Explanation of Bede Aircraft Dealership Program

Dear Sir,

You have expressed interest in receiving information on a Bede aircraft dealership. In response to that interest, we are pleased to offer the following explanation of our dealership philosophy.

The purpose is to provide a local sales outlet for Bede products and to provide a service center for customers desiring technical assistance in the building of their aircraft. It is expected also that the dealer would serve as a focal point of Bede activity in the area.

We are well aware of the value of strong and successful dealers and plan to locate dealerships in such a way that each dealer will be able to thrive and prosper by properly cultivating his area.

Sales assistance and technical assistance will be made available by the Bede company. A part of this sales assistance will be a program of national advertising and some of the technical assistance will be two week training course at the Newton, Kansas facility.

The dealer will market initially the BD-4 and BD-5 airplane packages, spare parts and accessories. Other products will be forthcoming and the dealer will be in a position to market these products as well.

We believe there is underway the beginning of a tremendous expansion in air sports and we feel the potential in this field is unlimited. Quite frankly we believe the Bede philosophy of providing a speedy, economical and safe airplane that the average person can afford has helped to inspire this expansion. We are first, we are ahead and know how to stay ahead, we expect a fine future for ourselves and our dealers.

We are actually offering a share in this future, at no cost to those who are prepared and who will work at it as we ourselves.

The following terms are intended to answer some basic questions you may have about the dealership:

There is no franchise or lump sum set-up fee. The investment required to become a dealer represents only the value of those items necessary for dealership. Items of initial dealership expense are:
- A minimum of one demonstrator airplane package, which may be the airplane he has on order, if any.
- 10% down payment on a minimum of 10 airplane packages.
- Assembly jigs to speed airplane assembly.
- Advertising literature and sales promotion material, etc.
It is expected this will represent total initial investment of approximately $6,000.
The dealer will be assigned an area, but not a protected territory of his own. Nor will he be restricted to his local area. He will receive an adequate territory, one in which he can grow and prosper without severe competition from another Bede dealer and this will remain so as long as the dealer properly attends to and cultivates business.
Service to customers will be an essential part of the dealer's business. The dealer will definitely be expected to render service as required to those customers he sells. Dealers will be performance-rated. A dealer who might show an interest only in selling would be dealt with appropriately.
Those selected as dealers will spend two weeks at Newton to receive instruction on the assembly of a BD-5. (Dealer will pay his own expenses.)
The dealer must have (own or lease) a place of business with adequate shop facilities to suit his area.
Dealer profit structure on sales of airplane packages and spare parts will be approximately 20%.
When a dealer is established in an area, the Bede company will not accept direct orders from customers in that area but will refer them to the local dealer. Those sales made direct to customers by the company where there is no local dealer yet established will be made at the prevailing standard retail price.
Sales to dealer will be on cash prior to shipment basis F.O.B. Newton, Kansas.
Dealership will be on a year-to-year basis.

If you are seriously interested in becoming a part of the Bede marketing team as a dealer, please answer the questions on the attached dealer information sheet and return it to me at the address below at your earliest convenience.

<signed>

Vic Oliver, Dept. of Marketing

Dealers

Mr. Edward B. Mahler, PO Box 57, Pittstown, NJ 08867

Mr. James B. Hammers, Mr. Keith T. Hinshaw, 1555 Cherry Ave, San Jose, CA 95125

Mr. E. A. Schroeder, 331 S. Phillips, Sioux Falls, SD 57102

Mr. Charles Brewer, 1504 Putnam St., Richland, WA 99352

Mr. Mark Anderson, Mr. Austin Belnap, 1399 S 7th St E Ste 9, Salt Lake City, UT 84105

Donald L. Winter, 3123 E Kirkwood Pl, Bay City, MI 48706

Mr. John Cartwright, 1319 Iowa Ave, York, NE 68467