Sample Business Contracts

Aircraft Lease Agreement - Regal Aviation LLC and MW Sky LLC

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                            AIRCRAFT LEASE AGREEMENT

This Aircraft Lease Agreement ("Agreement") is entered into on this 20th day of
August, 2004, by and between Regal Aviation LLC, a Delaware limited liability
corporation, having an office at 3232 Love Field Drive, Dallas, Texas 75235
(hereinafter referred to as "Regal") and MW Sky LLC, a Delaware limited
liability company, having its principal office at 5803 Glenmont, Houston, Texas
77081 (hereunder referred to as "Lessor"), and

Lessor is the owner of a certain Gulfstream III, N444GA, Serial Number 301
aircraft (as identified in Exhibit "A" and hereinafter referred to as the
"Aircraft"), and Regal desires to lease from Lessor, and to operate, manage, and
market, the Aircraft in accordance with the terms of this Agreement.

In consideration of the foregoing and the agreements contained herein, Lessor
agrees to lease the Aircraft to Regal, and Regal agrees to lease the Aircraft
from Lessor and to provide aircraft management services as follows:

1)    SCHEDULING AND DISPATCH SERVICES. Regal shall provide scheduling and
      dispatch service to Lessor. Scheduling and dispatch services shall include
      the coordination of flight schedules for use of the Aircraft, the
      coordination of maintenance to be performed on the Aircraft, record
      keeping and reporting (to both Lessor and such governmental entities as
      may be required by applicable law), and such additional services as may be
      mutually agreed upon by the parties.

      One full time account manager will be provided to Lessor who will be
      responsible to Lessor for scheduling and dispatch services. The initial
      manager shall be Casey Barr.

2)    AIRCRAFT STORAGE AND IN-CABIN SERVICES. Regal shall cause the Aircraft to
      be based at Regal Aviation's Lessor Care Center (the "Facility"), Dallas
      Love Field Airport, Dallas, Texas (the "Airport"). Lessor shall lease
      hangar storage space for the Aircraft at the Facility at the rates
      outlined in Exhibit B of this Agreement. Lessor agrees to pay to Regal all
      amounts due under the hangar lease, in accordance with the terms of this

      Regal will arrange for trash removal, vacuuming, supply restocking, and
      interior cleaning after each flight for the Aircraft. Additional cleaning
      and detailing services (i.e., shampooing of carpets, steam cleaning of
      seats, polishing of bright work, etc.) to maintain the appearance of the
      aircraft will be provided by Regal at a reasonable additional cost, which
      will be itemized in detail of the monthly invoice. No cosmetic work
      exceeding $1,500.00 will be performed without prior approval of Lessor.

                                   Page 1 of 1

3)    CREW SERVICE. Regal shall provide Crew Services (as defined below) for all
      flights whether such flights are for the Lessor or for Federal Aviation
      Regulations ("FAR's") Part 135 charter. Lessor shall pay Regal Twenty One
      Thousand and No/100 Dollars ($21,000.00) per month for Regal to provide
      Crew Services (as defined below) for the Aircraft.

      (a)   The "Crew Services" shall consist of (2) Captains, each holding an
            Airline Transport Pilot rating and possessing sufficient training
            and experience in the Aircraft and one Co-Pilot holding at least a
            commercial pilot's license with multi-engine and instrument
            endorsements (together, the "Crew").

      (b)   Lessor agrees to pay all reasonable direct out-of-pocket expenses
            incurred either by the Crew or in connection with the operation of
            the Aircraft while on assignment for the Lessor. Such expenses
            include, but are not limited to, (i) Crew meals, lodging, and
            transportation; (ii) parking, landing fees, hangar fees, fuel
            purchases, deicing fees, customs fees, and all other
            Aircraft-related expenses; and (iii) normal cabin supplies consumed
            during use of the Aircraft by Lessor.

      (c)   With respect to any flights, the captain shall have the final
            authority to determine whether any flight should be delayed and/or
            canceled due to departure and/or enroute and/or terminal weather
            conditions or aircraft, equipment, facility, or other conditions
            that may be considered hazardous to the Aircraft or its occupants.

      (d)   All Crew members are required to successfully complete initial and
            recurrent annual Regal administered ground school and factory
            simulator training as required. Lessor shall be responsible for the
            cost of the initial and recurrent training for Crew members.

      (e)   The Aircraft and Crew shall be made available upon the request of
            Lessor except when the Aircraft has a charter flight scheduled as
            provided herein by Regal.

      (f)   If during the term of this Agreement, or any extension thereof, or
            for three (3) months thereafter, Lessor elects to hire any
            Applicable Employee, to perform the same of substantially the same
            services for Owner as said Applicable Employee was providing or had
            provided Regal, Lessor agrees to pay Regal Twelve Thousand Five
            Hundred Dollars ($12,500.00) for each such Applicable Employee that
            Lessor hires. Such compensation shall be paid within thirty (30)
            days of Lessor's hiring of said Applicable Employee and shall be
            deemed compensation for Regal's expenses incurred in training such
            Applicable Employee. For purposes of this provision, an "Applicable
            Employee" shall be defined as a current employee of Regal and/or any
            former employees of Regal whose employment with Regal terminated
            less than three (3) months prior to Lessor's hiring of said

                                   Page 2 of 2

4)    MAINTENANCE. Regal and Lessor agree that the Aircraft shall be maintained
      in accordance with all of its manufacturer's recommendations and
      procedures and in accordance with the standards and guidelines established
      by the Federal Aviation Administration ("FAA") and other applicable law.
      Regal shall perform, or cause to be performed, all maintenance, repair,
      inspection, and overhaul work necessary to maintain the Aircraft in good
      operating condition, including, without limitation, maintenance of the
      airworthiness of the Aircraft pursuant to Part 91 and 135 of the FAR's and
      the manufacturer's recommendations, including the annual Aircraft Flight
      Information System ("AFIS") subscription for the Aircraft (hereinafter the

      All work performed on the Aircraft shall be accomplished in accordance
      with the standards set by the FAA, the Aircraft manufacturer, and relevant
      component manufacturers. Regal shall cause to be maintained all records,
      logs, and other materials required by the FAA to be maintained in
      connection with the Aircraft.

      Regal shall provide assistance to Lessor on matters regarding the
      Aircraft, including, without limitation, FAA and manufacturer's
      correspondence and directives, administration and enforcement of warranty
      claims and insurance matters, and preparation and filing of FAA and any
      other required reports or registrations.

      The cost of all Maintenance shall be the sole responsibility of Lessor,
      unless a repair is caused by the negligence of, or breach of this
      Agreement by Regal, its officers, employees, or affiliates. Maintenance
      performed by Regal personnel shall be at the shop rate of Seventy-Five
      Dollars ($75.00) per hour.

5)    FUEL. Lessor shall be responsible for all fuel and lubricant costs for the
      Aircraft. Fuel shall be purchased at a contract discount rate wherever
      possible. Regal agrees to use Lessor's fuel credit cards for fuel
      purchases whenever possible. For fuel purchased using Regal's fuel credit
      cards, Lessor shall pay to Regal a handling fee of fifteen cents ($0.15)
      per gallon for all fuel provided to the Aircraft. Fuel purchased at the
      Facility shall be charged to Lessor at forty-five cents ($0.45) off
      Regal's retail rate per gallon.

6)    INSURANCE. Lessor shall provide hull and liability insurance under an
      aircraft fleet policy. The amounts of such insurance, coverage areas,
      named insured, etc. are described in Exhibit "C" of this Agreement. Regal
      shall notify Lessor immediately of any incident which may give rise to a
      claim under Lessors insurance coverages detailed in Exhibit "C." Regal
      shall obtain the consent of Lessor prior to making any decisions regarding
      the filing of insurance claims or the involvement of the Aircraft in any
      litigation. Regal shall not allow the Aircraft to be operated or located
      in any area excluded from coverage by any insurance provided by the terms
      of this Agreement.

      Regal shall provide workers compensation insurance for all pilots and
      personnel working in, on, or about Lessor's aircraft.

                                  Page 3 of 3

      All insurance coverages set forth in Exhibit "C" must be with insurers
      having an A.M. Best minimum rating of "A XII" or Standard & Poor's minimum
      rating of "A."

      Lessor shall provide to Regal evidence of all required insurance by way of
      a certificate.

7)    SERVICE FEE. Lessor shall pay to Regal a Service Fee in the amount of Four
      Thousand Dollars ($4,000.00) per month during the term of this Agreement,
      in addition to the costs and expenses for which Lessor is responsible. The
      Management Fee and expense reimbursement shall be due within thirty (30)
      days after invoice from Regal for services provided to Lessor. Regal's
      invoices to Lessor shall identify with reasonable particularity the
      Management Fee and other services and expenses for which Lessor is
      responsible. In the event that Lessor disputes any invoiced amount or
      portion thereof, Lessor shall notify Regal of its dispute within ten (10)
      days of its receipt of the invoice, specifying the item or items that
      Lessor disputes and providing each reason therefore. Notwithstanding
      Lessor's dispute of any portion of an invoice, Lessor shall be obligated
      to pay the undisputed balance in accordance with the terms hereof.

      Aircraft, Lessor and its affiliates shall have the right to unlimited use
      of the Aircraft on a priority basis. At such times as the Aircraft is not
      being used by Lessor or its affiliates, as provided above, Lessor hereby
      grants to Regal the exclusive right to charter the Aircraft to third
      parties, upon such financial terms and conditions, as Regal deems
      acceptable; provided, however, that without the prior written approval of
      Lessor, Regal shall charge charter customers not less than $4,300 per hour
      for charter of the Aircraft. The Aircraft will be placed under the Regal
      Aviation, LLC Charter Certificate, #YNTA128U. Regal will actively
      advertise, market, send out invoices, and collect revenues for charter
      flights. Lessor may from time to time, upon written notice to Regal and
      subject to Regal's consent (which consent shall not be unreasonably
      withheld), increase the minimum charge per hour. As rent for the Aircraft,
      Regal will pay Lessor eighty-five percent (85%) of all billed flight
      revenue for time the Aircraft is chartered by Regal to third parties,
      rounded to the nearest tenth of an hour. All amounts due to Lessor for
      each month shall be paid to Lessor within thirty (30) days following the
      last day of each calendar month.

9)    TERMINATION. The initial term of this Agreement shall be twelve (12)
      months. This Agreement shall automatically renew on every anniversary
      date, pursuant to the same terms and conditions as set forth herein,
      unless either party gives written notice of termination of at least thirty
      (30) days prior to the end of the term. Unless otherwise agreed in writing
      by the parties hereto, this Agreement shall terminate on the date of any
      sale of the Aircraft by Lessor.

      This Agreement may be terminated by either party, upon not less than
      thirty (30) days prior written notice to the other party, upon any
      material breach of the Agreement buy such other party. Such notice shall
      describe in reasonable detail

                                  Page 4 of 4

      the material breach (or breaches) upon which such notice of termination is

      This Agreement may be terminated by Lessor, upon written notice to Regal
      designating the date of termination, in the event of a Change of Control.
      As used in this Agreement, "Change of Control" means with respect to Regal
      (a) the sale, lease or transfer of all or substantially all of Regal's
      assets to any person or group (within the meaning of the Securities,
      Exchange Act of 1934 and the rules of the Securities and Exchange
      Commission thereunder), (b) the liquidation or dissolution of Regal or (c)
      the acquisition or ownership, directly or indirectly, beneficially or of
      record by any person or group (within the meaning of the Securities
      Exchange Act of 1934 and the rules of the Securities and Exchange
      Commission thereunder) of more than 49% of the ownership of Regal.

      Termination of this Agreement shall not relieve either Lessor or Regal
      from any obligation hereunder arising prior to the effective date of such

10)   MODIFICATION. This Agreement shall not be modified except in writing and
      signed by both parties.

11)   LEASING TO THIRD PARTIES. Other than charters pursuant to FAR Part 135 as
      provided above, the Aircraft shall not be leased to third parties without
      the express written permission of Lessor and Regal.

12)   OPERATIONS. During the term of this Agreement, the Aircraft shall be
      operated and maintained in accordance with this Agreement. Regal shall at
      all times have and maintain exclusive use and operational control of the
      Aircraft in accordance with FAR Section 135.77. Regal shall have sole
      possession, control and use of the Aircraft for flight, within the meaning
      of FAR Section 135.25, and for the purposes of determining and performing
      required maintenance and ensuring compliance with all applicable FAA

      Notwithstanding any other provision of this Agreement which may possibly
      be interpreted to the contrary, it is the intent of the parties that Regal
      shall maintain "operational control" (pursuant to the definition and use
      of such term in the FAA regulations) of the Aircraft operated pursuant to
      this Agreement during all such operations, and shall be responsible for
      complying with all provisions of the FAA regulations applicable to such

13)   INDEMNIFICATION. Lessor hereby agrees to defend, indemnify, protect, save
      and keep harmless Regal and its agents and employees, from and against any
      and all liabilities, obligations, losses, damages, penalties, claims,
      actions and suits, including legal expenses, of whatever kind and nature,
      imposed or incurred by or asserted against Regal on the basis of any act
      or omission of Lessor, its agents, servants and employees.

      Regal hereby agrees to defend, indemnify, protect, save and keep harmless
      Lessor and its agents and employees from and against any and all

                                  Page 5 of 5

      obligations, losses, damages, penalties, claims actions and suits,
      including legal expenses, of whatever kind and nature, imposed or incurred
      by or asserted against Lessor on the basis of any act or omission of
      Regal, or negligence of Regal, its agents, servants and employees.

      The indemnities contained in this Section 13 shall survive the termination
      of this Agreement.

14)   RETURN OF AIRCRAFT. Upon the termination of this Agreement Regal shall
      return the Aircraft (with all Records) to Lessor, at a location designated
      by Lessor in the continental United States, in good operating and
      airworthy condition with the same interior configuration as of the date of
      this Agreement. Regal is not responsible for normal wear and tear to the
      Aircraft during the term of this Agreement. As used in this Agreement, the
      term "Records" means all log books, manuals, certificates, inspection,
      maintenance, modification, overhaul, engineering and technical records
      (including all computerized data, records and materials) relating to the
      Aircraft, including, without limitation, all records required to be
      maintained by the FAA or any other governmental agency or authority having
      jurisdiction with respect to the Aircraft or any manufacturer of the
      Aircraft (or any part thereof, including the engines).

15)   SECURITY. Termination of this Agreement shall not release either Lessor or
      Regal from any obligation hereunder arising prior to the effective date of
      such termination.

      Regal will cause the Aircraft to be locked and inaccessible to outsiders
      during flights away from the Facility when the Crew is not physically
      present at the Aircraft. Regal will secure the Aircraft while it is
      located at the Facility.

16)   DISPUTES. In the event of a dispute under this Agreement, the prevailing
      party shall be entitled to recover reasonable attorney's fees and costs
      from the other party.

17)   GOVERNING LAW AND VENUE. This Agreement shall be governed by and construed
      in accordance with the laws of the State of Texas (excluding its conflicts
      of law principles), including all matters of construction, validity, and
      performance. Any claim or controversy that arises out of this Agreement,
      or is related to this Agreement, or the breach of it, shall be settled by
      arbitration in Dallas, Texas before and in accordance with the rules of
      the American Arbitration Association. Judgment upon the award may be
      entered in any court with jurisdiction.

18)   PAYMENTS. Any payments due to either party under this Agreement, or any
      portion thereof, if not paid on or before the due date, shall bear
      interest at the lesser of 8% per annum or the maximum rate allowed by law.

19)   NOTICES. All notices, requests, consents, and permissions required or
      permitted by the terms and conditions of this Agreement shall be in
      writing, and

                                  Page 6 of 6

      any such notice, request, consent, and permission shall become effective
      when delivered by overnight courier or messenger, or telecopier/facsimile,
      when receipt is confirmed at the following contact information for the

         Lessor:           MW Sky LLC
                           5803 Glenmont
                           Houston, Texas 77081
                           Attn: Ms. Claudia Pruitt
                           PH: 713-592-7322
                           FX: 713-592-7075

         Regal:            David MacDonald
                           Regal Aviation LLC
                           3232 Love Field Drive
                           Dallas, Texas 75235
                           Phone (214) 654-0994
                           Fax (214) 654-9588.

      or to such other notice address as either party may, from time to time,
      hereafter designate in writing to the other.

20)   ENTIRE AGREEMENT, AMENDMENTS. This Agreement embodies the entire agreement
      and understanding between Regal and Lessor with respect to its subject
      matter and supersedes all prior agreements and understandings and shall
      not be modified or amended except by a written instrument signed by duly
      authorized representatives of the parties.

21)   ASSIGNMENT. Neither party shall have the right to assign all or any part
      of its rights or obligations under this Agreement without the agreement of
      the other party.

22)   EXECUTION. Each of the parties agree that each of them shall be entitled
      to rely upon the signature of the other party hereto, received via
      facsimile transmission, to the same extent as an originally signed copy
      hereof; provided, however, this shall not relieve either party from
      delivery of originally signed documents.

23)   SUCCESSORS. The rights and obligations of the parties shall inure to the
      benefit of, and be binding and enforceable upon, the respective successors
      and permitted assigns of the parties.

                                  Page 7 of 7

IN WITNESS WHEREOF, the parties hereto affix their duly authorized signatures in
the spaces provided below as of the date first written above.


Regal Aviation LLC                              MW Sky LLC

By: /s/ DAVID MACDONALD                         By: /s/ CLAUDIA A. PRUITT
    ---------------------                           ----------------------------
    David MacDonald                                 Claudia A. Pruitt
    President                                       Vice President and Treasurer

                                  Page 8 of 8