October 12, Lee County Procurement Management 1825 Hendry Street, 3 rd Floor Fort Myers, FL Re: LOI Dear Mr.

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1 October 12, 2012 Lee County Procurement Management 1825 Hendry Street, 3 rd Floor Fort Myers, FL Re: LOI Dear Mr. Franceschini: On behalf of Keystone Med-Flight, LLC, thank you for this opportunity to participate in this Request for Letters of Interest. Keystone Med-Flight has the experience and industry success to provide Lee County with a turnkey solution. Please find attached our response which includes several options whicht can be tailored to your specific needs and requirements. We believe that our ability to modify our program to your needs while also introducing the world class maintenance our sister company, Uniflight, LLC is known for, guarantees the successful re-instatement of your Medstar Program. Again, thank you for this opportunity. My team, led by Rick Hinkle, stands by to provide answers to any questions you may have and assist Lee County in this program. Sincerely, Paul C. Rayhill President, Keystone Med-Flight, LLC. 189A Twin County Road Morgantown PA

2 SOLICITATION NO.: LOI OFFICIAL LOI FORM DATE: TIME: 5:00 PM EDT Lee County Procurement Management P O Box 398 Ft. Myers Florida Gentlemen: 1. The Undersigned, hereinafter called "PROPOSER", having become familiar with the local conditions, nature and extent of the work, and having examined carefully the Request for LOI and having fulfilled their requirements, proposes to furnish all information necessary for the selection of the: LETTERS OF INTEREST PART 135 AIRCRAFT OPERATIONS MANAGEMENT PROGRAM This LOI shall remain in full force and effect for a period of 180 days after the time of the opening of this LOI and it shall not be revoked, withdrawn or canceled within that time frame. Once the Party has been notified that his/her LOI has been awarded by the Board of County Commissioners, within the above time frame the successful Party and the County will enter into a formal agreement regarding the project. 2. Acknowledgment is hereby made of receipt of the following Addenda issued during the LOI period: N/A Addendum No. Dated Addendum No. Dated This LOI is genuine and not collusive or a sham; the person, firm or corporation named therein has not colluded, conspired, connived or agreed directly or indirectly with any Party or person, firm or corporation, to submit a sham LOI, or that such other person, firm or corporation, shall refrain from proposing, and has not in any manner directly or indirectly, sought by agreement or collusion, or communication or conference with any person, firm or corporation, to fix the price of said LOI or LOI s of any other proposer, or to secure any advantage against the County or any person, firm or corporation interested in the proposed contract; all statements contained in the LOI or LOIs described above are true; and further, neither the undersigned, nor the person, firm or corporation named herein, has directly or indirectly submitted said LOI or the contents thereto, to any association or to any member or agent thereof.

3 In witness whereof, the Party has hereunto set his signature and affixed his seal this 12th day of October, ATTEST: By: Printed Rick Hinkle (Seal) By: Signature Title: Executive VP and Chief Marketing Officer Keystone Med-Flight LLC, wholly owned Company of Hawke Aerospace Group Company Name 189A Twin County Road Mailing Address Rick Hinkle Contact Person ext 3 Phone Number Morgantown, PA City, State, and Zip Fax Number rhinkle@keystonemedflight.com Page 3 of 25

4 189 A Twin County Road Morgantown Pennsylvania Phone: Response to Lee County MedStar Letter of Interest LOI Part 135 Aircraft Operations Management Program Page 4 of 25

5 Table of Contents I. Executive Summary... 5 II. Company Information... 6 A. Description of the Responding Organization... 6 B. Experience in Alternative Service Models C. Maintenance Operations D. Marketing Program/Market Share E. Safety Quality Management System F. Aviation Safety Record G. Personnel H. Training Programs K. Insurance Coverage L. Patient Billing and Collections IV Pricing of proposed Models F. Timeline G. Cost Benefit Exhibits: A. Hawke Aero Parent/Sub Ownership Structure B. Company Organizational Structure (KMF) C. Prior Customer References D. Current Customer & Business/Industry References Page 5 of 25

6 I. Executive Summary 1. Summary of Proposed Alternate Service Models Traditional Hybrid Model: Keystone Med-Flight, LLC (Keystone) will acquire or lease the Helicopter assets now held by LEE COUNTY and provide a turnkey agreement under industry traditional terms to MedStar. This program allows LEE COUNTY to maintain full control of the strategic /market plan, medical command and patient disposition as well as patient transport revenue. Alternative Model 1: Keystone acquires all of the aviation assets now held by LEE COUNTY and establishes a free standing air ambulance helicopter program or Community Base Model (CBM) and pays LEE COUNTY a fee for medical direction, medical crew and possibly for communication center activities. Alternative Model 2: Keystone manages Lee County s Part 135 Certificate and Aircraft and then provides all of the services on a management only program. Alternative Model 3: Keystone provides flight operations management as shown in any of the models above as well as leasing space at the Page Field facility and will create a new Part 145 FAA Repair Station under our Brand UNIFLIGHT hiring new employees within the county. 2. Distinguishing Features of the Keystone Response: All of our proposals offer LEE COUNTY the value of Keystone purchasing the aviation assets from LEE COUNTY and allowing LEE COUNTY everything from partial or shared control of the air ambulance system up to full and continuing control. Keystone s proposals offer much flexibility to LEE COUNTY and if allowed to set up a Part 145 at Page Field also creates new jobs for Lee County. 3. Elements of Differentiation pertaining to the Keystone Offering The value differentiator is Keystone s philosophy regarding air ambulance systems. We are completely dedicated to the belief that the best system is one of a partnership with a tertiary medical service provider. We know how to best operate and maintain helicopters; LEE COUNTY knows what is best for their patients in regards to medical services. We believe that we should stick to our individual areas of expertise. We, therefore, are dedicated and loyal partners in an air medical transport system. Keystone s sister company is the well-known and much respected maintenance company, Uniflight, LLC. Uniflight is a Platinum Level Bell Helicopter Customer Service Facility and an Emerald Eurocopter Customer Support Facility. A central core aspect of Uniflight s business strategy focuses on identifying new geographic opportunities for expansion. In the past two years, Uniflight has aggressively expanded and established operations in the Northeast, Page 6 of 25

7 adding three locations across Pennsylvania and New York. The next area identified for expansion is Florida. This will be an opportunity for Lee County to tout excellent job creation 4. Why is KMF the best long-term choice for LEE COUNTY in an alternative service model? Keystone was founded on the belief that the large operators of helicopters, both in hospital based systems and community based systems, have all gotten so large they are now at a point where they are stretched to the absolute limit logistically and always at the limit for solid operational control. Their attention and focus on any one customer or geographic area is so stretched that they must develop their processes around themselves and not around their customers; sort of a one size must fit all mentality. We believe in providing individual attention and not being outside our logistical capabilities. We have developed our systems, processes and network around the concept of being local to our customers. We achieve this with our strategy of dovetailing flight operations, Keystone, with maintenance operations, Uniflight. Our parent Corporation is a company that is heavily invested in Aerospace Logistics and Services Distribution through a network of companies strategically located throughout the country and also believes in Keystone s basic be local philosophy. II. Responding Company Information A. Description of the Responding Organization Company Information Keystone Med-Flight LLC 189 A Twin County Road Morgantown, Pa info@keystonemedflight.com Phone: Federal EIN: A wholly owned subsidiary of Hawke Aerospace Group LP info@hawkeaerospace.com 1. There have been no certificate actions against the Keystone Med-Flight Air Taxi (FAA Part 135) Certificate. 2. Keystone Med-Flight LLC ( Keystone ) is a Delaware Limited Liability Company. 3. Keystone is a wholly owned subsidiary of Hawke Aerospace Group, a Morgantown, PAbased helicopter services holding company in which the original founders of Keystone are Page 7 of 25

8 not only management, but also investors and owners. Hawke Aerospace was formed to focus on growing a combined set of high quality, customer-service oriented business lines serving the rotorcraft market and its end-user customers. With its niche specialization in the Rotorcraft segment of the aerospace industry, Hawke Aerospace seeks to develop the market leader providing a diversified set of rotorcraft services, including MRO and flight services, both HEMS and non-ems. Through Hawke Aerospace, Keystone is able to access necessary capital and other general and administrative functions in order to allow Keystone to focus solely on rebuilding its historical customer relationships by offering an alternative to that presented by the current mainstream operators. Keystone is managed by one of the most experienced teams in the industry who together have more than 100 years of experience at senior management levels within the air medical industry. We also enjoy the highly praised and expert logistics and depot level maintenance offered through our sister company Uniflight, LLC. Uniflight is a network of FAA Certified Repair Stations located in Grand Prairie, Texas (adjacent to American Eurocopter); Rome, NY; Reading, PA and Belle Vernon, PA (Rostraver Airport). Uniflight is one of only four USbased Bell Platinum Customer Service Facilities and an Emerald-rated Eurocopter Service Center. Our Pennsylvania based facilities specialize in the refurbishment, general maintenance and repair of the BK117, EC145, EC135, AS365N, AS355, AS350 and BO-105 Helicopter models and also the Agusta Westland A109E and A119 Helicopters. Principals of Keystone Med-Flight: Joseph Hawke, Chairman and CEO, Hawke Aerospace jhawke@hawkeaerospace.com Rick Hinkle, Executive VP & Chief Marketing Officer, Hawke Aerospace rhinkle@hawkeaerospace.com Paul Rayhill, President, Keystone Med-Flight prayhill@keystonemedflight.com Jack Hustwit, Vice President, Safety and Flight Operations, Keystone Med-Flight jhustwit@keystonemedflight.com Steve Weinert, Vice President, Maintenance, Keystone Med-Flight sweinert@keystonemedflight.com The following personnel will serve you on a daily basis: Rick Hinkle, Hawke Aerospace Rick Hinkle has been involved in the rotorcraft industry for over thirty years. He spent twentythree years at Keystone Helicopter Corporation with 10 years as their Vice President of Sales and Business Development. He was Keystone s first Vice President and General Manager of the corporation s Air Medical Flight Services Division where he was personally involved in obtaining agreements with all of their Hospital contracts. This included Allegheny General Hospital, Page 8 of 25

9 Geisinger Medical Center, Boston Med-Flight, Cleveland MetroHealth, Cleveland Clinic, Hershey Medical Center and Hahnemann University. He was also instrumental in developing Keystone s Aircraft Modification Center (later sold to Sikorsky Aircraft Corp) and numerous firsts we take for granted in our industry today, such as the use of Liquid Oxygen in medical helicopters, modularized medical interiors, and pivoting litter bases. Rick is a Penn State University graduate and served for ten years in the U.S. Army as a pilot and a commissioned officer holding numerous command and staff positions. He has attended the HAI Helicopter Management Course and is active in numerous industry associations. Rick is primarily responsible for Contracts Management and Financial matters. Paul Rayhill, President 25 years rotorcraft experience: Naval Academy Graduate; Navy Pilot; Owner/Operator of ASU. Prior to merging ASU with Hawke Aerospace Group, Paul spent 14 years as the President of Aviation Services Unlimited (ASU), Inc., which he acquired in ASU is one of the oldest, best established and continuously operating rotorcraft fleet operators in the Northeastern U.S., providing air taxi flight operations since Originally based in Oriskany, New York, Paul relocated the business to Griffiss International Airport in Rome, New York in ASU's flight services consist of utility powerline and gas line patrols for the largest utilities in New York State and New England, as well as outsourced law enforcement agency support and Part 135 Charter and Aerial Film/Photography services. Under Mr. Rayhill's leadership, ASU grew helicopter operations by 300%, added FAA Part 133 External Load and Part 145 Repair Station Certificates, provided Large Fleet Acquisition Consulting and Analysis, and became an Authorized Bell Helicopter/Textron Customer Service Facility (CSF). Mr. Rayhill began his aviation career in the United States Navy as a Naval Aviator flying various helicopter platforms including the CH-46, UH-3 and TH-57. He holds Commercial Instrument Fixed and Rotary Wing Ratings. Mr. Rayhill obtained an MS in Engineering from the United States Naval Academy, Annapolis, Maryland. He is a veteran of Operations Southern Watch, Enduring Freedom and Iraqi Freedom. He is also a US Naval Academy Blue Gold Officer. Jack Hustwit, Vice-President, Safety and Flight Operations Jack Hustwit has an extensive and diverse aviation background that includes experience in the military and the Air Medical Industry. Jack s experience in the air medical business ranges from line pilot, contract site safety director, base manager, regional manager, Director of Operations, and Director of Safety. Most recently, Jack was Director of Operations and Safety at Era Med (Seacor Holdings). Jack also currently holds a leadership position within the Air Medical Page 9 of 25

10 Community. He is a Certified Medical Transport Executive, having completed the undergraduate portion of Medical Transport Leadership Institute (MTLI) as well as Graduate Recertification. He is a founding member of the Air Medical Safety Advisory Council (AMSAC) and has been a continuous participant since its inception. His AMSAC duties include chairing the subcommittee on Air Medical Resource Management and teaching the Train the Trainer Course at the industry s prime event the Air Medical Transport Conference (AMTC) each year. He is a member of the Association of Air Medical Services (AAMS) Research Committee and has presented at both the AMTC and the AAMS Midyear Conferences. In 2005, Jack established the Pilot Safety Subcommittee of the AAMS Research Committee and, together with three other researchers, conducted a nationwide pilot safety survey which netted responses from close to one-third of the active EMS Pilots in North America. Findings from the survey were reported at the 2006 AAMS Midyear Conference and AMTC He is the co-author of a published article on industry safety issues in The Air Medical Journal. Jack is also the Director of Operations for Keystone Med Flight. Steve Weinert, Vice-President, Maintenance and Resource Management Steve Weinert has well over thirty years of maintenance management experience. His extensive background includes everything from being the Owner/President of his own consulting company, Chief Operating Officer of LifePort Corporation, to Director of Maintenance for several large helicopter operators. He was the Director of Maintenance for Air Methods Corporation (now the largest air medical vendor in the US) and most recently the Director of Maintenance for Keystone Flight Services and Era Med. His experience includes setting up and operating maintenance and overhaul shops, certified repair stations, inspection departments, inventory management, and record keeping, as well as close liaison with the FAA. An Air Medical operation requires a constant vigil on maintenance for safety and regulatory compliance. One mistake can cause not only millions of dollars but, most importantly, lives! Steve takes this responsibility very seriously and uses his years of experience to keep a fleet safe at all times and ready to go. Steve is also the Director of Maintenance for Keystone Med Flight. Heidi Ames, Chief Pilot Heidi is an aviation professional with over 20 years of experience in flight operations management for both commercial air medical companies and the Military. Heidi was most recently the South East Regional Manager and Pilot Hiring Manager for Med-Trans Corporation and was also responsible for the management of 44 helicopter pilots across 11 air medical bases in the Southeastern United States. Heidi began her aviation career in the United States Army in 1991 upon graduating as a Distinguished Military Graduate from the University of Alabama where she attended on a US Army Scholarship. Heidi also served as an officer in the Georgia National Guard and as a Civilian Multi National Force Observer in Egypt. Page 10 of 25

11 4. Organization Chart See Exhibits A & B. B. Experience in Alternative Service Models Keystone Med-Flight LLC was founded in 2010 by four individuals who observed that a gap had developed in the marketplace between what is offered by the mainstream commercial helicopter operators and, in many cases, what is actually desired by numerous hospital customers. That gap can be characterized as a lack of management attention to the program and operations and a level of inflexibility or unwillingness to tailor the program to the specific needs of the customer. By contrast, Keystone Med-Flight is committed to bridging this gap and providing each program with a customized solution that suits the customer s needs and marrying that with a high-level of senior management attention. Every member of the senior management of Keystone individually has more than 25 years of managing commercial helicopter operations with the majority of that time spent in Air Medical Transport (AMT). Most of the managers were the same team responsible for the creation, management of and ownership of P&L responsibility for Keystone Helicopter Corporation s Air Medical Flight Division and subsequently for EraMed LLC. (EraMed was the company that purchased the Air Medical Flight Division assets from Keystone Helicopter following its acquisition by Sikorsky Aircraft Corporation). Therefore, although Keystone Med-Flight, LLC is a relatively new company (formed in 2010), the Company s principals are certainly not industry neophytes. While at Keystone Helicopter, our current management team established and managed Traditional Hybrid operations at the following institutions: 1. Conemaugh Memorial Hospital s MedStar program a. Two (2) BK117s: 1 SPIFR,1 SPVFR only (later 2-EC135s VFR) b. Hospital s Med Crew and Medical Direction paid for by Keystone Helicopter c. Communications from a Keystone operated Center d. Third Party Billing via an outsourced agency e. Performed On Scene, Neonatal and Intra-aortic balloon pump (IABP) transports 2. Wellmont Health System Page 11 of 25

12 a. One (1) BK117 SPVFR only b. Hospital s Med Crew and Medical Direction paid for by Keystone Helicopter c. Communications from a Keystone-operated Center d. Third Party Billing via an outsourced agency e. Performed scene calls and traditional inter hospital transfers 3. The Cleveland Clinic a. Four (4) S76A++ s all DPIFR (PIC+SIC) b. Hospital s Med Crew and Medical Direction paid for on a flat rate fee per shift hour c. Communications from a Keystone-operated Center d. Performed inter-facility transfers only 1. Intra-aortic balloon pump (IABP) 2. Neonatal 3. Extracorporeal Membrane Oxygenation (ECMO) e. Third Party Billing via an outsourced agency f. Era Helicopters lost this program after our management team left the company All of these programs were managed in cooperation with the clinical management teams employed by the individual hospitals. C. Fleet Maintenance Program Keystone will manage and administer maintenance services to maintain aircraft availability and uptime with its direct aircraft maintenance technicians (mechanics) assigned on-site at the current MedStar bases and through our sister company Uniflight s regional maintenance centers. We maximize in-service time by minimizing turn-around-time and on a cost effective basis. All of these centers perform depot level avionics, sheet metal and back shop support as well as heavy maintenance on all Agusta, Bell, Eurocopter products as well as the MD900 series of aircraft. These centers are used by most of the large air operators, including Air Methods (and formerly Omniflight), Air Medical Resource Group, Air Evac Lifeteam, MedTrans and others. Furthermore, we will use the services of Uniflight s flagship maintenance depot location in Grand Prairie, Texas for supplementary support, parts procurement and logistics support, overhaul and repair and other back shop capabilities that are available on-site at that location, which is right next door to American Eurocopter (AEC), the U.S. headquarters of Eurocopter, and twenty-minutes by car to both Bell Helicopter and AEC s local parts warehouses. Our Philadelphia Area Facility is within driving distance of Agusta Aerospace. As a consequence, Uniflight is generally able to provide next day delivery or even counter-to-counter from DFW and PHL of AOG parts, assuming the OEM has them in stock. For this reason, Uniflight is very well regarded both nationally and internationally Page 12 of 25

13 for its parts distribution and logistics support capabilities throughout the rotary wing industry. a. Like our sister company Uniflight, Keystone maintains its own very strong associations and longtime relationships with most of the manufacturers in the aerospace industry. b. These organizations include: 1. Agusta Westland 2. Ahlers Night Vision 3. Aviall 4. ASU Night Vision Technologies 5. Cadorath 6. Eurocopter 7. Garmin 8. Intermountain Turbine Corporation (LTS101 overhaul and repair ) 9. Leading Edge Technologies (composite manufacturing and repair) 10. Pratt and Whitney Canada (PW206 series repair and overhaul) 11. Rolls Royce Engine Company 12. Spectrum Aeromed (Medical Interior Kits) 13. Standard Aero (Rolls Royce overhaul and repair) 14. SureFlight LLC (Upholstery and Paint) 15. Turbomeca Engine Company to name just a few! a. Maintenance Scheduling Our Vice President of Maintenance and Director of Maintenance use the AMS Maintenance Tracking software system. All aircraft log sheets displaying flight time, maintenance performed and any parts / component changes are recorded daily and stored in the Cloud on the AMS database. This information is made available to the relevant Uniflight Part 145 Repair Station that is providing primary heavy maintenance support. Communication between Uniflight and our assigned Maintenance Manager ensures: 1. Both your staff and ours are kept informed of scheduled maintenance far in advance 2. Maintenance is planned and performed in a manner that minimizes out of service time. b. Keystone will implement an Approved Aircraft Inspection Program (AAIP) as an alternative to the OEM s inspection program if we determine that it will work more effectively for the MedStar mission profile. Page 13 of 25

14 D. Marketing Program /Market Share 1. The sales and marketing function at Hawke Aerospace is led by Rick Hinkle, Chief Marketing Officer, who has been a sales and marketing executive within the air medical industry for nearly thirty years. Rick manages and leads the sales and marketing team across all lines of business, including Keystone, Uniflight, and ASU. Rick is supported by Dave Oglesbee, another seasoned executive in the industry, who, after retiring as the Chief Pilot in charge of Florida s Fish and Wildlife Law Enforcement fleet, began selling into the same market on behalf of several of the aircraft OEMs for many years. Another of the experienced sales executives on the Hawke Aerospace team is Dave Cramer, who is based in the Pittsburgh metropolitan area. We also recognize that the new program format will place an increased level of responsibility on the program vendor to create and generate flight volume. We believe we can do that very effectively by bringing on additional resources that have had significant experience with marketing to referral resources. In addition, we would hasten to add that LEE COUNTY has a remarkably excellent record in its own right for outreach programs to referral sources, and we would absolutely want to join forces or depending on the ultimate program format would consider directly hiring members of the current LEE COUNTY marketing team, subject to mutual agreement with our doing so, to spearhead the marketing specifically for this program going forward. 2. In our experience with numerous programs and a variety of bases both at the prior Keystone, as well as with other air medical transportation companies, the typical minimum flight volume to justify a program is at least 30 flights per month. Certainly, this is only a rule of thumb, and the payer mix and costs of the operation can vary this result. 3. Keystone does not have any covenants not to compete, nor is it subject to other contractual covenants or restrictions on its ability to operate within the air medical transportation industry. E. Safety Quality Management System Keystone treats management of safety issues on a parallel with its other Quality Management Practices. In order to accomplish this task it has installed a Safety Quality Management System that exceeds the requirements of Federal Aviation Administration Advisory Circular AC A copy of the Safety Quality Management System Manual is required reading for all Keystone employees and is placed in the Pilot Quarters of each Base Site. This manual is available for your review at any time. Highlights of the SQMS are as follows: a. An Internal Evaluation Program (IEP) Page 14 of 25

15 The Keystone Med-Flight Safety Management System requires an Internal Evaluation Program which consists of: a. Audits, by an external consulting company, of all Keystone Safety Policies and Practices, every two years. b. Internal Audits of each Keystone Contract every two years, opposite the years in which the above external audit is conducted. c. Internal Audits and FOD inspections, conducted by trained Keystone Safety Pilots and Mechanics, each quarter. d. Regular recorded site visits by Keystone Managers. b. Risk Assessment Tools Keystone provides several levels of Risk Assessment Tools to determine the severity and probability of risks involved in day-to-day operations, special operations and management of change. a. Day-to-Day Risk Management: Each Keystone Captain is required to fill out a Mission Risk Assessment at the beginning of each shift and prior to each mission when conditions change. b. Special Operations: A lengthier Risk Management Tool is required for special operations such as PR Flights, training flights and aerial search missions. c. Management of Change: When the program contemplates a major change in operations such as employing a new airframe, beginning NVG Operations, or opening a new Base Site, a Management of Change Process is required. The Management of Change Process involves a series of Risk Matrices to be executed by all stake holders in the change, i.e., Director of Operations, DOM, Chief Pilot, appropriate Contract Management representatives, etc. The Risk Assessment Tools all use a common methodology: measure the risk in terms of severity and probability, determine the level of acceptable risk exposure, attempt to mitigate the risk to an acceptable level, make a Go/No-Go decision. Risk Assessment Tools may be found in the Keystone General Operations Manual or in the Keystone SQMS Manual. c. A No-Fault Reporting System All Keystone Employees are required to report any near miss, aircraft incident, accident, personal injury, or environmental event and are encouraged to make suggestions to improve the Safety Management System. This is accomplished by use of the HAI safety reporting software. Employees may make anonymous reports if they so desire. It is the overall philosophy of Keystone that safety practices, policies and shortcomings must be measurable in order to be managed. Therefore, a scientific method is required. By utilization of standardized measurement and analyses processes, we can improve on Page 15 of 25

16 the stellar safety record of the experienced managers in the company who exercise Operational Control over all ground and air activities and share safety decisions with our customers. d. Personnel Safety Reviews Keystone conducts annual safety reviews for all on-site personnel and will consult with the LEE COUNTY administration for additional input on Keystone employee performance. The standards of operating procedures and suitability in performance of assigned duties are stressed in addition to the normal, on-going responsibilities. Keystone wants to insure that all personnel meet the safety standards demanded by the complex operating environment of aero medical flight. F. Aviation Safety Record Keystone is a very new company with a seasoned management team. We have had no accidents or incidents since our inception and have won the HAI Safety award for 2010 and While together at Keystone Helicopter Corporation and EraMed for 12 years, this same management team had no accidents and incidents. G. Labor collective bargaining agreements Hawke Aerospace, Uniflight and Keystone do not have any collective bargaining agreements. We have never experienced work stoppages due to any labor disputes or any other labor related actions. H. Personnel Information 1. Minimum Requirements/Qualifications for Pilots See Section I (Training) below a. Current Scheduling Policies and Staffing Patterns for Pilots Keystone Schedules pilots on a 7shifts on /7 shifts off basis. If a pilot works more than a 7 shift period or is called in during the pilot s off period, the pilot receives pay at our work over rate (1.5X normal rate). Keystone prefers not to schedule pilots for more than 8 consecutive shifts and attempts to back fill pilot absences with per diem pilots and the Chief Pilot when possible. b. Minimum Requirements/Qualifications for Mechanics See Section I (Training) below c. Current Scheduling Policies and Staffing Patterns for Mechanics Keystone s Maintenance Staff are on call for their respective base site on a 24hours/day basis. When working more than a 40 hour week they receive OT at 1.5Xtimes their normal rate. They receive a weekend per month off call and the requirement is filled by either our staff maintenance technicians at our sister company Uniflight. Page 16 of 25

17 2. Medical Personnel a. Keystone currently does not employ any medical services personnel. It has always been our management team s philosophy that the transport program is better served by having a partner that has the depth and experience providing medical services as we are specialists in providing high quality, safe and effective flight services and aircraft maintenance. b. MedStar has many years of air medical experience and we would be honored to work with their team as a true partner. I. Training Programs 1. Pilot prerequisites and training: The pilot training and qualifications outlined in the Code of Federal Regulations (CFR) Title 14: Aeronautics and Space, Subpart FAR are the minimum requirements for Keystone pilots. Additionally the FAA certifies our Operations Manual which further describes all specific and additional training. This is a partial list of items in our training manual. 2. Pilot in Command (PIC) initial qualification a. PlC with minimum of 1500 hr. experience, more than 2000 Hours preferred b. 20 hr. in type or be able to demonstrate capabilities of an individual with 20 hr. in type to VP Operations and/or Chief Pilot c. 100 hours of actual and simulated instrument ; 50 hr. actual instrument preferred d. ATP & EMS experience preferred e. FAA commercial rotorcraft certification rating with helicopter instrument qualifications. f. Pilots have demonstrated proficiency in the aircraft prior to mission assignment. g. All Pilots have demonstrated a high degree of aptitude for air medical mission demands. h. Pilots reside within reasonable commuting distance of the base of operations. i. Pilots are qualified and licensed as required by applicable state and federal laws and regulations, as well as any additional requirements of the final agreement. j. All pilots are required to meet our FAA approved drug and alcohol regulations and are subject to random urinalysis selection by our administrative office. k. All pilots have their medical certificate date on computer record at Keystone Med- Flight Service s head office and they receive 30 day notice of their required physical and certificate update. If they do not send their certificate update to Keystone Med-Flight Services by the expiration, the pilot is grounded without pay until the situation is resolved. l. Our customer/ partners have the right to approve all pilots and mechanics. The schedules are seven days on/seven days off with 12 hour shifts. We can be flexible, but we prefer not to have the pilots work over eight days in a row. 3. Site manager: Same as PIC, but additionally: a. Minimum 3,000 PlC hours; ATP & EMS experience preferred or Page 17 of 25

18 b. Minimum 3 years experience as A&P on an air medical contract 4. Initial Training a. Pilots receive over thirty hours classroom and computer training on required FAA topics b. Fourteen hours initial aircraft ground school training c. Four to eight hours of VFR Initial Training d. Inadvertent IMC Training e. Up to ten hours IFR initial training f. Training may be adjusted by the Chief Pilot or Director of Operations based on prior EMS and aircraft experience 5. Annual Recurrent Training a. Minimum of 10 hours of in-flight + ground training each year plus two check rides b. All check rides include Unusual Attitude Recovery and inadvertent IMC c. Training is uniquely scenario based which is intended to enhance the pilot s Aeronautical Decision Making and build good CRM technique d. Annual Aircraft Safety Awareness (ASAT) Training e. Annual Performance Review Initial Aircraft Maintenance Technician (Mechanics) Qualifications a. Minimum of 3 years experience as an AMT b. Factory or equivalent training/experience on type aircraft operated for the Hospital c. Factory or equivalent training/experience on engine type operated for the Hospital d. Recurrent training is as required by the Director of Maintenance e. Annual Performance Review J. Insurance Keystone Med-Flight Services maintains Hull Insurance in an amount not less than the stipulated loss value required in lease contract or a mutually agreed value (with finance source or customer owned aircraft) or FMV on all Hawke owned aircraft ; cargo, uninstalled equipment and baggage liability as respects contents of the helicopters up to a total value of $100,000; Aircraft Liability Insurance of at least $50,000,000 combined single limit as respects both ground and flight; at least $50,000,000 general Liability in regards to Hangar operations (hangar keepers), product liability and completion insurance and Workers Compensation Insurance, including Employer's Liability Insurance, complying with the laws of the various states as may be required for Keystone employees. K. Patient Billing and Collections 1. Our team outsources to transport patient account service experts. We would utilize either MD Recoveries, Inc. ( or Golden Hour ( as the two most experienced and professional of the transport billing services available. Page 18 of 25

19 2. Keystone does not have the current need for a regional or a national patient charge master but would work with one of our contracted services to acquire or develop a solution. 3. Our parent corporation utilizes several collection services depending on the subsidiaries particular product/service area. The decision to turn over a receivable to a given collection agency is based upon protocols our CFO establishes either in coordination with the subsidiary s president or, in the case of air medical transport billing, in partnership with the partner and the outside account services company. Page 19 of 25

20 IV. Pricing of Proposed Models A. Hybrid Traditional Model Keystone s vision of the hybrid model is to provide LEE COUNTY with continued definitive control of the service while being able to gain greater control of expenses in order to enhance program profitability. Our vision for this program is to help LEE COUNTY have a competitive program that ensures regional market control and control of patient disposition. Our view, interpretation and experience with the Traditional Hybrid Model have been as follows: 1. All aircraft, pilots, related flight operations (maintenance, insurance) provided by Keystone for a fee; 2. Med Crew and Medical Direction provided by Hospital, with payments made to Hospital by Keystone Helicopter; 3. Communications center paid for through reimbursement to the County. 4. Third Party Billing either done by Hospital or contracted and administered by Keystone via an outsourced agency, in which case Hospital is charged a collectionsbased fee. B. Hybrid Traditional Contract with a twist (Alternative Model 1) 1. Keystone would acquire LEE COUNTY s current fleet of helicopters and aviation assets or leases aircraft from Lee County (Negotiable) 2. Keystone contracts with an outsourced Patient Account Services company. 3. Keystone provides turnkey aviation management services as follows 1) 4 pilots per base site 2) 1 FT Aviation Manager 3) 1 FT Maintenance Technician per primary aircraft 4. Keystone via the outsourced patient accounts service would direct all reimbursements to LEE COUNTY. 5. Fixed fees to include management, overhead and administrative fees of $35,000 would be charged to LEE COUNTY and due first of each month 6. If Applicable, aircraft leases at a monthly LRF of 1.35 X aircraft value ( this could also apply if the County wanted new aircraft) 7. Pilot and Mechanic Salaries at actual salaries plus 50% for fringes, taxes and back up. 8. Commercial Insurance at 2.75% of Hull Values (valid until December 2012) 9. Variable Fee per Flight Hour to cover all aircraft maintenance costs: $1200/flight hour for the Bell 430 and $750/flight hour for the BO105 Page 20 of 25

21 C. Benefits of Hybrid Traditional Model 1. Predictable Cost 2. LEE COUNTY continues to collect revenue from flight volume as Provider and Air Ambulance Certificate Holder. 3. LEE COUNTY could receive an equity payoff on existing fleet of helicopters and have no further direct or fiduciary responsibility for the equipment or maintain equity and lease the aircraft to Keystone on a FMV basis. D. Alternative Model 2 1. Keystone manages Lee County s Part 135 Certificate and Aircraft and then provides all of the services on a management services fee only program. This is the simplest and quickest route to getting back in service. 2. Monthly Fee of $25000 with any over and above expenses paid by Keystone on behalf of the county passed through and invoiced to the county at Keystone s cost. E. Alternative Model 3: 1. Keystone provides flight operations management as shown in any of the models above as well as leasing space at the Page Field facility and will create a new Part 145 FAA Repair Station under our Brand UNIFLIGHT hiring new employees within the county. 2. The lease can be an operational offset to the flight management fees. F. Timeline 1. Hybrid Traditional : can be in operation within 90 Days from date of Award and Contract execution 2. Model 2 : Can be in operation within 30 days from date of Award and Contract execution 3. Model 3 would be simultaneous with either above models. G. Cost Benefit Analysis 1. Any of the models will provide the County with Patient Transport Revenue via third party payers. 2. Allowing the use of the Hangar facility for Uniflight will provide rent revenue (to be negotiated ) to the county 3. Improved aircraft readiness will be seen due to onsite maintenance 4. Possibly revenue from the sale of the current aircraft ($1mill Possible) 5. New employee base through Uniflight and Keystone. Page 21 of 25

22 Exhibit A Page 22 of 25

23 Exhibit B: Company Organizational Structure within Keystone Paul Rayhill President Donna Miklas Accounting Flight Ops. Jack Hustwit VP Operations and Safety Heidi Ames Chief Pilot Steve Weinert VP Maintenance Site Manager Field Maintenance Techniciams Aircraft Records Maintenance Scheduling Uniflight LLC Reading, PA Operations Line Pilots Safety Officer Page 23 of 25

24 Exhibit C: Example of Prior Customers for References Boston Med Flight NEW ENGLAND LIFE FLIGHT, INC. Robins Street, Hangar 1727 Bedford, MA Business Manager Maura Hughes (781) Medical Director Dr. Suzanne Wedel (781) Conemaugh Med Star CONEMAUGH VALLEY MEMORIAL HOSPITAL 1086 Franklin Street Johnstown, PA Program Director Storm Nagel (814) LifeFlight ALLEGHENY GENERAL HOSPITAL 320 East North Avenue Pittsburgh, PA Program Director Kathy Fackovec (412) Dir. of Operations Jim Palafoutus (412) Geisinger Life Flight GEISINGER MEDICAL CENTER North Academy Avenue Danville, PA Program Director Jerry Splitt (717) Hospital VP Tom Weir (570) Page 24 of 25

25 Exhibit D: Current Customer and Business/Industry References Hahnemann University Hospital MidAtlantic Medevac Broad & Vine Streets Mail Stop 993, Philadelphia, PA Hal Spatz, Director of Medical Transportation Phone: Mike Richardson Director of Marketing, Eurocopter (972) , Anthony DiNota Vice President-Commercial Sales, Marketing & Customer Support (972) , Robert Brant Sr. VP Business Development, Agusta Westland (215) , Dr. Robert Budica - Chairman Emeritus, Agusta Aerospace Corp. sailawave@aol.com Russ Spray - President, Turbomeca Corporation (972) , russ.spray@turbomeca.com Steve Townes - Chairman, Ranger Aerospace stownes@rangeraerospace.com More references are available upon request. Page 25 of 25