Exhibit 10.8
*PORTIONS OF THIS DISTILLERS GRAIN PURCHASE AGREEMENT HAVE BEEN OMITTED
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
DISTILLER'S GRAIN PURCHASE AGREEMENT
THIS DISTILLER'S GRAIN PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of October 13, 2006 by and between Southwest Iowa Renewable
Energy, LLC, an Iowa limited liability company ("Producer"), and Xxxxx North
America, Inc., a New York corporation ("Bunge") (each of Producer and Bunge, a
"Party" and collectively, the "Parties").
RECITALS
A. Producer intends to construct and own an ethanol plant located near
Council Bluffs, Iowa (the "Facility").
X. Xxxxx is regularly engaged in the business of marketing grain and feed
products throughout the world.
C. As of the date of this Agreement, 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").
D. Producer desires to sell and Bunge desires to purchase all distiller's
grains with solubles produced by the Facility (the "DGS"), which includes wet
distillers grains and modified wet distillers grains (together, "WDGS") and dry
distiller's grains with solubles ("DDGS").
E. The Parties desire to agree in advance of such sale and purchase to the
price formula, payment, delivery and other terms thereof in consideration of the
mutually promised performance of the other.
AGREEMENT
Therefore, the Parties agree:
1. DGS Purchase/Sale.
1.1 Exclusive Purchaser. Subject to the terms of this Agreement (including,
but not limited to, Section 1.2 hereof), Producer agrees to sell to Bunge all
DGS produced during the Term (as defined in Section 6.1 hereof) by the Facility,
including the Facility as initially constructed and any modifications or
expansions thereof. Bunge agrees that it will be obligated to purchase all DGS
produced by the Facility during the Term under the conditions herein set forth.
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.
1.2 Right to Direct Sale. If, at any time, Producer identifies or receives
offers from potential purchasers of DGS of acceptable credit quality at more
favorable pricing than available through Bunge for the same grade, quality,
quantity and delivery period, Producer may direct Bunge to either (i) market the
DGS to a different purchaser at the same terms and pricing, or (ii) market the
DGS to the identified purchaser, the choice of which shall be at Bunge's sole
discretion. If Producer makes such direction to Bunge, Bunge shall promptly
negotiate and execute contracts for the sale of the DGS as described in the
preceding sentence, provided that with respect to such contracts, Producer shall
indemnify Bunge from any losses (including attorneys fees and collection costs)
resulting from the non-payment of amounts due under any such contracts with
purchasers identified by Producer.
1.3 Title. Title, risk of loss and full shipping responsibility shall pass
to Bunge upon Producer loading the DGS into trucks or rail cars at the Facility
and delivery to Bunge of a xxxx of lading for each shipment. Bunge and Producer
shall agree upon documented inspection, loading and sealing procedures.
1.4 Location. The place of delivery by Producer for all DGS sold to Bunge
pursuant to this Agreement shall be the Facility (the "Delivery Location").
Bunge will provide loading instructions to Producer designating the shipment
date and amount of DGS to be shipped with enough advance notice such that
Producer can direct the loading of all DGS delivered hereunder in a commercially
reasonable manner. Producer shall give Bunge and Bunge's agents access to the
Facility, in such a manner and at all times as shall be commercially reasonably
necessary and convenient, in order for Bunge or Bunge's agents and/or designees
to take delivery as provided herein. To the extent that Bunge has provided
Producer with loading instructions, such instructions are subject to change at
the discretion of Bunge upon reasonable notice to Producer. If Producer has
delivered DGS prior to such notice, Producer will not be responsible for any
failure of such DGS to comply with the changed instructions and Bunge will incur
the cost, if any associated with the change of instructions.
1.5 DGS Marketing Policy. Producer and Bunge will jointly establish a DGS
marketing policy with respect to Contracts (as defined in Section 2.1(b))
setting forth how far in advance such Contracts may provide for the sale of DGS,
referred to as forward contracting limits (the "DGS Marketing Policy"). Without
limitation, the DGS Marketing Policy shall also include obligations of Producer
to deliver to Bunge written estimates of DGS production at the Facility,
including the budgeted mix of DDGS and WDGS, as such budgeted mix may be revised
by the parties from time to time, a reasonable period of time prior to such
production. The DGS Marketing Policy is subject to approval and modification
from time-to-time jointly by Bunge and 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. The DGS Marketing Policy will be updated by the Parties as necessary.
Bunge shall promptly make Producer aware if the DGS Marketing Policy is
reasonably believed to be limiting Bunge's ability to market DGS in accordance
with this Agreement. Bunge shall have the right to market distiller's grains and
solubles from other
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facilities for its own account with respect to contracts for the sale of
distiller's grains and solubles which exceed the forward contracting limits set
by the DGS Marketing Policy. Resales by Bunge of spot market purchases from
Producer shall not be limited by this Agreement.
2. Obligations of the Parties; Quantity and Weights.
2.1 Bunge's Obligations.
(a) Market Information. Bunge will provide Producer with relevant and
transparent market information, including bid/ask sheets for DGS produced at the
Facility.
(b) DGS Contracts. Bunge will negotiate and execute contracts, arrangements
and agreements on its own behalf for the resale by Bunge of DGS ("Contracts"),
and provide Producer with copies of such Contracts upon request. Bunge will also
provide Producer with, or make available to Producer, consolidated daily
position reports of delivery dates, volumes and pricing under all open
Contracts.
(c) Bunge Re-sale Efforts. Bunge agrees to use commercially reasonable
efforts to achieve the highest resale price for DGS available under prevailing
market conditions. If Producer's general manager determines in good faith that
he or she believes Bunge is not meeting the standard for performance set forth
in the immediately preceding sentence, then the general manager shall bring this
to the attention of Bunge. If the general manager's concerns are not promptly
addressed, then Producer may issue a Notice of Dispute as provided in Section
15.2.
(d) Shipping Charges. Bunge will schedule and arrange, in conjunction with
Producer's general manager or designee, the loading, shipping and delivery of
all DGS bought by Bunge pursuant to this Agreement. All freight and delivery
charges after delivery of the DGS by Producer to the Delivery Location will be
the responsibility of Bunge or the purchasers of DGS from Bunge, and will be
included in the calculation of Purchase Price to the extent set forth Section
5.1. Once rail freight service to the Facility is established, Bunge shall be
responsible for negotiating with the rail service provider the rates and service
levels for shipments of DGS from the Facility. Bunge shall disclose to Producer
any discussions, negotiations, proposals and agreements involving such rail
service and rail rates for the Facility and, upon termination of the Agreement,
Bunge shall assign rights to such rail service and rates to Producer subject to
consent by the rail carrier if required under applicable agreements. Producer
shall buy or lease, and shall maintain and be responsible for, a number of rail
cars to meet anticipated needs for the loading, shipping and delivery of DGS
bought by Bunge pursuant to this Agreement.
(e) DGS Marketing Policy; Directions Given by Producer. Bunge will abide by
any terms of the DGS Marketing Policy applicable to Bunge, provided that neither
Bunge nor its Affiliates shall be in breach of this Agreement or liable to
Producer under this Agreement to the extent Bunge acts in accordance with the
DGS Marketing Policy or in accordance with directions given by Producer's Board
or general manager. If Bunge determines to accept, for its own account and at
its risk, Contract terms that are outside the parameters of the DGS Marketing
Policy, Bunge will promptly offer Producer the opportunity to waive or amend the
DGS
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Marketing Policy and accept the Contract. If Producer elects to accept the
Contract, the waiver or amendment must be made promptly. If Producer elects not
to accept the Contract, then Bunge may elect to fulfill the Contract with spot
market purchases from Producer.
(f) DGS Marketing Staff. Bunge will provide or make available one full-time
DGS marketer (the "DGS Marketer"), to be located at the Facility. In connection
with the DGS Marketer, the Parties agree as follows:
(i) The DGS marketer shall be responsible for formulating and
implementing a sales and marketing strategy consistent with the
DGS Marketing Policy to develop a market for local sales of DGS
as provided under this Agreement. In furtherance of those
responsibilities, the DGS marketer will gather and analyze market
data, and will establish relationships with local DGS purchasers.
(ii) The DGS marketer shall be an employee of Bunge or a Bunge
Affiliate and Bunge shall be responsible for providing the DGS
marketer with all appropriate compensation and benefits. Bunge
shall be responsible for supervision of the DGS marketer. The DGS
marketer 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 Bunge will jointly conduct periodic employment review
of the DGS marketer. Producer's general manager may make staffing
recommendations to Bunge at any time. If the recommendations of
the Producer's general manager are not accepted by Bunge,
Producer may issue a Notice of Dispute as provided in Section
15.2.
2.2 Producer's Obligations.
(a) Production Estimates. Annually, Producer will deliver to Bunge a
written estimate of its anticipated monthly DGS production at the Facility based
upon Producer's annual operating budget. At least 30 days before the beginning
of each calendar month during the Term (but not before the Effective Date),
Producer will deliver to Bunge a written estimate of its anticipated DGS
production at the Facility for such calendar month (the "Monthly Estimate").
Producer will immediately notify Bunge of any revisions to the Monthly Estimate
and Bunge will utilize commercially reasonable efforts to adjust its DGS
marketing and sales strategy accordingly; provided that Producer will bear all
costs incurred by Bunge to attempt to meet such revised quantities.
(b) Handling and Shipping. In connection with this Agreement, Producer
will:
i. Determine the weight of all DGS delivered to Bunge from the
Facility using scales at the Facility that are inspected and
certified as required by applicable law as provided in
Section 3;
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ii. Load the DGS for shipment in accordance with the loading
instructions from Section 1.4 to trucks or rail cars with
DGS in a timely manner, which shall include supplying
adequate labor and equipment necessary for such loading;
iii. Handle DGS in a good and workmanlike manner;
iv. Maintain the truck/rail loading facilities in safe operating
condition; and
v. Abide by the DGS Marketing Policy.
(c) Storage. Storage space for not less than 7,500 tons of DGS shall be
reserved by Producer for Bunge's use at the Facility, which shall be
continuously available for storage of DGS purchased or to be purchased by Bunge
from Producer. Such storage shall be provided at no charge to Bunge. Producer
shall be responsible at all times for the quantity, quality and condition of any
DGS in storage at the Facility.
2.3 Contract Commitments.
(a) All Contracts negotiated by Bunge shall be consistent with the DGS
Marketing Policy unless the general manager of the Facility, or his designee,
approves in advance any Contract terms inconsistent with the DGS Marketing
Policy.
(b) Producer will not be a party to, or have any liability or obligation to
any purchaser or to Bunge under Contracts except as provided in this Section 2.
Producer acknowledges that in order to maximize the total revenue to be
generated through the sale of the DGS, Bunge may take positions by selling DGS
in anticipation of Producer providing the DGS, subject to the terms of the DGS
Marketing Policy. Notwithstanding the fact that Producer's obligation is to
provide Bunge with the DGS output of the Facility, the Parties acknowledge that
Bunge may suffer losses as a result of positions taken by Bunge if Producer
discontinues operations for any reason whatsoever including Force Majeure.
Producer shall indemnify, defend and hold Bunge and its Affiliates (as defined
below) harmless from all liabilities, costs and expenses (including, without
limitation, attorneys fees) that Bunge or its Affiliates may suffer, sustain or
become subject to as a result of any sale or purchase of DGS taken by Bunge
which is consistent with the DGS Marketing Policy in anticipation of Producer
delivering the DGS hereunder, provided Bunge has taken commercially reasonable
steps to avoid the loss. Bunge will indemnify, defend and hold harmless Producer
and its Affiliates, 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 failure of DGS to comply with
the Production Standards or degrading the quality of DGS which results from
causes or conditions arising after title passes to Bunge, except to the extent
such liabilities, costs and expenses arise out of the gross negligence or
intentional misconduct of Producer or a breach of this Agreement by Producer.
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3. Quantity and Weights.
3.1 Scales. Producer will determine the weight of DGS delivered to Bunge
from the Facility using scales at the Facility. Producer will maintain (at its
expense) the accuracy of such scales and ensure that they are inspected and
certified as required by applicable law. Upon Bunge's request, Producer will
promptly provide Bunge with copies of all scale certifications. Bunge may, at
its sole expense, test the accuracy of such scales. Producer will maintain all
weight certificates for at least two years after their creation and provide
copies of such weight certificates to Bunge upon request. If the scales used for
weighing DGS at the Facility are found to be inaccurate, the Parties will
negotiate in good faith a reasonable adjustment for DGS sales reasonably
believed to have been affected. If the Facility scales are unavailable or
inoperable, any scales certified as required by applicable law may be used, at
Producer's sole cost and expense (including any transport costs), until the
Facility scales are available and operable.
3.2 Weight Certificates. The outbound weight certificates generated
pursuant to Section 3.1 will determine the quantity of DGS for which Bunge is
obligated to pay pursuant to Section 5. Producer will provide a copy of each
such weight certificate to Bunge at the same time that such certificate is
produced.
4. Quality; Sampling; Rejection; Disposition.
4.1 Quality. Producer understands that Bunge intends to re-sell the DGS as
a primary animal feed ingredient. Producer agrees and warrants that the DGS
produced at the Facility and delivered to Bunge at the Delivery Location shall
meet the minimum quality standards outlined in Exhibit A hereto (the "Production
Standards"). The Production Standards are subject to change at the discretion of
Producer upon reasonable notice to Bunge. If Bunge has executed Contracts prior
to such notice, Producer will indemnify Bunge for all costs, expenses and
damages incurred as a result of the change of Production Standards. Producer
will not be responsible for any failure of DGS to comply with the Production
Standards or degrading the quality of DGS which results from causes or
conditions arising after title passes to Bunge.
4.2 Sampling and Retention of Samples. Producer will take and analyze an
origin sample of the DGS from each truck or rail car in compliance with industry
standards before it leaves the Facility (the "Sample"). Producer will label such
Sample to indicate the date of shipment, the truck or rail car from which the
Sample was taken, and the order/shipment number. Producer will retain such
Samples of WDGS for not less than five (5) days and Samples of DDGS and labeling
information of all Samples for not less than thirty (30) days. At a minimum, a
composite analysis of DGS shall be sent once a month to Bunge. It is understood
that said analysis is a composite and may not be indicative of the current
analysis.
4.3 Rejection; Testing. Unless otherwise agreed between the Parties, and in
addition to other remedies permitted by law, Bunge may, without obligation to
pay, reject either before or after delivery by Producer at the Delivery
Location, any of the DGS, which when inspected, fails in a material way to
conform to the Production Standards. If Producer knows or reasonably suspects
that any of the DGS produced at the Facility fail to conform to the Production
Standards, Producer shall promptly notify Bunge so that such DGS can be retested
before
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entering interstate commerce. If Bunge knows or reasonably suspects that any of
the DGS produced by Producer at the Facility fail to conform to the Production
Standards, then Bunge may obtain independent laboratory tests of the affected
DGS. If such DGS are tested and found to comply with the Production Standards,
then Bunge shall pay all testing costs; and if the DGS are found not to comply
with the Production Standards, Producer will pay all testing costs. Any testing
obtained by Bunge shall be performed no later than five (5) days from the
delivery of WDGS to the Delivery Location, and thirty (30) days from the
delivery of DDGS to the Delivery Location.
4.4 Disposition. When rejection occurs before or after delivery by Producer
at the Delivery Location, at its option, Bunge may:
(a) Dispose of the rejected DGS after first offering Producer a reasonable
opportunity of examining and taking possession thereof, if the condition of the
DGS reasonably appears to Bunge to permit such delay in making disposition.
(b) Work with Producer to dispose of the rejected DGS in any manner
directed by Producer that Bunge can accomplish without violation of applicable
laws, regulations or property rights.
(c) If Bunge has no available means of disposal of rejected DGS or Producer
fails to direct Bunge to dispose of them as provided herein, Bunge may return
the rejected DGS to Producer, upon which event Bunge's obligations with respect
to said rejected DGS shall be deemed fulfilled. Title and risk of loss shall
pass to Producer promptly upon proper rejection by Bunge.
(d) Producer shall reimburse Bunge for all costs reasonably incurred by
Bunge in storing, transporting, returning and disposing of the properly rejected
DGS. Bunge shall have no obligation to pay Producer for rejected DGS and may
deduct reasonable costs and expenses to be reimbursed by Producer from amounts
otherwise owed by Bunge to Producer.
5. Price/Payment.
5.1 Purchase Price.
(a) Bunge will pay the Purchase Price to Producer for all DGS purchased
hereunder within * days after the date that weight certificates for such DGS are
delivered by Producer to Bunge in accordance with Section 3.2. Bunge will retain
the applicable Marketing Fee and Transportation Costs (if any) for such DGS.
Demurrage, either for or against Producer's account, will be billed as it
occurs. An example of the computations under this Section 5.1 is provided in
Exhibit B.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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(b) The following definitions shall apply to any given ton of DGS:
(i) The "Purchase Price" shall be equal to the Sale Price minus the
applicable Marketing Fee and Transportation Costs (if any).
(ii) The "Sale Price" shall be equal to: (A) with respect to DGS that Bunge
purchases to fulfill its commitments to third party purchasers under agreements
consistent with the DGS Marketing Policy, the sale price received by Bunge from
such purchasers; and (b) with respect to DGS purchased by Bunge on the spot
market, the spot price for such DGS agreed upon by Bunge and Producer.
(iii) The "Marketing Fee" shall be equal to *% of the Net Sales Price.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(iv) The "Net Sales Price" shall be equal to the Sales Price minus all
Transportation Costs and Rail Lease Charges, if any.
(v) "Transportation Costs" shall be equal to: (A) with respect to DGS
delivered via rail, all rail freight charges, rail and fuel surcharges,
switching charges, and any other accessorial charges applicable to delivery of
the DGS; and (B) with respect to DGS delivered via truck or other conveyance,
all freight charges, fuel surcharges, and any other accessorial charges
applicable to delivery of the DGS. There are no Transportation Costs for any DGS
picked up at the Facility by purchasers.
(vi) "Rail Lease Charges" shall be equal to the sum of (A) the monthly
lease payment for leased rail cars, plus (B) all administrative and tax filing
fees applicable to such leased rail cars.
5.2 Payment. Bunge will pay the Purchase Price by wire transfer. 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 plus
2%, and (b) the highest rate permitted by law. All amounts due to Producer under
this Agreement will be paid without setoff, counterclaim or deduction.
5.3 Annual Minimum Payments. Subject to Section 9 hereof, if on each
anniversary of the Effective Date, the total amount of the Marketing Fee
retained by Bunge during the immediately preceding 12-month period (a "Total Fee
Amount") is less than $150,000 ("Annual Minimum Amount"), then within 15 days
after such anniversary, Producer will pay to Bunge an amount equal to the Annual
Minimum Amount minus the Total Fee Amount.
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5.4 Adjustments.
(a) Beginning on the third anniversary of the Effective Date of this
Agreement and on each anniversary thereafter, the Annual Minimum Amount will be
increased (or decreased) by an amount equal to the product of: (i) the Annual
Minimum Amount 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) Beginning on the third anniversary of the Effective Date of this
Agreement and on each anniversary thereafter (the "Anniversary Date"), the
Purchase Price will be reviewed and open for renegotiation. If the Parties
cannot agree to a renegotiated Purchase Price within 30 days of the Anniversary
Date, the Purchase Price will remain the same during the twelve-month period
following such Anniversary Date.
(c) If the Effective Date has not occurred on or before July 15, 2008, then
Bunge may require the Parties to renegotiate the provisions of this Section 5.
Upon such renegotiation, if the Parties do not agree upon adjustments to the
compensation on terms agreeable to Bunge, then Bunge may terminate this
Agreement upon notice to Producer.
5.5 Tax. For purposes of personal property taxation and/or assessment or
other taxation, if any, any tax assessed on DGS produced under this Agreement
will be the responsibility of Producer, and at no time will Bunge be responsible
for the payment of any such tax.
6. Term and Termination.
6.1 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 begins production of DGS; provided that Producer will notify Bunge at
least 30 days in advance of when DGS are first produced.
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6.2 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 immediately upon notice to Bunge
if Bunge fails to pay any amount due under this Agreement within 15 days after
Producer gives Bunge notice of such nonpayment.
(c) Bunge may terminate this Agreement immediately upon notice to Producer:
(i) if the Effective Date has not occurred on or before October 15, 2008; (ii)
in accordance with Section 5.4(c) hereof; and/or (iii) upon the occurrence of a
Dissolution Event (as defined in Article X 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 a
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) Bunge 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
11.3 hereof.
(g) Producer may terminate this Agreement upon thirty (30) days prior
written notice to Bunge 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
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Producer. The provisions of this Section 6.2(g) shall not apply to
intra-Affiliate transfers by Bunge and/or its Affiliates.
(h) Producer may terminate this Agreement immediately upon notice to Bunge
if there is a Change in Control of Producer upon payment to Bunge of an amount
equal to the Annual Minimum Amount on the date of such termination.
(i) Producer may terminate this Agreement upon thirty days prior written
notice to Bunge if, subject to the remaining provisions of this Section 6.2(i),
the Facility has shut down operations because of Bunge's failure to timely
purchase DGS in accordance with this Agreement, given the storage capacity
Producer is required to maintain in accordance with this Agreement, on two or
more occasions during a twelve-month period and Producer has notified Bunge 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 occasion
allowing a termination right under this Section 6.2(i), then Producer's right to
terminate shall cease with respect to such occasion. Notwithstanding the
foregoing, to the extent a Facility Shut-Down occurs as the result of Producer's
actions or inactions (unless Producer provides reasonable notice to Bunge of
such actions or inactions) or as a result of a mechanical malfunction, 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
6.2(i). On the first Facility Shut-Down in a twelve month period, Bunge 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-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 6.2(i) and
Bunge 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 6.2(i) and Bunge will pay to Producer an amount equal to $750,000. 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 Bunge will pay to Producer an amount equal to the actual damages
suffered by Producer as a result of the shut down of the Facility.
6.3 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 2.1(d), 2.3(b), 2.3(c), 4, 5.1, 5.2, 5.5, 6.2(i), 6.3, 9,
10, 14, 15 and 16, will remain in effect after the expiration or termination of
this Agreement.
7. Covenants of Producer. Producer covenants to Bunge that it will use
commercially reasonable efforts to ensure that the Facility will be fully
operational no later than July 15, 2008.
8. Representations and Warranties. The parties make the following
warranties, representations or guarantees as described below:
(a) Bunge represents and warrants to Producer that Bunge, 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 DGS.
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(b) Bunge represents and warrants to Producer that: all necessary corporate
action has been taken to authorize the execution, delivery and performance of
this Agreement; the execution, delivery and performance of this Agreement by
Bunge does not, and will not, violate or constitute a breach of or default under
any Governmental Requirement (as defined in Section 16.4) or any indenture,
contract or other instrument to which its assets are bound or to which the
representing party's business is subject.
(c) Producer represents and warrants to Bunge that: all necessary corporate
action has been taken to authorize the 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 Producer or its assets are bound or to which Producer's
business is subject.
(d) Producer warrants that at the time of loading at the Delivery Location
the DGS will not be adulterated within the meaning of the Federal Food, Drug and
Cosmetic Act and that each shipment may lawfully be introduced into interstate
commerce under said Act. Should any of the DGS be seized or condemned by any
federal or state department or agency for any reason except noncompliance by
Bunge with applicable federal or state requirements, such seizure or
condemnation shall operate as a proper rejection by Bunge of the DGS seized or
condemned. However, Bunge agrees to cooperate with Producer in connection with
the defense of any quality or other DGS claims, or any claims involving seizure
or condemnation.
(e) Producer warrants that the DGS delivered to Bunge shall be free and
clear of liens and encumbrances.
9. Limitation of Liability.
9.1 General Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
PRODUCER MAKES NO STATUTORY, WRITTEN, ORAL, EXPRESSED OR IMPLIED WARRANTIES,
REPRESENTATIONS OR GUARANTEES OF ANY KIND CONCERNING THE DGS SOLD UNDER THIS
AGREEMENT, OR ITS QUALITY SOURCE, OR CHARACTERISTICS, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, BUNGE MAKES NO
STATUTORY, WRITTEN, ORAL, EXPRESSED OR IMPLIED WARRANTIES, REPRESENTATIONS OR
GUARANTEES OF ANY KIND CONCERNING THE SERVICES PROVIDED UNDER THIS AGREEMENT OR
THE FAILURE TO PROVIDE SERVICES UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE.
9.2 IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OTHER
PERSON OR ENTITY FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES UNDER ANY
CIRCUMSTANCES.
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10. Remedies.
10.1 Suspend Performance. Producer may suspend its performance under this
Agreement until Bunge has paid all amounts due under this Agreement if Bunge
fails to pay any amount within 15 days after the date when such amount is due
and uncured under this Agreement.
10.2 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.
10.3 Liquidated Damages of Bunge. If any actions or inactions by Producer
lead to termination of this Agreement, Bunge 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 Bunge terminates this Agreement under Sections 6.2(a) or 6.2(c),
Producer will pay to Bunge liquidated damages in an amount equal to $*. If Bunge
terminates this Agreement under Sections 6.2(e), Producer will pay to Bunge
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.
10.4 Liquidated Damages of Producer. If any actions or inactions by Bunge
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 estimate thereof and will not be viewed
as a penalty. If Producer terminates this Agreement under Section 6.2(a), Bunge
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.
10.5 Rights Not Exclusive. 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.
11. Force Majeure.
11.1 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
13
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 without limitation Section 5.3) and will not affect
Bunge's right to terminate this Agreement pursuant to Section 6.2(c)(i).
11.2 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 11 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.
11.3 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.
12. Insurance.
12.1 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
14
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 12.1(b) and (c), each Party's
total coverage under both its commercial general liability insurance in Section
12.1(b) and excess or umbrella liability policy in Section 12.1(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 12.1 and any other property insurance covering the Party
applicable to the Facility.
12.2 Insurance Policy Requirements. All insurance policies required by this
Agreement will (a) provide coverage on an "occurrence" basis; (b) provide that
no cancellation, non-renewal or change 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 coverage. From time to time, upon a Party's request, the
other Party will provide the requesting Party, within five business days, a
certified duplicate original of any policy required to be maintained hereunder.
13. Relationship of Parties. This Agreement creates no relationship other
than those of producer/seller and purchaser between the Parties hereto. Except
as 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.
14. Confidentiality.
15
14.1 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 DGS produced and any pricing matter under this Agreement
will be deemed to be Confidential Information of the appropriate Party.
14.2 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 its
and its Affiliates internal business purposes, or (b) disclose Confidential
Information to any Person, except to its personnel who are subject to
nondisclosure obligations comparable in scope to this Section 14 and who have a
need to know such Confidential Information in order to perform under this
Agreement. Notwithstanding the foregoing, the Parties acknowledge that Bunge
and/or its Affiliates may perform services for other third parties similar to
the services provided to Producer hereunder and that the use by Bunge and/or its
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 Bunge's and its Affiliates' internal business purposes shall not
be considered a violation of this Section 14; provided, that such use of
Producer's Confidential Information may not be to the competitive disadvantage
of Producer.
14.3 Disclosure of Confidential Information. Notwithstanding Section 14.2,
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, 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.
14.4 Injunctive Relief. Each Party acknowledges and agrees that its breach
or threatened breach of any provision of this Section 14 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.
15. Governing Law; Disputes.
15.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa, excluding any applicable
conflicts-of-law rule or
16
principle that might refer the construction or interpretation of this Agreement
to the laws of another state.
15.2 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 15.2 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 Bunge who shall within twenty (20)
additional days meet to attempt in good faith to resolve the dispute.
15.3 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.
15.4 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
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.
15.5 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.
16. Indemnification.
17
16.1 Indemnification By Producer. Producer agrees to indemnify and hold
Bunge harmless from any Loss suffered or incurred by Bunge 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 Bunge
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 Bunge's gross
negligence or willful misconduct and in each case only to the extent Bunge is
not otherwise compensated for such Loss by applicable insurance (to the extent
actually paid).
16.2 Indemnification By Bunge. Bunge 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 Bunge's employees, or leased
or subcontracted by Bunge, whether at the Facility or elsewhere;
(b) any violation or alleged violation of any Governmental Requirement by
Bunge.
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).
16.3 Mutual Indemnification. Each Party shall indemnify, defend and hold
the other Party harmless from all liabilities, costs and expenses (including,
without limitation, attorneys fees) that such Party may suffer, sustain or
become subject to as a result any misrepresentation or breach of warranty,
covenant or agreement of the indemnifying Party contained herein or the
indemnifying Party's gross negligence or willful misconduct in performance of
its obligations under this Agreement.
16.4 Employees, Affiliates, Etc. A party's indemnification of the other
party pursuant to this Section 16 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.
18
16.5 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.
(c) "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
direction of the management and policies of a Person, whether through the
ownership of voting securities or voting interests, by contract or otherwise.
(d) "Person" means any individual, general partnership, limited
partnership, limited liability company, joint venture, trust, business trust,
cooperative, association or other entity of whatever nature.
17. 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 Bunge:
Xxxxx North America, Inc.
00000 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Senior Vice President - Bunge Grain
Facsimile: 000-000-0000
with copy to:
Xxxxx North America, Inc.
00000 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
19
If to Producer:
Southwest Iowa Renewable Energy, LLC
000 X. Xxx 0, XX Xxx 000
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
18. 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.
19. 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.
20. Assignment. No Party may assign this Agreement, or assign or delegate any of
its rights, interests, or obligations under this Agreement, voluntarily or
involuntarily, whether by merger, consolidation, dissolution, operation of law,
or any other manner, without the prior written consent of the other Party, and
any purported assignment or delegation without such consent will be void.
Despite the prior sentence, Bunge may assign this Agreement, or assign or
delegate any of its rights, interests, or obligations under this Agreement, to
any of its Affiliates without Producer's prior written consent. Subject to the
preceding sentences in this Section 20, this Agreement binds and benefits the
Parties and their respective permitted successors and assigns.
21. 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.
20
22. 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.
23. 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.
24. 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]
21
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed the
day and year first above written.
SOUTHWEST IOWA RENEWABLE
XXXXX NORTH AMERICA, INC. ENERGY, LLC
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------ --------------------------------------
Name: Xxxxxx Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President Title: Chairman
22
EXHIBIT A
Production Standards
New production all corn PREMIUM DRIED DISTILLERS GRAIN
Pro-fat: 36.0% minimum
Moisture: 12.0% maximum
*THE PORTIONS OF THIS EXHIBIT B WHICH ARE MARKED WITH AN ASTERISK HAVE BEEN
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT B
Purchase Price Example
Assume the following facts:
x Xxxxx pays Producer for DGS on a weekly basis.
o Producer produces approximately * tons/year of DGS, or * tons/week.
x Xxxxx sells DGS at a Sale Price of $* per ton to a third party purchaser,
and delivers such DGS via rail car.
x Xxxxx incurs $* per ton in Transportation Costs.
o Producer has leased 300 rail cars with a monthly lease fee of $* per car,
or a total of $* per month.
o Producer pays Bunge an administrative and tax filing fee of $* per car
which equals $* per month.
Therefore the calculation associated with the weekly payment would be as
follows:
o Sales Price = $*/T x * T = $*
o Transportation Cost = $*/T x * T = $*
o RailLease Charges = $* + $* = $*
o Net Sales Price = $* - $* - $* = $*
o MarketingFee = *% x $* = $*
o Purchase Price = $* - $* - $* = $*
o Note: The Rail Lease Charges are incurred once per month. In the week
those charges are due and payable, such monthly amount will be
deducted in the above calculations to arrive at a Marketing Fee for
Bunge and Purchase Price paid to Producer. In all other weeks, the
Rail Lease Charges will be zero.
