from time to time or at the Parties last known
address.

 

15.                Assignment. Lessee shall not assign this Agreement or its
interest in the Helicopter without prior written consent of Lessor. Any such
attempted assignment shall be null and void.

 

16.                Force Majeure. Non-performance of either party shall be
excused to the extent that performance is rendered impossible by strike, fire,
flood, governmental acts, orders or restrictions, or any other reason where
failure to perform is beyond the control and not caused by the negligence of the
non-conforming party.

 

17.                Governing Law. This Agreement shall be construed and enforced
according to laws of the State of Nevada.

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In Witness Whereof, the parties hereto have executed this Agreement as of the
day and year first above written.

 

General Aircraft, Inc.

Date: 1-16-2014

 

By: /s/ Ari L. Nagler

Its: President

 

Coast Flight Academy, LLC

Date: 1-16-2014

 

By: /s/ Authorized Signatory

Its: Member Manager

 

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