Exhibit 10.1

 

NON-CONTINUOUS AIRCRAFT DRY LEASE AGREEMENT

 

THIS NON-CONTINUOUS AIRCRAFT DRY LEASE AGREEMENT (the “Lease”) is entered into
effective as of September 1, 2006, between 55JS Limited, Co. a Utah corporation
(“Lessor”), and RehabCare Group, Inc. a Delaware corporation (“Lessee”), with
offices at 7733 Forsyth Boulevard, St. Louis, Missouri 63105.

 

WITNESSETH THAT:

 

WHEREAS, Lessor is the owner of a Gates Learjet Corp. model 35A aircraft,
manufacturer’s serial number 138, Federal Aviation Administration (“FAA”)
Registration No. N124ZT, equipped with the engines and components attached there
to and associated therewith (the “Aircraft”); and

 

WHEREAS, Lessee desires to dry lease the Aircraft from Lessor on a
non-continuous basis.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties agree as follows:

 

1.

LEASE TERM

 

1.1        Lessor agrees to dry lease the Aircraft without crew to Lessee on a
non-continuous basis and Lessee hereby agrees to dry lease the Aircraft from
Lessor, upon the terms and conditions set forth herein.

 

1.2        This Lease shall commence on the date hereof and shall terminate on
August 31, 2007 (the “Initial Term”). Unless Lessee notifies Lessor at least
ninety (90) days prior to the end of the Initial Term (or additional term, as
the case may be), this Lease will automatically renew for two (2) additional
terms of one (1) year each, with the last automatic renewal of the Lease ending
on August 31, 2009 (the “Renewal Terms”) upon the same terms and conditions
provided herein. Notwithstanding the foregoing, either party may terminate this
Lease, with or without cause, upon thirty (30) days written notice to the other
party. The Initial Term and any Renewal Term(s) shall be collectively referred
to herein as the “Lease Term.”

 

2.

USE AND OPERATION OF AIRCRAFT

 

2.1        During the Lease Term, Lessor agrees to make the Aircraft available
to Lessee at Lessee’s request, subject only to use by other lessees which use is
scheduled prior to any use request made by Lessee. The Aircraft will be
available for use only when the Aircraft is not undergoing maintenance or
inspection. Lessee will only utilize the Aircraft for the carriage of employees,
directors, business guests and property of Lessee and its affiliates.

 

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2.2        The Aircraft will not be operated or located in (i) any area excluded
from coverage by the terms of any applicable insurance pursuant to the terms of
this Lease or (ii) any recognized or threatened area of hostilities, unless
fully covered to Lessor’s satisfaction by war risk insurance or where the
government of the United States of America has assumed liability for (a) any
damage, loss, destruction or failure to return possession of the Aircraft and
(b) injury to persons or damage to property of others.

 

2.3        Lessee further covenants and agrees that, at all times when Lessee is
using the Aircraft during the Lease Term, the Aircraft will be operated by duly
qualified pilots with valid airline transport or commercial pilot certificates,
except for Dr. John Short who will maintain a private certificate, and each
having the minimum total pilot hours required by the requirements of Lessor’s
insurance carriers, and any other certificate, rating, type rating or
endorsement appropriate to the Aircraft, purpose of flight, condition of flight
or as otherwise required by the Federal Aviation Regulations (FARs). Every pilot
of the Aircraft shall be employed and/or paid and contracted for by Lessee,
shall meet all recency of flight requirements and shall meet the requirements
established and specified by the insurance policies required under this Lease
and the FAA.

 

2.4          Lessee acknowledges that it accepts full “operational control” of
the Aircraft (as defined in applicable FARs) as well as possession, command and
control of the Aircraft at all times when Lessee is using the Aircraft under
this lease. Lessee agrees and warrants that the Aircraft will be used and
operated: (i) in compliance with any and all statues, laws, ordinances,
regulations and binding standards or directives issued by any governmental
agency applicable to the use or operation thereof; (ii) in compliance with any
current airworthiness certificate, license or registration relating to the
Aircraft issued by any agency; (iii) in compliance with all safety and security
directives of the FAA and similar governmental regulations relating to aircraft
security; (iv) in compliance with all applicable insurance requirements
including those specified in Section 8 hereof; and (v) in a manner that does not
modify or impair any existing warranties on the Aircraft or any part thereof.
Lessee shall promptly reimburse Lessor for all costs and expenses and loss of
income incurred by Lessor by reason of Lessee’s violation of any provision of
this Section.

 

2.5        Subject to the further provisions of Section 5 below, Lessee shall
bear all variable operating costs including, but not limited to: fuel, crew
salaries, expenses and employee benefits; handling and custom fees and related
charges; flight planning, landing, and navigation fees, hangar and storage
charges when the Aircraft is used by Lessee pursuant to this lease; and any
fines, fees or penalties arising directly or indirectly out of this Lease or
Lessee’s operation of the Aircraft.

 

 

3.

AIRCRAFT MAINTENANCE

 

3.1        During the Lease Term, Lessor, at its own cost and expense, shall
maintain the Aircraft and its engines in an airworthy, fully maintained
condition. Lessor shall perform: (i) all

 

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repairs, inspections and maintenance required by the Manufacturer’s Recommended
Maintenance Program delineated in the applicable maintenance manual per FAR Part
91.409(f)(3); (ii) all procedures required to remain in compliance with the
selected Computerized Aircraft Maintenance Program (CAMP), (iii) all other
repairs and maintenance as may be necessary to enable the airworthiness
certification of the Aircraft to be maintained in good standing at all times
under the FARs, and (iv) any other repairs, inspections and maintenance, as is
required to maintain the Aircraft and its engines in the same condition as of
the date hereof, discarding normal and reasonable wear and tear from ordinary
use.

 

4.

ALTERATIONS

 

4.1        Lessee shall not in any way alter, modify or make additions or
improvements to the Aircraft or engines without the prior written consent of
Lessor. All alterations, modifications, additions and improvements which are
made shall become property of Lessor and shall be subject to all the terms of
this Lease.

 

5.

LEASE AMOUNT AND TIME OF PAYMENTS

 

5.1        For use of the Aircraft hereunder, Lessee shall pay Lessor the
charges, and reimburse Lessor for its other costs and expenses, the amounts
required pursuant to the payment and reimbursement principles set forth on
Appendix I.

 

5.2        The charges specified in this Section may be adjusted periodically by
the mutual agreement of the parties.

 

6.

HANGAR LOCATION

 

6.1        During the Lease Term, the Aircraft shall be based at Spirit of St.
Louis Airport in St. Louis, Missouri (the “Hangar Location”) and shall be
hangared there at all times when not in use. Lessor may, upon at least ten (10)
days prior written notice to Lessee, change the Hangar Location to another
location reasonably acceptable to Lessee and as specified in such notice.

 

7.

LEASE TAXES

 

7.1        Lessor shall pay or cause to be paid all taxes incurred by reason of
its ownership or its use, as the case may be, of the Aircraft during the Lease
Term, including personal property taxes. Lessor represents and warrants to
Lessee that no Missouri sales or use tax applies to the Rent.

 

7.2        Lessee shall pay all taxes associated with Lessee’s use of the
Aircraft, including landing fees and any other taxes or fees which may be
assessed against a specific flight by the Lessee.

 

 

 

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8.

INSURANCE

 

 

8.1

Lessor shall provide and maintain during the Lease Term insurance

coverages of the types, in the amounts and including the special provisions set
forth                 below:

 

8.1.1             Aircraft liability insurance, including war, hi-jacking and
allied perils coverage, with respect to the Aircraft insuring against liability
for bodily injury to or death of persons, including passengers, and damage to or
loss of property, in an amount not less than Fifty Million United States Dollars
(US$ 50,000,000) combined single limit per occurrence. Such insurance shall name
Lessee as an Additional Insured.

 

8.1.2             All-risks physical damage (hull) insurance, including war,
hi-jacking and allied perils coverage, with respect to the Aircraft insuring
against any loss, theft or damage to the Aircraft and any engines or parts while
temporarily removed from the Aircraft, in an amount equal to One Million Eight
Hundred Thousand United States Dollars (US$ 1,800,000). Such insurance shall
also contain a waiver of subrogation in favor of Lessee.

 

8.1.3             Additional coverages as set forth on Appendix II on behalf of
both the Lessor and the Lessee.

 

 

8.1.4

All insurance required by this Section 8.1 shall:

 

8.1.4.1         be provided by insurance carriers and policies approved by
Lessee, which approval shall not be unreasonably withheld;

 

8.1.4.2         name Lessor as a Named Insured and name Lessee and Lessee’s
officers, directors, partners, members, managers, employees, affiliates and
subsidiaries as Additional Insureds;

 

8.1.4.3         be primary and without any right of contribution from any other
insurance available to Lessor or Lessee;

 

8.1.4.4         contain a standard clause as to cross liability or severability
of interests among insured parties providing that the insurance shall operate in
all respects as if a separate policy had been issued covering each party
insured;

 

8.1.4.5         cover a worldwide geographical territory, except that in the
case of war, hi-jacking and allied perils coverage, the coverage territory shall
be subject to such excluded territories as is usual in the aviation insurance
industry; and

 

8.1.4.6 provide that not fewer than thirty (30) calendar days written notice
shall be given to Lessee of cancellation by any party or adverse material change
or reduction in the limits of coverage applicable to Lessee under the policies
(except

 

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that ten (10) days advance written notice shall be given in the event of
cancellation for non-payment of premium and such shorter notice period shall be
given as is customarily available under war risk and allied perils coverage).

 

8.2   Lessor shall provide Lessee with a Certificate of Insurance evidencing the
coverages, limits of liability and special provisions required by Section 8.1
above. Upon each renewal of Lessor’s policy, Lessor shall provide Lessee with a
Certificate of Insurance evidencing the coverages, limits of liability and
special provisions required by Section 8.1 above. As soon as practicable
thereafter, at Lessee’s request, Lessor shall provide Lessee with a copy of such
renewal policy, including each endorsement applicable to Lessee.

 

8.3   In the event that, in the opinion of Lessor, the Aircraft is lost, stolen,
damaged beyond repair, confiscated, seized or its use appropriated by any
government or instrumentality thereof, this Lease shall terminate and the
proceeds of the insurance policy or policies shall be payable to Lessor.

 

8.4                  In the event the Aircraft is partially damaged and in the
opinion of Lessor such damage is repairable, then this Lease shall remain in
full force and effect and Lessor shall use the insurance proceeds to repair the
Aircraft.

 

8.5                  Lessee shall immediately notify Lessor of any accident or
incident involving the Aircraft, which notification shall specify the time,
place, and nature of the accident or incident or damage, the names and addresses
of parties involved, persons injured, witnesses and owners of properties
damages, and such other information as may be known. Lessee shall advise Lessor
of all correspondence, papers, notices, and documents whatsoever received by
Lessee in connection with any claim or demand involving or relating to the
Aircraft or its operation, and shall aid in any investigation instituted by
Lessor and in the recovery of damages from third persons liable therefore.

 

9.

REGISTRATION AND OWNERSHIP

 

9.1                  The Aircraft shall be duly registered with the FAA in the
name of Lessor during the Lease Term. At all reasonable times during the Lease
Term, Lessor or its authorized representatives may inspect the Aircraft and the
books and records of Lessee relating to the operation and maintenance thereof,
provided that such inspections do not interfere with the operations of Lessee.
Lessor shall have no duty to make any such inspection and shall not incur any
liability or obligation by reason of not making any such inspection.

 

10.

INDEMNIFICATION

 

10.1                Each party hereto agrees to indemnify and hold harmless the
other against all losses, including costs, attorneys fees and expenses by reason
of claims for injury to or death of persons and loss of or damage to property
arising out of or in any manner connected with the negligent performance of such
party’s responsibilities under this Lease or the negligent use, operation or
maintenance of the Aircraft by such party, or any breach by such party of any
covenant or warranty made herein, to the extent such claims are covered by the
indemnifying

 

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party’s insurance; provided, however, that such limitation shall not apply to
claims arising out of the indemnifying party’s gross negligence or willful or
intentional misconduct, unless such loss or damage arises from the gross
negligence or willful or intentional misconduct of the non-indemnifying party,
its officers, directors, agents, servants or employees. Lessee and Lessor agree
that in the event either party shall be liable to the other for any reason
relating to this Lease, that under no circumstances shall the damaged party be
entitled to any special, punitive or consequential damages, including but not
limited to damages for lost profits.

 

10.2                The indemnities and assumptions of liability in this Section
10 as to occurrences prior to the termination of this Lease shall continue in
full force and effect notwithstanding the termination of this Lease, whether by
expiration of time, by operation of law or otherwise. The parties shall give
reasonably prompt notice of any claim or liability hereby indemnified against.
The indemnifying party shall be entitled to control, and shall assume full
responsibility for, the defense of such matter.

 

11.

DEFAULT

 

 

11.1

Lessee shall be in default hereunder if at any time during the Lease Term,
Lessee:

 

11.1.1          is delinquent in making any Rent payment for a period of more
than fifteen (15) days; or

 

 

11.1.2

is adjudicated bankrupt or insolvent; or

 

 

11.1.3

files a voluntary petition in bankruptcy or for reorganization; or

 

11.1.4          attempts to make an assignment of this Agreement or the Aircraft
for the benefit of creditors; or

 

 

11.1.5

suffers a receivership to be appointed for Lessee’s assets; or

 

11.1.6          does not perform any or all of the requirements on Lessee’s part
to be performed under this Lease or is in breach of all or any of the covenants
herein contained whatsoever and fails, within thirty (30) days after notice from
Lessor, to cure such nonperformance or breach.

 

11.2                    If any of the events set forth in Section 11.1 occur,
Lessor shall at its sole discretion have any one or more of the following
remedies:

 

11.2.1          Lessor may sue to collect any and all sums which may be due to
Lessor hereunder together with any and all damages which may accrue by reason of
Lessee’s breach of this Lease.

 

11.2.2          By notice in writing terminate this Lease, whereupon all rights
of Lessee to the use of the Aircraft or any part thereof shall absolutely cease
and terminate but Lessee shall remain liable as hereinafter provided; and
thereupon Lessee, if so requested by

 

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Lessor, shall at its expenses promptly return the Aircraft as required by
Article 12 hereof, or Lessor, at its option, may enter upon the premises where
the Aircraft is located and take immediate possession of and remove the same.
Lessee specifically authorizes Lessor’s entry upon any premises where the
Aircraft may be located for the purpose of, and waives any cause of action it
may have arising from a peaceful retaking of the Aircraft. Lessee shall, without
further demand, forthwith pay to Lessor as all accrued and unpaid amounts due
hereunder.

 

11.2.3          Perform or cause to be performed any obligation, covenant or
agreement of Lessee hereunder. Lessee agrees to pay all costs and expenses
incurred by Lessor for such performance as additional Rent hereunder and
acknowledges that such performance by Lessor shall not be deemed to cure said
event of default.

 

11.2.4          Lessor may exercise any other rights or remedies which may be
available under the provisions of this Lease, under any of the laws of the
United States or under any of the laws of any of the states of the United
States.

 

12.

RETURN OF AIRCRAFT

 

Following each Lessee trip, and upon expiration of the Lease Term, Lessee shall
at its expense, return the Aircraft to Lessor to the Hangar Location (or such
other place as agreed to by the parties).

 

13.

ASSIGNS

 

This Lease is binding on the parties and their successors and assigns. Neither
party may assign or sublease its interests hereunder without the written consent
of the other party.

 

14.

NOTICES

 

Any notices provided for in this Lease shall be in writing and shall be deemed
to have been duly given (1) when delivered personally, or (2) the day following
delivery to a recognized delivery services:

 

 

In the case of Lessor, to:

 

 

55JS Limited, Co.

 

 

4377 McPherson

 

 

St. Louis, Missouri 63108

 

Attn: John H. Short

 

 

 

In the case of Lessee, to:

 

 

RehabCare Group, Inc.

 

 

7733 Forsyth Boulevard

 

 

St. Louis, Missouri 63105

 

 

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Attn: General Counsel

Or to such other address as a party may from time to time designate in writing
to the other for that purpose.

 

15.

ENTIRE AGREEMENT AND GOVERNING LAW

 

15.1                This Lease constitutes the entire and complete understanding
and agreement between the parties with respect to the lease of the Aircraft, and
it shall be interpreted in accordance with, and performance shall be governed
by, the laws of the State of Missouri, United States of America without regard
to its conflict of laws provisions. It shall not be modified or changed by any
expressed or implied promises, warranties, guarantees, representations or other
information unless expressly and specifically set forth in this Lease or any
addendum thereto properly executed by Lessor and Lessee.

 

16.

DISCLAIMER OF WARRANTIES

 

16.1                EXCEPT AS OTHERWISE PROVIDED IN THIS LEASE: (A) LESSOR
DISCLAIMS ALL EXPRESS AND/OR IMPLIED WARRANTIES OF ANY KIND WHATSOEVER WITH
RESPECT TO THE PHYSICAL CONDITION, MERCHANTABILITY OR FITNESS OF THE AIRCRAFT
FOR ANY PARTICULAR USE OR PURPOSE; AND (B) LESSEE AGREES THAT IT HAS NOT RELIED
UPON ANY REPRESENTATION, EXPRESSED OR IMPLIED, BY LESSOR OR ANYONE ACTING ON
LESSOR’S BEHALF, WITH RESPECT TO THE PHYSICAL CONDITION, MERCHANTABILITY OR
FITNESS OF THE AIRCRAFT FOR ANY PARTICULAR USE OR PURPOSE.

 

17.

OWNERSHIP

 

17.1                Lessee acknowledges and agrees that legal title to the
Aircraft shall be vested in Lessor, or its assigns as applicable, it being
expressly understood that this Lease is an agreement of lease only. Lessee shall
keep the Aircraft free from any markings or labeling which might be interpreted
as a claim of ownership thereof by Lessee or any party other than Lessor or its
assigns.

 

17.2                Lessee will not directly or indirectly create, incur,
assume, or suffer to exist any liens on or with respect to (i) the Aircraft or
any part thereof, (ii) Lessor’s title thereto or (iii) any interest of Lessor
therein (and Lessee will promptly, at its own expense, take such action as may
be necessary duly to discharge any such lien), except (w) the respective rights
of Lessor and Lessee as herein provided, (x) liens created by Lessor, (y) liens
for taxes either not yet due or being contested by Lessee in good faith with due
diligence and by appropriate proceedings in accordance with Section 7 below, and
(z) inchoate materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or
other like liens arising in the ordinary course of business of Lessee and not
delinquent (and for the payment of which adequate reserves have been provided).

 

18.

MISCELLANEOUS

 

 

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18.1

Time is of the essence in this Lease.

 

18.2                The parties agree that this Lease may be executed in any
number of counterparts, each of which, when duly executed, whether by facsimile
or otherwise, shall constitute an original hereof.

 

 

18.3

Lessee shall keep a legible copy of this lease in the Aircraft at all times.

 

19.

TRUTH-IN-LEASING

 

21.1                    TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE
FEDERAL AVIATION REGULATIONS.

 

 

(a)

THE AIRCRAFT, A GATES LEARJET CORP., SERIAL NO. 138, CURRENTLY REGISTERED WITH
THE FEDERAL AVIATION ADMINISTRATION AS N124ZT, HAS BEEN MAINTAINED AND INSPECTED
UNDER FAR PART 91 DURING THE 12 MONTHS PRECEDING THE EXECUTION OF THIS LEASE.

 

 

(b)

LESSOR CERTIFIES THAT THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR
PART 91 FOR OPERATIONS TO BE CONDUCTED UNDER THIS LEASE DURING THE DURATION OF
THIS LEASE.

 

 

(c)

LESSEE CERTIFIES THAT LESSEE, AND NOT LESSOR, IS CONSIDERED RESPONSIBLE FOR
OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE DURING THE TERM HEREOF.

 

 

(d)

LESSEE HEREBY CERTIFIES THAT IT UNDERSTANDS ITS RESPONSIBILITIES FOR COMPLIANCE
WITH APPLICABLE FEDERAL AVIATION REGULATIONS.

 

 

(e)

LESSEE UNDERSTANDS THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL
AND PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA
FLIGHT STANDARDS DISTRICT OFFICE.

 

The “Instructions For Compliance with Truth-In-Leasing Requirements” attached as
Appendix II hereto are incorporated herein by reference.

 

 

[SIGNATURE PAGE FOLLOWS.]

 

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                IN WITNESS WHEREOF, the parties hereto have caused this Lease to
be executed in their names and on their behalf by their respective officers
thereunto duly authorized.

 

 

LESSEE

LESSOR

 

REHABCARE GROUP, INC.

55JS LIMITED, CO.

 

 

By:        /s/ David B. Groce                              

By: /s/ John H. Short                         

 

Print Name:     David B. Groce                      

Print Name:      John H. Short_______

Title:    Senior Vice President                          

Title:

  General Manager                    

 

 

 

 

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APPENDIX I

 

 

In concept, Lessee shall be responsible for (i) all of the variable expenses
incurred relative to its operation of the Aircraft under this Non Continuous Dry
Lease, and (ii) a pro rata share of Lessor’s fixed expenses associated with
Lessor’s ownership of the Aircraft and the provision of the Aircraft to Lessee
under the terms hereof. It is further understood that Lessor shall be
responsible for all costs of operation of the Aircraft that are for Lessor’s or
its principal’s benefit or use, including a pro rata share of costs incurred
directly by the Lessee.

 

For purposes of this Non Continuous Dry Lease, “variable expenses” shall include
items such as fuel, maintenance, landing fees, local airport taxes, provisions,
compensation and benefits for a first officer if not the Chief Pilot and crew
expenses. “Fixed expenses” shall include items such as Chief Pilot compensation
and benefits, flight training, hull and liability insurance, long term
maintenance such as for the engines, hangar/storage and interest costs.

 

Consistent with that concept:

 

Lessee shall pay Lessor a lease charge of $1728 per flight hour for each flight
hour (or majority portion thereof) that the Aircraft is operated by Lessee
hereunder; such lease charge being an estimate of the actual variable and fixed
expenses of operating the Aircraft as of the date of this Agreement payable by
Lessor as follows: fuel, maintenance, amortized maintenance, master service
program costs, amortized dues and subscriptions, liability and hull insurance,
interest costs and miscellaneous business expenses.

 

Both parties acknowledge that Lessee pays directly the following fixed and
variable costs which are not included in the above lease charge but which
should, except for premiums associated with non-owned aircraft liability
insurance, be considered in the comparison to charter rates referred to in the
sixth succeeding paragraph below: chief pilot compensation and fringe benefits,
first officer compensation and fringe benefits, flight training, crew expenses,
hangar/storage and non-owned aircraft liability insurance.

 

In addition to the lease charge payable by Lessee for each flight hour, Lessee
shall pay Lessor a capital charge of $8,033 for each month during the Lease
Term; such capital charge being an estimate of Lessor’s interest expense
associated with the Aircraft.

 

The estimated hourly lease charge and the estimated capital charge set forth
above shall be reviewed, adjusted, and agreed to by Lessee and Lessor not less
frequently than once every twelve (12) months during the Lease Term.

 

Each month during the Lease Term, Lessor shall submit an invoice to Lessee for
the lease charges and the capital charge owing by Lessee for operation of the
Aircraft by Lessee during the immediately preceding month. Lessee shall pay
Lessor the amount due under each invoice within fifteen (15) days of Lessee’s
receipt of each invoice.

 

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Within thirty (30) days following the end of each twelve (12) month period
during the Lease Term, Lessee and Lessor shall reconcile the true and actual
lease charges and the true and actual capital charges that Lessee shall be
responsible for hereunder based on the fundamental concept that Lessee shall pay
or reimburse Lessor for (i) all of the variable expenses associated with
Lessee’s operation of the Aircraft, and (ii) a pro rata share of Lessor’s fixed
ownership costs; such reconciliation to be based on such methods, historical
usage patterns, and other information that Lessee and Lessor agree from time to
time is appropriate in furtherance of this agreement. Any amount due and owing
by one party to the other based on such reconciliation shall be paid within
fifteen (15) days of the date such reconciliation has been agreed between the
parties.

 

Lessee and Lessor shall maintain true and accurate records of all flight
segments, the destinations, the nature and purposes all flight segments, the
names of the passengers, when the Aircraft is operated, whether hereunder or
otherwise, and Lessee and Lessor shall maintain true and accurate records of all
variable expenses, all fixed expenses, and as to any other matters upon which
they may separately agree, and each party shall make available to the other
party upon request copies of all such records on an open book basis.

 

Notwithstanding the foregoing, in no event shall the fully allocated cost of all
variable and fixed expenses charged to Lessee, inclusive of costs directly paid
by the Lessee but exclusive of non-owned aircraft liability insurance, when
calculated on an hourly basis, exceed the average hourly charter rate for
comparable aircraft charged by three well known charter operators in the Midwest
region.

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX II

 

 

Additional Insurance Coverages

 

See the attached description.

 

 

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APPENDIX III

 

INSTRUCTIONS FOR COMPLIANCE WITH

"TRUTH IN LEASING" REQUIREMENTS

 

 

1.

Mail a copy of the contract to the following address via certified mail, return
receipt requested immediately upon the execution of the Lease: (14 C.F.R. 91.23
requires that the copy be sent within twenty-four hours after it is signed.)

 

Federal Aviation Administration

Aircraft Registration Branch

 

ATTN: Technical Section

P.O. Box 25724

Oklahoma City, Oklahoma 73125

 

 

2.

Telephone or fax the nearest Flight Standards District Office at least
forty-eight hours prior to the first flight under this Lease.

 

 

3.

Carry a copy of the contract in the aircraft at all times.

 

 

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