EFTA00592782.pdf

CMG Capital Group 4141 NE 2 Ave #204-A, Miami, FL 33137 Tel: PROPOSAL LETTER Date: May 31, 2016 Lender: CMG Capital or its assigns (collectively, the investor" or "Investors") Borrower: Global Oil 604, Lit. Finance Amount: $2,250,000.00 (Two Million Two Hundred Fifty United States Dollars) Term Facility Amount: Two Million Two Hundred and Fifty Thousand United States Dollars (US$ 2,250,000.00) Type: Term Note (the "Note") Term: Twelve Months (12) Months from Closing (the "Maturity Date"). Interest Rate: Twelve Percent (12%) per annum payable in advance in cash on monthly basis. Three (3) months to be paid in advance with minimum six (6) month interest payment guarantee. Principal Amortization: N/A Collateral: Bombardier Inc., model CL-600.26-16 (Challenger 604) Serial Number 5408 and FAA Registration Mark N604SA Covenants: Lender shall finance Borrower the amount of Two Million Two Hundred and Fifty Thousand United States Dollars (US$ 2,250,000.00) in exchange for the aircraft title, aircraft thereafter to be leased back to Borrower. Fair market value of the Aircraft shall be and remain through the term of the Note no less than of the amount of the outstanding obligations under the Note as determined by Lender. Lender may, at Borrowers expense, conduct a third party appraisal of the Aircraft at any time; provided, that, so long as no event of default has occurred and is continuing under the Note, Borrower shall only be responsible to reimburse a single third-party appraisal per 12 month period. Events of Default: Standard events of default under Lease Documentation: Borrower shall provide all documentation reasonably requested by Lender/Lenders counsel for review, including, without limitation, evidence of due organization and capitalization, personal financial statement and personal guarantee. EFTA00592782 CMG Capital Group 4141 NE 2 Ave 4204-A, Miami, FL 33137 Tel: ww w.cmgciikta I.com Insurance: The Borrower shall obtain All-Risk Hull Coverage, Third Party General Liability Coverage, Passenger Liability Coverage, and any other insurance reasonably required by the Lender on the Aircraft, including without limitation, War Risk and Allied Peril Coverage Endorsements. All such insurance shall be in amounts, with insurers, and under policies, in form and substance reasonably satisfactory to the Lender, and contain endorsements naming the Lender, for the benefit of Lender, as additional insured and loss payee as appropriate. Collateral: Lender shall have title to the aircraft Guarantor(s): Harry Sargeant III / Global Oil 604, LLC Aircraft Maintenance Limitation of 500 flight hours annually. Borrower shall maintain and operate And Operations: the Aircraft in accordance with the terms and conditions of the final loan Documentation. No subleasing of Aircraft or commercial operations for compensation or hire without consent of tender, which may include collateral assignment of any lease to Lender. Appraisal: Lender will arrange at Borrower's expense an Aircraft Appraisal which shall be acceptable to Lender. Confidentiality: The information contained herein is confidential and may not be released by you or your representatives or agents, in written or verbal form, without the prior written consent of Lender. Transaction Expenses: Borrower will pay all of its costs and expenses. Borrower also agrees to pay all expenses of Lender in connection with this transaction, including, but not limited to, processing fees, credit verification and investigation, attorney's fees, FAA and Cape Town filing fees and lien searches, whether or not the proposed transaction closes ("Lender Expenses"). Assuming all documentation is in order, Investor anticipates these fees and expenses to be no more than Ten Thousand United States Dollars (US$ 10,000) (the "Fee Estimate), provided that if such fees and expenses are in excess of the Fee Estimate as a result of unforeseen events, such excess shall also be borne by Borrower. Borrower shall pay at time of closing to Lender an origination fee equal to 2.5% of the loan amount. Deposit: A good faith deposit of Ten Thousand United States Dollars (US$ 10,000.00) (the "Deposit"), is payable upon execution of this Proposal Letter, and will be credited against the Lender Expenses associated with the loan. In the event that EFTA00592783 CMG Capital Group 4141 NE 2 Ave #204-A, Miami, FL 33137 Tel: the Deposit exceeds the Lender/Lease Expenses, such excess shall be returned to Borrower. This proposal letter does not set forth all the terms and conditions of the Loan/Lease offered herein. Rather, it is only an outline, in summary format, of the major points of understanding that will form the basis of the final documentation, which will be prepared by Lender/Lessor. The Borrower authorizes the Lender, to file UCC-1 and/or other financing statements covering the Collateral naming the Lender as secured party and the Borrower as the debtor, in all appropriate jurisdictions, together with any amendments, modifications and substitutions thereto to secure the obligations of the Borrower to the Lender contained herein and the cost, if any, incurred in collecting such obligations. This Proposal Letter is not and shall not be deemed to be a binding agreement by Lender to provide the loan as set forth herein. Such agreement will arise only upon the execution and delivery by the Borrower of definitive agreements satisfactory in form and substance to Lender and the fulfillment, to the satisfaction of Lender, of certain conditions precedent required by Lender and set forth therein. In the event the Borrower elects not to consummate the transactions contemplated hereby or the Borrower is unable for any reason to close the transaction in accordance with the terms and conditions of this letter on or before June 10, 2016, the terms of this Proposal Letter, other than Sections entitled "Confidentiality," "Transaction Expenses" and "Deposit," shall automatically terminate (unless extended in writing in Lenders discretion). If the above is acceptable to you, please sign and return to us the enclosed copy of this Proposal Letter no later than the close of business on June 2, 2016. Name: /4-4--ri SA-260Di Title: Merl EFTA00592784