AIRCRAFT LEASE AGREEMENT Effective March 1, 2006 Between Capitaline Advisors, LLC (“Lessor”) And US BioEnergy Corporation (“Lessee”) Regarding Cessna T182T Skylane Manufacturer’s Serial No: T18208421 FAA Registration Mark: N1485C
Exhibit 10.18
Effective March 1, 2006
Between
Capitaline Advisors, LLC (“Lessor”)
And
US BioEnergy Corporation (“Lessee”)
Regarding
Cessna T182T Skylane
Manufacturer’s Serial No: T18208421
FAA Registration Xxxx: N1485C
THIS AIRCRAFT LEASE AGREEMENT (the “Agreement”) is made and entered into effective as of the
1st day of March, 2006, between, Capitaline Advisors, LLC a South Dakota limited
liability company, with its principal office in Brookings, South Dakota (“Lessor”); and US
BioEnergy Corporation, a South Dakota corporation, with its principal office in Brookings, South
Dakota, (“Lessee”).
1. | LEASE; TERM |
(i) Dry Lease. The parties intend that this Agreement shall constitute a “dry”
operating lease. During each usage by Lessee, Lessee shall have possession, command, and
operational control over the Aircraft, aircrew and maintenance. “Operational control”
shall mean, consistent with 14 C.F.R. § 1.1 and FAA guidelines, the exercise of authority
over initiating, conducting, or terminating a flight. Lessee shall exercise complete control
over the phases of operation of the Aircraft requiring aviation expertise for all flights
under this Agreement.
(ii) Flight Crew. Lessee shall be solely responsible for supplying a flight
crew for Lessee’s operations. Lessee shall ensure that all flight crews (1) are FAA
certified and duly qualified to operate the Aircraft in accordance with all applicable laws
and regulations; and (2) meet the applicable requirements of Lessor’s insurance policies in
Section 8 of this Agreement.
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(iv) Pilot in Command. Lessor and Lessee acknowledge and agree that, contrary
provisions of Section 2 notwithstanding, (i) the pilot in command (“PIC”) of any flight, in
her or his sole discretion, my terminate the flight, refuse to commence the flight, or take
any other flight-related action which in her or his sole judgment is necessitated by
considerations of safety, (ii) the PIC of any flight shall have final and complete
authority to postpone or cancel the flight for any reason or condition which in his or her
judgment would compromise the safety of the flight, and (iii) no such action of the PIC
shall create or support any liability for loss, injury, damage, or delay to Lessor.
(v) Security Precautions. Lessee shall at all times use reasonable care and
diligence to maintain the security and safety of the Aircraft and to abide by applicable
security regulations and recommendations of the FAA, Department of Transportation, or local
airport authorities. Lessee shall secure or hangar the Aircraft at any time it is to be
unattended by Lessee or Lessee’s crew.
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accordance with Section 3(a).
5. | REGISTRATION |
Lessee undertakes that at all times under this Agreement it shall not do or allow to be done
anything whereby the registration of the Aircraft with the FAA may be forfeited or imperiled.
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7. | TERMINATION |
(i) In the event Lessee fails to pay Rent or other sums due under this
Agreement, and such failure is not corrected within 15 days after receipt by Lessee of
written notice by Lessor, or
(ii) In the event Lessee operates the Aircraft in a manner not permitted by Lessor’s
insurance or FAA rules or regulations, upon written notice; or
(iii) In the event Lessee fails to observe or fulfill any term, condition and/or
provision of this Agreement other than those specified in Sections 7(a)(i) or 7(a)(ii) and
such failure is not corrected within 30 days after receipt by Lessee of written notice from
Lessor.
(a} Insurance. Lessor shall provide insurance coverage related to Lessee’s
possession, use, maintenance and operations of the Aircraift, under policies in form and substance
and with insurers reasonably satisfactory to Lessee, as follows:
(i) Liability. The policies will insure liability for personal injuries, death
or property damages, or any one or more of them, arising or occasioned in any manner
occasioned by the acts or omissions of Lessor, Lessee, or others with respect to the
custody, operation or use of or with respect to said Aircraft in an amount not less than
$1,000,000 per occurrence relative to the personal injuries and/or death, and
relative to the property damage of others, all set within a single limit of coverage.
Lessee shall be an additional insured on said policies.
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(ii) Hull Insurance. The policies will insure against the loss or damage from
any cause or causes to the Aircraft for not less than $1,800,000 unless a different
value is agreed upon in writing between Lessee and Lessor. The policies shall be for the
benefit of Lessor with Lessor named as the sole loss payee. Any policies insuring against
the loss or damage to the Aircraft will provide a waiver of subrogation in favor of Lessee.
Lessee shall be responsible for the amount of the deductible, if any, if the damage to said
Aircraft is incurred during Lessee’s use hereunder. Such deductible will not exceed
$5,000 in motion or $2,000 not in motion unless agreed upon in writing
between Lessee and Lessor. Such policies need not include coverage against war risks.
(iii) Conditions. The policies shall also specifically grant approval for
all Lessee’s pilots that meet the requirements of the policies, including, without
limitation, pilots approved by the insurer and pilots that meet the requirements of any
“open pilot warranty” under the policy. Such insurance under this Section 8 shall be
primary, without any right of contribution from Lessee or any insurance maintained by
Lessee. Lessor’s insurance shall provide that any cancellation or substantive change in
coverage shall not be effective as to Lessee without written notice to Lessee from Lessor’s
insurer at least 10 days for cancellation due to nonpayment, 7 days for cancellation due to
war risks, or otherwise 30 days for any other change or cancellation.
(iv) Certificates of Insurance. Lessor shall deliver to Lessee a certificate
of insurance upon executive of this Agreement, as well as additional certificates from
time-to-time as requested by Lessee, but not less often than annually. Such certificate
shall include evidence of premiums paid and all policy amendments or endorsements necessary
to satisfy the requirements of this Section 8.
(i) Lessee is not and shall not be bound by any other agreements, restrictions, or
obligations which do or would in any way interfere with or be inconsistent with or be
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violated by this Agreement, nor shall Lessee assume any such obligations or
restrictions, which do or would in any way interfere with or be inconsistent with or be
violated by this Agreement.
(ii) Lessee has full authority to enter into and fulfill this Agreement and has taken
all steps and has done all acts required by applicable law to permit Lessee to enter into
and fulfill this Agreement and that upon execution, this Agreement shall become the legal,
valid and binding obligation of Lessee, enforceable in accordance with its terms.
10. | NOTICES |
All notices or other communications required under this Agreement shall be in writing and
shall be effective when delivered personally or deposited in the mail, postage prepaid, and
addressed to the parties at their respective addresses first written above, unless by such notice a
different party or address shall have been designated in writing.
11. | MISCELLANEOUS |
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12. | GOVERNING LAW |
This Agreement shall be governed by and interpreted in accordance with the laws of the State of
South Dakota (excluding its choice of law rules) and the United States of America.
13. | TRUTH IN LEASING |
TRUTH IN LEASING STATEMENT UNDER SECTION 91.23 OF THE FEDERAL AVIATION REGULATIONS.
(a) LESSOR HEREBY CERTIFIES THAT THE AIRCRAlCT HAS BEEN INSPECTED AND MAINTAINED FROM THE DATE OF
ITS DELIVERY TO LESSOR TO THE DATE OF THIS AGREEMENT IN ACCORDANCE WITH THE PROVISIONS OF FAR PART
135 AND ALL APPLICABLE REQUIREMENTS FOR THE MAINTENANCE AND INSPECTION THEREUNDER HAVE BEEN MET.
(b) LESSOR WILL XXXXXXX.XX AT ALL TIMES UNDER THIS LEASE TO MAINTAIN AND INSPECT THE AIRCRAFT UNDER
FAR PART 135 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.
(c) LESSOR AND LESSEE AGREE, CERTIFY AND KNOWINGLY ACKNOWLEDGE THAT WHEN THE AIRCRAFT IS OPERATED
UNDER THIS AGREEMENT, LESSEE SHALL BE KNOWN AS, CONSIDERED, AND SHALL IN FACT BE THE OPERATOR OF
THAT AIRCRAFT. LESSEE IS RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER THIS LEASE.
(d) THE PARTIES UNDERSTAND THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND
PERTINENT FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT STANDARDS
DISTRICT OFFICE.
(e) LESSEE IS RESPONSIBLE FOR COMPLYING WITH THE TRUTH IN LEASING REQUIREMENTS SET FORTH IN
SCHEDULE 2.
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LESSEE HEREBY ACKNOLWEDGES THIS TRUTH IN LEASING STATEMENT AND THAT HE OR SHE UNDERSTANDS THE
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL REGULATIONS.
Signature of Lessee:
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/s/ XXXXXX XXXXX
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Printed Name of Lessee: |
||||
IN WITNESS WHEREOF, the parties have entered into this Aircraft Lease Agreement on the date first
written above.
LESSOR:
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LESSEE: | |||
Capitaline Advisors, LLC
|
US BioEnergy Corporation | |||
/s/ XXXXXX X. XXXXX
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/s/ XXXXXX XXXXX
|
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Is: President
|
Its: Chief Executive Officer |
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Lease Payment
Lessee will pay monthly installments that equal:
Hourly Charge for Use of Aircraft: |
$ | 100.00 |
Payments will be made on or before the 15th of each month.
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