Exhibit 10(s)

 

 

LOAN AGREEMENT

 

 

between

 

RICHLAND COUNTY, NORTH DAKOTA

 

and

 

MINN-DAK FARMERS COOPERATIVE

regarding

 

$12,240,000

RICHLAND COUNTY, NORTH DAKOTA

VARIABLE RATE DEMAND

INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS

(MINN-DAK FARMERS COOPERATIVE PROJECT)

SERIES 2010A

 

and

 

$7,000,000

RICHLAND COUNTY, NORTH DAKOTA

VARIABLE RATE DEMAND

RECOVERY ZONE FACILITY REVENUE BONDS

(MINN-DAK FARMERS COOPERATIVE PROJECT)

SERIES 2010B

 

Dated as of February 1, 2010

          Certain rights of Richland County, North Dakota in this Loan Agreement
have been pledged and assigned to Wells Fargo Bank, National Association,
Minneapolis, Minnesota, as Trustee, under an Indenture of Trust dated as of
February 1, 2010, between the County and the Trustee.

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TABLE OF CONTENTS
(This Table of Contents is not part of the
Loan Agreement and is only for convenience of reference)

 

 

 

 

 

 

 

Page

 

 

 

 

PARTIES

 

1-1

 

 

 

ARTICLE I

 

 

DEFINITIONS

 

 

 

 

 

Section 1.1.

Definitions

 

1-1

Section 1.2.

Interpretation

 

1-5

 

 

 

 

ARTICLE II

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

 

 

Section 2.1.

Representations by the Issuer

 

2-1

Section 2.2.

Representations and Warranties by the Company

 

2-1

Section 2.3.

Representations of the Company Regarding Federal Tax Matters

 

2-2

 

 

 

 

ARTICLE III

 

 

CONSTRUCTION OF PROJECT; REFUNDING OF PRIOR BONDS

 

 

 

 

 

Section 3.1.

Acquisition and Construction of Project by Company

 

3-1

Section 3.2.

Payment of Costs of the Project by Company

 

3-1

Section 3.3.

Disbursements from Project Fund

 

3-1

Section 3.4.

Enforcement of Contract and Surety Bonds

 

3-2

Section 3.5.

Plans and Specifications

 

3-2

Section 3.6.

Establishment of Completion Date

 

3-2

Section 3.7.

Refunding of Prior Bonds

 

3-3

Section 3.8.

Obligation of the Company to Cooperate in Furnishing Documents to Trustee

 

3-3

 

 

 

 

ARTICLE IV

 

 

ISSUANCE OF THE BONDS; INVESTMENT OF FUNDS

 

 

 

 

 

 

Section 4.1.

Agreement to Issue Bonds

 

4-1

Section 4.2.

The Loan

 

4-1

Section 4.3.

Investment of Moneys

 

4-1

 

 

 

 

ARTICLE V

 

 

EFFECTIVE DATE OF AGREEMENT; DURATION OF TERM;
PAYMENT AND OTHER PROVISIONS

 

 

 

 

 

 

Section 5.1.

Effective Date and Duration of Agreement

 

5-1

-i-

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Section 5.2.

Basic Payments and Other Amounts Payable

 

5-1

Section 5.3.

Certain Company Obligations Unconditional

 

5-3

Section 5.4.

Basic Payments and Other Payments Assigned

 

5-3

Section 5.5.

Maintenance and Modification of the Projects by the Company

 

5-4

Section 5.6.

Taxes, Other Governmental Charges and Utility Charges

 

5-4

Section 5.7.

Insurance

 

5-5

Section 5.8.

Determination of Taxability

 

5-5

Section 5.9.

Optional Tender Purchases and Mandatory Purchases

 

5-5

 

 

 

 

ARTICLE VI

 

 

CASUALTY AND CONDEMNATION

 

 

 

 

 

Section 6.1.

Casualty

 

6-1

Section 6.2.

Condemnation

 

6-1

Section 6.3.

Failure to Restore Projects; Application of Net Proceeds

 

6-1

Section 6.4.

Cooperation

 

6-1

Section 6.5.

Effect of Damage, Destruction or Condemnation

 

6-1

 

 

 

 

ARTICLE VII
SPECIAL COVENANTS

 

 

 

 

 

Section 7.1.

No Warranty of Condition or Suitability by the Issuer; Issuer to Maintain
Existence

 

7-1

Section 7.2.

Right of Access to the Projects

 

7-1

Section 7.3.

The Company to Maintain its Existence; Conditions Under Which Exceptions
Permitted

 

7-1

Section 7.4.

Further Assurances and Corrective Instruments

 

7-1

Section 7.5.

The Issuer and Company Representatives

 

7-1

Section 7.6.

Removal of Liens Respecting Company Payments

 

7-1

Section 7.7.

Release and Indemnification

 

7-2

Section 7.8.

Compliance with the Indenture

 

7-3

Section 7.9.

Delivery of Substitute Credit

 

7-3

Section 7.10.

Annual Statement

 

7-3

 

 

 

 

ARTICLE VIII

 

 

ASSIGNMENT, SALE, LEASING OF PROJECTS

 

 

 

 

 

Section 8.1.

Assignment of Agreement; or Leasing of Projects

 

8-1

Section 8.2.

Sale and Encumbrance of Projects

 

8-1

 

 

 

 

ARTICLE IX

 

 

EVENTS OF DEFAULT AND REMEDIES

 

 

 

 

 

Section 9.1.

Events of Default Defined

 

9-1

Section 9.2.

Remedies on Default

 

9-2

-ii-

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Section 9.3.

No Remedy Exclusive

 

9-2

Section 9.4.

Agreement to Pay Attorneys’ Fees and Expenses

 

9-3

Section 9.5.

No Additional Waiver Implied by One Waiver

 

9-3

Section 9.6.

Rights of Credit Provider

 

9-3

 

 

 

 

ARTICLE X

 

 

COMPANY OPTIONS

 

 

 

 

 

 

Section 10.1.

Optional Termination Upon Discharge of Indenture

 

10-1

Section 10.2.

Optional Prepayment of Rent Because of Casualty or Condemnation

 

10-1

Section 10.3.

Optional Redemption of Bonds

 

10-2

 

 

 

 

ARTICLE XI

 

 

MISCELLANEOUS

 

 

 

 

 

 

Section 11.1.

Notices

 

11-1

Section 11.2.

Binding Effect

 

11-1

Section 11.3.

Severability

 

11-2

Section 11.4.

Amounts Remaining in Funds

 

11-2

Section 11.5.

Amendments, Changes and Modifications

 

11-2

Section 11.6.

Execution in Counterparts

 

11-2

Section 11.7.

Captions

 

11-2

Section 11.8.

Recording and Filing

 

11-2

Section 11.9.

Law to Govern

 

11-2

Section 11.10.

Limitation on Issuer’s Liability

 

11-3

Section 11.11.

Credit Not in Effect

 

11-3

 

 

 

 

SIGNATURES

 

11-4

 

 

 

EXHIBIT A:  DESCRIPTION OF PRIOR PROJECTS

 

A-1

EXHIBIT B:  DESCRIPTION OF RECOVERY ZONE PROJECTS

 

B-1

EXHIBIT C:  CERTIFICATE OF REQUISITION

 

C-l

-iii-

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LOAN AGREEMENT

          THIS LOAN AGREEMENT is entered into as of February 1, 2010 (the
“Agreement”), by and between RICHLAND COUNTY, a political subdivision of the
State of North Dakota (the “Issuer”), and MINN-DAKFARMERS COOPERATIVE, a North
Dakota cooperative association (the “Company”).

ARTICLE I

DEFINITIONS

          SECTION 1.1. DEFINITIONS. Unless a different meaning clearly appears
from the context, all capitalized terms shall have the meanings defined in this
Section, or if not so defined, as defined in the Indenture:

          “Act” means North Dakota Century Code, Chapter 40-57, applicable as of
the Date of Issue.

          “Act of Bankruptcy” means the filing of a petition in bankruptcy by or
against the Company or any guarantor of the Company’s obligations under the
United States Bankruptcy Code.

          “Additional Payments” means the amounts payable as such under Section
5.2(b) and (d) and Section 5.9.

          “Agreement” means this Loan Agreement, as amended from time to time in
accordance with the Indenture.

          “Bank” means the same as that term is defined in the Indenture.

          “Basic Payments” means the payments required under Section 5.2(a).

          “Bond Counsel” means the same as that term is defined in the
Indenture.

          “Bond Fund” means the same as that term is defined in the Indenture.

          “Bond Year” means the same as that term is defined in the Indenture.

          “Bondholder” or “Holder” means, when used with reference to a Bond or
Bonds, the registered owner of any Outstanding Bond or Bonds.

          “Bonds” means, collectively, the Series 2010A Bonds and the Series
2010B Bonds.

          “Business Day” means the same as that term is defined in the
Indenture.

          “Call Date” means February 18, 2010, the date on which the Prior Bonds
will be redeemed.

1-1

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          “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.

          “Company” means Minn-Dak Farmers Cooperative, a North Dakota
cooperative association, its successors and assigns.

          “Company Representative” means the same as that term is defined in the
Indenture.

          “Conversion Date” means the same as that term is defined in the
Indenture.

          “Costs of Issuance” means any and all costs and expenses relating to
the issuance, sale and delivery of the Bonds, including, but not limited to,
Underwriter’s discount or commission, all fees and expenses of legal counsel,
financial consultants, feasibility consultants, accountants, any fee to be paid
to the Issuer, printing costs, costs of preparation and reproduction of
documents, filing and recording fees, initial fees and charges of the Trustee,
and any other cost, charge or fee in connection with the original issuance of
the Bonds which are treated as “issuance costs” within the meaning of Section
147(g) of the Code.

          “Credit” means the same as that term is defined in the Indenture.

          “Credit Provider” means the same as that term is defined in the
Indenture.

          “Date of Issue” means the same as that term is defined in the
Indenture.

          “Determination of Taxability” means the same as that term is defined
in the Indenture.

          “Eligible Funds” means the same as that term is defined in the
Indenture.

          “Event of Default” means an event defined as such under Section 9.1.

          “Facilities” means the Company’s sugar beet processing facilities in
Richland County, North Dakota.

          “Fund” means the same as that term is defined in the Indenture.

          “Indenture” means the Indenture of Trust of even date herewith between
Issuer and the Trustee, and any amendment thereof permitted by the Indenture.

          “Insurance and Award Fund” means the same as that term is defined in
the Indenture.

          “Interest Payment Date” means the same as that term is defined in the
Indenture.

          “Interest Rate Period” means the same as that term is defined in the
Indenture.

          “Investment Obligations” means the same as that term is defined in the
Indenture.

1-2

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          “Issuer” means Richland County, a political subdivision of the State,
and any successors or assigns.

          “Issuer Representative” means any person at any time designated to act
on behalf of the Issuer by a written certificate furnished to the Company, the
Trustee and the Credit Provider containing the specimen signature of such person
and signed on behalf the Issuer by the Chair of the Board of County
Commissioners or County Auditor of the Issuer.

          “Mandatory Purchase” means the same as that term is defined in the
Indenture.

          “Mandatory Tender Date” means the same as that term is defined in the
Indenture.

          “Net Proceeds” means the same as that term is defined in the
Indenture.

          “Opinion of Counsel” means the same as that term is defined in the
Indenture.

          “Optional Tender Date” means the same as that term is defined in the
Indenture.

          “Optional Tender Purchase” means the same as that term is defined in
the Indenture.

          “Payments” means Basic Payments and Additional Payments.

          “Plans” means the plans and specifications for the acquisition and
construction of the Recovery Zone Projects.

          “Principal Office” means the same as that term is defined in the
Indenture.

          “Prior Bonds” means, collectively, the Series 1996A Bonds, the Series
1996B Bonds and the Series 2002 Bonds.

          “Prior Indentures” means the Indenture of Trust between the Issuer and
First Trust National Association, now known as U.S. Bank National Association,
dated as of January 1, 1996; and the Indenture of Trust between the Issuer and
Wells Fargo Bank Minnesota, National Association, dated as of February 1, 2002,
relating to the Prior Bonds.

          “Prior Projects” means all items of machinery, equipment, fixtures and
functionally related property described on Exhibit A attached hereto acquired
and installed with the proceeds of the Prior Bonds and used in connection with
solid waste disposal facilities within the meaning of Section 142(a)(6) of the
Code or manufacturing facilities within the meaning of Section 144(a)(12) of the
Code.

          “Project Fund” means the same as that term is defined in the
Indenture.

          “Projects” means collectively the Prior Projects and the Recovery Zone
Projects.

1-3

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          “Purchase Account” means the same as that term is defined in the
Indenture.

          “Purchase Price” means the same as that term is defined in the
Indenture.

          “Qualifying Costs” means (i) expenses or costs for “recovery zone
property” which means any property to which Section 168 of the Code applies
(relating to the accelerated cost recovery system) or would apply but for
Section 179 of the Code (relating to electing to expense certain depreciable
business assets) if: (a) such property was constructed, reconstructed,
renovated, or acquired by purchase by the Company after August 3, 2009; (b) the
original use of which in Richland County, North Dakota commences with the
Company; (c) substantially all of the use of which is in Richland County, North
Dakota and is in the active conduct of a qualified business (as defined in
Section 1400U-3(c)(1) of the Code; and (d) such expenses or costs were not
incurred more than sixty (60) days prior to November 2, 2009, the Official
Action Date, or (ii) to pay Costs of Issuance, provided such Costs of Issuance
do not exceed two percent (2%) of the proceeds of the Series 2010B Bonds.

          “Rebate Amount” means the same as that term is defined in the
Indenture.

          “Recovery Zone Projects” means all items of machinery, equipment,
fixtures and functionally related property described on Exhibit B attached
hereto acquired and installed with the proceeds of the Series 2010B Bonds and
used in connection with Company’s sugar beet processing facilities.

          “Redemption Date” means the same as that term is defined in the
Indenture.

          “Reimbursement Agreement” means the same as that term is defined in
the Indenture.

          “Remarketing Agent” means W.R. Taylor & Company, LLC, Montgomery,
Alabama, its successors and assigns.

          “Remarketing Agreement” means the Remarketing Agreement of even date
herewith between the Company and Remarketing Agent.

          “Series 1996A Bonds” means the Issuer’s Solid Waste Disposal Revenue
Bonds (Minn-Dak Farmers Cooperative Project), Series 1996A, dated January 25,
1996, issued in the original principal amount of $11,000,000.

          “Series 1996B Bonds” means the Issuer’s Industrial Development Revenue
Bonds (Minn-Dak Farmers Cooperative Project), Series 1996B, dated February 13,
1996, issued in the original principal amount of $1,000,000.

          “Series 2002 Bonds” means the Issuer’s Solid Waste Disposal Revenue
Bonds (Minn-Dak Farmers Cooperative Project), Series 2002, dated February 28,
2002, issued in the original principal amount of $14,000,000.

1-4

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          “Series 2010A Bonds” means the Issuer’s Variable Rate Demand
Industrial Development Revenue Refunding Bonds (Minn-Dak Farmers Cooperative
Project), Series 2010A described in the Indenture.

          “Series 2010B Bonds” means the Issuer’s Variable Rate Demand Recovery
Zone Facility Revenue Bonds (Minn-Dak Farmers Cooperative Project), Series 2010B
described in the Indenture.

          “State” means the State of North Dakota.

          “Substitute Credit” means the same as that term is defined in the
Indenture.

          “Tender Date” means the same as that term is defined in the Indenture.

          “Tendered Bonds” means the same as that term is defined in the
Indenture.

          “Term” means, subject to Section 9.6, the period from the Date of
Issue to May 15, 2025, or earlier termination of this Agreement in accordance
herewith.

          “Trustee” means the same as that term is defined in the Indenture.

          “Underwriter” means W.R. Taylor & Company, LLC, Montgomery, Alabama.

          SECTION 1.2. INTERPRETATION.

 

 

 

 

          (a)          Any reference herein to the Issuer or to any officer
thereof includes entities or officials succeeding to their respective functions,
duties or responsibilities pursuant to or by operation of law or who are
lawfully performing their functions.

 

 

 

 

          (b)          Unless the context indicates otherwise, words importing
the singular number include the plural number, and vice versa. Words of any
gender include the correlative words of the other gender, unless the sense
indicates otherwise. “Articles” and “Sections” mentioned by number only are the
respective Articles and Sections of this Agreement so numbered. The terms
“hereof,” “hereby,” “herein,” “hereto,” “hereunder,” “hereinafter,” and similar
terms refer to this Agreement; and the term “hereafter” means after, and the
term “heretofore” means before, the Date of Issue. Reference to a “person” shall
include any natural individual, corporation, cooperative, limited liability
company, association, partnership, joint venture, trust or other legally
recognized entity and any successor or assign not in contravention of this
Agreement or the Indenture. Reference to any document or instrument shall mean
each amendment thereof or supplement thereto.

 

 

 

 

          (c)          Unless otherwise expressly provided herein, any terms
pertaining to accounting or financial matters shall be interpreted conformity
and in accordance with generally accepted accounting principles as the case may
be.

1-5

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

          SECTION 2.1. REPRESENTATIONS BY THE ISSUER. The Issuer represents
that:

 

 

 

 

          (a)          The Issuer is a political subdivision of the State, duly
organized and existing under the Constitution and the laws of the State. Under
the provisions of the Act, the Issuer has the power to enter into this Agreement
and carry out its obligations hereunder.

 

 

 

 

          (b)          To the best knowledge of the Issuer, no member of the
governing body or other officer or employee of the Issuer is directly or
indirectly interested in this Agreement or, the issuance and sale of the Bonds.

 

 

 

 

          (c)          The issuance and sale of the Bonds and the execution and
delivery of this Agreement and the Indenture have been duly authorized by
resolutions of the governing body of the Issuer adopted at meetings thereof duly
called, by the affirmative vote of not less than a majority of its members.

 

 

 

 

          (d)          The execution and delivery of this Agreement, the
Indenture and the other agreements contemplated hereby to which the Issuer is a
party will not conflict with, or constitute on the part of the Issuer a breach
of or a default under, any agreement, indenture, mortgage, lease or other
instrument to which the Issuer is subject or is a party or by which it is bound.

 

 

          SECTION 2.2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The
Company represents and warrants as of the Date of Issue that:

 

 

 

          (a)          The Company is a cooperative association duly organized
under the laws of the State of North Dakota, is not in violation of any
provisions of its Articles of Incorporation (the “Articles”) pursuant to which
it was formed or the laws of the State, has power to enter into this Agreement,
the Reimbursement Agreement and the Remarketing Agreement and has duly
authorized the execution, delivery and performance of this Agreement, the
Reimbursement Agreement and the Remarketing Agreement.

 

 

 

          (b)          Neither the execution and delivery of this Agreement, the
Reimbursement Agreement, or the Remarketing Agreement, the consummation of the
transactions contemplated hereby and thereby nor the fulfillment of or
compliance with the terms and conditions of such instruments is prevented by,
limited by or conflicts with or results in a breach of the terms, conditions or
provisions of any restriction of the Articles, or the Company’s Bylaws or any
evidence of indebtedness, agreement or instrument of whatever nature to which
the Company is now a party or by which it is bound or constitutes a default
under any of the foregoing.

2-1

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          (c)          The Company is duly authorized and licensed to operate
the Projects under the laws, rulings, regulations and ordinances of the State
and the departments, agencies and political subdivisions thereof; the Company
has obtained or will obtain all requisite approvals of the State and other
federal, state, regional and local governmental bodies for the operation of the
Projects; and the Prior Projects are, and the Recovery Zone Projects will be, in
compliance with applicable federal, state and local zoning, subdivision,
environmental, pollution control and building laws, regulations, codes and
ordinances.

 

 

 

 

          (d)          The Company shall operate or cause the Projects to be
operated as a “project” within the meaning of the Act and otherwise comply with
all provisions of the Act.

 

 

 

 

          (e)          To the best of the Company’s knowledge, no member of the
governing body or other officer or employee of the Issuer is directly or
indirectly interested in the transaction contemplated by the Indenture, this
Agreement, the Bonds, or any contract, agreement or job hereby contemplated to
be entered into or undertaken.

 

 

 

 

          (f)          There is no pending suit, action or proceeding against or
affecting the Company before or by any court, arbitrator, administrative agency
or other governmental authority which will materially and adversely affect the
validity, as to the Company, of any of the transactions contemplated hereby or
the ability of the Company to perform its obligations as contemplated hereby.

 

 

 

 

          (g)          The Company has reviewed and approved the provisions of
the Indenture and will observe and comply with any obligations of the Company
stated therein.

 

 

 

          SECTION 2.3. REPRESENTATIONS OF THE COMPANY REGARDING FEDERAL TAX
MATTERS. The Company makes the following representations, understanding, after
such consultation with such legal counsel as deemed appropriate, that the
exclusion from gross income of interest on the Bonds for federal income tax
purposes is dependent on the accuracy and truthfulness of such representations:

 

 

 

 

          (a)          All of the proceeds of the Series 2010A Bonds will be
used exclusively to refund the outstanding Prior Bonds on the Call Date. The
principal amount of the Series 2010A Bonds does not exceed the outstanding
principal amount of the Prior Bonds. At least ninety-five percent (95%) of the
net proceeds of the Prior Bonds were used to provide the Prior Projects which
constitute solid waste disposal facilities within the meaning of Section
142(a)(6) of the Code or manufacturing facilities within the meaning of Section
144(a)(12) of the Code.

 

 

 

 

          (b)          The average maturity of the Series 2010A Bonds does not
exceed one hundred twenty percent (120%) of the average remaining reasonably
expected life of the Prior Projects financed with proceeds of the Prior Bonds
within the meaning of Section 147(b) of the Code.

2-2

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          (c)          Within the meaning of Section 150(b) of the Code, there
has been no change in the use of the Prior Projects financed with the proceeds
of the Prior Bonds.

 

 

 

 

          (d)          Within the meaning of Section 147(c) of the Code, no
portion of the proceeds of the Prior Bonds was used (directly or indirectly) for
the acquisition of land (or an interest therein) to be used for farming purposes
and not more than twenty-five percent (25%) of the net proceeds of the Prior
Bonds was used (directly or indirectly) for the acquisition of any other land
(or interest therein).

 

 

 

 

          (e)          No portion of the Prior Bond proceeds was used to provide
any airplane, sky box or other private luxury box, health club facility,
facility primarily used for gambling, or store the principal business of which
is the sale of alcoholic beverages for consumption off premises, all within the
meaning of Section 147(e) of the Code.

 

 

 

 

          (f)          The Prior Bonds and the Bonds satisfied the public
approval requirements of Section 147(f) of the Code because the issuance of the
Prior Bonds and the Bonds was approved by the Issuer (which has jurisdiction
over the Projects) by its elected legislative body after reasonable public
notice published in a newspaper of general circulation in the corporate limits
of the Issuer not less than fourteen (14) days prior to the date of respective
public hearings held with respect to the Prior Bonds and the Bonds.

 

 

 

 

          (g)          No more than two percent (2%) of the proceeds of the
Prior Bonds was used to finance Costs of Issuance of the Prior Bonds within the
meaning of Section 147(g) of the Code. No proceeds of the Series 2010A Bonds and
no more than two percent (2%) of the proceeds of the Series 2010B Bonds will be
used to pay Costs of Issuance.

 

 

 

 

          (h)          Within the meaning of Section 149(b) of the Code, the
Bonds are not “federally guaranteed.”

 

 

 

 

          (i)          In addition to the Bonds, no other obligations have been
or are expected to be issued under Section 103(a) of the Code for sale at
substantially the same time (within fifteen (15) days) as the Bonds are sold,
pursuant to the same plan of financing, including bonds for the same facility or
related facilities, and which are reasonably expected to be paid from
substantially the same source of funds, determined without regard to guarantees
from unrelated parties, or to otherwise become part of the same “issue of
obligations” of the Bonds as described in Treasury Regulations Section
1.150-(1)(c)(1).

 

 

 

 

          (j)          The Prior Bonds have received proper allocation of
authority for the entire amount of the issues in accordance with Section 146 of
the Code and the amount of the Series 2010A Bonds does not exceed the
outstanding principal amount of the Prior Bonds.

2-3

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          (k)          The Company will not use the proceeds of the Bonds in
such a manner as to cause the Bonds to be “arbitrage bonds” within the meaning
of Section 148 of the Code. The Company shall determine or cause to be
determined the Rebate Amount at or before such time as may be required by the
Treasury Regulations. Upon each such determination, the Company shall furnish
the Trustee a certificate showing how such calculation was made and shall pay to
the United States the amounts required to be paid in respect of each Rebate
Payment Date. The Company shall retain all records of the determination of the
foregoing amounts until six (6) years after the Bonds have been fully paid.

 

 

 

 

          (l)          The Company shall cooperate with the Issuer in filing all
information returns required by Section 149(e) of the Code.

 

 

 

 

          (m)          No net proceeds of the Prior Bonds was used to provide an
office unless the office was located on the premises of the Prior Projects and
not more than a de minimis amount of the functions to be performed at such
office is not directly related to the day-to-day operations of the Company.

 

 

 

 

          (n)          Ninety-five percent (95%) or more of the net proceeds of
the Series 2010B Bonds will be used for Recovery Zone Property within the
meaning of Section 1400U-3 of the Code and none of the Series 2010B Bond
proceeds will used to provide any residential rental property, private or
commercial golf course, country club, massage parlor, hot tub facility, suntan
facility, racetrack or other facility used for gambling, or any store the
principal business of which is the sale of alcoholic beverages for consumption
off premises, all within the meaning of Section 1400U-3 of the Code.

 

 

 

 

          (o)          The Issuer has designated the Series 2010B Bonds as
Recovery Zone Facility Bonds for purposes of Section 1400U-3 of the Code and the
Series 2010B Bonds have received proper allocation of the Recovery Zone Facility
Bond volume cap from the Issuer for the entire amount of the Series 2010B Bonds
in accordance with Section 1400U-l of the Code.

 

 

 

 

          (p)          Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall not otherwise use any of the Bond proceeds or
take or fail to take any action the effect of which would cause interest on the
Bonds to be included in gross income of the Holders thereof for federal income
tax purposes.

 

 

 

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ARTICLE III

CONSTRUCTION OF THE PROJECT;
REFUNDING OF PRIOR BONDS

          SECTION 3.1. ACQUISITION AND CONSTRUCTION OF PROJECT BY COMPANY. The
Issuer hereby authorizes the Company to provide for the acquisition,
construction, equipping and installation of the Project without advertisement
for bids as required for the acquisition and installation of other municipal
property and pursuant to the terms and conditions of this Article III. Pursuant
to such authority, the Company agrees that it will:

 

 

 

          (a)     acquire, construct and equip the Project in accordance with
the Plans;

 

 

 

          (b)     cause insurance to be maintained during the construction
period in accordance with the provisions of Section 5.7 hereof; and

 

 

 

          (c)     use its best efforts to complete construction and installation
of the Project by February 1, 2013.

          SECTION 3.2. PAYMENT OF COSTS OF THE PROJECT BY COMPANY. The Company
agrees that it will provide promptly any and all sums of money required to
complete the acquisition, construction, equipping and installation of the
Project to the extent not paid from the proceeds of the Series 2010B Bonds.

          The Company agrees to pay from its own funds all Costs of Issuance
incurred in connection with the Series 2010B Bonds in excess of two percent (2%)
of the proceeds of the Series 2010B Bonds.

          SECTION 3.3. DISBURSEMENTS FROM PROJECT FUND. The proceeds of the
Series 2010B Bonds and any Company funds deposited in the Project Fund will be
disbursed by the Trustee in accordance with the terms of this Agreement upon
receipt of a certificate (substantially in the form of Exhibit C attached
hereto) signed by a Company Representative, evidencing the written consent of
the Bank and containing the following information:

 

 

 

 

          (a)     if the Company seeks reimbursement for Qualifying Costs paid
by it, a statement of the amount and nature of the Qualifying Costs and the name
and address of the payee of each item of the Qualifying Costs certified to have
been paid by and requested to be reimbursed to the Company; or

 

 

 

          (b)     if payment is to be made to someone other than the Company, a
statement of the amount and nature of each item of Qualifying Costs certified to
be due and payable and requested to be paid to a person other than the Company;
and

 

 

 

          (c)     a certificate for payment under paragraphs (a) or (b) of this
Section must also contain a statement that each item for which payment or
reimbursement is requested is or was necessary in connection with the Project
and that such item has not formed the basis for any previous payment or
reimbursement from the Project Fund.

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          Upon receipt of the certificate the Trustee shall disburse funds from
the Project Fund to the persons entitled thereto. Bond proceeds in the Project
Fund shall be expended only to pay Qualifying Costs. Company funds in the
Project Fund may be expended to pay Costs of Issuance which exceed two percent
(2%) of the proceeds of the Series 2010B Bonds.

          SECTION 3.4. ENFORCEMENT OF CONTRACT AND SURETY BONDS. In the event of
material default of any contractor or subcontractor under any contract made in
connection with the Project, or in the event of a material breach of warranty
with respect to any materials, workmanship or performance, the Company will
diligently pursue, either separately or in conjunction with others, such
remedies of the Company as it deems reasonable against the contractor or
subcontractor in default and against any surety on a bond securing the
performance of such contract.

          SECTION 3.5. PLANS AND SPECIFICATIONS. The Company may make any
changes in or modifications of the Plans as initially approved by the Company,
any may make any deletions from or substitutions or additions to the Project,
without the prior consent of the Credit Provider or the Trustee, so long as such
changes or modifications in the Plans, or deletions from or substitutions or
additions to the Project, do not, in the opinion of a Company Representative as
noted on each change order, materially and adversely alter the size, scope or
cost of the Project, materially impair the structural integrity and utility of
the structures, or materially impair the usefulness or character of the Project.
No material changes in the size, scope or cost of the Project may be made
without the written consent of the Credit Provider.

          SECTION 3.6. ESTABLISHMENT OF COMPLETION DATE. The completion date
shall be evidenced to the Trustee by a Certificate of Completion signed by a
Company Representative and accepted by the Trustee stating that, except for
amounts retained by the Trustee at the direction of the Company for any
Qualifying Costs not then due and payable or the liability for which is being
contested in good faith by the Company:

 

 

 

          (a)     construction of the Project has been completed in accordance
with the Plans, and all labor, services, materials and supplies used in such
construction have been paid for; and

 

 

 

          (b)     all other facilities necessary in connection with the Project
have been constructed, acquired and installed in accordance with the Plans and
all costs and expenses incurred in connection therewith have been paid.

Notwithstanding the foregoing, the Certificate of Completion may state that it
is given without prejudice to any rights against third parties which exist at
the date of such certificate or which may subsequently come into being. The
Company agrees to cooperate in causing such Certificate of Completion to be
furnished to the Trustee as promptly as practicable after the occurrence of the
events and conditions referred to in clauses (a) and (b) of the first sentence
of this Section 3.6. Moneys remaining in the Project Fund on the completion
date, except for any moneys which the Company directs the Trustee in writing to
retain therein for the payment of any Qualifying Costs not then due and payable
or the liability for which is being contested in good faith by the Company shall
be transferred to the Bond Fund and used to redeem the a portion of the Series
2010B Bonds.

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          SECTION 3.7. REFUNDING OF PRIOR BONDS. The Issuer has, in the
Indenture, authorized and directed the Trustee to use the proceeds of the Series
2010A Bonds and other available funds of the Company to pay the principal of,
premium, if any, and interest on the Prior Bonds to and including the Call Date
and to cause the Prior Bonds to be paid or redeemed in whole on the Call Date,
as further specified in the Indenture.

          The Company covenants and agrees that, in addition to the proceeds of
the Bonds, it will provide such moneys as may be required to refund and pay or
redeem in whole the Prior Bonds on the Call Date including (i) the accrued
interest on the Prior Bonds to the Call Date; (ii) the fees and expenses of the
Trustee in connection with the redemption of the Prior Bonds; and (iii) all
Costs of Issuance related to the Series 2010A Bonds, and that on the Call Date
there shall accordingly be sufficient funds on hand with the Trustee to pay all
principal of, premium, if any, and interest then due on the Prior Bonds. The
Company further covenants and agrees that it will cause or has caused the
Trustee to give notice of the redemption in whole of the Prior Bonds to be
redeemed, in accordance with the provisions of the Prior Indentures.

          SECTION 3.8. OBLIGATION OF THE COMPANY TO COOPERATE IN FURNISHING
DOCUMENTS TO TRUSTEE. The Company agrees to cooperate in furnishing to the
Trustee (i) any documents referred to in the Indenture or the Prior Indentures
that are required to effect the payment and redemption of the Prior Bonds on the
Call Date, and (ii) the documents referred to in Section 205 of the Indenture
required for the authentication and delivery of the Bonds. Such obligations are
subject to any provision of this Agreement or the Indenture requiring additional
documentation.

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ARTICLE IV

ISSUANCE OF THE BONDS; INVESTMENT OF FUNDS

          SECTION 4.1. AGREEMENT TO ISSUE BONDS. In accordance with the
Indenture, the Issuer, upon the request of the Company, shall sell, issue and
deliver the Bonds and deposit the net proceeds thereof with the Trustee;
provided the conditions to such issuance as set forth in the Indenture have been
satisfied with respect to the Bonds.

          SECTION 4.2. THE LOAN. The Issuer agrees, upon the terms and
conditions herein specified, to lend to the Company the proceeds received by the
Issuer from the sale of the Bonds, excluding any accrued interest, by causing
such proceeds to be deposited with the Trustee for disposition as provided
herein and in the Indenture. The amount of the Loan shall also be deemed to
include any “discount” or any other amount by which the aggregate price at which
the Issuer sells the Bonds to the Underwriter is less than the aggregate
principal amount of the Bonds, plus accrued interest; and the obligation of the
Issuer to make the Loan shall be deemed fully discharged upon so depositing the
proceeds of the Bonds with the Trustee.

          SECTION 4.3. INVESTMENT OF AONEYS. Subject to Sections 409 and 410 of
the Indenture, any moneys held as a part of any Fund shall be invested or
reinvested by the Trustee, at the request of and as directed by the Company in
Investment Obligations to the extent permitted by law; and provided further,
however, investments shall not be made in such a way as to cause any of the
Bonds to become an “arbitrage bond” within the meaning of Section 148 of the
Code. The Trustee may make any and all such investments from and through its own
investment department.

          Any investments shall mature in such amounts and at such times or
shall be redeemable by the Holder at such times as may be necessary to provide
funds when needed by the respective Funds. The Trustee may, at any time, to the
extent required for payment from any Fund, sell any of the investments in such
Fund, and the proceeds of such sale and of all payments at maturity and upon
redemption of such investments shall be held in the Fund from which such
investments were sold. Interest and other income received on moneys or
securities in any Fund shall be credited to such Fund and applied as provided in
Article IV of the Indenture, except as may be otherwise provided herein.

          At the request of the Credit Provider or Company, the Issuer agrees to
cause and direct the Trustee, at the expense of the Company, to furnish the
Company or Credit Provider monthly or at such other times as the Company or
Credit Provider and the Issuer may reasonable request, but not more often than
monthly, an accounting of any Fund held by the Trustee under the Indenture.

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ARTICLE V

EFFECTIVE DATE OF AGREEMENT; DURATION OF TERM;
PAYMENT AND OTHER PROVISIONS

 

 

 

SECTION 5.1. EFFECTIVE DATE AND DURATION OF AGREEMENT.

 

 

 

          (a)     This Agreement shall become effective upon the Date of Issue.
Subject to the provisions of this Agreement, this Agreement and the terms and
provisions herein, shall remain in full force and effect in their entirety from
the Date of Issue throughout the Term. Upon the expiration of the Term, this
Agreement shall terminate, and the provisions and terms of this Agreement shall
become unenforceable and of no effect, except as specifically provided otherwise
by Section 5.1(b).

 

 

 

          (b)     Any other provision of this Agreement notwithstanding, the
provisions of Sections 5.2(b), 5.2(d), 5.8, 7.6, 7.7 and Article X of this
Agreement shall survive any expiration or termination of this Agreement, and
such provisions shall remain effective and enforceable with respect to any party
according to their terms subsequent to any such termination or expiration of the
remainder of this Agreement.

          SECTION 5.2. BASIC PAYMENTS AND OTHER AMOUNTS PAYABLE.

 

 

 

 

          (a)     As long as any Bonds are Outstanding, as and for Basic
Payments the Company shall pay in immediately available funds at the Principal
Office of the Trustee for deposit in the Bond Fund amounts sufficient to pay
when due all principal and Redemption Price of and interest on all Outstanding
Bonds, including:

 

 

 

 

          (i)     on or before 10:00 a.m., Minneapolis, Minnesota time, on or
before the Business Day preceding each Interest Payment Date, Redemption Date or
Stated Maturity Date occurring on or before the Conversion Date (or on or before
9:00 a.m., Minneapolis, Minnesota time on the Interest Payment Date, in the case
of a Conversion Date which is not otherwise an Interest Payment Date), an amount
equal to all principal and Redemption Price of and interest on all Outstanding
Bonds to become due on such Interest Payment Date, Redemption Date or Stated
Maturity Date for whatever reason; and

 

 

 

 

 

          (ii)     on or before the day which is two (2) Business Days preceding
each Interest Payment Date, Redemption Date or Stated Maturity Date occurring
after the Conversion Date, an amount equal to all principal and Redemption Price
of and interest on the Bonds to become due on such Interest Payment Date,
Redemption Date or Stated Maturity Date for whatever reason.

 

 

 

 

          Any above payment by the Company which would otherwise be due and
payable on a date which is not a Business Day shall be due and payable on the
first Business Day immediately preceding such date. Any payment due above shall
be reduced by giving credit for moneys then on deposit in the Bond Fund and
available for payment of principal of or interest on the Bonds which do not
consist of prior Basic Payments (or amounts credited against such payments).

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          (b)     In addition to any other amounts payable hereunder, as
Additional Payments:

 

 

 

 

          (i)     If a Determination of Taxability occurs, the Company shall
within two (2) Business Days after notice thereof from the Trustee or otherwise
pay to the Trustee in immediately available funds an amount which, together with
any balance on hand in any Fund and available for such purpose, shall equal the
Redemption Price of all related Outstanding Bonds, together with unpaid interest
accrued or to accrue thereon to the Redemption Date.

 

 

 

 

 

          (ii)     If all Bonds are subject to redemption as a result of an
Event of Default hereunder and direction to the Trustee is given by the Credit
Provider to redeem all Bonds, the Company shall pay to the Trustee in
immediately available funds no later than one (1) Business Day prior to the date
selected for redemption an amount which, together with any balance on hand in
any Fund and available for such purpose, shall equal the Redemption Price,
together with unpaid interest accrued or to accrue to the Redemption Date.

 

 

 

 

 

          (iii)     If the Bonds shall be accelerated pursuant to Section 9.2
after any Event of Default, the Company shall pay to the Trustee in immediately
available funds on the date the Bonds are accelerated (or such later date as the
Trustee may designate pursuant to such Section) the principal of all Outstanding
Bonds and all unpaid interest accrued or to accrue on such Bonds to the payment
date established by the Trustee pursuant to the Indenture, together with any
applicable premium due for redemption of the Bonds.

 

 

 

 

 

          (iv)     If the Trustee notifies the Company of a deficiency in the
Rebate Fund in accordance with Section 411 of the Indenture, the Company shall
promptly deposit the amount of such deficiency.

 

 

 

 

          (c)     If the amount held by the Trustee in the Bond Fund and
available for such purpose should be sufficient to pay when due all principal or
Redemption Price of and interest on all Outstanding Bonds then remaining unpaid,
the Company shall not be obligated to make any further payment of Basic Payments
under the provisions of Section 5.2(a).

 

 

 

          (d)     As Additional Payments, the Company shall also pay the
following amounts to the following persons:

 

 

 

 

 

         (i)     to the Trustee, when due, all fees of the Trustee for services
rendered under the Indenture and all fees and charges of legal counsel and
others incurred at the request of the Trustee in the performance of services
under the Indenture for which the Trustee and such other persons are entitled to
payment or reimbursement, provided that the Company may, without creating a
default hereunder, contest in good faith the reasonableness of any such fees or
expenses; and

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          (ii)     to the Issuer, all reasonable expenses incurred by the Issuer
in connection with the transactions contemplated hereby and by the Indenture
which are not otherwise required to be paid by the Company under the terms of
this Agreement, provided that the Company may, without creating a default
hereunder, contest in good faith the reasonableness of any such expenses.

 

 

 

 

          (e)       In the event the Company should fail to make any of the
payments required by this Section, the item in default shall continue as an
obligation of the Company until the amount in default shall have been fully paid
with interest accruing thereon at a rate equal to the “Prime Rate” or “Reference
Rate” of Wells Fargo Bank, National Association.

          SECTION 5.3. CERTAIN COMPANY OBLIGATIONS UNCONDITIONAL. The obligation
of the Company to make the payments as provided in this Agreement and to
maintain or cause to be maintained the Projects in accordance with Section 5.5
of this Agreement shall be absolute and unconditional, irrespective of any
defense or any rights of setoff, recoupment, or counterclaim it might otherwise
have against the Issuer, the Trustee, the Credit Provider, any Holder of a Bond
or any other person. The Company shall not suspend or discontinue any such
payment or terminate this Agreement (other than such termination as is provided
for hereunder) for any cause or circumstance whatsoever, including, without
limiting the generality of the foregoing, any acts or circumstances that may
constitute an eviction or constructive eviction, any failure of consideration,
any failure of title, any commercial frustration of purpose, the
unenforceability or invalidity of the Credit or the failure for any reason of
the Trustee to submit a claim under the Credit, any damage to or destruction of
the Projects, any taking by eminent domain of title to or the right of temporary
use of all or any part of the Projects, any change in the tax or other laws of
any jurisdiction, including the United States, the State or any political
subdivision of either, or any failure of the Issuer, the Credit Provider or the
Trustee to perform and observe any agreement or covenant, whether express or
implied, or any duty or obligation of the Issuer to the Company, whether
hereunder or otherwise, or out of any indebtedness or liability at any time
owing to the Company by the Issuer. The provisions of this paragraph shall apply
only if and so long as there shall be Outstanding Bonds. The Company hereby
waives, to the extent permitted by applicable law, any or all rights which the
Company may now have or which at any time hereafter may be conferred upon the
Company, by statute or otherwise, to terminate, to cancel or to limit the
Company’s liability under this Agreement except in accordance with the express
terms hereof.

          SECTION 5.4. BASIC PAYMENTS AND OTHER PAYMENTS ASSIGNED. It is
understood and agreed that all Basic Payments, all payments in respect of
mandatory or optional prepayment and all payments in respect of an Optional
Tender Purchase or Mandatory Purchase, paid over by the Company pursuant to
Section 5.2 and Section 5.9, are assigned under the Indenture to the Trustee.
The Company consents to such assignment and hereby agrees that, as to the
Trustee, the Company’s obligation to make such Basic Payments and other amounts
payable to the Trustee hereunder shall be absolute and shall not be subject to
any defense or any right of setoff, counterclaim or recoupment arising out of
any breach by the Issuer of any duty or obligation to the Company, whether
hereunder or otherwise, or out of any indebtedness or liability at any time
owing to the Company by the Issuer.

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          SECTION 5.5. MAINTENANCE AND MODIFICATION OF THE PROJECTS BY THE
COMPANY. The Company agrees that, at all times during the Term, the Company
shall, at its own expense, operate and maintain, preserve and keep the Projects
with the appurtenances and every part and parcel thereof in good repair, working
order and condition (loss by fire or other casualty, condemnation, ordinary
wear, tear and obsolescence and acts of God excepted), and that the Company
shall, from time to time, make or cause to be made all necessary and proper
repairs, replacements and renewals thereto.

          Subject to the provisions of the Reimbursement Agreement, the Company
agrees during the Term to comply at all times with respect to the Projects, with
all governmental laws, ordinances, approvals, rules, regulations and
requirements, including, but not limited to, such zoning, sanitary, pollution,
environmental, safety ordinances, laws and such rules and regulations thereunder
as shall be binding upon the Company under applicable laws, except during any
period in which the Company at its expense and in its name and subject to
Section 5.5 or Section 5.6 herein shall be in good faith contesting compliance
with any of the aforesaid laws, ordinances, approvals, rules, regulations,
restrictions and requirements.

          The Company shall have the privilege of renovating the Projects or
making substitutions, additions, modifications, deletions and improvements to
the Projects from time to time as the Company, in its discretion, may deem to be
desirable for its uses and purposes. The costs of such renovating,
substitutions, additions, modifications and improvements shall be paid by the
Company, and the same shall be included under the terms of this Agreement as
part of the Projects, provided, however, that the nature of the Projects shall
not be changed if such change would cause the Prior Projects to fail as a “solid
waste disposal facility” or a “manufacturing facility” under the Code or cause
the Recovery Zone Projects to fail as “recovery zone property” within the
meaning of the Code.

          Subject to the provisions of the Reimbursement Agreement, the Company
shall have the privilege from time to time of removing from the Projects any
improvements, machinery, equipment, fixtures or facilities constituting a part
of the Projects, provided that such improvements, machinery, equipment, fixtures
or facilities are removed in the ordinary course of business or are substituted
or replaced at the expense of the Company by improvements, machinery, equipment,
fixtures or facilities free of all liens and encumbrances (other than liens
granted to CoBank, ACB) and such substitution or replacement shall not cause the
Prior Projects to fail as a “solid waste disposal facility” or a “manufacturing
facility” under the Code or cause the Recovery Zone Projects to fail to qualify
as “recovery zone property” within the meaning of the Code.

          SECTION 5.6. TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES.
The Company shall pay during the Term all taxes, special assessments and
governmental charges of any kind whatsoever as the same become due,
respectively, that may at any time be lawfully assessed or levied upon or with
respect to any property of the Company, any sales and excise taxes on products
or transactions thereof, any taxes levied upon or with respect to income or
profits from any property of the Company and, without limiting the generality of
the foregoing, any taxes which, if not paid, would become a lien on the property
of the Company, all utility and other charges incurred in the operation,
maintenance, use, occupancy and upkeep of the Company’s facilities and all other
assessments and charges of any nature that may be secured by a lien on the
Company’s facilities; provided, however, with respect to special assessments or
other governmental charges that may lawfully be paid in installments over a
period of years, the Company shall be obligated to pay only such installments as
are required to be paid during the Term.

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          The Company may, in good faith, at its expense in its own name,
contest any such taxes, assessments and other charges and, in the event of any
such contest, may permit the taxes, assessments or other charges or payments in
lieu of taxes so contested to remain unpaid during the period of such contest
and any appeal therefrom.

          In the event that the Company shall fail to pay any of the foregoing
items required by this Section to be paid by the Company, the Trustee may (but
shall be under no obligation to) pay the same, and any amounts so advanced
therefor by the Trustee shall become an additional obligation of the Company to
the party making the advance, which amounts, together with interest thereon from
the date thereof at the rate stated in Section 5.2, the Company agrees to pay.

          SECTION 5.7. INSURANCE. The Company shall insure the Company’s
Facilities against such perils and for such amounts as are customary for similar
facilities by means of policies issued by reputable insurance companies duly
qualified to do such business in the State. As an alternative, the Company may
insure the Facilities under a blanket policy or policies which cover not only
the Facilities but other properties of the Company.

          The Company shall carry public liability insurance with respect to its
activities with one or more reputable insurance companies. The insurance
provided by this paragraph may be by blanket insurance policy or policies. The
Net Proceeds of the insurance required in this paragraph shall be applied toward
extinguishment or satisfaction of the liability with respect to which such
insurance proceeds may be paid.

          SECTION 5.8. DETERMINATION OF TAXABILITY. If a Determination of
Taxability occurs, the Company shall immediately pay Additional Payments as
provided in Section 5.2(b)(i), and the Trustee, following such Determination of
Taxability shall call for redemption and prepayment of all Bonds then
Outstanding as provided in Section 304 of the Indenture. The Company shall
immediately give notice to the Issuer, the Credit Provider and the Trustee upon
receipt of notice by the Company of a Determination of Taxability.

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          SECTION 5.9. OPTIONAL TENDER PURCHASES AND MANDATORY PURCHASES. The
Company shall cause an Optional Tender Purchase on each Optional Tender Purchase
Date and Mandatory Purchase of all Tendered Bonds on each Mandatory Tender Date.
For such purpose the Company shall cause to be paid to the Tender Agent in
immediately available funds the Purchase Price of all Tendered Bonds no later
than 10:00 a.m., Minneapolis, Minnesota time on each Tender Date, less any
amounts on deposit with the Tender Agent in the Purchase Account and available
for such purpose. Each Purchase Price payment shall be paid directly to the
Tender Agent at its Principal Office and shall be deposited in the Purchase
Account as provided in the Indenture. All Bonds purchased shall be transferred,
held or canceled as provided in the Indenture. The Company hereby authorizes and
directs the Trustee to submit a claim under or draw upon the Credit in
accordance with the terms of the Indenture to the extent necessary to pay such
Purchase Price on any Tender Date. All moneys drawn under the Credit to pay the
Purchase Price shall be credited against the obligation of the Company.
Following a draw by the Trustee as contemplated by this Section and the
Indenture, the amount of such draw shall be paid by the Trustee to the Credit
Provider, but only from and to the extent of amounts in the Purchase Account
deposited by the Company or the Remarketing Agent and not required to pay any
Purchase Price due on or before such Tender Date.

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ARTICLE VI

CASUALTY AND CONDEMNATION

          SECTION 6.1. CASUALTY. Unless the Company exercises its option to
prepay Basic Payments pursuant to Section 10.2(a) with reasonable promptness
after the occurrence of any material damage to or destruction of the Projects or
any material part thereof, the Company shall notify the Issuer, the Credit
Provider and the Trustee as to the nature and extent of such damage or
destruction. The Company shall proceed promptly to rebuild or restore the
Projects to substantially the same or better condition or value as it existed
prior to the event causing such damage or destruction. Any Net Proceeds of
insurance received in respect of such damage or destruction and on deposit with
the Trustee in the Insurance and Award Fund shall be applied to such restoration
or repair as provided in the Indenture. After completion of the restoration and
repair of the Projects, any Net Proceeds remaining in the Insurance and Award
Fund shall be paid to the Company.

          SECTION 6.2. CONDEMNATION. Unless the Company is permitted to and does
elect to prepay Basic Payments pursuant to Section 10.2(b) in the event the
title to or the temporary use of the Projects or any material part thereof shall
be taken by the exercise of the power of eminent domain by any governmental body
or by any person acting under governmental authority, the Company shall, with
reasonable promptness after such taking, notify the Issuer, the Credit Provider
and the Trustee as to the nature and extent of such taking. The Company shall
proceed promptly to restore the Projects to as substantially a similar facility
as possible, given such taking, through the replacement of the equipment or
otherwise. Any Net Proceeds received from any award or awards in respect of such
taking or takings and on deposit with the Trustee in the Insurance and Award
Fund shall be applied to such restoration and as provided in the Indenture.
After completion of the restoration and repair of the Projects, any Net Proceeds
remaining in the Insurance and Award Fund shall be paid to the Company.

          SECTION 6.3. FAILURE TO RESTORE PROJECTS; APPLICATION OF NET PROCEEDS.
If the Company elects not to restore, repair or replace that part of the
Projects damaged or destroyed or taken by the exercise of the power of eminent
domain, any Net Proceeds on deposit in the Insurance and Award Fund but not
expended in restoring, repairing or replacing the Projects shall be paid to the
Trustee for deposit in the Bond Fund and application as provided in Section
10.2.

          SECTION 6.4. COOPERATION. The Issuer shall cooperate with the Company,
at the request and sole expense of the Company, in all matters relating to any
casualty to or condemnation of all or any material part of the Projects to
protect the interests of the Issuer under this Agreement pledged to the Trustee
under the Indenture.

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          SECTION 6.5. EFFECT OF DAMAGE, DESTRUCTION OR CONDEMNATION. Unless all
of the Bonds shall have been called for redemption and the Company shall prepay
Basic Payments pursuant to the provisions of Section 10.2(a) or (b), in the
event that the Projects are damaged or destroyed in whole or in part, or title
to or the temporary use of the Projects or any part thereof is condemned or
taken under the exercise of the power of eminent domain, the Company shall be
obligated to continue to make all payments due under Section 5.2, including
Basic Payments and payment for any Optional Tender Purchase or Mandatory
Purchase in accordance with Section 5.9.

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ARTICLE VII

SPECIAL COVENANTS

          SECTION 7.1. NO WARRANTY OF CONDITION OR SUITABILITY BY THE ISSUER;
ISSUER TO’ MAINTAIN EXISTENCE. The Issuer makes no warranty, either express or
implied, as to the Projects or their condition or that they shall be suitable
for the Company’s purposes or needs. The Issuer covenants and agrees that the
Issuer shall, at all times, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence or to assure the
assumption of its obligations under this Agreement and the Indenture by any
public body succeeding to its powers under the Act.

          SECTION 7.2. RIGHT OF ACCESS TO THE PROJECTS. The Company agrees that
the Issuer, the Credit Provider and the Trustee and their duly authorized agents
shall have the right at all reasonable times to enter upon the Projects to
examine and inspect the Projects as may be necessary to carry out or determine
compliance with this Agreement and the Reimbursement Agreement.

          SECTION 7.3. THE COMPANY TO MAINTAINITS EXISTENCE; CONDITIONS UNDER
WHICH EXCEPTIONS PERMITTED. The Company agrees and warrants that during the Term
the Company shall maintain its existence as a cooperative association duly
organized and in good standing under the laws of the State. The Company shall
not dissolve and wind up, dispose of all or substantially all of its assets or
consolidate with or merge into another entity, unless the resultant or
transferee entity is a party subject to personal jurisdiction in the State who
shall assume in writing all of the obligations of the Company under this
Agreement. The Company’s privileges under this Section may not be exercised
unless, (i) previously consented thereto in writing by the Credit Provider (if
such consent is required under the Reimbursement Agreement); and (ii) the
Trustee obtains a written opinion of Bond Counsel confirming that the
transaction to be undertaken pursuant to this Section shall not adversely affect
the exclusion of interest on the Bonds from gross income for federal income tax
purposes.

          SECTION 7.4. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. The Issuer
and the Company shall, from time to time, execute, acknowledge and deliver or
cause to be executed, acknowledged and delivered such supplements hereto and
such further instruments as may reasonably be required for correcting any
inadequate or incorrect description of the Projects for carrying out the
intention of or facilitating the performance of this Agreement.

          SECTION 7.5. THE ISSUER AND COMPANY REPRESENTATIVES. Whenever under
the provisions of this Agreement the approval of the Issuer or the Company is
required to take some action at the request of the other, such approval or such
request may be given for the Issuer by an Issuer Representative and for the
Company by a Company Representative, and the Trustee shall be authorized to act
on any such approval or request.

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          SECTION 7.6. REMOVAL OF LIENS RESPECTING COMPANY PAYMENTS.
Notwithstanding any discharge of the Indenture, termination or expiration of
this Agreement or payment of the Bonds, if any lien, encumbrance or charge of
any kind based on any claim of any kind (including, without limitation, any
claim for income, franchise or other taxes, whether federal, state or otherwise)
shall be asserted or filed against any amount paid or payable by the Company
under or pursuant to this Agreement or any order (whether or not valid) of any
court shall be entered with respect to any such amount by virtue of any claim of
any kind, in either case so as to:

 

 

 

          (a)          interfere with the due payment of such amount to the
Trustee or the due application of such amount by the Trustee pursuant to the
applicable provisions of the Indenture; or

 

 

 

          (b)          result in the refusal of the Trustee to make such due
application because of its good-faith determination that liability might be
incurred if such due application were to be made;

then the Company shall promptly take such action (including, but not limited to,
the payment of money) as may be necessary to prevent or to nullify the cause or
result of such interference, such obligation or such refusal, as the case may
be.

          SECTION 7.7. RELEASE AND INDEMNIFICATION. The Company hereby (i)
releases the Issuer its governing body members, officers, agents, including
independent contractors, consultants and legal counsel, servants and employees
(hereinafter, for purposes of this Section, the “indemnified parties”) from,
(ii) agrees that the indemnified parties shall not be liable for, and (iii)
agrees to indemnify and hold harmless the indemnified parties from and against
the following (except for matters directly resulting from the negligence, breach
of contract, willful misconduct or recklessness of an indemnified party or their
agents) all liabilities, losses, damages, costs, expenses, suits, claims,
settlements and judgments, of any nature whatsoever arising from or related in
any manner whatsoever to the acquisition, construction, improving, equipping,
ownership, leasing or operation of the Projects or any activities related to the
foregoing and the authorization, execution or delivery of the Bonds, the
offering or sale of the Bonds or any documents, action or transaction related to
any of the same.

          All covenants, stipulations, promises, agreements and obligations of
the Issuer contained herein shall not be deemed to be the covenants,
stipulations, promises, agreements and obligations of any governing body member,
officer, agent, consultant and legal counsel, servant or employee of the Issuer
in the individual capacity thereof. No recourse shall be had for the payment of
the principal or Redemption Price of or Purchase Price or interest on the Bonds
or for any claim based thereon or hereunder against the Issuer or any governing
body member, officer, agent, consultants and legal counsel, servant or employee
of the Issuer or any natural person executing the Bonds or pertaining to their
sale, delivery, payment, redemption or Mandatory Purchase or Optional Tender
Purchase.

          Neither the Issuer nor the Trustee shall be responsible or liable for
any market loss suffered in connection with the investment of funds made in
accordance with the Indenture, or shall have any liability for nonpayment of
interest on any uninvested moneys that the Trustee may hold at any time in trust
or receive under any of the provisions of the Agreement or the Indenture, except
as otherwise specifically agreed in writing.

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          Promptly after receipt by the Issuer or Trustee, as the case may be,
or any such other indemnified person of notice of the commencement of any action
in respect of which indemnity may be sought against the Company under this
Section, such person will notify the Company in writing of the commencement
thereof, and, subject to the provisions hereinafter stated, the Company shall
assume the defense of such action (including the employment of counsel who shall
be counsel satisfactory to the Issuer, Trustee or such other person as the case
may be, and the payment of expenses). Insofar as such action shall relate to any
alleged liability in respect of which indemnity may be sought against the
Company, the Issuer or any such other indemnified person shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the expense
of the Company unless the employment of such counsel has been specifically
authorized by the Company. The Company shall not be liable to indemnify any
person for any settlement of any such action effected without its consent.

          SECTION 7.8. COMPLIANCE WITH THE INDENTURE. The Company agrees that it
shall comply with the provisions of the Indenture with respect to the Company
and that the Company shall not interfere with the exercise of the power and
authority granted to the Trustee in the Indenture. The Company further agrees to
aid in the furnishing to the Issuer or the Trustee of any Opinion of Counsel
that may be required under the Indenture.

          SECTION 7.9. DELIVERY OF SUBSTITUTE CREDIT. The Company has caused the
Trustee to be provided with the Letter of Credit for the benefit of the holders
of all Bonds. At any time prior to full payment of all Bonds and the accrued
interest thereon, the Company may deliver a Substitute Credit in accordance with
Section 412 of the Indenture conforming to the definition of “Substitute Credit”
set forth in Section 101 thereof.

          SECTION 7.10. ANNUAL STATEMENT. The Company shall have an annual audit
made by an independent certified public accountant and shall furnish the Credit
Provider a copy of such audit promptly upon its completion but not later than
one hundred fifty (150) days after the end of each fiscal year of the Company
during the term of this Agreement.

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ARTICLE VIII

ASSIGNMENT, SALE, LEASING OF PROJECTS

          SECTION 8.1. ASSIGNMENT OF AGREEMENT; OR LEASING OF PROJECTS.

 

 

 

          (a)          This Agreement may be assigned by the Company, but only
if: (i) the assignee shall assume in writing, satisfactory to the Credit
Provider, all obligations and covenants of the Company hereunder in respect of
the interest assigned and shall deliver such assumption, and such other
documents or certificates as the Issuer and Bond Counsel shall deem reasonably
necessary, to the Trustee; and (ii) the Company shall furnish the Trustee, an
opinion of Bond Counsel to the effect that the assignment shall not result in
interest on the Bonds becoming included in the gross income of the Holders for
federal income tax purposes.

 

 

 

          (b)          None of the Projects shall be leased unless: (i) the
Company shall have first obtained prior written consent of the Credit Provider
(if such consent is required by the Reimbursement Agreement), and (ii) the
lessee shall expressly subordinate its rights under the lease to the rights of
the Issuer and the Trustee under this Agreement and (iii) the Company shall
furnish the Trustee an opinion of Bond Counsel to the effect that the leasing
shall not result in interest on the Bonds becoming included in the gross income
of Holders for federal income tax purposes.

 

 

          SECTION 8.2. SALE AND ENCUMBRANCE OF PROJECTS. The Company agrees
that, except as provided in Section 5.5 hereof, it will not during the Term
sell, assign, transfer, convey or otherwise dispose of any of the Projects or
any part thereof, unless:

 

 

 

          (a)          In the event any of the Projects or a material portion
thereof is sold, assigned, transferred or conveyed in connection with the sale
or transfer of a processing facility, the purchaser thereof shall receive an
assignment of this Agreement in accordance with Section 8.1, and the Credit
Provider shall consent thereto in writing. Upon such sale the Company shall be
released from all obligations of or performance hereunder thereafter to become
due; or

 

 

 

          (b)           In any other event, the proceeds from such sale,
assignment, transfer, conveyance or other disposition are deposited with the
Trustee and used to redeem a portion of the Bonds corresponding to the amount of
the Prior Bonds or Series 2010B Bonds issued to finance such Project or portion
of the Facilities on the earliest practicable redemption date.

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ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES

          SECTION 9.1. EVENTS OF DEFAULT DEFINED. The following shall be “Events
of Default” under this Agreement, and the term “Event of Default” shall mean,
whenever it is used in this Agreement, any one or more of the following events
(and the term “default” shall mean any event which would, with the passage of
time or giving of notice, or both, be an “Event of Default” hereunder):

 

 

 

 

 

 

          (a)          failure by the Company to pay in full when due any Basic
Payment and such amount remains unpaid on the next succeeding Interest Payment
Date, Redemption Date or Stated Maturity Date;

 

 

 

 

          (b)          failure by the Company to pay in full when due any
payments required to be paid under Section 5.2(b) (but only to the extent
amounts due under Section 5.2(b) remain unpaid on the Redemption Date
established under Section 5.2(b)) or Section 5.9 (but only to the extent amounts
due under Section 5.9 remain unpaid at the close of business on the applicable
Tender Date);

 

 

 

 

          (c)          the occurrence of an Act of Bankruptcy;

 

 

 

 

          (d)          if the Company shall:

 

 

 

 

 

 

 

 

(i)

admit in writing its inability to pay its debts generally as they become due;

 

 

 

 

 

 

 

 

(ii)

make an assignment for the benefit of its creditors;

 

 

 

 

 

 

 

 

(iii)

have appointed a receiver (or other similar official) for itself or for the
whole or any substantial part of its property;

 

 

 

 

 

 

          (e)          if a court of competent jurisdiction shall enter an order
or decree appointing, without the consent of the Company, a receiver or other
similar official for the Company or of the whole or substantially all of its
property; or

 

 

 

          (f)          failure by the Company to observe and perform any
covenant, condition, obligation or agreement on its part to be observed or
performed hereunder, other than as referred to in Section 9.1 (a), (b), (c), (d)
or (e) hereof, after written notice, specifying such failure and requesting that
it be remedied, given to the Company and the Credit Provider by the Trustee or
to the Company and the Trustee by the Holders of not less than twenty-five
percent (25%) of the aggregate principal amount of the Bonds then Outstanding,
and the continuance of such default for a period of thirty (30) days or such
longer period as shall be reasonably necessary to cure such default, but only if
in the Trustee’s reasonable opinion, the Company is continuing to pursue
diligently the cure of such default (which is subject to cure).

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          The Trustee shall promptly provide telephonic notice to the Company,
Credit Provider and Remarketing Agent, promptly confirmed in writing, upon the
Trustee receiving notice that any default is existing.

          SECTION 9.2. REMEDIES ON DEFAULT. If a Credit is in effect and an
Event of Default shall occur and be continuing pursuant to above paragraphs (a)
or (b) of Section 9.1, the Trustee may, and upon the request of the Credit
Provider or upon the request of Holders owning not less than twenty-five percent
(25%) principal amounts of Bonds outstanding (accompanied by the written consent
of the Credit Provider) shall, take any one or more of the following actions:

 

 

 

          (a)          Declare all Payments to be immediately due and payable
(being an amount equal to that necessary to pay in full the principal of and
interest accrued to the date for payment of all Bonds then outstanding, assuming
acceleration of the Bonds under the Indenture, and to pay all other amounts due
and payable hereunder), whereupon the same shall become immediately due and
payable.

 

 

 

          (b)          Take whatever action at law or in equity may appear
necessary or appropriate to collect the Payments then due and thereafter to
become due hereunder, or to enforce performance and observance of any
obligation, agreement, or covenant of the Company under this Agreement.

          Whenever any Event of Default occurs and is continuing, and if the
Credit is not in effect, the Issuer or the Trustee may, and upon the request of
the Holders owning not less than twenty-five percent (25%) principal amount of
all Bonds Outstanding shall, take whatever action, at law or in equity, as may
appear necessary or desirable to enforce performance and observance of any
obligation, agreement or covenant of the Company under this Agreement.

               Any amounts collected pursuant to action taken under this Section
shall be paid into the Bond Fund, except as provided in the Indenture, and
applied in accordance with the provisions of the Indenture, or if the Bonds have
been fully paid (or provision for payment thereof has been made in accordance
with the provisions of the Indenture) and all sums owing hereunder by the
Company to the Issuer have been paid, the amount so collected shall be paid
first to the Credit Provider to the extent of any amounts owing under the
Reimbursement Agreement and then to the Company.

          SECTION 9.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer to exercise any remedy reserved to the Issuer in this Article
IX, it shall not be necessary to give notice, other than such notice as may be
required in this Article IX. Such rights and remedies as are given the Issuer
hereunder shall also extend to the Trustee, and the Trustee and the Holders,
subject to the provisions of the Indenture, shall be entitled to the benefit of
all covenants and agreements herein contained.

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          SECTION 9.4. AGREEMENT TO PAY ATTORNEYS’ FEES AND EXPENSES. In the
event the Company should default under any of the provisions of this Agreement
and the Issuer or the Trustee or both shall employ attorneys or incur other
expenses for the collection of payments due or to become due or incur other
expenses for the collection of payments due or to become due or the enforcement
or performance or observance of any obligation or agreement on the part of the
Company herein contained, the Company agrees that it shall, on demand therefor,
pay to the Issuer or the Trustee, as the case may be, the reasonable fees of
such attorneys and such other expenses so incurred by the Issuer or the Trustee
or both.

          SECTION 9.5. No ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event
any agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waiver any other
concurrent, previous or subsequent breach hereunder.

          SECTION 9.6. RIGHTS OF CREDIT PROVIDER. The Company and the Issuer
hereby agree that the Credit Provider shall be subrogated to the rights of the
Company under this Agreement, including the Company’s options set forth in
Article X hereof, for any amounts paid under the Letter of Credit and not
reimbursed by the Company pursuant to the Reimbursement Agreement.

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ARTICLE X

COMPANY OPTIONS

          SECTION 10.1. OPTIONAL TERMINATION UPON DISCHARGE OF INDENTURE. The
Company shall have the following options to terminate this Agreement and
discharge the lien of the Indenture as provided in Section 1001 of the
Indenture:

 

 

 

          (a)          At any time prior to full payment of the Bonds (or
provision for payment thereof having been made in accordance with the provisions
of the Indenture), the Company may terminate this Agreement by giving the Issuer
notice in writing of such termination and by paying or causing to be paid to the
Trustee, for the account of the Issuer for deposit in the Bond Fund, an amount
of Eligible Funds which, when added to the amount on deposit in any Funds and
available therefor, shall be sufficient to discharge the Indenture in accordance
with its terms.

 

 

 

          (b)          At any time after full payment of the Bonds (or provision
for payment thereof having been made in accordance with the provisions of
Section 1001 of the Indenture) and arrangements satisfactory to the Trustee and
Issuer have been made for the discharge of all other accrued liabilities under
this Agreement, this Agreement shall terminate.

          Section 10.2. Optional Prepayment Because of Casualty or Condemnation.
The Company shall be permitted to prepay amounts due hereunder in full or in
part prior to the Stated Maturity of the Bonds (or provision for payment in full
thereof having been made under the Indenture), if any of the following shall
have occurred:

 

 

 

          (a)          Any Project or any material part of a Project shall have
been damaged or destroyed to such extent that in the reasonable judgment of the
Company such Project or any material part thereof (i) cannot reasonably be
restored within six (6) months to substantially its condition immediately
preceding such damage or destruction, or (ii) cannot reasonably be used to carry
on the normal operations of the Company for six (6) months, or (iii) the
reasonably estimated cost of restoration exceeds twenty percent (20%) of the
original face amount of the Bonds and is also reasonably estimated to exceed the
Net Proceeds; or

 

 

 

          (b)          By reason of the exercise of the power of eminent domain
by any governmental authority, title shall have been taken to all or a material
part of any Project, or so much thereof that in the reasonable judgment of the
Company such Project (i) cannot reasonably be restored within six (6) months to
substantially its condition immediately preceding such damage or destruction, or
(ii) cannot reasonably be used to carry on the normal operations of the Company
for six (6) months, or (iii) the reasonably estimated cost of restoration
exceeds twenty percent (20%) of the original face amount of the Bonds and is
also reasonably estimated to exceed the Net Proceeds; or

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          (c)           As a result of any changes in the Constitution of the
State or the Constitution of the United States of America, or of any legislative
or administrative action, whether state or federal, or of any final decree,
judgment or order of any court or administrative body, whether state or federal,
entered after the contest thereof by the Company in good faith, the agreements
contained in this Agreement shall have become impossible of performance in
accordance with the intent and purposes of the parties as expressed herein, or
unreasonable burdens or excessive liabilities shall have been imposed upon the
Company, including, but not limited to the imposition of new state or local ad
valorem, property, income or other taxes not imposed on the date of this
Agreement, other than ad valorem taxes upon privately owned property and for the
same general purpose as the Projects and special assessments levied in amounts
proportionate to and not exceeding the benefits of future public improvements to
the Company’s property.

To exercise such prepayment, the Company shall, within one hundred twenty (120)
days following the event as set forth in paragraph (a), (b) or (c) above, give
written notice to the Issuer, Credit Provider and the Trustee if any of the
Bonds shall then be unpaid and provision for the payment thereof has not been
made in accordance with the provisions of the Indenture and shall specify
therein the date of closing such prepayment, which date shall be not less than
ten (10) days nor more than ninety (90) days from the date such notice is
mailed. Such notice shall specify the Redemption Date for the Bonds to be
redeemed, which date shall be the first date succeeding the date set for closing
such prepayment for which the Trustee can properly give notice as provided in
Section 303 of the Indenture, and shall request the Trustee to take all steps
necessary under the applicable provisions of the Indenture to effect the
redemption of the Bonds on such date upon receipt in full of the prepayment. The
prepayment amounts by the Company pursuant to this Section shall be the sum of
the following:

 

 

 

          (i)          an amount of money to be paid into the Bond Fund which,
when added to the amount then on deposit with the Trustee in the Funds and
available for payment of the Bonds, shall be sufficient to pay the principal of
and accrued interest to the redemption date on all the Bonds to be redeemed in
accordance with the Indenture; plus

 

 

 

          (ii)          an amount of money equal to the Trustee’s fees and
expenses under the Indenture and the expenses of the Issuer accrued and to
accrue in connection with the redemption of the Bonds.

In such event, the Company may direct the Trustee to pay into the Bond Fund any
Net Proceeds of insurance or condemnation award which the Trustee may then hold
to be used solely for payment of principal of and accrued interest on the Bonds
on the date selected for redemption.

          Section 10.3. Optional Redemption of Bonds. The Company shall have the
option, at any time and from time to time, to direct the Issuer to cause all or
a portion, as the case may be, of Outstanding Bonds to be redeemed pursuant to
Section 301(a) of the Indenture on any Redemption Dates and at the prices
specified therein, from moneys available therefor in the Bond Fund or from
Eligible Funds paid by the Company or caused to be paid to the Trustee for
deposit in the Bond Fund for the purpose of such redemption prior to the giving
of notice of redemption. To exercise the foregoing option, the Company shall
deliver to the Issuer, Credit Provider and to the Trustee a certificate of a
Company Representative:

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          (a)          stating that the Company elects to exercise such option
and specifying the Redemption Date for the Bonds to be redeemed;

 

 

 

          (b)          specifying the aggregate principal amount and the
maturity of the Bonds to be redeemed and stating that all funds necessary to
effect such redemption have been deposited by the Company in the Bond Fund; and

 

 

 

          (c)          requesting the Trustee to take all steps necessary under
the applicable redemption provisions of the Indenture to effect the redemption
of the Bonds to be redeemed.

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ARTICLE XI

MISCELLANEOUS

          Section 11.1. Notices. All notices, certificates or other
communications hereunder shall be deemed sufficiently given when delivered or
when mailed by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:

 

 

 

To the Issuer:

 

Richland County
418 2nd Avenue North
Wahpeton, North Dakota 58075
Attention: County Auditor

 

 

 

To the Trustee:

 

Wells Fargo Bank, National Association
MAC N9311-115
625 Marquette Avenue, 11th Floor
Minneapolis, Minnesota 55479
Attention: Corporate Trust Department

 

 

 

To the Company:

 

Minn-Dak Farmers Cooperative
7525 Red River Road
Wahpeton, North Dakota 58075
Attention: Controller

 

 

 

To the Bank:

 

CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111
Attention: Corporate Finance Division

 

 

 

To the Remarketing Agent:

 

W.R. Taylor & Company, LLC
4740 Woodmere Boulevard
Montgomery, Alabama 36106
Attention: Robbins Taylor

          A duplicate copy of each notice, certificate or other communication
given hereunder by the Issuer or the Company to the other shall also be given to
the Trustee, the Credit Provider and the Remarketing Agent. The Issuer, the
Company, the Credit Provider, the Remarketing Agent and the Trustee may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.

          Section 11.2. Binding Effect. This Agreement shall inure to the
benefit of the Trustee, the Holders and the Credit Provider and shall inure to
the benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns (whether or not such successors or assigns are
specifically referred to in the definitions or other provisions hereof),
subject, however, to the limitations contained in Sections 7.3 and 8.1. This
Agreement is executed in part to induce the purchase of the Bonds and for the
further securing of the Bonds, and accordingly, all representations, warranties,
covenants and agreements of the parties hereto herein contained are hereby
declared to be for the benefit of the Holders from time to time of the Bonds
(whether or not so expressed) and may be enforced by or on behalf of such
Holders by the Trustee in accordance with the provisions of the Indenture.
Except as expressly provided in this Section, this Agreement shall not be deemed
to create any right in any person who is not a party hereto and shall not be
construed in any respect to be a contact, in whole or in part, for the benefit
of any third party.

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          Section 11.3. Severability. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

          Section 11.4. Amounts Remaining in Funds. It is agreed by the parties
hereto that any amounts remaining in any Funds upon expiration or sooner
termination of the Term, as provided in this Agreement, and after payment in
full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Indenture) and the fees, expenses and
advances of the Trustee, the Issuer and the Credit Provider, their agents and
counsel in accordance with the Indenture, shall, subject to the Indenture, be
paid to the Company.

          Section 11.5. Amendments, Changes and Modifications. Subsequent to the
issuance of the Bonds and so long as any Bonds remain Outstanding, this
Agreement, except as provided herein and in the Indenture, may not be
effectively amended, changed, modified, altered, supplemented or terminated.

          Section 11.6. Execution in Counterparts. This Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 11.7. Captions. The captions or headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or Sections of this Agreement.

          Section 11.8. Recording and Filing. The security interest of the
Trustee created by the Indenture and the assignment of such security interest to
the Trustee shall be perfected by the filing of financing statements which fully
comply with the Uniform Commercial Code--Secured Transactions. All necessary
instruments and continuation statements (but exclusive of the initial filing of
any financing statements) shall be prepared by the Trustee or its agents at the
expense of the Company and be recorded and filed by the Trustee or its attorneys
or agents within the time prescribed by law, including, but not limited to, the
Uniform Commercial Code--Secured Transactions of the State in order to continue
the security interest created by the Indenture.

          Section 11.9. Law to Govern. This Agreement is delivered in and shall
be governed by and construed in accordance with the laws of the State.

11-2

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          Section 11.10. Limitation on Issuer’s Liability. It is understood and
agreed by the Company that the Bonds shall not be a general obligation of the
Issuer or give rise to a charge against its general credit or taxing powers, but
rather shall be a special obligation payable solely from the revenues pledged
and assigned to the payment thereof and secured as provided in the Indenture. No
Holder or Holders of the Bonds shall ever have the right to compel any exercise
of any taxing power of the Issuer to pay the Bonds or the interest or premium,
if any, thereon nor to enforce payment thereof against any property of the
Issuer except the Projects and the revenues under this Agreement pledged to the
payment thereof or other amounts pledged pursuant to the Indenture. No failure
of the Issuer to comply with any term, condition, covenant or agreement herein
shall subject the Issuer to liability for any claim for damages, costs or other
financial or pecuniary charge except to the extent that the same can be
recovered from the Projects or the revenues therefrom, and no execution on any
claim, demand, cause of action or judgment shall be levied upon or collected
from the general credit, general funds or taxing power of the Issuer. The Bonds
shall not constitute a debt of the Issuer within the meaning of any
constitutional, statutory or charter limitation.

          Section 11.11. Credit Not in Effect. If a Credit is not in effect as
provided by Section 1115 of the Indenture, notwithstanding any other provision
herein to the contrary, no notice to or consent by, or action in respect of the
Credit Provider or the Credit shall be required hereunder.

(Remainder of this page intentionally left blank.)

11-3

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          IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan
Agreement to be executed in their respective names, all as of the date first
above written.

 

 

 

 

RICHLAND COUNTY, NORTHDAKOTA

 

 

 

 

By:

(ILLEGIBLE) [a105883001_v1.jpg]

 

 

Vice Chair, Board of County Commissioners

 

 

 

 

By:

(ILLEGIBLE) [a105883002_v1.jpg]

 

 

     County Auditor

 

 

 

 

MINN-DAK FARMERS COOPERATIVE

 

 

 

By:

(ILLEGIBLE) [a105883003_v1.jpg]

 

 

     President

11-4

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EXHIBIT A

DESCRIPTION OF PRIOR PROJECTS

1996 SOLID WASTE HANDLING AND DISPOSAL FACILITIES

Pulp Presses (2)
Multiclones with Aspirator
Sugar Dryer Emission Control
Beet Washing Equipment
Flume Water Mud Filters
Aerobic Treatment
Domestic Sewer System
Evaporation System-Yeast Waste

2002 SOLID WASTE HANDLING AND DISPOSAL FACILITIES

Anaerobic Sludge Filter System
Pulp Dryer
Dust Collectors

A-1

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EXHlBIT B

DESCRIPTION OF RECOVERY ZONE PROJECTS

Replace Modicon 800 Series I/O
Main MCC Expansion
Pipe Steam Dryer Vaper to Boiler
New Belt Cleaners
Extend Remelt Scroll
Molasses Railcar Loadout System
Beet Bunker Pokers
Increase Capacity of Trash Pumping Station
Flume Mud Bunker Overflow Screw Conveyer
Dewatering Louvers for Wet Pulp Chute
Raw Pan Automation
Dust Abatement
Yeast Plant Improvements
Loop Track Rail System
Fly Ash Bunker Expansion
Coal Unloading System
Evaporator for Steam Dryer

B-1

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EXHIBIT C

CERTIFICATE OF REQUISITION

$7,000,000
Richland County, North Dakota
Variable Rate Demand Recovery Zone Facility Revenue Bonds
(Minn-Dak Farmers Cooperative Project)
Series 2010B

Certificate of Requisition
of Minn-Dak Farmers Cooperative
As to Requested Payment or Reimbursement
From the Project Fund

Wells Fargo Bank, National Association
625 Marquette Avenue, 11th Floor
Minneapolis, Minnesota 55479
Attn: Corporate Trust Services

Dear Sirs:

In conformity with the provisions of Section 3.3 of the Loan Agreement between
Richland County, North Dakota, and Minn-Dak Farmers Cooperative, as an
authorized Company Representative, I hereby certify to you, as Trustee, as
follows:

          (1)          That the Company hereby requests payment or reimbursement
from the Project Fund as of the date hereof of the following amounts:

 

 

 

Payments:

 

 

 

 

 

To

For

Amount

 

 

 

Reimbursement to Company:

 

 

 

 

 

Payee

For

Amount

C-l

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          (2)         That each of the above items for which payment or
reimbursement is requested is or was necessary in connection with the above
Project, and that none of such items has formed the basis for any previous
payment or reimbursement from the Project Fund.

          (3)         That the Company has received properly executed lien
waivers from all contractors, subcontractors and suppliers for materials, goods
and services previously paid from the Project Fund.

 

 

 

 

 

          Dated:

 

.

 

 

 

Sincerely,

 

 

 

MINN-DAK FARMERS COOPERATIVE

 

 

 

By: 

 

 

 

Authorized Company Representative

CONSENT OF CREDIT PROVIDER

          CoBank, ACB as the Credit Provider, hereby consents to the foregoing
disbursement from the Project Fund.

 

 

 

 

 

 

 

          Dated:

 

 

 

 

 

COBANK, ACB

 

 

 

By: 

 

 

 

      Its: 

 

 

C-2

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