Exhibit 10.11
ASSIGNMENT OF GRAIN FEEDSTOCK AGENCY AGREEMENT
This Assignment of Grain Feedstock Agency Agreement 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 of
even date herewith (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 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.
B. As a condition to extending the various credit facilities to Company,
the Banks have required the execution of this Assignment by Company.
Accordingly, in consideration of the foregoing, the parties agree as follows:
1. The Company does hereby grant, assign, transfer and set over unto the
Agent all of its right, title and interest in and to that certain Grain
Feedstock Agency Agreement dated October 13, 2006 (the "Contract"), by and
between the Company and AGRI-Xxxxx, LLC, an Iowa limited liability company
("Bunge"), providing for the procurement of grain by Bunge for Company, a true
and correct copy of which is attached hereto as Exhibit A.
2. The Company agrees that the Agent and the Banks do not assume any of the
obligations or duties of the Company under and with respect to the Contract
unless and until the Agent shall have given written notice to Bunge that it has
affirmatively exercised its right to perform under the Contract following the
occurrence of an Event of Default under the Credit Agreement. In the event that
the Agent does not personally undertake to perform under the Contract, for the
benefit of the Banks, the Agent and the Banks shall have no liability whatsoever
for the performance of any of such obligations or duties. For the purpose of
performing under the Contract, the Agent may for the benefit of the Banks, in
its absolute discretion, reassign its right, title and interest in the Contract,
upon notice to Bunge but without any requirement of the Company's consent.
3. The 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 party 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. The Company agrees that no material
change in the terms thereof shall be valid without the prior written approval of
the Agent, which approval shall not be unreasonably withheld. Except as
otherwise permitted under the Credit Agreement, the 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.
4. The Company hereby irrevocably constitutes and appoints the Agent as
attorney-in-fact to demand, receive and enforce the 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 the Company, at the option of the Agent in the name of the Agent, 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 the Agent shall have no right under this Assignment to
enforce the provisions of the Contract until an Event of Default shall occur
under the Agreement. Upon the occurrence of any such Event of Default, the Agent
may, without affecting any of its rights or remedies against the Company under
any other instrument, document or agreement, exercise its rights under this
Assignment as the Company's attorney-in-fact in any manner permitted by law.
6. The Company hereby agrees to indemnify and hold Agent and the Banks
harmless from and against any and all claims, demands, liabilities, losses,
lawsuits, judgment, and costs and expenses, including without limitation
reasonable attorneys' fees, to which Agent and the Banks may become exposed, or
which Agent and Banks may incur, in exercising any of its rights under this
Assignment.
7. Subject to the aforesaid limitation of further assignment by the
Company, this Assignment shall be binding upon the Company, its successors and
assigns, and shall inure to the benefit of the Agent and the Banks, their
successors and assigns.
8. This Assignment can be waived, modified, amended, terminated or
discharged only explicitly in writing signed by the Agent. A waiver signed by
the 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 the Agent's or the Bank's rights or remedies hereunder.
All rights and remedies of the Agent and the Banks shall be cumulative and shall
be exercised singularly or concurrently, at the 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. Company agrees that it shall not agree to termination of the Contract
without first having entered into an agreement with a substitute grain procurer
acceptable to the Agent. Company agrees that it shall promptly provide to Agent
a copy of any notice of breach of the Contract that it sends to Bunge or
receives from Bunge. In addition to the foregoing, in the event that Company
decides to terminate the Contract, Company agrees that it shall provide Agent at
least 60 days prior written notice of its intent to terminate the Contract.
10. All capitalized terms used in this Assignment, but not otherwise
defined herein, shall have the meanings as set forth in the Credit Agreement.
11. Upon the repayment in full of all obligations due the Banks by Company
and there being no continuing obligation to extend credit to Company under the
Credit Agreement, the assignment granted herein shall terminate and all rights,
title and interest in and to the Contract shall revert back to Company. Upon any
such termination, Agent will, at the expense
of Company, execute and deliver to Company such documents as Company shall
reasonably request to evidence the termination of the assignment.
12. This Assignment and Acknowledgement and Consent to Assignment may be
executed in two or more counterparts, each of which counterpart shall be deemed
to be an original but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Company executed this Assignment of Grain Feedstock
Agency Agreement this 2nd day of May, 2007.
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
ACKNOWLEDGMENT AND CONSENT TO ASSIGNMENT
In consideration of the Banks making the loan to the Company described in
the foregoing Assignment, the undersigned, AGRI-Xxxxx, LLC, an Iowa limited
liability company ("Bunge") hereby consents to the above Assignment on the
following terms and conditions and agrees with the Agent as follows,
notwithstanding that the Contract prohibits the Company from assigning its
rights, interests or obligations thereunder:
1. Bunge has read the Assignment and this Acknowledgement and Consent to
Assignment and understands all of the provisions therein and herein.
2. Bunge has entered into a contract with the Company, a true and correct
copy of which is attached as Exhibit A (the "Contract"), pursuant to which Bunge
has agreed to purchase grain for the Company.
3. The Contract is in full force and effect and has not been amended or
assigned and no 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.
4. The Assignment is a perfected, absolute and present assignment, provided
that Agent has 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.
5. Upon the occurrence of an Event of Default under the Credit Agreement,
Bunge shall, at the Agent's request, continue performance under the Contract for
the benefit of the Agent and the Banks or the Agent's assignee for a period of
six months following its receipt of notice from Agent that Agent is exercising
its rights under Paragraph 4 of the Assignment (the "Assignment Period"),
provided that (i) the Contract has not been earlier terminated in accordance
with its terms and (ii) during the Assignment Period, Agent or Agent's assignee
fully and faithfully perform the obligations of Company under the terms of the
Contract. Upon the expiration of the Assignment Period, unless Bunge otherwise
notifies the Agent or the Agent's assignee (as applicable) in writing, Bunge
shall have no further obligation or liability under the terms of the Contract.
Agent shall give Bunge prompt written notice of the occurrence of an Event of
Default under the Credit Agreement. Nothing contained herein shall be deemed in
any way to limit or relieve the Company of any liability to Bunge under the
terms of the Contract.
6. During the Assignment Period, the Agent may enforce the obligations of
the Contract with the same force and effect as if enforced by the Company and
may perform the obligations of the Company. Bunge will accept such performance
in lieu of performance by the Company and in full satisfaction of the Company's
obligations thereunder for which performance is made.
7. Bunge will give the Agent prompt written notice of any default by the
Company under the Contract. Bunge will not terminate the Contract on account of
any default of the Company thereunder without written notice of such default to
the Agent and providing the Agent thirty (30) days notice to cure the default.
However, nothing herein shall require the Agent to cure any default of the
Company under the Contract.
8. Except as expressly provided in this Acknowledgment and Consent, nothing
contained in the Assignment or in this Acknowledgment and Consent shall be
deemed to modify the terms of the Contract or the rights of the parties
thereunder.
9. All capitalized terms used in this Acknowledgment and Consent, but not
otherwise defined herein, shall have the meanings as set forth in the Credit
Agreement.
Dated: April 25, 2007
AGRI-XXXXX, LLC, an Iowa limited
liability company
By /s/ Xxxxxx Xxxxx
Its Manager
EXHIBIT A
Grain Feedstock Agency Agreement
By and Between Company and AGRI-Xxxxx, LLC
