Exhibit 10.6

SUBORDINATION AGREEMENT

THIS SUBORDINATION AGREEMENT (this “Agreement”), dated as of June 17, 2010, is
made by and among BUNGE N.A. HOLDINGS, INC., a Delaware corporation (“Bunge”),
ICM, Inc., a Kansas corporation (“ICM”), AGSTAR FINANCIAL SERVICES, PCA, and its
successors and assigns, as Agent (the “Agent”) for itself and for the other
commercial, banking or financial institutions whose signatures appear on the
signature pages to the Credit Agreement (as defined below) or which hereafter
become parties to the Credit Agreement (the “Banks”), and, upon execution of a
counterpart signature page to this Agreement, the trustee appointed under the
Indenture (as defined below) (the “Trustee”), as trustee and as attorney-in-fact
for the Public Noteholders (as defined below).  Bunge, ICM and the Public
Noteholders are each referred to individually herein as a “Subordinated
Noteholder” and, collectively, as the “Subordinated Noteholders.”  Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.

RECITALS

A.           SOUTHWEST IOWA RENEWABLE ENERGY, LLC, an Iowa limited liability
company (“SIRE”), the Agent, and the Banks have entered into an Amended and
Restated Credit Agreement dated March 31, 2010, which has been amended from time
to time (collectively, as amended, the “Credit Agreement”) under which the Banks
agreed to extend certain loans in the original principal amount of up to
$126,000,000.00 (the “Loans”) to SIRE for the construction, equipping,
furnishing, and operating of an ethanol production facility (the
“Project”).  SIRE’s obligation to repay the Loans is secured by a mortgage on
the Project and a security interest in substantially all of the assets of SIRE.

B.           Bunge has provided credit facilities to SIRE pursuant to the terms
of a (i) Revolving Credit Note dated as of August 26, 2009 (the “Bunge Revolving
Note”) in the original principal amount of up to $10,000,000.00 and (ii)
Subordinated Term Loan Note dated as of June 17, 2010 (the “Bunge Subordinated
Note”) in a principal amount of $28,106,578.97.

C.           ICM has provided a term loan to SIRE pursuant to a Subordinated
Term Loan Note (the “ICM Subordinated Note”), in an original maximum principal
amount of $9,969,816.08.

D.            SIRE will offer to the public, including its existing members, up
to $10,000,000 in Series A Convertible Term Loan Notes (when issued, the “Public
Subordinated Notes”), pursuant to the terms of an Indenture to be executed by
and between SIRE and the Trustee (the “Indenture”), which Public Subordinated
Notes will be registered under the Securities Act of 1933, as amended, pursuant
to a Form S-1 Registration Statement to be filed by SIRE with the Securities and
Exchange Commission.

E.           The Banks require that the Subordinated Noteholders subordinate the
payment of the Subordinated Indebtedness to the payment of any and all
indebtedness of SIRE to the Banks as provided in the Credit Agreement.

 
 
 

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F.           This Agreement replaces and supersedes in its entirety that certain
Debt Subordination Agreement, dated as of August 1, 2009, executed by and
between Bunge and Agent.

AGREEMENT

NOW, THEREFORE, in order to induce the Banks to consummate the transactions
contemplated by the AgStar Loan Documents, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereby agrees as follows:

1.           Definitions.  As used herein, the following terms have the meanings
set forth below:

“AgStar Indebtedness” shall mean all obligations, liabilities and indebtedness
of every nature of SIRE from time to time owed to the Banks under the AgStar
Loan Documents, including, without limitation, the principal amount of all
debts, claims and indebtedness, accrued and unpaid interest and all fees, costs
and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and from time to time hereafter owing, due or
payable, whether before or after the filing of a proceeding under the Bankruptcy
Code together with (a) any amendments, modifications, renewals or extensions
thereof and (b) any interest accruing thereon after the commencement of a
proceeding, without regard to whether or not such interest is an allowed
claim.  AgStar Indebtedness shall be considered to be outstanding whenever any
loan commitment or loan under the AgStar Loan Documents is outstanding.

“AgStar Loan Documents” shall mean the Credit Agreement and all other notes,
mortgages, security agreements, documents, instruments, and assignments and
contracts between SIRE and the Banks as the same may be amended, restated,
supplemented or otherwise modified from time to time.

“Public Noteholder” shall mean any holder of a Public Subordinated Note.

“SIRE Default” shall mean a Default or Event of Default as defined in the AgStar
Loan Documents, or any other agreement or instrument evidencing, governing, or
issued in connection with the Loans, or any default under or breach of any such
agreement or instrument.

“Subordinated Debt Documents” shall mean the Bunge Revolving Note, the Bunge
Subordinated Note, the ICM Subordinated Note, each Public Subordinated Note and
all indentures, loan agreements, documents and other instruments executed in
connection therewith, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Subordinated Indebtedness” shall mean all obligations, liabilities and
indebtedness of every nature of SIRE from time to time owed to the Subordinated

 
 
 

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Noteholders pursuant to the Subordinated Debt Documents, including, without
limitation, the principal amount of all debts, claims and indebtedness, accrued
and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and from time
to time hereafter owing, due or payable, whether before or after the filing of a
proceeding under the Bankruptcy Code together with (a) any amendments,
modifications, renewals or extensions thereof and (b) any interest accruing
thereon after the commencement of a proceeding, without regard to whether or not
such interest is an allowed claim.  The Subordinated Indebtedness shall be
considered to be outstanding whenever any loan commitment or loan under a
Subordinated Debt Document is outstanding.

2.           Subordination.

(a)           Payment Subordination.  The payment of the Subordinated
Indebtedness is hereby expressly subordinated to the AgStar Indebtedness on the
terms set forth in this Agreement; provided, however, that SIRE shall have the
right to pay, and the applicable Subordinated Noteholder will have the right to
accept payment of, without the prior written consent of the Agent, any principal
or interest on: (i) the Bunge Revolving Note, so long as immediately prior to
the proposed payment and after giving effect thereto, (x) no Default or Event of
Default described in Section 6.01(a) of the Credit Agreement shall exist, and
(y) the sum of the outstanding Revolving Letters of Credit plus the outstanding
Revolving Line of Credit Advances does not exceed the Borrowing Base (as the
foregoing terms are defined in the Credit Agreement); (ii) the Bunge
Subordinated Note, to the extent such payment constitutes a prepayment of the
Bunge Subordinated Note made with proceeds from the offering of the Public
Subordinated Notes or any other equity or debt securities of SIRE, as required
by the terms of the Bunge Subordinated Note; (iii) the ICM Subordinated Note, to
the extent such payment constitutes a prepayment of the ICM Subordinated Note
made with proceeds from the offering of the Public Subordinated Notes or any
other equity or debt securities of SIRE, as required by the terms of the ICM
Subordinated Note; and (iv) any other Subordinated Indebtedness from and after
its stated maturity, which shall be not earlier than the maturity date of the
Term Loan (as defined in the Credit Agreement).  Nothing in this subsection 2(a)
shall be deemed to prohibit (i) any interest from being capitalized and added to
the principal balance of any Subordinated Indebtedness in accordance with the
terms of the Subordinated Debt Documents or (ii) any Subordinated Noteholder
from converting any or all of the Subordinated Indebtedness held by it into the
applicable series of units in SIRE upon the terms set forth in the Subordinated
Debt Documents.

(b)           Security Interest Subordination.  Regardless of any priority
otherwise available to a Subordinated Noteholder by law or by agreement, the
Agent for the benefit of the Banks shall hold a first security interest in all
collateral securing payment of the AgStar Indebtedness (the “AgStar
Collateral”), and any security interest claimed therein (including any proceeds
thereof) by any Subordinated Noteholder shall be and remain fully subordinate
for all purposes to the security interest of Banks therein for all purposes
whatsoever.

 
 
 

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3.           Payments Prior to Acceleration or Demand for Payment.  It is
understood and agreed that SIRE shall not pay, and no Subordinated Noteholder
shall accept, any principal or interest on any Subordinated Indebtedness, except
as expressly set forth in subsection 2(a) above.  In the event of receipt of
payments by a Subordinated Noteholder described in subsection 2(a) prior such
Subordinated Noteholder’s receipt of a notice of acceleration or demand for
payment of the AgStar Indebtedness, such payments shall belong to such
Subordinated Noteholder as its own property, and such Subordinated Noteholder
shall have no obligation under this Agreement to hold or remit any part of such
payments for the account of the Banks.

4.           Payments After Acceleration or Demand for Payment.  In the event of
receipt of any payments by a Subordinated Noteholder from SIRE under a
Subordinated Debt Document after such Subordinated Noteholder’s receipt of the
notice of acceleration or demand for payment in full of the AgStar Indebtedness
from Agent (unless Agent has revoked such notice in writing), such payments
shall be applied by such Subordinated Noteholder as follows:

 
(a)
All payments received by such Subordinated Noteholder after the receipt of the
notice of acceleration or demand for payment in full of the AgStar Indebtedness
from Agent shall be held in trust by such Subordinated Noteholder, and shall
promptly be transferred to the Agent and thereafter shall be applied to the
payment of the AgStar Indebtedness.

 
(b)
Until all of AgStar Indebtedness has been paid in full, such Subordinated
Noteholder shall not, without Agent’s prior written consent, exercise any right
of or permit any setoff in respect of any Subordinated Indebtedness.

 
(c)
If such Subordinated Noteholder receives any payment on the Subordinated
Indebtedness that such Subordinated Noteholder is not entitled to receive under
the provisions of this Agreement, such Subordinated Noteholder will hold the
amount so received in trust for the Banks and will forthwith turn over such
payment to Agent in the form received (except for the endorsement of such
Subordinated Noteholder where necessary) for application to the AgStar
Indebtedness (whether or not due).  If such Subordinated Noteholder exercises
any right of setoff which such Subordinated Noteholder is not permitted to
exercise under the provisions of this Agreement, such Subordinated Noteholder
will promptly pay over to Agent, in immediately available funds, an amount equal
to the amount of the claims or obligations offset.  If such Subordinated
Noteholder fails to make any endorsement required under this Agreement, Agent,
or any of its officers or employees or agents on behalf of Agent, is hereby
irrevocably appointed as the attorney-in-fact (which appointment is coupled with
an interest) for such Subordinated Noteholder to make such endorsement in such
Subordinated Noteholder’s name.

 
(d)
In the event of the bankruptcy of, or the appointment of a trustee, receiver or
other representative or liquidator for any of the property of SIRE, or if SIRE
shall become the subject of any proceeding of any character under any federal or
state bankruptcy or insolvency act or law, all monies and other property
allocated or

 
 
 

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allocable to the Subordinated Indebtedness and which would be payable or
deliverable to a Subordinated Noteholder in the absence of the provisions of
this Agreement shall be paid and delivered directly to Agent for application by
Agent as hereinafter provided, regardless of whether a Subordinated Noteholder
or Agent or both file a claim on behalf of a Subordinated Noteholder in any such
proceeding.  Agent is irrevocably authorized, at its option, but is under no
duty or obligation, (a) to represent a Subordinated Noteholder in any such
proceeding, and (b) in its own name or otherwise, to make proof of, and receive
any payments and property allocated or declared for payment or delivery on
account of the Subordinated Indebtedness in any such proceeding; and for said
purposes, each Subordinated Noteholder further agrees at Agent’s request to
deliver to Agent a separate instrument of assignment assigning the Subordinated
Indebtedness to Agent.  Agent may apply all payments and property it receives on
such of AgStar Indebtedness as it shall then elect, until full payment of all of
AgStar Indebtedness, the excess, if any, to be paid to the Subordinated
Noteholders.

 
(e)
The Subordinated Noteholders’ and SIRE’s undertakings and Agent’s rights and
remedies shall not be affected or impaired by (a) any neglect or omission on the
part of Agent to look to, or to preserve any collateral at any time securing
payment of the AgStar Indebtedness, or (b) any act on the part of Agent in
releasing, canceling or surrendering all or part of such collateral, or in
extending the time for payment with respect to all or any part of the AgStar
Indebtedness or such collateral, or in enforcing or relying upon such
collateral, or (c) any other act or omission by  Agent or any Bank.  No notice
need be given to any Subordinated Noteholder at any time of the AgStar
Indebtedness or the amount thereof, whether now existing or later arising, or
any increase or decease therein, or any payment thereof, or with respect to any
collateral, or in any other respect.

 
(f)
No Subordinated Noteholder shall, without the prior written consent of Agent,
assign, pledge or otherwise transfer, or permit to be assigned, pledged or
otherwise transferred (other than, in the case of the Public Noteholders, as
permitted by the terms of the Indenture and the Public Subordinated Notes), or
execute any power of attorney (other than the limited power of attorney granted
by the Public Noteholders to the Trustee pursuant to the Indenture) with respect
to the Subordinated Indebtedness or any part thereof, except to Agent.

5.           Continuing Effect.  This Agreement shall constitute a continuing
agreement of subordination, and Agent may, subject to the provisions of the
AgStar Loan Documents and without notice to or consent by any Subordinated
Noteholder, modify any of the AgStar Loan Documents in reliance upon this
Agreement.  Without limiting the generality of the foregoing, Agent may, at any
time and from time to time, either before or after receipt of any such notice of
revocation, without the consent of or notice to any Subordinated Noteholder and
without incurring responsibility to any Subordinated Noteholder or impairing or
releasing any of Agent’s rights or any of Subordinated Noteholder’s obligations
hereunder:

 
 
 

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(a)           change the interest rate or change the amount of payment or extend
the time for payment or renew or otherwise alter the terms of any AgStar
Indebtedness or any instrument evidencing the same in any manner;

 
(b)
sell, exchange, release or otherwise deal with any property at any time securing
payment of AgStar Indebtedness or any part thereof;

 
(c)
release anyone liable in any manner for the payment or collection of AgStar
Indebtedness or any part thereof;

 
(d)
exercise or refrain from exercising any right against SIRE or any other person
(including any Subordinated Noteholder); and

 
(e)
apply any sums received by Agent, by whomsoever paid and however realized, to
AgStar Indebtedness in such manner as Agent shall deem appropriate.

6.           Notice.  All notices and other communications hereunder shall be in
writing and shall be (i) personally delivered, (ii) transmitted by registered
mail, postage prepaid, or (iii) transmitted by telecopy, in each case addressed
to the party to whom notice is being given at its address as set forth below:

If to Bunge:
Bunge N.A. Holdings, Inc.
c/o Bunge North America, Inc.
11720 Borman Drive
St. Louis, MO  63146
Facsimile:  (314)292-2110
Attention:  General Manager, Biofuels

With copy to:
Bunge North America, Inc.
11720 Borman Drive
St. Louis, MO  63146
Facsimile:  (314)292-2119
Attention:  General Counsel

If to ICM:
ICM, Inc.
310 N. First St.
Colwich, KS 67030
Facsimile: (316)796-0570
Attention: General Counsel

If to any
Public Noteholder:               c/o Trustee
see signature page hereto

 
 
 

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If to Agent:
AgStar Financial Services, PCA
1921 Premier Drive
PO Box 4249
Mankato, MN 56002-4249
Facsimile: (507) 344-5088
Attention: Ron Munson

or at such other address as may hereafter be designated in writing by that
party.  All such notices or other communications shall be deemed to have been
given on (i) the date received if delivered personally, (ii) the date of posting
if delivered by mail, or (iii) the date of transmission if delivered by
telecopy.

7.           Trustee.  Any notice, demand, payment or other communication to be
made to any Public Noteholder pursuant to the terms of this Agreement shall be
deemed to be received by the applicable Public Noteholder to the extent received
by the Trustee in accordance with the terms of this Agreement.  The Trustee
shall hold any payment received hereunder in trust for the benefit of the
applicable Public Noteholder and cause any such notices, demands, payments or
other communications to be distributed in accordance with the terms of the
Indenture, including to any paying agent appointed pursuant to the Indenture.

8.           Conflict.  In the event of any conflict between any term, covenant
or condition of this Agreement and any term, covenant or condition of any of the
AgStar Loan Documents, the provisions of this Agreement shall control and
govern.

9.           Headings.  The paragraph headings used in this Agreement are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.

10.        Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

11.        Severability.  In the event that any provision of this Agreement is
deemed to be invalid, illegal or unenforceable by reason of the operation of any
law or by reason of the interpretation placed thereon by any court or
governmental authority, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby, and the affected provision shall be modified to the minimum
extent permitted by law so as most fully to achieve the intention of this
Agreement.

12.       Termination of Agreement.  This Agreement shall remain in full force
and effect until the indefeasible payment in full in cash of the AgStar
Indebtedness after which this Agreement shall terminate without further action
on the part of Agent hereto.

 
 
 

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13.           Applicable Law.  This Agreement shall be governed by and shall be
construed and enforced in accordance with the internal laws of the State of
Minnesota, without regard to conflicts of law principles.

14.           WAIVER OF JURY TRIAL. EACH SUBORDINATED NOTEHOLDER HEREBY WAIVES
ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT.  EACH SUBORDINATED NOTEHOLDER ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP AND THAT
AGENT HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT.  EACH
SUBORDINATED NOTEHOLDER REPRESENTS AND WARRANTS THAT IT HAS HAD THE OPPORTUNITY
TO REVIEW THIS AGREEMENT AND THIS WAIVER WITH LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

15.           SUBROGATION. Subject to the payment of the AgStar Indebtedness in
full, to the extent cash, property or securities otherwise payable or
deliverable to any Subordinated Noteholder shall have been applied to the
payment of AgStar Indebtedness pursuant to this Agreement (whether by reason of
turnover by such Subordinated Noteholder to the Agent or any Bank or otherwise),
then such Subordinated Noteholder shall be subrogated to the rights of the Agent
and the Banks to receive payments and distributions of cash, property and
securities applicable to the AgStar Indebtedness until the Subordinated
Indebtedness is paid in full.  For purposes of such subrogation, no payments or
distributions to the Agent or any Bank of any cash, property or securities to
which a Subordinated Noteholder would have been entitled except for the
provisions of this Agreement, and no payments pursuant to the provisions of this
Agreement by a Subordinated Noteholder to the Agent or any Bank, shall, as among
SIRE and/or any of SIRE’s creditors (other than the Agent, the Banks and the
Subordinated Noteholders), be deemed to be a payment or distribution by SIRE to
or on account of any of the AgStar Indebtedness.
 
 

 
 
 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above-written.
 

 
BUNGE N.A. HOLDINGS, INC.,
a Delaware corporation
         
 
By:
/s/ Todd A. Bastean       Name: Todd A. Bastean        Title: Vice President   
       

 

 
ICM, INC.,
a Kansas corporation
         
 
By:
/s/ Brian Burris       Name: Brian Burris       Title: Secretary & General
Counsel      
 
 

 
 

 
AGSTAR FINANCIAL SERVICES, PCA,
and its successors and assigns,
as Agent for itself and the other Banks
         
 
By:
/s/ Ron Munson       Name: Ron Munson       Title:        

 
 
 

 
 
 

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The undersigned, the Trustee under that certain Indenture, dated as of [·],
2010, by and between the Trustee and Southwest Iowa Renewable Energy, LLC,
hereby executes and delivers this counterpart signature page to that certain
Subordination Agreement, dated as of [·], 2010, by and among Bunge N.A.
Holdings, Inc., ICM, Inc., and AgStar Financial Services, PCA, and agrees to be
bound by all of the terms and conditions set forth therein from and after the
date hereof.
 

 
[·], as Trustee and as attorney-in-fact
for the Public Noteholders
         
 
By:
        Name:       Title:    
 
Date:
 
     
Address for notices:

______________________________
______________________________
______________________________

 
 

[COUNTERPART SIGNATURE PAGE TO SUBORDINATION AGREEMENT]

 
 
 

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ACKNOWLEDGEMENT

The undersigned hereby acknowledges and agrees to the terms and provisions of
this Subordination Agreement. By executing this Acknowledgement, Southwest Iowa
Renewable Energy, LLC, through the undersigned authorized manager, agrees to be
bound by the provisions of the Subordination Agreement insofar as such
provisions relate to the relative rights of Agent and the Subordinated
Noteholders thereto as among such parties.  The undersigned further agrees that
the terms of the Debt Subordination Agreement shall not give the undersigned any
substantive rights vis-à-vis the parties and does not affect the undersigned’s
obligations under the AgStar Loan Documents or the Subordinated Debt Documents.

SOUTHWEST IOWA RENEWABLE ENERGY, LLC,
an Iowa limited liability company

By: /s/ Brian T. Cahill
Name:  Brian T. Cahill
Title:  President

 
 
 

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