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. 

D/B/A MONARCH AIR 

Response to Second Information Request 

Communications with respect to this document should be sent to: 

January 23,2015 

Rebecca B. MacPherson 

Jones Day 

51 Louisiana Ave., NW 

Washington, DC 20001 

Telephone: 202-879-3939 

Fax: 202-626-1700 

Email: rrnacpherson@j onesday. corn 
Application of 

BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Menagerie Enterprises, Inc. d/b/a 

Monarch Air 

) 

) 

) 

) 

) 

) 

) 

) 

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. 

DIB/ A MONARCH AIR 

Response to Second Information Request 

General Information 

I. The supplemental information dated December 23, 20I 4, filed by Monarch did not contain 

the requisite certification statement affirming that the information submitted was true and 

correct. Therefore, please provide the certification. 

Please see the certification submission at the end of this document which covers both this 

submission and the December 23, 2014 submission. 

Management and Key Technical Personnel 

I. Please provide a resume for Mr. Raymond Sawtelle, detailing his experience, expertise and 

responsibilities. Also provide the compliance history information as required by sections 

204.3(!), (m), (o), and (p) of our rules. 

Raymond Sawtelle's resume is attached as Exhibit 1 to this submission. 

A list of all actions and outstanding judgments for more than $5,000 against any 

relevant corporation, key personnel employed (or to be employed) by any relevant 

corporation, or person having a substantial interest in any relevant corporation, 

including the amount of each judgment, the party to whom it is payable, and how 

long it has been outstanding. (I 4 CFR 204.3 (l)) 

2 
None. 

The number of actions and outstanding judgments of less than $5,000 against any 

relevant corporation, key personnel employed (or to be employed) by any relevant 

corporation, or person having a substantial interest in any relevant corporation, 

and the total amount owed by each on suchjudgments. (14 CFR 204.3(m)) 

None. 

A description of the current status of all pending investigations, enforcement 

actions, and formal complaints filed by the Department, including the FAA, 

involving the applicant or any relevant corporation, any personnel employed (or 

to be employed) by any relevant corporation or person having a substantial 

interest in any relevant corporation, regarding compliance with the Statute or 

orders, rules, regulations, or requirements issued pursuant to the Statute, and any 

corrective actions taken. (If an applicant has a compliance history that warrants 

it, additional iriformation may be required.) (14 CFR 204.3 (o)) 

None. 

A description of all charges of urifair or deceptive or anticompetitive business 

practices, or of fraud, felony or antitrust violation, brought against any relevant 

corporation or person having a substantial interest in any relevant corporation, 

or member of the key personnel employed (or to be employed) by any relevant 

corporation in the past I 0 years. Such descriptions shall include the disposition 

or current status of each such proceeding. (14 CFR 204.3 (p) 

Synergy v. Groesbeck, et al. - Dallas County district court, Dallas, TX 

The above-listed action was instituted by Synergy Aviation ("Synergy"), a 

company owned by Menagerie Enterprises, Inc.'s former chief financial officer, 

Paul Clark. Menagerie Enterprises, Inc. does not possess a financial interest in 

Synergy. Synergy sought recovery of a commission on the sale of an aircraft to 

Groesbeck. Groesbeck's defense included the assertion of a third party action 

against Menagerie Enterprises, Inc. and counterclaims against Synergy and Clark, 

contending violations ofthe Texas Deceptive Trade Practices Act ("DTPA") and 

assertions of fraud. Menagerie Enterprises, Inc. and Clark asserted counterclaims 

for frivolous DTP A claims against Groesbeck. Menagerie Enterprises, Inc., 

Synergy, Clark and Groesbeck agreed to a mutual release of all claims without the 

exchange of any additional consideration, resulting in the dismissal of 

Groesbeck's claims against Menagerie Enterprises, Inc., Synergy and Clark in 

2014. 

Financial Position and Operating Plans 

3 
An applicant for commuter authority is expected to be prepared to fully prosecute its application 

at the time it is filed. With respect to financial fitness, the applicant is required to provide 

current financial data, and three years of historic financial data, together with a detailed 

forecast of its pre-operating costs and a pro-forma forecast profit and loss statement reflecting 

all revenues and expenses the applicant expects to earn/incur during its first year of actual 

commuter operations. In addition, the company must demonstrate that it has obtained all of the 

funding needed to meet our financial fitness test or, at a minimum, that it has a reasonable plan 

for doing so. Please provide the following: 

1. In the December 23, 2014, submission, you indicate that Monarch will need $422,349 to 

commence the proposed commuter operations. Does Monarch consider this as its pre-operating 

cost forecast? If so, please explain how these costs were derived. If not, please provide a preoperating cost forecast that identifies all costs expected to be incurred by Monarch prior to the 

actual start of its operations. 

The $422,349 provided earlier consisted of both the pre-operating cost forecast and the 

cost associated with the first full month of operations. As such, it is overstated. Monarch 

estimates that the pre-operating cost forecast will be approximately $88,800. That cost consists 

of the following: 

Professional services (i.e., legal and accounting fees) 

and application fee 

Salaries for two-man crew 

Aircraft insurance 

$60,000 

$25,800 

$3,000 

In addition, as indicated on the spread sheet provided as Exhibit 5 to this submission, the 

first year's operating expenses are anticipated to cost a total of$6,387,469.16. 1 A simple 25% of 

these costs results in a projected financial fitness threshold of$1,684,867.29 ($1,596,867.29 + 

88,000). 

As indicated in Exhibit 2 to this submission and the separate documentation submitted by 

Rise, Monarch Air will have access to nearly $2 million in cash at the initiation of commuter 

service. This is more than sufficient to meet DOT's financial fitness threshold. 

Please note that the numbers used to calculate the financial fitness threshold were derived 

from the portion of the spreadsheets limited to Rise-only operations. This is because Monarch 

1 This number is lower than the anticipated first year's operating expenses projected in the December 23, 

2013 submission because ofthe dramatic decrease in jet fuel prices. A more thorough explanation ofthe fuel 

projection is provided in response to question 4 below. At the original estimates, the cost for the first year of 

proposed operations would be $7,122,268.97. The financial fitness threshold would be $1,868,567.24 

($1,780,567.24 + $88,000). 

4 
Air will continue to operate as an on-demand carrier and will incur expenses unrelated to the 

Rise operations. The income associated with these operations has not been used in any way to 

offset the costs associated with the Rise operations. As such, they should not be included in the 

determination of financial fitness. Indirect expenses have been allocated between Rise and nonRise operations as indicated in both exhibit G to the December 23, 2014 submission and Exhibit 

5 to today's submission. 

2. In your application, you indicated that Monarch intends to add three aircraft to its 

fleet and provided information related to the financing of each of the aircraft. The forecasted 

profit and loss statement specifically states the interest payments for each of the aircraft. 

However, we are unable to determine how Monarch calculated the aircraft interest payments 

since detailed information regarding the aircraft financing from Legacy Texas Bank was not 

provided. Thus we ask that you please provide the following: 

a. The line of credit from Legacy Texas Bank that will be used to finance 

the three aircraft. This should include the total available line of credit, the 

amount drawn down to date, the terms of payment, any conditions that must 

be met before the funds are advanced, and the expiration date. 

The aircraft that will be used in the Rise operations will not be 

purchased under a line of credit. The line of credit authorized by Legacy 

Texas Bank is provided for the support of Monarch Air's day-to-day Rise 

operations in the event that insufficient funds are available in the Rise line of 

credit. Each aircraft will be financed by a separate security agreement, with 

the aircraft serving as collateral for each loan agreement. The letter of credit 

will not be utilized to purchase the aircraft, although it could be used to 

service the monthly lease or interest payment. A letter from Legacy Texas 

Bank clarifying the financing arrangements is provided as Exhibit 2 to this 

submission.z 

Menagerie Enterprises has already purchased the first aircraft 

through N 111RZ, LLC, a limited liability corporation established by Trey 

Sawtelle for liability purposes. Monarch Air leases the aircraft from N111RZ, 

LLC for the amount of$38,150.00 per month. A copy of the promissory note 

from N111RZ, LLC to Legacy Texas Bank, the corporate documents for 

N111RZ, LLC and the lease agreement between N111RZ, LLC and Monarch 

Air are attached as Exhibit 3 to this submission. 

b. An updated first-year profit and loss forecast that reflects the interest 

payments associated with the terms of the aircraft financing from Legacy Texas 

Bank. 

2 Please note that Legacy Texas Bank has increased the available line of credit from $800,000, as noted in 

previous submissions, to $1 ,05,000. 

5 
Because the aircraft recently acquired by Monarch Air is covered by a 

lease agreement between it and N111RZ, LLC which establishes a monthly 

payment of $38,150.00 per month, the profit and loss forecast has been 

updated to reflect that dollar amount as the cost of Rise aircraft 1. The costs 

associated with servicing Rise aircraft 2 and 3 assume the aircraft will be 

procured through a secured bank loan as described above. The terms of the 

loan will determine the applicable interest rate and its amortization. 

Monarch Air has assumed an interest rate of 5.00%. In addition, the 

profit and loss forecast has been amended to reflect the dramatic reduction 

in fuel costs. Fuel costs constitute the largest single monthly expense 

associated with the proposed Rise operations. The revised balance sheet is 

provided as Exhibit 4 to this submission and the revised profit and loss 

forecast is provided as Exhibit 5 to this submission. 

3. In your application and supplemental information submitted, you stated that Monarch 

intends to support the Rise operations by drawing on a line of credit provided by Rise. However, 

we are unable to ascertain the veracity of this statement without additional information on Rise. 

Therefore we ask that you please provide the following: 

a. The line of credit agreement between Rise and Monarch that includes the total 

available line of credit, amount drawn down, terms ofrepayment, any conditions that must be 

met before funds will be advanced and the expiration date. 

Initially, the parties assumed that there would be a line of credit between Rise and 

Monarch, but as plans evolved, Monarch Air required Rise to establish a line of credit for 

Monarch Air's sole benefit to guarantee Rise's payment. As required, Rise has established a 

$500,000 line of credit with Liberty Capital Bank of Addison, Texas. Collateral for that line of 

credit is a certificate of deposit valued at $500,000. Rise will separately provide copies of key 

documents governing that line of credit, although some parts may be covered by a motion for 

confidential treatment. 

b. Third party verification of Rise's ability to extend the line of credit to Monarch, 

including Rise's current (within 3 months) financial statements, together with their 

accompanying explanatory footnotes. Since Monarch is relying on Rise, we need to determine 

that Rise has the necessary financial wherewithal to fulfill any financial commitment made to or 

on behalf of Monarch. 

Rise will provide its financial statements and confirmation of bank balances in a separate 

filing, some of which may be covered by a motion for confidential treatment. 

4. Please provide the explanatory footnotes associated with the projected balance sheet and 

profit and loss statement submitted on December 23, 2014. 

Monarch charter department expense 

6 
We understand that there was a specific question related to the line item 5 under 

"EXPENSES" of the Monarch Air Projected Revenues and Expenses (Line item 5 under 

"EXPENSES" for the non-Rise Projected Revenues and Expenses) 

This expense category does not apply to the anticipated Rise operations. It is comprised 

of miscellaneous expenses such as American Express annual enrollment fees, identification 

badges, holiday gifts such as wine baskets to our fleet owners, etc. The large portion of this 

estimated expense is for the hosting and updates of our charter software, which is approximately 

$10,000 of the overall budget number. This expense has been running less than half of the 

overall budget in previous years. However, we left the budget number the same for this forecast. 

Additionally, we have verified our calculations to insure the expense numbers are totaling 

correctly as we understood there was some concern that this line item of $4,166.67 per month 

number was not reflected in the totals. When we total all items in our spreadsheet, the projected 

expense is accounted for. We note that the depreciation budget figure is calculated at the same 

cost of $4,166.67 per month, and perhaps this is where the disagreement in numbers manifests. 

Rise-only operations 

COST OF GOODS SOLD 

Rise aircraft I, 2, or 3 miscellaneous fees (line items 7, 8, 9) - the line items reflect a yearly 

forecasted budget per aircraft of $43,400.04, which is normalized on a monthly basis (aircraft 2 

and 3 are pro rated to reflect their acquisition later in the year). The projected costs cover 

miscellaneous aircraft expenses such as manufacturer service plan annual enrollment fees, 

aircraft manufacture special inspection program documentation, aircraft cleaning and detailing, 

and general upkeep expenses on overall wear and tear items such as aircraft exterior paint. 

Rise aircraft I, 2, or 3 refurbishment (line items 10, 11, 12)- a forecasted yearly budget per 

aircraft of $15,000 normalized, on a monthly basis to cover aircraft interior refurbishment such 

as re-conditioning or replacement of the leather seats, carpet replacement, woodwork, etc. 

(aircraft 2 and 3 are pro rated to reflect their acquisition later in the year). 

Rise aircraft I, 2 or 3 fuel costs (line items 16, 17, 18) - original forecasted cost of fuel required 

for the flight scheduled was based on the hourly use of 129 gallons per hour multiplied by $4.02 

per gallon, which equals $518.58 per flight hour. With this hourly fuel figure, the aircraft fuel 

budget was calculated as follows: 

• Aircraft 1: 2,218.67 hours annual utilization multiplied by $518.58, then divided by 12 

months of operation equals $95,879 per month of fuel costs. 

• Aircraft 2: 1,664 hours annual utilization multiplied by $518.58, then divided by 9 

months of operation equals $95,879 per month of fuel costs. 

• Aircraft 3: 825 hours annual utilization multiplied by $518.58, then divided by 6 months 

of operation equals $71,304 per month offuel costs. 

7 
However, Monarch Air's fuel prices have dropped over 30% to a price of $2.81 per 

gallon per our current pricing matrix provided by our fuel provider dated January 14, 2015. This 

is consistent with the change in fuel prices reported by the United States Department of Energy 

in the Weekly Petroleum Status Report. The average cost of U.S. Gulf Coast jet fuel for the 

week ending October 17, 2014 was $2.428 per gallon,3 while the average cost of U.S. Gulf Coast 

jet fuel for the week ending January 9, 2015 was $1.634 per gallon. 4 

Given the dramatic drop in its own prices and U.S. Government projections on the price 

of oil for 2015, Monarch Air believes that it is reasonable to adjust its projected fuel budget to 

reflect current prices. The Department of Energy, U.S. Energy Information Administration's 

Short-Term Energy Outlook January 2015 5 predicts that U.S. crude oil prices will average 

between $55 per barrel and $58 per barrel in 2015, depending on the type of oil. 6 This projection 

is significantly lower than the average price of oil in 2014 of approximately $93 per barrel to $99 

per barrel, depending on the type of oil.7 As such, the projected fuel costs provided in revised 

line items 16, 17, and 18, which are based on actual prices provided by Monarch Air's fuel 

provider, appear warranted and reasonable. 

The difference in fuel costs quoted to Monarch Air from its fuel provider when the initial 

application was filed and the fuel costs quoted to Monarch Air today equate to a $734,821.53 

total yearly reduction of fuel expense based on the proposed annual utilizations of the three 

aircraft listed above. This reduction in fuel expense has been adjusted in our most recent 

Balance Sheet and Projected Revenues and Expenses statement. Forecasted cost of fuel required 

for the flight scheduled based on the hourly use of 129 gallons per hour multiplied by $2.81 per 

gallon equals $362.49 per hour. With this hourly fuel figure, the aircraft fuel budget was recalculated as follows: 

• Aircraft 1: 2,218.67 hours annual utilization multiplied by $362.49, then divided by 12 

months of operation equals $67,020.47 per month of fuel costs. 

3 Weekly Petroleum Status Report, data for week ended: October 31,2014, DOE/EIA-0208(2014-44), p. 

25, http://www .eia.gov/forecasts/steo/pdf. 

4 Weekly Petroleum Status Report, data for week ended: January 9, 2014, DOE/EIA-0208(2014-54), p. 25, 

http://www.eia.gov/forecasts/steo/pdf. (hereinafter "WPSR 2014-54") 

5 Monarch Air is aware of no official government publications that detail the projected future costs of jet 

fuel over the next 12 months. The FAA discusses the projected cost of oil in 2014 and 2015 in its March 12, 2014 

FAA Aerospace Forecast Fiscal Years 2014-2034, http://www.faa.gov/about/office-org/headquartesoffices/apl!aviation-forecasts/aerospace-forecasts/20 14-2034/media/faa-aerospace-forecasts-fy20 14-2034. pdf. . 

However, the forecast fails to account for the unanticipated, dramatic drop in oil in the later part of2014 and opined 

that "Oil prices are forecast to decline to around $92 to $93 per barrel by 20 15116." I d. At p. 38. According to the 

Department of Energy's Energy Information Administration, the actual average price of oil at the end of 2014 

ranged between $55.58 per barrel and 58.69 per barrel, depending on the type of oil. WPSR 2014-54, p. 23. 

6 U.S. Energy Information Administration Short-term Energy Outlook January 20 I 5, p.l, 

http://www.eia.gov/forecasts/steo/pdf. 

7 Price summary for U.S. Energy Information Administration Short-term Energy Outlook January 20 I 5, 

http://www.eia.gov/forecasts/steo/?src=home-b I. 

8 
• Aircraft 2: 1,664 hours annual utilization multiplied by $362.49, then divided by 9 

months of operation equals $67,020.37 per month of fuel costs. 

• Aircraft 3: 825 hours annual utilization multiplied by $362.49, then divided by 6 months 

of operation equals $49,842.37 per month of fuel costs. 

Rise aircraft I, 2, or 3 maintenance department parts and supplies (line items 22, 23, 24) -

based on a flight hourly rate of $148.95 calculated at actual labor and part replacement cost. 

This figured was based on industry averages from publications such as Conklin & de Decker 

Aircraft Cost Evaluator based on the King Air 350 make and model, then reduced to actual cost 

with no retail mark-up. 

Rise aircraft I, 2, or 3 maintenance engine reserves (line items 25, 26, 27) -based on a flight 

hourly rate of $261.42 for reserves towards engine hot sections and overhaul. This figure was 

based on industry averages from publications such as Conklin & de Decker Aircraft Cost 

Evaluator based on the King Air 350 make and model. 

Rise required aircraft supplies (line item 31) - miscellaneous required items for the 3 aircraft 

outside the normal maintenance inspection and repair costs. This figure is based on an annual 

budget of $25,000 and is normalized over a 12-month period. Examples would be items such as 

navigational charts, GPS database updates, navigational database updates, terrain awareness and 

warnings updates, and flight management system updates. 

Rise trip and crew expenses (line items 33)- miscellaneous crew expense items such as meals, 

flight crew ground transportation costs, and hotels. With no scheduled overnight stays, crew 

expenses will primarily consist of meal costs away from base. This figure is based on an annual 

budget of $83,360.04, assumes the addition of aircraft 2 and 3 in months 4 and 7, respectively 

and is normalized over a 12-month period. 

EXPENSES 

Rise wages and salaries- administrative staff(line item 33)- salary and benefits budgeted for 

two employees due to the Rise operation growth normalized over a 12-month period. The two 

positions are for a full-time charter client service representative at $19.00 per hour and a fulltime account payable assistant at $22.00 per hour. 

Rise wages and salaries aircraft I, 2 or 3 - maintenance (line item 35) - salary and benefits 

budgeted for additional maintenance personnel for positions such as general aircraft technician 

and floor supervisor. For Rise aircraft 1, this figure is based on an annual budget of$75,000 and 

is normalized over a 12-month period to hire an experienced aircraft technician. For Rise aircraft 

2 and 3, this figure is based on an annual budget of $166,666 and is normalized over a 12-month 

period to hire an entry-level aircraft technician and one floor technician supervisor. Salaries are 

commensurate with the technicians experience and expected duties. With this in mind, the 

hourly pay rate per individual will vary from $22 per hour to $3 7 per hour. 

9 
Rise wages and salaries aircraftfUght crew (line items 36, 37, and 38)- salary and benefits for 

flight crew needed for the proposed schedule. For each flightcrew (i.e., captain and first officer), 

salary and benefits are figured at $12,900 per month. 

• Aircraft 1: two flight crew for the proposed schedule totaling $25,800 per month. 

• Aircraft 2: two flight crew for the proposed schedule plus one flight crew member for 

reserve totaling $38,700 per month. 

• Aircraft 3: two flight crew for the proposed schedule plus one flight crew member for 

reserve totaling $38,700 per month. 

Certification 

The contents of this application, as well as the application submission dated December 

23, 2014, and the attached exhibits are true and correct to the best of my knowledge and belief. 

Pursuant to Title 18 United States code Section 1001, I, Trey Sawtelle, in my individual capacity 

and as the authorized representative of the applicant, have not in any manner knowingly and 

willfully falsified, concealed or failed to disclose any material fact or made any false, fictitious, 

or fraudulent statement or knowingly used any documents which contain such statements in 

connection with the preparation, filing or prosecution of the application. I understand that an 

individual who is found to have violated the provisions of 18 U.S.C. section 1001 shall be fined 

or imprisoned not more than five years, or both. 

Attachments: 

Exhibits 

-~-~~~x usz .. LTrey Sawtelle, 

President 

10 
Raymond F. Sawtelle Jr. 

1775 CR 1215 

Savoy, Texas 75479 

(903) 965-0505 

PROFESSIONAL EXPERIENCE 

June 1986-

Present 

October 1966 -

February 1997 

November 1958 -

October 1966 

Monarch Air, Addison, Texas. Owner/Director of an integrated aviation service company 

specializing in aircraft charter, sales, flight training and maintenance with year-after-year 

success achieving revenue, profit, and business growth objectives with start-up, turnaround, 

and rapid-change environments. FAA approved and certified facility for Part 135, 141, and 

145 operations. During the years, several positions from President, Chief Pilot, Director of 

Operations, and Check Airman were held. 

Delta Airlines, Dallas/Ft. Worth, Texas. Employed as a FAR Part 121 line pilot and retired as 

an international Captain flying the Lockheed L-1 011 Tri-Star. 

United States Air Force. Served 8 years as Captain in the 81h Tactical Fighter squadron flying 

the F-1 00 Super Sabre fighter overseas and domestic US. 

FLIGHT EXPERIENCE Airline Transport Pilot 

Certified Flight Instructor 

Airframe and Power Plant Certificate 

Captain Type Ratings: B-727, DC-9, L-1011, CE-500, IAI-1124 

Total Flight Time: Over 30,000 Hours 

Clear FAA record with no accidents or violations 

Exhibit 1 
G 

B A N K 

January 20, 2015 

To Whom It May Concern: 

As noted in my letter dated December 18, 2014, LegacyTexas Bank has agreed to provide 

Menagerie Enterprises, Inc. d/b/a Monarch Air with the necessary financing to support its 

anticipated operatiol)s with Rise, LLC. 

We anticipate that this financing will require two parts. First, LegacyTexas Bank has agreed to 

offer a line of credit that could support short term working capital needs for Monarch in 

relation to the Rise operations. The amount of that line of credit is $1,050,000.00 and would 

mature one year after the line is granted and could be eligible for renewal at that time. 

Monarch Air could have access to the line of credit as long as it is 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 of credit facility. 

The second part of the financing is associated with the acquisition of up to five future aircraft 

acquisitions. Each future aircraft purchase will be a separate loan that will be secured by the 

aircraft being purchased. The first aircraft has already been acquired (1/8/15) by N111RZ, LLC 

on behalf of Monarch Air. It is my understanding that a copy of the promissory note containing 

the relevant loan terms has been provided to you by Monarch Air. At this point in time, it is 

impossible to determine the terms of any future loans. However, we provided some basic 

assumptions in paragraph 2 of my letter dated December 18, 2014. Please assume that the 

terms covering the recent aircraft purchase will similarly apply to future aircraft loans, with the 

variation allowed for the purchase price, amortization schedule, and applicable interest rate. 

As a point of clarification, the December 18, 20141etter provided an approximate monthly 

payment on the 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. 

7}:-// # 

'Steve Youn?-Y" A 

Senior Vice President 

PO Box 869111 Plano, Tx 75086-9111 972.461.1300 Metro 972.562.5600 www.legacyTexas.com 

Member FDIC/tStEqual Housing lender 

Exhibit 2 
PROMISSORY NOTE 

$3,350,000.00 

Note Number 

January 7, 2015 

Effective Date 

January 7, 2025 

Maturity Date 

1. Definitions. As used in this Promissory Note, the following terms shall have the 

following meanings. 

"Bank" means LegacyTexas Bank, and its successors and assigns. 

"Borrower" means, whether one or more, N111RZ LLC, a Texas limited liability company. 

"Business Day" means a weekday, Monday through Friday, except a legal holiday or a day on 

which banking institutions in Dallas, Texas are authorized or required by law to be closed. Unless 

otherwise provided, the term "days" when used herein shall mean calendar days. 

"Effective Date" means January 7, 2015. 

"Loan Agreement" means the Loan and Security Agreement, dated January 7, 2015, between 

Bank and Borrower as such may be amended, renewed, extended and replaced from time to time. 

"Loan Documents" means this Note, the Loan Agreement, and any and all other agreements, 

documents, and instruments executed and delivered in connection with this Note, and any future 

amendments thereto, or restatements thereof, together with any and all renewals, extensions, 

amendments and modifications to any such agreements, documents, and instruments. 

"Loan Rate" means (a) for the period commencing on the Effective Date up though and Including 

January 6, 2020, a fixed rate equal to the 4-5 Year Standard Bullet Federal Home Loan Bank Rate plus 

three and one half percent (3.5%) in effect on January 6, 2015, and {b) for the period commencing on 

January 7, 2020, up though and including the Maturity Date, a fixed rate equal to the 4-5 Year Standard 

Bullet Federal Home Loan Bank Rate plus three percent (3.0%) in effect on January 6, 2020; provided, 

however, notwithstanding the amount of the Loan Rate in effect from time to time, the Loan Rate shall 

never be lower than five and one quarter percent (5.25%) per annum. 

"Maturity Date" means January 7, 2025. 

"Maximum Lawful B§tg" means the maximum lawful rate of interest which may be contracted for, 

charged, taken, received or reserved by Bank in accordance with the applicable laws of the State of 

Texas (or applicable United States federal law to the extent that such law permits Bank to contract for, 

charge, take, receive or reserve a greater amount of interest than under Texas law). 

"Note" means this Promissory Note and all modifications, increases, replacements, renewals, and 

extensions of this Promissory Note. 

Any capitalized term used in this Note and not otherwise defined herein shall have the meaning 

ascribed to each such term in the Loan Agreement. All terms used herein, whether or not defined in this 

Note, and whether used in singular or plural form, shall be deemed to refer to the object of such term 

whether such is singular or plural In nature, as the context may suggest or require. 

2. Promise to Pay. For value received, Borrower Oointly and severally if more than one), 

unconditionally hereby promises to pay to the order of Bank, at its place of business located at 3512 

Preston Road, Plano, Texas 75093-7406, or at such other place as the holder of this Note may hereafter 

designate, the principal sum of Three Million Three Hundred Fifty Thousand and No/100 Dollars 

($3,350,000.00) or so much thereof as may be advanced, in lawful money of the United States of America 

for the payment of private debts, together with interest on the unpaid principal balance from time to time 

W:\41 04\2697\Note .doc Page 1 

Exhibit 3 
owing hereon computed from the date hereof until maturity at a per annum rate which shall be, except as 

otherwise provided in this Note, the lesser of (a) the Loan Rate in effect from day to day, or (b) the 

Maximum Lawful Rate. Interest on this Note is computed on a 365/360 simple interest basis; that is by 

applying the ratio of the annual interest over a year of 360 days times the outstanding principal balance, 

times the actual number of days the principal balance is outstanding, unless such calculation would result 

in a usurious rate, in which case interest shall be calculated on a per diem basis of a year of 365 or 366 

days as the case may be. All past due principal and matured unpaid interest, at Bank's option, shall bear 

interest at the Maximum Lawful Rate, whether or not the maturity of the indebtedness evidenced by this 

Note has been accelerated. This Note is not subject to multiple advances and does not have a revolving 

credit feature. 

3. Interest Rate. The Loan Rate is subject to change as set forth in the definition of "Loan 

Rate." 

4. Payments. This Note is payable as follows: 

A. Installments of principal each in the amount of Twenty Seven Thousand Nine 

... · -- --Hundred Sixteen --and--6'7/100 --Dollars- i$27;916:61) -plus--accrued--but- unpaid- interest on--the -unpaid--- - --

principal balance hereof at the Loan Rate In effect on such payment date shall be due and payable 

monthly, with the first of such installments of principal plus accrued but unpaid interest being due on 

February 7, 2015, and a like principal installment plus accrued but unpaid interest on the unpaid principal 

balance hereof shall be due on the same day of each succeeding calendar month until the Maturity Date 

when the outstanding principal balance of this Note and any and all accrued but unpaid interest hereon 

shall be due and payable in full. 

Except as expressly provided herein or in the Loan Agreement (if applicable) to the contrary, all 

payments on this Note shall be applied in the following order of priority: (a) the payment or reimbursement 

of any expenses, costs or obligations (other than the outstanding principal balance hereof and interest 

hereon) for which Borrower shall be obligated or Bank shall be entitled pursuant to the provisions of this 

Note or the other Loan Documents, (b) the payment of accrued blit unpaid Interest hereon, and (c) the 

payment of a11 or any portion of the principal balance hereof then outstanding hereunder. If an Event of 

Default exists under this Note, then Bank may, at the sole option of Bank, apply any such payments, at 

any time and from time to time, to any of the items specified In clauses (a), (b) or (c) above without regard 

to the order of priority otherwise specified in this Section 4 and any application to the outstanding principal 

balance hereof may be made in either direct or inverse order of maturity. Payments by check or draft 

shall not constitute payment in Immediately available funds until the required amount is actually received 

by Bank. Payments in immediately available funds received by Bank in the place designated for payment 

on a Business Day prior to 11:00 a.m. Dallas, Texas time at said place of payment shall be credited prior 

to the close of business on the Business Day received, while payments received by Bank on a day other 

than a Business Day or after 11:00 a.m. Dallas, Texas time on a Business Day shall not be credited until 

the next succeeding Business Day. If any payment of principal or interest on this Note shall become due 

and payable on a day other than a Business Day, such payment shall be made on the next succeeding 

Business Day. Acceptance by Bank of any payment in an amount less than the full amount then due 

shall be deemed an acceptance on account only, and the failure to pay the entire amount then due may 

become an Event of Default. Borrower agrees that all payments of any obligation due hereunder shall be 

final, and if any such payment is recovered In any bankruptcy, insolvency or similar proceedings instituted 

by or against Borrower, all obligations due hereunder shall be automatically reinstated in respect of the 

obligation as to which payment is so recovered. 

5. Prepayment. Borrower may prepay this Note iii i)'art or iii fi:iii without penalty before.ffnaf 

maturity, whether by cash, a new loan, renewal, or otherwise. Prepayment in full shall consist of payment 

of the remaining unpaid principal balance together with all accrued and unpaid interest and all other 

amounts, costs and expenses for which Borrower is responsible under this Note or any other agreement 

with Bank pertaining to this loan, and in no event will Borrower ever be required to pay any unearned 

interest. Early payments will not, unless agreed in writing, relieve Borrower of Borrower's obligation to 

continue to make payments under the above payment schedule. Upon a prepayment in full,. points, if---- .. 

any, are not refundable except and to the extent the total interest and points for the time the loan is 

outstanding would exceed the maximum interest allowed by law at the time of prepayment. 

W:\410412697\Note.doc Page 2 
6. Waiver. Except as otherwise provided herein and In the other Loan Documents, 

Borrower hereby waives all notices of nonpayment, demands for payment, presentments for payment, 

notices of intention to accelerate maturity, notices of actual acceleration of maturity, grace, protests, 

notices of protest, and any other demands or notices of any kind as to this Note, diligence in collection 

hereof and in bringing suit hereon, and any notice of, or defense on account of, the extension oftlme of 

payments or change in the method of payments, and without further notice hereby consents to any and all 

renewals and extensions In the time of payment hereof either before or after maturity and the release of 

any party primarily or secondarily liable hereon. Borrower agrees that Bank's acceptance of partial or 

delinquent payments, or failure of Bank to exercise any right or remedy contained herein or in any 

instrument given as security for the payment of this Note shall not be a waiver of any obligation of 

Borrower to Bank or constitute waiver of any similar default subsequently occurring. The holder of this 

Note Is entitled to the benefits and security provided in the Loan Documents. 

7. Events of Default and Remedle~. At the option of Bank, the entire unpaid principal 

balance and accrued interest owing hereon shall at once become due and payable upon the occurrence 

at any time of any of the following "Events of Default" (herein so called): 

.. ··· -- --........ ------A----·-Thei'ailure-otBorrowerio·pay--(or-cause-to--be-paid) -when-due-any-installment-of------- ..... _-·-

principal or interest of this Note in accordance with its terms, through acceleration, or otherwise; or 

B. An Event of Default occurs under any other Loan Document. 

It is understood and agreed by Borrower that the foregoing "Events of Default" are cumulative 

and in addition to any "Default," "Defaults," "Event of Default," or "Events of Default" contained In the 

other Loan Documents, or other documents modifying, renewing, extending, evidencing, securing or 

pertaining to this Note or the loan evidenced hereby. Upon the occurrence of any of the Events of Default, 

then the holder hereof may, at its option, do any one or more of the following: (a) declare the entire 

unpaid balance of principal and accrued, unpaid interest upon this Note to be Immediately due and 

payable, (b) reduce any claim to judgment, (c) foreclose all liens and security interests securing payment 

thereof or any part thereof, and/or (d) without notice of default or demand, pursue and enforce any of 

Bank's other rights and remedies provided under or pursuant to any applicable laws or agreement. All 

rights and remedies of Bank shall be cumulative and concurrent and may be pursued singularly, 

successively, or together, at the sole discretion of Bank, and may be exercised as often as the occasion 

therefor shall arise and whether or not Bank has initiated any foreclosure proceeding, judicial or 

otherwise. Failure by Bank to exercise any right or remedy upon the occurrence of an Event of Default 

shall not constitute a waiver of the right to exercise such right or remedy upon the occurrence of any 

subsequent Event of Default. In the event that Bank, after the occurrence of an Event of Default 

hereunder, consults an attorney regarding the enforcement of any of its rights under this Note or if this 

Note Is placed in the hands of an attorney for collection or if suit be brought to enforce this Note, Borrower 

promises to pay all costs thereof, Including reasonable attorneys' fees. Such costs and attorneys' fees 

shall include, without limitation, costs and reasonable attorneys' fees incurred by Bank in any appellate 

proceedings or in any proceedings under any present or future federal bankruptcy act, state receivership 

law or probate. 

8. Savings Clause; Ceiling Election. It is expressly stipulated and agreed to be the Intent 

of Borrower and Bank at all times to comply strictly with the applicable Texas law governing the maximum 

rate or amount of interest payable on the indebtedness evidenced by this Note and the Related 

Indebtedness (or applicable United States federal law to the extent that it permits Bank to contract for, 

_ _c::~~\9.~. t?~ke, resef\le or receive a greater amount of interest than under Texas law). If the applicable law 

is ever judicially interpreted so as to render usurious any amount (a) contracted for, charged, taken, 

reserved or received pursuant to this Note, any of the other Loan Documents or any other communication 

or writing by or between Borrower and Bank related to the transaction or transactions that are the subject 

matter of the Loan Documents, (b) contracted for, charged, taken, reserved or received by reason of 

Bank's exercise of the option to accelerate the maturity of this Note and/or any and all indebtedness paid 

or payable by Borrower to Bank pursuant to any Loan Document other than the Note (such other 

... -.indebtedness. belng .. refer.red.to .. in .. th is .. Section. as the ~~Related .. lndebtedQ§J?.§.'.') .-or .. (c)_Borr.ow.er....will hr;we 

paid or Bank will have received by reason of any prepayment by Borrower of this Note and/or the Related 

Indebtedness, then it is Borrower's and Bank's express intent that all amounts charged in excess of the 

Maximum Lawful Rate shall be automatically canceled, ab initio, and all amounts in excess of the 

W:\41 04\2697\Note.doc Page 3 
Maximum Lawful Rate theretofore collected by Bank shall be credited on the principal balance of this 

Note and/or the Related Indebtedness (or, if this Note and the Related Indebtedness have been or would 

thereby be paid in full, refunded to Borrower), and the provisions of this Note and the other Loan 

Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and 

thereunder reduced;- Withoot the necessity of the execution of any new document; s·o as to comply with 

the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder 

and thereunder; provided, however, if this Note has been paid in full before the end of the stated term of 

this Note, then Borrower and Bank agree that Bank shall, with reasonable promptness after Bank 

discovers or Is advised by Borrower that interest was received In an amount In excess of the Maximum 

Lawful Rate, either refund such excess interest to Borrower and/or credit such excess interest against this 

Note then owing by Borrower to Bank. Borrower hereby agrees that as a condition precedent to any claim 

or counterclaim (In Which event such proceeding shall be abated for such time period) seeking usury 

penalties against Bank, Borrower will provide written notice to Bank, advising Bank in reasonable detail of 

the nature and amount of the violation, and Bank shall have sixty (60) days after receipt of such notice in 

which to correct such usury violation, If any, by either refunding such excess interest to Borrower or 

crediting such excess interest against this Note then owing by Borrower to Bank. All sums contracted for, 

charged, taken, reserved or received by Bank for the use, forbearance or detention of any debt evidenced 

-· --· · -- --------by-this-Note---andtor---the-other--1:.-oan -BoetJments-shall;----to--the -extent---permitted -by--appfieable--law,-be----------- -

amortized or spread, using the actuarial method, throughout the stated term of this Note (Including any 

and all renewal and extension periods) until payment in full so that the rate or amount of interest on 

account of this Note does not exceed the Maximum Lawful Rate from time to time in effect and applicable 

to this Note for so long as debt is outstanding. In no event shall the provisions of Chapter 346 of the 

Texas Finance Code apply to this Note. To the extent that Bank is relying on Chapter 303 of the Texas 

Finance Code to determine the Maximum Lawful Rate payable on the Note, Bank will utilize the weekly 

ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent United 

States federal law permits Bank to contract for, charge, take, receive or reserve a greater amount of 

interest than under Texas law, Bank will rely on United States federal law instead of such Chapter 303 for 

the purpose of determining the Maximum Lawful Rate. Additionally, to the extent permitted by applicable 

law now or hereafter in effect, Bank may, at its option and from time to time, utilize any other method of 

establisliing the Maximum LaWful Rate under such Chapter 303 or under' other applicable law by giving 

notice, if required, to Borrower as provided by applicable law now or hereafter in effect 

9. GOVERNING LAW AND VENUE. THIS NOTE IS BEING EXECUTED AND 

DELIVERED, AND IS INTENDED TO BE PERFORMED, IN TARRANT COUNTY, TEXAS AND THE 

LAWS (EXCLUDING CHOICE OF LAW PROVISIONS) OF SUCH STATE SHALL GOVERN THE 

VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS NOTE, EXCEPT TO 

THE EXTENT FEDERAL LAWS OTHERWISE GOVERN THE VALIDITY, CONSTRUCTION, 

ENFORCEMENT AND INTERPRETATION OF ALL OR ANY PART OF THIS NOTE. ALL LEGAL 

ACTIONS RELATED TO THIS NOTE SHALL BE BROUGHT IN THE APPROPRIATE COURT OF LAW 

LOCATED IN TARRANT COUNTY, TEXAS, TO THE EXCLUSION OF ALL OTHER VENUES. 

10. WAIVER OF JURY TRIAL. BORROWER, TO THE FULLEST EXTENT PERMITTED BY 

APPLICABLE LAW, HEREBY KNOWINGLY, INTENTIONALLY, IRREVOCABLY, UNCONDITIONALLY 

AND VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVES, 

RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR 

PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO THIS NOTE OR 

ANY CONDUCT, ACT OR OMISSION OF BANK OR BORROWER, OR ANY OF THEIR DIRECTORS, 

OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER 

PERSONS AFFILIATED WITH BANK OR BORROWER, IN EACH OF THE FOREGOING CASES, 

. WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. , 

11. Miscellaneous. 

A. Notices or communications to be given under this Note shall be given to the 

respective parties in writing as set forth in the Loan Agreement. 

B. Time Is of the essence for this Note. 

W:\41 0412697\Note.doc Page 4 
C. This Note may not be changed or terminated orally, but only by an agreement In 

writing signed by the party against whom enforcement of any waiver, change, modification, termination or 

discharge is sought. 

o: Tnis Note· is secured, hi part, by the Loan Agreement to Which refe·rence Is 

hereby made for a description of the collateral, the nature and extent of the security, and the rights of the 

Bank in respect thereof. 

E. This Note and all the covenants, promises and agreements contained herein 

shall be binding upon Borrower's successors, assigns, heirs and personal representatives and inure to 

the benefit of Bank's successors and assigns. 

F. At the option of Bank, Borrower will pay Bank, on demand, (i) a "late charge" 

equal to five percent (5%) of the amount of any installment on this Note when such installment is not paid 

within ten (10) days following the date such installment Is due, and (ii} a processing fee in the amount of 

$25.00 for each check which is provided to Bank by Borrower in payment for an obligation owing to Bank 

under any Loan Document but is returned or dishonored for any reason, in order to cover the additional 

-------expenses-tnvolvedinilandling-clefint~uent-andl'ettlmed·or-dishonored-payments:--------------··--· 

G. If any provision of this Note or the application thereof to any person or 

circumstance shall, for any reason and to any extent, be Invalid or unenforceable, then neither the 

remainder of this Note nor the application of such provision to other persons or circumstances nor the 

other instruments referred to herein shall be affected thereby, but rather shall be enforced to the greatest 

extent permitted by applicable law. 

Effective as of the Effective Date. 

W:\410412697\Note.doc Page 5 
i iSecretary of State 

!P.O. Box 13697 

iAustin, TX 78711-3697 

!FAX: 512/463-5709 

I 

[Filing Fee: $300 

Certificate of Formation 

Limited Liability Company 

Filed in the Office of the 

Secretary of State of Texas 

Filing#: 802128147 01/02/2015 

Document #: 584963750002 

Image Generated Electronically 

for Web Filing 

Article 2- Registered Agent and Registered Office 

ir'J\. The initial registered agent is an organization (cannot be company named above) by the name of: 

OR 

[~8. The initial regisiered-ageni-is-ari (ridividual resident of the staie whose name .. is·s-efiorth .below: ii\iame: __ ....................................... ---·--~----- ........... ., ................. -... · ........................ _ .................. ,.. ·· ··· --- .......... ., ..................................... ,. ............ ,. ............... ,. ..... ,. .. ,. ,. · ... ,. ........ ,. · · -··· · 

jRay Sawtelle Jr 

!c. The business address of the registerecf'agent and the regfsten3d office address is: . :streei-Adctre-ss:----·-----··---,.--·-· --------· -· -····- --- ·- -- ····-····-------- ------...... ----- · 

:Monarch Air 

\4580 Claire Chennault Addison TX 75001 

Consent of Registered Agent ;r·A: A··c;opy-orttie .... co·n-seili'0Ti-89i.si'erecfa9eilTi5a.ttached. · ................. -······· · ··· · .... ····· · ...... · ·· · ·· ··· ·· ···· ··· · · · · 

OR 

IWB. The consent of the registeredagent is maintained by the entity. 

Article 3 - Governing Authority 

iiA. The li-mit.eci liability company-is to be managed by managers .. 

OR 

The limited liability company will not have managers. Management of the company is reserved to the members. 

The names and addresses of the governing persons are set forth below: 

~~~-~~~~~M~;;:;b·~·;··1·:· .. Ray·---·-s-awteWe···-Jr····· ···· ....................... -- ...... !ri1~: · ·iVIana9ini)"iVfem"be·r····· 

~dd;~~~-:-458tfcla'irectiennault Addison TX, usA 75001 .~----.... ---~-.. -·--·---· .. ·-·-····--.. --......... _ ·-----.. --~-- .. --· ................ A"itici.e ·4--:· Pu.rri'ose ......................... _~ ........... ., ........................................................................................ · 

fftie-pullJose for-whicil .. Til·e-com.P'any·i·sor9anizea-Ts .. tort'he.iransaciTori--of'anY'.ancTail.faWi'liTGlisii1€;s·s·tarwhTcil-limiteCi .. 

:liability companies may be organized under the Texas Business Organizations Code. 

- - - Supplemental Provisions /Information 
i[The attached addendum, if any, is incorporated herein by reference.] 

Organizer [flle-·riame_a_n_Ci_aa<Iress··c;yitie-or9anizer_a.reset"fo.rth .. teiaw.··- ---·-····- ·------····· ---····-···-- ·----·-·-----·------------------------·----·-····, 

:Greg W. Carboy 901 Main Street, Suite 3900, Dallas, TX 75202 

Effectiveness of Filing 

This document becomes effective when the document is filed by the secretary of state. 

OR 

:i·s·. This documen{becomes-effective-at·a-iater date, w-hich is not more than nin-ety(9o) days tram the date of itsjsigning. The delayed effective date is: 

Execution -·---· -----·--·- --------------~-------------·-·· --- ---- ------------ ·------ . -- ····-···-··· ··- -- .. ---------------

:The undersigned affirms that the person designated as registered agent has consented to the appointment. The 

;undersigned signs this document subject to the penalties imposed by law for the submission of a materially false or 

:fraudulent instrument and certifies under penalty of perjury that the undersigned is authorized under the provisions of , 

;1aw governing the entity to execute the filing instrument. idre9·w.-cari>oy·---·--·------------------------·····-----------··-- -------------- ·· -- "'"·····-=···= .. -=··""--=---=----=-=--=--=--=--=--·'=·--=··=-=--=·-·-= .. ·=--·-=··-=··-=···-=····=--=·······=·--·=-·=-···=···---=·····=··-=·····=······;:;;-:: ..... =·--=···=···-=--=·-·=·····=··-=····=··=--··=··-=····=-.. =--=-.. -""··-=---=---==·=··--=--==·---=-·=·-···=·-··= .. ···=······=·--·=········=··--··=--··=--··=·····=·····=-----=··· =--···=·· ·=--·=-----=·-=···=···=----·=--·=····=·.,: [Signature of Organizer 

FILING OFFICE COPY 
Corporations Section 

P.O.Box 13697 

Austin, Texas 78711-3697 

Office of the Secretary of State 

CERTIFICATE OF FILING 

OF 

NlllRZLLC 

File Number: 802128147 

Nandita Berry 

Secretary of State 

The undersigned, as Secretary of State of Texas, hereby certifies that a Certificate of Formation for the 

above named Domestic Limited Liability Company (LLC) has been received in this office and has been 

found to conform to the applicable provisions of law. 

ACCORDINGLY, the undersigned, as Secretary of State, and by virtue of the authority vested in the 

secretary by law, hereby issues this certificate evidencing filing effective on the date shown below. 

The issuance of this certificate does not authorize the use of a name in this state in violation of the rights 

of another under the federal Trademark Act of 1946, the Texas trademark law, the Assumed Business or 

Professional N arne Act, or the common law. 

Dated: 01/02/2015 

Effective: 01/02/2015 

Phone: (512) 463-5555 

Prepared by: Bridget Mouton 

Nandita Berry 

Secretary of State 

Come visit us on the internet at http://www.sos.state. tx. us! 

Fax: (512) 463-5709 Dial: 7-1-1 for Relay Services 

TID: 10306 Document: 584963750002 
Menagerie Enterprises, Inc. 

d.b.a. Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

(972) 931-0345 

AIRCRAFT DRY LEASE AGREEMENT 

This Aircraft Dry Lease Agreement (this "Lease"}, effective as of the 8th day of January 2015 (the "Effective 

Date"), is entered into by and between N111 RZ LLC (the "Lessor") and Menagerie Enterprises, Inc. DBA Monarch 

Air (the "Lessee"). For purposes of this Lease, Lessor and Lessee are sometimes collectively referred to as the 

"Parties," and individually, a "Party." 

RECITALS 

WHEREAS, Lessor is the registered owner of an aircraft (the "Aircraft") described as follows: 

1. Make: Beech 

2. Model: King Air 350 

3. Serial number: FL-402 

WHEREAS, Lessee provides charter operations under Lessee's Federal Aviation Regulation ("FAR") Part 

135 operating certificate; 

WHEREAS, Lessor has purchased the Aircraft solely for the purpose of leasing the Aircraft to Lessee for 

charter operations; 

WHEREAS, Lessor desires that Lessee lease, operate, exercise ful! Operational Control (as defined below) 

and take exclusive possession of the Aircraft in accordance with the terms and conditions stated herein; 

WHEREAS, Lessee agrees to lease, operate, exercise full Operational Control and take exclusive 

possession of the Aircraft under the terms and conditions stated herein; 

NOW, THEREFORE, the Parties, for and in consideration of the rents, covenants and conditions contained 

herein, mutually agree as follows: 

AGREEMENT 

1. Lease of Aircraft; Transfer of Exclusive Possession and Control. Lessor hereby leases the Aircraft to 

Lessee, and transfers exclusive possession, use and Operational Control of the Aircraft to Lessee during the Term 

(as defined below) of this Lease. Upon termination of this Lease, Lessee shall relinquish possession of the Aircraft 

and return the Aircraft to Lessor at Lessee's facility in the same condition as it was delivered to Lessee, less 

reasonable wear & tear and Lessor shall have the right to have the Aircraft inspected at Lessor's expense. 

2. Operational Control of Aircraft. Lessee shall maintain control and authority over the initiation, 

continuation, conduct, and termination of all flights and other operations of the Aircraft during the Term, and shall 

maintain exclusive possession, control, and use of the Aircraft and the pilots and crew thereon ("Operational 

Control") at all times during the Term. All flights shall be dispatched and monitored from Lessee's dispatch and 

operations division located at Addison Airport. All Aircraft operations shall be conducted in accordance with the 

Lessee FAA approved Air Carrier General Operations Manual and Operations Specifications and all other applicable 

laws, rules, regulations and specifications. By granting Operational Control to Lessee, Lessor hereby relinquishes 

and grants to Lessee each and every right Lessor may have to control, direct, instruct or in any way influence the 

manner of performance of any and all Aircraft flight operations, including any control of flight crew members on the 

Aircraft. 

3. Term. The initial term (the "Initial Term") of this Lease shall commence on the Effective Date and shall 

continue for a period of one (1) year. Following the Initial Term, this Lease shall automatically renew for successive 

Aircraft Dry Lease Agreement- Page I 

Final 
Menagerie Enterprises, Inc. 

d.b.a. Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

(972) 931-0345 

one year terms (each a "Renewal Term") until such time as either Party provides the other Party with written notice 

of termination; provided, however, that: (a) such notice must be given no fewer than forty-five (45) calendar days 

prior to the last day of the then current term; and (b) any such termination shall be effective as of the date that would 

have been the first day of the next Renewal Term. In addition, Lessee shall have the right to terminate this Lease 

without penalty or fee upon thirty days' written notice if Lessee sells, trades or otherwise no longer owns the Aircraft. 

For purposes of this Lease, "Term" shall collectively mean and include the Lease periods represented by the Initial 

Term and all Renewal Terms. 

4. Lease Payments. In consideration of this Lease, Lessee agrees to make lease payments to Lessor (each, 

a "Lease Payment") the amount of thirty eight thousand, one hundred and fifty dollars and no cents ($38,150.00.00) 

upon execution of this agreement and on the first day of each month thereafter during the Term of this agreement. 

5. Obligations of Lessee: 

a. Aircraft Inspection. Lessee agrees to inspect the Aircraft as required under FAA regulations to 

ensure the Aircraft's continued conformity with FAA Part 135 requirements. The Lessee shall bear the cost for the 

FAA Part 135 required conformity inspection for operations unless this Lease is terminated within 180 days from 

receipt of the FAA aircraft approval documentation (Operations Specifications 0085). In such event, Lessor shall 

pay to lessee a $4,000 fee to cover the costs of such inspection. 

b. Aircraft Maintenance. lessee will determine what, if any, modifications or maintenance is required 

with respect to the Aircraft in order to comply with applicable Federal Aviation Administration (the "FAA") regulations. 

c. Insurance. Lessee shall secure and maintain insurance coverage for the Aircraft pursuant to 

lessee's existing fleet hull policy of aircraft !lull insurance and liability in such amounts, deductibles and terms 

reasonably acceptable to lessor at lessor's expense. Lessor will be named as an additional insured on with 

respect to all insurance policies secured with respect to the Aircraft. Lessor will be provided with a Certificate of 

Insurance describing limits of the policy. 

6. Obligations of Lessor: 

a. Delivery. Lessor shall deliver the aircraft to Lessee at lessee's facility at Addison Airport, Texas 

with a valid airworthiness certificate and all current maintenance records and free of all materialman's liens and/or 

encumbrances. 

b. Qul~1.f._QjQY.QJ~n!. Lessor agrees that it will not interfere with lessee's use and possession of the 

aircraft and agrees to defend, at lessor's expense, Lessee's rights to possess and operate the aircraft pursuant to 

the terms of this Lease. 

7. Taxes. Lessor shall pay all Taxes on the Aircraft when due. In the event that Lessor fails to timely pay a 

Tax, Lessee may, at its option, pay such Tax on behalf of Lessee and seek reimbursement from Lessor. For 

purposes of this Lease, "Taxes" means license, documentation and registration fees and any sales and property, 

excise, stamp and value added taxes together with any assessments, penalties, fines, additions to tax and interest 

thereon (each, individually, a "Tax"). 

8. Remedies. Upon a breach of a representation or obligation hereunder (each an "Event of Default"), the 

Parties shall have the following remedies: 

Aircraft Dry Lease Agreement- Page 2 

Final 

.·· I ..... '" !.·· 

LESSOH INITIAL~~··:?/::>{/ 

LESSEE INITIAL~ 
Menagerie Enterprises, Inc. 

d.b.a. Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

(972) 931-0345 

a. Lessee's Remedies: Upon any Event of Default, Lessee may, at Lessee 's option and in addition to 

all other rights, remedies and recourses afforded Lessee hereunder or by contract, law or equity, do any one or 

more of the following (i) terminate this Lease by the giving of written notice to Lessor, or (ii) withhold any payments 

due to Lessor until such event of default is remedied. In any legal proceeding arising from this Lease, Lessee shall 

be entitled to recover reasonable attorney's fees and legal disbursements in addition to all available relief. 

b. Lessor's Remedies: Upon a material Event of Default by Lessee, Lessor shall have all rights and 

remedies available by contract, law or equity including, without limitation, the right to retake immediate possession of 

the Aircraft. In any legal proceeding arising from this Lease, Lessor shall be entitled to recover reasonable 

attorney's fees and legal disbursements in addition to all available relief. 

9. Further Acts. The Parties to this Lease shall, from time to time, do and perform such other and further acts, 

and execute and deliver any and all such other and further instruments as may be required by law or reasonably 

requested by the other to estab!isl1, maintain and protect tt1e respective rights and remedies of the other, and to 

carry out and effect the intents and purposes of this Lease. 

10. Notices. All notices to be given hereunder shall be in writing and may be sent by certified mail, return 

receipt requested to the address listed below and shall be deemed to be received three business days after 

depositing same in the United States mail, postage paid, or such notices may be transmitted by facsimile to the 

Parties at their respective telephone numbers shown below and shall be deemed received when so transmitted. 

To Lessor: 

To Lessee: 

N111RZ,LLC 

4580 Claire Chennault 

Addison, Texas 750013900 

Menagerie Enterprises DBA Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

Telephone: (972} 931-0345 

Fax: (972} 692-7927 

11. Binding Effect. This Lease and all of the provisions hereof shall be binding upon and shall insure to the 

benefit of the Parties hereto and their respective heirs, distributees, legal representatives, successors and assigns. 

12. Amendment. This Lease may be modified, altered and amended from time to time by mutual written 

agreement of the Parties, but not otherwise. 

13. Governing Law. This Lease shall be interpreted and governed by the laws of the State of Texas applicable 

to contracts made and to be performed therein without giving effect to the conflict of laws principles thereof. In any 

legal action relating to this Lease, both Parties agree to the exercise of jurisdiction over it by a State or Federal court 

in Dallas County, Texas. Such action shall be instituted in a State or Federal court in Collin County, Texas. 

14. Severability. In case any one or more of the provisions contained in this Lease shall for any reason be held 

to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any 

other provision thereof, and this Lease shall be construed as if such invalid, illegal or unenforceable provision had 

never been contained herein. 

15. Counterpart Execution. This Lease rnay be executed concurrently in one or more counterparts, each of 

which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

Aircraft Dry Lease Agreement- Page 3 

Final 

_.·· ....... 'I/ ,. ,· 

LfSSOR INITIAL~/ 

LESSEE INITIALS 
Menagerie Enterprises, Inc. 

d.b.a. Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

(972) 931-0345 

16. Assignment of Lease. This Lease shall be assignable by Lessee or Lessor in its entirety to any entity to 

which Lessee or Lessor may transfer all or substantially all of its assets and business pursuant to a merger, 

acquisition, or other such reorganization. Notwithstanding the preceding sentence, no assignment shall be valid 

unless: (i) such assignee is a citizen of the United States (as defined by 49 U.SC. §40102) or otherwise eligible to 

register Aircraft pursuant to Part 47 of the FAR, and (ii) in the case of an assignment by Lessee, such assignment is 

approved by the FAA and DOT as an on-demand FAR 135 Air Carrier and such assignee shall execute all other 

documents necessary to reflect such assignee's assumption of this Lease. Any such assignment shall not operate 

to relieve the assignor of any liability accrued prior to such assignment. 

17. Risk of Loss. Lessor agrees to assume all risk of loss of the Aircraft until the Aircraft is delivered to 

Lessee. Thereafter, Lessee agrees to assume risk of loss of the Aircraft to the extent of the Aircraft's insured value 

until this lease terminates, subject to the disclaimers and limitations set forth in Paragraph 20. 

18. Indemnification. Each Party agrees to indemnify and hold harmless the other Party, its directors, 

managers, officers, agents, employees and the like from and against any and all loss, costs, damages, 

injuries or expenses (including attorneys fees and expenses) that may be incurred by a Party arising from 

the breach of any representations or obligations by the breaching Party, whether caused by the sole, 

comparative and concurrent negligence of the breaching Party. Each Party further agrees to indemnify and 

hold harmless the other Party against any loss sustained or reasonable expense (including attorneys fees 

and expenses) incurred by the other Party as the direct result of or arising out of the imposition on the 

Aircraft of any Federal or other tax lien or the foreclosure thereof by virtue of the failure to pay or the 

underpayment by the indemnifying Party of Federal or other taxes payable by the indemnifying Party. IT IS 

SPECIFICALLY AGREED AND UNDERSTOOD THAT EACH PARTY'S INDEMNIFICATION OBLIGATION DOES 

NOT EXTEND TO (I) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER 

PARTY, OR (I!) CONSEQUENTIAL LOSSES, COSTS, DAMAGES, INJURIES OR EXPENSES ARISING OUT OF 

THE OTHER PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. 

19. DISCLAIMER OF WARRANTIES & LIMITATIONS ON RECOVERY 

(a) Lessee disclaims all warranties, express or implied, with respect to any products, parts, and 

components that Lessee may install on the Aircraft and with respect the maintenance Lessee 

performs to the Aircraft during the period the Aircraft is in Lessee's Operational Control and all 

such products, parts and components shall remain with the Aircraft during and after the Term. 

The Parties further agree that Lessor bears all risk of loss for the aircraft beyond the Aircraft's 

insured value, including physical damage, consequential damages arising from loss of use of the 

Aircraft and diminution in the Aircraft's value, while Lessee is in Operational Control of the 

Aircraft. 

(b) LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS WHATSOEVER REGARDING 

THE AIRCRAFT. ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY 

INTENDED OR PARTICULAR PURPOSE, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY 

OR PERFORMANCE AND THOSE ARISING FROM A COURSE OF DEALING OR USAGE IN THE 

TRADE ARE COMPLETELY EXCLUDED AND HEREBY DISCLAIMED. NO EMPLOYEE, AGENT OR 

REPRESENTATIVE OF LESSOR IS AUTHORIZED TO MAKE ANY WARRANTY OR 

REPRESENTATION IN EXTENSION OF OR CONTRARY TO THE PROVISIONS OF THIS 

AGREEMENT; 

Aircraft Dry Lease Agreement- Page 4 

Final 

. / • f /·· 

LESSOR INITIALS./ /f-(.f 

LESSEE INITIA~ 
Menagerie Enterprises, Inc. 

d.b.a. Monarch Air 

4580 Claire Chennault 

Addison, Texas 75001 

(972) 931-0345 

hi;~ ~ MONARCH AIR 

Whore You & Your Business Take Flight! 

(c) In no event shall Lessee be entitled to recover any incidental or consequential damages, 

including, without limitation, inconvenience, rental or replacement equipment lost profits or other 

commercial loss. 

20. No Agency. The Parties' sole relationship is Lessor/Lessee. Neither Party shall enter into any 

agreements, made representations, incur any liability or act as the agent of the other Party. 

IN WITNESS WHEREOF, the Parties hereto have caused this Lease to be executed effective as of the 

Effective Date. 

LESSOR 

N111RZ LLC 

LESSEE 

Menagerie Enterprise, Inc. DBA Monarch Air 

Aircraft Dry Lease Agreement- P»ge 5 

Final 

------------=SSOR INITIA~'­

LESSEE INITIAL' 
Balance Sheet 

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 

ASSETS 

Current Assets 

Cash 364,070.63 309,291.54 299,202.72 441,947.14 445,435.33 440,304.47 558,864.86 517,577.58 525,798.32. 527,703.71 529,629.02 

Accounts Receivable 551,182.28 551,182.28 551 '182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 

Loans to Employees 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 

Fuel Credit Refunds Receivable 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Inventories 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 

Prepaid Insurance 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 

Total Current Assets 1,352,517.75 1,297,738.66 1,287,649.84 1,430,394.26 1,433,882.45 1,428,751.59 1,547,311.98 1 ,506,024. 70 1,514,245.44 1,516,150.83 1,518,076.14 

Fixed Assets 

Machinery & Equipment 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 

Aicraft & Aircraft Equipment 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 

Rise Aircraft 2 0.00 0.00 0.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 

Rise Aircraft 3 0.00 0.00 0.00 0.00 0.00 0.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 

Furniture & Fixtures 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.4 7 48,845.47 48,845.47 

Computer Equipment 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 

Leasehold Improvements 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 

Accumulated Depreciation -725,371.67 -729,538.34 -733,705.01 -757,705.01 -781,705.01 -805,705.01 -859,455.01 -913,205.01 -966,955.01 -1,020,705.01 -1,074,455.01 

Total Fixed Assets 155,799.10 151,632.43 147,465.76 2,623,465.76 2,599,465.76 2,575,465.76 5,021,715.76 4,967,965.76 4,914,215.76 4,860,465.76 4,806,715.76 

Other Assets 

Aircraft Insurance Deposit 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 

Aircraft Escrow Deposits 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 

Aircraft Purchase Deposits 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 

COD Checks Outstanding 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,00_0.00 1,000.00 1,000.00 1,000.00 1,000.00 

Deposits 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 

Gift Certificates Outstanding 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 .. -

Total Other Assets 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 103,340.27 

TOTAL ASSETS 1,611,657.12 1,552,711.36 L__!_,5_38,455.87 4,157,200.29 4,136,688.48 4,107,557.62 6,672,368.01 6,577,330.73 6,531,801.47 6,479,956.86 6,428,132.17 --

Exhibit 5 
LIABILITIES AND EQUITY 

Accounts Payable 874,696.83 874,696.83 874,696.83 874,696.83 874,696.83 874,696.83 874,696.83 816,678.06 816,678.06 810,560.58 804,792.20 

NIP -Legacy Texas Bank 643,644.64 630,889.15 617,788.80 604,909.61 591,878.19 578,875.02 565,723.04 552,594.70 539,403.53 526,068.74 512,750.62 

LOC - Legacy Texas Bank 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 

LOC- Legacy Texas Bank (Rise) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Loans from Shareholder 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 

Payroll Tax Liability 0.06 0.06 0."06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 

LOC-BB&T 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Sales Tax Payable 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 18,142.56 

I 

Total Current Liabilities 1,883,484.09 1,870,728.60 1,857,628.25 1,844,749.06 1,831,717.64 1,818,714.47 1,805,562.49 1,734,415.38 1,721,224.21 1,701,771.94 1,682,685.44 

Other Liabilities 

NIP Rise Aircraft 2 2,500,000.00 2,483,900.29 2,467,733.49 2,451,499.33 2,435,197.53 2,418,827.81 2,402,389.88 2,385,833.46 

NIP Rise Aircraft 3 2,500,000.00 2,483,900.26 2,467,733.49 2,451,499.33 2,435,197.53 

Loan - Trey Aviation, Inc 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 

Loan - Trey Aviation LLC 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 

Refundable Insurance Deposits 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 

Total Other Liabilities 81,423.36 81,423.36 81,423.36 2,581,423.36 2,565,323.65 2,549,156.85 5,032,922.69 5,000,521.15 4,967,984.66 4,935,312.57 4,902,454.35 

Equity 

Capital Stock 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 

Additional Paid In Capital 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 

Retained Earnings -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 

Revenues Over (Under) Expenses 185,968.87 139,778.60 138,623.46 270,247.07 278,866.39 278,905.50 373,102.03 381,613.40 381,811.80 382,091.55 382,211.58 

Total Equity -353,250.33 -399,440.60 -400,595.74 -268,972.13 -260,352.81 -260,313.70 -166,117.17 -157,605.80 -157,407.40 -157,127.65 -157,007.62 

TOTAL LIABILITIES & .. 

EQUITY 1,611,657.12 1,552,711.36 1,538,455.87 4,157,200.29 4,136,688.48 4,107,557.62 6,672,368.01 6,577,330.73 6,531,801.47 6,479,956.86 6,428,132.17 

* There will be considerable amount of cash build up that will be used to pay down the LOC - Legacy Texas Bank liablity acccount. This is not currently reflected on the balance sheet as the exact time of this has yet to be determined. 
Balance Sheet- Non-Rise Operations 

Month I Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month II Month 12 

ASSETS 

Current Assets 

Cash 216,278.38 207,183.29 198,594.47 189,660.79 180,948.27 172,083.52 163,247.02 96,242.94 87,281.27 72,129.29 57,202.79 9,574.70 

Accounts Receivable 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 551,182.28 

Loans to Employees 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 8,200.00 

Fuel Credit Refunds Receivable 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 130,000.00 

Inventories 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 423,787.76 

Prepaid Insurance 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 5,277.08 

Total Current Assets 1,204,725.50 1,195,630.41 1,187,041.59 1,178,107.91 1,169,395.39 I, 160,530.64 1,151,694.14 I ,084,690.06 1,075,728.39 I ,060,576.41 1,045,649.91 I, 128,021.82 

Fixed Assets 

Machinery & Equipment 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 70,139.20 

Aicraft & Aircraft Equipment 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 616,825.94 

Furniture & Fixtures 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 48,845.47 

Computer Equipment 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 54,616.46 

Leasehold Improvements 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 90,743.70 

Accumulated Depreciation -725,371.67 -729,538.34 -733,705.01 -737,871.68 -742,038.35 -746,205.02 -750,371.69 -754,538.36 -758,705.03 -762,871.70 -767,038.37 -771,205.04 

Total Fixed Assets 155,799.10 151,632.43 147,465.76 143,299.09 139,132.42 134,965.75 130,799.08 126,632.41 122,465.74 118,299.07 114,132.40 109,965.73 

Other Assets 

Aircraft Insurance Deposit 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 14,134.64 

Aircraft Escrow Deposits 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 57,491.63 

Aircraft Purchase Deposits 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 

COD Checks Outstanding 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 

Deposits 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 15,565.00 

Gift Certificates Outstanding 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 149.00 

Total Other Assets 103,340.27 I 03,340.27 103,340.27 103,340.27 103,340.27 103,340.27 I 03,340.27 I 03,340.27 I 03,340.27 I 03,340.27 103,340.27 I 03,340.27 

TOTAL ASSETS 1,463,864.87 I ,450,603.11 1,437,847.62 1,424,747.27 I ,411,868.08 1,398,836.66 1,385,833.49 1,314,662.74 1,301,534.40 1,282,215.75 1,263,122.58 1,341,327.82 -
,I 

I, 

LIABILITIES AND EQUITY 

Accounts Payable 

NIP- Legacy Texas Bank 

LOC- Legacy Texas Bank 

Loans from Shareholder 

Payroll Tax Liability 

LOC-BB&T 

Sales Tax Payable 

Total Current Liabilities 

Other Liabilities 

Loan - Trey Aviation, Inc 

Loan - Trey Aviation LLC 

Refundable Insurance Deposits 

Total Other Liabilities 

Equity 

Capital Stock 

Additional Paid In Capital 

Retained Earnings 

Revenues Over (Under) Expenses 

Total Equity 

TOTAL LIABILITIES & 

EQUITY 

--

874,696.83 874,696.83 

643,644.64 630,889.15 

297,000.00 297,000.00 

50,000.00 50,000.00 

0.06 0.06 

0.00 0.00 

I8,I42.56 I8,I42.56 

I ,883,484.09 1 ,870, 728.60 

I4,900.00 14,900.00 

49,600.00 49,600.00 

16,923.36 16,923.36 

81,423.36 81,423.36 

1,000.00 1,000.00 

3,894.67 3,894.67 

-544,113.87 -544,113.87 

38,176.62 37,670.35 

-501,042.58 -501,548.85 

I ,463,864.87 1,450,603.I1 

874,696.83 874,696.83 874,696.83 

617,788.80 604,909.61 591,878.I9 

297,000.00 297,000.00 297,000.00 

50,000.00 50,000.00 50,000.00 

0.06 0.06 0.06 

0.00 0.00 0.00 

I8,I42.56 I8,I42.56 I8,I42.56 

I,857,628.25 I,844,749.06 I,83I,7I7.64 

14,900.00 14,900.00 14,900.00 

49,600.00 49,600.00 49,600.00 

16,923.36 16,923.36 16,923.36 

81,423.36 81,423.36 81,423.36 

1,000.00 1,000.00 1,000.00 

3,894.67 3,894.67 3,894.67 

-544,113.87 -544,113.87 -544,113.87 

38,015.21 37,794.05 37,946.28 

-501,203.99 -501,425.15 -501,272.92 

1,437,847.62 1,424,747.27 1,41 I ,868.08 

.. 

874,696.83 874,696.83 8I6,678.06 816,678.06 810,560.58 804,792.20 766,3I5.56 

578,875.02 565,723.04 552,594.70 539,403.53 526,068.74 512,750.62 499,292.37 

297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 297,000.00 

50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 50,000.00 

0.06 0.06 0.06 0.06 0.06 0.06 0.06 

0.00 0.00 0.00 0.00 0.00 0.00 0.00 

I8,I42.56 I8,I42.56 I8,I42.56 I8,I42.56 I8,I42.56 I8,I42.56 I8,I42.56 

I,8I8,714.47 I ,805,562.49 I,734,4I5.38 I, 72I ,224.2I I,701,771.94 I ,682,685.44 I,630,750.55 

14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 14,900.00 

49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 49,600.00 

16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 16,923.36 

81,423.36 81,423.36 81,423.36 81,423.36 81,423.36 8I,423.36 81,423.36 

1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 

3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 3,894.67 

-544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 -544,113.87 

37,918.03 38,066.84 38,043.20 38,106.03 38,239.65 38,232.98 168,373.11 

-501,301.17 -501 '152.36 -501' 176.00 -501,113.17 -500,979.55 -500,986.22 -3 70,846.09 

I ,398,836.66 1,385,833.49 1,314,662.74 1,30 I ,534.40 1,282,215.75 1,263,122.58 1,341,327.82 
Balance Sheet - Rise Operations 

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 

ASSETS 

Current Assets 

Cash 147,792.25 102,108.25 100,608.25 252,286.35 264,487.06 268,220.95 395,617.84 421,334.64 438,517.05 455,564.42 472,426.23 444,980.49 

Fuel Tax Credit Receivable 147,571.40 

Total Current Assets 147,792.25 102,108.25 100,608.25 252,286.35 264,487.06 268,220.95 395,617.84 421,334.64 438,517.05 455,564.42 472,426.23 592,551.89 

Fixed Assets . 

Rise Aircraft 2 0.00 0.00 0.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 

Rise Aircraft 3 0.00 0.00 0.00 0.00 0.00 0.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 2,500,000.00 

Accumulated Depreciation 0.00 0.00 0.00 -19,833.33 -39,666.66 -59,499.99 -109,083.32 -158,666.65 -208,249.98 -257,833.31 -307,416.64 -356,999.97 

Total Fixed Assets 0.00 0.00 0.00 2,480,166.67 2,460,333.34 2,440,500.01 4,890,916.68 4,841,333.35 4,791,750.02 4, 7 42,166.69 4,692,5 83.3 6 4,643,000.03 

Other Assets 

Total Other Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

TOTAL ASSETS 147,792.25 102,108.25 100,608.25 2, 732,453.02 2, 724,820.40 2,708,720.96 5,286,534.52 5,262,667.99 5,230,267.07 5,197,731.11 5,165,009.59 5,235,551.92 

LIABILITIES AND EQUITY 

LOC- Legacy Texas Bank (Rise) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Total Current Liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Other Liabilities 

NIP Rise Aircraft 2 2,500,000.00 2,483,900.29 2,467,733.49 2,451,499.33 2,435,197.53 2,418,827.81 2,402,389.88 2,385,833.46 2,369,308.26 

NIP Rise Aircraft 3 .. 2,500,000.00 2,483,900.26 2,467,733.49 2,451,499.33 2,435,197.53 2,418,827.81 

Total Other Liabilities 0.00 0.00 0.00 ·2,500,000.00 2,483,900.29 2,467,733.49 4,951,499.33 4,919,097.79 4,886,561.30 4,853,889.21 4,821 ,030.99• 4,788,136.07 -· --- -- ---
! Equity 

Capital Stock . 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Additional Paid In Capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Retained Earnings 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 

Revenues Over (Under) Expenses 147,792.25 102,108.25 100,608.25 232,453.02 240,920.11 240,987.47 335,035.19 343,570.20 343,705.77 343,841.90 343,978.60 447,415.85 

Total Equity 147,792.25 102,108.25 100,608.25 232,453.02 240,920.11 240,987.47 335,035.19 343,570.20 343,705.77 343,841.90 343,978.60 447,415.85 

TOTAL LIABILITIES & 147,792.25 102,108.25 100,608.25 2,732,453.02 2,724,820.40 2,708,720.96 5,286,534.52 5,262,667.99 5,230,267.07 5,197,731.11 5,165,009.59 5,235,551.92 EQUITY 

i 

00 

- -- _L --- - L__ 
Projected Revenues and Expenses 

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 

REVENUES 

Non-Rise Fee revenue 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 

Rise revenue- Aircraft lDAL , HOU 368,964.33 368,964.33 368,964.33 368,964.33 368,964.3, 368,964.33 368,964.33 368,964.33 368,964.33 368,964.33 368,964.33 368,964.33 

Rise revenue- Aircraft 2 DAL HOU 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 

Rise revenue- Aircraft 3 ~~~ 295,632.67 295,632.67 295,632.67 295,632.67 295,632.67 295,632.67 

Rise revenue- initial start~p 51 ,

284.

00 1ee 

Aircraft sales & commission 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Rise revenue- training billed 64,400.00 96,600.00 96,600.00 

Fuel tax credit for no~-Rise 130 000.00 

aircraft ' 

Fuel tax credit for Rise aircraft 48 684 06 

1 ' . 

Fuel tax credit for Rise aircraft 36 513 04 

2 ' . 

Fuel tax credit for Rise aircraft 18 102 89 

3 ' . 

Gross revenue 1,035,898.33 920,214.33 920,214.33 1,389,407.00 1,292,807.00 1,292,807.00 1,685,039.67 1,588,439.67 1,588,439.67 1,588,439.67 1,588,439.67 1,821,739.65 

COST OF GOODS SOLD 

Non-Rise aircraft operating m. 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 

ex..,ense 

Non-Riseaircraftinsurance 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 

Rise aircraft 1 insurance 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 2 insurance 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 3 insurance 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 1 hangar fees 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 2 hangar fees 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 3 hangar fees 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft 1 miscellaneous , .. fees .J,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 

Rise aircraft 2 miscellane,ous 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 

1ees 

Rise aircraft 3 miscellane,ous 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 

1ees 

Rise aircraft 1 refurbishmen!'--- 1,250.00 1,250.00 1,250.00 '--- 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Exhibit 6 
Rise aircraft 2 refurbishment 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Rise aircraft 3 refurbishment 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Non-Rise crew training costs 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 

Rise aircraft 1 crew training 70,000.00 costs 

Rise aircraft 2 crew training 105,000.00 costs 

Rise aircraft 3 crew training 105,000.00 costs 

Non-Rise aircraft fuel costs 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 

Rise aircraft 1 fuel cost~ 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 

Rise aircraft 2 fuel costs 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 

Rise aircraft 3 fuel costs 49,842.37 49,842.37 49,842.37 49,842.37 49,842.37 49,842.37 

Ground transportation** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Non-aircraft lease expense 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 (e.g., office space)** 

Licenses and fees ** 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33! 

Non-Rise maintenance 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 Department 

Rise aircraft 1 maintenance 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 department parts and supplies 

Rise aircraft 2 maintenance 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 department parts and supplies 

Rise aircraft 3 maintenance 20,480.63 20,480.63 20,480.63 20,480.63 20,480.63 20,480.63 department parts and supplies 

Rise aircraft I maintenance 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 engine reserves 

Rise aircraft 2 maintenance 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 engine reserves 

Rise aircraft 3 maintenance 35,945.25 35,945.25 35,945.25 35,945.25 35,945.25 35,945.25 engine reserves 

Outside services ** 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 5,833.33 

Pilot shop supplies ** 4,333.33 4;333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,33-3.33 

Ramp/landing fees ** 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 

Rise required aircraft supplies 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 

Sales department expenses ** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Non-Rise trip and crew 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 ----- expenses -- ------- -- - ,_ 
I 

Rise trip and crew expenses 

(costs are normalized across 

the year. Actual expenses 

would likely be slightly lower 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 

with fewer aircraft, but pilots 

will not stay overnight, so 

costs are not significant 

Total cost of goods sold 410,842.53 340,842.53 342,342.53 596,602.54 491,602.54 491,602.54 710,737.46 605,737.46 605,737.46 605,737.46 605,737.46 605,737.46 

Gross profit 625,055.80 579,371.80 577,871.80 792,804.46 801,204.46 801,204.46 974,3Q2.21 982,702.21 982,702.21 982,702.21 982,702.21 1,216,002.19 

EXPENSES 

Advertising ** 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 

Bank fees** 250 250 ·250 250 250 250 250 250 250 250 250 250 

Business promotions ** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Charitable contributions ** 250 250 250 250 250 250 250 250 250 250 250 250 

Monarch charter department 4,166.67 4,166.67 

expense 

4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Monarch charter department 

expense - 41 C (fuel, database 33,333,33 . 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 

subscriptions, crew expenses ) 

Computer expense and 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 upgrades** 

Consulting service ** 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 

Contract labor * * 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 17,000.00 

Credit card fees * * 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Delivery and freight * * 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 

Dues and subscriptions ** 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 1,833.33 

Franchise tax ** 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 

Non-Rise Hangar services 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 

Insurance (non-aircraft) ** 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 

LOC interest expense 3,054.62 2,993.89 2,649.03 2,870.19 2,717.96 2,746.21 2,597.40 2,621.04 2,558.21 2,414.59 2,431.26 2,291.13 

Rise aircraft 2 interest expense 10,416.67 10,349.58 10,282.22 10,214.58 10,146.66 10,078.45 10,009.96 9,941.18 9,872.12 

.. 

Rise aircraft 3 interest expense 10,416.67 10,349.58 10,282.22 10,214.58 10,146.66 10,078.45 

Rise aircraft 1 Lease Expense 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 . 38,150.00 38,150.00 

Legal and professional 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 4,666.66 L__ services** -
Non-Rise aircraft Maintenance 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 service plans 

Meals and entertainment** 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 1083.33 

Miscellaneous expense** 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 

Office expense** 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67 

Office supplies ** 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 

Non-Rise payroll service fees 933 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 ** 

Rise payroll service fees ** 166 166 166 415 415 415 666 666 666 666 666 666 

Printing and reproduction 825 825 825 825 825 825 825 825 825 825 825 825 costs** 

Reference library ** 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 1,850.00 

Rent expense ** 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 

Non-aircraft Repairs and 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 maintenance ** · 

Small shop tools ** 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 

Taxes** 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 7,166.67 

Telephone and 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 communications** 

Training and education 

(unrelated to crew training, 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 2,916.66 which is already accounted 

for) ** 

Travel** 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 2,583.33 

Uniforms 250 250 250 250 250 250 250 250 250 250 250 250 

Utilities ** 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 . 3,250.00 3,250.00 3,250.00 

Non-Rise wages and salaries 

(includes payroll taxes and 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 

employee benefits programs) 

Rise wages and salaries --

administrative staff (includes 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 payroll taxes and employee 

benefits programs) 

Rise wages and salaries 

aircraft I -- maintenance 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,25(l..00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 (includes payroll taxes and 

employee benefits programs 

Rise wages_ and salaries .. 

aircraft 2 and 3 - maintenance 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 (includes payroll and 

employee benefits) 
Rise wages and salaries 

aircraft I -- 2 flight crew 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 (includes payroll taxes and 

employee benefits programs) 

Rise wages and salaries 

aircraft 2 -- 3 flight crew 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 (includes payroll taxes and 

employee benefits programs) 

Rise wages and salaries 

aircraft 3 -- 3 flight crew 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 (includes payroll taxes and 

employee benefits programs 

Total expenses 434,920.26 435,426.53 435,081.67 498,557.39 498,338.07 498,298.96 547,450.18 547,338.81 547,140.41 546,860.66 546,740.63 546,463.23 

Revenues over (under) 190,135.54 143,945.27 142,790.13 294,247.07 302,866.39 302,905.50 426,852.03 435,363.40 435,561.80 435,841.55 435,961.58 669,538.96 expenses before depreciation 

Depreciation - Income Tax 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 Basis 

Depreciation- Income Tax 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 Basis Rise Aircraft 2 

Depreciation- Income Tax 29,750.00 29,750.00 29,750.00 29,750.00 29,750.00 29,750.00 Basis Rise Aircraft 3 

Revenues over (under) 185,968.87 139,778.60 138,623.46 270,247.07 278,866.39 278,905.50 373,102.03 381,613.40 381,811.80 382,091.55 382,211.58 615,788.96 expenses after depreciation 

* * denotes indirect costs ----- ---------
Projected Revenues and Expenses- Non-Rise Operations 

Month 1 Month 2 Month 3 Month4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 

REVENUES 

Fee revenue 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 550,000.00 

Aircraft sales & commission 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00. 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Fuel tax credit for aircraft 130,000.00 

Gross revenue 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 551,250.00 681,250.00 

COST OF GOODS SOLD 

Aircraft operating expense 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 9,044.37 

Aircraft insurance 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 11,354.10 

Crew training costs 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 

Aircraft fuel costs 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083.33 37,083:33 37,083.33 37,083.33 37,083.33 37,083.33 

Ground transportation ** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Non-aircraft lease expense 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 23,166.67 (e.g., office space)** 

Licenses and fees ** 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 

Maintenance Department 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 82,500.00 

· Outside services ** 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 . 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 

Pilot shop supplies ** 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 4,333.33 

Ramp/landing fees** 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 291.67 

Sales department expenses** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 .1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Trip and crew expenses 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 2,237.29 

Total cost of goods sold 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 178,969.09 

Gross profit 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 372,280.91 502,280.91 

EXPENSES 

Advertising ** 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 1,750.00 

Bank fees** 250 250 250 250 250 250 250 250 250 250 250 250 

Business promotions ** 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 .. 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 

Charitable contributions ** 250 250 250 250 250 250 250 250 250 250 250 250 

Monarch charter department 

expense 

4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Monarch charter department 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 33,333,33 

-··expense- 41 C 
Computer expense and 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 upgrades ** 

Consulting service ** 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Contract labor** 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00 

Credit card fees ** 4,166.67 4,166.67 4,166.67 4,166.67 4,169.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Delivery and freight ** 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 2,333.33 

Dues and subscriptions ** 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 1,583.33 

Franchise tax ** 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 3,750.00 

Non-Rise Hangar services 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 5,266.67 

Insurance (non-aircraft) ** 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3,541.67 3',541.67 3,541.67 3,541.67 3,541.67 

LOC interest expense 3,054.62 2,993.89 2,649.03 2,870.19 2,717.96 2,746.21 2,597.40 2,621.04 2,558.21 2,414.59 2,431.26 2,291.13 

Legal and professional 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 1,666.66 services ** 

Aircraft Maintenance service 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 12,083.33 plans 

Meals and entertainment ** 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 

Miscellaneous expense** 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 

Office expense ** 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 1,666.67 

Office supplies ** 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 

Payroll service fees ** 933 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Printing and reproduction 625 625 625 625 625 625 625 625 625 625 625 625 costs ** 

Reference library ** 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 1,016.67 

Rent expense ** 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 27,916.67 

Non-aircraft Repairs and 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 maintenance** 

Small shop tools ** 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 3,333.33 

Taxes** 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 

Telephone and 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 5,416.67 communications ** 

Training and education 

(unrelated to crew training, 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00 which is separately accounted 

for)** 

Travel ** 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 

Uniforms 250 250 250 250 250 250 250 250 250 250 250 250 

Utilities ** 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 3,250.00 
Wages and salaries (includes 

payroll taxes and employee 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 202,916.66 

benefits programs 

Total expenses 329,937.62 330,443.89 330,099.03 330,320.19 330,167.96 330,196.21 330,047.40 330,071.04 330,008.21 329,864.59 329,881.26 329,741.13 

Revenues over (under) I 

42,343.29 41,837.02 42,181.88 41,960.72 42,112.95 42,084.70 42,233.51 42,209.87 42,272.70 42,416.32 42,399.65 172,539.781 

expenses before depreciation 

Depreciation - Income Tax 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 4,166.67 Basis . 

Revenues over (under) 38,176.62 37,670.35 38,015.21 37,794.05 37,946.28 37,918.03 38,066.84 38,043.20 38,106.03 38,249.65 38,232.98 168,373.11 

expenses after depreciation 

** denotes indirect costs 
Projected Revenues and Expenses- Rise Operations 

Month I Month2 Month 3 Month4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month II Month 12 

REVENUES 

Rise revenue - Aircraft I DAL 368,96433 368,964.33 368,964.33 368,964 33 368,964.33 368,964.33 368,964.33 368,96433 368,96433 368,96433 368,964.33 368,964.33 HOU 

Rise revenue- Aircraft 2 DAL 372,592.67 372,592.67 372;592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 372,592.67 HOU 

Rise revenue - Aircraft 3 DAL 295,632.67 295,632.67 295,632.67 295,632.67 295,632.67 295,632.67 AUS 

Rise revenue- initial start up 51,284.00 fee 

Rise revenue- training billed 64,400.00 96,600.00 96,600.00 

Fuel tax credit for Rise aircraft 48,684.06 I 

Fuel tax credit for Rise aircraft 36,513.04 2 

Fuel tax credit for Rise aircraft 18,102.89 3 

Gross revenue 484,648.33 368,964.33 368,964.33 838,157.00 741,557.00 741,557.00 1,133,789.67 1,037,189.67 1,037,189.67 1,037,189.67 1,037,189.67 1,140,489.65 

COST OF GOODS SOLD 

Rise aircraft I insurance 1,500.00 1,500.00 I ,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 I ,500.00 1,500.00 I ,500.00 I ,500.00 

Rise aircraft 2 insurance 1,500.00 1,500.00 1,500.00 I ,500.00 1,500.00 I ,500.00 1,500.00 I ,500.00 1,500.00 1,500.00 

Rise aircraft 3 insurance 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft I hangar fees I ,500.00 1,500.00 I ,500.00 I ,500.00 I ,500.00 1,500.00 I ,500.00 I ,500.00 I ,500.00 I ,500.00 I ,500.00 1,500.00 

Rise aircraft 2 hangar fees 1,500.00 1,500.00 I ,500.00 I ,500.00 I ,500.00 1,500.00 I ,500.00 1,500.00 1,500.00 

Rise aircraft 3 hangar fees 1,500.00 1,500.00 I ,500.00 1,500.00 1,500.00 1,500.00 

Rise aircraft I miscellaneous 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 fees 

Rise aircraft 2 miscellaneous 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 fees 

Rise aircraft 3 miscellaneous 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 3,616.67 fees 

Rise aircraft I refurbishment 1,250.00 I ,250.00 1,250.00 1,250.00 I ,250.00 1,250.00 1,250.00 1,250.00 I ,250.00 1,250.00 1,250.00 1,250.00 

Rise aircraft 2 refurbishment 1,250.00 I ,250.00 I ,250.00 I ,250.00 I ,250.00 I ,250.00 I ,250.00 I ,250.00 1,250.00 

Rise aircraft 3 refurbishment 1,250.00 1,250.00 I ,250.00 1,250.00 I ,250.00 1,250.00 

Rise aircraft I crew training 70,000.00 costs 

Rise aircraft 2 crew training 105,000.00 costs 

Rise aircraft 3 crew training 105,000.00 costs 

Rise aircraft I fuel costs 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 67,020.47 

Rise aircraft 2 fuel costs 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 67,020.37 

Rise aircraft 3 fuel costs 49,842.37 49,842.37 49,842.37 49,842.37 49,842.37 49,842.37 

Ground transportation ** No cost assessed against Rise operations because costs are not expected to increase as a result ofthe new operations. 

Non-aircraft lease expense No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. Monarch already has ample office space for additional staff and operations. (e.g., office space)** 
Licenses and fees 

Rise aircraft I maintenance 27,539.24 department parts and supplies 

Rise aircraft 2 maintenance 

department parts and supplies 

Rise aircraft 3 maintenance 

department parts and supplies 

Rise aircraft I maintenance 

48,333.73 engine reserves 

Rise aircraft 2 maintenance 

engine reserves 

Rise aircraft 3 maintenance 

engine reserves 

Outside services ** 2083.33 

Pilot shop supplies ** 

Ramp/landing fees ** 

Rise required aircraft supplies 2,083.33 

Sales department expenses ** 

Rise trip and crew expenses 

(costs are normalized across 

the year. Actual expenses 

would likely be slightly lower 6,946.67 

with fewer aircraft, but pilots 

will not stay overnight, so 

costs are not significant 

Total cost of goods sold 231,873.44 

Gross Profit 252,774.89 

EXPENSES 

Advertising ** 

Bank fees** 

Business promotions ** 

Charitable contributions ** 

Computer expense and 1666.66 

u=ades ** 

Consulting service ** 3000 

Contract labor** 2000 

Credit card fees ** 

Delivery and freight** 

Dues and subscriptions ** 250 

Franchise tax ** 8333.33 

Insurance (non-aircraft) ** 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 • 27,539.24 

27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 27,539.24 

20,480.63 20,480.63 20,480.63 20,480.63 20,480.63 

48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 

48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 48,333.73 

35,945.25 35,945.25 35,945.25 35,945.25 35,945.25 

2083.33 2083.33 2083.33 2083.33 2083.33 2083.33 2083.33 2083.33 2083.33 2083.33 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations 

2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 2,083.33 

6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 6,946.67 

161,873.44 163,373.44 417,633.45 312,633.45 312,633.45 531,768.37 426,768.37 426,768.37 426,768.37 426,768.37 

207,090.89 205,590.89 420,523.55 428,923.55 428,923.55 602,021.30 610,421.30 610,421.30 610,421.30 610,421.30 

No cost assessed against Rise operations because costs are to be borne solely by Rise. 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. All promotion costs are to be borne solely by Rise. 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

1666.66 1666.66 1666.66 1666.66 1666.66 1666.66 1666.66 1666.66 1666.66 1666.66 

3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 

2000 200Q. 2000 2000 2000 2000 2000 2000 2000 2000 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. Rise will be invoiced via a draw-down on its letter of credit. 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

250 250 250 250 250 250 250 250 250 250 

8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 8333.33 

No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

27,539.24 

27,539.24 

20,480.63 

48,333.73 

48,333.73 

35,945.25 

2083.33! 

2,083.33 

6,946.67 

426,768.37 

713,721.28 

1666.66 

3000 

200~ 

25( 

8333.33 

Total Cost of Goods 

Total Expenses 

Total of both 

25% of total expense 

Pre-operating cost 

DOT Fitness Number 

4,265,630.89 

2,121,838.27 

6,387,469.16 

1,596,867.29 

88,000.00 

1,684,867.29 
Rise aircraft 2 interest expense 10,416.67 10,349.58 10,282.22 10,214.58 10,146.66 10,078.45 10,009.96 9,941.18 9,872.12 

Rise aircraft 3 interest expense 10,416.67 .10,349.58 10,282.22 10,214.58 I 0,146.66 10,078.45 

Rise aircraft I Lease Expense 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 38,150.00 

Legal and professional 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 services** 

Meals and entertainment** 250 250 250 250 250 250 250 250 250 250 250 250 

Miscellaneous expense ** 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 

Office expense ** 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 

Office supplies ** 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 

Rise payroll service fees ** !66 166 166 415 .415 415 666 666 666 666 666 666 

Printing and reproduction 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 200.00 costs ** 

Reference library ** 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 

Rent expense ** No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

Non-aircraft Repairs and No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. maintenance ** 

Small shop tools ** No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

Taxes** 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 

Training and education 

(unrelated to crew training, 

which is separately accounted 

416.66 416.66 416.66 416.66 416.66 416.66 416.66 416.66 416.66 416.66 416.66 416.66 

fnri ** 

Telephone and No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. communiCations ** 

Travel** 500 500 500 500 500 500 500 500 500 500 500 500 

Uniforms No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

Utilities ** No cost assessed against Rise operations because costs are not expected to increase as a result of the new operations. 

Rise wages and salaries --

administrative staff (includes 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 8,333.33 payroll taxes and employee 

benefits programs 

Rise wages and salaries 

aircraft I --maintenance 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 6,250.00 (includes payroll taxes and 

employee benefits programs 

Rise wages and salaries 

aircraft 2 and 3 - maintenance 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 13,888.89 (includes payroll and 

employee benefits) 

Rise wages and salaries 

aircraft I -- 2 flight crew 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 25,800.00 (includes payroll taxes and .. .. 

employee benefits programs 

Rise wages and salaries 

. aircraft 2 -- 3 flight crew 38,700.00 38,700.00 38,700.00 38,700.00 38,700'.00 38,700.00 38,700.00 38,700.00 38,700.0C (includes payroll taxes and 

employee benefits programs) 
Rise wages and salaries 

aircraft 3 -- 3 flight crew 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 38,700.00 (includes payroll taxes and 

employee benefits programs 

Total expenses 104,982.64 104,982.64 104,982.64 168,237.20 168,170.11 168,102.75 217,402.78 217,267.77 217,132.20 216,996.07 216,859.37 216,722.10 

Revenues over (under) 147,792.25 102,108.25 100,608.25 252,286.35 260,753.44 260,820.80 384,618.52 393,153.53 393,289.10 393,425.23 393,561.93 496,999.18 

expenses before depreciation 

Depreciation - Income Tax 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 19,833.33 Basis Rise Aircraft 2 

Depreciation- Income Tax 29,750.00 29,750.00 29,750.00 29,750.00 29,750.00 29,750.00 Basis Rise Aircraft 3 

Revenues over (under) 147,792.25 102,108.25 100,608.25 232,453.02 240,920.11 240,987.47 335,035.19 343,570.20 343,705.77 343,841.90 343,978.60 447,415.85 

expenses after depreciation 

** denotes indirect costs