REMARKETING AGREEMENT by and between FIRST UNITED ETHANOL, LLC and Dated as of October 1, 2006
Exhibit 10.31
by and between
FIRST UNITED ETHANOL, LLC
and
X.X. XXXXXX & COMPANY, LLC,
Dated as of October 1, 2006
This REMARKETING AGREEMENT, dated as of October 1, 2006 (the “Remarketing Agreement”), is by
and between First United Ethanol, LLC (the “Borrower”) and X.X. Xxxxxx & Company, LLC (“Xxxxxx”),
as the remarketing agent (the “Remarketing Agent”), and is entered into in connection with
$53,500,000 Xxxxxxxx County Development Authority Variable Rate Demand Taxable Economic Development
Revenue Bonds (First United Ethanol, LLC Project), Series 2006 (the “Bonds”), issued by the
Xxxxxxxx County Development Authority (the “Issuer”) for the benefit of the Borrower.
ARTICLE I
Definitions
Section 1.01. Capitalized Terms.
Capitalized terms used in this Remarketing Agreement, unless otherwise defined herein, shall
have the meanings assigned to them in the Trust Indenture (“Indenture”) dated as of October 1,
2006, between the Issuer and Xxxxx Fargo Bank, National Association, as trustee (the “Trustee”).
Section 1.02. Rules of Interpretation.
(a) This Remarketing Agreement shall be interpreted in accordance with and governed by the
laws of the State of Georgia.
(b) The words “herein” and “hereof” and words of similar import, without reference to any
particular Article, Section or subsection, refer to this Remarketing Agreement as a whole rather
than to any particular Article, Section or subsection hereof.
(c) The headings of Articles and Sections herein are for convenience only and shall not affect
the construction hereof.
ARTICLE II
Remarketing Agent
Section 2.01. Remarketing Agent’s Acceptance and Qualification.
(a) Xxxxxx hereby accepts the appointment pursuant to the Indenture of Xxxxxx to be the
Remarketing Agent for the Bonds.
(b) Xxxxxx hereby represents that it is a member of the National Association of Securities
Dealers, Inc., and is authorized to perform all of the duties of the Remarketing Agent imposed by
the Indenture and this Remarketing Agreement.
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(c) The Remarketing Agent shall have the right in its sole discretion to refuse to remarket
the Bonds (i) if any Event of Default under the Indenture or the Agreement shall have occurred and
be continuing, (ii) if any Event of Default under the Reimbursement Agreement shall have occurred
and be continuing which gives the Bank the right to exercise any of the remedies referred to in
Article 13 of the Reimbursement Agreement, or (iii) if the Bank’s obligations to pay under the
Letter of Credit or to purchase or redeem Bonds under the Reimbursement Agreement shall have been
suspended or terminated (or notice of such suspension or termination given) and no Alternate Letter
of Credit shall have been issued and delivered to the Trustee and then be in effect, or (iv) if it
shall have determined in its sole discretion, after consultation with its counsel, that a
Disclosure Statement (as defined in Section 3.01 hereof), or an amendment or supplement thereto, is
required for distribution to prospective purchasers and that such a Disclosure Statement or an
amendment or supplement thereto, is not available, or if available, is not reasonably satisfactory
to it and its counsel in form or substance, or (v) if it shall receive (x) an opinion of its
counsel, after consultation with Bond Counsel, that a substantial legal basis exists
upon which the exclusion of interest on the Bonds from gross income of the owner can be challenged,
or (y) an opinion of its counsel that a substantial legal basis exists upon which either the
exemption from registration of the Bonds, the Reimbursement Agreement or the Letter of Credit,
either individually or collectively, under the Securities Act of 1933, as amended, or the exemption
from qualification of the Indenture under the Trust Indenture Act of 1939, as amended, can be
challenged.
(d) Nothing contained herein or in the Indenture shall be construed to obligate Xxxxxx to
purchase, sell, hold or deal in the Bonds as a principal. Xxxxxx shall not be required to use any
of its own funds, or otherwise incur financial liability, in carrying out its duties hereunder;
provided, however, that Xxxxxx may, at its sole discretion, purchase, sell, hold or deal in the
Bonds for its own account.
Section 2.02. Remarketing Agent’s Obligations.
The Remarketing Agent, shall:
(a) hold all moneys delivered to it as Remarketing Agent for the purchase of Bonds, in
remarketing transactions pursuant to the Indenture, as agent and bailee of, and in escrow for the
benefit of, (i) the person or entity which has so delivered those moneys, until the Bonds purchased
with those moneys have been delivered to or for the account of that person or entity and (ii)
thereafter, the person or entity which has so tendered the Bonds for purchase until those moneys
have been delivered to or for the account of that person or entity;
(b) keep such books and records with respect to its activities as Remarketing Agent hereunder
as is consistent with prudent industry practice, which books and records shall be available for
inspection, upon reasonable notice, by the Trustee and the Borrower;
(c) subject to Section 2.01(c) hereof, use its best efforts to remarket Bonds tendered for
purchase pursuant to the Indenture (whether at the option of the owners thereof or pursuant to
mandatory tender for purchase);
(d) (i) determine the Variable Rate in accordance with the provisions therefor in the form of
Bond and the Indenture, (ii) determine the Fixed Interest Rate in accordance with the provisions
therefor in Section 4.02 of the Indenture and the form of Bond, and (iii) give notice to the Tender
Agent, the Borrower and the Trustee of such rates and the terms in accordance with the provisions
therefor in the form of Bond and the Indenture; and
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(e) assume all other obligations, duties and rights of the Remarketing Agent in accordance
with the Indenture, including, in particular, Article III, Article IV, Section 10.11, and Section
10.12 thereof.
ARTICLE III
Disclosure
Section 3.01. Provision of Disclosure Materials.
If the Remarketing Agent determines that it is necessary or desirable to use a disclosure
statement (a “Disclosure Statement”) in connection with any remarketing of Bonds, the Remarketing
Agent will so notify the Borrower. The Borrower agrees to provide for the use of the Remarketing
Agent in connection with remarketing of the Bonds a Disclosure Statement reasonably satisfactory to
the Remarketing Agent. The Borrower agrees to supply to the Remarketing Agent such number of
copies of the Disclosure Statement and documents related thereto as are reasonably requested from
time to time by the Remarketing Agent and further agrees to amend the Disclosure Statement (and/or
any documents incorporated by reference therein) so that at all times the Disclosure Statement and
documents related thereto will not contain any untrue statement of a material fact relating to the
Borrower or the Project or omit to state a material fact relating to the Borrower or the Project
necessary to make the statements contained therein, in the light of the circumstances under which
they were made, not misleading. The Borrower agrees to promptly advise the Remarketing Agent of
any information concerning any event with respect to the Borrower which may be required to be
included in a Disclosure Statement or an amendment or supplement thereto. In addition, the
Borrower agrees to take all steps, at their own expense, reasonably requested by the Remarketing
Agent to (a) either (i) register the Bonds for sale under the applicable federal or state
securities laws or to qualify the Indenture under the Trust Indenture Act of 1939, as amended, if
required, or (ii) cause the Bonds required to be so registered to cease to be outstanding within
the meaning of the Indenture and to cause the Indenture required to be so qualified to be
discharged in accordance with its terms, or (b) enable the Remarketing Agent to establish a “due
diligence” defense to any action commenced against the Remarketing Agent in respect of a Disclosure
Statement.
ARTICLE IV
General
Section 4.01. Indemnification of Remarketing Agent.
The Borrower agrees to indemnify and hold harmless the Remarketing Agent and each member,
trustee, partner, officer, official or employee thereof and any person who controls the Remarketing
Agent within the meaning of the Securities Act of 1933, against any and all losses, claims, damages
and liabilities arising out of (i) the failure to provide to the Remarketing Agent information
concerning the Borrower or the Project which should have been included in a Disclosure Statement or
which would have caused the Remarketing Agent, in the exercise of its reasonable judgment, to
request that the Borrower prepare a Disclosure Statement, or amend or supplement an existing
Disclosure Statement, for use by the
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Remarketing Agent in the remarketing of the Bonds or (ii) any statement or information concerning
the Borrower or the Project contained in the Disclosure Statement provided pursuant to Section 3.01
hereof that is untrue in any material respect, or the omission therefrom of any information
concerning the Borrower or the Project which should be contained therein which is necessary to make
the statements therein, in light of the circumstances under which they are made, not misleading in
any material respect, and to the extent of the aggregate amount paid in settlement of any
litigation commenced or threatened arising from a claim based upon any such untrue statement or
omission if such settlement is effected with the written consent of the Borrower; provided that,
the Borrower shall not be liable in any case if a court of competent jurisdiction has rendered a
final judgment to the effect that the loss, claim, damage or liability has been asserted by a
person who purchased one or more Bonds from the Remarketing Agent and resulted solely from the
failure of the Remarketing Agent to deliver or cause to be delivered to that person the Disclosure
Statement or any amendment or supplement thereto that had been timely prepared and was then
available to the Remarketing Agent, and that such delivery to such person would have been a valid
and complete defense to the action from which such loss, claim, damage or liability arose. In case
any claim shall be made or action brought against the Remarketing Agent or any indemnified person
(as aforesaid) in respect of which indemnity may be sought against and the Borrower, the
Remarketing Agent shall promptly notify the Borrower in writing, setting forth the particulars such
claim or action, and the Borrower shall assume the defense thereof including the retaining of
counsel (who shall be reasonably satisfactory to the Remarketing Agent) and the payment, as
incurred, of all expenses reasonably incurred by the Remarketing Agent or such other indemnified
person; provided, however, that if the Remarketing Agent is advised in an opinion of counsel that
there may be legal defenses available to the Remarketing Agent which are adverse to or in conflict
with those available to the Borrower, or that the defense of the Borrower should be handled by
separate counsel, the Borrower shall not assume such defense of the Remarketing Agent, the Borrower
shall be responsible for the payment, as incurred, of the reasonable fees and expenses of counsel
retained by the Remarketing Agent in assuming its own defense and for all other expenses reasonably
incurred by the Remarketing Agent in connection with such defense, and provided also that if the
Borrower shall have failed to assume the defense of such action or to retain counsel reasonably
satisfactory to the Remarketing Agent within a reasonable time after notice of the commencement of
such action, the reasonable fees and expenses of counsel retained by the Remarketing Agent and all
other expenses reasonably incurred by the Remarketing Agent in connection with such defense shall
be paid, as incurred, by the Borrower. Notwithstanding, and in addition to, any of the foregoing,
the Remarketing Agent or any such indemnified person (as aforesaid) shall have the right to retain
separate counsel in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the party retaining such counsel unless the
retaining of such counsel has been specifically authorized by the Borrower in writing. The
Remarketing Agent agrees to indemnify and hold harmless the Borrower and each member, trustee,
officer, official or employee thereof and any person who controls the Borrower within the meaning
of the Securities Act of 1933, against any and all losses, claims, damages and liabilities arising
out of any statement or information relating to the Remarketing Agent or based upon information
provided by the Remarketing Agent contained in the Disclosure Statement that is untrue in any
material respect, or the omission therefrom of any information relating to the Remarketing Agent or
which should have been provided by the Remarketing Agent which should be contained therein which is
necessary to make the statements therein, in light of the circumstances under which they are made,
not misleading in any material respect, and for any liability arising from failure of the
Remarketing Agent to comply with any “blue sky” laws in any jurisdiction (unless such failure to
comply is a result of the unwillingness or inability of the Borrower or the Issuer to provide
information or to take steps required for such compliance, as reasonably requested by the
Remarketing Agent) applicable to the remarketing of Bonds by the Remarketing Agent, but only to the
extent that the Borrower or the Issuer also would be liable for such failure in whole or in part in
such
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jurisdiction. The indemnity agreements contained in this Section 4.01 shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of the Remarketing
Agent (or any controlling person) or the Borrower (or any controlling person) and shall survive the
termination of this Remarketing Agreement.
Section 4.02. Payment of Remarketing Agent.
The Borrower shall pay Xxxxxx for its services as Remarketing Agent for the Bonds (i) during
the time that interest is borne on the Bonds at the Variable Rate, an annual fee equal to .125% of
the average aggregate principal amount of Bonds outstanding during the period since the date of the
immediately preceding payment (or the date of the initial delivery of the Bonds) but not less than
$2,500 annually, payable as directed by the Remarketing Agent, quarterly in advance, commencing on
November 30, 2006 and on the first day of each January, April, July and October thereafter through
and including the Conversion Date; and (ii) after the Conversion Date, such fee as shall be
negotiated by the Remarketing Agent and the Borrower. Such fee payable pursuant to clause (i) of
the preceding sentence shall be calculated based on the actual number of days elapsed since the
immediately preceding payment date, with a year of 365 or 366 days, as applicable. The Borrower
also will pay all reasonable expenses in connection with the preparation of any Disclosure
Statement and the registration of the Bonds under any state securities laws and will reimburse the
Remarketing Agent for all of its reasonable direct out-of-pocket expenses incurred by it as
Remarketing Agent under this Remarketing Agreement, including reasonable counsel fees and
disbursements and the costs of notices, mailings and other activities required under this
Remarketing Agreement. The Remarketing Agent acknowledges that it has no legal right or interest
under this Remarketing Agreement to any proceeds received from the remarketing of Bonds other than
those Bonds which it has purchased for its own account.
Section 4.03. Term.
This Remarketing Agreement will terminate upon the earlier of (i) the effective date of the
resignation or removal of Xxxxxx as Remarketing Agent, (ii) 30 days following such date, if any,
that all outstanding Bonds first bear interest at the Fixed Interest Rate, or (iii) the first date
on which no Bonds are outstanding. The Borrower may remove Xxxxxx as Remarketing Agent under this
Remarketing Agreement, at any time upon not less than sixty (60) days’ written notice from the
Borrower to such removed Remarketing Agent, upon satisfaction of the requirements of the Indenture.
Xxxxxx may resign as Remarketing Agent at any time, upon notice to the Borrower, the Issuer, the
Trustee and the Bank and provided that the resignation shall not be effective until the earlier of
(i) the 30th day following receipt of the notice of resignation, or (ii) either the assumption,
subject to the provisions of the Indenture, by the non-resigning Remarketing Agent of sole
responsibility for the performance of all duties and obligations of the Remarketing Agent under
this Remarketing Agreement or the appointment by the Borrower of a successor remarketing agent.
Upon the termination of this Remarketing Agreement, the provisions of Section 4.01 hereof will
continue to remain in effect and any Bonds or moneys then held by the Remarketing Agent will be
delivered to the Tender Agent, who will deliver those Bonds and moneys to the successor Remarketing
Agent or, if no successor has been designated, to the Trustee.
Section 4.04. Amendments.
This Remarketing Agreement may not be amended so as to adversely affect the right of the
owners of Bonds to tender their Bonds for purchase pursuant to the Indenture, without the prior
written consent of the Issuer and the Trustee (with notice to the owner of each such Bond so
affected).
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Section 4.05. Remarketing Agent’s Performance; Duty of Care.
The Remarketing Agent consents and agrees to perform and comply with all of the terms and
provisions on its part to be performed or complied with in this Remarketing Agreement and the
Indenture. In performing its duties and obligations hereunder and under the Indenture, the
Remarketing Agent shall exercise the same degree of skill and care as a prudent person would use
under the same circumstances in the conduct of his or her own affairs.
The duties and obligations of the Remarketing Agent shall be determined solely by the express
provisions of this Remarketing Agreement and the Indenture, and the Remarketing Agent shall not be
liable except for the performance of such duties and obligations as are specifically set forth in
this Remarketing Agreement and the Indenture, and no implied covenants or obligations shall be read
into this Remarketing Agreement or the Indenture against the Remarketing Agent; and in the absence
of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely, as
to the truth of the statements expressed therein, upon any notice or document furnished to the
Remarketing Agent and conforming to the requirements of this Remarketing Agreement or the Indenture
and shall be protected in acting upon any such notice or document reasonably believed by it to be
genuine and to have been given, signed or presented by the proper party or parties.
Section 4.06. Notices.
Unless otherwise specified, any notices, requests or other communications given or made
hereunder or pursuant hereto shall be made in writing and shall be deemed to have been validly
given or made when delivered or mailed, registered or certified mail, return receipt requested, and
postage prepaid, addressed as follows:
| if to Borrower: | First United Ethanol, LLC | |||
| 0 Xxxx Xxxxx Xxxxxx | ||||
| Xxxxxxx, Xxxxxxx 00000 | ||||
| Attention: Mr. Xxxxxx Xxxxxxxx | ||||
| Fax: (000) 000-0000 | ||||
| if to Remarketing Agent: | X.X. Xxxxxx & Company, LLC | |||
| 0000 X-00 Xxxxxxx | ||||
| Xxxxxxxxxx, Xxxxxxx 00000 | ||||
| Attn: Xx. Xxxxxxx Xxxxxx |
Section 4.07. Counterparts.
This Remarketing Agreement may be executed in any number of counterparts all of which taken
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have cause this Remarketing Agreement to be executed by
their duly authorized officers or agents, as the case may be, as of the date first above written.
| X.X. XXXXXX & COMPANY, LLC, as Remarketing Agent |
||||||
| By: | /s/ Xxxxxxx Xxxxxx | |||||
| Xxxxxxx Xxxxxx | ||||||
| President | ||||||
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| FIRST UNITED ETHANOL, LLC, a Georgia limited liability company as Borrower |
||||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||||
| Xxxxxx Xxxxxxxx | ||||||
| Chairman of the Board | ||||||
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