Exhibit 10.10
*PORTIONS OF THIS GRAIN FEEDSTOCK AGENCY AGREEMENT HAVE BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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GRAIN FEEDSTOCK AGENCY AGREEMENT
THIS GRAIN FEEDSTOCK AGENCY AGREEMENT (this "Agreement") is made and
entered into as October 13, 2006 by and between Southwest Iowa Renewable Energy,
LLC, an Iowa limited liability company ("Producer") and AGRI-Bunge, LLC, an Iowa
limited liability company ("A-B") (each of Producer and A-B, a "Party" and
collectively, the "Parties").
RECITALS
A. Producer intends to construct and own an ethanol plant located near
Council Bluffs, Iowa (the "Facility").
B. As of the date of this Agreement, Bunge North America, Inc. ("Bunge")
has subscribed to become a Member of Producer pursuant to the Amended and
Restated Operating Agreement of Producer dated June 2, 2006 ("Operating
Agreement") and holds an equity ownership interest in A-B.
C. Producer desires for A-B to act as Producer's exclusive agent in
procuring all grain ("Feedstock") required for ethanol production at the
Facility in accordance with the terms set forth in this Agreement.
D. A-B desires to act as Producer's exclusive agent and A-B is willing to
procure on behalf of Producer all Feedstock required for operation of the
Facility.
AGREEMENT
Therefore, the Parties agree as follows:
1. Corn Procurement.
1.1 Corn As Feedstock. As of the date of this Agreement, it is the intent
of Producer that initially the Facility will only use corn as its Feedstock.
Accordingly, the remainder of this Agreement will deal with A-B acting as the
agent of Producer to procure corn meeting the specifications described herein
("Corn") as a Feedstock for the Facility. As of the date of this Agreement, the
Corn to be supplied hereunder shall be U.S. number 2 yellow corn as defined by
the United States Grain Standards Act (USGA). If any changes occur in the USGA
specifications for number 2 yellow corn, then Producer and A-B will mutually
agree on the Corn applicable to this Agreement. If Producer requires the use of
another grain Feedstock, Producer will negotiate in good faith the terms of such
exclusive procurement agency relationship with Bunge.
1.2 Exclusive Agent. Subject to the terms of this Agreement (including, but
not limited to, Section 1.3), Producer agrees that A-B will have the exclusive
right to act as the agent of Producer in procuring all Corn that Producer
requires for ethanol production at the Facility during the Term (as defined in
Section 4.1 hereof), including the Facility as initially constructed and any
modifications or expansions thereof. Upon any modifications or expansions of the
Facility, the Parties shall make such amendments to this Agreement as are
mutually agreed upon as necessary to reflect such modifications or expansions at
the Facility. A-B agrees that it will be responsible for procuring on Producer's
behalf all Corn necessary for the operation of the Facility during the Term
under the conditions herein set forth.
1.3 Right to Direct Purchase. If, at any time, A-B fails to maintain the
Minimum Supply in accordance with Section 2.3(b) or Producer identifies Corn
offered by a reliable supplier other than A-B at more favorable pricing (not
including the Agency Fee set forth in Section 3.1) than available through A-B
for the same grade, quality, quantity and delivery period, Producer may direct
A-B to either (i) procure other Corn on Producer's behalf at the same terms and
pricing, or (ii) procure on Producer's behalf Corn from the identified supplier
and deliver it to Producer, the choice of which shall be at A-B's sole
discretion. If A-B procures Corn from the identified supplier, Producer shall
pay the Agency Fee as calculated in accordance with Section 3.1. If Producer's
general manager determines in good faith that he or she has repeatedly
identified Corn for the Facility at more favorable prices in accordance with the
preceding sentence to the extent that the general manager believes A-B is not
adequately providing Corn at favorable prices to the Facility, then the general
manager shall bring this to the attention of A-B. If the general manager's
concerns are not promptly addressed, then Producer may issue a Notice of Dispute
as provided in Section 13.2.
1.4 Repeated Delivery Failures. If Producer's general manager determines in
good faith that one or more Corn Suppliers (as defined in Section 2.2(a)) have
repeatedly failed to make required deliveries at the Facility, then the general
manager shall bring this to the attention of A-B. If the general manager's
concerns are not promptly addressed, then Producer may issue a Notice of Dispute
as provided in Section 13.2
1.5 Restrictions in Facility Service Area. Except as provided in Section
2.6, after the Restriction Date (as herein after defined), none of A-B or any
Affiliate of A-B ("A-B Entity") will * or * within a * radius of the Facility
(the "Facility Service Area") for * or * thereof other than *. An A-B Entity may
contract for * to be * within the Facility Service Area if: (1) the contract is
not with *, and (2) * is not the *, and (3) the Producer is * provided that such
* must be promptly * by Producer's general manager or his designee, and any
unavailability or failure to * shall be deemed a *. No A-B Entity will invest
(either directly or indirectly) in a Corn ethanol production facility within the
Facility Service Area. If this Agreement is terminated by Producer under
Sections 4.2(b) or 4.2(g), the restrictions under this Section 1.5 shall survive
for a period of one year from the effective date of termination. If this
Agreement is terminated or expires in any other manner other than the preceding
sentence, the restrictions under this Section 1.5 shall not survive such
termination or expiration. For purposes of this Agreement: (a) the term
"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the party specified, with "control" or "controlled" meaning the possession,
directly or indirectly, of the power to direct or cause the
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direction of the management and policies of a Person, whether through the
ownership of voting securities or voting interests, by contract or otherwise;
(b) the term "Person" shall mean any individual, general partnership, limited
partnership, limited liability company, joint venture, trust, business trust,
cooperative, association or other entity of whatever nature. For purposes of
this Agreement, Bunge shall not be deemed an Affiliate of A-B; and (c) the term
"Restriction Date" shall mean the date that the Facility first becomes ready for
delivery of Corn to the Facility; provided that Producer will notify A-B at
least thirty (30) days in advance of such date.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
2. Corn Procurement Policy; Contracts.
2.1 Corn Procurement Policy. Producer will establish, with the input of
A-B, a Corn procurement policy setting forth the guidelines and parameters
within which A-B will acquire Corn as agent of Producer for the Facility (the
"Corn Procurement Policy"). The Corn Procurement Policy is subject to approval
and modification by Producer's risk management committee and/or Board of
Managers and may be developed in connection with a comprehensive risk management
policy for the marketing of all products produced by the Facility and the inputs
required for operation of the Facility. The Corn Procurement Policy shall
include, among other things, obligations of Producer to deliver to A-B written
estimates of Corn requirements at the Facility a reasonable period of time prior
to such requirement, allowable range of prices and guidelines for the
establishment of daily bids, credit limits, forward contracting limits, risk
management guidelines, quality standards, a price discount schedule and other
daily operating parameters to be followed by A-B in procuring the Corn. The Corn
Procurement Policy shall be updated as necessary to reflect current market
conditions and operational needs of the Facility. The allowable range of prices
for Corn included within the Corn Procurement Policy may include, in Producer's
discretion, the price actually paid by Producer to purchase the Corn, plus all
expenses incurred by Producer to deliver the Corn to the Facility, whether
incurred before or during the Term, less any quality discounts.
2.2 Agency Services. To the extent that Producer meets its obligations set
forth in Section 2.3, A-B will provide the following services (the "Services")
to Producer:
(a) Contracting with Corn Suppliers. A-B will negotiate and execute,
in the name and on behalf of Producer, contracts, arrangements and agreements
for purchase by Producer of all Corn for the Facility ("Contracts") with corn
suppliers, including local grain producers and local, regional and national
grain merchants ("Corn Suppliers"). Contracts will require Corn Suppliers to
deliver Corn meeting minimum quality standards ("Quality Standards") and will
apply pricing premiums and discounts to differing qualities of Corn delivered,
in each case as set forth in the Corn Procurement Policy. If a Corn Supplier
fails to make a delivery in accordance with a Contract, A-B shall procure
substitute Corn as soon as possible, provided that such substitution shall be at
Producer's expense (provided further that the forgoing does not and shall not
limit Producer's legal rights or remedies to recover the expense of procuring
substitute Corn from the Corn Supplier.)
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(b) Corn Deliveries. A-B will schedule and arrange, on Producer's
behalf, the shipping and delivery of all Corn to the Facility. A-B will endeavor
to purchase Corn on a delivered to Facility basis, but in no event shall A-B be
responsible for transportation costs for Corn. A-B will complete the settlement
of Corn deliveries, including matching of Corn deliveries to outstanding
Contracts.
(c) Corn Inventory, Open Contracts and Accounting. A-B shall provide
daily accounting to Producer of the following as of the prior business day: (i)
current Corn inventory held at the Facility on behalf of Producer, (ii) open
Contracts with consolidated delivery dates, volumes and pricing information, and
(iii) Corn delivered by Corn Suppliers, both with respect to Corn accepted by
the Producer and, to the extent notified by Producer, Corn rejected by Producer
for failure to meet Quality Standards.
(d) Corn Originators and Grain Accounting Staff. Except as provided in
Section 2(d)(ii) below, A-B shall provide or make available the following staff,
which may be employees of A-B or employees leased or subcontracted from Bunge to
A-B (the "A-B Staff") dedicated to performing the Services:
i. A-B shall provide not less than two grain originators, to be
located at the Facility, having the following characteristics: (A) one
being a Senior Grain Merchandiser of Bunge and a pre-existing employee
of Bunge; and (B) the other having at least two years grain
merchandising experience. The originators shall be responsible for
formulating and implementing a merchandising strategy consistent with
the Corn Procurement Policy to procure Corn for Producer as provided
under this Agreement. In furtherance of those responsibilities, the
originators will gather and analyze market data, and will establish
relationships with Corn Suppliers.
ii. A-B shall provide the grain accounting staff necessary to
complete settlement and daily accounting of Corn purchases, Corn
deliveries and Contracts entered into on behalf of Producer, as well
as completing necessary UCC and Farm Security Act searches to confirm
clear title in the Corn delivered. Notwithstanding the foregoing, the
Parties may mutually agree for some or all of the services set forth
in this Section 2.2(d)(ii) to be provided by an employee of Producer
instead of A-B ("Producer-Provided Staff"), in which case the mutually
agreed upon salary and benefits for the Producer-Provided Staff may be
offset against the Agency Fee (as hereinafter defined) owed to A-B.
Any agreement under this subsection shall be evidenced by a writing
between the parties.
iii. Upon any expansion of the Facility, A-B shall provide
additional A-B Staff as necessary for A-B to provide the same level of
services under this Agreement as was provided by A-B before such
expansion. All employee compensation, bonuses, benefits (including
retirement benefits) and employment taxes for the A-B Staff shall be
the responsibility of A-B.
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(e) A-B Staff and Producer Employees. A-B shall be responsible for
supervision of A-B Staff and Producer shall be responsible for supervision of
Producer's employees. A-B Staff will abide by the same rules of conduct as are
applied to Producer's employees in Producer's employee handbook for the
Facility. Notwithstanding the foregoing, the Producer's general manager and A-B
will jointly conduct periodic employment review of the A-B Staff and any
Producer-Provided Staff . Producer's general manager may make staffing
recommendations to A-B at any time and A-B may make staffing recommendations to
Producer for Producer-Provided Staff at any time. A-B may also notify Producer's
general manager or Board of Managers of any misconduct by Producer's employees.
If the recommendations of the Producer's general manager are not accepted by
A-B, Producer may issue a Notice of Dispute as provided in Section 13.2. If
A-B's recommendations regarding Producer-Provided Staff are not accepted by
Producer or if A-B's concerns regarding any misconduct by Producer's employees
are not timely addressed by Producer, A-B may issue a Notice of Dispute as
provided in Section 13.2.
(f) Corn Procurement Policy. A-B shall abide by any terms of the Corn
Procurement Policy applicable to A-B in connection with provision of the
Services. Neither A-B nor its Affiliates shall be in breach of this Agreement or
liable to Producer as the result of Services provided under this Agreement to
the extent A-B acts in accordance with the Corn Procurement Policy or in
accordance with directions given by Producer's Board or general manager.
2.3 Producer's Obligations. In connection with A-B's provision of the
Services, Producer will provide the
following:
(a) Software. Producer shall provide the grain origination and
accounting software reasonably acceptable to A-B to record Corn contracts,
purchases and deliveries.
(b) Monthly Estimates and Minimum Supply. At least 30 days before the
beginning of each calendar month during the Term (but not before the Effective
Date), Producer will deliver to A-B a written estimate of its anticipated Corn
requirements at the Facility for such calendar month (a "Monthly Estimate"). A-B
shall maintain at all times a minimum supply of Corn in Storage for the Facility
of three days usage based on the Monthly Estimate, which is estimated to be
approximately * bushels, or * bushels per day, unless the general manager of the
Facility, or his designee (or such other individual identified in writing by
Producer) approves in advance different minimum supply requirements (with such
requirements collectively, the "Minimum Supply"). Producer will immediately
notify A-B if the Minimum Supply has not been met by A-B. Producer will make
storage room available for no less than * bushels of Corn in order for A-B to
fulfill the Minimum Supply requirement. A-B and Producer will renegotiate the
preceding sentences of this Section in the event of any material changes to the
three days usage estimate set forth above. Producer will immediately notify A-B
of any revisions to a Monthly Estimate and A-B will utilize commercially
reasonable efforts consistent with industry standards to adjust its planned Corn
deliveries accordingly. In addition, Producer will give A-B reasonable advance
notice of any circumstances that would reasonably be expected to materially
affect Corn requirements at the Facility. Producer's sole and exclusive remedy
for A-B's failure
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to maintain the Minimum Supply in accordance with this Section 2.3(b) shall be
the rights set forth in Sections 4.2(b) and 13.2.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c) Corn Procurement Policy. Producer will abide by any terms of the
Corn Procurement Policy applicable to Producer.
(d) Corn Receiving. Producer will receive, sample, weigh and unload
all Corn delivered to the Facility using scales at the Facility that are
inspected and certified as required by applicable law. Prior to unloading,
Producer will have the right to inspect any Corn delivered for purposes of
verifying that such Corn meets the Quality Standards and determining whether any
pricing discounts associated with differing qualities of Corn apply.
(e) Contracts. Producer will respond promptly to any requests by A-B
regarding Contracts submitted to Producer pursuant to section 2.4.
2.4 Contract Commitments. All Contracts negotiated by A-B shall be
consistent with the Corn Procurement Policy, unless the general manager of the
Facility, or his designee (or such other individual identified in writing by
Producer) approves in advance any Contract terms inconsistent with the Corn
Procurement Policy. Attached hereto as Exhibit A is a form of the Contract that
A-B intends to use to purchase Corn hereunder. Any material changes to the form
contract must be approved by Producer prior to use. A-B will not be a party to,
or have any liability or obligation to any seller or Producer under, Contracts
which are executed in compliance with the provisions of this Section 2 and
Producer will bear all risk of loss (including, without limitation, for
non-delivery and quality of Corn) under the terms of the Contracts. Producer
will indemnify, defend and hold harmless A-B and its Affiliates (as defined
above), employees and agents from and against any and all liabilities, costs and
expenses (including, without limitation, attorneys fees) arising out of,
relating to or resulting from any Contracts and the obligations of Producer
there under, except to the extent such liabilities, costs and expenses arise out
of the gross negligence or intentional misconduct of A-B.
2.5 Financial Risk Management. Producer may elect to engage Bunge, or an
Affiliate of Bunge, for a separately negotiated fee, to provide a portfolio
strategy (which may include the purchase and use of futures, options, and other
hedging tools, as well as storage at sites other than the Facility) that will
permit Producer to optimize its Corn supply pricing and security.
2.6 Corn Merchandising. If the Facility ceases producing ethanol at any
time during the Term and Producer, in its sole discretion, determines to
continue operating the Facility as a grain elevator, A-B and Producer may elect
to negotiate in good faith the terms of an agreement under which A-B will
merchandise and re-sell Corn delivered to the Facility on behalf of Producer for
a mutually agreeable fee. Notwithstanding the forgoing, if the Facility ceases
ethanol production and is not operating the facility as a grain elevator, A-B
shall
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cease entering any additional Contracts and shall attempt to negotiate on
Producer's behalf with Corn Suppliers alternate delivery terms for any
outstanding Contracts.
3. Agency Fee and Payment.
3.1 Agency Fee. For all Corn delivered to the Facility, Producer will pay
A-B a price per bushel agency fee equal to (a) $* per bushel for Corn delivered
to the Facility by truck; and (b) $* per bushel for Corn delivered to the
Facility by rail (collectively, the "Agency Fee").
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.2 Payment. Producer will pay, by wire transfer on or before the 10th day
of each month during the Term, the Agency Fee for the immediately preceding
month. Interest will accrue on amounts past due at a rate per annum equal to the
lesser of (a) the prime rate, as reported from time to time by the Wall Street
Journal (or similar publication), plus 2%, and (b) the highest rate permitted by
law. All amounts due to A-B under this Agreement will be paid without setoff,
counterclaim or deduction, except to the extent provided in Section 2.2(d)(ii).
3.3 Annual Minimum Payments. Subject to Section 9 hereof, if as of each
anniversary of the Effective Date during the Term, the total amount of Fees that
Producer has paid or has been obligated to pay A-B during the immediately
preceding 12-month period (a "Total Fees Amount") is less than $225,000 ("Annual
Minimum Amount"), then within 15 days after such Producer receives notice from
A-B, Producer will pay to A-B an amount equal to the Annual Minimum Amount minus
the Total Fees Amount. At Producer's request, A-B shall provide evidence
supporting the amount. Notwithstanding, if the Facility has not operated for
twelve consecutive months due to a Force Majeure Event, then Producer shall not
be obligated to pay any Annual Minimum Amount for periods after the twelve
consecutive months.
3.4 Adjustments.
(a) Beginning on the third anniversary of the Effective Date (as
defined in Section 4.1). and on each anniversary thereafter, the Agency Fee and
the Annual Minimum Payment will be increased or decreased by an amount equal to
the product of: (i) the Agency Fee and the Annual Minimum Payment, as
applicable, for the immediately preceding 12-month period, multiplied by (ii)
the percentage increase (or decrease) for such 12-month period in the Employment
Cost Index; Not Seasonally Adjusted; Total Compensation; Private Industry;
twelve-month percent change; Midwest Workers, published by the Bureau of Labor
Statistics, U.S. Department of Labor.
(b) If the Effective Date has not occurred on or before July 15, 2008,
then A-B may require the Parties to renegotiate the provisions of this Article
3. Upon such renegotiation, if the Parties do not agree upon adjustments to the
compensation on terms agreeable to A-B, then A-B may terminate this Agreement
upon notice to Producer.
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3.5 Tax. For purposes of personal property taxation and/or assessment or
other similar taxation, if any, any tax assessed on Corn purchased or supplied
to the Facility under this Agreement will be the responsibility of Producer, and
at no time will A-B be responsible for the payment of any such tax.
4. Term and Termination.
4.1 Term. The initial term of this Agreement will begin upon execution of
this Agreement by both Parties and, unless earlier terminated in accordance with
the terms hereof, will expire upon the tenth anniversary of the Effective Date.
Unless earlier terminated in accordance with this Agreement, this Agreement will
automatically renew for successive three-year terms thereafter unless either
Party gives written notice to the other Party of its election not to renew, no
later than 180 days prior to the expiration of the initial term or the then
current renewal term, as applicable. The "Term" will be the total of the initial
term of this Agreement and any renewal terms. The "Effective Date" will be July
15, 2008 or such other date agreed by the Parties in writing that the Facility
first needs Corn for ethanol processing operations; provided that Producer will
notify A-B at least thirty (30) days in advance of when Corn is first so needed.
4.2 Termination Rights.
(a) Either Party may terminate this Agreement immediately upon notice
to the other Party if such other Party has (i) materially breached any
representation, warranty, or obligation under this Agreement, and (ii) failed to
remedy such breach within 30 days after the terminating Party has given notice
of such breach, or if such breach cannot reasonably be cured within such 30-day
period, such other Party has failed to commence and diligently pursue remedy of
the breach and failed to remedy such breach not later than 120 days after the
terminating Party has given notice of such breach.
(b) Producer may terminate this Agreement upon thirty days prior
written notice to A-B if: (i) A-B has failed to maintain the Minimum Supply of
Corn in accordance with the standards set in Section 2.3(b) on six or more days
during a twelve-month period and Producer has notified A-B of each such failure
in accordance with Section 2.3(b); or (ii) subject to the remaining provisions
of this Section 4.2(b), the Facility has shut down operations because of the
lack of Corn delivered to or in storage for the Facility on two or more
occasions during a twelve-month period and Producer has notified A-B of such
shut-downs ("Facility Shut-Down"). If Producer has not exercised its right to
deliver notice to terminate this Agreement within 10 days after each day or
occasion (as applicable) allowing a termination right under this Section 4.2(b),
then Producer's right to terminate shall cease with respect to such day or
occasion, as applicable. Notwithstanding the foregoing, to the extent A-B's
failure to maintain the Minimum Supply of Corn or a Facility Shut-Down occurs as
the result of Producer's actions or inactions (unless Producer provides
reasonable notice to A-B of such actions or inactions), then such event shall
not be considered in determining whether Producer has a termination right (or
any other right, including any right of payment) under this Section 4.2(b). On
the first Facility Shut-Down in a twelve month period, A-B will pay to Producer
an amount equal to the actual damages suffered by Producer as a result of the
shut down of the Facility. On the second Facility Shut-
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Down in a twelve month period, Producer may elect to: (i) exercise its right to
terminate this Agreement as set forth in the first sentence of this Section
4.2(b) and A-B will pay to Producer an amount equal to the actual damages
suffered by Producer as a result of the shut down of the Facility; or (ii) not
exercise its right to terminate the Agreement as set forth in the first sentence
of this Section 4.2(b) and A-B will pay to Producer an amount equal to $*. On
the third or more Facility Shut-downs during a twelve month period, then either
Party may elect to terminate this Agreement on thirty days notice to the other
Party and A-B will pay to Producer an amount equal to the actual damages
suffered by Producer as a result of the shut down of the Facility.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c) A-B may terminate this Agreement immediately upon notice to
Producer (i) if Producer fails to pay any amount due under this Agreement within
15 days after A-B gives Producer notice of such nonpayment; (ii) if the
Effective Date has not occurred on or before October 15, 2008; (iii) in
accordance with Section 3.4(b) hereof; and/or (iv) upon the occurrence of a
Dissolution Event (as defined in Article X of the Operating Agreement).
(d) Either Party may terminate this Agreement immediately upon notice
to the other Party if (i) such other Party files a petition for adjudication as
bankrupt, for reorganization or for an arrangement under any bankruptcy or
insolvency law; (ii) an involuntary petition under such law is filed against
such other Party and is not dismissed, vacated or stayed within 60 days
thereafter; or (iii) such other Party makes an assignment of all or
substantially all of its assets for the benefit of its creditors.
(e) A-B may terminate this Agreement immediately upon notice to
Producer if there is a Change in Control of Producer. A "Change of Control"
occurs upon any of: (i) a sale of all or substantially all of the assets of
Producer; (ii) a merger or consolidation involving Producer, excluding a merger
or consolidation after which 50% or more of the outstanding equity interests of
Producer continue to be held by the same holders that held 50% of more of the
outstanding equity interests of Producer immediately before such merger or
consolidation; or (iii) any issuance and/or acquisition of equity interests of
Producer that results in a person or entity holding 50% or more of the
outstanding equity interests of Producer, excluding any persons or entities that
held 50% or more of the outstanding equity interests of Producer immediately
before such acquisition.
(f) Either Party may terminate this Agreement in accordance with
Section 9.3 hereof.
(g) Producer may terminate this Agreement upon thirty days prior
written notice to A-B if: (i) prior to May 1, 2011, Bunge or its Affiliates sell
any of the Series B Units of Producer originally purchased by Bunge from
Producer; or (ii) from and after May 1, 2011, (A) Bunge and/or its Affiliates
sell more than 15% per annum (on a cumulative basis) of the Series B Units of
Producer originally purchased by Bunge from Producer; or (B) Bunge and/or its
Affiliates hold 25% or less of the Series B Units originally purchased by Bunge
from Producer.
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The provisions of this Section 4.2(g) shall not apply to intra-Affiliate
transfers by Bunge and/or its Affiliates.
(h) Producer may terminate this Agreement immediately upon notice to
A-B if there is a Change in Control of Producer upon payment to A-B of an amount
equal to the Annual Minimum Amount on the date of such termination.
4.3 Survival. The provisions of this Agreement which expressly or by their
nature survive expiration or termination of this Agreement, including, but not
limited to, Sections 1.5, 3.2, 3.3, 4, 6, 7, 12, 13 and 14, will remain in
effect after the expiration or termination of this Agreement. For the avoidance
of doubt, Section 1.5 will only survive termination of this Agreement to the
extent set forth in Section 1.5.
5. Covenants of Producer. Producer covenants to A-B that it will use
commercially reasonable efforts to ensure that the Facility will be fully
operational no later than July 15, 2008.
6. Representations and Warranties. The following parties make warranties,
representations or guarantees as described below.
(a) A-B represents and warrants to Producer that A-B, either through
its own management or through lawful contracts entered into with third parties,
currently has and shall maintain or cause to be maintained such licenses,
permits and/or authorities as may be required to lawfully engage in the purchase
and sale of Corn.
(b) A-B represents and warrants to Producer that all necessary
corporate action has been taken for the authorization, execution, delivery and
performance of this Agreement; the execution, delivery and performance of this
Agreement by it does not, and will not, violate or constitute a breach of or
default under any Governmental Requirement (as defined in Section 14.4) or any
indenture, contract or other instrument to which the representing party or its
assets are bound or to which its business is subject.
(c) Producer represents and warrants to A-B that all necessary
corporate action has been taken for the authorization, execution, delivery and
performance of this Agreement; the execution, delivery and performance of this
Agreement by Producer does not, and will not, violate or constitute a breach of
or default under any Governmental Requirement or any indenture, contract or
other instrument to which the representing party or its assets are bound or to
which its business is subject.
7. Limitation of Liability; General Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, A-B MAKES NO STATUTORY, WRITTEN, ORAL, EXPRESSED OR IMPLIED
WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND CONCERNING THE SERVICES
PROVIDED BY A-B OR ITS AFFILIATES UNDER THIS AGREEMENT. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT (INCLUDING SECTION 4.2(b) AND 8.4), NEITHER A-B NOR
ITS AFFILIATES, NOR ANY OTHER PARTY PROVIDING SERVICES HEREUNDER (INCLUDING ANY
SUBCONTRACTOR ALLOWED TO PROVIDE SERVICES BY THIS AGREEMENT), WILL
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BE LIABLE TO PRODUCER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES ARISING OUT OF,
RELATING TO OR RESULTING FROM SERVICES PROVIDED UNDER THIS AGREEMENT OR THE
FAILURE TO PROVIDE SERVICES UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT SUCH
DAMAGES ARISE OUT OF OR RESULT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF A-B OR SUCH PARTY PROVIDING SERVICES (INCLUDING ANY SUBCONTRACTOR ALLOWED TO
PROVIDE SERVICES BY THIS AGREEMENT); PROVIDED, THAT THE AGGREGATE AMOUNT OF ALL
SUCH DAMAGES UNDER THIS AGREEMENT IN ANY FISCAL YEAR WILL NOT EXCEED THE AMOUNT
OF THE FEE IN SUCH FISCAL YEAR. THE REMUNERATION TO BE PAID FOR THE SERVICES TO
BE PERFORMED REFLECTS THIS LIMITATION OF LIABILITY. IN NO EVENT WILL A-B OR ANY
OF ITS AFFILIATES OR ANY OTHER PARTY PROVIDING SERVICES HEREUNDER (INCLUDING ANY
SUBCONTRACTOR ALLOWED TO PROVIDE SERVICES BY THIS AGREEMENT) BE LIABLE TO
PRODUCER OR ANY OTHER PERSON OR ENTITY FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES UNDER ANY CIRCUMSTANCES.
8. Remedies.
8.1 Suspend Performance. A-B may suspend its performance under this
Agreement until Producer has paid all amounts due under this Agreement if
Producer fails to pay any amount within 15 days after the date when such amount
is due and uncured under this Agreement.
8.2 Specific Enforcement. The Parties shall have the right and remedy to
seek to have the provisions of this Agreement specifically enforced by any court
having equity jurisdiction without the necessity of posting any bond, it being
acknowledged and agreed by the parties that the scope of the provisions of this
Agreement are reasonable under the circumstances.
8.3 Liquidated Damages of A-B. If any actions or inactions by Producer lead
to termination of this Agreement, A-B will suffer damages which will be
difficult to calculate and the Parties agree that the liquidated damages in the
following sentence are a reasonable estimate thereof and will not be viewed as a
penalty. If A-B terminates this Agreement under Sections 4.2(a) or 4.2(c),
Producer will pay to A-B liquidated damages in an amount equal to $*. If A-B
terminates this Agreement under Sections 4.2(e), Producer will pay to A-B
liquidated damages in an amount equal to the Annual Minimum Amount on the date
of such termination.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8.4 Liquidated Damages of Producer. If any actions or inactions by A-B lead
to termination of this Agreement, Producer will suffer damages which will be
difficult to calculate and the Parties agree that the liquidated damages in the
following sentence are a reasonable
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estimate thereof and will not be viewed as a penalty. If Producer terminates
this Agreement under Section 4.2(a), A-B will pay to Producer liquidated damages
in an amount equal to $*.
*OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
8.5 Rights Not Exclusive. Subject to Section 2.3(b) and Article 7, no
right, power or remedy conferred by this Agreement will be exclusive of any
other right, power or remedy now or hereafter available to a Party at law, in
equity, by statute or otherwise.
9. Force Majeure.
9.1 Definition of Force Majeure Event. Each Party is excused from
performing its obligations under this Agreement to the extent that such
performance is prevented by an act or event (a "Force Majeure Event") whether or
not foreseen, that: (i) is beyond the reasonable control of, and is not due to
the fault or negligence of, such Party, and (ii) could not have been avoided by
such Party's exercise of due diligence, including, but not limited to, a labor
controversy, strike, lockout, boycott, transportation stoppage, action of a
court or public authority, fire, flood, earthquake, storm, war, civil strife,
terrorist action, epidemic, or act of God; provided that a Force Majeure Event
will not include economic hardship, changes in market conditions, or
insufficiency of funds. Notwithstanding the foregoing sentence, a Force Majeure
Event does not excuse any obligation to make any payment required by this
Agreement (including Section 3.3) and will not affect either Party's right to
terminate this Agreement pursuant to Section 4.2
9.2 Conditions Regarding Force Majeure Event. A Party claiming a Force
Majeure Event must: (i) use commercially reasonable efforts to cure, mitigate,
or remedy the effects of its nonperformance; provided that neither Party will
have any obligation hereunder to settle a strike or labor dispute; (ii) bear the
burden of demonstrating its existence; and (iii) notify the other Party of the
occurrence of the Force Majeure Event as quickly as reasonably possible, but no
later than five business days after learning of the occurrence of the Force
Majeure Event. Any Party that fails to notify the other Party of the occurrence
of a Force Majeure Event as required by this Section 9.2 will forfeit its right
to excuse performance of its obligations due to such Force Majeure Event. When a
Party claiming a Force Majeure Event is able to resume performance of its
obligations under this Agreement, it will immediately give the other Party
notice to that effect and resume performance.
9.3 Third Parties; Termination. During any period that a Party claiming a
Force Majeure Event is excused from performance under this Agreement, the other
Party may accept performance from other parties as it may reasonably determine
under the circumstances. If a Party has not performed under this Agreement due
to a Force Majeure Event for twelve consecutive months or more, the other Party
may terminate this Agreement immediately upon notice to the non-performing
Party.
10. Insurance.
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10.1 Other Required Coverage.
(a) Each Party will maintain automobile liability insurance covering
owned, hired, and non-owned vehicles against claims for bodily injury, death and
property damage, with a combined single limit of not less than $1,000,000, or
equivalent coverage using split limits. Such insurance will name the other
Party, its parents, subsidiaries and Affiliates as additional insureds
thereunder, and will be primary and non-contributory to any other insurance
available to such other Party, its parents, subsidiaries and Affiliates as
insureds or otherwise.
(b) Each Party will maintain commercial general liability insurance
(including, without limitation, coverage for Contractual Liability and
Products/Completed Operations) against claims for bodily injury, death and
property damage, with limits of not less than $1,000,000 for each occurrence and
$1,000,000 in the General and Products/Completed Operations Aggregate. Such
insurance will name the other Party, its parents, subsidiaries and Affiliates as
additional insureds there under, and will be primary and non-contributory to any
other insurance available to such other Party, its parents, subsidiaries and
Affiliates as insureds or otherwise.
(c) An excess or umbrella liability policy with a limit of not less
than $2,000,000 per occurrence and $2,000,000 aggregate. Such excess or umbrella
liability policy shall follow form with the primary liability policies, and
contain a drop-down provision in case of impairment of underlying limits.
(d) Notwithstanding the provisions of Section 10.1(b) and (c), each
Party's total coverage under both its commercial general liability insurance in
Section 10.1(b) and excess or umbrella liability policy in Section 10.1(c) must
have combined limits together totalling $4,000,000 for each occurrence and
$4,000,000 aggregate.
(e) Worker's Compensation insurance providing statutory benefits for
injury or disease in the state(s) of operation of the Parties, and Employer's
Liability with limits of at least $500,000 for individual injury or disease,
with an aggregate of $500,000 for disease.
(f) Each Party waives all rights against the other Party and its
employees and agents for all losses and damages caused by, arising out of or
resulting from any of the perils or causes of loss of the Party covered by the
policies contemplated by Section 10.1 and any other property insurance covering
the Party applicable to the Facility.
10.2 Policy Requirements. All insurance policies required by this Agreement
will (a) provide coverage on an "occurrence" basis; (b) provide that no
cancellation will be effected without giving the other Party at least thirty
days' prior written notice; and (c) be valid and enforceable policies issued by
insurers of recognized responsibility, properly licensed in the State where the
Facility is located, with an A.M. Best's Rating of A- or better and Class VII or
better. Such insurance policies will not contain a cross-liability exclusion or
an exclusion for punitive or exemplary damages where insurable under law. Prior
to the Effective Date and, thereafter, within five business days of renewal,
certificates and endorsements of such insurance will be delivered to the other
Party, as appropriate, as evidence of the specified insurance
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coverage. From time to time, upon a Party's request, the other Party will
provide the requesting Party a certified duplicate original of any policy
required to be maintained hereunder.
11. Relationship of Parties. This Agreement creates no relationship other than
an agency relationship between the Parties hereto. Except for the terms of the
agency arrangement expressly provided herein, there is no partnership, joint
venture or other joint or mutual enterprise or undertaking created hereby and
neither Party, or any of such Party's representatives, agents or employees, will
be deemed to be the representative or employee of the other Party. Except as
expressly provided herein or as otherwise specifically agreed in writing,
neither Party will have authority to act on behalf of or bind the other Party.
Notwithstanding the foregoing, the Parties acknowledge that Bunge will be a
member of Producer and has certain rights related thereto.
12. Confidentiality.
12.1 Definition of Confidential Information. The term "Confidential
Information" means all material or information relating to a Party's business
operations and affairs (including trade secrets) that such Party treats as
confidential. Without limiting the generality of the foregoing, all information
regarding quantities of Corn requested, supplied, or capable of being supplied
and any pricing matter under this Agreement will be deemed to be Confidential
Information of the appropriate Party.
12.2 Use of Confidential Information. During the Term and for three years
thereafter, neither Party will (a) use any Confidential Information of the other
Party for any purpose other than in accordance with this Agreement or for
internal business purposes, or (b) disclose Confidential Information to any
Person, except to its personnel (and with respect to A-B, to Bunge and its
Affiliates) who are subject to nondisclosure obligations comparable in scope to
this Section 12 and who have a need to know such Confidential Information in
order to perform under this Agreement. Notwithstanding the foregoing, the
Parties acknowledge that A-B, Bunge and/or their respective Affiliates may
perform services for other third parties similar to the services provided to
Producer hereunder and that the use by A-B, Bunge and/or their respective
Affiliates of any Confidential Information regarding the services provided under
this Agreement in the course of the provision of such services to other third
parties and for A-B's, Bunge's and their Affiliates' internal business purposes
shall not be considered a violation of this Section 12; provided, that such use
of Producer's Confidential Information may not be to the competitive
disadvantage of Producer.
12.3 Disclosure of Confidential Information. Notwithstanding Section 12.2,
either Party may use for any purpose or disclose any material or information
that it can demonstrate (i) is or becomes publicly known through no act or fault
of such Party; (ii) is developed independently by such Party without reference
to the other Party's Confidential Information; (iii) is known by such Party when
disclosed by the other Party, and such Party does not then have a duty to
maintain its confidentiality; or (iv) is rightfully obtained by such Party from
a third party not obligated to preserve its confidentiality who did not receive
the material or information directly or indirectly from the other Party. A Party
also may disclose the other Party's Confidential Information to the extent
required by a court or other governmental authority,
-14-
provided that the disclosing Party (a) gives the other Party advance written
notice of the disclosure, (b) uses reasonable efforts to resist disclosing the
Confidential Information, (c) cooperates with the other Party on request to
obtain a protective order or otherwise limit the disclosure, and (d) as soon as
reasonably possible, provides a letter from its counsel confirming that such
Confidential Information is, in fact, required to be disclosed.
12.4 Injunctive Relief. Each Party acknowledges and agrees that its breach
or threatened breach of any provision of this Section 12 would cause the other
Party irreparable injury for which it would not have an adequate remedy at law.
In the event of a breach or threatened breach, the nonbreaching Party will be
entitled to injunctive relief in addition to all other remedies it may have at
law or in equity.
13. Governing Law; Disputes.
13.1 Governing Law. This Agreement shall be governed by the laws of the
state of Iowa, without regard to principles of conflicts of laws.
13.2 Notice of Dispute. If any dispute shall arise under or in connection
with this Agreement, the Parties hereto agree to follow the procedures set forth
in this Section 13 in an effort to resolve the dispute prior to the commencement
of any formal proceedings; provided, however, that either Party may institute
judicial proceedings seeking equitable relief or remedies without following the
procedures set forth herein. The Parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement, the breach,
termination, or validity hereof, or the transactions contemplated herein
promptly by negotiation between representatives who have authority to settle the
controversy. Any Party may give the other Party written notice that a dispute
exists (a "Notice of Dispute") setting forth a statement of such Party's
position. Within twenty (20) business days of the delivery of the Notice of
Dispute, representatives of the Parties shall meet at a mutually acceptable time
and place, and thereafter as long as they both reasonably deem necessary, to
exchange relevant information and attempt to resolve the dispute. If the matter
has not been resolved within thirty (30) days of the disputing party's
delivering its Notice of Dispute, the dispute shall be referred to the Boards of
Directors or Managers of Producer and A-B who shall within twenty (20)
additional days meet to attempt in good faith to resolve the dispute.
13.3 Mediation. If the matter still has not been resolved within sixty (60)
days of the delivery of the Notice of Dispute, then any Party may seek to
resolve the dispute through mediation administered by the Commercial Mediation
Rules of the American Arbitration Association. If the Parties fail to resolve
the dispute within twenty-one (21) days after starting mediation, then either
Party may initiate appropriate proceedings to obtain a judicial resolution of
the dispute.
13.4 Negotiations; Jurisdictional Matters. If a representative of any Party
intends to be accompanied at a meeting by an attorney, the other negotiator
shall be given at least three (3) business days' notice of such intention and
may also be accompanied by an attorney. All negotiations pursuant to this clause
are confidential and shall be treated as compromise and settlement negotiations
for purposes of the Federal Rules of Evidence and similar state rules of
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evidence. Any proceeding initiated by either Party hereto shall be commenced and
prosecuted in the United States District Courts for the Eastern District of
Missouri or the Western District of Iowa or the state courts in St. Louis
County, Missouri or Des Moines, Iowa, and any courts to which an appeal may be
taken, and each Party hereby consents to and submits to the personal
jurisdiction of each of such courts.
13.5 Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHTS
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
14. Indemnification.
14.1 Indemnification By Producer. Producer agrees to indemnify and hold A-B
harmless from any Loss suffered or incurred by A-B arising out of, or in any way
relating to:
(a) Producer's use or possession or operations on or at, or any action
or failure to act at, the Facility;
(b) any personal injury or property damage related to the use,
possession, condition of, disposal of, physical contact with or exposure to any
products manufactured at the Facility;
(c) injuries or alleged injuries suffered by Producer's employees
whether at the Facility or elsewhere and whether or not under the direction of
A-B and/or the Producer; or
(d) any violation or alleged violation of any Governmental Requirement
by Producer,
unless and to the extent such Loss was directly caused by A-B's gross negligence
or willful misconduct and in each case only to the extent A-B is not otherwise
compensated for such Loss by applicable insurance (to the extent actually paid).
14.2 Indemnification By A-B. A-B agrees to indemnify and hold Producer
harmless from any Loss suffered or incurred by Producer arising out of, or in
any way relating to:
(a) injuries or alleged injuries suffered by A-B's employees, or
leased or subcontracted by A-B, whether at the Facility or elsewhere; or
(b) any violation or alleged violation of any Governmental Requirement
by A-B,
unless and to the extent such Loss was directly caused by Producer's gross
negligence or willful misconduct and in each case only to the extent Producer is
not otherwise compensated for such Loss by applicable insurance (to the extent
actually paid).
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14.3 Employees, Affiliates, Etc. A party's indemnification of the other
party pursuant to this Section 14 will also run in favor of such indemnified
party's officers, directors, employees, agents and representatives, and
indemnification claims may be made hereunder by any of such parties or by the
indemnified party on such third parties' behalf.
14.4 Definitions. For purposes of this Agreement:
(a) "Governmental Requirement" means all laws, statutes, codes,
ordinances and governmental rules, regulations and requirements of any
Governmental Authority that are applicable to the Parties, the property of the
Parties or activities described in or contemplated by this Agreement.
(b) "Loss" means any claim, loss, cost, expense, liability, fine,
penalty, interest, payment or damage, including but not limited to reasonable
attorneys' fees, accountants' fees and any cost and expense of litigation,
negotiation, settlement or appeal
15. Notices. All notices required or permitted under this Agreement will be
in writing and will be deemed given and made: (i) if by personal delivery, on
the date of such delivery, (ii) if by facsimile, on the date sent (as evidenced
by confirmation of transmission by the transmitting equipment), (iii) if by
nationally recognized overnight courier, on the next business day following
deposit, and (iv) if by certified mail, return receipt requested, postage
prepaid, on the third business day following such mailing; in each case
addressed to the address or facsimile number shown below for such Party, or such
other address or facsimile number as such Party may give to the other Party by
notice:
If to A-B:
AGRI-Bunge, LLC
x/x Xxxxx Xxxxx Xxxxxxx, Inc.
00000 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Senior Vice President - Bunge Grain
Facsimile: (000) 000-0000
with copies to:
American Grain and Related Industries
Xxxxx North America, Inc. (a Xxxxxx-owned cooperative)
00000 Xxxxxx Xxxxx 0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000 Xxxx Xxx Xxxxxx, Xxxx 00000
Attn: General Counsel Attn: Chief Executive Officer
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to Producer:
Southwest Iowa Renewable Energy, LLC
000 X. Xxx 0, XX Xxx 000
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Xxxxxxx, XX 00000-0000
Attn: General Manager
with copies to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Facsimile: (000) 000-0000
16. Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes
the entire agreement between the Parties with respect to the subject matter
hereof and supersedes all prior agreements and understandings, both written and
oral, between the Parties with respect to the subject matter hereof. This
Agreement does not, and is not intended to, confer any rights or remedies upon
any person other than the Parties (or their Affiliates, successors, assignees or
subcontractors to the extent set forth herein).
17. Amendments; Waiver. The Parties may amend this Agreement only by a written
agreement of the Parties. No provision of this Agreement may be waived, except
as expressly provided herein or pursuant to a writing signed by the Party
against whom the waiver is sought to be enforced. No failure or delay in
exercising any right or remedy or requiring the satisfaction of any condition
under this Agreement, and no "course of dealing" between the Parties, operates
as a waiver or estoppel of any right, remedy or condition. A waiver made in
writing on one occasion is effective only in that instance and only for the
purpose that it is given and is not to be construed as a waiver on any future
occasion or against any other person.
18. Assignment. No Party may assign this Agreement, or assign or delegate any of
its rights, interests, or obligations under this Agreement, without the prior
written consent of the other Party. Despite the prior sentence, (a) SIRE may
assign to Affiliates of SIRE and may enter in assignments required by lenders
without A-B's prior written consent, and (b) A-B may assign this Agreement, or
assign or delegate any of its rights, interests, or obligations under this
Agreement, to Bunge North America, Inc. and its Affiliates without Producer's
prior written consent. Subject to the preceding sentences in this Section 18,
this Agreement binds and benefits the Parties and their respective permitted
successors and assigns.
19. Subcontracting. In connection with A-B providing the Services, A-B may
subcontract with or otherwise retain the services of Bunge and Bunge's
Affiliates, and Producer hereby consents to such subcontracting activities for
purposes of Section 18 hereof.
20. Severability. If a court or arbitrator with proper jurisdiction determines
that any provision of this Agreement is illegal, invalid, or unenforceable, the
remaining provisions of this Agreement remain in full force. The Parties will
negotiate in good faith to replace such illegal, invalid, or unenforceable
provision with a legal, valid, and enforceable provision that carries out the
Parties' intentions to the greatest lawful extent under this Agreement.
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21. Interpretation. Each Party has been represented by counsel during the
negotiation of this Agreement and agrees that any ambiguity in this Agreement
will not be construed against one of the Parties.
22. Further Assurances. Each Party will execute and cause to be delivered to the
other Party such instruments and other documents, and will take such other
actions, as the other Party may reasonably request for the purpose of carrying
out or evidencing any of the transactions contemplated by this Agreement.
23. Counterparts. This Agreement may be executed by the Parties by facsimile and
in separate counterparts, each of which when so executed will be deemed to be an
original and all of which together will constitute one and the same agreement.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.
AGRI-XXXXX, LLC SOUTHWEST IOWA RENEWABLE
ENERGY, LLC
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------------- --------------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxx Xxxxx
Title: Manager Title: Chairman
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Exhibit A
FORM OF CONTRACT
Southwest Iowa Renewable Energy, LLC
000 X. Xxx 0, XX Xxx 000
Xxxxxxx, XX 00000-0000
--------------------------------
Seller Name and Address:
--------------------------------
-----------------------------
DATE
-----------------------------
------------------------------------------
LOCATION
------------------------------------------
-------------------------------------------------------
SUBJECT TO RULES OF:
NATIONAL GRAIN AND FEED ASSOCIATION
-------------------------------------------------------
WE CONFIRM PURCHASE FROM YOU OF:
------------------------------- ------------------------------------- -------------------------------- -----------------------------
QUANTITY GRADE-GRAIN PRICE BASIS
------------------------------- ------------------------------------- -------------------------------- -----------------------------
------------------------------- ------------------------------------- -------------------------------- -----------------------------
TERMS: INSPECTIONS: WEIGHTS:
TIME OF DELIVERY:
SPECIAL TERMS:
LIENS:
GENERAL TERMS:
1. Seller warrants that commodity which is the subject matter of this
confirmation is free and clear of any penalty, lien, charge or
encumbrance, governmental or otherwise, except as stated above.
Notwithstanding any such penalty, lien, encumbrance, neither Seller of
Buyer intends that such commodity be grown on any specific farm, tract of
land or territory.
2. The terms of this confirmation are subject in all respects to the rules
and regulations of the exchange, board, or association designated above.
If Seller is not a member of the said exchange, board or association, then
the rules and regulations of the National Grain and Feed Association shall
govern. Buyer and Seller agree that all disputes controversies between
them with respect to this confirmation shall be arbitrated according to
said rules and regulation, and that judgement may be entered on the
arbitration award in any court of competent jurisdiction.
3. Buyer reserves the right to cancel, extend delivery time, or fill at the
above location or elsewhere at Buyer's option, any balance not delivered
within delivery period, and any loan resulting therefrom to be paid by
Seller. Extensions of delivery time will be made only upon 48 hours
notice, excluding Saturdays and legal holidays and will be effective
unless Seller objects to such notice within said 48 hour period.
4. The term "inspection" shall mean inspection in accordance with the terms
of National Grain and Feed Association's "Class A" Official Inspection.
Buyer's weights and inspections shall be specified where official weights
and grades are not available.
5. The commodity to be delivered hereunder is intended to be transported in
interstate or foreign commerce. (a) Seller warrants all commodities
applied against this confirmation (i) to be free of crotalaria; (ii) to be
fit for human consumption, and (iii) not to be adultered or miobranded
within the meaning of the Federal Food, Drug and Cosmetic Act or an
article or commodity which may not, under the provisions of the Act, be
introduced into interstate commerce. (b) Any commodity not in compliance
with the foregoing warranties or any commodity, irrespective of grade,
which is tagged, seized, condemned, declared unfit or is otherwise
actionable by any municipal state, or federal agency, shall not be
applicable on contract and ownership shall remain in Seller. All costs
incurred by Buyer with respect to any such commodity shall be for account
of Seller.
6. Buyer reserves the right to reject off-grade grain or to unload same
without first notifying Seller.
7. Any increase in present freight raises shall be for Seller's account.
Where proportional rates are applicable, Seller shall furnish tonnage to
protect minimum pay-in ("pad") in effect on or prior to the date of this
confirmation.
8. Seller warrants that the commodity delivered under this confirmation was
grown within the boundary of the continental United States.
9. Acceptance of any delivery by Buyer after breach of the terms and
conditions of this confirmation by Seller shall not waive any rights or
remedies accruing to Buyer as a result of such breach.
10. This contract is subject to reciprocal margins common in the trade,
including the following: when the market price exceeds the contract price,
Buyer may require Seller to place the difference between market price and
contract price on the undelivered balance in escrow and/or withhold
amounts due Seller for deliveries on this or any other contract, in an
amount no greater than the difference between market price and contract
price, until the balance is delivered. When the market price is below the
contract price, Seller may require Buyer to place the difference between
market price and contract price on the undelivered balance in escrow. If
more than one contract is outstanding, the aggregate balance on all open
contracts will be considered. Any payment made prior to completion of
delivery will be considered merely an accommodation, and in making such
advance Buyer waives none of the conditions of this confirmation to be
performed by Seller.
11. Buyer's performance under this confirmation is contingent upon conditions
beyond Buyer's control such as, but not limited to, labor disputes and
disturbances, embargo delays, accidents, fire, delay or non-performance of
carriers, acts of God, or war.
12. If Seller does not return a signed copy of this confirmation to Buyer
within ten days from the above date, Buyer shall have the option to cancel
this confirmation by sending written notice to Seller within fourteen days
from the above date. If Buyer does not give such written notice, this
confirmation shall remain in full force and effect.
SELLER: BUYER:
------------------------------------ Southwest Iowa Renewable Energy, LLC
By: By:
--------------------------------- ------------------------------------
================================================================================
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