Exhibit 10.1
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFEREED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE ISSUER OF THIS SECURITY OR AN
AFFILIATE OF THE ISSUER, OR (B) IF THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”) TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A.
NOTWITHSTANDING ANYTHING IN THIS NOTE TO THE CONTRARY, ANY RIGHT TO PAYMENT
HEREUNDER, THE LIEN OR SECURITY INTEREST GRANTED TO THE HOLDER, THE EXERCISE OF
ANY RIGHT OR REMEDY BY THE DESIGN-BUILDER HEREUNDER, AND EACH PROVISION OF THIS
NOTE ARE SUBJECT TO THE PROVISIONS OF THE SUBORDINATION AGREEMENT, DATED ON OR
ABOUT THE DATE HEREOF, AMONG THE HOLDER, THE OBLIGOR AND WESTLB AG, NEW YORK
BRANCH (THE “SUBORDINATION AGREEMENT’). IN THE EVENT OF ANY CONFLICT BETWEEN THE
TERMS OF THE SUBORDINATION AGREEMENT AND THIS NOTE, THE TERMS OF SUBORDINATION
AGREEMENT SHALL GOVERN AND CONTROL.
SOUTHWEST GEORGIA ETHANOL, LLC
SUBORDINATED PROMISSORY NOTE DUE JUNE 30, 2011

      $3,977,544.83   June 30, 2009

FOR VALUE RECEIVED, the undersigned, SOUTHWEST GEORGIA ETHANOL, LLC, a Georgia
limited liability company (the “Obligor”), hereby promises to pay to the order
of FAGEN, INC., a Minnesota corporation, or its permitted assigns (as the case
may be, the “Holder”), the principal sum of THREE MILLION NINE HUNDRED
SEVENTY-SEVEN THOUSAND FIVE HUNDRED FORTY-FOUR DOLLARS AND EIGHTY-THREE CENTS
($3,977,544.83), with interest on the outstanding principal amount as provided
below.
Principal Payments.
(i) The Obligor will make a principal payment in the amount of five hundred
thousand dollars ($500,000) not later than the date that is ninety (90) days
after the date first set forth above.
(ii) The Obligor will make additional payments of principal on the dates and in
the amounts provided in Schedule B attached hereto.

 

 

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(iii) All remaining unpaid principal (if any) and accrued and unpaid interest
due hereunder shall be payable on or prior to June 30, 2011 (the “Maturity
Date”).
Interest. The Obligor promises to pay to the order of the Holder cash interest
on the principal amount hereof at a rate per annum equal to four percent (4%)
through June 30, 2010, and at a rate per annum equal to eight percent (8%)
thereafter. Interest shall be payable in arrears on a quarterly basis on the
dates provided in Schedule A attached hereto and shall be calculated on the
basis of a year of 365 days and for the number of days actually elapsed.
Prepayment. The Obligor shall have the right to pay the principal hereof in
whole or in part without penalty at any time prior to the Maturity Date.
No Waiver. No failure or delay by the Holder in exercising any right, power or
privilege under this Note shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law. No course of dealing between the Obligor and the Holder shall
operate as a waiver of any rights by the Holder.
Waiver of Presentment and Notice of Dishonor. The Obligor and all endorsers,
guarantors and other parties that may be liable under this Note hereby waive
presentment, dishonor, demand, protest and notice of presentment, notice of
protest and notice of dishonor of any of the obligations created under this Note
and each and every notice of any kind in connection with the delivery,
acceptance, performance and enforcement of this Note, and, to the fullest extent
permitted by law, all rights to assert any statute of limitations to an action
hereunder.
Place of Payment. All payments of principal of this Note and the interest due
thereon shall be made by wire transfer in accordance with the Holder’s wire
transfer instructions to be delivered by the. Holder to the Obligor in advance
of the time of payment or at such other place and by such other means as the
Holder may from time to time designate in writing to the Obligor.
Events of Default. The entire unpaid principal amount of this Note and the
interest due thereon shall, at the option of the Holder exercised by written
notice to the Obligor, forthwith become and be due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, if any one or more of the following events (herein
called “Events of Default”) shall have occurred (for any reason whatsoever and
whether such happening shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) and be continuing at the time of such
notice:
(i) the Obligor’s failure to pay any principal or interest on this Note when
such principal or interest becomes due and payable;
(ii) the Obligor’s failure to pay, or an admission in writing of its inability
or unwillingness to pay, debts as they become due;

 

 

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(iii) the Obligor’s application for, consent to, or acquiescence in, the
appointment of a trustee, receiver, sequestrator or other custodian for the
Obligor or a substantial portion of the Obligor’s property, or the Obligor’s
making a general assignment for the benefit of creditors;
(iv) the Obligor’s permitting or suffering to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law concerning the Obligor or any of its assets, or
any dissolution, winding up or liquidation proceeding concerning the Obligor or
any of its assets; or
(v) the Obligor’s taking any action authorizing, or in furtherance of, any of
the foregoing.
Remedies. In case any one or more of the Events of Default specified above shall
have occurred and be continuing, the Holder may proceed to protect and enforce
its rights either by suit in equity and/or by action at law, whether for the
specific performance of any covenant or agreement contained in this Note or in
aid of the exercise of any power granted in this Note, or the Holder may proceed
to enforce the payment of all sums due upon this Note or to enforce any other
legal or equitable right of the Holder.
All rights and remedies of the Holder under this Note are in addition to all
rights and remedies given to the Holder contained in any other agreement,
instrument or document or available to the Holder at law or in equity. All such
rights and remedies are cumulative and not exclusive or exhaustive and may be
exercised successively or concurrently. No exercise of any right or remedy shall
be deemed an election of remedies and preclude exercise of any other right or
remedy.
Severability. In the event that one or more of the provisions of this Note shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
Governing Law. This Note and the rights and obligations of the Obligor and the
Holder shall be governed by and construed in accordance with the laws of the
State of Georgia without reference to any rules of conflict of laws that would
require the application of any law other than Georgia law.
Waiver of Trial by Jury. THE OBLIGOR AND THE HOLDER, AS BETWEEN THEM, WAIVE ANY
RIGHTS THEY MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR
ARISING FROM THIS NOTE, ANY TRANSACTION CONTEMPLATED HEREBY OR EFFECTED PURSUANT
HERETO, ANY DEALINGS OR COURSE OF DEALING AMONG THEM RELATING IN ANY WAY TO THE
SUBJECT MATTER OF THIS NOTE OR ANY STATEMENTS OR ACTIONS OF ANY OF THEM OR THEIR
AFFILIATES. Each of the parties acknowledges and agrees that this waiver is a
material inducement to enter into the business relationship contemplated by this
Note and that each has relied on this waiver in entering into this Note and will
continue to rely on this waiver in its future dealings with the other parties.
The scope of this waiver is intended to be all-encompassing, and this waiver
will apply to all claims, of any nature whatsoever, whether deriving from
contract, arising by law, based on tort or otherwise. THE OBLIGOR AND THE HOLDER
HAVE MADE THIS WAIVER KNOWINGLY AND VOLUNTARILY, AND THIS WAIVER WILL BE
IRREVOCABLE. THIS WAIVER WILL ALSO APPLY TO ALL AMENDMENTS, SUPPLEMENTS,
RESTATEMENTS, EXTENSIONS AND MODIFICATIONS OF THIS NOTE. In the event of
litigation, the relevant portions of this Note may be filed as a written consent
to a trial by the court.

 

 

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No Set-Off. The Obligor will not be entitled to offset against any of its
financial obligations to the Holder under this Note, any obligation owed to it
or any of its affiliates by or for the Holder or any affiliate of the Holder.
Assignment. The Obligor shall not assign its obligations under this Note without
the prior written consent of the Holder.
[signature page follows]

 

 

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IN WITNESS WHEREOF, the undersigned has caused this Note to be executed and
delivered on the date first set above.

            SOUTHWEST GEORGIA ETHANOL, LLC
      By  /s/ Lawrence A. Kamp         Name:  Lawrence A. Kamp        Title: 
Chief Financial Officer   

 

 

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SCHEDULE A
QUARTERLY INTEREST PAYMENT DATES

      Quarterly Payment   Date 1   September 30, 2009 2   December 31, 2009 3  
March 31, 2010 4   June 30, 2010 5   September 30, 2010 6   December 31, 2010 7
  March 31, 2011 8   June 30, 2011

 

 

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SCHEDULE B
ANNUAL PRINCIPAL INSTALLMENT PAYMENTS

          Annual Principal Installment   Amount   Date 1   $1,738,772.41  
June 30, 2010 2   $1,738,722.42   June 30, 2011