Exhibit 10.30
LIEN SUBORDINATION AGREEMENT
THIS LIEN SUBORDINATION AGREEMENT (this "Agreement") is made this ___ day
of ______, 2007 by and among SOUTHWEST IOWA RENEWABLE ENERGY, LLC, an Iowa
limited liability company (the "Borrower"), AGSTAR FINANCIAL SERVICES, PCA, and
its successors and assigns, as Agent for the benefit of the Banks (in such
capacity, the "Agent") in connection with that certain Credit Agreement dated
May 2, 2007, between the Borrower and the Banks (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
and the IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT, 000 Xxxx Xxxxx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000 (hereafter referred to as "IDED").
RECITALS
A. As of the date of this Agreement, the Borrower and the Banks will have
entered into the Credit Agreement, pursuant to which the Banks will have
extended to Borrower various credit facilities for the purposes of acquiring,
constructing, equipping, furnishing and operating an ethanol production facility
to be located in Pottawattamie County, Iowa.
B. IDED has previously extended credit to Borrower, which credit is secured
in part by a security interest in certain assets of Borrower.
C. As a condition to extending the various credit facilities to Borrower,
the Banks have required the execution of this Lien Subordination Agreement by
IDED.
TERMS
NOW, THEREFORE, Borrower and IDED in consideration of and to induce Banks
to extend credit to Borrower and other good and valuable consideration, do
hereby agree with Banks as follows:
1. IDED Security Interest; IDED Collateral. IDED has previously extended
credit to Borrower (the "IDED Loan"), which credit is secured by a security
interest in those certain assets of Borrower specifically identified in Exhibit
A hereto (the "IDED Collateral"), and evidenced by the following instrument,
which is owned and held by IDED (the "IDED Security Interest"), and which has
been executed by Borrower:
Title of Instrument Date Filed Office Filed at File #
------------------- ---------- ------------------ ------
Financing Statement November 21, 2006 Secretary of Xxxxx X000000
Xxxxx xx Xxxx
2. Banks Debt; Banks Collateral. The Banks have entered into that a Credit
Agreement dated May 2, 2007, with Borrower (together with any amendments,
modifications, renewals or extensions thereof, the "Credit Agreement") by which
the Banks have agreed to provide the Borrower with certain financial
accommodations. The obligations of the Borrower from time to time owed to the
Banks under the Credit Agreement and related loan documents,
including, without limitation, the principal amount of all debts, claims and
indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, whether
before or after the filing of a proceeding under the Bankruptcy Code together
with any interest, fees or expenses accruing thereon after the commencement of a
Proceeding is hereafter referred to as the "Bank Debt." The Bank Debt is
secured, in part, by all of the assets of Borrower, (the "Bank Collateral"), as
more fully described and attached hereto as Exhibit B. Bank Debt shall be
considered to be outstanding whenever any loan commitment or loan under the
Credit Agreement is outstanding.
3. Priority of Banks and IDED Liens and Security Interests. The following
shall be the relative priority of the liens, security interests, encumbrances
and claims of the Agent and IDED in the collateral regardless of the date,
manner, time or order of attachment, perfection or recording of the liens,
security interests, encumbrances or claims granted to either the Agent or IDED;
any provision of law or judicial decision, any term or condition contained in
the Credit Agreement or related loan documents or the IDED loan documents or any
other term or condition described in this Agreement; whether the Agent or IDED
holds possession of all or any part of the Bank Collateral; or the commencement
of any bankruptcy, insolvency or reorganization proceeding:
a. Bank Collateral. Agent shall have a first priority lien, security
interest, encumbrance and claim in the Bank Collateral to secure the
Bank Debt with the exception of the IDED Collateral. IDED shall have a
second priority lien, security interest, encumbrance and claim to the
Bank Collateral to secure the IDED Loan.
b. IDED Collateral. IDED shall have a first priority lien, security
interest, encumbrance and claim in the IDED Collateral to secure the
IDED Loan. The Agent shall have a second priority lien, security
interest, encumbrance and claim to the IDED Collateral to secure the
Bank Debt.
4. Prohibited Actions. Except as provided in section 5 below, IDED agrees
not to:
a. Demand payment or, xxx for, or receive all or any part of the
Subordinated Lien.
b. Take any action against the IDED Security Interest.
c. Commence or participate in the commencement of any bankruptcy,
insolvency, or reorganization proceedings against Borrower to recover
assets represented by the IDED Security Interest.
5. IDED's Right to Receive Payment. Notwithstanding the provisions of
section 4 above, and so long as Borrower is not in default under the Bank Debt,
IDED may:
a. receive regularly scheduled installments of principal and interest
under the Loan,
b. in the event of a default under IDED Loan as a judgment creditor, IDED
may accelerate, demand payment or, xxx upon or otherwise exercise its
rights and remedies under the IDED Loan and other agreements related
to the Loan, but IDED may not commence any action against any of IDED
Security Interest for the duration of this Agreement.
6. Duration. This Subordination Agreement commences on the date first set
forth above and continues until:
a. the Bank Debt has been paid in full, or
b. the credit extended is otherwise ended between the Borrower and the
Banks, or
c. IDED Loan is canceled and the security interest created by the above
described financing statement is formally terminated and no longer
claimed by IDED.
7. Notice of Default; Repayment. Agent shall give prompt written notice to
IDED of any default of Borrower in obligations of Borrower under agreements
representing the Bank Debt. Agent shall also provide IDED with written notice:
a) of Borrower's payment in full of the Bank Debt, and b) if the credit extended
is otherwise ended between Borrower and Banks.
8. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto, their respective heirs, personal representatives,
successors, and assigns.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Iowa.
10. Amendment. This Agreement may only be changed by a written amendment
signed by the Parties.
IDED:
IOWA DEPARTMENT OF ECONOMIC DEVELOPMENT
/s/ Xxxxxxx X. Tramontia
------------------------------------
By: Xxxxxxx X. Tramontia
Its: Director
AGENT:
AGSTAR FINANCIAL SERVICES, PCA, as Agent
/s/ Xxx Xxxxxx
-----------------------------------
By: Xxx Xxxxxx
Its: Vice President
BORROWER'S ACKNOWLEDGMENT OF
LIEN SUBORDINATION AGREEMENT
Borrower hereby acknowledges receipt of a copy of the foregoing Lien
Subordination Agreement and agrees that it will be bound by all the provisions
thereof (including making payment on the Loan). Borrower agrees to xxxx its
records to reflect the existence of this Agreement.
BORROWER:
SOUTHWEST IOWA RENEWABLE ENERGY, LLC,
an Iowa limited liability company
/s/ Xxxxx Xxxx
-----------------------------------
By: Xxxxx Xxxx
Its: Chairman
EXHIBIT A
IDED COLLATERAL
Rolling stock to the extent of $200,000.00.
EXHIBIT B
BANK DEBT COLLATERAL
Iowa Real Property:
TRACT A
A parcel of land being a portion of the East One Half of Section 31, T74 North,
R43 West of the Fifth Principal Meridian, Pottawattamie County, Iowa, more fully
described as follows:
Beginning at the North quarter corner of said Sec. 31; thence along the North
line of said Sec. 31, South 88 Degrees, 17 Minutes 16 Seconds East, 2270.71 feet
to a point on the Westerly right-of-way line of Interstate 29: thence along said
Westerly right-of-way line, the following seven (7) courses:
1. South 00 Degrees 45 Minutes 10 Seconds West, 468.19 feet;
2. South 00 Degrees 41 Minutes 04 Seconds East, 200.06 feet;
3. South 00 Degrees 44 Minutes 56 Seconds West, 1964.84 feet;
4. South 00 Degrees 45 Minutes 02 Seconds West, 1635.16 feet;
5. South 01 Degree 13 Minutes 56 Seconds West, 593.52 feet;
6. South 00 Degrees 07 Minutes 12 Seconds East, 353.62 feet;
7. South 01 Degree 49 Minutes 08 Seconds West, 50.00 feet to a point on the
Southerly line of said Sec. 31; thence along said Southerly line, North 88
Degrees 10 Minutes 52 Seconds West, 2276.52 feet to the South quarter corner of
said Sec. 31; thence along the North-South centerline of said Sec. 31, North 00
Degrees 45 Minutes 27 Seconds East, 2629.84 feet to the center of said Sec. 31,
thence continuing along said North-South centerline, North 00 Degrees 46 Minutes
14 Seconds East, 2631.10 feet to the point of beginning.
TRACT B-1
Parcel "A" of the SW1/4 SE1/4 of Sec. 19, T74N, R 43W of the 5th Principal
Meridian, Pottawattamie County, Iowa, being more fully described as follows:
Commencing at the NW corner of said SW1/4 SE1/4; thence along the North line of
said SW1/4 SE1/4, South 88 Degrees 15 Minutes 27 Seconds East a distance of
113.56 feet to the true point of beginning; thence continuing along said North
line South 88 Degrees 15 Minutes 27 Seconds East a distance of 200 feet; thence
South 12 Degrees 06 Minutes 23 Seconds East a distance of 549.14 feet; thence
South 77 Degrees 46 Minutes 56 Seconds West a distance of 204.39 feet; thence
South 68 Degrees 35 Minutes 49 Seconds West a distance of 105.34 feet to a point
on the East right of way line of Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxxxx Xx. 00; thence
along said East right xx xxx xxxx, Xxxxx 00 Degree 34 Minutes 53 Seconds West a
distance of 624.94 feet to the true point of beginning.
TRACT B-2
A tract of land located in the SW1/4 SE1/4 in Sec. 18, T74N, R43W of the 5th
Principal Meridian, Pottawattamie County, Iowa, more fully described as follows:
Commencing at the SE corner of said Sec. 18; thence South 89 Degrees 44 Minutes
04 Seconds West along the South line of said Sec. 18 a distance of 1,573.21 feet
to the point of beginning; thence continuing South 89 Degrees 44 Minutes 04
Seconds West along the South line of said
Sec. 18 a distance of 242.14 feet to a point on the Easterly right of way line
of Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxxxx Xx. 00; thence North 31 Degrees 26 Minutes
27 Seconds East along said Easterly right of way line a distance of 317.26 feet;
thence South 58 Degrees 33 Minutes 33 Seconds East a distance of 206.00 feet;
thence South 31 Degrees 26 Minutes 27 Seconds West and parallel to said Easterly
right of way line a distance of 190.00 feet to the point of beginning.
Other Collateral of the Borrower:
All Accounts and other rights to payment whether or not earned by
performance, and including, but not limited to, payment for property sold,
leased, rented, licensed or assigned or services rendered or to be
rendered; Goods; Farm Products; Fixtures, Chattel Paper; Inventory;
Equipment; Instruments; Investment Property; Documents; Deposit Accounts;
Commodity Accounts; Commercial Tort Claims, Securities Accounts, Money;
Letter-of-Credit Rights; General Intangibles; Payment Intangibles;
Software; Supporting Obligations; and to the extent not included in the
foregoing as original collateral, the Proceeds and Products of the
foregoing.
All payments, rights to payment whether or not earned by performance,
Accounts, General Intangibles and benefits, including, but not limited to,
payments in kind, deficiency payments, letters of entitlement, storage
payments, emergency assistance, diversion payments, production flexibility
contracts, contract reserve payments, ethanol incentive funds, bioenergy
programs, under or from any preexisting, current or future federal or state
government program and, to the extent not included in the foregoing as
original collateral, the Proceeds and Products of the foregoing.
All books and records pertaining to the foregoing.
