AIRCRAFT DRY LEASE
This Lease of aircraft is made, effective as of April 5, 1996, by and
between Morgan Corp., a corporation incorporated under the laws of the State of
South Carolina, with principal offices at 1800 East Main Street, Duncan, South
Carolina 29334 hereinafter referred to as "Lessor") and Extended Stay America,
Inc., a corporation incorporated under the laws of the State of South Carolina,
with principal offices at 961 East Main Street, Spartanburg, South Carolina
29302 (hereinafter referred to as "Lessee").
The parties recite that:
A. Lessor owns a 1987 Beechcraft Baron Model 58 aircraft, Serial No. TH-
1519, and currently registered as N358CC (hereinafter referred to as the
"Aircraft"). The Aircraft is available for use by a qualified Lessee; and
B. Lessee desires to lease the Aircraft under such terms and conditions as
are mutually satisfactory to the parties.
The parties agree as follows:
LEASE OF AIRCRAFT
For Two Hundred Dollars and No/100 ($ 200.00) per flight hour, Lessor
agrees to lease the Aircraft to Lessee without crew. Said amount shall include
and fully cover Lessee's responsibility for the cost of maintenance and
insurance for the Aircraft. The Aircraft shall be delivered to Lessee at
Spartanburg Downtown Airport in Spartanburg,
South Carolina on April 5, 1996, at which time Lessee shall inspect the Aircraft
to the extent deemed necessary. Lessee shall have ten (10) flight hours
following delivery of the aircraft in which to notify Lessor in writing of any
defects in the Aircraft or its equipment or accessories. If, at the end of such
period, Lessor has not received such notification, it shall be conclusively
presumed between the parties that Lessee has fully inspected the Aircraft having
knowledge that it is in good condition and repair and that Lessee is satisfied
with and has accepted the Aircraft in such condition and repair.
This Lease shall commence on April 5, 1996 and continue for one year after
said date. Thereafter, this Lease shall be automatically renewed on a month to
month basis, unless sooner terminated by either party as hereinafter provided.
Either party may at any time terminate this Lease upon thirty (30) days written
notice to the other party, delivered personally or by certified mail, return
receipt requested, at the address for said other party as set forth above.
COMMERCIAL OPERATION RESTRICTION
Neither Lessee nor Lessor will make the Aircraft available for hire within
the meaning of the Federal Aviation Regulations. The Aircraft is to be operated
strictly in accordance with 14 C.F.R. Part 91.
At all times during the term of this Lease, Lessor shall cause to be
carried and maintained, at Lessee's cost and expense, as set forth in Section
One, physical damage insurance with respect to the Aircraft in the amount set
Aircraft Physical Damage $ 420,000.00
(No Deductible While --------------
In Motion or Not In Motion)
At all times during the term of this Lease, Lessor shall also cause to
be carried and maintained, at Lessee's cost and expense, as set forth in Section
One, third party aircraft liability insurance, passenger legal liability
insurance, property damage liability insurance, and medical expense insurance in
the amounts set forth below:
Combined Liability Coverage for
Bodily Injury and Property Damage
Including Passengers -
Each Occurrence $50,000,000.00
Medical Expense Coverage - --------------
Each Person $ 5,000.00
Lessee shall also bear the cost of paying any deductible amount on any
policy of insurance in the event of a claim or loss.
Any policies of insurance carried in accordance with this Lease: (i) shall
name Lessor as an additional insured; and (ii) shall contain a waiver by the
underwriter thereof of any right of subrogation against Lessor. Each liability
policy shall be primary without right of contribution from any other insurance
which is carried by Lessee or Lessor and shall expressly provide that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering
Lessor shall submit this Lease for approval to the insurance carrier for
each policy of insurance on the Aircraft. Lessor shall arrange for a Certificate
of Insurance evidencing appropriate coverage as to the Aircraft and the
satisfaction of the requirements set forth above to be given by its insurance
carriers to Lessee.
RESTRICTIONS ON USE
Lessee may operate the Aircraft only for the purposes and within the
geographical limits set forth in the insurance policy or policies obtained in
compliance with Section Four of this Lease. The Aircraft shall be operated at
all times in accordance with the flight manual and all manufacturer's suggested
operating procedures. Furthermore, Lessee shall not use the Aircraft in
violation of any foreign, federal, state, territorial, or municipal law or
regulation and shall be solely responsible for any fines, penalties, or
forfeitures occasioned by any violation by Lessee. If such fines or penalties
are imposed on Lessor and paid by Lessor, Lessee shall reimburse Lessor for the
amount thereof within thirty (30) days of receipt by Lessee of written demand
from Lessor. Lessee will not base the Aircraft, or permit it to be based,
outside the limits of the United States of America, without the written consent
The Aircraft shall be flown only by certificated and qualified pilots and
shall be maintained only by certificated and qualified mechanics. In the event
the insurance on the Aircraft would be invalidated because Lessee is unable to
obtain certificated and qualified pilots and mechanics, Lessee shall not operate
the Aircraft until such time as certificated and qualified pilots and mechanics
are obtained and insurance on the
Aircraft is made valid.
Lessee will not directly or indirectly create, incur, assume or suffer to
exist any lien on or with respect to the Aircraft. Lessee will promptly, at its
own expense, take such action as may be necessary to discharge any lien not
excepted above if the same shall arise at any time.
INSPECTION BY LESSOR
Lessee agrees to permit Lessor or any authorized agent to inspect the
Aircraft at any reasonable time and to furnish any information in respect to the
Aircraft and its use that Lessor may reasonably request.
Except in accordance with other written agreements entered into subsequent
to the date of this Lease between Lessee and Lessor regarding maintenance of the
Aircraft, Lessee shall not have the right to alter, modify, or make additions or
improvements to the Aircraft without the written permission of Lessor. All such
alterations, modifications, additions, and improvements as are so made shall
become the property of Lessor and shall be subject to all of the terms of this
The registration of and title to the Aircraft shall be in the name of the
Lessor, and the Aircraft, at all times during the term of this Lease or any
extension, shall bear
United States registration markings. All responsibility and obligations in
regard to the operation of the Aircraft as above owned, registered, and marked
shall be borne by Lessee during the term of this Lease.
PAYMENT OF TAXES
Lessee shall pay all taxes associated with Lessee's use of the Aircraft on
Lessee's own business, including landing fees, fuel taxes, and any other taxes
or fees which may be assessed against a specific flight by Lessee.
Lessee shall not assign this Lease or any interest in the Aircraft, or
sublet the Aircraft, without prior written consent of Lessor. Subject to the
foregoing, this Lease inures to the benefit of, and is binding on, the heirs,
legal representatives, successors, and assigns of the parties.
ACCIDENT AND CLAIM
Lessee shall immediately notify Lessor of each accident involving the
Aircraft, which notification shall specify the time, place, and nature of the
accident or damage, the names and addresses of parties involved, persons
injured, witnesses, and owners of properties damaged, and such other information
as may be known. Lessee shall advise Lessor of all correspondence, papers,
notices, and documents whatsoever received by
Lessee in connection with any claim or demand involving or relating to the
Aircraft or its operation, and shall aid in any investigation instituted by
Lessor and in the recovery of damages from third persons liable therefore.
RETURN OF AIRCRAFT TO LESSOR
On the termination of this Lease by expiration or otherwise, Lessee shall
return the Aircraft to Lessor at Spartanburg Downtown Airport in Spartanburg,
South Carolina, in as good operating condition and appearance as when received,
ordinary wear, tear and deterioration excepted, and shall indemnify Lessor
against any claim for loss or damage occurring prior to the actual physical
delivery of the Aircraft to Lessor.
MODIFICATION OF AGREEMENT
This Lease constitutes the entire understanding between the parties, and
any change or modification must be in writing and signed by both parties.
This Lease is entered into under, and is to be construed in accordance
with, the laws of the State of South Carolina.
TRUTH IN LEASING STATEMENT
THE AIRCRAFT, A 1987 BEECHCRAFT BARON MODEL 58, MANUFACTURER'S SERIAL NO.
TH-1519, CURRENTLY REGISTERED WITH THE FEDERAL AVIATION ADMINISTRATION AS
N358CC, HAS BEEN MAINTAINED AND INSPECTED UNDER FAR PART 91 DURING THE 12 MONTH
PERIOD PRECEDING THE DATE OF THIS LEASE.
THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED UNDER FAR PART 91 FOR
OPERATIONS TO BE CONDUCTED UNDER THIS LEASE. DURING THE DURATION OF THIS LEASE,
EXTENDED STAY AMERICA, INC., 961 EAST MAIN STREET, SPARTANBURG, SOUTH CAROLINA
29302, IS CONSIDERED RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT UNDER
AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT
FEDERAL AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA FLIGHT
STANDARDS DISTRICT OFFICE.
THE "INSTRUCTIONS FOR COMPLIANCE WITH TRUTH IN LEASING REQUIREMENTS"
ATTACHED HERETO ARE INCORPORATED HEREIN BY REFERENCE.
I, THE UNDERSIGNED ROBERT A. BRANNON , AS CHIEF FINANCIAL OFFICER OF
EXTENDED STAY AMERICA, INC., 961 EAST MAIN STREET, SPARTANBURG S.C. 29302,
CERTIFY THAT I AM RESPONSIBLE FOR OPERATIONAL CONTROL OF THE AIRCRAFT AND THAT I
UNDERSTAND MY RESPONSIBILITIES FOR COMPLIANCE WITH APPLICABLE FEDERAL AVIATION
IN WITNESS WHEREOF, the parties have executed this Lease.
/s/ Stewart H. Johnson 4/5/96
- ------------------------------- -------------------------------
Stewart H. Johnson, President Date and Time of Execution
EXTENDED STAY AMERICA, INC.
/s/ Robert A. Brannon 4/5/96
- ------------------------------- -------------------------------
Robert A. Brannon, C.F.O. Date and Time of Execution