BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of ) ) Menagerie Enterprises, Inc. d/b/a ) DOCKET DOT-OST-2014-0192 Monarch Air ) ) For authority to conduct scheduled ) Passenger operations as a commuter air ) Carrier under 49 U.S.C. 41738 )

APPLICATION OF MENAGERIE ENTERPRISES, INC. DIBI A MONARCH AIR

Response to Third Information Request

Communications with respect to this document should be sentto:

March 25, 2015 Rebecca B. MacPherson Jones Day 51 LouisianaAve., NW Washington, DC 20001 Telephone: 202-879-3939 Fax: 202-626-1700 Email: rmacpherson@jonesday.comApplication of BEFORETHE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Menagerie Enterprises, Inc. d/b/a MonarchAir ) ) ) ) ) ) ) ) DOCKET DOT-OST-2014-0192

For authority to conduct scheduled Passenger operations as a commuter air Carrier under 49 U.S.C. 41738

APPLICATION OF MENAGERIE ENTERPRISES, INC. D/B/A MONARCH AIR Response to Third Information Request

Monarchunderstands DOT'spositionthat Monarch's negative working capital balance needs to be considered in determining its financial fitness. In the balance sheet dated August 31, 2014 (Exhibit 6Ato Monarch's application), Monarch showed current assets of$1,074,995 and current liabilities of$1,495,036, resulting in a negative working capital balance of$420,040. Adding this capital to the financial fitness threshold basedpre-operating costs and three months ofanticipated operations results in a financial fitness threshold of$2,156,407. In additionto assessing its negative working capital as ofDecember 31, 2014, Monarch has been able to secure an increase in its existing letter ofcredit ("LOC") of$1,750,000. This, combined with the LOC dedicatedto these operations by Rise's financial institution and the written financial commitment by Rise to payfor pre-operating costs, guarantees Monarch dedicated financial resources for the contemplated commuter operations of$2,360,000. In addition, Monarch has been able to determine that as ofDecember 31,2014, its current assets equaled $1,219,073.98 and its current liabilities equaled $1,570,832.65, resulting in a negative working capital balance of$351,758.67, a nearly $70,000 reduction from its August 31, 2014 balance. Monarch calculates thatthe financial fitness threshold is $2,088,126, significantly less than the $2,360,000 that it is able to verify is available for its Rise operations.
Monarch notes thatproviding the information requested in questions 1and 2 on Finances would represent anunnecessary cost and introduce additional delay inprocessing Monarch's application because ofthe impact oftax season on its accountants. However, Monarch does have its assets, liabilities and equity evaluatedby its accountants on a quarterlybasis. The most recent quarterly report calculated Monarch's current assets and liabilities using the same

2accounting methodology as was used in the August 31,2014report (Exhibit 6A to Monarch's application). Accordingly, Monarch believes that this documentation should be sufficientto allowDOTto determine Monarch's negative working capital within the pastthree months and should be sufficientto determine ifMonarchhas sufficientresources to meet DOT'sfinancial fitness threshold.
Finances


### I. A current balance sheet (within 

### 3months) alongwith explanatory footnotes.
Please seeMenagerie Enterprises, Inc. UnauditedFinancialStatements andAccountants' Compilation Report, December 31, 2014, included as Exhibit 1to this submission. Please note that the financial statement does not include the accountants' explanatoryfootnotes because of workload associated with filing clienttaxes priorto April15, 2015. However, the accounting practices discussed in Exhibit 7 ofMonarch's application continue to apply to this financial statement. Monarch has not entered into any major commitments in the past six months other than the aircraft lease agreement withN111RZ, LLC for the amount of$38,150.00 per month for use ofthe aircraft intended to initiate the Rise operations and previously disclosed in the Response to Second Information Request dated January 23, 2015. The purchase ofsubsequent aircraft is dependentupon DOT granting Monarch's application for commuter authority and will be accomplishedthrough a secured loan with Legacy Texas Bank, as initially outlined in the bank's December 18, 2014letter(ExhibitB to the Response to Information Request dated December 23, 2014) and as revised by Exhibit 2to this submission. There are no new liabilities more than 60 days past due. The liabilityto Cowles and Thompson has been reduced from $38,604.72 to $9,386.86; the dispute with Pratt & Whitney has been resolved and there are no remaining liabilities; the dispute with Dallas Airmotive remains unresolved and the disputed debt of$19,777.07 remains the same. 2. A current income statement (for 12 months ending the same date as date of balance sheet) alongwith explanatory footnotes.
Please see Menagerie Enterprises, Inc. UnauditedFinancialStatements andAccountants' Compilation Report, December 31, 2014, included as Exhibit 1to this submission. Please note that the financial statement does not include the accountants' explanatory footnotes because of workload associated with filing clienttaxes priorto April15, 2015. However, the accounting practices discussed in Exhibit 7 ofMonarch's application continue to apply to this financial statement. Monarchhas not entered into any major commitments in the past six months other thanthe aircraft lease agreementwithN111RZ, LLC for the amount of$38,150.00per month for use ofthe aircraft intendedto initiate the Rise operations and previously disclosed in the Response to Second Information Request dated January 23,2015. The purchase ofsubsequent aircraft is dependentupon DOT granting Monarch's application for commuter authority and will be accomplished through a secured loan with Legacy Texas Bank, as initially outlined in the bank's December 18, 2014letter(Exhibit Bto the Response to Information Request dated December23, 2014) and as revised by Exhibit 2 to this submission. There are no newliabilities more than 60 days past due. There are no new liabilities more than 60 days past due. The liabilityto Cowles and Thompsonhas been reduced from $38,604.72 to $9,386.86; the dispute

3with Pratt & Whitney has been resolved and there are no remaining liabilities; the dispute with Dallas Airmotive remains unresolved and the disputed debt of$19,777.07 remains the same. 3. Third-party verification from Monarch'sfinancial institution of any financial resources available to Monarch to meetthe Department's financialfitness test.
Please see ExhibitA to Monarch's December 23, 2014 submission for verification ofRise's commitmentto payMonarch a set sum to coverpre-operating expenses. Please see Exhibit 4to Rise's January 23, 2015 submission for verification ofa LOC from Rise's financial institution dedicated for use in Monarch's Rise operations. Please see the letter from Legacy Texas Bank confirming a LOC for Rise operations in the amount of$1,750,000, included as Exhibit 2 to this submission. Operations
The application submittedstates the RiseAlpha, LLC ("Rise"), plans to charter air transportationfrom Monarch on behalf of its members, whereas the agreement between Rise and Monarch mentions rise as a ticketagent. Pleaseprovide additionaldetaileddescription on how the membership club will operate.
Becausethis questionrelates to Rise's business model, we have asked Rise to provide a response. Rise's response is as follows: Response ofRise Alpha, LLC Rise is pleasedto provide the following information to assistthe Departmentin its review ofMonarch Air's application. Rise urges the Departmentto grant Monarch Air's application expeditiously. Rise is neither an applicant in, nor a partyto, this proceeding. Instead, Rise has a vital interest in the expeditious grant ofMonarchAir's application because the Rise wishes to arrange needed services for its membership- services eitherthat do not exist or are so expensive interms oftime or moneythat they obstruct the efficient performance ofday-to-day business responsibilities. The Department'srequest has two parts: the first appears to suggestthat an inconsistency exists betweenthe statements that Rise Alpha, LLC (Rise) plans to charter air transportation from a certificated U.S. air carrier on behalfofits members, and the statement that Rise is aticket agent. These statements are wholly consistent: Rise is a person otherthan an air carrierthat, as agent for the Rise membership, arranges for air transportation. Rise therefore falls squarely within the definition ofticketagent in 49 U.S.C. §40102(a)(45), which in its entirety reads as follows: (45) "ticket agent" means aperson (except an air carrier, a foreign air carrier, or an employee ofan air carrier or foreign air carrier) that as a principal or agent sells, offers for sale, negotiates for, or holds itselfout as selling, providing, or arranging for, air transportation.
4The remainder ofthis response addresses the second part ofthe request, which is to explain howthe membership program will work. Itdraws upon and compiles factual material already in the docket. 2. Description ofRise's Business! Rise is a Texas limited liability company, wholly owned and managed by Rise, LLC. Both are U.S. citizens withinthe meaning of49 U.S.C. 40102(a)(15).Z Rise arranges door-to-door transportation onbehalfofits members. Rise'splan is an innovative, pro-competitive advance in executive air travel, one that we believe will be an increasingly importantpart oftransportation in this country. 3 Rise's membership program is designed to address a market failure that has resulted in excessively high costs oftransportation for middle-to-senior level business executives traveling in short-haul business markets. These costs impede day-to-daybusiness and are aburden ontheir freedom to travel. These executives ascribe a high value to theirtime, especiallyunproductive time in airports and lines. Yet, due to inefficiencies inherent in the system, existing air carrier services require travelers to spendthree or more hours traveling over a short-haul segment that could be accomplished in less than an hour. Most ofthat time is unproductive, resulting in a drag onthe U.S. economy. Similarly, driving can take four hours ormore, all unproductive time, and is an option that is considerably less safe than flying on a U.S. air carrier such as Monarch. Further, current services do not adequately serve the close-in airports preferred by business travelers. Other options available to these travelers include air taxi charters, privately owned aircraft, orfractional ownership programs, all of which cost considerably more thanthe Rise membership program would. The Riseprogram reduces unproductive time to an absolute minimum. Notonlywill it operate from the smallerterminals set aside for small aircraft operations, but it will arrange a complete door-to-door transportation solution on behalfofits members. The Rise membership program allows members to reduce costs (both transportation costs and executive time) by coming togetherto buy a convenient high-quality air service in bulk. Rise conducted considerable market research, including polling and surveys oflikely members andpersons who have reserved membership. These data were used to determine the markets for which the

Most ofthe information in this section 2 was included in the 12/23/2014 Reply ofMonarch Air at 2-3 (docketed 12/30/2014). Docket DOT-OST-2014-0192-5. 2 Source: 12/23/2014 Reply ofMonarch Air at 2-3 (docketed 12/30/2014). Docket DOT-OST2014-0192-5 Rise's business plan appears to be very similarto that ofcompetitor, Wheels Up, exceptthat Wheels Up it does not appearto have chartered a regularly scheduled service for its members. Wheels Up has been operating for about two years and has thousands ofmembers. Further information about its operation can be found on its website. See also, a recent interview with its founder, http:/ /pages.wheelsup.com/foxBusinessDec20 14.html.

5members needed bettertransportation options, the number andtiming offlights to be chartered and other services. Overtime, the membership may decide to add more markets. Fromtime to time, Rise members may also wishto arrange nonscheduled charters infuture. Rise has broughttogether an experienced managementteam, https://iflyrise.com/about/, all ofwhom are well-regarded business leaders. Rise's operationpresents very little (ifany) risk to consumers or their funds, in partbecause Rise's members are well-educated, well-informed consumers ofair transportation services. Initially, Rise will arrange for Monarch Airto provide high-frequency daily flights for Rise members between Dallas and Houston, and between Dallas and Austin. Rise will pay Monarch a contractually agreed amount for its services onbehalfofits members. Rise'smonthlymembership fee will entitle a memberto travel on any Monarch flight operated onbehalfofRise'smembership where space is available with no additional fees or other costs. Members will be able to reserve space on Rise-arranged flights, and theirmembership level will dictate the number of advancedreservations a member can make. 

### 2. Rise's Relationship to Members.4 The relationship ofRise members to Rise is that ofprincipal (members) and agent (Rise) and is governed by state law. Rise is not an air carrier, direct or indirect. Rise's membership terms and conditions, its website, and published marketing communications all emphasize clearlythat Rise is not an air carrier and that it does not provide or engage in air transportation. Underthe membership agreements, which incorporate byreference Rise's membership terms and conditions,5 Rise members appoint Rise as their agent in arrangingtransportation. Rise representatives have beentrained specifically to include in all oral marketing communications the fact that Rise is not an air carrier and that it is an agent on behalfofmembers. Rise has arranged with Monarch that all contracts of carriage for suchtransportation will be directlybetweenRise members and Monarch. Monarch's conditions ofcarriage are specifically linked on Rise's website.6 

### 3. How The Membership Program Works.7 Rise will arrange a completetransportation solutionfor its members, from doorto door, arranging air and ground transportation, aircraft catering, member parking at airports, airport facilities, and concierge services. Each membership is

Most material in this section is new, added in response to the 3/19 request. Rise's terms and conditions ofmembership can be viewed at https://iflyrise.com/terms/. Monarch's Contract ofCarriage can be viewed at http://monarchair.com/section!contract-carriage. Most material in this section 4 was previously filed in Monarch's 12/23 response to Information Request, DocketDOT-OST-2014-0192-5.

6subjectto a monthlyprice that differs for each ofthree membership levels and a one-time initiation fee of$750. A membership is subjectto an initial 90-day minimum, payable on a monthly basis. After the first 90 days, a member may cancel a membership on 30 days' notice. Underthis arrangement, Rise will never hold more than 30 days' worth ofconsumer funds. The following table, taken from Rise's website, identifies the currentpricing for each membership level.

Membership Level Monthly Price Initiation Fee Minimum term Total Cost Express $1,650 $750 90 days $5,700 Executive $2,150 $750 90 days $7,200 Chairman $2,650 $750 90 days $8,700

4. Rise's Legal Status. As a legal matter, Rise Alpha, LLC is an agent appointed by its membersmostlybusiness executives -to arrange complete transportation solutions. State lawgoverns the relationship. In general, the Department does not license or regulate ticket agents, except for certain consumerprotection rules.8 Rise is not a common carrier, and it does not have common carrier obligations, such as the duty to provide safe and adequate service. 49 U.S.C. §§ 41702, 41712; FirstPennsylvaniaBank, NA. v. EasternAirlines, Inc., 731 F.2d 1113 (3rd Cir. 1984); Nippon Fire & Marine Ins. Co. v. Skyway FreightSys., 235 F.3d 53 (2nd Cir. 2000) (both applying common-lawduty to carry to air carriers). State law ofagency, not tort or contract law, governs Rise's duty to its members. The Montreal Convention does not govern its liability for any future international charters or other operations, nor would Rise enjoythe benefit ofthe treaty's liability limit.9 Rise is neither a "contracting carrier" nor (obviously) a direct air carrier, called an "actual carrier" underthe treaty. The ability ofatransportation agent to represent eitherthe carrier orthe consumer is well established, especially in cargo shipping. For example, an air freight forwarder that is not an air carrier (direct or indirect) may act as agent either for the shipper or the carrier. 10 The statutory definition ofa ticket agent at
See, e.g., 14 C.F.R. §§ 257.4-5, 258.4-5, 399.80, 399.83; Order 2002-9-2, Complaint ofThe American Society of TravelAgents, Inc., andJoseph Galloway against UnitedAirLines, Inc., et al., Dockets OST99-6410, OST-02-12004, at 58 n. 27 (served Sept. 4, 2002). See also, Notice ofProposed Rulemaking, Enhanced Consumer Protections for CharterAir Transportation, 78 Fed. Reg. 59880, 59882 (discussing the role ofa ticket agent) (Sept. 30, 2013).
9 Convention for the Unification ofCertain Rules for International Carriage by Air, Art. 39, opened for signature at Montreal, 28 May 1999 ("Montreal Convention"). Both a contracting and an actual carrier are presumed liable in case ofa loss, but in return, they enjoy a substantial liability limit. Montreal Convention, Arts. 39-41. 10 14 C.F.R. §296.5 ("An indirect cargo air carriermay act as agent ofa shipper, or ofa direct air carrierthat has authorized such agency, rather than as an air carrier, ifit expressly reserves the option to do so when the shipment is accepted.").

749 U.S.C. §401 02(a)(45) cited above governs both agents ofpassengers and agents ofshippers. Similarly, in ocean shipping, an ocean f:l·eight forwarder may act as agent ofthe shipper oi· the carrier, depending on the facts.''

(;ertification

The contents ofthis application and the attached exhibits are true and correct to the best ofmy knowledge and belief. Pursuantto Title 18 United States code Section 1001, I, Trey Sawtelle, in my individual capacity and as the authorized representative 

### ofthe applicant, have not in any manner knowingly and willfully falsified, concealed orfailed to disclose any material fact or made any false, fictitious, or fl'audulent statement orknowingly used any documents whichcontain such statements 

### in connectionwith the preparation, f:lling or prosecution

### ofthe application. 

### I understand that an individual who is found to have violated theprovisions of 

### 18 U.S.C. section 1 00I shall be fined orimprisoned not more than five years, orboth.

Attachments: Verification ofNick Kennedy, manager ofRise Exhibits 1and 2

11 46 U.S.C. §40I02( 18) provides: OCEAN FREIGHT FORWARDER.-Theterm "ocean freight forwarder" means aperson that- ( A) in the United States, dispatches shipments fi·om the United States via acommon carrier and books or otherwise arranges space for those shipments 011 beha((ofshippers; and (B) processes the documentation or performs related activities incidentto those shipments.

8VERIFICATION The contents ofthe "Operations"part ofthis Response to DOT Information Request dated March 19, 2015, are true and correctto the best ofmyknowledge and belief. Pursuantto 18 U.S.C. § 1001, I, Nick Kennedy, in my individual capacity and as the authorized representative ofRise Alpha, LLC, have not in any manner knowingly and willfully falsified, concealed orfailed to disclose any material fact or made any false, fictitious, orfraudulent statement orknowingly used any documents which contain such statements in connection withthe preparation, filing orprosecution ofthe application. I understand that an individual who is found to have violated the provisions of 18 U.S.C. 

### § 1001 shall be fined not more than $10,000 or imprisoned notmore than five years, or both. Signed,

Nick Kennedy in his individual capacity and as manager ofRise, LLCMENAGERIE ENTERPRISES, INC. UNAUDITED FINANCIAL STATEMENTS and ACCOUNTANTS' COMPILATION REPORT DECEMBER 31,2014



# Exhibit 1

## BEAIRD 

# HARRIS &CO., P.C. CERTIFIED PUBLIC ACCOUNTANTS

ACCOUNTANTS' COMPILATION REPORT

To The Shareholders Menagerie Enterprises, Inc. Addison, Texas

We have compiled the accompanying statement ofassets, liabilities, and equityincome tax basis ofMenagerie Enterprises, Inc. (an S corporation) as ofDecember 31, 2014, and the related statement ofrevenues and expenses
- income tax basis for the twelve months then ended. We have not audited orreviewed the accompanying financial statements and, accordingly, do not express an opinion orprovide any assurance about whetherthe financial statements are in accordance with the income tax basis ofaccounting. Management is responsible for the preparation and fair presentation ofthe financial statements in accordance with the incometax basis ofaccounting and for designing, implementing, and maintaining internal control relevantto the preparation and fair presentation ofthe financial statements. Ourresponsibility is to conductthe compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective ofa compilation is to assist management in presenting financial information in the form offinancial statements without undertaking to obtain orprovide any assurance that there are no material modifications that should be made to the financial statements. Managementhas elected to omit substantially all ofthe disclosures ordinarily included in financial statementsprepared in accordance with the income tax basis ofaccounting. Ifthe omitted disclosures were included in the financial statements, they might influence the user's conclusions about the Company's assets, liabilities, equity, revenues, and expenses. Accordingly, these financial statements are not designed for those who are not informed about such matters. We are not independent with respectto Menagerie Enterprises, Inc

..

Dallas, Texas March 24, 2015 1222I Merit Drive, Suite 750 Dallas, TX 75251 Phone: 972-503-1040

Fax: 972-503-1120

www.bh-co.com

Member ofAmerican Institute ofCertified Public Accountants I MemberofTexas Society ofCertified PublicAccountantsMENAGERIE ENTERPRISES, INC. STATEMENT OF ASSETS, LIABILITIES AND EQUITY INCOME TAX BASIS

CurrentAssets Cash Accounts Receivable Loans to Employees Fuel Credit Refund Receivable Inventories Prepaid Insurance
Total CurrentAssets
Fixed Assets Machinery & Equipment Aircraft & Aircraft Equipment Furniture & Fixtures Computer Equipment Leasehold Improvements Accumulated Depreciation
Total Fixed Assets
OtherAssets Aircraft Insurance Deposit Aircraft Escrow Deposits Aircraft Purchase Deposits Deposits
Total OtherAssets

TOTAL ASSETS December 31, 2014
UNAUDITED

ASSETS

$ 173,188.54 514,231.35 8,200.00 86,500.00 428,063.80 8,890.29

$ 110,982.62 616,825.94

52,448.94 55,298.42 90,743.70 (750,471.41)

$ 14,134.64 77,491.63 15,000.00 15,565.00

SEE ACCOUNTANTS' COMPILATION REPORT $ 1,219,073.98

175,828.21

122,191.27 $ 1,517,093.46MENAGERIE ENTERPRISES, INC. STATEMENT OF ASSETS, LIABILITIES AND EQUITY INCOME TAX BASIS December 31, 2014
UNAUDITED

LIABILITIES AND EQUITY

Current Liabilities Accounts Payable Payroll Tax Liability Sales Tax Payable Franchise Tax Payable LOC

- Legacy Texas Bank Refundable Insurance Deposits Loans from Shareholder Current Portion of Long-Term Debt

Total Current Liabilities Long-Term Liabilities NIP

- Legacy Texas Bank- A/C NIP

- Legacy Texas Bank- Tools Less: Current Portion of Long-Term Debt
Total Long-Term Liabilities

Equity Capital Stock Additional Paid In Capital Retained Earnings Revenues Over (Under) Expenses
Total Equity

TOTAL LIABILITIES & EQUITY $ 819,979.53 205.02 10,770.19 35,518.00 297,000.00

13,456.19 231,000.00 162,903.72

$ 656,342.33 41,583.59 (162,903.72)

$ 1,000.00 3,894.67 (300, 134.72) (293,521.34)

SEE ACCOUNTANTS' COMPILATION REPORT $ 1,570,832.65

535,022.20

(588,761.39) $ 1,517,093.46MENAGERIE ENTERPRISES, INC. STATEMENT OF REVENUES AND EXPENSES INCOME TAX BASIS For the twelve months ended December 31, 2014

Revenues Fee Revenue Interest Income UNAUDITED

Gross Revenue

Cost of Goods Sold Aircraft Operating Expense Aircraft Insurance Crew Training Costs Fuel Ground Transportation Lease Expense MX Department Outside Services Pilot Shop Supplies Ramp/Landing Fees Required Aircraft Supplies Trip & Crew Expenses
Total Cost of Goods Sold
Gross Profit

Expenses Advertising Bank Fees Cash Over Short Charitable Contributions Cleaning & Landscaping Charter Department Expense Charter Department Expense

- 41 C Computer Expense & Upgrades Consulting Service Contract Labor Credit Card Fees

SEE ACCOUNTANTS' COMPILATION REPORT $ 6,131,464.16 26.38 $ 6,131,490.54

$

$ $

$ 97,545.90 127,601.91 116,031.04 740,362.82

11,364.86 242,777.76 826,596.64

17,940.45 51,945.48 12,121.56

9,270.77 51,919.75 2,305,478.94
3,826,011.60

33,766.25

2,503.69 (40.02) 250.00 9,734.92 48,536.38 53,063.67 4,787.13 21,293.49 145,809.38

50,684.32MENAGERIE ENTERPRISES, INC. STATEMENT OF REVENUES AND EXPENSES INCOME TAX BASIS For the twelve months ended December 31, 2014
UNAUDITED

Delivery & Freight $ Dues & Subscriptions Employee Benefits Programs Equipment Maintenance Franchise Tax Hangar Services Insurance Interest Expense Legal & Professional Maintenance Service Plans Meals & Entertainment Miscellaneous Expense Office Expense Office Supplies Payroll Taxes Payroll Service Fees Printing & Reproduction Reference Library Rent Expense Repairs & Maintenance Small Shop Tools Taxes Telephone & Communications Training & Education Travel Uniforms Utilities Wages & Salaries
Total Expenses $
Revenues Over (Under) Expenses Before Depreciation $ Depreciation

- Income Tax Basis
Revenues Over (Under) Expenses After Depreciation $

SEE ACCOUNTANTS' COMPILATION REPORT 25,834.73 22,145.32 176,450.37

21,788.84 74,389.76 54,990.41 55,583.12 56,403.30 170,120.81 132,668.12

5,226.24 4,420.51

853.74 27,887.22 168,129.39

10,987.60

7,543.31 29,323.85 292,833.54

17,953.87 39,381.31 39,381.22 65,845.03 665.17 17,078.06

3,478.71 51,077.88 2,082,947.30
4,025,777.94

(199,766.34)

93,755.00 (293,521.34)

# LEGACYTEXAS

March 24, 2015

To Whom It May Concern:

As noted in my letter dated December 18, 2014, Legacy Texas Bank has agreed to provide Menagerie Enterprises, Inc. d/b/a Monarch Air ("Monarch Air") the necessary financing to support its anticipated operations with RISE, LLC.

We anticipatethatthis financing will require two parts. First; Legacy Texas Bank has agreed to offer a line ofcredit that could support shortterm working capital needs for Monarch in relation tothe RISE operations. The amount ofthe line ofcredit could go up to $1,750,000 and would mature one year afterthe line is granted and could then be eligible for renewal atthat time. Monarch Air could have access tothe line ofcredit as long as it making regular payments against any outstanding balance as detailed in paragraph 3 of my December 18, 2014 letter. To date, Monarch Air has not made any withdrawals against this line ofcredit facility.

The second part ofthe financing is associated with the acquisition of up tofive (5) future aircraft acquisitions. Each future aircraft purchase could be placed on aseparate loan that will be secured bythe aircraft being purchased. The first aircraft has already been acquired (1/8/15) by N111RZ, LLC on behalfof Monarch Air. It is my understandingthat acopy ofthe promissory note containing the relevant loan terms ofthis loan has been provided to you by Monarch Air. Atthis point in time, it is impossible to determinetheterms ofany future loans. However, we provided some basic assumptions in paragraph 2 ofmy letter dated December 18, 2014. Please assume that the terms coveringthe recent aircraft purchase could similarly apply tofuture aircraft loans, with variations allowed for the purchase price, amortization schedule, and applicable interest rates. As a point ofclarification, the December 18, 2014 letter provided an approximate monthly payment on an anticipated loan. The actual monthly payment would be subject to the applicable amortization schedule.

Please let me know if I can provide any further information on this matter.

# ~~API · Steve Young/

# ~ 

# p SeniorVice President

P.O. Box 869105, Plano, TX 75086-9105 nwin 972.578.5000 I LegacyTexas.com 

# Exhibit 2