Irrevocable Standby Letter of Credit

STANDBY LETTER OF CREDIT[Bank Name][Street][City, State 00000][Date]IRREVOCABLE STANDBY LETTER OF CREDIT NO. [0000000]BENEFICIARIES:United States Department <strong>of</strong> AgricultureRural Utilities Service1400 Independence Ave., SWWashington, D.C. 20250-1500[Borrower’s Name][Street][City, State 00000]ACCOUNT PARTY: [LOC Issuing Party’s Name][Street][City, State 00000]Gentlemen:We, [NAME OF BANK,] (the “BANK”) hereby open our irrevocable standby credit(this “<strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>”) on behalf <strong>of</strong> [BORROWER’S NAME] (hereinafter the“ACCOUNT PARTY”) in favor <strong>of</strong> the RURAL UTILITIES SERVICE (“RUS”) and[BORROWER’S NAME], (hereinafter the “BORROWER”) for the sum or sums not toexceed the aggregate amount <strong>of</strong> [AMOUNT IN WORDS] Dollars ($000,000)(hereinafter the “Maximum Amount,”) to be made available by either <strong>of</strong> yourrequests for payment at sight.The BANK has been informed by the ACCOUNT PARTY that this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> isissued to secure obligations as set forth in that certain loan agreement, enteredinto between the BORROWER and RUS, dated as <strong>of</strong> [date] (as amended from timeto time, hereinafter the “Loan Agreement.”) The BANK also acknowledges thatpursuant to said Loan Agreement, this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> may not be secured,guaranteed, or serviced by any asset <strong>of</strong> the BORROWER.This <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> shall be valid until [insert date five years from today],provided however; that this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> may be terminated at any time withthe prior written consent <strong>of</strong> RUS. After receiving RUS consent, the BANK shallprovide written notice <strong>of</strong> termination by certified mail to: (a) RUS at U.S.D.A.,1400 Independence Ave., S.W., Room 2854, Stop 1599, Washington, D.C.20250-1599; (b) the BORROWER at [Street, City, State, Zip] ; and (c) [LOCISSUING PARTY’S NAME] at [Street, City, State, Zip]. The notice requiredhereunder will be deemed to have been given when received by all parties.Funds under this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> are available to RUS and/or the BORROWER inone or more drawings upon the presentation <strong>of</strong> one or more executed drafts

payable at sight, in the form as provided in Exhibits 1 or 2 attached hereto, aswell as the original <strong>of</strong> this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> (including all amendments thereto, ifany). Such draft(s) shall be presented to our <strong>of</strong>fice at [Street, City, State Zip],on any business day except those in which banking institutions in our State areauthorized or required by law to close. Partial drawings and multiple drawingsare permitted under this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>, as well as drafts presented by one orboth beneficiaries.The BANK hereby agrees to honor one or more drafts drawn under, or demandsfor payment made under, and in conformity with this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>, up to theMaximum Amount, and accompanied by the documents required by this <strong>Letter</strong><strong>of</strong> <strong>Credit</strong>, and the BANK’s honoring <strong>of</strong> such draft or demand shall not relieve itsobligation to so honor any further drafts or demands; provided however, thatour aggregate obligation to honor such drafts and demands shall not exceed theMaximum Amount as reduced by prior draws hereunder. This <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>is not subject to any condition or qualification, and is the obligation <strong>of</strong> the BANKwhich is in no way contingent upon reimbursement or likelihood <strong>of</strong>reimbursement.This <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> sets forth in full the terms <strong>of</strong> our understanding with you,and this undertaking shall not in any way be modified, amended, amplified, orlimited by reference to any document, instrument, or agreement referred toherein, or in which this <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> is referred to, or to which it relates,except only the drafts referred to herein.This letter <strong>of</strong> credit is issued subject to the Uniform Customs and Practices forDocumentary <strong>Credit</strong>s, 1993 Revision, International Chamber <strong>of</strong> CommercePublication No. 500.Very Truly Yours,[NAME OF BANK]by:________________________Name:Title:

EXHIBIT 1 (Draft presented by RUS)DRAFTON IRREVOCABLE STANDBY LETTER OF CREDIT NO. [00000][Date]Pay to the order <strong>of</strong> RURAL UTILITIES SERVICE, the sum <strong>of</strong> [amount in words] and[00]/100 dollars ($000,000.00), drawn on [BANK’S NAME], the issuer <strong>of</strong> theabove-mentioned irrevocable standby <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>, dated [insert date <strong>of</strong>issuance <strong>of</strong> <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>].RURAL UTILITIES SERVICEBy:__________________________Name:Position:CERTIFICATEThe undersigned hereby certifies that he/she is authorized to execute thiscertificate on behalf <strong>of</strong> the UNITED STATES OF AMERICA, acting through the RURALUTILITIES SERVICE, the BENEFICIARY under that certain irrevocable standby <strong>Letter</strong><strong>of</strong> <strong>Credit</strong> No. [00000], issued by [BANK’S NAME]. The BENEFICIARY, as Lender, isentitled to draw the amount stated above pursuant to the terms <strong>of</strong> the LoanAgreement (as defined in the <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>).RURAL UTILITIES SERVICEBy:__________________________Name:Position:

EXHIBIT 2 (Draft presented by BORROWER)DRAFTON IRREVOCABLE STANDBY LETTER OF CREDIT NO. [00000][Date]Pay to the order <strong>of</strong> [BORROWER’S NAME], the sum <strong>of</strong> [amount in words] and[00]/100 dollars ($000,000.00), drawn on [BANK’S NAME], the issuer <strong>of</strong> theabove-mentioned irrevocable standby <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>, dated [insert date <strong>of</strong>issuance <strong>of</strong> <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>].[BORROWER’S NAME]By:__________________________Name:Position:CERTIFICATEThe undersigned hereby certifies that he/she is authorized to execute thiscertificate on behalf <strong>of</strong> [BORROWER’S NAME], a BENEFICIARY under that certainirrevocable standby <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> No. [00000], issued by [BANK’S NAME]. TheBENEFICIARY, as Borrower, is entitled to draw the amount stated above pursuantto the terms <strong>of</strong> the Loan Agreement (as defined in the <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>).[BORROWER’S NAME]By:__________________________Name:Position:

EXHIBIT 3 (Incumbency Certificate <strong>of</strong> BANK)OFFICER INCUMBENCY CERTIFICATEI [Secretary’s Name], do hereby certify that I am the Secretary <strong>of</strong> [NAME OFBANK] <strong>of</strong> [City] in [County] County, [State], Charter No. [00000]; that [Name <strong>of</strong>Bank Official Signing <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>] is a(n) [position] <strong>of</strong> [NAME OF BANK] and isauthorized to execute on behalf <strong>of</strong> the BANK, such documents as the <strong>Irrevocable</strong><strong>Standby</strong> <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong> No. [00000] (hereinafter the “<strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>,”) onbehalf <strong>of</strong> [LOC ISSUING PARTY’S NAME] for the benefit <strong>of</strong> [BORROWER’SNAME] and the RURAL UTILITIES SERVICE; and that the following is the name,signature, and <strong>of</strong>fice <strong>of</strong> said <strong>of</strong>ficial, who validly held and occupied his/herposition on the date <strong>of</strong> actual execution <strong>of</strong> the <strong>Letter</strong> <strong>of</strong> <strong>Credit</strong>.Name Signature PositionIN WITNESS where<strong>of</strong>, I have set my hand and affixed the seal <strong>of</strong> the[NAME OF BANK] <strong>of</strong> [City] on [date].(corporate seal)________________________________Secretary