Exhibit 10.1
*PORTIONS OF THIS AMENDED AND
RESTATED RAILCAR LEASE AGREEMENT
HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL
TREATMENT WHICH HAS BEEN FILED
SEPARATELY WITH THE SECURITIES
AND EXCHANGE
COMMISSION.
AMENDED AND RESTATED RAILCAR
LEASE AGREEMENT
This Amended and Restated Railcar Lease
Agreement, dated as of March 25, 2009 (the “
Lease ”), is made by and between Bunge North America,
Inc., a New York corporation (“ Lessor ”) and
Southwest Iowa Renewable Energy, LLC, an Iowa limited liability
company (“ Lessee ”).
WHEREAS, the parties previously entered into
that certain Railcar Sublease Agreement dated as of June 25, 2007
(the “ 2007 Lease ”) relating to Lessor’s
provision of certain railcars (consisting of 325 tank cars and 300
grain hopper cars) for Lessee’s use in connection with its
ethanol operations; and
WHEREAS, Lessor is leasing the Cars from a
different railcar lessor (the “ Equipment Lessor
”) than contemplated in the 2007 Lease under the terms of a
Lease Agreement with the Equipment Lessor (the “ Equipment
Lease ”); and
WHEREAS, the parties have agreed to certain
changes to the 2007 Lease to reflect Lessor’s purchase and
subsequent sale/leaseback of the Cars, and therefore desire to
amend and restate the 2007 Lease in its entirety;
NOW, THEREFORE, the parties agree as
follows:
1.
Lease Agreement; Reliance . Subject to the terms
and conditions of this Lease and the Equipment Lease, Lessor shall
furnish and Lease to Lessee, and Lessee shall accept and lease from
Lessor, the railcars (each, a “ Car ” and
collectively, the “ Cars ”) set forth on
Riders 1 and 2 attached hereto.
2.
Delivery . Except as provided otherwise in this
Lease, Lessor agrees to deliver each Car to Lessee, freight charges
collect, to Lessee’s facility in Council Bluffs, Iowa, and
Lessee agrees to accept such delivery.
3.
Condition of Cars – Acceptance .
(a) All
cars delivered under this Lease 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 Lessee 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. Lessee shall inspect cars promptly after they
are delivered and shall notify Lessor in writing within three
business days after delivery of its rejection of any car, and the
specific reasons for such rejection. Failure by Lessee
to inspect such cars within three business days after delivery,
and/or the successful
loading of any
such car by Lessee, shall constitute acceptance of such car or
cars, as the case may be, by Lessee. At Lessor’s
request, Lessee shall deliver to Lessor an executed Certificate of
Acceptance in the form of Exhibit A with respect to all Cars
accepted by Lessee.
(b) If
Lessee rejects any car, Lessor shall have the right to have the
rejected car inspected by an inspector acceptable to both Lessor
and Lessee. The cost of such inspection will be paid by
Lessor if the cause for rejection is affirmed by the inspector,
otherwise such cost will be borne by Lessee. Lessee
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
Lessee properly rejects any car, Lessor shall promptly repair such
car to the standards set forth in this Section 3 or promptly
replace the car with another railcar reasonably acceptable to
Lessee which meets such standards. In either event,
Lessor shall deliver to Lessee the repaired or replaced car and
Lessee shall have the right to accept or reject such car as
provided in this Section 3.
(d) Lessee’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 Lease and the Interchange
Rules.
(e) For
all Cars physically delivered to Lessee at its facility in Council
Bluffs, Iowa before January 30, 2009, the test for acceptance
shall be as set forth in Section 3 hereof. For all
other Cars (which Cars are now fully constructed but, at
Lessee’s request, have not been physically delivered to
Lessee), notwithstanding anything herein to the contrary, Lessee is
deemed to have accepted such Cars as of January 30,
2009.
4.
Rentals . Lessee agrees to pay to Lessor for the
use of each Car the monthly rental set forth in the applicable
Rider from the date such Car is accepted by Lessee until such car
is returned to Lessor, 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 Lessor at
11720 Borman Drive, St. Louis, MO 63146, or at such other address
as Lessor may specify by written notice to
Lessee. Except as set forth in this Lease, rental shall
be paid without deduction, set-off or counterclaim.
5.
Mileage Allowance . Lessor shall use commercially
reasonable efforts to collect all mileage earned by the Cars, and,
subject to all rules of the tariffs of the railroads, Lessor shall
credit to Lessee’s rental account such mileage as and when
received during the term of this Lease. Lessee agrees to
promptly refund to Lessor any mileage allowances that are reclaimed
by the railroads upon Lessee’s receipt of notice therefor
together with reasonably acceptable documentation from the
railroads that any such mileage allowance has been
reclaimed.
6.
Term . This Lease 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 Lease 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 Lease.
7.
Use and Possession . Subject to the obligations
of Lessor under the Equipment Lease, throughout the continuance of
this Lease so long as Lessee is not in default under this Lease,
Lessee shall be entitled to possession of each Car from the date
the Lease 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 Lessee agrees that the Cars shall at all times be
used: (a) in conformity with all Interchange Rules; (b) in
compliance with the terms and conditions of this Lease; and (c)
only in the continental United States, Canada and Mexico, provided
that in no event shall the Cars be used in a location excluded from
coverage by any insurance policy required to be maintained under
this Lease, and provided further that in no event will more than
50% of the aggregate number of Cars leased hereunder be, at any
time, located in Mexico. In the event any Car is used by
Lessee outside of the continental United States, for any reason
whatsoever, Lessee shall assume full responsibility (and reimburse
Lessor and/or Equipment Lessor) for all costs, taxes (other than
taxes on the income of Lessor), duties or other charges incidental
to such use, including costs incurred in returning the car to the
continental United States. Lessor shall promptly furnish
Lessee 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 . Lessee 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 Lessor is obligated to
pay 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 Lessee shall reimburse 100% of such amount to
Lessor. For the purpose of this Section 8, the
railroad mileage reports received by Lessor shall be prima
facie evidence of the facts reported therein.
9.
Additional Charges by Railroads . Lessee 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 Lessor and/or Lessor by any such railroad, Lessee shall pay
to Lessor the amount of such charges within the period prescribed
by and at the rate and under the conditions of the then prevailing
tariffs. Lessee agrees to indemnify Equipment Lessor and
Lessor against any such charges. Lessee 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 Lessor’s
responsibility under this Lease or (ii) charges incurred as a
result of Lessor’s failure to perform its obligations under
this Lease.
10.
Lessee’s Right To Transfer or Lease
. Lessee shall not transfer, lease or assign any Car or
any of its interests and obligations pursuant to this Lease without
Lessor’s prior written consent, and any attempted transfer,
lease or assignment without such consent shall be
void and
ineffective against Lessor and Equipment Lessor. No
transfer, lease or assignment of the Lease, or of any Car, shall
relieve Lessee from any of its obligations to Lessor under this
Lease. This Lease shall be binding upon the parties
hereto and their respective successors and assigns.
11.
Maintenance Responsibility .
(a) Subject
to the other terms of this Lease, Lessor will 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. Lessee agrees
to notify 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 Lease to shops as directed by Lessor for repairs
and/or periodic maintenance and inspections. No repairs
to any of the Cars shall be made by Lessee without Lessor’s
prior written consent, except that Lessee 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, Lessee 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 wells,
gauging devices, regulator valves, safety heads and top unloading
valves. On hopper Cars, Lessee will be responsible for
inspection and cleaning of the operating mechanisms of the outlets,
hatches, dome covers, and special fittings on such Cars leased
herein, and damage to such outlets, hatches, dome covers, special
fittings or the operating mechanisms will be repaired for the
account of Lessee.
(c) When
a Car is placed in a shop for maintenance or repair as provided in
this Lease, 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 Lessee, in which case rental charges will
cease on communication of such defects to Lessor from Lessee, 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 Lessee. 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 Lessee or its consignee, agent or Lessee 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 Lessee agrees to pay Lessor 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 Lessor, rental will
cease as to such Car as of the date on which such event
occurred. Lessor may cancel this Lease as to such Car as
of the date on which such event occurred, or may substitute another
Car reasonably acceptable to Lessee within a reasonable period of
time. Lessee shall notify Lessor 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 Lease. Lessee 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 Lessee or its consignee, agent or Lessee 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,
Lessee will pay Lessor, in cash, the depreciated value of such Car
as determined by Rule #107 of the Interchange Rules within 15 days
following a request by Lessor for such payment. Any
amount payable by Lessee to Lessor pursuant to this Section 12
shall be reduced by any amounts received by Lessor from any third
party responsible for such loss, destruction or
damage. Lessee shall be subrogated to the rights of
Lessor against any person to the extent that the actions or
omissions of such person caused Lessee to incur liability under
this Section 12, and Lessor shall cooperate fully with Lessee
in its pursuit of these subrogation rights. Lessor and
Lessee 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 Lessor has received payment from Lessee of the
depreciated value, Lessor shall, at Lessee's request, use
commercially reasonable efforts to cause Equipment Lessor to
execute and deliver to Lessee a bill of sale transferring to
Lessee, free and clear of all security interests and other liens,
all of Equipment Lessor’s right, title and interest in and to
such Car, as well as all claims and rights Equipment Lessor may
have against any manufacturer, supplier, vendor, repairer, Carrier
or dealer of such Car, and any part thereof.
(b) Lessee
shall obtain commercial general liability insurance against claims
for bodily injury, death or third party property damage,
designating Lessor and Equipment Lessor as additional insureds with
respect to Lessee's operation and use of the Cars under this Lease
in an amount of not less than $10 million per
occurrence. The insurance coverage shall:
(i) be
valid for the term of this Lease as defined in
Section 6;
(ii) be
primary without any right of contribution from any other insurance
that is carried by Lessee, any Insured Party (as defined below) or
any other person;
(iii) expressly
provide that all of the provisions thereof, except the limits of
liability, shall operate in the same manner as if there were a
separate policy covering each insured and shall waive any right of
subrogation of the insurers (including any right of the insurers to
set-off or counterclaim or any other deduction) against the Insured
Parties;
(iv) name
the following parties under the Equipment Lease as additional
insureds: Lessor, Equipment Lessor, Trust Company (in its
individual capacity and as Owner Trustee), Owner Participant, the
Loan Participants and the Indenture Trustee (the “Insured
Parties”);
(v) provide
that the insurers agree that such coverage is extended to insure
the Cars for liability purposes; and
(vi) provide
that the respective interests of the Insured Parties shall not be
invalidated by any act of negligence of or breach of warranty or
representation by Lessee, any other additional insured, or any
other person having an interest in the Cars.
(c) Lessee
shall endeavor to provide 30-days advance written notice to Lessor
of any policy cancellation, other than cancellation for failure to
pay premiums (which shall require only 10 days advance notice),
respecting the Cars or any Insured Party. Lessee shall
deliver to Lessor, Indenture Trustee, the Loan Participants and
Owner Participant on or before each Funding Date and not less often
than annually thereafter, a certificate of insurance, substantially
in the same form as delivered by Lessee to such parties on each
Funding Date except for the changes in the report or the coverage
consistent with the terms hereof.
(d) Lessee
shall be solely responsible for any and all payments under the
insurance policy. If Lessee does not comply with its
obligations under this Section 12(b), Lessor may obtain insurance
for the Cars itself, at the sole expense and responsibility of
Lessee. Any payment received by Lessor from the
insurance company shall be credited to the amount that Lessee is
obligated to pay under Section 12(a), unless such insurance policy
has been obtained by Lessor or Lessor has paid any premium under
such insurance policy.
13.
Loss of Commodity . Lessor 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. Lessee agrees to
assume responsibility for, to indemnify Lessor against, and to save
it harmless from any such loss or damage or claim
therefor.
14.
Damage to Car by Commodity . Lessee shall be
liable for damage to any Car covered by this Lease, whether or not
due to Lessee’s negligence, if caused by or as a result of
the commodity loaded therein or caused by trying to remove product
from the Cars during the Lease term. Lessee assumes
responsibility for such damage to any Car, including without
limitation, as applicable, for tank Cars, to the tank, fittings or
appurtenances thereto, ordinary wear and tear (including for any
interior linings) excepted, and for covered hopper Cars, any damage
to the exterior of the Cars including without limitation, hammer
damage or similar damage to the side of the Cars and cracked paint
and rust on the exterior of the Car, ordinary wear and tear
excepted. Hammer damage, cracked paint and rust will not
be considered ordinary wear and tear. Lessee will use
the Cars for the transportation and handling of commodities which
will not injure the Cars.
15.
Alteration and Lettering . Lessee will not in any
way alter the physical structure of the Cars without the advance
approval, in writing, of Lessor. Lessee shall cause each
Car to be kept stenciled with the reporting mark as shall be set
forth in this Lease or any applicable
Rider. Except as otherwise
contemplated herein, Lessee shall place no lettering or marking of
any kind upon the Cars without Lessor’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
Lessee. Commodity or mechanical damage to such linings
or coatings shall be for the account of Lessee.
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 Lessee
during the term of the Lease shall be done at Lessee’s
expense unless otherwise agreed.
18.
Return of Cars – Cleaning . At the
expiration of the Lease term as provided in the applicable Rider,
Lessee shall, at its expense, return the Cars described in that
Rider to Lessor or its designee at a point designated by Lessor,
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 Lessor’s
obligation to maintain and repair. At the expiration of
the Lease term, should cleaning be required to place the Car in the
condition required hereunder, Lessee 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
Lessee’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 Lessor modify such Car to qualify it for
operation in railroad interchange, 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 Lessee’s service and will be
reinstated on the date the Car has been modified and is forwarded
from the shop. If Lessor, in its sole discretion, elects
to remove a Car from Lessee’s service rather than make such a
modification, the rent with respect to such Car shall terminate
upon the date specified in writing by Lessor, 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 Lease are based on normal usage of
Cars in non-unit train or other non-high mileage operations, Lessee
agrees not to use the Cars in unit train or other designated high
mileage usage without prior written consent of
Lessor. Each Car will be subject to a surcharge shown on
the applicable Rider for all excess miles. Lessee shall
not exceed the weight limitations prescribed for operation of Cars
in unrestricted interchange service as set forth under Interchange
Rule 91. Lessee 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 Lessee (which request
shall name the railroads involved), Lessor shall use reasonable
best efforts 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)”). Lessee shall furnish to
Lessor such i
