exv10w37



 



Exhibit
10.37



CREDIT AGREEMENT

(10 Year Term Loan)




by and between




CoBank, ACB,

as Administrative Agent and as a Syndication Party,




the other Syndication Parties signatory hereto 




and




CHS INC




dated as of December 12, 2007




 









 





CREDIT AGREEMENT

(10 Year Term Loan)




     THIS AGREEMENT (“Credit Agreement”) is entered into as of the 12th day of December 2007, by
and between COBANK, ACB (“CoBank”) for its own benefit as a Syndication Party, and as the
Administrative Agent for the benefit of the present and future Syndication Parties (in that
capacity “Administrative Agent”), the Syndication Parties identified on Schedule 1 hereto,
and CHS INC, a cooperative corporation formed under the laws of the State of Minnesota, whose
address is 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077 (“Borrower”).



ARTICLE 1. DEFINED TERMS




     As used in this Credit Agreement, the following terms shall have the meanings set forth below
(and such meaning shall be equally applicable to both the singular and plural form of the terms
defined, as the context may require):



     1.1 Additional Costs: shall have the meaning set forth in Section 14.12.



     1.2 Adjusted Consolidated Funded Debt: All Consolidated Funded Debt of Borrower and
its Consolidated Subsidiaries, plus the net present value of operating leases of Borrower and its
Consolidated Subsidiaries as discounted by a rate of 8.0% per annum.



     1.3 Administrative Agent: shall initially mean CoBank, ACB.



     1.4 Administrative Agent Office: shall mean the address set forth at Subsection
14.4.2, as it may change from time to time by notice to all parties to this Credit Agreement.



     1.5 Advance: an advance of funds under the Term Loan.



     1.6 Advance Date: a day (which shall be a Banking Day) on which an Advance is made.



     1.7 Advance Payment: shall have the meaning set forth in Section 13.1.



     1.8 Affiliate: with respect to any Person means (a) a Subsidiary of such Person, (b)
any Person in which such Person, directly or indirectly, owns more than five percent (5.0%) of the
outstanding equity thereof, and (c) any Person which, directly or indirectly, (i) owns more than
five percent (5.0%) of the outstanding equity of such Person, or (ii) has the power under ordinary
circumstances to control the management of such Person.



 









 





     1.9 Aggregate Term Loan Commitment: shall be $150,000,000.



     1.10 Amortization: the total amortization of Borrower and its Consolidated
Subsidiaries as measured in accordance with GAAP.



     1.11 Annual Operating Budget: means the annual operating budget for Borrower and its
Subsidiaries in substantially the form of, and containing substantially the same or similar
information as set forth in, the Annual Operating Budget (Business Plan) for Borrower and its
Subsidiaries included in the booklet delivered to the Administrative Agent on March 29, 2006.



     1.12 Anti-Terrorism Laws: shall have the meaning set forth in Subsection 7.24.1.



     1.13 Applicable Lending Office: means, for each Syndication Party and for each type
of Advance, the lending office of such Syndication Party designated as such for such type of
Advance on its signature page hereof or in the applicable Syndication Acquisition Agreement or such
other office of such Syndication Party as such Syndication Party may from time to time specify to
the Administrative Agent and Borrower as the office by which its Advances of such type are to be
made and maintained.



     1.14 Authorized Officer: shall have the meaning set forth in Subsection 8.1.4.



     1.15 Bank Debt: all amounts owing under the Note, fees, Borrower’s obligations to
purchase Bank Equity Interests, Funding Losses and all interest, expenses, charges and other
amounts payable by Borrower pursuant to the Loan Documents.



     1.16 Banking Day: any day other than a Saturday or a Sunday, and other than a Federal
legal holiday or a legal holiday for banks in the States of Colorado, Minnesota, or New York.



     1.17 Bank Equity Interests: shall have the meaning set forth in Article 5 hereof.



     1.18 Base Rate: a rate of interest per annum equal to the “prime rate” as published
from time to time in the Eastern Edition of the Wall Street Journal as the average prime lending
rate for seventy-five percent (75%) of the United States’ thirty (30) largest commercial banks, or
if the Wall Street Journal shall cease publication or cease publishing the “prime rate” on a
regular basis, such other regularly published average prime rate applicable to such commercial
banks as is acceptable to the Administrative Agent in its reasonable discretion, with the consent
of Borrower, which consent will not be unreasonably withheld (provided that Borrower’s consent
shall not be required at any time there has occurred and is continuing a Potential Default or an
Event of Default).



     1.19 Borrower’s Account: shall mean Borrower’s account #44070 at Wells Fargo Bank,
N.A., Minneapolis, Minnesota (ABA #091000019).



     1.20 Borrower Benefit Plan: means (a) any “employee benefit plan”, as such term is
defined in Section 3(3) of ERISA (including any “multiemployer plan” as defined in Section 3(37) of
ERISA); (b) any “multiple employer plan” within the meaning of Section 413 of the Code; (c) any
“multiple employer welfare arrangement” within the meaning of Section 3(40) of ERISA; (d) a
“voluntary employees’ beneficiary association” within the meaning of Section 501(a)(9) of the



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Code; (e) a “welfare benefit fund” within the meaning of Section 419 of the Code; or (f) any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA for the benefit of
retired or former employees, which is maintained by Borrower or in which Borrower participates or
to which Borrower is obligated to contribute.




     1.21 Borrowing Notice: shall have the meaning set forth in Section 2.2.



     1.22 Borrower Pension Plan: means each Borrower Benefit Plan that is an “employee
pension benefit plan” as defined in Section 3(2) of ERISA that is intended to satisfy the
requirements of Section 401(a) of the Code.



     1.23 Capital Leases: means any lease of property (whether real, personal or mixed) by
a Person which has been or should be , in accordance with GAAP, reflected on the balance sheet of
such Person as a capital lease.



     1.24 Closing Date: the date (a) the Administrative Agent, the Syndication Parties and
Borrower have executed all Loan Documents, and (b) the conditions set forth in Section 8.1 of this
Credit Agreement have been met, which must occur on or before December 15, 2008.



     1.25 Code: means the Internal Revenue Code of 1986.



     1.26 Committed Term Loan Advance: the principal amount of the Term Loan Advance which
any Syndication Party is obligated to make as a result of such Syndication Party having received a
Term Loan Advance funding notice pursuant to Section 2.2 hereof, but which has not been funded.



     1.27 Compliance Certificate: a certificate of the chief financial officer of Borrower
acceptable to the Administrative Agent and in the form attached hereto as Exhibit 1.27.



     1.28 Communications: shall have the meaning set forth in Subsection 14.16.1.



     1.29 Consolidated Cash Flow: for any period, the sum of (a) earnings before income
taxes of Borrower and its Consolidated Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; plus (b) amounts that have been deducted in the determination of
such earnings before income taxes for such period for (i) Consolidated Interest Expense for such
period, (ii) Depreciation for such period, (iii) Amortization for such period, and (iv)
extraordinary and/or one-time non-cash losses for such period; minus (c) the amounts that have been
included in the determination of such earnings before income taxes for such period for (i)
extraordinary gains, (ii) extraordinary and/or one-time income, (iii) non-cash patronage income,
and (iv) non-cash equity earnings in joint ventures.



     1.30 Consolidated Current Assets: the total current assets of Borrower and its
Consolidated Subsidiaries as measured in accordance with GAAP.



     1.31 Consolidated Current Liabilities: the total current liabilities of Borrower and
its Consolidated Subsidiaries as measured in accordance with GAAP.



     1.32 Consolidated Funded Debt: all indebtedness for borrowed money of the Borrower
and its Subsidiaries, that is classified as long term debt in accordance with GAAP, and shall



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include Debt of such maturity created or assumed by the Borrower or any Consolidated Subsidiary
either directly or indirectly, including obligations of such maturity secured by liens upon
property of the Borrower or its Consolidated Subsidiaries and upon which such entity customarily
pays the interest, and all rental payments under capitalized leases of such maturity.




     1.33 Consolidated Interest Expense: for any period, all interest expense of Borrower
and its Consolidated Subsidiaries, as determined in accordance with GAAP.



     1.34 Consolidated Members’ and Patrons’ Equity: the amount of equity accounts plus
(or minus in the case of a deficit) the amount of surplus and retained earnings accounts of
Borrower and its Consolidated Subsidiaries and the minority interest in Subsidiaries, provided that
the total amount of intangible assets of Borrower and its Consolidated Subsidiaries (including,
without limitation, unamortized debt discount and expense, deferred charges and goodwill) included
therein shall not exceed $30,000,000 (and to the extent such intangible assets exceed
$30,000,000.00, they will not be included in the calculation of Consolidated Members’ and Patrons’
Equity); all as determined in accordance with GAAP consistently applied.



     1.35 Consolidated Subsidiary: any Subsidiary whose accounts are consolidated with
those of Borrower in accordance with GAAP.



     1.36 Contributing Syndication Parties: shall have the meaning set forth in Section
13.3.



     1.37 Debt: means as to any Person: (a) indebtedness or liability of such Person for
borrowed money, or for the deferred purchase price of property or services (including trade
obligations); (b) obligations of such Person as lessee under capital leases; (c) obligations of
such Person arising under bankers’ or trade acceptance facilities; (d) all guarantees, endorsements
(other than for collection or deposit in the ordinary course of business), and other contingent
obligations of such Person to purchase any of the items included in this definition, to provide
funds for payment, to supply funds to invest in any other Person, or otherwise to assure a creditor
of another Person against loss (without duplication); (e) all obligations secured by a lien on
property owned by such Person, whether or not the obligations have been assumed; and (f) all
obligations of such Person under any agreement providing for an interest rate swap, cap, cap and
floor, contingent participation or other hedging mechanisms with respect to interest payable on any
of the items described in this definition.



     1.38 Default Interest Rate: a rate of interest equal to 200 basis points in excess of
the interest rate which would otherwise be applicable on the Loan.



     1.39 Delinquency Interest: shall have the meaning set forth in Section 13.3.



     1.40 Delinquent Amount: shall have the meaning set forth in Section 13.3.



     1.41 Delinquent Syndication Party: shall have the meaning set forth in Section 13.3.



     1.42 Depreciation: the total depreciation of Borrower and its Consolidated
Subsidiaries as measured in accordance with GAAP.



     1.43 Embargoed Person: shall have the meaning set forth in Section 9.15.



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     1.44 Environmental Laws: means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.



     1.45 ERISA: shall have the meaning set forth in Section 7.10.



     1.46 ERISA Affiliate: means any corporation or trade or business which is a member of
the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as
Borrower or is under common control (within the meaning of Section 414(c) of the Code) with
Borrower, provided, however, that for purposes of provisions herein concerning minimum funding
obligations (imposed under Section 412 of the Code or Section 302 of ERISA), the term “ERISA
Affiliate” shall also include any entity required to be aggregated with Borrower under Section
414(m) or 414(o) of the Code.



     1.47 Event of Default: shall have the meaning set forth in Section 12.1.



     1.48 Event of Syndication Default: shall have the meaning set forth in Subsection
13.28.1.



     1.49 Executive Order: shall have the meaning set forth in Subsection 7.24.1.



     1.50 Farm Credit System Institution: shall mean any Farm Credit Bank, any Federal
land bank association, any production credit association, the banks for cooperatives, and such
other institutions as may be a part of the Farm Credit System and chartered by and subject to
regulation by the Farm Credit Administration.



     1.51 Fiscal Quarter: each three (3) month period beginning on the first day of each
of the following months: September, December, March and June.



     1.52 Fiscal Year: a year commencing on September 1 and ending on August 31.



     1.53 Funded Debt: means, with respect to any Person, at any time, all Debt of such
Person in each case maturing by its terms more than one year after the date of creation thereof, or
which is renewable or extendible at the option of such Person for a period ending more than one (1)
year after the date of creation thereof, and shall include Debt of such maturity created or assumed
by such Person either directly or indirectly, including obligations of such maturity secured by
liens upon property of such Person and upon which such Person customarily pays the interest, and
all obligations of such Person under Capital Leases of such maturity, and the net present value of
obligations under Operating Leases as discounted by a rate of 8.0% per annum, and all obligations
of reimbursement with respect to all letters of credit which support long-term debt, with
expiration dates in excess of one year from the date of issuance thereof.



     1.54 Funding Losses: shall have the meaning set forth in Section 4.5.



     1.55 Funding Loss Notice: shall have the meaning set forth in Section 4.5.



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     1.56 Funding Share: shall mean the amount of any Term Loan Advance which each
Syndication Party is required to fund; which shall be equal to the Term Loan Advance multiplied by
such Syndication Party’s Individual Term Loan Pro Rata Share.



     1.57 GAAP: generally accepted accounting principles in the United States of America,
as in effect from time to time.



     1.58 Good Faith Contest: means the contest of an item if (a) the item is diligently
contested in good faith by appropriate proceedings timely instituted, (b) either the item is (i)
bonded or (ii) adequate reserves are established with respect to the contested item if and to the
extent required in accordance with GAAP, (c) during the period of such contest, the enforcement of
any contested item is effectively stayed, and (d) the failure to pay or comply with the contested
item could not reasonably be expected to result in a Material Adverse Effect.



     1.59 Governmental Authority: means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.



     1.60 Hazardous Substances; means any and all pollutants, toxic or hazardous wastes or
any other substances that might pose a hazard to health or safety, the removal of which may be
required or the generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage, or
filtration of which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).



     1.61 Holdout Lender : shall have the meaning set forth in Section 13.30.



     1.62 Indemnified Agency Parties: shall have the meaning set forth in Section 13.17.



     1.63 Indemnified Parties: shall have the meaning set forth in Section 11.1.



     1.64 Individual Term Loan Commitment: means with respect to any Syndication Party,
the amount shown as its Individual Term Loan Commitment on Schedule 1 hereto, subject to
adjustment in the event of the sale of all or a portion of a Syndication Interest in accordance
with Section 13.25 hereof.



     1.65 Individual Outstanding Term Loan Obligation: means with respect to any
Syndication Party, the sum of (a) the aggregate outstanding principal amount of the Term Loan
Advance made by such Syndication Party, or (b) such Syndication Party’s Committed Term Loan
Advance.



     1.66 Individual Term Loan Pro Rata Share: means with respect to any Syndication Party
a fraction, determined from time to time, expressed as a percentage (rounded to 9 decimal points),
where the numerator is such Syndication Party’s Individual Term Loan Commitment and the denominator
is the Aggregate Term Loan Commitment.



     1.67 Intellectual Property: shall have the meaning set forth in Section 7.18.



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     1.68 Investment: means, with respect to any Person, (a) any loan or advance by such
Person to any other Person, (b) the purchase or other acquisition by such Person of any capital
stock, obligations or securities of, or any capital contribution to, or investment in, or the
acquisition by such Person of all or substantially all of the assets of, or any interest in, any
other Person, (c) any performance or standby letter of credit where (i) that Person has the
reimbursement obligation to the issuer, and (ii) the proceeds of such letter of credit are to be
used for the benefit of any other Person, (d) the agreement by such Person to make funds available
for the benefit of another Person to either cover cost overruns incurred in connection with the
construction of a project or facility, or to fund a debt service reserve account, (e) the agreement
by such Person to assume, guarantee, endorse or otherwise be or become directly or contingently
responsible or liable for the obligations or debts of any other Person (other than by endorsement
for collection in the ordinary course of business), (f) an agreement to purchase any obligations,
stocks, assets, goods or services but excluding an agreement to purchase any assets, goods or
services entered into in the ordinary course of business, (g) an agreement to supply or advance any
assets, goods or services not in the ordinary course of business, or (h) an agreement to maintain
or cause such Person to maintain a minimum working capital or net worth or otherwise to assure the
creditors of any Person against loss.



     1.69 Licensing Laws: shall have the meaning set forth in Section 7.4.



     1.70 Lien: means with respect to any asset any mortgage, deed of trust, pledge,
security interest, hypothecation, assignment for security purposes, encumbrance, lien (statutory or
other), or other security agreement or charge, or encumbrance of any kind or nature whatsoever
(including, without limitation, any conditional sale, Capital Lease or other title retention
agreement related to such asset).



     1.71 Loans: shall mean all Quoted Rate Loans outstanding at any time.



     1.72 Loan Documents: this Credit Agreement and the Notes.



     1.73 Material Adverse Effect: means a material adverse effect on (a) the financial
condition, results of operation, business or property of Borrower; or (b) on the ability of
Borrower to perform its obligations under this Credit Agreement and the other Loan Documents; or
(c) on the ability of the Administrative Agent or the Syndication Parties to enforce their rights
and remedies against Borrower under the Loan Documents.



     1.74 Material Agreements: all agreements of Borrower, the termination or breach of
which, based upon Borrower’s knowledge as of the date of making any representation with respect
thereto, would have a Material Adverse Effect.



     1.75 Multiemployer Plan: means a Plan meeting the definition of a “multiemployer
plan” in Section 3(37) of ERISA.



     1.76 Not Used.



     1.77 Non-US Lender: shall have the meaning set forth in Section 13.29.



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     1.78 Note or Notes: the Term Loan Notes and all amendments, renewals, substitutions
and extensions thereof.



     1.79 OFAC: shall have the meaning set forth in Section 9.15.



     1.80 Operating Lease: means any lease of property (whether real, personal or mixed)
by a Person under which such Person is lessee, other than a Capital Lease.



     1.81 Organization Documents: in the case of a corporation, its articles or
certificate of incorporation and bylaws; in the case of a partnership, its partnership agreement
and certificate of limited partnership, if applicable; in the case of a limited liability company,
its articles of organization and its operating agreement.



     1.82 Other List: shall have the meaning set forth in Section 9.15.



     1.83 Payment Account: shall have the meaning set forth in Section 13.9.



     1.84 Payment Distribution: shall have the meaning set forth in Section 13.9.



     1.85 PBGC: shall have the meaning set forth in Section 7.10.



     1.86 Permitted Encumbrance: shall have the meaning set forth in Section 10.3.



     1.87 Person: any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company, cooperative
association, institution, government or governmental agency (whether national, federal, state,
provincial, country, city, municipal or otherwise, including without limitation, and
instrumentality, division, agency, body or department thereof), or other entity.



     1.88 Plan: means any plan, agreement, arrangement or commitment which is an employee
benefit plan, as defined in Section 3(3) of ERISA, maintained by Borrower or any Subsidiary or any
ERISA Affiliate or with respect to which Borrower or any Subsidiary or any ERISA Affiliate at any
relevant time has any liability or obligation to contribute.



     1.89 Platform: shall have the meaning set forth in Subsection 14.16.2.



     1.90 Potential Default: any event, other than an event described in Section 12.1(a)
hereof, which with the giving of notice or lapse of time, or both, would become an Event of
Default.



     1.91 Prohibited Transaction: means any transaction prohibited under Section 406 of
ERISA or Section 4975 of the Code.



     1.92 Quoted Rate: means a fixed rate of interest determined and quoted by the
Administrative Agent in its sole and absolute discretion from time to time at the request of
Borrower, which may not necessarily be the lowest rate at which the Administrative Agent or any of
the Syndication Parties loans funds at that time.



     1.93 Quoted Rate Loan: shall have the meaning set forth in Subsection 3.1.1.



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     1.94 Quoted Rate Period: shall have the meaning set forth in Subsection 3.1.1.



     1.95 Not Used



     1.96 Regulatory Change: shall have the meaning set forth in Section 14.12.



     1.97 Replacement Lender: shall have the meaning set forth in Section 13.30.



     1.98 Reportable Event: means any of the events set forth in Section 4043(b) of ERISA
or in the regulations thereunder.



     1.99 Required Lenders: shall mean Syndication Parties (including Voting Participants)
whose aggregate Individual Term Loan Commitments constitute fifty-one percent (51.0%) or more of
the Aggregate Term Loan Commitment; provided however, if fewer than three Syndication
Parties (including Voting Participants) hold fifty-one percent (51.0%) or more of the Aggregate
Term Loan Commitment, then the number of Syndication Parties (including Voting Participants) which
shall constitute the Required Lenders shall be not less than (i) all of the Syndication Parties
(including Voting Participants) if there are only one or two Syndication Parties (including Voting
Participants), or (ii) three of the Syndication Parties (including Voting Participants) if
there are three or more Syndication Parties (including Voting Participants) and two of them
together hold fifty-one percent (51.0%) or more of the Aggregate Term Loan Commitment. Pursuant to
Section 13.26 hereof, Voting Participants shall, under the circumstances set forth therein, be
entitled to voting rights and to be included in determining whether certain action is being taken
by the Required Lenders.



     1.100 Required License: shall have the meaning set forth in Section 7.9.



     1.101 Restricted Subsidiary: shall mean those Subsidiaries identified on Exhibit
1.101 hereto, as it may be amended from time to time with the prior written consent of
Borrower, the Administrative Agent and the Required Lenders.



     1.102 Revolving Loan Credit Agreement: shall mean that certain Credit Agreement
(Revolving Loan) dated as of May 18, 2006 by and between Borrower and CoBank, as administrative
agent for all syndication parties thereunder, and as a syndication party thereunder, and the other
syndication parties set forth on the signature pages thereto, as amended from time to time.



     1.103 SDN List: shall have the meaning set forth in Section 9.15.



     1.104 Subsidiary: means with respect to any Person: (a) any corporation in which
such Person, directly or indirectly, (i) owns more than fifty percent (50%) of the outstanding
stock thereof, or (ii) has the power under ordinary circumstances to elect at least a majority of
the directors thereof, or (b) any partnership, association, joint venture, limited liability
company, or other unincorporated organization or entity, with respect to which such Person, (i)
directly or indirectly owns more than fifty percent (50%) of the equity interest thereof, or (ii)
directly or indirectly owns an equity interest in an amount sufficient to control the management
thereof. All of Borrower’s Subsidiaries owned as of the Closing Date are set forth on Exhibit
1.104 hereto.



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     1.105 Successor Agent: such Person as may be appointed as successor to the rights and
duties of the Administrative Agent as provided in Section 13.20 of this Credit Agreement.



     1.106 Syndication Acquisition Agreement: shall have the meaning set forth in Section
13.25.



     1.107 Syndication Interest: shall have the meaning set forth in Section 13.1.



     1.108 Syndication Parties: shall mean those entities listed on Schedule 1
hereto as having an Individual Term Loan Commitment, and such Persons as shall from time to time
execute a Syndication Acquisition Agreement substantially in the form of Exhibit 13.25
hereto signifying their election to purchase all or a portion of the Syndication Interest of any
Syndication Party, in accordance with Section 13.25 hereof, and to become a Syndication Party
hereunder.



     1.109 Syndication Party Advance Date: shall have the meaning set forth in Section
13.2.



     1.110 Term Loan Note(s): shall have the meaning set forth in Section 2.3.



     1.111 
Term Loan Advance: shall have the meaning set forth in Section 2.1.




     1.112 Term Loan: means the loan made pursuant to Article 2 of this Credit Agreement.


     1.113 Term Loan Maturity Date: means December 15, 2017.



     1.114 Transfer: shall have the meaning set forth in Section 13.25.



     1.115 USA Patriot Act: shall have the meaning set forth in Section 7.24.1.



     1.116 Voting Participant : shall have the meaning set forth in Section 13.26.



     1.117 Wire Instructions: shall have the meaning set forth in Section 13.27.



ARTICLE 2. TERM LOAN




     2.1 Term Loan. On the terms and conditions set forth in this Credit Agreement, each
of the Syndication Parties severally agrees to advance funds hereunder to Borrower on or about the
Closing Date in an aggregate principal amount of $150,000,000 (“Term Loan Advance”), and Borrower
agrees that its execution of this Credit Agreement shall constitute its request for the Term Loan
Advance.



     2.2 Borrowing Notice. With respect to the Term Loan Advance (which the Syndication
Parties shall provide automatically on or about the Closing Date), Borrower shall confirm that the
Quoted Rate Period shall be ten (10) years. The Administrative Agent will make such Term Loan
Advance available to Borrower, in immediately available funds, and will transmit such funds by wire
transfer to Borrower’s Account.



     2.3 Promissory Note. Borrower’s obligations to each Syndication Party under the Term
Loan, including Borrower’s payment obligations with respect to all Term Loan Advances made by each
Syndication Party shall be evidenced by, and repaid with interest in accordance with, a



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promissory note of Borrower in substantially the form of Exhibit 2.3 hereto duly
completed, in the stated maximum principal amount equal to such Syndication Party’s Individual Term
Loan Commitment, payable to such Syndication Party for the account of its Applicable Lending
Office, and maturing as to principal on the Term Loan Maturity Date (each a “Term Loan Note” and
collectively, the “Term Loan Notes”).




     2.4 Syndication Party Records. Each Syndication Party shall record on its books and
records the amount of the Term Loan Advance which it funds, the rate and interest period applicable
thereto, all payments of principal and interest, and the principal balance from time to time
outstanding. The Syndication Party’s record thereof shall be prima facie evidence as to all such
amounts and shall be binding on Borrower absent manifest error. Notwithstanding the foregoing,
Borrower will never be required to pay as principal more than the principal amount of the Term Loan
Advance made by the Syndication Parties.



     2.5 Use of Proceeds. The proceeds of the Term Loan Advance will be used by Borrower
to fund working capital requirements and for general corporate purposes, and Borrower agrees not to
request or use such proceeds for any other purpose. Borrower will not, directly or indirectly, use
any part of such proceeds for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors or to extend credit to any Person for the purpose
of purchasing or carrying any such margin stock.



     2.6 Syndication Party Funding Failure. The failure of any Syndication Party to fund
its Funding Share of the Term Loan Advance to be made by it on the date specified for such Advance
shall not relieve any other Syndication Party of its obligation (if any) to fund its Funding Share
of any Advance on such date, but no Syndication Party shall be responsible for the failure of any
other Syndication Party to make any Advance to be made by such other Syndication Party.



ARTICLE 3. INTEREST




     3.1 Interest. Interest on all Loans shall be calculated as follows:



          3.1.1 Quoted Rate. At the request of Borrower in a Borrowing Notice all of the
outstanding principal balance under the Term Loan Notes shall bear interest at the initial Quoted
Rate (a “Quoted Rate Loan”). The Borrowing Notice must confirm that the entire principal amount of
the Term Loan is to bear interest at the Quoted Rate for a period of ten (10) years (“Quoted Rate
Period”).



     3.2 Default Interest Rate. All past due payments on the Notes or of any other Bank
Debt (whether as a result of nonpayment by Borrower when due, at maturity, or upon acceleration)
shall bear interest at the Default Interest Rate from and after the due date for the payment, or on
the date of maturity or acceleration, as the case may be.



     3.3 Interest Calculation. Interest shall be calculated on the actual number of days
that the principal owing thereunder is outstanding with the daily rate calculated on the basis of a
year consisting of 360 days. In calculating interest, the Advance Date shall be included and the
date each payment is received shall be excluded.



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ARTICLE 4. PAYMENTS; FUNDING LOSSES




     4.1 Principal Payments. Principal shall be payable under the Term Loan in equal
semiannual installments of Fifteen Million Dollars ($15,000,000) on June 15 and December 15 of each
year or the next succeeding Banking Day commencing on June 15, 2013, and in any event all principal
payable under the Term Loan shall be paid on or before the Term Loan Maturity Date, provided that
prepayments may be made only as provided in Section 4.5 hereof.



     4.2 Interest Payments. Interest owing under the Term Loan (a) shall be payable
semiannually in arrears on December 15 and June 15 of each year or the next succeeding Banking Day;
and (b) any interest then accrued and unpaid shall be payable on the Term Loan Maturity Date.



     4.3 Application of Principal Payments. Principal prepayments under the Term Loan
shall be applied to the most remote installment of principal due and unpaid. Upon the occurrence
and during the continuance of an Event of Default or Potential Default, all payments shall be
applied, first to fees, second to interest, third to principal, and last to any other Bank Debt.



     4.4 Manner of Payment. All payments, including prepayments, that Borrower is required
or permitted to make under the terms of this Credit Agreement shall be made to the Administrative
Agent (a) in immediately available federal funds, to be received no later than 1:00 P.M. Central
time of the Banking Day on which such payment is due (or the following Banking Day if such date is
not a Banking Day) by wire transfer through Federal Reserve Bank, Kansas City, as provided in the
Wire Instructions (or to such other account as the Administrative Agent may designate by notice).



          4.4.1 Payments to Be Free and Clear. All sums payable by Borrower under this Credit
Agreement and the other Loan Documents shall be paid without setoff or counterclaim and free and
clear of, and without any deduction or withholding on account of, any tax imposed, levied,
collected, withheld or assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction from or to which a
payment is made by or on behalf of Borrower or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of payment (excluding
taxes imposed on or measured by the net income or net profits of the recipient of such payment, and
franchise taxes imposed in lieu thereof).



          4.4.2 Grossing-up of Payments. If Borrower or any other Person is required by law to
make any deduction or withholding on account of any such tax from any sum paid or payable by
Borrower to the Administrative Agent or any Syndication Party under any of the Loan Documents:



               (a) Borrower shall notify the Administrative Agent of any such requirement or any change in
any such requirement as soon as Borrower becomes aware of it;



               (b) Borrower shall pay any such tax when such tax is due, such payment to be made (if the
liability to pay is imposed on Borrower) for its own account or (if that liability



13









 




is imposed on the Administrative Agent or such Syndication Party, as the case may be) on
behalf of and in the name of the Administrative Agent or such Syndication Party;




               (c) the sum payable by Borrower in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, the Administrative Agent or such Syndication Party, as the
case may be, receives on the due date a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and



               (d) within thirty (30) days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty (30) days after the due date of payment of any tax
which it is required by clause (b) above to pay, Borrower shall deliver to the Administrative Agent
evidence satisfactory to the other affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other authority;


provided that no such additional amount shall be required to be paid to any Syndication
Party under clause (c) above except to the extent that any change after the date on which such
Syndication Party became a Syndication Party in any such requirement for a deduction, withholding
or payment as is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date on which such Syndication Party became a
Syndication Party, in respect of payments to such Syndication Party




     4.5 Voluntary Prepayments. Borrower shall have the right to prepay all or any part of
the outstanding principal balance under the Loans at any time, provided that partial pre-payments
shall be in a minimum amount of $5,000,000 and in integral multiples of $1,000,000 on any Banking
Day; provided that (a) Borrower must provide three (3) Banking Days notice to the Administrative
Agent prior to making such prepayment, (b) Borrower must, at the time of making such prepayment,
pay all accrued but unpaid interest and all Funding Losses applicable to such prepayment, and (c)
Borrower must, at the time of making such prepayment, pay all accrued but unpaid interest and all
Funding Losses applicable to such prepayment.



     In the event of any payment of any Loans before the expiration of the applicable Quoted Rate
Period, whether voluntary or mandatory, and including on account of acceleration, Borrower must, at
the time of making such payment, pay all accrued but unpaid interest and all Funding Losses
applicable to such payment. “Funding Losses” shall be determined on an individual Syndication
Party basis as the amount which would result in such Syndication Party being made whole (on a
present value basis) for the actual or imputed funding losses (including, without limitation, any
loss, cost or expense incurred by reason of obtaining, liquidating or employing deposits or other
funds acquired by such Syndication Party to fund or maintain such Loan incurred by such Syndication
Party as a result of such payment (regardless of whether the Syndication Party actually funded with
such deposits); provided that such amount shall in no event be less than $300.00 with respect to
any Syndication Party. In the event of any such payment, each Syndication Party which had funded
the Loan being paid shall, promptly after being notified of such payment, send written notice
(“Funding Loss Notice”) to the Administrative Agent by facsimile setting forth the amount of
attributable Funding Losses and the method of calculating the same. The Administrative Agent shall
notify Borrower orally or in writing of the amount of such Funding Losses. A determination by a
Syndication Party as to the amounts payable pursuant to this Section shall be conclusive absent
manifest error.



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     The term “Make-Whole Amount” means, with respect to any Loan, an amount equal to the excess,
if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Prepaid
Principal of such Loan over the amount of such Prepaid Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:




     “Prepaid Principal” means, with respect to any Loan, the principal of such Loan that is
to be prepaid voluntarily or has become or is declared to be immediately due and payable.




     “Discounted Value” means, with respect to the Prepaid Principal of any Loan, the amount
obtained by discounting all Remaining Scheduled Payments with respect to such Prepaid
Principal from their respective scheduled due dates to the Settlement Date with respect to
such Prepaid Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the Loans is
payable) equal to the Reinvestment Yield with respect to such Prepaid Principal.




     “Reinvestment Yield” means, with respect to the Prepaid Principal of any Loan, 0.50%
plus the yield to maturity calculated by using (i) the yields reported, as of 10:00 A.M.
(New York City time) on the second Business Day preceding the Settlement Date on screen “PX
1” on the Bloomberg Financial Market Service (or such other display on the Bloomberg
Financial Market Service as may be agreed upon by the Company and the Required Holders
having the same information if “PX-1” is replaced by Bloomberg Financial Market Service) for
the most recently issued, actively traded, on-the-run benchmark U.S. Treasury securities,
having a maturity equal to the Remaining Average Life of such Prepaid Principal as of such
Settlement Date or (ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, (including by way of interpolation), the
Treasury Constant Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the Settlement Date, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the Remaining
Average Life of such Prepaid Principal as of such Settlement Date. In either case, the
yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond equivalent yields in accordance with accepted financial practice and (b) interpolating
linearly on a straight line basis between (1) the applicable U.S. Treasury security with the
maturity closest to and greater than the Remaining Average Life and (2) the applicable U.S.
Treasury security with the maturity closest to and less than the Remaining Average Life.
The Reinvestment Yield shall be rounded to the number of decimal places as appears in the
interest rate of the applicable Loan.




     “Remaining Average Life” means, with respect to any Prepaid Principal, the number of
years (calculated to the nearest one-twelfth year) obtained by dividing (a) such Prepaid
Principal into (b) the sum of the products obtained by multiplying (i) the principal
component of each Remaining Scheduled Payment with respect to such Prepaid Principal by (ii)
the number of years (calculated to the nearest one-twelfth year) that will elapse between
the Settlement Date with respect to such Prepaid Principal and the scheduled due date of
such Remaining Scheduled Payment.



15









 






     “Remaining Scheduled Payments” means, with respect to the Prepaid Principal of any
Loan, all payments of such Prepaid Principal and interest thereon that would be due after
the Settlement Date with respect to such Prepaid Principal if no payment of such Prepaid
Principal were made prior to its scheduled due date, provided that if such Settlement Date
is not a date on which interest payments are due to be made under the terms of the Loans,
then the amount of the next succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and required to be paid on such
Settlement Date.




     “Settlement Date” means, with respect to the Prepaid Principal of any Loan, the date on
which such Prepaid Principal is to be prepaid pursuant or has become or is declared to be
immediately due and payable.



     4.6 Distribution of Principal and Interest Payments. The Administrative Agent shall
distribute payments of principal and interest payments on the Term Loan Advance among the
Syndication Parties in accordance with their Individual Term Loan Pro Rata Share.



ARTICLE 5. BANK EQUITY INTERESTS




     Borrower agrees to purchase such equity interests in CoBank (“Bank Equity Interests”) as
CoBank may from time to time require in accordance with its bylaws and capital plans as applicable
to cooperative borrowers generally. In connection with the foregoing, Borrower hereby acknowledges
receipt, prior to the execution of this Credit Agreement, of the following with respect to CoBank
(a) the bylaws, (b) a written description of the terms and conditions under which the Bank Equity
Interests are issued, (c) the most recent annual report, and if more recent than the latest annual
report, the latest quarterly report. CoBank reserves the right to sell participations under the
provisions of Section 13.25 on a non-patronage basis.



ARTICLE 6. SECURITY




     The obligations of Borrower under this Credit Agreement shall be unsecured, except the
statutory lien in favor of CoBank, but not any other Syndication Parties, in the Bank Equity
Interests.



ARTICLE 7. REPRESENTATIONS AND WARRANTIES




     To induce the Syndication Parties to make the Loans and recognizing that the Syndication
Parties and the Administrative Agent are relying thereon, Borrower represents and warrants as
follows:



     7.1 Organization, Good Standing, Etc. Borrower: (a) is duly organized, validly
existing, and in good standing under the laws of its state of incorporation; (b) qualifies as a
cooperative association under the laws of its state of incorporation; (c) is duly qualified to do
business and is in good standing in each jurisdiction in which the transaction of its business
makes such qualification necessary, except to the extent that the failure to so qualify has not
resulted in, and could not reasonably be expected to cause, a Material Adverse Effect; and (d) has
all authority and all requisite corporate and legal power to own and operate its assets and to
carry on its business, and to enter into and perform the Loan Documents to which it is a party.
Each




16












 




Subsidiary: (a) is duly organized, validly existing, and in good standing under the laws of
its state of incorporation; (b) is duly qualified to do business and is in good standing in each
jurisdiction in which the transaction of its business makes such qualification necessary, except to
the extent that the failure to so qualify has not resulted in, and could not reasonably be expected
to cause, a Material Adverse Effect; and (c) has all authority and all requisite corporate and
legal power to own and operate its assets and to carry on its business.




     7.2 Corporate Authority, Due Authorization; Consents. Borrower has taken all
corporate action necessary to execute, deliver and perform its obligations under the Loan Documents
to which it is a party and to pay off all amounts owing under the Existing Credit Agreement. All
consents or approvals of any Person which are necessary for, or are required as a condition of
Borrower’s execution, delivery and performance of and under the Loan Documents, have been obtained.



     7.3 Litigation. Except as described on Exhibit 7.3 hereto, there are no
pending legal or governmental actions, proceedings or investigations to which Borrower or any
Subsidiary is a party or to which any property of Borrower or any Subsidiary is subject which might
reasonably be expected to result in any Material Adverse Effect and, to Borrower’s knowledge, no
such actions or proceedings are threatened or contemplated by any federal, state, county, or city
(or similar unit) governmental agency or any other Person.



     7.4 No Violations. The execution, delivery and performance of its obligations under
the Loan Documents will not: (a) violate any provision of Borrower’s articles of incorporation or
bylaws, or any law, rule, regulation (including, without limitation, Regulations T, U, and X of the
Board of Governors of the Federal Reserve System), or any judgment, order or ruling of any court or
governmental agency; (b) violate, require consent under (except such consent as has been obtained),
conflict with, result in a breach of, constitute a default under, or with the giving of notice or
the expiration of time or both, constitute a default under, any existing real estate mortgage,
indenture, lease, security agreement, contract, note, instrument or any other agreements or
documents binding on Borrower or affecting its property; or (c) violate, conflict with, result in a
breach of, constitute a default under, or result in the loss of, or restriction of rights under,
any Required License or any order, law, rule, or regulation under or pursuant to which any Required
License was issued or is maintained (“Licensing Laws”).



     7.5 Binding Agreement. Each of the Loan Documents to which Borrower is a party is, or
when executed and delivered, will be, the legal, valid and binding obligation of Borrower,
enforceable in accordance with its terms, subject only to limitations on enforceability imposed by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors’
rights generally and by general principles of equity.



     7.6 Compliance with Laws. Borrower and each Subsidiary are in compliance with all
federal, state, and local laws, rules, regulations, ordinances, codes and orders, including without
limitation all Environmental Laws and all Licensing Laws, with respect to which noncompliance could
reasonably be expected to result in a Material Adverse Effect.



     7.7 Principal Place of Business; Place of Organization. Borrower’s place of business,
or chief executive office if it has more than one place of business, and the place where the
records required by Section 9.1 hereof are kept, is located at 5500 Cenex Drive, Inver Grove
Heights,



17









 




Minnesota 55077. Borrower is a cooperative corporation formed under the laws of the State of
Minnesota.




     7.8 Payment of Taxes. Except as shown on Exhibit 7.8 hereto, Borrower and
each Subsidiary have filed all required federal, state and local tax returns and have paid all
taxes as shown on such returns as they have become due, and have paid when due all other taxes,
assessments or impositions levied or assessed against Borrower or any Subsidiary, or their business
or properties, except where the failure to make such filing or payment could not reasonably be
expected to result in a Material Adverse Effect. Exhibit 7.8 specifically indicates all
such taxes, if any, which are subject to a Good Faith Contest.



     7.9 Licenses and Approvals. Borrower and each Subsidiary have ownership of, or
license to use, or have been issued, all trademarks, patents, copyrights, franchises, certificates,
approvals, permits, authorities, agreements, and licenses which are used or necessary to permit it
to own its properties and to conduct the business as presently being conducted as to which the
termination or revocation thereof could reasonably be expected to have a Material Adverse Effect
(“Required Licenses”). Each Required License is in full force and effect, and there is no
outstanding notice of cancellation or termination or, to Borrower’s knowledge, any threatened
cancellation or termination in connection therewith, nor has an event occurred with respect to any
Required License which, with the giving of notice or passage of time or both, could result in the
revocation or termination thereof or otherwise in any impairment of Borrower’s rights with respect
thereto, which impairment could reasonably be expected to have a Material Adverse Effect. No
consent, permission, authorization, order, or license of any governmental authority, is necessary
in connection with the execution, delivery, performance, or enforcement of and under the Loan
Documents to which Borrower is a party except such as have been obtained and are in full force and
effect.



     7.10 Employee Benefit Plans. Exhibit 7.10 sets forth as of the Closing Date a
true and complete list of each Borrower Benefit Plan that is maintained by Borrower or any of its
Subsidiaries or in which Borrower or any of its Subsidiaries participates or to which Borrower or
any of its Subsidiaries is obligated to contribute, in each case as of the Closing Date. Borrower
and its Subsidiaries are in compliance in all material respects with the Employee Retirement Income
Security Act of 1974, as amended, and the regulations thereunder (“ERISA”), to the extent
applicable to them, and have not received any notice to the contrary from the Pension Benefit
Guaranty Corporation (“PBGC”).



     7.11 Equity Investments. Borrower does not now own any stock or other voting or
equity interest, directly or indirectly, in any Person valued at the greater of book value or
market value at $5,000,000 or more, other than: (a) the Bank Equity Interests, and (b) as set
forth on Exhibit 7.11.



     7.12 Title to Real and Personal Property. Borrower and each Subsidiary have good and
marketable title to, or valid leasehold interests in, all of their material properties and assets,
real and personal, including the properties and assets and leasehold interests reflected in the
financial statements of the Borrower and its Subsidiaries referred to in Section 7.13 hereof,
except (a) any properties or assets disposed of in the ordinary course of business, and (b) for
defects in title and encumbrances which could not reasonably be expected to result in a Material
Adverse Effect; and none of the properties of Borrower or any Consolidated Subsidiary are subject
to any Lien, except



18









 




as permitted by Section 10.3 hereof. All such property is in good operating condition and
repair, reasonable wear and tear excepted, and suitable in all material respects for the purposes
for which it is being utilized except where their failure to be in good operating condition could
not reasonably be expected to result in a Material Adverse Effect. All of the leases of Borrower
and each Subsidiary which constitute Material Agreements are in full force and effect and afford
Borrower or such Subsidiary peaceful and undisturbed possession of the subject matter thereof.




     7.13 Financial Statements. The consolidated balance sheets of Borrower and its
Subsidiaries as of August 31, 2007, and the related consolidated statements of operations, cash
flows and consolidated statements of capital shares and equities for the Fiscal Year then ended,
and the accompanying footnotes, together with the unqualified opinion thereon of
PricewaterhouseCoopers LLP, independent certified public accountants, copies of which have been
furnished to the Administration Agent and the Syndication Parties, fairly present in all material
respects the consolidated financial condition of Borrower and its Subsidiaries as at such dates and
the results of the consolidated operations of Borrower and its Subsidiaries for the periods covered
by such statements, all in accordance with GAAP consistently applied. Since August 31, 2007, there
has been no material adverse change in the financial condition, results of operations, business or
prospects of Borrower or any of its Subsidiaries. As of the Closing Date, there are no liabilities
of Borrower or any of its Subsidiaries, fixed or contingent, which are material but are not
reflected in the financial statements of Borrower and its Subsidiaries referred to above or
referred to in the notes thereto, other than liabilities arising in the ordinary course of business
since August 31, 2007. No information, exhibit, or report furnished by Borrower or any of its
Subsidiaries to the Administration Agent or the Syndication Parties in connection with the
negotiation of this Credit Agreement contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements contained therein not materially
misleading in light of the circumstances in which they were made and taken together with the other
information, exhibits and reports furnished to the Administration Agent and/or the Syndication
Parties.



     7.14 Environmental Compliance. Except as set forth on Exhibit 7.14 hereto,
Borrower and each Subsidiary have obtained all permits, licenses and other authorizations which are
required under all applicable Environmental Laws, except to the extent failure to have any such
permit, license or authorization could not reasonably be expected to result in a Material Adverse
Effect. Except as set forth on Exhibit 7.14 hereto, Borrower and each Subsidiary are in
compliance with all Environmental Laws and the terms and conditions of the required permits,
licenses and authorizations, and are also in compliance with all other limitations, restrictions,
obligations, schedules and timetables contained in those Laws or contained in any plan, order,
decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, except to the extent, in each case, failure to comply has not resulted in, and could
not reasonably be expected to result in, a Material Adverse Effect.



     7.15 Fiscal Year. Each fiscal year of Borrower begins on September 1 of each calendar
year and ends on August 31 of the following calendar year.



     7.16 Material Agreements. Neither Borrower nor, to Borrower’s knowledge, any other
party to any Material Agreement, is in default thereunder, and no facts exist which with the giving
of notice or the passage of time, or both, would constitute such a default.



19









 





     7.17 Regulations U and X. No portion of any Advance will be used for the purpose of
purchasing, carrying, or making loans to finance the purchase of, any “margin security” or “margin
stock” as such terms are used in Regulations U or X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224.



     7.18 Trademarks, Tradenames, etc. Borrower owns or licenses all patents, trademarks,
trade names, service marks and copyrights (collectively, “Intellectual Property”) that it utilizes
in its business as presently being conducted and as anticipated to be conducted, except where the
failure to do so could not reasonably be expected to result in a Material Adverse Effect on
Borrower. Borrower is not a licensee under any written license for any patent, trademark,
tradename, service mark or copyright other than shrinkwrap licenses for “off-the-shelf” software
used by Borrower in the conduct of its business. The Intellectual Property is in full force and
effect, and Borrower has taken or caused to be taken all action, necessary to maintain the
Intellectual Property in full force and effect and has not taken or failed to take or cause to be
taken any action which, with the giving of notice, or the expiration of time, or both, could result
in any such Intellectual Property being revoked, invalidated, modified, or limited.



     7.19 No Default on Outstanding Judgments or Orders. Borrower and each Subsidiary have
satisfied all judgments and Borrower and each Subsidiary are not in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any court, arbitrator or federal, state,
municipal or other Governmental Authority, commission, board, bureau, agency or instrumentality,
domestic or foreign, except to the extent such failure to satisfy any or all such judgments or to
be in such a default has not resulted in, and could not reasonably be expected to result in, a
Material Adverse Effect.



     7.20 No Default in Other Agreements. Neither Borrower nor any Subsidiary is a party
to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject
to any certificate of incorporation or corporate restriction which has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect. Neither Borrower nor any
Subsidiary is in default in any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument where such failure to
perform, observe or fulfill has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.



     7.21 Acts of God. Neither the business nor the properties of Borrower or any
Subsidiary are currently affected by any fire, explosion, accident, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by
insurance) which has resulted in, or could reasonably be expected to result in, a Material Adverse
Effect.



     7.22 Governmental Regulation. Neither Borrower nor any Subsidiary is subject to
regulation under the Public Utility Holding Company Act of 1935, the Investment Company Act of
1940, the Interstate Commerce Act, the Federal Power Act or any statute or regulation, in each
case, limiting its ability to incur indebtedness for money borrowed as contemplated hereby.



     7.23 Labor Matters and Labor Agreements. Except as set forth in Exhibit 7.23
hereto: (a) As of the Closing Date, there are no collective bargaining agreements or other labor
agreements covering any employees of Borrower or any Subsidiary the termination, cessation, or
breach of which could reasonably be expected to result in a Material Adverse Effect, and a true



20









 




and correct copy of each such agreement will be furnished to the Administrative Agent upon its
written request from time to time. (b) There is no organizing activity involving Borrower pending
or, to Borrower’s knowledge, threatened by any labor union or group of employees. (c) There are,
to Borrower’s knowledge, no representation proceedings pending or threatened with the National
Labor Relations Board, and no labor organization or group of employees of Borrower has made a
pending demand for recognition. (d) There are no complaints or charges against Borrower pending
or, to Borrower’s knowledge threatened to be filed with any federal, state, local or foreign court,
governmental agency or arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment by Borrower of any individual. (e) There
are no strikes or other labor disputes against Borrower that are pending or, to Borrower’s
knowledge, threatened. (f) Hours worked by and payment made to employees of Borrower or any
Subsidiary have not been in violation of the Fair Labor Standards Act (29 U.S.C. § 201 et seq.) or
any other applicable law dealing with such matters. The representations made in clauses (b)
through (f) of this Section are made with respect to those occurrences described which could,
considered in the aggregate, reasonably be expected to have a Material Adverse Effect.




     7.24 Anti-Terrorism Laws.



          7.24.1 Violation of Law. Neither the Borrower nor, to the knowledge of Borrower, any
of its Subsidiaries, is in violation of any laws relating to terrorism or money laundering
(“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (“Executive Order”), and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (“USA
Patriot Act”).



          7.24.2 Classification. Neither Borrower nor, to the knowledge of Borrower, any of its
Subsidiaries, or their respective brokers or other agents acting or benefiting in any capacity in
connection with the Loans, is any of the following:



               (a) a Person or entity that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;



               (b) a Person or entity owned or controlled by, or acting for or on behalf of, any Person or
entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive
Order;



               (c) a Person or entity with which any Syndication Party is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;



               (d) a Person or entity that commits, threatens or conspires to commit or supports “terrorism”
as defined in the Executive Order; or



               (e) a Person or entity that is named as a “specially designated national and blocked person”
on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement official publication of
such list.



21









 





          7.24.3 Conduct of Business. Neither Borrower nor to the knowledge of Borrower, any of
its brokers or other agents acting in any capacity in connection with the Loans (a) conducts any
business or engages in making or receiving any contribution of funds, goods or services to or for
the benefit of any Person described in clause (b) of Subsection 7.24.2 above, (b) deals in, or
otherwise engages in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order, or (c) engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.



     7.25 Disclosure. The representations and warranties contained in this Article 10 and
in the other Loan Documents or in any financial statements provided to the Administrative Agent do
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make such representations or warranties not misleading; and all projections provided to the
Administrative Agent were prepared in good faith based on reasonable assumptions.



ARTICLE 8.  CONDITIONS TO ADVANCES




     8.1 Conditions to Closing. The obligation of the Syndication Parties to make Loans
hereunder are subject to satisfaction, in the sole discretion of the Administrative Agent and the
Syndication Parties (except that satisfaction of Subsection 8.1.6 shall be determined in the
reasonable discretion of the Administrative Agent and the Syndication Parties), of each of the
following conditions precedent:



          8.1.1 Loan Documents. The Administrative Agent shall have received duly executed
originals of the Loan Documents.



          8.1.2 Approvals. The Administrative Agent shall have received evidence satisfactory
to it that all consents and approvals of governmental authorities and third parties which are with
respect to Borrower, necessary for, or required as a condition of the validity and enforceability
of the Loan Documents to which it is a party.



          8.1.3 Organizational Documents. The Administrative Agent shall have received: (a)
good standing certificate, dated no more than thirty (30) days prior to the Closing Date, for
Borrower for its state of incorporation; (b) a copy of the articles of incorporation of Borrower
certified by the Secretary of State of its state of organization; and (c) a copy of the bylaws of
Borrower, certified as true and complete by the Secretary or Assistant Secretary of Borrower.



          8.1.4 Evidence of Corporate Action. The Administrative Agent shall have received in
form and substance satisfactory to the Administrative Agent: (a) documents evidencing all
corporate action taken by Borrower to authorize (including the specific names and titles of the
persons authorized to so act (each an “Authorized Officer”)) the execution, delivery and
performance of the Loan Documents to which it is a party, certified to be true and correct by the
Secretary or Assistant Secretary of Borrower; and (b) a certificate of the Secretary or Assistant
Secretary of Borrower, dated the Closing Date, certifying the names and true signatures of the
Authorized Officers.



          8.1.5 Evidence of Insurance. Borrower shall have provided the Administrative Agent
with insurance certificates and such other evidence, in form and substance satisfactory to



22









 




the Administrative Agent, of all insurance required to be maintained by it under the Loan
Documents. 




          8.1.6 Appointment of Agent for Service. The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that Borrower has appointed The Corporation
Company to serve as its agent for service of process at their Denver, Colorado office (presently at
1675 Broadway), and that The Corporation Company has accepted such appointment by Borrower.



          8.1.7 No Material Change. No change shall have occurred in the condition or
operations of Borrower since August 31, 2007 which could reasonably be expected to result in a
Material Adverse Effect.



          8.1.8 Fees and Expenses. Borrower shall have paid the Administrative Agent, by wire
transfer of immediately available federal funds the fees as set forth in the Fee Letter dated
November 7, 2007 from CoBank and acknowledged by Borrower, and all expenses owing pursuant to
Section 14.1 hereof.



          8.1.9 Bank Equity Interest Purchase Obligation. Borrower shall have purchased such
Bank Equity Interests as CoBank may require pursuant to Article 5 hereof.



          8.1.10 Opinion of Counsel. Borrower shall have provided a favorable opinion of its
counsel addressed to the Administrative Agent and each of the present and future Syndication
Parties, covering such matters as the Administrative Agent may reasonably require.



          8.1.11 Further Assurances; No Default. Borrower shall have provided and/or executed
and delivered to the Administrative Agent such further assignments, documents or financing
statements, in form and substance satisfactory to the Administrative Agent that Borrower is to
execute and/or deliver pursuant to the terms of the Loan Documents or as the Administrative Agent
may reasonably request. No Event of Default or Potential Default shall have occurred and be
continuing, and the disbursing of the amount of the Advance requested shall not result in an Event
of Default or Potential Default, and without limitation, the representations and warranties of
Borrower herein shall be true and correct in all material respects on and as of the date on which
the Advance is to be made.



ARTICLE 9. AFFIRMATIVE COVENANTS




     From and after the date of this Credit Agreement and until the Bank Debt is indefeasibly paid
in full and the Syndication Parties have no obligation to make any Advance hereunder, Borrower
agrees that it will observe and comply with the following covenants for the benefit of the
Administrative Agent and the Syndication Parties:



     9.1 Books and Records. Borrower shall at all times keep, and cause each Subsidiary to
keep, proper books of record and account, in which correct and complete entries shall be made of
all its dealings, in accordance with GAAP.



     9.2 Reports and Notices. Borrower shall provide to the Administrative Agent the
following reports, information and notices:



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          9.2.1 Annual Financial Statements. As soon as available, but in no event later than
one hundred and twenty (120) days after the end of any Fiscal Year of Borrower occurring during the
term hereof one copy of the audit report for such year and accompanying consolidated financial
statements (including all footnotes thereto), including a consolidated balance sheet, a
consolidated statement of earnings, a consolidated statement of capital, and a consolidated
statement of cash flow for the Borrower and its Subsidiaries, showing in comparative form the
figures for the previous Fiscal Year, all in reasonable detail, prepared in conformance with GAAP
consistently applied and certified without qualification by PricewaterhouseCoopers, or other
independent public accountants of nationally recognized standing selected by the Borrower and
satisfactory to the Administrative Agent. Delivery to the Administrative Agent within the time
period specified above of copies of Borrower’s Annual Report on Form 10-K as prepared and filed in
accordance with the requirements of the Securities Exchange Commission shall be deemed to satisfy
the requirements of this Subsection if accompanied by the required unqualified accountant’s
certification. Such annual financial statements or Form 10-K’s required pursuant to this
Subsection shall be accompanied by a Compliance Certificate signed by Borrower’s Chief Financial
Officer or other officer of Borrower acceptable to the Administrative Agent.



          9.2.2 Quarterly Financial Statements. As soon as available but in no event more than
forty-five (45) days after the end of each Fiscal Quarter (except the last Fiscal Quarter of
Borrower’s Fiscal Year) the following financial statements or other information concerning the
operations of Borrower and its Subsidiaries for such Fiscal Quarter, the Fiscal Year to date, and
for the corresponding periods of the preceding Fiscal Year, all prepared in accordance with GAAP
consistently applied: (a) a consolidated balance sheet, (b) a consolidated summary of earnings,
(c) a consolidated statement of cash flows, and (d) such other statements as the Administrative
Agent may reasonably request. Delivery to the Administrative Agent within the time period
specified above of copies of Borrower’s Quarterly Report on Form 10-Q as prepared and filed in
accordance with the requirements of the Securities Exchange Commission shall be deemed to satisfy
the requirements of this Subsection other than clause (d) hereof. Such quarterly financial
statements or Form 10-Q’s required pursuant to this Subsection shall be accompanied by a Compliance
Certificate signed by Borrower’s Chief Financial Officer or other officer of Borrower acceptable to
the Administrative Agent (subject to normal year end adjustments).



          9.2.3 Notice of Default. As soon as the existence of any Event of Default or
Potential Default becomes known to any officer of Borrower, prompt written notice of such Event of
Default or Potential Default, the nature and status thereof, and the action being taken or proposed
to be taken with respect thereto.



          9.2.4 ERISA Reports. As soon as possible and in any event within twenty (20) days
after Borrower knows or has reason to know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or Borrower or any Subsidiary has instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, or that Borrower, any
Subsidiary or any ERISA Affiliate has completely or partially withdrawn from a Multiemployer Plan,
or that a Plan which is a Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA) or is terminating, a
certificate of Borrower’s Chief Financial Officer setting forth details as to such Reportable Event
or Prohibited Transaction or Plan termination or withdrawal or reorganization or insolvency and the
action Borrower or such Subsidiary proposes to take with respect thereto,



24









 




provided, however, that notwithstanding the foregoing, no reporting is required under this
subsection (6) unless the matter(s), individually or in the aggregate, result, or could be
reasonably expected to result, in aggregate obligations or liabilities of Borrower and/or the
Subsidiaries in excess of ten million dollars ($10,000,000).




          9.2.5 Notice of Litigation. Promptly after the commencement thereof, notice of all
actions, suits, arbitration and any other proceedings before any Governmental Authority, affecting
Borrower or any Subsidiary which, if determined adversely to Borrower or any Subsidiary, could
reasonably be expected to require Borrower or any Subsidiary to have to pay or deliver assets
having a value of ten million dollars ($10,000,000) or more (whether or not the claim is covered by
insurance) or could reasonably be expected to result in a Material Adverse Effect.



          9.2.6 Notice of Material Adverse Effect. Promptly after Borrower obtains knowledge
thereof, notice of any matter which, alone or when considered together with other matters, has
resulted or could reasonably be expected to result in, a Material Adverse Effect.



          9.2.7 Notice of Environmental Proceedings. Without limiting the provisions of
Subsection 9.2.5 hereof, promptly after Borrower’s receipt thereof, notice of the receipt of all
pleadings, orders, complaints, indictments, or other communication alleging a condition that may
require Borrower or any Subsidiary to undertake or to contribute to a cleanup or other response
under Environmental Laws, or which seeks penalties, damages, injunctive relief, or criminal
sanctions related to alleged violations of such laws, or which claims personal injury or property
damage to any person as a result of environmental factors or conditions or which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.



          9.2.8 Regulatory and Other Notices. Promptly after Borrower’s receipt thereof, copies
of any notices or other communications received from any Governmental Authority with respect to any
matter or proceeding the effect of which could reasonably be expected to have a Material Adverse
Effect.



          9.2.9 Adverse Action Regarding Required Licenses. As soon as Borrower learns that any
petition, action, investigation, notice of violation or apparent liability, notice of forfeiture,
order to show cause, complaint or proceeding is pending, or, to the best of Borrower’s knowledge,
threatened, to seek to revoke, cancel, suspend, modify, or limit any of the Required Licenses,
prompt written notice thereof and Borrower shall contest any such action in a Good Faith Contest.



          9.2.10 Budget. Promptly upon becoming available and in any event within thirty (30)
days after the beginning of each Fiscal Year, a copy of the Annual Operating Budget for the next
succeeding Fiscal Year and for each of the following two Fiscal Years approved by Borrower’s board
of directors, together with the assumptions and projections on which such budget is based and a
copy of forecasts of operations and capital expenditures (including investments) for each Fiscal
Year. In addition, if any material changes are made to such budget or projections or forecasts
during the year, then Borrower will furnish copies to the Administrative Agent of any such changes
promptly after such changes have been approved.



          9.2.11 Additional Information. With reasonable promptness, such other information
respecting the condition or operations, financial or otherwise, of Borrower or any



25









 




Subsidiary as the Administrative Agent or any Syndication Party may from time to time
reasonably request.




     9.3 Maintenance of Existence and Qualification. Borrower shall, and shall cause each
Subsidiary to, maintain its corporate existence in good standing under the laws of its state of
organization. Borrower shall, and shall cause each Subsidiary to, qualify and remain qualified as
a foreign corporation in each jurisdiction in which such qualification is necessary in view of its
business, operations and properties except where the failure to so qualify has not and could not
reasonably be expected to result in a Material Adverse Effect.



     9.4 Compliance with Legal Requirements and Agreements. Borrower shall, and shall
cause each Subsidiary to: (a) comply with all laws, rules, regulations and orders applicable to
Borrower (or such Subsidiary, as applicable) or its business unless such failure to comply is the
subject of a Good Faith Contest; and (b) comply with all agreements, indentures, mortgages, and
other instruments to which it (or any Subsidiary, as applicable) is a party or by which it or any
of its (or any Subsidiary, or any of such Subsidiary’s, as applicable) property is bound; provided,
however, that the failure of Borrower to comply with this sentence in any instance not directly
involving the Administrative Agent or a Syndication Party shall not constitute an Event of Default
unless such failure could reasonably be expected to have a Material Adverse Effect.



     9.5 Compliance with Environmental Laws. Without limiting the provisions of Section
9.4 of this Credit Agreement, Borrower shall, and shall cause Subsidiary to, comply in all material
respects with, and take all reasonable steps necessary to cause all persons occupying or present on
any properties owned or leased by Borrower (or any Subsidiary, as applicable) to comply with, all
Environmental Laws, the failure to comply with which would have a Material Adverse Effect or unless
such failure to comply is the subject of a Good Faith Contest.



     9.6 Taxes. Borrower shall pay or cause to be paid, and shall cause each Subsidiary to
pay, when due all taxes, assessments, and other governmental charges upon it, its income, its
sales, its properties (or upon Subsidiary and its income, sales, and properties, as applicable),
and federal and state taxes withheld from its (or Subsidiary’s, as applicable) employees’ earnings,
unless (a) the failure to pay such taxes, assessments, or other governmental charges could not
reasonably be expected to result in a Material Adverse Effect, or (b) such taxes, assessments, or
other governmental charges are the subject of a Good Faith Contest and Borrower has established
adequate reserves therefor in accordance with GAAP.



     9.7 Insurance. Borrower shall maintain, and cause each Subsidiary to maintain,
insurance with one or more financially sound and reputable insurance carrier or carriers reasonably
acceptable to the Administrative Agent, in such amounts (including deductibles) and covering such
risks (including fidelity coverage) as are usually carried by companies engaged in the same or a
similar business and similarly situated, provided, however, that Borrower may, to the extent
permitted by Law, provide for appropriate self-insurance with respect to workers’ compensation. At
the request of Administrative Agent, copies of all policies (or such other proof of compliance with
this Section as may be reasonably satisfactory) shall be delivered to the Administrative Agent.
All such insurance policies shall contain a provision requiring at least ten (10) days’ notice to
Borrower prior to any cancellation for non-payment of premiums and at least forty-five (45) days’
notice to Borrower of cancellation for any other reason or of non-renewal. With respect to all
such insurance policies, Borrower shall provide the Administrative Agent with



26









 




(a) within ten (10) days after obtaining such knowledge, written notice of any material
modification of which it has knowledge; and (b) one or more certificates of insurance which shall
include the agreement of the broker/insuror representative providing such certificates to provide
to the Administrative Agent at least ten (10) days’ notice prior to any cancellation of any such
insurance policies for non-payment of premiums and at least forty-five (45) days’ notice prior to
cancellation of any such insurance policies for any other reason, and of non-renewal or material
modification of any such insurance policies. No later than forty (40) days prior to expiration,
Borrower shall give the Administrative Agent (x) satisfactory written evidence of renewal of all
such policies with premiums paid, or (y) a written report as to the steps being taken by Borrower
to renew or replace all such policies, provided that notwithstanding the receipt of such written
report, the Administrative Agent may at any time thereafter give Borrower written notice to provide
the Administrative Agent with such evidence as described in clause (x), in which case Borrower must
do so within ten (10) days of such notice. Borrower agrees to pay all premiums on such insurance
as they become due (including grace periods), and will not permit any condition to exist which
would wholly or partially invalidate any insurance thereon.




     9.8 Maintenance of Properties. Borrower shall maintain, keep and preserve, and cause
each Subsidiary to maintain, keep and preserve, all of its material properties (tangible and
intangible) necessary or used in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted, and shall cause to be made all repairs, renewals,
replacements, betterments and improvements thereof, all as in the sole judgment of Borrower may be
reasonably necessary so that the business carried on in connection therewith may be properly and
advantageously conducted at all times.



     9.9 Payment of Liabilities. Borrower shall pay, and shall cause its Subsidiaries to
pay, all liabilities (including, without limitation: (a) any indebtedness for borrowed money or
for the deferred purchase price of property or services; (b) any obligations under leases which
have or should have been characterized as Capital Leases; and (c) any contingent liabilities, such
as guaranties, for the obligations of others relating to indebtedness for borrowed money or for the
deferred purchase price of property or services or relating to obligations under leases which have
or should have been characterized as Capital Leases) as they become due beyond any period of grace
under the instrument creating such liabilities, unless (with the exception of the Bank Debt) (a)
the failure to pay such liabilities within such time period could not reasonably be expected to
result in a Material Adverse Effect, or (b) they are contested in good faith by appropriate actions
or legal proceedings, Borrower establishes adequate reserves therefor in accordance with GAAP, and
such contesting will not result in a Material Adverse Effect.



     9.10 Inspection. Borrower shall permit, and cause its Subsidiaries to permit, the
Administrative Agent or any Syndication Party or their agents, during normal business hours or at
such other times as the parties may agree, to inspect the assets and operations of Borrower and its
Subsidiaries and to examine, and make copies of or abstracts from, Borrower’s properties, books,
and records, and to discuss the affairs, finances, operations, and accounts of Borrower and its
Subsidiaries with their respective officers, directors, employees, and independent certified public
accountants (and by this provision Borrower authorizes said accountants to discuss with the
Administrative Agent or any Syndication Party or their agents the finances and affairs of
Borrower); provided, that, in the case of each meeting with the independent accountants Borrower is
given an opportunity to have a representative present at such meeting.



27









 





     9.11 Required Licenses; Permits; Intellectual Property; Etc. Borrower shall duly and
lawfully obtain and maintain in full force and effect, and shall cause its Subsidiaries to obtain
and maintain in full force and effect, all Required Licenses and Intellectual Property as
appropriate for the business being conducted and properties owned by Borrower or such Subsidiaries
at any given time.



     9.12 ERISA. Borrower shall make or cause to be made, and cause each Subsidiary to
make or cause to be made, all payments or contributions to all Borrower Pension Plans covered by
Title IV of ERISA, which are necessary to enable those Borrower Pension Plans to continuously meet
all minimum funding standards or requirements.



     9.13 Maintenance of Commodity Position. Borrower shall protect its commodity
inventory holdings or commitments to buy or sell commodities against adverse price movements,
including the taking of equal and opposite positions in the cash and futures markets, to minimize
losses and protect margins in commodity production, storage, processing and marketing as is
recognized as financially sound and reputable by prudent business persons in the commodity
business.



     9.14 Financial Covenants. Borrower shall maintain the following financial covenants:



          9.14.1 Consolidated Funded Debt to Consolidated Cash Flow. Borrower shall have at all
times and measured as of the end of each Fiscal Quarter, a ratio of Consolidated Funded Debt
divided by Consolidated Cash Flow of no greater than 3.00 to 1.00 as measured on the previous
consecutive four Fiscal Quarters.



          9.14.2 Adjusted Consolidated Funded Debt to Consolidated Members’ and Patrons’ Equity.
Borrower shall not permit the ratio of Adjusted Consolidated Funded Debt to Consolidated Members’
and Patrons’ Equity to exceed at any time .80 to 1.00.



     9.15 Embargoed Person. At all times throughout the term of the Loans, (a) none of the
funds or assets of Borrower that are used to repay the Loans shall constitute property of, or shall
be beneficially owned directly or, to the knowledge of Borrower, indirectly by, any Person subject
to sanctions or trade restrictions under United States law (“Embargoed Person” or “Embargoed
Persons”) that is identified on (1) the “List of Specially Designated Nationals and Blocked
Persons” (the “SDN List”) maintained by the Office of Foreign Assets Control (“OFAC”), U.S.
Department of the Treasury, and/or to the knowledge of Borrower, as of the date thereof, based upon
reasonable inquiry by Borrower, on any other similar list (“Other List”) maintained by OFAC
pursuant to any authorizing statute including, but not limited to, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1
et seq., and any Executive Order or regulation promulgated thereunder, with the result that
the investment in Borrower (whether directly or indirectly), is prohibited by law, or the Loans
made by the Syndication Parties would be in violation of law, or (2) the Executive Order, any
related enabling legislation or any other similar Executive Orders, and (b) no Embargoed Person
shall have any direct interest, and to the knowledge of Borrower, as of the date hereof, based upon
reasonable inquiry by Borrower, indirect interest, of any nature whatsoever in Borrower, with the
result that the investment in Borrower (whether directly or indirectly), is prohibited by law or
the Loans are in violation of law.



28









 





     9.16 Anti-Money Laundering. At all times throughout the term of the Loans, to the
knowledge of Borrower, as of the date hereof, based upon reasonable inquiry by Borrower, none of
the funds of Borrower, that are used to repay the Loans shall be derived from any unlawful
activity, with the result that the investment in Borrower (whether directly or indirectly), is
prohibited by law or the Loans would be in violation of law.



ARTICLE 10.  NEGATIVE COVENANTS




     From and after the date of this Credit Agreement until the Bank Debt is indefeasibly paid in
full and the Syndication Parties have no obligation to make any Advance hereunder, Borrower agrees
that it will observe and comply with the following covenants:



     10.1 Borrowing. Borrower covenants that it will not, and will not permit any of its
Consolidated Subsidiaries to, directly or indirectly, create, issue, incur or assume any Priority
Debt if after giving effect thereto the aggregate outstanding principal amount of all Priority Debt
would exceed 20% of Consolidated Net Worth at the time of such creation, issuance, incurrence or
assumption. “Priority Debt” means, at any time, without duplication, the sum of (a) all then
outstanding Debt of Borrower or any Consolidated Subsidiary secured by any Lien on any property of
Borrower or any Consolidated Subsidiary (other than Debt secured only by Liens permitted under
paragraphs (a) through (i) of Section 10.3), plus (b) all Funded Debt of Consolidated Subsidiaries
of Borrower. “Consolidated Net Worth” means as of any date, total equity of Borrower and its
Consolidated Subsidiaries as of such date, determined on a consolidated basis in accordance with
GAAP.



     10.2 No Other Businesses. Borrower shall not engage in any material respects in any
business activity or operations other than operations or activities (a) in the agriculture
industry, (b) in the food industry, or (c) which are not substantially different from or are
related to its present business activities or operations.



     10.3 Liens. Borrower shall not (nor shall it permit any of its Consolidated
Subsidiaries to) create, incur, assume or suffer to exist any mortgage, pledge, lien, charge or
other encumbrance on, or any security interest in, any of its real or personal properties
(including, without limitation, leasehold interests, leasehold improvements and any other interest
in real property or fixtures), now owned or hereafter acquired, except the following Liens
(“Permitted Encumbrances”):



     (a) Liens for taxes, assessments or other governmental charges or levies securing obligations
not overdue, or if overdue, being actively contested in good faith by appropriate proceedings that
will prevent the forfeiture or sale of any property, provided that adequate reserves are
established in accordance on the books of Borrower or a Consolidated Subsidiary of Borrower in
accordance with GAAP;



     (b) attachment, judgment and other similar Liens arising in connection with court proceedings,
provided the execution or other enforcement of such Lien(s) is effectively stayed and the claims
secured thereby are being actively contested in good faith in such manner that the property subject
to such Lien(s) is not subject to forfeiture or sale, and further provided that adequate reserves
are established on the books of Borrower or a Consolidated Subsidiary of Borrower in accordance
with GAAP;



29









 





     (c) Liens incidental to the normal conduct of the business of Borrower or a Consolidated
Subsidiary of Borrower or to the ownership by Borrower or a Consolidated Subsidiary of its property
which were not incurred in connection with the borrowing of money or the obtaining of credit or
advances and which do not in the aggregate materially detract from the value of the property of
Borrower or any Consolidated Subsidiary of Borrower for the purpose of such business or materially
impair the use thereof in the operation of the business of Borrower or any Consolidated Subsidiary
of Borrower, including, without limitation, Liens




     (i) in connection with workers’ compensation, unemployment insurance, social security
and other like laws,




     (ii) to secure (or to obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety and performance bonds (of a type other than set forth in
Section 10.3(b)), bids, leases (other than Capital Leases), purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made in connection
with the borrowing of money, the obtaining of advances or credit or the payment of the
deferred purchase price of property,




     (iii) to secure the claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, repairmen, landlords, lessors and other like Persons, arising in the
ordinary course of business, and




     (iv) in the nature of reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other similar title
exceptions or encumbrances affecting real property;



     provided that any amounts secured by such Liens are not yet due and payable.



     (d) Liens existing as of the date of this Agreement;



     (e) any Lien renewing, extending or refunding any Lien permitted by clause (d) of this Section
10.3, provided that (a) the principal amount of the Debt secured by such Lien immediately prior to
such extension, renewal or refunding is not increased or the maturity thereof reduced, (b) such
Lien is not extended to any other property, and (c) immediately after such extension, renewal or
refunding no Event of Default would exist;



     (f) Liens on property of Borrower or any of its Consolidated Subsidiaries securing Debt owing
to Borrower or to any of its Consolidated Subsidiaries;



     (g) any Lien created to secure all or any part of the purchase price or cost of construction,
or to secure Debt incurred or assumed to pay all or a part of the purchase price or cost of
construction, of any property (or any improvement thereon) acquired or constructed by Borrower or a
Consolidated Subsidiary of Borrower after the date of this Credit Agreement, provided that




     (i) no such Lien shall extend to or cover any property other than the property (or
improvement thereon) being acquired or constructed or rights relating solely to such item or
items of property (or improvement thereon),




30












 






     (ii) the principal amount of Debt secured by any such Lien shall at no time exceed an
amount equal to the lesser of (A) the cost to Borrower or such Consolidated Subsidiary of
the property (or improvement thereon) being acquired or constructed or (B) the “Fair Market
Value” (defined as , the sale value of such property that would be realized in an
arm’s-length sale at such time between an informed and willing buyer and an informed and
willing seller (neither being under a compulsion to buy or sell, respectively) (as
determined in good faith by Borrower) of such property, determined at the time of such
acquisition or at the time of substantial completion of such construction, and




     (iii) such Lien shall be created contemporaneously with, or within 180 days after, the
acquisition or completion of construction of such property (or improvement thereon);



     (h) any Lien existing on property acquired by Borrower or any Consolidated Subsidiary of
Borrower at the time such property is so acquired (whether or not the Debt secured thereby is
assumed by Borrower or such Consolidated Subsidiary) or any Lien existing on property of a Person
immediately prior to the time such Person is merged into or consolidated with Borrower or any
Consolidated Subsidiary of Borrower, provided that




     (i) no such Lien shall have been created or assumed in contemplation of such
acquisition of property or such consolidation or merger,




     (ii) such Lien shall extend only to the property acquired or the property of such
Person merged into or consolidated with Borrower or Consolidated Subsidiary which was
subject to such Lien as of the time of such consolidation or merger, and




     (iii) the principal amount of the Debt secured by any such Lien shall at no time exceed
an amount equal to 100% of the Fair Market Value (as defined above) (as determined in good
faith by the board of directors of Borrower or such Consolidated Subsidiary) of the property
subject thereto at the time of the acquisition thereof or at the time of such merger or
consolidation;



     (i) Liens to CoBank and other cooperatives with respect to equity held by Borrower in such
banks or other cooperatives securing Debt, provided that the aggregate Fair Market Value (as
defined above) of such equity securing Debt shall not exceed $50,000,000 at any one time; and



     (j) other Liens not otherwise permitted under clause (a) through (i) of this Section 10.3
securing Debt, provided that the existence, creation, issuance, incurrence or assumption of such
Debt is permitted under Sections 10.1, 9.14.1 and 9.14.2 hereof.


If, notwithstanding the prohibition contained herein, Borrower shall, or shall permit any of its
Consolidated Subsidiaries to, directly or indirectly create, incur, assume or permit to exist any
Lien, other than those Liens permitted by the provisions of paragraphs (a) through (j) of this
Section 10.3 (but including any Liens in respect of the Revolving Loan Credit Agreement whether or
not permitted by paragraphs (a) — (j) of this Section 10.3), it will make or cause to be made
effective provision whereby the Notes will be secured equally and ratably with any and all other
obligations thereby secured, such security to be pursuant to agreements reasonably satisfactory to
the Required Lenders (including intercreditor arrangements providing for the pari passu treatment
of the Notes and all such secured Debt) and, in any such case, the Notes shall have the benefit, to




31









 




the fullest extent that, and with such priority as, the holders of the Notes may be entitled under
applicable law, of an equitable Lien on such property. For the avoidance of doubt, Borrower
acknowledges that it will not, and will not permit any Consolidated Subsidiary to, secure or grant
any Liens in respect of the Revolving Loan Credit Agreement, unless an equal and ratable Lien is
granted in respect of the Notes.




     10.4 Sale of Assets. Borrower shall not (nor shall it permit any of its Consolidated
Subsidiaries to) sell, convey, assign, lease or otherwise transfer or dispose of, voluntarily, by
operation of law or otherwise, any material part of its now owned or hereafter acquired assets
during any twelve (12) month period commencing September 1, 2007 and each September 1 thereafter,
except: (a) the sale of inventory, equipment and fixtures disposed of in the ordinary course of
business, (b) the sale or other disposition of assets no longer necessary or useful for the conduct
of its business, and (c) leases of assets to an entity in which Borrower has at least a
fifty-percent (50%) interest in ownership, profits, and governance. For purposes of this Section,
“material part” shall mean ten percent (10%) or more of the lesser of the book value or the market
value of the assets of Borrower or such Consolidated Subsidiary as shown on the balance sheets
thereof as of the August 31 immediately preceding each such twelve (12) month measurement period.



     10.5 Merger; Acquisitions; Business Form; Etc. Borrower shall not (nor shall it
permit any of its Consolidated Subsidiaries to) merge or consolidate with any entity, or acquire
all or substantially all of the assets of any person or entity, or form or create any new
Subsidiary, change its business form from a cooperative corporation, or commence operations under
any other name, organization, or entity, including any joint venture; provided, however,



               (a) The foregoing shall not prevent any consolidation, acquisition, or merger if after giving
effect thereto:




     (i) Borrower and its Consolidated Subsidiaries are permitted to incur at least $1.00 of
additional Priority Debt under the provisions of Section 10.1;




     (ii) Borrower is the surviving entity; and




     (iii) No Event of Default or Potential Default shall have occurred and be continuing.



               (b) The foregoing shall not prevent Borrower from forming or creating any new Subsidiary
provided such Subsidiary shall not acquire all or substantially all of the assets of any Person
except through an acquisition, consolidation, or merger satisfying the requirements of clause (a)
of this Section.



     10.6 Transactions With Related Parties. Borrower shall not purchase, acquire,
provide, or sell any equipment, other personal property, real property or services from or to any
Subsidiary (other than a Restricted Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of Borrower’s business and upon fair and reasonable terms no less favorable
than would be obtained by Borrower in a comparable arm’s-length transaction with an unrelated
Person.



32









 





     10.7 Change in Fiscal Year. Borrower shall not change its Fiscal Year from a year
ending on August 31 unless required to do so by the Internal Revenue Service, in which case
Borrower agrees to such amendment of the terms Fiscal Quarter and Fiscal Year, as used herein, as
the Administrative Agent reasonably deems necessary.



     10.8 ERISA. Borrower shall not: (a) engage in or permit any transaction which could
result in a “prohibited transaction” (as such term is defined in Section 406 of ERISA) or in the
imposition of an excise tax pursuant to Section 4975 of the Code with respect to any Borrower
Benefit Plan; (b) engage in or permit any transaction or other event which could result in a
“reportable event"( as such term is defined in Section 4043 of ERISA) for any Borrower Pension
Plan; (c) fail to make full payment when due of all amounts which, under the provisions of any
Borrower Benefit Plan, Borrower is required to pay as contributions thereto; (d) permit to exist
any “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA) as of the
end of any Fiscal Year, in excess of five percent (5.0%) of the net worth (determined in accordance
with GAAP) of Borrower and its Consolidated Subsidiaries, whether or not waived, with respect to
any Borrower Pension Plan; (e) fail to make any payments to any Multiemployer Plan that Borrower
may be required to make under any agreement relating to such Multiemployer Plan or any law
pertaining thereto; or (f) terminate any Borrower Pension Plan in a manner which could result in
the imposition of a lien on any property of Borrower pursuant to Section 4068 of ERISA. Borrower
shall not terminate any Borrower Pension Plan so as to result in any liability to the PBGC.



     10.9 Anti-Terrorism Law. Borrower shall not (a) conduct any business or engage in
making or receiving any contribution of funds, goods or services to or for the benefit of any
Person described in Subsection 7.24.2 above, (b) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order or any
other Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law (and Borrower shall deliver to the Administrative Agent any
certification or other evidence requested from time to time by the Administrative Agent in its
reasonable discretion, confirming Borrower’ compliance with this Section).



ARTICLE 11. INDEMNIFICATION




     11.1 General; Stamp Taxes; Intangibles Tax. Borrower agrees to indemnify and hold the
Administrative Agent and each Syndication Party and their directors, officers, employees, agents,
professional advisers and representatives (“Indemnified Parties”) harmless from and against any and
all claims, damages, losses, liabilities, costs or expenses whatsoever which the Administrative
Agent or any other Indemnified Party may incur (or which may be claimed against any such
Indemnified Party by any Person), including attorneys’ fees incurred by any Indemnified Party,
arising out of or resulting from: (a) the material inaccuracy of any representation or warranty of
or with respect to Borrower in this Credit Agreement or the other Loan Documents; (b) the material
failure of Borrower to perform or comply with any covenant or obligation of Borrower under this
Credit Agreement or the other Loan Documents; or (c) the exercise by the Administrative Agent of
any right or remedy set forth in this Credit Agreement or the other Loan Documents; provided that
Borrower shall have no obligation to indemnify any Indemnified Party against claims, damages,
losses, liabilities, costs or expenses to the extent that a court of competent jurisdiction renders
a final non-appealable determination that the foregoing are solely



33









 




the result of the willful misconduct or gross negligence of such Indemnified Party. In
addition, Borrower agrees to indemnify and hold the Indemnified Parties harmless from and against
any and all claims, damages, losses, liabilities, costs or expenses whatsoever which the
Administrative Agent or any other Indemnified Party may incur (or which may be claimed against any
such Indemnified Party by any Person), including attorneys’ fees incurred by any Indemnified Party,
arising out of or resulting from the imposition or nonpayment by Borrower of any stamp tax,
intangibles tax, or similar tax imposed by any state, including any amounts owing by virtue of the
assertion that the property valuation used to calculate any such tax was understated. Borrower
shall have the right to assume the defense of any claim as would give rise to Borrower’s
indemnification obligation under this Section with counsel of Borrower’s choosing so long as such
defense is being diligently and properly conducted and Borrower shall establish to the Indemnified
Party’s satisfaction that the amount of such claims are not, and will not be, material in
comparison to the liquid and unrestricted assets of Borrower available to respond to any award
which may be granted on account of such claim. So long as the conditions of the preceding sentence
are met, Indemnified Party shall have no further right to reimbursement of attorneys’ fees incurred
thereafter. The obligation to indemnify set forth in this Section shall survive the termination of
this Credit Agreement and other covenants.




     11.2 Indemnification Relating to Hazardous Substances. Borrower shall not locate,
produce, treat, transport, incorporate, discharge, emit, release, deposit or dispose of any
Hazardous Substance in, upon, under, over or from any property owned or held by Borrower, except in
accordance with all Environmental Laws; Borrower shall not permit any Hazardous Substance to be
located, produced, treated, transported, incorporated, discharged, emitted, released, deposited,
disposed of or to escape in, upon, under, over or from any property owned or held by Borrower,
except in accordance with Environmental Laws; and Borrower shall comply with all Environmental Laws
which are applicable to such property. Borrower shall indemnify the Indemnified Parties against,
and shall reimburse the Indemnified Parties for, any and all claims, demands, judgments, penalties,
liabilities, costs, damages and expenses, including court costs and attorneys’ fees incurred by the
Indemnified Parties (prior to trial, at trial and on appeal) in any action against or involving the
Indemnified Parties, resulting from any breach of the foregoing covenants in this Section or the
covenants in Section 9.5 hereof, or from the discovery of any Hazardous Substance in, upon, under
or over, or emanating from, such property, it being the intent of Borrower and the Indemnified
Parties that the Indemnified Parties shall have no liability or responsibility for damage or injury
to human health, the environmental or natural resources caused by, for abatement and/or clean-up
of, or otherwise with respect to, Hazardous Substances as the result of the Administrative Agent or
any Syndication Party exercising any of its rights or remedies with respect thereto, including but
not limited to becoming the owner thereof by foreclosure or conveyance in lieu of foreclosure of a
judgment lien; provided that such indemnification as it applies to the exercise by the
Administrative Agent or any Syndication Party of its rights or remedies with respect to the Loan
Documents shall not apply to claims arising solely with respect to Hazardous Substances brought
onto such property by the Administrative Agent or such Syndication Party while engaged in
activities other than operations substantially the same as the operations previously conducted on
such property by Borrower. The foregoing covenants of this Section shall be deemed continuing
covenants for the benefit of the Indemnified Parties, and any successors and assigns of the
Indemnified Parties, including but not limited to, any transferee of the title of the
Administrative Agent or any Syndication Party or any subsequent owner of the property, and shall
survive the satisfaction or release of any lien, any foreclosure of



34









 




any lien and/or any acquisition of title to the property or any part thereof by the
Administrative Agent or any Syndication Party, or anyone claiming by, through or under the
Administrative Agent or any Syndication Party or Borrower by deed in lieu of foreclosure or
otherwise. Any amounts covered by the foregoing indemnification shall bear interest from the date
incurred at the Default Interest Rate, shall be payable on demand, and shall be secured by the
Security Documents. The indemnification and covenants of this Section shall survive the
termination of this Credit Agreement and other covenants.




ARTICLE 12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES




     12.1 Events of Default. The occurrence of any of the following events (each an “Event
of Default”) shall, at the option of the Administrative Agent, make the entire Bank Debt
immediately due and payable (provided, that in the case of an Event of Default under Subsection
12.1(f) all amounts owing under the Notes and the other Loan Documents shall automatically and
immediately become due and payable without any action by or on behalf of the Administrative Agent),
and the Administrative Agent may exercise all rights and remedies for the collection of any amounts
outstanding hereunder and take whatever action it deems necessary to secure itself, all without
notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor,
or other notices or demands of any kind or character:



               (a) Failure of Borrower to pay (i) when due, whether by acceleration or otherwise, any
principal in accordance with this Credit Agreement or the other Loan Documents, or (ii) within five
(5) days of the date when due, whether by acceleration or otherwise, any interest or amounts other
than principal in accordance with this Credit Agreement or the other Loan Documents.



               (b) Any representation or warranty set forth in any Loan Document, any Borrowing Notice, any
financial statements or reports or projections or forecasts, or in connection with any transaction
contemplated by any such document, shall prove in any material respect to have been false or
misleading when made or furnished by Borrower.



               (c) Any default by Borrower in the performance or compliance with the covenants, promises,
conditions or provisions of Sections 9.7 (only if such default is with respect to the last sentence
of such Section), 9.10, 9.14, 9.15, 9.16, 10.1, 10.4, 10.5 or 10.9 of this Credit Agreement.



               (d) Any default by Borrower in the performance or compliance with the covenants, promises,
conditions or provisions of Sections 9.2, 9.4, 9.5, 9.6, 9.7 (except as provided in clause (c) of
this Section), 9.8, 9.9, (except as provided in Section 12.1(e)), 9.11, 9.12, 9.13, 10.3, 10.6 or
10.7 of this Credit Agreement, and such failure continues for fifteen (15) days after Borrower
learns of such failure to comply, whether by Borrower’s own discovery or through notice from the
Administrative Agent.



               (e) The failure of Borrower to pay when due, or failure to perform or observe any other
obligation or condition with respect to any of the following obligations to any Person, beyond any
period of grace under the instrument creating such obligation: (i) any indebtedness for borrowed
money or for the deferred purchase price of property or services, (ii) any obligations under leases
which have or should have been characterized as Capital Leases,



35









 







or (iii) any contingent liabilities, such as guaranties, for the obligations of others relating
to indebtedness for borrowed money or for the deferred purchase price of property or services or
relating to obligations under leases which have or should have been characterized as Capital
Leases; provided that no such failure will be deemed to be an Event of Default hereunder unless and
until the aggregate amount owing under obligations with respect to which such failures have
occurred and are continuing is at least $10,000,000.00.



               (f) Borrower applies for or consents to the appointment of a trustee or receiver for any part
of its properties; any bankruptcy, reorganization, debt arrangement, dissolution or liquidation
proceeding is commenced or consented to by Borrower; or any application for appointment of a
receiver or a trustee, or any proceeding for bankruptcy, reorganization, debt management or
liquidation is filed for or commenced against Borrower, and is not withdrawn or dismissed within
sixty (60) days thereafter.



               (g) Failure of Borrower to comply with any other provision of this Credit Agreement or the
other Loan Documents not constituting an Event of Default under any of the preceding subparagraphs
of this Section 12.1, and such failure continues for thirty (30) days after Borrower learns of such
failure to comply, whether by Borrower’s own discovery or through notice from the Administrative
Agent.



               (h) The entry of one or more judgments in an aggregate amount in excess of $5,000,000.00
against Borrower not stayed, discharged or paid within thirty (30) days after entry.



               (i) The occurrence of an “Event of Default” under the Revolving Loan Credit Agreement.



     12.2 No Advance. The Syndication Parties shall have no obligation to make any Advance
if a Potential Default or an Event of Default shall occur and be continuing.



     12.3 Rights and Remedies. In addition to the remedies set forth in Section 12.1 and
12.2 hereof, upon the occurrence of an Event of Default, the Administrative Agent shall be entitled
to exercise, subject to the provisions of Section 13.7 hereof, all the rights and remedies provided
in the Loan Documents and by any applicable law. Each and every right or remedy granted to the
Administrative Agent pursuant to this Credit Agreement and the other Loan Documents, or allowed the
Administrative Agent by law or equity, shall be cumulative. Failure or delay on the part of the
Administrative Agent to exercise any such right or remedy shall not operate as a waiver thereof.
Any single or partial exercise by the Administrative Agent of any such right or remedy shall not
preclude any future exercise thereof or the exercise of any other right or remedy.



ARTICLE 13. AGENCY AGREEMENT




     13.1 Funding of Syndication Interest. Each Syndication Party, severally but not
jointly, hereby irrevocably agrees to fund its Funding Share of the Term Loan Advance (“Advance
Payment”) as determined pursuant to the terms and conditions contained herein. Each Syndication
Party’s interest (“Syndication Interest”) in the Term Loan Advance hereunder shall be without
recourse to the Administrative Agent or any other Syndication Party and shall not be



36









 




construed as a loan from any Syndication Party to the Administrative Agent or any other
Syndication Party.




     13.2 Syndication Parties’ Obligations to Remit Funds. Each Syndication Party agrees
to remit its Funding Share of the Term Loan Advance to the Administrative Agent as, and within the
time deadlines (“Syndication Party Advance Date”), required in this Credit Agreement. Unless the
Administrative Agent shall have received notice from a Syndication Party prior to the date on which
such Syndication Party is to provide funds to the Administrative Agent for an Advance to be made by
such Syndication Party that such Syndication Party will not make available to the Administrative
Agent such funds, the Administrative Agent may assume that such Syndication Party has made such
funds available to the Administrative Agent on the date of such Advance in accordance with the
terms of this Credit Agreement and the Administrative Agent in its sole discretion may, but shall
not be obligated to, in reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent such Syndication Party shall not have made such funds
available to the Administrative Agent by 2:00 P.M. (Central time) on the Banking Day due, such
Syndication Party agrees to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is made available to
Borrower until the Banking Day such amount is repaid to the Administrative Agent (assuming payment
is received by the Administrative Agent at or prior to 2:00 P.M. (Central time), and until the next
Banking Day if payment is not received until after 2:00 P.M.), at the customary rate set by the
Administrative Agent for the correction of errors among banks for three (3) Banking Days and
thereafter at the Base Rate. If such Syndication Party shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Syndication Party’s Advance
for purposes of this Credit Agreement. If such Syndication Party does not pay such corresponding
amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall
promptly notify Borrower, and Borrower shall immediately pay such corresponding amount to the
Administrative Agent with the interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is repaid to the Administrative Agent, at the rate
of interest applicable at the time to such Advance at the time.



     13.3 Syndication Party’s Failure to Remit Funds. If a Syndication Party (“Delinquent
Syndication Party”) fails to remit its Funding Share, in full by the date and time required (the
unpaid amount of any such payment being hereinafter referred to as the “Delinquent Amount”), in
addition to any other remedies available hereunder, any other Syndication Party or Syndication
Parties may, but shall not be obligated to, advance the Delinquent Amount (the Syndication Party or
Syndication Parties which advance such Delinquent Amount are referred to as the “Contributing
Syndication Parties”), in which case (a) the Delinquent Amount which any Contributing Syndication
Party advances shall be treated as a loan to the Delinquent Syndication Party and shall not be
counted in determining the Individual Term Loan Obligations of any Contributing Syndication Party,
and (b) the Delinquent Syndication Party shall be obligated to pay to the Administrative Agent, for
the account of the Contributing Syndication Parties, interest on the Delinquent Amount at a rate of
interest equal to the rate of interest which Borrower is obligated to pay on the Delinquent Amount
plus 200 basis points (“Delinquency Interest”) until the Delinquent Syndication Party remits the
full Delinquent Amount and remits all Delinquency Interest to the Administrative Agent, which will
distribute such payments to the Contributing Syndication Parties (pro rata based on the amount of
the Delinquent Amount which each of them



37









 




(if more than one) advanced) on the same Banking Day as such payments are received by the
Administrative Agent if received no later than 2:00 P.M. (Central time) or the next Banking Day if
received by the Administrative Agent thereafter. In addition, the Contributing Syndication Parties
shall be entitled to share, on the same pro rata basis, and the Administrative Agent shall pay over
to them, for application against Delinquency Interest and the Delinquent Amount, the Delinquent
Syndication Party’s Payment Distribution and any fee distributions or distributions made under
Section 13.9 hereof until the Delinquent Amount and all Delinquency Interest have been paid in
full. For voting purposes the Administrative Agent shall readjust the Individual Commitments of
such Delinquent Syndication Party and the Contributing Syndication Parties from time to time first
to reflect the advance of the Delinquent Amount by the Contributing Syndication Parties, and then
to reflect the full or partial reimbursement to the Contributing Syndication Parties of such
Delinquent Amount. As between the Delinquent Syndication Party and the Contributing Syndication
Parties, the Delinquent Syndication Party’s interest in its Notes shall be deemed to have been
partially assigned to the Contributing Syndication Parties in the amount of the Delinquent Amount
and Delinquency Interest owing to the Contributing Syndication Parties from time to time. For the
purposes of calculating interest owed by a Delinquent Syndication Party, payments received on other
than a Banking Day shall be deemed to have been received on the next Banking Day, and payments
received after 2:00 P.M. (Central time) shall be deemed to have been received on the next Banking
Day.




     13.4 Agency Appointment. Each of the Syndication Parties hereby designates and
appoints the Administrative Agent to act as agent to service and collect the Loans and its
respective Notes and to take such action on behalf of such Syndication Party with respect to the
Loans and such Notes, and to execute such powers and to perform such duties, as specifically
delegated or required herein, as well as to exercise such powers and to perform such duties as are
reasonably incident thereto, and to receive and benefit from such fees and indemnifications as are
provided for or set forth herein, until such time as a successor is appointed and qualified to act
as the Administrative Agent.



     13.5 Power and Authority of the Administrative Agent. Without limiting the generality
of the power and authority vested in the Administrative Agent pursuant to Section 13.4 hereof, the
power and authority vested in the Administrative Agent includes, but is not limited to, the
following:



          13.5.1 Advice. To solicit the advice and assistance of each of the Syndication
Parties and Voting Participants concerning the administration of the Loans and the exercise by the
Administrative Agent of its various rights, remedies, powers, and discretions with respect thereto.
As to any matters not expressly provided for by this Credit Agreement or any other Loan Document,
the Administrative Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by all of the Syndication Parties or the
Required Lenders, as the case may be (and including in each such case, Voting Participants), and
any action taken or failure to act pursuant thereto shall be binding on all of the Syndication
Parties, Voting Participants, and the Administrative Agent.



          13.5.2 Documents. To execute, seal, acknowledge, and deliver as the Administrative
Agent, all such instruments as may be appropriate in connection with the administration of the
Loans and the exercise by the Administrative Agent of its various rights with respect thereto.



38









 





          13.5.3 Proceedings. To initiate, prosecute, defend, and to participate in, actions
and proceedings in its name as the Administrative Agent for the ratable benefit of the Syndication
Parties.



          13.5.4 Retain Professionals. To retain attorneys, accountants, and other
professionals to provide advice and professional services to the Administrative Agent, with their
fees and expenses reimbursable to the Administrative Agent by Syndication Parties pursuant to
Section 13.16 hereof.



          13.5.5 Incidental Powers. To exercise powers reasonably incident to the
Administrative Agent’s discharge of its duties enumerated in Section 13.6 hereof.



     13.6 Duties of the Administrative Agent. The duties of the Administrative Agent
hereunder shall consist of the following:



          13.6.1 Possession of Documents. To safekeep one original of each of the Loan
Documents other than the Notes (which will be in the possession of the Syndication Party named as
payee therein).



          13.6.2 Distribute Payments. To receive and distribute to the Syndication Parties
payments made by Borrower pursuant to the Loan Documents, as provided in Article 4 hereof. Unless
the Administrative Agent shall have received notice from Borrower prior to the date on which any
payment is due to any Syndication Party hereunder that Borrower will not make such payment in full,
the Administrative Agent may assume that Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent in its sole discretion may, but
shall not be obligated to, in reliance upon such assumption, cause to be distributed to each
Syndication Party on such due date an amount equal to the amount then due such Syndication Party.
If and to the extent Borrower shall not have so made such payment in full to the Administrative
Agent, each Syndication Party shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Syndication Party together with interest thereon, for each day from the
date such amount is distributed to such Syndication Party until the date such Syndication Party
repays such amount to the Administrative Agent at the customary rate set by the Administrative
Agent for the correction of errors among banks for three (3) Banking Days and thereafter at the
Base Rate.



          13.6.3 Loan Administration. Subject to the provisions of Section 13.8 hereof, to, on
behalf of and for the ratable benefit of all Syndication Parties, in accordance with customary
banking practices, exercise all rights, powers, privileges, and discretion to which the
Administrative Agent is entitled to administer the Loans, including, without limitation: (a)
monitor all borrowing activity, Individual Term Loan Commitment balances, and maturity dates of all
Quoted Rate Loans; (b) monitor and report Credit Agreement and covenant compliance, and coordinate
required credit actions by the Syndication Parties (including Voting Participants where
applicable); (c) manage the process for future waivers and amendments if modifications to the
Credit Agreement are required; and (d) administer, record, and process all assignments to be made
for the current and future Syndication Parties (including the preparation of a revised Schedule
1 to replace the previous Schedule 1).



39









 





          13.6.4 Forwarding of Information. The Administrative Agent shall, within a reasonable
time after receipt thereof, forward to the Syndication Parties and Voting Participants notices and
reports provided to the Administrative Agent by Borrower pursuant to Section 9.2 hereof.



     13.7 Action Upon Default. Each Syndication Party agrees that upon its learning of any
facts which would constitute a Potential Default or Event of Default, it shall promptly notify the
Administrative Agent by a writing designated as a notice of default specifying in detail the nature
of such facts and default, and the Administrative Agent shall promptly send a copy of such notice
to all other Syndication Parties. The Administrative Agent shall be entitled to assume that no
Event of Default or Potential Default has occurred or is continuing unless an officer thereof
primarily responsible for the Administrative Agent’s duties as such with respect to the Loans or
primarily responsible for the credit relationship between the Administrative Agent and Borrower has
actual knowledge of facts which would result in or constitute a Potential Default or Event of
Default, or has received written notice from Borrower of such fact, or has received written notice
of default from a Syndication Party. In the event the Administrative Agent has obtained actual
knowledge (in the manner described above) or received written notice of the occurrence of a
Potential Default or Event of Default as provided in the preceding sentences, the Administrative
Agent may, but is not required to exercise or refrain from exercising any rights which may be
available under the Loan Documents or at law on account of such occurrence and shall be entitled to
use its discretion with respect to exercising or refraining from exercising any such rights, unless
and until the Administrative Agent has received specific written instruction from the Required
Lenders to refrain from exercising such rights or to take specific designated action, in which case
it shall follow such instruction; provided that the Administrative Agent shall not be required to
take any action which will subject it to personal liability, or which is or may be contrary to any
provision of the Loan Documents or applicable law. The Administrative Agent shall not be subject
to any liability by reason of its acting or refraining from acting pursuant to any such
instruction.



          13.7.1 Indemnification as Condition to Action. Except for action expressly required
of the Administrative Agent hereunder, the Administrative Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall have received further assurances
(which may include cash collateral) of the indemnification obligations of the Syndication Parties
under Section 13.17 hereof in respect of any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.



     13.8 Consent Required for Certain Actions. Notwithstanding the fact that this Credit
Agreement may otherwise provide that the Administrative Agent may act at its discretion, the
Administrative Agent may not take any of the following actions (nor may the Syndication Parties
take the action described in Subsection 13.8.1(a)) with respect to, or under, the Loan Documents
without the prior written consent, given after notification by the Administrative Agent of its
intention to take any such action (or notification by such Syndication Parties as are proposing the
action described in Subsection 13.8.1(a) of their intention to do so), of:



          13.8.1 Unanimous. Each of the Syndication Parties and Voting Participants before:



               (a) Amending the definition of Required Lenders as set forth herein or this Subsection 13.8.1;



40









 





               (b) Amending Section 4.6 hereof;



               (c) Agreeing to an increase in the Term Loan Commitment, or any Syndication Party’s share
thereof, or an extension of the Term Loan Maturity Date;



               (d) Agreeing to a reduction in the amount, or to a delay in the due date, of any payment by
Borrower of interest, principal, or fees with respect to the Term Loan; provided, however, this
restriction shall not apply to a delay in payment granted by the Administrative Agent in the
ordinary course of administration of the Loans and the exercise of reasonable judgment, so long as
such payment delay does not exceed five (5) days.



          13.8.2 Required Lenders. The Required Lenders before:



               (a) Consenting to any action, amendment, or granting any waiver not covered in Subsections
13.8.1 or 13.8.3; or



               (b) Agreeing to amend Article 13 of this Credit Agreement (other than Subsections 13.8.1 or
13.8.2).



          13.8.3 Action Without Vote. Notwithstanding any other provisions of this Section, the
Administrative Agent may take the following actions without obtaining the consent of the
Syndication Parties or the Voting Participants:



               (a) Determining whether the conditions to a Term Loan Advance have been met.



          13.8.4 Voting Participants. Under the circumstances set forth in Section 13.26
hereof, each Voting Participant shall be accorded voting rights as though such Person was a
Syndication Party, and in such case the voting rights of the Syndication Party from which such
Voting Participant acquired its participation interest shall be reduced accordingly.


If no written consent or denial is received from a Syndication Party or a Voting Participant within
five (5) Banking Days after written notice of any proposed action as described in this Section is
delivered to such Syndication Party or Voting Participant by the Administrative Agent, such
Syndication Party or Voting Participant shall be conclusively deemed to have consented thereto for
the purposes of this Section.




     13.9 Distribution of Principal and Interest. The Administrative Agent will receive
and accept all payments (including prepayments) of principal and interest made by Borrower on the
Loans and the Notes and will hold all such payments in trust for the benefit of all appropriate
present and future Syndication Parties, and, if requested in writing by the Required Lenders, in an
account segregated from the Administrative Agent’s other funds and accounts (“Payment Account”).
After the receipt by the Administrative Agent of any payment representing interest or principal on
the Loans, the Administrative Agent shall remit to the appropriate Syndication Party its share of
such payment as provided in Article 4 hereof, (“Payment Distribution”) no later than 3:00 P.M.
(Central time) on the same Banking Day as such payment is received by the Administrative Agent if
received no later than 1:00 P.M. (Central time) or the next Banking Day if received by the
Administrative Agent thereafter. Any Syndication Party’s rights to its Payment



41









 




Distribution shall be subject to the rights of any Contributing Syndication Parties to such
amounts as set forth in Section 13.3 hereof.




     13.10 Distribution of Certain Amounts. The Administrative Agent shall (a) receive and
hold in trust for the benefit of all present and future Syndication Parties, in the Payment Account
and, if requested in writing by the Required Lenders, segregated from the Administrative Agent’s
other funds and accounts and (b) shall remit to the Syndication Parties, as indicated, the amounts
described below:



          13.10.1 Funding Losses. To each Syndication Party the amount of any Funding Losses
paid by Borrower to the Administrative Agent in connection with a prepayment of any portion of a
Quoted Rate Loan, in accordance with the Funding Loss Notice such Syndication Party provided to the
Administrative Agent, no later than 3:00 P.M. (Central time) on the same Banking Day that payment
of such Funding Losses is received by the Administrative Agent, if received no later than 1:00 P.M.
(Central time), or the next Banking Day if received by the Administrative Agent thereafter.



     13.11 Collateral Application. The Syndication Parties shall have no interest in any
other loans made to Borrower by any other Syndication Party other than the Loans, or in any
property taken as security for any other loan or loans made to Borrower by any other Syndication
Party, or in any property now or hereinafter in the possession or control of any other Syndication
Party, which may be or become security for the Loans solely by reason of the provisions of a
security instrument that would cause such security instrument and the property covered thereby to
secure generally all indebtedness owing by Borrower to such other Syndication Party.
Notwithstanding the foregoing, to the extent such other Syndication Party applies such funds or the
proceeds of such property to reduction of one or more of the Loans, such other Syndication Party
shall share such funds or proceeds with all Syndication Parties according to their respective
Individual term Loan Commitments. In the event that any Syndication Party shall obtain payment,
whether partial or full, from any source in respect of one or more of the Loans, including without
limitation payment by reason of the exercise of a right of offset, banker’s lien, general lien, or
counterclaim, such Syndication Party shall promptly make such adjustments (which may include
payment in cash or the purchase of further Syndication Interests or participations in the Loans) to
the end that such excess payment shall be shared with all other Syndication Parties in accordance
with their respective Individual Term Loan Commitments. Notwithstanding any of the foregoing
provisions of this Section or Article 6 hereof, no Syndication Party other than CoBank shall have
any right to, or to the proceeds of, or any right to the application to any amount owing to such
Syndication Party hereunder of any the proceeds of, any Bank Equity Interests issued to Borrower by
CoBank or on account of any statutory lien held by CoBank on such Bank Equity Interests.



     13.12 Amounts Required to be Returned. If the Administrative Agent makes any payment
to a Syndication Party in anticipation of the receipt of final funds from Borrower, and such funds
are not received from Borrower, or if excess funds are paid by the Administrative Agent to any
Syndication Party as the result of a miscalculation by the Administrative Agent, then such
Syndication Party shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent any such amounts, plus interest thereon (from the day such amounts were
transferred by the Administrative Agent to the Syndication Party to, but not including, the day
such amounts are returned by Syndication Party) at a rate per annum equal to the customary rate set
by the Administrative Agent for the correction of errors among banks for three (3) Banking



42









 




Days and thereafter at the Base Rate. If the Administrative Agent is required at any time to
return to Borrower or a trustee, receiver, liquidator, custodian, or similar official any portion
of the payments made by Borrower to the Administrative Agent, whether pursuant to any bankruptcy or
insolvency law or otherwise, then each Syndication Party shall, on demand of the Administrative
Agent, forthwith return to the Administrative Agent any such payments transferred to such
Syndication Party by the Administrative Agent but without interest or penalty (unless the
Administrative Agent is required to pay interest or penalty on such amounts to the person
recovering such payments).




     13.13 Reports and Information to Syndication Parties. The Administrative Agent shall
use reasonable efforts to provide to the Syndication Parties, as soon as practicable after actual
knowledge thereof is acquired by an officer thereof primarily responsible for the Administrative
Agent’s duties as such with respect to the Loans or primarily responsible for the credit
relationship between the Administrative Agent and Borrower, any material factual information which
has a material adverse effect on the creditworthiness of Borrower, and Borrower hereby authorizes
such disclosure by the Administrative Agent to the Syndication Parties (and by the Syndication
Parties to any of their participants). Failure of the Administrative Agent to provide the
information referred to in this Section or in Subsection 13.6.4 hereof shall not result in any
liability upon, or right to make a claim against, the Administrative Agent except where a court of
competent jurisdiction renders a final non-appealable determination that such failure is a result
of the willful misconduct or gross negligence of the Administrative Agent. Syndication Parties
acknowledge and agree that all information and reports received pursuant to this Credit Agreement
will be received in confidence in connection with their Syndication Interest, and that such
information and reports constitute confidential information and shall not, without the prior
written consent of the Administrative Agent or Borrower (which consent will not be unreasonably
withheld, provided that Borrower shall have no consent rights upon the occurrence and during the
continuance of an Event of Default), be (a) disclosed to any third party (other than the
Administrative Agent, another Syndication Party or potential Syndication Party, or a participant or
potential participant in the interest of a Syndication Party, which disclosure is hereby approved
by Borrower), except pursuant to appropriate legal or regulatory process, or (b) used by the
Syndication Party except in connection with the Loans and its Syndication Interest.



     13.14 Standard of Care. The Administrative Agent shall not be liable to Syndication
Parties for any error in judgment or for any action taken or not taken by the Administrative Agent
or its agents, except to the extent that a court of competent jurisdiction renders a final
non-appealable determination that any of the foregoing resulted from the gross negligence or
willful misconduct of the Administrative Agent. Subject to the preceding sentence, the
Administrative Agent will exercise the same care in administering the Loans and the Loan Documents
as it exercises for similar loans which it holds for its own account and risk, and the
Administrative Agent shall not have any further responsibility to the Syndication Parties. Without
limiting the foregoing, the Administrative Agent may rely on the advice of counsel concerning legal
matters and on any written document it believes to be genuine and correct and to have been signed
or sent by the proper Person or Persons.



     13.15 No Trust Relationship. Neither the execution of this Credit Agreement, nor the
sharing in the Loans, nor the holding of the Loan Documents in its name by the Administrative
Agent, nor the management and administration of the Loans and Loan Documents by the



43









 




Administrative Agent (including the obligation to hold certain payments and proceeds in the
Payment Account in trust for the Syndication Parties), nor any other right, duty or obligation of
the Administrative Agent under or pursuant to this Credit Agreement is intended to be or create,
and none of the foregoing shall be construed to be or create, any express, implied or constructive
trust relationship between the Administrative Agent and any Syndication Party. Each Syndication
Party hereby agrees and stipulates that the Administrative Agent is not acting as trustee for such
Syndication Party with respect to the Loans, this Credit Agreement, or any aspect of either, or in
any other respect.




     13.16 Sharing of Costs and Expenses. To the extent not paid by Borrower, each
Syndication Party will promptly upon demand reimburse the Administrative Agent (based on its
Individual Term Loan Pro Rata Share), for all reasonable costs, disbursements, and expenses
incurred by the Administrative Agent on or after the date of this Credit Agreement for legal,
accounting, consulting, and other services rendered to the Administrative Agent in its role as the
Administrative Agent in the administration of the Loans, interpreting the Loan Documents, and
protecting, enforcing, or otherwise exercising any rights, both before and after default by
Borrower under the Loan Documents, and including, without limitation, all costs and expenses
incurred in connection with any bankruptcy proceedings and the exercise of any remedies with
respect to the Cash Collateral Account or otherwise; provided, however, that the costs and expenses
to be shared in accordance with this Section shall not include any costs or expenses incurred by
the Administrative Agent solely as a Syndication Party in connection with the Loans, nor to the
Administrative Agent’s internal costs and expenses.



     13.17 Syndication Parties’ Indemnification of the Administrative Agent and Bid Agent.
Each of the Syndication Parties agree to indemnify the Administrative Agent, including any
Successor Agent, and their respective directors, officers, employees, agents, professional advisers
and representatives (“Indemnified Agency Parties”), (to the extent not reimbursed by Borrower, and
without in any way limiting the obligation of Borrower to do so), ratably (based on its Individual
Term Loan Pro Rata Share), from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the payment of the Loans
and/or the expiration or termination of this Credit Agreement) be imposed on, incurred by or
asserted against the Administrative Agent (or any of the Indemnified Agency Parties while acting
for the Administrative Agent or for any Successor Agent) in any way relating to or arising out of
this Credit Agreement or the Loan Documents, or the performance of the duties of the Administrative
Agent hereunder or thereunder or any action taken or omitted while acting in the capacity of the
Administrative Agent under or in connection with any of the foregoing; provided that the
Syndication Parties shall not be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of an Indemnified Agency Party to the extent that a court of competent jurisdiction
renders a final non-appealable determination that the foregoing are the result of the willful
misconduct or gross negligence of such Indemnified Agency Party. The agreements and obligations in
this Section shall survive the payment of the Loans and the expiration or termination of this
Credit Agreement.



     13.18 Books and Records. The Administrative Agent shall maintain such books of
account and records relating to the Loans as it maintains with respect to other loans of similar
type



44









 




and amount, and which shall clearly and accurately reflect the Syndication Interest of each
Syndication Party. The Syndication Parties, or their agents, may inspect such books of account and
records at all reasonable times during the Administrative Agent’s regular business hours.




     13.19 Administrative Agent Fee. The Administrative Agent and any Successor Agent
shall be entitled to such fee as agreed upon between Borrower and the Administrative Agent for
acting as the Administrative Agent.



     13.20 The Administrative Agent’s Resignation or Removal. The Administrative Agent may
resign at any time by giving at least sixty (60) days’ prior written notice of its intention to do
so to each of the Syndication Parties and Borrower. After the receipt of such notice, the Required
Lenders shall appoint a successor (“Successor Agent”). If (a) no Successor Agent shall have been
so appointed which is either (i) a Syndication Party, or (ii) if not a Syndication Party, which is
a Person approved by Borrower, such approval not to be unreasonably withheld (provided that
Borrower shall have no approval rights upon the occurrence and during the continuance of an Event
of Default), or (b) if such Successor Agent has not accepted such appointment, in either case
within forty-five (45) days after the retiring Administrative Agent’s giving of such notice of
resignation, then the retiring Administrative Agent may, after consulting with, but without
obtaining the approval of, Borrower, appoint a Successor Agent which shall be a bank or a trust
company organized under the laws of the United States of America or any state thereof and having a
combined capital, surplus and undivided profit of at least $250,000,000. Any Administrative Agent
may be removed upon the written demand of the Required Lenders, which demand shall also appoint a
Successor Agent. Upon the appointment of a Successor Agent hereunder, (a) the term “Administrative
Agent” shall for all purposes of this Credit Agreement thereafter mean such Successor Agent, and
(b) the Successor Agent shall notify Borrower of its identity and of the information called for in
Subsection 14.4.2 hereof. After any retiring Administrative Agent’s resignation hereunder as the
Administrative Agent, or the removal hereunder of any Administrative Agent, the provisions of this
Credit Agreement shall continue to inure to the benefit of such Administrative Agent as to any
actions taken or omitted to be taken by it while it was the Administrative Agent under this Credit
Agreement.



     13.21 Representations and Warranties of All Parties. The Administrative Agent, the
Bid Agent, and each Syndication Party represents and warrants that: (a) the execution and delivery
of, and performance of its obligations under, this Credit Agreement is within its power and has
been duly authorized by all necessary corporate and other action by it; (b) this Credit Agreement
is in compliance with all applicable laws and regulations promulgated under such laws and does not
conflict with nor constitute a breach of its charter or by-laws nor any agreements by which it is
bound, and does not violate any judgment, decree or governmental or administrative order, rule or
regulation applicable to it; (c) no approval, authorization or other action by, or declaration to
or filing with, any governmental or administrative authority or any other Person is required to be
obtained or made by it in connection with the execution and delivery of, and performance of its
obligations under, this Credit Agreement; and (d) this Credit Agreement has been duly executed by
it, and constitutes the legal, valid, and binding obligation of such Person, enforceable in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors
generally and general equitable principles (regardless of whether such enforceability is considered
in a proceeding at law or in equity). Each Syndication Party that is a state or national bank




45












 




represents and warrants that the act of entering into and performing its obligations under this
Credit Agreement has been approved by its board of directors or its loan committee and such action
was duly noted in the written minutes of the meeting of such board or committee, and that it will,
upon the Administrative Agent’s written request, furnish the Administrative Agent with a certified
copy of such minutes or an excerpt therefrom reflecting such approval.




     13.22 Representations and Warranties of CoBank. Except as expressly set forth in
Section 13.21 hereof, CoBank, in its role as a Syndication Party and as the Administrative Agent,
makes no express or implied representation or warranty and assumes no responsibilities with respect
to the due authorization, execution, or delivery of the Loan Documents; the accuracy of any
information, statements, or certificates provided by Borrower, the legality, validity, or
enforceability of the Loan Documents; the filing or recording of any document; the collectibility
of the Loans; the performance by Borrower of any of its obligations under the Loan Documents; or
the financial condition or solvency of Borrower or any other party obligated with respect to the
Loans or the Loan Documents.



     13.23 Syndication Parties’ Independent Credit Analysis. Each Syndication Party
acknowledges receipt of true and correct copies of all Loan Documents (other than any Note payable
to another Syndication Party) from the Administrative Agent. Each Syndication Party agrees and
represents that it has relied upon its independent review (a) of the Loan Documents, and (b) any
information independently acquired by such Syndication Party from Borrower or otherwise in making
its decision to acquire an interest in the Loans independently and without reliance on the
Administrative Agent. Each Syndication Party represents and warrants that it has obtained such
information as it deems necessary (including any information such Syndication Party
independently obtained from Borrower or others) prior to making its decision to acquire an
interest in the Loans. Each Syndication Party further agrees and represents that it has made its
own independent analysis and appraisal of and investigation into each Borrower’s authority,
business, operations, financial and other condition, creditworthiness, and ability to perform its
obligations under the Loan Documents and has relied on such review in making its decision to
acquire an interest in the Loans. Each Syndication Party agrees that it will continue to rely
solely upon its independent review of the facts and circumstances related to Borrower, and without
reliance upon the Administrative Agent, in making future decisions with respect to all matters
under or in connection with the Loan Documents and the Loans. The Administrative Agent assumes no
responsibility for the financial condition of Borrower or for the performance of Borrower’s
obligations under the Loan Documents. Except as otherwise expressly provided herein, no
Syndication Party shall have any duty or responsibility to furnish to any other Syndication Parties
any credit or other information concerning Borrower which may come into its possession.



     13.24 No Joint Venture or Partnership. Neither the execution of this Credit
Agreement, the sharing in the Loans, nor any agreement to share in payments or losses arising as a
result of this transaction is intended to be or to create, and the foregoing shall not be construed
to be, any partnership, joint venture or other joint enterprise between the Administrative Agent
and any Syndication Party, nor between or among any of the Syndication Parties.



     13.25 Purchase for Own Account; Restrictions on Transfer; Participations. Each
Syndication Party represents that it has acquired and is retaining its interest in the Loans for
its own account in the ordinary course of its banking or financing business and not with a view



46









 




toward the sale, distribution, further participation, or transfer thereof. Each Syndication Party
other than CoBank agrees that it will not sell, assign, convey or otherwise dispose of (“Transfer”)
to any Person, or create or permit to exist any lien or security interest on all or any part of its
interest in the Loans, without the prior written consent of the Administrative Agent and Borrower
(which consent will not be unreasonably withheld, provided that Borrower shall have no approval
rights upon the occurrence and during the continuance of an Event of Default); provided that: (a)
any such Transfer (except a Transfer to another Syndication Party or a Transfer by CoBank) must be
in a minimum amount of $5,000,000.00; (b) each Syndication Party must maintain an Individual Term
Loan Commitment of no less than $5,000,000.00, unless it Transfers its entire Syndication Interest;
(c) the transferee must execute an agreement substantially in the form of Exhibit 13.25
hereto (“Syndication Acquisition Agreement”) and assume all of the transferor’s obligations
hereunder and execute such documents as the Administrative Agent may reasonably require; and (d)
the Syndication Party making such Transfer must pay, or cause the transferee to pay, the
Administrative Agent an assignment fee of $3,500.00. Any Syndication Party may participate any
part of its interest in the Loans to any Person with the prior written consent of the
Administrative Agent and Borrower (which consent will not be unreasonably withheld, provided that
Borrower shall have no approval rights upon the occurrence and during the continuance of an Event
of Default), provided that no such consent shall be required where the participant is a Person at
least fifty percent (50%) the equity interest in which is owned by such Syndication Party or which
owns at least fifty percent (50%) of the equity interest in such Syndication Party or at least
fifty percent (50%) of the equity interest of which is owned by the same Person which owns
at least fifty percent (50%) of the equity interest of such Syndication Party, and each
Syndication Party understands and agrees that in the event of any such participation: (x) its
obligations hereunder will not change on account of such participation; (y) the participant will
have no rights under this Credit Agreement, including, without limitation, voting rights (except as
provided in Section 13.26 hereof with respect to Voting Participants) or the right to receive
payments or distributions; and (z) the Administrative Agent shall continue to deal directly with
the Syndication Party with respect to the Loans (including with respect to voting rights, except as
provided in Section 13.26 hereof with respect to Voting Participants) as though no participation
had been granted and will not be obligated to deal directly with any participant (except as
provided in Section 13.26 hereof with respect to Voting Participants). Notwithstanding any
provision contained herein to the contrary, any Syndication Party may at any time pledge or assign
all or any portion of its interest in the Loans to any Federal Reserve Bank or the Federal Farm
Credit Bank in accordance with applicable law. CoBank reserves the right to sell participations on
a non-patronage basis.




     13.26 Certain Participants’ Voting Rights. Any Farm Credit System Institution which
(a) has acquired and, at any time of determination maintains, a participation interest in the
minimum aggregate amount of $10,000,000 in a particular Syndication Party’s Syndication Interest;
and (b) has been designated in writing by such Syndication Party to the Administrative Agent as
having such entitlement (such designation to include for such participant, its name, contact
information, and dollar participation amount) (each a “Voting Participant”), shall be entitled to
vote (and such Syndication Party’s voting rights shall be correspondingly reduced), on a dollar
basis, as if such Voting Participant were a Syndication Party, on any matter requiring or allowing
a Syndication Party, to provide or withhold its consent, or to otherwise vote on any proposed
action. The voting rights of any Syndication Party so designating a Voting Participant shall be
reduced by an equivalent dollar amount.



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     13.27 Method of Making Payments. Payment and transfer of all amounts owing or to be
paid or remitted hereunder, including, without limitation, payment of the Advance Payment by
Syndication Parties, and distribution of principal or interest payments or fees or other amounts by
the Administrative Agent, shall be by wire transfer in accordance with the instructions contained
on Exhibit 13.27 hereto (“Wire Instructions”).



     13.28 Events of Syndication Default/Remedies.



          13.28.1 Syndication Party Default. Any of the following occurrences, failures or
acts, with respect to any of the Syndication Parties shall constitute an “Event of Syndication
Default” hereunder by such party: (a) if any representation or warranty made by such party in this
Credit Agreement shall be found to have been untrue in any material respect; (b) if such party
fails to make any distributions or payments required under this Credit Agreement within five (5)
days of the date required; (c) if such party breaches any other covenant, agreement, or provision
of this Credit Agreement which breach shall have continued uncured for a period of thirty (30)
consecutive days after such breach first occurs, unless a shorter period is required to avoid
prejudicing the rights and position of the other Syndication Parties; (d) if any agency having
supervisory authority over such party, or any creditors thereof, shall file a petition to
reorganize or liquidate such party pursuant to any applicable federal or state law or regulation and such petition shall not be discharged or
denied within fifteen (15) days after the date on which it is filed; (e) if by the order of a court
of competent jurisdiction or by any appropriate supervisory agency, a receiver, trustee or
liquidator shall be appointed for such party or for all or any material part of its property or if
such party shall be declared insolvent; or (f) if such party shall be dissolved, or shall make an
assignment for the benefit of its creditors, or shall file a petition seeking to take advantage of
any debtors’ act, including the bankruptcy act, or shall admit in writing its inability to pay its
debts generally as they become due, or shall consent to the appointment of a receiver or liquidator
of all or any material part of its property.



          13.28.2 Remedies. Upon the occurrence of an Event of Syndication Default, the
non-defaulting Syndication Parties, acting by, or through the direction of, a simple majority
(determined based on their Individual Term Loan Pro Rata Shares) of the non-defaulting Syndication
Parties, may, in addition to any other remedy specifically set forth in this Credit Agreement, have
and exercise any and all remedies available generally at law or equity, including the right to
damages and to specific performance.



     13.29 Withholding Taxes. Each Syndication Party represents that under the applicable
law in effect as of the date it becomes a Syndication Party, it is entitled to receive any payments
to be made to it hereunder without the withholding of any tax and will furnish to the
Administrative Agent and to Borrower such forms, certifications, statements and other documents as
the Administrative Agent or Borrower may request from time to time to evidence such Syndication
Party’s exemption from the withholding of any tax imposed by any jurisdiction or to enable the
Administrative Agent or Borrower, as the case may be, to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, each Syndication Party
that was not created or organized under the laws of the United States of America or any state or
other political subdivision thereof (“Non-US Lender”), shall, on the Closing Date, or upon its
becoming a Syndication Party (for Persons that were not Syndication Parties on the Closing Date),
furnish to the Administrative Agent and Borrower two original copies of IRS Form W-8BEN, W-8ECI,
4224, or Form 1001, as appropriate, (or any successor forms), or such other forms,



48









 




certifications, statements of exemption, or documents as may be required by the IRS or by the Administrative Agent
or Borrower, in their reasonable discretion, duly executed and completed by such Syndication Party,
to establish, and as evidence of, such Syndication Party’s exemption from the withholding of United
States tax with respect to any payments to such Syndication Party of interest or fees payable under
any of the Loan documents. Further, each Non-US Lender hereby agrees, from time to time after the
initial delivery by such Syndication Party of such forms, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence so delivered obsolete or
inaccurate in any material respect, that such Syndication Party shall promptly (a) deliver to the
Administrative Agent and to Borrower two original copies of renewals, amendments or additional or
successor forms, properly completed and duly executed by such Syndication Party, together with any
other certificate or statement of exemption required in order to confirm or establish that such
Syndication Party is not subject to United States withholding tax with respect to payments to such
Syndication Party under the Loan Documents or (b) notify the Administrative Agent and Borrower of
its inability to deliver any such forms, certificates or other evidence. Notwithstanding anything
herein to the contrary, Borrower shall not be obligated to make any payments hereunder to such
Syndication Party until such Syndication Party shall have furnished to the Administrative Agent and Borrower each
requested form, certification, statement or document.




     13.30 Replacement of Holdout Lender. If any action to be taken by the Syndication
Parties or the Administrative Agent hereunder requires the unanimous consent, authorization, or
agreement of all Syndication Parties, and a Syndication Party (“Holdout Lender”) fails to give its
consent, authorization, or agreement, then the Administrative Agent, upon at least five (5) Banking
Days prior irrevocable notice to the Holdout Lender, may permanently replace the Holdout Lender
with one or more substitute Syndication Parties (each, a “Replacement Lender”), and the Holdout
Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout
Lender shall specify an effective date for such replacement, which date shall not be later than
fifteen (15) Banking Days after the date such notice is given. Prior to the effective date of such
replacement, the Holdout Lender and each Replacement Lender shall execute and deliver a Syndication
Acquisition Agreement, subject only to the Holdout Lender being repaid its full share of the
outstanding Bank Debt without any premium, discount, or penalty of any kind whatsoever. If the
Holdout Lender shall refuse or fail to execute and deliver any such Syndication Acquisition
Agreement prior to the effective date of such replacement, the Holdout Lender shall be deemed to
have executed and delivered such Syndication Acquisition Agreement. The replacement of any Holdout
Lender shall be made in accordance with the terms of Section 13.25 hereof. Until such time as the
Replacement Lenders shall have acquired all of the Syndication Interest of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to provide
the Holdout Lender’s Funding Share of Advances.



     13.31 Amendments Concerning Agency Function. Neither the Administrative Agent nor the
Bid Agent shall be bound by any waiver, amendment, supplement or modification of this Credit
Agreement or any other Loan Document which affects its duties hereunder or thereunder unless it
shall have given its prior written consent thereto.



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     13.32 Further Assurances. The Administrative Agent and each Syndication Party agree
to take whatever steps and execute such documents as may be reasonable and necessary to implement
this Article 13 and to carry out fully the intent thereof.



ARTICLE 14.  MISCELLANEOUS




     14.1 Costs and Expenses. To the extent permitted by law, Borrower agrees to pay to
the Administrative Agent and the Syndication Parties, on demand, all out-of-pocket costs and
expenses (a) incurred by the Administrative Agent (including, without limitation, the reasonable
fees and expenses of counsel retained by the Administrative Agent, and including fees and expenses
incurred for consulting, appraisal, engineering, inspection, and environmental assessment services)
in connection with the preparation, negotiation, and execution of the Loan Documents and the
transactions contemplated thereby, and processing the Borrowing Notices; and (b) incurred by the
Administrative Agent or any Syndication Party (including, without limitation, the reasonable fees
and expenses of counsel retained by the Administrative Agent and the Syndication Parties) in
connection with the enforcement or protection of the Syndication Parties’ rights under the Loan Documents upon the
occurrence of an Event of Default or upon the commencement of an action by Borrower against the
Administrative Agent or any Syndication Party, including without limitation collection of the Loan
(regardless of whether such enforcement or collection is by court action or otherwise). Borrower
shall not be obligated to pay the costs or expenses of any Person whose only interest in the Loan
is as a holder of a participation interest.



     14.2 Service of Process and Consent to Jurisdiction. Borrower and each Syndication
Party hereby agrees that any litigation with respect to this Credit Agreement or to enforce any
judgment obtained against such Person for breach of this Credit Agreement or under the Notes or
other Loan Documents may be brought in the courts of the State of Colorado and in the United States
District Court for the District of Colorado (if applicable subject matter jurisdictional
requirements are present), as the Administrative Agent may elect; and, by execution and delivery of
this Credit Agreement, Borrower and each Syndication Party irrevocably submits to such
jurisdiction. With respect to litigation concerning this Credit Agreement or under the Notes or
other Loan Documents within the jurisdiction of the courts of the State of Colorado or the United
States District Court for the District of Colorado, Borrower and each Syndication Party hereby
irrevocably appoints, until six (6) months after the expiration of the Term Loan Maturity Date (as
it may be extended at anytime), The Corporation Company, or such other Person as it may designate
to the Administrative Agent, in each case with offices in Denver, Colorado and otherwise reasonably
acceptable to the Administrative Agent to serve as the agent of Borrower or such Syndication Party
to receive for and on its behalf at such agent’s Denver, Colorado office, service of process, which
service may be made by mailing a copy of any summons or other legal process to such Person in care
of such agent. Borrower and each Syndication Party agrees that it shall maintain a duly appointed
agent in Colorado for service of summons and other legal process as long as it remains obligated
under this Credit Agreement and shall keep the Administrative Agent advised in writing of the
identity and location of such agent. The receipt by such agent and/or by Borrower or such
Syndication Party, as applicable, of such summons or other legal process in any such litigation
shall be deemed personal service and acceptance by Borrower or such Syndication Party, as
applicable, for all purposes of such litigation.



     14.3 Jury Waiver. IT IS MUTUALLY AGREED BY AND BETWEEN THE ADMINISTRATIVE AGENT, THE
BID AGENT, EACH SYNDICATION PARTY, AND



50









 




BORROWER
THAT THEY EACH WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN
DOCUMENTS.




     14.4 Notices. All notices, requests and demands required or permitted under the terms
of this Credit Agreement shall be in writing and (a) shall be addressed as set forth below or at
such other address as either party shall designate in writing, (b) shall be deemed to have been
given or made: (i) if delivered personally, immediately upon delivery, (ii) if by telex, telegram
or facsimile transmission, immediately upon sending and upon confirmation of receipt, (iii) if by
nationally recognized overnight courier service with instructions to deliver the
next Banking Day, one (1) Banking Day after sending, and (iv) if by United States Mail,
certified mail, return receipt requested, five (5) days after mailing.



          14.4.1 Borrower:




CHS Inc.

5500 Cenex Drive

Inver Grove Heights, Minnesota 55077

FAX: (651) 355-4554

Attention: Executive Vice President and Chief Financial Officer

e-mail address: john.schmitz@chsinc.com



          with a copy to:




Cenex Harvest States Cooperatives

5500 Cenex Drive

Inver Grove Heights, Minnesota 55077

FAX: (651) 355-4554

Attention: Sr. Vice President and General Counsel

e-mail address: david.kastelic@chsinc.com



          14.4.2 Administrative Agent:




CoBank, ACB

5500 South Quebec Street

Greenwood Village, Colorado 80111

FAX: (303) 740-4100

Attention: Administrative Agent

e-mail address: abahr@cobank.com



          14.4.3 Syndication Parties:



          See signature pages hereto.



     14.5 Liability of Administrative Agent. The Administrative Agent shall not have any
liabilities or responsibilities to Borrower or any Subsidiary on account of the failure of any



51









 




Syndication Party to perform its obligations hereunder or to any Syndication Party on account of
the failure of Borrower or any Subsidiary to perform their respective obligations hereunder or
under any other Loan Document.




     14.6 Successors and Assigns. This Credit Agreement shall be binding upon and inure to
the benefit of Borrower, the Administrative Agent and the Syndication Parties, and their respective
successors and assigns, except that Borrower may not assign or transfer its rights or obligations
hereunder without the prior written consent of all of the Syndication Parties.



     14.7 Severability. The invalidity or unenforceability of any provision of this Credit
Agreement or the other Loan Documents shall not affect the remaining portions of such documents or
instruments; in case of such invalidity or unenforceability, such documents or instruments shall be
construed as if such invalid or unenforceable provisions had not been included therein.



     14.8 Entire Agreement. This Credit Agreement (together with all exhibits hereto,
which are incorporated herein by this reference) and the other Loan Documents represent the entire
understanding of the Administrative Agent, each Syndication Party and Borrower with respect to the
subject matter hereof and shall replace and supersede any previous agreements of the parties with
respect to the subject matter hereof.



     14.9 Applicable Law. To the extent not governed by federal law, this Credit Agreement
and the other Loan Documents, and the rights and obligations of the parties hereto and thereto
shall be governed by and interpreted in accordance with the internal laws of the State of Colorado,
without giving effect to any otherwise applicable rules concerning conflicts of law.



     14.10 Captions. The captions or headings in this Credit Agreement and any table of
contents hereof are for convenience only and in no way define, limit or describe the scope or
intent of any provision of this Credit Agreement.



     14.11 Complete Agreement; Amendments. THIS CREDIT AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS ARE INTENDED BY THE PARTIES HERETO TO BE A COMPLETE AND FINAL EXPRESSION OF THEIR
AGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT.
THE ADMINISTRATIVE AGENT, THE BID AGENT, EACH SYNDICATION PARTY, AND BORROWER ACKNOWLEDGE AND AGREE
THAT NO UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN THEM WITH RESPECT TO THE SUBJECT MATTER OF THIS
AGREEMENT. This Credit Agreement may not be modified or amended unless such modification or
amendment is in writing and is signed by Borrower, the Administrative Agent, and all Syndication
Parties (and each Syndication Party hereby agrees to execute any such amendment approved pursuant
to Section 13.8 hereof). Borrower agrees that it shall reimburse the Administrative Agent for all
fees and expenses incurred by the Administrative Agent in retaining outside legal counsel in
connection with any amendment or modification to this Credit Agreement requested by Borrower.



     14.12 Additional Costs of Maintaining Loan. Borrower shall pay to the Administrative
Agent from time to time such amounts as the Administrative Agent may determine to be necessary to
compensate any Syndication Party for any increase in costs to such Syndication Party which the



52









 




Administrative Agent determines, based on information presented to it by such Syndication Party, are
attributable to such Syndication Party’s making or maintaining an Advance hereunder or its
obligation to make such Advance, or any reduction in any amount receivable by such Syndication
Party under this Credit Agreement or the Notes payable to it in respect to such Advance or such
obligation (such increases in costs and reductions in amounts receivable being herein called
"Additional Costs”), resulting from any change after the date of this Credit Agreement in United
States federal, state, municipal, or foreign laws or regulations (including Regulation D of the
Federal Reserve Board), or the adoption or making after such date of any interpretations,
directives, or requirements applying to a class of banks including such Syndication Party of or
under any United States federal, state, municipal, or foreign laws or regulations (whether or not
having the force of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof (“Regulatory Change”), which: (a) changes the basis of
taxation of any amounts payable to such Syndication Party under this Credit Agreement or the Notes
payable to such Syndication Party in respect of such Advance (other than taxes imposed on the
overall net income of such Syndication Party); or (b) imposes or modifies any reserve, special
deposit, or similar requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Syndication Party; or (c) imposes any other condition
affecting this Credit Agreement or the Notes payable to such Syndication Party (or any of such
extensions of credit or liabilities). The Administrative Agent will notify Borrower of any event
occurring after the date of this Credit Agreement which will entitle such Syndication Party to
compensation pursuant to this Section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. The Administrative Agent shall include with such
notice, a certificate from such Syndication Party setting forth in reasonable detail the
calculation of the amount of such compensation. Determinations by the Administrative Agent for
purposes of this Section of the effect of any Regulatory Change on the costs of such Syndication
Party of making or maintaining an Advance or on amounts receivable by such Syndication Party in
respect of Advances, and of the additional amounts required to compensate such Syndication Party in
respect of any Additional Costs, shall be conclusive absent manifest error, provided that such
determinations are made on a reasonable basis.




     14.13 Capital Requirements. In the event that the introduction of or any change in:
(a) any law or regulation; or (b) the judicial, administrative, or other governmental
interpretation of any law or regulation; or (c) compliance by any Syndication Party or any
corporation controlling any such Syndication Party with any guideline or request from any
governmental authority (whether or not having the force of law) has the effect of requiring an
increase in the amount of capital required or expected to be maintained by such Syndication Party
or any corporation controlling such Syndication Party, and such Syndication Party certifies that
such increase is based in any part upon such Syndication Party’s Individual Outstanding Term Loan
Obligations, Borrower shall pay to such Syndication Party such additional amount as shall be
certified by such Syndication Party to the Administrative Agent and to Borrower to be the net
present value (discounted at the Base Rate) of (a) the amount by which such increase in capital
reduces the rate of return on capital which such Syndication Party could have achieved over the
period remaining until the Term Loan Maturity Date, but for such introduction or change, (b)
multiplied by such Syndication Party’s Individual Outstanding Term Loan Obligations. The
Administrative Agent will notify Borrower of any event occurring after the date of this Credit
Agreement that will entitle any such Syndication Party to compensation pursuant to this Section as
promptly as practicable after it obtains knowledge thereof and of such Syndication Party’s determination to request such



53









 




compensation. The Administrative Agent shall include with such notice, a certificate from such Syndication Party setting forth in
reasonable detail the calculation of the amount of such compensation. Determinations by any
Syndication Party for purposes of this Section of the effect of any increase in the amount of
capital required to be maintained by any such Syndication Party and of the amount of compensation
owed to any such Syndication Party under this Section shall be conclusive absent manifest error,
provided that such determinations are made on a reasonable basis.




     14.14 Replacement Notes. Upon receipt by Borrower of evidence satisfactory to it of:
(a) the loss, theft, destruction or mutilation of any Note, and (in case of loss, theft or
destruction) of the agreement of the Syndication Party to which the Note was payable to indemnify
Borrower, and upon surrender and cancellation of such Note, if mutilated; or (b) the assignment by
any Syndication Party of its interest hereunder and the Notes relating thereto, or any portion
thereof, pursuant to this Credit Agreement, then Borrower will pay any unpaid principal and
interest (and Funding Losses, if applicable) then or previously due and payable on such Notes and
will (upon delivery of such Notes for cancellation, unless covered by subparagraph (a) of this
Section) deliver in lieu of each such Note a new Note or, in the case of an assignment of a portion
of any such Syndication Party’s Syndication Interest, new Notes, for any remaining balance.



     14.15 Patronage Payments. Borrower acknowledges and agrees that: (a) only that
portion of the Loan represented by CoBank’s Individual Term Loan Pro Rata Share which is retained
by CoBank for its own account is entitled to patronage distributions in accordance with CoBank’s
bylaws and its practices and procedures related to patronage distribution; and (b) any patronage,
or similar, payments to which Borrower is entitled on account its ownership of Bank Equity
Interests or otherwise will not be based on any portion of CoBank’s interest in the Loans in which
CoBank has at any time granted a participation interest.



     14.16 Direct Website Communications; Electronic Mail Communications



          14.16.1 Delivery.



               (a) Borrower hereby agrees that it will provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the Administrative Agent pursuant
to this Credit Agreement and any other Loan Document, including, without limitation, all notices,
requests, financial statements, financial and other reports, certificates and other information
materials, but, subject to the provisions of Subsection 14.16.3 hereof, excluding any such
communication that (i) relates to a request for a new, or a conversion of an existing, borrowing or
other extension of credit (including any election of an interest rate or interest period relating
thereto), (ii) relates to the payment of any principal or other amount due under this Credit
Agreement prior to the scheduled date therefor, (iii) provides notice of any Potential Default or
Event of Default under this Credit Agreement or (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Credit Agreement or other extension of credit
hereunder (all such non-excluded communications collectively, the “Communications”), by
transmitting the Communications in an electronic/soft medium and in a format acceptable to the
Administrative Agent as follows (A) all financial statements to closing@cobank.com and (B) all other Communications to mtousignant@cobank.com.
In addition, Borrower agrees to continue to provide the Communications to the Administrative Agent
in the manner specified in this Credit Agreement but only to the extent requested by the



54









 




Administrative Agent. Receipt of the Communications by the Administrative Agent at the appropriate
e-mail address as set forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of this Credit Agreement and any other Loan Documents. Nothing
in this Section 14.16 shall prejudice the right of the Administrative Agent or any Syndication
Party to give any notice or other communication pursuant to this Credit Agreement or any other Loan
Document in any other manner specified in this Credit Agreement or any other Loan Document.




               (b) Each Syndication Party agrees that receipt of e-mail notification that such Communications
have been posted pursuant to Subsection 14.16.2 below at the e-mail address(es) set forth beneath
such Syndication Party’s name on its signature page hereto or pursuant to the notice provisions of
any Syndication Acquisition Agreement shall constitute effective delivery of the Communications to
such Syndication Party for purposes of this Credit Agreement and any other Loan Document. Each
Syndication Party further agrees to notify the Administrative Agent in writing (including by
electronic communication) promptly of any change in its e-mail address or any extended disruption
in its internet delivery services.



          14.16.2 Posting. Borrower further agrees that the Administrative Agent may make the
Communications available to the Syndication Parties by posting the Communications on “Synd-Trak”
(“Platform”). The Platform is secured with a dual firewall and a User ID/Password Authorization
System and through a single user per deal authorization method whereby each user may access the
Platform only on a deal-by-deal basis. Borrower acknowledges that the distribution of
Communications through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution.



          14.16.3 Additional Communications. The Administrative Agent reserves the right and
Borrower and each Syndication Party consents and agrees thereto, to, upon written notice to
Borrower and all Syndication Parties, implement and require use of a secure system whereby any
notices or other communications required or permitted by this Credit Agreement, but which are not
specifically covered by Subsection 14.16.1 hereof, and including, without limitation, Borrowing
Notices, Quoted Rate Requests and any communication described in clauses (i) through (iv) of
Subsection 14.16.1(a) hereof, shall be sent and received via electronic mail to the e-mail
addresses described in Subsection 14.16.1(b) hereof.



          14.16.4 Disclaimer. The Communications transmitted pursuant to this Section 14.16 and
the Platform are provided “as is” and “as available.” CoBank does not warrant the accuracy,
adequacy or completeness of the Communications or the Platform and CoBank expressly disclaims
liability for errors or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or
other code defects, is made by CoBank in connection with the Communications or the Platform.



          14.16.5 Termination. The provisions of this Section 14.16 shall automatically
terminate on the date that CoBank, ACB ceases to be the Administrative Agent under this Credit
Agreement.



55









 





     14.17 Mutual Release. Upon full indefeasible payment and satisfaction of the Bank
Debt and Notes and the other obligations contained in this Credit Agreement, the parties, including
Borrower, the Administrative Agent and each Syndication Party shall thereupon automatically each be
fully, finally, and forever released and discharged from any further claim, liability, or
obligation in connection with the Bank Debt.



     14.18 Liberal Construction. This Credit Agreement constitutes a fully negotiated
agreement between commercially sophisticated parties, each assisted by legal counsel, and shall not
be construed and interpreted for or against any party hereto.



     14.19 Counterparts. This Credit Agreement may be executed by the parties hereto in
separate counterparts, each of which, when so executed and delivered, shall be an original, but all
such counterparts shall together constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all, but together signed by all of
the parties hereto. Copies of documents or signature pages bearing original signatures, and
executed documents or signature pages delivered by a party by telefax, facsimile, or e-mail
transmission of an Adobe® file format document (also known as a PDF file) shall, in each such
instance, be deemed to be, and shall constitute and be treated as, an original signed document or
counterpart, as applicable. Any party delivering an executed counterpart of this Credit Agreement
by telefax, facsimile, or e-mail transmission of an Adobe® file format document also shall deliver
an original executed counterpart of this Credit Agreement, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding effect of this
Credit Agreement.



     14.20 Confidentiality. Each Syndication Party shall maintain the confidential nature
of, and shall not use or disclose, any of Borrower’s financial information, confidential
information or trade secrets without first obtaining Borrower’s written consent. Nothing in this
Section shall require any Syndication Party to obtain such consent after there is an Event of
Default. The obligations of the Syndication Parties shall in no event apply to: (a) providing
information about Borrower to any financial institution contemplated or described in Sections 13.6,
13.13, and 13.25 hereof or to such Syndication Party’s parent holding company or any of such
Syndication Party’s Affiliates; (b) any situation in which any Syndication Party is required by Law
or required by any Governmental Authority to disclose information; (c) providing information to
counsel to any Syndication Party in connection with the transactions contemplated by the Loan
Documents; (d) providing information to independent auditors retained by the such Syndication
Party; (e) any information that is in or becomes part of the public domain otherwise than through a
wrongful act of such Syndication Party or any of its employees or agents thereof; (f) any
information that is in the possession of any Syndication Party prior to receipt thereof from
Borrower or any other Person known to such Syndication Party to be acting on behalf of Borrower;
(g) any information that is independently developed by any Syndication Party; and (h) any
information that is disclosed to any Syndication Party by a third party that has no obligation of
confidentiality with respect to the information disclosed. A Syndication Party’s confidentiality
requirements continue after it is no longer a Syndication Party under this Credit Agreement.
Notwithstanding any provision to the contrary in this Credit Agreement, the Administrative
Agent and each Syndication Party (and each employee, representative, or other agent thereof) may
disclose to any and all Persons, without limitations of any kind, the tax treatment and tax
structure of the transaction described in this Credit Agreement and all materials of any kind
(including opinions or other tax analyses), if any,



56









 




that are provided to the Administrative Agent or such Syndication Party relating to such tax treatment and tax structure. Nothing in the
preceding sentence shall be taken as an indication that such transaction would, but for such
sentence, be deemed to be a “reportable transaction” as defined in Treasury Regulation Section
1.6011-4.




     14.21 USA Patriot Act Notice. Each Syndication Party that is subject to the USA
Patriot Act and the Administrative Agent (for itself and not on behalf of any Syndication Party)
hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act, it is required
to obtain, verify and record information that identifies Borrower, which information includes the
name and address of Borrower and other information that will allow such Syndication Party or
Administrative Agent, as applicable, to identify Borrower in accordance with the USA Patriot Act.



     14.22 Waiver of Borrower’s Rights Under Farm Credit Act. Borrower, having been
represented by legal counsel in connection with this Credit Agreement and, in particular, in
connection with the waiver contained in this Section 14.22, does hereby voluntarily and knowingly
waive, relinquish, and agree not to assert at any time, any and all rights that Borrower may have
or be afforded under the sections of the Agricultural Credit Act of 1987 designated as 12 U.S.C.
Sections 2199 through 2202e and the implementing Farm Credit Administration regulations as set
forth in 12 C.F.R. Sections 617.7000 through 617.7630, including those provisions which afford
Borrower certain rights, and/or impose on any lender to Borrower certain duties, with respect to
the collection of any amounts owing hereunder or the foreclosure of any liens securing any such
amounts, or which require the Administrative Agent or any present or future Syndication Party to
disclose to Borrower the nature of any such rights or duties. This waiver is given by Borrower
pursuant to the provisions of 12 C.F.R. Section 617.7010(c) to induce the Syndication Parties to
fund and extend to Borrower the credit facilities described herein and to induce those Syndication
Parties which are Farm Credit System Institutions to agree to provide such credit facilities
commensurate with their Individual 5-Year Commitments as they may exist from time to time.



[SIGNATURE PAGES FOLLOW]




57









 





     IN WITNESS WHEREOF, the parties have executed this Credit Agreement as of the date first above
written.



	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	CHS INC, a cooperative corporation formed under the
laws of the State of Minnesota	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Schmitz	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John Schmitz	 	 
	 

	 	Title:
	 	 Executive Vice President Finance and
	 	 
	 	 	Administration, and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	COBANK, ACB	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael Tousignant	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael Tousignant	 	 
	 

	 	Title:
	 	 Vice President	 	 







58












 





                      SYNDICATION PARTIES:




	 	 	 	 	 	 	 	 	 
	 	 	CoBank, ACB	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	/s/ Michael Tousignant
 

	 	 
	 	 	Name: Michael Tousignant	 	 
	 	 	Title: Vice President	 	 
	 
	 	 	Contact Name: Michael Tousignant	 	 
	 	 	Title: Vice President	 	 
	 	 	Address: 5500 South Quebec Street	 	 
	 

	 	 	 	 	 	  Greenwood Village, CO 80111	 	 
	 	 	Phone No.: 303/694-5838	 	 
	 	 	Fax No.: 303/694-5830	 	 
	 	 	E-mail: mtousignant@cobank.com	 	 
	 	 	Individual Term Loan Commitment: $150,000,000	 	 






59









 






SCHEDULE 1

To Credit Agreement




SYNDICATION PARTIES AND INDIVIDUAL COMMITMENTS




	 	 	 	 	 
	 	 	Individual
	Syndication Party	 	Term Loan
	Name / Address	 	Commitment
	 
	CoBank, ACB
	 	$	150,000,000	 
	5500 South Quebec St.

Greenwood Village,

Colorado 80111
	 	 	 	 








60












 





TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE 1. DEFINED TERMS
	 	 	2	 
	 
	 	 	 	 
	1.1 Additional Costs
	 	 	2	 
	 
	 	 	 	 
	1.2 Adjusted Consolidated Funded Debt
	 	 	2	 
	 
	 	 	 	 
	1.3 Administrative Agent
	 	 	2	 
	 
	 	 	 	 
	1.4 Administrative Agent Office
	 	 	2	 
	 
	 	 	 	 
	1.5 Advance
	 	 	2	 
	 
	 	 	 	 
	1.6 Advance Date
	 	 	2	 
	 
	 	 	 	 
	1.7 Advance Payment
	 	 	2	 
	 
	 	 	 	 
	1.8 Affiliate
	 	 	2	 
	 
	 	 	 	 
	1.9 Aggregate Term Loan Commitment
	 	 	3	 
	 
	 	 	 	 
	1.10 Amortization
	 	 	3	 
	 
	 	 	 	 
	1.11 Annual Operating Budget
	 	 	3	 
	 
	 	 	 	 
	1.12 Anti-Terrorism Laws
	 	 	3	 
	 
	 	 	 	 
	1.13 Applicable Lending Office
	 	 	3	 
	 
	 	 	 	 
	1.14 Authorized Officer
	 	 	3	 
	 
	 	 	 	 
	1.15 Bank Debt
	 	 	3	 
	 
	 	 	 	 
	1.16 Banking Day
	 	 	3	 
	 
	 	 	 	 
	1.17 Bank Equity Interests
	 	 	3	 
	 
	 	 	 	 
	1.18 Base Rate
	 	 	3	 
	 
	 	 	 	 
	1.19 Borrower’s Account
	 	 	3	 
	 
	 	 	 	 
	1.20 Borrower Benefit Plan
	 	 	3	 
	 
	 	 	 	 
	1.21 Borrowing Notice
	 	 	4	 
	 
	 	 	 	 
	1.22 Borrower Pension Plan
	 	 	4	 
	 
	 	 	 	 
	1.23 Capital Leases
	 	 	4	 






i










 





	 	 	 	 	 
	 
	 	 	 	 
	1.24 Closing Date
	 	 	4	 
	 
	 	 	 	 
	1.25 Code
	 	 	4	 
	 
	 	 	 	 
	1.26 Committed Term Loan Advance
	 	 	4	 
	 
	 	 	 	 
	1.27 Compliance Certificate
	 	 	4	 
	 
	 	 	 	 
	1.28 Communications
	 	 	4	 
	 
	 	 	 	 
	1.29 Consolidated Cash Flow
	 	 	4	 
	 
	 	 	 	 
	1.30 Consolidated Current Assets
	 	 	4	 
	 
	 	 	 	 
	1.31 Consolidated Current Liabilities
	 	 	4	 
	 
	 	 	 	 
	1.32 Consolidated Funded Debt
	 	 	4	 
	 
	 	 	 	 
	1.33 Consolidated Interest Expense
	 	 	5	 
	 
	 	 	 	 
	1.34 Consolidated Members’ and Patrons’ Equity
	 	 	5	 
	 
	 	 	 	 
	1.35 Consolidated Subsidiary
	 	 	5	 
	 
	 	 	 	 
	1.36 Contributing Syndication Parties
	 	 	5	 
	 
	 	 	 	 
	1.37 Debt
	 	 	5	 
	 
	 	 	 	 
	1.38 Default Interest Rate
	 	 	5	 
	 
	 	 	 	 
	1.39 Delinquency Interest
	 	 	5	 
	 
	 	 	 	 
	1.40 Delinquent Amount
	 	 	5	 
	 
	 	 	 	 
	1.41 Delinquent Syndication Party
	 	 	5	 
	 
	 	 	 	 
	1.42 Depreciation
	 	 	5	 
	 
	 	 	 	 
	1.43 Embargoed Person
	 	 	5	 
	 
	 	 	 	 
	1.44 Environmental Laws
	 	 	6	 
	 
	 	 	 	 
	1.45 ERISA
	 	 	6	 
	 
	 	 	 	 
	1.46 ERISA Affiliate
	 	 	6	 
	 
	 	 	 	 
	1.47 Event of Default
	 	 	6	 
	 
	 	 	 	 
	1.48 Event of Syndication Default
	 	 	6	 






ii









 






	 	 	 	 	 
	1.49 Executive Order
	 	 	6	 
	 
	 	 	 	 
	1.50 Farm Credit System Institution
	 	 	6	 
	 
	 	 	 	 
	1.51 Fiscal Quarter
	 	 	6	 
	 
	 	 	 	 
	1.52 Fiscal Year
	 	 	6	 
	 
	 	 	 	 
	1.53 Funded Debt
	 	 	6	 
	 
	 	 	 	 
	1.54 Funding Losses
	 	 	6	 
	 
	 	 	 	 
	1.55 Funding Loss Notice
	 	 	6	 
	 
	 	 	 	 
	1.56 Funding Share
	 	 	7	 
	 
	 	 	 	 
	1.57 GAAP
	 	 	7	 
	 
	 	 	 	 
	1.58 Good Faith Contest
	 	 	7	 
	 
	 	 	 	 
	1.59 Governmental Authority
	 	 	7	 
	 
	 	 	 	 
	1.60 Hazardous Substances
	 	 	7	 
	 
	 	 	 	 
	1.61 Holdout Lender
	 	 	7	 
	 
	 	 	 	 
	1.62 Indemnified Agency Parties
	 	 	7	 
	 
	 	 	 	 
	1.63 Indemnified Parties
	 	 	7	 
	 
	 	 	 	 
	1.64 Individual Term Loan Commitment
	 	 	7	 
	 
	 	 	 	 
	1.65 Individual Outstanding Term Loan Obligation
	 	 	7	 
	 
	 	 	 	 
	1.66 Individual Term Loan Pro Rata Share
	 	 	7	 
	 
	 	 	 	 
	1.67 Intellectual Property
	 	 	7	 
	 
	 	 	 	 
	1.68 Investment
	 	 	8	 
	 
	 	 	 	 
	1.69 Licensing Laws
	 	 	8	 
	 
	 	 	 	 
	1.70 Lien
	 	 	8	 
	 
	 	 	 	 
	1.71 Loans
	 	 	8	 
	 
	 	 	 	 
	1.72 Loan Documents
	 	 	8	 
	 
	 	 	 	 
	1.73 Material Adverse Effect
	 	 	8	 






iii









 






	 	 	 	 	 
	 
	 	 	 	 
	1.74 Material Agreements
	 	 	8	 
	 
	 	 	 	 
	1.75 Multiemployer Plan
	 	 	8	 
	 
	 	 	 	 
	1.76 Not Used
	 	 	8	 
	 
	 	 	 	 
	1.77 Non-US Lender
	 	 	8	 
	 
	 	 	 	 
	1.78 Note or Notes
	 	 	9	 
	 
	 	 	 	 
	1.79 OFAC
	 	 	9	 
	 
	 	 	 	 
	1.80 Operating Lease
	 	 	9	 
	 
	 	 	 	 
	1.81 Organization Documents
	 	 	9	 
	 
	 	 	 	 
	1.82 Other List
	 	 	9	 
	 
	 	 	 	 
	1.83 Payment Account
	 	 	9	 
	 
	 	 	 	 
	1.84 Payment Distribution
	 	 	9	 
	 
	 	 	 	 
	1.85 PBGC
	 	 	9	 
	 
	 	 	 	 
	1.86 Permitted Encumbrance
	 	 	9	 
	 
	 	 	 	 
	1.87 Person
	 	 	9	 
	 
	 	 	 	 
	1.88 Plan
	 	 	9	 
	 
	 	 	 	 
	1.89 Platform
	 	 	9	 
	 
	 	 	 	 
	1.90 Potential Default
	 	 	9	 
	 
	 	 	 	 
	1.91 Prohibited Transaction
	 	 	9	 
	 
	 	 	 	 
	1.92 Quoted Rate
	 	 	9	 
	 
	 	 	 	 
	1.93 Quoted Rate Loan
	 	 	9	 
	 
	 	 	 	 
	1.94 Quoted Rate Period
	 	 	10	 
	 
	 	 	 	 
	1.95 Not Used
	 	 	10	 
	 
	 	 	 	 
	1.96 Regulatory Change
	 	 	10	 
	 
	 	 	 	 
	1.97 Replacement Lender
	 	 	10	 
	 
	 	 	 	 
	1.98 Reportable Event
	 	 	10	 






iv









 





	 	 	 	 	 
	 
	 	 	 	 
	1.99 Required Lenders
	 	 	10	 
	 
	 	 	 	 
	1.100 Required License
	 	 	10	 
	 
	 	 	 	 
	1.101 Restricted Subsidiary
	 	 	10	 
	 
	 	 	 	 
	1.102 Revolving Loan Credit Agreement
	 	 	10	 
	 
	 	 	 	 
	1.103 SDN List
	 	 	10	 
	 
	 	 	 	 
	1.104 Subsidiary
	 	 	10	 
	 
	 	 	 	 
	1.105 Successor Agent
	 	 	11	 
	 
	 	 	 	 
	1.106 Syndication Acquisition Agreement
	 	 	11	 
	 
	 	 	 	 
	1.107 Syndication Interest
	 	 	11	 
	 
	 	 	 	 
	1.108 Syndication Parties
	 	 	11	 
	 
	 	 	 	 
	1.109 Syndication Party Advance Date
	 	 	11	 
	 
	 	 	 	 
	1.110 364-Term Loan Note(s)
	 	 	11	 
	 
	 	 	 	 
	1.111 Term Loan Advance
	 	 	11	 
	 
	 	 	 	 
	1.112 Term Loan
	 	 	11	 
	 
	 	 	 	 
	1.113 Term Loan Maturity Date
	 	 	11	 
	 
	 	 	 	 
	1.114 Transfer
	 	 	11	 
	 
	 	 	 	 
	1.115 USA Patriot Act
	 	 	11	 
	 
	 	 	 	 
	1.116 Voting Participant
	 	 	11	 
	 
	 	 	 	 
	1.117 Wire Instructions
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 2. TERM LOAN
	 	 	11	 
	 
	 	 	 	 
	2.1 Term Loan
	 	 	11	 
	 
	 	 	 	 
	2.2 Borrowing Notice
	 	 	11	 
	 
	 	 	 	 
	2.3 Promissory Note
	 	 	11	 
	 
	 	 	 	 
	2.4 Syndication Party Records
	 	 	12	 
	 
	 	 	 	 
	2.5 Use of Proceeds
	 	 	12	 






v









 






	 	 	 	 	 
	 
	 	 	 	 
	2.6 Syndication Party Funding Failure
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 3. INTEREST
	 	 	12	 
	 
	 	 	 	 
	3.1 Interest
	 	 	12	 
	 
	 	 	 	 
	3.1.1 Quoted Rate
	 	 	12	 
	 
	 	 	 	 
	3.2 Default Interest Rate
	 	 	12	 
	 
	 	 	 	 
	3.3 Interest Calculation
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 4. PAYMENTS; FUNDING LOSSES
	 	 	13	 
	 
	 	 	 	 
	4.1 Principal Payments
	 	 	13	 
	 
	 	 	 	 
	4.2 Interest Payments
	 	 	13	 
	 
	 	 	 	 
	4.3 Application of Principal Payments
	 	 	13	 
	 
	 	 	 	 
	4.4 Manner of Payment
	 	 	13	 
	 
	 	 	 	 
	4.4.1 Payments to Be Free and Clear
	 	 	13	 
	 
	 	 	 	 
	4.4.2 Grossing-up of Payments
	 	 	13	 
	 
	 	 	 	 
	4.5 Voluntary Prepayments
	 	 	14	 
	 
	 	 	 	 
	4.6 Distribution of Principal and Interest Payments
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 5. BANK EQUITY INTERESTS
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 6. SECURITY
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 7. REPRESENTATIONS AND WARRANTIES
	 	 	16	 
	 
	 	 	 	 
	7.1 Organization, Good Standing, Etc.
	 	 	16	 
	 
	 	 	 	 
	7.2 Corporate Authority, Due Authorization; Consents
	 	 	17	 
	 
	 	 	 	 
	7.3 Litigation
	 	 	17	 
	 
	 	 	 	 
	7.4 No Violations
	 	 	17	 
	 
	 	 	 	 
	7.5 Binding Agreement
	 	 	17	 
	 
	 	 	 	 
	7.6 Compliance with Laws
	 	 	17	 
	 
	 	 	 	 
	7.7 Principal Place of Business; Place of Organization
	 	 	17	 






vi









 





	 	 	 	 	 
	 
	 	 	 	 
	7.8 Payment of Taxes
	 	 	18	 
	 
	 	 	 	 
	7.9 Licenses and Approvals
	 	 	18	 
	 
	 	 	 	 
	7.10 Employee Benefit Plans
	 	 	18	 
	 
	 	 	 	 
	7.11 Equity Investments
	 	 	18	 
	 
	 	 	 	 
	7.12 Title to Real and Personal Property
	 	 	18	 
	 
	 	 	 	 
	7.13 Financial Statements
	 	 	19	 
	 
	 	 	 	 
	7.14 Environmental Compliance
	 	 	19	 
	 
	 	 	 	 
	7.15 Fiscal Year
	 	 	19	 
	 
	 	 	 	 
	7.16 Material Agreements
	 	 	19	 
	 
	 	 	 	 
	7.17 Regulations U and X
	 	 	20	 
	 
	 	 	 	 
	7.18 Trademarks, Tradenames, etc.
	 	 	20	 
	 
	 	 	 	 
	7.19 No Default on Outstanding Judgments or Orders
	 	 	20	 
	 
	 	 	 	 
	7.20 No Default in Other Agreements
	 	 	20	 
	 
	 	 	 	 
	7.21 Acts of God
	 	 	20	 
	 
	 	 	 	 
	7.22 Governmental Regulation
	 	 	20	 
	 
	 	 	 	 
	7.23 Labor Matters and Labor Agreements
	 	 	20	 
	 
	 	 	 	 
	7.24 Anti-Terrorism Laws
	 	 	21	 
	 
	 	 	 	 
	7.24.1 Violation of Law
	 	 	21	 
	 
	 	 	 	 
	7.24.2 Classification
	 	 	21	 
	 
	 	 	 	 
	7.24.3 Conduct of Business
	 	 	22	 
	 
	 	 	 	 
	7.25 Disclosure
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 8. CONDITIONS TO ADVANCES
	 	 	22	 
	 
	 	 	 	 
	8.1 Conditions to Closing
	 	 	22	 
	 
	 	 	 	 
	8.1.1 Loan Documents
	 	 	22	 
	 
	 	 	 	 
	8.1.2 Approvals
	 	 	22	 






vii









 





	 	 	 	 	 
	 
	 	 	 	 
	8.1.3 Organizational Documents
	 	 	22	 
	 
	 	 	 	 
	8.1.4 Evidence of Corporate Action
	 	 	22	 
	 
	 	 	 	 
	8.1.5 Evidence of Insurance
	 	 	22	 
	 
	 	 	 	 
	8.1.6 Appointment of Agent for Service
	 	 	23	 
	 
	 	 	 	 
	8.1.7 No Material Change
	 	 	23	 
	 
	 	 	 	 
	8.1.8 Fees and Expenses
	 	 	23	 
	 
	 	 	 	 
	8.1.9 Bank Equity Interest Purchase Obligation
	 	 	23	 
	 
	 	 	 	 
	8.1.10 Opinion of Counsel
	 	 	23	 
	 
	 	 	 	 
	8.1.11 Further Assurances; No Default
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 9. AFFIRMATIVE COVENANTS
	 	 	23	 
	 
	 	 	 	 
	9.1 Books and Records
	 	 	23	 
	 
	 	 	 	 
	9.2 Reports and Notices
	 	 	23	 
	 
	 	 	 	 
	9.2.1 Annual Financial Statements
	 	 	24	 
	 
	 	 	 	 
	9.2.2 Quarterly Financial Statements
	 	 	24	 
	 
	 	 	 	 
	9.2.3 Notice of Default
	 	 	24	 
	 
	 	 	 	 
	9.2.4 ERISA Reports
	 	 	24	 
	 
	 	 	 	 
	9.2.5 Notice of Litigation
	 	 	25	 
	 
	 	 	 	 
	9.2.6 Notice of Material Adverse Effect
	 	 	25	 
	 
	 	 	 	 
	9.2.7 Notice of Environmental Proceedings
	 	 	25	 
	 
	 	 	 	 
	9.2.8 Regulatory and Other Notices
	 	 	25	 
	 
	 	 	 	 
	9.2.9 Adverse Action Regarding Required Licenses
	 	 	25	 
	 
	 	 	 	 
	9.2.10 Budget
	 	 	25	 
	 
	 	 	 	 
	9.2.11 Additional Information
	 	 	25	 
	 
	 	 	 	 
	9.3 Maintenance of Existence and Qualification
	 	 	26	 
	 
	 	 	 	 
	9.4 Compliance with Legal Requirements and Agreements
	 	 	26	 








viii











 





	 	 	 	 	 
	9.5 Compliance with Environmental Laws
	 	 	26	 
	 
	 	 	 	 
	9.6 Taxes
	 	 	26	 
	 
	 	 	 	 
	9.7 Insurance
	 	 	26	 
	 
	 	 	 	 
	9.8 Maintenance of Properties
	 	 	27	 
	 
	 	 	 	 
	9.9 Payment of Liabilities
	 	 	27	 
	 
	 	 	 	 
	9.10 Inspection
	 	 	27	 
	 
	 	 	 	 
	9.11 Required Licenses; Permits; Intellectual Property; Etc.
	 	 	28	 
	 
	 	 	 	 
	9.12 ERISA
	 	 	28	 
	 
	 	 	 	 
	9.13 Maintenance of Commodity Position
	 	 	28	 
	 
	 	 	 	 
	9.14 Financial Covenants
	 	 	28	 
	 
	 	 	 	 
	9.14.1 Consolidated Funded Debt to Consolidated Cash Flow
	 	 	28	 
	 
	 	 	 	 
	9.14.2 Adjusted Consolidated Funded Debt to Consolidated
Members’ and Patrons’ Equity
	 	 	28	 
	 
	 	 	 	 
	9.15 Embargoed Person
	 	 	28	 
	 
	 	 	 	 
	9.16 Anti-Money Laundering
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 10. NEGATIVE COVENANTS
	 	 	29	 
	 
	 	 	 	 
	10.1 Borrowing
	 	 	29	 
	 
	 	 	 	 
	10.2 No Other Businesses
	 	 	29	 
	 
	 	 	 	 
	10.3 Liens
	 	 	29	 
	 
	 	 	 	 
	10.4 Sale of Assets
	 	 	32	 
	 
	 	 	 	 
	10.5 Merger; Acquisitions; Business Form; Etc.
	 	 	32	 
	 
	 	 	 	 
	10.6 Transactions With Related Parties
	 	 	32	 
	 
	 	 	 	 
	10.7 Change in Fiscal Year
	 	 	33	 
	 
	 	 	 	 
	10.8 ERISA
	 	 	33	 
	 
	 	 	 	 
	10.9 Anti-Terrorism Law
	 	 	33	 






ix









 






	 	 	 	 	 
	ARTICLE 11. INDEMNIFICATION
	 	 	33	 
	 
	 	 	 	 
	11.1
General; Stamp Taxes; Intangibles Tax
	 	 	33	 
	 
	 	 	 	 
	11.2 Indemnification Relating to Hazardous Substances
	 	 	34	 
	 
	 	 	 	 
	ARTICLE 12. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
	 	 	35	 
	 
	 	 	 	 
	12.1 Events of Default
	 	 	35	 
	 
	 	 	 	 
	12.2 No Advance
	 	 	36	 
	 
	 	 	 	 
	12.3 Rights and Remedies
	 	 	36	 
	 
	 	 	 	 
	ARTICLE 13. AGENCY AGREEMENT
	 	 	36	 
	 
	 	 	 	 
	13.1 Funding of Syndication Interest
	 	 	36	 
	 
	 	 	 	 
	13.2 Syndication Parties’ Obligations to Remit Funds
	 	 	37	 
	 
	 	 	 	 
	13.4 Syndication Party’s Failure to Remit Funds
	 	 	37	 
	 
	 	 	 	 
	13.4 Agency Appointment
	 	 	38	 
	 
	 	 	 	 
	13.5 Power and Authority of the Administrative Agent
	 	 	38	 
	 
	 	 	 	 
	13.5.1 Advice
	 	 	38	 
	 
	 	 	 	 
	13.5.2 Documents
	 	 	38	 
	 
	 	 	 	 
	13.5.3 Proceedings
	 	 	39	 
	 
	 	 	 	 
	13.5.4 Retain Professionals
	 	 	39	 
	 
	 	 	 	 
	13.5.5 Incidental Powers
	 	 	39	 
	 
	 	 	 	 
	13.6 Duties of the Administrative Agent
	 	 	39	 
	 
	 	 	 	 
	13.6.1 Possession of Documents
	 	 	39	 
	 
	 	 	 	 
	13.6.2 Distribute Payments
	 	 	39	 
	 
	 	 	 	 
	13.6.3 Loan Administration
	 	 	39	 
	 
	 	 	 	 
	13.6.4 Forwarding of Information
	 	 	40	 
	 
	 	 	 	 
	13.7 Action Upon Default
	 	 	40	 
	 
	 	 	 	 
	13.7.1 Indemnification as Condition to Action
	 	 	40	 






x









 






	 	 	 	 	 
	13.8 Consent Required for Certain Actions
	 	 	40	 
	 
	 	 	 	 
	13.8.1 Unanimous
	 	 	40	 
	 
	 	 	 	 
	13.8.3 Required Lenders
	 	 	41	 
	 
	 	 	 	 
	13.8.4 Action Without Vote
	 	 	41	 
	 
	 	 	 	 
	13.8.4 Voting Participants
	 	 	41	 
	 
	 	 	 	 
	13.9 Distribution of Principal and Interest
	 	 	41	 
	 
	 	 	 	 
	13.10 Distribution of Certain Amounts
	 	 	42	 
	 
	 	 	 	 
	13.10.1 Funding Losses
	 	 	42	 
	 
	 	 	 	 
	13.11 Collateral Application
	 	 	42	 
	 
	 	 	 	 
	13.12 Amounts Required to be Returned
	 	 	42	 
	 
	 	 	 	 
	13.13 Reports and Information to Syndication Parties
	 	 	43	 
	 
	 	 	 	 
	13.14 Standard of Care
	 	 	43	 
	 
	 	 	 	 
	13.15 No Trust Relationship
	 	 	43	 
	 
	 	 	 	 
	13.16 Sharing of Costs and Expenses
	 	 	44	 
	 
	 	 	 	 
	13.17 Syndication Parties’ Indemnification of the Administrative Agent and Bid
Agent
	 	 	44	 
	 
	 	 	 	 
	13.18 Books and Records
	 	 	44	 
	 
	 	 	 	 
	13.19 Administrative Agent Fee
	 	 	45	 
	 
	 	 	 	 
	13.20 The Administrative Agent’s Resignation or Removal
	 	 	45	 
	 
	 	 	 	 
	13.21 Representations and Warranties of All Parties
	 	 	45	 
	 
	 	 	 	 
	13.22 Representations and Warranties of CoBank
	 	 	46	 
	 
	 	 	 	 
	13.23 Syndication Parties’ Independent Credit Analysis
	 	 	46	 
	 
	 	 	 	 
	13.24 No Joint Venture or Partnership
	 	 	46	 
	 
	 	 	 	 
	13.25 Purchase for Own Account; Restrictions on Transfer; Participations
	 	 	46	 
	 
	 	 	 	 
	13.26 Certain Participants’ Voting Rights
	 	 	47	 






xi









 






	 	 	 	 	 
	13.27 Method of Making Payments
	 	 	48	 
	 
	 	 	 	 
	13.28 Events of Syndication Default/Remedies
	 	 	48	 
	 
	 	 	 	 
	13.28.1 Syndication Party Default
	 	 	48	 
	 
	 	 	 	 
	13.28.2 Remedies
	 	 	48	 
	 
	 	 	 	 
	13.29 Withholding Taxes
	 	 	48	 
	 
	 	 	 	 
	13.30 Replacement of Holdout Lender
	 	 	49	 
	 
	 	 	 	 
	13.31 Amendments Concerning Agency Function
	 	 	49	 
	 
	 	 	 	 
	13.32 Further Assurances
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 14. MISCELLANEOUS
	 	 	50	 
	 
	 	 	 	 
	14.1 Costs and Expenses
	 	 	50	 
	 
	 	 	 	 
	14.2 Service of Process and Consent to Jurisdiction
	 	 	50	 
	 
	 	 	 	 
	14.3 Jury Waiver
	 	 	50	 
	 
	 	 	 	 
	14.4 Notices
	 	 	51	 
	 
	 	 	 	 
	14.5 Liability of Administrative Agent and Bid Agent
	 	 	51	 
	 
	 	 	 	 
	14.6 Successors and Assigns
	 	 	52	 
	 
	 	 	 	 
	14.7 Severability
	 	 	52	 
	 
	 	 	 	 
	14.8 Entire Agreement
	 	 	52	 
	 
	 	 	 	 
	14.9 Applicable Law
	 	 	52	 
	 
	 	 	 	 
	14.10 Captions
	 	 	52	 
	 
	 	 	 	 
	14.11 Complete Agreement; Amendments
	 	 	52	 
	 
	 	 	 	 
	14.12 Additional Costs of Maintaining Loan
	 	 	52	 
	 
	 	 	 	 
	14.13 Capital Requirements
	 	 	53	 
	 
	 	 	 	 
	14.14 Replacement Notes
	 	 	54	 
	 
	 	 	 	 
	14.15 Patronage Payments
	 	 	54	 
	 
	 	 	 	 
	14.16 Direct Website Communications; Electronic Mail Communications
	 	 	54	 






xii









 






	 	 	 	 	 
	14.16.1 Delivery
	 	 	54	 
	 
	 	 	 	 
	14.16.2 Posting
	 	 	55	 
	 
	 	 	 	 
	14.16.3 Additional Communications
	 	 	55	 
	 
	 	 	 	 
	14.16.4 Disclaimer
	 	 	55	 
	 
	 	 	 	 
	14.16.5 Termination
	 	 	55	 
	 
	 	 	 	 
	14.17 Mutual Release
	 	 	56	 
	 
	 	 	 	 
	14.18 Liberal Construction
	 	 	56	 
	 
	 	 	 	 
	14.19 Counterparts
	 	 	56	 
	 
	 	 	 	 
	14.20 Confidentiality
	 	 	56	 
	 
	 	 	 	 
	14.21 USA Patriot Act Notice
	 	 	57	 
	 
	 	 	 	 
	14.22 Waiver of Borrower’s Rights Under Farm Credit Act
	 	 	57	 
	 
	 	 	 	 





xiii









 






EXHIBITS




	 	 	 
	Exhibit 1.27

	 	Compliance Certificaten
	 
	 	 
	Exhibit 1.101

	 	List of Restricted Subsidiaries
	 
	 	 
	Exhibit 1.104

	 	List of Subsidiaries
	 
	 	 
	Exhibit 2.3

	 	Term Note Form
	 
	 	 
	Exhibit 7.3

	 	Litigation
	 
	 	 
	Exhibit 7.8

	 	Payment of Taxes
	 
	 	 
	Exhibit 7.10

	 	Employee Benefit Plans
	 
	 	 
	Exhibit 7.11

	 	Equity Investments
	 
	 	 
	Exhibit 7.14

	 	Environmental Compliance
	 
	 	 
	Exhibit 7.23

	 	Labor Matters and Agreements
	 
	 	 
	Exhibit 13.25

	 	Syndication Acquisition Agreement
	 
	 	 
	Exhibit 13.27

	 	Wire Instructions
	 
	 	 
	Schedule 1

	 	Syndication Parties and Individual Term Loan Commitments






xiv