Document:

exv10w16

 

Exhibit 10.16

SERVICES AGREEMENT

     THIS SERVICES AGREEMENT is made and entered into this ___ day of November, 2005 by and between
US BioEnergy Corporation, a corporation organized under the laws of the State of South Dakota with
an office at 111 Main Avenue, Suite 200, Brookings, South Dakota 57006 (the “Company”), and
Capitaline Advisors, LLC, a limited liability company organized under the laws of the State of
South Dakota with an office at 111 Main Avenue, Brookings, South Dakota 57006 (“Capitaline”).

     In consideration of the mutual benefits to the parties hereto and the promises, terms and
conditions hereinafter set forth, intending to be legally bound, the parties do hereby mutually
agree as follows:

     1. Parties and Related Persons.

     (a) The Company. The Company is a South Dakota corporation engaged in the
business of developing, owning and operating ethanol plants and other bio-refining
facilities.

     (b) Capitaline. Capitaline is a South Dakota limited liability company and,
for itself, as a controlling person of various investment funds and through its affiliates,
Capitaline is a significant beneficial owner of the Company’s Class A common stock.
Capitaline provides investment capital and financial and human resources to companies in the
renewable energy and finance industries.

     2. Purpose. The Company requires certain services for the operation of its business
as it may request from time to time from the services described in Exhibit A hereto (collectively
the “Services”) and Capitaline is willing and able to provide such Services as the Company may
request from time to time.

     3. Scope of Services.

     (a) Scope. The Company and Capitaline agree that all work performed by
Capitaline must be in accordance with, subject to and governed by the standards, terms and
conditions as contained in this Service Agreement, and any other documents attached hereto
and incorporated by reference herein (collectively the “Agreement”).

     (b) Changes to Services. The Company may amend Exhibit A to eliminate Services
to be provided at any time, with or without cause, upon ten (10) days’ written notice to
Capitaline. Exhibit A may be amended to add Services at any time upon mutual agreement of
the parties hereto.

     (c) Independent Contractor. Capitaline is an independent contractor and not an
employee, joint venturer or partner of the Company. Capitaline is free to exercise its best
judgment in all aspects of its performance under this Agreement.

     4. Compensation.

     (a) Rate. During the term of this Agreement, the Company agrees to pay
Capitaline for Services rendered by Capitaline for or on behalf of the Company and to
reimburse Capitaline for certain costs and expenses in connection with the Services as
described on Exhibit A.

 

 

     (b) Compensation and Settlement Procedures. Capitaline will provide the
Company with a written monthly statement detailing the charges for Services furnished
pursuant to this Agreement no later than the 10th day of each month. The Company shall pay
each monthly statement provided by Capitaline by the 20th day of the month in which such
statement was delivered. In addition, the books, accounts and records of each of the parties
will be maintained in such a manner as to be able to determine the appropriateness or
reasonableness of the compensation and reimbursements made under this Agreement.

     5. Standard of Performance.

     (a) Warranty. Capitaline warrants to Company that the Services supplied
hereunder will be performed in a competent, diligent manner and in accordance with generally
accepted standards for such Services and any applicable federal, state or local laws,
regulations or rules.

     (b) Compliance with the Company’s Policies. Capitaline agrees to comply with
all of the policy statements of the Company that now exist or as are implemented or revised
from time to time.

     (c) No Company Expenses. Capitaline will not incur any expenses or liability
on account of the Company outside the normal course of business without specific written
approval from the Company’s authorized representative.

     (d) Retention of Control by the Company. Capitaline acknowledges and agrees
that all Services performed by Capitaline for or on behalf of the Company pursuant to this
Agreement will be subject to the ultimate authority, control, review and limitation of the
Company and its Board of Directors. Capitaline will provide all such services in compliance
with all applicable laws, regulations and ruling issued by governmental authorities in all
jurisdictions in which it transacts business.

     (e) Supplies and Materials. Supplies and materials, if any, furnished to
Capitaline by the Company shall remain the property of the Company and shall be returned
upon demand.

     (f) Trademarks and Sales Literature. Capitaline is permitted to use the
Company’s name, trademarks, sales literature, advertising, logos and other marks to the
extent necessary to perform the Services, subject to the terms, conditions and restriction
contained in any separate agreement between the parties.

     6. Indemnity

     (a) Indemnification by Capitaline. Capitaline agrees to indemnify and hold
harmless the Company, its affiliates, employees and agents, against any and all loss or cost
the Company may become obligated to pay as a result of actual or alleged negligent or
intentional violation of state or federal laws or regulations by Capitaline, its employees
or agents in providing the Services hereunder or as a result of any civil action against the
Company resulting from the negligent or intentional acts or omissions of Capitaline, its
employees or agents in providing the Services hereunder.

     (b) Notice to Capitaline. The Company agrees to promptly notify Capitaline if
the Company receives notice of any investigation, proceeding or action relating to any
statutory or regulatory violation or to any negligence or willful acts or omissions of
Capitaline. The

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Company will be entitled to participate in the defense of the Company but Capitaline
will have the right to control the defense and to select defense counsel.

     (c) Indemnification by the Company. The Company agrees to indemnify and hold
harmless Capitaline against any and all loss or cost Capitaline may become obligated to pay
as a result of actual or alleged negligent or intentional violation of state or federal laws
or regulations by the Company, its employees or agents or as a result of any civil action
against Capitaline, including (without limitation) the assessment of fines or penalties by
the state insurance department of any state in which Capitaline does business, resulting
from the negligent or intentional acts or omissions of the Company, its employees or agents.

     (d) Notice to the Company. Capitaline agrees to promptly notify the Company if
Capitaline receives notice of any investigation, proceeding or action relating to any
statutory or regulatory violation or to any negligence or willful acts or omissions of the
Company. Capitaline will be entitled to participate in the defense of Capitaline but the
Company will have the right to control the defense and to select defense counsel.

     (e) Limits on Liability. Neither party will be liable for any indirect,
special, incidental or consequential damages of any kind (including lost profits or
interruption of business) regardless of the form of action, whether in tort or contract
(including negligence, strict liability, breach of contract or otherwise), even if a party
has been advised of the possibility of such damages.

     7. Term and Termination.

     (a) Term. The term of this Agreement will commence on the date hereof and will
continue for a period of three (3) years, unless earlier terminated as provided herein, and
will automatically continue thereafter until terminated by either party as provided in
Section 7(b).

     (b) Termination. Either party may terminate this Agreement at any time after
the end of the initial three (3) year term by giving at least thirty (30) days’ written
notice of termination to the other party.

     (c) Termination upon Company’s Notice. The Company may terminate this
Agreement for any reason upon not less than sixty (60) days’ notice to Capitaline.

     (d) Termination for Cause. Either party may terminate this Agreement for
material breach of any provision or condition of this Agreement. In the event either party
allegedly breaches this Agreement, then (i) the other party must provide written notice of
the alleged breach to the breaching party, (ii) the breaching party must commence a cure of
the alleged breach within ten (10) days, and (iii) the breaching party must complete the
cure of the alleged breach within twenty (20) days. If the breaching party does not
commence or complete the cure within the specified time, then this Agreement will terminate
immediately and without further notice.

     (e) Rights upon Termination. At termination, Company’s obligation to pay and
Capitaline’s right to receive compensation hereunder will cease, except for compensation for
Services performed prior to the date of termination.

     (f) Survival of Obligations. The termination of this Agreement will not
terminate any obligation accrued prior to such termination, or any continuing obligations
which will survive

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termination, including, without limitation, the indemnification, warranty and
confidentiality provisions of this Agreement.

     (g) Return of Material. Upon termination of this Agreement, each party will
return to the other party all confidential or proprietary material of the other party and
all material owned by the other party.

     8. Confidentiality.

     (a) The parties agree that all information provided, obtained or generated during the
performance of the Services hereunder is owned by the party disclosing such information (the
“Disclosing Party”) and must be kept strictly confidential during term of this Agreement and
for five (5) years thereafter. Unless required by law, the party receiving the information
(the “Receiving Party”) will not disclose said information to any third party, or make use
of the same for said third party’s or the Receiving Party’s benefit in any manner, without
the prior written approval of the Disclosing Party, except Capitaline may utilize
confidential information received from the Company to perform the Services.

     (b) At any time, at the request of the Disclosing Party, the Receiving Party must
promptly destroy or return or cause to be returned to the Disclosing Party any confidential
information which may have been released to, or generated by, the Receiving Party and will
not retain any copies or other reproductions or extracts thereof. Furthermore, the
Receiving Party must, if so requested by the Disclosing Party, provide a certificate stating
that the Receiving Party has complied with the terms and conditions of these paragraphs.

     9. Notices. All payments, notices, claims, requests and other communications
(“Notices”) under this Agreement (i) must be in writing and (ii) must be addressed or delivered to
the following relevant address or at such other address as is giving in writing by a party to the
other party:

If to the Company:

Gordon W. Ommen

Chief Executive Officer

US BioEnergy Corporation

111 Main Avenue, Suite 200,

Brookings, SD 57006

If to Capitaline:

Chad D. Hatch

Chief Financial Officer

Capitaline Advisors, LLC

111 Main Avenue

Brookings, SD 57006

Notice will be deemed to have been delivered (i) upon the date of delivery if delivered in person
or by facsimile, (ii) five (5) days after the date of mailing if deposited in the United States
mail, postage prepaid, or (iii) upon the date of the postmark on the return receipt if deposited in
the United States mail, with postage prepaid for certified or registered mail, return receipt
requested, unless an earlier delivery date is indicated by the return receipt.

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     10. Miscellaneous.

     (a) Rights Cumulative. Except as expressly provided in this Agreement, and to
the extent permitted by law, any rights and remedies described in this Agreement are
cumulative and not alternative to any other rights or remedies available at law or in
equity.

     (b) Deviation from Contract Terms. If either party deviates from the
provisions of this Agreement, even without protest by the other party, the deviation will
not be held to change this Agreement or the rights and responsibilities of the parties.

     (c) Waiver. A party will not be deemed to waive a right or remedy unless the
waiver is in writing. A waiver (i) of any breach of any right or remedy will not be deemed
a waiver of the right or remedy, (ii) will not affect any term or condition other than the
one specified in the waiver, and (iii) will waive a specified term or condition only for the
time and in the manner specifically stated in the waiver.

     (d) Severability. If any provision herein is held to be partially or
completely contrary to law and/or unenforceable, then this Agreement will be deemed to be
amended to partially or completely modify such provision or portion thereof to the extent
necessary to make it enforceable, or, if necessary, this Agreement will be deemed to be
amended to delete the unenforceable provision or portion thereof.

     (e) Entire Agreement and Amendments. This Agreement, in addition to the
attachments specifically incorporated by reference herein, constitutes the entire agreement
between the parties hereto and there are no other understandings, representations or
warranties, oral or written, relating to the subject matter of this Agreement which will be
deemed to exist or to bind any of the parties hereto, their respective heirs, successors or
permitted assigns. Except as provided herein, this Agreement may not be changed, modified,
or amended in whole or in part, (i) except in writing and duly signed by all of the parties
hereto and (ii) after proper notice to, and approval (or non-disapproval) by, the regulatory
bodies having authority over either party.

     (f) Disputes. If a dispute arises from or relates to this Agreement, or breach
of this Agreement, the parties will attempt to settle the dispute through good faith
negotiations. If, at any time, negotiations do not settle the dispute, the parties agree to
first endeavor to settle the dispute in an amicable manner by mediation administered by the
American Arbitration Association (“AAA”) under the AAA’s Commercial Mediation Rules. If
mediation is unsuccessful, any unresolved controversy or claim arising from or relating to
this Agreement, or breach of this Agreement, will be settled by binding arbitration
administered by the AAA in accordance with the AAA’s Commercial Arbitration Rules. Judgment
upon the award rendered in arbitration may be entered in any court having proper
jurisdiction.

     (g) Attorneys’ Fees and Costs. In the event of litigation, arbitration,
mediation or other proceeding arising from or related to this Agreement, the prevailing
party shall be entitled to recover its reasonable attorneys’ fees, expert witness fees and
costs.

     (h) Interest on Past Due Amounts. Except as otherwise provided in this
Agreement, all payments due under this Agreement shall bear interest at the rate of one and
one-half percent (1.5%) per month (annual percentage rate of 18%) compounded monthly, unless
a lower interest rate is required by applicable law. Interest shall be calculated from the
due date until paid.

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     (i) Law, Jurisdiction and Venue. This Agreement will be governed by the laws
of the State of South Dakota, disregarding the conflict of laws principles thereof.
CAPITALINE AND THE COMPANY HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE STATE OF SOUTH DAKOTA AND IRREVOCABLY AGREE THAT, SUBJECT TO THE OTHER
PROVISIONS OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT THAT MAY BE LITIGATED WILL BE LITIGATED IN SUCH COURTS. EACH OF THE PARTIES
HERETO ACCEPTS, FOR SUCH PARTY AND IN CONNECTION WITH SUCH PARTY’S PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH OF THE PARTIES HERETO AGREES TO ACCEPT SERVICE OF ALL PROCESS BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, IN ANY SUCH PROCEEDINGS IN ANY SUCH
COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. IF ANY AGENT APPOINTED BY ANY PARTY HERETO REFUSES TO ACCEPT
SERVICE, SUCH PARTY HEREBY AGREES THAT SERVICE UPON SUCH PARTY BY CERTIFIED MAIL CONSTITUTES
SUFFICIENT NOTICE. NOTHING HEREIN AFFECTS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.

     (j) No Assignments. No right, benefit, duty or interest in this Agreement may
be assigned in whole or in part without the written consent of the other party. This
Agreement will be binding upon and inure to the benefit of the parties and their respective
successors, permitted assigns, heirs and personal representatives.

     (k) Counterparts. This Agreement may be executed in one or more counterparts,
each of which will constitute an original, and all of which together will constitute one and
the same instrument.

[signatures next page]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above written.

	 	 	 	 	 
	COMPANY 

US BIOENERGY CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ CHAD HATCH
 

	 	 
	 
	 	 	 	 
	Its:

	 	Vice President	 	 
	 
	 	 	 	 
	CAPITALINE:	 	 
	 
	 	 	 	 
	CAPITALINE ADVISORS, LLC	 	 
	 
	 	 	 	 
	By:

	 	/s/ GORDON OMMEN
 

	 	 
	 
	 	 	 	 
	Its:

	 	President	 	 

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EXHIBIT A TO SERVICES AGREEMENT

Description of Services

	 	(1)	 	All accounting, payroll, purchasing, cash management, financial planning,
budgeting, auditing, tax, and financial reporting services;
	 
	 	(2)	 	All data processing and management reporting (including reporting to the Board
of Directors of the Company and arrangements for meetings of the Company’s Board of
Directors);
	 
	 	(3)	 	All billing and collection services;
	 
	 	(4)	 	All business planning and budgeting, including quarterly and annual budgeting
and long-range planning;
	 
	 	(5)	 	All human resource activities, including administration of benefit plans,
development of compensation and affirmative action programs, negotiation and
administration of collective bargaining agreements, recruitment of employees, and such
other human resources functions and activities as may be necessary for the Company;
	 
	 	(6)	 	All reporting requirements of federal, state, or local governments, including
tax consulting, tax planning and preparation of federal, state, and local tax returns;
	 
	 	(7)	 	All media and community relations, and government affairs activities;
	 
	 	(8)	 	Maintenance of all business and corporate records of the Company, including
stock and equity records and stock transfers; and
	 
	 	(9)	 	Any and all other administrative services reasonably necessary for the Company.

Description of Compensation

	 	(1)	 	The Company shall pay to Capitaline for personnel costs related to the
provision of Services, which costs shall be determined based upon an hourly rate for
each person as set forth on Schedule A to this Exhibit A (which Exhibit A also
estimates the number of hours of Services be provided by each such person each month);
	 
	 	(2)	 	Other than the fee stated in Paragraph (1) of this Exhibit A, the Company shall
not be obligated to Capitaline for any additional fees to compensate Capitaline for any
portion of its corporate infrastructure expenses or the benefits or salary of any
person and the Company shall not be obligated to Capitaline for any portion of the
taxes or withholdings in respect of any person; and
	 
	 	(3)	 	The Company shall reimburse Capitaline for all out-of-pocket expenses incurred
by Capitaline in connection with providing Services that are not otherwise paid or
reimbursed under any other provision of the Agreement.

 

 

FIRST AMENDMENT TO THE SERVICES AGREEMENT

     THIS FIRST AMENDMENT TO THE SERVICES AGREEMENT is made and entered into as of the
14th day of August, 2006 (this “First Amendment”) by and between US BioEnergy
Corporation, a corporation organized under the laws of the State of South Dakota with its executive
office at 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077 (the “Company”), and Capitaline
Advisors, LLC, a limited liability company organized under the laws of the State of South Dakota
with an office at 111 Main Avenue, Brookings, South Dakota 57006 (“Capitaline”).

RECITALS

     A. The Company and Capitaline entered into that certain Services Agreement dated November 17,
2005 (the “Services Agreement”) pursuant to which Capitaline agreed to provide the Company with
certain services related to the operation of the Company’s business, as requested by the Company
from time to time, from the listing of services described in Exhibit A to the Services Agreement
(collectively the “Services”).

     B. The Company and Capitaline have discussed the scope of services historically provided to
the Company by Capitaline, the types of services the Company is likely to require in the future,
changes in the Company’s staffing and the number of hours Capitaline employees have and are, in the
future, expected to provide the Company.

     C. The Company and Capitaline have agreed to amend certain provisions of the Services
Agreement as described in this First Amendment.

     NOW, THEREFORE, in consideration of the mutual benefits to the parties hereto and the
promises, terms and conditions hereinafter set forth, intending to be legally bound, the parties do
hereby mutually agree as follows:

     Section 1. Defined Terms. Unless otherwise defined in this First Amendment, each
capitalized term used in this First Amendment which is defined in the Services Agreement has the
meaning assigned to such term in the Services Agreement.

     Section 2. Amendments to Services Agreement. The Services Agreement is amended as
follows:

          A. Compensation. Section 4(a) of the Services Agreement is hereby deleted in its
entirety and replaced by the following:

(a) Rate; Expenses. During the term of this Agreement, the Company agrees to pay
Capitaline a monthly fee of $35,000 for all Services rendered by Capitaline for or on behalf
of the Company. The Company shall reimburse Capitaline for all out-of-pocket expenses
incurred by Capitaline in connection with providing Services that are not otherwise paid or
reimbursed under any other provision of the Agreement.

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          B. Exhibit A to Services Agreement. Exhibit A to Services Agreement is hereby deleted
in its entirety and replaced by the Exhibit A1 attached to this First Amendment to the Services
Agreement.

     Section 3. Governance. This First Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the laws of the State of
South Dakota.

     Section 4. Descriptive Headings, etc. The descriptive headings of the several
sections of this First Amendment are inserted for convenience only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.

     Section 5. Counterparts; Facsimiles. This First Amendment may be executed in several
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This First Amendment may be executed by facsimile signatures.

     Section 6. Further Assurances. Each party shall, from time to time, at the request of
the other party and without further consideration, execute and deliver, or cause to be executed and
delivered, such other documents and instruments as may be reasonably requested by such other party
to evidence or more effectively consummate the transactions contemplated by this First Amendment.

     Section 7. Supremacy; Entire Agreement. The parties each acknowledge and agree that
this First Amendment is intended to supercede certain provisions of the Services Agreement. If
there is a conflict between this First Amendment and the Services Agreement, the relevant term or
condition of this First Amendment shall govern.

[SIGNATURE PAGE TO FOLLOW]

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       IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Services
Agreement the day and year first above written.

	 	 	 	 	 
	COMPANY:	 	 
	US BIOENERGY CORPORATION	 	 
	 
	 	 	 	 
	By:         /s/
Brian D. Thome
	 	 
	 

	 	 	 	 
	Name:

	 	Brian D. Thome	 	 
	Title:

	 	President	 	 
	 
	 	 	 	 
	CAPITALINE:	 	 
	 
	 	 	 	 
	CAPITALINE ADVISORS, LLC	 	 
	 
	 	 	 	 
	By:       /s/
Steven
P. Myers
	 	 
	 

	 	 	 	 
	Name:

	 	Steven P. Myers	 	 
	Title:

	 	President	 	 

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EXHIBIT A1 TO SERVICES AGREEMENT

Description of Services

Steve Myers

Operations

Participation on Risk Management Committee

Participation on Executive Management Committee

Assistance with Strategic Planning

Plant Projects

Assistance with Site Evaluation and Selection

Assistance with Contract Negotiation with Landowners and

Construction Companies

Jill Wilts

Corporate Secretary

Assist with the Preparation of Board Materials

Assist with Document Retention Planning, Procedures and

Implementation

Assist with the Maintenance of Minutes and Other Corporate Records

Operations

Assist with Real Estate Options / Closings

Assist with the Maintenance of Shareholder Records

Chad Haselhorst

Accounting

Assist with Financial Analysis and Projections / Pro Formas

Assist in the Preparation of Budgets and Budget Variance Reports

Assist with the Evaluation of Strategic Transactions

Angie Burns

Marketing

Manage Logo design and standards

Coordinate and maintain website

Preparation and Production of Presentation Materials

Design and Maintain External Marketing Collateral

Production of Marketing Packets

Event Planning

Operations

Airplane Scheduling

Backup Receptionist/Telephone/Mail

Travel Reservations

 

 

Deanna Wilson

Accounting

Set up vendor files

File vendor invoices

Reconcile credit card statements

Operations

Receptionist

Mail / correspondence

Filing

Production and Assembly of Board Packets

Production of Executive Committee Packets

Production of Marketing Packets

Production of Meeting Presentation Materials

Office Space

Capitaline shall provide executive office space for up to four
employees of the Company at it office at 111 Main Avenue, Suite
200, Brookings, South Dakota 57006, together with appropriate
secretarial support, office supplies and office equipmentexv10w17

 

Exhibit 10.17

AIRCRAFT LEASE AGREEMENT

Effective March 1, 2006

Between

Capitaline Advisors, LLC (“Lessor”)

And

US BioEnergy Corporation (“Lessee”)

Regarding

Beechcraft King Air B200

Manufacturer’s Serial No: BB-1711

FAA Registration Mark: N44KA

 

 

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”).

     WHEREAS, Lessor wishes to lease on an hourly basis its Beechcraft King Air B200,
Manufacturer’s Serial Number BB-1711, Federal Aviation Administration (“FAA”) Registration Mark
N44KA, and the appliances, communications equipment, accessories, instruments and other items of
equipment installed thereon (the “Aircraft’) to Lessee, and Lessee wishes to lease the Aircraft
from Lessor;

     NOW, THEREFORE, in consideration of and subject to the terms and conditions herin, Lessor and
Lessee agree as follows:

1. LEASE; TERM

     (a) Effective Date. This Agreement is effective as of March 1, 2006.

     (b) Lease Term. Lessee hereby agrees to lease the Aircraft on an hourly basis from
Lessor, and Lessor hereby agrees lo lease the Aircraft to Lessee, pursuant to the terns and
conditions in this Agreement. This Agreement shall commence on the first date written above and
continue in full force until terminated by either party upon 30 day’s prior written notice or
earlier pursuant to Section 7, below.

     (c) Availability and Delivery. The Aircraft shall be available to Lessee, and shall
be scheduled for use, on an as-needed and first-come, first-serve basis. In order to schedule the
use of the Aircraft, Lessee shall contact Lessor and specify the dates and times use of the
Aircraft is requested. At such time, Lessor shall indicate whether or not the Aircraft is
available. Should the Aircraft not be available at the requested time, Lessor may indicate
alternative dates and times the Aircraft is available to Lessee. Lessee shall not have the right to
use the Aircraft for a period of time that would exceed 7 consecutive days without the prior
consent of Lessor.

2. USE OF AIRCRAFT

     (a) Permitted Use. Notwithstanding anything herein to the contrary, during the times
the Aircraft is leased to Lessee:

     (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.

2

 

     (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.

     (b) Compliance with Laws. Lessee shall not use or cause or permit the Aircraft to be
used in any way inconsistent with state, federal or international law or the law of any place to
which the Aircraft may go, or contrary to any manufacturer’s operation manuals and instructions, or
in violation of any airworthiness certificate, license or registration. Lessee shall not use or
cause or permit the Aircraft to be used in any way that would endanger the registration or
airworthiness of the Aircraft.

     (c) Compliance with Insurance. Lessee shall not operate the Aircraft or permit or
suffer the Aircraft to be operated in conflict with the terms of the insurance coverage pursuant to
Section 8 of this Agreement. Lessee shall abide by all geographical limitations of such insurance.

3. RENT, TAXES AND PAYMENTS

     (a) Rent. As rent for the lease of the Aircraft, the Lessee shall pay to the Lessor
the amounts set forth in Schedule 1 (“Rent”). Lessee will pay Rent to Lessor no later than the
15th day of the calendar month for the rental activity in the preceding month.

     (b) Taxes. Lessee shall be responsible for any taxes (other than those based on
Lessor’s income), including but not limited to sales, use, embarkation or passenger departure
taxes, custome duties, charges or levies of the United States, any state or local government or any
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.

     (c) Operating Costs. Lessee shall be responsible for all expenses related to Lessee’s
use of the Aircraft, including, without limitation, all necessary ground and flight operations
support such as charts, forms, aircraft cleaning (interior and exterior), lavatory service,
deicing, catering, and aircraft stocks (i.e. newspapers, beverages, snacks), all fuel, oil, and
lubricants, and all crew hiring costs and crew expenses. Lessee shall pay all such expenses
directly unless otherwise agreed to in advance by Lessor. To the extent Lessor pays for such
expenses, Lessor shall invoice Lessee for the expenses in conjunction with the invoices for the
Rent and Lessee will reimburse Lessor in

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accordance with Section 3(a).

     (d) Payments. All payments or reimbursements due by virtue of this Agreement shall be
made to the Lessor at such address or bank accounts as may be specified to Lessee by Lessor by
written notice from time to time.

4. TITLE AND SECURITY

     (a) Title; No Liens. Title to the Aircraft and all equipment subject to this
Agreement is retained by Lessor at all times. Lessee may not pledge or encumber the Aircraft in any
manner whatsoever, nor permit any liens, other than liens arising by operation of law or liens
solely attributable to Lessor, to attach thereto, and Lessee shall promptly cause to be removed any
such lien which may be placed on the Aircraft as a result of Lessee’s action or inaction hereunder.
Except as set forth in the immediately subsequent paragraph (b), Lessor shall not permit any lien
or encumbrance of any kind whatsoever to be created or exist upon the Aircraft if such lien or
eucumbrance may or does interfere with Lessee’s quiet use and enjoyment of the Aircraft hereunder.

     (b) Security Interests. In the event that this Agreement or the Aircraft are subject
to a security agreement between Lessor and its lender, all rights of Lessee under this Agreement
will be subordinate to the rights of under such a security agreement. To the extent, if any, that
this Agreement constitutes chattel paper under the UCC in connection with such a security
agreement, the original of this Agreement shall be delivered to the lender upon demand as sectary
for the obligation of Lessor.

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.

6, MAINTENANCE; COSTS OF OPERATION; NO ALTERATIONS

     (a) Maintenance. Lessor shall pay for costs of any repairs or maintenance of the
Aircraft required during the term associated with Lessee’s use, movement and operation of the
Aircraft, including, without limitation, all service, repairs, tests, and maintenance necessary to
maintain the Aircraft in accordance with FAA regulations, as amended from time to time. 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.

     (b) Aircraft Documents. Lessor shall maintain and preserve, or cause to be maintained
and preserved, in the English language, all Aircraft Documents required by the FAA, the Aircraft
manufacturer and the manufacturers of all component parts thereof, and in a current, accurate, and
complete manner and shall be available at all reasonable times for examination and inspection by
Lessee. For purposes of this Agreement, “Aircraft Documents” means all records and documents (I)
required by the applicable law or any manufacturer’s warranty or any applicable maintenance service
plan to be maintained with respect to the Aircraft (I1) customarily maintained with respect to
aircraft of the same category and class as the Aircraft, or (I11) otherwise associated with the
Aircraft, including without limitation, flight records, maintenance and inspection records,
modification and repair records, overhaul records, historical records, manuals, logbooks,
authorizations, and drawings.

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     (c) No Alterations. Lessee shall not alter, modify, or make additions or improvements
to the Aircraft without the prior written permission of Lessor, and any such alterations,
modifications, additions or improvements shall immediately become the property of Lessor.

     (d) Maior Maintenance Events. Notwithstanding anything to the contrary in this
Section 5, Lessee shall be entitled to reimbursement from Lessor for all amounts paid directly to
third parties, or may request that Lessor directly pay, any invoice received in connection with any
unusual, non-routine, or extraordinary maintenance or repairs, including, without limitation, costs
of engine overhauls and costs associated with routine schedule maintenance and inspections.

7. TERMINATION

     (a) By Lessor. Lessor may immediately terminate this Agreement upon the occurrence of
any one of the following:

     (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.

     (b) By Lessee. Lessee may immediately terminate this Agreement in the event Lessor
fails to observe or fulfill any term, condition and/or provision of this Agreement and such failure
is not corrected within 30 days after written notice by Lessee.

     (c) Rights Upon Termination. Upon the termination of this Agreement, rights of the
Lessee as to the Aircraft pursuant to this Agreement shall immediately cease and terminate. If the
Lessor terminates this Agreement as provided in this Section 7, Lessee shall notwithstanding such
termination, be liable to the Lessor for any arrears of Rent or other amounts due under this
Agreement. The provisions of Sections 4 and 5 shall survive the termination of this Agreement.

8. INSURANCE AND INDEMNIFICATION

     (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
$10,000,000 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.

     (b) Indemnification by Lessee. Lessee agrees to indemnify, defend, and hold Lessor
and all other users of the Aircraft harmless from any and all fines, citations, forfeitures, or
penalties of any kind imposed by the FAA or any other governmental entity arising out of operation,
use, or possession of the Aircraft by Lessee during the term of this Agreement, except to the
extent arising from the negligence or willful misconduct by Lessor or other users.

     (c) Indemnification by Lessor. Lessor agrees to indemnify, defend, and hold Lessee
harmless from any and all fines, citations, forfeitures, or penalties of any kind imposed by the
FAA or any other governmental entity arising out of the operation, use, or possession of the
Aircraft by Lessor or other users, except to the extent arising out of the negligence or willful
misconduct of Lessee.

9. REPRESENTATIONS AND WARRANTIES / DISCLAIMER

     (a) By Lessor. Lessor represents and warrants to Lessee that Lessor 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 Lessor to enter into and fulfill this Agreement, and upon
execution, this Agreement shall become the legal, valid and binding obligation of Lessor,
enforceable in accordance with its terms.

     (b) By Lessee. Lessee represents and warrants to Lessor that:

     (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

6

 

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.

     (c) Disclaimer; Limitation of Liability. EXCEPT AS EXPRESSLY STATED TO THE CONTRARY
HEREIN, THE AIRCRAFT IS BEING LEASED BY THE OWNER TO THE OPERATOR HEREUNDER ON A COMPLETELY “AS
IS”, “WHERE IS”, BASIS. THE WARRANTIES AND 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 GREEMENT 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, OR DIMINUTION IN VALUE OF THE AIRCRAFT.

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

     (a) Entire Agreement; Amendments. This Agreement constitutes the entire agreement of
the parties as of the date hereof and supersedes all prior or independent, oral or written
agreements, understandings, statements, representations, commitments, promises and warranties made
with respect to the subject matter of this Agreement. This Agreement may not be amended except in a
writing signed by all parties.

     (b) Severability. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibitions or unenforceability in any jurisdiction. To the extent permitted by applicable law,
each of Lessor and Lessee hereby waives any provision of applicable law which renders any provision
hereof prohibited or unenforceable in any respect.

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     (c) No Assignment. Neither party may assign its fights or obligations under this
Agreement without the prior written permission of the other.

     (d) Further Assurances. The parties hereto agree to cooperate with each other in
effectuating this Agreement, and, at the reasonable request of the other party, to execute and
deliver such further documents or instruments and take such further actions as shall reasonably be
requested in order to carry out the proposes of this Agreement.

     (e) No Waiver. Neither party shall be deemed to have waived any breach by the other
party of any provision of this Agreement unless it expressly does so in writing. If either patty
shall expressly waive any right hereunder, such waiver shall not be construed as a continuing
waiver of other rights under the same or other provisions of this Agreement.

     (f) Force Majeure. Either party shall be relieved of its obligations hereunder if the
performance hereof is delayed or prevented or interrupted by any cause beyond its reasonable
control, including but not limited to, acts of God, public enemies, war, civil disorder, fire,
flood, explosion, labor disputes or strikes, or any acts or orders of any governmental authority.

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 CONTINI.IE 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 ACKNOWLEDGES THIS TRUTH IN LEASING STATEMENT AND THAT HE OR SHE UNDERSTANDS THE
RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL REGULATIONS.

	 	 	 	 	 
	Signature of Lessee:

	 	     /s/ GORDON OMMEN
 

	 	 
	 
	 	 	 	 
	Printed Name of Lessee:
	 	 	 	 
	 

	 	 

	 	 

IN WITNESS WHEREOF, the parties have entered into this Aircraft Lease Agreement on the date first
written above.

	 	 	 
	LESSOR:

	 	LESSEE:
	 
	 	 
	Capitaline Advisors, LLC

	 	US BioEnergy Corporation
	 
	 	 
	/s/ STEVEN P. MYERS

	 	/s/ GORDON OMMEN
	 

	 	 
	By: Steven P. Myers

	 	By: Gordon W. Ommen
	Is: President

	 	Its: Chief Executive Officer

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Lease Payment

Lessee will pay monthly installments that equal:

	 	 	 	 	 
	Base Monthly Fee
	 	$	25,000.00	 
	 
	Hourly Charge for Use of Aircraft:
	 	$	300.00	 

Payments will be made on or before the 15th of each month.

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