South Farm Credit Letterhead]
Murray Street Suite 700
are aware, a Loan Agreement governs the lending relationship between First
Farm Credit and Vanguard Synfuels, LLC. During our review of the financial
statements for Vanguard
LLC for the period ending 12/31/07, we discovered that the company is not in
compliance with the Working Capital Covenant of the financial covenants
contained in the Loan Agreement. This letter is intended to act as a waiver
the non-compliance as specifically set forth below.
undersigned hereby waives the Company’s current non-compliance with the Working
Capital covenant of the Loan Agreement, which specifically stated that the
Company shall have at the end of FYE l2/31/07 Working Capital of not less than
$500,000. At l2/31/2007, the Company reported a Working Capital position of
$418,217. If you foresee that the Company may not be able to comply with this
requirement, please contact me so we can discuss possible options.
represents to First South that, after giving effect to the waiver provided
above, no other Event of Default shall have occurred and be continuing on the
date hereof, nor shall result from the consummation of the transactions
contemplated herein. In addition, the Loan Agreement, as amended, and each
the other Loan Documents shall otherwise remain in full force and effect in
accordance with their respective terms. Except as specifically set forth herein,
this non-compliance letter shall not constitute or be deemed or construed as
cure of any other existing defaults under the Loan Agreement.
Timothy C. Dupuy