Exhibit 10.13
*PORTIONS OF THIS RAILCAR SUBLEASE AGREEMENT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Execution Copy
RAILCAR SUBLEASE AGREEMENT
This Railcar Sublease Agreement, dated as of June 25, 2007 (the
"Sublease"), is made by and between Bunge North America, Inc., a New York
corporation ("Sublessor") and Southwest Iowa Renewable Energy, LLC, an Iowa
limited liability company ("Sublessee").
WHEREAS, Sublessee has requested that Sublessor provide railcars for
Sublessee to use in connection with its intended ethanol operations; and
WHEREAS, to induce Sublessor to provide such railcars, Sublessee's Board of
Directors committed to Sublessor on September 13, 2006 that Sublessee would
lease 320 tank cars and 300 grain ▇▇▇▇▇▇ cars from Sublessor; and
WHEREAS, in reliance upon such commitment, Sublessor is contracting to
lease railcars from a railcar lessor (the "Master Lessor") under the terms of a
Lease Agreement with the Master Lessor (the "Master Lease"); and
WHEREAS, the parties desire to set forth all of the terms upon which
Sublessee will sublease railcars from Sublessor.
NOW, THEREFORE, the parties agree as follows:
1. Sublease Agreement; Reliance. Subject to the terms and conditions of
this Sublease, Sublessor shall furnish and sublease to Sublessee, and Sublessee
shall accept and sublease from Sublessor, the railcars (each, a "Car" and
collectively, the "Cars") set forth on Riders 1 and 2 attached hereto. Sublessee
acknowledges and agrees that Sublessor is entering into the Master Lease in
reliance upon Sublessee's obligations under this Sublease.
2. Delivery. Except as provided otherwise in this Sublease, Sublessor
agrees to deliver each Car to Sublessee, freight charges collect, to Sublessee's
facility in Council Bluffs, Iowa, and Sublessee agrees to accept such delivery.
The obligations of Sublessor to deliver the Cars shall be excused, and Sublessor
shall not be liable, for any causes beyond the reasonable control of Sublessor
(including, but not limited to, delays caused by fire, labor difficulties,
delays of carriers and materials suppliers, governmental authority, late
delivery by the manufacturer of the Cars or late delivery by the Master Lessor)
and, in the event of a delay in such delivery, Sublessor shall deliver the Cars
to Sublessee as soon as reasonably possible thereafter.
3. Condition of Cars - Acceptance.
(a) All cars delivered under this Sublease shall be in compliance with
all applicable laws and industry and government regulations and rules,
including, without limitation, the Association of American Railroad Rules for
the Interchange of Freight Cars (the "Interchange Rules"), in satisfactory
condition for movement in the normal interchange of rail traffic, empty, clean,
and free of residue; but Sublessee shall be solely responsible for determining
that cars are in proper condition for loading and shipment, except for those
responsibilities which, under applicable
law and regulations, have been assumed by the railroads. Sublessee shall inspect
cars promptly after they are delivered and shall notify Sublessor in writing
within three business days after delivery of its rejection of any car, and the
specific reasons for such rejection. Failure by Sublessee to inspect such cars
within three business days after delivery, and/or the successful loading of any
such car by Sublessee, shall constitute acceptance of such car or cars, as the
case may be, by Sublessee. At Sublessor's request, Sublessee shall deliver to
Sublessor an executed Certificate of Acceptance in the form of Exhibit A with
respect to all Cars accepted by Sublessee.
(b) If Sublessee rejects any car, Sublessor shall have the right to
have the rejected car inspected by an inspector acceptable to both Sublessor and
Sublessee. The cost of such inspection will be paid by Sublessor if the cause
for rejection is affirmed by the inspector, otherwise such cost will be borne by
Sublessee. Sublessee shall be deemed to have accepted any such car for which the
inspector determines that good cause for rejection did not exist. The decision
of the inspector shall be final and binding upon the parties.
(c) If Sublessee properly rejects any car, Sublessor shall use
commercially reasonable efforts to cause Master Lessor to promptly repair such
car to the standards set forth in this Section 3 or promptly replace the car
with another railcar reasonably acceptable to Sublessee which meets such
standards. In either event, Sublessor shall use commercially reasonable efforts
to cause Master Lessor to deliver to Sublessee the repaired or replaced car and
Sublessee shall have the right to accept or reject such car as provided in this
Article 3.
(d) Sublessee's acceptance, however effected, shall be deemed
effective as of the acceptance date and the monthly rentals as hereinafter set
forth shall accrue from the acceptance date. Such acceptance shall presumptively
establish that such Cars conform to the applicable standards set forth in this
Sublease and the Interchange Rules.
4. Rentals. Sublessee agrees to pay to Sublessor for the use of each Car
the monthly rental set forth in the applicable Rider from the date such car is
accepted by Sublessee until such car is returned to Sublessor, as hereinafter
provided in Section 18. The rental shall be payable in U.S. Dollars and in
advance on or before the first day of each calendar month (provided, that the
rental for each car for the month in which it is accepted shall be prorated for
the number of days, including the day of acceptance, remaining in such month at
a daily rate based upon a 365 day year and shall be payable on or before the
first day of the next succeeding month) to Sublessor at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address as Sublessor may specify by written
notice to Sublessee. Except as set forth in this Sublease, rental shall be paid
without deduction, set-off or counterclaim.
5. Mileage Allowance. Under the Master Lease, Master Lessor is obligated to
use commercially reasonable efforts to collect all mileage earned by the Cars,
and, subject to all rules of the tariffs of the railroads, Sublessor shall
credit to Sublessee's rental account such mileage as and when received from
Master Lessor during the term of this Sublease.
6. Term. This Sublease shall be effective as dated and will expire upon the
completion of the leasing arrangement shown on the attached Riders of the last
Car or Cars covered thereunder. The Sublease term, with respect to all Cars
covered by a particular Rider, shall commence on the average date of delivery of
the Cars covered by such Rider; and shall terminate as specified in such Rider,
unless sooner terminated in accordance with provisions of this Sublease.
7. Use and Possession. Subject to the obligations of Sublessor under the
Master Lease, throughout the continuance of this Sublease so long as Sublessee
is not in default under this Sublease, Sublessee shall be entitled to possession
of each Car from the date the Sublease becomes effective as to such Car; and
shall use such Car only in the manner for which it was designed and intended,
and so as to subject it only to ordinary wear and tear; provided, however, that
Sublessee agrees that the Cars shall at all times be used: (a) in conformity
with all Interchange Rules; and (b) in compliance with the terms and conditions
of this Sublease. In the event any Car is used by Sublessee outside of the
continental United States, for any reason whatsoever, Sublessee shall assume
full responsibility (and reimburse Sublessor and/or Master Lessor) for all
costs, taxes (other than taxes on the income of Sublessor), duties or other
charges incidental to such use, including costs incurred in returning the car to
the continental United States. Sublessor shall promptly furnish Sublessee with
copies of all receipts, invoices or other requests for payment that it receives
with respect to such costs, taxes, duties or other charges
8. Empty Mileage Indemnification. Sublessee will use its best efforts to
use the Cars such that their total mileage under load will equal or exceed their
mileage empty on each railroad over which the Cars move. Should the empty
mileage exceed the loaded mileage such that Sublessor is obligated to pay Master
Lessor for such excess at the rate and at the time established by the tariff of
the railroad on which such excess of empty miles has accrued, then Sublessee
shall reimburse 100% of such amount to Sublessor. For the purpose of this
Section 8, the railroad mileage reports received by Master Lessor shall be prima
facie evidence of the facts reported therein.
9. Additional Charges by Railroads. Sublessee agrees to use the Cars, upon
each railroad over which Cars shall move, in accordance with the then prevailing
tariffs to which each railroad shall be a party; and if the operation or
movements of any of the Cars during the term hereof shall result in any charges
being made against Master Lessor and/or Sublessor by any such railroad,
Sublessee shall pay to Sublessor the amount of such charges within the period
prescribed by and at the rate and under the conditions of the then prevailing
tariffs. Sublessee agrees to indemnify Master Lessor and Sublessor against any
such charges. Sublessee shall be liable for any switching, demurrage, track
storage, detention or special handling charges imposed on any Car during the
term hereof, except (i) charges incurred while the car is en route to a shop for
maintenance or repairs that are Master Lessor's responsibility under this
Sublease or (ii) charges incurred as a result of Sublessor or Master Lessor's
failure to perform its obligations under this Sublease.
10. Sublessee's Right To Transfer or Sublease. Sublessee shall not
transfer, sublease or assign any Car or any of its interests and obligations
pursuant to this Sublease without Sublessor's prior written consent, and any
attempted transfer, sublease or assignment without such consent shall
be void and ineffective against Sublessor and Master Lessor. No transfer,
sublease or assignment of the Sublease, or of any Car, shall relieve Sublessee
from any of its obligations to Sublessor under this Sublease. This Sublease
shall be binding upon the parties hereto and their respective successors and
assigns.
11. Maintenance Responsibility.
(a) Subject to the other terms of this Sublease, Sublessor agrees to
use commercially reasonable efforts to cause Master Lessor to maintain the Cars,
at its sole cost and expense, in good working order, condition and repair
according to applicable law and regulations, including, without limitation, the
Interchange Rules. Sublessee agrees to notify Sublessor (and at Sublessor's
request will also notify Master Lessor), promptly, after learning that any Car
is damaged or in need of repair, and to forward such Cars and any other Cars
subject to this Sublease to shops as directed by Sublessor and/or Master Lessor
for repairs and/or periodic maintenance and inspections. No repairs to any of
the Cars shall be made by Sublessee without Sublessor's prior written consent,
except that Sublessee shall, at its expense, replace any removable part (dome
covers, hatch covers, outlet caps, etc.) if lost or broken. Running repairs (as
specified in the Interchange Rules) may be performed by railroads or hauling
Carriers without prior consent. Replacement or repair of any parts, equipment
and/or accessories on any of the Cars shall be with parts, equipment and/or
accessories that are of like kind and of at least equal quality to those being
replaced or repaired, unless otherwise agreed in writing by the parties.
(b) On tank Cars, Sublessee will be responsible for maintenance and
replacement of all movable parts, including angle valves and check valves and,
if such Cars are so equipped, thermometer ▇▇▇▇▇, gauging devices, regulator
valves, safety heads and top unloading valves. On ▇▇▇▇▇▇ Cars, Sublessee will be
responsible for inspection and cleaning of the operating mechanisms of the
outlets, hatches, dome covers, and special fittings on such Cars Subleased
herein, and damage to such outlets, hatches, dome covers, special fittings or
the operating mechanisms will be repaired for the account of Sublessee.
(c) When a Car is placed in a shop for maintenance or repair as
provided in this Sublease, the rental charges shall cease on date of arrival in
the shop, except in the case where a Car arrives without advance notice of
defects from Sublessee, in which case rental charges will cease on communication
of such defects to Sublessor from Sublessee, and shall be reinstated on the date
that maintenance and repairs have been completed and the Car is forwarded from
the shop or on the date that the Car is ready to leave, awaiting disposition
instructions from Sublessee. If any Car is derailed and requires repairs, the
rental charges for such Car will cease effective as of the date of the
derailment and will resume as of the date the Car is forwarded from the repair
shop. If any repairs are required as a result of the misuse by or negligence of
Sublessee or its consignee, agent or sublessee or while on a railroad that does
not subscribe to, or fails to meet its responsibility under the Interchange
Rules, the rental charges shall continue during the repair period, and Sublessee
agrees to pay Sublessor for the cost of such repairs. If any repairs are
required while on any private siding or track or any private or industrial
railroad, the rental charges shall continue during the repair period.
12. Loss or Destruction.
(a) If any of the Cars shall be completely destroyed, or if the
physical condition of any Car shall become such that the Car cannot be operated
in railroad service, as determined by Sublessor or Master Lessor, rental will
cease as to such Car as of the date on which such event occurred. As directed by
Master Lessor, Sublessor may cancel this Sublease as to such Car as of the date
on which such event occurred, or may substitute another Car reasonably
acceptable to Sublessee within a reasonable period of time. Sublessee shall
notify Sublessor of the occurrence of any such event within three business days
after learning of such event. In the event of such substitution, the substituted
Car shall be held pursuant to all the terms and conditions of this Sublease.
Sublessee agrees that if a Car is lost or destroyed or is in such physical
condition that it cannot be operated in railroad service by reason of misuse or
negligence of Sublessee or its consignee, agent or sublessee or while on a
railroad that does not subscribe to the Interchange Rules or while on any
private siding or track or any private or industrial railroad, Sublessee will
pay Sublessor, in cash, the depreciated value of such Car as determined by Rule
#107 of the Interchange Rules within 15 days following a request by Sublessor
for such payment. Any amount payable by Sublessee to Sublessor pursuant to this
Section 12 shall be reduced by any amounts received by Sublessor from any third
party responsible for such loss, destruction or damage. Sublessee shall be
subrogated to the rights of Sublessor against any person to the extent that the
actions or omissions of such person caused Sublessee to incur liability under
this Section 12, and Sublessor shall cooperate fully with Sublessee in its
pursuit of these subrogation rights. Sublessor and Sublessee shall cooperate
with and assist each other in any reasonable manner requested, but without
affecting their respective obligations under this Section 12 or Section 22, to
establish proper claims against parties responsible for the loss, destruction of
or damage to, the Cars. With respect to any Car for which Sublessor has received
payment from Sublessee of the depreciated value, Sublessor shall, at Sublessee's
request, use commercially reasonable efforts to cause Master Lessor to execute
and deliver to Sublessee a ▇▇▇▇ of sale transferring to Sublessee, free and
clear of all security interests and other liens, all of Master Lessor's right,
title and interest in and to such Car, as well as all claims and rights Master
Lessor may have against any manufacturer, supplier, vendor, repairer, Carrier or
dealer of such Car, and any part thereof.
(b) Sublessee shall obtain commercial general liability insurance
against claims for bodily injury, death or third party property damage,
designating Sublessor and Master Lessor as additional insureds with respect to
Sublessee's operation and use of the Cars under this Sublease. The insurance
policy should be valid for the term of this Sublease as defined in Section 6.
Sublessee shall be solely responsible for any and all payments under the
insurance policy. If Sublessee does not comply with its obligations under this
Section 12(b), Sublessor may obtain insurance for the Cars itself, at the sole
expense and responsibility of Sublessee. Any payment received by Sublessor from
the insurance company shall be credited to the amount that Sublessee is
obligated to pay under Section 12(a), unless such insurance policy has been
obtained by Sublessor or Sublessor has paid any premium under such insurance
policy. In these
last events, the amounts received by Sublessor shall be first applied to
reimburse Sublessor for any and all payments and costs paid by Sublessor related
to such insurance policy plus a reasonable amount of interest. The remaining
amount, if any, shall be applied to Sublessee's obligation of payment in
accordance with Section 12(a).
13. Loss of Commodity. Sublessor shall not be liable for any loss of, or
damage to, commodities, or any part thereof, loaded or shipped in or on any of
the Cars however such loss or damage shall be caused or shall result. Sublessee
agrees to assume responsibility for, to indemnify Sublessor against, and to save
it harmless from any such loss or damage or claim therefor.
14. Damage to Car by Commodity. Sublessee shall be liable for damage to any
Car covered by this Sublease, whether or not due to Sublessee's negligence, if
caused by or as a result of the commodity loaded therein during the Sublease
term. Sublessee assumes responsibility for such damage to any Car, including
without limitation, as applicable, to the tank, fittings or appurtenances
thereto, including the interior lining for tanks so equipped, ordinary wear and
tear of interior linings excepted. Sublessee will use the Cars for the
transportation and handling of commodities which will not injure the Cars.
15. Alteration and Lettering. Sublessee will not in any way alter the
physical structure of the Cars without the advance approval, in writing, of
Sublessor. Except as otherwise contemplated herein, Sublessee shall place no
lettering or marking of any kind upon the Cars without Sublessor's prior written
consent.
16. Linings and Coatings. The application, maintenance and removal of
interior protective linings and coatings in Cars so equipped is to be at the
expense of Sublessee. Commodity or mechanical damage to such linings or coatings
shall be for the account of Sublessee.
17. Interior Preparation for Commodities. Any cleaning or special
preparation of the interior of Cars to make them suitable for the shipment of
commodities by or for Sublessee during the term of the Sublease shall be done at
Sublessee's expense unless otherwise agreed.
18. Return of Cars - Cleaning. At the expiration of the Sublease term as
provided in the applicable Rider, Sublessee shall, at its expense, return the
Cars described in that Rider to Sublessor or its designee at a point designated
by Sublessor, empty, clean and free from residue (including, without limitation,
sludge, heel or other similar materials) for use in the type of service for
which the Cars were used hereunder, and in the same condition as the Cars were
in when delivered, except for: (i) normal wear and tear and (ii) those items
that were Sublessor's and/or Master Lessor's obligation to maintain and repair.
At the expiration of the Sublease term, should cleaning be required to place the
Car in the condition required hereunder, Sublessee shall bear the full cost of
cleaning and the rental shall continue until the Car is so cleaned.
19. Modifications. If, at any time after Sublessee's acceptance of a Car,
the Federal Railroad Administration or any other governmental agency or
non-governmental organization having
jurisdiction over the operation, safety or use of such Car, requires that
Sublessor modify such Car to qualify it for operation in railroad interchange,
Sublessor and/or Master Lessor shall promptly perform all required modifications
and the cost of those modifications shall be reflected in an increase in the
monthly rental rate per Car according to the rental escalation formula shown on
the Rider for that Car. Rental charges will cease on the first day the Car is no
longer in Sublessee's service and will be reinstated on the date the Car has
been modified and is forwarded from the shop. If Sublessor, in its sole
discretion (or as directed by Master Lessor), elects to remove a Car from
Sublessee's service rather than make such a modification, the rent with respect
to such Car shall terminate upon the date specified in writing by Sublessor,
provided that such date must be prior to the date such modification is required
to be made.
20. High Mileage and Weight Limitation. Since the rentals and other terms
of this Sublease are based on normal usage of Cars in non-unit train or other
non-high mileage operations, Sublessee agrees not to use the Cars in unit train
or other designated high mileage usage without prior written consent of
Sublessor. Each Car will be subject to a surcharge shown on the applicable Rider
for all excess miles. Sublessee shall not exceed the weight limitations
prescribed for operation of Cars in unrestricted interchange service as set
forth under Interchange Rule 91 without Sublessor's prior written consent.
Sublessee shall not load any of the Cars in excess of the load limit stenciled
thereon or any load limit prescribed by tariff, circular, or regulation.
21. Use of Cars on Certain Roads Under AAR Circular OT-5. Upon the written
request of Sublessee (which request shall name the railroads involved),
Sublessor shall use reasonable efforts to work with Master Lessor to obtain from
each named railroad authority to place the Cars (other than tanks) in service
under the provisions of AAR Circular OT-5 as promulgated by the AAR and all
supplements thereto and reissues thereof (such authority hereinafter called
"consent(s)"). Sublessee shall furnish to Sublessor such information as is
necessary to apply for and obtain such consents. Sublessor, however, shall not
be liable for failure to obtain such consents for any reason whatsoever and this
Sublease shall remain in full force and effect notwithstanding any failure of
Sublessor to obtain such consents.
22. Indemnifications.
(a) Sublessee shall defend (if such defense is tendered to Sublessee),
indemnify and hold Sublessor and Master Lessor harmless from and against and
does hereby release Sublessor and Master Lessor from all claims, suits,
liabilities, losses, damages, costs and expenses, including reasonable
attorney's fees, in any way arising out of, or resulting from, the storage, use
or operation of the Cars during the term of this Sublease, except to the extent:
(i) the same arises from or is related to the negligence or willful misconduct
of Master Lessor and/or Sublessor, or either of their employees or agents, (ii)
a railroad or other third party has assumed full responsibility and satisfies
such responsibility, (iii) the same arises from or is related to Sublessor's
failure to perform its obligations under this Sublease, (iv) the same accrues
with respect to any Car while such Car is in a repair shop undergoing
maintenance and repairs, or (v) the same arises from or is related to the use or
condition of the Cars prior to being in Sublessee's service under this Sublease.
(b) Sublessor shall defend (if such defense is tendered to Sublessor),
indemnify and hold Sublessee harmless from and against and does hereby release
Sublessee from all claims, suits, liabilities, losses, damages, costs and
expenses, including reasonable attorney's fees, in any way arising out of, or
resulting from, the repair and maintenance of the Cars during the term of this
Sublease, except to the extent: (i) the same arises from or is related to the
negligence or willful misconduct of Sublessee, its employees or agents, (ii) a
railroad or other third party has assumed full responsibility and satisfies such
responsibility, or (iii) the same arises from or is related to Sublessee's
failure to perform its obligations under this Sublease.
23. Taxes and Liens. Sublessee shall not be liable for any Federal, State
or other governmental property taxes assessed or levied against the Cars, except
that (i) Sublessee shall be liable for and pay such taxes when the Cars bear
Sublessee's reporting marks and numbers and (ii) Sublessee shall be liable for
and shall pay or reimburse Sublessor for the payment of any sales, use, leasing,
operation, excise, gross receipts and other taxes with respect to the Cars
(together with any penalties, fines or interest thereon), duties, imposts,
taxes, investment tax credit reductions and similar charges arising out of
Sublessee's use of Cars outside the continental United States, except to the
extent levied or assessed on Sublessor's income. Sublessee acknowledges and
agrees that by the execution of this Sublease it does not obtain, and by
payments and performance hereunder it does not, and will not, have or obtain any
title to the Cars or any property right or interest therein, legal or equitable,
except solely as Sublessee hereunder and subject to all of the terms hereof.
Sublessee shall keep the Cars free from any liens or encumbrances created by or
through Sublessee.
24. Defaults and Remedies. If (a) Sublessee defaults in the payment of any
sum of money to be paid under this Sublease and such default continues five days
after written notice to Sublessee of such default, or (b) Sublessee fails to
perform any covenant or condition required to be performed by Sublessee, which
failure shall not be remedied within ten days after written notice thereof by
Sublessor to Sublessee or (c) Sublessee shall dissolve, make or commit any act
of bankruptcy or if any proceeding under any bankruptcy or insolvency statute or
any laws relating to relief of debtors is commenced by Sublessee or if any such
proceeding is commenced against Sublessee and same shall not have been stayed,
vacated, removed or dismissed within 60 days after the date of the filing
thereof or (d) a receiver, trustee or liquidator is appointed for Sublessee or
for all or a substantial part of Sublessee's assets with Sublessee's consent or,
if without Sublessee's consent, the same shall not have been stayed, vacated,
removed or dismissed within 60 days after the date of the appointment thereof or
if a writ of attachment or execution is levied on any Car as a result of a
judgment against Sublessee and the same is not stayed, vacated or discharged
within 30 days thereafter, or (e) Sublessee fails to keep all of the Cars free
from any lien or encumbrance arising by, through or under it which may encumber
or otherwise affect title to any Car, and within 20 days after Sublessee
receives written notice of any such lien or encumbrance, Sublessee has not
discharged such lien or encumbrance, Sublessor may exercise one or more of the
following remedies with respect to the Cars:
1. Immediately terminate this Sublease and Sublessee's rights hereunder;
2. Require Sublessee to return the Cars to Sublessor at Sublessee's
expense, and if Sublessee fails to so comply, Sublessor may take
possession of such Cars without demand or notice and without court
order or legal process. Sublessee acknowledges that it may have a
right to notice of possession and the taking of possession with a
court order or other legal process. Sublessee, however, knowingly
waives any right to such notice of possession and the taking of such
possession without court order or legal process;
3. Sublease the Cars to such persons, at such rental, and for such period
of time as Sublessor shall elect. Sublessor shall apply the proceeds
from such leasing, less all costs and expenses reasonably incurred in
the recovery, repair (if such repairs are otherwise Sublessee's
obligation under this Sublease), storage and renting of such Cars,
toward the payment of Sublessee's obligations hereunder. Sublessee
shall remain liable for any deficiency, which, at Sublessor's option,
shall be paid monthly as suffered or immediately, or at the end of the
Sublease term as damages for Sublessee's default;
4. Bring legal action to recover all rent or other amounts then accrued
or thereafter accruing from Sublessee to Sublessor under any
provisions hereunder;
5. Pursue any other remedy which Sublessor may have.
Each of the foregoing remedies is cumulative and may be enforced separately or
concurrently, and in addition to any other remedy referred to herein or
otherwise available to Sublessor in law or equity, and action upon one such
remedy shall not be deemed to constitute an election or waiver of the other
remedies or rights of action. Any repossession or sale of any Car by Sublessor
shall not bar an action for a deficiency as herein provided and the bringing of
an action or entering of a judgment against Sublessee shall not bar Sublessor's
right to repossess any or all of the Cars. In the event of default, Sublessee
shall pay to Sublessor upon demand all costs and expenses, including reasonable
attorneys' fee expended by Sublessor in the enforcement of its rights and
remedies hereunder, and Sublessee shall pay interest on any amount owing to
Sublessor from the time such amount becomes due hereunder at a rate per annum
equal to one and one-half percentage points (1.5%) above the prime rate of
JPMorgan Chase Bank N.A. (or its successor), such rate to be reduced, however,
to the extent it exceeds the maximum rate permitted by applicable law. In
addition, Sublessee shall, without expense to Sublessor, assist Sublessor in
repossessing the Cars.
If Sublessee fails to perform any of its obligations hereunder, Sublessor, at
Sublessee's expense, and without waiving any rights it may have against
Sublessee for such nonperformance, may, with prior written notice to Sublessee,
itself render such performance. Sublessee shall reimburse Sublessor on demand
for all sums so paid by Sublessor on Sublessee's behalf, together with interest
at a rate per annum equal to one and one-half percentage points (1.5%) above the
prime rate of JPMorgan Chase Bank N.A. (or its successor), such rate to be
reduced, however, to the extent it exceeds the maximum rate permitted by
applicable law.
25. Sublessor's or Master Lessor's Right to Assign; Subordination. All of
Sublessee's
rights under this Sublease are subject and subordinate to the rights of the
Master Lessor set forth in this Section 25. All rights of Master Lessor in the
Master Lease may be assigned, pledged, mortgaged, leased, transferred or
otherwise disposed of, either in whole or in part, and/or Master Lessor may
assign, pledge, mortgage, lease, transfer or otherwise dispose of title to the
Cars, with or without notice to Sublessor or Sublessee. In the event of any such
assignment, pledge, mortgage, lease, transfer or other disposition, the Master
Lease and all rights of Sublessor thereunder, and all rights of Sublessee in
this Sublease, will be subject and subordinate to the terms, covenants and
conditions of any assignment, pledge, mortgage, lease, or other agreements
covering the Cars heretofore or hereafter created and entered into by Master
Lessor, its successors or assigns and to all of the rights of any such assignee,
pledgee, mortgagee, lessor, transferee or other holder of legal title to or
security interest in the Cars. At the request of Master Lessor or any assignee,
pledgee, mortgagee, lessor, transferee or other holder of the legal title to or
security interest in the Cars may, if applicable, place on each side of each
Car, in letters not less than one inch in height, the words "Ownership Subject
to a Security Lease Filed with the Surface Transportation Board" or other
appropriate words reasonably requested. In the event that Master Lessor assigns
its interest in the Master Lease, Sublessee, at the request of Sublessor, shall
execute and deliver to Master Lessor and Sublessor an Acknowledgment of
Assignment in substantially the form attached hereto as Exhibit B.
26. Warranties. EXCEPT AS OTHERWISE PROVIDED IN THIS SUBLEASE, SUBLESSOR
MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO THE CONDITION,
MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER MATTER CONCERNING
THE CARS. Sublessee shall be solely responsible for determining that the
specifications and design of any Car are appropriate for the commodities loaded
therein.
27. Right of Inspection and Notices. Sublessor, Master Lessor, or any of
their assignees, shall, at any reasonable time and without interfering with
Sublessee's operations, have the right to inspect the Cars by its authorized
representative wherever they may be located for the purpose of determining
compliance by Sublessee with its obligations hereunder. Sublessee shall use
commercially reasonable efforts to obtain permission, if necessary, for
Sublessor or its representative to enter upon any premises where the Cars may be
located. Sublessee shall notify Sublessor, in writing, within three business
days after any attachment, lien (including any tax and mechanics' liens) or
other judicial process arising by, through or under Sublessee attaches to any of
the Cars.
28. Miscellaneous. This Sublease, together with any and all exhibits
attached hereto, constitutes the entire agreement between Sublessor and
Sublessee with respect to the subject matter addressed herein, and it shall not
be amended, altered or changed except by written agreement signed by the parties
hereto. No waiver of any provision of this Sublease or consent to any departure
by either party therefrom shall be effective unless the same shall be in
writing, signed by both parties and then such waiver of consent shall be
effective only in the specific instance and for the purpose for which it was
given.
1. Governing Law. This Sublease shall be interpreted under and
performance
shall be governed by the laws of the State of
Illinois.
2. Conflict with Interchange Rules. In the event the Interchange
Rules conflict with any provision of this Sublease, this Sublease
shall govern.
3. Exhibits. All exhibits attached hereto are incorporated herein by
this reference.
4. Payments. All payments to be made under this Sublease shall be
made at the address set forth in Section 4.
5. Severability. If any term or provision of this Sublease or the
application thereof shall, to any extent, be invalid or
unenforceable, such invalidity or unenforceability shall not
affect or render invalid or unenforceable any other provision of
this Sublease, and this Sublease shall be valid and enforced to
the fullest extent permitted by law.
6. Headings. The headings that have been used to designate the
various Sections and Articles hereof are solely for convenience
in reading and ease of reference and shall not be construed in
any event or manner as interpretative or limiting the
interpretation of the same.
7. Governmental Laws. Sublessor shall use commercially reasonable
efforts to cause Master Lessor to comply with all governmental
laws, rules, regulations, requirements and the Interchange Rules
(herein collectively referred to as the "Rules") with respect to
the repair and maintenance of the Cars and any part thereof.
Sublessee shall comply with all Rules with respect to the use,
operation and maintenance of any interior lading protective
devices, special interior linings or removable parts. Sublessee,
at its expense, shall further comply with the Rules in the event
such Rules require a change or replacement of such devices,
linings or parts.
8. Survival. All indemnities contained in this Sublease shall
survive the termination hereof, but only with respect to
indemnified claims that accrue with respect to events occurring
prior to the expiration or earlier termination of this Sublease.
In addition, the obligation to pay any deficiency, as well as the
obligation for any and all other payments hereunder shall survive
the termination of this Sublease or the Sublease contained
herein.
29. Addressing of Notices. All notices and other communications required or
permitted by this Agreement shall be in writing and deemed given to a party when
(a) delivered by hand or by nationally recognized overnight courier service; (b)
sent by facsimile with confirmation
of transmission by the transmitting equipment; or (c) received or rejected by
the addressee if sent by certified mail, return receipt requested, in each case
(a) - (c) to the following addresses or facsimile numbers and marked to the
attention of the person (by name or title) designated below (or to such other
address, facsimile number, or person as a party may designate by notice to the
other party):
Sublessor to Sublessee Sublessee to Sublessor:
TO: Southwest Iowa Renewable Energy, LLC Bunge North America, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇ Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇ ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President -- Transportation
30. Administration of Sublease. Sublessee agrees to make available to
Sublessor information concerning the movement of the Cars reasonably required
for the efficient administration of this Sublease. Sublessee agrees to cooperate
with Sublessor for the purpose of complying with any reasonable requirements of
any lender, the Surface Transportation Board or the provisions of Article 9 of
the Uniform Commercial Code provided such cooperation does not materially affect
the rights, obligations or liabilities of Sublessee hereunder.
31. Recordation of Lease. If Sublessor or Master Lessor elect or are
required to record a memorandum of this lease with the Surface Transportation
Board, then Sublessee will cooperate with the preparation, execution, and filing
of such memorandum.
32. Potential Conversion of Master Lease. Sublessor may, at its sole
discretion, convert the Master Lease to either a net lease or direct purchase.
In such event, Sublessor and Sublessee shall negotiate appropriate modifications
to this Sublease or a direct lease of the Cars, as applicable, provided however,
such conversion shall not affect Sublessor's obligation to furnish the Cars to
Sublessee hereunder on terms at least as favorable to Sublessee as hereunder nor
shall Sublessee be obligated to accept any modifications to this Sublease or a
direct lease on terms less favorable to Sublessee than the terms contained
herein.
[signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed and delivered as of the day and year first above written.
Sublessor: Sublessee:
SOUTHWEST IOWA RENEWABLE
BUNGE NORTH AMERICA, INC. ENERGY, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------ --------------------------------------
Title: Vice President Title: President and CEO
--------------------------- -----------------------------------
*THE PORTIONS OF THIS RIDER NO: 001 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.
Rider No: 001 to Railcar Sublease Agreement
It is hereby agreed as of June 25, 2007 that this Rider shall become part
of the Railcar Sublease Agreement, dated as of June 25, 2007 (the "Sublease"),
between Bunge North America, Inc. ("Sublessor") and Southwest Iowa Renewable
Energy, LLC ("Sublessee"), and that the Cars described herein shall be placed in
Sublessee's service, subject to the following terms and conditions:
Capitalized Terms. All capitalized terms defined in the Sublease shall have the
meanings defined therein when used in this Rider No. 001 except that the term
"Cars" as used herein shall only refer to the railcars described in this Rider.
Number of Cars: Three hundred (300).
Description: 6,351 cu. ft. covered ▇▇▇▇▇▇ cars with gravity outlet gates and
with 286,000 pound gross load weight capacity.
Car Initials and Numbers: See Exhibit A attached hereto.
Sublease Rental Rate: $* per Car per month, subject to the following
provisions:
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) This Sublease Rental Rate will be adjusted by any amounts by which
Sublessor's rental rate under the Master Lease (the "Master Rental
Rate") is adjusted, in accordance with the following provisions:
(i) The Master Rental Rate is subject to adjustment for any increase
in * implicit in the unit sales price agreed by Sublessor and
Master Lessor as follows: For each $* increase in * costs (or
fraction thereof), the Master Rental Rate and this Sublease
Rental Rate shall be increased $* (or pro rata portion thereof).
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(ii) The Master Rental Rate is subject to adjustment for any change in
the yield to maturity of * as of the date of delivery of the
initial car under Rider Five to the Master Lease as follows: For
each * basis point change (or fraction thereof) in such yield to
maturity, the Master Rental Rate and this Sublease Rental Rate
shall be adjusted $* (or pro rata portion thereof).
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(b) If Sublessor and/or Master Lessor are required to modify a Car in
accordance with Section 19 of the Sublease, then the Sublease Rental
Rate will increase by $* for each $* cost incurred by Sublessor and/or
Master Lessor in the course of making
modifications.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c) In accordance with Section 20 of the Sublease, in the event that a Car
travels more than * miles (empty and loaded) in Sublessee's service
during any calendar year, Sublessee shall pay Sublessor $* per mile
for each mile over * traveled by such Car.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Impact Damage: Impact damage resulting from striking the car with hammers,
lances, sledges, or other such mechanical device shall not be considered normal
wear and tear to the extent such damage results in (a) cracks, punctures, or
tears of the steel sheet, or (b) dents to the steel sheet exceeding one inch
(1") in depth, or (c) penetration of the exterior paint film exposing the steel
sheet to the elements; all of the preceding enumerated items shall collectively
be defined as "Sublessee Responsibility Damage". Sublessee Responsibility Damage
shall be repaired at Sublessee's expense by means of straightening dents,
welding any cracks, patching punctures or tears, and spot painting any repaired
or exposed surfaces.
Weiqht Limitation: Sublessee shall not exceed the weight limitations prescribed
for operation of cars in unrestricted interchange service as set forth under AAR
Interchange Rule 70 without Sublessor's prior written consent.
Minimum Rental Period: The minimum rental period for the Cars subleased
hereunder shall be 120 months, and the Cars shall continue under sublease
thereafter for successive one (1) month terms, at the same rate and under the
same conditions, unless notice, in writing, requesting cancellation shall be
given by either party to the other at least 30 days prior to expiration of the
initial term or any successive term for Cars covered by this Rider. Thereafter,
this Rider shall terminate automatically upon the date of release of the last
Car covered by this Rider.
Miscellaneous: The parties acknowledge that all of the Cars to be subleased
under this Rider are being built and will be delivered to Sublessee's service as
released from the manufacturer.
[signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Rider to be
executed and delivered as of the day and year first above written.
Sublessor: Sublessee:
SOUTHWEST IOWA RENEWABLE
BUNGE NORTH AMERICA, INC. ENERGY, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------ --------------------------------------
Title: Vice President Title: President and CEO
--------------------------- -----------------------------------
*THE PORTIONS OF THIS RIDER NO: 002 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.
Rider No: 002 to Railcar Sublease Agreement
It is hereby agreed as of June 25, 2007 that this Rider shall become part
of the Railcar Sublease Agreement, dated as of June 25, 2007 (the "Sublease"),
between Bunge North America, Inc. ("Sublessor") and Southwest Iowa Renewable
Energy, LLC ("Sublessee"), and that the Cars described herein shall be placed in
Sublessee's service, subject to the following terms and conditions:
Capitalized Terms. All capitalized terms defined in the Sublease shall have the
meanings defined therein when used in this Rider No. 002 except that the term
"Cars" as used herein shall only refer to the railcars described in this Rider.
Number of Cars: Three hundred twenty-five (325).
Description: 30,145 gallon tank cars, equipped with 2" x 1" top unloading
capability.
Commodity: Ethanol.
Car Initials and Numbers: See Exhibit A attached hereto.
Rental Rate: $* per Car per month, subject to the following provisions:
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) This Sublease Rental Rate will be adjusted by any amounts by which
Sublessor's rental rate under the Master Lease (the "Master Rental
Rate") is adjusted, in accordance with the following provisions:
(i) The Master Rental Rate is subject to adjustment for any increase
in * implicit in the unit sales price agreed by Sublessor and
Master Lessor as follows: For each $* increase in * costs (or
fraction thereof), the Master Rental Rate and this Sublease
Rental Rate shall be increased $* (or pro rata portion thereof).
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(ii) The Master Rental Rate is subject to adjustment for any change in
the yield to maturity of * as of the date of delivery of the
initial car under Rider Five to the Master Lease as follows: For
each * basis point change (or fraction thereof) in such yield to
maturity, the Master Rental Rate and this Sublease Rental Rate
shall be adjusted $* (or pro rata portion thereof).
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(d) If Sublessor and/or Master Lessor are required to modify a Car in
accordance with Section 19 of the Sublease, then the Sublease Rental
Rate will increase by $* for each $* cost incurred by Sublessor and/or
Master Lessor in the course of making
modifications.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(e) In accordance with Section 20 of the Sublease, in the event that a Car
travels more than * miles (empty and loaded) in Sublessee's
service during any calendar year, Sublessee shall pay Sublessor $*
per mile for each mile over * traveled by such Car.
* OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Weiqht Limitation: Sublessee shall not exceed the weight limitations prescribed
for operation of cars in unrestricted interchange service as set forth under AAR
Interchange Rule 70 without Sublessor's prior written consent.
Minimum Rental Period: The minimum rental period for the Cars subleased
hereunder shall be 120 months, and the Cars shall continue under sublease
thereafter for successive one (1) month terms, at the same rate and under the
same conditions, unless notice, in writing, requesting cancellation shall be
given by either party to the other at least 30 days prior to expiration of the
initial term or any successive term for Cars covered by this Rider. Thereafter,
this Rider shall terminate automatically upon the date of release of the last
Car covered by this Rider.
Miscellaneous: The parties acknowledge that all of the Cars to be subleased
under this Rider are being built and will be delivered to Sublessee's service as
released from the manufacturer.
[signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Rider to be
executed and delivered as of the day and year first above written.
Sublessor: Sublessee:
SOUTHWEST IOWA RENEWABLE
BUNGE NORTH AMERICA, INC. ENERGY, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------ --------------------------------------
Title: Vice President Title: President and CEO
--------------------------- -----------------------------------
EXHIBIT A
CERTIFICATE OF ACCEPTANCE OF RAILROAD CAR
This Certificate relates to the railroad cars listed below subleased by
Bunge North America, Inc. to Southwest Iowa Renewable Energy, LLC under a
Sublease for ____ railroad cars dated ____ into which this certificate is
incorporated (by Article 3 thereof).
Railcar Numbers
Sublessee hereby certifies that the railcars listed above were delivered to
and received by Sublessee, determined to be acceptable under the applicable
standards (set forth in Section 3 of the Sublease); and Sublessee hereby
certifies its acceptance of the railcars as of____________________
SUBLESSEE:SIRE
BY:TITLE: