exv10w1



 





Exhibit 10.1




Execution Document




AGREEMENT REGARDING DISTRIBUTION OF ASSETS




     THIS AGREEMENT REGARDING DISTRIBUTION OF ASSETS (this “Agreement”) is made as of September 4,
2007, by and between United Country Brands, LLC (“UCB”), its parent organization, CHS Inc. (“CHS”)
and Winfield Solutions, LLC (“WS”), and its parent organization, Land O’Lakes, Inc. (“LOL”).



RECITALS




     WHEREAS, UCB and LOL are the member owners of Agriliance LLC (Agriliance LLC and its
subsidiaries referred to herein collectively as “Agriliance”), with each of them holding fifty
percent governance and financial interests. Agriliance is engaged in the wholesale distribution
and marketing of crop nutrient products, crop protection products, seed and related technical
services to farmers and ranchers through local cooperatives and independent dealers in North
America and the sale of products and services through retail locations.



     WHEREAS, to enhance operating efficiencies, UCB, CHS, WS and LOL have agreed to more closely
align certain of the business segments of Agriliance with each parent entity. The parties have
agreed that the crop nutrient business segment of Agriliance (“CN Business”) will be aligned with
CHS and the crop protection products business segment (“CPP Business”) will be aligned with LOL.
These objectives will be met by causing a distribution of the CN Business Assets (as defined
hereinafter) to CHS, as directed by UCB, and a distribution of the CPP Business Assets (as defined
hereinafter) to WS, as directed by LOL, all in accordance with the provisions set forth herein.
Agriliance will continue to own and operate its remaining assets.



     NOW, THEREFORE, in consideration of the Recitals set forth above which are contractual in
nature and part of this Agreement, and the other agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties further agree as follows:



I. DEFINITIONS




     1.1 Definitions. The following capitalized terms used in this Agreement
have the meanings set forth below:



     “Affiliate” means any person or entity which controls, is controlled by or under common
control with another person or entity. For purposes of this Agreement, “control” means, in the
case of a privately held person or entity, the ownership of greater than tenty-five percent (25%)
of the voting interests of the person or entity, or the right to appoint fifty percent (50%) or
more of the members of the governing body of the person or entity and in the case of a publicly
traded person or entity, ownership of greater than five percent (5%) of the outstanding voting
securities of such person or entity.



     “Bank Debt” means the Private Placement Notes, the Revolving Credit Agreement, and the
Securitization Agreement.



     “Business Day” means any day excluding Saturday, Sunday or any day which the Federal Reserve
Bank of Minneapolis is closed.



     “CN Inventories” means all raw materials, ingredients, supplies, materials, work-in-
progress, semi-finished goods, finished goods, components, spare parts and packaging materials
used in the CN Business.



     “CN Site Contamination” means the presence of any Material of Environmental Concern
in soil, groundwater or surface water at any CN Owned Real Property or CN Leased Real
Property.



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



     “Contract” means a contract, agreement, commitment or binding understanding that is in effect
as of the date of this Agreement or any time after the date of this Agreement, including, but not
limited to, leases for the CPP Leased Real Property and CN Leased Real Property (including all
amendments, modifications, schedules, addenda, exhibits and attachments thereto).



 









 





     “CPP Inventories” means all raw materials, ingredients, supplies, materials, work-in-
progress, semifinished goods, finished goods, components, spare parts and packaging materials
used in the CPP Business.



     “CPP Site Contamination” means the presence of any Material of Environmental Concern
in soil, groundwater or surface water at any CPP Owned Real Property or CPP Leased Real
Property.



     “Distribution
Date” means September 4, 2007, which is the date upon which the distributions
contemplated hereunder will occur.



     “Effective Time” means 12:01 a.m. on September 1, 2007.



     “Encumbrance” means any mortgage, deed of trust, lien, option, pledge, security interest,
right of first refusal, easement, right of way, title imperfection, restriction, zoning ordinance
or similar restriction of any kind.



     “Environmental Claim” means any actual or threatened claim, action, cause of action or
investigation by any Person other than UCB, CHS, LOL, and WS, alleging liability (including,
without limitation, liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties) arising out of,
based on or resulting from (a) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned or operated by Agriliance or (b)
circumstances forming the basis of any violation of any Environmental Law.



     “Environmental, Health and Safety Requirements” means all Laws concerning public health and
safety, worker health and safety related to Materials of Environmental Concern, and/or pollution
or protection of the environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage, emissions, disposal,
distribution, labeling, testing, processing, discharge, release, threatened release, control, or
cleanup of any Materials of Environmental Concern.



     “Environmental Law” means all Laws relating to pollution or protection of the environment,
including Laws relating to releases of Materials of Environmental Concern or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern, including without limitation the federal
Comprehensive Environmental Response, Compensation and Liability Act, as amended, the federal
Resource Conservation and Recovery Act, as amended, the federal Clean Water Act as amended, the
federal Toxic Substances Control Act as amended, and the federal Clean Air Act, as amended, and
regulations promulgated thereunder.



     “Environmental
Response Action” means any action undertaken to remediate soil, groundwater or
surface water to applicable standards, including standards that are based on reasonable projections
concerning the property’s future use (often known as risk-based remediation standards), or
undertaken in lieu of, or in addition to, remediation in order to prevent or minimize harm to human
health or the environment from the presence of any Material of Environmental Concern in soil,
groundwater or surface water. This definition shall include any actions or measures taken, even if
there is no legal obligation to take such action or measures, and even if no legal liability will
result from not taking such action or measures, if in the exercise of commercially reasonable
discretion, the party taking such actions or measures believes such will avoid or reduce future
Liabilities.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations thereunder.



     “Governmental Authorization” means any approval, consent, license, permit, waiver,
registration or other authorization issued, granted, given, made available or otherwise required
by any Governmental Entity or pursuant to Law.



     “Governmental Entity” means any federal, state or local entity or authority exercising
executive, legislative, judicial, regulatory, administrative or taxing functions of or pertaining
to government.



     “Governmental Order” means any judgment, injunction, writ, order, ruling, award or
decree by any Governmental Entity or arbitrator.



     “Intellectual Property Rights” means patents and patent applications; trademarks, trade
names, and the trade dress related to such trademarks and trade names; designations of origin;
works of authorship; copyrights;



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copyrightable works; technical research; product formulations, product specifications, software,
manuals, source codes documentation, configuration, architecture, know-how, inventions (whether
patented, patentable or unpatentable); methods; information; data; domain names; confidential
information; trade secrets; and any other intellectual or proprietary rights (including without
limitation Contracts relating to any of the foregoing).




     “Law” means any constitution, law (including principle of common law), ordinance,
regulation, statute, treaty, ruling, determination, order or legally binding directive of any
Governmental Entity.



     “Liability” means any liability or obligation whether accrued, absolute, contingent, whether
due or to become due and regardless of when asserted.



     “Litigation” means any claim, action, arbitration, mediation, proceeding, agency complaint,
litigation or suit (whether civil, criminal, administrative or investigative) commenced,
brought, conducted or heard by or before any Governmental Entity or arbitrator or mediator.



     “Loss” means any damage, deficiency, penalty, fine, cost, amount paid in settlement, monetary
loss, expense or fee, including court costs and reasonable attorneys’ fees and expenses.



     “Materials of Environmental Concern” means all substances and materials listed, defined in or
in any way regulated by, or for which liability may be incurred under, any Environmental, Health
and Safety Requirement or Environmental Law, including, without limitation, pollutants,
contaminants, wastes, toxic substances, radioactive materials, asbestos, petroleum and petroleum
products.



     “Permitted Encumbrances” means (a) Encumbrances for Taxes and other governmental charges and
assessments that are not yet due and payable or which are being contested in good faith by
appropriate proceedings, (b) easements, rights of way, title imperfections and restrictions,
zoning ordinances and other similar encumbrances affecting the CN Owned Real Property or the CPP
Owned Real Property and which do not materially interfere with the use or title thereof in the
ordinary course of business.



     “Person” means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture, Governmental Entity
or other entity.



     “Private Placement Notes” means the following notes issued by Agriliance pursuant to that
certain Note Agreement, dated as of December 4, 2003, as amended: $42,000,000 of 5.66% Series A-l
Senior Secured Notes due December 4, 2008, $6,000,000 of Floating Rate Series A-2 Senior Secured
Notes due December 4, 2008, $47,000,000 of 6.31% Series B-l Senior Secured Notes due December 4,
2010, and $5,000,000 of Floating Rate Series B-2 Senior Secured Notes due December 4, 2010



     “Responsibility” means responsibility under the various Environmental Laws for contamination,
or for conducting Environmental Response Action or other remedial measures. This definition shall
include any actions or measures taken, even if there is no legal obligation to take such action or
measures, and even if no legal liability will result from not taking such action or measures, if in
the exercise of commercially reasonable discretion, the party taking such actions or measures
believes such will avoid or reduce future Liabilities.



     “Revolving Credit Agreement” means, as amended, that certain $325 Million Third Amended and
Restated Revolving Credit Facility, dated as of December 20, 2005, among Agriliance, Agro
Distribution, LLC, as borrowers, the lenders party thereto, CoBank, ACB, as administrative agent,
and General Electric Capital Corporation as collateral agent.



     “Securitization Agreement” means, as amended, the Amended and Restated Receivables Purchase
Agreement, dated as of November 16, 2005, by and among Agriliance SPV, LLC, as seller, Agriliance
LLC, as initial servicer and originator, CoBank, ACB and the other purchasers from time to time
party thereto, and CoBank, ACB, as administrator.



     “Taxes” means all taxes, charges, fees, levies or other assessments, including all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, social security, unemployment, excise, estimated, severance,
stamp, occupation, property or other taxes, customs duties, fees, assessments or charges of any
kind whatsoever, including all interest and penalties thereon, and additions to tax or additional
amounts imposed by any Governmental Entity.



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     “Third Party Licenses” means license agreements or arrangements between either LOL or
Agriliance and a third party software provider which may or may not contain terms and conditions
prohibiting the transfer of Intellectual Property to either CHS or LOL. The parties agree that
should such prohibitive terms exist in the license agreements the Intellectual Property associated
with such license agreements may not be transferred to the relevant party. This definition is not
intended to diminish or eliminate the obligations of the parties to assist each other in the
transfer of an Third Party License to the other party as further described in Section 9.2. below:



     1.2 Other Defined Terms. The following terms are defined in the sections indicated



	 	 	 	 	 
	Term	 	 	Section
	Active Employees
	 	 	 	7.4
	Controlling Party
	 	 	 	8.3
	CN Business
	 	 	 	Preamble
	CN Business Assets
	 	 	 	3.1
	CN Contracts
	 	 	 	3.1(d)
	CN Equity Interests
	 	 	 	3.1(h)
	CN Employees
	 	 	 	7.1
	CN Intellectual Property
	 	 	 	3.1(g)
	CN Leased Real Property
	 	 	 	3.1(b)
	CN Obligations
	 	 	 	3.2
	CN Owned Real Property
	 	 	 	3.1(a)
	CN Prepaid Customer Accounts
	 	 	 	3.2(a)
	CN Prepaid Supplier Accounts
	 	 	 	3.1(i) CN
	Product Registrations
	 	 	 	3.1(j) CN
	Site Contamination
	 	 	 	3.2(b)
	CN Supplier Rebate Accruals
	 	 	 	3.1(n)
	CN Tangible Personal Property
	 	 	 	3.1(c)
	Collateral Source
	 	 	 	12.7
	CPP Business
	 	 	 	Preamble
	CPP Business Assets
	 	 	 	4.1
	CPP Contracts
	 	 	 	4.1(e)
	CPP Employees
	 	 	 	7.2
	CPP Equity Interests
	 	 	 	4.1(d)
	CPP Intellectual Property
	 	 	 	4.1(h)
	CPP Leased Real Property
	 	 	 	4.1(b)
	CPP Obligations
	 	 	 	4.2
	CPP Owned Real Property
	 	 	 	4.1(a)
	CPP Prepaid Customer Accounts
	 	 	 	4.2(a)
	CPP Prepaid Supplier Accounts
	 	 	 	4.1(c)
	CPP Product Registrations
	 	 	 	4.1(k)
	CPP Site Contamination
	 	 	 	4.2(b)
	CPP Supplier Rebate Accruals
	 	 	 	4.1(m)
	CPP Tangible Personal Property
	 	 	 	4.1(c)
	Estimated Inventories
	 	 	 	6.5(b)
	Final Balance Sheet
	 	 	 	6.2
	Hired CN Employees
	 	 	 	7.1
	Hired CPP Employees
	 	 	 	7.2
	Indemnified Party
	 	 	 	12.5
	Indemnifying Party
	 	 	 	12.5
	Interim Balance Sheet
	 	 	 	6.2
	Post Transfer Period
	 	 	 	9.1(c)
	Pre-Transfer Period
	 	 	 	9.1(c)
	Property Taxes
	 	 	 	9.1(c)
	Retained Environmental Liabilities
	 	 	 	8.1
	Title Commitment
	 	 	 	9.1(a
	Title Company
	 	 	 	9.1(a)
	Third Party Action
	 	 	 	12.6






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II. GENERAL OVERVIEW OF DISTRIBUTION PROCESS




     To clarify the intent of the parties, a general overview of the distribution process is as
follows:



     2.1 Retire Portions of Bank Debt of Agriliance; Additional Payment to CHS. The
parties recognize that the assets to be distributed hereunder constitute collateral for the Bank
Debt. Further, the parties recognize and agree that the value attributed to the CPP Business
Assets exceeds the value attributed to the CN Business Assets. Because the parties intend to
maintain their current membership interests in Agriliance after the distribution of assets
hereunder, the parties agree that LOL shall, on the Distribution Date, make those payments against
the Bank Debt on behalf of Agriliance as set forth in that certain Agreement to Pay Debt dated
September 4, 2007, by and between LOL and Agriliance, a copy of which is attached hereto as
Exhibit A. To the extent additional funds are necessary to bring into equal balance the value
received by each party, LOL shall pay the requisite cash directly to CHS on the Distribution Date.



     2.2 Distribution of Assets; Assumption of Certain Liabilities. On
the Distribution Date, the parties shall cause the following to occur:




     (a) Agriliance shall distribute the CN Business Assets to CHS and CHS shall assume
the CN Business Obligations; and,




     (b) Agriliance shall distribute the CPP Business Assets to WS and WS shall assume
the CPP Business Obligations.



     2.3 Timing. The parties recognize that the Distribution Date will be September 4,
2007, and that September 1 through September 3, 2007, are not Business Days. For purposes of allocating
responsibility for ordinary income gained and ordinary expenses incurred from the conduct of the CN Business and
the CPP Business in the ordinary course, and except as otherwise provided for herein, the parties
agree that such responsibility shall be treated as if the distribution occurred as of September 1, 2007. The
parties recognize that the distributions contemplated by Sections HI and IV of this Agreement and the cash equalization
payment from LOL to CHS contemplated by paragraph 2.1 of the Agreement are all scheduled to occur essentially
simultaneously. The parties also recognize that for tax purposes, these transactions (i.e., the distributions
of the businesses and the cash equalization payment) will have to be reported as occurring in sequence which will have
tax implications. Therefore, the parties agree to report the transaction consistently in an order to be
determined by the parties so as to minimize the tax liabilities of the parties.



     2.4 A griliance Continues Operations. Agriliance will continue its operations as a
limited liability company in which LOL and UCB each will continue to have fifty percent financial and governance rights.



III. DISTRIBUTION OF CN BUSINESS ASSETS TO CHS;

ASSUMPTION OF CERTAIN CN BUSINESS OBLIGATIONS




     3.1 Distribution of CN Business Assets. On the Distribution Date UCB and LOL
shall cause Agriliance to distribute to CHS all of Agriliance’s right, title and interest in and
to the following assets and property of Agriliance, free and clear of all encumbrances other than
the Permitted Encumbrances (collectively, the “CN Business Assets”):




     (a) all of the real property owned by Agriliance described on Schedule 3.1(a) (the
“CN Owned Real Property”), including all improvements and fixtures thereon and all rights
and easements appurtenant thereto;




     (b) leasehold interests in all of the real property leased by Agriliance and
described on Schedule 3.1(b) (the “CN Leased Real Property”), including all Agriliance’s
rights in the improvements and fixtures thereon and all rights and easements appurtenant
thereto;




     (c) all machinery, equipment, tools, furniture, office equipment, computer hardware,
computer software used on such computer hardware (excluding, however, such items of
Intellectual Property which



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are otherwise provided for in this Agreement and subject to Third Party Licenses) supplies,
materials, vehicles and other items of tangible personal property of every kind owned,
leased, or subleased by Agriliance and used in the operation of the CN Business and located
at the CN Owned Real Property or the CN Leased Real Property, and those additional items
described on Schedule 3.1(c) (the “CN Tangible Personal Property”).




     (d) all Contracts primarily related to the operation of the CN Business to which
Agriliance is a party or a third party beneficiary, including any lease agreements pertaining
to the CN Leased Real Property or the CN Personal Tangible Property, and the Contracts listed
on Schedule 3.1(d) (the “CN Contracts”);




     (e) to the extent legally transferable, all Governmental Authorizations held by
Agriliance and utilized to own, lease or operate the CN Business Assets or to conduct the CN
Business as presently operated.




     (f) all written materials, data and records of Agriliance related exclusively to the
operation of the CN Business, including (i) client, customer, prospect, supplier, dealer and
distributor lists and records, (ii) service catalogs and brochures, (iii) sales and
marketing, advertising and promotional materials, (iv) research and development materials,
reports, and records, (v) maintenance records and other documents relating to the CN Tangible
Personal Property, (vi) purchase orders and invoices, (vii) sales orders and sales order log
books, (viii) correspondence, (ix) books, records, journals and ledgers, (x) product ideas
and developments, and, (xi) all data to support the CN Product Registrations;




     (g) subject to Third Party Licenses, all of Agriliance’s rights in the Intellectual
Property Rights that are owned by Agriliance or licensed to Agriliance, used in connection
with the conduct of the CN Business and are listed on Schedule 3.1(g) (the “CN Intellectual
Property”);




     (h) the equity interests held by Agriliance in the following
entities (the “CN Equity Interests”):





Northwest Iowa Agronomy LLC

Southwest Crop Nutrients, LLC 

Loomis Crop Nutrients LLC

Cooperative Agronomy Services 

Plains Partners,LLC




     (i) those deposits or prepaid accounts to suppliers set forth on
Schedule 3.1(i) (the “CN Prepaid Supplier Accounts”);




     (j) the CN Inventories set forth on Schedule 3.1(j);




     (k) to the extent legally transferable, those state and federal registrations as
set forth on Schedule 3.1 (k) (the “CN Product Registrations”) and associated assets, including (i)
confidential statements of formulations, (ii) data files/packages for each product, (iii) trade secrets, know-how,
specifications, technical processes, and information used in the manufacture of each product, (iv) any
task force memberships not regarded as a CN Equity Interest, and (v) all other related data;




     (1) all storage tanks for the storage of ammonia products commonly referred to in the
industry as “ammonia bullets” or “NH3 tanks” owned or leased by Agriliance, wherever located;




     (m) assets supporting accrued benefits under Agriliance non-qualified benefit plans for
Hired CN Employees, as described on Schedule 3.1(m);




     (n) accruals for CN supplier rebates as set forth on Schedule 3. l(n) (the “CN
Supplier Rebate Accruals”); and,




     (0) the goodwill associated with the CN Business.



     3.2 Assignment and Assumption of Certain CN Obligations. Agriliance shall assign,
and CHS shall assume, pursuant to an Assignment and Assumption of Certain CN Obligations Agreement attached
hereto in the



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form of Exhibit B, the following, and only the following, obligations and Liabilities of
Agriliance (the “CN Obligations”):





     (a) Contract Obligations; CN Prepaid Customer Accounts; CN Equity Interests. The
obligations of Agriliance under the CN Contracts arising after the Effective Time; provided,
however, that CHS shall not assume any obligations arising as a result of Agriliance’s breach
of, or failure to pay in the ordinary course in accordance with the terms of any CN Contract
prior to the Effective Time, which such responsibility shall remain with Agriliance; and, all
Liabilities for delivery of prepaid products or services of the CN prepaid accounts listed on
Schedule 3.2(a) (the “CN Prepaid Customer Accounts”); and, the obligations of Agriliance
under the CN Equity Interests arising after the Effective Time; CHS shall not assume any
obligations of Agriliance under the CN Equity Interests to the extent arising prior to the
Effective Time, which such responsibility shall remain with Agriliance.




     (b) Environmental Contamination at CN Properties. Except as provided in Article VIII,
the Responsibility and Liability of Agriliance for any Environmental Response Action at any
CN Owned Real Property or any CN Leased Real Property




     (c) Other Environmental Conditions. The Responsibility and Liability of Agriliance for
any physical and operational features not in compliance with any Environmental Law at any CN
Owned Real Property or any CN Leased Real Property, excluding CN Site Contamination;
provided, however, that to the extent a fine or penalty for such non-compliant features is
allocated or attributed in any part to ownership or operation by Agriliance prior to the
Effective Time, then Agriliance’s allocable share shall be retained by Agriliance; and




     (d) Non-Qualified Plan Liabilities. Liabilities to Hired CN Employees for benefits
accrued under Agriliance non-qualified benefit plans.



     IV. DISTRIBUTION OF CPP BUSINESS ASSETS TO WS;
ASSUMPTION OF CERTAIN CPP BUSINESS OBLIGATIONS



     4.1 Distribution of CPP Business Assets. On the Distribution Date, and as of
the Effective Time, UCB and LOL shall cause Agriliance to distribute to WS (or, with respect to certain items,
distribute to LOL as LOL may direct) all of Agriliance’s right, title and interest in and to the
following assets and property of Agriliance, free and clear of all encumbrances other than the
Permitted Encumbrances (collectively, the “CPP Business Assets”):




     (a) all of the real property owned by Agriliance described on Schedule 4.1(a) (the “CPP
Owned Real Property”), including all improvements and fixtures thereon and all rights and
easements appurtenant thereto;




     (b) leasehold interests in all of the real property leased by Agriliance and described
on Schedule 4.1 (b) (the “CPP Leased Real Property”), including all Agriliance’s rights in
the improvements and fixtures thereon and all rights and easements appurtenant thereto;




     (c) all machinery, equipment, tools, furniture, office equipment, computer hardware,
computer software used on such computer hardware (excluding, however, such items of
Intellectual Property which are otherwise provided for in this Agreement and subject to Third
Party Licenses) supplies, materials, vehicles and other items of tangible personal property
of every kind owned, leased or subleased by Agriliance and used in the operation of the CPP
Business and located at the CPP Owned Real Property or the CPP Leased Real Property and those
additional items described on Schedule 4.1(c) (the “CPP Tangible Personal Property”);




     (d) all of the equity interests owned by Agriliance in each of the following entities
(the “CPP Equity Interests”):




Impec Services, LLC

GHB Services, LLC

Farm Kan, LLC;

Spray Drift Task Force, LLC



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Outdoor Residential Exposure Task Force LLC;
and 
Agriculture Re-Entry Task Force LLC.




     (e) all Contracts primarily related to the operation of the CPP Business to which
Agriliance is a party or a third party beneficiary, including any lease agreements pertaining
to the CPP Leased Real Property or the CPP Tangible Personal Property, and all of the
Contracts listed on Schedule 4.1(e) (the “CPP Contracts”);




     (f) to the extent legally transferable, all Governmental Authorizations held by
Agriliance and utilized to own, lease or operate the CPP Business Assets or to conduct the
CPP Business as presently operated;




     (g) all written materials, data and records of Agriliance related exclusively to the
operation of the CPP Business, including (i) client, customer, prospect, supplier, dealer and
distributor lists and records, (ii)service catalogs and brochures, (iii) sales and marketing,
advertising and promotional materials, (iv) research and development materials, reports and
records, (v) maintenance records and other documents relating to the CPP Tangible Personal
Property, (vii) purchase orders and invoices, (vi) sales orders and sales order log books,
(vii) correspondence, (viii) books, records, journals and ledgers, (ix) product ideas and
developments; and, (x) all data to support CPP Product Registrations.




     (h) subject to Third Party Licenses, all of Agriliance’s rights in the Intellectual
Property Rights owned or licensed by it and used in connection with the conduct of the CPP
Business, and any others listed on Schedule 4.1(h) (the “CPP Intellectual Property”) The
parties agree that certain of these Intellectual Property Rights may be distributed to LOL
instead of WS, all as directed by LOL;




     (i) the CPP Inventories listed on Schedule 4.1(i);




     (j) those deposits or prepaid accounts to suppliers listed on Schedule 4.1 (j) (the
“CPP Prepaid Supplier Accounts”);




     (k) to the extent legally transferable, those state and federal product registrations
and registrations in Mexico as set forth on Schedule 4.1(k) (the “CPP Product
Registrations”)and associated assets including, (i) confidential statements of formulations,
(ii) data files/packages for each product, (iii) trade secrets, know-how, specifications,
technical processes, and information used in the manufacture of each product, (iv) any task
force memberships not regarded as a CPP Equity Interest, and (v) all other related data;




     (1) assets supporting accrued benefits under Agriliance non-qualified benefit
plans for Hired CPP Employees as described on Schedule 4.1(1);




     (m) accruals for CPP supplier rebates as set forth on Schedule 4.1 (m) (the “CPP
Supplier Rebate Accruals”); and,




     (n) the goodwill associated with the CPP Business.



     4.2 Assignment and Assumption of Certain CPP Obligations. Agriliance shall
assign, and WS shall assume, pursuant to an Assignment and Assumption of Certain CPP Obligations
Agreement attached hereto in the form of Exhibit C, the following, and only the following,
obligations and Liabilities of Agriliance (the “CPP Obligations”):




     (a) Contract Obligations; CPP Prepaid Customer Accounts; CPP Equity Interests. The
obligations of Agriliance under the CPP Contracts arising after the Effective Time; provided,
however, that WS shall not assume any obligations arising as a result of Agriliance’s breach
of, or failure to pay in the ordinary course in accordance with the terms of any CPP Contract
prior to the Effective Time, which such responsibility shall remain with Agriliance; and, all
Liabilities for delivery of prepaid products or services of the CPP prepaid customer accounts
listed on Schedule 4.2(a) (the “CPP Prepaid Customer Accounts”); and, the obligations of
Agriliance under the CPP Equity Interests arising after the Effective Time; WS shall not
assume any obligations of Agriliance under the CPP Equity Interests to the extent arising
prior to the Effective Time, which such responsibility shall remain with Agriliance.




     (b) Environmental Contamination at CPP Properties. Except as provided in Article
VIII, the




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Responsibility and Liability of Agriliance for any Environmental Response Action at any CPP
Owned Real Property or any CPP Leased Real Property




     (c) Other Environmental Conditions. The Responsibility and Liability of Agriliance for
any physical and operational features not in compliance with any Environmental Law at any
CPP Owned Real Property or any CPP Leased Real Property, excluding CPP Site Contamination; provided,
however, that to the extent a fine or penalty for such non-compliant features is allocated or attributed
in any part to ownership or operation by Agriliance prior to the Effective Time, then Agriliance’s
allocable share shall be retained by Agriliance; and




     (d) Non-Qualified Plan Liabilities. Liabilities to Hired CPP Employees for benefits
accrued under Agriliance non-qualified benefit plans.



     V. ASSETS RETAINED BY AGRILIANCE; OBLIGATIONS RETAINED BY AGRILIANCE



     5.1 Assets Retained by Agriliance. The parties recognize and agree that Agriliance is
not distributing, but is retaining, all of its assets not specifically identified as distributed hereunder,
including, but not limited to the following:




     (a) Equity Interests. Agriliance’s equity interests in Agro Distribution, LLC,
Agriliance SPV, LLC, Agriliance AFC, LLC, Wilco-Agriliance, LLC, Westco Agronomy Company,
LLC, Vision Ag LLC, Valley Agronomics, LLC, Wisconsin River Agronomy, LLC, North Plains
Fertilizer & Chemical, L.L.C., RSA Microtech, Agriliance de Mexico, S.A and.,Templeton Crop
Nutrients, LLC.




     (b) Idle Properties. The following real properties owned by Agriliance but not currently
active in the conduct of Agriliance’s business:



     Shenandoah, IA Albert Lea, MN Janesville, MN



     (c) Cash. All of Agriliance’s cash and cash equivalents (including marketable
securities and short-term investments);



     (d) Accounts Receivable. Except for the CN Prepaid Supplier Accounts, the CN Supplier
Rebate Accruals, the CPP Prepaid Supplier Accounts, and the CPP Supplier Rebate Accruals, all
of Agriliance’s (i) accounts receivable and other rights to payment from customers of
Agriliance arising prior to the Effective Time and the full benefit of all security for such
accounts receivable or rights to payment, (ii) other accounts or notes receivable of
Agriliance and the full benefit of all security for such accounts or notes and (iii)
Agriliance’s rights related to any of the foregoing; and,



     (e) Retail Assets. Those assets generally described by the parties as the retail north
and retail south assets.



     5.2 Retention of Obligations by Agriliance The parties agree that neither CHS nor WS
is assuming or intending to assume or agreeing to pay, discharge, perform or fulfill any obligations or
Responsibility or Liability not specifically assumed by them in accordance with Sections 3.2 and 4.2 hereunder, all of
which such obligations and Liabilities shall remain with Agriliance, including, but not limited to, the following:




     (a) Retained Assets: Any obligations of Agriliance relating to the assets retained by
Agriliance;




     (b) Tax Liability: Except as provided in Section 9.1(c), neither CHS nor WS is assuming
any Tax Liability of any kind of Agriliance, including Tax liabilities arising, imposed or
assessed in respect of Agriliance’s operation of either the CN Business or the CPP Business
or its ownership of either the CN Business Assets or the CPP Business Assets for or
applicable to periods of time ending on or before the Effective Time (such as Taxes on or
measured by net worth, sales and use Taxes, property Taxes, liabilities for withheld federal
and state income Taxes and employee or employer Federal Insurance Contribution Act Taxes and
tonnage Taxes);




     (c) Employees. Any obligations for Agriliance employees who are not Hired CN
Employees



9









 






or Hired CPP Employees. Agriliance shall also retain any obligations arising before
September 1, 2007 with respect to Hired CN Employees or Hired CPP Employees, including but
not limited to obligations for personal, sick and vacation time accruals, workers’
compensation accruals, any liability arising out of or relating to an employee claim or
grievance, liabilities and obligations to any employee under any welfare benefit plan,
obligations to pay wages or incentives, bonuses or variable compensation, and post-
retirement welfare benefit obligations. Further, Agriliance shall retain and neither CHS or
WS is assuming any obligations for severance pay, termination benefits, or retention payments
of any kind whatsoever, including COBRA obligations, for any employees who do not accept
employment with either CHS or WS and for those LOL or Hired CPP Employees identified in
Schedule 5.2(c), regardless of whether such termination occurs before or after the Effective
Time; provided, however, that such termination occurs on or before the termination of the
last transition services agreement related to Agriliance or any purchaser of Agriliance
assets.




     (d) Debt. Any obligations for any indebtedness for borrowed money;




     (e) Warranties and Returns: Any obligations or liabilities with respect to product
returns or product warranty claims relating to the operation of the businesses prior to the
Effective Time;




     (f) Accounts Payable. Except for CN Prepaid Accounts or CPP Prepaid Accounts, any
obligations for any accounts payable arising from the conduct of business prior to the
Effective Time;




     (g) Liability; Litigation. Except as specifically assigned and assumed under Sections
3.2 and 4.2, any Responsibility, Liability or Litigation to the extent pertaining to the time
period prior to the Effective Time, including without limitation, any (i) Liability or
Litigation pertaining to noncompliance prior to the Effective Time with any Laws,
Governmental Order, or Governmental Authorization ; and (ii) Liability for any Environmental
Claim arising our of or associated with ownership or operation by Agriliance of any CN Owned
Real Property, CN Leased Real Property, CPP Owned Real Property, CPP Leased Real Property or
any other property; and (iii) Responsibility and Liability for Environmental Response Actions
at any property other than the CN Owned Real Property, CN Leased Real Property, CPP Owned
Real Property and CPP Leased Real Property; and




     (h) Retained Cleanup Responsibilities under Article VIII below.



VI. VALUATION




     6.1 Maintenance of Membership Interests. UCB and LOL intend that after the retirement
of the Bank Debt and payment by LOL to CHS described in Section 2.1, the completion of the
distribution of the CN Business Assets to UCB and the CPP Business Assets to WS, and the true-up
procedures referenced herein, each of them shall maintain their fifty percent governance and
financial interests in Agriliance. Therefore, UCB and LOL agree as follows:



     6.2 Value Distributed to CHS and WS. The actual value attributed to the CN Business
Assets and the CPP Business Assets will be based on the August 31, 2007 audited balance sheet of
Agriliance (the “Final Balance Sheet”); with adjustments made to inventory valuations as set forth
in Section 6.3, and with adjustments made for supplier rebates as set forth in Section 6.4 and with
adjustments made for prepays for CPP and CN product by Agriliance retail facilities allocated to WS
and CHS.



     The parties shall utilize the unaudited balance sheet of Agriliance as of July 31, 2007 (the
“Interim Balance Sheet”), for purposes of determining the amount of cash necessary to address the
Bank Debt and the payment by LOL to CHS as referenced in Section 2.1 and to maintain their equal
membership interests in Agriliance as of the Distribution Date. Upon receipt of the Final Balance
Sheet, the parties shall reconcile any differences from the action taken on the Distribution Date.
The calculation of value of the distributions to CHS and WS based on the Interim Balance Sheet is
attached hereto as Schedule 6.2. The same calculations contained in Schedule 6.2 shall be utilized
to determine any differences between the Interim Balance Sheet and the Final Balance Sheet, subject
to Sections 6.3 and 6.4, to determine the actual value distributed.



     The difference between the “adjusted value at closing” line for each of CPP and CN based on
the Interim Balance Sheet (Schedule 6.2) and the “adjusted values at closing” line for each of CPP
and CN based on the Final



10









 





Balance Sheet, if positive, will be paid to Agriliance by the respective party. If such difference
is negative, then such difference shall be paid by Agriliance to the respective party. Payments
received pursuant to this calculation by Agriliance will be distributed to LOL and UCB on an equal
basis. Similarly, any payments required by Agriliance pursuant to this calculation will be funded
equally by LOL and UCB.



     6.3 Calculation of Value of Inventories. The value of the CN Inventories and the CPP
Inventories shall be calculated as set forth in Schedule 6.2, modified as follows:




     (a) Quantity; Reconciliation. As of the Effective Time, the value of the respective
inventories distributed to each party hereunder, shall be based on the quantities as then
reflected on the Interim Balance Sheet (“Estimated Inventories”). As soon as practical,, the
parties shall cause to be prepared a final balance sheet with respect to both the CN
Inventories and the CPP Inventories as of August 31, 2007, prepared on a basis consistent
with the preparation of the financial statements of Agriliance, along with a detailed
explanation of any differences between the Estimated Inventories and the final CN and CPP
Inventories. The parties have agreed to retain the accounting firm of KPMG, L.L.P. (“KPMG”)
to audit these Inventories numbers, including physical audits of the locations housing such
inventories. The determination of KPMG of the final Inventories numbers will be set forth in
writing and be conclusive and binding on the parties. The cost of KPMG will be borne by
Agriliance. The results of such audits shall be part of the true up referenced below.




     (b) Merchantable. The parties agree that only Inventories which are usable in the
ordinary course of business and are not obsolete, damaged or defective as of the Effective
Time shall be utilized in making the calculations herein. The cost to dispose of any
Inventories not meeting these requirements shall be borne by Agriliance.




     (c) Ordinary Course of Business. The valuations performed hereunder assume
inventory movements in the ordinary course of business, consistent with past practice.
The economic effect of any unusual inventory movements prior to the Effective Time will
be taken into account by the parties in determining value distributed hereunder.



     6.4 Subsequent True Up; Rebates. As referenced above, the parties shall reconcile any
differences between the calculation made on Schedule 6.2 (which is based on the Interim Balance Sheet) and
the Final Balance Sheet, with Inventories finally valued as set forth in Section 6.3. Any payments mandated by
such reconciliation shall be made within three Business Days of receipt of the Final Balance Sheet.



     Further, the parties agree that the accruals for CN product rebates and incentives and CPP
product rebates and incentives may not equal the actual cash ultimately received. The parties will
compare the actual cash received from suppliers as rebates or incentives for all sales of CN
products and CPP products prior to the Effective Time against the CN Supplier Rebate Accruals and
the CPP Supplier Rebate Accruals. If the actual amount received exceeds the relevant accrual, then
such difference shall be remitted to Agriliance. If the actual amount received is less than the
relevant accrual, then Agriliance shall pay such difference to the appropriate party. Provided,
however, any such rebates or incentives targeted for distribution to an existing customer of
Agriliance, such as a CPP Equity Interest or a CN Equity Interest shall be directed to such party
holding such equity interest (Agriliance, WS or CHS), prior to making the calculation set forth
herein.



     Such calculation will be based on the total dollar sales of each specific item of CN products
and CPP products during the relevant rebate or incentive period, including both prior to and after
the Effective Time. It is the intent of the parties that any volume or similarly based rebates or
incentives which may be triggered by sales after the Effective Time will be spread evenly by dollar
sales over the entire rebate or incentive period for purposes of making this calculation. The
parties expect the rebate calculations to be completed by March 1, 2008. Any payments required
under this Section 6.4 shall be made within three Business Days of the date of such calculation.



VII. EMPLOYEES AND EMPLOYEE MATTERS




     7.1 CN Employees. As set forth in Section 7.4, CHS shall offer employment to
Agriliance’s employees principally engaged in the CN Business along with certain employees in
shared services; a current list of such employees is attached hereto as Schedule 7.1 (“CN
Employees”). All of the CN Employees who accept employment with CHS shall be referred to as “Hired
CN Employees”. (The parties acknowledge that included in the CN Assigned Contracts is the Labor
Union Agreement at Indianapolis, Indiana.). If CHS does not offer



11









 




employment to CN Employee, CHS shall be solely responsible for any and all severance costs paid by
CHS or Agriliance.




     7.2 CPP Employees. As set forth in Section 7.4, LOL shall offer employment to
Agriliance’s employees principally engaged in the CPP Business along with certain employees in
shared services (such as Finance, IS, HR), a current list of such employees is attached hereto as
Schedule 7.2 (“CPP Employees”). All of the CPP Employees who accept employment with LOL shall be
referred to as the “Hired CPP Employees”. If LOL does not offer employment to a CPP Employee, LOL
shall be solely responsible for any and all severance costs paid by LOL or Agriliance.



     7.3 Schedule Information. Schedules 7.1 and 7.2 indicate whether each such employee is
full-time, part-time, or temporary, and whether each such employee is subject to any employment
agreements (other than the standard non-competition and employee non-solicitation agreement signed
by each employee of Agriliance), or other Contracts relating to employment, severance or changes in
control.



     Schedules 7.1 and 7.2 also show for each such employee his/her date of employment, location
and position.



     7.4 Offers of Employment. As soon as administratively practicable after the execution
of this Agreement, but in no event later than September 4, 2007, CHS shall make an offer of
employment to all CN Employees, and LOL shall make an offer of employment to CPP Employees. The
terms CN Employees and CPP Employees shall mean all Agriliance employees listed on Schedules 7.1
and 7.2 but shall not include employees that would otherwise be CN Employees and CPP Employees
except that they are currently on family medical leave, military leave, temporary disability or
sick leave, workers’ compensation leave (unless in a rehabilitation or light duty role) or
long-term disability leave (collectively, “Leave Status”). CN Employees and CPP Employees who are
on Leave Status as of September 4, 2007 will remain employees of Agriliance until they are removed
from Leave Status. Once an employee of Agriliance is removed from Leave Status and is ready to
work, and has been designated as on FMLA leave or Military leave on Schedule 7.4, either CHS or LOL
shall offer employment to the employee and the employee shall become a Hired CN Employee or Hired
CPP Employee if employment is accepted. Once an employee of Agriliance is removed from Leave
Status and is ready to work and that employee has been designated in a leave category other than
FMLA leave or Military leave on Schedule 7.4, either CHS or LOL may offer employment to the
employee and such employee shall become a Hired CN Employee or a Hired CPP Employee if employment
is accepted. If the respective future employer does not offer employment to the employee removed
from Leave Status and is ready to work, that employer shall be solely responsible for all severance
costs and liabilities associated with such decision not to hire. All employees that are on Leave
Status are listed on Schedule 7.4. Schedule 7.4 will also show the employee’s allocation, current
status, type of leave, date of employment, location and position. Nothing in this Agreement will be
construed to create a right in any Agriliance employee to employment with either CHS or LOL.
Subject to all applicable Laws, CHS and LOL will have reasonable access to the personnel records
(including performance appraisals, disciplinary actions, and grievances) of the Agriliance
employees for the purpose of preparing for and conducting employment interviews. Except as set
forth herein with respect to those on Leave Status as of September 4, 2007, CHS’s and LOL’s
employment of the CN Hired Employees and the CPP Hired Employees shall be deemed to commence as of
September 4, 2007.



     7.5 Recognition of Years of Service. CHS and LOL each agree that with respect to any
Hired CN Employee or any Hired CPP Employee, it shall recognize for purposes of participation,
eligibility and vesting (but not for purposes of benefit accrual and compensation arrangements)
under its employee benefit plans including paid time off (PTO), the Agriliance service credit date
of any Hired CN Employee or any Hired CPP Employee with Agriliance prior to the Effective Time.
Notwithstanding the foregoing, neither CHS nor LOL will recognize Agriliance service for purposes
of eligibility for retiree medical subsidy for any CPP Hired Employee or CNN Hired Employee;
however, if such employee was eligible for a retiree medical subsidy from Agriliance as of
September 1, 2007, such employee will retain eligibility for retiree medical subsidy under the CHS
or LOL plans, as the case may be.



     7.6 Welfare Plans.




     (i) CHS and LOL each agree that with respect to any Hired CN Employee or any Hired
CPP Employee, it shall waive pre-existing condition requirements, evidence of insurability
provisions, waiting period requirements or any similar provisions under any welfare employee
benefit plan or compensation arrangements maintained or sponsored by such party after the
Effective Time, but only to the extent such Hired CN Employee or Hired CPP Employee had
satisfied such requirements under the



12









 






appropriate provisions of Agriliance’s plans as of the Effective Time, so that the employee
shall be in at least as good a position with respect to such matters under CHS’s or LOL’s
employee benefit plans as under Agriliance’s plans.




     (ii) CHS and LOL each agree that with respect to any Hired CN Employee or any
Hired CPP Employee, it shall apply toward any deductible requirements and out-of- pocket
maximum limits under its employee welfare benefit plans any amounts paid by each Hired CN
Employee or Hired CPP Employee that qualified as such under Agriliance’s employee welfare
benefit plans during the current plan year in which the Effective Time occurs.



     7.7 Qualified Defined Benefit Retirement Plans. After the Distribution Date, LOL and
CHS will mutually agree upon the treatment of the qualified defined benefit plans of Agriliance
with respect to the Hired CN Employees and Hired CPP Employees including, without limitation,
possible transfer of the assets and liabilities of the Agriliance retirement plan to the respective
defined benefit plans sponsored by LOL or CHS, to be effective as of a date to be determined by
Agriliance and LOL and CHS. CHS and LOL shall share equally in the responsibility to fund any
asset shortfall that may arise related to benefits accrued under the Agriliance defined benefit
plan prior to the Effective Time. The amount of the asset shortfall shall be based upon a valuation
mutually agreed upon between LOL and CHS.



     7.8 Qualified Defined Contribution Plans. Agriliance will cause its qualified
defined contribution plan to transfer assets to the qualified defined contribution plans of CHS
or LOL at such time as CHS and LOL may jointly direct through the Agriliance benefit committee
for the account of any Hired CN Employees or Hired CPP Employees.



     7.9 Non-Qualified Deferred Compensation Plans. With respect to the transfer of
employment of the Hired CN Employees from Agriliance to CHS, and the transfer of the Hired CPP
Employees from Agriliance to LOL in connection with this Agreement,, Agriliance, CHS and LOL agree
that such transfer shall not be treated as a “termination of employment” or “separation from
service” that would be a distributable event under
Agriliance’s non-qualified deferred compensation
plans.



VIII. EXISTING ENVIRONMENTAL CONTAMINATION




     8.1 Agriliance to Retain Certain Responsibility. Except with respect to those
Properties identified on Schedule 8.1 for which a longer period of time shall be in effect as
described in Section 8.7 below, for a period of three (3) years after the Effective Time (the
“Retained Responsibility Period”), Agriliance shall retain all Responsibility and Liability for
Environmental Response Actions at all CN Owned Real Property, CN Leased Real Property, CPP Owned
Real Property and CPP Leased Real Property (collectively the “Properties”), to the extent arising
out of or associated with CN Site Contamination or CPP Site Contamination existing prior to the
Effective Time ( “Retained Cleanup Responsibilities”), provided that notice of the Environmental
Response Action has been given pursuant to Section 8.2 or the Environmental Response Action
pertains to matters listed on Schedule 8.6. The burden of proof to show that the CN Site
Contamination or CPP Site Contamination existed prior to the Effective Time shall be on the
Controlling Party. Upon expiration of the applicable Retained Responsibility Period and payment of
the Anticipated Costs (as defined below), Agriliance shall have no further Responsibility or
Liability for Environmental Response Actions at any of the Properties.



     8.2 Notice Within 3 Year Period. In addition to the known matters set forth on
Schedule 8.6, in order for any Responsibility or Liability for any Environmental Response Action
pertaining to the Properties to be considered a Retained Cleanup Responsibility of Agriliance, the
party seeking to so designate it must provide Agriliance and the other party with written notice of
such matter on or before the three (3) year anniversary of the Effective Time. Such notice shall
include a description of the Environmental Response Action and an estimation of the anticipated
costs associated therewith based on such information as the party giving notice has at that time.



     8.3 Costs. To the extent a party undertakes any environmental site assessment or
other environmental investigation in order to determine whether there is any existing CN Site
Contamination or CPP Site Contamination, and without any legal requirement or request by a
governmental authority, such cost shall not be considered part of the Retained Cleanup
Responsibility. In addition, only out-of-pocket costs actually incurred are eligible to be paid or
reimbursed by Agriliance under this Article VIII, and neither party shall be entitled to
reimbursement of its own internal costs.



13









 





          During the applicable Retained Responsibility Period, any party who has incurred costs to
perform a Retained Cleanup Responsibility shall be entitled to reimbursement from Agriliance in
accordance with Section 8.5 below. Prior to the expiration of the applicable Retained
Responsibility Period, CHS and LOL shall work together in good faith to determine amounts that are
reasonably expected to be required to pay future, ongoing costs associated with Retained Cleanup
Responsibilities with respect to the Properties for which payment was not made by Agriliance during
the applicable Retained Responsibility Period (“Anticipated Costs”), and Agriliance shall pay such
Anticipated Costs to CHS and WS as provided in this Section 8.3 and in Section 8.5. In determining
Anticipated Costs, the parties shall take into consideration the time periods during which the
costs for fulfilling such Retained Cleanup Responsibilities will likely be paid, the present value
thereof, and the effect of inflation on such costs.




          The procedure for determining Anticipated Costs shall be as follows: Within thirty (30) days
after the expiration of the applicable Retained Responsibility Period, CHS and WS shall each
deliver to the other an itemized list of all outstanding Retained Cleanup Responsibilities
pertaining to their respective Properties, along with that party’s assessment of the Anticipated
Costs for each, in detail and with supporting documentation sufficient for the other party to
evaluate the same. Each party shall promptly furnish all additional information reasonably
requested by the other party. Within twenty (20) days following receipt of such information by both
CHS and WS (the “Objection Period”), CHS and WS shall notify the other party and Agriliance in
writing of any objections they may have to Agriliance paying the Anticipated Costs identified by
the other party, and the basis for such objections. Objections shall be made to specific itemized
Anticipated Costs. All Anticipated Costs for which no objection has been made within the Objection
Period shall be paid by Agriliance as provided in Section 8.5 below, and thereafter all Anticipated
Costs for which objections have been resolved shall be paid by Agriliance as provided in Section
8.5 below. The parties shall work diligently and in good faith to resolve all objections within
thirty (30) days after the expiration of the Objection Period.




          If the parties are unable to resolve all objections within the Objection Period, they shall
engage a neutral third party (“Neutral”) to assist in resolving the objections. The Neutral shall
have substantial experience in assessing costs associated with the Retained Cleanup
Responsibilities to which the objections pertain. CHS and WS shall work diligently and in good
faith with the Neutral to resolve all objections within sixty (60) days after the expiration of the
Objection Period. If the parties have not been able to resolve all objections within such 60-day
period, the Neutral shall resolve the objections in the Neutral’s sole and absolute discretion and
the Neutral’s determination shall be binding on the parties. In making a determination, the Neutral
may engage such additional, independent consultants as the Neutral deems necessary or desirable, in
the Neutral’s sole and absolute discretion. The Neutral shall be directed to use best efforts to
make its determination within ninety (90) days after the expiration of the Objection Period and the
parties shall provide such information and other cooperation as the Neutral may require. CHS and WS
shall share equally the cost of the Neutral and any consultants engaged by the Neutral; provided,
however, that if the Neutral determines that additional site assessment or other investigation is
required to reasonably determine any Anticipated Costs, such additional assessment or investigation
shall be performed by consultants engaged by the Neutral and the party who owns or leases the
Property in question shall be solely responsible for the costs of the same.




     8.4 Control of Process; Third Party Recoveries. The party owning or leasing the
Property in question (the “Controlling Party”) shall have the sole right to direct and control any process,
including any litigation or governmental investigation or enforcement action, concerning any such property. During the
applicable Retained Responsibility Period for the Properties, the Controlling Party shall provide information and
keep Agriliance and the other party informed as to the particular matter to the extent practical. During and after the
applicable Retained Responsibility Period, the Controlling Party shall make reasonable efforts to pursue recovery
from third parties of any costs paid to such party by Agriliance for a Retained Cleanup Responsibility, including
from any applicable insurance carriers and/or from programs administered by any Governmental Entity for purposes
of reimbursing investigation and cleanup costs associated with particular contaminants (e.g., state petroleum
tank release cost- recovery funds), to the extent that the Controlling Party, in its sole discretion reasonably
exercised, deems prudent and cost-effective. The Controlling Party shall remit or credit fifty percent of any
recoveries received (less the costs incurred by the Controlling Party in obtaining such recoveries) promptly to the other party.



     8.5 Time for Payment. At any time during the applicable Retained Responsibility Period , the party
seeking reimbursement for costs incurred to perform a Retained Cleanup Responsibility may
submit any invoice to Agriliance and to the other party within a reasonable time after a cost has been actually
incurred, but no later than thirty (30) days after expiration of the applicable Retained Responsibility Period. Such
invoices shall describe the




14












 




nature of the cost, how it was incurred, and any other information reasonably required by the other
party. Payment of said invoices shall be made within thirty (30) days of receipt of such invoice by
the other party unless within such time period the other party objects by delivering written notice
to both Agriliance and the requesting party, which notice shall state the basis of the objection.
In the event of any objection, the parties shall work together in good faith and use best efforts
to promptly resolve such objection within thirty (30) days after notice of the objection has been
received by the requesting party. If the parties are unable to resolve any objection within such
period, the objection shall be resolved in accordance with the procedure set forth in Section 8.3
for resolving objections to Anticipated Costs and Agriliance shall make such payment as is
appropriate within fifteen (15) days after resolution of the objection. With respect to Anticipated
Costs, upon expiration of the Objection Period, Agriliance shall pay to CHS an amount equal to the
Anticipated Costs allocable to the CN Owned Real Property and CN Leased Real Property , and shall
pay to WS an amount equal to the Anticipated Costs allocable to the CPP Owned Real Property and CPP
Leased Real Property; provided, however, that if either party has timely raised objections to any
Anticipated Costs, then Agriliance shall pay only such Anticipated Costs for which no objections
were timely made, and shall pay the remaining Anticipated Costs within fifteen (15) days after
resolution of the objections in accordance with Section 8.3.




     8.6 Known Matters. Set forth on Schedule 8.6 attached hereto is a list of ongoing
CN Site Contamination and CPP Site Contamination matters which the parties agree are among
Agriliance’s Retained Cleanup Responsibilities.



     8.7 Extended Period Sites. With respect to those sites listed on Schedule 8.1, the Retained
Responsibility Period for the Retained Cleanup Responsibilities shall be extended through the
calendar year 2020. Correspondingly, the notice period provided for in Section 8.2 shall be
extended through the calendar year 2020.



IX. SHARED EXPENSES; CONSENTS/TRANSFERS; AUDIT RIGHTS




     9.1 Transfer Expenses. The parties hereby agree that certain reasonable
expenses incurred to effectuate the distributions hereunder, including those reasonably incurred
after the Effective Time, shall be shared equally between them, and that such expenses shall be
borne by Agriliance. Therefore, the parties agree as follows:




     (a) Title Evidence, Closing Fees and Proration of Utilities.




     
(i) Title Commitments. As evidence of title to the CN Owned Real Property
and the CPP Real Property, and if requested by a party and for informational purposes
as to the CN Leased Real Property or the CPP Leased Real Property, Agriliance shall
cause to be prepared and delivered to the either CHS or WS, as the case may be, at
Agriliance’s expense, a commitment or preliminary title report for the each property
(a “Title Commitment”) from First American Title Company (the “Title Company”)
together with copies of all exception documents, to issue to the respective receiving
party at the Distribution Date, an owner’s title insurance policy (for owned real
property only), subject to any easements and encroachments and other encumbrances
disclosed by the Title Commitments.




     (ii) Title Fees and Costs. Agriliance shall pay all fees charged by the Title
Company for the Title Commitments, as well as all costs to record the general warranty deeds, including
payment of any transfer tax, and the costs for the final title policy and endorsements.



     (iii) Utility Charges. All utility charges, including gas, oil, electricity,
telephone, sewer and water, pertaining to the CN Business Assets or the CPP Business Assets,
shall be prorated between Agriliance and the respective recipient as of the Effective Time.



     (iv) Surveys. Any surveys shall be done at the direction and expense of either
CHS or LOL, as applicable, and shall be completed within four months of the Distribution
Date.




     
(v) Title and /Survey Correction. Expenses reasonably incurred with third
parties to reasonably rectify any issues identified in the Title Commitments or surveys, other
than Permitted Encumbrances, shall be the responsibility of Agriliance.




     (b) Motor Vehicles. Agriliance shall take all actions and prepare all documents
necessary to effect the transfer to the appropriate recipient of all motor vehicle leases and registrations
pertaining to automobiles, trucks, and other motor vehicles of whatever kind distributed hereunder in
compliance with the



15









 






motor vehicle registration and other applicable Laws of any jurisdictions where such
motor vehicles are registered. All transfer taxes related to the distribution of motor
vehicles shall be borne by Agriliance.




     (c) Property Taxes. As of the Effective Time, Agriliance shall ensure that all state and
local real and personal property Taxes, tonnage taxes, ad valorem and similar Taxes and
assessments (“Property Taxes”) which are past due or have become due and payable in the
normal course of business upon any of the distributed assets on or before the Effective Time
have been paid. All Property Taxes imposed by any Tax authority with respect to the
distributed assets that have been paid or are due and payable with respect to a Taxable
period beginning before the Effective Time and ending after the Effective Time (taking into
account whether the Property Taxes are payable in advance or in arrears) shall be apportioned
between: (1) the period beginning before and ending at the Effective Time (the “Pre-Transfer
Period”); and (2) the period beginning on the day immediately after the Effective Time and
ending on the last day of the relevant Taxable period (the “Post-Transfer Period”). In
performing the apportionment, all Property Taxes shall be prorated on the assumption that an
equal amount of Property Tax applies to each day of the relevant Taxable period regardless of
how installment payments are billed or made. Agriliance shall be liable for all Property
Taxes apportioned to the Pre-Transfer Period. The respective recipient shall be liable for
all the Property Taxes apportioned to the Post-Transfer Period.




     (d) Governmental Authorizations; Product Registrations. Any transfer fees that are
required to transfer any Governmental Authorization, including CN Product Registration Fees
and CPP Product Registration Fees, shall be borne by each respective party, and not by
Agriliance.




     (e) Leasehold Rentals. All leasehold rentals shall be pro rated between Agriliance
and either CHS or WS as applicable as of the Effective Time.




     (f) Employees. Expenses incurred with respect to employees shall be shared as set
forth in Section 5.2(c).



     9.2 Consents/Transfers. The parties shall make good faith efforts and cooperate with
each other to obtain all consents and/or transfers necessary to assign the Contracts, the Third
Party Licenses, and the CN Equity Interests and the CPP Equity Interests, or to otherwise
effectuate the distributions hereunder, as quickly as possible. All costs or fees incurred to
obtain the consents or transfers, with respect to Third Party
Licenses shall be borne by the party seeking the consent or transfer.



     9.3 Delayed Transfer. If any consent referenced in Section 9.2 above is not obtained
prior to the Effective Time, such Contract (other than Contracts pertaining to leased properties,
which are addressed below) Third Party License, or equity interest shall remain with Agriliance
until such time as consent is obtained. The party to which such Contract, Third Party License, or
equity interest is to be assigned shall bear all economic consequences of such Contract, Third
Party License, or equity interest after the Effective Time as if such had been assigned as of the
Effective Time. Similarly, if a Title Commitment is not obtained with respect to any CPP Owned Real
Property or CN Owned Real Property, or if consent to assign any of the CN Leased Real Property or
the CPP Leased Real Property is not obtained, prior to the Effective Time, then such property shall
remain with Agriliance until such Title Commitment or consent is obtained, and, during such interim
period, the party to whom the property is to be distributed shall lease such property pursuant to
the terms of that Master Lease Agreement attached hereto as Exhibit D. Also, those vehicles for
which transfer is delayed shall be subject to the Vehicle Lease Agreements referenced in Article
10.1 as Ancillary Agreements.



     9.4 Audit and Access Rights. The parties recognize and agree that information will
need to be shared between them and verified for purposes of effectuating the terms of this Agreement and, after
the Effective Time, for the purposes of business operations and tax and other regulatory purposes. Each party shall
permit the other parties and their representatives reasonable access to its books and records to verify any
calculations made hereunder and for use of such information for legitimate business, tax and regulatory purposes. At the expense
of the requesting party, each party shall have the right to conduct a reasonable audit of the other parties’ books and
records as reasonably necessary to verify any such calculation.



X. DELIVERIES ON THE DISTRIBUTION DATE




     The parties shall cause to be delivered to the appropriate party on the Distribution Date all documents



16









 




reasonably necessary to effectuate the intent hereunder, including the following:




     10.1
Ancillary Agreements.




     (a) Supply Agreement to CHS. That certain supply agreement by and between WS and LOL
as supplier and CHS as purchaser in the form of Exhibit E, attached hereto;




     (b) Transition Services Agreement. That certain transition services agreement by and
between LOL, Agriliance and CHS in the form of Exhibit F, attached hereto.




     (c) Amendment to Master Services Agreement. The Master Services Agreement between LOL as
service provider and Agriliance as modified, in the form of Exhibit G, attached hereto; and,




     (d) Storage and Handling Agreements). Those certain storage and handling agreements by
and between CHS, WS and/or Agriliance, as applicable to the facilities located at Green Bay,
Wisconsin, and Winona, Minnesota, as referenced on Schedule 10.1(d) hereto.




	 	(f)	 	Vehicle Leases that need to be assumed
	 
	 	(g)	 	Supply Agreements to Agriliance. Those certain supply agreements
by and between LOL and WS as supplier, and Agriliance as purchaser; and CHS as
supplier and Agriliance as purchaser, attached hereto as Exhibits H and I.
	 
	 	(h)	 	Vehicle Lease to CHS. With respect to those vehicles for
which transfer to CHS is delayed, that certain Vehicle Lease Agreement attached
hereto as Exhibit J.
	 
	 	(i)	 	Vehicle Lease to WS. With respect to those vehicles for which
transfer to WS is delayed, that certain form of Vehicle Lease Agreement attached
hereto as Exhibit K.





     10.2 Conveyance Documents to CHS and WS.




     (a) Warranty deeds in the form of Schedule 10.2(a), subject to Permitted Encumbrances,
for the CN Owned Real Property and the CPP Owned Real Property.




     (b) Assignment and Assumption Agreements for the CN Leased Real Properties and the CPP
Leased Real Properties in the form of Schedule 10.2(b).




     (c) Bills of Sale for the CN Tangible Personal Property and the CPP Tangible Personal
property in the form of Schedule 10.2(c).




     (d) Assignment and Assumption Agreements for the CN and CPP Contracts in the form
of Schedule 10.2(d).




     (e) Assignment and Assumption Agreements for the CN and CPP Equity
Interests in the form of Schedule 10.2(e).




     (f) Bills of Sale for the CN and CPP Inventories in the form of
Schedule 10.2(f).




     (g) Affidavit of Owner in the form of Schedule 10.2(g), for the CN Owned Real Property
and the CPP Leased Real Property.




     (h) Such ancillary real property documents as may be necessary in the
jurisdiction where the CN Owned Real Property or CPP Owned Real Property is located.




     (i) Certificates of title for all vehicles duly endorsed for transfer.




     (k) Mutually acceptable documentation to transfer intellectual property.



     10.3 Assignment and Assumption Agreements. Those Assignment and Assumption
Agreements



17









 




pertaining to the assumed obligations in the forms of Exhibits B and C.




XI. COVENANTS NOT TO COMPETE




     At the formation of Agriliance, CHS and LOL agreed not to directly or indirectly engage in
the wholesale marketing of fertilizer products and agricultural chemicals in North America so long
as they remained a member of Agriliance and for a period of time thereafter. Additionally, at the
formation of Agriliance, CHS agreed not to engage in the wholesale seed business. In consideration
of the distribution of assets and the other terms hereof, UCB and its parent entity, CHS (for
purposes of this Article XI, UCB and CHS shall be referred to collectively and individually as
“CHS”) and LOL and WS (for purposes of this Article XI, LOL and WS shall be referred to
collectively and individually as “LOL”), the parties hereby agree to modify their non-compete
covenants as follows.



     11.1
LOL Non-Compete. For a period of ten (10) years from the Distribution Date , LOL,
individually and on behalf of its successors, assigns, subsidiaries, Agriliance and Affiliates agrees not
to directly or indirectly engage in the wholesale marketing and/or sale of crop nutrient products in the territory of
North America; except to the extent currently conducted by any of the CPP Equity Interests or other equity interests
held by Agriliance which may subsequently be transferred to LOL or WS, by the Agronomy Company of Canada or by
Agriliance through the business retained by Agriliance after the Effective Time; and except with respect to the
distribution, marketing and sale of micro nutrient products or animal waste products; and except with respect to the
distribution, marketing and sale of organic lawn fertilizers through its Bradfield Organics line of products and certain
other home lawn care fertilizers, such as under its Clear Lake lawn food line of products, provided that these
endeavors shall not materially expand in scope from their current state. Notwithstanding the foregoing, LOL shall not be
deemed to be indirectly competing in violation of this Section through ownership of a person or entity which does not
meet the definition of an Affiliate.



     11.2
CHS Non-Compete. For a period of ten (10) years from the Distribution Date, CHS,
individually and on behalf of its successors, assigns, subsidiaries, Agriliance and Affiliates,
agrees not to directly or indirectly engage in the wholesale marketing and/or sale of micro
nutrient products, agricultural chemicals and/or corn, soybeans, canola, alfalfa, cotton or sorghum
seed products, including seeds, seed coatings and seed treatments related to such defined seed
products, in the territory of North America, except to the extent currently conducted by any of the
CN Equity Interests or other equity interests held by Agriliance which may subsequently be
transferred to CHS, by the Agronomy Company of Canada or by Agriliance through the business
retained by Agriliance after the Effective Time. Notwithstanding the foregoing, CHS shall not be
deemed to be indirectly competing in violation of this Section through ownership of a person or
entity which does not meet the definition of an Affiliate.



     11.3
Definition. For the purposes of this Agreement, the term “wholesale marketing
and/or sale” shall be defined to include any activity to promote, market, sell or otherwise
transfer products to any entity or person (including local cooperatives, agronomy centers, joint
ventures, dealers, owned retail locations and the like) where such entity or person will resell or
otherwise transfer such products.



     11.4 Subsequent Acquisitions. Nothing in this Article XI shall be construed to prevent
CHS from making an acquisition that includes a wholesale micro nutrient, agricultural chemical
and/or seed marketing and/or sale business so long as LOL is given the option, exercisable within
six (6) months after the closing of such acquisition, for LOL to acquire from CHS that portion of
such acquisition relating to the wholesale agricultural chemical and/or seed marketing and/or sale
business for fair market value and otherwise on customary and commercially reasonable terms.
Similarly, nothing in this Section shall be construed to prevent LOL from making an acquisition
that includes a wholesale crop nutrient marketing and/or sale business so long as CHS is given the
option, exercisable within six (6) months after the closing of such acquisition, for CHS to acquire
from LOL that portion of such acquisition relating to the wholesale crop nutrient marketing and/or
sale business for fair market value and otherwise on customary and commercially reasonable terms.



     11.5 Restrictions Reasonable. The parties believe that the restrictive covenants
contained in this Article XI are reasonable. However, if any court having jurisdiction shall at any
time hereafter hold any of these restrictions to be unenforceable or unreasonable, whether as to
scope, territory or period of time specified herein, and if such court shall declare or determine
the scope, territory or period of time which it deems to be reasonable, such scope, territory or
period of time shall be deemed to be reduced to that declared or determined by such court to be
reasonable.



18









 





     11.6 Equitable Remedies, Each party recognizes that in the event of violation of any
of the terms of this provision, the non-violating party will suffer irreparable damages and that it
will be difficult, if not impossible, to compute actual damages sustained by the non-violating
party as the result of such breach. Accordingly, in addition to any relief at law that may be
available to the non-violating party for such violation or breach, the non-violating party will be
entitled to injunctive and other equitable relief restraining such violation, breach or threatened
breach (without any requirement that the non-violating provide any bond or other security).



     11.7 Supercedes Existing Agreements. The covenants contained in this Article XI
supercede and replace in their entirety those provisions found in Section 8.3 of the original Joint
Venture Agreement dated January 1, 2000 by and between CHS and LOL, and those provisions found in
Section 8.2 of the original Seed Agreement dated February 18, 2000, by and between CHS and LOL.



XII. INDEMNIFICATION




     12.1 Indemnification by LOL and WS. LOL and WS, jointly and severally, will indemnify
Agriliance, CHS and/or UCB, and their respective officers, directors, and employees, and hold them
harmless against any Loss to the extent arising from the conduct of business by WS of the CPP
Business Assets after the Effective Time, or to the extent arising from the CPP Obligations.



     12.2 Indemnification by CHS and UCB. CHS and UCB, jointly and severally, will
indemnify Agriliance, LOL and/or WS, and their respective officers, directors, and employees, and
hold them harmless against any Loss to the extent arising from the conduct of business by CHS of
the CN Business Assets after the Effective Time, or to the extent arising from the CN Obligations.



     12.3 Indemnification by Agriliance. Agriliance will indemnify CHS, UCB, LOL and WS,
and their respective officers, directors, and employees, and hold them harmless against any Loss to
the extent arising from any Retained Obligations.



     12.4 Indemnification Unavailable from Agriliance. In the event that indemnification
from Agriliance in accordance with Section 12.3 is unavailable for whatever reason, then CHS and
UCB shall share equally in any such Loss with LOL and WS, including, but not limited to, any Loss
resulting from any Liability or Litigation or Retained Cleanup Responsibilities, including
Anticipated Costs.



     12.5 Notice. Any claim for indemnification hereunder shall be made in a written
notice from the party seeking indemnification (the “Indemnified Party”) to the party from which
indemnification is sought (the “Indemnifying Party”) which will state in reasonable detail the
basis for such indemnification and the amount of the loss claimed. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described in such notice or fails
to notify the Indemnified Party within forty-five (45) Business Days after delivery of such notice
whether it disputes the claim described in such notice, the loss amount specified in the notice
will be admitted by the Indemnifying Party, and the Indemnifying Party will pay the amount of such
loss to the Indemnified Party. If the Indemnifying Party has timely disputed its liability with
respect to such claim, the relevant parties will proceed in good faith to negotiate a resolution of
such dispute. If a resolution has not been resolved within sixty (60) days after delivery of the
original claim notice, either party may seek judicial recourse. In the event that (i) an
Indemnified Party does not deliver to the Indemnifying Party written notice of a claim promptly
after its discovery of a claim or (ii) such written notice inaccurately of incompletely describes
the basis or nature of the claim, each as required by this Section 12.5, then the Indemnifying
Party’s obligation to indemnify hereunder shall be reduced to the extent the Indemnified Party’s
failure to provide prompt, accurate and complete written notice has prejudiced the Indemnifying
Party.



          The Indemnifying Party will pay the amount of any claim within fifteen (15) days following the
final determination of the Indemnifying Party’s liability for and the amount of such loss.




     12.6 Third Party Actions. With respect to any Litigation instituted by any Person
against a party entitled to indemnification hereunder, (the “Indemnified Party”): The Indemnified Party will give the
party(ies) from which it seeks indemnity (the “Indemnifying Party(ies) prompt written notice of the commencement of
such third party action (“ Third Party Action”). The complaint or other papers pursuant to which the third
party commenced such Third Party Action will be attached to such written notice. In the event that (i) the
Indemnified Party does not



19









 




deliver to the Indemnifying Party prompt written notice of a Third Party Claim promptly after
commencement or (ii) fails to attach the entire complaint or all of the other papers pursuant to
which the third party commenced such Third Party Action, each as required by this Section 12.6,
then the Indemnifying Party’s obligation to indemnify shall be reduced to the extent the
Indemnified Party’s failure to provide prompt, accurate and complete written notice has prejudiced
the Indemnifying Party. The Indemnifying Party will contest and defend such Third Party Action on
behalf of any Indemnified Party that requests that they do so. Notice of the intention to so
contest and defend will be given by Indemnifying Party to the requesting Indemnified Party within
twenty (20) Business Days after the Indemnified Party’s notice of such Third Party Action (but, in
all events, at least five (5) Business Days prior to the date that a response to such Third Party
Action is due to be filed). Such contest and defense will be conducted by reputable attorneys
retained by the Indemnifying Party. An Indemnified Party will be entitled at any time, at its own
cost and expense, to participate in such contest and defense and to be represented by attorneys of
its own choosing. If the Indemnified Party elects to participate in such defense, the Indemnified
Party will cooperate with the Indemnifying Party in the conduct of such defense. An Indemnified
Party will cooperate with the Indemnifying Party to the extent reasonably requested by the
Indemnifying Party in the contest and defense of such Third Party Action, including providing
reasonable access (upon reasonable notice) to the books, records and employees of the Indemnified
Party if relevant to the defense of such Third Party Action.




          Neither an Indemnified Party nor an Indemnifying Party may concede, settle or compromise
any Third Party Action without the consent of the other party, which consents will not be
unreasonably withheld.




     12.7 Losses Net of Insurance, Taxes. The amount of any loss for which
indemnification is provided under this Article XII shall be net of (i) any amounts recovered by
the Indemnified Party pursuant to any indemnification by or indemnification agreement with any
third party, (ii) any insurance proceeds or other cash receipts or sources of reimbursement
received as an offset against such loss (each source named in clauses (i) and (ii), a “Collateral
Source”), and (iii) an amount equal to the present value of the Tax benefit, if any, available to
or taken by the indemnified party attributable to such loss. The parties shall take all reasonable
steps to mitigate any loss upon becoming aware of any event that would reasonably be expected to,
or does, give rise thereto, including incurring costs only to the minimum extent necessary to
remedy a breach that gives rise to the loss. Indemnification under this Article XII shall not be
available to any party, unless the party seeking indemnification first uses commercially
reasonable efforts to seek recovery from all Collateral Sources. The parties acknowledge and agree
that no right of subrogation shall accrue or inure to the benefit of any Collateral Source
hereunder. The Indemnifying Party may require an Indemnified Party to assign the rights to seek
recovery pursuant to the preceding sentence; provided, however, that the Indemnifying Party will
then be responsible for pursuing such recovery at its own expense. If the amount to be netted
hereunder from any payment required under this Article XII is determined after payment by the
Indemnifying Party of any amount otherwise required to be paid to an Indemnified Party, the
Indemnified Party shall repay to the Indemnifying Party, promptly after such determination, any
amount that the Indemnifying Party would not have had to pay pursuant to this Article XII had such
determination been made at the time of such payment.



XIII. GENERAL




     13.1 Further Assurances Before and After the Effective Time. The parties will take all
appropriate action and execute any documents, instruments or conveyances of any kind that may be reasonably
requested by any of them, to carry out any of the provisions of this Agreement.



     13.2 Amendment and Waiver. This Agreement may not be amended, nor may any provision
of this Agreement be waived, except in a writing executed by the party against which such
amendment or waiver is sought to be enforced.



     13.3 Notices. All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and will be deemed to
have been given (i) when delivered if personally delivered by hand, (ii) when received if sent by
a nationally recognized overnight courier service (receipt requested), (iii) five Business Days
after being mailed, if sent by first class mail, return receipt requested, or (iv) when receipt is
acknowledged by an affirmative act of the party receiving notice, if sent by facsimile, telecopy
or other electronic transmission device (provided that such an acknowledgement does not include an
acknowledgment generated automatically by a facsimile or telecopy machine or other electronic
transmission device). Notices, demands and communications to the parties will, unless another
address is specified in writing, be




20











 




sent to the address indicated below:




     If to LOL or Agriliance:


Land O’Lakes, Inc.

Attention: President
 4001
Lexington Avenue North

Arden Hills, MN 551126




     With copies to:


Land O’Lakes, Inc. Attention:

General Counsel MS 2500
 4001
Lexington Avenue North 
Arden
Hills, MN 551126




     If to CHS or UCB:


CHS Inc.

Attention: President and Chief Executive Officer

5500 Cenex Drive

Inver Grove Heights, MN 55077




     With copies to:


CHS Inc.

Attention: General Counsel

5500 Cenex Drive

Inver Grove Heights, MN 55077




     13.4 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this
Agreement may be assigned by any party to this Agreement without the prior written consent of
the other parties to
this Agreement. Subject to the foregoing, this Agreement and all of the provisions of this
Agreement will be
binding upon and inure to the benefit of the parties to this Agreement and their respective
successors and permitted
assigns.



     13.5 No Third Party Beneficiaries. Nothing expressed or referred to in this Agreement
confers any rights or remedies upon any Person that is not a party or permitted assign of a party to this
Agreement.



     13.6 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable Law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable Law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.



     13.7 Complete Agreement. This Agreement, including the Exhibits and Schedules hereto,
contains the complete agreement between the parties and supersedes any prior understandings,
agreements or representations by or between the parties, written or oral with respect to this
reorganization of agronomy business.



     13.8 Signatures; Counterparts. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one party, but all such
counterparts taken together will constitute one and the same instrument. A facsimile signature will
be considered an original signature.



     13.9 Governing Law. The domestic law, without regard to conflicts of laws principles,
of the State of Minnesota will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed by this Agreement.



     13.10 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy
that may arise under this Agreement is likely to involve complicated and difficult issues, and
therefore it irrevocably and unconditionally waives any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to this Agreement or
the transactions contemplated by this Agreement. Each party certifies and



21









 




acknowledges that (i) No representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of litigation, seek to
enforce the foregoing waiver, (ii) It understands and has considered the implications of such
waiver, (iii) It makes such waiver voluntarily and (iv) It has been induced to enter into this
Agreement by, among other things, the mutual waiver and certifications in this Section 13.




     13.11 Construction. The parties and their respective counsel have participated
jointly in the negotiation and drafting of this Agreement. In addition, each of the parties
acknowledges that it is sophisticated and has been advised by experienced counsel and, to the
extent it deemed necessary, other advisors in connection with the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement
will be construed as if drafted jointly by the parties and no presumption or burden of proof will
arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement. Any reference to any Law will be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. References to sections, articles,
schedules or exhibits are to the sections, articles, schedules and exhibits contained in, referred
to or attached to this Agreement, unless otherwise specified. The word “including” means “including
without limitation.” The use of the masculine, feminine or neuter gender or the singular or plural
form of words will not limit any provisions of this Agreement.



22









 





     EXHIBITS AND SCHEDULES



EXHIBITS




	 	 	 
	Exhibit A

	 	Agreement to Pay Debt
	Exhibit B

	 	Assignment and Assumption of Certain CN Obligations
	Exhibit C

	 	Assignment and Assumption of Certain CPP Obligations
	Exhibit D

	 	Master Lease Agreement
	Exhibit E

	 	Supply Agreement to CHS
	Exhibit F

	 	Transition Services Agreement
	Exhibit G

	 	Modified Master Services Agreement
	Exhibit H

	 	Supply Agreement from CHS to Agriliance
	Exhibit I

	 	Supply Agreement from LOL/WS to Agriliance
	Exhibit J

	 	Vehicle Lease Agreement to CHS
	Exhibit K

	 	Vehicle Lease Agreement to WS






SCHEDULES




	 	 	 
	3.1(a)

	 	CN Owned Real Property
	3.1(b)

	 	CN Leased Real Property
	3.1(c)

	 	CN Tangible Personal Property
	3.1(d)

	 	CN Contracts
	3.1(f)

	 	CN Intellectual Property
	3.1(i)

	 	CN Prepaid Accounts
	3.1(j)

	 	CN Inventories
	3.1(k)

	 	CN Product Registrations
	4.1(a)

	 	CPP Owned Real Property
	4.1(b)

	 	CPP Leased Real Property
	4.1(c)

	 	CPP Tangible Personal Property
	4.1(e)

	 	CPP Contracts
	4.1(h)

	 	CPP Intellectual Property
	4.1(1)

	 	CPP Inventories
	4.1(j)

	 	CPP Prepaid Accounts
	4.1(k)

	 	CPP Product Registrations
	6.2

	 	Estimated Value Distributed
	7.1

	 	CN Employees
	7.2

	 	CPP Employees
	7.4

	 	Active Employees
	8.6

	 	Known Retained Environmental Liabilities
	10.1(d)

	 	Schedule of Leases of Shared Locations
	10.2(a)

	 	Form of General Warranty Deed
	10.2(b)

	 	Form of Assignment and Assumption Agreements for CN and CPP Leased Real
Property and CN Leased Real Property
	10.2(c)

	 	Bills of Sale for CN and CPP Tangible Personal Property
	10.2(d)

	 	Assignment and Assumption Agreements for the CN and CPP Contracts
	10.2(e)

	 	Assignment and Assumption Agreements for the CN and CPP Equity Interests
	10.2(f)

	 	Bills) Form of Sale for the CN and CPP Inventories

	10.2(g)

	 	Owner’s Affidavits for the CN and CPP Real Property






24









 






     IN WITNESS WHEREOF, LOL, WS, UCB and CHS have executed this
Agreement as of the date first above written.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	LAND O’ LAKES, INC.	 	 	 	WINFIELD SOLUTIONS, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BY:	 	/s/ Daniel Knutson	 	 	 	BY:	 	/s/ John W. Curran	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Print Name:
	 	Daniel Knutson
	 	 	 	 	 	Print Name:
	 	John W. Curran	 	 
	 

	 	Title:
	 	CFO
	 	 	 	 	 	Title:
	 	Asst. Secretary	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CHS, INC.	 	 	 	UNITED COUNTRY BRANDS, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BY:	 	/s/ Mark L. Palmquist	 	 	 	BY:	 	/s/ John Schmitz	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Print Name:
	 	Mark L. Palmquist
	 	 	 	 	 	Print Name:
	 	John Schmitz	 	 
	 

	 	Title:
	 	EVP
	 	 	 	 	 	Title:
	 	EVP	 	 







23