AIRCRAFT LEASE AGREEMENT Effective September 20, 2007 Between CapitalineFlight Services, LLC (“Lessor”) And US BioEnergy Corporation (“Lessee”) Regarding Manufacturer’s Serial No: T20608758 FAA Registration Mark: N2451A
Effective September 20, 2007
Between
CapitalineFlight Services, LLC (“Lessor”)
And
US BioEnergy Corporation (“Lessee”)
Regarding
2007 Cessna T206H Turbo Stationair, Nav III
Manufacturer’s Serial No: T20608758
FAA Registration Xxxx: N2451A
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THIS AIRCRAFT LEASE AGREEMENT (the “Agreement”) is entered into this 2nd day of October,
2007, between, Capitaline Flight Services, 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 Inver Grove Heights, Minnesota (“Lessee”).
i. Operations. Lessee’s operations shall be conducted under Part 91 of the
Federal Aviation Regulations. In no event shall any revenue passengers or cargo be
permitted on board the Aircraft during any such flights.
ii. 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; provided that during each
reserved use by Lessor or other lessee of the Aircraft, Lessor or such other lessee, as
applicable, shall have possession command and operational control of the Aircraft.
“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
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exercise complete control over the phases of operation of the Aircraft requiring
aviation expertise for all flights under this Agreement.
iii. Flight Crew. Lessee shall be solely responsible for supplying a flight
crew for Lessee’s operations of the Aircraft, as Lessee’s expense. 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, and are qualified and approved under, Lessor’s insurance policies in
Section 8 of this Agreement.
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.
vi. Lessee and Lessor (or their authorized agents) shall execute certificates of
acceptance of delivery and acceptance of redelivery of the Aircraft prior to each use of
the Aircraft by Lessee and following redelivery of the Aircraft to Lessor after such use by
Lessee. Following each use by Lessee hereunder, the Aircraft shall be returned to the Base
of Operation by Lessee.
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foreign government related to Lessee’s use, possession, or lease of the Aircraft (collectively
“taxes”). Except as otherwise specified in Schedule 1 or any applicable invoice, neither the Rent
nor any other payments to be made by Lessee under this Agreement includes the amount of any such
taxes which may be assessed or levied by any taxing jurisdictions as a result of the lease of the
Aircraft to Lessee, or the use of the Aircraft by Lessee. Lessee shall be responsible for, shall
indemnify and hold harmless Lessor against, and shall remit to Lessor all such Taxes together with
each payment of Rent at the time required by applicable taw.
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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maintain the Aircraft in accordance with FAA regulations, as amended from time to time;
provided, however, Lessee shall be responsible and pay for any maintenance and repairs to the
Aircraft which are the result of misuse of the Aircraft by Lessee or otherwise occasioned by the
negligence or willful misconduct of Lessee, its employees, and guests. Lessor shall have no
expense or liability for repair or maintenance delays and shall not be liable to Lessee for any
damage from loss of profit or loss of use of Aircraft, either before or after delivery of Aircraft
to Lessee. Lessee shall clean the interior of the Aircraft after each use by Lessee. Lessee shall
promptly notify Lessor of any damage or required maintenance or repair of the Aircraft or the
performance of any such repair and maintenance.
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 to Lessee; or
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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.
i. Liability. The policies will insure liability for personal injuries, death
or property damages, arising or occasioned in any manner 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 named insured on said
policies.
ii. Hull Insurance. The policies will insure against the loss or damage from
any cause or causes to the Aircraft for not less than $500,000 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 and shall reimburse Lessor 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-
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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
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.
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REPRESENTATIONS SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF, AND OWNER DISCLAIMS
AND OPERATOR WAIVES, ALL OTHER REPRESENTATIONS OR WARRANTIES OF EVERY KIND WHATSOEVER, WHETHER
EXPRESS OR IMPLIED OR ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE, INCLUDING,
WITHOUT LIMITATION, REPRESENTATIONS OF AND WARRANTIES, WITH RESPECT TO THE AIRCRAFT, OF
AIRWORTHINESS, VALUE, CONDITION, DESIGN, MERCHANTABILITY, COMPLIANCE WITH SPECIFICATIONS,
CONSTRUCTION AND CONDITION, OPERATION, FITNESS FOR A PARTICULAR USE, ABSENCE OF LATENT AND OTHER
DEFECTS WHETHER OR NOT DISCOVERABLE, ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK OR
COPYRIGHT, AND QUALITY OF MATERIALS OR WORKMANSHIP. IN NO EVENT SHALL EITHER PARTY TO THIS
AGREEMENT BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, DAMAGES ARISING FROM LOSS OF USE, LOSS OF REVENUE OR
PROFIT.
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.
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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. LESSEE WILL CONTINUE AT ALL TIMES UNDER THIS LEASE TO MAINTAIN AND
INSPECT THE AIRCRAFT UNDER FAR PART 91 FOR ALL OPERATIONS TO BE CONDUCTED UNDER THIS LEASE.
b. LESSEE AGREES, CERTIFIES AND KNOWINGLY ACKNOWLEDGES 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.
c. 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.
LESSEE HEREBY ACKNOLWEDGES THIS TRUTH IN LEASING STATEMENT AND THAT LESSEE UNDERSTANDS THE
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL REGULATIONS.
Signature of Lessee: |
/s/ Xxxxxxx X. Xxxxxxxx | |||
Printed
Name of Lessee: |
Xxxxxxx X. Xxxxxxxx | |||
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IN WITNESS WHEREOF, the parties have entered into this Aircraft Lease Agreement on the date first
written above.
LESSOR:
|
LESSEE: | |||
Capitaline Flight Services, LLC
|
US BioEnergy Corporation | |||
/s/ Xxxxxx X. Xxxxx
|
/s/ Xxxxxxx X. Xxxxxxxx | |||
By: Xxxxxx X. Xxxxx
|
By: Xxxxxxx X. Xxxxxxxx | |||
Is: President
|
Its: Vice President, General Counsel and Corporate Secretary |
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Schedule 1
To Aircraft Lease Agreement dated October 2, 2007
Lease Payment
Lessee will pay monthly installments that equal:
Base Monthly Fee |
$ | 5,000.00 | ||
Hourly Charge for Use of Aircraft: |
$ | 125.00 |
Payments will be made on or before the 15th of each month.
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