SUBORDINATED TERM LOAN
NOTE
$27,106,078.55
St. Louis, Missouri
August 26, 2009
FOR VALUE
RECEIVED, the undersigned, SOUTHWEST IOWA RENEWABLE ENERGY, LLC, an
Iowa limited liability company (the “Borrower”), hereby
promises to pay to the order of BUNGE N.A. HOLDINGS, INC., a
Delaware corporation (the “Lender”), the principal sum
of Twenty-Seven Million One Hundred Six Thousand Seventy-Eight and
55/100ths Dollars ($27,106,078.55) (plus any PIK Interest which is
capitalized and added to the outstanding principal balance of this
Note) on August 31, 2014. The Borrower hereby covenants and agrees
to pay to the Lender as a mandatory prepayment on this Note, within
three (3) Business Days’ after receipt thereof,
Seventy-Six Percent (76%) of the net cash proceeds
received by the Borrower from each sale or other issuance of any
membership interests or other equity interests in the Borrower
after the date of this Note. Amounts repaid or prepaid under this
Note may not be reborrowed.
The Borrower
further promises to pay to the order of the Lender interest on the
from time to time outstanding principal balance of this Note
(including any increase in the outstanding principal balance of
this Note which is attributable to the capitalization of PIK
Interest) prior to the maturity of this Note as follows: (a) so
long as no Event of Default under this Note has occurred and is
continuing, at a rate per annum equal to Seven and One-Half Percent
(7-1/2%) per annum over and above the Floating Rate (which rate of
interest shall fluctuate as and when the Floating Rate shall
change) and (b) so long as any Event of Default under this Note has
occurred and is continuing, at a rate per annum equal to Ten and
One-Half Percent (10-1/2%) per annum over and above the Floating
Rate (which rate of interest shall fluctuate as and when the
Floating Rate shall change). Said interest shall be due
and payable semi-annually in arrears on each January 31st and July
31st commencing January 31, 2010, and at the maturity of
this Note, whether by reason of acceleration or otherwise;
provided, however, that prior to the maturity of this Note, the
Borrower, at is option, shall have the right to, in lieu of paying
such accrued and unpaid interest in cash, capitalize and add any or
all of the accrued and unpaid interest on this Note (the “PIK
Interest”) to the outstanding principal balance of this Note
(and any accrued and unpaid interest on this Note which is not paid
in cash on its due date shall automatically be capitalized and
added to the outstanding principal balance of this Note on such due
date). From and after the maturity of this Note, whether
by reason of acceleration or otherwise, interest shall accrue and
be due and payable on the demand of the Lender on the from time to
time outstanding principal balance of this Note (including any
increase in the outstanding principal balance of this Note which is
attributable to the capitalization of PIK Interest) at a rate per
annum equal to Ten and One-Half Percent (10-1/2%) per annum over
and above the Floating Rate (which rate of interest shall fluctuate
as and when the Floating Rate shall change).
Interest on
this Note shall be computed on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day
but excluding the last day). All payments received by
the Lender under or in respect of this Note shall be allocated
among the principal, interest, collection costs and expenses and
other amounts due under this Note in such order and manner as the
Lender shall elect.
The books and records of the Lender
showing the account between the Lender and the Borrower shall be
admissible in evidence in any action or proceeding and shall
constitute prima facie proof of the items therein set
forth.
The Borrower shall have the right,
upon not less than thirty (30) days’ prior written notice to
the Lender, to prepay all at any time or any portion of the from
time to time outstanding principal balance of this Note at any time
without penalty or premium.
The Borrower
shall make each payment of principal of, and interest on, this Note
and all other amounts payable under this Note not later than 12:00
noon (St. Louis time) on the date when due by wire
transferring such amounts to the Lender’s Account No.
323-891918 at JP Morgan Chase (ABA Routing No. 0210-0002-1) or to
such other bank account of the Lender as the Lender may from time
to time designate in writing. Any such payment received
by the Lender after 12:00 noon (St. Louis time) shall be
deemed to have been paid on the next succeeding Business
Day. Whenever any payment of principal of, or interest
on, this Note shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest
thereon, at the then applicable rate, shall be payable for such
extended time. The acceptance by the Lender of any payment of
principal or interest due under this Note after the date it is due
shall not be held to establish a custom or waive any rights of the
Lender to enforce prompt payment of any further payments or
otherwise.
The Lender shall have the right, at
its option and upon at least fifteen (15) days prior written notice
to the Borrower, to elect to convert all or any portion of the
outstanding principal balance of this Note (excluding any portion
of the outstanding principal balance of this Note which is
attributable to the capitalization of PIK Interest) into Series U
Units of the Borrower. In the event any such election is
made, the number of Series U Units to which the Lender will be
entitled shall be equal to the quotient obtained by dividing (a)
the portion of the outstanding principal balance of this Note which
the Lender has elected to convert, by (ii) a per unit price equal
to $3,000.00 (the “Conversion Price”). On the date of
the conversion of all or any portion of the outstanding principal
balance of this Note, the Borrower at its expense will issue in the
name of and deliver to the Lender a certificate or certificates for
the number of Series U Units to which the Lender is entitled as a
result of such conversion. If a fraction of a unit would
result upon conversion of this Note pursuant to this paragraph, the
Borrower will, in lieu of issuing a fractional unit, pay in cash
the amount of principal represented by the fractional unit
calculated on the basis of the Conversion Price. The Lender and the
Borrower each agree to execute all necessary documents in
connection with the conversion of all or any portion of this
Note.
The Borrower hereby represents and
warrants to the Lender that (a) all of the proceeds of the loan
evidenced by this Note will be used by Borrower solely to make a
payments on the Borrower’s existing indebtedness to Commerce
Bank, National Association, (b) the Borrower is a limited liability
company duly organized, validly existing and in good standing under
the laws of the State of Iowa, (c) the execution, delivery and
performance by the Borrower of this Note and the issuance by the
Borrower of any Series U Units pursuant to the conversation rights
granted to the Lender in this Note (i) are within the limited
liability company powers of the Borrower, (ii) have been duly
authorized by all necessary limited liability company action on
the
part of the
Borrower, (iii) require no consent, approval or authorization of,
action by or in respect of or filing or recording with any
governmental or regulatory body, agency or official or any other
third party and (iv) do not conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default
under or result in any violation of, the terms of the articles or
organization, operating agreement or other organizational documents
of the Borrower, any applicable law, rule, regulation, order, writ,
judgment or decree of any court or governmental or regulatory body,
instrumentality, authority, agency or official or any agreement,
document or instrument to which the Borrower is a party or by which
the Borrower or any of its property or assets is bound or to which
the Borrower or any of its property or assets is subject, (d) this
Note has been duly executed and delivered by the Borrower and
constitutes the legal, valid and binding obligation of the Borrower
and is enforceable against the Borrower in accordance with its
terms, (e) the Borrower is not engaged principally, or as one of
its important activities, in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of The Board of Governors of the Federal
Reserve System, as amended) and no part of the proceeds of the loan
under this Note will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately (i) to
purchase or carry margin stock or to extend credit to others for
the purpose of purchasing or carrying margin stock, or to refund or
repay indebtedness originally incurred for such purpose or
(ii) for any purpose which entails a violation of, or which is
inconsistent with, the provisions of any of the Regulations of The
Board of Governors of the Federal Reserve System, including,
without limitation, Regulations U, T or X thereof, as amended and
(f) the Series U Units to be issued by the Borrower pursuant to the
conversion rights granted by terms of this Note have been duly and
validly authorized and, when issued to the Lender pursuant to the
terms of this Note, will be duly and validly issued, fully paid and
non-assessable and free of any security interest, other encumbrance
or adverse claim and free of any statutory and contractual
preemptive rights, rights of first refusal and/or similar
rights.
The Borrower hereby covenants and
agrees that it will not (a) declare, make or pay any distribution,
dividend or other payment of any kind (whether in cash, property,
membership interests, other equity interests or otherwise) on any
outstanding membership interests or other equity interests of or in
the Borrower, (b) allow, or propose to allow, any amendment,
modification or change to the Borrower’s Articles of
Organization or Third Amended and Restated Operating Agreement, or
enter into any other agreement or instrument, or pass any
resolution, which is inconsistent with the terms of this Note, or
that would otherwise limit the rights, privileges or preferences of
the Lender under the terms of this Note or the rights, privileges
or preferences of the Series U Units or other membership interests
or other equity interests in existence under the Borrower’s
Third Amended and Rest
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