Southwest Georgia Farm
Credit
www.swgafarmcredit.com
Irrevocable Letter of Credit
No. 050-011-574509-02
Wells Fargo
Bank, National Association
Corporate Trust Department
1300 SW Fifth Avenue, 11 th Floor
MAC P6101-114
Portland, Oregon 97201
TO: Wells Fargo
Bank, N.A., as Trustee
1. For the
account of First United Ethanol, LLC, a Georgia limited liability
company (the “Company”), we hereby authorize you to
draw on us at sight, as hereinafter provided, an amount not
exceeding $29,866,028 (such amount, as reduced from time to time
pursuant to paragraph 6 below and as reinstated from time to time
pursuant to paragraphs 10 and 11 below, being herein called the
“Stated Amount”).
2. This Letter
of Credit is irrevocable and is issued to you, as trustee under the
Trust Indenture dated as of October 1, 2006 (the
“Indenture”), between you and the Mitchell County
Development Authority (the “Issuer”), pursuant to which
Indenture up to $ 29,000,000 in aggregate principal amount
of the Issuer’s Variable Rate Demand Tax-Exempt Economic
Development Revenue Bonds, Series 2006 (First United Ethanol, LLC
Project) (the “Bonds”) are being issued. This Letter of
Credit is issued pursuant to a Reimbursement Agreement dated as of
November 30, 2006 (the “Reimbursement Agreement”)
between us and the Company. Subject to paragraph 20 hereof,
capitalized terms used herein without definition shall have the
respective meanings assigned to them in the Indenture.
3. Of the
Stated Amount, up to $ 29,000,000 , which is an amount equal
to the principal amount of the Bonds (the “Principal
Portion”) may be drawn with respect to payment of the unpaid
principal amount of the Bonds, or payment of the principal portion
of the purchase price of Bonds tendered (or deemed tendered) to you
for purchase in accordance with the optional or mandatory tender
provisions of the Indenture (“Tendered Bonds”), and up
to $866,028 , which is an amount equal to interest on the
Bonds at the rate of 10% per annum for a period of 109 days,
computed on the basis of a 365/366-day year (the “Interest
Portion”), may be drawn with respect to payment of unpaid
interest on the Bonds, or payment of the interest portion of the
purchase price of Tendered Bonds. This Letter of Credit does not
apply to any interest that may accrue on the Bonds after the Bonds
become due (whether by maturity, redemption, acceleration or
otherwise), or to any premium due upon redemption of Bonds, or to
the principal of or interest or
Annex Office
411 West Broughton Street - Bainbridge, Georgia 39817 — P. O.
Box 816 — Bainbridge, Georgia 39818
Telephone (229) 248-0049 - Toll-free (800) 844-2709 - Fax
(229) 248-0054
redemption
premium on any Pledged Bonds or if the Bonds have been converted
and are no longer in a Variable Rate Period.
4. Funds under
this Letter of Credit are available to you against your sight
draft(s), drawn on us, stating on their face: “Drawn under
Southwest Georgia Farm Credit, ACC Irrevocable Letter of Credit
No. 050-011-574509-02”, a form of which is attached
hereto as Appendix G, accompanied by your written certificate
signed by your authorized officer, appropriately completed, in the
form of appendix A, B or C hereto, as indicated below. Presentation
of such drafts and certificates shall be made at our office located
at:
Southwest
Georgia Farm Credit, ACA
411 West Broughton Street
Bainbridge, Georgia 39818
Attention: Ted Murkerson
or at any other
office which may be designated by us by written notice delivered to
you (the office address specified above and any other office so
designated by us being herein called our (“Principal
Office”). We hereby agree that each draft drawn under and in
compliance with the terms o this Letter of Credit will be duly
honored by us with our own funds upon due delivery of the
certificates, as specified below, if presented at our Principal
Office on or before the expiration date hereof.
5. If a drawing
is made by you hereunder at or prior to 10:00 a.m. (Eastern
time) on a Business Day, and provided that the documents so
presented conform to the terms and conditions hereof, payment shall
be made to you, or to our designee, of the amount specified, in
immediately available funds, not later than 3:00 p.m. (Eastern
time) on the same Business Day. If a drawing if made by you
hereunder after 10:00 a.m. (Eastern time) on a Business Day,
and provided that the documents so presented conform to the terms
and conditions hereof, payment shall be made to you, or to your
designee, of the amount specified, in immediately available funds,
not later than 3:00 p.m. (Eastern time) on the next succeeding
Business Day. Payment under this Letter of Credit may be made by
deposit of immediately available funds into a designated account
that you maintain with us. As used herein “Business
Day” shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in the city where our Principal
Office is located are authorized or required by law to close or a
day on which the payment system of the Federal Reserve is not
operational.
6. Multiple
drawings may be made hereunder, provided that drawings honored by
us hereunder shall not, in the aggregate, exceed the Stated Amount.
The Stated Amount shall be reduced as follows:
(a) Payment
by us of drawings with respect to principal due upon maturity,
redemption or acceleration of the Bonds shall pro tanto reduce the
Principal Portion of the Stated Amount, without
reinstatement.
(b) Payment
by us of drawings with respect to interest due on the Bonds
shall
pro tanto
reduce the Interest Portion of the Stated Amount, subject to
reinstatement as provided in paragraph 10 below.
(c) Payment
by us of drawings with respect to the purchase of Tendered Bonds
shall prop tanto reduce the Principal Portion of the Stated Amount
to the extent of the principal portion of the purchase price so
drawn, and shall pro tanto reduce the Interest Portion of the
Stated Amount to the extent of the interest portion of the purchase
price so drawn, in each case subject to reinstatement as provided
in paragraph 11 below.
(d) At any
time after the principal amount of the Bonds outstanding is reduced
as a result of payment of the principal of Bonds due upon maturity
or redemption, the Interest Portion of the Stated Amount shall be
reduced to the maximum amount of interest that would be payable on
the Bonds then outstanding for a period of 109 days at the
rate of 10% per annum, computed on the basis of a 365/366-day year
(the “Maximum Interest coverage”). The Interest Portion
of the Stated Amount shall not thereafter be increased or
reinstated to an amount in excess of such Maximum Interest
Coverage. If, on the date of such reduction the Interest Portion of
the Stated Amount then available for drawing hereunder is less than
the Maximum Interest Coverage (as a result of draws against the
Interest Portion for which no reinstatement has become effective),
the Interest Portion shall not thereafter be increased or
reinstated to an amount greater than the Maximum Interest Coverage.
You will notify us from time to time of changes in the Maximum
Interest Coverage.
7. For drawings
under the Principal Portion to pay principal of the Bonds due upon
maturity, redemption or acceleration, our drafts must be
accompanied by your written certificate in the form of
Appendix A signed by your authorized officer and appropriately
completed (an “A Drawing”).
8. For drawings
under the Interest Portion to pay the interest on the Bonds, your
drafts must be accompanied by your written certificate in the form
of Appendix signed by your authorized officer and appropriately
completed (a “B Drawing”).
9. For drawings
under the Principal Portion and (if applicable) the Interest
Portion to pay the purchase price of Tendered Bonds, your drafts
must be accompanied by your written certificate in the form of
Appendix C signed by your authorized officer and appropriately
completed (a “C Drawing”).
10. At the
close of business on the 10 th day following payment by us of any B Drawing
hereunder, the Interest Portion of the Stated Amount will be
automatically reinstated by the amount of such B Drawing unless
prior to the close of business on the 10 th day following payment of such B Drawing you
shall receive written notice from us that the Interest Portion has
not been reinstated or that any “Event of Default” as
defined in the Reimbursement Agreement has occurred and is
continuing; provided, however, that the Interest Portion shall
never be reinstated to an amount in excess of the Maximum Interest
Coverage, as certified in the most recent notice with respect to
Maximum Interest Coverage received by us pursuant to paragraph 6
above.
11. Upon
receipt by us of reimbursement in full of amounts due to us because
of a C Drawing with respect to any Tendered Bonds, we shall
promptly notify you that we have been so reimbursed and that the
Stated Amount has been reinstated by the amount of the C Drawing
with respect to such Tendered Bonds (such notice is herein called a
“Reimbursement Notice” and shall be in the form of
appendix D), whereupon (i) the Principal Portion shall be
reinstated by the amount of the principal portion of the purchase
price of such Tendered Bond or Bonds, which shall be designated in
our Reimbursement Notice to you, and (ii) the Interest Portion
shall be reinstated by the amount of the interest portion of the
purchase price of such Tendered Bond or Bonds, which shall be
designated in our Reimbursement Notice to you; provided, however,
that the Interest Portion shall never be reinstated to an amount in
excess of the Maximum Interest Coverage, as certified in the most
recent notice with respect to Maximum Interest Coverage received by
us pursuant to paragraph 6 above. If we receive reimbursement for
the purchase price of less than all Bonds with respect to which a C
Drawing has been made, our Reimbursement Notice shall designate the
aggregate principal amount of, and certificate numbers (if
applicable), of Bonds with respect to which we have been
reimbursed. Bonds with respect to which you
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