Exhibit 10.7
ASSIGNMENT OF ELECTRIC SERVICE CONTRACT
This Assignment of Electric Service Contract is made this 2nd day of May,
2007, by and between SOUTHWEST IOWA RENEWABLE ENERGY, LLC, an Iowa limited
liability company (the "Company") and AGSTAR FINANCIAL SERVICES, PCA, and its
successors and assigns, as Agent (in such capacity, the "Agent") for the benefit
of the Banks (the "Banks") in connection with that certain Credit Agreement
dated on or about May 2, 2007 (as amended, restated, supplemented or otherwise
modified from time to time, the "Credit Agreement").
A. Company and Banks have entered into a Credit Agreement, dated on or
about May 2, 2007, pursuant to which Banks will extend to Company various credit
facilities for the purposes of acquiring, constructing, equipping, furnishing
and operating an ethanol production facility to be located in Pottawattamie
County, Iowa (the "Project").
B. As a condition to extending the various credit facilities to
Company, the Banks have required the execution of this Assignment by Company.
AGREEMENT
Accordingly, in consideration of the foregoing, the parties agree as follows:
1. Company does hereby grant, assign, transfer and set over unto Agent, for
the benefit of the Banks, all of its right, title and interest in and to that
certain Electric Service Contract dated December 15, 2006, (the "Contract"), by
and between Company and MidAmerican Energy Company, an Iowa corporation, whose
address is 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxx, Xxxx 00000 (the
"Supplier"), providing for electric service to the Project.
2. Company agrees that the Agent and Banks do not assume any of the
obligations or duties of Company under and with respect to the Contract unless
and until Agent shall have given Supplier written notice that it has
affirmatively exercised its right to assume and perform under the Contract
following the occurrence of an Event of Default under the Credit Agreement. In
the event that Agent does not personally undertake to perform under the
Contract, for the benefit of the Banks, neither the Agent nor the Banks shall
have any liability whatsoever for the performance of any of such obligations or
duties. For the purpose of performing under the Contract, Agent may assign the
Contract, upon notice to Supplier and subject to the terms of the Contract, to
an entity that will own all or substantially all of the assets of the Company,
but without any requirement of Company's consent.
3. Company represents and warrants there have been no prior assignments of
the Contract, that the Contract is a valid and enforceable agreement and that
neither Company nor Supplier is in default thereunder and that all covenants,
conditions and agreements have been performed as required therein, except those
not due to be performed until after the date hereof. Company agrees that no
material change in the terms thereof shall be valid without the prior written
approval of Agent, which approval shall not be unreasonably withheld. Company
agrees not to assign, sell, pledge, mortgage or otherwise transfer or encumber
its interest in the Contract
so long as this Assignment is in effect, except as otherwise permitted under the
Credit Agreement. Supplier does not join in the representations and warranties
of this Section 3.
4. Subject to Paragraph 5 below, Company hereby irrevocably constitutes and
appoints Agent as attorney-in-fact to demand, receive and enforce Company's
rights with respect to the Contract, to make payments under the Contract and to
give appropriate receipt, releases and satisfactions for and on behalf of and in
the name of Company, at the option of Agent in the name of Agent, for the
benefit of the Banks, with the same force and effect as the Company could do if
this Assignment had not been made.
5. This Assignment shall constitute a perfected, absolute and present
assignment, provided that Agent shall have no right under this Assignment to
take any actions under Paragraph 4 of this Assignment or enforce the provisions
of the Contract until an Event of Default occurs under the Credit Agreement.
Upon the occurrence of any such Event of Default, Agent may, upon expiration of
any applicable cure period and without affecting any of its rights or remedies
against Company under any other instrument, document, or agreement, exercise its
rights under this Assignment as Company's attorney-in-fact in any manner
permitted by law.
6. Company hereby agrees to indemnify and hold Agent and Banks harmless
from and against any and all claims, demands, liabilities, losses, lawsuits,
judgments, and costs and expenses, including without limitation reasonable
attorneys' fees, to which Agent and Banks may become exposed, or which Agent and
Banks may incur, in exercising any of its rights under this Assignment.
7. This Assignment shall be binding upon Company, its successors and
assigns, and shall inure to the benefit of Agent, for the benefit of the Banks,
and its successors and assigns.
8. This Assignment can be waived, modified, amended, terminated or
discharged only explicitly in writing signed by Agent. A waiver signed by Agent
shall be effective only in a specific instance and for the specific purpose
given. Mere delay or failure to act shall not preclude the exercise or
enforcement of any of Agent's or Banks' rights or remedies hereunder. All rights
and remedies of Agent and Banks shall be cumulative and shall be exercised
singularly or concurrently, at Agent's option, and the exercise or enforcement
of any one such right or remedy shall neither be a condition to nor bar the
exercise of enforcement of any other.
9. All capitalized terms used in this Assignment, but not otherwise defined
herein, shall have the meanings as set forth in the Credit Agreement.
IN WITNESS WHEREOF, the Company executed this Assignment of Electric
Service Contract this 2nd day of May, 2007.
(SIGNATURE PAGE TO FOLLOW THIS PAGE)
SIGNATURE PAGE
TO
ASSIGNMENT OF ELECTRIC SERVICE CONTRACT
BY AND BETWEEN
SOUTHWEST IOW RENEWABLE ENERGY, LLC
AND
AGSTAR FINANCIAL SERVICES, PCA, AS AGENT
DATED: May 2, 2007
COMPANY:
SOUTHWEST IOWA RENEWABLE
ENERGY, LLC, an Iowa
limited liability company
/s/ Xxxx Xxxxx
By: Xxxx Xxxxx
Its: General Manager
/s/ Xxxxx Xxxx
By: Xxxxx Xxxx
Its: Board Chairman
SUPPLIER'S CONSENT TO ASSIGNMENT
AND AGREEMENT
In consideration of the undertakings of AGSTAR FINANCIAL SERVICES, PCA, and
its successors and assigns, as agent (in such capacity, the "Agent") for the
benefit of the banks (the "Banks") who are entering into a credit agreement
("Credit Agreement") with the Company (as herein defined) to facilitate the
Company's acquisition, construction, equipping, furnishing and operation of an
ethanol production facility to be located in Pottawattamie County, Iowa (the
"Project"), which Banks include the Agent, and in consideration of the
undertakings of MidAmerican Energy Company ("Supplier"), in this Consent to
Assignment and Agreement, the undersigned Supplier hereby consents to
Southwestern Iowa Renewable Energy LLC's ("Company") assignment of the Contract
(as defined herein) to the Agent, and agrees with the Agent as follows:
1. Supplier has entered into a Electric Service Contract dated December 15,
2006, providing for the supply of electric services by Supplier to Company (the
"Contract") as therein provided. A copy of said Electric Service Contract is
attached hereto, as Exhibit A, and is incorporated in this Consent to Assignment
and Agreement by this reference.
2. The Contract is in full force and effect and has not been amended or
assigned and Supplier is not currently aware that any event has occurred or
failed to occur as of the date hereof which, but for the passage of time or the
giving of notice or both, would be a default thereunder.
3. Agent represents to Supplier that it is the agent for the Banks under
the Credit Agreement and as such is authorized by the Banks to accept the
assignment of the Contract and to act on behalf of the Banks, for the benefit of
the Banks, as provided for in the Credit Agreement. Upon Agent's notification to
Supplier (at the address and as specified in paragraph 13 of this Consent to
Assignment and Agreement) that an Event of Default has occurred under the Credit
Agreement and that the Agent assumes the Contract, then and only then shall the
Agent be responsible for and shall perform all of Company's obligations and
duties under the Contract, consistent with the provisions of the Contract.
4. Agent acknowledges and agrees that Supplier does not join in any of the
Company's representations, warranties, commitments, duties, obligations, or
agreements contained in the foregoing Assignment, and Supplier will not be bound
thereby. Nothing in this Section 4 shall be read to negate any commitments,
duties, obligations, or agreements undertaken by Supplier in this Consent to
Assignment and Agreement.
5. Agent and Company have represented that the Assignment is a perfected,
absolute and present assignment, provided that Agent and Banks have no right
under the Assignment to take any actions under Paragraph 4 of the Assignment or
enforce the provisions of the Contract until an Event of Default occurs under
the Credit Agreement.
6. Upon the occurrence of an Event of Default under the Credit Agreement
and notification by Agent to Supplier that Agent has undertaken performance of
and assumed the Contract for the benefit of the Banks, including without
limitation the obligation to take and pay for service under the Contract,
Supplier will, at Agent's request, continue performance to Agent
as an assignee of the Contract in accordance with the terms thereof, provided
that Supplier shall be reimbursed in accordance with the terms of the Contract
for all services, and provided that all of Company's obligations and duties,
under the Contract, are met.
7. Upon Agent's notification to Supplier (at the address and as specified
in paragraph 13 of this Consent to Assignment and Agreement), that an Event of
Default has occurred under the Credit Agreement, and that the Agent assumes the
Contract for the benefit of the Banks, Agent may request that Supplier consent
to further assignment of the Contract, if consent is required by the terms of
the Contract for such assignment, and Supplier shall review said request in a
manner consistent with the Contract. Supplier shall not unreasonably withhold
its consent to any proposed further assignment of the Contract if such further
assignment is consistent with the terms of the Contract. Supplier agrees that
any future assignment, once consented to (if required), shall be binding on and
inure to the benefit of such assignee. Notwithstanding the foregoing, Agent
agrees and acknowledges that any such assignment shall be to an entity that will
own all or substantially all of the assets of the Company or the Project.
8. Upon the notification addressed in Section 7 above, concerning an
occurrence of an Event of Default, the Supplier agrees to review Agent's request
for the disclosure of the Contract and its terms to a proposed assignee, if such
a request for disclosure is required under the Contract, and to reasonably
consent to such disclosure in a manner that is consistent with the Contract and
Supplier's reasonable proprietary interests, which will be deemed satisfied if
the proposed assignee agrees in writing in advance of any such disclosure to be
bound by the terms of a commercially reasonable confidentiality agreement, which
incorporates the requirements of Article VI(A) of the Contract and prohibits
such proposed assignee from any disclosure to third parties (other than such
party's officers, directors, employees, lenders, counsel, accountants or other
advisors) and from the use of such information for any purpose other than the
evaluation of the purchase of all or substantially all of the assets of the
Company or the Project.
9. Upon assumption of the Contract by Agent, Agent may enforce the
obligations of the Contract with the same force and effect as if enforced by
Company, provided Agent has and shall perform the duties and obligations of the
Company under the Contract, consistent with the terms of the Contract. Upon
assumption of the Contract by Agent, Supplier will accept Agent's performance in
lieu of performance by Company provided such performance is consistent with the
Contract, and provided further that performance, or partial performance, of such
duties and obligations shall not excuse Company or Agent from performing all
other duties and obligations under the Contract.
10. Nothing herein shall be interpreted as extending in any way the
termination date contained in the Contract or otherwise creating any additional
obligation or duty on any party thereto, other than those that may be set forth
therein.
11. Supplier's consent is subject to such approvals as may be required from
any Governmental Authority which has jurisdiction over and has previously
approved the terms of the Contract.
12. The Supplier agrees to give the Agent reasonable written notice of any
default, of which Supplier becomes aware, by the Company under the Contract. The
Supplier agrees that it
will only terminate the Contract, on account of any default of the Company, in a
manner that complies with the Contract. If the Agent has not cured the default
within the time allowed by the Contract then Supplier may terminate the Contract
in compliance with the terms of the Contract and Agent shall have no further
rights under the Contract. However, nothing herein shall require the Agent to
cure any default of the Company under the Contract unless and until Agent has
undertaken performance of and assumed the Contract, pursuant to the foregoing
Assignment.
13. Agent's address for notices hereunder is: AgStar Financial Services,
PCA, 1921 Premier Dr. XX Xxx 0000, Xxxxxxx, XX 00000-0000, Attn: Xxx Xxxxxx,
Telephone: (000) 000-0000, Facsimile: (000) 000-0000 with a copy to Xxxx, Plant,
Xxxxx, Xxxxx & Xxxxxxx, P.A., 0000 Xxxx Xx. Xxxxxxx Xx., Xxxxx 000, Xx. Xxxxx,
XX 00000, Attn: Xxxxxxx X. Xxxxxx., Facsimile: (000) 000-0000. Supplier's
address for notices hereunder is: MidAmerican Energy Company, Council Bluffs
Energy Center, Attn: General Manager, 0000 Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxx
00000, Telephone: (000) 000-0000, Facsimile: (000) 000-0000, with a copy to
Xxxxxxx X. Xxxxxxxxxx, 0000 XX Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000,
Telephone: (000) 000-0000, Facsimile: (000) 000-0000. All notices and other
communications provided for under this Consent to Assignment and Agreement shall
be in writing and mailed, faxed, or delivered at the addresses/numbers set forth
in this paragraph, or at such other address/number as such party may specify by
written notice to the other party. All such notices and communications shall
have been duly given and shall be effective when the following applicable
delivery has occurred: (i) when delivered, (ii) when transmitted via facsimile
to the numbers set forth above, (iii) the business day following the day on
which the same has been delivered prepaid (or pursuant to an invoice
arrangement) to a reputable national overnight air courier service, or (iv) the
third business day following the day on which the same is sent by certified or
registered mail, postage prepaid.
14. All capitalized terms used in this Consent to Assignment and Agreement,
but not otherwise defined herein, shall have the meanings as set forth in the
Credit Agreement.
15. Any waiver by either party of any default by the other party under this
Consent to Assignment and Agreement must, in order to be effective, be committed
to writing and executed by the party against whom such waiver is to be enforced.
No waiver by a party of any default by the other party under this Consent to
Assignment and Agreement shall operate as a waiver of any future default,
whether of a like or different character or nature.
16. No amendment of the terms and provisions of this Consent to Assignment
and Agreement shall be or become effective except by written amendment executed
by the Supplier and the Agent.
17. This Consent to Assignment and Agreement shall be governed by the laws
of the State of Iowa, without reference to conflicts of law provisions.
(SIGNATURE PAGE TO FOLLOW THIS PAGE)
SIGNATURE PAGE
TO
SUPPLIER'S CONSENT TO ASSIGNMENT AND AGREEMENT
BY AND BETWEEN
MIDAMERICAN ENERGY COMPANY
AND
AGSTAR FINANCIAL SERVICES, PCA, AS AGENT
DATED: May 2, 2007
AGENT:
AGSTAR FINANCIAL SERVICES, PCA (AS
AGENT FOR THE BANKS)
/s/ Xxx Xxxxxx
By: Xxx Xxxxxx
Its: Vice President
SUPPLIER:
MIDAMERICAN ENERGY COMPANY, an
Iowa corporation
/s/ Xxxxx X. Xxxxxx
By: Xxxxx X. Xxxxxx
Its: Vice President - Quality Assurance
& Key Accounts
EXHIBIT A
Electric Service Contract
By and Between Company and MidAmerican
