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exv10w3

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EXECUTION COPY

CHS, INC.

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

$15,000,000 4.08% Series F Senior Notes due April 13, 2010

$15,000,000 4.39% Series G Senior Notes due April 13, 2011

and

$70,000,000

Private Shelf Facility

Dated as of April 13, 2004

 

Table of Contents

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1. AUTHORIZATION OF ISSUE OF NOTES
	 	 	1	 
	1A(1). Authorization of Issue of Series F Notes
	 	 	1	 
	1A(2). Authorization of Issue of Series G Notes
	 	 	1	 
	1B. Authorization of Issue of Shelf Notes
	 	 	2	 
	2. PURCHASE AND SALE OF NOTES
	 	 	2	 
	2A. Purchase and Sale of Series F Notes and Series G Notes
	 	 	2	 
	2B. Purchase and Sale of Shelf Notes
	 	 	3	 
	2B(1). Facility
	 	 	3	 
	2B(2). Issuance Period
	 	 	3	 
	2B(3). Request for Purchase
	 	 	3	 
	2B(4). Rate Quotes
	 	 	4	 
	2B(5). Acceptance
	 	 	4	 
	2B(6). Market Disruption
	 	 	4	 
	2B(7). Facility Closings
	 	 	5	 
	2B(8). Fees
	 	 	5	 
	2B(8)(i). [Intentionally Omitted]
	 	 	5	 
	2B(8)(ii). Issuance Fee
	 	 	5	 
	2B(8)(iii). Delayed Delivery Fee
	 	 	5	 
	2B(8)(iv). Cancellation Fee
	 	 	6	 
	3. CONDITIONS OF CLOSING
	 	 	6	 
	3A. Certain Documents
	 	 	7	 
	3B. Opinion of Purchaser’s Special Counsel
	 	 	8	 
	3C. Representations and Warranties; No Default
	 	 	8	 
	3D. Purchase Permitted by Applicable Laws
	 	 	8	 
	3E. Payment of Fees and Expenses
	 	 	8	 
	4. PREPAYMENTS
	 	 	8	 
	4A. [Intentionally Omitted]
	 	 	8	 
	4B. Required Prepayments of Shelf Notes
	 	 	8	 
	4C. Optional Prepayment with Yield-Maintenance Amount
	 	 	8	 
	4D. Notice of Optional Prepayment
	 	 	9	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	4E. Application of Prepayments
	 	 	9	 
	4F. Retirement of Notes
	 	 	9	 
	5. AFFIRMATIVE COVENANTS
	 	 	10	 
	5A. Financial Statements; Notice of Defaults
	 	 	10	 
	5B. Information Required by Rule 144A
	 	 	11	 
	5C. Inspection of Property
	 	 	11	 
	5D. Covenant to Secure Notes Equally
	 	 	11	 
	5E. Offer to Prepay Notes in the Event of a Change in Control
	 	 	12	 
	5E(1) Notice of Impending Change in Control
	 	 	12	 
	5E(2) Notice of Occurrence of Change in Control
	 	 	12	 
	5E(3) Notice of Acceptance of Offer Under Paragraph 5E(2)
	 	 	12	 
	5E(4) Offer to Prepay Notes
	 	 	12	 
	5E(5) Rejection; Acceptance
	 	 	12	 
	5E(6) Prepayment
	 	 	13	 
	5E(7) Officer’s Certificate
	 	 	13	 
	5F. Compliance with Law
	 	 	13	 
	5G. Insurance
	 	 	13	 
	5H. Maintenance of Properties
	 	 	13	 
	5I. Payment of Taxes
	 	 	14	 
	5J. Corporate Existence, etc.
	 	 	14	 
	5K. Lines of Business
	 	 	14	 
	5L. Agreement Assuming Liability on Notes
	 	 	14	 
	6. NEGATIVE COVENANTS
	 	 	15	 
	6A. [Intentionally Left Blank]
	 	 	15	 
	6B. Financial Covenants
	 	 	15	 
	6B(1). Working Capital
	 	 	15	 
	6B(2). Funded Debt to Consolidated Cash Flow
	 	 	15	 
	6B(3). Adjusted Consolidated Funded Debt to Consolidated Members’
and Patrons’ Equity
	 	 	15	 
	6C. Priority Debt
	 	 	15	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	6D. Liens
	 	 	15	 
	6E. Merger and Consolidation
	 	 	17	 
	6F. Sale of Assets
	 	 	17	 
	6G. Transactions with Affiliates
	 	 	18	 
	6H. Subsidiary Dividend Restrictions
	 	 	18	 
	6I. Subsidiary Preferred Stock
	 	 	19	 
	6J. Issuance of Stock by Subsidiaries
	 	 	19	 
	7. EVENTS OF DEFAULT
	 	 	19	 
	7A. Acceleration
	 	 	19	 
	7B. Rescission of Acceleration
	 	 	21	 
	7C. Notice of Acceleration or Rescission
	 	 	22	 
	7D. Other Remedies
	 	 	22	 
	8. REPRESENTATIONS, COVENANTS AND WARRANTIES
	 	 	22	 
	8A(1). Organization
	 	 	22	 
	8A(2). Power and Authority
	 	 	22	 
	8B. Financial Statements
	 	 	23	 
	8C. Actions Pending
	 	 	23	 
	8D. Outstanding Debt
	 	 	23	 
	8E. Title to Properties
	 	 	23	 
	8F. Taxes
	 	 	24	 
	8G. Conflicting Agreements and Other Matters
	 	 	24	 
	8H. Offering of Notes
	 	 	24	 
	8I. Use of Proceeds
	 	 	24	 
	8J. ERISA
	 	 	25	 
	8K. Governmental Consent
	 	 	25	 
	8L. Environmental Compliance
	 	 	25	 
	8M. Regulatory Status
	 	 	26	 
	8N. Permits and Other Operating Rights
	 	 	26	 
	8O. Disclosure
	 	 	26	 
	8P. Hostile Tender Offers
	 	 	26	 

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TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page
	9. REPRESENTATIONS OF THE PURCHASERS
	 	 	26	 
	9A. Nature of Purchase
	 	 	26	 
	9B. Source of Funds
	 	 	27	 
	10. DEFINITIONS; ACCOUNTING MATTERS
	 	 	28	 
	10A. Yield-Maintenance Terms
	 	 	28	 
	10B. Other Terms
	 	 	29	 
	10C. Accounting Principles, Terms and Determinations
	 	 	37	 
	11. MISCELLANEOUS
	 	 	37	 
	11A. Note Payments
	 	 	38	 
	11B. Expenses
	 	 	38	 
	11C. Consent to Amendments
	 	 	38	 
	11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes
	 	 	39	 
	11E. Persons Deemed Owners; Participations
	 	 	40	 
	11F. Survival of Representations and Warranties; Entire Agreement
	 	 	40	 
	11G. Successors and Assigns
	 	 	40	 
	11H. Independence of Covenants
	 	 	40	 
	11I. Notices
	 	 	40	 
	11J. Payments Due on Nom-Business Days
	 	 	41	 
	11K. Severability
	 	 	41	 
	11L. Descriptive Headings
	 	 	41	 
	11M. Satisfaction Requirement
	 	 	41	 
	11N. Governing Law
	 	 	41	 
	11O. Severalty of Obligations
	 	 	42	 
	11P. Counterparts
	 	 	42	 
	11Q. Binding Agreement
	 	 	42	 

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Exhibits and Schedules

	 	 	 	 	 
	Purchaser Schedule
	 	 	 	 
	 
	 	 	 	 
	Information Schedule
	 	 	 	 
	 
	 	 	 	 
	Exhibit A-1

	 	—
	 	Form of Series F Note
	Exhibit A-2

	 	—
	 	Form of Series G Note
	Exhibit A-3

	 	—
	 	Form of Shelf Note
	Exhibit B

	 	—
	 	Form of Disbursement Direction Letter
	Exhibit C

	 	—
	 	Form of Request for Purchase
	Exhibit D

	 	—
	 	Form of Confirmation of Acceptance
	Exhibit E-1

	 	—
	 	Form of Opinion of Company Counsel (Series F and G Notes)
	Exhibit E-2

	 	—
	 	Form of Opinion of Company Counsel (Shelf Notes)
	Schedule 6D

	 	—
	 	List of Existing Liens
	Schedule 8G

	 	—
	 	Agreements Restricting Debt

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CHS, INC.

5500 Cenex Drive

Inver Grove Heights, MN 55077

As of April 13, 2004

Prudential Investment
Management, Inc. (“Prudential”)

Each of the Purchasers named in

     the Purchaser Schedule attached

     hereto as purchasers of Series F Notes

     or Series G Notes (the “Initial
Purchasers”)

Each Prudential Affiliate (as hereinafter defined)

     which becomes bound by certain provisions

     of this Agreement as hereinafter provided

c/o Prudential Capital
Group

Two Prudential Plaza

Suite 5600

Chicago, Illinois 60601

Ladies and Gentlemen:

     The undersigned, CHS Inc., a nonstock agricultural cooperative corporation
organized under the laws of Minnesota formerly known as Cenex Harvest States
Cooperatives (herein called the “Company”), hereby agrees with you as set forth
below. Reference is made to paragraph 10 hereof for definitions of capitalized
terms used herein and not otherwise defined herein.

     1. AUTHORIZATION OF ISSUE OF NOTES.

     1A(1). Authorization of Issue of Series F Notes. The Company will
authorize the issue of its senior promissory notes (the
“Series F Notes”) in
the aggregate principal amount of $15,000,000, to be dated the date of issue
thereof, to mature April 13, 2010, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 4.08% per annum and on overdue principal,
Yield-Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms “Series F
Note” and “Series F Notes” as used herein shall include each Series F Note
delivered pursuant to any provision of this Agreement and each Series F Note
delivered in substitution or exchange for any such Series F Note pursuant to
any such provision.

     1A(2). Authorization of Issue of Series G Notes. The Company will
authorize the issue of its senior promissory notes (the
“Series G Notes”) in
the aggregate principal amount of $15,000,000, to be dated the date of issue
thereof, to mature April 13, 2011, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof
shall have become due and payable at the rate of 4.39% per annum and

 

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on
overdue principal, Yield-Maintenance Amount and interest at the rate specified
therein, and to be substantially in the form of Exhibit A-2 attached hereto.
The terms “Series G Note” and “Series G Notes” as used herein shall include
each Series G Note delivered pursuant to any provision of this Agreement and
each Series G Note delivered in substitution or exchange for any such Series G
Note pursuant to any such provision.

     1B. Authorization of Issue of Shelf Notes. The Company will authorize the
issue of its additional senior promissory notes (the “Shelf
Notes”) in the
aggregate principal amount of $70,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than 15
years after the date of original issuance thereof, to have an average life, in
the case of each Shelf Note so issued, of no more than 15 years after the date
of original issuance thereof, to bear interest on the unpaid balance thereof
from the date thereof at the rate per annum, and to have such other particular
terms, as shall be set forth, in the case of each Shelf Note so issued, in the
Confirmation of Acceptance with respect to such Shelf Note delivered pursuant
to paragraph 2B(5), and to be substantially in the form of Exhibit A-3 attached
hereto. The terms “Shelf Note” and “Shelf Notes” as used herein shall include
each Shelf Note delivered pursuant to any provision of this Agreement and each
Shelf Note delivered in substitution or exchange for any such Shelf Note
pursuant to any such provision. The terms “Note” and “Notes” as used herein
shall include each Series F Note, each Series G Note and each Shelf Note
delivered pursuant to any provision of this Agreement and each Note delivered
in substitution or exchange for any such Note pursuant to any such provision.
Notes which have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage
of the original principal amount of each Note), (iv) the same interest rate,
(v) the same interest payment periods and (vi) the same date of issuance
(which, in the case of a Note issued in exchange for another Note, shall be
deemed for these purposes the date on which such Note’s ultimate predecessor
Note was issued), are herein called a “Series” of Notes.

     2. PURCHASE AND SALE OF NOTES.

     2A. Purchase and Sale of Series F Notes and Series G Notes. The Company
hereby agrees to sell to each Initial Purchaser and, subject to the terms and
conditions herein set forth, each Initial Purchaser agrees to purchase from the
Company the aggregate principal amount of Series F Notes and/or Series G Notes
set forth opposite such Initial Purchaser’s name on the Purchaser Schedule
attached hereto at 100% of such aggregate principal amount. On April 13, 2004
(herein called the “Series F/G Closing Day”), the Company will deliver to each
Initial Purchaser at the offices of Schiff Hardin LLP, at 6600 Sears Tower,
Chicago, Illinois, one or more Series F Notes and/or Series G Notes registered
in such Initial Purchaser’s name (or, if specified in the Purchaser Schedule,
in the name of the nominee(s) for such Initial Purchaser specified in the
Purchaser Schedule), evidencing the aggregate principal amount of Series F
Notes and/or Series G Notes to be purchased by such Initial Purchaser and in
the denomination or denominations specified with respect to such Initial
Purchaser in the Purchaser Schedule attached hereto, against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the account or accounts as shall be specified in a letter on the Company’s
letterhead, in substantially the form of Exhibit B attached hereto, from the
Company to the Initial Purchasers delivered prior to the Series F/G Closing
Day.

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     2B. Purchase and Sale of Shelf Notes.

     2B(1). Facility. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
Affiliates from time to time, the purchase of Shelf Notes pursuant to this
Agreement. The willingness of Prudential to consider such purchase of Shelf
Notes is herein called the “Facility”. At any time, the aggregate principal
amount of Shelf Notes stated in paragraph 1B, minus the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, is herein called the “Available Facility Amount” at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES BY PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE
OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND
THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.

     2B(2). Issuance Period. Shelf Notes may be issued and sold pursuant to
this Agreement until the earlier of (i) the third anniversary of the date of
this Agreement (or if the date of such anniversary is not a Business Day, the
Business Day next preceding such anniversary), (ii) the 30th day after
Prudential shall have given to the Company, or the Company shall have given to
Prudential, a written notice stating that it elects to terminate the issuance
and sale of Shelf Notes pursuant to this Agreement (or if such 30th day is not
a Business Day, the Business Day next preceding such 30th day), (iii) the last
Closing Day after which there is no Available Facility Amount, (iv) the
termination of the Facility under paragraph 7A of this Agreement, and (v) the
acceleration of any Note under paragraph 7A of this Agreement. The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the “Issuance Period”.

     2B(3). Request for Purchase. The Company may from time to time during the
Issuance Period make requests for purchases of Shelf Notes (each such request
being herein called a “Request for Purchase”). Each Request for Purchase shall
be made to Prudential by telecopier or overnight delivery service, and shall
(i) specify the aggregate principal amount of Shelf Notes covered thereby,
which shall not be less than $10,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities (which shall be no more than 15 years from
the date of issuance), average life (which shall be no more than 15 years from
the date of issuance), principal prepayment dates (if any) and amounts and
interest payment periods (quarterly or semi-annually in arrears) of the Shelf
Notes covered thereby, (iii) specify the use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the closing of the purchase and sale of such
Shelf Notes, which shall be a Business Day during the Issuance Period not less
than 10 days and not more than 25 days after the making of such Request for
Purchase, (v) specify the number of the account and the name and address of the
depository institution to which the purchase prices of such Shelf Notes are to
be transferred on the Closing Day for such
purchase and sale, (vi) certify that the representations and warranties
contained in paragraph 8 are true on and as of the date of such Request for
Purchase and that there exists on

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the date of such Request for Purchase no Event of Default or Default, and (vii) be substantially in the form of Exhibit
C attached hereto. Each Request for Purchase shall be in writing and shall be
deemed made when received by Prudential.

     2B(4). Rate Quotes. Not later than five Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2B(3),
Prudential may, but shall be under no obligation to, provide to the Company by
telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M. New York
City local time (or such later time as Prudential may elect) interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable
on the outstanding principal balance of such Shelf Notes at which a Prudential
Affiliate or Affiliates would be willing to purchase such Shelf Notes at 100%
of the principal amount thereof.

     2B(5). Acceptance. Within the Acceptance Window with respect to any
interest rate quotes provided pursuant to paragraph 2B(4), the Company may,
subject to paragraph 2B(6), elect to accept such interest rate quotes as to not
less than $10,000,000 aggregate principal amount of the Shelf Notes specified
in the related Request for Purchase. Such election shall be made by an
Authorized Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window that the Company elects to accept such
interest rate quotes, specifying the Shelf Notes (each such Shelf Note being
herein called an “Accepted Note”) as to which such acceptance (herein called an
“Acceptance”) relates. The day the Company notifies Prudential of an
Acceptance with respect to any Accepted Notes is herein called the “Acceptance
Day” for such Accepted Notes. Any interest rate quotes as to which Prudential
does not receive an Acceptance within the Acceptance Window shall expire, and
no purchase or sale of Shelf Notes hereunder shall be made based on such
expired interest rate quotes. Subject to paragraph 2B(6) and the other terms
and conditions hereof, the Company agrees to sell to a Prudential Affiliate or
Affiliates, and Prudential agrees to cause the purchase by a Prudential
Affiliate or Affiliates of, the Accepted Notes at 100% of the principal amount
of such Notes. As soon as practicable following the Acceptance Day, the Company
and each Prudential Affiliate which is to purchase any such Accepted Notes will
execute a confirmation of such Acceptance substantially in the form of Exhibit
D attached hereto (herein called a “Confirmation of Acceptance”). If the
Company should fail to execute and return to Prudential within three Business
Days following the Company’s receipt thereof a Confirmation of Acceptance with
respect to any Accepted Notes, Prudential or any Prudential Affiliate may at
its election at any time prior to Prudential’s receipt thereof cancel the
closing with respect to such Accepted Notes by so notifying the Company in
writing.

     2B(6). Market Disruption. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or other financial
instruments shall have closed or there shall have occurred a general
suspension, material limitation, or significant disruption of
trading in securities generally on the New York Stock Exchange or in the
domestic market for U.S. Treasury securities or other financial instruments,
then such interest rate quotes shall expire, and no purchase or sale of Shelf
Notes hereunder shall be made based on such expired interest rate quotes. If
the Company thereafter

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notifies Prudential of the Acceptance of any such
interest rate quotes, such Acceptance shall be ineffective for all purposes of
this Agreement, and Prudential shall promptly notify the Company that the
provisions of this paragraph 2B(6) are applicable with respect to such
Acceptance.

     2B(7). Facility Closings. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group, 180 North Stetson Street, Suite 5600,
Chicago, Illinois 60601, Attention: Law Department, the Accepted Notes to be
purchased by such Purchaser in the form of one or more Notes in authorized
denominations as such Purchaser may request for each Series of Accepted Notes
to be purchased on the Closing Day, dated the Closing Day and registered in
such Purchaser’s name (or in the name of its nominee), against payment of the
purchase price thereof by transfer of immediately available funds for credit to
the Company’s account specified in the Request for Purchase of such Notes. If
the Company fails to tender to any Purchaser the Accepted Notes to be purchased
by such Purchaser on the scheduled Closing Day for such Accepted Notes as
provided above in this paragraph 2B(7), or any of the conditions specified in
paragraph 3 shall not have been fulfilled by the time required on such
scheduled Closing Day, the Company shall, prior to 1:00 P.M., New York City
local time, on such scheduled Closing Day notify Prudential (which notification
shall be deemed received by each Purchaser) in writing whether (i) such closing
is to be rescheduled (such rescheduled date to be a Business Day during the
Issuance Period not less than one Business Day and not more than 10 Business
Days after such scheduled Closing Day (the “Rescheduled Closing Day”)) and
certify to Prudential (which certification shall be for the benefit of each
Purchaser) that the Company reasonably believes that it will be able to comply
with the conditions set forth in paragraph 3 on such Rescheduled Closing Day
and that the Company will pay the Delayed Delivery Fee in accordance with
paragraph 2B(8)(iii) or (ii) such closing is to be canceled. In the event that
the Company shall fail to give such notice referred to in the preceding
sentence, Prudential (on behalf of each Purchaser) may at its election, at any
time after 1:00 P.M., New York City local time, on such scheduled Closing Day,
notify the Company in writing that such closing is to be canceled.
Notwithstanding anything to the contrary appearing in this Agreement, the
Company may not elect to reschedule a closing with respect to any given
Accepted Notes on more than one occasion, unless Prudential shall have
otherwise consented in writing.

     2B(8). Fees.

     2B(8)(i). [Intentionally Omitted].

     2B(8)(ii). Issuance Fee. The Company will pay to each Purchaser in
immediately available funds a fee (herein called the “Issuance Fee”) on each
Closing Day in an amount equal to 0.10% of the aggregate principal amount of
Notes sold to such Purchaser on such Closing Day.

     2B(8)(iii). Delayed Delivery Fee. If the closing of the purchase and sale
of any Accepted Note is delayed for any reason beyond the original Closing Day
for such Accepted Note, the Company will pay to the Purchaser which shall have
agreed to purchase such Accepted Note (a) on the Cancellation Date or actual
closing date of such purchase and sale and (b) if earlier, the next Business
Day following 90 days after

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the Acceptance Day for such Accepted Note and on each Business Day following 90 days after the prior payment hereunder, a fee
(herein called the “Delayed Delivery Fee”) calculated as follows:

(BEY – MMY) X DTS/360 X PA

where “BEY” means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; “MMY” means Money Market Yield, i.e., the yield
per annum on a commercial paper investment of the highest quality selected by
Prudential and having a maturity date or dates the same as, or closest to, the
Rescheduled Closing Day or Rescheduled Closing Days for such Accepted Note (a
new alternative investment being selected by Prudential each time such closing
is delayed); “DTS” means Days to Settlement, i.e., the number of actual days
elapsed from and including the original Closing Day for such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent Delayed Delivery Fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and “PA” means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(7).

     2B(8)(iv). Cancellation Fee. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2B(5) or
the penultimate sentence of paragraph 2B(7) that the closing of the purchase
and sale of such Accepted Note is to be canceled, or if the closing of the
purchase and sale of such Accepted Note is not consummated on or prior to the
last day of the Issuance Period (the date of any such notification or the last
day of the Issuance Period, as the case may be, being herein called the
“Cancellation Date”), the Company will pay to the Purchaser which shall have
agreed to purchase such Accepted Note in immediately available funds an amount
(the “Cancellation Fee”) calculated as follows:

PI X PA

where “PI” means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and “PA” has the
meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask
prices shall be as reported by TradeWeb LLC (or, if such data for any reason
ceases to be available through
TradeWeb LLC, any publicly available source of similar market data). Each
price shall be rounded to the second decimal place. In no case shall the
Cancellation Fee be less than zero.

     3. CONDITIONS OF CLOSING. The obligation of any Purchaser to purchase and
pay for any Notes is subject to the satisfaction, on or before the Closing Day
for such Notes, of the following conditions:

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     3A. Certain Documents. Such Purchaser shall have received the following,
each dated the date of the applicable Closing Day:

     (i) This Agreement;

     (ii) The Note(s) to be purchased by such Purchaser;

     (iii) A favorable opinion of David A. Kastelic, General Counsel of
the Company (or such other counsel designated by the Company and
acceptable to the Purchaser(s)) satisfactory to such Purchaser and
substantially in the form of Exhibit E-1 (in the case of the Series F
Notes and Series G Notes) or E-2 (in the case of any Shelf Notes)
attached hereto and as to such other matters as such Purchaser may
reasonably request. The Company hereby directs each such counsel to
deliver such opinion, agrees that the issuance and sale of any Notes will
constitute a reconfirmation of such direction, and understands and agrees
that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion;

     (iv) a Secretary’s Certificate signed by the Secretary or an
Assistant Secretary and one other officer of the Company certifying,
among other things, (A) as to the names, titles and true signatures of
the officers of the Company authorized to sign this Agreement, the Notes
and the other documents to be delivered in connection with this
Agreement, (B) that attached as Exhibit A thereto is a true, accurate and
complete copy of the Articles of Incorporation of the Company, certified
by the Secretary of State of Minnesota as of a date not more than ten
Business Days from the Closing Day, (C) that attached as Exhibit B
thereto is a true, accurate and complete copy of the Company’s Bylaws
which were duly adopted and are presently in effect and have been in
effect immediately prior to and at all times since the adoption of the
resolutions referred to in clause (D) below, (D) that attached as Exhibit
C thereto is a true, accurate and complete copy of the resolutions of the
Company’s Board of Directors (authorizing the issuance and sale of the
Notes and the execution, delivery and performance of this Agreement) duly
adopted by written action or at a meeting of the Company’s Board of
Directors, and such resolutions have not been rescinded, amended or
modified and (E) that attached as Exhibit D thereto is a good standing
certificate for the Company from the Secretary of State of Minnesota;

     (v) an Officer’s Certificate certifying that (A) the representations
and warranties contained in paragraph 8 shall be true on and as of the
Closing Day, except to the extent of changes caused by the transactions
herein contemplated; and (B) on the date of closing no Event of Default
or Default exists;

     (vi) certified copies of Requests for Information or Copies (Form
UCC-11) or equivalent reports listing all effective financing statements
which name the Company or any Subsidiary (under its present name and
previous names used in the last seven years) as debtor and which are
filed in the office of the Secretary of State of Minnesota together with
copies of such financing statements; and

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     (vii) additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.

     3B. Opinion of Purchaser’s Special Counsel. Such Purchaser shall have
received from Wiley S. Adams, Vice President and Corporate Counsel of
Prudential or such other counsel who is acting as special counsel for it in
connection with this transaction, a favorable opinion satisfactory to such
Purchaser as to such matters incident to the matters herein contemplated as it
may reasonably request.

     3C. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 8 shall be true on and as of such Closing
Day, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event of Default or
Default; and the Company shall have delivered to such Purchaser an Officer’s
Certificate, dated such Closing Day, to both such effects.

     3D. Purchase Permitted by Applicable Laws. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the
Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation
U, T or X of the Board of Governors of the Federal Reserve System) and shall
not subject such Purchaser to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and such Purchaser shall have received such certificates or other evidence as
it may request to establish compliance with this condition.

     3E. Payment of Fees and Expenses. The Company shall have paid to such
Purchaser any fees due it pursuant to or in connection with this Agreement,
including any Issuance Fee due pursuant to paragraph 2B(8)(ii) and any Delayed
Delivery Fee due pursuant to paragraph 2B(8)(iii) and the reasonable fees,
charges and disbursements of any special counsel to the Purchasers.

     4. PREPAYMENTS. The Series F Notes and the Series G Notes shall not be
subject to scheduled required prepayments. Any Shelf Notes shall be subject to
required prepayment as and to the extent provided in paragraphs 4B. The Series
F Notes, the Series G Notes and any Shelf Notes shall also be subject to
prepayment under the circumstances set forth in paragraph 4C. Any prepayment
made by the Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any required prepayment
as specified in paragraph 4B.

     4A. [Intentionally Omitted]..

     4B. Required Prepayments of Shelf Notes. Each Series of Shelf Notes shall
be subject to required prepayments, if any, set forth in the Notes of such
Series.

     4C. Optional Prepayment with Yield-Maintenance Amount. The Notes of each
Series shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $1,000,000 and in a minimum amount of
$5,000,000), at the option of the Company,

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at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4C shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.

     4D. Notice of Optional Prepayment. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable
written notice of such prepayment not less than 10 Business Days prior to the
prepayment date, specifying such prepayment date, the aggregate principal
amount of the Notes of such Series to be prepaid on such date, the principal
amount of the Notes of such Series held by such holder to be prepaid on that
date and that such prepayment is to be made pursuant to paragraph 4C. Notice
of prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the Yield-Maintenance Amount, if any, herein provided, shall
become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4C, give telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each Significant Holder which shall have
designated a recipient for such notices in the Purchaser Schedule attached
hereto or the applicable Confirmation of Acceptance or by notice in writing to
the Company.

     4E. Application of Prepayments. In the case of each prepayment of less
than the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4E only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
other than by prepayment pursuant to paragraph 4A, 4B or 4C) according to the
respective unpaid principal amounts thereof.

     4F. Retirement of Notes. The Company shall not, and shall not permit any
of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in
part prior to their stated final maturity (other than by prepayment pursuant to
paragraphs 4A, 4B or 4C or upon exercise of the put option pursuant to
paragraph 5E, or upon acceleration of such final maturity pursuant to paragraph
7A), or purchase or otherwise acquire, directly or indirectly, Notes held by
any holder unless the Company or such Subsidiary or Affiliate shall have
offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes
held by each other holder of Notes at the time outstanding upon the same terms
and conditions. Any such offer shall provide each holder with sufficient
information to enable it to make an informed decision with respect to such
offer, and shall remain open for at least 30 Business Days. If the holders of
more than 5% of the principal amount of the Notes then outstanding accept such
offer, the Company shall promptly notify the remaining holders of such fact and
the expiration date for the acceptance by holders of Notes of
such offer shall be extended by the number of days necessary to give each
such remaining holder at least 15 Business Days from its receipt of such notice
to accept such offer. Any notes so prepaid or otherwise retired or purchased
or otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4E.

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     5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:

     5A. Financial Statements; Notice of Defaults. The Company covenants that
it will deliver to each Significant Holder in duplicate:

     (i) as soon as practicable and in any event within 45 days after the
end of each quarterly period (other than the last quarterly period) in
each fiscal year consolidated statements of income, members’ equity and
cash flows of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly period,
and a consolidated balance sheet of the Company and its Subsidiaries as
at the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and satisfactory in form to the
Required Holder(s) and certified by an authorized financial officer of
the Company, subject to changes resulting from year-end adjustments;
provided, however, that delivery pursuant to clause (iii) below of copies
of the Quarterly Report on Form 10-Q of the Company for such quarterly
period, if any, including such financial statements filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (i);

     (ii) as soon as practicable and in any event within 90 days after
the end of each fiscal year, consolidating and consolidated statements of
income and cash flows and a consolidated statement of members’ equity of
the Company and its Subsidiaries for such year, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all
in reasonable detail and satisfactory in form to the Required Holder(s)
and, as to the consolidated statements, reported on by independent public
accountants of recognized national standing selected by the Company whose
report shall be unqualified and without limitation as to scope of the
audit and satisfactory in substance to the Required Holder(s) and, as to
the consolidating statements, certified by an authorized financial
officer of the Company provided, however, that delivery pursuant to
clause (iii) below of copies of the Annual Report on Form 10-K of the
Company for such fiscal year including such financial statements filed
with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this clause (ii);

     (iii) promptly upon transmission thereof, copies of all such
financial statements and copies of all registration statements (without
exhibits) and all reports which it files with the Securities and Exchange
Commission (or any governmental body or agency succeeding to the
functions of the Securities and Exchange Commission);

     (iv) promptly upon receipt thereof, a copy of each other report
submitted to the Company by independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Company or any Subsidiary; and

     (v) with reasonable promptness, such other information as such
Significant Holder may reasonably request.

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Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each Significant Holder an Officer’s
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of paragraphs 6B, 6C,
6D and 6F and stating that there exists no Event of Default or Default, or, if
any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto. Together with each delivery of financial statements required by
clause (ii) above, the Company will deliver to each Significant Holder a
certificate of such accountants stating that, in making the audit necessary for
their report on such financial statements, they have obtained no knowledge of
any Event of Default or Default arising under paragraph 6B or 6C or under
paragraph 6E(ii) or 6F(iv) insofar as such Default or Event of Default relates
to 6E(ii)(c)(y) or 6F(iv)(b)(y) and existing as of the last day of the
Company’s fiscal year, or, if they have obtained knowledge of any Event of
Default or Default arising under any such paragraph, specifying the nature and
period of existence thereof. Such accountants, however, shall not be liable to
anyone by reason of their failure to obtain knowledge of any Event of Default
or Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards. The Company also
covenants that immediately after any Responsible Officer obtains knowledge of
an Event of Default or Default, it will deliver to each Significant Holder an
Officer’s Certificate specifying the nature and period of existence thereof and
what action the Company proposes to take with respect thereto.

     5B. Information Required by Rule 144A. The Company covenants that it
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term “qualified institutional buyer” shall have the meaning specified
in Rule 144A under the Securities Act.

     5C. Inspection of Property. The Company covenants that it will permit any
Person designated by any Significant Holder in writing, at such Significant
Holder’s expense (if no Default or Event of Default then exists) or at the
expense of the Company (if a Default or an Event of Default then exists), to
visit and inspect any of the properties of the Company and its Subsidiaries, to
examine the corporate books and financial records of the Company and its
Subsidiaries and make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations with the principal
officers of the Company and its independent public accountants; provided,
however, that the Company shall have the option to have a representative
present at any meeting between its independent public accountants and
such Significant Holder, all at such reasonable times and as often as such
Significant Holder may reasonably request.

     5D. Covenant to Secure Notes Equally. The Company covenants that, if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6D (unless prior

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written consent to the creation or
assumption thereof shall have been obtained pursuant to paragraph 11C), it will
make or cause to be made effective provision whereby the Notes will be secured
by such Lien equally and ratably with any and all other Debt thereby secured so
long as any such other Debt shall be so secured.

     5E. Offer to Prepay Notes in the Event of a Change in Control.

     5E(1) Notice of Impending Change in Control. The Company will not
take any action that consummates or finalizes a Change in Control unless
at least 30 days prior to such action it shall have given to each holder
of the Notes written notice of such impending Change in Control.

     5E(2) Notice of Occurrence of Change in Control. The Company will,
within five Business Days after any Responsible Officer has knowledge of
the occurrence of any Change in Control, give written notice of such
Change in Control to each holder of the Notes. If a Change in Control
has occurred, such notice shall contain and constitute an offer to prepay
the Notes as described in paragraph 5E(4) and shall be accompanied by the
certificate described in paragraph 5E(7).

     5E(3) Notice of Acceptance of Offer Under Paragraph 5E(2). If the
Company shall at any time receive an acceptance to an offer to prepay
Notes under paragraph 5E(2) from some, but not all of, the holders of the
Notes, then the Company will, within two Business Days after the receipt
of such acceptance, give written notice of such acceptance to each other
holder of the Notes.

     5E(4) Offer to Prepay Notes. The offer to prepay Notes contemplated
by paragraph 5E(2) shall be an offer to prepay, in accordance with and
subject to this paragraph 5E, all, but not less than all, of the Notes
held by each holder (in this case only, “holder” in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner
shall mean such beneficial owner) on a date specified in such offer (the
“Proposed Prepayment Date”). Such Proposed Prepayment Date shall be not
less than 30 days and not more than 60 days after the date of such offer
(if the Proposed Prepayment Date shall not be specified in such offer,
the Proposed Prepayment Date shall be the 30th day after the date of such
offer). Notwithstanding the foregoing, if the Company shall be required
to give a notice of acceptance under paragraph 5E(3) hereof with respect
to any offer to prepay Notes under paragraph 5E(2), then the Proposed
Prepayment Date for such offer shall be the later of (i) the date
specified in the immediately preceding sentences, or (ii) the 10th
Business Day after the date the first such notice of acceptance with
respect to such offer was given by the Company under paragraph 5E(3).

     5E(5) Rejection; Acceptance. A holder of Notes may accept the offer
to prepay made pursuant to this paragraph 5E by causing a notice of such
acceptance to be delivered to the Company prior to the Proposed
Prepayment Date. A failure by a holder of Notes to so respond to an
offer to prepay made pursuant to this paragraph 5E shall be deemed to
constitute a rejection of such offer by such holder.

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     5E(6) Prepayment. Prepayment of the Notes to be prepaid pursuant to
this paragraph 5E shall be at 100% of the principal amount of such Notes,
together with interest on such Notes accrued to the date of prepayment.
The prepayment shall be made on the Proposed Prepayment Date.

     5E(7) Officer’s Certificate. Each offer to prepay the Notes
pursuant to this paragraph 5E shall be accompanied by a certificate,
executed by a Responsible Officer of the Company and dated the date of
such offer, specifying (i) the Proposed Prepayment Date, (ii) that such
offer is made pursuant to this paragraph 5E, (iii) the principal amount
of each Note offered to be prepaid, (iv) the interest that would be due
on each Note offered to be prepaid, accrued to the Proposed Prepayment
Date, (v) that the conditions of this paragraph 5E have been fulfilled,
and (vi) in reasonable detail, the nature and date of the Change in
Control.

     5F. Compliance with Law. The Company covenants that it will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject (unless such
failure to comply is subject to a good faith contest), including, without
limitation, environmental laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations would not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and its Subsidiaries,
taken as a whole.

     5G. Insurance. The Company covenants that it will, and will cause each of
its Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated; provided,
however, the Company may, to the extent permitted by law, provide for
appropriate self-insurance with respect to workers’ compensation.

     5H. Maintenance of Properties. The Company covenants that it will, and
will cause each of its Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective Properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted in all material respects
at all times, provided that this paragraph shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
Properties if
such discontinuance is desirable in the conduct of its business and such
discontinuance would not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and its Subsidiaries
taken as a whole.

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     5I. Payment of Taxes. The Company covenants that it will, and will cause
each of its Subsidiaries to, file all income tax or similar tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges or levies payable by any of them, and to pay and discharge
all amounts payable for work, labor and materials, in each case to the extent
such taxes, assessments, charges, levies and amounts payable have become due
and payable and before they have become delinquent, provided that neither the
Company nor any Subsidiary need pay any such tax, assessment, charge, levy or
amount payable if (i) the amount, applicability or validity thereof is being
actively contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor in accordance with generally accepted
accounting principles on the books of the Company or such Subsidiary or (ii)
the nonpayment of all such taxes, assessments, charges, levies and amounts
payable in the aggregate would not reasonably be expected to have a materially
adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.

     5J. Corporate Existence, etc. Subject to paragraph 6E, the Company will
at all times preserve and keep in full force and effect its corporate existence
and will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries except to the extent the failure to do so
could not reasonably be expected to result in a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole. The Company will at all times preserve and
keep in full force and effect all certificates of convenience and necessity,
rights and franchises, licenses, permits, operating rights and other
authorization from federal, state, foreign, regional, municipal and other local
regulatory bodies or administrative agencies or governmental bodies having
jurisdiction over the Company and its Subsidiaries or any of their respective
Properties as are necessary for the ownership, operation and maintenance of its
respective businesses and Properties, unless the termination of or failure to
preserve and keep in full force and effect such corporate existence, right,
certificate or franchise, license, permit, operating right or other
authorization would not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company and its Subsidiaries
taken as a whole.

     5K. Lines of Business. The Company shall not engage in any material
respects in any business activity or operations other than operations or
activities (i) in or reasonably related to the agriculture industry, (ii) in
the food industry, or (iii) which are not substantially different from or
related to its present business activities or operations.

     5L. Agreement Assuming Liability on Notes. The Company covenants that, if
at any time any Person should become liable (as co-obligor, endorser, guaranty
or surety) on any other material obligation of the Company, the Company will,
at the same time, cause such Person to deliver to the holder of the Notes an
agreement pursuant to which such Person
becomes similarly liable on the Notes; provided this paragraph 5L shall
not apply to any Person becoming liable solely as an endorser of a check, or as
a signatory to a letter of credit for trade liabilities of the Company
incurred, in the ordinary course of business.

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     6. NEGATIVE COVENANTS. During the Issuance Period and so long thereafter
as any Note or other amount due hereunder is outstanding and unpaid, the
Company covenants as follows:

     6A. [Intentionally Left Blank].

     6B. Financial Covenants.

     6B(1). Working Capital. The Company covenants that it will not permit
Working Capital at any time to be less than the minimum level of Working
Capital (or comparable term) that the Company is then required to maintain
under the Company’s Primary Bank Facility without causing a default or event of
default thereunder. As used herein, the term “Working Capital” means
Consolidated Current Assets minus Consolidated Current Liabilities.

     6B(2). Funded Debt to Consolidated Cash Flow. The Company shall not
permit the ratio of (i) consolidated Funded Debt of the Company and its
Subsidiaries at such time to (ii) Consolidated Cash Flow determined as of the
end of the four fiscal quarter period then most recently ended, to exceed 3.00
to 1.00 at any time.

     6B(3). Adjusted Consolidated Funded Debt to Consolidated Members’ and
Patrons’ Equity. The Company shall not permit the ratio of Adjusted
Consolidated Funded Debt to Consolidated Members’ and Patrons’ Equity to exceed
..80 to 1.00 at any time.

     6C. Priority Debt. The Company covenants that it will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create, issue, incur
or assume any Priority Debt if after giving effect thereto the aggregate
outstanding principal amount of all Priority Debt would exceed 20% of
Consolidated Net Worth at the time of such creation, issuance, incurrence or
assumption.

     6D. Liens. The Company covenants that it will not, and will not permit
any of its Subsidiaries to, directly or indirectly create, incur, assume or
suffer to be created, incurred or assumed or to exist (upon the happening of a
contingency or otherwise) any Lien on or with respect to any Property of the
Company or any of its Subsidiaries, whether now owned or held or hereinafter
acquired (unless (1) provision is made for the equal and ratable securing of
the Notes in accordance with paragraph 5D, and (2) the obligees of the
obligations secured by such Liens shall have entered into an intercreditor
agreement with the holders of the Notes in form and substance satisfactory to
the holders of the Notes), except:

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

     (ii) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided the execution or other
enforcement of such Lien(s) is effectively stayed and the claims secured
thereby are being actively contested in good faith in such manner

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that
the Property subject to such Lien(s) is not subject to forfeiture or
sale, and further provided that adequate reserves are established in
accordance with generally accepted accounting principles on the books of
the Company or a Subsidiary of the Company;

     (iii) Liens incidental to the normal conduct of the business of the
Company or a Subsidiary of the Company or to the ownership by the Company
or a Subsidiary of the Company of its Property which were not incurred in
connection with the borrowing of money or the obtaining of credit or
advances and which do not in the aggregate materially detract from the
value of the Property of the Company or any Subsidiary of the Company for
the purpose of such business or materially impair the use thereof in the
operation of the business of the Company or any Subsidiary of the
Company;

     (iv) Liens existing as of the date of this Agreement and set forth
on Schedule 6D hereto;

     (v) any Lien renewing, extending or refunding any Lien permitted by
clause (iv) of this paragraph 6D, provided that (a) the principal amount
of the Debt secured by such Lien immediately prior to such extension,
renewal or refunding is not increased or the maturity thereof reduced,
(b) such Lien is not extended to any other Property, and (c) immediately
after such extension, renewal or refunding no Default or Event of Default
would exist;

     (vi) Liens on Property of the Company or any of its Subsidiaries
securing Debt owing to the Company or to any of its Wholly-Owned
Subsidiaries;

     (vii) any Lien created to secure all or any part of the purchase
price or cost of construction, or to secure Debt incurred or assumed to
pay all or a part of the purchase price or cost of construction, of any
Property acquired or constructed by the Company or a Subsidiary of the
Company after the date of closing, provided that (a) any such Lien shall
extend solely to the item or items of such Property so acquired or
constructed or rights relating solely to such item or items or Property,
(b) the principal amount of the Debt secured by any such Lien shall at no
time exceed an amount equal to 100% of the fair market value of the
Property acquired or constructed at the time of such acquisition or
construction, and (c) such Lien shall be created contemporaneously with,
or within 180 days after, the acquisition or completion of construction
of such Property;

     (viii) any Lien existing on Property acquired by the Company or any
Subsidiary of the Company at the time such Property is so acquired
(whether or not the Debt secured thereby is assumed by the Company or
such Subsidiary) or any Lien existing on Property of a Person immediately
prior to the time such Person is merged into or consolidated with the
Company or any Subsidiary of the Company, provided that (a) no such Lien
shall have been created or assumed in contemplation of such acquisition
of Property or such consolidation or merger, (b) such Lien shall extend
only to the Property acquired or the
Property of such Person merged into or consolidated with the Company
or Subsidiary which was subject to such Lien as of the time of such
consolidation or merger, and (c) the principal amount of the

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Debt secured by any
such Lien shall at no time exceed an amount equal to 100% of the
fair market value of the Property subject thereto at the time of the
acquisition thereof or at the time of such merger or consolidation;

     (ix) Liens to CoBank, St. Paul Bank and other cooperatives with
respect to equity held by Company in such banks or other cooperatives
securing Debt with the aggregate amount of such equity securing Debt not
to exceed $50,000,000 at any one time; and

     (x) other Liens not otherwise permitted under clause (i) through
(ix) of this paragraph 6D securing Debt, provided that the creation,
issuance, incurrence or assumption of such Debt is permitted under
paragraphs 6B and 6C hereof.

     For the avoidance of doubt, the Company acknowledges that it will not, and
will not permit any Subsidiary to, secure or grant any Liens in respect of the
Primary Bank Facility, unless an equal and ratable Lien is granted in respect
of the Notes.

     6E. Merger and Consolidation. The Company covenants that it will not, and
will not permit any of its Subsidiaries to, merge or consolidate with any other
Person, except that

     (i) any Subsidiary of the Company may merge into the Company or any
Wholly-Owned Subsidiary, provided that the Company or such Wholly-Owned
Subsidiary is the surviving corporation, and

     (ii) the Company may merge or consolidate with any other Person
provided that (a) the successor formed by such consolidation or the
survivor of such merger (the “Surviving Corporation”) is a solvent
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, (b) if the
Company is not the Surviving Corporation, the Surviving Corporation shall
have executed and delivered to each holder of the Notes its written
assumption of the due and punctual performance and payment of each
covenant and condition in this Agreement and the Notes, which assumption
shall be in form and substance approved in writing by the Required
Holders, and the Company shall have caused to be delivered to each holder
of Notes an opinion of nationally recognized independent counsel, or
other independent counsel reasonably satisfactory to the Required
Holders, to the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and comply with
the terms hereof, and (c) immediately after giving effect to such merger
or consolidation, (x) no Default or Event of Default shall exist and (y)
the Surviving Corporation is able to incur at least $1.00 of additional
Funded Debt under the provisions of paragraph 6B(2) and (3) and at least
$1.00 of additional Priority Debt under the provisions of paragraph 6C
hereof.

     6F. Sale of Assets. The Company covenants that it will not, and will not
permit any of its Subsidiaries to, sell, transfer, convey, lease or otherwise
dispose of (a “Transfer”) any Property (including capital stock of or other ownership
interests in any Subsidiary of the Company), except that:

     (i) the Company or any Subsidiary of the Company may Transfer any of
its inventory, fixtures or equipment in the ordinary course of business;

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     (ii) any Subsidiary may Transfer any of its Property to the Company
or a Wholly-Owned Subsidiary; and

     (iii) the Company or any Subsidiary of the Company may lease its
assets to any joint venture entity, of which the Company or any
Subsidiary of the Company holds an ownership interest and shares in the
earnings; provided that the terms of any such lease and the division of
the joint venture’s earnings, when viewed as a whole, can be reasonably
expected to generate the same or greater book earnings and cash flow for
the Company or Subsidiary of the Company as would be generated absent
such lease;

     (iv) the Company or any Subsidiary of the Company may Transfer any
of its Properties at the fair market value thereof provided that (a)
either (1) the aggregate amount of the Disposition Value of all Property
Transferred pursuant to this clause (iv) on or after the date of closing
does not exceed an amount equal to 25% of Consolidated Total Assets as of
the end of the fiscal year of the Company most recently ended prior to
the date of such Transfer, or (2) concurrently with the making of such
Transfer the Net Proceeds Amount for such Transfer is (A) applied to the
acquisition by the Company or the Subsidiary making such Transfer of
other Property of a nature similar to, and of at least an equivalent
value of, the Property Transferred, or is committed to be applied to such
acquisition within one year of the date of such Transfer, or (B) applied
to the payment of the outstanding principal of all of the Funded Debt of
the Company (excluding any Funded Debt owed to any Subsidiary or
Affiliate of the Company and excluding any Funded Debt in respect of any
revolving credit or similar credit facility providing the Company with
the right to obtain loans or other extensions of credit from time to
time, except to the extent that, in connection with such payment of such
Funded Debt, the availability of loans or other extensions of credit
under such credit facility is permanently reduced by an amount not less
than the amount of such proceeds applied to the payment of such Funded
Debt) pro rata in proportion to the respective outstanding principal
amounts thereof, and (b) immediately after giving effect to such Transfer
(x) no Default or Event of Default shall exist and (y) the Company is
able to incur at least $1.00 of additional Funded Debt under the
provisions of paragraph 6B(2) and (3) hereof and at least $1.00 of
additional Priority Debt under the provisions of paragraph 6C hereof.

     6G. Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary of the Company to, enter into directly or indirectly any
transaction (including, without limitation, the purchase, lease, sale or
exchange of Properties of any kind or the rendering of any service) with any
Affiliate, except pursuant to the reasonable requirements of the Company’s or
such Subsidiary’s business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would be obtainable in a comparable
arm’s-length transaction with a Person not an Affiliate.

     6H. Subsidiary Dividend Restrictions. The Company covenants that it will
not, and will not permit any Subsidiary of the Company to, enter into, or be
otherwise subject to, any contract or agreement (including its certificate of
incorporation) which limits the amount of, or otherwise imposes restrictions on
the payment of, dividends by any Subsidiary of the Company.

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     6I. Subsidiary Preferred Stock. The Company covenants that it will not,
and will not permit any Subsidiary of the Company to, issue or permit to be
outstanding any class of capital stock which has priority over any other class
of capital stock of such Subsidiary as to dividends or in liquidation.

     6J. Issuance of Stock by Subsidiaries. The Company covenants that it will
not permit any Subsidiary of the Company to issue, sell or otherwise dispose of
any shares of any class of its stock (either directly or indirectly by the
issuance of rights or options for, or securities convertible into, such shares)
except to the Company or another Subsidiary of the Company.

     7. EVENTS OF DEFAULT.

     7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):

     (i) the Company defaults in the payment of any principal of, or
Yield- Maintenance Amount payable with respect to, any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or

     (ii) the Company defaults in the payment of any interest on any Note
for more than 5 Business Days after the date due; or

     (iii) the Company or any Subsidiary of the Company defaults (whether
as primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional sale
or other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a purchase
money mortgage or any obligation under notes payable or drafts accepted
representing extensions of credit) beyond any period of grace provided
with respect thereto, or the Company or any Subsidiary of the Company
fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created (or
if any other event thereunder or under any such agreement shall occur and
be continuing) and the effect of such failure or other event is to cause,
or a holder or holders of such obligation (or a trustee on behalf of such
holder or holders) causes, such obligation to become due (or to be
repurchased by the Company or any Subsidiary of the Company) prior to any
stated maturity, provided that the aggregate amount of all obligations as
to which such a payment default shall occur and be continuing or such a
failure or other event causing acceleration (or resale to the Company or
any Subsidiary of the Company) shall occur and be continuing exceeds
$5,000,000; or

     (iv) any representation or warranty made by the Company herein or by
the Company or any of its officers in any writing furnished in connection
with or pursuant to this Agreement shall be false in any material respect
on the date as of which made or deemed to have been made; or

     (v) the Company fails to perform or observe any agreement contained
in paragraph 5E or paragraph 6; or

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     (vi) the Company fails to perform or observe any other agreement,
term or condition contained herein and such failure shall not be remedied
within 30 days after any Responsible Officer obtains actual knowledge
thereof; or

     (vii) the Company or any Subsidiary of the Company makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or

     (viii) any decree or order for relief in respect of the Company or
any Subsidiary of the Company is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or hereafter
in effect (herein called the “Bankruptcy Law”), of any jurisdiction; or

     (ix) the Company or any Subsidiary of the Company petitions or
applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any Subsidiary of the Company, or of
any substantial part of the assets of the Company or any Subsidiary of
the Company, or commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Subsidiary) relating to the
Company or any Subsidiary of the Company under the Bankruptcy Law of any
other jurisdiction; or

     (x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary of the
Company and the Company or such Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgment or decree remains unstayed
and in effect for more than 30 days; or

     (xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than 60
days: or

     (xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary of the Company decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock
of a Subsidiary of the Company whose assets represent a substantial part,
of the consolidated assets of the Company and its Subsidiaries
(determined in accordance with generally accepted accounting principles)
or which
requires the divestiture of assets, or stock of a Subsidiary of the
Company, which shall have contributed a substantial part of the
consolidated net income of the Company and its Subsidiaries (determined
in accordance with generally accepted accounting principles) for any of
the three fiscal years then most recently ended, and such order, judgment
or decree remains unstayed and in effect for more than 60 days; or

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     (xiii) a final judgment in an amount in excess of $5,000,000 is
rendered against the Company or any Subsidiary of the Company and, within
45 days after entry thereof, any such judgment is not discharged or
execution thereof stayed pending appeal, or within 45 days after the
expiration of any such stay, such judgment is not discharged; or

     (xiv) the Company or any ERISA Affiliate, in its capacity as an
employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $10,000,000 unless paid within 60 days;

then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, any holder of any Note (other than the Company or any of
its Affiliates or Subsidiaries) may at its option, by notice in writing to the
Company, declare all of the Notes held by such holder to be, and all of the
Notes held by such holder shall thereupon be and become, immediately due and
payable at par together with interest accrued thereon, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Company, (b) if such event is an Event of Default specified in clause (viii),
(ix) or (x) of this paragraph 7A with respect to the Company, all of the Notes
at the time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Company, and (c)
with respect to any event constituting an Event of Default, the Required
Holder(s) of the Notes of any Series may at its or their option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if
any, with respect to each Note of such Series, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the Company.
The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of Yield-Maintenance Amount by the Company in the event
the Notes are prepaid or are accelerated as a result of an Event of Default is
intended to provide compensation for the deprivation of such right under such
circumstances.

     7B. Rescission of Acceleration. At any time after any or all of the Notes
of any Series shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) of the Notes of such Series may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have become due
otherwise than by reason of such declaration, and interest on such overdue
interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes of such
Series, (ii) the Company shall not have paid any amounts which have become due
solely by reason of such declaration, (iii) all Events of Default and Defaults,
other than non-payment of amounts which have become due solely by reason of
such declaration, shall have been cured or waived pursuant to paragraph 11C,
and (iv) no judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes of such Series or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.

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     7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.

     7D. Other Remedies. If any Event of Default or Default shall occur and be
continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by
suit in equity or by action at law, or both, whether for specific performance
of any covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.

     8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows (all references to “Subsidiary” and
“Subsidiaries” in this paragraph 8 shall be deemed omitted if the Company has
no Subsidiaries at the time the representations herein are made or repeated):

     8A(1). Organization. The Company is a nonstock agricultural cooperative
corporation duly organized and existing in good standing under the laws of the
State of Minnesota and each Subsidiary of the Company is duly organized and
existing in good standing under the laws of the jurisdiction in which it is
incorporated. The Company and each of its Subsidiaries have duly qualified or
been duly licensed, and are authorized to do business and are in good standing,
in each jurisdiction in which the ownership of their respective properties or
the nature of their respective businesses makes such qualification or licensing
necessary and in which the failure to be so qualified or licensed would be
reasonably likely to have a material adverse effect on the business condition
(financial or otherwise) or operations of the Company and its Subsidiaries,
taken as a whole.

     8A(2). Power and Authority. The Company and each Subsidiary of the
Company has all requisite corporate power to own and operate its respective
properties and to conduct its business as currently conducted and as currently
proposed to be conducted. The Company has all requisite corporate power to
execute, deliver and perform its obligations under this Agreement and the
Notes. The execution, delivery and performance of this Agreement and the Notes
has been duly authorized by all requisite corporate action, and this Agreement
and the Notes have been duly executed and delivered by authorized officers of
the Company and are
valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).

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     8B. Financial Statements. The Company has furnished each Purchaser of any
Note with the following financial statements, identified by a principal
financial officer of the Company: (i) a consolidated balance sheet of the
Company and its Subsidiaries as at August 31 in each of the three fiscal years
of the Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which audited financial
statements have not been released) and consolidated statements of income and
cash flows and a consolidated statement of members’ equity of the Company and
its Subsidiaries for each such year, all reported on by either Deloitte &
Touche, L.L.P. or Pricewaterhouse Coopers, LLP or other nationally recognized
independent public accounting firm and (ii) consolidated balance sheet of the
Company and its Subsidiaries as at the end of the quarterly period (if any)
most recently completed prior to such date and after the end of such fiscal
year (other than quarterly periods completed within 60 days prior to such date
for which financial statements have not been released) and the comparable
quarterly period in the preceding fiscal year and consolidated statements of
income and cash flows and a consolidated statement of members’ equity for the
periods from the beginning of the fiscal years in which such quarterly periods
are included to the end of such quarterly periods, prepared by the Company.
Such financial statements (including any related schedules and/or notes) are
true and correct in all material respects (subject, as to interim statements,
to changes resulting from audits and year-end adjustments), have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its Subsidiaries required to be shown in
accordance with such principles. The balance sheets fairly present the
condition of the Company and its Subsidiaries as at the dates thereof, and the
statements of income, stockholders’ equity and cash flows fairly present the
results of the operations of the Company and its Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in
the business, condition (financial or otherwise), operations of the Company and
its Subsidiaries taken as a whole since the end of the most recent fiscal year
for which such audited financial statements have been furnished.

     8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which, individually or in the aggregate,
could reasonably be expected to result in any material adverse change in the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.

     8D. Outstanding Debt. Neither the Company nor any of its Subsidiaries has
outstanding any Debt except as permitted by paragraph 6B. There exists no
default under the provisions of any instrument evidencing such Debt or of any
agreement relating thereto.

     8E. Title to Properties. The Company has and each of its Subsidiaries has
good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the
most recent audited balance sheet referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), except
for defects in title not reasonably expected to result in a material adverse
effect, subject to no Lien of any kind except Liens

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permitted by paragraph 6D.
All leases necessary in any material respect for the conduct of the respective
businesses of the Company and its Subsidiaries are valid and subsisting and are
in full force and effect.

     8F. Taxes. The Company has and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the knowledge of the
officers of the Company, are required to be filed, and each has paid all taxes
as shown on such returns and on all assessments received by it to the extent
that such taxes have become due, except such taxes as are being actively
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with generally accepted accounting
principles or with respect to which the failure to so pay could not be
reasonably expected to have a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole or the ability of the Company to satisfy its
obligations under this Agreement. The Company is a cooperative association
taxed under the provisions of “subchapter T” of the Code and the Company does
not presently intend to alter its status as a subchapter T cooperative
association for federal income tax purposes.

     8G. Conflicting Agreements and Other Matters. Neither the Company nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction which materially and adversely affects
its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any
of its Subsidiaries, any award of any arbitrator or any agreement (including
any agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of its Subsidiaries is
subject. Neither the Company nor any of its Subsidiaries is a party to, or
otherwise subject to any provision contained in, any instrument evidencing Debt
of the Company or such Subsidiary, any agreement relating thereto or any other
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the incurring of, Debt of the Company of the
type to be evidenced by the Notes except as set forth in the agreements listed
in Schedule 8G attached hereto (as such Schedule 8G may have been modified from
time to time by written supplements thereto delivered by the Company and
accepted in writing by Prudential).

     8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security
of the Company for sale to, or solicited any offers to buy the Notes or any
similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its behalf has
taken or will take any action which would subject the issuance or sale of the
Notes to the provisions of Section 5 of the Securities Act or to the provisions
of any securities or Blue Sky law of any applicable jurisdiction.

     8I. Use of Proceeds. The proceeds of the Series F Notes and the Series G
Notes will be used to fund capital expenditures and general

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corporate purposes.
The Company is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
“margin stock” (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System), and the aggregate market value of all “margin
stock” owned by the Company and its Subsidiaries does not exceed 25% of the
aggregate value of the assets thereof, as determined by any reasonable method.
Neither the Company nor any agent acting on its behalf has taken or will take
any action which might cause this Agreement or the Notes to violate Regulation
U, Regulation T or any other regulation of the Board of Governors of the
Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect.

     8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan) which could be reasonably
expected to have a material adverse effect on the business condition (financial
or otherwise) or operations of the Company and its Subsidiaries) taken as a
whole or the ability of the Company to satisfy its obligations under this
Agreement. No liability to the PBGC has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, property or assets,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, property or assets,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole. The execution and delivery of this Agreement
and the issuance and sale of the Notes will be exempt from or will not involve
any transaction which is subject to the prohibitions of section 406 of ERISA
and will not involve any transaction in connection with which a penalty could
be imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the next
preceding sentence is made in reliance upon and subject to the accuracy of the
representation of each Purchaser in paragraph 9B as to the source of funds to
be used by it to purchase any Notes.

     8K. Governmental Consent. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor
any circumstance in connection with the offering, issuance, sale or delivery of
the Notes is such as to require any authorization, consent, approval, exemption
or any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.

     8L. Environmental Compliance. The Company and its Subsidiaries and all of
their respective properties and facilities have complied at all times and in
all respects with all federal, state, local and regional statutes, laws,
ordinances and judicial or administrative orders, judgments, rulings and
regulations including, without limitation, those relating to protection of the
environment except, in any such case, where failure to

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comply, individually or
in the aggregate, would not reasonably be expected to result in a material
adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.

     8M. Regulatory Status. Neither the Company nor any Subsidiary is (i) an
“Investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, (ii) a
“holding company” or a “subsidiary company” or an “affiliate” of a “holding
company” or a “subsidiary company” of a “holding company”, within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (iii) a
“public utility” within the meaning of the Federal Power Act, as amended.

     8N. Permits and Other Operating Rights. The Company and each Subsidiary
of the Company has all such valid and sufficient certificates of convenience
and necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over the Company or any Subsidiary of the Company or any of
its Properties, as are necessary for the ownership, operation and maintenance
of its businesses and Properties, as presently conducted and as proposed to be
conducted while the Notes are outstanding, subject to exceptions and
deficiencies which, individually or in the aggregate, would not reasonably be
expected to materially adversely affect the business and operations of the
Company, any Subsidiary of the Company or any material part thereof, and such
certificates of convenience and necessity, franchises, licenses, permits,
operating rights and other authorizations from federal, state, foreign,
regional, municipal and other local regulatory bodies or administrative
agencies or other governmental bodies having jurisdiction over the Company, any
Subsidiary of the Company or any of its Properties are free from restrictions
or conditions which, individually or in the aggregate, would reasonably be
expected to be materially adverse to the business or operations of the Company
and its Subsidiaries and neither the Company nor any Subsidiary of the Company
is in violation of any restriction or condition thereof in any material
respect.

     8O. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely affect
the business, property or assets, condition (financial or otherwise) or
operations of the Company or any of its Subsidiaries and which has not been set
forth in this Agreement.

     8P. Hostile Tender Offers. None of the proceeds of the sale of any Notes
will be used to finance a Hostile Tender Offer. Each Purchaser represents as
follows:

     9. REPRESENTATIONS OF THE PURCHASERS.

     Each Purchaser represents as follows:

     9A. Nature of Purchase. Such Purchaser is not acquiring the Notes
purchased by it hereunder with a view to or for sale in connection with

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any
distribution thereof within the meaning of the Securities Act, provided that
the disposition of such Purchaser’s property shall at all times be and remain
within its control. Such Purchaser will not sell or otherwise transfer the
Notes to be purchased by it hereunder in violation of the Securities Act.

     9B. Source of Funds. At least one of the following statements is an
accurate representation as to each source of funds (a
“Source”) to be used by
such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:

     (i) the Source is an “insurance company general account” (as the
term is defined in the United States Department of Labor’s Prohibited
Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and
liabilities (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(the “NAIC Annual Statement”)) for the general account contract(s) held
by or on behalf of any employee benefit plan together with the amount of
the reserves and liabilities for the general account contract(s) held by
or on behalf of any other employee benefit plans maintained by the same
employer (or affiliate thereof as defined in PTE 95-60) or by the same
employee organization in the general account do not exceed 10% of the
total reserves and liabilities of the general account (exclusive of
separate account liabilities) plus surplus as set forth in the NAIC
Annual Statement filed with such Purchaser’s state of domicile; or

     (ii) the Source is a separate account that is maintained solely in
connection with such Purchaser’s fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan (or
its related trust) that has any interest in such separate account (or to
any participant or beneficiary of such plan (including any annuitant))
are not affected in any manner by the investment performance of the
separate account; or

     (iii) the Source is either (a) an insurance company pooled separate
account, within the meaning of PTE 90-1, or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as
disclosed by such Purchaser to the Company in writing pursuant to this
clause (iii), no employee benefit plan or group of plans maintained by
the same employer or employee organization beneficially owns more than
10% of all assets allocated to such pooled separate account or collective
investment fund; or

     (iv) the Source constitutes assets of an “investment fund” (within
the meaning of Part V of PTE 84-14 (the “QPAM Exemption”)) managed by a
“qualified professional asset manager” or “QPAM” (within the meaning of
Part V of the QPAM
Exemption), no employee benefit plan’s assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption)
of such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled

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by the QPAM
(applying the definition of “control” in Section V(e) of the
QPAM
Exemption) owns a 5% or more interest in the Company and (a) the identity
of such QPAM and (b) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (iv); or

     (v) the Source constitutes assets of a “plan(s)” (within the meaning
of Section IV of PTE 96-23 (the “INHAM Exemption”)) managed by an
“in-house asset manager” or “INHAM” (within the meaning of Part IV of the
INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of “control” in Section
IV(h) of the INHAM Exemption) owns a 5% or more interest in the Company
and (a) the identity of such INHAM and (b) the name(s) of the employee
benefit plan(s) whose assets constitute the Source have been disclosed to
the Company in writing pursuant to this clause (v); or

     (vi) the Source is a governmental plan; or

     (vii) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing
pursuant to this clause (vii); or

     (viii) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.

     As used in this paragraph 9B, the terms “employee benefit plan”,
“governmental plan”, and “separate account” shall have the respective
meanings assigned to such terms in Section 3 of ERISA.

     10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement,
the terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.

     10A. Yield-Maintenance Terms.

        “Called Principal” shall mean, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to paragraph 4C, is put to the Company
pursuant to paragraph 5E or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.

        “Discounted Value” shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.

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        “Reinvestment Yield” shall mean, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields reported
as of 10:00 a.m. (New York City local time) on the Business Day next preceding
the Settlement Date with respect to such Called Principal for actively traded
U.S. Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date on the display designated
as “Page PX1” on the Bloomberg Financial Services Screen (or such other display
as may replace Page PX1 on the Bloomberg Financial Services Screen or, if
Bloomberg Financial Services shall cease to report such yields or shall cease
to be Prudential Capital Group’s customary source of information for
calculating yield-maintenance amounts on privately placed notes, then such
source as is then Prudential Capital Group’s customary source of such
information), or if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, (ii) the Treasury
Constant Maturity Series yields reported, for the latest day for which such
yields shall have been so reported as of the Business Day next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between yields reported for
various maturities. The Reinvestment Yield will be rounded to that number of
decimal places as appears in the coupon for the Notes.

        “Remaining Average Life” shall mean, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.

        “Remaining Scheduled Payments” shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.

        “Settlement Date” shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4C, is put to the Company pursuant to paragraph 5E or is declared to
be immediately due and payable pursuant to paragraph 7A, as the context
requires.

        “Yield-Maintenance Amount” shall mean, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no event be less
than zero.

     10B. Other Terms.

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        “Acceptance” shall have the meaning specified in paragraph 2B(5).

        “Acceptance Day” shall have the meaning specified in paragraph 2B(5).

        “Acceptance Window” shall mean, with respect to any interest rate quotes
provided by Prudential pursuant to paragraph 2B(4), the time period after the
time Prudential shall have provided such interest rate quotes to the Company
designated by Prudential as the time period during which the Company may elect
to accept such interest rate quotes. If no such time period is designated by
Prudential with respect to any such interest rate quotes, then the Acceptance
Window for such interest rate quotes will be 10 minutes after the time
Prudential shall have provided such interest rate quotes to the Company.

        “Accepted Note” shall have the meaning specified in paragraph 2B(5).

        “Adjusted Consolidated Funded Debt” shall mean all indebtedness for
borrowed money of the Company and its Subsidiaries, in each case maturing by
its terms more than one year after, or which is renewable or extendible for a
period ending one year or more after the date of determination, and shall
include Debt of such maturity created or assumed by the Company or any
Subsidiary of the Company either directly or indirectly, including obligations
of such maturity secured by liens upon property of the Company or its
Subsidiaries and upon which such entity customarily pays the interest, and all
rental payments under capital leases of such maturity, and the net present
value of operating leases as discounted by a rate of 10% per annum.

        “Affiliate” shall mean (i) with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such first Person, except a Subsidiary of the Company
shall not be an Affiliate of the Company, and (ii) with respect to Prudential,
shall include any managed account, investment fund or other vehicle for which
Prudential Financial, Inc. or any Affiliate of Prudential Financial, Inc. acts
as investment advisor or portfolio manager. A Person shall be deemed to
control a corporation or other entity if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or other entity, whether through the ownership of
voting securities, by contract or otherwise.

        “Authorized Officer” shall mean (i) in the case of the Company, its chief
executive officer, its chief financial officer, any vice president of the
Company designated as an “Authorized Officer” of the Company in the Information
Schedule attached hereto or any vice president of the Company designated as an
“Authorized Officer” of the Company for the purpose of this Agreement in an
Officer’s Certificate executed by the Company’s chief executive officer or
chief financial officer and delivered to Prudential, and (ii) in the case of
Prudential, any officer
of Prudential designated as its “Authorized Officer” in the Information
Schedule or any officer of Prudential designated as its “Authorized Officer”
for the purpose of this Agreement in a certificate executed by one of its
Authorized Officers or a lawyer in its law department. Any action taken under
this Agreement on behalf of the Company by any individual who on or after the
date of this Agreement shall have been an Authorized Officer of the Company and
whom Prudential in good faith believes to be an Authorized Officer of the
Company at the time of

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such action shall be binding on the
Company even though
such individual shall have ceased to be an Authorized Officer of the Company,
and any action taken under this Agreement on behalf of Prudential by any
individual who on or after the date of this Agreement shall have been an
Authorized Officer of Prudential and whom the Company in good faith believes to
be an Authorized Officer of Prudential at the time of such action shall be
binding on Prudential even though such individual shall have ceased to be an
Authorized Officer of Prudential.

        “Available Facility Amount” shall have the meaning specified in paragraph
2B(1).

        “Bankruptcy Law” shall have the meaning specified in clause (viii) of
paragraph A.

        “Business Day” shall mean any day other than (i) a Saturday or a Sunday,
(ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2B(3) hereof only,
a day on which Prudential is not open for business.

        “Cancellation Date” shall have the meaning specified in paragraph
2B(8)(iv).

        “Cancellation Fee” shall have the meaning specified in paragraph
2B(8)(iv).

        “Capitalized Lease Obligation” shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.

        “Change of Control” shall mean any Person or Persons acting in concert,
together with the Affiliates thereof, directly or indirectly controlling or
owning (beneficially or otherwise) in the aggregate more than 50% of the
aggregate voting power of the issued and outstanding Voting Interests of the
Company.

        “Closing Day” shall mean, with respect to the Series F Notes and the
Series G Notes, the Series F/G Closing Day and, with respect to any Accepted
Note, the Business Day specified for the closing of the purchase and sale of
such Accepted Note in the Request for Purchase of such Accepted Note, provided
that (i) if the Company and the Purchaser which is obligated to purchase such
Accepted Note agree on an earlier Business Day for such closing, the “Closing
Day” for such Accepted Note shall be such earlier Business Day, and (ii) if the
closing of the purchase and sale of such Accepted Note is rescheduled pursuant
to paragraph 2B(7), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to “original Closing Day” in paragraph
2B(8)(iii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.

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

        “Confirmation of Acceptance” shall have the meaning specified in paragraph
2B(5).

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        “Consolidated Cash Flow” for any period shall mean the sum of (i) earnings
before income taxes of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with generally accepted
accounting principles, plus (ii) the amounts that have been deducted in the
determination of such earnings before income taxes for such period for (a)
interest expense, (b) depreciation, (c) amortization, and (d) extraordinary
non-cash or one-time non-cash losses, minus (iii) the amounts that have been
included in the determination of such earnings before income taxes for such
period for (a) one-time gains, (b) extraordinary income, (c) non-cash patronage
income, and (d) non-cash equity earnings in joint ventures.

        “Consolidated Current Assets” means total current assets of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles.

        “Consolidated Current Liabilities” means total current liabilities of the
Company and its Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles.

        “Consolidated Members’ and Patrons’ Equity” shall mean the amount of
equity accounts plus (or minus in the case of a deficit) the amount of surplus
and retained earnings accounts of the Company and its Subsidiaries and the
minority interest in Subsidiaries, provided that the total amount of intangible
assets of the Company and its Subsidiaries (including, without limitation,
unamortized debt discount and expense, deferred charges and goodwill) included
therein shall not exceed $30,000,000 (and to the extent such intangible assets
exceed $30,000,000, they will not be included in the calculation of
Consolidated Members’ and Patrons’ Equity); all as determined in accordance
with generally accepting accounting principles consistently applied, but
excluding therefrom any minority interests in any Subsidiaries without
duplication of deduction if already deducted in determining retained earnings
and surplus.

        “Consolidated Net Worth” shall mean, as of any date, members’ equity of
the Company and its Subsidiaries as of such date, determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied.

        “Consolidated Total Assets” shall mean, as of any date, the total assets
of the Company and its Subsidiaries as of such date, determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied.

        “Debt” shall mean, with respect to any Person (i) all obligations of such
Person for borrowed money (including all obligations for borrowed money secured
by any Lien with respect to any Property owned by such Person whether or not
such Person has assumed or otherwise become liable for such obligations), (ii)
all obligations of such Person for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional
sale or other title retention agreement with respect to such property),
(iii) all Capital Lease Obligations of such Person and (iv) all Guarantees of
such Person with respect to liabilities of the type described in clause (i),
(ii) or (iii) of any other Person, provided that (a) Debt of a Subsidiary

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of
the Company shall exclude such obligations and Guarantees of such Subsidiary if owed or guaranteed by a Subsidiary to the Company or a Wholly-Owned Subsidiary
of the Company, (b) Debt of the Company shall exclude such obligations and
Guarantees if owed or guaranteed by the Company to a Wholly-Owned Subsidiary of
the Company and (c) Debt of the Company shall exclude any unfunded obligations
which may exist now and in the future in the Company’s pension plans.

        “Delayed Delivery Fee” shall have the meaning specified in paragraph
2B(8)(iii).

        “Disposition Value” shall mean, with respect to the Transfer of any
Property:

      (i) in the case of Property that does not constitute capital stock
of or other ownership interests in any Subsidiary of the Company, the
book value thereof, valued at the time of such Transfer in good faith by
the board of directors of the Company, and

      (ii) in the case of Property that constitutes capital stock of or
other ownership interests in any Subsidiary of the Company, an amount
equal to that percentage of book value of the assets of the Subsidiary
that issued such capital stock or other ownership interests as is equal
to the percentage that the book value that such capital stock or other
ownership interests represents of the book value of all of the
outstanding capital stock of or other ownership interests in such
Subsidiary (assuming, in making such calculations, that all securities
convertible into such capital stock or other ownership interests are so
converted and giving full effect to all transactions that would occur or
be required in connection with such conversion), determined at the time
of such Transfer in good faith by the board of directors of the Company.

        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

        “ERISA Affiliate” shall mean any corporation which is a member of the same
controlled group of corporations as the Company within the meaning of section
414(b) of the Code, or any trade or business which is under common control with
the Company within the meaning of section 414(c) of the Code.

        “Event of Default” shall mean any of the events specified in paragraph 7A,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act, and “Default” shall mean any of such events,
whether or not any such requirement has been satisfied.

        “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

        “Facility” shall have the meaning specified in paragraph 2B(1).

        “Funded Debt” shall mean, with respect to any Person, all Debt which
would, in accordance with generally accepted accounting principles, be required
to be classified as a long term liability on the books of such Person, and
shall include, without limitation (i) any Debt which by its terms or by the
terms of any instrument or agreement relating thereto matures, or which is
otherwise payable or unpaid, more than

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one year from the date of creation
thereof, (ii) any Debt outstanding under a revolving credit or similar
agreement providing for borrowings (and renewals and extensions thereof) which
would, in accordance with generally accepted accounting principles, be required
to be classified as a long term liability of such Person, (iii) any Capital
Lease Obligation of such Person, and (iv) any Guarantee of such Person with
respect to Funded Debt of another Person. Notwithstanding anything to the
contrary contained herein, any Debt outstanding under a revolving credit or
similar agreement providing for borrowings where no amount of such Debt is
outstanding for a period of 30 consecutive days during each 12 month period
(and which has not been refinanced with other Debt which does not constitute
Funded Debt) will not be deemed to constitute Funded Debt.

        “Guarantee” shall mean, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any Debt,
lease, dividend or other obligation of another, including, without limitation,
any such obligation directly or indirectly guaranteed, endorsed (otherwise than
for collection or deposit in the ordinary course of business) or discounted or
sold with recourse by such Person, or in respect of which such Person is
otherwise directly or indirectly liable, including, without limitation, any
such obligation in effect guaranteed by such Person through any agreement
(contingent or otherwise) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or service, regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of
any Guarantee shall be equal to the outstanding principal amount of the
obligation guaranteed or such lesser amount to which the maximum exposure of
the guarantor shall have been specifically limited.

        “Hedge Treasury Note(s)” shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.

        “Hostile Tender Offer” shall mean, with respect to the use of proceeds of
any Note, any offer to purchase, or any purchase of, shares of capital stock of
any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such
shares, equity interests, securities or rights representing less than 5% of the
equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing
body of such other entity prior to the date on which the Company makes the
Request for Purchase of such Note.

        “including” shall mean, unless the context clearly requires otherwise,
“including without limitation”.

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        “Initial Purchasers” shall have the meaning given in the address block of
this Agreement.

        “Issuance Fee” shall have the meaning given in paragraph 2B(8)(i) hereof.

        “Issuance Period” shall have the meaning specified in paragraph 2B(2).

        “Lien” shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise) or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction other than solely for notification purposes as opposed to security
purposes), any interest or title of a lessor under a lease the obligations
under which constitute Capitalized Lease Obligations, or any other type of
preferential arrangement for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or performance of an obligation.

        “Multiemployer Plan” shall mean any Plan which is a “multiemployer plan”
(as such term is defined in section 4001(a)(3) of ERISA.

        “Net Proceeds Amount” shall mean, with respect to any Transfer of any
Property by any Person, an amount equal to the difference of (i) the aggregate
amount of the consideration (valued at the fair market value of such
consideration at the time of the consummation of such Transfer) received by
such Person in respect of such Transfer, minus (ii) all ordinary and reasonable
out-of-pocket costs and expenses actually incurred by such Person in connection
with such Transfer.

        “Notes” shall have the meaning specified in paragraph 1B.

        “Officer’s Certificate” shall mean a certificate signed in the name of the
Company by an Authorized Officer of the Company.

        “Person” shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an unincorporated
organization and a government or any department or agency thereof.

        “Plan” shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.

        “Primary Bank Facility” shall mean an agreement, guaranty or other
instrument (or agreements, guaranties or other instruments to the extent such
agreements, guaranties or other
instruments were entered into in concert in one or a series of
transactions): (i) entered into by the Company in connection with the
provision of recourse credit in the form of revolving loans, term loans,
letters of credit or other extensions of credit commonly provided under
syndicated bank credit agreements to the Company or any of its Subsidiaries and
(ii) under which the aggregate amount of credit extended (whether in the form
of loans or commitments) to the Company or for which the Company is obligated
as a guarantor or otherwise is $150,000,000 or more.

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        “Priority Debt” shall mean (i) all Debt of the Company or any Subsidiary
of the Company secured by a Lien (other than Debt secured only by Liens
permitted under clauses (i) through (viii) of paragraph 6D hereof), and (ii)
all Funded Debt of the Subsidiaries of the Company.

        “Property” shall mean any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.

        “Prudential” shall have the meaning given in the address block of this
Agreement.

        “Prudential Affiliate” shall mean any Affiliate of Prudential.

        “Purchasers” shall mean, with respect to the Series F Notes and the Series
G Notes, the Initial Purchasers and, with respect to any Accepted Notes, the
Prudential Affiliate(s) which are purchasing such Accepted Notes.

        “Related Party” shall mean (i) any Significant Stockholder, (ii) all
persons to whom any Significant Stockholder is related by blood, adoption or
marriage and (iii) all Affiliates of the foregoing Persons.

        “Request for Purchase” shall have the meaning specified in paragraph
2B(3).

        “Required Holder(s)” shall mean the holder or holders of at least a
majority of the aggregate principal amount of the Notes or of a Series of
Notes, as the context may require, from time to time outstanding.

        “Rescheduled Closing Day” shall have the meaning specified in paragraph
2B(7).

        “Responsible Officer” shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.

        “Securities Act” shall mean the Securities Act of 1933, as amended.

        “Series” shall have the meaning specified in paragraph 1B.

        “Series F/G Closing Day” shall have the meaning specified in paragraph 2A.

        “Series F Note(s)” shall have the meaning specified in paragraph 1A(1).

        “Series G Note(s)” shall have the meaning specified in paragraph 1A(2).

        “Shelf Notes” shall have the meaning specified in paragraph 1B.

        “Significant Holder” shall mean (i) Prudential, (ii) each Purchaser, so
long as such Purchaser or any of its Affiliates shall hold (or be

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committed
under this Agreement to purchase) any Note, (iii) any other holder of at least
5% of the aggregate principal amount of the Notes from time to time
outstanding, or (iv) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment company, any
insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.

        “Subsidiary” shall mean with respect to any Person any other Person
greater than 50% of the total combined voting power of all classes of Voting
Interests of which shall, at the time as of which any determination is being
made, be owned by such first Person either directly or through other
Subsidiaries of such first Person.

        “Transfer” shall have the meaning given in paragraph 6F hereof.

        “Transferee” shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.

        “Voting Interests” shall mean (a) with respect to any stock corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation or persons performing similar functions (irrespective of whether at
the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency), and (b) with respect to
the Company or any other entity, membership or other ownership interests in the
Company or such other entity whose holders are entitled under ordinary
circumstances to vote for the election of the directors of the Company or such
other entity or persons performing similar functions (irrespective of whether
at the time membership or other ownership interests of any other class or
classes shall have or might have voting power by reasoning of the happening of
any contingency).

        “Wholly-Owned Subsidiary” shall mean any Subsidiary of the Company all of
the capital stock or other ownership interests of every class of which is, at
the time as of which any determination is being made, owned by the Company
either directly or through a wholly-owned Subsidiary.

     10C. Accounting Principles, Terms and Determinations. All references in
this Agreement to “generally accepted accounting principles” shall be deemed to
refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied
on a basis consistent with the most recent audited financial statements
delivered pursuant to clause (ii) of paragraph 5A or, if no such statements
have been so delivered, the most recent audited financial statements referred
to in clause (i) of paragraph 8B. Any reference herein to any specific law,
statute, rule or regulation shall refer to such law, statute, rule or
regulation as the same may be may be modified, amended or replaced from time to
time.

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     11. MISCELLANEOUS.

     11A. Note Payments. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and
any Yield-Maintenance Amount payable with respect to, such Note, which comply
with the terms of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City local time, on the
date due) to (i) the account or accounts of such Purchaser specified in the
Purchaser Schedule attached hereto in the case of any Series F Note or Series G
Note, (ii) the account or accounts of such Purchaser specified in the
Confirmation of Acceptance with respect to such Note in the case of any Shelf
Note or (iii) such other account or accounts in the United States as such
Purchaser may from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been
paid. The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as the Purchasers have made
in this paragraph 11A.

     11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and expenses
of any special counsel engaged by the Purchasers or any Transferee in
connection with this Agreement, the transactions contemplated hereby and any
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys’ fees, incurred
by any Purchaser or any Transferee in enforcing (or determining whether or how
to enforce) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of any Purchaser’s or any Transferee’s having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy case
and (iii) all costs and expenses, including, without limitation, reasonable
attorneys’ fees, of obtaining a Private Placement Number from CUSIP Service
Bureau of Standard and Poor’s Ratings Group with respect to the Notes. The
obligations of the Company under this paragraph 11B shall survive the transfer
of any Note or portion thereof or interest therein by any Purchaser or any
Transferee and the payment of any Note.

     11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s)
of the Notes of each Series except that, (i) with the
written consent of the holders of all Notes of a particular Series, and if
an Event of Default shall have occurred and be continuing, of the holders of
all Notes of all Series, at the time outstanding (and such written consents),
the Notes of such Series may be amended or the provisions thereof waived to
change the maturity thereof, to change or affect the principal thereof, or to
change or affect the rate or time of payment of interest on or any
Yield-Maintenance Amount payable with respect to the Notes of such Series, (ii)
without the written consent of the holder or holders of all Notes at the time
outstanding, no amendment to or waiver of the provisions of this Agreement
shall change or affect the provisions of paragraph 7A or this paragraph 11C
insofar as such

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provisions relate to proportions of the principal amount of the
Notes of any Series, or the rights of any individual holder of Notes, required
with respect to any declaration of Notes to be due and payable or with respect
to any consent, amendment, waiver or declaration, (iii) with the written
consent of Prudential (and without the consent of any other holder of the
Notes) the provisions of paragraph 2B may be amended or waived (except insofar
as any such amendment or waiver would affect any rights or obligations with
respect to the purchase and sale of Notes which shall have become Accepted
Notes prior to such amendment or waiver), and (iv) with the written consent of
all of the Purchasers which shall have become obligated to purchase Accepted
Notes of any Series (and not without the written consent of all such
Purchasers), any of the provisions of paragraphs 2B and 3 may be amended or
waived insofar as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted Notes of such
Series or the terms and provisions of such Accepted Notes. Each holder of any
Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term “this
Agreement” and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.

     11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes. The
Notes are issuable as registered notes without coupons in denominations of at
least $100,000, except as may be necessary to reflect any principal amount not
evenly divisible by $100,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other
Notes of like tenor and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at the principal
office of the Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the holder
making the exchange is entitled to receive. Each prepayment of principal
payable on each prepayment date upon each new Note issued upon any such
transfer or exchange shall be in the same proportion to the unpaid principal
amount of such new Note as the prepayment of principal payable on such date on
the Note surrendered for registration of transfer or exchange bore to the
unpaid principal amount of such Note. No reference need be made in any such
new Note to any prepayment or prepayments of principal previously due and paid
upon the Note surrendered for registration of transfer or exchange. Every Note
surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer duly
executed, by the holder of such Note or such holder’s attorney duly authorized
in writing. Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon receipt
of written notice from the holder of any Note of the loss, theft, destruction
or mutilation of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder’s unsecured indemnity agreement, or in
the case of any such mutilation upon surrender and cancellation of

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such Note,
the Company will make and deliver a new Note, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Note.

     11E. Persons Deemed Owners; Participations. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes
whatsoever, whether or not such Note shall be overdue, and the Company shall
not be affected by notice to the contrary. Subject to the preceding sentence,
the holder of any Note may from time to time grant participations in all or any
part of such Note to any Person on such terms and conditions as may be
determined by such holder in its sole and absolute discretion, provided that
any such participation shall be in a principal amount of at least $100,000
except as may be necessary to reflect any principal amount not evenly divisible
by $100,000.

     11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any Transferee, regardless of any investigation made at
any time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.

     11G. Successors and Assigns. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.

     11H. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not avoid (i) the occurrence of a Default or Event of Default if such
action is taken or such condition exists or (ii) in any way prejudice an
attempt by the holder of any Note to prohibit through equitable action or
otherwise the taking of any action by the Company or any Subsidiary which would
result in a Default or Event of Default.

     11I. Notices. All written communications provided for hereunder (other
than communications provided for under paragraph 2) shall be sent by first
class mail or nationwide overnight delivery service (with charges prepaid) and
(i) if to any Purchaser, addressed as specified for such communications in the
Purchaser Schedule attached hereto (in the case of the Series F Notes or the
Series G Notes) or the Purchaser Schedule attached to the applicable
Confirmation of Acceptance (in the case of any Shelf Notes) or at such other
address as any such Purchaser shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to it at such address as it
shall have specified in

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writing to the Company or, if any such holder shall not
have so specified an address, then addressed to such holder in care of the last
holder of such Note which shall have so specified an address to the Company and
(iii) if to the Company, addressed to it at 5500 Cenex Drive, Inver Grove
Heights, Minnesota, 55077, Attention: Chief Financial Officer with a copy to
the attention of the General Counsel, or at such other address as the Company
shall have specified to the holder of each Note in writing; provided, however,
that any such communication to the Company may also, at the option of the
Person sending such communication, be delivered by any other means either to
the Company at its address as determined above or to any Authorized Officer of
the Company. Any communication pursuant to paragraph 2 shall be made by the
method specified for such communication in paragraph 2, and shall be effective
to create any rights or obligations under this Agreement only if, in the case
of a telephone communication, an Authorized Officer of the party conveying the
information and of the party receiving the information are parties to the
telephone call, and in the case of a telecopier communication, the
communication is signed by an Authorized Officer of the party conveying the
information, addressed to the attention of an Authorized Officer of the party
receiving the information, and in fact received at the telecopier terminal the
number of which is listed for the party receiving the communication in the
Information Schedule or at such other telecopier terminal as the party
receiving the information shall have specified in writing to the party sending
such information.

     11J. Payments Due on Nom-Business Days. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
on, or Yield-Maintenance Amount payable with respect to, any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall not be included in the computation of the interest payable on such
Business Day.

     11K. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     11L. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

     11M. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be
satisfactory to any Purchaser, to any holder of Notes or to the Required
Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.

     11N. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF ILLINOIS.

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     11O. Severalty of Obligations. The sales of Notes to the Purchasers are
to be several sales, and the obligations of Prudential and the Purchasers under
this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and neither
Prudential nor any Purchaser shall be responsible for the obligations of, or
any action taken or omitted by, any other such Person hereunder.

     11P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

     11Q. Binding Agreement. When this Agreement is executed and delivered by
the Company, Prudential and the Initial Purchasers, it shall become a binding
agreement between the Company, on one hand, and Prudential, on the other hand.
This Agreement shall also inure to the benefit of each Purchaser which shall
have executed and delivered a Confirmation of Acceptance and each such
Purchaser shall be bound by this Agreement to the extent provided in such
Confirmation of Acceptance.

	 	 	 	 	 
	

	Very truly yours,
	 
	 	 	 	 
	

	CHS INC.
	 
	 	 	 	 
	

	By:
	

	 	 	
 
	

	 	 	Name:	 
	

	 	 	 	
 
	

	 	 	Title:	 
	

	 	 	 	
 

The foregoing Agreement is hereby

accepted as of the date first above written.

THE PRUDENTIAL INVESTMENT

  MANAGEMENT, INC.

	 	 	 
	By:
	 	 
	

	 	
 
	

	 	Vice President

THE PRUDENTIAL INSURANCE

COMPANY OF AMERICA

	 	 	 
	By:
	 	 
	

	 	
 
	

	 	Vice President

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	ING LIFE INSURANCE AND ANNUITY COMPANY
	 
	 	 
	By:

	 	Prudential Private Placement Investors,
	

	 	L.P. (as Investment Advisor)
	By:

	 	Prudential Private Placement Investors, Inc.
	

	 	(as its General Partner)
	 
	 	 
	By:

	 	 
	

	 	
Vice President
	 
	 	 
	UNITED OF OMAHA LIFE INSURANCE COMPANY
	 
	 	 
	By:

	 	Prudential Private Placement Investors,
	

	 	L.P. (as Investment Advisor)
	By:

	 	Prudential Private Placement Investors, Inc.
	

	 	(as its General Partner)
	 
	 	 
	By:

	 	 
	

	 	
Vice President
	 
	 	 
	RELIASTAR LIFE INSURANCE COMPANY
	 
	 	 
	By:

	 	Prudential Private Placement Investors,
	

	 	L.P. (as Investment Advisor)
	By:

	 	Prudential Private Placement Investors, Inc.
	

	 	(as its General Partner)
	 
	 	 
	By:

	 	 
	

	 	
Vice President
	 
	 	 
	MUTUAL OF OMAHA INSURANCE COMPANY
	 
	 	 
	By:

	 	Prudential Private Placement Investors,
	

	 	L.P. (as Investment Advisor)
	By:

	 	Prudential Private Placement Investors, Inc.
	

	 	(as its General Partner)

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	By:

	 	 
	

	 	
Vice President

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INFORMATION SCHEDULE

Authorized Officers for Prudential

	 	 	 
	Allen A. Weaver

	 	P. Scott von Fischer
	Senior Managing Director

	 	Managing Director
	Prudential Capital Group

	 	Prudential Capital Group
	Two Prudential Plaza, Suite 5600

	 	Two Prudential Plaza, Suite 5600
	Chicago, Illinois 60601

	 	Chicago, Illinois 60601
	Telephone: (312) 540-4211

	 	Telephone: (312) 540-4225
	Facsimile: (312) 540-4222

	 	Facsimile: (312) 540-4222
	 
	 	 
	Marie L. Fiormanti
	 	 
	Managing Director
	 	 
	Prudential Capital Group
	 	 
	Two Prudential Plaza, Suite 5600
	 	 
	Chicago, Illinois 60601
	 	 
	Telephone: (312) 540-4233
	 	 
	Facsimile: (312) 540-4222
	 	 
	 
	 	 
	William Engelking

	 	Julia Buthman
	Senior Vice President

	 	Senior Vice President
	Prudential Capital Group

	 	Prudential Capital Group
	Two Prudential Plaza, Suite 5600

	 	Two Prudential Plaza, Suite 5600
	Chicago, Illinois 60601

	 	Chicago, Illinois 60601
	Telephone: (312) 540-4214

	 	Telephone: (312) 540-4237
	Facsimile: (312) 540-4222

	 	Facsimile: (312) 540-4222
	 
	 	 
	Mathew Douglass

	 	Tan Vu
	Vice President

	 	Vice President
	Prudential Capital Group

	 	Prudential Capital Group
	Two Prudential Plaza, Suite 5600

	 	Two Prudential Plaza, Suite 5600
	Chicago, Illinois 60601

	 	Chicago, Illinois 60601
	Telephone: (312) 540-5435

	 	Telephone: (312) 540-5437
	Facsimile: (312) 540-4222

	 	Facsimile: (312) 540-4222
	 
	 	 
	Managing Director
	 	 
	Central Credit
	 	 
	Prudential Capital Group
	 	 
	Four Gateway Center
	 	 
	100 Mulberry Street
	 	 
	Newark, New Jersey 07102
	 	 
	Telephone: (973) 802-6429
	 	 
	Facsimile: (973) 624-6432
	 	 

 

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Authorized Officers for Company

John Johnson

President and Chief Executive Officer

CHS Inc.

5500 Cenex Drive

Inver Grove Heights, MN 55077

Telephone: 651-355-3764

Facsimile: 651-355-6417

John Schmitz

Executive Vice President and Chief Financial Officer

CHS Inc.

5500 Cenex Drive

Inver Grove Heights, MN 55077

Telephone: 651-355-3778

Facsimile: 651-355-3743

 

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PURCHASER SCHEDULE

Series F Notes

CHS INC.

	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series F Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	 
	 	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA	 	$7,500,000	 	$7,500,00

	(1)	 	All payments on account of Series F Notes held by such purchaser

shall be made by wire transfer of immediately available funds for

credit to:
	 
	 	 	Account No.: 890-0304-391

The Bank of New York

New York, NY

(ABA No.: 021-000-018)
	 
	 	 	Each such wire transfer shall set forth the name of the Company, a

reference to “4.08% Senior Notes due 2010, Security No.

!INV 10504!”, and the due date and application (as among principal, 

interest and Yield-Maintenance Amount) of the payment being made.
	 
	(2)	 	Address for all notices relating to payments:
	 
	 	 	The Prudential Insurance Company of America

c/o Investment Operations Group

Gateway Center Two, 10th Floor

100 Mulberry Street

Newark, NJ 07102-4077
	 
	 	 	Attention: Manager, Billings and Collections
	 
	(3)	 	Address for all other communications and notices:
	 
	 	 	The Prudential Insurance Company of America

c/o Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Ave.

Chicago, IL 60601
	 
	 	 	Attention: Managing Director

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	(4)	 	Recipient of telephonic prepayment notices:
	 
	 	 	Manager, Trade Management Group
	 
	 	 	Telephone: (973) 367-3141

Facsimile: (800) 224-2278
	 
	(5)	 	Address for Delivery of Notes:
	 
	 	 	Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Ave.

Chicago, IL 60601
	 
	 	 	Attention: Wiley S. Adams

Telephone: (312) 540-4204
	 
	(6)	 	Tax Identification No.: 22-1211670

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	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series F Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	 
	 	ING LIFE INSURANCE AND ANNUITY COMPANY	 	$3,750,000	 	$3,750,000

	(1)	 	All principal, interest and Yield-Maintenance payments

on account of Series F Notes held by such purchaser shall be made

by wire transfer of immediately available funds for credit to:
	 
	 	 	The Bank of New York

ABA No.: 021-000-018

BNF: 1OC566

Attention: P&I Department

Reference: ING Life Insurance and Annuity Company; Account No. 216101
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.08% Senior Notes due 2010”, and the due date

and application (as among principal, interest and

Yield-Maintenance Amount) of the payment being made.
	 
	(2)	 	All payments, other than principal, interest or Yield-Maintenance,

on account of Notes held by such purchaser shall be made by wire

transfer of immediately available funds for credit to:
	 
	 	 	The Bank of New York

ABA No.: 021-000-018

BNF 1OC565

Reference: ING Life Insurance and Annuity Company; Account No. 216101
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.08% Senior Notes due 2010”, and the due date

and application (Type of Fee) of the payment being made.

	 
	(3)	 	Address for all notices relating to payments:
	 
	 	 	ING Investment Management LLC

5780 Powers Ferry Road, NW, Suite 300

Atlanta, GA 30327-4943
	 
	 	 	Attention: Securities Accounting
	 
	 	 	Facsimile: (770) 690-4886

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	(4)	 	Address for all other communications and notices:
	 
	 	 	Prudential Private Placement Investors, L.P.

4 Gateway Center, 100 Mulberry Street

Newark, NJ 07102
	 
	 	 	Attention: Albert Trank, Managing Director
	 
	 	 	Telephone: (973) 802-8608

Facsimile: (973) 624-6432
	 
	(5)	 	Recipient of telephonic prepayment notices:
	 
	 	 	Manager, Trade Management Group
	 
	 	 	Telephone: (973) 802-8107

Facsimile: (800) 224-2278
	 
	(6)	 	Address for Delivery of Notes:

	 	(a)	 	Send Physical Security to:
	 
	 	 	 	Bank of New York

1 WaIl Street

3rd Floor, Free Received Dept.

New York, NY 10286
	 
	 	 	 	Attention: Jerrick Smallwood

Telephone: (212) 635-4652

Facsimile: (212) 635-8844
	 
	 	 	 	Please include in the cover letter accompanying the

Notes a reference to the Purchaser’s account number

(ING Life Insurance and Annuity Company; Account

Number: 216101)
	 
	 	(b)	 	Send copy via overnight mail to:
	 
	 	 	 	Prudential Capital Group

Gateway Center 4

100 Mulberry, 7th Floor

Newark, NJ 07102
	 
	 	 	 	Attention: Trade Management, Manager

Telephone: (973) 367-3141

	(7)	 	Tax Identification No.: 71-0294708

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	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series F Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	UNITED OF OMAHA LIFE INSURANCE COMPANY	 	$3,750,000	 	$3,750,000

	(1)	 	All principal, interest and Yield-Maintenance payments on

account of Series F Notes held by such purchaser shall be made

by wire transfer of immediately available finds for credit to:
	 
	 	 	JPMorgan Chase Bank

ABA No. 02 1-000-021

Private Income Processing
	 
	 	 	For credit to:

United of Omaha Life Insurance Company

Account No. 900-9000200

a/c: G09588
	 
	 	 	Each such wire transfer shall set forth the name of the Company, a reference

to “4.08% Senior Notes due 2010”, and the due date and application

(as among principal, interest and Yield-Maintenance Amount) of the

payment being made.
	 
	(2)	 	All payments, other than principal, interest or Yield-Maintenance on,

account of Notes held by such purchaser shall be made by wire

transfer of immediately available funds for credit to:
	 
	 	 	JPMorgan Chase Bank

ABA No. 021-000-021

Account No. G09588

Account Name: United of Omaha Life Insurance Co.
	 
	 	 	Each such wire transfer shall set forth the name of the Company, a

reference to “4.08% Senior Notes due 2010”, and the due date and

application (Type of Fee) of the payment being made.
	 
	(3)	 	Address for all notices relating to payments:
	 
	 	 	JPMorgan Chase Bank

14201 Dallas Parkway - 13th Floor

Dallas, TX 75254-2917
	 
	 	 	Attn: Income Processing - C. Ruiz

a/c: G09588

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	(4)	 	Address for all other communications and notices:
	 
	 	 	Prudential Private Placement Investors, L.P.

4 Gateway Center, 100 Mulberry Street

Newark, NJ 07102
	 
	 	 	Attention: Albert Trank, Managing Director

Telephone: (973) 802-8608

Facsimile: (973) 624-6432
	 
	(5)	 	Address for Delivery of Notes:

	 	(a)	 	Send Physical Security to:
	 
	 	 	 	JP Morgan Chase

North America Insurance - 5th Floor

3 Chase Metrotech Center

Brooklyn, NY 11245
	 
	 	 	 	Attention: Patricia A. Radzicki

Telephone: (718) 242-8475
	 
	 	 	 	Please include in the cover letter accompanying the

	 	Notes a reference to the Purchaser’s account number (United of

Omaha Life Insurance Company; Account Number: G09588).
	 
	 	(b)	 	Send copy via overnight mail to:
	 
	 	 	 	Prudential Capital Group

Gateway Center 4

100 Mulberry, 7th Floor

Newark, NJ 07102
	 
	 	 	 	Attention: Trade Management, Manager

Telephone: (973) 367-3141

	(6)	 	Tax Identification No.: 47-0322111

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PURCHASER SCHEDULE

Series G Notes

CHS INC.

	 	 	 	 	 	 	 
	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series G Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	 
	 	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA	 	$7,500,000	 	$,7,500,000

	(1)	 	All payments on account of Series G Notes held by such

purchaser shall be made by wire transfer of immediately available

funds for credit to:
	 
	 	 	Account No.: 890-0304-391

The Bank of New York

New York, NY

(ABA No.: 021-000-018
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.39% Senior Notes due 2011, Security No.

!INV 10511!”, and the due date and application (as among

principal, interest and Yield-Maintenance Amount) of the

payment being made.
	 
	(2)	 	Address for all notices relating to payments:
	 
	 	 	The Prudential Insurance Company of America

c/o Investment Operations Group

Gateway Center Two, 10th Floor

100 Mulberry Street

Newark, NJ 07102-4077
	 
	 	 	Attention: Manager, Billings and Collections
	 
	(3)	 	Address for all other communications and notices:
	 
	 	 	The Prudential Insurance Company of America

c/o Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Ave.

Chicago, IL 60601
	 
	 	 	Attention: Managing Director

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	(4)	 	Recipient of telephonic prepayment notices:
	 
	 	 	Manager, Trade Management Group
	 
	 	 	Telephone: (973) 367-3141

Facsimile: (800) 224-2278
	 
	(5)	 	Address for Delivery of Notes:
	 
	 	 	Prudential Capital Group

Two Prudential Plaza, Suite 5600

180 N. Stetson Ave.

Chicago, IL 60601
	 
	 	 	Attention: Wiley S. Adams

Telephone: (312) 540-4204
	 
	(6)	 	Tax Identification No.: 22-1211670

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	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series G Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	 
	 	RELIASTAR LIFE INSURANCE COMPANY	 	$3,750,000	 	$,3,750,000

	(1)	 	All principal, interest and Yield-Maintenance payments on

account of Series G Notes held by such purchaser shall be made by

wire transfer of immediately available funds for credit to:
	 
	 	 	The Bank of New York

ABA No.: 021-000-018

BNF: 1OC566/INST’L CUSTODY
	 
	 	 	Reference: ReliaStar Life Insurance Company; Account No. 187035
	 
	 	 	Each such wire transfer shall set forth the name of the Company, 

a reference to “4.39% Senior Notes due 2011, and the due

date and application (as among principal, interest and Yield-

Maintenance Amount) of the payment being made.
	 
	(2)	 	All payments, other than principal, interest or Yield-

Maintenance, on account of Notes held by such purchaser shall

be made by wire transfer of immediately available funds for

credit to:
	 
	 	 	The Bank of New York

ABA No.: 021-000-018

BNF: IOC565/INST’L CUSTODY
	 
	 	 	Reference: ReliaStar Life Insurance Company; Account No.187035
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.39% Senior Notes due 2011, and the due date

and application (Type of Fee) of the payment being made.
	 
	(3)	 	Address for all notices relating to payments;
	 
	 	 	ING Investment Management LLC

5780 Powers Ferry Road, NW, Suite 300

Atlanta, GA 30327-4943
	 
	 	 	Attention: Securities Accounting
	 
	 	 	Facsimile: (770) 690-4886

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	(4)	 	Address for all other communications and notices:
	 
	 	 	Prudential Private Placement Investors, L.P.

4 Gateway Center, 100 Mulberry Street

Newark, NJ 07102
	 
	 	 	Attention: Albert Trank, Managing Director
	 
	 	 	Telephone: (973 802-8608

Facsimile: (973) 624-6432
	 
	(5)	 	Recipient of telephonic prepayment notices:
	 
	 	 	Manager, Trade Management Group
	 
	 	 	Telephone: (973) 802-8107

Facsimile: (800) 224-2278
	 
	(6)	 	Address for Delivery of Notes:

	 	(a)	 	Send Physical Security to:
	 
	 	 	 	Bank of New York

1 Wall Street

3rd Floor, Free Received Dept.

New York, NY 10286
	 
	 	 	 	Attention: Jerrick Smallwood

Telephone: (212) 635-4652

Facsimile: (212) 635-8844
	 
	 	 	 	Please include in the cover letter accompanying the

Notes a reference to the Purchaser’s account number

([Account Name]; [Account Number]).
	 
	 	 	 	[Account Numbers:
	 
	 	 	 	Reliastar Life Insurance Company; Account

Number: 187035
	 
	 	 	 	Reliastar Life Insurance Company Reinsurance 

Business Account; Account Number: 301612]
	 
	 	(b)	 	Send copy via overnight mail to:

Prudential Capital Group

Gateway Center 4

100 Mulberry, 7th Floor

Newark, NJ 07102
	 
	 	 	 	Attention: Trade Management, Manager

Telephone: (973)367-3141

	(7)	 	Tax Identification No.: 41-0451140

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	 	 	 	 	Aggregate	 	 
	 	 	 	 	Principal	 	 
	 	 	 	 	Amount of	 	 
	 	 	 	 	Series G Notes	 	Note
	 	 	 	 	to be Purchased
	 	Denomination(s)

	 
	 	MUTUAL OF OMAHA INSURANCE COMPANY	 	$3,750,000	 	$,3,750,000

	(1)	 	All principal, interest and Yield-Maintenance payments on

account of Series G Notes held by such purchaser shall be made by

wire transfer of immediately available funds for credit to:
	 
	 	 	JPMorgan Chase Bank

ABA No.: 021-000-021

Private Income Processing
	 
	 	 	For credit to:

Mutual of Omaha Insurance Company

Account No. 900-9000200

a/c: G09587
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.39% Senior Notes due 2011”, and the due date

and application (as among principal interest and Yield-

Maintenance Amount) of the payment being made.
	 
	(2)	 	All payments, other than principal, interest or Yield-

Maintenance, on account of Notes held by such purchaser shall

be made by wire transfer of immediately available funds for

credit to:
	 
	 	 	JPMorgan Chase Bank

ABA No.: 021-000-021

Account No.: G09587

Account Name: Mutual of Omaha Insurance Co.
	 
	 	 	Each such wire transfer shall set forth the name of the Company,

a reference to “4.39% Senior Notes due 2011”, and the due date

and application (Type of Fee) of the payment being made.
	 
	(3)	 	Address for all notices relating to payments:
	 
	 	 	JP Morgan Chase Bank

14201 Dallas Parkway – 13th Floor

Dallas, TX 75254-2917
	 
	 	 	Attention: Income Processing – G. Ruiz

a/c: G09587

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	(4)	 	Address for all other communications and notices:
	 
	 	 	Prudential Private Placement Investors, L.P.

4 Gateway Center, 100 Mulberry Street

Newark, NJ 07102
	 
	 	 	Attention: Albert Trank, Managing Director
	 
	 	 	Telephone: (973) 802-8608

Facsimile: (973) 624-6432
	 
	(5)	 	Address for Delivery of Notes:

	 	(a)	 	Send Physical Security to:
	 
	 	 	 	JP Morgan Chase

North America Insurance – 5th Floor

3 Chase Metrotech Center

Brooklyn, NY 11245
	 
	 	 	 	Attention: Patricia A. Radzicki

Telephone: (718) 242-8475
	 
	 	 	 	Please include in the cover letter accompanying 

the Notes a reference to the Purchaser’s account number

(United of Omaha Life Insurance Company; Account

Number: G09588).
	 
	 	(b)	 	Send copy via overnight mail to:
	 
	 	 	 	Prudential Capital Group

Gateway Center 4

100 Mulberry, 75h Floor

Newark, NJ 07102
	 
	 	 	 	Attention: Trade Management, Manager

Telephone: (973) 367-3141

	(6)	 	Tax Identification No.: 47-0246511

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EXHIBIT A-1

[FORM OF SERIES F NOTE]

CHS INC.

4.08% SERIES F SENIOR NOTE DUE APRIL 13, 2010

	 	 	 
	No.                                       

	 	[Date]
	$                                      

	 	PPN                                       

     FOR VALUE RECEIVED, the undersigned, CHS Inc., a nonstock agricultural
cooperative corporation organized under the laws of the State of Minnesota
formerly known as Cenex Harvest States Cooperatives (herein called the
“Company”), hereby promises to pay to                    , or
registered assigns, the principal sum of                     DOLLARS on
April 13, 2010, with interest (computed on the basis of a 360-day year—30-day
month) (a) on the unpaid balance thereof at the rate of 4.08% per annum from
the date hereof, payable quarterly on the 13th day of July, October, January
and April in each year, commencing with the July 13, October 13, January 13 or
April 13 next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Yield-Maintenance Amount (as defined in the Note Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.08% or (ii) 2.0% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City
as its Prime Rate.

     Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.

     This Note is one of a series of Series F Senior Notes (herein called the
“Notes”) issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of April 13, 2004 (herein called the “Agreement”), among the Company, on one
hand, and Prudential Investment Management, Inc., the Initial Purchasers named
in the Purchaser Schedule attached thereto and each Prudential Affiliate which
becomes party thereto, on the other hand, and is entitled to the benefits
thereof.

     This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder’s attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the

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purpose of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.

     In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.

     Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.

     This Note is intended to be performed in the State of Illinois and shall
be construed and enforced in accordance with the laws of such State.

	 	 	CHS INC.
	 
	 	 	By: 
	 	 	 	

	 	 	Title:
	 	 	 	

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EXHIBIT A-2

[FORM OF SERIES G NOTE]

CHS INC.

4.39% SERIES G SENIOR NOTE DUE APRIL 13, 2011

	 	 	 
	No.                                       

	 	[Date]
	$                                      

	 	PPN                                       

     FOR VALUE RECEIVED, the undersigned, CHS Inc., a nonstock agricultural
cooperative corporation organized under the laws of the State of Minnesota
formerly known as Cenex Harvest States Cooperatives (herein called the
“Company”), hereby promises to pay to                    , or
registered assigns, the principal sum of                     DOLLARS on
April 13, 2011, with interest (computed on the basis of a 360-day year—30-day
month) (a) on the unpaid balance thereof at the rate of 4.39% per annum from
the date hereof, payable quarterly on the 13th day of July, October, January
and April in each year, commencing with the July 13, October 13, January 13 or
April 13 next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Yield-Maintenance Amount (as defined in the Note Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.39% or (ii) 2.0% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City
as its Prime Rate.

     Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.

     This Note is one of a series of Series G Senior Notes (herein called the
“Notes”) issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of April 13, 2004 (herein called the “Agreement”), among the Company, on one
hand, and Prudential Investment Management, Inc., the Initial Purchasers named
in the Purchaser Schedule attached thereto and each Prudential Affiliate which
becomes party thereto, on the other hand, and is entitled to the benefits
thereof.

     This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder’s attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the

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purpose of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.

     In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.

     Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.

     This Note is intended to be performed in the State of Illinois and shall
be construed and enforced in accordance with the laws of such State.

	 	 	CHS INC.
	 
	 	 	By: 
	 	 	 	

	 	 	Title:
	 	 	 	

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EXHIBIT A-3

[FORM OF SHELF NOTE]

CHS INC.

SENIOR SERIES                     NOTE

No.     

ORIGINAL PRINCIPAL AMOUNT:

ORIGINAL ISSUE DATE:

INTEREST RATE:

INTEREST PAYMENT DATES:

FINAL MATURITY DATE:

PRINCIPAL PREPAYMENT DATES AND AMOUNTS:

     FOR VALUE RECEIVED, the undersigned, CHS Inc. (herein called the
“Company”), a nonstock agricultural cooperative corporation organized and
existing under the laws of the State of Minnesota formerly known as Cenex
Harvest States Cooperatives, hereby promises to pay to                    , or
registered assigns, the principal sum of                     DOLLARS [on the Final
Maturity Date specified above] [, payable on the Principal Prepayment Dates and
in the amounts specified above, and on the Final Maturity Date specified above
in an amount equal to the unpaid balance of the principal hereof,] with
interest (computed on the basis of a 360-day year—30-day month) (a) on the
unpaid balance thereof at the Interest Rate per annum specified above, payable
on each Interest Payment Date specified above and on the Final Maturity Date
specified above, commencing with the Interest Payment Date next succeeding the
date hereof, until the principal hereof shall have become due and payable, and
(b) on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of Yield Maintenance Amount and any overdue payment of
interest, payable on each Interest Payment Date as aforesaid (or, at the option
of the registered holder hereof, on demand), at a rate per annum from time to
time equal to the greater of (i) 2% over the Interest Rate specified above or
(ii) 2% over the rate of interest publicly announced by Bank of New York from
time to time in New York City as its Prime Rate.

     Payments of principal, Yield Maintenance Amount, if any, and interest are
to be made at the main office of Bank of New York in New York City or at such
other place as the holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.

     This Note is one of a series of Senior Notes (herein called the “Notes”)
issued pursuant to a Note Purchase and Private Shelf Agreement, dated as of
April 13, 2004 (herein called the “Agreement”), between the Company, on the one
hand, and Prudential Investment Management, Inc., the Initial Purchasers named
in the Purchaser Schedule attached thereto and each Prudential Affiliate (as
defined in the Agreement) which becomes party thereto, on the other hand, and
is entitled to the benefits thereof.

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     This Note is subject to optional prepayment, in whole or from time to time
in part, on the terms specified in the Agreement.

     This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder’s attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.

     In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.

     Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.

     This Note is intended to be performed in the State of Illinois and shall
be construed and enforced in accordance with the laws and decisions of such
State.

	 	 	CHS INC.
	 
	 	 	By: 
	 	 	 	

	 	 	Title:
	 	 	 	

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EXHIBIT B

[FORM OF DISBURSEMENT DIRECTION LETTER]

CHS INC.

[On Company Letterhead – place on one page]

[Date]

[Names and Addresses of

Initial Purchasers]

	 	 	 	 	 
	 

	 	Re:
	 	4.08% Series F Senior Notes due April 13, 2010 and

4.39% Series G Senior Notes due April 13, 2011

(collectively, the “Notes”)

Ladies and Gentlemen:

     Reference is made to that certain Note Purchase and Private Shelf
Agreement (the “Note Agreement”), dated April 13, 2004, between CHS Inc. (the
“Company”), Prudential Investment Management, Inc., and you. Capitalized terms
used herein shall have the meanings assigned to such terms in the Note
Agreement.

     You are hereby irrevocably authorized and directed to disburse the
$30,000,000 purchase price of the Notes by wire transfer of immediately
available funds to [bank name and address], ABA #  
                                     , for credit to
the account of              
                   
     , account no.                                        .

     Disbursement when so made shall constitute payment in full of the purchase
price of the Notes and shall be without liability of any kind whatsoever to
you.

	 	 	 	Very truly yours,
	 
	 	 	 	CHS INC.
	 
	 	 	By:	 
	 	 	 	

	 	 	Title: 	  
	 	 	 	

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EXHIBIT C

[FORM OF REQUEST FOR PURCHASE]

CHS INC.

     Reference is made to the Note Purchase and Private Shelf
Agreement (the “Agreement”), dated as of April 13, 2004, between
CHS Inc. (the “Company”), on the one hand, and Prudential
Investment Management, Inc. (“Prudential”), the Initial Purchasers
named in the Purchaser Schedule attached thereto and each
Prudential Affiliate which becomes party thereto, on the other
hand. Capitalized terms used and not otherwise defined herein
shall have the respective meanings specified in the Agreement.

     Pursuant to Paragraph 2B(3) of the Agreement, the Company
hereby makes the following Request for Purchase:

	1.	 	Aggregate principal amount of

the Notes covered hereby

the “Notes”)
          $                    1

	2.	 	Individual specifications of the Notes:

	 	 	 	 	 	 	 
	Principal

Amount
	 	Final

Maturity

Date
	 	Principal

Prepayment

Dates and

Amounts
	 	Interest

Payment

Period
	
 
	 	
 
	 	
 
	 	
 

	3.	 	Use of proceeds of the Notes:

	4.	 	Proposed day for the closing of the purchase and sale of the
Notes:

	5.	 	The purchase price of the Notes is to be transferred to:

	 	 	 
	Name and Address

and ABA Routing

Number of Bank
	 	Number of

Account
	
 
	 	
 

	 	 	1 Minimum principal amount of $10,000,000.

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	6.	 	The Company certifies (a) that the representations and
warranties contained in paragraph 8 of the Agreement are true on and
as of the date of this Request for Purchase except to the extent of
changes caused by the transactions contemplated in the Agreement and
(b) that there exists on the date of this Request for Purchase no
Event of Default or Default.
	 
	7.	 	The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.

	 	 	 	 	 
	Dated:

	 	CHS INC.
	 
	 	 	 	 
	

	 	By:  	 	 
	

	 	 	

	

	 	Authorized Officer

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EXHIBIT D

[FORM OF CONFIRMATION OF ACCEPTANCE]

CHS INC.

     Reference is made to the Note Purchase and Private Shelf Agreement (the
“Agreement”), dated as of April 13, 2004 between CHS Inc. (the “Company”), on
the one hand, and Prudential Investment Management, Inc. (“Prudential”), the
Initial Purchasers named in the Purchaser Schedule attached thereto and each
Prudential Affiliate which becomes party thereto, on the other hand. All terms
used herein that are defined in the Agreement have the respective meanings
specified in the Agreement.

     The Prudential Affiliate which is named below as a Purchaser of Notes
hereby confines the representations as to such Notes set forth in paragraph 9
of the Agreement, and agrees to be bound by the provisions of paragraphs 2B(5)
and 2B(7) of the Agreement relating to the purchase and sale of such Notes and
by the provisions of the penultimate sentence of paragraph 11A of the
Agreement.

     Pursuant to paragraph 2B(5) of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:

	I.	 	Accepted Notes: Aggregate principal
amount $_______________

	 	 	 	 	 	 	 
	 

	 	(A)
	 	(a)
	 	Name of Purchaser:
	 
	 	 	 	 	 	 
	

	 	 	 	(b)
	 	Principal amount:
	 
	 	 	 	 	 	 
	

	 	 	 	(c)
	 	Final maturity date:
	 
	 	 	 	 	 	 
	

	 	 	 	(d)
	 	Principal prepayment dates and amounts:
	 
	 	 	 	 	 	 
	

	 	 	 	(e)
	 	Interest rate:
	 
	 	 	 	 	 	 
	

	 	 	 	(f)
	 	Interest payment period:
	 
	 	 	 	 	 	 
	

	 	 	 	(g)
	 	Payment and notice instructions: As set forth on attached Purchaser Schedule
	 
	 	 	 	 	 	 
	

	 	(B)
	 	(a)
	 	Name of Purchaser:
	 
	 	 	 	 	 	 
	

	 	 	 	(b)
	 	Principal amount:
	 
	 	 	 	 	 	 
	

	 	 	 	(c)
	 	Final maturity date:
	 
	 	 	 	 	 	 
	

	 	 	 	(d)
	 	Principal prepayment dates and amounts:
	 
	 	 	 	 	 	 
	

	 	 	 	(e)
	 	Interest rate:
	 
	 	 	 	 	 	 
	

	 	 	 	(f)
	 	Interest payment period:
	 
	 	 	 	 	 	 
	

	 	 	 	(g)
	 	Payment and notice instructions: As set forth on attached Purchaser Schedule
	 
	 	 	 	 	 	 
	 	 	[(C),
(D)        same information as above.]

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	II.	 	Issuance Fee:
	 
	III.	 	Closing Day:

	 	 	 	 	 
	Dated:

	 	CHS INC.
	 	 
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	Title:

	 	 
	 
	 	 	 	 
	

	 	[PRUDENTIAL AFFILIATE]	 	 
	 
	 	 	 	 
	

	 	By:
	 	 
	

	 	Vice President	 	 

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EXHIBIT E-1

[FORM OF OPINION OF COMPANY’S COUNSEL]

[Letterhead of General Counsel]

                   , 2004

The Prudential Insurance Company of America

[Pruco Life Insurance Company]

[U.S. Private Placement Fund]

c/o Prudential Capital Group

Two Prudential Plaza

Suite 5600

Chicago, Illinois 60601

Ladies and Gentlemen:

     I am general counsel of CHS Inc., a nonstock agricultural cooperative
corporation formerly known as Cenex Harvest States Cooperatives (the
“Company”), in connection with the Note Purchase and Private Shelf Agreement,
dated as April 13, 2004 (the “Agreement”) between the Company, on one hand, and
Prudential Investment Management, Inc., the Initial Purchasers named in the
Purchaser Schedule attached thereto and each Prudential Affiliate which becomes
a party thereto, on the other hand, pursuant to which the Company has issued to
you today its 4.08% Senior Series F Notes in the aggregate principal amount of
$15,000,000 and 4.39% Senior Series G Notes in the aggregate principal amount
of $15,000,000 (collectively, the “Notes”). Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3A(iii) of the Agreement and with the understanding that you
are purchasing the Notes in reliance on the opinions expressed herein.

     In this connection, I have examined such certificates of public officials,
certificates of officers of the Company and copies certified to my satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as I have deemed relevant and necessary as a
basis for my opinion hereinafter set forth. I have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph
3 below, I have also relied upon the representation made by you in paragraph 9A
of the Agreement. For purposes of this opinion, I have assumed that you have
all requisite power and authority and have taken all necessary action to
execute and deliver the Agreement and to effect the transactions contemplated
thereby.

     Based on the foregoing, it is my opinion that:

     1. The Company is a nonstock agricultural cooperative corporation duly
organized and validly existing and in good standing under the laws of the State
of Minnesota. The Company has the corporate power to carry on its business as
now being conducted.

E-1-1

Table of Contents

     2. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

     3. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Agreement to
register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.

     4. The extension, arranging and obtaining of the credit represented by the
Notes do not result in any violation of regulation U, T or X of the Board of
Governors of the Federal Reserve System.

     5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company pursuant to, or
require any authorization, consent, approval, exemption, or other action by or
notice to or filing with any court, administrative or governmental body or
other Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities) pursuant
to, the Articles of Incorporation or by-laws of the Company, any applicable law
(including any securities or Blue Sky law), statute, rule or regulation or to
our knowledge any agreement (including, without limitation, any agreement
listed in Schedule 8G to the Agreement), instrument, order, judgment or decree
to which the Company is a party or otherwise subject.

     I am a member of the Bar of the State of Minnesota, and the opinions
expressed herein are based upon and are limited exclusively to the laws of that
state and the Federal laws of the United States of America. For purposes of
the opinion given in paragraph 2, I have assumed with your permission that the
laws of the State of Illinois are the same in all material respects as the laws
of the State of Minnesota. The foregoing opinion is for the benefit of and may
be relied upon only by you and Transferees permitted by the Agreement.

Very truly yours,

E-1-2

Table of Contents

EXHIBIT E-2

[FORM OF OPINION OF COMPANY’S COUNSEL]

[Letterhead of General Counsel]

[Date of Closing]

[List Purchasers]

c/o Prudential Capital Group

Two Prudential Plaza

Suite 5600

Chicago, Illinois 60601

Ladies and Gentlemen:

     I am the general counsel of CHS Inc., a nonstock agricultural cooperative
corporation organized under the laws of Minnesota formerly known as Cenex
Harvest States Cooperatives (the “Company”), in connection with the Note
Purchase and Private Shelf Agreement, dated as April 13, 2004 (the “Agreement”)
between the Company, on the one hand, and Prudential Investment Management,
Inc., the Initial Purchasers named in the Purchaser Schedule attached thereto
and each Prudential Affiliate which becomes a party thereto, on the other hand,
pursuant to which the Company has issued to you today Senior Series
             Notes
of the Company in the aggregate principal amount of
$             (the “Notes”).
Capitalized terms used and not otherwise defined herein shall have the meanings
provided in the Agreement. This letter is being delivered to you in
satisfaction of the condition set forth in paragraph 3A(iii) of the Agreement
and with the understanding that you are purchasing the Notes in reliance on the
opinions expressed herein.

     In this connection, I have examined such certificates of public officials,
certificates of officers of the Company and copies certified to my satisfaction
of corporate documents and records of the Company and of other papers, and have
made such other investigations, as I have deemed relevant and necessary as a
basis for my opinion hereinafter set forth. I have relied upon such
certificates of public officials and of officers of the Company with respect to
the accuracy of material factual matters contained therein which were not
independently established. With respect to the opinion expressed in paragraph
3 below, I have also relied upon the representation made by you in paragraph 9A
of the Agreement. For purposes of this opinion, I have assumed that you have
all requisite power and authority and have taken all necessary action to
execute and deliver the Agreement and to effect the transactions contemplated
thereby.

     Based on the foregoing, it is my opinion that:

E-2-1

Table of Contents

     1. The Company is a nonstock agricultural cooperative corporation duly
organized and validly existing and in good standing under the laws of the State
of Minnesota. The Company has the corporate power to carry on its business as
now being conducted.

     2. The Agreement and the Notes have been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Company, and are valid obligations of the Company, legally binding upon and
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

     3. It is not necessary in connection with the offering, issuance, sale and
delivery of the Notes under the circumstances contemplated by the Agreement to
register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.

     4. The extension, arranging and obtaining of the credit represented by the
Notes do not result in any violation of regulation U, T or X of the Board of
Governors of the Federal Reserve System.

     5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company pursuant to, or
require any authorization, consent, approval, exemption, or other action by or
notice to or filing with any court, administrative or governmental body or
other Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities) pursuant
to, the Articles of Incorporation or by-laws of the Company, any applicable law
(including any securities or Blue Sky law), statute, rule or regulation or to
my knowledge any agreement (including, without limitation, any agreement listed
in Schedule 8G to the Agreement), instrument, order, judgment or decree to
which the Company is a party or otherwise subject.

     I am a member of the Bar of the State of Minnesota, and the opinions
expressed herein are based upon and are limited exclusively to the laws of that
state and the Federal laws of the United States of America. For purposes of
the opinion given in paragraph 2, I have assumed with your permission that the
laws of the State of Illinois are the same in all material respects as the laws
of the State of Minnesota. The foregoing opinion is for the benefit of and may
be relied upon only by you and Transferees permitted by the Agreement.

Very truly yours,

E-2-2

Table of Contents

SCHEDULE 6D

LIST OF EXISTING LIENS

 

Table of Contents

SCHEDULE 8G

AGREEMENTS RESTRICTING DEBT

     The following loan agreements restrict the Company from incurring
additional indebtedness. However, the indebtedness insured under the Note
Purchase and Private Shelf Agreement is permitted to be incurred by the Company
pursuant to exceptions as noted:

	 	1.	 	Note Agreement to provide for $225,000,000 6.81%
Series A Senior Notes due June 19, 2013 dated June 19, 1998.
Exception provided by section 6B(iv).
	 
	 	2.	 	$200,000,000 Term Loan Agreement dated June 1,
1998. Exception provided by section 10.1(g).
	 
	 	3.	 	Note Purchase and Private Shelf Agreement for
$25,000,000 7.90% Series B Senior Notes due January 10, 2001
and $55,000,000 Private Shelf Facility dated as of January 10,
2001. Exceptions provided by sections 6B(2) and 6B(3).
	 
	 	4.	 	Note Purchase Agreement dated as of October 18,
2002 for $115,000,000 4.96% Series D Notes due October 18,
2012 and $60,000,000 5.60% Series E Senior Notes due October
18, 2017. Exceptions provided by sections 10.3 and 10.4.
	 
	 	5.	 	$600,000,000 364-day Revolving Loan and
$100,000,000 3-year Revolving Loan Agreement dated May 21,
2003. Exception provided by section 13.1(g).exv4w2

 

Exhibit 4.2

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITORY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OF TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

CAMDEN PROPERTY TRUST

FORM OF

4.70% NOTE DUE 2009

	 	 	 
	REGISTERED

No.: R-1

	 	PRINCIPAL AMOUNT

$100,000,000

CUSIP No.: 133131 AM 4

     CAMDEN PROPERTY TRUST, a real estate investment trust organized and
existing under the laws of the State of Texas (hereinafter called the
“Company,” which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, upon presentation, the principal sum of One Hundred
Million Dollars ($100,000,000) on July 15, 2009 at the office or agency of the
Company referred to below, and to pay interest thereon from July 12, 2004, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on January 15 and July 15 in each
year (each, an “Interest Payment Date”), commencing January 15, 2005 at the
rate of 4.70% per annum, until the entire principal hereof is paid or duly
provided for. The interest so payable, and punctually paid or duly provided
for on any Interest Payment Date will, as provided for in the Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest which shall be January 1 or July 1 (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may either
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not more than 15
days and not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in the Indenture.

 

 

     Payment of the principal of, or Make-Whole Amount, if any, and interest
on, the Securities will be made to The Depository Trust Company or its nominee
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
(i) check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) by wire transfer of funds to an
account of the Person entitled thereto maintained within the United States.

     Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE.

     Unless the Certificate of Authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

	 	 	 	 	 
	 	 	CAMDEN PROPERTY TRUST
	 
	 	 	 	 
	Dated: July 12, 2004

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Dennis M. Steen

Senior Vice President-Finance,

Chief Financial Officer and Secretary

Attest:

	 	 	 	 	 
	By:

	 	 	 	 
	

	 	
 	 	 
	

	 	Terry S. McKinney	 	 
	

	 	Assistant Secretary	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION:

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

SunTrust Bank,

as Trustee

	 	 	 	 	 
	By:

	 	 	 	Dated: July 12, 2004
	

	 	
 	 	 
	

	 	Authorized Officer	 	 

2

 

Reverse of Note

CAMDEN PROPERTY TRUST

4.70% NOTE DUE 2009

     This Security is one of a duly authorized issue of securities of the
Company (herein called the “Securities”), issued and to be issued in one or
more series under an Indenture, dated as of February 11, 2003, (herein called
the “Indenture”), between the Company and SunTrust Bank, a banking corporation
organized and existing under the laws of the State of Georgia, as Trustee
(herein called the “Trustee,” which term includes any successor trustee under
the Indenture with respect to the series of which this Security is a part), to
which Indenture and all board resolutions and indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the first page hereof.

     “Make-Whole Amount” means, in connection with any optional redemption or
accelerated payment of any Security, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest
(exclusive of interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of such dollar if such
redemption or accelerated payment had not been made, determined by discounting,
on a semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had not been made, over (ii) the aggregate
principal amount of the Securities being redeemed or paid.

     “Reinvestment Rate” means .20% (twenty one-hundredths of one percent) plus
the arithmetic mean of the yields under the respective headings “This Week” and
“Last Week” published in the Statistical Release under the caption “Treasury
Constant Maturities” for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such
maturity, yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated or extrapolated from
such yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month. For purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of determination of
the Make-Whole Amount shall be used.

     “Statistical Release” means the statistical release designated “H.15(519)”
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities or, if such statistical release is
not published at the time of any determination under the Indenture, then such
other reasonably comparable index which shall be designated by the Company.

     The covenants set forth in Section 10.12 of the Indenture shall be fully
applicable to this Security.

     The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.

     If any Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of, and the Make-Whole Amount, if any,
on, the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.

     As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for

3

 

any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of acontinuing Event of Default with respect to the Securities of this series,
the Holders of not less than 25% in principal amount of the Securities of this
series at the time Outstanding shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default as Trustee,
offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities of
this series at the time Outstanding a direction inconsistent with such request,
and the Trustee shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof (and premium or Make-Whole
Amount, if any) or any interest on and any Additional Amounts in respect
thereof on or after the respective due dates expressed herein.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of not less than a majority in principal amount of
the Securities of each series at the time Outstanding affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, Make-Whole Amount, if any,
on, and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of,
Make-Whole Amount, if any, on, and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

     No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Security, or because of any indebtedness evidenced
thereby, shall be had against any promoter, as such or, against any past,
present or future shareholder, officer, trust manager or director, as such, of
the Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.

4

 

     All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

     THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused “CUSIP” numbers to
be printed on the Securities of this series as convenience to the Holders of
such Securities. No representation is made as to the correctness or accuracy
of such CUSIP numbers as printed on the Securities, and reliance may be placed
only on the other identification numbers printed hereon.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

5

 

ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

	 	 	 	 	 	 	 
	TEN COMM

	 	—
	 	as tenants in common
	 	UNIF GIFT/TRANSFER MIN ACT —

	TEN ENT

	 	—
	 	as tenants by the entireties
	 	               Custodian                
	JT TEN

	 	—
	 	as joint tenants with right of
survivorship and not as tenants
in common
	 	(Cust)                       (Minor)

Under Uniform Gifts/Transfers to Minors Act

            
	

	 	 	 	 	 	(State)

Additional abbreviations may also be used though not in the above list.

Social Security or taxpayer I.D. or other identifying number of assignee:

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(name and address of assignee)

	the within Note and all rights thereunder, hereby irrevocably constituting and
appointing	 	,
	attorney to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.	 	 

Dated:

6

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