EXECUTION COPY
LEASE AGREEMENT
This LEASE AGREEMENT (the "Lease") is made and entered into as of the
15th day of December, 2008 (the "Commencement Date"), by and between ▇▇▇▇▇ NORTH
AMERICA, INC., a New York corporation ("Landlord"), and SOUTHWEST IOWA RENEWABLE
ENERGY, LLC, an Iowa limited liability company ("Tenant").
WITNESSETH:
WHEREAS, Landlord is the owner of the real property located in Council
Bluffs, Iowa, as more particularly described on Exhibit A attached hereto and
incorporated herein by reference (the "Property"); and
WHEREAS, Landlord desires to lease to Tenant, and Tenant desires to
lease from Landlord, the Property, on the terms and conditions set forth herein.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
1. Lease of Property. Landlord, for and in consideration of the rents,
covenants and agreements herein reserved, mentioned and contained on the part of
the Tenant to be paid, kept and performed, does hereby demise and lease to
Tenant, upon and subject to the conditions herein expressed, and Tenant hereby
accepts from Landlord, the Property, including without limitation the two grain
elevators and any and all other fixtures, alterations, improvements or additions
located on the Property (the "Improvements").
2. Term. The term of this Lease (hereinafter referred to as the "Term")
shall commence on the Commencement Date and shall end on the date which is
twelve (12) months thereafter, provided however that if the Commencement Date is
a date other than the first day of a calendar month, then the Term shall end on
the final day of the month in which the twelve-month anniversary of the
Commencement Date falls (said date of termination being known herein as the
"Termination Date"), unless sooner terminated or extended as herein provided.
The period from the Commencement Date through the Termination Date shall be
referred to herein as the "Initial Term." Notwithstanding the foregoing, the
Termination Date shall be extended at the end of the Initial Term and each
Additional Term for one (1) additional year (the "Additional Term(s)") if, on or
before the date which is ninety (90) days prior to the Termination Date, both
Landlord and Tenant shall agree in writing to said extension. The Initial Term
and any Additional Term(s) shall constitute the "Term" for purposes hereof. As
used herein, the term "Lease Year" shall mean each consecutive twelve-month
period beginning on the Commencement Date; provided, however, that if the
Commencement Date is a date other than the first day of a calendar month, then
the first Lease Year shall be the period commencing on the Commencement Date and
ending on the final day of the month in which the twelve-month
anniversary of the Commencement Date falls, and each subsequent Lease Year shall
be the twelve-month period immediately following the prior Lease Year.
3. Base Rent. Tenant agrees that it shall pay base rental in the amount
of Sixty-Six Thousand Six Hundred Sixty-Six and 67/100 Dollars ($66,666.67) per
month ("Base Rent") during the Term, such amount being pro-rated for any partial
month.
4. Additional Rent. All payments to Landlord required by Tenant
hereunder which are not Base Rent shall be deemed "Additional Rent" for purposes
hereof and may be collected in the same manner as Base Rent hereunder. Base Rent
and Additional Rent shall together be referred to as "Rent."
5. Payments of Rent. All payments of Base Rent shall be due and payable
by Tenant to Landlord on or before the first day of each calendar month during
the Term, and all payments of Additional Rent shall be due and payable by Tenant
to Landlord on or before the date therefor required hereunder, in each case in
lawful money of the United States of America at Landlord's address set forth in
the introductory paragraph above, or at such place as Landlord may, from time to
time, designate in writing. If requested by Landlord in writing, Tenant shall
arrange for all payments of Rent to be made via automatic transfer of funds into
a bank account designated by Landlord. In the event that Tenant fails to make
any payment of Rent in a timely manner, Tenant shall be obligated to pay a late
fee of $500 for each such late payment, and each and every installment of Rent
accruing under the covenants of this Lease which shall not be paid when due,
shall bear interest at the rate of eighteen percent (18%) per annum, or at the
rate which is the highest rate which is at the time lawful in the state in which
the Property is located, whichever is less, beginning on the date such payment
is due, until the same shall be paid ("Interest").
6. Utilities. Upon Tenant's request, Landlord shall use reasonable
efforts to arrange for the following utilities to be furnished to the Property
at Landlord's sole cost and expense: water, electricity, telephone, sewer, trash
and rubbish removal, and any other utility service desired by Tenant and used on
the Property. Notwithstanding the foregoing, Landlord's total out-of-pocket
expenses incurred in connection with this paragraph, including without
limitation any monthly or periodic service fees, taxes, penalties, surcharges,
tap-on or connection fees or similar charges relating to such utilities and any
charges associated with establishing utility service at the Property
(collectively, "Utility Charges") shall not in any event exceed One Hundred
Fifteen Thousand and No/100 Dollars ($115,000.00) per Lease Year (the "Utility
Charges Cap"). If at any time Landlord is invoiced for or otherwise incurs any
such Utility Charges in excess of the Utility Charges Cap, Tenant shall
reimburse Landlord for one hundred percent (100%) of all such charges and costs
incurred by Landlord in excess of the Utility Charges Cap. To the extent that
Tenant fails to reimburse Landlord for any such Utility Charges due hereunder
within ten (10) days following written demand therefor: (a) Tenant shall be
liable for Interest on any unpaid amounts from the date paid by Landlord until
the date that the full amount to be reimbursed plus all Interest accrued thereon
has been paid to Landlord, and (b) Landlord shall be entitled to discontinue
utilities at the Property until all such amounts owed by Tenant, including all
Interest accrued thereon, has been paid to Landlord. Tenant agrees that Landlord
shall not be liable for damages, direct or indirect, by abatement of Rent or
otherwise, for any failure, delay, diminution or interruption of any utilities
or services for any reason, except
when such delays, diminutions or interruptions are caused by the gross
negligence or willful misconduct of Landlord. Tenant shall have no right to
terminate this Lease as a result of any such interruption or failure of utility
services and no such interruption or failure of utility services shall be deemed
to constitute a constructive eviction of Tenant.
7. Taxes and Assessments. Landlord shall pay before delinquency all
real property taxes levied, assessed, confirmed or imposed upon the Property.
Notwithstanding the foregoing, Landlord may contest any such taxes in any manner
allowed by law as long as such contest does not place the Property in imminent
danger of sale or forfeiture. Tenant shall be solely responsible for payment of
all personal property taxes or similar taxes and assessments associated with any
personal property, inventory, equipment or other items owned by Tenant and
stored on the Property.
8. As Is. Except as otherwise specifically set forth herein, Tenant
acknowledges and agrees that Landlord shall not be required to alter, remodel,
decorate, clean or improve the Property or to demolish and/or remove any
improvements, equipment or property located in the Property (or to provide
Tenant with any credit or allowance for any of the foregoing), and Tenant
further acknowledges and agrees that no representation or warranty regarding the
condition of the Property has been made by or on behalf of Landlord or relied
upon by Tenant, it being agreed that Tenant shall accept the Property in an
"as-is" "where-is" condition. Tenant, at its expense, shall obtain any and all
certificates of occupancy, special use permits, business licenses and other
permits, licenses, approvals, waivers and the like which may be required by
applicable law for Tenant's use and occupancy of the Property. The failure of
Tenant to obtain any such certificate, permit, license, approval, waiver or the
like shall not be a condition precedent to Tenant's obligation to pay Rent or to
perform any of its other obligations hereunder or affect the validity of this
Lease.
9. Maintenance.
(a) Landlord shall keep, maintain, and repair the Property and
any part thereof, including, without limitation, the Improvements, in good
condition and repair; provided, however, that Tenant shall be responsible at its
sole cost and expense for all maintenance, repairs or replacements which are
necessary to keep the Property or any part thereof in good condition and repair
which arise as a result of (i) the gross negligence or willful misconduct of
Tenant, its employees, agents, contractors, licensees or invitees, or (ii) the
failure of Tenant to report any such maintenance, repairs or replacements
pursuant to Section 9(c).
(b) Notwithstanding the foregoing, Landlord's total
out-of-pocket expenses incurred in connection with this Section 9 shall not in
any event exceed Ninety Thousand and No/100 Dollars ($90,000.00) per Lease Year
(the "Maintenance Expense Cap"), and Landlord shall not be required to (i) make
any expenditure in excess of the Maintenance Expense Cap or (ii) perform any
maintenance, repairs or replacements if the cost of said maintenance, repairs or
replacements would exceed the Maintenance Expense Cap. Landlord may, in its sole
discretion and upon Tenant's request, perform or cause to be performed such
maintenance, repairs or replacements in excess of the Maintenance Expense Cap.
All maintenance, repairs and replacements on the Property or Improvements shall
be performed by and at the direction of Landlord and with contractors and
subcontractors approved by Landlord in its sole discretion.
To the extent that any maintenance, repairs and replacements are at Tenant's
cost and expense, Tenant shall reimburse Landlord within ten (10) days of the
completion of said maintenance, repair or replacement for all costs incurred by
Landlord, plus Interest from the date such expense was incurred by Landlord to
the date that the full amount to be reimbursed plus all Interest accrued thereon
has been paid to Landlord.
(c) Tenant shall promptly inform Landlord of all maintenance,
repairs or replacements which are required to the Property during the Term and
Landlord shall have no liability to Tenant for the failure to make any repairs
to the extent Tenant has not provided such notice to Landlord.
(d) For the avoidance of doubt, Tenant shall be solely
responsible for all of Tenant's operations at the Facility and Landlord shall
have no obligation to provide any labor or services in connection with such
operations.
10. Insurance.
(a) At all times during the Term of this Lease, Tenant, at
Tenant's sole cost and expense, shall maintain the following types of insurance:
(1) 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;
(2) Commercial General Liability insurance, including
contractual liability and products/completed operations, for 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 Aggregates, and such insurance shall be
written on an occurrence basis;
(3) Excess or Umbrella liability policy with limits
of not less than $4,000,000 per occurrence and $4,000,000 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;
(4) Worker's Compensation insurance providing
statutory benefits for injury or disease in the State of Iowa, and
Employer's Liability with limits of at least $500,000 for individual
injury or disease, with an aggregate of $500,000 for disease; and
(5) Business interruption insurance in such amount as
required to insure the payment of all Rent required to be paid by
Tenant to Landlord for a period of twelve (12) months.
(b) The parties acknowledge and agree that Landlord shall have
the right to increase the foregoing limits of insurance, or the type or scope of
such insurance coverage, from time to time, in its sole but reasonable
discretion.
(c) Tenant shall deliver to Landlord, prior to the expiration
date of each policy, certificates of insurance, evidencing the insurance
coverage herein required to be maintained by Tenant and specifying the insured
parties as required herein. All policies of insurance which Tenant is required
to maintain pursuant to this Lease shall: (1) provide that they shall not be
cancelled or non-renewed without at least thirty (30) days prior written notice
to Landlord and Mortgagee (if applicable), except ten (10) days notice for
non-payment of premium; (2) name Tenant as the insured and Landlord and any
holder of a mortgage or deed of trust encumbering the Property from time to time
(a "Mortgagee") as lender loss payable on property policy, and as additional
insured to general liability and automobile liability, as their respective
interests may appear; (3) if the Landlord so requests in writing at any time,
shall indicate any Mortgagee as loss payee, as the interest of such Mortgagee
may appear; and (4) be valid and enforceable policies issued by insurers of
recognized responsibility, properly licensed in the State of Iowa, with an A.M.
Best's Rating of A- or better and Class VII or better. Tenant shall provide
Landlord and Mortgagee with at least thirty (30) days prior written notice of
any material amendment to any policy of insurance which Tenant is required to
maintain pursuant to this Lease.
(d) At all times during the Term of this Lease, Landlord, at
Landlord's sole cost and expense, shall maintain property insurance on an "all
risks" of physical loss or damage basis in an amount equivalent to the full
replacement cost of the Improvements.
(e) Whenever (1) any loss, cost, damage or expense resulting
from fire, explosion or any other casualty or occurrence is incurred by either
of the parties to this Lease in connection with the Property or the
Improvements, and (2) such party is then covered in whole or in part by
insurance with respect to such loss, cost, damage or expense, then the party so
insured hereby releases the other party from any liability it may have on
account of such loss, cost, damage or expense to the extent of any amount
recovered by reason of such insurance and waives any right of subrogation which
might otherwise exist in or accrue to any person on account thereof, provided
that such release of liability and waiver of the right of subrogation shall not
be operative in any case where the effect thereof is to invalidate such
insurance coverage. Each policy of insurance required to be maintained by either
party pursuant to this Lease shall contain an express waiver of any right of
subrogation by the insurance company against the other party, any Mortgagee, and
their respective directors, officers, agents, employees, successors and assigns.
(f) To the extent that Tenant fails to insure the Property in
accordance with this Section 10, Landlord may, at its option, elect to pay for
and/or procure such insurance on Tenant's behalf, in which case Tenant shall be
responsible to reimburse Landlord upon written demand for all costs incurred by
Landlord in doing so, plus Interest from the date paid by Landlord to the date
that the full amount to be reimbursed plus all Interest accrued thereon has been
paid to Landlord. All such amounts shall be "Insurance Costs" for purposes
hereof.
11. Use. The Property may be used and occupied solely for receiving,
warehousing, and distributing corn and milo as feedstock for Tenant's operation
of that certain ethanol processing plant located near Council Bluffs, Iowa which
is under development by Tenant as of the Commencement Date. Any other or further
use of the Property shall require Landlord's prior written consent.
12. Environmental.
(a) Tenant will fully comply with all Hazardous Materials Laws
(defined below) and agrees that Tenant, its employees, agents, contractors,
licensees and invitees shall not use, manufacture, release, store or dispose of
any Hazardous Materials (defined herein) in, on, under or about the Property.
However, the foregoing shall not prohibit de minimis quantities of cleaning
solvents and other materials which qualify as Hazardous Materials but which are
used and handled in accordance with good property management practices and in
compliance with all Hazardous Materials Laws and without disposal, leaking,
spillage or other contamination of or to the Property or the property of any
third party. At any time Landlord is notified or otherwise suspects that
Hazardous Materials, or any other dangerous, illegal or improper conditions,
exist with respect to the Property, Landlord may enter upon the Property in
order to conduct inspections, tests or studies. In the event Landlord discovers
the existence of any such Hazardous Materials or any breach of the provisions of
this Lease due to fault or other act of Tenant or its agents, employees,
contractors, invitees or licensees, Tenant shall reimburse Landlord upon demand
for the costs of all inspection, sampling and analysis, plus Interest from the
date of Landlord's demand to the date that the full amount to be reimbursed plus
all Interest accrued thereon has been paid to Landlord.
(b) Tenant hereby agrees to indemnify, defend and save
harmless Landlord, its agents and all Mortgagees and their respective successors
and assigns, from and against any loss, cost, damage or expense (including
reasonable attorneys' fees) arising out of or in any way connected with the
existence, use, manufacture, storage, disposal or other handling of Hazardous
Materials on, under or about the Property, except to the extent (i) caused by
Landlord, Landlord's employees or agents, or contractors or tenants under
contract or lease with Landlord or (ii) that Tenant proves said Hazardous
Materials existed on the Property on or before the Commencement Date. The
indemnity obligations of Tenant under this clause shall survive the expiration
or any termination of this Lease.
(c) For purposes hereof, "Hazardous Materials" includes,
without limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related materials
defined in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the Hazardous
Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et
seq.), and in the regulations adopted and publications promulgated pursuant
thereto, or any other federal, state or local environmental law, ordinance, rule
or regulation (collectively, "Hazardous Materials Laws").
13. Alterations. Tenant shall not, without the prior written consent of
Landlord, make any alterations, improvements or additions to the Property or
employ any person or contractor to
provide such services to the Property. Such consent may be conditioned upon such
matters as Landlord reasonably deems appropriate, including submission to and
review and approval by Landlord of complete plans and specifications for such
work, Landlord's approval and/or employment of the contractor and/or
subcontractors, the terms of their contracts, the maintenance of builder's risk
and other appropriate insurance, the terms and procedures for payment for such
work by Tenant and the terms and procedures pertaining to the delivery of
mechanic's lien waivers in connection therewith. Tenant shall promptly pay to
Tenant's contractors, when due, the cost of all such work, such that no lien is
filed against the Property. All work done by Tenant or its contractors pursuant
hereto shall be done in a good and workmanlike manner and shall comply with all
applicable laws and ordinances and rules and regulations of governmental
departments or agencies. All such alterations, additions or improvements
constructed or installed by or on behalf of Tenant shall become the property of
the Landlord upon the expiration or other sooner termination of this Lease,
except that Landlord may, by written notice to Tenant, given at least thirty
(30) days prior to the expiration or termination of this Lease, require Tenant
to remove any and all such alterations, additions or improvements and Tenant
shall repair any damage to the Property arising from such removal or, at
Landlord's option, shall pay to Landlord all of Landlord's costs of such removal
and repair. The provisions of this Section 13 shall survive the expiration or
termination of this Lease.
14. Surrender. Subject to Landlord's obligations to keep, maintain and
repair the Property and the Improvements as set forth in Section 9, Tenant
agrees that at the termination or expiration of this Lease, either by lapse of
time or otherwise, Tenant will surrender up possession of the Property in as
good condition and repair as the same shall be in upon Tenant's taking
possession thereof, ordinary wear and tear excepted. Tenant shall also remove
its furniture, equipment, trade fixtures, grain and all other items of personal
property from the Property prior to the conclusion of the Term. Tenant shall
repair, or reimburse Landlord on demand for the cost of repairing, all damage
done to the Property by such removal. If Tenant does not remove such items
(including, without limitation, grain), Tenant shall be conclusively presumed to
have conveyed the same to Landlord without further payment or credit by Landlord
to Tenant or, at Landlord's sole option, such items shall be deemed abandoned,
in which event Landlord may cause such items to be removed and disposed of at
Tenant's expense, without notice to Tenant and without obligation to compensate
Tenant. Tenant shall reimburse Landlord on demand for all costs of such removal
and disposition of Tenant's abandoned property, and Landlord shall have no
liability to Tenant in any respect regarding such property of Tenant.
15. Rights Reserved to Landlord. Without limiting any other rights
reserved or available to Landlord under this Lease, at law or in equity,
Landlord reserves the following rights to be exercised at Landlord's election:
(a) Upon reasonable advance notice (except in the case of an
emergency, in which case no notice shall be required), to inspect the Property
and to make repairs, additions or alterations to the Property;
(b) To show the Property to prospective purchasers,
mortgagees, or other persons having a legitimate interest in viewing the same
and, in addition, at any time within one hundred eighty (180) days prior to the
expiration of the Term to persons wishing to rent the
Property, and to place and maintain "For Rent" or "For Sale" or "Available"
signs at, in or on the Property.
(c) To assign its interest in this Lease and/or to sell,
assign, convey or otherwise dispose of the Property or any part thereof to any
third party, including without limitation the City of Council Bluffs, Iowa. If
Landlord assigns its rights under this Lease, then Landlord shall thereby be
released from any further obligations hereunder arising after the date of
transfer, provided that the assignee assumes Landlord's obligations hereunder in
writing, and Tenant shall look solely to Landlord's successor in interest for
all future obligations of Landlord. Tenant hereby agrees to attorn to Landlord's
successors in interest, whether such interest is acquired by sale, transfer,
foreclosure, taking in payment, deed in lieu of foreclosure, or otherwise.
16. Mechanic's Liens. Tenant will not permit any mechanic's or other
lien or encumbrance to be filed against or placed upon the Property during the
Term of this Lease, and in case of any such lien attaching will promptly pay all
amounts necessary to cause the release of the same. If default in the payment
thereof shall continue for ten (10) business days after written notice thereof
from Landlord to Tenant, Landlord shall have the right of paying the same or any
portion thereof, and any amount or amounts so paid, including reasonable
attorneys' fees and expenses, together with Interest on the amount or amounts of
such expenditures from the respective dates thereof until the date that the full
amount to be reimbursed plus all Interest accrued thereon has been paid to
Landlord, shall become Additional Rent due from Tenant to Landlord hereunder.
Notwithstanding the foregoing, Tenant shall have the right to contest the
validity or amount of any mechanic's lien claim upon Tenant's posting with
Landlord prior to such contest security reasonably satisfactory to Landlord in
an amount reasonably sufficient to discharge any such lien in full, plus any
applicable interest or penalties.
17. Default and Termination.
(a) Tenant covenants and agrees that: (1) if default be made
by Tenant in the payment of any rent or other sums herein provided to be paid by
Tenant to Landlord and such default shall continue for five (5) days after such
payment is due; or (2) if Tenant shall make default in any of the covenants of
this Lease to be kept and performed by Tenant and such default shall continue
after thirty (30) days' notice thereof in writing by Landlord to Tenant; or (3)
if at any time after the date of this Lease any proceedings in bankruptcy,
insolvency or reorganization shall be instituted against Tenant pursuant to any
federal or state law now or hereafter enacted, or a receiver or trustee shall be
appointed for all or any portion of Tenant's business or property and such
action or appointment is not dismissed within ninety (90) days; or (4) any
execution or attachment shall issue against Tenant of any of Tenant's business
or property or any of Tenant's interest in the Property acquired by or through
this Lease, or if Tenant shall be adjudged a bankrupt or insolvent, or Tenant
shall make an assignment for the benefit of creditors, or if Tenant shall file a
voluntary petition in bankruptcy or shall petition for or enter into an
arrangement or reorganization, composition or any other arrangement with
Tenant's creditors under any federal or state law now or hereafter enacted;
then, Landlord may treat the occurrence of such event as a breach of this Lease
and thereupon at its option may, exercise any one or more of the following
described remedies, in addition to all other rights and remedies provided to
Landlord, whether at law, in equity, or otherwise:
(1) Landlord may terminate this Lease and the Term created
hereby, in which event Landlord may forthwith repossess the Property
and recover forthwith as damages a sum of money equal to the value of
the Rent (including, without limitation, all Base Rent, Additional
Rent and all other sums required to be paid by Tenant hereunder)
provided to be paid by Tenant for the balance of the Term hereof and
any other sum of money and damages owed by Tenant to Landlord, less
the amount of the fair rental value of the Property for said period;
provided that if the fair rental value shall exceed the value of the
rent provided to be paid by Tenant for the balance of the Term hereof,
Landlord shall have no obligation to pay to Tenant such excess or any
part thereof; or
(2) Landlord may terminate only Tenant's right of possession and
may repossess the Property, by taking peaceful possession or
otherwise, without terminating this Lease, in which event Landlord
may, but shall be under no obligation to, relet the same for the
account of Tenant, for such rent and for such time (which may be for a
term extending beyond the Term of this Lease) and upon such terms as
the Landlord shall determine, and Landlord shall not be required to
accept any tenant offered by Tenant or to observe any instructions
given by the Tenant relative to such reletting. Landlord shall have
the right to make repairs, alterations and additions in or to the
Property and redecorate the same to the extent deemed by Landlord
necessary or desirable and in connection therewith change the locks to
the Property, and Tenant shall, upon demand, pay to Landlord the cost
thereof together with the Landlord's expenses of reletting. Landlord
may collect the rents from any such reletting and apply the same,
first, to the payment of the expenses of reentry, redecoration, repair
and alterations and the expenses of reletting, and second, to the
payment of rent and additional rent to be paid by Tenant hereunder,
and any excess or residue shall operate only as an offsetting credit
against the amount of rent and additional rent thereafter due and
payable hereunder. The use of such offsetting credit to reduce the
amount of rent and additional rent due Landlord, if any, shall not be
deemed to give Tenant any right, title or interest in or to such
excess or residue and any such excess or residue shall belong to
Landlord solely; provided that in no event shall Tenant be entitled to
a credit on its indebtedness to Landlord in excess of the aggregate
sum (including rent and additional rent) which would have been paid by
Tenant for the period for which the credit to Tenant is being
determined, had no event of default occurred. No such re-entry or
repossession, repairs, alterations and additions, or reletting shall
be construed as an eviction or ouster of the Tenant or as an election
on Landlord's part to terminate this Lease or shall operate to release
the Tenant, in whole or in part, from any of the Tenant's obligations
hereunder. Landlord shall have the right, at any time and from time to
time, to ▇▇▇ and recover judgment for any deficiencies from time to
time remaining after the application from time to time of the proceeds
of any such reletting.
(b) Landlord may in Landlord's sole discretion terminate this Lease and
Tenant's possession of the Property upon 10 days prior notice to Tenant upon:
(1) termination of that certain Grain Feedstock Supply Agreement of even date
herewith between Tenant and AGRI-Bunge, LLC and that certain Grain Feedstock
Agency Agreement between the Tenant and
AGRI-Bunge, LLC dated October 13, 2006, as amended by that certain First
Amendment dated as of the date hereof, or (2) termination of that certain
Purchase Agreement between Tenant and Landlord dated as of the date hereof;
provided, however, that Tenant shall have a period of 20 days following any such
termination to remove its furniture, equipment, trade fixtures, grain and all
other items of personal property from the Property in accordance with Section
14. Tenant shall promptly initiate and conduct such removal and shall coordinate
with Landlord to promptly transition Tenant's use of the Property to Landlord.
18. Remedies of Landlord.
(a) Upon termination of Tenant's right of possession hereunder, whether
this Lease be terminated or not, Tenant agrees to surrender possession of the
Property promptly, and hereby grants to Landlord full, free and complete license
to enter into and upon the Property, or any part thereof, to take possession
thereof, with process of law, and to expel and remove Tenant or any other person
who may be occupying the Property, or any part thereof, and Landlord may, with
process of law use such force in and about expelling and removing Tenant and
said other persons as may reasonably be necessary, but said entry and
repossession of the Property shall not constitute a trespass or forcible entry
or detainer, nor shall it cause a forfeiture or cancellation of rents or other
sum or sums due or to become due during the full stated term of this Lease, nor
a waiver of any covenant, agreement or promise herein contained to be performed
by Tenant.
(b) Landlord shall have the right (but not the obligation) to pay or
perform any obligation of Tenant hereunder; provided that no such payment or
performance by Landlord shall waive or cure any event of default by Tenant.
Tenant shall pay to Landlord, upon demand, any and all amounts and expenses paid
or incurred by Landlord in paying or performing any obligation of Tenant
hereunder, together with Interest thereon from the date such amount is paid or
such expense is incurred until Landlord is fully reimbursed by Tenant.
(c) It is further covenanted and agreed that Landlord may pursue any of the
remedies in this Lease provided, or any which may be allowed at law, in equity
or by statute, either separately or concurrently, and that any and all of
Landlord's rights and remedies are cumulative and not alternative, and shall not
be exhausted by the exercise thereof on one or more occasions. No delay or
omission to exercise any remedy or right accruing on any default shall impair
any such remedy or right, or be construed as a waiver of any such default, or
acquiescence therein, nor shall it affect any subsequent default of the same or
a different nature, but every such remedy or right may be exercised from time to
time, and as often as may be deemed expedient by Landlord.
19. Casualty.
(a) In the event that the Property is damaged or destroyed by fire,
explosion or other casualty or occurrence (a "Casualty"), Tenant shall give
prompt notice thereof to Landlord. Landlord shall use good faith efforts to
deliver to Tenant within sixty (60) days after such Casualty a good faith
estimate (the "Damage Notice") of the time needed to repair the damage caused by
such Casualty.
(b) If a material portion of the Property is damaged by Casualty such that
Tenant is prevented from conducting its business on the Property in a manner
reasonably comparable to that conducted immediately before such Casualty and
Landlord estimates that the damage caused thereby cannot be repaired within
sixty (60) days after the commencement of repairs (the "Repair Period"), then
Tenant may terminate this Lease by delivering written notice to Landlord of its
election to terminate within thirty (30) days after the Damage Notice has been
delivered to Tenant.
(c) If a Casualty damages the Property or a material portion of the
Improvements and (1) Landlord estimates that the damage to the Property cannot
be repaired within the Repair Period; (2) Landlord makes a good faith
determination that restoring the Improvements would be uneconomical; or (3)
Landlord is required to pay any insurance proceeds arising out of the Casualty
to a Mortgagee, then Landlord may terminate this Lease by giving written notice
of its election to terminate within thirty (30) days after the Damage Notice has
been delivered to Tenant.
(d) If neither party elects to terminate this Lease following a Casualty,
then Landlord shall, within a reasonable time after such Casualty, begin to
repair the Property and shall proceed with reasonable diligence to restore the
Property and the Improvements to substantially the same condition as they
existed immediately before such Casualty; however, Landlord shall not be
required to repair or replace any alterations constructed by Tenant (which shall
be promptly and with due diligence repaired and restored by Tenant at Tenant's
sole cost an expense) or any equipment, grain inventory, or personal property of
Tenant or others on the Property, and Landlord's obligation to repair or restore
the Property and the Improvements shall be limited to the extent of the
insurance proceeds actually received by Landlord for the Casualty in question.
There shall be no abatement of Tenant's obligations to pay Rent as the result of
any such damage or destruction, except that, to the extent and for so long as
any insurance policy maintained by Tenant pays Landlord for loss of Rent during
said period, Tenant shall be entitled to a rent abatement in like amount.
20. Condemnation.
(a) Total Taking. If the whole of the Property is taken under the power of
eminent domain, this Lease will terminate as of the date possession is taken by
the condemning authority.
(b) Partial Taking. If any portion of the Property is taken under the power
of eminent domain, then this Lease will terminate as to the portion so taken as
of the date possession is taken by the condemning authority; provided, however,
that this Lease shall remain and continue in full force and effect relative to
the portion of the Property not so taken until the expiration of the Term and
Tenant shall be entitled to an equitable abatement of Rent based upon the
utility and extent of the portion of the Property so taken.
(c) Substantial Partial Taking. Notwithstanding anything to the contrary in
Section 20(b) above, if more than thirty percent (30%) of the Property is
permanently taken under the power of eminent domain which renders the Property
reasonably unusable by Tenant for the Tenant's permitted use to the extent then
being used, as reasonably determined, then both
Landlord and Tenant shall have the option to unilaterally terminate this Lease.
Such option must be exercised, if at all, by giving written notice to the
non-terminating party within sixty (60) days after receipt of notice of such
taking and such termination shall be effective on the effective date of such
taking. In the event this Lease is not terminated as a result of any such
taking, any obligations of Tenant hereunder and all of the other provisions of
this Lease shall remain in full force and effect; provided, however, that this
Lease shall remain and continue in full force and effect relative to the portion
of the Property not so taken until the expiration of the Term and Tenant shall
be entitled to an equitable abatement of Rent based upon the utility and extent
of the portion of the Property so taken.
(d) Damages. All damages awarded for any such taking under the power of
eminent domain, whether for the whole or a part of the Property, shall belong to
and be the property of Landlord; provided, however, that so long as Tenant is
not in default hereunder, Tenant may make a separate claim the cost of
relocation.
(e) Rent. If this Lease is terminated as provided in this Section 20, all
Rent shall be paid to Landlord up to the date that possession is taken.
(f) Voluntary Sale. A voluntary sale by Landlord to any person or entity
having the power of eminent domain, either under the threat of condemnation or
while condemnation proceedings are pending, shall be considered a taking by
eminent domain for the purposes of this Section; provided that in such event
Tenant shall be entitled to recover any of its costs of relocation to the extent
Landlord is able to obtain reimbursement for such costs from such condemning
authority.
21. Holding Over. Should Tenant fail to vacate and relinquish
possession of the Property after the expiration of the Term or earlier
termination of this Lease or of Tenant's right of possession of the Property,
Tenant shall for purposes of such holding over be construed to be a tenant at
sufferance at monthly installments of rent equal to one hundred fifty percent
(150%) of the monthly Base Rent in effect as of the date of such expiration or
earlier termination and the full amount of its Additional Rent due hereunder
during each month or portion thereof for which Tenant shall retain possession of
the Property or any part thereof. Tenant shall also be liable to Landlord for
all damages, losses and costs which Landlord suffers or incurs because of any
holding over by Tenant, and Tenant shall indemnify Landlord against all claims
made by any other tenant or prospective tenant against Landlord resulting from
delay by Landlord in delivering possession of the Property to such other tenant
or prospective tenant. The provisions of this Section 21 shall not be deemed to
limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law or in equity.
22. Assignment and Subletting. Tenant shall not assign this Lease or sublet
the Property, or any portion thereof, without in each case first obtaining the
prior written consent thereto of Landlord. Any assignment or sublease without
such previous written consent of Landlord shall be null and void. Any change in
control of Tenant shall constitute an assignment for purpose of this Section 22.
If Landlord grants consent to such sublease or assignment, Tenant shall pay all
of the attorney fees of Landlord incurred with respect to such assignment or
sublease.
23. Subordination. The rights and interest of Tenant under this Lease,
including without limitation any right of first refusal granted pursuant to this
Lease, shall be subject and subordinate to any mortgage or trust deed that may
now or hereafter exist or be placed upon the Property and to any and all
advances made thereunder, and to the interest thereon, and all renewals,
replacements and extensions thereof. Any mortgagee or trustee may elect to give
the rights and interest of Tenant under this Lease priority over the lien of its
mortgage or trust deed. Tenant shall execute and deliver whatever instruments
may be reasonably required for such purposes including, but not limited to, such
subordination, non-disturbance and attornment agreements or lease estoppels and
certificates as Landlord requests in conjunction with any anticipated
assignment, conveyance, transfer, financing or refinancing of the Landlord's
interests in the Property.
24. Indemnity. Tenant covenants and agrees that it will protect, indemnify
and forever save and keep harmless Landlord of, from and against any and all
penalties, fines, damages, loss, costs, charges and expenses whatsoever
(including, without limitation, attorneys' fees) which arise as the result of
any breach or default by Tenant in the performance or observance of any of the
covenants of this Lease or any accident, injury, loss or damage resulting to
person or property caused by Tenant, its employees, agents, vendors, independent
contractors or business invitees or otherwise in, upon, at or from the Property,
unless the such penalty, fine, damage, loss, cost, charge or expense results
directly from the gross negligence or willful misconduct of the Landlord. The
provisions of this paragraph will survive the expiration or termination of the
Term of this Lease.
25. Notices. All notices required or permitted under this Lease 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 Landlord:
▇▇▇▇▇ North America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President - Bunge Grain
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ North America, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Tenant:
Southwest Iowa Renewable Energy, LLC
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Husch ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
26. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and the permitted successors and assigns
of the parties hereto respectively.
27. Brokerage. Landlord and Tenant each represent that Landlord and Tenant
have not dealt with any party as broker(s) in connection with this Lease, and
that insofar as each party knows, no other broker negotiated this Lease or is
entitled to any commission in connection therewith. Each party agrees to
indemnify, defend and hold the other, its beneficiaries or its partners, and any
of its or their employees, agents, legal representatives, shareholders,
directors, officers, partners, successors or assigns harmless from and against
any claims made by any broker or finder for a commission or fee in connection
with this Lease, provided that the other party has not in fact retained such
broker or finder.
28. Signage. Tenant shall be solely responsible for all costs and expenses
relating to the installation, maintenance and removal of any signage installed
on or at the Property by Tenant, which shall be removed by the conclusion of the
Term or upon the earlier termination of this Lease and all damage caused by such
removal shall be repaired by Tenant. All such signage shall comply with all
applicable laws, rules and regulations.
29. Estoppel Certificate. Within ten (10) business days after Landlord's
written request, Tenant shall execute, acknowledge and deliver to Landlord, or
to any third party designated by Landlord, a written estoppel certificate
certifying (i) that none of the terms or provisions of this Lease have been
changed (or if they have been changed, stating how they have been changed), (ii)
that this Lease has not been canceled or terminated, (iii) the last date of
payment of Rent and other charges and the time period covered by such payment,
(iv) that Landlord is not in default under this Lease (or, if Landlord is
claimed to be in default, stating the reasons therefor with particularity), and
(v) such other information with respect to Tenant or the Lease as Landlord may
reasonably request, it being agreed that each such certificate may be relied
upon by any prospective purchaser, mortgagee, prospective mortgagee, or other
person
having or acquiring an interest in the Property. If Tenant fails to deliver a
certificate in the form required hereunder within ten (10) business days after
Landlord's written request for same then Tenant's failure to execute and deliver
any such certificate to Landlord (or to any such designated third party) shall
automatically constitute Tenant's approval of the requested certificate as
though such certificate had been executed and delivered by Tenant to Landlord or
such designated third party in form identical to the form submitted by Landlord
to Tenant.
30. General.
(a) This Lease contains all agreements of the parties with respect to
any matter mentioned herein. No prior agreement or understanding pertaining
to any such matter shall be effective. This Lease may be modified in
writing only signed by the parties hereto.
(b) This Lease is to be construed according to the laws of the state
in which the Property is located.
(c) If any term, condition or provision of this Lease or the
application thereof to any party hereto or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to any party hereto or circumstances
other than those as to which it is held invalid or unenforceable, shall not
be affected thereby, and each term, condition and provision of this Lease
shall be valid and be enforced to the fullest extent permitted by law.
(d) Feminine or neuter pronouns shall be substituted for masculine
form or vice versa, and the plural shall be substituted for the singular
number or vice versa in any place or places herein in which the context may
require such substitution or substitutions.
(e) The headings or captions of Sections of this Lease are for
convenience and reference only, and in no way define, limit or describe the
scope of this Lease or the provisions of such Section.
(f) This Lease may be executed in any number of counterparts that
together shall constitute the Lease between the parties.
(g) Time is of the essence as to all provisions of this Lease.
(h) In the event that either party is required to bring any action
against the other party to enforce the other party's obligations under this
Lease, then the prevailing party shall be entitled to recover its
litigation expenses including reasonable attorneys' fees and costs.
(i) Neither this Lease nor any memorandum thereof shall be recorded.
(j) Landlord shall not be in default hereunder and Tenant shall not be
excused from performing any of its obligations hereunder if Landlord is
prevented from performing any of its obligations hereunder due to any
accident, breakage, strike, delay in obtaining any governmental permit or
license, including any building permit, shortage of materials, act of God
or other causes beyond Landlord's reasonable control.
(k) It is expressly understood and agreed by Tenant that none of
Landlord's covenants, undertakings or agreements are made or intended as
personal covenants, undertakings or agreements by Landlord or the
shareholders, directors or officers of Landlord, and any liability of
Landlord or the members in Landlord for damages or breach or
non-performance by Landlord or otherwise arising under or in connection
with this Lease or the relationship of Landlord and Tenant hereunder, shall
be collectible only out of Landlord's interest in the Property, as the same
may then be encumbered, and no personal liability is assumed by, nor at any
time may be asserted against Landlord, all such liability, if any, being
expressly waived and released by Tenant.
(l) The liability of Landlord to Tenant (or any person claiming by,
through or under Tenant) for any default by Landlord under the terms of
this Lease or any matter relating to or arising out of the occupancy or use
of the Property shall be limited to Tenant's actual direct (but not
consequential) damages.
(m) Landlord shall not be liable for any loss or damage to property of
Tenant or of others located on the Property, unless such loss or damage
shall be caused by the willful act or gross negligence of Landlord or its
agents, contractors, or employees. Landlord shall not be liable for any
loss or damage resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow or leaks from any part of the Property or
from the pipes, appliances or plumbing works or from any other place or
cause, unless such loss or damage shall be caused by the willful act or
gross negligence of Landlord or its agents, contractors, or employees.
(n) No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in writing signed by Landlord. The waiver by Landlord
of any breach of any provision of this Lease shall not be deemed a waiver
of any subsequent breach of the same or any other provision of this Lease.
No delay or omission in the exercise of any right or remedy of Landlord
upon any default by Tenant shall impair such right or remedy or be
construed as a waiver. Landlord's acceptance of any payments of Rent due
under this Lease shall not be deemed a waiver of any default by Tenant
under this Lease (including Tenant's recurrent failure to timely pay Rent)
other than Tenant's nonpayment of the accepted sums, and no endorsement or
statement on any check or accompanying any check or payment shall be deemed
an accord and satisfaction. Landlord's consent to or approval of any act by
Tenant requiring Landlord's consent or approval shall not be deemed to
waive or render unnecessary Landlord's consent to or approval of any
subsequent act by Tenant.
(o) All obligations of Tenant hereunder to be paid or performed prior
to or after the expiration of the Term or earlier termination of this Lease
shall survive such expiration or termination.
[The remainder of this page has intentionally been left blank. Signature
page follows.]
IN WITNESS WHEREOF, Landlord has caused this Lease to be executed by
its duly authorized signatory, and Tenant has caused this Lease to be executed
by its duly authorized signatory, all as of the day and year first above
written.
LANDLORD:
BUNGE NORTH AMERICA, INC.,
a New York corporation
By: _________________________________
Name: _________________________________
Title: _________________________________
TENANT:
SOUTHWEST IOWA RENEWABLE ENERGY,
LLC, an Iowa limited liability company
By: _________________________________
Name: _________________________________
Title: _________________________________
Exhibit A
(Legal Description of the Property)
The following legal description for the subject property is as
follows:
West Tract
Lots 1-8 and 13-16 in Block 8. ▇▇▇▇▇▇ and Clarks Addition
Lots 1-10 in Block 7, ▇▇▇▇▇▇ and Clarks Addition
Lots 1-6, Block 6, Ferry's Addition, and including vacated ▇▇▇▇ ▇▇▇▇▇▇
and vacated alleys and adjoining and excepting parts owned by the
railroad
Middle Tract
Lots 1-8, Block 9, ▇▇▇▇▇▇ and ▇▇▇▇▇ Addition
East Tract
▇▇▇▇ ▇-▇, ▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇ ▇-▇, ▇▇▇▇▇ 3, all in ▇▇▇▇▇▇ and ▇▇▇▇▇
Addition and including vacated ▇▇▇▇ ▇▇▇▇▇▇ and vacated alley, and excepting
parts owned by the railroad.
All three tracts are located in Council Bluffs, Pottawattamie County, Iowa
