aircraftjointownershipag






DocuSign Envelope ID: 1F6DFE32-CC17-4D15-AB49-43340C5484BD                              AIRCRAFT JOINT OWNERSHIP AGREEMENT                                      CITATION XLS s/n 560-5597                                                                     THIS AIRCRAFT JOINT OWNERSHIP AGREEMENT (the "Agreement") is made            and entered into as of the 1st day of January, 2019 (“Effective Date”), by and between National            Education Loan Network, Inc. ("Nelnet"), and MSD711, LLC (“MSD”), (Nelnet and MSD being            referred to herein individually as a “Joint Owner” and collectively as the "Joint Owners") and            Michael S. Dunlap, as Lessee and operator (“Dunlap”).                              A.    Joint  Owners  are  the  registered  joint  owners,  as  tenants  in  common  in  the            proportions provided for herein, of that certain Cessna Citation XLS model aircraft, Serial No.            560-5597, U.S. Registration No. N711LV (as such number may be amended from time to time)            (the “Aircraft”).                              B.    Joint Owners now wish to enter into an agreement pursuant to the provisions of            Section 91.501 of the Federal Aviation Regulations for the use, operation and maintenance of the            Aircraft and for the allocation of the costs associated therewith.                              NOW,  THEREFORE,    in  consideration  of  the  premises  and  of  the  mutual  covenants            contained herein, and intending to be legally bound hereby, the parties agree as follows:                              1.    Joint Ownership.                                    (a)   Allocation.   Notwithstanding  the  designation  of  any  Joint  Owner  as  a            registered joint owner of the Aircraft on the records of the Federal Aviation Administration, the            parties agree that all of their respective rights and obligations with respect to the Aircraft shall be            determined solely and entirely by the terms of this Agreement.  Each of the Joint Owners is the            owner, as a tenant in common, of the following undivided interest in the Aircraft (such interest            being referred to herein as the “Ownership Percentage”):                                    Nelnet            82.5%                                     MSD               17.5%                                    (b)   Rights to  Aircraft.  Joint  Owners hereby acknowledge  that, the  Joint            Owners,  to  the  extent  of  their  respective undivided  interests  in  the  Aircraft  (“Ownership            Percentages”) own the Aircraft, free and clear of any lien, security interest or encumbrance of any            nature.                                    (c)   Use and Lease of Aircraft.  The parties agree that the Aircraft has been            purchased solely for their private, non-commercial use, and that the Aircraft will not be used            for lease-back, air taxi, or charter purposes.  Nelnet acknowledges that MSD will not operate the            Aircraft, and has simultaneously entered into a lease of the Aircraft to Dunlap who will be an            operator of the Aircraft.  Nelnet has reviewed and approves of the lease.                                                                                        1  





 






DocuSign Envelope ID: 1F6DFE32-CC17-4D15-AB49-43340C5484BD                   2.    Relationship of Parties.  The relationship among the parties is as tenants in common            of a chattel (the Aircraft).  Notwithstanding the foregoing, each Joint Owner waives any right it            may have to demand the partition, or sale for partition, of the Aircraft under any law of the State            of Nebraska, or any other jurisdiction, and hereby agrees that the sole means by which a Joint            Owner may divest itself of its interest in the Aircraft is as provided for in Section 10 hereof.  No            partnership, joint venture or other relationship between the parties whereby any party may be held            liable for the acts or omissions of any other party is intended or created by this Agreement or by            virtue of the designation of any party as a registered joint owner of the Aircraft.  Each Joint Owner            shall be entitled to its pro rata share (based on its Ownership Percentage) of the depreciation, gain,            loss or deduction with respect to the Aircraft and shall be severally liable for all costs and expenses            chargeable to such Joint Owner under the Management Agreement (as defined herein) and incurred            with respect to the Aircraft.                              3.    Management  Agreement.   Each  Joint  Owner  agrees  that  it  will  enter  into  an            agreement with Duncan Aviation, Inc. (“Duncan”) to operate and manage the Aircraft on the Joint            Owners’ behalf (the “Management Agreement”).  Each Joint Owner shall perform their respective            obligations pursuant to the Management Agreement during the term of this Agreement.  Each Joint            Owner hereby acknowledges that, in order to provide each Joint Owner with sufficient use of the            Aircraft, no Joint Owner shall be entitled to utilize the Aircraft in excess of such Joint Owner’s            Use  Amount (as  defined  in  Section  5(b)  hereof)  during  any  given  year,  except  to  the  extent            provided for herein or in the Management Agreement.  Each Joint Owner further acknowledges            that in the event any Joint Owner fails to utilize its Use Amount during any year hereunder, such            Joint Owner will be deemed to have waived its rights to such hours thereafter.                              4.    Representations,  Warranties  and  Covenants.   Each  Joint  Owner  represents,            warrants and covenants to the other Joint Owners that the:                                    (a)   Joint Owner is, and for so long as this Agreement remains in effect will be,            a citizen of the United States as described in 49 U.S.C. § 40101, et seq., as amended;                                    (b)   Joint  Owner  will  not  utilize  the  Aircraft  for  any  illegal  purposes  or  for            purposes of providing transportation of passengers or cargo in air commerce for compensation or            hire except as permitted under Section 91.501 of the Federal Aviation Regulations;                                    (c)   Joint  Owner  shall  not  operate  the  Aircraft  unless  appropriate  insurance            coverage, as detailed in the Management Agreement, is in effect.                              5.    Scheduling.  Duncan shall have the exclusive right to schedule use of the Aircraft            in accordance with the following criteria:                                    (a)   Use  will  be  scheduled  among  the  Joint  Owners,  on  a  "first-come,  first            served" basis.                                    (b)   Each Joint Owner will be entitled to use the Aircraft in an amount consistent            with their Ownership Percentages in each twelve (12) month period under this Agreement (“Use            Amount”), unless otherwise agreed.                                                                 2  





 






DocuSign Envelope ID: 1F6DFE32-CC17-4D15-AB49-43340C5484BD                                                 (c)  Each party shall in any case be responsible for all actual expenses incurred            as a result of its use of the Aircraft.  Use of the Aircraft shall be deemed to commence at the time            the Aircraft takes off and shall terminate when the Aircraft lands at the destination Airport.  Flight            Hours for one way trips shall include, as applicable, the time required to return the Aircraft from            the point of destination to Lincoln, Nebraska or the time required to position the Aircraft from            Lincoln, Nebraska to the point of origin.                                    (d)   Subject to the Aircraft’s availability for use by another Joint Owner for its            Use Amount, a Joint Owner may make reasonable use of the Aircraft for more than the Joint            Owner’s Use Amount.  In such situations the Joint Owners will reconcile actual use as compared            to Use Amount of the Aircraft on an annual basis as contemplated by Section 6(b) below.                              6.    Operating Cost Allocation.  The Joint Owners will share the costs of operating the            Aircraft as follows:                                    (a)   Monthly Fixed Cost Payment.  The Joint Owners will each make a monthly            fixed cost payment to Duncan as provided for in the Management Agreement. It is agreed and            understood that the proportion of the total monthly fixed costs initially paid by each Joint Owner            is  based  on  the  Joint  Owner’s  respective  Ownership  Percentage.  If  any  Joint  Owner  uses  the            Aircraft in excess of its annual Use Amount, as soon as practicable after January 1 of each year,            from  and after January 1, 2020, the Joint  Owners will determine the percentage of each Joint            Owner’s actual use of the Aircraft during the 12-month period (the “Measurement Period”) ending            on December 31 of the prior year (the “Actual Use Percentage”). If the Actual Use Percentages            are different than the Ownership Percentages, the amount of the total monthly fixed cost payments            made during such Measurement Period will be adjusted among the Joint Owners on the basis of            the Actual Use Percentages.                                    (b)   Maintenance, Repair and Refurbishment Costs.  Each Joint Owner will be            responsible and liable for its pro-rata portion (based on the Joint Owner’s Ownership Percentage)            of the cost of maintaining, repairing and refurbishing the Aircraft and its components. To the extent            a Joint Owner’s Actual Use Percentage at the end of a Measurement Period exceeds the Joint            Owner’s Ownership Percentage, the Joint Owners will complete a reconciliation.                                     (c)   Fuel and Out of Pocket Costs. Each Joint Owner will be responsible and            liable to Duncan for the cost of fuel and other consumables in connection with all flight hours            charged to such Joint Owner and for all out-of-pocket expenses incurred by Duncan in connection            with the Joint Owner’s use of the Aircraft such as, but not limited to, catering, landing fees and            crew expenses.                                    (d)   Personal Property Tax.  Each Joint Owner will be responsible and liable for,            and will indemnify, defend and hold the other Joint Owners harmless from liability for, personal            property taxes assessed on such Joint Owner’s interest in the Aircraft.                                              7.    Insurance. Each Joint Owner shall, pursuant to the Management Agreement, cause                                                                3  





 






DocuSign Envelope ID: 1F6DFE32-CC17-4D15-AB49-43340C5484BD             Duncan to provide and keep in force a policy or policies of liability insurance covering Aircraft            operations with coverage limits of not less than $100,000,000 per occurrence, single limit bodily            injury and property damage, including passengers.  Each Joint Owner and Dunlap will be endorsed            as an additional insured and loss payee under such policies. Each Joint Owner shall, pursuant to            the Management Agreement, cause Duncan to obtain hull insurance coverage on the Aircraft in an            amount equal to the value of the Aircraft.                               8.    Maintenance and Repair.  Each Joint Owner shall, pursuant to the Management            Agreement,  cause  Duncan  to  be  responsible  for  maintaining  the  Aircraft  in  a  serviceable  and            airworthy condition in accordance with applicable regulations, requirements and directives. Joint            Owners shall not be entitled to any abatement of their fixed cost payment obligation by reason of            the unavailability of the Aircraft due to the performance of any repair or maintenance activities.                               9     Taxes.  Each Joint Owner will be responsible for, and will indemnify and hold the            other Joint Owners harmless from liability for, any excise, sales or similar taxes (including interest            and penalties) assessed as the result of the ownership or use of the Aircraft by such Joint Owner.                              10.   Alienation of Ownership Interest.                                    (a)   Each Joint Owner hereby covenants and agrees that, except as specifically            authorized  herein  or  by  agreement  of  the  Joint  Owners  holding  a  majority of  the  Ownership            Percentages, it will not voluntarily encumber, sell, transfer, assign or otherwise convey, directly            or indirectly, any portion of its interest in the Aircraft to anyone other than a current Joint Owner            and that any attempt to do so will be void and of no force or effect.                                    (b)   In the event a Joint Owner wishes to voluntarily sell or otherwise transfer            all (but not less than all) of its interest in the Aircraft to someone other than a current Joint Owner,            such Joint Owner (the “Selling Joint Owner”) shall notify the other Joint Owner (the “Non-Selling            Joint Owner”) in writing of its intent.  In such event, the Non-Selling Joint Owner shall have the            right, but not the obligation, for a period of thirty (30) days following receipt of such notice to            purchase (for cash or its equivalent) the interest of the Selling Joint Owner in the Aircraft for an            amount  equal  to  the  Selling  Joint  Owner’s  pro  rata  portion  (determined  on  the  basis  of  its            Ownership Percentage) of the Aircraft’s then current fair market value as determined by mutual            agreement.  If the Non-Selling Joint Owner and the Selling Joint Owner are unable to agree on the            Aircraft’s fair market value within thirty (30) days, fair market value will be determined by three            (3) qualified appraisers of used aircraft, one of whom shall be designated by the Selling Joint            Owner, one by the Non-Selling Joint Owner and one by the two appraisers selected by the Joint            Owners.  In the event the Non-Selling Joint Owner does not exercise such right in connection with            a proposed voluntary sale or transfer, the interest of the Selling Joint Owner may be transferred to            a third party provided, however, that such purchaser or transferee, as a condition of the sale or            transfer, shall execute this Agreement and the Management Agreement and become fully subject            to the terms thereof.                                    (c)   In the event of any change in the ownership of the controlling interest in a            Joint Owner or in the event of an attempted involuntary sale or transfer of the interest of any Joint            Owner (in either case, the “Selling Joint Owner”) in the Aircraft, whether directly or indirectly,                                                                4  





 






DocuSign Envelope ID: 1F6DFE32-CC17-4D15-AB49-43340C5484BD             the other Joint Owner (the “Non-Selling Joint Owner”) shall have the right, but not the obligation,            for a period of thirty (30) days following receipt of notice of such change in ownership or attempted            involuntary sale or transfer to purchase (for cash or its equivalent) the interest of the Selling Joint            Owner in the Aircraft for an amount equal to the Selling Joint Owner’s pro rata portion (determined            on  the  basis  of  its  Ownership  Percentages)  of  the  Aircraft’s  then  current  fair  market  value  as            determined by mutual agreement.  If the Non-Selling Joint Owner and the Selling Joint Owner are            unable to agree on the Aircraft’s fair market value within thirty (30) days, the process set forth in            Section 10(b) shall be utilized to determine the Aircraft’s fair market value.  In the event the Non-           Selling Joint Owner does not exercise such right in connection with a proposed involuntary sale,            the interest of the Selling Joint Owner may be sold to a third party provided, however, that such            purchaser or transferee, as a condition of the sale or transfer, shall execute this Agreement and the            Management Agreement and become fully subject to the terms thereof.                                                                        11.   Term and Termination.  This Agreement is effective as of the date first written            above and will continue in effect on a month to month basis until terminated by mutual agreement.             At anytime hereunder, MSD shall have the right to require Nelnet to purchase MSD’s interest in            the  Aircraft  for  an  amount  equal  to MSD’s pro  rata  portion  (determined  on  the  basis  of  its            Ownership Percentage) of the Aircraft’s then current fair market value as determined by mutual            agreement.  If the parties are unable to agree on the Aircraft’s fair market value within thirty (30)            days, the process set forth in Section 10(b) shall be utilized to determine the Aircraft’s fair market            value. If so agreed by the Joint Owners, the Joint Owners shall cause Duncan, as agent for the Joint            Owners, to sell the Aircraft in a commercially reasonable manner. The net proceeds from such sale            will be distributed to each Joint Owner in proportion to their Ownership Percentages.  The good            faith decision of Duncan regarding the terms and conditions of such sale shall be conclusive and            binding on each of the Joint Owners.                               IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first            written above.                        National Education Loan Network, Inc.,    MSD711, LLC, Joint Owner            Joint Owner                                                             By: _____________________                                                            Michael S. Dunlap            By: __________________________                              William J. Munn, Secretary          _________________________________                                                         Michael S. Dunlap, Lessee and Operator                                                                                              5