Exhibit 10(s)  


	
  

 
	
  

 
	
 LOAN AGREEMENT

 
	
  



 
	
  

 
	
 between 

 
	
  

 
	
 RICHLAND COUNTY, NORTH DAKOTA 

 
	
  

 
	
 and 

 
	
  

 
	
 MINN-DAK FARMERS COOPERATIVE

regarding 

 
	
  

 
	
 $12,240,000 

 
	
 RICHLAND COUNTY, NORTH DAKOTA 

 
	
 VARIABLE RATE DEMAND 

 
	
 INDUSTRIAL DEVELOPMENT REVENUE REFUNDING BONDS 

 
	
 (MINN-DAK FARMERS COOPERATIVE PROJECT) 

 
	
 SERIES
2010A 

 
	
  

 
	
 and 

 
	
  

 
	
 $7,000,000 

 
	
 RICHLAND
COUNTY, NORTH DAKOTA 

 
	
 VARIABLE
RATE DEMAND 

 
	
 RECOVERY
ZONE FACILITY REVENUE BONDS 

 
	
 (MINN-DAK
FARMERS COOPERATIVE PROJECT) 

 
	
 SERIES
2010B 

 
	
  

 
	
 Dated
as of February 1, 2010 

 


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





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


	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Page



 
	
  

 	
  

 	
  

 	
  

 
	
 PARTIES

 	
  

 	
 1-1
 

 
	
  

 	
  

 	
  

 
	
 ARTICLE
 I 

 	
  

 	
  

 
	
 DEFINITIONS

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 1.1.

 	
 Definitions

 	
  

 	
 1-1
 

 
	
 Section 1.2.

 	
 Interpretation

 	
  

 	
 1-5
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

 	
  

 
	
 REPRESENTATIONS AND
 WARRANTIES

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 2.1.

 	
 Representations by the Issuer

 	
  

 	
 2-1
 

 
	
 Section 2.2.

 	
 Representations and Warranties by the Company

 	
  

 	
 2-1
 

 
	
 Section 2.3.

 	
 Representations of the Company Regarding Federal Tax Matters

 	
  

 	
 2-2
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
  

 
	
 CONSTRUCTION OF PROJECT;
 REFUNDING OF PRIOR BONDS

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 3.1.

 	
 Acquisition and Construction of Project by Company

 	
  

 	
 3-1
 

 
	
 Section 3.2.

 	
 Payment of Costs of the Project by Company

 	
  

 	
 3-1
 

 
	
 Section 3.3.

 	
 Disbursements from Project Fund

 	
  

 	
 3-1
 

 
	
 Section 3.4.

 	
 Enforcement of Contract and Surety Bonds

 	
  

 	
 3-2
 

 
	
 Section 3.5.

 	
 Plans and Specifications

 	
  

 	
 3-2
 

 
	
 Section 3.6.

 	
 Establishment of Completion Date

 	
  

 	
 3-2
 

 
	
 Section 3.7.

 	
 Refunding of Prior Bonds

 	
  

 	
 3-3
 

 
	
 Section 3.8.

 	
 Obligation of the Company to Cooperate in Furnishing Documents to
 Trustee

 	
  

 	
 3-3
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
  

 
	
 ISSUANCE OF THE BONDS;
 INVESTMENT OF FUNDS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 4.1.

 	
 Agreement to Issue Bonds

 	
  

 	
 4-1
 

 
	
 Section 4.2.

 	
 The Loan

 	
  

 	
 4-1
 

 
	
 Section 4.3.

 	
 Investment of Moneys

 	
  

 	
 4-1
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
  

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

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 5.1.

 	
 Effective Date and Duration of Agreement

 	
  

 	
 5-1
 

 


-i-









	
  

 	
  

 	
  

 	
  

 
	
 Section 5.2.

 	
 Basic Payments and Other Amounts Payable

 	
  

 	
 5-1
 

 
	
 Section 5.3.

 	
 Certain Company Obligations Unconditional

 	
  

 	
 5-3
 

 
	
 Section 5.4.

 	
 Basic Payments and Other Payments Assigned

 	
  

 	
 5-3
 

 
	
 Section 5.5.

 	
 Maintenance and Modification of the Projects by the Company

 	
  

 	
 5-4
 

 
	
 Section 5.6.

 	
 Taxes, Other Governmental Charges and Utility Charges

 	
  

 	
 5-4
 

 
	
 Section 5.7.

 	
 Insurance

 	
  

 	
 5-5
 

 
	
 Section 5.8.

 	
 Determination of Taxability

 	
  

 	
 5-5
 

 
	
 Section 5.9.

 	
 Optional Tender Purchases and Mandatory Purchases

 	
  

 	
 5-5
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
  

 
	
 CASUALTY AND CONDEMNATION

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 6.1.

 	
 Casualty

 	
  

 	
 6-1
 

 
	
 Section 6.2.

 	
 Condemnation

 	
  

 	
 6-1
 

 
	
 Section 6.3.

 	
 Failure to Restore Projects; Application of Net Proceeds

 	
  

 	
 6-1
 

 
	
 Section 6.4.

 	
 Cooperation

 	
  

 	
 6-1
 

 
	
 Section 6.5.

 	
 Effect of Damage, Destruction or Condemnation

 	
  

 	
 6-1
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII 
SPECIAL
 COVENANTS

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 7.1.

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

 	
  

 	
 7-1
 

 
	
 Section 7.2.

 	
 Right of Access to the Projects

 	
  

 	
 7-1
 

 
	
 Section 7.3.

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

 	
  

 	
 7-1
 

 
	
 Section 7.4.

 	
 Further Assurances and Corrective Instruments

 	
  

 	
 7-1
 

 
	
 Section 7.5.

 	
 The Issuer and Company Representatives

 	
  

 	
 7-1
 

 
	
 Section 7.6.

 	
 Removal of Liens Respecting Company Payments

 	
  

 	
 7-1
 

 
	
 Section 7.7.

 	
 Release and Indemnification

 	
  

 	
 7-2
 

 
	
 Section 7.8.

 	
 Compliance with the Indenture

 	
  

 	
 7-3
 

 
	
 Section 7.9.

 	
 Delivery of Substitute Credit

 	
  

 	
 7-3
 

 
	
 Section 7.10.

 	
 Annual Statement

 	
  

 	
 7-3
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VIII

 	
  

 	
  

 
	
 ASSIGNMENT, SALE, LEASING
 OF PROJECTS

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 8.1.

 	
 Assignment of Agreement; or Leasing of Projects

 	
  

 	
 8-1

 
	
 Section 8.2.

 	
 Sale and Encumbrance of Projects

 	
  

 	
 8-1
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IX

 	
  

 	
  

 
	
 EVENTS OF DEFAULT AND
 REMEDIES

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Section 9.1.

 	
 Events of Default Defined

 	
  

 	
 9-1
 

 
	
 Section 9.2.

 	
 Remedies on Default

 	
  

 	
 9-2
 

 


-ii-









	
  

 	
  

 	
  

 	
  

 
	
 Section 9.3.

 	
 No Remedy Exclusive

 	
  

 	
 9-2
 

 
	
 Section 9.4.

 	
 Agreement to Pay Attorneys’ Fees and Expenses

 	
  

 	
 9-3
 

 
	
 Section 9.5.

 	
 No Additional Waiver Implied by One Waiver

 	
  

 	
 9-3
 

 
	
 Section 9.6.

 	
 Rights of Credit Provider

 	
  

 	
 9-3
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE X

 	
  

 	
  

 
	
 COMPANY OPTIONS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 10.1.

 	
 Optional Termination Upon Discharge of Indenture

 	
  

 	
 10-1
 

 
	
 Section 10.2.

 	
 Optional Prepayment of Rent Because of Casualty or Condemnation

 	
  

 	
 10-1
 

 
	
 Section 10.3.

 	
 Optional Redemption of Bonds

 	
  

 	
 10-2
 

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE XI

 	
  

 	
  

 
	
 MISCELLANEOUS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 11.1.

 	
 Notices 

 	
  

 	
 11-1

 
	
 Section 11.2.

 	
 Binding Effect

 	
  

 	
 11-1
 

 
	
 Section 11.3.

 	
 Severability

 	
  

 	
 11-2
 

 
	
 Section 11.4.

 	
 Amounts Remaining in Funds

 	
  

 	
 11-2

 
	
 Section 11.5.

 	
 Amendments, Changes and Modifications

 	
  

 	
 11-2
 

 
	
 Section 11.6.

 	
 Execution in Counterparts

 	
  

 	
 11-2
 

 
	
 Section 11.7.

 	
 Captions

 	
  

 	
 11-2
 

 
	
 Section 11.8.

 	
 Recording and Filing

 	
  

 	
 11-2
 

 
	
 Section 11.9.

 	
 Law to Govern

 	
  

 	
 11-2
 

 
	
 Section 11.10.

 	
 Limitation on Issuer’s Liability

 	
  

 	
 11-3
 

 
	
 Section 11.11.

 	
 Credit Not in Effect

 	
  

 	
 11-3
 

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNATURES

 	
  

 	
 11-4
 

 
	
  

 	
  

 	
  

 
	
 EXHIBIT A:  DESCRIPTION OF PRIOR PROJECTS

 	
  

 	
 A-1

 
	
 EXHIBIT B:  DESCRIPTION OF RECOVERY ZONE PROJECTS

 	
  

 	
 B-1

 
	
 EXHIBIT C:  CERTIFICATE OF REQUISITION

 	
  

 	
 C-l

 


-iii-





LOAN AGREEMENT


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


ARTICLE I


DEFINITIONS


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


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



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


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


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


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


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


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


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


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


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


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


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


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


1-1





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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


1-2





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


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


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


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


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


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


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


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


          “Payments” means Basic Payments and Additional Payments.



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


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


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


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


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


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


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


1-3





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


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


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


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


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


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


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


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


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


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


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


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


1-4





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


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


          “State” means the State of North Dakota. 


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


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


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


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


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


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


          SECTION 1.2. INTERPRETATION.


	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


1-5





ARTICLE II


REPRESENTATIONS AND WARRANTIES


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


	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 



2-1 









	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


2-2









	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


2-3










	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
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2-4






ARTICLE III


CONSTRUCTION
OF THE PROJECT; 

REFUNDING OF PRIOR BONDS 


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


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


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


	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


3-1





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


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


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


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


3-2





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


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


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


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3-3





ARTICLE IV


ISSUANCE OF THE BONDS; INVESTMENT OF FUNDS


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


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



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


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


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


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4-1





ARTICLE V


EFFECTIVE DATE OF AGREEMENT; DURATION OF
TERM; 

PAYMENT AND OTHER PROVISIONS


	
  

 	
  

 
	
  

 	
 SECTION 5.1. EFFECTIVE
 DATE AND DURATION OF AGREEMENT.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


          SECTION 5.2. BASIC PAYMENTS AND OTHER
AMOUNTS PAYABLE. 


	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


5-1









	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 


5-2









	
  

 	
  

 	
  

 
	
  

 	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 


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


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


5-3





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


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


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


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


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


5-4





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


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


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


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


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


5-5





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


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5-6






ARTICLE VI 


CASUALTY AND CONDEMNATION 


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


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


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


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


6-1 





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


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6-2





ARTICLE VII 


SPECIAL COVENANTS 


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


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


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


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


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


7-1 





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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


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


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


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


7-2 





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


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


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


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


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7-3 





ARTICLE VIII 


ASSIGNMENT, SALE, LEASING OF PROJECTS  


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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8-1 






ARTICLE IX


EVENTS OF DEFAULT AND REMEDIES


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


	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
           (c)          the
 occurrence of an Act of Bankruptcy; 

 
	
  

 	
  

 	
  

 
	
  

 	
           (d)          if
 the Company shall: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 make an assignment
 for the benefit of its creditors; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

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

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


9-1





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


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


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


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


9-2





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


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


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


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9-3





ARTICLE X 

COMPANY OPTIONS


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


10-1









	
  

 	
  

 
	
  

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

 


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


	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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


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


10-2









	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 


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10-3





ARTICLE XI 


MISCELLANEOUS


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


	
  

 	
  

 	
  

 
	
 To the
 Issuer:

 	
  

 	
 Richland
 County 

 418 2nd Avenue North

 Wahpeton, North Dakota 58075

 Attention: County Auditor

 
	
  

 	
  

 	
  

 
	
 To the
 Trustee:

 	
  

 	
 Wells Fargo
 Bank, National Association

 MAC N9311-115 

 625 Marquette Avenue, 11th Floor

 Minneapolis, Minnesota 55479

 Attention: Corporate Trust Department

 
	
  

 	
  

 	
  

 
	
 To the
 Company:

 	
  

 	
 Minn-Dak
 Farmers Cooperative

 7525 Red River Road

 Wahpeton, North Dakota 58075

 Attention: Controller 

 
	
  

 	
  

 	
  

 
	
 To the Bank:

 	
  

 	
 CoBank, ACB 

 5500 South Quebec Street

 Greenwood Village, Colorado 80111

 Attention: Corporate Finance Division

 
	
  

 	
  

 	
  

 
	
 To the
 Remarketing Agent:

 	
  

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

 


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


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


11-1





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


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


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


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


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


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


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


11-2





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


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


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blank.)


11-3





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


	
  

 	
  

 	
  

 
	
  

 	
 RICHLAND COUNTY, NORTHDAKOTA

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 



 
	
  

 	
  

 	
 Vice
 Chair, Board of County Commissioners

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 



 
	
  

 	
  

 	
      County
 Auditor

 
	
  

 	
  

 	
  

 
	
  

 	
 MINN-DAK FARMERS COOPERATIVE 

 
	
  

 	
  

 
	
  

 	
 By: 

 	
 



 
	
  

 	
  

 	
      President

 


11-4






EXHIBIT A


DESCRIPTION OF PRIOR PROJECTS


1996 SOLID WASTE HANDLING AND DISPOSAL
FACILITIES


Pulp Presses (2) 

Multiclones with Aspirator 

Sugar Dryer Emission Control 

Beet Washing Equipment 

Flume Water Mud Filters

Aerobic Treatment 

Domestic Sewer System 

Evaporation System-Yeast Waste


2002 SOLID WASTE HANDLING AND DISPOSAL
FACILITIES


Anaerobic Sludge Filter System 

Pulp Dryer 

Dust Collectors 




A-1





EXHlBIT B


DESCRIPTION OF RECOVERY ZONE PROJECTS


Replace Modicon 800 Series I/O 

Main MCC Expansion 

Pipe Steam Dryer Vaper to Boiler 

New Belt Cleaners 

Extend Remelt Scroll 

Molasses Railcar Loadout System 

Beet Bunker Pokers 

Increase Capacity of Trash Pumping Station 

Flume Mud Bunker Overflow Screw Conveyer 

Dewatering Louvers for Wet Pulp Chute 

Raw Pan Automation 

Dust Abatement 

Yeast Plant Improvements 

Loop Track Rail System 

Fly Ash Bunker Expansion 

Coal Unloading System 

Evaporator for Steam Dryer


B-1





EXHIBIT C


CERTIFICATE OF REQUISITION


$7,000,000 

Richland County, North Dakota 

Variable Rate Demand Recovery Zone Facility Revenue Bonds 

(Minn-Dak Farmers Cooperative Project) 

Series 2010B


Certificate of Requisition 

of Minn-Dak Farmers Cooperative 

As to Requested Payment or Reimbursement 

From the Project Fund


Wells Fargo
Bank, National Association 

625 Marquette Avenue, 11th Floor 

Minneapolis, Minnesota 55479 

Attn: Corporate Trust Services  


Dear Sirs: 


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


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


	
  

 	
  

 	
  

 
	
 Payments:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 To

 	
 For

 	
 Amount

 
	
  

 	
  

 	
  

 
	
 Reimbursement
 to Company:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Payee

 	
 For

 	
 Amount

 


C-l





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


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


	
  

 	
  

 	
  

 	
  

 	
  

 
	
           Dated:

 	
  

 	
 .

 	
  

 	
  

 
	
  

 	
 Sincerely, 

 
	
  

 	
  

 
	
  

 	
 MINN-DAK FARMERS
 COOPERATIVE 

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
 Authorized Company Representative

 


CONSENT OF CREDIT PROVIDER


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


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
           Dated:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COBANK, ACB

 
	
  

 	
  

 
	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
       Its: 

 	
  

 	
  

 


C-2