Document:

MCHP 06.30.2011 EX 10.1

EXHIBIT 10.1

MICROCHIP TECHNOLOGY INCORPORATED
2004 EQUITY INCENTIVE PLAN

As Amended and Restated by the Board on May 10, 2011

1.Purposes of the Plan.  The purposes of this 2004 Equity Incentive Plan are:

		
	▪
	to attract and retain the best available personnel,

		
	▪
	to provide additional incentive to Service Providers, and

		
	▪
	to promote the success of the Company's business.

Awards granted under the Plan may be Nonstatutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Shares, Performance Units or Deferred Stock Units, as determined by the Administrator at the time of grant.

2.Definitions.  As used herein, the following definitions shall apply:

(a)“Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan.

(b)“Applicable Laws” means the legal requirements relating to the administration of equity compensation plans under state and federal corporate and securities laws and the Code. 

(c)“Award” means, individually or collectively, a grant under the Plan of Options, Restricted Stock, Stock Appreciation Rights, Performance Shares, Performance Units or Deferred Stock Units.

(d)“Award Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan.  The Award Agreement is subject to the terms and conditions of the Plan.

(e)“Awarded Stock” means the Common Stock subject to an Award.

(f)“Board” means the Board of Directors of the Company. 

(g)“Change of Control” means the occurrence of any of the following events, in one or a series of related transactions: 

(1)any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than the Company, a subsidiary of the Company or a Company employee benefit plan, including any trustee of such plan acting as trustee, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities entitled to vote generally in the election of directors; or

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(2)a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or 

(3)the sale or disposition by the Company of all or substantially all of the Company's assets; or

(4)a change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors who either (A) are Directors as of the date this Plan is approved by the Board, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors and whose election or nomination was not in connection with any transaction described in (1) or (2) above or in connection with an actual or threatened proxy contest relating to the election of directors of the Company.

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

(i)“Committee” means a committee appointed by the Board in accordance with Section 4 of the Plan.

(j)“Common Stock” means the common stock of the Company.

(k)“Company” means Microchip Technology Incorporated.

(l)“Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services and who is compensated for such services.  The term Consultant shall not include Directors who are compensated by the Company only for their service as Directors.

(m)“Deferred Stock Unit” means a deferred stock unit Award granted to a Participant pursuant to Section 13.
 
(n)“Director” means a member of the Board.

(o)“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 

(p)“Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company.  A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor.  Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute “employment” by the Company.

(q)“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(r)“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

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(1)If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market of the National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”) System, the Fair Market Value of a Share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such system or exchange (or the exchange with the greatest volume of trading in Common Stock) on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(2)If the Common Stock is quoted on the Nasdaq System (but not on the Nasdaq National Market thereof) or is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(3)In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator.

(s)“Fiscal Year” means a fiscal year of the Company. 

(t)“Fiscal Quarter” means a fiscal quarter of the Company.

(u)“Non-Employee Director” means a member of the Board who is not an Employee.

(v)“Nonstatutory Stock Option” means an Option not intended to qualify as an incentive stock option under Section 422 of the Code and regulations promulgated thereunder.

(w)“Notice of Grant” means a written or electronic notice evidencing certain terms and conditions of an individual Award.  The Notice of Grant is part of the Option Agreement.

(x)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(y)“Option” means a stock option granted pursuant to the Plan.

(z)“Option Agreement” means a written or electronic agreement between the Company and a Participant evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms and conditions of the Plan.

(aa)“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(bb)    “Participant” means the holder of an outstanding Award granted under the Plan.

(cc)    “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award.  As determined by the Administrator, the performance measures for any performance period will be any one or more of the following objective performance criteria, applied to either the Company as a whole or, except with respect to stockholder return metrics, to a region, business unit, affiliate or business segment or specific product or products, and measured either on an absolute basis or relative to a pre-established target, to a previous period's results or to a designated comparison group, and, with respect to financial metrics, which may be determined in accordance with United States Generally Accepted Accounting Principles ("GAAP"), in accordance with accounting 

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principles established by the International Accounting Standards Board ("IASB Principles") or which may be adjusted when established to exclude any items otherwise includable under GAAP or under IASB Principles or any other objectively determinable items including, without limitation, (a) any extraordinary non-recurring items, (b) the effect of any merger, acquisition, or other business combination or divestiture, or (c) the effect of any changes in accounting principles affecting the Company's or a business units', region's, affiliate's or business segment's reported results: (i) cash flow (including operating cash flow or free cash flow), (ii) cash position, (iii) revenue (on an absolute basis or adjusted for currency effects), (iv) revenue growth, (v) contribution margin, (vi) gross margin or gross margin as a percentage of revenue, (vii) operating margin or operating margin as a percentage of revenue, (viii) operating expenses or operating expenses as a percentage of revenue, (ix) earnings (which may include earnings before interest and taxes, earnings before taxes and net earnings), (x) earnings per share, (xi) net income, (xii) stock price, (xiii) return on equity, (xiv) total stockholder return, (xv) growth in stockholder value relative to a specified publicly reported index (such as the S&P 500 Index), (xvi) return on capital, (xvii) return on assets or net assets, (xviii) return on investment, (xix) operating profit or net operating profit, (xx) market share (which may include ranking for a specific product line or market share percentage for a given product line), (xxi) contract awards or backlog, (xxii) overhead or other expense reduction, (xxiii) credit rating, (xxiv) objective customer indicators, (xxv) new product invention or innovation, (xxvi) attainment of research and development milestones, (xxvii) improvements in productivity, (xxviii) attainment of objective operating goals, and (xxix) objective employee metrics.  The Performance Goals may differ from Participant to Participant and from Award to Award.

(dd)    “Performance Share” means a performance share Award granted to a Participant pursuant to Section 11.
 
(ee)    “Performance Unit” means a performance unit Award granted to a Participant pursuant to Section 12.

(ff)    “Plan” means this 2004 Equity Incentive Plan. 

(gg)    “Restricted Stock” means Shares granted pursuant to Section 10 of the Plan.

(hh)    “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(ii)    “Section 16(b)” means Section 16(b) of the Exchange Act, as amended.

(jj)    “Service Provider” means an Employee, Consultant or Non-Employee Director.

(kk)    “Share” means a share of the Common Stock, as adjusted in accordance with Section 19 of the Plan. 

(ll)    “Stock Appreciation Right” or “SAR” means an Award granted pursuant to Section 9 of the Plan.

(mm)    “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

3.Stock Subject to the Plan.  Subject to the provisions of Section 19 of the Plan, the maximum aggregate number of Shares which may be issued under the Plan is 20,400,000 Shares comprised of (i) any Shares remaining available for issuance pursuant to the Company's 1993 Stock Option Plan as of the date upon which this Plan is effective, up to a maximum 

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of 7,500,000 Shares, (ii)  any Shares remaining available for issuance pursuant to the Company's 1997 Nonstatutory Stock Option Plan as of the date upon which this Plan is effective, up to a maximum of 7,900,000 Shares, and (iii) any Shares subject to any outstanding options under the Company's 1993 or 1997 Nonstatutory Stock Option Plans that subsequently expire unexercised, up to a maximum of an additional 5,000,000 Shares.  In no event shall more than 30% of the Shares remaining issuable under the Plan as of the effective date and 30% of the Shares subsequently added to the Plan by virtue of outstanding 1993 Stock Option Plan and 1997 Nonstatutory Stock Option Plan options expiring unexercised be issued pursuant to Restricted Stock, Performance Share, Performance Unit or Deferred Stock Unit Awards with a purchase price lower than 100% of the Fair Market Value of the underlying Shares or units on the date of grant; provided, however, that such 30% limitation shall not apply to Restricted Stock Units issued on or after the date of the Company's 2006 annual stockholders' meeting.
The Shares may be authorized, but unissued, or reacquired Common Stock.
If an Award expires or becomes unexercisable without having been exercised in full, or with respect to Restricted Stock, Performance Shares, Performance Units or Deferred Stock Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and SARs, the forfeited or repurchased Shares) which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated).  With respect to SARs, only Shares actually issued pursuant to an SAR shall cease to be available under the Plan; all remaining Shares under SARs shall remain available for future grant or sale under the Plan (unless the Plan has terminated).  However, Shares that have actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the Plan; provided, however, that if Shares of Restricted Stock, Performance Shares, Performance Units or Deferred Stock Units are repurchased by the Company at their original purchase price or are forfeited to the Company, such Shares shall become available for future grant under the Plan.  Shares used to pay the exercise price or purchase price, if applicable, of an Award shall become available for future grant or sale under the Plan.  To the extent an Award under the Plan is paid out in cash rather than stock, such cash payment shall not result in reducing the number of Shares available for issuance under the Plan.

4.Administration of the Plan.

(a)Procedure.

(1)Multiple Administrative Bodies.  The Plan may be administered by different Committees with respect to different groups of Service Providers.

(2)Section 162(m).  To the extent that the Administrator determines it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

(3)Rule 16b-3.  To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

(4)Other Administration.  Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws.

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(b)Powers of the Administrator.  Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

(1)to determine the Fair Market Value of the Common Stock, in accordance with Section 2(u) of the Plan; 

(2)to select the Service Providers to whom Awards may be granted hereunder (other than the automatic grants to Non-Employee Directors provided for in Section 17 of the Plan);

(3)to determine whether and to what extent Awards or any combination thereof, are granted under
 the Plan;
(4)to determine the number of shares of Common Stock or equivalent units to be covered by each Award granted under the Plan; 

(5)to approve forms of agreement for use under the Plan; 

(6)to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted under the Plan.  Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or SARs may be exercised or other Awards vest (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 

(7)to construe and interpret the terms of the Plan and Awards; 

(8)to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;

(9)to modify or amend each Award (subject to Section 21(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options and SARs longer than is otherwise provided for in the Plan;

(10)to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;

(11)to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to be issued upon exercise or vesting of an Award (or distribution of a Deferred Stock Unit) that number of Shares or cash having a Fair Market Value equal to the minimum amount required to be withheld (but no more).  The Fair Market Value of any Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined.  All elections by a Participant to have Shares or cash withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 

(12)to determine the terms and restrictions applicable to Awards; and 

(13)to make all other determinations deemed necessary or advisable for administering the Plan.

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(c)Effect of Administrator's Decision.  The Administrator's decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards.

5.Eligibility.  Restricted Stock, Performance Shares, Performance Units, Stock Appreciation Rights, Deferred Stock Units and Nonstatutory Stock Options may be granted to Service Providers.  Non-Employee Directors shall only receive Awards pursuant to Section 17 of the Plan.

6.Limitations.

(a)Nonstatutory Stock Option.  Each Option shall be designated in the Notice of Grant as a Nonstatutory Stock Option.

(b)No Employment Rights.  Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant's employment with the Company or its Subsidiaries, nor shall they interfere in any way with the Participant's right or the Company's or Subsidiary's right, as the case may be, to terminate such employment at any time, with or without cause or notice.

(c)162(m) Limitations.  The following limitations shall apply to grants of Options and Stock Appreciation Rights to Participants:

(1)No Participant shall be granted, in any Fiscal Year, Options and Stock Appreciation Rights to purchase more than 1,500,000 Shares; provided, however, that such limit shall be 4,000,000 Shares in the Participant's first Fiscal Year of Company service.

(2)The foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 19(a).

7.Term of Plan.  The Plan is effective as of October 1, 2004 (the “Effective Date”).  It shall continue in effect until September 30, 2014, unless sooner terminated under Section 21 of the Plan.

8.Stock Options.

(a)Term.  The term of each Option shall be stated in the Notice of Grant; provided, however, that the term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Notice of Grant.
  
(b)Option Exercise Price.  The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator and shall be no less than 100% of the Fair Market Value per share on the date of grant.

(c)No Repricing.  The exercise price for an Option may not be reduced.  This shall include, without limitation, a repricing of the Option as well as an Option exchange program whereby the Participant agrees to cancel an existing Option in exchange for an Option, SAR or other Award.

(d)Waiting Period and Exercise Dates.  At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised.  In so doing, the Administrator may specify that an Option may not be exercised until the completion of a service period.

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(e)Form of Consideration.  The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment.  Subject to Applicable Laws, such consideration may consist entirely of:  

(1)cash;

(2)check;

(3)other Shares which (A) in the case of Shares acquired upon exercise of an option have been owned by the Participant for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;

(4)delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale proceeds required to pay the exercise price;

(5)any combination of the foregoing methods of payment; or

(6)such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

(f)Exercise of Option.

Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.  Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option shall be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse.  Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the optioned stock, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised.  No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 19 of the Plan.

Exercising an Option in any manner shall decrease the number of Shares thereafter available for sale under the Option, by the number of Shares as to which the Option is exercised. 

(g)Termination of Relationship as a Service Provider.  If a Participant ceases to be a Service Provider, other than upon the Participant's misconduct, death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in  

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no event later than the expiration of the term of such Option as set forth in the Option Agreement).  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Participant's termination.  If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Participant does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(h)Disability.  If a Participant ceases to be a Service Provider as a result of the Participant's Disability, the Participant may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement).  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for six (6) months following the Participant's termination.  If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(i)Death of Participant.  If a Participant dies while a Service Provider, the Option may be exercised following the Participant's death within such period of time as is specified in the Option Agreement (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Option Agreement), by the personal representative of the Participant's estate, provided such representative has been designated prior to Participant's death in a form acceptable to the Administrator.  If no such representative has been designated by the Participant, then such Option may be exercised by the person(s) to whom the Option is transferred pursuant to the Participant's will or in accordance with the laws of descent and distribution.  In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following Participant's death.  If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

9.Stock Appreciation Rights.

(a)Grant of SARs.  Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Administrator, in its sole discretion.  The Administrator shall have complete discretion to determine the number of SARs granted to any Participant.

(b)Exercise Price and Other Terms.  Subject to Section 4(c) of the Plan, the Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, that no SAR may have a term of more than ten (10) years from the date of grant.  The per share exercise price for the Shares or cash to be issued pursuant to exercise of an SAR shall be determined by the Administrator and shall be no less than 100% of the Fair Market Value per share on the date of grant.  The exercise price may not be reduced.  This shall include, without limitation, a repricing of the SAR as well as an SAR exchange program whereby the Participant agrees to cancel an existing SAR in exchange for an Option, SAR or other Award.

(c)Payment of SAR Amount.  Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(1)the difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(2)the number of Shares with respect to which the SAR is exercised.

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(d)Payment Upon Exercise of SAR.  At the discretion of the Administrator, payment for an SAR may be in cash, Shares or a combination thereof.

(e)SAR Agreement.  Each SAR grant shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, shall determine.

(f)Expiration of SARs.  An SAR granted under the Plan shall expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement.

(g)Termination of Relationship as a Service Provider.  If a Participant ceases to be a Service Provider, other than upon the Participant's death or Disability termination, the Participant may exercise his or her SAR within such period of time as is specified in the SAR Agreement to the extent that the SAR is vested on the date of termination (but in no event later than the expiration of the term of such SAR as set forth in the SAR Agreement).  In the absence of a specified time in the SAR Agreement, the SAR shall remain exercisable for three (3) months following the Participant's termination.  If, on the date of termination, the Participant is not vested as to his or her entire SAR, the Shares covered by the unvested portion of the SAR shall revert to the Plan.  If, after termination, the Participant does not exercise his or her SAR within the time specified by the Administrator, the SAR shall terminate, and the Shares covered by such SAR shall revert to the Plan.

(h)Disability.  If a Participant ceases to be a Service Provider as a result of the Participant's Disability, the Participant may exercise his or her SAR within such period of time as is specified in the SAR Agreement to the extent the SAR is vested on the date of termination (but in no event later than the expiration of the term of such SAR as set forth in the SAR Agreement).  In the absence of a specified time in the SAR Agreement, the SAR shall remain exercisable for six (6) months following the Participant's termination.  If, on the date of termination, the Participant is not vested as to his or her entire SAR, the Shares covered by the unvested portion of the SAR shall revert to the Plan.  If, after termination, the Participant does not exercise his or her SAR within the time specified herein, the SAR shall terminate, and the Shares covered by such SAR shall revert to the Plan.

(i)Death of Participant.  If a Participant dies while a Service Provider, the SAR may be exercised following the Participant's death within such period of time as is specified in the SAR Agreement (but in no event may the SAR be exercised later than the expiration of the term of such SAR as set forth in the SAR Agreement), by the personal representative of the Participant's estate, provided such representative has been designated prior to Participant's death in a form acceptable to the Administrator.  If no such representative has been designated by the Participant, then such SAR may be exercised by the person(s) to whom the SAR is transferred pursuant to the Participant's will or in accordance with the laws of descent and distribution.  In the absence of a specified time in the SAR Agreement, the SAR shall remain exercisable for twelve (12) months following Participant's death.  If the SAR is not so exercised within the time specified herein, the SAR shall terminate, and the Shares covered by such SAR shall revert to the Plan.

10.Restricted Stock.

(a)Grant of Restricted Stock.  Subject to the terms and conditions of the Plan, Restricted Stock may be granted to Participants at any time as shall be determined by the Administrator, in its sole discretion.  The Administrator shall have complete discretion to determine (i) the number of Shares subject to a Restricted Stock award granted to any Participant 

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(provided that during any Fiscal Year, no Participant shall be granted more than 300,000 Shares of Restricted Stock); provided, however, that such limit shall be 750,000 Shares in the Participant's first Fiscal Year of Company service, and (ii) the conditions that must be satisfied, which typically will be based principally or solely on continued provision of services but may include a performance-based component, upon which is conditioned the grant or vesting of Restricted Stock.  

(b)Restricted Stock Units.  Restricted Stock may be granted in the form of Restricted Stock or units to acquire Shares.  Each such unit shall be the equivalent of one Share for purposes of determining the number of Shares subject to an Award.  With respect to the units to acquire Shares, until the Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist.

(c)Other Terms.  The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of Restricted Stock granted under the Plan.  Restricted Stock grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the stock is awarded.  The Administrator may require the recipient to sign a Restricted Stock Award agreement as a condition of the award.  Any certificates representing the Shares of stock awarded shall bear such legends as shall be determined by the Administrator.

(d)Restricted Stock Award Agreement.  Each Restricted Stock grant shall be evidenced by an agreement that shall specify the purchase price (if any) and such other terms and conditions as the Administrator, in its sole discretion, shall determine; provided, however, that if the Restricted Stock grant has a purchase price, such purchase price must be paid no more than ten (10) years following the date of grant. 

(e)Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals shall be set by the Administrator on or before the latest date permissible to enable the Restricted Stock to qualify as “performance-based compensation” under Section 162(m) of the Code.  In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals).

11.Performance Shares.

(a)Grant of Performance Shares.  Subject to the terms and conditions of the Plan, Performance Shares may be granted to Participants at any time as shall be determined by the Administrator, in its sole discretion.  The Administrator shall have complete discretion to determine (i) the number of Shares subject to a Performance Share award granted to any Participant (provided that during any Fiscal Year, no Participant shall be granted more than 300,000 units of Performance Shares); provided, however, that such limit shall be 750,000 Shares in the Participant's first Fiscal Year of Company service, and (ii) the conditions that must be satisfied, which typically will be based principally or solely on achievement of performance milestones but may include a service-based component, upon which is conditioned the grant or vesting of Performance Shares.  Performance Shares shall be granted in the form of units to acquire Shares.  Each such unit shall be the equivalent of one Share for purposes of determining the number of Shares subject to an Award.  Until the Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the units to acquire Shares. 

(b)Other Terms.  The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of Performance Shares granted under the Plan.  Performance Share grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the stock is awarded, which may

11

include such performance-based milestones as are determined appropriate by the Administrator.  The Administrator may require the recipient to sign a Performance Shares agreement as a condition of the award.  Any certificates representing the Shares of stock awarded shall bear such legends as shall be determined by the Administrator.

(c)Performance Share Award Agreement.  Each Performance Share grant shall be evidenced by an agreement that shall specify such other terms and conditions as the Administrator, in its sole discretion, shall determine. 

(d)Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Performance Shares as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals shall be set by the Administrator on or before the latest date permissible to enable the Performance Shares to qualify as “performance-based compensation” under Section 162(m) of the Code.  In granting Performance Shares which are intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Performance Shares under Section 162(m) of the Code (e.g., in determining the Performance Goals).

12.Performance Units.

(a)Grant of Performance Units.  Performance Units are similar to Performance Shares, except that they shall be settled in a cash equivalent to the Fair Market Value of the underlying Shares, determined as of the vesting date.  Subject to the terms and conditions of the Plan, Performance Units may be granted to Participants at any time and from time to time as shall be determined by the Administrator, in its sole discretion.  The Administrator shall have complete discretion to determine the conditions that must be satisfied, which typically will be based principally or solely on achievement of performance milestones but may include a service-based component, upon which is conditioned the grant or vesting of Performance Units.  Performance Units shall be granted in the form of units to acquire Shares.  Each such unit shall be the cash equivalent of one Share of Common Stock.  No right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Performance Units or the cash payable thereunder.

(b)Number of Performance Units.  The Administrator will have complete discretion in determining the number of Performance Units granted to any Participant, provided that during any Fiscal Year, no Participant shall receive Performance Units having an initial value greater than $1,500,000, provided, however, that such limit shall be $4,000,000 in the Participant's first Fiscal Year of Company service.

(c)Other Terms.  The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of Performance Units granted under the Plan.  Performance Unit grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the stock is awarded, which may include such performance-based milestones as are determined appropriate by the Administrator.  The Administrator may require the recipient to sign a Performance Unit agreement as a condition of the award.  Any certificates representing the Shares awarded shall bear such legends as shall be determined by the Administrator.

(d)Performance Unit Award Agreement.  Each Performance Unit grant shall be evidenced by an agreement that shall specify such terms and conditions as the Administrator, in its sole discretion, shall determine.

12

(e)Section 162(m) Performance Restrictions.  For purposes of qualifying grants of Performance Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals.  The Performance Goals shall be set by the Administrator on or before the latest date permissible to enable the Performance Units to qualify as “performance-based compensation” under Section 162(m) of the Code.  In granting Performance Units which are intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Performance Units under Section 162(m) of the Code (e.g., in determining the Performance Goals).

13.Deferred Stock Units.

(a)Description.  Deferred Stock Units shall consist of a Restricted Stock, Performance Share or Performance Unit Award that the Administrator, in its sole discretion permits to be paid out in installments or on a deferred basis, in accordance with rules and procedures established by the Administrator.  Deferred Stock Units shall remain subject to the claims of the Company's general creditors until distributed to the Participant.

(b)162(m) Limits.  Deferred Stock Units shall be subject to the annual 162(m) limits applicable to the underlying Restricted Stock, Performance Share or Performance Unit Award. 

14.Death of Participant.  In the event that a Participant dies while a Service Provider, then 100% of his or her Awards shall immediately vest.

15.Leaves of Absence.  Unless the Administrator provides otherwise or as otherwise required by Applicable Laws, vesting of Awards granted hereunder shall cease commencing on the first day of any unpaid leave of absence and shall only recommence upon return to active service.

16.Misconduct.  Should (i) the Participant's service be terminated for misconduct (including, but not limited to, any act of dishonesty, willful misconduct, fraud or embezzlement), or (ii) the Participant makes any unauthorized use or disclosure of confidential information or trade secrets of the Company or any Parent or Subsidiary, then in any such event all outstanding Awards held by the Participant under the Plan shall terminate immediately and cease to be outstanding, including as to both vested and unvested Awards.

17.Non-Employee Director Options.

(a)Initial Grants.  Each Non-Employee Director who first becomes a Non-Employee Director on or after May 5, 2010 (excluding any Non-Employee Director who previously served on the Board), shall be automatically granted  that number of Restricted Stock Units equal to $160,000 divided by the Fair Market Value, rounded down to the nearest whole Share (the “Initial RSU Grant”), as of the date that the individual first is appointed or elected as a Non-Employee Director.  The Initial RSU Grant will vest in equal 25% annual installments on each of the four anniversaries of the tenth business day of the second month of the Company's fiscal quarter in which the grant is made.  All vesting of the Initial RSU Grant is contingent upon the Non-Employee Director maintaining continued status as a Non-Employee Director through the applicable vesting date.

(b)Annual Grants.  On the date of the Company's annual stockholders' meeting, each Non-Employee Director who has served as a Non-Employee Director for at least three months on that date shall be automatically granted that number of Restricted Stock Units equal to $84,000 divided by the Fair Market Value, rounded down to the nearest whole Share (the “Annual RSU Grant”), provided that such Non-Employee Director has been elected by the stockholders to serve as a member of the Board at that annual meeting.  The Annual RSU Grant will vest in equal 50% annual installments on each of the

13

two anniversaries of the tenth day of the second month of the Company's fiscal quarter in which the grant is made.  All vesting of the Annual RSU Grant is contingent upon the Non-Employee Director maintaining continued status as a Non-Employee Director through the applicable vesting date.

(c)One-Time Grant.  On the date of the Company's 2009 stockholders' meeting, each Non-Employee Director who has served as a Non-Employee Director for at least five years on that date shall be automatically granted a one-time grant of that number of Restricted Stock Units equal to $100,000 divided by the Fair Market Value, rounded down to the nearest whole Share, provided that such Non-Employee Director has been elected by the stockholders to serve as a member of the Board at that annual meeting.  The Restricted Stock Units subject to this grant will vest in equal 25% annual installments on each of the four anniversaries of the first business day of the second month of the Company's fiscal quarter in which the grant is made.  Vesting of the one-time grant is contingent upon the Non-Employee Director maintaining continued status as a Non-Employee Director through the applicable vesting date.

18.Non-Transferability of Awards.  Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the recipient, only by the recipient.  If the Administrator makes an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate.  

		
	19.
	Adjustments Upon Changes in Capitalization, Dissolution or Liquidation or Change of Control.

(a)Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Award, the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award and the 162(m) fiscal year share issuance limits under Sections 6(c), 10(a) and 11(a) shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that any such change in capitalization shall not affect the number of shares awarded under the automatic grants to Non-Employee Directors described in Sections 17(a) and (b), and provided that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. 

(b)Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction.  The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Option or SAR until ten (10) days prior to such transaction as to all of the Awarded Stock covered thereby, including Shares as to which the Award would not otherwise be exercisable.  In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse 100%, and that any Award vesting shall accelerate 100%, provided the proposed dissolution

14

or liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously exercised (with respect to Options and SARs) or vested (with respect to other Awards), an Award will terminate immediately prior to the consummation of such proposed action.

(c)Change of Control.

(1)Stock Options and SARs.  In the event of a Change of Control, each outstanding Option and SAR shall be assumed or an equivalent option or SAR substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Option or SAR, the Participant shall fully vest in and have the right to exercise the Option or SAR as to all of the Awarded Stock, including Shares as to which it would not otherwise be vested or exercisable.  If an Option or SAR becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change of Control, the Administrator shall notify the Participant in writing or electronically that the Option or SAR shall be fully vested and exercisable for a period of thirty (30) days from the date of such notice, and the Option or SAR shall terminate upon the expiration of such period.  For the purposes of this paragraph, the Option or SAR shall be considered assumed if, following the Change of Control, the option or stock appreciation right confers the right to purchase or receive, for each Share of Awarded Stock subject to the Option or SAR immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or SAR, for each Share of Awarded Stock subject to the Option or SAR, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change of Control.

(2)Restricted Stock, Performance Shares, Performance Units and Deferred Stock Units.  In the event of a Change of Control, each outstanding Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit award shall be assumed or an equivalent Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the Restricted Stock, Performance Share, Performance Unit or Deferred Stock Unit award, the Participant shall fully vest in the Restricted Stock, Performance Share, Performance Unit or Deferred Stock Unit including as to Shares (or with respect to Performance Units, the cash equivalent thereof) which would not otherwise be vested.  For the purposes of this paragraph, a Restricted Stock, Performance Share, Performance Unit and Deferred Stock Unit award shall be considered assumed if, following the Change of Control, the award confers the right to purchase or receive, for each Share (or with respect to Performance Units, the cash equivalent thereof) subject to the Award immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received, for each Share and each unit/right to acquire a Share subject to the Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change of Control.

20.Date of Grant.  The date of grant of an Award shall be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator.  Notice of the determination shall be provided to each Participant within a reasonable time after the date of such grant.

15

21.Amendment and Termination of the Plan.

(a)Amendment and Termination.  The Board may at any time amend, alter, suspend or terminate the Plan.  

(b)Stockholder Approval.  The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Section 422 of the Code (or any successor rule or statute or other applicable law, rule or regulation, including the requirements of any exchange or quotation system on which the Common Stock is listed or quoted).  Such stockholder approval, if required, shall be obtained in such a manner and to such a degree as is required by the applicable law, rule or regulation.

(c)Effect of Amendment or Termination.  No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.

22.Conditions Upon Issuance of Shares.

(a)Legal Compliance.  Shares shall not be issued pursuant to the exercise of an Award unless the exercise of the Award or the issuance and delivery of such Shares (or with respect to Performance Units, the cash equivalent thereof) shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

(b)Investment Representations.  As a condition to the exercise or receipt of an Award, the Company may require the person exercising or receiving such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

23.Liability of Company.

(a)Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

(b)Grants Exceeding Allotted Shares.  If the Awarded Stock covered by an Award exceeds, as of the date of grant, the number of Shares which may be issued under the Plan without additional stockholder approval, such Award shall be void with respect to such excess Awarded Stock, unless stockholder approval of an amendment sufficiently increasing the number of Shares subject to the Plan is timely obtained in accordance with Section 21(b) of the Plan.

24.Reservation of Shares.  The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

16exv99

EXECUTION VERSION

 

 

U.S. $100,000,000

CREDIT AGREEMENT

dated as of June 13, 2011

among

PICO Northstar Hallock, LLC, as the Borrower,

PICO Northstar, LLC, as the Parent Guarantor

VARIOUS LENDERS,

ING CAPITAL LLC,

as Agent for the Lenders,

and

ING CAPITAL LLC,

as Sole Lead Arranger and Bookrunner

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 

	ARTICLE 1 DEFINITIONS
	 	 	1	 
	Section 1.1 Defined Terms
	 	 	1	 
	Section 1.2 Construction and Use of Defined Terms
	 	 	43	 
	Section 1.3 Cross-References
	 	 	43	 
	Section 1.4 Accounting and Financial Determinations
	 	 	43	 
	 
	 	 	 	 
	ARTICLE 2 COMMITMENTS
	 	 	43	 
	Section 2.1 Commitments
	 	 	43	 
	Section 2.1.1 Term Loan Facility Commitments
	 	 	43	 
	Section 2.1.2 Working Capital Facility Commitments
	 	 	43	 
	Section 2.1.3 Additional Term Loan Facility Commitments
	 	 	44	 
	Section 2.1.4 Agent and Lenders Not Required to Extend Credit under Working
Capital Facility Commitments
	 	 	45	 
	Section 2.1.5 Additional Working Capital Facility Commitments
	 	 	45	 
	Section 2.2 Establishment of Reserves
	 	 	47	 
	Section 2.3 Commitment Fee, Unused Commitment Fee, Deferral Surcharge and
Administrative Fees
	 	 	47	 
	Section 2.4 Defaulting Lender
	 	 	48	 
	Section 2.5 Increased Costs; Capital Adequacy
	 	 	48	 
	Section 2.6 Replacement of Lenders
	 	 	49	 
	Section 2.7 Change of Lending Office
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 3 LOANS AND NOTES
	 	 	50	 
	Section 3.1 Borrowing and Issuance Procedure
	 	 	50	 
	Section 3.2 Notes
	 	 	52	 
	Section 3.3 Principal Payments
	 	 	52	 
	Section 3.3.1 Repayments and Prepayments
	 	 	52	 
	Section 3.3.2 Working Capital Facility Loans on Borrower’s Behalf
	 	 	55	 
	Section 3.3.3 Reduction of Commitments
	 	 	55	 
	Section 3.4 Interest
	 	 	56	 
	Section 3.4.1 Loan Rates
	 	 	56	 
	Section 3.4.2 Continuation and Conversion Elections
	 	 	56	 
	Section 3.4.3 Post-Default Rates
	 	 	56	 
	Section 3.4.4 Payment Dates
	 	 	57	 
	Section 3.4.5 Rate Determinations
	 	 	57	 
	Section 3.4.6 Limitation on Types of Loans
	 	 	57	 
	Section 3.4.7 Illegality
	 	 	58	 
	Section 3.4.8 Treatment of Affected Loans
	 	 	58	 
	Section 3.4.9 Compensation
	 	 	58	 
	Section 3.5 Taxes
	 	 	59	 
	Section 3.6 Payments, Interest Rate Computations, Other Computations, Etc.
	 	 	62	 
	Section 3.7 Proration of Payments
	 	 	62	 
	Section 3.8 Setoff
	 	 	63	 

 

	 	 	 	 	 

	Section 3.9 Use of Proceeds and Sources of Payment of Construction Expenses
	 	 	63	 
	Section 3.10 Letters of Credit
	 	 	64	 
	Section 3.10.1 Manner of Issuance
	 	 	64	 
	Section 3.10.2 Terms of Letters of Credit
	 	 	64	 
	Section 3.10.3 Drawings Under Letters of Credit
	 	 	65	 
	Section 3.10.4 Letter of Credit Fees
	 	 	66	 
	Section 3.10.5 Letter of Credit Participations
	 	 	66	 
	Section 3.10.6 Limitation of Liability With Respect to Letters of Credit
	 	 	67	 
	Section 3.11 Income With Respect to Deposit Accounts
	 	 	68	 
	 
	 	 	 	 
	ARTICLE 4 CONDITIONS TO LOANS
	 	 	68	 
	Section 4.1 Closing Date Conditions to All Loans and Letters of Credit
	 	 	68	 
	Section 4.1.1 Loan Documents
	 	 	68	 
	Section 4.1.2 Resolutions, Etc
	 	 	68	 
	Section 4.1.3 Notes
	 	 	69	 
	Section 4.1.4 Major Project Documents
	 	 	69	 
	Section 4.1.5 Necessary Project Approvals
	 	 	69	 
	Section 4.1.6 Technical Evaluation Report
	 	 	69	 
	Section 4.1.7 Insurance Report
	 	 	70	 
	Section 4.1.8 No Contest, Etc
	 	 	70	 
	Section 4.1.9 Certificate as to Completed Conditions, Warranties, No
Default, Etc
	 	 	70	 
	Section 4.1.10 Compliance with Requirements of Law
	 	 	70	 
	Section 4.1.11 Opinions of Counsel
	 	 	71	 
	Section 4.1.12 Closing Fees, Expenses, Etc
	 	 	71	 
	Section 4.1.13 Perfection
	 	 	71	 
	Section 4.1.14 Employment Agreements; Compensation
	 	 	72	 
	Section 4.1.15 Pension and Welfare Liabilities
	 	 	72	 
	Section 4.1.16 Insurance
	 	 	72	 
	Section 4.1.17 Financial Information, Etc
	 	 	72	 
	Section 4.1.18 Required Equity Funding
	 	 	72	 
	Section 4.1.19 Letter to Accountants
	 	 	72	 
	Section 4.1.20 Appointment of Agent for Service of Process
	 	 	72	 
	Section 4.1.21 Agreement to Contribute Capital
	 	 	72	 
	Section 4.1.22 Construction Budget and Construction Schedule
	 	 	72	 
	Section 4.1.23 Other Documents, Certificates, Etc
	 	 	73	 
	Section 4.2 All Loans, Letters of Credit, and Disbursement Instructions
	 	 	73	 
	Section 4.2.1 Compliance with Warranties, No Default, Etc
	 	 	73	 
	Section 4.2.2 Borrowing Request and Letter of Credit Request
	 	 	73	 
	Section 4.2.3 Satisfactory Legal Form
	 	 	74	 
	Section 4.2.4 Margin Regulations
	 	 	74	 
	Section 4.2.5 Adverse Change
	 	 	74	 
	Section 4.3 Conditions to Term Loans
	 	 	74	 
	Section 4.4 Conditions to Additional Term Loans
	 	 	75	 

- ii -

 

	 	 	 	 	 

	Section 4.5 Conditions to Disbursement of Funds in Cost Overrun Account
	 	 	77	 
	 
	 	 	 	 
	ARTICLE 5 REPRESENTATIONS AND WARRANTIES, ETC.
	 	 	77	 
	Section 5.1 Organization, Power, Authority, Etc
	 	 	78	 
	Section 5.2 Due Authorization
	 	 	78	 
	Section 5.3 Validity, Etc
	 	 	78	 
	Section 5.4 Financial Information; Solvency
	 	 	78	 
	Section 5.5 Material Adverse Change
	 	 	79	 
	Section 5.6 Absence of Default
	 	 	79	 
	Section 5.7 Litigation, Legislation, Etc
	 	 	79	 
	Section 5.8 Regulations T, U and X
	 	 	79	 
	Section 5.9 Government Regulation
	 	 	79	 
	Section 5.10 Taxes
	 	 	80	 
	Section 5.11 Pension and Welfare Plans
	 	 	80	 
	Section 5.12 Labor Controversies
	 	 	81	 
	Section 5.13 Ownership of Properties; Collateral
	 	 	82	 
	Section 5.14 Intellectual Property
	 	 	82	 
	Section 5.15 Accuracy of Information
	 	 	82	 
	Section 5.16 Insurance
	 	 	82	 
	Section 5.17 Indebtedness
	 	 	83	 
	Section 5.18 Environmental Matters
	 	 	83	 
	Section 5.19 No Burdensome Agreements
	 	 	83	 
	Section 5.20 Consents
	 	 	83	 
	Section 5.21 Major Project Documents
	 	 	83	 
	Section 5.22 Employment Agreements
	 	 	83	 
	Section 5.23 Condition of Property
	 	 	83	 
	Section 5.24 Subsidiaries
	 	 	84	 
	Section 5.25 Trade Relations
	 	 	84	 
	Section 5.26 Leases
	 	 	84	 
	Section 5.27 Event of Abandonment; Loss
	 	 	84	 
	Section 5.28 Anti-Terrorism Laws
	 	 	84	 
	 
	 	 	 	 
	ARTICLE 6 COVENANTS
	 	 	84	 
	Section 6.1 Affirmative Covenants
	 	 	84	 
	Section 6.1.1 Financial Information, Etc
	 	 	84	 
	Section 6.1.2 Maintenance of Corporate Existence, Etc
	 	 	87	 
	Section 6.1.3 Foreign Qualification
	 	 	87	 
	Section 6.1.4 Payment of Taxes, Etc
	 	 	87	 
	Section 6.1.5 Insurance
	 	 	88	 
	Section 6.1.6 Notice of Default, Litigation, Etc
	 	 	88	 
	Section 6.1.7 Books and Records
	 	 	89	 
	Section 6.1.8 Maintenance of Properties, Etc
	 	 	89	 
	Section 6.1.9 Maintenance of Licenses and Permits
	 	 	90	 
	Section 6.1.10 Employee Plans
	 	 	90	 
	Section 6.1.11 Compliance with Laws
	 	 	90	 
	Section 6.1.12 Real Estate
	 	 	90	 

- iii -

 

	 	 	 	 	 

	Section 6.1.13 Deposit Accounts, Securities Accounts and Commodity Accounts
	 	 	90	 
	Section 6.1.14 Subsidiary Guaranty, Etc.
	 	 	90	 
	Section 6.1.15 Hedge Contract
	 	 	90	 
	Section 6.1.16 Agricultural Inventory
	 	 	91	 
	Section 6.1.17 Major Project Documents
	 	 	92	 
	Section 6.1.18 Project Construction Completion Requirements
	 	 	92	 
	Section 6.1.19 Debt Service Reserve Account
	 	 	92	 
	Section 6.2 Negative Covenants
	 	 	93	 
	Section 6.2.1 Business Activities
	 	 	93	 
	Section 6.2.2 Indebtedness
	 	 	93	 
	Section 6.2.3 Liens
	 	 	93	 
	Section 6.2.4 Financial Covenants
	 	 	95	 
	Section 6.2.5 Capital Expenditures
	 	 	95	 
	Section 6.2.6 Lease Obligations
	 	 	95	 
	Section 6.2.7 Investments
	 	 	96	 
	Section 6.2.8 Restricted Payments, Etc.
	 	 	96	 
	Section 6.2.9 Take or Pay Contracts; Sale/Leasebacks
	 	 	97	 
	Section 6.2.10 Consolidation, Merger, Subsidiaries, Etc.
	 	 	97	 
	Section 6.2.11 Asset Dispositions, Etc.
	 	 	97	 
	Section 6.2.12 Modification of Organizational Documents, Etc.
	 	 	98	 
	Section 6.2.13 Transactions with Affiliates
	 	 	98	 
	Section 6.2.14 Inconsistent Agreements
	 	 	98	 
	Section 6.2.15 Change in Accounting Method
	 	 	98	 
	Section 6.2.16 Change in Fiscal Year End
	 	 	98	 
	Section 6.2.17 Compliance with ERISA
	 	 	98	 
	Section 6.2.18 Amendments to, and Replacement of, Project Documents
	 	 	98	 
	Section 6.2.19 Change Orders
	 	 	99	 
	Section 6.2.20 Anti-Terrorism Laws
	 	 	99	 
	 
	 	 	 	 
	ARTICLE 7 EVENTS OF DEFAULT
	 	 	99	 
	Section 7.1 Events of Default
	 	 	99	 
	Section 7.1.1 Non-Payment of Obligations
	 	 	99	 
	Section 7.1.2 Non-Performance of Certain Covenants
	 	 	99	 
	Section 7.1.3 Defaults Under Other Loan Documents; Non-Performance of Other
Obligations
	 	 	100	 
	Section 7.1.4 Bankruptcy, Insolvency, Etc.
	 	 	100	 
	Section 7.1.5 Breach of Warranty
	 	 	100	 
	Section 7.1.6 Default on Other Indebtedness, Etc.
	 	 	100	 
	Section 7.1.7 Failure of Valid, Perfected Lien; Unenforceability of Loan
Documents
	 	 	101	 
	Section 7.1.8 Employee Plans
	 	 	101	 
	Section 7.1.9 Judgments
	 	 	101	 
	Section 7.1.10 Divestiture
	 	 	102	 
	Section 7.1.11 Loss of Permits, Etc.
	 	 	102	 
	Section 7.1.12 Event of Abandonment
	 	 	102	 

- iv -

 

	 	 	 	 	 

	Section 7.1.13 Material Loss
	 	 	102	 
	Section 7.1.14 Force Majeure
	 	 	102	 
	Section 7.1.15 Default by Third Parties under Project Documents; Insolvency of Project Party; Termination or 

Unenforceability of Project Document

	 	 	102	 
	Section 7.1.16 Default by Borrower under Major Project Documents
	 	 	103	 
	Section 7.1.17 Default by Sponsor under Contribution Documents
	 	 	103	 
	Section 7.1.18 Major Environmental Event
	 	 	103	 
	Section 7.1.19 Project Delay
	 	 	103	 
	Section 7.1.20 Change in Control
	 	 	103	 
	Section 7.1.21 Minimum Tangible Net Worth of Sponsor
	 	 	103	 
	Section 7.2 Action if Bankruptcy
	 	 	103	 
	Section 7.3 Action if Other Event of Default
	 	 	103	 
	Section 7.4 Application of Proceeds Following Default
	 	 	104	 
	 
	 	 	 	 
	ARTICLE 8 THE AGENT
	 	 	105	 
	Section 8.1 Actions
	 	 	105	 
	Section 8.2 Funding Reliance, Etc
	 	 	105	 
	Section 8.3 Exculpation
	 	 	106	 
	Section 8.4 Successor
	 	 	106	 
	Section 8.5 Loans and other Transactions by the Agent and its Affiliates
	 	 	106	 
	Section 8.6 Credit Decisions
	 	 	106	 
	Section 8.7 Copies, Etc
	 	 	107	 
	Section 8.8 Collateral Matters
	 	 	107	 
	 
	 	 	 	 
	ARTICLE 9 MISCELLANEOUS
	 	 	108	 
	Section 9.1 Waivers, Amendments, Etc.
	 	 	108	 
	Section 9.2 Notices
	 	 	112	 
	Section 9.3 Costs and Expenses
	 	 	113	 
	Section 9.4 Indemnification
	 	 	113	 
	Section 9.5 Termination; Survival
	 	 	115	 
	Section 9.6 Severability
	 	 	115	 
	Section 9.7 Headings
	 	 	115	 
	Section 9.8 Counterparts, Effectiveness, Etc
	 	 	115	 
	Section 9.9 Governing Law; Entire Agreement
	 	 	116	 
	Section 9.10 Successors and Assigns
	 	 	117	 
	Section 9.11 Sale and Transfers, Participations, Etc
	 	 	117	 
	Section 9.12 Other Transactions
	 	 	119	 
	Section 9.13 Confidentiality
	 	 	119	 
	Section 9.14 Change in Accounting Principles
	 	 	120	 
	Section 9.15 Immunity
	 	 	120	 
	Section 9.16 Waiver of Jury Trial, Etc
	 	 	120	 
	Section 9.17 Limitation of Liability
	 	 	121	 
	Section 9.18 Usury Savings Clause
	 	 	121	 
	Section 9.19 Notice from Agent
	 	 	122	 
	Section 9.20 Sponsor Non-Recourse
	 	 	122	 

- v -

 

SCHEDULES AND EXHIBITS

	 

	Schedules

	Schedule 1.1(a) Locations of Inventory

	Schedule 1.1(b) Project Construction Completion Requirements

	Schedule 1.1(c) Construction Schedule

	Schedule 1.1(d) Construction Budget

	Schedule 1.1(e) Project Site

	Schedule 1.1(f) Initial Commitments

	Schedule 1.1(g) Standard Hedge Contract Terms and Conditions

	Schedule 3.1 Borrower’s Account

	Schedule 3.6 Agent’s Account

	Schedule 4.1.5 Necessary Project Approvals

	Schedule 4.1.16 Insurance Requirements

	Schedule 5.10 Taxes

	Schedule 5.11 Benefit Plans

	Schedule 5.13 Existing Liens

	Schedule 5.14 Intellectual Property

	Schedule 5.16 Insurance

	Schedule 5.18 Environmental Matters

	Schedule 5.21 Major Project Documents

	Schedule 5.22 Employment Contracts

	Schedule 5.26 Existing Leases

- vi -

 

	 

	Exhibit A-1 Form of Term Note

	Exhibit A-2 Form of Working Capital Facility Note

	Exhibit A-3 Form of Additional Term Note

	Exhibit B-1 Form of Working Capital Facility Borrowing Request

	Exhibit B-2 Form of Term Loan Borrowing Request

	Exhibit B-3 Form of Additional Term Loan Borrowing Request

	Exhibit B-4 Form of Cost Overrun Account Disbursement Request

	Exhibit C Form of Borrowing Base Certificate

	Exhibit D Form of Compliance Certificate

	Exhibit E Form of Continuation/Conversion Notice

	Exhibit F Form of Letter of Credit Request

	Exhibit G Form of Project Party Consent

	Exhibit H Form of Transfer Supplement

- vii -

 

CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of June 13, 2011 (this “Agreement”), among PICO
Northstar Hallock, LLC (the “Borrower”), PICO Northstar, LLC (the “Parent
Guarantor”), the various lenders from time to time party hereto (the “Lenders”), ING
Capital LLC, a Delaware limited liability company (“ING”), as agent for the Secured Parties
(in such capacity, the “Agent”).

W I T N E S S E T H:

RECITALS.

     WHEREAS, the Borrower has requested that the Lenders (i) make loans available to the Borrower
from time to time under a delayed draw term loan facility in an aggregate principal amount of up to
Eighty-Nine Million Five Hundred Thousand and No/100 Dollars ($89,500,000) to finance in part the
construction of the Project, and (ii) extend credit in the form of a working capital facility in an
aggregate principal amount of up to Ten Million Five Hundred Thousand and No/100 Dollars
($10,500,000); and

     WHEREAS, the Lenders are willing, on the terms and conditions hereinafter set forth
(including, without limitation, Articles 2 and 4), to extend such credit facilities
and make extensions of credit pursuant thereto; and

     WHEREAS, the credit facilities will be used in the manner described in Section 3.9
below;

     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

DEFINITIONS

     SECTION 1.1 Defined Terms. The following terms (whether or not underscored) when used
in this Agreement, including its preamble and recitals, shall, except where the context otherwise
requires, have the following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):

     “Accounts” means “accounts”, “instruments”, “contract rights”, “chattel paper”,
“documents”, and “general intangibles” (including “payment intangibles”), as each term is defined
in the UCC, and the proceeds thereof, arising directly or indirectly from the sale or lease of
goods or the providing of services in the ordinary course of business and shall include, without
limitation the Land O’Lakes Accounts.

     “Account Debtor” means any Person who is or may become obligated under, with respect
to, or on account of, an Account.

 

 

     “Additional Equity Contributions” shall mean all contributions of equity made by the
Sponsor from time to time after the Closing Date pursuant to the Agreement to Contribute Capital.

     “Additional Lender” means any bank or other financial institution that agrees to make
an Additional Term Loan or to provide an Additional Working Capital Facility Commitment and that at
the time it agrees to extend such credit is not a Lender hereunder.

     “Additional Term Loan” means a loan made by the Lenders to the Borrower pursuant to
Section 2.1.3.

     “Additional Term Loan Amendment” has the meaning set forth in Section 2.1.3.

     “Additional Term Loan Facility Availability Period” means the period (a) beginning on
April 30, 2011, and (b) ending on the Additional Term Loan Maturity Date.

     “Additional Term Loan Facility Commitment” means any commitment that hereafter may be
obtained from the Additional Term Loan Lenders to make Additional Term Loans pursuant to
Section 2.1.3.

     “Additional Term Loan Facility Commitment Amount” means up to $10,500,000, as such
amount may be reduced from time to time upon repayment of the Additional Term Loans.

     “Additional Term Loan Lender” means a Lender or an Additional Lender that agrees to
provide an Additional Term Loan Facility Commitment in accordance with Section 2.1.3.

     “Additional Term Loan Maturity Date” means the earliest of:

     (a) the fifth anniversary of the Closing Date;

     (b) immediately and without further action, the date on which any Event of Default described
in Section 7.1.4 occurs;

     (c) the date on which any Event of Default other than any Event of Default described
Section 7.1.4 shall have occurred and be continuing and either:

          (i) any Loans are declared to be due and payable pursuant to Section 7.3; or

          (ii) in the absence of such declaration, the Agent, acting at the direction of the Required
Lenders, shall give notice to Borrower that the Term Loan Facility Commitments, the Additional Term
Loan Facility Commitments and the Working Capital Facility Commitments have been terminated; and

     (d) the date on which a Change in Control occurs.

     “Additional Term Loan Mortgage Amendment” has the meaning set forth in Section
4.4.

     “Additional Term Loan Percentage” means as to any Lender, the percentage equivalent of
a fraction the numerator of which is the amount of such Lender’s Additional Term Loan

2

 

Facility Commitment and the denominator of which is the aggregate amount of the Additional Term Loan Facility Commitments of all Lenders.

     “Additional Term Note” means a promissory note of the Borrower, dated the date hereof,
and substantially in the form of Exhibit A-3 attached hereto, as amended, restated,
supplemented or otherwise modified from time to time, and shall also refer to all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.

     “Additional Working Capital Facility Commitment” has the meaning set forth in
Section 2.1.5.

     “Additional Working Capital Facility Commitment Amendment” has the meaning set forth
in Section 2.1.5.

     “Additional Working Capital Facility Commitment Amount” has the meaning set forth in
Section 2.1.5.

     “Additional Working Capital Facility Lender” has the meaning set forth in Section
2.1.5.

     “Additional Working Capital Facility Mortgage Amendment” has the meaning set forth in
Section 2.1.5.

     “Affected Lender” has the meaning set forth in Section 2.6.

     “Affiliate” of any Person means any other Person that, directly or indirectly,
controls or is controlled by or under common control with such Person. A Person shall be deemed to
be “controlled by” any other Person if such other Person possesses, directly or indirectly, the
power:

     (a) to vote 10% or more of the securities having ordinary voting power for the election of
directors of such Person; or

     (b) to direct or cause the direction of the management or policies of such Person whether by
contract or otherwise;

provided, however, that no Lender (other than a Sponsor Lender) shall be deemed to be an Affiliate
of the Borrower.

     “Agent” means ING, as agent for the Secured Parties pursuant to the terms of this
Agreement, or such other Person as shall have subsequently been appointed as the successor agent
pursuant to Section 8.4.

     “Agreement” means this Credit Agreement as originally in effect on the Closing Date
and as thereafter from time to time amended, restated, supplemented, or otherwise modified from
time to time.

     “Agreement to Contribute Capital” means that certain Agreement to Contribute Capital,
dated as of the Closing Date made by the Sponsor in favor of the Agent, for the benefit of the
Secured Parties, pursuant to which the Sponsor has agreed to make the PICO Equity

3

 

Contribution, the Financial Covenant Default Contribution and the Cost Overrun Contributions,
as such Agreement to Contribute Capital may be amended, restated, supplemented or otherwise
modified from time to time.

     “Alternate Base Rate” means a fluctuating rate of interest per annum equal to the
higher of:

     (a) the arithmetic average of rates of interest announced by each of the Reference Lenders
from time to time at such Reference Lender’s principal New York City office as its prime (or base)
rate for U.S. domestic commercial loans;

     (b) the Federal Funds Rate from time to time in effect plus one half of one percent
(0.50%); and

     (c) the Eurodollar Base Rate for a one-month interest period from time to time in effect
plus 1.00% per annum.

The Alternate Base Rate shall be calculated as of each date. If the Alternate Base Rate as of any
given date shall change from the immediately prior date, the interest rate applicable to Base Rate
Loans shall change effective on such date.

     “Anti-Terrorism Laws” means any laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws administered by OFAC.

     “Applicable Margin” means, (a) at all times prior to the Project Construction
Completion Date, as to Base Rate Loans, 3.00% per annum and as to Eurodollar Loans, 4.00% per
annum, and (b) from and after the Project Construction Completion Date, (i) for the first ninety
(90) days following the Project Construction Completion Date, as to Base Rate Loans, 2.75% per
annum and as to Eurodollar Loans, 3.75% per annum, and (ii) thereafter, the margins applicable to
Base Rate Loans and Eurodollar Loans, respectively, shall be based upon the Debt to Capitalization
Ratio determined on the applicable Debt to Capitalization Ratio Determination Date, in accordance
with the following grid:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Debt to	 	Eurodollar Base	 	Base Rate
	Category	 	 Capitalization Ratio	 	Rate Margin	 	Margin
	1	 	Greater than 55%
	 	3.75%	 	2.75%
	2	 	Greater than 45%
and less than or
equal to 55%
	 	3.00%	 	2.00%
	3	 	Greater than 35%
and less than or
equal to 45%
	 	2.50%	 	1.50%
	4	 	Less than or equal
to 35%
	 	2.00%	 	1.00%

4

 

The Applicable Margin shall be calculated on each Debt to Capitalization Ratio Determination Date
and shall be effective with respect to all Loans and Letters of Credit outstanding from and
including such date up to and excluding the next succeeding Debt to Capitalization Ratio
Determination Date; provided, however, that, if it is not possible to calculate the Applicable
Margin as a result of the Borrower’s failure to deliver financial statements and Compliance
Certificate when so required by Section 6.1.1(a) and (b) or the Compliance
Certificate when so required by Section 6.1.1(d), respectively, the Applicable Margin shall
be at Category 1 of the grid set forth above until such time as such financial statements and
Compliance Certificates are delivered, at which time the Applicable Margin shall be determined as
provided above. In the event that the determination of the Debt to Capitalization Ratio is shown
to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when such
inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of
a higher Applicable Margin under the grid set forth above for any period, then (i) the Borrower
shall immediately deliver to the Agent a corrected Compliance Certificate for such period, (ii) the
Applicable Margin shall be at the Applicable Margin under the grid for such period determined on
the basis of such corrected Compliance Certificate, and (iii) the Borrower shall immediately pay to
the Agent, for the account of the Lenders, the accrued additional interest owing as a result of the
increased Applicable Margin for such period. The provisions of this definition shall not limit the
rights of the Agent and the Lenders with respect to Section 3.4.3 or Article 7.

     “Approval” means each and every approval, consent, filing and registration by or with
any federal, state or other regulatory authority (domestic or foreign) necessary to authorize or
permit the execution, delivery or performance of this Agreement, the Notes or any other Loan
Document, the granting of any security contemplated hereby or thereby, the validity or
enforceability hereof or thereof, or the consummation of the transactions contemplated by the Loan
Documents and shall include, without limitation, the Necessary Project Approvals.

     “Authorized Officer” means, relative to any Loan Party, those officers of such Loan
Party whose signatures, incumbency and authority shall have been certified to the Agent and the
Lenders pursuant to Section 4.1.2(a) or which are certified after the Closing Date in a
certificate conforming to the requirements of Section 4.1.2(a) and, with respect to the
Borrower, shall include the chief operating officer, president, chief financial officer, or chief
legal officer of the Borrower.

     “Base Rate Loans” means Loans, or portions thereof, that bear interest on the basis of
the Alternate Base Rate.

     “Blocked Person” means any Person: (i) listed in the annex to, or is otherwise subject
to the provisions of, Executive Order No. 13224; (ii) owned or controlled by, or acting for or on
behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224; (iii) with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law; (iv) that commits, threatens or conspires to
commit or supports “terrorism” as defined in Executive Order No. 13224; or (v) that is named as a
“specially designated national” or “blocked person” on the most current OFAC Lists.

5

 

     “Borrower” has the meaning set forth in the preamble to this Agreement.

     “Borrower’s Tax-Paying Entities” has the meaning set forth in Section 6.2.8.

     “Borrowing” means any group of Loans, or portions thereof, of the same type and, in
the case of Eurodollar Loans, having the same Interest Period, in each case made, converted or
continued by the Lenders on the same Business Day pursuant to the same Borrowing Request or
Continuation/Conversion Notice in accordance with Sections 3.1 or 3.4.2,
respectively.

     “Borrowing Base” means, on any date of determination, an amount equal to: (a) the sum
of (i) 80% of Eligible Accounts plus (ii) 70% of Eligible Finished Goods Inventory
plus (iii) 80% of Eligible Hedged Seed Inventory, plus (iv) 70% of Eligible
Unhedged Seed Inventory plus (v) 50% of Eligible Canadian Inventory, plus (vi) 70%
of Eligible Crude Canola Oil Inventory plus (vii) 50% of Eligible Other Inventory
plus (viii) 100% of Eligible Margin Deposits minus (b) such reserves as may be
established from time to time pursuant to Section 2.2 hereof.

     “Borrowing Base Certificate” means a certificate of the chief operating, accounting or
financial Authorized Officer of the Borrower in the form of Exhibit C attached hereto.

     “Borrowing Request” means a loan request and certificate duly executed by an
Authorized Officer of the Borrower in the form of Exhibit B-1 with respect to Borrowings of
Working Capital Facility Loans, in the form of Exhibit B-2 with respect to Borrowings of
Term Loans, and in the form of Exhibit B-3 with respect to Borrowings of Additional Term
Loans.

     “Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close, provided,
that with respect to notices and determinations in connection with, and payments of principal and
interest on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.

     “Capital Stock” of any Person means any and all Stock of such Person, rights to
purchase, warrants, options, participations or other equivalents of or interests in (however
designated) Stock of such Person or other equity participations in such Person, in each case
whether general or limited, voting or non-voting, preferred or common.

     “Capitalized Lease Liabilities” means all monetary obligations of the Borrower and its
Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, are or would
be classified as capitalized leases.

     “Cash Equivalent Investment” means, at any time:

     (a) any direct obligation issued or guaranteed by the United States of America or any agency
or instrumentality thereof and backed by the full faith and credit of the United States of America,
or issued by any state or political subdivision or public instrumentality thereof, (i) which has a
remaining maturity at the time of purchase of not more than one year or (ii) which is subject to a
repurchase agreement with a Lender or any Eligible Lending Institution exercisable within one year
from the time of purchase so long as such direct obligation remains

6

 

in the possession of the Borrower or in the possession of a Lender and (iii) which, in the case of
obligations of any state or political subdivision or public instrumentality thereof, is rated AA or
better by Moody’s;

     (b) certificates of deposit, time deposits, demand deposits and bankers’ acceptances, having a
remaining maturity at the time of purchase of not more than one year, issued by a Lender or by any
Eligible Lending Institution;

     (c) corporate obligations rated Prime-1 by Moody’s or A-1 by S&P, having a remaining maturity
at the time of purchase of not more than one year; and

     (d) shares of funds registered under the Investment Company Act of 1940, as amended, having
assets of at least $100,000,000 which invest only in obligations described above and which shares
are rated by Moody’s or S&P in one of the two highest rating categories assigned by such agencies
for obligations of such nature.

     “Certificate Regarding Capital Contributions” means a certificate duly executed by the
chief operating, accounting or financial Authorized Officer of the Borrower as to receipt by the
Borrower of (i) the Pre-Closing Equity Contributions, and (ii) the PICO Equity Contribution.

     “Change in Control” means the occurrence of one or more of the following:

     (a) the failure of the Parent Guarantor to own and hold, beneficially and of record, and to
control, 100% of the Stock of the Borrower;

     (b) the failure of the Sponsor to own and hold, directly or indirectly, beneficially and of
record, not less than eighty-eight percent (88%) of the Common Stock and 100% of the Qualified
Preferred Equity Interests of the Parent Guarantor;

     (c) the failure of the Original Member to own and hold, beneficially and of record, not less
than twelve percent (12%) of the Common Stock of the Parent Guarantor, other than as a result of
any Additional Equity Contributions;

     (d) the sale, transfer or other disposition by the Sponsor or any of its Subsidiaries, or by
the Original Member of any Stock of the Parent Guarantor;

     (e) during any consecutive twelve-month period, individuals who at the beginning of such
period constituted the board of directors of the Sponsor (together with any new directors whose
election by the board of directors of the Sponsor or whose nomination for election by the
stockholders of the Sponsor was approved by a vote of at least a majority of the directors then
still in office who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved shall cease for any reason to constitute a
majority of the board of directors of the Sponsor then in office; or

     (f) any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) shall become the “beneficial owner” (as defined in
Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of more than thirty percent
(30%) of the outstanding membership interests of the Sponsor.

7

 

     “Change Order” means a request by the Borrower to amend, modify, supplement or
otherwise alter the scope of work under any Construction Contract where the effect of such
amendment, modification, supplementation or alteration would be to materially increase the cost
payable by the Borrower under such Construction Contract or to materially extend or delay the
period originally provided to the Project Party under such Construction Contract for the
achievement or delivery of any material item under such Construction Contract.

     “Charges” means all federal, state, county, city, municipal, local, foreign or other
governmental (including, without limitation, PBGC) (a) taxes at the time due and payable, and (b)
levies, assessments, charges, liens, claims or encumbrances upon or relating to (i) the Collateral,
(ii) the Obligations, (iii) the Borrower’s and its Subsidiaries’ employees, payroll, income or
gross receipts, (iv) the Borrower’s and its Subsidiaries’ ownership or use of their assets, or (v)
any other aspect of the Borrower’s and its Subsidiaries’ business.

     “Closing Date” means June 13, 2011.

     “Collateral” means all property and interests in property and proceeds thereof now
owned or hereafter acquired by the Borrower or any Subsidiary on which a Lien is granted to secure
the Obligations.

     “Commitment” means, with respect to any Lender, the commitment of such Lender to make
Loans pursuant to Section 2.1 and to participate in Letters of Credit pursuant to
Section 3.10.

     “Commodity Account” means any commodity account, as such term is defined in the UCC.

     “Commodity Account Control Agreement” means any control agreement executed by and
among the Borrower, the Agent, for the benefit of the Secured Parties, and the commodity
intermediary at which the Borrower maintains a Commodity Account, in form and substance
satisfactory to the Agent.

     “Commonly Controlled Entity” means an entity, trade or business, whether or not
incorporated, which is from time to time a member of a controlled group or a group under common
control with the Borrower within the meaning of Sections 414(b), 414(c), 414(m) or 414(o) of the
IRC or Section 4001(a)(14) of ERISA.

     “Compliance Certificate” means a certificate duly executed by the chief operating,
accounting or financial Authorized Officer of the Borrower in the form of Exhibit D
attached hereto.

     “Consolidated Capital Expenditures” means, for any period, without duplication, the
sum of (a) the gross dollar amount of additions during such period to property, plant, equipment
and other fixed assets of the Borrower and its Subsidiaries, including those additions made in the
ordinary course of business, plus (b) (to the extent not otherwise included in clause (a)
of this definition) the aggregate amount of Capitalized Lease Liabilities incurred during such
period by the Borrower and its Subsidiaries.

8

 

     “Construction Budget” means the budget identified as the “Construction Budget” on
Schedule 1.1(d) that sets forth the projected Construction Expenses, with a categorization
of each anticipated material Construction Expense, and presented in a manner that reflects each of
the key dates in the Construction Schedule.

     “Construction Contracts” means the agreements identified as “Construction Contracts”
on Schedule 5.21, as such agreements may be amended, restated, supplemented or otherwise
modified from time to time, together with such additional Contractual Obligations for the
development, engineering, design, construction, permitting, insuring, environmental compliance,
procurement and installation of materials, supplies and equipment, start-up and testing of, or the
provision of consulting services in connection with, the Project; provided,
however, that “Construction Contracts” shall not include any Loan Document.

     “Construction Expenses” means all items of costs and expenses required in connection
with the acquisition, development, engineering, design, construction, permitting, insuring,
environmental compliance, procurement and installation of materials, supplies and equipment,
start-up, testing and financing (including without limitation, interest, fees and expenses related
to financing) with respect to the Project, as more particularly described on Schedule
1.1(d).

     “Construction Schedule” means the schedule for construction of the Project described
in Schedule 1.1(c).

     “Consulting Contracts” means the agreements identified as “Consulting Contracts” on
Schedule 5.21, as such agreements may be amended, restated, supplemented or otherwise
modified from time to time; provided, however, that “Consulting Contracts” shall
not include any agreement with the Lender Consultants.

     “Continuation/Conversion Notice” means a notice of continuation or conversion and
certificate duly executed by the chief operating, accounting or financial Authorized Officer of the
Borrower in the form of Exhibit E attached hereto.

     “Contractual Obligation” means, relative to any Person, any provision of any security
issued by such Person or any provision of any Instrument or undertaking to which such Person is a
party or by which it or any of its property is bound, excluding, in the case of the Borrower and
any of its Subsidiaries, the Loan Documents.

     “Contribution Documents” means (i) the Certificate Regarding Capital Contributions,
and (ii) the Agreement to Contribute Capital, in each case as amended, restated, supplemented or
otherwise modified from time to time.

     “Contributions” means the contributions to the equity capital of the Parent Guarantor
and the Borrower made pursuant to, or described in, the Contribution Documents.

     “Cost Overrun” means the amount, if any, by which Construction Expenses exceed the sum
of (a) the budgeted amount of Construction Expenses, including the budgeted contingency amount, as
reflected in the Construction Budget, and (b) the amount of cash on deposit in the Cost Overrun
Account.

9

 

     “Cost Overrun Account” means the deposit account which is established for the payment
of Construction Expenses, which shall be subject to a Deposit Account Control Agreement in favor of
the Agent for the benefit of the Secured Parties, and into which shall be deposited the proceeds of
the Cost Overrun Contributions.

     “Cost Overrun Account Disbursement Request” means a request and certificate duly
executed by an Authorized Officer of the Borrower in the form of Exhibit B-4.

     “Cost Overrun Contribution” means any and all contributions made by the Sponsor
directly or indirectly to the Borrower in satisfaction of the requirements of Section 2(a) of the
Agreement to Contribute Capital.

     “Current Assets” means, with respect to any Person, all current assets of such Person
as of any date of determination calculated in accordance with GAAP, but excluding Indebtedness due
from Affiliates and cash and Cash Equivalent Investments.

     “Current Liabilities” means, with respect to any Person, (i) all liabilities of such
Person that should, in accordance with GAAP, be classified as current liabilities, excluding the
current portion of long-term debt.

     “Debt Service” means, for any period, the sum of (a) Interest Expense for such
period, plus (b) scheduled principal repayments of Indebtedness (including, without
limitation, scheduled payments of principal in respect of Capitalized Lease Liabilities) of the
Borrower and its Subsidiaries for such period; provided, however, (i) Debt Service
for the four Fiscal Quarter period ending on the last day of the second full Fiscal Quarter
following the Project Construction Completion Date shall be deemed to be (x) Debt Service for the
first and second full Fiscal Quarters following the Project Construction Completion Date
multiplied by (y) 2.0; and (ii) Debt Service for the four Fiscal Quarter period ending on
the last day of the third full Fiscal Quarter following the Project Construction Completion Date
shall be deemed to be (x) Debt Service for the first, second and third full Fiscal Quarters
following the Project Construction Completion Date multiplied by (y) 1.33.

     “Debt Service Coverage Ratio” means, for any period, the ratio of (a) EBITDA
of the Borrower and its Subsidiaries for such period less (i) Consolidated Capital
Expenditures for such period (excluding that portion of Consolidated Capital Expenditures that is
financed by Indebtedness (other than the Obligations)) less (ii) Permitted Tax
Distributions with respect to such period less (iii) any other distributions made by the
Parent Guarantor to its members during such period to (b) Debt Service for such period.

     “Debt Service Reserve Account” means a Deposit Account established by the Borrower on
or prior to the Project Construction Completion Date, in the name of the Agent for the benefit of
the Lenders into which the Borrower shall, from and after the Closing Date, remit and maintain an
amount on deposit at all times that is not less than the Debt Service Reserve Amount in accordance
with Section 6.1.19.

     “Debt Service Reserve Amount” means as of any given date, the greater of (x) an amount
equal to $5,000,000, and (y) projected debt service for the Loans for the immediately following

10

 

six-month period. For the avoidance of doubt, the Debt Service Reserve Amount shall be in
addition to, and shall not include, the amount of any Financial Covenant Default Contribution.

     “Debt to Adjusted Capitalization Ratio” means, as of any date, the ratio of (a) Total
Debt as of such date to (b) the sum of (i) Total Debt as of such date plus (ii) the Parent
Guarantor’s consolidated shareholders’ or member’s equity as of such date plus (iii) an
amount equal to the difference of (x) an amount equal to development expenses in an amount not to
exceed $8,350,000 incurred in connection with the Project but solely to the extent such development
expenses are treated as current expenses (and are not capitalized) on the financial statements of
the Borrower in accordance with GAAP minus (y) the amount of development expenses
referenced in clause (x) above that would have been amortized as of such date in accordance with
GAAP had such development expenses been capitalized and not currently expensed.

     “Debt to Capitalization Ratio” means, as of any date, the ratio of (a) Total Debt as
of such date to (b) the sum of (i) Total Debt as of such date plus (ii) the Parent
Guarantor’s consolidated shareholders’ or member’s equity as of such date.

     “Debt to Capitalization Ratio Determination Date” means the date of determination of
the Debt to Capitalization Ratio, which shall be the date upon which the Borrower has delivered to
the Agent the financial statements and Compliance Certificate required pursuant to Section
6.1.1(a) and (b) or the Compliance Certificate required pursuant to Section
6.1.1(d), or, in the event the Borrower should fail to deliver any such financial statements or
Compliance Certificate, as applicable, the date such financial statements or Compliance Certificate
were required to be delivered.

     “Default” means any condition that constitutes an Event of Default, or that, with the
giving of any notice or lapse of time or both, would constitute an Event of Default.

     “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Loans or participations in the Letters of Credit required to be funded by it hereunder within one
(1) Business Day of the date required to be funded by it hereunder unless such failure has been
cured, (b) has otherwise failed to pay over to Agent or any other Lender any other amount required
to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of
a good faith dispute or unless such failure has been cured, (c) has been, or its parent company has
been, deemed insolvent, (d) has given verbal or written notice to Agent, Borrower, or any other
Lender, or has otherwise announced, that such Lender believes it will not, or fails to promptly
provide to Agent upon request reasonably satisfactory assurance that such Lender will, comply with
its funding obligations under this Agreement, or (e) has become, or its parent company has become,
the subject of a bankruptcy, receivership, conservatorship, or insolvency proceeding.

     “Deferral Period” means each Fiscal Quarter with respect to which a Quarterly Payment
has been declared to be a Deferred Payment.

     “Deferred Payment” means a payment of principal due with respect to the Term Loan
which is deferred pursuant to the provisions of Section 3.3.1(c).

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     “Deferred Payment Date” means a Quarterly Payment Date on which a Deferred Payment
would have been due had it not been declared to be a Deferred Payment.

     “Deposit Account” means any deposit account, as such term is defined in the UCC.

     “Deposit Account Control Agreement” means any control agreement executed by and among
the Borrower, the Agent, for the benefit of the Secured Parties, and the depository institution at
which the Borrower maintains a Deposit Account, in form and substance satisfactory to the Agent.

     “Disbursement Instruction” means an instruction given by the Agent at the request of
the Borrower, from time to time, to the bank at which the Cost Overrun Account is maintained, to
disburse proceeds maintained in the Cost Overrun Account for payment or reimbursement of
Construction Expenses.

     “Dollar” and the sign “$” mean lawful money of the United States.

     “Downgraded Lender” means any Lender (other than a Farm Credit System Lender) during
any period for which such Lender or, if such Lender does not have a long term unsecured debt
rating, such Lender’s parent company, fails to maintain both a long term unsecured debt rating by
S&P of not less than BBB and a long term unsecured debt rating by Moody’s of not less than Baa.

     “EBITDA” means, for any period for any Person and its Subsidiaries determined on a
consolidated basis, an amount equal to Net Income plus (to the extent deducted in
determining Net Income) Interest Expense, provisions for income taxes, depreciation and
amortization expense, and all unrealized non-cash losses minus (to the extent included in
determining Net Income) all unrealized non-cash gains, with each such component of EBITDA to be
determined in accordance with GAAP; provided, however, (i) EBITDA for the four
Fiscal Quarter period ending on the last day of the second full Fiscal Quarter following the
Project Construction Completion Date shall be deemed to be (x) EBITDA for the first and second full
Fiscal Quarters following the Project Construction Completion Date plus (y) $15,148,557;
and (ii) EBITDA for the four Fiscal Quarter period ending on the last day of the third full Fiscal
Quarter following the Project Construction Completion Date shall be deemed to be (x) EBITDA for the
first, second and third full Fiscal Quarters following the Project Construction Completion Date
plus (y) $6,381,481.

     “Eligible Accounts” means the net outstanding balance, less all finance charges, late
fees and other fees which are unearned, of all Land O’Lakes Accounts of the Borrower and its
Subsidiaries; provided however, that the following Accounts shall not be Eligible
Accounts:

     (a) any Account as to which any representation or warranty contained in this Agreement, the
Security Agreement or any of the other Loan Documents applicable either to Accounts in general or
to any such specific Account is not true as of any date made in any material respect;

     (b) all Accounts if more than twenty percent (20%) of such Accounts do not constitute Eligible
Accounts by virtue of clause (e) of this definition;

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     (c) all Accounts if Land O’Lakes has (i) become insolvent or generally failed to pay, or
admitted in writing its inability to pay, debts as they become due, (ii) applied for, consented to,
or acquiesced in, the appointment of a trustee, receiver, sequestrator or other custodian for Land
O’Lakes or any property thereof or made a general assignment for the benefit of creditors, (iii) in
the absence of such application, consent or acquiescence, permitted or suffered to exist the
appointment of a trustee, receiver, sequestrator or other custodian for Land O’Lakes or for a
substantial part of its property, or (iv) permitted or suffered to exist the commencement and
continuance of any bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law or any dissolution, winding up or liquidation proceeding in
respect of Land O’Lakes;

     (d) any Account that is billed with terms that exceed fifteen (15) days;

     (e) any Account that, as of any date of determination, remains unpaid fifteen (15) days past
original due date;

     (f) any Account that is subject to set-off (including, without limitation, the amount of all
commissions owing to Land O’Lakes under the Land O’Lakes Agreements), provided that only a portion
of such Account in the amount by which such Account may be set off shall not be deemed an Eligible
Account;

     (g) any Account that is denominated in any currency other than Dollars;

     (h) any Account that is subject to any claim or dispute by Land O’Lakes;

     (i) any Account that arises from a transaction wherein goods are placed on consignment or are
sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any
other terms by reason of which the payment may be conditional;

     (j) any Account that is not subject to a valid and perfected, first priority Lien in favor of
the Agent, for the benefit of the Secured Parties, or that is subject to any Lien whatsoever, other
than such Lien in favor of the Agent, for the benefit of the Secured Parties and other than
Qualified Liens;

     (k) any Account that is not evidenced by an invoice or other writing in form acceptable to the
Agent;

     (l) any Account that is evidenced by chattel paper or an instrument unless such chattel paper
or instrument is pledged to the Agent, for the benefit of the Secured Parties, pursuant to
documentation in form and substance satisfactory to the Agent;

     (m) any Account as to which the Borrower may be, in order to be entitled to collect such
Account (or, if such Account is evidenced by multiple invoices, the amount of such Account
evidenced by any such invoice), required to perform any additional service or perform or incur any
additional obligation in respect of such Account (or amount so invoiced);

     (n) any Account as to which the Borrower has not submitted all necessary documentation or
supplied all necessary information to Land O’Lakes for payment of such

13

 

Account or has not fulfilled all other obligations in respect thereof, including verification
of the eligibility of the Account for payment by Land O’Lakes; or

     (o) any Account that contravenes (or as to which any related contract contravenes) in any
material respect any laws, rules or regulations applicable thereto or as to which any party to any
such related contract is in violation of any such law, rule or regulation in any material respect.

The determination by the Agent that any Account shall be deemed ineligible by virtue of its being
described by one of such categories shall not be deemed to indicate that such Account may not also
be deemed ineligible by virtue of being described by any other such category or to preclude the
Agent from reclassifying such Account into such other category, should the Account cease to be
described by the first such category.

     “Eligible Canadian Inventory” means Inventory consisting of canola seed that would
constitute Eligible Inventory but for the fact that it is not located in the United States so long
as (i) such Inventory is located in Manitoba, Canada, in a bonded warehouse acceptable to the
Agent, and (ii) such Inventory is evidenced by negotiable documents of title which have been
delivered to the Agent; provided that “Eligible Canadian Inventory” shall exclude any
Inventory acquired within 30 days of the date of determination which is subject to the currently
exercisable rights of unpaid suppliers or farmers under section 81.1 or 81.2 of the Bankruptcy and
Insolvency Act (Canada) or the comparable provision of any other applicable law.

     “Eligible Crude Canola Oil Inventory” means Inventory consisting of crude canola oil
that satisfies the criteria for Eligible Inventory set forth in the definition thereof.

     “Eligible Finished Goods Inventory” means Finished Goods Inventory (valued at cost or,
if such Eligible Finished Goods Inventory is subject to a binding sales contract, the contract
price for such Eligible Finished Goods Inventory as provided in such binding sales contract) that
satisfies the criteria for Eligible Inventory set forth in the definition thereof.

     “Eligible Futures Contracts” means written contracts between the Borrower and
third-party counterparties for sale at a future date for a specific already determined price or
prices that seek to eliminate or reduce volatility in (i) price (or cost) and (ii) performance
which would otherwise affect the Borrower in its normal daily operations in cash-basis (or spot)
markets, provided that (a) such contracts are exchange-traded contracts with counterparties
that are futures exchanges regulated by the Commodities Futures Trading Commission or the Manitoba
Securities Commission, or such contracts are traded over-the-counter with counterparties that have
been approved by the Agent, and (b) such contracts constitute commodity contracts carried in a
Commodity Account that is subject to a Commodity Account Control Agreement.

     “Eligible Hedged Seed Inventory” means Eligible Inventory consisting of canola seed
(valued at fair market value) with respect to which the Borrower has entered into Eligible Futures
Contracts.

     “Eligible Inventory” means Inventory that complies with each of the representations
and warranties with respect to any specific item of Inventory or to Inventory generally made by the

14

 

Borrower in the Loan Documents, and that the Agent shall have determined to be eligible for
inclusion in the Borrowing Base at any particular time; provided, however, that the value
of such Eligible Inventory shall be the lower of the cost and fair market value of such Eligible
Inventory, such cost determined on a first-in, first-out basis (except that (x) Eligible Hedged
Seed Inventory shall be valued at fair market value and (y) Eligible Finished Goods Inventory shall
be valued at cost or, if such Eligible Finished Goods Inventory is subject to a binding sales
contract, the contract price for such Eligible Finished Goods Inventory as provided in such binding
sales contract). Without limitation of the Agent’s right to determine that an item of Inventory
does not constitute Eligible Inventory, an item of Inventory shall not constitute Eligible
Inventory if:

     (a) the Borrower does not have good, valid, and marketable title thereto;

     (b) it is not located at one of the locations in the United States set forth on Schedule
1.1(a) hereto;

     (c) it is located on real property leased by the Borrower, in a contract warehouse, in transit
in the possession of a third party carrier, or otherwise in the possession of a third party, in
each case, unless (i) such Inventory is subject to a landlord’s waiver, warehouseman’s agreement,
bailee agreement, freight forwarder’s agreement or similar agreement, in each case in form and
substance satisfactory to the Agent, executed by the landlord, warehouseman, bailee, or other third
party, as the case may be, or (ii) the Agent has established rent or other appropriate reserves
with respect to such Inventory;

     (d) it bears trademarks owned by any third party as to which there are restrictions (other
than the payment of royalties) on the Borrower’s or any assignee’s rights to re-sell such Inventory
(unless such third party has provided a trademark licensor consent in favor of the Agent in form
and substance satisfactory to the Agent);

     (e) it is not subject to a valid and perfected first priority Lien in favor of the Agent, for
the benefit of the Secured Parties, or it is subject to any Lien whatsoever, other than such Lien
in favor of the Agent, for the benefit of the Secured Parties and other than Qualified Liens;

     (f) it consists of goods returned or rejected by the Account Debtors;

     (g) it consists of goods that are obsolete or slow-moving, excess, restrictive or custom
items, work-in-process, or goods that constitute packaging and shipping materials, bill and hold
goods, defective goods, or Inventory acquired on consignment;

     (h) it consists of Finished Goods Inventory that does not meet the specifications set forth in
the Sales and Marketing Contracts, including without limitation, the Land O’Lakes Agreements, as
modified from time to time; or

     (i) it consists of crude canola oil that does not meet the commercial standards established by
the Oil Seed Processors Association for crude canola oil or established by other similar and
generally accepted industry organizations identified by the Agent from time to time.

15

 

     “Eligible Lending Institution” means a financial institution having a branch or office
in the United States and having capital and surplus and undivided profits aggregating at least
$100,000,000 and rated Prime-1 or better by Moody’s or A-1 or better by S&P.

     “Eligible Margin Account” means any Commodity Account of the Borrower: (i) through
which the Borrower has entered into Eligible Futures Contracts, (ii) which is maintained with a
registered commodities broker who has entered into a Commodity Account Control Agreement with the
Agent and the Borrower, (iii) in which the Agent has a first priority perfected Lien, and (iv)
which is subject to no other Lien, other than Permitted Liens.

     “Eligible Margin Deposits” means the net liquidation value maintained in all Eligible
Margin Accounts.

     “Eligible Other Inventory” means Inventory, other than Finished Goods Inventory,
Eligible Hedged Seed Inventory, Eligible Unhedged Seed Inventory, Eligible Canadian Inventory and
Eligible Crude Canola Oil Inventory, that satisfies the criteria for Eligible Inventory set forth
in the definition thereof.

     “Eligible Unhedged Seed Inventory” means Eligible Inventory consisting of canola seed
that is not Eligible Hedged Seed Inventory.

     “Environment” means soil, surface waters, ground waters, land, streams, sediments,
surface or subsurface strata and ambient air.

     “Environmental Laws” means all federal, state, local and foreign laws and regulations,
codes, common law, consent agreements, orders and decrees, and judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or protection of the
Environment, natural resources or human health and safety.

     “Environmental Indemnity Agreement” means the Environmental Indemnity Agreement, dated
as of the Closing Date, made by the Borrower in favor of the Agent, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

     “Environmental Liabilities and Costs” means all liabilities, obligations,
responsibilities, remedial actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies), fines, penalties,
settlement costs, sanctions and interest, incurred as a result of any claim or demand by any
Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or
civil statute, any Environmental Law, permit, order, variance or agreement with a Governmental
Authority or other Person, arising from or related to the administration of any Environmental Law
or arising from environmental, health or safety conditions or a release or threatened release
resulting from the past, present or future operations of the Borrower or any of its Subsidiaries or
affecting any of their properties, or any release or threatened release for which the Borrower or
any of its Subsidiaries is otherwise responsible under any Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the regulations thereunder, in each case

16

 

as in effect from time to time. References to sections of ERISA also refer to any successor
sections.

     “Eurodollar Base Rate” means, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the greater of (i) one percent (1.0%) per annum, and (ii) the rate
per annum determined on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period as reported on Reuters Screen
LIBOR01 Page (or any successor source) as of 11:00 A.M., London time, three (3) Business Days prior
to the beginning of such Interest Period. In the event that such rate does not appear on Reuters
Screen LIBOR01 Page (or otherwise on such screen), the “Eurodollar Base Rate” shall be
determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Agent or, in the absence of such availability, by
reference to the rate at which the Agent is offered Dollar deposits at or about 11:00 A.M., New
York City time, three (3) Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for the number of days
comprised therein.

     “Eurodollar Loans” means Loans, or portions thereof, that bear interest on the basis
of the Eurodollar Rate.

     “Eurodollar Rate” means, with respect to any Borrowing of Eurodollar Loans for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined by the Agent to be equal to (i) the Eurodollar Base Rate for such Borrowing for such
Interest Period divided by (ii) one (1) minus the Reserve Requirement. The
Eurodollar Rate for any Interest Period will be determined initially by the Agent on the basis of
the Reserve Requirement in effect on the date three (3) Business Days prior to the commencement of
such Interest Period and, from time to time thereafter during such Interest Period, such Eurodollar
Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve
Requirement during such Interest Period.

     “Event of Abandonment” means any of the following shall have occurred: (a) the
abandonment by the Borrower of the development, engineering, construction, use, testing, start-up,
operation or maintenance of the Project, or (b) the suspension of all or any substantial part of
the Borrower’s activities with respect to the Project, except as expressly permitted under the Loan
Documents or in connection with any event of force majeure, a Loss, or an emergency affecting the
Project which the Borrower is using commercially reasonable efforts to overcome, or any maintenance
or repair of the Project (whether scheduled or unscheduled) which the Borrower is using
commercially reasonable efforts in undertaking.

     “Event of Default” means any of the events set forth in Section 7.1.

     “Excess Cash Flow” means, for any Fiscal Year, an amount equal to: EBITDA for such
Fiscal Year minus (b) the sum of (i) cash Interest Expense paid during such Fiscal Year,
plus (ii) taxes and Permitted Tax Distributions paid in cash during such Fiscal Year,
plus (iii) the amount of actual Consolidated Capital Expenditures made during such Fiscal
Year which are not financed (other than with the proceeds of Loans), plus (iv) scheduled
repayments of principal

17

 

under any Indebtedness plus (v) prepayments of the Term Loan during any such Fiscal
Year (other than prepayments pursuant to Section 3.3.1(l)) plus (vi) any increase
in Working Capital from the last day of the prior Fiscal Year to the last day of such Fiscal Year,
minus (vii) any decrease in Working Capital from the last day of the prior Fiscal Year to
the last day of such Fiscal Year.

     “Excess Cash Flow Recapture Percentage” means, as to each Fiscal Year, the applicable
percentage set forth below the applicable Debt to Capitalization Ratio as of the last day of such
Fiscal Year:

	 	 	 	 	 	 	 	 	 
	Debt to	 	 	 	Less than or	 	Less than or	 	 
	Capitalization	 	 	 	equal to 55% and	 	equal to 45% and	 	Less than or
	Ratio	 	Greater than 55%	 	greater than 45%	 	greater than 35%	 	equal to 35%
	Excess Cash Flow
Recapture
Percentage
	 	75%	 	50%	 	25%	 	0%

     “Excess Contingency Funds Certificate” means a certificate given by the Borrower and
confirmed by the Independent Engineer stating that after giving effect to the making of any
Borrowing of Term Loans all or any portion of the proceeds of which are to be used to purchase
canola seed, the undrawn amount of the Term Loan Commitment, together with the amounts in the Cost
Overrun Account, are sufficient to satisfy the Project Construction Completion Requirements on or
prior to the Project Construction Completion Deadline.

     “Excluded Issuances” means the proceeds of any (a) issuance of any Capital Stock of
the Parent Guarantor to any employees, officers, directors or consultants of any Loan Party under,
or upon the exercise of options granted under, any stock-based incentive plan of any Loan Party,
(b) any issuance of Capital Stock of the Parent Guarantor under any employee stock purchase plan of
any Loan Party, and (c) Qualified Preferred Equity Issuances.

     “Excluded Taxes” means, with respect to the Agent, any Lender or any other recipient
of any payment to be made by or on account of any obligation of the Borrower hereunder, under any
Note or any other Loan Document, (a) Taxes imposed on or measured by the net income (however
denominated), gross margins, profits or gains of, and franchise Taxes imposed (in lieu of net
income Taxes) on, such recipient by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized, in which its principal office (or, in the case of a
Lender, its applicable lending office) is located or with which it has a permanent or former
connection (other than a connection resulting in whole or in part from any Loan Document or any
actions related thereto), (b) any branch profits Taxes imposed by the United States or any similar
Tax imposed by any other jurisdiction in which the Borrower is located or under the laws of which
such recipient is organized or in which its principal office (or, in the case of a Lender, its
applicable lending office) is located, (c) any backup withholding Tax required to be withheld from
amounts payable to a Lender that has failed to comply with clause (A) of Section
3.5(f)(ii), and (d) in the case of a Foreign Lender, any United States withholding tax that (i)
is required to be imposed on amounts that are payable (directly or indirectly) to such Foreign
Lender pursuant

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to the laws in force at the time such Foreign Lender becomes a party hereto (or designates a
new lending office) or (ii) is attributable to any failure or inability of such Foreign Lender
(other than as a result of a change in law after such Foreign Lender becomes a party hereto) to
comply with clause (B) of Section 3.5(f)(ii) or Section 9.11(e) (or to any
inaccuracy or deficiency of any documentation provided by such Foreign Lender under clause (B) of
Section 3.5(f)(ii) or Section 9.11(e)), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to such withholding Tax
pursuant to Section 3.5(a).

     “Existing Leases” shall have the meaning set forth in Section 6.2.6.

     “Farm Products” means farm products as such term is defined in the Food Security Act
and the regulations promulgated pursuant thereto or the Uniform Commercial Code as in effect from
time to time in any relevant jurisdiction.

     “Farm Products Seller” has the meaning set forth in Section 6.1.16.

     “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to:

     (a) the weighted average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York; or

     (b) if such rate is not so published for any day which is a Business Day, the arithmetic
average of the quotations for such transactions received by the Agent, in its sole discretion,
either from (i) three federal funds brokers of recognized standing selected by the Agent in its
sole discretion or (ii) the Reference Lenders.

     “Fee Letter” means that certain confidential letter agreement dated the Closing Date
among the Agent and the Borrower.

     “Financial Covenant Default Contribution” means an additional one-time contribution to
the Borrower in the amount of $5,000,000 made by the Sponsor for deposit into the Debt Service
Reserve Account upon failure of the Borrower to comply with any financial covenant set forth in
Section 6.2.4.

     “Financing Statements” means the UCC-1 financing statements filed with respect to the
Security Documents pursuant to clause (a) of Section 4.1.13.

     “Finished Goods Inventory” means Inventory that constitutes finished goods and
products produced at the Project Site consisting of canola meal, oil and other by-products of
processed canola seed, but excluding Inventory that constitutes raw materials, work-in-process and
crude canola oil.

     “Fiscal Quarter” means any quarter of a Fiscal Year ending March 31, June 30,
September 30 or December 31.

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     “Fiscal Year” means, subject to Sections 6.2.16 and 9.14, each twelve
month accounting period of the Borrower ending on December 31.

     “Food Security Act” means the Food Security Act, 7 U.S.C. § 1631.

     “Food Security Act Notices” shall have the meaning set forth in Section
6.1.16.

     “Foreign Lender” means any Lender that is organized (or that is otherwise resident for
Tax purposes) under the laws of a jurisdiction other than that in which the Borrower is resident
for Tax purposes. The United States, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction for purposes of this definition.

     “Fund” means any Person (other than a natural person) that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course.

     “F.R.S. Board” means the Board of Governors of the Federal Reserve System (or any
successor).

     “GAAP” means generally accepted accounting principles in effect from time to time in
the United States.

     “General Contractor” means McGough Industrial Construction, LLC.

     “General Contractor Agreement” means that certain Agreement dated November 16, 2007,
between Northstar Agri Industries Hallock, LLC and the General Contractor, for a Canola Crushing
Facility, as amended by that certain Amendment No. 1 to Agreement Between Owner and Contractor
dated September 20, 2010, as such agreement may be further amended, restated, supplemented or
otherwise modified from time to time.

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

     “Hedge Contract” means any “floor”, “hedge”, “swap”, “collar”, “cap”, “futures”, or
similar agreement between a Borrower and any other Person, including any Lender Party or Affiliate
of any Lender Party, intended to fix the relative amount of such Borrower’s risk in respect of
changes in interest rates, commodity prices and/or foreign currency exchange.

     “Hedge Termination Value” means, in respect of any one or more Hedge Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Hedge
Contracts, (a) for any date on or after the date such Hedge Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Hedge Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Hedge Contracts (which may include a
Lender or any Affiliate of a Lender) or, if no such readily available

20

 

quotations are available, the termination value(s) determined in accordance with such Hedge
Contracts.

     “Hedging Reserve” means, at any time, an amount equal at such time to the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower would be required to
pay if all Eligible Futures Contracts were terminated at such time giving effect to current market
conditions notwithstanding any contrary treatment in accordance with GAAP.

     “herein”, “hereof”, “hereto”, “hereunder” and similar terms
contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan
Document, as the case may be, as a whole and not to any particular section, subsection, clause or
provision of this Agreement or such other Loan Document.

     “including” means including without limiting the generality of any description
preceding or following such term.

     “Indebtedness” of any Person means, without duplication,

     (a) all obligations of such Person for borrowed money (including all notes payable and drafts
accepted representing extensions of credit) and all obligations evidenced by bonds, debentures,
notes or other similar instruments on which interest charges are customarily paid;

     (b) all obligations, contingent or otherwise, relative to the stated amount of all letters of
credit, whether or not drawn, and banker’s acceptances issued for the account of such Person and
the net obligations under all Hedge Contracts of such Person;

     (c) all Capitalized Lease Liabilities of such Person (to the extent required by GAAP to be
included on the balance sheet of such Person);

     (d) whether or not so included as liabilities in accordance with GAAP:

     (i) all obligations of such Person to pay the deferred purchase price of property or
services (excluding trade accounts payable arising in the ordinary course of business) and
Indebtedness secured by a Lien on property owned or being purchased by such Person
(including Indebtedness arising under conditional sales or other title retention
agreements), whether or not such Indebtedness shall have been assumed by such Person or is
limited in recourse; and

     (ii) all obligations of such Person in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise assure a creditor against loss in
respect of, Indebtedness of another Person of the type described in clause (a), (b), (c) or
(d)(i), above, or clause (e) below;

     (e) all obligations of such Person to redeem, purchase or otherwise retire or extinguish any
of its Capital Stock at a fixed or determinable date (whether by operation of a sinking fund or
otherwise), at another’s option or upon the occurrence of a condition not solely with the control
of such Person (e.g., redemption from future earnings).

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     “Indemnified Liabilities” means any and all actions, causes of action, suits, losses,
costs, liabilities, damages and expenses incurred by or asserted or awarded against any Lender
Party and against which the Borrower has indemnified the Lender Parties as provided in Section
9.4.

     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Independent Engineer” means SAIC Energy, Environment & Infrastructure, LLC, a
Delaware limited liability company, successor to R.W. Beck, Inc., a Washington corporation, or any
replacement appointed by the Agent and, unless an Event of Default shall have occurred and be
continuing, consented to by the Borrower, such consent not to be unreasonably withheld or delayed.

     “ING” means ING Capital LLC, a Delaware limited liability company.

     “Insolvency” or “Insolvent” means, at any particular time, with respect to any
Multiemployer Pension Plan that such Multiemployer Pension Plan is insolvent within the meaning of
Section 4245 of ERISA.

     “Instrument” means any contract, agreement, letter of credit, indenture, mortgage,
warrant, deed, certificate of title, document or writing (whether by formal agreement, letter or
otherwise) under which any obligation is evidenced, assumed or undertaken, any Lien (or right or
interest therein) is granted or perfected, or any property (or right or interest therein) is
conveyed.

     “Insurance Consultant” means Moore-McNeil, LLC, a Tennessee limited liability company,
or any replacement appointed by the Agent and, unless an Event of Default shall have occurred and
be continuing, consented to by the Borrower, such consent not to be unreasonably withheld or
delayed.

     “Intellectual Property” means, collectively, (a) patents, patent rights and patent
applications, copyrights and copyright applications, trademarks, trademark rights, trade names,
trade name rights, service marks, service mark rights, applications for registration of trademarks,
trade names and service marks, fictitious names registrations and trademarks, trade name and
service mark registrations, domain names and domain name registration agreements, and (b) patent
licenses, trademark licenses, copyright licenses and other licenses to use any of the items
described in clause (a), and any other similar items necessary to conduct or operate the business
of the Borrower and its Subsidiaries.

     “Interest Expense” means, for any period, the interest expense accrued during such
period in respect of Indebtedness of the Borrower and its Subsidiaries, measured on a consolidated
basis in accordance with GAAP.

     “Interest Period” means, relative to any Eurodollar Loans comprising part of the same
Borrowing, the period beginning on (and including) the date on which such Eurodollar Loans are made
or continued as, or converted into, Eurodollar Loans pursuant to Section 3.1 or Section
3.4.2 and ending on (but excluding) the date which numerically corresponds to such date three
or six months thereafter (or, if such month has no numerically corresponding date, on the

22

 

last Business Day of such month), in either case as the Borrower may select in its relevant notice
pursuant to Section 3.1 or Section 3.4.2; provided, however, that:

     (a) the Borrower shall not be permitted to select Interest Periods to be in effect at any one
time which have expiration dates occurring on more than four (4) different dates;

     (b) if such Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day (unless such next following Business
Day is the first Business Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding date);

     (c) (i) no such Interest Period with respect to Term Loans may end later than the Term Loan
Maturity Date, (ii) no such Interest Period with respect to Additional Term Loans may end later
than the Additional Term Loan Maturity Date, and (iii) no such Interest Period with respect to
Working Capital Facility Loans may end later than the Working Capital Facility Maturity Date; and

     (d) in the case of Interest Periods for the Term Loans or Additional Term Loans consisting of
Eurodollar Loans, no such Interest Period may end later than the date of any principal repayment
with respect to the Term Loans or Additional Term Loans as set forth in clause (c) of Section
3.3.1, if on such date the Borrower otherwise would be required to repay any portion of any
Borrowing prior to the end of the Interest Period relative to such Borrowing.

     “Internal Revenue Service” means the Internal Revenue Service of the United States of
America.

     “Inventory” means “inventory” (as such term is defined in the UCC).

     “Investment” means, relative to any Person:

     (a) any loan or advance made by such Person to any other Person (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of business);

     (b) any ownership or similar interest held by such Person in any other Person; and

     (c) the purchase of any debt or equity securities or instruments issued by any other Person
(including, without limitation, Capital Stock, notes, debentures, drafts and acceptances, and trust
certificates).

The amount of any Investment shall be the original principal or capital amount thereof less all
returns of principal or equity thereon (and without adjustment by reason of the financial condition
of such other Person) and shall, if made by the transfer or exchange of property other than cash,
be deemed to have been made in an original principal or capital amount equal to the fair market
value of such property.

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     “IRC” means the Internal Revenue Code of 1986, as amended, and any successor statute
of similar import, together with the regulations thereunder, in each case as in effect from time to
time. References to Sections of the IRC also refer to any successor sections.

     “knowledge” means, with respect to an individual, that such individual has knowledge
of the particular fact or other matter at the applicable time of determination, and with respect to
an entity, that any director, manager or other person performing similar functions of such entity,
or any officer or employee of such entity at a vice-president level or above, has knowledge of the
particular fact or other matter at the applicable time of determination.

     “Land O’Lakes” means Land O’Lakes Purina Feed, LLC, a wholly owned subsidiary of Land
O’Lakes Inc.

     “Land O’Lakes Accounts” means Accounts for which Land O’Lakes is the Account Debtor
and which (i) arise from the purchase of the Borrower’s Inventory by Land O’Lakes for its own
account as Account Debtor (whether for its own use, for resale or otherwise), or (ii) consist of
the payment obligations of Land O’Lakes arising under the Land O’Lakes Agreements with respect to
purchases of the Borrower’s Inventory by third parties.

     “Land O’Lakes Agreements” means (i) that certain Canola Oil Exclusive Product
Marketing and Off Take Agreement dated February 9, 2010, between Land O’Lakes and Northstar Agri
Industries Hallock, LLC, a Delaware limited liability company, and (ii) that certain Canola Meal
Exclusive Product Marketing and Off Take Agreement dated February 9, 2010, between Land O’Lakes and
Northstar Agri Industries Hallock, LLC, a Delaware limited liability company, as such agreements
may be amended, restated, supplemented or otherwise modified from time to time.

     “Lead Arranger” means ING in its capacity as Lead Arranger for the credit facilities
provided under this Agreement.

     “Lender” means any of the various lenders as are, or hereafter become, parties to this
Agreement.

     “Lender Consultants” means the Independent Engineer, the Insurance Consultant and any
other advisors in connection with the construction or operation of the Project, including without
limitation, the development, engineering, construction, start-up, permitting, environmental
compliance and testing of the Project, which are selected and engaged by the Agent.

     “Lender Parties” means, collectively, the Agent, any issuer of a Letter of Credit and
each Lender, each of their respective successors and assigns, and each of their respective
officers, directors, employees, attorneys and agents and each of their respective successors and
assigns.

     “Letter of Credit” means an irrevocable standby letter of credit issued pursuant to
the Working Capital Facility Commitment for the account of the Borrower or one of its Subsidiaries
pursuant to Section 3.10.

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     “Letter of Credit Obligation” means, in respect of each Letter of Credit, the undrawn
stated amount of such Letter of Credit, plus the amount of all drawings under such Letter
of Credit for which any Lender has not been reimbursed by the Borrower.

     “Letter of Credit Request” means a request and certificate for the issuance of a
Letter of Credit, duly executed by the chief operating, accounting or financial Authorized Officer
of the Borrower in the form of Exhibit F, delivered by the Borrower to the Agent pursuant
to Section 3.10.1, together with the letter of credit application accompanying such
request.

     “Letter of Credit Sub-Facility” means the letter of credit facility provided by the
Lenders to the Borrower pursuant to Section 2.1.2 and Section 3.10.

     “Letter of Credit Sub-Facility Amount” means the maximum amount of the Working Capital
Facility Availability which may be used by the Borrower under the Letter of Credit Sub-Facility for
Letters of Credit, which shall initially be $5,000,000, as such amount may be reduced from time to
time pursuant to Section 3.3.3.

     “Lien” means any mortgage, pledge, hypothecation, assignment, charge, deposit
arrangement, encumbrance, lien (statutory or otherwise), adverse claim or preference, priority or
other security agreement or preferential arrangement of any kind or nature whatsoever, including
any conditional sale or other title retention agreement, any financing lease involving
substantially the same economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction.

     “Liquidity” means, as to the Borrower, an amount equal to the sum of (i) the
Borrower’s unrestricted cash and Cash Equivalent Investments plus (ii) Working Capital
Facility Availability.

     “LLC Agreement” means the Agreement of Limited Liability Company dated as of December
23, 2010, of the Borrower, as it may be amended, restated, supplemented, or otherwise modified from
time to time.

     “Loan Documents” means, collectively, this Agreement, the Notes, each Security
Document, the Fee Letter, the Post-Closing Syndication Letter Agreement, each Borrowing Request,
each Cost Overrun Account Disbursement Request, and each other Instrument executed in favor of the
Agent or any issuer of a Letter of Credit that is delivered by any Loan Party, on or prior to the
date hereof or at any time hereafter, in connection with the transactions contemplated by this
Agreement, in each case, as amended, restated, supplemented or otherwise modified from time to
time.

     “Loan Party” means any of the Borrower, the Parent Guarantor, the Parent Guarantor’s
Subsidiaries and any Affiliate of any of them which is a party to any of the Loan Documents, other
than the Sponsor.

     “Loans” means, relative to a Lender, the Term Loans, the Additional Term Loans and the
Working Capital Facility Loans made by such Lender to the Borrower pursuant to Section
2.1.1, Section 2.1.2, Section 2.1.3, and Section 3.10.3(c).

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     “Loss” means any loss, damage, destruction, theft, or seizure of, or any other
casualty with respect to, or any condemnation of, any property or asset of the Borrower or any
Subsidiary in an amount in excess of $500,000 individually or $500,000 in the aggregate for any
Fiscal Year; and the “amount” of any Loss means the greater of (i) the costs to repair or
replace the property or asset that was the subject of such Loss and (ii) the amount of insurance
proceeds or condemnation awards payable as a result of such Loss.

     “Major Construction Contracts” means the General Contractor Agreement, the Project
Architect-Engineer Agreement, the other Construction Contracts identified as “Major Construction
Contracts” on Schedule 5.21, and each additional Construction Contract entered into by or
on behalf of the Borrower (a) that provides for payments in an aggregate amount in excess of
$2,000,000, or (b) that the Independent Engineer has determined in good faith and in consultation
with the Borrower is material to the Project and has designated as a “Major Construction Contract”.

     “Major Environmental Event” means (i) prior to the Project Construction Completion
Date, any event, release, occurrence or other matter arising as a result of the failure of any Loan
Party to be in compliance with all applicable Environmental Laws or the discovery of the existence
of any condition governed by applicable Environmental Laws (each, an “Environmental
Event”), which, singly or in the aggregate with all other Environmental Events, could
reasonably be expected to result in a Project Delay, a Cost Overrun, or Environmental Liabilities
and Costs in excess of $500,000, and (ii) on or after the Project Construction Completion Date, the
occurrence of any Environmental Event, which, singly or in the aggregate with all other
Environmental Events, could reasonably be expected to result in Environmental Liabilities and Costs
in excess of $500,000.

     “Major Loss” means a Loss or Losses to the extent that such Loss or Losses exceed
$2,500,000 during the term of this Agreement, provided that such Loss or Losses do not constitute a
Total Loss.

     “Major Permitted Replacement Expenses” means, with respect to a Major Loss, the sum of
(i) expenses required to repair or replace the property and assets that are the subject of such
Major Loss, plus (ii) the Borrower’s Debt Service and operating expenses for the Major
Replacement Construction Period with respect to such Major Loss.

     “Major Project Documents” means the Major Construction Contracts, the Consulting
Contracts, the Sales and Marketing Contracts and the Project Party Consents and each additional
Major Construction Contract or Replacement Contract entered into by or on behalf of the Borrower
after the Closing Date, and includes, without limitation, the agreements identified as “Major
Project Documents” on Schedule 5.21, and if a Major Replacement is undertaken by the
Borrower, shall also include the Major Replacement Project Documents.

     “Major Replacement” means the repair and replacement of any portion of the Project
that becomes subject to a Major Loss and for which each of following conditions has been satisfied:
(i) the Insurance Consultant has conducted a review of the available proceeds of insurance with
respect to such Loss, including the amount and duration for which delay in start-up insurance
proceeds or business interruption insurance proceeds will be available during the

26

 

Major Replacement Construction Period, and the Agent in consultation with the Insurance
Consultant has determined that the sum of (a) such insurance proceeds, plus (b) the lesser
of the amount of any applicable deductibles with respect to such insurance proceeds and the
Deductible Coverage Amount, will be available in amounts not less than the aggregate projected
Major Permitted Replacement Expenses with respect to such Major Loss, (ii) the Borrower has
submitted to the Agent and the Independent Engineer a Major Replacement Construction Schedule and a
Major Replacement Construction Budget, and in each case the Independent Engineer has conducted a
review thereof and of the proposed repair or replacement and has notified the Agent in writing of
the Independent Engineer’s approval thereof, (iii) no Material Adverse Change could reasonably be
expected to result from such repair or replacement, including as a result of the delay in
operations during the Major Replacement Construction Period, (iv) such expenses are incurred within
three hundred sixty-five (365) days following receipt by the Borrower or such Subsidiary of any
insurance proceeds or condemnation award with respect to such Loss, (v) the Major Replacement
Construction Period described in the Major Replacement Construction Schedule shall not extend
beyond a date which is two hundred seventy (270) days prior to the scheduled Term Loan Maturity
Date, (viii) the Sponsor shall have executed in favor of the Agent an agreement satisfactory to the
Agent pursuant to which the Sponsor agrees to make contributions directly or indirectly to the
Borrower to cover cost overruns with respect to all Major Permitted Replacement Expenses, (ix) each
of the Major Replacement Project Documents shall be in form and substance satisfactory to the Agent
and the Independent Engineer, and the Borrower and each party to each Major Replacement Project
Document shall have entered into a Project Party Consent in form and substance satisfactory to the
Agent, and (x) if such Major Loss occurs prior to the Project Construction Completion Date, such
Major Loss could not reasonably be expected to result in a Cost Overrun or a Project Delay. For
purposes of the foregoing, “Deductible Coverage Amount” means (i) with respect to a Major Loss that
occurs prior to the Project Construction Completion Date, the sum of (a) the amount of any unused
contingency in the Construction Budget, plus (b) amounts deposited into the Cost Overrun Account
with respect to such Major Loss, and (ii) with respect to a Major Loss that occurs on or
after the Project Construction Completion Date, the amount by which Borrower’s Liquidity exceeds
$3,000,000.

     “Major Replacement Construction Budget” means a budget prepared with respect to any
Major Replacement (i) which is prepared by the Borrower and approved by the Independent Engineer
and the Agent, (ii) which shall be in a form substantially similar to the budget identified as the
“Construction Budget” on Schedule 1.1(d), and (iii) which sets forth projected Major
Permitted Replacement Expenses and presented in a manner that reflects each of the key dates in the
Major Replacement Construction Schedule.

     “Major Replacement Construction Deadline” means the date designated in writing by the
Agent following the Agent’s review of the Major Replacement Construction Schedule by which the
Major Replacement Construction Requirements must be satisfied (which date may not be later than two
hundred seventy (270) days prior to the Term Loan Maturity Date), as such date may be extended
thereafter by the Required Lenders in their sole and absolute discretion.

     “Major Replacement Construction Period” means a period of not greater than three
hundred sixty-five (365) days beginning on the date of any Major Loss and ending on the date that
the Agent receives, with respect to any Major Replacement for such Major Loss, evidence

27

 

satisfactory to the Agent that the Major Replacement Construction Requirements have been
satisfied, which shall be in the form of (a) a certificate from the Borrower certifying that each
of the matters described on the Major Replacement Construction Requirements Report and identified
as to be certified by the Borrower are true and correct in all respects with respect to the Major
Replacement Construction Requirements for such Major Loss, and (b) a certificate of the Independent
Engineer certifying that each of the matters described on the Major Replacement Construction
Requirements Report and identified as to be certified by the Independent Engineer are true and
correct in all respects with respect to the Major Replacement Construction Requirements for such
Major Loss.

     “Major Replacement Construction Requirements” means the requirements established by
the Agent and the Independent Engineer with respect to any Major Replacement, and in any event
specifying that the Project after such Major Replacement shall meet the specifications set forth in
Schedule 1.1(b).

     “Major Replacement Construction Requirements Report” means a report prepared by the
Independent Engineer in consultation with the Borrower and approved by the Agent, which shall be in
the form similar to Schedule 1.1(b), setting forth the Major Replacement Construction
Requirements and such other matters with respect to the Major Replacement as the Agent may request.

     “Major Replacement Construction Schedule” means the schedule established by the
Borrower and approved by the Independent Engineer and the Agent for any Major Replacement, which
shall be substantially in the form of the schedule set forth on Schedule 1.1(c), and which
shall set forth the Major Replacement Construction Deadline.

     “Major Replacement Project Documents” means the construction contracts, the consulting
contracts, and the Project Party Consents entered into by or on behalf of the Borrower with respect
to any Major Replacement.

     “Material Adverse Change” means a material adverse change in (a) the condition
(financial or otherwise), operations, performance, business, properties or prospects of the Parent
Guarantor and its Subsidiaries, taken as a whole, or, prior to the Project Construction Completion
Date, of the Sponsor, (b) the Project, (c) the rights and remedies of the Lenders or the Agent
under the Loan Documents, (d) the ability of the Borrower to repay the Obligations or the ability
of the Borrower, any Subsidiary of the Borrower, the Parent Guarantor or the Sponsor to perform
their respective obligations under the Loan Documents, (e) the legality, validity or enforceability
of any Loan Document, or (f) the Liens granted to the Agent for the benefit of the Secured Parties
pursuant to the Security Documents.

     “Maturity” means (i) relative to any Term Loan or portion thereof, the earlier of the
Term Loan Maturity Date or such other date when such Loan or portion thereof shall be or become due
and payable in accordance with the terms of this Agreement, whether by required repayment,
prepayment, declaration, acceleration or otherwise, (ii) relative to any Additional Term Loan or
portion thereof, the earlier of the Additional Term Loan Maturity Date or such other date when such
Loan or portion thereof shall be or become due and payable in accordance with the terms of this
Agreement, whether by required repayment, prepayment, declaration, acceleration or

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otherwise, and (iii) relative to any Working Capital Facility Loan or portion thereof, the
earlier of the Working Capital Facility Maturity Date or such other date when such Working Capital
Facility Loan or portion thereof shall be or become due and payable in accordance with the terms of
this Agreement, whether by required repayment, prepayment, declaration, acceleration or otherwise.

     “Maximum Lawful Rate” has the meaning set forth in Section 9.18.

     “Monthly Progress Report” means, collectively, (a) a written progress report prepared
by the General Contractor, in form and substance satisfactory to the Agent and reviewed and
certified by the Independent Engineer, detailing (i) construction progress as compared with the
Construction Schedule, (ii) remaining projected Construction Expenses, (iii) the estimated Project
Construction Completion Date, (iv) progress of payments as compared with the remaining projected
Construction Expenses and to the Construction Budget, and (v) the status of any Change Orders under
any of the Construction Contracts, and (b) a written report prepared by the Project
Architect-Engineer, in form and substance satisfactory to the Agent and reviewed and certified by
the Independent Engineer, detailing Construction Expenses expended and a description of the status
of design, engineering and procurement.

     “Moody’s” means Moody’s Investors Service, Inc., a corporation organized and existing
under the laws of the State of Delaware, its successors and their assigns.

     “Mortgage” means any mortgage, leasehold mortgage, deed of trust, deed to secure debt
and other instrument, from time to time executed by a Loan Party for the purpose of granting the
Agent, for the benefit of the Secured Parties, a Lien on real property, or any interest therein or
rights with respect thereto, of such Loan Party, in form and substance satisfactory to the Agent;
and “Mortgages” means each and every Mortgage.

     “Mortgaged Property” means the real property and related rights and interests
described in the Mortgages and includes, without limitation, the fee interest of the Borrower in
the Project Site and Project Improvements.

     “Multiemployer Pension Plan” means a Multiemployer Plan which is subject to Subtitle E
of Title IV of ERISA.

     “Multiemployer Plan” means a Plan which is a “multiemployer plan” within the meaning
of Section 3(37) of ERISA.

     “Necessary Project Approvals” has the meaning set forth in Section 4.1.5.

     “Necessary Project Expansion Approvals” has the meaning set forth in Section
4.4.

     “Net Disposition Proceeds” means, with respect to any sale or disposition of assets
(other than sales of inventory in the ordinary course of business), (A) the gross cash proceeds
received from such sale or disposition minus (B) the sum of (x) all reasonable
out-of-pocket fees and expenses incurred in connection with such sale or disposition plus
(y) all taxes incurred in connection with such sale or disposition plus (z) all amounts
used to repay Indebtedness (other

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than the Loans) secured by Liens permitted by Section 6.2.3 on the assets subject to
such sale or disposition.

     “Net Income” means, as to any Person for any period, the net income (or loss) of such
Person for such period, determined in accordance with GAAP.

     “Net Indebtedness Proceeds” means, with respect to the issuance or incurrence by any
Loan Party of any Indebtedness, the excess of: (a) the gross cash proceeds received by such Loan
Party from the issuance or incurrence such Indebtedness, minus (b) all reasonable
out-of-pocket fees and expenses incurred in connection with such issuance or incurrence and paid or
payable to Persons that are not Affiliates of any Loan Party.

     “Net Securities Proceeds” means, with respect to the issuance or sale by the Parent
Guarantor of any securities representing Stock of the Parent Guarantor or contribution to the
equity capital of the Parent Guarantor (other than any Excluded Issuance and any issuance of
securities described in or made pursuant to the Contribution Documents), the excess of (a) the
gross cash proceeds received by the Parent Guarantor from such issuance and sale, minus (b)
all reasonable out-of-pocket fees and expenses incurred in connection with such issuance and sale
and paid or payable to Persons that are not Affiliates of the Parent Guarantor.

     “Net Worth” means, as of any date, with respect to any Person, the amount by which
such Person’s total assets exceed its total liabilities, determined on a consolidated basis in
accordance with GAAP.

     “Notes” means, collectively, all of the Term Notes, any Additional Term Notes, and all
of the Working Capital Facility Notes.

     “Obligations” means and includes any and all of the Loan Parties’ Indebtedness,
obligations and/or liabilities to the Agent, Lenders, each other Lender Party (or any Affiliate of
any Lender Party) and each other Secured Party, of every kind, nature and description, whether
direct or indirect, secured or unsecured, joint, several, joint and several, absolute or
contingent, due or to become due, now existing or hereafter arising, contractual or tortious,
liquidated or unliquidated arising under this Agreement, any other Loan Document or any Secured
Hedge Contract, and all obligations of the Loan Parties to the Agent, Lenders or any other Lender
Party (or any Affiliate of a Lender Party) to perform acts or refrain from taking any action
hereunder, under any other Loan Document or under any such Secured Hedge Contract. Without
limitation of the foregoing, the term “Obligations” extends to and includes all Loans, all Letter
of Credit Obligations, all accrued (but unpaid) interest thereon and all fees payable hereunder and
any Loan Document.

     “OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control and its
successors.

     “OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept.
25, 2001) and any other list of terrorists or other restricted Persons maintained pursuant to any
of the rules and regulations of OFAC or pursuant to any other applicable Executive Orders.

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     “Organizational Document” means, relative to any Person, its articles or
certificate of incorporation, certificate of limited liability company or formation, or certificate
of limited partnership or organization, its bylaws, partnership or operating agreement or other
organizational documents, and all stockholders agreements, member agreements, voting trusts and
similar arrangements applicable to any of its Capital Stock or other ownership interests, in each
case, as amended.

     “Original Member” means Northstar Founders, LLC, f/k/a Northstar Agri Industries, LLC,
a Delaware limited liability company.

     “OSHA” means the Occupational Safety and Health Act of 1970, as amended from time to
time, and any successor statute.

     “Parent Guarantor” means PICO Northstar, LLC, a Delaware limited liability company.

     “Parent Guarantor’s LLC Agreement” means the Amended and Restated Limited
Liability Company Agreement of the Parent Guarantor dated as of December 23, 2010, by and between
PICO Northstar Management, LLC and the Original Member, as it may be amended, restated,
supplemented, or otherwise modified from time to time.

     “Parent Guaranty” means that certain Parent Guaranty, dated as of the Closing Date,
made by the Parent Guarantor in favor of the Agent, for the benefit of the Secured Parties, as such
agreement may be amended, restated, supplemented or otherwise modified from time to time.

     “Parent Pledge Agreement” means that certain Parent Pledge Agreement, dated as of the
Closing Date, made by the Parent Guarantor in favor of the Agent, for the benefit of the Secured
Parties, as such agreement may be amended, restated, supplemented or otherwise modified from time
to time.

     “Participant” means the banks or other entities that purchase participating interests
in any Loan, Note, Commitment, Letter of Credit Obligation or other interest hereunder, as provided
in subsection (a) of Section 9.11.

     “Pass-Through Entity” means a Person which is an “S corporation” within the meaning of
Section 1361 of the IRC, a “qualified subchapter S subsidiary” within the meaning of Section 1361
(b)(3)(B) of the IRC, a partnership (including a limited liability company) within the meaning of
Section 7701(a)(2) of the IRC (other than one electing to be taxed as a corporation), or an entity
with a single owner that is disregarded pursuant to Treasury Reg. §301.7701-3.

     “PBGC” means the Pension Benefit Guaranty Corporation and any entity succeeding to any
or all of its functions under ERISA.

     “Pension Plan” means any Plan which is subject to the provisions of Title IV of ERISA,
or to the provisions of Section 302 of ERISA or Section 412 of the IRC.

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     “Perfection Certificate” means that certain Perfection Certificate executed by the
Borrower and delivered to the Agent in connection with the transactions contemplated herein.

     “Permitted Amendment” means any amendment, modification or change to a Project
Document (other than a Project Document that is a Loan Document) that (a) does not adversely affect
the rights and privileges of the Borrower or its Subsidiaries in any material respect, (b) does not
adversely affect the ability of the Borrower to perform its obligations hereunder or under the
other Loan Documents or Major Project Documents, (c) does not restrict the ability of the Borrower
or its Subsidiaries to amend, modify, renew or supplement the terms of this Agreement or any of the
other Loan Documents, (d) does not adversely affect the interests of the Agent or the Lenders in
any material respect, (e) would not reasonably be expected to result in a Project Delay or a Cost
Overrun and (f) in the case of the Land O’Lakes Agreements, does not shorten the duration of the
“Initial Term” (as such quoted term is defined in each of the Land O’Lakes Agreements as in effect
on the Closing Date); provided, however, in each case that no such amendment,
modification or change shall constitute a “Permitted Amendment” if at the time of such amendment,
modification or change, a Default or an Event of Default has occurred and is continuing or would
result therefrom.

     “Permitted Hedge Contract” means (a) any Hedge Contract that is required to be entered
into pursuant to the terms hereof on or subsequent to the Closing Date, (b) the Qualified Commodity
Hedge Contract, and (c) any other Hedge Contract that has been approved by the Required Lenders and
the Agent.

     “Permitted Investments” means cash and Cash Equivalent Investments and other
investments selected by the Agent and approved by the Borrower.

     “Permitted Liens” means Liens permitted under Section 6.2.3.

     “Permitted Replacement Expenses” means expenses incurred by the Borrower or any
Subsidiary to repair or replace any property and assets that are subject to Losses that do not
exceed $2,500,000 in the aggregate with other such Losses during the term of this Agreement and
that satisfy each of the following conditions: (i) the amount of such expenses does not exceed
available funds for such use (including any insurance and condemnation proceeds with respect to
such Loss), (ii) if such Loss occurs prior to the Project Construction Completion Date, the
Independent Engineer has conducted a review of the proposed repair or replacement satisfactory to
the Agent and has approved such repair or replacement, (iii) no Material Adverse Change could
reasonably be expected to result from such repair or replacement, and (iv) such expenses are
incurred within one hundred and eighty (180) days following receipt by the Borrower or such
Subsidiary of any insurance proceeds or condemnation award with respect to such Loss.

     “Permitted Tax Distributions” has the meaning set forth in Section 6.2.8.

     “Person” means any natural person, corporation, partnership, limited liability
company, firm, association, government, governmental agency or other entity, whether acting in an
individual, fiduciary or other capacity.

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     “PICO Equity Contribution” shall mean the equity contribution to the Parent Guarantor
made by the Sponsor on or prior to the Closing Date, in the aggregate amount of not less than
$60,000,000, all of which has been contributed by the Parent Guarantor to the Borrower.

     “Plan” means, at a particular time, any employee benefit plan (within the meaning of
Section 3(3) of ERISA), which is covered by ERISA and in respect of which the Borrower, a
Subsidiary or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

     “Post-Closing Syndication Letter Agreement” means the letter agreement dated the
Closing Date among the Borrower, the Parent Guarantor, the Sponsor, PICO Northstar Management, LLC,
the Lenders, and ING.

     “Post-Default Rate” means the sum of (i) the highest rate per annum applicable to any
Loans from time to time plus (ii) two percent (2%) per annum.

     “Pre-Closing Equity Contributions” shall mean equity contributions to the Parent
Guarantor made by the Original Member prior to the Closing Date, in the aggregate amount of not
less than $8,350,000, all of which has been contributed by the Parent Guarantor to the Borrower.

     “Project” means the Project Improvements and the Project Site.

     “Project Architect-Engineer” means Karge-Faulconbridge, Inc.

     “Project Architect-Engineer Agreement” means that certain Agreement dated November 16,
2007, between Northstar Agri Industries Hallock, LLC and the Project Architect-Engineer, for a
Canola Crushing Facility, as amended by that certain Amendment No. 1 to Agreement Between Owner and
Architect dated September 20, 2010, as such agreement may be further amended, restated,
supplemented or otherwise modified from time to time.

     “Project Construction Completion Date” shall mean the date on which the Agent receives
(a) a certificate from the Borrower certifying that each of the matters described on Schedule
1.1(b) and identified as to be certified by the Borrower are true and correct in all respects,
and (b) a certificate of the Independent Engineer certifying that each of the matters described on
Schedule 1.1(b) and identified as to be certified by the Independent Engineer are true and
correct in all respects.

     “Project Construction Completion Deadline” means April 15, 2013, as such date may be
extended by the Required Lenders in their sole and absolute discretion.

     “Project Construction Completion Requirements” means the requirements established by
the Independent Engineer and set forth in Schedule 1.1(b).

     “Project Delay” means (i) the failure of the Project Construction Completion
Requirements to be satisfied on or before the Project Construction Completion Deadline, and (ii) if
a Major Replacement is undertaken by the Borrower, shall also include the failure of the Major

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Replacement Construction Completion Requirements to be satisfied on or before the Major Replacement
Construction Completion Deadline.

     “Project Documents” means the Major Project Documents plus all other documents and
agreements entered into by the Borrower with respect to the design, development, procurement,
construction and operation of the Project, including without limitation, the documents and
agreements for which copies are provided to the Agent pursuant to Section 6.1.1(g) or which
are included on any of the lists provided to the Agent pursuant to Section 6.1.1(g).

     “Project Expansion” means the expansion of the Project Improvements to increase the
capacity of the Project Improvements to process up to 1,650 short tons per day of canola seed into
canola meal, oil and other by-products.

     “Project Improvements” means the canola seed processing plant and integrated refinery
which is to be constructed at the Project Site near Hallock, Minnesota and which initially will
have the capacity to process up to 1,000 short tons per day of canola seed into canola meal, oil
and other by-products.

     “Project Title Insurance Policy” has the meaning set forth in Section
4.1.13(c).

     “Project Party” means each Person (other than the Borrower or any Subsidiary thereof)
who is a party to a Major Project Document.

     “Project Party Consent” means a Project Party Consent executed by the Borrower and a
Project Party in favor of the Agent for the benefit of the Secured Parties substantially in the
form of Exhibit G (with such changes and modifications to which the Agent in its discretion
may agree).

     “Project Site” means the real property located in Kittson County, Minnesota, near
Hallock, Minnesota, described on Schedule 1.1(e) on which the Project is located.

     “Projections” means, collectively, the projected balance sheets, statements of
operations and changes in cash flows of the Borrower and any of its Subsidiaries for the Fiscal
Years 2011 through 2018 inclusive, delivered to the Agent from time to time, prepared by or on
behalf of the Borrower on an annual basis, together with supporting details and a statement of
underlying assumptions. On the Closing Date, “Projections” shall refer to the Projections prepared
by Christianson & Associates, PLLP and dated January 18, 2011.

     “Punch List Certificate” means the certificate from the Borrower and approved by the
Independent Engineer as described on Schedule 1.1(b) as the “Punch List Certificate”.

     “Purchase Money Indebtedness” means Indebtedness incurred to finance part or all of
(but not more than) the purchase price of equipment in which neither the Borrower nor any of its
Subsidiaries had an interest at any time prior to such purchase.

     “Purchasing Lender” means any Person purchasing all or any part of the rights and
obligations under this Agreement and the Notes of any Lender in accordance with Section
9.11.

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     “Qualified Commodity Hedge Contract” means “over-the-counter” Hedge Contracts between
the Borrower and a Qualified Counterparty with respect to commodity prices having terms
substantially as set forth on Schedule 1.1(g) provided that (a) the Borrower and such Qualified Counterparty shall have provided the Agent prior written notice thereof and copies
of all documentation related thereto, and (b) the Loan Parties, the Qualified Counterparty to such
Hedge Contracts, and the Agent shall have executed and delivered the Qualified Commodity Hedge
Intercreditor Agreement.

     “Qualified Commodity Hedge Intercreditor Agreement” means an intercreditor agreement
among the Loan Parties, the Qualified Counterparties to all commodities-related Secured Hedge
Contracts and the Agent, having terms and conditions substantially as set forth on Schedule
1.1(g).

     “Qualified Commodity Hedge Related Amendment” means (i) any amendment or modification
of the definitions of “Major Loss”, “Qualified Commodity Hedge Contract”, “Qualified Commodity
Hedge Intercreditor Agreement” or “Total Loss”, including defined terms included in the foregoing,
or any amendment or modification of Section 8.8 or Section 9.1(a) (iv) or
(vi), in each case in any manner adverse to the rights of a Qualified Counterparty to a
Qualified Commodity Hedge Contract, or (ii) any amendment or modification of Section 3.3.1
the effect of which would be to require prepayment of the Loans from Net Disposition Proceeds or
the proceeds of a Loss in an amount that would be greater or at a time that would be earlier than
the amount and time otherwise required under Section 3.3.1 as in effect on the Closing
Date; provided, however, that any amendment or modification of the definition of “Project Delay”,
or defined terms included therein, the effect of which is to extend the Project Construction
Completion Deadline or a Major Replacement Construction Deadline shall not constitute a Qualified
Commodity Hedge Related Amendment.

     “Qualified Counterparty” means any counterparty to a Permitted Hedge Contract (other
than the Borrower and its Subsidiaries) that was a Lender or an Affiliate of a Lender at the time
it entered into such Permitted Hedge Contract.

     “Qualified Liens” means Liens permitted by Sections 6.2.3(c) and (e).

     “Qualified Preferred Equity Interests” means preferred equity membership interests in
the Parent Guarantor, which preferred equity membership interests (i) are in addition to any
Additional Equity Contributions required under the terms of the Agreement to Contribute Capital,
(ii) provide for the payment of dividends and the making of distributions solely at the discretion
of the board of directors of the Parent Guarantor or upon liquidation of the Parent Guarantor,
(iii) do not require redemption, purchase or otherwise retirement or extinguishment at a fixed or
determinable date (whether by operation of a sinking fund or otherwise), at the holder’s or
member’s option, or upon the occurrence of any event other than liquidation of the Parent
Guarantor, and (iv) otherwise does not contain any terms or conditions that would adversely effect
the Agent’s or the Lender’s rights under the Loan Documents or such Loan Party’s capacity or
ability to meet its obligations under this Agreement or any Loan Document.

     “Qualified Preferred Equity Issuance” means the issuance on or prior to the Project
Construction Completion Date by the Parent Guarantor to the Sponsor or any of its Subsidiaries,

35

 

other than the Parent Guarantor and its Subsidiaries, of Qualified Preferred Equity Interests for
cash the proceeds of which are contributed by the Parent Guarantor to the common equity capital
of the Borrower and which proceeds are used by the Borrower to make a mandatory prepayment
pursuant to Section 3.3.1(g).

     “Quarterly Payment” means a payment of principal on the Term Loans due on a Quarterly
Payment Date in the amount of the Quarterly Principal Payment Amount pursuant to Section
3.3.1(c).

     “Quarterly Payment Date” means the last day of each March, June, September or
December, or, if such day is not a Business Day, the immediately preceding Business Day.

     “Quarterly Principal Payment Amount” means $1,491,667.

     “Reference Lenders” means, collectively, JPMorgan Chase Bank, N.A., Citibank, N.A. and
Bank of America, N.A.

     “Register” has the meaning set forth in Section 9.11(c).

     “Regulatory Change” means, as to any or all of the Lenders or the Agent, any change
(including, without limitation, any change in the interpretation) occurring after the Closing Date
in, or the adoption after the Closing Date of, (i) any United States federal, state or foreign law
applicable to the Agent or such Lender, or (ii) any regulation, interpretation, directive,
guideline or request (whether or not having the force of law) applicable to the Agent or such
Lender of any court or Governmental Authority charged with the interpretation or administration of
any law referred to in clause (i) or of any central bank or fiscal, monetary or other authority
having jurisdiction over the Agent or such Lender; provided, that notwithstanding anything herein
to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests,
rules, guidelines or directives thereunder issued in connection therewith shall be deemed to be a
“Regulatory Change”, regardless of the date enacted, adopted or issued; and further provided, that
notwithstanding anything herein to the contrary, the International Convergence of Capital
Measurement and Capital Standards, a Revised Framework published by the Basel Committee on Banking
Supervision in June 2004 (“Basel II”) or any law or other regulation which implements Basel
II (whether such implementation, application or compliance is by a government, regulator, Loan
Party, Lender, or any of their respective Affiliates) shall be deemed to be a “Regulatory Change”,
regardless of the date enacted, adopted or issued; and further provided, that notwithstanding
anything herein to the contrary, each of the agreements reached on July 26, 2010 and September 12,
2010 by the Groups of Governors and Heads of Supervision of the Basel Committee on Banking
Supervision, the paper “The Basel Committee’s response to the financial crisis: report to the G20”
published by the Basel Committee on Banking Supervision in October 2010, the documents “Basel III:
A global regulatory framework for more resilient banks and banking systems” and “Basel III:
International framework for liquidity risk measurement, standards and monitoring” both published by
that committee in December 2010 or any follow-up agreement or paper from that committee, shall be
deemed to be a “Regulatory Change”, regardless of the date enacted, adopted or issued.

36

 

     “Related Fund” means any Fund that is administered, advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers, advises or manages a Lender.

     “Reorganization” means with respect to any Multiemployer Pension Plan, the condition
that such plan is in reorganization within the meaning of such term as used in Section 4241 of
ERISA.

     “Replacement Contract” means, in respect of a Project Document (other than a Project
Document which is a Loan Document), a replacement of such Project Document with a contract in form
and substance, and executed by parties, reasonably acceptable to the Agent as evidenced by its
written consent thereto, as such agreement may be amended, restated, supplemented or otherwise
modified from time to time; provided, however, that if such Project Document is a
Major Project Document, the Project Party to such Replacement Contract shall have executed a
Project Party Consent in form and substance satisfactory to the Agent.

     “Reportable Event” means (i) a reportable event described in Section 4043 of ERISA and
regulations thereunder (other than any Reportable Event described in Section 4043(c)(2) or (7) for
which notice is waived), (ii) a withdrawal by a “substantial employer” (within the meaning of
Section 4001(a)(2) of ERISA) from a Single Employer Plan to which more than one employer
contributes, as referred to in Section 4063(b) of ERISA, or (iii) a cessation of operations at a
facility causing more than twenty percent (20%) of participants under a Single Employer Plan to be
separated from employment, as referred to in Section 4062(e) of ERISA.

     “Required Lenders” means, (a) Lenders having, in the aggregate, more than 50% of the
aggregate Commitments or (b) if the Commitments shall have been terminated, whether pursuant to
this Agreement or otherwise, Lenders having, in the aggregate, more than 50% of the aggregate
outstanding principal amount of the Loans and Letter of Credit Obligations; provided that
(i) the Commitment of, and the portion of the outstanding principal amount of the Loans and Letter
of Credit Obligations held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders, and (ii) the Commitment of, and the portion of the outstanding
principal amount of the Loans and Letter of Credit Obligations held by any Sponsor Lender shall be
excluded for purposes of making a determination of Required Lenders.

     “Requirements of Law” means, as to any Person, the Organizational Documents of such
Person, and all federal, state and local laws, rules, regulations, orders, decrees or other
determinations of an arbitrator, court or other Governmental Authority, including all disclosure
and other requirements of ERISA, the requirements of Environmental Laws and environmental permits,
and the requirements of OSHA, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

     “Reserve Requirement” means, relative to any Interest Period for any Eurodollar Loans,
from time to time during such Interest Period, the reserve percentage (expressed as a decimal)
equal to the maximum aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) specified under regulations issued from time to time by the F.R.S.
Board and then applicable to assets or liabilities consisting of or including

37

 

“Eurodollar
Liabilities”, as currently defined under Regulation D of the F.R.S. Board, having a term
approximately equal or comparable to such Interest Period.

     “Sales and Marketing Contracts” means the Land O’Lakes Agreements and each other
agreement identified as a “Sales and Marketing Agreement” on Schedule 5.21, as such
agreements may be amended, restated, supplemented or otherwise modified from time to time.

     “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., a corporation organized and existing under the laws of the State of New York, its
successors and assigns.

     “Schedule” means each Schedule attached hereto, as each may be amended, supplemented
or otherwise modified from time to time by the Borrower with the consent of the Required Lenders as
provided in Section 4.2.2.

     “Secured Hedge Contract” means any Permitted Hedge Contract between the Borrower and a
Qualified Counterparty.

     “Secured Hedge Related Amendment” means (i) any amendment or modification of the
definitions of “Obligations”, “Secured Hedge Contract” or “Secured Party”, including defined terms
included in the foregoing, the effect of which is that the Obligations of the Borrower under a
Secured Hedge Contract shall cease to be Obligations or otherwise cease to be secured by the
Collateral, or a Secured Hedge Contract or a Qualified Counterparty to a Secured Hedge Contract
shall cease to have the rights and privileges accorded a Secured Hedge Contract or Qualified
Counterparty under this Agreement and the Security Documents, or (ii) any amendment or modification
of Section 9.1(a)(vii).

     “Secured Parties” means the collective reference to (i) the Agent, the Lenders, and
the issuers of the Letters of Credit, and (ii) any Qualified Counterparty to a Secured Hedge
Contract, and (iii) the respective successors, indorsees, transferees, and assigns of each of the
foregoing.

     “Securities Account” means any securities account, as such term is defined in the UCC.

     “Securities Account Control Agreement” means any control agreement executed by and
among the Borrower, the Agent, for the benefit of the Secured Parties, and the securities
intermediary at which the Borrower maintains a Securities Account, in form and substance
satisfactory to the Agent.

     “Security Agreement” means the Security Agreement, dated as of the Closing Date, made
by the Borrower in favor of the Agent, for the benefit of the Secured Parties, as such agreement
may be amended, restated, supplemented or otherwise modified from time to time.

     “Security Documents” means, collectively, the Security Agreement, the Trademark
Security Agreement, the Parent Guaranty, the Parent Pledge Agreement, the Financing Statements, the
Perfection Certificate, each of the Deposit Account Control Agreements, the Project Party Consents,
each Mortgage, each assignment of insurance, and each other Instrument at any time delivered in
connection with the foregoing to secure the Obligations.

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     “Single Employer Plan” means any Plan which is covered by Title IV of ERISA, other
than a Multiemployer Plan.

     “Solvent” means, with respect to any Person on a particular date, that on such date
(i) the fair value of the assets of such Person (both at fair valuation and at present fair
saleable value) is greater than the total amount of liabilities, including contingent and
unliquidated liabilities, of such Person, (ii) such Person is able to pay all liabilities of such
Person as they mature, and (iii) such Person does not have unreasonably small capital with which to
carry on its business. In computing the amount of contingent or unliquidated liabilities at any
time, such liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

     “Sponsor” means PICO Holdings, Inc., a California corporation.

     “Sponsor Lender” has the meaning set forth in Section 9.1(f).

     “Sponsor Loan” means a loan made to the Borrower by the Sponsor solely for use by the
Borrower to refinance that portion of the Sponsor Temporary Working Capital Loan which is not
repaid with advances of the Working Capital Facility on the Project Construction Completion Date
and which (i) shall at all times be unsecured, (ii) shall be subordinated to the prior payment in
full in cash of all Obligations on terms and conditions satisfactory to the Agent, (iii) shall
mature not earlier than six months after the scheduled Term Loan Maturity Date, (iv) shall not
require any payments of principal prior to its maturity, (v) shall bear interest payable-in-kind
and not in cash, (vi) shall be subject to documentation in form and substance satisfactory to the
Agent which, among other things, shall not contain any restrictive covenants or events of default,
other than for the failure to pay at maturity, and (vii) may not be prepaid, unless (a) any such
prepayment made in any Fiscal Year is in an amount that does not exceed the Borrower’s Excess Cash
Flow with respect to the immediately prior Fiscal Year (beginning with the first full Fiscal Year
ending after the Project Construction Completion Date) multiplied by the Excess Cash Flow
Recapture Percentage for such immediately preceding Fiscal Year, and (b) such prepayment satisfies
each of the Sponsor Loan Prepayment Requirements.

     “Sponsor Loan Prepayment Requirements” means the satisfaction of each of the following
requirements: (i) the Borrower shall have provided the Agent with not less than ten (10) days
prior written notice of its desire to prepay all or any portion of the Sponsor Loan, (ii) the
Borrower shall have provided written evidence satisfactory to the Agent of the amount of the
Borrower’s Excess Cash Flow based upon which such prepayment will be made, (iii) both before and
after giving effect to such prepayment, but without taking into account any prepayment required
under Section 3.3.1(l), the Borrower’s Liquidity shall not be less than $3,000,000, (iv)
both before and after giving effect to such prepayment, no Default or Event of Default shall have
occurred and be continuing or would result therefrom, and (v) both before and after giving effect
to such prepayment, all representations and warranties set forth in the Loan Documents shall be
true and correct in all material respects.

     “Sponsor Temporary Working Capital Loan” means a loan made to the Borrower by the
Sponsor solely for use by the Borrower to purchase canola seed for processing at the Project, which
loan may be secured solely by the Borrower’s interest in such canola seed and in

39

 

identifiable cash
proceeds thereof and which shall have terms, including interest rates and tenor, satisfactory to
the Agent and shall be subject to documentation and an intercreditor agreement in
form and substance satisfactory to the Agent; provided, however, that the
principal amount of such loan shall not exceed at any time $10,500,000.

     “Stock” means all shares of capital stock of or in a Person which is a corporation,
whether voting or non-voting, and including common stock and preferred stock, all membership or
other equity interests of or in a Person which is a limited liability company, all partnership and
other equity interests of or in a Person which is a partnership, and all similar equity and other
interests of or in any other Person.

     “Subsidiary” of any Person (other than a natural Person) means a corporation,
partnership or limited liability company of which greater than 50% of the outstanding shares of
Stock or other ownership interests having ordinary voting power for the election of directors (or
others serving equivalent functions) is owned directly or indirectly by such Person. Except as
otherwise indicated herein, references to Subsidiaries shall refer to Subsidiaries of the Borrower.

     “Tangible Net Worth” means, as of any date, with respect to the Sponsor, the Net Worth
of the Sponsor less amounts attributable to goodwill arising from the acquisition of a Person or
business unit of a Person.

     “Taxes” means all taxes, levies, imposts, deductions, charges or withholdings imposed
by any Governmental Authority, including interest, additions to tax or penalties applicable
thereto.

     “Term Loan” means a loan made by the Lenders to the Borrower pursuant to Section
2.1.1.

     “Term Loan Facility Availability Period” means the period (a) beginning on April 30,
2011, and (b) ending on the earliest to occur of (i) the Project Construction Completion Date, (ii)
the Project Construction Completion Deadline or (iii) the Term Loan Maturity Date.

     “Term Loan Facility Commitment” means the commitment of a Lender to make Term Loans
pursuant to Section 2.1.1.

     “Term Loan Facility Commitment Amount” means $89,500,000, as such amount may be
reduced from time to time.

     “Term Loan Maturity Date” means the earliest of:

     (a) the earlier to occur of (i) the fifth anniversary of the Project Construction Completion
Date, and (ii) April 15, 2018;

     (b) the date on which any Event of Default described in Section 7.1.4 occurs;

     (c) the date on which any Event of Default other than any Event of Default described
Section 7.1.4 shall have occurred and be continuing and either:

          (i) any Loans are declared to be due and payable pursuant to Section 7.3; or

40

 

          (ii) in the absence of such declaration, the Agent, acting at the direction of the Required
Lenders, shall give notice to the Borrower that the Term Loan Facility Commitments, the Additional
Term Loan Facility Commitments (if any) and the Working Capital Facility Commitments have been
terminated; and

     (d) the date on which a Change in Control occurs.

     “Term Loan Percentage” means as to any Lender, the percentage equivalent of a fraction
the numerator of which is the amount of such Lender’s Term Loan Facility Commitment and the
denominator of which is the aggregate amount of the Term Loan Facility Commitments of all Lenders.

     “Term Note” means a promissory note of the Borrower substantially in the form of
Exhibit A-1 attached hereto, as amended, restated, supplemented or otherwise modified from
time to time, and shall also refer to all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.

     “Total Debt” means, as of any date, the aggregate outstanding principal amount of all
Indebtedness of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP.

     “Total Loss” means, with respect to the Project, (a) a Loss affecting all or
substantially all of the Project, (b) a Loss for which the cost to repair or replace is projected
by the Independent Engineer to exceed 90% of the original Construction Budget, (c) if such Loss
occurs prior to the Project Construction Completion Date, a Loss which is projected by the
Independent Engineer to result in a Project Delay, or (d) if such Loss occurs on or after the
Project Construction Completion Date, a Loss which is reasonably expected (or which the Independent
Engineer has determined is reasonably expected) to result in the Project ceasing to operate
substantially in accordance with the Project Construction Completion Requirements for a period of
more than 365 days.

     “Trademark Security Agreement” means that certain Trademark Security Agreement, dated
as of the Closing Date, made by the Borrower and each of its Subsidiaries in favor of the Agent,
for the benefit of the Secured Parties, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.

     “Transfer Supplement” has the meaning set forth in Section 9.11.

     “UCC” means the Uniform Commercial Code of the State of New York, as in effect from
time to time.

     “United States” or “U.S.” means the United States of America, its 50 states
and the District of Columbia.

     “Working Capital” means an amount equal to (a) (i) Current Assets less (ii)
cash and Cash Equivalent Investments, less (b) (i) Current Liabilities less (ii)
the current portion of long-term debt required to be paid within one year.

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     “Working Capital Facility” means the revolving credit facility provided by the Lenders
to the Borrower pursuant to Section 2.1.2.

     “Working Capital Facility Availability” means, on any date, the amount available to
the Borrower under the Working Capital Facility, which shall be an amount equal to (a) the lesser
of (i) the Working Capital Facility Commitment Amount or (ii) the Borrowing Base minus (b)
the then aggregate outstanding principal amount of Working Capital Facility Loans minus (c)
the then aggregate outstanding amount of Letter of Credit Obligations.

     “Working Capital Facility Availability Period” means the period (a) beginning with the
Project Construction Completion Date, and (b) ending on the Working Capital Facility Maturity Date.

     “Working Capital Facility Commitment” means the commitment of a Lender to make Working
Capital Facility Loans pursuant to Section 2.1.2 and to cause the issuance of Letters of
Credit pursuant to Section 3.10.

     “Working Capital Facility Commitment Amount” means $10,500,000, as such amount may be
increased pursuant to Section 2.1.5 or reduced from time to time pursuant to Section
3.3.3.

     “Working Capital Facility Loan” means, relative to any Lender, any Loan made by such
Lender to the Borrower pursuant to Section 2.1.2.

     “Working Capital Facility Maturity Date” means the earliest of:

     (a) the earlier to occur of (i) the fifth anniversary of the Project Construction Completion
Date, and (ii) April 15, 2018;

     (b) the date on which any Event of Default described in Section 7.1.4 occurs;

     (c) the date on which any Event of Default other than an Event of Default described in
Section 7.1.4 shall have occurred and be continuing and either:

     (i) any Loans are declared to be due and payable pursuant to Section 7.3; or

     (ii) in the absence of such declaration, the Agent, acting at the direction of the
Required Lenders, shall give notice to Borrower that the Term Loan Facility Commitments, the
Additional Term Loan Facility Commitments (if any) and the Working Capital Facility
Commitments have been terminated; and

     (d) the date on which a Change in Control occurs.

     “Working Capital Facility Note” means a promissory note of the Borrower, dated the
date hereof, and substantially in the form of Exhibit A-2 attached hereto, as amended,
restated, supplemented or otherwise modified from time to time, and shall also refer to all other
promissory notes accepted from time to time in substitution therefor or renewal thereof.

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     “Working Capital Facility Percentage” means, as to any Lender, the percentage
equivalent of a fraction the numerator of which is the amount of such Lender’s Working Capital
Facility Commitment and the denominator of which is the aggregate amount of the Working Capital
Facility Commitments of all Lenders.

     “written” or “in writing” means any form of written communication or a
communication by means of telex, telecopier device, telegraph or cable.

     SECTION 1.2 Construction and Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this Agreement shall have such
meanings when used in the Schedules and each Note, Borrowing Request, Compliance Certificate,
Borrowing Base Certificate, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document. Unless otherwise indicated, the use of
any gender includes all genders. References to any time of the day in this Agreement shall refer
to Eastern standard time or Eastern daylight saving time, as in effect in New York City on such
day.

     SECTION 1.3 Cross-References. Unless otherwise specified, references in this
Agreement and in each other Loan Document to any Article or Section are references to such Article
or Section of this Agreement or such other Loan Document, as the case may be, and unless otherwise
specified, references in any Article, Section, or definition to any subsection or clause are
references to such subsection or clause of such Section, Article or definition.

     SECTION 1.4 Accounting and Financial Determinations. Unless otherwise specified, all
accounting terms used herein or in any other Loan Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be prepared, in accordance with GAAP.

ARTICLE 2

COMMITMENTS

     SECTION 2.1 Commitments. Subject to the terms and conditions of this Agreement
(including Article 4), each Lender agrees to provide: (a) its Working Capital Facility
Commitment, and (b) its Term Loan Facility Commitment, each as more fully described in this
Section 2.1. The Commitments of each initial Lender as of the Closing Date are set forth
on Schedule 1.1(f).

     SECTION 2.1.1 Term Loan Facility Commitments. Subject to the limitations set forth in
this Agreement, from time to time on any Business Day occurring during the Term Loan Facility
Availability Period, each Lender severally will make its Term Loan Facility Percentage of any
Borrowing of Term Loans on such Business Day as the Borrower shall request in accordance with
Section 3.1. Once repaid, Term Loans may not be reborrowed.

     SECTION 2.1.2 Working Capital Facility Commitments. Subject to the limitations set
forth in this Agreement, from time to time on any Business Day occurring during the Working Capital
Facility Availability Period, each Lender severally will make its Working Capital

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Facility
Percentage of any Borrowing of Working Capital Facility Loans on such Business Day as the Borrower
shall request in accordance with Section 3.1 and shall endeavor to arrange for the issuance
of any Letters of Credit as the Borrower shall request in accordance with Section 3.10.
Subject to the terms hereof, the Borrower may from time to time borrow, repay, and reborrow Working
Capital Facility Loans pursuant to the Working Capital Facility Commitment.

     SECTION 2.1.3 Additional Term Loan Facility Commitments. The Borrower may, on one
occasion during the Additional Term Loan Facility Availability Period by written notice to the
Agent (whereupon the Agent shall promptly deliver a copy to each of the Lenders), request
additional term loans (the “Additional Term Loans”) in an aggregate principal amount not to
exceed the Additional Term Loan Facility Commitment Amount, provided that (i) both at the
time of any such request and upon the date that any such Additional Term Loans are made (and after
giving effect thereto), no Default or Event of Default shall have occurred and be continuing, and
(ii) the Borrower shall be in compliance with each of the covenants set forth in Section
6.2.4, determined on a pro forma basis as if such Additional Term Loans were incurred on the
last day of the most recently ended Fiscal Quarter of the Borrower. The Additional Term Loans (a)
shall rank pari passu in right of payment and of security with the Term Loans, (b) shall not mature
earlier than the Term Loan Maturity Date (but may be amortized prior to such date), and (c) except
as set forth above, shall be treated substantially the same as the Term Loans (in each case,
including with respect to mandatory and voluntary prepayments and the deferral surcharge with
respect to any Deferred Payments of any Additional Term Loan); provided that (x) the terms
and conditions applicable to Additional Term Loans may be materially different from those of the
Term Loans to the extent such differences are acceptable to the Agent and the Borrower, and (y) the
interest rates and amortization schedule applicable to the Additional Term Loans shall be
determined by the Borrower and the Additional Term Loan Lenders; provided, that the yield to
maturity with respect to the Additional Term Loans (taking into account upfront fees paid to
Additional Term Loan Lenders) may be no more than 25 basis points (0.25% per annum) greater than
the yield to maturity with respect to the Term Loans (taking into account upfront fees paid to the
original Lenders making the Term Loans)(it being understood that the pricing of the Term Loans may
be increased or additional fees may be paid to such original Lenders, without the consent of such
original Lenders, to the extent necessary to satisfy such requirement). Any notice from the
Borrower pursuant to this Section 2.1.3 shall set forth the requested amount and proposed
terms of the Additional Term Loans. Additional Term Loans may be made by any existing Lender (and
each existing Lender will have the right to make a portion of the Additional Term Loans on terms
permitted in this Section 2.1.3 and otherwise on terms acceptable to the Agent and the
Borrower) or by any Additional Lender, provided that the Agent shall have consented to such
Lender’s or Additional Lender’s making such Additional Term Loans if such consent would be required
under Section 9.11 for an assignment of Loans to such Lender or Additional Lender.
Commitments in respect of Additional Term Loans shall become Commitments under this Agreement
pursuant to an amendment (“Additional Term Loan Amendment”) to this Agreement and, as
appropriate, the other Loan Documents, executed by the
Parent Guarantor, the Borrower, each Additional Term Loan Lender and the Agent. Each Lender
shall have the right for a period of fifteen (15) days following receipt of notice from the Agent
of the Borrower’s request for an Additional Term Loan to elect by written notice to the Agent and
the Borrower to provide an Additional Term Loan Facility Commitment in a principal amount equal to
its pro rata share of the Additional Term Loan Facility Commitment Amount. No Lender shall be
obligated to provide any Additional Term Loan Facility Commitment unless

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it so agrees. If any
Lender shall not elect to provide an Additional Term Loan Facility Commitment, the Borrower may
designate another bank or other financial institution (which may be, but need not be, one or more
of the existing Lenders) which at the time agrees to provide an Additional Term Loan Facility
Commitment, and in the case of an Additional Lender, to become a party to this Agreement. The
Additional Term Loan Amendment may, without the consent of any Lenders other than the Additional
Term Loan Lenders and the Agent, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the reasonable opinion of the Agent, to effect the
provisions of this Section 2.1.3. The effectiveness of any Additional Term Loan Amendment
shall be subject to the satisfaction on the date thereof of each of the conditions set forth in
Section 4.2 and Section 4.4 and such other conditions as the Additional Term Loan
Lenders or the Agent shall require, together with such evidence of appropriate authorization on the
part of the Borrower with respect to the Additional Term Loan Facility Commitment and such opinions
of counsel and other items as the Agent may reasonably request. The Borrower will use the proceeds
of the Additional Term Loans for the Project Expansion. Once repaid, Additional Term Loans may not
be reborrowed.

     SECTION 2.1.4 Agent and Lenders Not Required to Extend Credit under Working Capital
Facility Commitments. The Agent and the Lenders shall not be required to make any Working
Capital Facility Loan or issue or cause the issuance of any Letter of Credit if, after giving
effect thereto, the then aggregate outstanding principal amount of all Working Capital Facility
Loans plus the outstanding amount of all Letter of Credit Obligations would exceed the lesser of
(i) the Working Capital Facility Commitment Amount and (ii) the Borrowing Base. The Agent and the
Lenders shall not be required to issue or cause the issuance of any Letter of Credit if, after
giving effect thereto, the then aggregate outstanding amount of all Letter of Credit Obligations
would exceed the Letter of Credit Sub-Facility Amount.

     SECTION 2.1.5 Additional Working Capital Facility Commitments. The Borrower may, at
any time prior to the Working Capital Facility Maturity Date, by written notice to the Agent
(whereupon the Agent shall promptly deliver a copy to each of the Lenders), request an increase in
the Working Capital Facility Commitment (such increased commitment, an “Additional Working
Capital Facility Commitment”, and the amount of any such increase, the “Additional Working
Capital Facility Commitment Amount”) in an aggregate principal amount not to exceed
$10,000,000; provided that (i) both at the time of any such request and upon the effective
date of such increase, no Default or Event of Default shall have occurred and be continuing, and
(ii) the Borrower shall be in compliance with each of the covenants set forth in Section
6.2.4 determined on a pro forma basis as if such increase and any Working Capital Facility
Loans were made as of the last day of the most recently ended Fiscal Quarter of the Borrower.
Additional Working Capital Facility Commitments may be made by any existing
Lender or by any Additional Lender, provided that the Agent shall have consented to such
Lender’s or Additional Lender’s providing such Additional Working Capital Facility Commitment if
such consent would be required under Section 9.11 for an assignment of Loans to such Lender
or Additional Lender. Each Lender shall have the right for a period of fifteen (15) days following
receipt of notice from the Agent of the Borrower’s request for an increase in the Working Capital
Facility Commitment to elect by written notice to the Agent and the Borrower to increase its
Working Capital Facility Commitment by a principal amount equal to its pro rata share (in
proportion to their existing Working Capital Facility Commitments) of the Additional Working
Capital Facility Commitment Amount. No Lender shall be obligated to provide any

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Additional Working
Capital Facility Commitment unless it so agrees. If any Lender shall not elect to increase its
Working Capital Facility Commitment, the Borrower may designate another bank or other financial
institution (which may be, but need not be, one or more of the existing Lenders) which at the time
agrees to, in the case of any existing Lender, increase its Working Capital Facility Commitment, or
in the case of an Additional Lender, to become a party to this Agreement (each such Lender or
Additional Lender agreeing to provide an Additional Working Capital Facility Commitment, an
“Additional Working Capital Facility Lender”). An increase in the aggregate amount of the
Working Capital Facility Commitments shall become effective upon the receipt by the Agent of each
of the following items which shall be in form and substance satisfactory to the Agent and each
Additional Working Capital Facility Lender: (i) an amendment (“Additional Working Capital
Facility Commitment Amendment”) to this Agreement which shall have been authorized and executed
by the Borrower, the Agent, and the Additional Working Capital Facility Lenders, and acknowledged
by the Parent Guarantor, (ii) an amendment to the Mortgage increasing the maximum principal amount
secured by the Mortgage by the amount of the Additional Working Capital Facility Commitment
(“Additional Working Capital Facility Mortgage Amendment”) which shall have been authorized
and executed by the Borrower and the Agent, (iii) confirmation that all additional mortgage taxes
with respect to the Additional Working Capital Facility Mortgage Amendment have been paid, (iv) an
endorsement to the Project Title Insurance Policy to bring forward the date of the Project Title
Insurance Policy, including all endorsements thereto, to the effective date of the Additional
Working Capital Facility Mortgage Amendment and to modify the description of the Mortgage to mean
the Mortgage as amended by the Additional Working Capital Facility Mortgage Amendment, and (v) such
other documents, agreements, certificates, affidavits and opinions as the Agent, the Additional
Working Capital Facility Lenders and the title insurer shall require, including without limitation
amendments to the other Loan Documents, executed by the Parent Guarantor, the Borrower, each
Additional Working Capital Facility Lender, and the Agent, as appropriate, together with such
evidence of appropriate authorization on the part of the Borrower with respect to the increase in
the Working Capital Facility Commitment and such opinions of counsel and other items as the Agent
may reasonably request. The Additional Working Capital Facility Commitment Amendment may, without
the consent of any other Lenders, effect such amendments to this Agreement and the other Loan
Documents as may be necessary or appropriate, in the reasonable opinion of the Agent, to effect the
provisions of this Section 2.1.5. Upon any increase in the aggregate amount of the Working
Capital Facility Commitments pursuant to this Section 2.1.5 that is not pro rata among
Lenders (in proportion to their existing Working Capital Facility Commitments), within five (5)
Business Days, the Borrower shall prepay the outstanding Working Capital Facility Loans, and
subject to the conditions specified in Section 4.2, the Borrower shall borrow such Working Capital
Facility Loans from Additional
Working Capital Facility Lenders to the extent necessary that such Working Capital Facility
Loans are held by the Lenders and Additional Lenders ratably in proportion to their respective
Working Capital Facility Commitments after giving effect to such increase. If such prepayment is
not made on the last day of the applicable Interest Period, the Borrower shall pay to the Agent for
the account of the applicable Lenders any amount required under Section 3.4.9(a).
Effective upon such increase, the amount of the participations held by each Lender in the issuer’s
obligations and rights under and in respect of each Letter of Credit issued hereunder shall be
adjusted such that, after giving effect to such adjustments, each Lender and Additional Lender
shall hold a participation in each such Letter of Credit in the proportion its respective Working

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Capital Facility Commitment bears to the aggregate Working Capital Facility Commitments after
giving effect to such increase.

     SECTION 2.2 Establishment of Reserves. The Agent shall have the right to establish
reserves against the Borrowing Base in such amounts, and with respect to such matters, as the Agent
shall deem necessary or appropriate, including reserves with respect to (i) Charges and Liens; (ii)
Environmental Liabilities and Costs, (iii) sums as to which the Agent and the Lenders are permitted
to make Working Capital Facility Loans on the Borrower’s behalf under Section 3.3.2 of this
Agreement; (iv) Accounts for which the Agent, based on customary credit decisions, reasonably
determines that the prospect of payment or performance is impaired or that there is a reasonable
probability that such Account will not be paid, (v) Requirements of Law, (vi) any Hedging Reserve,
and (vii) such other matters, events, conditions or contingencies as to which the Agent, based on
customary credit considerations, reasonably determines reserves should be established from time to
time hereunder.

     SECTION 2.3 Commitment Fee, Unused Commitment Fee, Deferral Surcharge and Administrative
Fees.

     (a) The Borrower agrees to pay to the Agent, during the Working Capital Facility Availability
Period, for the account of each Lender of a Working Capital Facility (other than a Defaulting
Lender), a nonrefundable unused commitment fee equal to such Lender’s Working Capital Facility
Percentage multiplied by 0.75% per annum multiplied by the amount
by which (A) the Working Capital Facility Commitment Amount exceeds (B) the aggregate outstanding
principal amount of all Working Capital Facility Loans plus the aggregate outstanding
amount of Letter of Credit Obligations. The unused commitment fee described in this subsection (a)
shall be calculated on a daily basis and shall be payable by the Borrower in arrears on each
Quarterly Payment Date and on the Working Capital Facility Maturity Date.

     (b) The Borrower shall pay to the Agent, for the account of each Lender (other than a
Defaulting Lender), a nonrefundable ticking fee equal to (i) 0.75% per annum times (ii)
such Lender’s Working Capital Facility Percentage of the Working Capital Facility Commitments,
which shall be payable commencing on the Closing Date and continuing to but excluding the Project
Construction Completion Date, such fee to be payable by the Borrower in arrears on each Quarterly
Payment Date occurring prior to the Project Construction Completion Date and on the Project
Construction Completion Date.

     (c) The Borrower agrees to pay to the Agent, during the Term Loan Facility Availability
Period, for the account of each Term Lender (other than a Defaulting Lender), a nonrefundable
unused commitment fee equal to such Lender’s Term Loan Percentage multiplied by
0.75% per annum multiplied by the amount by which (A) the Term Loan Facility
Commitment Amount exceeds (B) the aggregate outstanding principal amount of all Term Loans. The
unused commitment fee described in this subsection (c) shall be calculated on a daily basis and
shall be payable by the Borrower in arrears on each Quarterly Payment Date and on the last day of
the Term Loan Facility Availability Period.

     (d) The Borrower shall pay to the Agent, for its own account, the fees in the amounts and at
such times as shall be set forth in the Fee Letter.

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     (e) The Borrower shall pay to the Agent, during each Deferral Period, for the account of each
Term Lender (other than a Defaulting Lender) a deferral surcharge equal to such Lender’s Term Loan
Percentage multiplied by 0.50% per annum multiplied by the aggregate principal
amount of all Term Loans outstanding during such Deferral Period. The deferral surcharge described
in this subsection (e) shall be calculated on a daily basis and shall be payable by the Borrower in
arrears on each Quarterly Payment Date and on the Term Loan Facility Maturity Date.

     SECTION 2.4 Defaulting Lender.

     (a) Notwithstanding anything to the contrary set forth in this Agreement, any amounts owed to
a Defaulting Lender under this Agreement may be applied to satisfy such Defaulting Lender’s
obligations under this Agreement, including without limitation, such Defaulting Lender’s obligation
to make Loans and such Defaulting Lender’s obligations under Section 3.10.5 with respect to
its pro rata participation interest in the Letters of Credit, and may be applied in such order as
the Agent may determine in its sole discretion to satisfy any of the other obligations of such
Defaulting Lender to the Agent, to the other Lenders which are not Defaulting Lenders or to the
Borrower under this Agreement.

     (b) The obligation of each Lender to makes Loans and to purchase and make payments in respect
of participations in Letters of Credit in accordance with this Agreement shall not be affected or
impaired in any manner by the failure of any other Lender to do so or to otherwise constitute a
Defaulting Lender.

     SECTION 2.5 Increased Costs; Capital Adequacy.

     (a) The Borrower shall pay to the Agent, for the account of each Lender, from time to time
within five (5) Business Days of its receipt of the certificate referred to in Section
2.5(c) (with a copy to the Agent) such amounts as such Lender may determine to be reasonably
necessary to compensate it or its holding company for any increased costs which such Lender
determines are attributable to its making or maintaining Loans, issuing Letters of Credit, or
maintaining Commitments hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any such Loans, Letters of Credit or Commitments, resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement in respect of any of such Loans, Letters of Credit or Commitments
(other than taxes imposed on the overall net income or franchise taxes of Lender); or (ii) imposes
or modifies any reserve, special deposit, deposit insurance or assessment, minimum capital, capital
ratio or similar requirement relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender or any holding company of such Lender, but
excluding any such reserve to the extent reflected in the definition of Eurodollar Rate (including
a request or requirement which affects the manner in which such Lender or the holding company
thereof allocates capital resources to commitments, including the Commitments). Each Lender will
notify the Borrower (with a copy to the Agent) of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this subsection (a) as
promptly as practicable after it obtains knowledge thereof and determines to request such
compensation.

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     (b) Without limiting the effect of the foregoing provisions of this Section 2.5 (but
without duplication), the Borrower shall pay to the Agent, for the account of each Lender, from
time to time within five (5) Business Days of its receipt of the certificate referred to in
Section 2.5(c) (with a copy to the Agent), such amounts as such Lender may determine to be
reasonably necessary to compensate such Lender for any costs which it determines are attributable
to the maintenance by it or its holding company, pursuant to any Regulatory Change, of capital in
respect of its Loans, Letters of Credit or Commitments (such compensation to include an amount
equal to any reduction in return on assets or equity of such Lender or its holding company to a
level below that which it could have achieved but for such law, regulation, interpretation,
directive or request). Each Lender will notify the Borrower (with a copy to the Agent) if it is
entitled to compensation pursuant to this subsection (b) as promptly as practicable after it
determines to request such compensation.

     (c) Each notice delivered by a Lender pursuant to this Section 2.5 shall contain a
statement of such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) which shall, in the absence of manifest error, be presumed correct of
the matters stated therein and be binding upon the Borrower. In determining such amount, such
Lender may use any method of averaging and attribution that it in good faith shall deem applicable.

     (d) The Borrower shall not be required to compensate a Lender pursuant to this Section
2.5 for any amounts incurred more than one hundred and eighty (180) days prior to the date that
such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; and
provided, further, that (x) if the circumstances giving rise to such claim have a retroactive
effect, then such one hundred and eighty (180) day period shall be extended to include the period
of such retroactive effect, and (y) the limitation set forth in this proviso shall not apply to
amounts already included in the determination of the applicable Eurodollar Rate.

     SECTION 2.6 Replacement of Lenders. Within thirty (30) days after (1) receipt by
Borrower of written notice and demand from any Lender for payment of additional amounts or
increased costs as provided in Sections 2.5(a), 2.5(b), 2.7 or 3.5
or (2) any Lender shall notify the Borrower pursuant to Section 3.4.7 that it has become
unlawful for such Lender to make or maintain a Eurodollar Loan or (3) any Lender fails to designate
an alternate lending office after it is required to use reasonable efforts to do so under
Section 2.7 or (4) any Lender is a Defaulting Lender (each, an “Affected
Lender”), Borrower may, at its option, notify Agent and such Affected Lender of its intention
to replace the Affected Lender. So long as no Default has occurred and is continuing, within
ninety (90) days following such notice by Borrower to Agent, at Borrower’s request and expense,
Agent, or a Person reasonably acceptable to Agent, shall have the right (but shall have no
obligation) to purchase from such Affected Lender, and such Affected Lender agrees that it shall
sell and assign to Agent or such Person, all of the Loans and Commitments of such Affected Lender
for an amount equal to the principal balance of all Loans held by the Affected Lender and all
accrued interest and fees and other obligations owing with respect thereto through the date of such
sale (except those amounts payable by Borrower as set forth in the proviso to this sentence), such
purchase and sale to be consummated pursuant to an executed Transfer Supplement; provided,
that Borrower shall have reimbursed such Affected Lender for the additional amounts or increased
costs that it is entitled to receive pursuant to Section 2.5(a), 2.5 (b),
2.7 or 3.5 through the date of such sale and assignment. Notwithstanding

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the
foregoing, Borrower shall not have the right to replace such Affected Lender as provided herein if
the Affected Lender rescinds its demand for increased costs or additional amounts within fifteen
(15) days following its receipt of Borrower’s notice of intention to replace such Affected Lender.
Furthermore, if Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower’s rights under this Section
2.6 based on such events shall terminate with respect to such Affected Lender and Borrower
shall promptly pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to Section 2.5(a) and (b).

     SECTION 2.7 Change of Lending Office. Each Lender agrees that it will use reasonable
efforts to designate an alternate lending office with respect to any of its Eurodollar Loans
affected by the matters or circumstances described in Section 2.5, Section 3.4.7 or
Section 3.5, so long as such designation is not disadvantageous to such Lender as
determined by such Lender in its sole discretion; provided that such Lender shall have no
obligation to so designate an alternate lending office located in the United States.

ARTICLE 3

LOANS AND NOTES

     SECTION 3.1 Borrowing and Issuance Procedure.

     (a) In the case of Working Capital Facility Loans, by delivering a Borrowing Request to the
Agent’s office (i) on or before 1:00 p.m., New York City time, at least three (3) Business Days in
advance of the requested borrowing date for a Eurodollar Loan and (ii) on or before 12:00 Noon, New
York City time, on the requested borrowing date for a Base Rate Loan, the Borrower may from time to
time request that a Borrowing of Working Capital Facility Loans be made on the Business Day
specified in such Borrowing Request. Such Borrowings of Working Capital Facility Loans shall be in
a minimum aggregate amount equal to $500,000 for Eurodollar Loans and $100,000 for Base Rate Loans,
and in integral multiples of $100,000 or, if less, the amount of the Working Capital Facility
Availability immediately prior to such Borrowing. Promptly following the receipt by the Agent of a
Borrowing Request in accordance with this Section 3.1(a), the Agent shall advise each
Lender of the details and amount of such Lender’s
Working Capital Facility Percentage of such Borrowing. Each Borrowing shall be made on the
Business Day specified in the Borrowing Request therefor (including the initial Borrowing to be
made on the Closing Date, if any). On such Business Day, each Lender shall, on or before 3:00
p.m., New York City time, deposit same day funds with the Agent in the amount equal to such
Lender’s Working Capital Facility Percentage of such Borrowing, such deposit to be made to such
account as the Agent shall specify from time to time by notice to the Lenders. On the Business Day
specified by the Borrower in the Borrowing Request, the proceeds of such Borrowing shall be made
available to the Borrower by wire transfer of such proceeds to the account of the Borrower
specified in Schedule 3.1 or to such other accounts of the Borrower as the Borrower shall
have specified in the Borrowing Request therefor; provided, however, that in each
case the Agent shall be required to make available to the Borrower the proceeds of any Borrowing
only to the extent received by it in same day funds from the Lenders. No Lender’s obligation to
make any Working Capital Facility Loan shall be affected by any other Lender’s failure to make any
Working Capital Facility Loan.

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     (b) In the case of Term Loans, by delivering a Borrowing Request to the Agent’s office
(i) on or before 1:00 p.m., New York City time, at least three (3) Business Days in advance of the
requested borrowing date for a Eurodollar Loan and (ii) on or before 12:00 Noon, New York City
time, on the requested borrowing date for a Base Rate Loan, the Borrower may from time to time
request that a Borrowing of Term Loans be made on the Business Day specified in such Borrowing
Request. Such Borrowings of Term Loans shall be in a minimum aggregate amount equal to $2,000,000
and in integral multiples of $1,000,000 or, if less, the amount of the unused portion of the Term
Loan Facility Commitments immediately prior to such Borrowing. Promptly following the receipt by
the Agent of a Borrowing Request in accordance with this Section 3.1(b), the Agent shall
advise each Lender of the details and amount of such Lender’s Term Loan Percentage of such
Borrowing. Each Borrowing shall be made on the Business Day specified in the Borrowing Request
therefor. On such Business Day, each Lender shall, on or before 3:00 p.m., New York City time,
deposit same day funds with the Agent in the amount equal to such Lender’s Term Loan Facility
Percentage of such Borrowing, such deposit to be made to such account as the Agent shall specify
from time to time by notice to the Lenders. On the Business Day specified by the Borrower in the
Borrowing Request, the proceeds of such Borrowing shall be made available to the Borrower by wire
transfer of such proceeds to the account of the Borrower specified in Schedule 3.1 or to
such other accounts of the Borrower as the Borrower shall have specified in the Borrowing Request
therefor; provided, however, that in each case the Agent shall be required to make
available to the Borrower the proceeds of any Borrowing only to the extent received by it in same
day funds from the Lenders. No Lender’s obligation to make any Term Loan shall be affected by any
other Lender’s failure to make any Term Loan.

     (c) In the case of Additional Term Loans, by delivering a Borrowing Request to the Agent’s
office (i) on or before 1:00 p.m., New York City time, at least three (3) Business Days in advance
of the requested borrowing date for a Eurodollar Loan and (ii) on or before 12:00 Noon, New York
City time, on the requested borrowing date for a Base Rate Loan, the Borrower may from time to time
request that a Borrowing of Additional Term Loans be made on the Business Day specified in such
Borrowing Request. Such Borrowings of Additional Term Loans shall be in a minimum aggregate amount
equal to $2,000,000 or, if less, the amount of the unused portion of the Additional Term Loan
Facility Commitments immediately prior to such Borrowing. Promptly following the receipt by the
Agent of a Borrowing Request in accordance with this Section 3.1(b), the Agent shall advise
each Lender of the details and amount of such Lender’s Additional Term Loan Percentage of such
Borrowing. Each Borrowing shall be made on the Business Day specified in the Borrowing Request
therefor. On such Business Day, each Lender shall, on or before 3:00 p.m., New York City time,
deposit same day funds with the Agent in the amount equal to such Lender’s Additional Term Loan
Facility Percentage of such Borrowing, such deposit to be made to such account as the Agent shall
specify from time to time by notice to the Lenders. On the Business Day specified by the Borrower
in the Borrowing Request, the proceeds of such Borrowing shall be made available to the Borrower by
wire transfer of such proceeds to the account of the Borrower specified in Schedule 3.1 or
to such other accounts of the Borrower as the Borrower shall have specified in the Borrowing
Request therefor; provided, however, that in each case the Agent shall be required
to make available to the Borrower the proceeds of any Borrowing only to the extent received by it
in same day funds from the Lenders. No Lender’s obligation to make any Additional Term Loan shall
be affected by any other Lender’s failure to make any Additional Term Loan.

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     SECTION 3.2 Notes. All Loans made by any Lender shall be evidenced:

     (a) in the case of the Term Loans, by a Term Note made by the Borrower payable to the order of
such Lender in a principal amount up to such Lender’s Term Loan Percentage of the Term Loan
Facility Commitment Amount;

     (b) in the case of the Working Capital Facility Loans, by a Working Capital Facility Note made
by the Borrower payable to the order of such Lender in a principal amount equal to such Lender’s
Working Capital Facility Percentage of the Working Capital Facility Commitment Amount; and

     (c) in the case of the Additional Term Loans, by an Additional Term Note made by the Borrower
payable to the order of such Additional Term Loan Lender in a principal amount up to such
Additional Term Loan Lender’s Additional Term Loan Percentage of the Additional Term Loan Facility
Commitment Amount.

The Borrower hereby irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on a grid schedule attached to such Lender’s Notes (or on a continuation of any such grid
attached to any Note and made a part thereof), which notations shall evidence, inter alia, the date
and outstanding principal amount of the Loans evidenced thereby. The notations on any such grid
(and on any such continuation) indicating the outstanding principal amount of a Lender’s Loans
shall be presumptive evidence of the principal amount thereof owing and unpaid, but the failure to
record any such amount on any such grid (or on any such continuation) shall not limit or otherwise
affect the obligations of the Borrower hereunder or under such Note to make payments of principal
of or interest on such Loans when due.

     SECTION 3.3 Principal Payments. Repayments and prepayments of principal of the Loans
shall be made in accordance with this Section 3.3.

     SECTION 3.3.1 Repayments and Prepayments. The Borrower will make payment in full of
all unpaid principal of the Term Loans, and, if applicable, the Additional Term Loans, at the Term
Loan Maturity Date and the Working Capital Facility Loans at the Working Capital Facility Maturity
Date (or such earlier date as the Loans may become or be declared due and payable pursuant to
Article 7). Prior thereto, the Borrower:

     (a) may, from time to time on any Business Day, make a voluntary prepayment, in whole or in
part, of the outstanding principal amount of any Loans; provided, however, that (i)
all such voluntary prepayments shall be in a minimum amount of $500,000 (subject to the Borrower’s
right to prepay in full the entire unpaid principal amount of the Loans it has incurred), and (ii)
any such prepayment of the Term Loans shall require at least five (5) Business Days prior written
notice to the Agent;

     (b) shall, on any Business Day on which the aggregate outstanding principal amount of all
Working Capital Facility Loans plus the then aggregate amount of Letter of Credit
Obligations exceeds the lesser of (i) the Working Capital Facility Commitment Amount and (ii)
the Borrowing Base, either (x) make a mandatory prepayment of the outstanding principal amount
of the Working Capital Facility Loans in an amount equal to such excess amount, (y) provide cash
collateral in respect of such Letter of Credit Obligations in an amount equal to
such

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excess amount, or (z) perform a combination of (x) and (y) in an amount that, in the aggregate, equals or
exceeds such excess amount;

     (c) shall, commencing on the earlier of (x) the first Quarterly Payment Date occurring one
hundred and eighty (180) or more days after the Project Construction Completion Date or (y)
September 30, 2013, and on each Quarterly Payment Date thereafter (other than a Deferred Payment
Date), make a payment to the Agent in the amount of the Quarterly Principal Payment Amount, which
amount shall be applied to the outstanding principal amount of the Term Loans; provided,
however, that once during the term of this Agreement at the request of the Borrower, up to
four (4) consecutive Quarterly Payments may be deferred to the Term Loan Maturity Date subject to
the following conditions: (i) such request may only be made once during the term of this
Agreement; (ii) a weather-related event shall have had a negative impact on that year’s aggregate
canola seed crop for the geographic region comprised of Minnesota, North Dakota, and Manitoba by
reducing the size of the crop by at least 15% from the prior year’s canola seed crop for the
geographic region comprised of Minnesota, North Dakota, and Manitoba; (iii) no Default or Event of
Default shall have occurred and be continuing at the time of such request or after giving effect
thereto; and (iv) all representations and warranties shall be true and correct as of the date of
such request and after giving effect thereto.

     (d) shall, within one hundred and eighty (180) days following receipt by the Borrower or any
Subsidiary or the Agent of any condemnation awards with respect to any Loss (other than a Major
Loss or a Total Loss), make a mandatory prepayment of the Loans in an amount by which such
condemnation award proceeds exceed the Permitted Replacement Expenses incurred by the Borrower or
such Subsidiary to repair or replace the property or asset which was the subject of the
condemnation giving rise to such condemnation award proceeds;

     (e) shall, within one hundred and eighty (180) days following receipt by the Borrower or any
Subsidiary or the Agent of any insurance proceeds with respect to any Loss resulting from a
casualty (other than a Major Loss or a Total Loss), make a mandatory prepayment of the Loans in an
amount by which such insurance proceeds exceed the Permitted Replacement Expenses incurred by the
Borrower to repair or replace the property or asset which was the subject of the Loss giving rise
to such insurance proceeds;

     (f) shall, promptly after (and in any event within two (2) Business Days following) receipt by
the Borrower or any Subsidiary or the Agent of any insurance proceeds or any condemnation proceeds
with respect to any Major Loss, make a mandatory prepayment of the Loans in the amount of such
insurance proceeds or condemnation proceeds; provided, however, that such mandatory
prepayment shall not be required during any period in which (i) the Borrower has provided written
notice to the Agent that the Borrower intends to undertake a Major Replacement with respect to such
Major Loss, which notice shall specify the aggregate amount of deductibles that are applicable to
the insurance proceeds with respect to such Major Loss and the amount and source of funds (in
addition to such insurance proceeds) that are available to pay Major Permitted Replacement
Expenses, (ii) the Borrower is diligently proceeding to satisfy each of the conditions for a Major
Replacement with respect to such Major
Loss, (iii) the Borrower is diligently proceeding to satisfy the Major Replacement
Construction Requirements not later than the Major Replacement Construction Deadline, and no event
has occurred which could reasonably be expected to result in the failure of such Major Replacement

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Construction Requirements to be satisfied by the Major Replacement Construction Deadline or to
cause the cost of such Major Replacement to exceed the amounts set forth in the Major Replacement Construction Budget; and (iv) no Default or Event of Default has occurred and is continuing;
provided further, however, that to the extent any insurance proceeds or any
condemnation proceeds with respect to such Major Loss exceed the Major Permitted Replacement
Expenses actually incurred by the Borrower with respect to such Major Replacement, the Borrower
shall make a mandatory prepayment of the Loans in the amount of such excess insurance or
condemnation proceeds within two (2) days of the date that such Major Replacement is completed;

     (g) shall, promptly after (and in any event within two (2) Business Days following) receipt by
the Borrower of any proceeds from a Qualified Preferred Equity Issuance, make a mandatory
prepayment of the outstanding principal amount of Term Loans held by the Sponsor Lenders, in an
amount equal to the amount of such proceeds;

     (h) shall, promptly after (and in any event within two (2) Business Days following) receipt by
the Borrower or any Subsidiary or the Agent of any insurance proceeds with respect to any Loss
resulting from a liability, make a mandatory prepayment of the Loans in an amount by which such
insurance proceeds exceed the amount of the liability to be satisfied with such proceeds (to the
extent such liability is so satisfied);

     (i) shall, promptly after (and in any event within two (2) Business Days following) receipt by
the Borrower or any Subsidiary or the Agent of any Net Disposition Proceeds which are in excess of
$1,000,000 in the aggregate in any Fiscal Year, make a payment to the Agent in an amount equal to
such excess Net Disposition Proceeds; provided, that this clause (i) of Section
3.3.1 shall not in any event be deemed a consent to any disposition by any Loan Party which is
otherwise prohibited by the terms of this Agreement or of any of the other Loan Documents;

     (j) shall, promptly after (and in any event within two (2) Business Days following) receipt by
the Borrower or any Subsidiary or the Agent of any Net Securities Proceeds, make a payment to the
Agent in an amount equal to such Net Securities Proceeds; provided, that this clause (j) of
Section 3.3.1 shall not in any event be deemed a consent to any issuance or sale of Stock
by any Loan Party that is otherwise prohibited by the terms of this Agreement or of any of the
other Loan Documents;

     (k) shall, concurrently with receipt by any Loan Party after the Closing Date of any Net
Indebtedness Proceeds (excluding any Net Indebtedness Proceeds resulting from the incurrence by any
Loan Party of any Indebtedness permitted under Section 6.2.2 of this Agreement), make a
payment to the Agent in an aggregate amount equal to such Net Indebtedness Proceeds;
provided that this clause (k) of Section 3.3.1 shall not in any event be deemed a
consent to any incurrence of Indebtedness by any Loan Party which is otherwise prohibited by the
terms of this Agreement or any of the other Loan Documents;

     (l) shall, promptly after (and in any event within two (2) Business Days following delivery
of) the Borrower’s annual financial statements pursuant to Section 6.1.1(a) with respect to
each Fiscal Year, make a payment to the Agent in an amount equal to (i) Borrower’s Excess

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Cash Flow
for such Fiscal Year multiplied by the Excess Cash Flow Recapture Percentage calculated for
such Fiscal Year, less (ii) the amount of any prepayment made by the Borrower with respect
to any Sponsor Loan that satisfies the Sponsor Loan Prepayment Requirements; provided,
however, that in connection with the first full Fiscal Year following the Project
Construction Completion Date, no such prepayment shall be required if, after giving effect to such
prepayment, Borrower’s Liquidity would be less than $3,000,000; and

     (m) shall, upon the occurrence of a Change in Control, make a mandatory prepayment of the
entire outstanding principal amount of all Loans and all unreimbursed Letter of Credit Obligations,
together with accrued and unpaid interest and fees and all other outstanding Obligations, and
deposit with the Agent, as cash collateral, an amount equal to 105% of the aggregate undrawn stated
amount of all Letters of Credit.

Unless expressly set forth to the contrary in this Section 3.3.1 or elsewhere in this
Agreement, any mandatory prepayment of any Loans or other payment required to be made by the
Borrower pursuant to this Section 3.3.1 shall be applied (i) first, to the payment in full
of the outstanding amount of the Term Loans; (ii) second, to the payment in full of the outstanding
amount of all drawings under Letters of Credit that have not been reimbursed by the Borrower, (iii)
third, to the payment in full of all outstanding Working Capital Facility Loans; and (iv) fourth,
to be held by the Agent as cash collateral, an amount equal to 105% of any outstanding Letter of
Credit Obligations; provided, however, that to the extent mandatory prepayments required under
Section 3.3.1(f) during the term of this Agreement exceed $20,000,000 in the aggregate,
such prepayments in excess of such amount shall be applied pari passu to the payment of (A) all
principal on the Loans, Letter of Credit Obligations (to be held by the Agent as cash collateral in
the amount of 105% of the then outstanding Letters of Credit Obligations), and (B) all Obligations
in respect of the Qualified Commodity Hedge Contract (to be held by the Qualified Counterparty as
cash collateral). Unless expressly set forth to the contrary in this Section 3.3.1 or
elsewhere in this Agreement, (i) any mandatory prepayment of the Term Loans required to be made by
the Borrower pursuant to this Section 3.3.1 shall be applied to required installments of
principal under subsection (c) of this Section 3.3.1 in the inverse order of maturity.

     SECTION 3.3.2 Working Capital Facility Loans on Borrower’s Behalf. The Lenders are
authorized to, and at their option may, make Working Capital Facility Loans on behalf of the
Borrower for payment of all fees, expenses, charges, costs, principal and interest owed and
outstanding beyond any due date under this Agreement and the other Loan Documents by the Borrower
to the Lenders (or any of them), or any issuer of a Letter of Credit, or the Agent. Such Working
Capital Facility Loans shall be made when and as the Borrower fails promptly to pay same, and all
such Working Capital Facility Loans shall constitute Loans made to the Borrower and shall be
secured by all of the Collateral. Following the making of any Working Capital Facility Loans
pursuant to this Section 3.3.2, such Lender shall promptly notify the Borrower of the
making of such Working Capital Facility Loans and the aggregate principal amount of such Loans;
provided that the failure by any Lender to give such notice shall not
affect the Borrower’s obligations under this Agreement or with respect to such Working Capital
Facility Loans.

     SECTION 3.3.3 Reduction of Commitments.

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     (a) The Borrower shall not have the right to reduce the Working Capital Facility Commitment
Amount unless (i) concurrently with such reduction it makes any prepayment required pursuant to
Section 3.3.1(b) and (ii) such reduction is permitted under the next succeeding sentence.
The Borrower shall not have the right to reduce the Working Capital Facility Commitment Amount to
less than $5,000,000 or cancel the Working Capital Facility Commitment except upon the simultaneous
prepayment of all outstanding Loans, reimbursement of all drawings under Letters of Credit, deposit
by the Borrower with the Agent, to be held by the Agent as cash collateral, of an amount equal to
105% of all Letters of Credit, termination of all Commitments, payment of all accrued and unpaid
interest and fees, and payment of all other Obligations.

     (b) The Term Loan Facility Commitments (and the Term Loan Facility Commitment Amount) shall be
permanently reduced on any day on which the principal amount of the Term Loans are repaid, by the
amount of such repayment.

     SECTION 3.4 Interest. Interest on the outstanding principal amount of the Loans and
other outstanding Obligations shall accrue and be payable in accordance with this Section
3.4.

     SECTION 3.4.1 Loan Rates. Subject to Section 3.4.6, each Borrowing of Term
Loans and each Borrowing of Working Capital Facility Loans shall accrue interest at the following
rates per annum, at the election of the Borrower pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice:

     (a) during such periods as such Borrowing consists of Base Rate Loans, the Alternate Base Rate
plus the Applicable Margin, each as in effect from time to time, and

     (b) during such periods as such Borrowing consists of Eurodollar Loans, for each Interest
Period relating thereto, the Eurodollar Rate for such Interest Period plus the Applicable Margin as
in effect from time to time.

     SECTION 3.4.2 Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 3:00 p.m., New York City time, on a
Business Day, the Borrower may from time to time irrevocably elect, on not less than three (3) or
no more than five (5) Business Days notice, that all or any portion of an aggregate minimum amount
of $500,000 and an aggregate multiple of $100,000 of Loans be, in the case of Base Rate Loans,
converted into Eurodollar Loans or, in the case of Eurodollar Loans, continued as Eurodollar Loans;
provided, however, that no portion of the outstanding principal amount of any Loan may be
continued as, or converted into, a Eurodollar Loan when any Event of Default has occurred and is
continuing.

The Agent shall give prompt notice to each Lender of the interest rate determined pursuant to this
Section 3.4.2 with respect to such Loans. Absent delivery of a Continuation/Conversion
Notice with respect to any Eurodollar Loan at least three (3) Business Days before the last day of
the then current Interest Period with respect thereto, such Eurodollar Loan shall, on such last
day, automatically convert to a Base Rate Loan.

     SECTION 3.4.3 Post-Default Rates. From and after the occurrence of an Event of
Default and during the continuance thereof, the Borrower shall pay interest (after as well as

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before judgment) on the outstanding principal amount of all Loans and other Obligations at a rate
per annum equal to the Post-Default Rate applicable to such Loans and other Obligations.

     SECTION 3.4.4 Payment Dates. Accrued interest on the Loans shall be payable, without
duplication:

     (a) on Maturity of such Loans;

     (b) with respect to any portion of any Loan prepaid or repaid pursuant to Section
3.3.1 or Section 3.3.2, on the date of such prepayment or repayment is due as provided
in Section 3.3.1 or Section 3.3.2 and, in the case of a voluntary prepayment, on
the date set forth in any notice required for such prepayment; and

     (c) with respect to Base Rate Loans, on each Quarterly Payment Date, commencing with the first
such day following the Closing Date;

     (d) with respect to Eurodollar Loans, on the last day of each applicable Interest Period (and
if such Interest Period shall exceed three (3) months, also on the numerically corresponding day of
the third calendar month after the commencement of such Interest Period);

     (e) with respect to any Base Rate Loans converted into Eurodollar Loans on a day which is not
a Quarterly Payment Date, on the date of such conversion;

     (f) on the date of acceleration of such Loans pursuant to Section 7.2 or Section
7.3; and

     (g) with respect to interest accruing at any Post-Default Rate and, to the extent permitted by
applicable law, interest on overdue amounts (including overdue interest), upon demand.

     SECTION 3.4.5 Rate Determinations. All determinations by the Agent of the rate of
interest applicable to any Loan shall be presumed correct in the absence of manifest error.

     SECTION 3.4.6 Limitation on Types of Loans. (a) Anything herein to the contrary
notwithstanding, if on or prior to the determination of any Eurodollar Rate for any Interest
Period, the Agent determines in good faith, which determination shall be conclusive, that
quotations of interest rates for the relevant deposits referred to in the definition of “Eurodollar
Rate” are not being provided in the relevant amounts
or for the relevant maturities for purposes of determining rates of interest for Eurodollar
Loans as provided herein; or (b) the Required Lenders determine in good faith, which determination
shall be conclusive, and notify the Agent that the relevant rates of interest referred to in the
definition of “Eurodollar Rate” upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined are not likely to cover adequately the cost to such
Lenders of making or maintaining Eurodollar Loans for such Interest Period; then the Agent shall
give the Borrower and each Lender prompt notice thereof, and so long as such condition remains in
effect, the Lenders shall be under no obligation to make additional Eurodollar Loans, to continue
Eurodollar Loans or to convert Base Rate Loans into Eurodollar Loans, and the Borrower shall, on
the last day(s) of the then current

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Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Loans or such Loans shall be converted into Base Rate Loans in accordance with
Section 3.4.8 hereof.

     SECTION 3.4.7 Illegality. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender to honor its obligation to make or maintain
Eurodollar Loans hereunder, then such Lender shall promptly notify the Borrower thereof (with a
copy to the Agent) and such Lender’s obligation to make or continue, or to convert Base Rate Loans
into, Eurodollar Loans shall be suspended until such time as such Lender may again make and
maintain Eurodollar Loans (in which case the provisions of Section 3.4.8 hereof shall be
applicable).

     SECTION 3.4.8 Treatment of Affected Loans. If the obligation of any Lender to make
Eurodollar Loans or continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Sections 3.4.6 or 3.4.7 hereof, such Lender’s Eurodollar
Loans shall be automatically converted into Base Rate Loans on the last day(s) of the then current
Interest Period(s) for Eurodollar Loans (or, in the case of a conversion required by Sections
3.4.6 or 3.4.7 hereof, on such earlier date as such Lender may specify to the Borrower
with a copy to the Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Sections 3.4.6 or 3.4.7 hereof which gave rise to such
conversion no longer exist:

     (a) to the extent that such Lender’s Eurodollar Loans have been so converted, all payments and
prepayments of principal which would otherwise be applied to such Lender’s Eurodollar Loans shall
be applied instead to its Base Rate Loans; and

     (b) all Loans which would otherwise be made or continued by such Lender as Eurodollar Loans
shall be made or continued instead as Base Rate Loans and all Base Rate Loans of such Lender which
would otherwise be converted into Eurodollar Loans shall remain as Base Rate Loans.

Promptly after the circumstances specified in Sections 3.4.6 or 3.4.7 which gave
rise to the conversion of such Lender’s Eurodollar Loans pursuant to this Section 3.4.8 no
longer exist, such Lender shall give the Agent and the Borrower notice thereof, and the Borrower
may thereafter request conversion of such Loans to Eurodollar Loans, subject to the subsequent
application of Section 3.4.6 or 3.4.7.

     SECTION 3.4.9 Compensation. The Borrower shall pay to the Agent for the account of
each Lender, within ten (10) Business Days of receipt of a written request of such Lender through
the Agent, which request shall set forth the basis for, and a calculation of, such requested
amounts, such amount or amounts as shall be sufficient (in the opinion of such Lender) to
compensate it for any loss, cost or expense which such Lender determines is attributable to:

     (a) any payment, prepayment or conversion of a Eurodollar Loan made by Lender for any reason
(including, without limitation, the acceleration of the Loans pursuant to Article 7 hereof)
on a date other than the last day of the Interest Period for such Loan; or

     (b) any failure by the Borrower for any reason (including, without limitation, the failure of
any of the conditions precedent specified in Article 4 hereof to be satisfied, but
excluding a default by such Lender to fund such Loan), to borrow a Eurodollar Loan from

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Lender on
the date for such borrowing specified in the Borrowing Request given pursuant to Section
3.1 hereof.

     SECTION 3.5 Taxes.

     (a) Any and all payments by the Borrower hereunder or under the Notes or any other Loan
Document shall, to the extent permitted by law, be made, in accordance with this Section
3.5, free and clear of and without deduction for any and all present or future Taxes. If the
Borrower shall be required by law to deduct any Taxes, including both United States federal backup
withholding and withholding Taxes, from or in respect of any sum payable hereunder or under any
Note or any other Loan Document to any Lender or the Agent, (i) the Borrower shall withhold or make
such deductions as are determined by the Borrower to be required based upon the information and
documentation it has received pursuant to subsection (f) of this Section 3.5 or Section
9.11(e), (ii) the Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law, and (iii) to the extent
the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the
Borrower to such Lender or the Agent (as the case may be) shall be increased as necessary so that,
after making all required deductions (including deductions applicable to additional sums payable
under this Section 3.5), such Lender or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made;

     (b) In addition, the Borrower agrees to pay any present or future stamp or documentary Taxes
or intangibles Taxes or any other excise or property Taxes, transfer Taxes, charges or similar
levies which arise from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to this Agreement, the Notes, or any other
Loan Document;

     (c) The Borrower will indemnify each Lender or the Agent (as the case may be) for the full
amount of Indemnified Taxes (including, without limitation, any Indemnified Taxes imposed by any
jurisdiction on amounts payable under this Section 3.5) paid by such Lender or the Agent
(as the case may be) and any penalties, interest and expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally asserted. Payment under
this subsection (c) shall be made within ten (10) days from the date such Lender
or the Agent (as the case may be) makes written demand therefor and provides a certificate
setting forth in reasonable detail the calculation of the amount required to be paid under this
subsection (c);

     (d) Each Lender will indemnify the Borrower for the full amount of any Taxes (including,
without limitation, any Taxes imposed by any jurisdiction on amounts payable under this Section
3.5) paid by the Borrower and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto incurred by, or asserted against, the Borrower as a
result of the failure of such Lender to deliver, or as a result of the inaccuracy, inadequacy or
deficiency of, any documentation that is required to be delivered by such Lender to the Borrower
pursuant to subsection (f) of this Section 3.5 or Section 9.11(e). Payment under
this subsection (d) shall be made within ten (10) days from the date the Borrower makes written
demand therefor and provides a certificate setting forth in reasonable detail the calculation of
the amount required to be paid under this subsection (e). Each Lender hereby authorizes the Agent
to set off

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and apply any and all amounts at any time owning to such Lender under this Agreement or
any Note or any other Loan Document against any amount that such Lender is required to pay under
this subsection (d). The agreement in this subsection (d) shall survive the resignation and/or
replacement of the Agent, and assignment of rights by, or the replacement of, any Lender, the
termination of the aggregate Commitments and the repayment, satisfaction or discharge of all other
Obligations;

     (e) Within ten (10) days after the date of any payment of any Taxes by the Borrower pursuant
to Section 3.5(a), the Agent makes written demand therefor, the Borrower will furnish to
the Agent, at its address referred to in Section 9.2, the original or a certified copy of
any receipt received by the Borrower evidencing payment of such Taxes by the Borrower.

     (f) Status of Lenders; Tax Documentation.

     (i) Each Lender shall promptly deliver to the Borrower and to the Agent, at the time or
times prescribed by applicable laws or when reasonably requested by the Borrower or by the
Agent, such properly completed and executed documentation prescribed by applicable laws or
by the taxing authorities of any jurisdiction and such other reasonably requested
information as will permit the Borrower or the Agent (as the case may be) to determine (A)
whether or not payments made hereunder or under any Note or any other Loan Document are
subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C)
such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes
in respect of all payments to be made to such Lender by the Borrower pursuant to this
Agreement or any other Loan Document or otherwise to establish such Lender’s status for
withholding Tax purposes in the applicable jurisdictions.

     (ii) Without limiting the generality of the foregoing, if the Borrower is resident for
Tax purposes in the United States,

     (A) any Lender that is a “United States person” within the meaning of Section
7701(a)(30) of the IRC shall deliver to the Borrower and the Agent (in such number
of copies as requested by the recipient), on or prior to the date on
which such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Agent) executed originals of
Internal Revenue Service Form W-9 or other documentation or information prescribed
by applicable laws or requested by the Borrower or the Agent as will enable the
Borrower or the Agent (as the case may be) to determine whether or not such Lender
is subject to backup withholding or information reporting requirements; and

     (B) each Foreign Lender that is entitled under the IRC or under any applicable
treaty to any exemption from or reduction of withholding Tax with respect to
payments hereunder or under any Note or any other Loan Document shall deliver to the
Borrower and the Agent (in such number of copies as requested by the recipient), on
or prior to the date on which such Foreign Lender becomes a Lender under this
Agreement (and from time to time thereafter upon

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the request of the Borrower or the
Agent, but only if such Foreign Lender is legally entitled to do so), whichever of
the following is applicable:

     (I) executed originals of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States
is a party,

     (II) executed originals of Internal Revenue Service Form W-8ECI,

     (III) executed originals of Internal Revenue Service Form W-8IMY and
all required supporting documentation,

     (IV) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 871(h) of the IRC, (x) a
certificate to the effect that such Foreign Lender is not a “10 percent
shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of
the IRC and (y) executed originals of Internal Revenue Service Form W-8BEN,

     (V) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the IRC, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of Section 881(c)(3)(A) of the IRC, (B) a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of
the IRC, or (C) a “controlled foreign corporation” described in Section
881(c)(3)(C) of the IRC and (y) executed originals of Internal Revenue
Service Form W-8BEN, or

     (VI) executed originals of any other form prescribed by applicable laws
as a basis for claiming exemption from or a reduction in United States
federal withholding tax, together with such supplementary documentation as
may be prescribed by applicable laws to permit the
Borrower or the Agent to determine the withholding or deduction
required to be made.

     (iii) Each Lender shall promptly (A) notify the Borrower and the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or reduction, and
(B) take such steps (including the re-designation of its lending office) as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary to avoid any requirement of applicable laws of any jurisdiction that
the Borrower or the Agent make any withholding or deduction for Taxes from amounts payable
to such Lender.

     (g) Unless required by applicable laws, at no time shall the Borrower have any obligation to
file for or otherwise pursue on behalf of any Lender, or have any obligation to pay to any Lender,
any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If the
Agent or any Lender determines that it has received a refund of any Taxes as to

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which it has been
indemnified by the Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 3.5, it shall pay to the Borrower an amount equal to such refund
(but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 3.5 with respect to the Taxes giving rise to such refund), net of all
reasonable out-of-pocket expenses incurred by the Agent or such Lender (as the case may be) and
without interest (other than any interest paid by the relevant Governmental Authority with respect
to such refund), provided that the Borrower, upon the request of the Agent or such Lender,
agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Agent or such Lender in the event the Agent
or such Lender is required to repay such refund to such Governmental Authority. This subsection
(g) shall not be construed to require the Agent or any Lender to make available its tax returns (or
any other information relating to its Taxes that it deems confidential) to the Borrower or any
other Person.

     SECTION 3.6 Payments, Interest Rate Computations, Other Computations, Etc. Except as
otherwise expressly provided in Section 3.3.1(g), all payments by the Borrower pursuant to
this Agreement, the Notes or any other Loan Document, in respect of principal or interest on the
Term Notes shall be made by the Borrower to the Agent for the account of the Lenders, pro rata
according to their respective Term Loan Percentages. All payments by the Borrower pursuant to this
Agreement, the Notes or any other Loan Document, in respect of principal or interest on the Working
Capital Facility Notes shall be made by the Borrower to the Agent for the account of the Lenders,
pro rata according to their respective Working Capital Facility Percentages. Except as otherwise
provided therein, the payment of fees referred to in Section 2.3 shall be made by the
Borrower to the Agent for the account of the Lenders pro rata according to their respective Working
Capital Facility Percentages and Term Loan Percentages. All other amounts payable to the Agent or
any Lender under this Agreement or any other Loan Document (except under Section 2.5) shall
be paid to the Agent for the account of the Person entitled thereto. All such payments required to
be made to the Agent shall be made, without setoff, deduction or counterclaim, not later than 1:00
p.m., New York City time, on the date due, in immediately available funds, to the account of the
Agent specified in Schedule 3.6 or to another account of the Agent specified from time to
time in writing to the Borrower. Funds
received after that time shall be deemed to have been received by the Agent on the next
following Business Day. The Agent shall promptly remit in the type of funds received to each
Lender notified to the Agent its share, if any, of such payments received by the Agent for the
account of such Lender. All interest and fees shall be computed on the basis of the actual number
of days (including the first day but excluding the last day) occurring during the period for which
such interest or fee is payable over a year comprised of 360 days with respect to Eurodollar Loans
and 365/366 days with respect to all Obligations other than Eurodollar Loans. Whenever any payment
to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made
on the immediately preceding Business Day.

     SECTION 3.7 Proration of Payments. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of
principal of or interest on any Loan or other Obligation (other than any payment otherwise
expressly provided under this Agreement) in excess of such Lender’s respective share of payments in
respect of such Loan or Obligation then and therewith obtained thereon by all Lenders, such Lender
which has received in excess of its ratable share of such Loan or

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Obligation shall purchase from
the other Lenders such participations in such Notes or other Obligations held by them as shall be
necessary to cause such purchaser to share the excess payment or other recovery ratably with each
of them; provided, however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing holder, the purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without interest. The Borrower
agrees that any Lender so purchasing a participation from another Lender pursuant to this
Section 3.7 may, to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 3.8) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu
of a setoff to which this Section 3.7 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.7 to share in the benefits of any recovery on
such secured claim.

     SECTION 3.8 Setoff. In addition to and not in limitation of any rights of any Lender
under applicable law, each Lender shall, upon the occurrence and during the continuance of any
Event of Default, have the right to appropriate and apply to the payment of the Obligations owing
to it (whether or not then due), and the Borrower hereby grants to each Lender, as security for
such Obligations, a continuing security interest in any and all balances, credits, deposits,
accounts or moneys of the Borrower then or thereafter maintained with such Lender;
provided, however, any such appropriation and application shall be subject to the
provisions of Section 3.7.

     SECTION 3.9 Use of Proceeds and Sources of Payment of Construction Expenses.

     (a) Until the Construction Expenses are paid in full and the Project Construction Completion
Date has occurred, the proceeds of the Term Loans shall be used solely (a) to finance Construction
Expenses and to fund the initial deposit by the Borrower into the Debt
Service Reserve Account required under Section 6.1.19, and (b) upon receipt by the Agent, not
earlier than ninety (90) days prior to the projected Project Construction Completion Date, of an
Excess Contingency Funds Certificate, to finance the purchase by the Borrower of initial canola
seed Inventory for processing at the Project. Thereafter, the proceeds of the Term Loan shall be
used for general corporate purposes. The proceeds of the Working Capital Facility Loans shall be
used for the purposes set forth in Section 3.3.2 and working capital purposes of the
Borrower, but shall not be used (i) to finance the payment of any Construction Expenses (ii) for
the payment of any dividend or distribution by the Borrower, (iii) to finance Inventory located in
Canada having a cost basis in excess of $1,000,000 unless such Inventory constitutes Eligible
Canadian Inventory, or (iv) to finance Inventory located in any province in Canada other than
Manitoba. Proceeds of any Working Capital Facility Loan made on the Project Construction
Completion Date may be used to repay any outstanding amounts owed by the Borrower with respect to
the Sponsor Temporary Working Capital Loan.

     (b) No part of the proceeds of any Loans shall be used for any purpose which violates
Regulations T, U or X of the F.R.S. Board.

     (c) Construction Expenses shall be paid from the following sources in the following order as
such Construction Expenses become due and payable from time to time: (i)

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Construction Expenses
which are due and payable at any given time shall be paid first from funds received by the Borrower
as Contributions until all such funds have been applied to pay such Construction Expenses, (ii) any
Construction Expenses which remain outstanding after the application of the funds received by the
Borrower as Contributions shall be paid with proceeds of the Term Loans, subject to the terms and
conditions for the making of Term Loans in this Agreement, and (iii) to the extent any Construction
Expenses remain outstanding after the application of the funds from the foregoing sources, the
Borrower shall pay any remaining Construction Expenses from its own funds.

     SECTION 3.10 Letters of Credit. Upon and subject to the terms and conditions of this
Section 3.10, in addition to the terms and conditions set forth elsewhere in this
Agreement, the Lenders, from time to time, in accordance with their respective Working Capital
Facility Percentages severally shall participate in the issuance of Letters of Credit for the
account of the Borrower or any of its Subsidiaries.

     SECTION 3.10.1 Manner of Issuance. The Borrower shall deliver to the Agent prior to
1:00 p.m. (New York City time) at least three (3) Business Days before the requested date of
issuance of a Letter of Credit, a Letter of Credit Request for the issuance of such Letter of
Credit setting forth (i) the beneficiary of the Letter of Credit, (ii) the stated amount thereof,
(iii) the requested issue date, (iv) the requested expiration date, and (v) the purpose for such
Letter of Credit. Each such Letter of Credit Request shall be accompanied by the proposed issuer’s
standard form standby letter of credit application, duly completed and executed by the Borrower
(which application shall be deemed for purposes of this Agreement to constitute part of such Letter
of Credit Request), together with all other documents, materials and evidences reasonably required
by the Agent prior to the issuance of such Letter of Credit. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with, the relevant
issuer relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

     SECTION 3.10.2 Terms of Letters of Credit. Each Letter of Credit shall (a) have an
expiration date not later than the earlier of (i) 365 days or, in the case of a leap year, 366
days, after the date of issuance thereof (or such longer period to which the Agent and the issuer
shall consent provided the Borrower agrees to pay any additional issuance cost or facing fees
arising by virtue of the issuance of a Letter of Credit for a period longer than the period
specified in this clause (i)) and (ii) the maturity date of the Working Capital Facility Loans set
forth in clause (a) of the definition of Working Capital Facility Maturity Date and (b) be issued
solely to secure bid, tender, surety, payment, performance, litigation or similar bonds required by
the Borrower and its Subsidiaries in the ordinary course of business. The Agent shall use
reasonable efforts to cause Letters of Credit to be governed by, and construed and enforced in
accordance with, the Uniform Customs and Practice for Documentary Credits (2007 Revision),
International Chamber of Commerce Publication 600 and, to the extent not inconsistent therewith,
the laws of the State of New York.

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     SECTION 3.10.3 Drawings Under Letters of Credit.

     (a) Notice to Borrower. Promptly upon receipt by the Agent from the issuer of a
Letter of Credit of a copy of any draft upon, or other notice of drawing under, a Letter of Credit,
the Agent shall give the Borrower written or telephonic notice of the amount of such draft or
notice of drawing, of the Letter of Credit against which it is drawn and of the date upon which the
issuer proposes to honor such draft.

     (b) Repayment by Borrower. The Borrower shall pay to the Agent the amount of any
drawing under any Letter of Credit on the date of such drawing. The amount of any drawing under a
Letter of Credit not paid on the date provided herein shall bear interest, payable on demand, from
the due date thereof until paid, at the Post-Default Rate.

     (c) Repayment with Working Capital Facility Loans. On the date of any drawing under a
Letter of Credit, the amount of such drawing automatically shall be paid with, and the Borrower
hereby authorizes the Lenders to make, a Borrowing of Working Capital Facility Loans in the amount
of such drawing; provided, that all conditions set forth in Sections 4.1, 4.2 and
4.3 (other than Section 4.2.2) have been satisfied. Unless the Lenders shall have
received a written notice otherwise prior to the making of any Working Capital Facility Loans
pursuant to this subsection (c) of this Section 3.10.3, the making of any such Working
Capital Facility Loans shall constitute a representation and warranty by the Borrower that on the
date of the making of such Working Capital Facility Loans, and after giving effect thereto, all
statements set forth in Section 4.2.1 are true and correct.

     (d) Borrower’s Obligation Absolute. The obligation of the Borrower to pay the Agent
for each drawing under a Letter of Credit shall be irrevocable, shall not be subject to any
qualification or exception whatsoever and shall be binding in accordance with the terms and
conditions of this Agreement under all circumstances, including the following circumstances:

     (i) any lack of validity or enforceability of this Agreement or any of the other Loan
Documents;

     (ii) the existence of any claim, set-off, defense or right which the Borrower or the
account party may have at any time against a beneficiary of any Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any such transferee may be
acting), the Lender or any other Person, whether in connection with this Agreement, or any
Letter of Credit, the transactions contemplated herein or any unrelated transactions;

     (iii) any draft, certificate or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;

     (iv) the surrender or impairment of any security for the performance or observance of
any of the terms of this Agreement or the other Loan Documents;

     (v) any failure of the Agent to provide notice to the Borrower of any drawing under any
Letter of Credit;

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     (vi) the occurrence or continuance of any Default; or

     (vii) any other reason.

Nothing contained herein shall be deemed to relieve the issuer of a Letter of Credit from liability
for errors or omissions in connection with its honoring of any drawing under such Letter of Credit
if such errors or omissions result from the gross negligence or willful misconduct of such issuer
(but without in any way impairing Borrower’s obligations under this Section 3.10.3).

     SECTION 3.10.4 Letter of Credit Fees. With respect to each Letter of Credit, the
Borrower shall pay (a) to the Agent, for the benefit of the Lenders in accordance with their
respective Working Capital Facility Percentages, a per annum fee equal to the Applicable Margin in
effect for Eurodollar Rate Loans times the undrawn stated amount of such Letter of Credit
which fee shall be calculated on a daily basis and shall be payable by the Borrower quarterly in
arrears on each Quarterly Payment Date and on the Term Loan Maturity Date, (b) to the issuer of
each Letter of Credit a fronting fee in the amount of 0.125% per annum of the stated amount of such
Letter of Credit, which fee shall be calculated on a daily basis and shall be payable by the
Borrower quarterly in arrears on each Quarterly Payment Date, and (c) issuer of each Letter of
Credit, such issuer’s customary fees with respect to issuance, amendment, cancellation,
negotiation, transfer, renewal or extension of any Letter of Credit or processing of drawings
thereunder. From and after the occurrence of an Event of Default and during the continuance
thereof, the fee payable pursuant to clause (a) of the preceding sentence shall increase to a per
annum rate equal to the Applicable Margin in effect for Eurodollar Rate Loans plus 200
basis points (2.00%) times the undrawn stated amount of each Letter of Credit, payable on
demand. All fees payable under this Section 3.10.4 shall be fully earned and nonrefundable
on the date such fees are due. Any fees described in this Section 3.10.4 which accrue on
the Commitment of, or are payable to, a Defaulting Lender, shall be paid to the Agent and held for
the benefit of the Agent, the Lenders or the issuers with respect to the Letter of Credit to which
such fee relates, which are not Defaulting Lenders, to reimburse the
Agent, the Lenders or such issuers which are not Defaulting Lenders for any losses, costs or
expenses incurred from time to time as a result of any Defaulting Lender’s failure to comply with
its obligations hereunder, and to the extent such accrued fees exceed the aggregate amount of such
losses, costs or expenses, may be applied to satisfy such Defaulting Lender’s obligations under
Section 3.10.5 with respect to its pro rata participation interest in the Letters of Credit
and then may be applied in such order as the Agent may determine in its sole discretion to satisfy
any of the other obligations of such Defaulting Lender to the Agent, to the other Lenders which are
not Defaulting Lenders or to the Borrower under this Agreement.

     SECTION 3.10.5 Letter of Credit Participations. The issuer of each Letter of Credit
irrevocably agrees to grant and hereby grants to each Lender, and, to induce such issuer to issue
such Letter of Credit, each Lender irrevocably agrees to accept and purchase and hereby accepts and
purchases from such issuer, on the terms and conditions set forth below, for such Lender’s own
account and risk an undivided pro rata participation interest in such issuer’s obligations and
rights under and in respect of each Letter of Credit and the amount of each draft paid by the
issuer thereunder based on such Lender’s Working Capital Facility Percentage of the Working Capital
Facility Commitment Amount. Each Lender agrees with each issuer of a Letter of Credit that, if a
draft is paid under any Letter of Credit for which such issuer is not reimbursed in full by

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the
Borrower in accordance with the terms of this Agreement, such Lender shall pay to the issuer of
such Letter of Credit upon demand, at such issuer’s address for notices specified herein, an amount
equal to such Lender’s Working Capital Facility Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed. Notwithstanding anything to the contrary set forth in this
Agreement, each Lender’s obligation to pay such amount shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment,
defense or other right that such Lender may have against the issuer, the Borrower or any other
Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in Section 4.2,
(iii) any adverse change in the condition (financial or otherwise) of the Borrower or any other
Loan Party, (iv) any breach of this Agreement or any other Loan Document by the Borrower, any other
Loan Party or any other Lender or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. At any time during which a Lender is a Downgraded
Lender, such Downgraded Lender shall provide to the Agent, for the benefit of the issuer of each
Letter of Credit, cash collateral (or other security acceptable to each issuer of Letter of Credit
in its sole discretion) in an amount equal to such Downgraded Lender’s pro rata participation
interest in such issuer’s obligations under and in respect of the Letter of Credit. The issuer of
such Letter of Credit shall pay to the Agent, for the account of each Downgraded Lender, interest
on any cash collateral provided by such Downgraded Lender on each Quarterly Payment Date, at a rate
not less than the Eurodollar Base Rate.

     SECTION 3.10.6 Limitation of Liability With Respect to Letters of Credit. As among
the Borrower, the Agent and the Lenders, the Borrower assumes all risks of the acts and omissions
of, or misuse of any Letter of Credit by, the beneficiaries of such Letter of Credit. Without
limiting the foregoing, neither the Agent nor any Lender shall be responsible for:

     (a) the form, validity, sufficiency, accuracy, genuineness or legal effect of any draft,
demand, application or other documents submitted by any party in connection with any Letter of
Credit even if such document should in fact prove to be in any and all respects invalid,
insufficient, inaccurate, fraudulent or forged;

     (b) the validity, genuineness or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason;

     (c) failure of the beneficiary of a Letter of Credit to comply fully with the conditions
required in order to draw upon such Letter of Credit;

     (d) errors, omissions, interruptions or delays in transmission or delivery of any messages by
mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;

     (e) errors in interpretations of technical terms;

     (f) any loss or delay in the transmission or otherwise of any document required to make a
drawing under any Letter of Credit or with respect to the proceeds thereof;

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     (g) the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing
under such Letter of Credit; or

     (h) any consequences arising from causes beyond the control of the Agent or any Lender,
including any act or omission, rightfully or wrongfully, of any present or future Governmental
Authority.

None of the above circumstances shall affect, impair or prevent the vesting of any of the Agent’s
or any Lender’s rights or powers under this Agreement. Nothing contained herein shall be deemed
to relieve the issuer of a Letter of Credit from liability for errors or omissions in connection
with its honoring of any drawing under such Letter of Credit if such errors or omissions result
from the gross negligence or willful misconduct of such issuer (but without in any way impairing
Borrower’s obligations under Section 3.10.3 or Section 3.10.4).

     SECTION 3.11 Income With Respect to Deposit Accounts. So long as no Default or Event
of Default has occurred and is continuing or would be caused thereby, the Borrower may invest, or
direct the investment of, the funds in its Deposit Accounts, other than the Cost Overrun Account,
in any Permitted Investment.

ARTICLE 4

CONDITIONS TO LOANS

     SECTION 4.1 Closing Date Conditions to All Loans and Letters of Credit. The
obligations of the Lenders to make all Loans, to cause the issuance of all Letters of Credit,
and to cause the Agent to provide Disbursement Instructions, shall be subject to the prior or
concurrent satisfaction on or prior to the Closing Date of each of the conditions precedent set
forth in this Section 4.1, except as the Required Lenders shall otherwise consent.

     SECTION 4.1.1 Loan Documents. Each Loan Party shall have delivered the Loan Documents
to which it is a party, each duly executed by an Authorized Officer of such Loan Party and the
other parties thereto.

     SECTION 4.1.2 Resolutions, Etc. The Agent shall have received on or before the
Closing Date with respect to each Loan Party and the Sponsor:

     (a) a certificate, dated the date hereof, of the Secretary or an assistant secretary of such
Person, as to:

     (i) resolutions of its Board of Directors or similar governing body, then in full force and
effect, authorizing the execution, delivery and performance of the Loan Documents or Major Project
Documents to which such Person is a party and the related transactions contemplated thereby, and

     (ii) the incumbency and signatures of those of its officers authorized to act with respect to
the Loan Documents or Project Documents to which it is party, upon which certificate the Agent and
the Lenders may conclusively rely until it shall have received further certificates

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of the
Secretary or an assistant secretary of such Person canceling or amending such prior certificates;

     (b) copies of the Organizational Documents of each Loan Party and the Sponsor certified by, in
the case of the charters, the appropriate Governmental Authority of the State of such Person’s
incorporation or formation and, in the case of its other Organizational Documents, such Person’s
Secretary or assistant secretary, which documents shall be satisfactory to the Agent;

     (c) a so-called “good standing” certificate with respect to each such Person from the
appropriate Governmental Authority of the State of its incorporation or formation and the State in
which the Project is located;

     (d) evidence satisfactory to the Agent in its sole discretion of qualification of each Loan
Party to do business in each other jurisdiction in which such Person is required to qualify; and

     (e) such other documents (certified if requested) as the Agent may reasonably request, with
respect to this Agreement, the Notes, any other Loan Document, or any Major Project Document, the
transactions contemplated hereby and thereby, or any Organizational Document, Contractual
Obligation of the Borrower or any of its Subsidiaries, or any Approval, including any Necessary
Project Approval.

     SECTION 4.1.3 Notes. The Agent shall have received, for the account of each Lender,
such Lender’s Notes, in each case duly executed and delivered pursuant to subsections (a) and (b)
of Section 3.2.

     SECTION 4.1.4 Major Project Documents. Each of the Major Project Documents shall have
been executed and delivered by all parties thereto and shall be in form and substance satisfactory
to the Agent and the Lenders. The Borrower shall have delivered to the Agent copies of all Major
Project Documents, certified by an Authorized Officer of the Borrower to be true, correct and
complete. No default or event of force majeure shall have occurred and be continuing under any of
the Major Project Documents as of the Closing Date. The Borrower shall have delivered a Project
Party Consent executed by each Project Party with respect to the Major Project Documents to which
such Project Party is a party, in form and substance satisfactory to the Agent and the Lenders.

     SECTION 4.1.5 Necessary Project Approvals. The Independent Engineer shall have
confirmed that all governmental and third party consents, approvals and permits which are required
for the construction and operation of the Project (“Necessary Project Approvals”) have been
obtained, other than consents, approvals and permits which the Independent Engineer has determined
in good faith are readily obtainable in due course and conditioned only upon the filing of the
appropriate application and the payment of nominal fees, and copies of all Necessary Project
Approvals shall have been delivered to the Agent, including without limitation those items listed
on Schedule 4.1.5.

     SECTION 4.1.6 Technical Evaluation Report. The Agent shall have received, on or
before the Closing Date, a report of the Independent Engineer, in form and substance satisfactory

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to the Agent and the Lenders, covering the technical and economic feasibility of the Project
(including, but not limited to a review of engineering design, equipment selections, actual and
projected performance, Construction Budget, Construction Schedule, actual and projected
performance, adequacy of contingency, status of construction, relevant Project Documents, status of
permits and licenses and compliance with applicable zoning laws) and covering such other matters as
the Agent may reasonably request.

     SECTION 4.1.7 Insurance Report. The Agent shall have received, on or before the
Closing Date, a report of the Insurance Consultant, in form and substance satisfactory to the Agent
and the Lenders, covering the adequacy of the insurance coverage to be maintained with respect to
the Project and such related matters as the Agent may reasonably request.

     SECTION 4.1.8 No Contest, Etc. On the Closing Date, no litigation, arbitration,
governmental investigation, injunction, proceeding or inquiry shall be pending or, to the knowledge
of the Borrower, threatened which:

     (a) seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by or in connection with this Agreement
or any other Loan Document, or any Major Project Document; or

     (b) would, in the opinion of the Required Lenders, be materially adverse to any of the parties
hereto with respect to the transactions contemplated hereby or give rise to any liability on the
part of the Agent or any Lender in connection with this Agreement, any other Loan Documents, any
Major Project Document or the transactions contemplated hereby or thereby.

     SECTION 4.1.9 Certificate as to Completed Conditions, Warranties, No Default, Etc.
The Agent shall have received, on or before the Closing Date, a certificate dated the Closing Date
of an Authorized Officer of the Borrower, to the effect that:

     (a) all conditions precedent set forth in this Section 4.1 have been satisfied, except
that such certificate shall not certify as to whether such documents or conditions referenced in
this Section 4.1 are in form and substance satisfactory to the Agent or the Lenders;

     (b) all representations and warranties set forth in Article 5 are true and correct in
all material respects;

     (c) all representations and warranties set forth in the Loan Documents are true and correct in
all material respects; and

     (d) no Default or Event of Default has occurred and is continuing.

     SECTION 4.1.10 Compliance with Requirements of Law. The Agent shall have received, on
or before the Closing Date, evidence satisfactory to it that the Borrower is in compliance in all
material respects with all other Requirements of Law (including without limitation applicable
zoning laws) and has obtained and maintains in full force and effect (a) all licenses, permits and
approvals issued by Governmental Authorities necessary to carry on its business (except where the
failure to have any such license, permit or approval could not reasonably be expected to result in
a Material Adverse Change), (b) all permits and consents

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necessary to consummate this Agreement and
necessary for Agent to have a first priority perfected security interest in any such permits or
licenses to the extent permitted by applicable law, and (c) all Approvals, other than Approvals
which the Independent Engineer has determined in good faith are readily obtainable in due course
and conditioned only upon the filing of the appropriate application and the payment of nominal
fees.

     SECTION 4.1.11 Opinions of Counsel. The Agent shall have received, on or before the
Closing Date, an opinion letter dated the Closing Date and addressed to the Agent and the Lenders
from special counsel to the Borrower, as well as such local counsel opinions as the Agent shall
require, each of which shall be in form and substance satisfactory to the Agent.

     SECTION 4.1.12 Closing Fees, Expenses, Etc. The Agent shall have received the fees
payable on the Closing Date pursuant to this Agreement and the Fee Letter, and payment or
reimbursement of all costs and expenses of the Agent which are payable upon the initial Borrowing
pursuant to Section 9.3.

     SECTION 4.1.13 Perfection. The Agent shall have received, on or before the Closing
Date:

     (a) evidence of all filings of the Financing Statements with respect to the Security Agreement
and other Security Documents; searches or other evidence as to the absence of any Liens (other than
Permitted Liens); and evidence that all other actions with respect to the Liens created by the
Security Documents have been taken as are necessary or appropriate to perfect such Liens;

     (b) duly executed Deposit Account Control Agreements with respect to the deposit accounts of
each Loan Party, all in form and substance satisfactory to the Agent and the Lenders;

     (c) duly executed counterparts of the Mortgages executed by Borrower as to the Mortgaged
Property, together with: (i) mortgagee title insurance policies in form and substance satisfactory
to the Agent, including, without limitation, any and all endorsements as the Agent shall request
and which are available in the jurisdiction in which the Project is located (as amended, further
endorsed, reissued, supplemented or replaced, and collectively, together with any additional title
insurance policy issued with respect to the Project, the “Project Title Insurance Policy”),
(ii) current surveys satisfactory in form and substance to Agent, (iii) environmental reports
prepared by an environmental testing firm satisfactory to the Agent and which reports shall be in
form and substance satisfactory to the Agent and the Lenders (including Phase I assessments in
accordance with ASTM 1527-05 and such other reports as Agent may reasonably require), (iv) flood
zone certifications, (v) evidence that counterparts of the Mortgages have been delivered to the
appropriate title agents for recording in all places to the extent necessary or desirable, in the
judgment of the Agent, to create a valid and enforceable first priority lien on each Mortgaged
Property (subject to no Liens other than Permitted Liens) in favor of Agent for the benefit of the
Secured Parties (or in favor of such trustee as may be required under local law), (vi) landlords
waivers from all landlords of real estate leased by any Loan Party, and (vii) such other documents,
instruments and agreements relating to the Mortgaged Property as Agent may reasonably require.

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     SECTION 4.1.14 Employment Agreements; Compensation. The Agent shall have received
copies of all employment agreements to which any Loan Party is a party.

     SECTION 4.1.15 Pension and Welfare Liabilities. The Agent shall have received (i) the
most recent actuarial valuation report, if any, for each Single Employer Plan, if any, and a copy
of Schedule B to the Annual Report on Form 5500 of the Internal Revenue Service, if any, for each
Single Employer Plan, if any, most recently filed with the Internal Revenue Service, and (ii) a
report prepared by the Borrower in form and substance satisfactory to the Agent detailing any
liabilities of the Borrower and each Subsidiary and Commonly Controlled Entity for post-retirement
benefits under Plans which are welfare benefit plans.

     SECTION 4.1.16 Insurance. The Agent shall have received evidence satisfactory to it
that the insurance maintained by the Borrower and its Subsidiaries has been issued in accordance
with the requirements set forth in Schedule 4.1.16,
coverage is in full force and effect and all premiums then due have been paid or are not in
arrears.

     SECTION 4.1.17 Financial Information, Etc. The Agent shall have received, with
counterparts for each Lender, the Projections, a pro forma balance sheet and a solvency certificate
of each of the Loan Parties.

     SECTION 4.1.18 Required Equity Funding. The Agent shall have received, on or before
the Closing Date, satisfactory evidence that the Borrower has received (a) the Pre-Closing Equity
Contributions, and (b) the PICO Equity Contribution by deposit into a Deposit Account which is
subject to a Deposit Account Control Agreement.

     SECTION 4.1.19 Letter to Accountants. The Agent shall have received, on or before the
Closing Date, satisfactory evidence that the Borrower has delivered a letter to such independent
public accountants authorizing such public accountants to discuss the Borrower’s financial matters
with the Agent and each Lender or any of their representatives.

     SECTION 4.1.20 Appointment of Agent for Service of Process. The Agent shall have
received, on or before the Closing Date, a signed acceptance from each agent appointed for service
of process in Section 9.9(c) hereof, under the Project Party Consent or under any other
agreement between the Agent and the Project Parties or the Borrower, each of which shall be in form
and substance satisfactory to the Agent and the Lenders.

     SECTION 4.1.21 Agreement to Contribute Capital. The Agreement to Contribute Capital
shall have been executed and delivered by all parties thereto and shall be in form and substance
satisfactory to the Agent and the Lenders. Each Person party thereto shall be in compliance with
its obligations thereunder.

     SECTION 4.1.22 Construction Budget and Construction Schedule. The Agent shall have
received the Construction Budget and the Construction Schedule certified by the Borrower as true
and correct, which shall be based on reasonable assumptions following reasonable investigation and
which shall be in form and substance satisfactory to the Agent and the Lenders.

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     SECTION 4.1.23 Other Documents, Certificates, Etc. The Agent shall have received, on
or before the Closing Date, such other documents, certificates, opinions of counsel or other
materials as it reasonably requests from any Loan Party.

     For purposes of determining compliance with the conditions specified in this Section
4.1, each Lender that has signed this Agreement shall be deemed to have consented to, approved
or accepted or to be satisfied with, each document or other matter required hereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the Agent shall have
received written notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

     SECTION 4.2 All Loans, Letters of Credit, and Disbursement Instructions. Without
duplication of any conditions precedent required to be satisfied on or before the Closing Date
pursuant to Section 4.1, the obligations of the Lenders to make any Loans, to cause the
issuance of Letters of Credit, and to cause the Agent to provide Disbursement Instructions shall be
subject to the satisfaction of each of the additional conditions precedent set forth in this
Section 4.2.

     SECTION 4.2.1 Compliance with Warranties, No Default, Etc. The representations and
warranties set forth in Article 5 shall have been true and correct in all material respects
as of the date initially made;

     (a) such representations and warranties shall be true and correct in all material respects
with the same effect as if then made (except to the extent expressly stated to be as of an earlier
date) both before and after giving effect to the making of any such Loan, the issuance of such
Letter of Credit or the provision of such Disbursement Instructions,

     (b) all representations and warranties set forth in the other Loan Documents shall be true and
correct in all material respects with the same effect as if then made (except to the extent
expressly stated to be as of an earlier date) and both before and after giving effect to the making
of any such Loan, the issuance of such Letter of Credit or the provision of such Disbursement
Instructions,

     (c) no material adverse development shall have occurred in any litigation, arbitration or
governmental investigation or proceeding which renders such litigation, arbitration or governmental
investigation or proceeding reasonably likely to succeed and, if successful, could reasonably be
expected to result in a Material Adverse Change;

     (d) no Default or Event of Default shall have occurred and be continuing or would result
therefrom; and

     (e) the aggregate of all Working Capital Facility Loans plus the aggregate outstanding amount
of all Letter of Credit Obligations does not exceed the Borrowing Base.

     SECTION 4.2.2 Borrowing Request and Letter of Credit Request. The Agent shall have
received a duly completed Borrowing Request in the case of a Borrowing, a Letter of Credit Request
in the case of the issuance of a Letter of Credit, or a Cost Overrun Account Disbursement Request
in the case of a Disbursement Instruction. Each delivery of any such Borrowing Request, Letter of
Credit Request, or Cost Overrun Account Disbursement Request,

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and the acceptance by the Borrower of
the proceeds of the Loan or the benefits of a Letter of Credit, or Disbursement Instruction
requested thereby shall constitute a representation and warranty by the Borrower that on the date
of such request, and before and after giving effect to the making of such Loans and the application
of any proceeds of such Loans or the issuance of
such Letter of Credit or the sending of such Disbursement Instruction, as the case may be, all
statements set forth in Section 4.2.1 are true and correct. In the event that, in
connection with the delivery of any such Borrowing Request, Letter of Credit Request, or
Disbursement Instruction, the Borrower is required to amend any item on the Schedules attached
hereto in order that the statement set forth in subsection (a) or (b) of Section 4.2.1
shall be true and correct, the Borrower shall deliver to the Agent at least five (5) Business Days
prior to the date of the requested Borrowing, Letter of Credit, or Disbursement Instruction, a
request that such Schedule be amended, and the Agent shall promptly forward such request to the
Lenders. To the extent that the Required Lenders agree to such requested amendment after receipt
of such request, the representations and warranties proposed to be amended by such requested
amendment to the Schedules will be deemed amended for purposes of this Agreement.

     SECTION 4.2.3 Satisfactory Legal Form. All documents executed or submitted by or on
behalf of the Borrower or any other Loan Party shall be satisfactory in form and substance to the
Agent and its counsel; the Required Lenders shall have received all information, and such
counterpart originals or such certified or other copies of such Instruments, as the Required
Lenders may reasonably request; and all legal matters incident to the transactions contemplated by
this Agreement shall be satisfactory to the Required Lenders.

     SECTION 4.2.4 Margin Regulations. The making of such Loan, the issuance of such
Letter of Credit, and the use of the proceeds thereof and of any disbursement made from the Cost
Overrun Account based on any Disbursement Instruction shall not violate Regulations T, U and X of
the F.R.S. Board.

     SECTION 4.2.5 Adverse Change. Since the Closing Date, no event shall have occurred
which Agent shall determine has resulted in, or could reasonably be expected to result in, a
Material Adverse Change, a Project Delay or a Cost Overrun.

     SECTION 4.3 Conditions to Term Loans. Without duplication of any conditions precedent
required to be satisfied pursuant to Section 4.1 and Section 4.2, the obligations
of the Lenders to make any Term Loans shall be subject to the satisfaction of each of the
additional conditions precedent set forth in this Section 4.3.

     (a) the Agent shall have received a certification from the Borrower that no event has occurred
that could reasonably be expected (i) to result in a Cost Overrun, or (ii) to result in a Project
Delay;

     (b) the Agent shall have received a Monthly Progress Report for the immediately preceding
calendar month, certified by the Independent Engineer;

     (c) the Agent shall have received evidence satisfactory to it that (i) the Borrower has
received all equity contributions needed as of that time to satisfy the equity contribution
requirements set forth in the Agreement to Contribute Capital, and that such contributions shall

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have been deposited into the Cost Overrun Account, and (ii) the principal amount of Term Loans
requested in such Borrowing Request does not exceed the amount of Construction Expenses then
due and payable after deducting the amount, if any, then on deposit in the Cost Overrun Account;

     (d) the Agent shall have received copies of all invoices and other supporting information with
respect to the amount for which such Term Loans are requested; and

     (e) if requested by the Agent, the Agent shall have received a title continuation with respect
to, or an endorsement of, the Project Title Insurance Policy, updating the date of the Project
Title Insurance Policy to the date of the disbursement requested in the Borrowing Request for such
Term Loans, in each case in form and substance satisfactory to the Agent;

     (f) if any portion of the proceeds of such Term Loans are to be used by the Borrower to
purchase its initial Inventory of canola seed, the Agent shall have received an Excess Contingency
Funds Certificate; and

     (g) in addition to each of the other conditions precedent to the obligations of the Lenders to
make any Term Loans, with respect to the initial funding of the Term Loans, the Agent shall have
received (i) copies of all invoices and other supporting information with respect to all
disbursements of Contributions, whether from the Cost Overrun Account or otherwise, applied to the
payment of Construction Expenses, (ii) evidence that the entire amount of the PICO Equity
Contribution has been applied to the payment of Construction Expenses, and (iii) a title
continuation with respect to, or an endorsement of, the Project Title Insurance Policy, updating
the date of the Project Title Insurance Policy to the date of the disbursement requested in the
Borrowing Request for such Term Loans, in each case in form and substance satisfactory to the
Agent.

     SECTION 4.4 Conditions to Additional Term Loans. Without duplication of any
conditions precedent required to be satisfied pursuant to Section 4.1 and Section
4.2, upon receipt by the Borrower of any Additional Term Loan Facility Commitments from one or
more Additional Term Loan Lenders in accordance with Section 2.1.3, the obligations of such
Additional Term Loan Lenders to make any Additional Term Loans shall be subject to the satisfaction
of each of the additional conditions precedent set forth in this Section 4.4.

     (a) the Agent shall have received a certification from the Borrower that no event has occurred
that could reasonably be expected (i) to result in a Cost Overrun, or (ii) to result in a Project
Delay;

     (b) the Agent shall have received a Monthly Progress Report for the immediately preceding
calendar month, certified by the Independent Engineer;

     (c) the Independent Engineer shall have confirmed that all governmental and third party
consents, approvals and permits which are required for the construction and operation of the
Project Expansion (“Necessary Project Expansion Approvals”) have been obtained, other than
consents, approvals and permits which the Independent Engineer has determined in good faith are
readily obtainable in due course and conditioned only upon the filing of the appropriate
application and the payment of nominal fees, and copies of such Necessary Project Expansion
Approvals shall have been delivered to the Agent;

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     (d) the Agent shall have received a report of the Independent Engineer, in form and substance
satisfactory to the Agent and the Additional Term Loan Lenders providing the Additional Term Loans,
covering the technical and economic feasibility of the Project Expansion (including, but not
limited to a review of engineering design, equipment selections, actual and projected performance,
Construction Budget (as amended to include expenses related to the Project Expansion), Construction
Schedule (as amended to include rescheduling related to the Project Expansion), actual and
projected performance, adequacy of contingency, status of construction, relevant additional Project
Documents, if any, status of permits and licenses and compliance with applicable zoning laws) and
covering such other matters as the Agent may request;

     (e) the Agent shall have received a report of the Insurance Consultant, in form and substance
satisfactory to the Agent and the Lenders, covering the adequacy of the insurance coverage to be
maintained with respect to the Project Expansion and such related matters as the Agent may request;

     (f) the Agent shall have received confirmation that the Land O’Lakes Agreements have been
amended to include the additional canola oil and canola meal production capacity resulting from the
Project Expansion;

     (g) the Agent shall have received copies of all invoices and other supporting information with
respect to the amount for which such Additional Term Loans are requested;

     (h) the Agent shall have received an Additional Term Loan Amendment which shall have been
executed and delivered by all parties thereto and shall be in form and substance satisfactory to
the Agent and the Additional Term Lenders;

     (i) the Agent shall have received an amendment to the Mortgage increasing the maximum
principal amount secured by the Mortgage by the amount of the Additional Term Loans
(“Additional Term Loan Mortgage Amendment”) which shall have been executed and delivered by
all parties thereto and shall be in form and substance satisfactory to the Agent and the Additional
Term Lenders;

     (j) the Agent shall have received confirmation that all additional mortgage taxes with respect
to the Additional Term Loan Mortgage Amendment have been paid;

     (k) the Agent shall have received an endorsement to the Project Title Insurance Policy, which
endorsement shall (i) bring forward the date of the Project Title Insurance Policy, including all
endorsements thereto, to the effective date of the Additional Term Loan Mortgage Amendment, (ii)
modify the description of the Mortgage to mean the Mortgage as amended by the Additional Term Loan
Mortgage Amendment, (iii) increase the amount of the Project Title Insurance Policy by the amount
of the Additional Term Loan, (iv) confirm that each of the existing endorsements to the Project
Title Insurance Policy cover the Project Expansion, and (v) include such additional endorsements as
may be required by the Agent and available in the jurisdiction in which the Project is located, in
each case in form and substance satisfactory to the Agent; and

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     (l) if requested by the Agent, the Agent shall have received certified copies of resolutions
of the Borrower and the Parent Guarantor, authorizing the Additional Term Loans and the execution,
delivery and performance of the Additional Term Loan Amendment, the Additional Term Loan Mortgage
Amendment and such other Loan Documents related thereto as may be required, together with such
opinions of counsel to the Borrower and the Parent Guarantor as the Agent may request with respect
thereto, each of which shall be in form and substance satisfactory to the Agent.

     SECTION 4.5 Conditions to Disbursement of Funds in Cost Overrun Account. Without
duplication of any conditions precedent required to be satisfied pursuant to Section 4.1
and Section 4.2, the obligations of the Agent to provide any Disbursement Instruction shall
be subject to the satisfaction of each of the additional conditions precedent set forth in this
Section 4.5:

     (a) the Agent shall have received a certification from the Borrower that no event has occurred
that could reasonably be expected (i) to result in a Cost Overrun, or (ii) to result in a Project
Delay;

     (b) the Agent shall have received a Monthly Progress Report for the immediately preceding
calendar month, certified by the Independent Engineer;

     (c) the Agent shall have received evidence satisfactory to it that (i) the Borrower has
received all equity contributions needed as of that time to satisfy the equity contribution
requirements set forth in the Agreement to Contribute Capital, and such contributions shall have
been deposited into the Cost Overrun Account, and (ii) the amount of the disbursement requested in
the Borrowing Request for such Disbursement Instruction does not exceed the amount of Construction
Expenses then due and payable;

     (d) the Agent shall have received copies of all invoices and other supporting information with
respect to the amount for which such Disbursement Instruction is requested; and

     (e) if requested by the Agent, the Agent shall have received a title continuation with respect
to, or an endorsement of, the Project Title Insurance Policy, updating the date of the Project
Title Insurance Policy to the date of the disbursement requested in the Borrowing Request for such
Disbursement Instructions, in each case in form and substance satisfactory to the Agent.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES, ETC.

     In order to induce the Lenders and the Agent to enter into this Agreement, to engage in the
transactions contemplated herein and in the other Loan Documents and to make the Loans and cause
the issuance of Letters of Credit, the Borrower represents and warrants to the Agent and each
Lender as set forth in this Article 5. Each and all of the representations and warranties
set forth in this Article 5 shall be true and correct, assuming and after giving
effect to the

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consummation of the transactions contemplated by this Agreement, the other Loan
Documents and the Project Documents.

     SECTION 5.1 Organization, Power, Authority, Etc. Each of the Loan Parties (i) is a
corporation or limited liability company validly organized and existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, (ii) is duly qualified to do
business and is in good standing as a foreign corporation or limited liability company in each
jurisdiction where the failure to so qualify could reasonably be expected to result in a Material
Adverse Change, Project Delay or Cost Overrun, and (iii) has full corporate or limited liability
power and authority, and holds all governmental licenses, permits, registrations and other
approvals required under all Requirements of Law, to own and hold under lease its property, to
construct and operate the Project, and to conduct its business as contemplated on and after the
Closing Date, including, without limitation, all Approvals, except where the failure to do so could
not reasonably be expected to result in a Material Adverse Change, Project Delay or Cost Overrun.
Each Loan Party has full corporate or limited liability company power and authority to enter into,
incur and perform its Obligations under this Agreement, the Notes and each other Loan Document
executed or to be executed by it and to obtain Loans and other extensions of credit hereunder.

     SECTION 5.2 Due Authorization. The execution and delivery by each Loan Party of this
Agreement, the Notes and each other Loan Document executed or to be executed by it, and the
incurrence and performance by each Loan Party of its Obligations have been duly authorized by all
necessary corporate or limited liability company action, do not require any Approval (except those
Approvals already obtained), do not and will not conflict with, result in any violation of, or
constitute any default under, any provision of any Organizational Document or Contractual
Obligation of any Loan Party or any law or governmental regulation or court decree or order, and
will not result in or require the creation or imposition of any Lien on any Loan Party’s properties
pursuant to the provisions of any Contractual Obligation of any Loan Party other than the Loan
Documents.

     SECTION 5.3 Validity, Etc. This Agreement, the Notes and each other Loan Document
executed by any Loan Party constitute the legal, valid and binding obligations of such Loan Party,
enforceable in accordance with their respective terms subject to the effect of any applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally, and the
effect of general principles of equity (regardless of whether considered in a proceeding in equity
or at law).

     SECTION 5.4 Financial Information; Solvency.

     (a) All balance sheets, all statements of operations, stockholders’ or members’ equity and
cash flows (excluding Projections and pro forma financial information) of the Loan Parties which
have been or shall hereafter be furnished by or on behalf of the Borrower to each Lender and the
Agent for the purposes of or in connection with this Agreement or any transaction contemplated
hereby, have been prepared in accordance with GAAP consistently applied throughout the periods
involved and present fairly in all material respects the matters reflected
therein subject, in the case of unaudited statements, to changes resulting from normal
year-end audit adjustments and except as to the absence of footnotes; provided,
however, that financial

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statements delivered by the Borrower to the Lenders and the Agent
pursuant to Section 6.1.1(c) have not been prepared in accordance with GAAP. As of the
date hereof, no Loan Party has material contingent liabilities or material liabilities for taxes,
long-term leases or unusual forward or long-term commitments other than those arising under the
Major Project Documents or those reflected on such Loan Party’s financial statements (whether or
not such items are required to be disclosed on a financial statement). The Projections that have
been or shall hereafter be furnished by or on behalf of the Borrower to each Lender and the Agent
are based upon estimates and assumptions stated therein, all of which the Borrower believes to be
reasonable and fair in light of the then current conditions and current facts and reflect the good
faith and reasonable estimates of the Borrower of the future financial performance of the Borrower
and the other information projected therein for the time periods set forth therein.

     (b) Each of the Loan Parties is Solvent, and each of the Loan Parties will have adequate
capital to carry on its business and will be able to pay its anticipated liabilities as and when
they become due.

     (c) None of the transactions with respect to the Loan Documents are being entered into with
the intent to delay, hinder or defraud any of the creditors of Borrower or its Subsidiaries.

     SECTION 5.5 Material Adverse Change. Since the Closing Date, there has been no
Material Adverse Change.

     SECTION 5.6 Absence of Default. No Loan Party is in default in the payment of (or in
the performance of any obligation applicable to) any Indebtedness, or is in default under any
regulation of any Governmental Authority or court decree or order, or is in default under any
Requirements of Law which default in any such case could reasonably be expected to result a
Material Adverse Change, Project Delay or Cost Overrun.

     SECTION 5.7 Litigation, Legislation, Etc. There is no pending or, to the knowledge of
the Borrower, threatened litigation, arbitration or governmental investigation, proceeding or
inquiry by or against any Loan Party, or to the knowledge of the Borrower, any other Person,
including, without limitation, any condemnation action, that could reasonably be expected to result
in a Material Adverse Change, Project Delay or Cost Overrun. To the knowledge of Borrower, there
is no legislation, governmental regulation or judicial decision that could reasonably be expected
to result in a Material Adverse Change, a Project Delay or a Cost Overrun.

     SECTION 5.8 Regulations T, U and X. No Loan Party is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock (as defined in F.R.S. Board Regulation U), and no assets of any Loan Party
consist of Margin Stock. The Loans and other extensions of credit hereunder will not be used for a
purpose which violates, or would be inconsistent with, F.R.S. Board Regulation T, U or X.

     SECTION 5.9 Government Regulation. No Loan Party is an “investment company” within
the meaning of the Investment Holding Company Act of 1940, as amended, or subject to

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regulation
under the Federal Power Act, the Interstate Commerce Act or any other federal or state law limiting
its ability to incur Indebtedness or to execute, deliver or perform the Loan Documents to which it
is party.

     SECTION 5.10 Taxes. Except as disclosed in Schedule 5.10 (“Taxes”), each of
the Loan Parties has filed all material tax returns and reports required by law to have been filed
by it and has paid all taxes and Charges thereby shown to be owing, except any such taxes or
Charges which are being diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its books.

     SECTION 5.11 Pension and Welfare Plans.

     (a) Except as set forth on Schedule 5.11, (a) no Loan Party has assumed any liability
under any employee benefit plan, fund, program, arrangement, agreement or commitment maintained by
or on behalf of or contributed to by or on behalf of any entity or trade or business which,
together with any of such corporations, is treated as a single employer under Sections 414(b), (c),
(m) or (o) of the IRC, and (b) no Loan Party will be subject (directly or indirectly) to any
liability, tax or penalty whatsoever to any person whomsoever with respect to any such employee
benefit plan, fund, program, arrangement, agreement or commitment.

     (b) No Reportable Event which could result in a Material Adverse Change has occurred during
the six-year period prior to the date as of which this representation is made or deemed made with
respect to any Single Employer Plan. Each Loan Party, each Commonly Controlled Entity, Subsidiary,
each Plan, and each trust maintained pursuant to any such Plan have complied in all respects with
the applicable provisions of ERISA, the IRC, and any other applicable laws. The present value of
all “benefit liabilities” (within the meaning of Section 4001(a)(16) of ERISA) under each Single
Employer Plan (based on those assumptions that would be used in a termination of each such Plan,
did not, as of the last annual valuation date for which an actuarial valuation report has been
done), did not, as of such date, exceed the value of the assets of such Plan as of such date. No
Loan Party nor any Commonly Controlled Entity has incurred any liability to the PBGC or to any
other Person under Section 4062, 4063 or Section 4064 of ERISA on account of the termination of, or
its withdrawal from, a Single Employer Plan, and no Lien has been imposed on the assets of any Loan
Party or any Commonly Controlled Entity under Section 4068 of ERISA. To the knowledge of the
Borrower, there does not exist any event or condition which would permit the institution of
proceedings to terminate any Single Employer Plan pursuant to Section 4042 of ERISA. No Pension
Plan has failed to satisfy the minimum funding standard applicable to it for any plan year (within
the meaning of Section 302 of ERISA or Section 412 of the IRC), whether or not waived, exists with
respect to any Pension Plan. The Loan Parties and each Commonly Controlled Entity have timely made
in full each quarterly installment payment to any Pension Plan required under Section 303(j) of
ERISA or Section 430 of the IRC and have also made full and timely payment of any other costs or
expenses related to such a Plan. The Loan Parties and all Commonly Controlled Entities have made
full and timely payment of all contributions to Multiemployer Plans required under
ERISA, the IRC or applicable collective bargaining agreements. No Loan Party nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any Multiemployer Pension Plan and
the liability to which such Loan Party or Commonly Controlled Entity would become subject under
ERISA if such Loan Party or any such Commonly Controlled Entity were

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to withdraw completely from
all Multiemployer Pension Plans as of the valuation date most closely preceding the date hereof is
not in excess of $250,000. No such Multiemployer Pension Plan has been terminated or is in
Reorganization or Insolvent, nor is any such Multiemployer Pension Plan likely to be terminated or
to become in Reorganization or Insolvent. No Multiemployer Plan has failed to satisfy the minimum
funding standard applicable to it for any plan year (within the meaning of Section 302 of ERISA or
Section 412 of the IRC), whether or not waived. The present value (determined using assumptions
which are reasonable in respect of the benefits provided and the employees participating) of the
aggregate liability of the Loan Parties and any Commonly Controlled Entities for post-retirement
benefits to be provided to their current and former employees under all Plans which are welfare
benefit plans (as defined in Section 3(1) of ERISA) is not in excess of $250,000. No written
notice of liability has been received with respect to the Loan Parties, or any Plan for any
“prohibited transaction” (within the meaning of Section 4975 of the IRC or Section 406 of ERISA),
nor has any such prohibited transaction resulting in liability to the Loan Party occurred. No Loan
Party or Commonly Controlled Entity will, as a result of consummating the transactions contemplated
by this Agreement (pursuant to the provisions of the Agreement, by operation of law or otherwise)
(i) have incurred or become liable for any tax assessed by the Internal Revenue Service for any
alleged violations of Section 4975 of the IRC or any civil penalty imposed by the Department of
Labor for any alleged violations of Section 406 of ERISA, (ii) have caused or permitted to occur
any “prohibited transaction” within the meaning of such Section 4975 of the IRC or Section 406 of
ERISA with respect to any Plan for which no exemption is available or (iii) have incurred any
liability to the PBGC (other than ordinary and usual PBGC premium liability) or any liability for
complete or partial withdrawal to any Multiemployer Pension Plan. No Loan Party is subject
(directly or indirectly) to, and no facts exist which could subject any Loan Party (directly or
indirectly) to, any other liability, penalty, tax or lien whatsoever, which could result in a
Material Adverse Change and which is directly or indirectly related to any Plan, including, but not
limited to, liability for any damages or penalties arising under Title I or Title IV of ERISA,
liability for any tax or penalty resulting from a loss of deduction under Section 404 or 419 of the
IRC, any tax or penalty under chapter 43 of the IRC, or any taxes or penalties under any other
applicable law.

     SECTION 5.12 Labor Controversies. There are no labor controversies pending or, to the
best knowledge of the Borrower, threatened, relating to any Loan Party which could reasonably be
expected to result in a Material Adverse Change, Project Delay or Cost Overrun. There is (i) no
unfair labor practice complaint pending against any Loan Party or, to the best knowledge of the
Borrower, threatened against any of them, before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under any collective bargaining agreement is
so pending against any Loan Party or, to the best knowledge of the Borrower, threatened against any
of them, (ii) no strike, labor dispute, slowdown or stoppage is pending against any Loan Party or,
to the best knowledge of the Borrower, threatened against any Loan Party, and (iii) no union
representation question existing with respect to the employees of any Loan Party, in each case,
which could reasonably be expected to result in a Material Adverse Change, Project Delay or Cost
Overrun.
Each Loan Party is in compliance in all material respects with all collective bargaining
agreements to which it is subject.

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     SECTION 5.13 Ownership of Properties; Collateral.

     (a) Each of the Loan Parties has good title to, or a valid leasehold interest in, all of its
material personal properties and assets of any nature whatsoever, free and clear of all Liens
except as permitted pursuant to Section 6.2.3. All Liens attaching to property or assets
of any Loan Party as of the Closing Date are identified in Schedule 5.13 (“Existing
Liens”) or are otherwise permitted pursuant to Section 6.2.3.

     (b) The provisions of the Security Documents are effective to create in favor of the Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable security interest in all
right, title and interest of the Loan Parties in the Collateral described therein, and, upon the
filing of the Financing Statements and taking of the other actions described in Section
4.1.13, the Security Documents will create a fully perfected security interest in all right,
title and interest of the Loan Parties in all of the Collateral subject to no other Liens other
than Liens permitted by Section 6.2.3.

     SECTION 5.14 Intellectual Property. Each of the Loan Parties owns or licenses all such
Intellectual Property, and has obtained assignments of all licenses and other rights, as the
Borrower considers necessary for or as are otherwise material to the conduct of the business of the
Loan Parties as now conducted without, individually or in the aggregate, any infringement upon
rights of other Persons which could reasonably be expected to result in a Material Adverse Change,
Project Delay or Cost Overrun. As of the Closing Date, all Intellectual Property owned or licensed
from third Persons described in this Section 5.14 is set forth in Schedule 5.14
(“Intellectual Property”).

     SECTION 5.15 Accuracy of Information. All factual information heretofore or
contemporaneously furnished by or on behalf of the Loan Parties in writing to the Agent or any
Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby,
taken as a whole, is true and accurate in every material respect on the date as of which such
information is dated or certified and as of the date of execution and delivery of this Agreement by
the Agent or such Lender, and such information is not incomplete by omitting to state any material
fact necessary to make such information not misleading in light of the circumstances under which it
was furnished.

     SECTION 5.16 Insurance. All policies of insurance in effect of any kind or nature
owned by or issued to the Loan Parties, including policies of fire, theft, product liability,
public liability, property damage, other casualty, employee fidelity, workers’ compensation,
property and liability insurance, (a) as of the Closing Date are listed in Schedule 5.16
(“Insurance”), (b) are, together with all policies of employee health and welfare and title
insurance, in full force and effect, (c) comply in all material respects with the applicable
requirements set forth herein and in the Security Documents and (d) are of a nature and provide
such coverage as is customarily carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Loan Parties operate. No Loan Party
provides any of its insurance through self-insurance except as disclosed in Schedule 5.16
and ordinary course insurance deductibles.

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     SECTION 5.17 Indebtedness. Other than the Obligations and Indebtedness permitted by
the terms of this Agreement, there is no other Indebtedness of the Loan Parties.

     SECTION 5.18 Environmental Matters. Except as set forth in Schedule 5.18
(“Environmental Matters”), the Loan Parties are in compliance in all material respects with
all applicable Environmental Laws except where noncompliance could not reasonably be expected to
result in Environmental Liabilities and Costs in excess of $500,000 or in a Material Adverse
Change, Project Delay or Cost Overrun, and there are no conditions or circumstances associated with
the currently or previously owned, operated, used or leased properties of such Loan Party or
current or past operations of such Loan Party or any predecessor interest of such Loan Party, which
could reasonably be expected to give rise to Environmental Liabilities and Costs in excess of
$500,000 or which may reasonably be expected to give rise to any Lien.

     SECTION 5.19 No Burdensome Agreements. No Loan Party is a party to or has assumed any
indenture, loan or credit agreement or any lease or other agreement or instrument or is subject to
any charter or other corporate restriction that could reasonably be expected to result in a
Material Adverse Change, Project Delay or Cost Overrun.

     SECTION 5.20 Consents. The Loan Parties have all material permits and governmental
consents and approvals necessary under Requirements of Law or, in the reasonable business judgment
of the Borrower, deemed advisable under Requirements of Law, in connection with the transactions
contemplated hereby or the ongoing business and operations of the Borrower and its Subsidiaries,
except where the failure to do so could not reasonably be expected to result in a Material Adverse
Change, Project Delay or Cost Overrun.

     SECTION 5.21 Major Project Documents. Set forth in Schedule 5.21 (“Major
Project Documents”) is a complete and accurate list of each Major Project Document to which any
Loan Party is a party, or by which it is bound, as of the Closing Date. Each Major Project
Document is in full force and effect in accordance with the terms thereof, except to the extent
replaced by a Replacement Contract in accordance with this Agreement. There are no defaults by any
Loan Party or, to the Borrower’s knowledge, any other default in existence under any Major Project
Document, except where such default could not reasonably be expected to result in a Material
Adverse Change, Project Delay or Cost Overrun. Each of the Loan Parties and, to the Loan Parties’
knowledge, each other party to the Major Project Document, has duly taken all necessary
organizational action to authorize the execution, delivery and performance of the Major Project
Documents and the consummation of all transactions contemplated thereby. Each of the
representations and warranties contained in the Major Project Documents made by any Loan Party is
true and correct in all material respects, and to each Loan Party’s knowledge, each of the
representations and warranties contained in the Major Project Documents made by any Person other
than such Loan Party is true and correct in all material respects.

     SECTION 5.22 Employment Agreements. Set forth in Schedule 5.22 (“Employment
Contracts”) is a complete and accurate list of each employment agreement to which any Loan Party is
a party, or by which it is bound, as of the Closing Date.

     SECTION 5.23 Condition of Property. All of the assets and properties owned by, leased
to or used by any Loan Party material to the conduct of their business are in adequate

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operating condition and repair, ordinary wear and tear excepted, and are free and clear of known defects
except for defects which do not substantially interfere with the use thereof in the conduct of
normal operations.

     SECTION 5.24 Subsidiaries. As of the Closing Date, the Borrower has no Subsidiaries.

     SECTION 5.25 Trade Relations. There exists no actual or, to the best of the
Borrower’s knowledge, threatened termination, cancellation or limitation of, or any modification or
change in, the business relationship of any Loan Party with any customer or group of customers of
any Loan Party or any material supplier of goods or services to any Loan Party, in each case which
could reasonably be expected to result in a Material Adverse Change, Project Delay or Cost Overrun.

     SECTION 5.26 Leases. Schedule 5.26 (“Existing Leases”) sets forth all leases
of real or personal property of each Loan Party as of the Closing Date. No Loan Party is in
default under or respect to (i) any lease of real property, or (ii) any lease of personal property.

     SECTION 5.27 Event of Abandonment; Loss. As of the Closing Date, no Event of
Abandonment has occurred and no Loss has occurred.

     SECTION 5.28 Anti-Terrorism Laws. No Loan Party and, to Loan Parties’ knowledge, no
Affiliate of any Loan Party (a) is in violation of any Anti-Terrorism Law; (b) is engaged in or has
conspired to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law; (c)
is a Blocked Person, or controls, is controlled by, or is under common control with, a Blocked
Person; (d) is acting for or on behalf of a Blocked Person; (v) is providing material, financial or
technological support or other services to or in support of acts of terrorism of a Blocked Person;
(e) conducts any business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person; or (f) deals in, or otherwise engages in any
transaction relating to, any property or interest in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism Law.

ARTICLE 6

COVENANTS

     SECTION 6.1 Affirmative Covenants. The Borrower agrees that it will perform, or cause
to be performed, the Obligations set forth in this Section 6.1.

     SECTION 6.1.1 Financial Information, Etc. The Borrower will furnish, or will cause to
be furnished, to each Lender and to the Agent copies of the following financial statements, reports
and information:

     (a) promptly when available and in any event within ninety (90) days after the close of each
Fiscal Year, a consolidated balance sheet and a consolidating balance sheet for the Parent
Guarantor and its Subsidiaries at the close of such Fiscal Year, and related consolidated and

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consolidating statements of operations, retained earnings, and cash flows for such Fiscal Year, of
the Parent Guarantor and its Subsidiaries (with comparable information as of the close of and for
the prior Fiscal Year beginning with the Fiscal Year ending December 31, 2011) in each case
certified (in the case of consolidated statements) without qualification by independent public
accountants satisfactory to the Agent, which statements shall be delivered together with a
report from management of the Borrower containing a description of projected business prospects
(including capital expenditures) and management’s discussion and analysis of financial condition
and results of operation of the Parent Guarantor and its Subsidiaries; and

     (b) promptly when available and in any event within ninety (90) days after the close of each
Fiscal Year, a Compliance Certificate calculated as of the close of such Fiscal Year;

     (c) promptly when available and in any event within forty-five (45) days after the close of
each calendar month of each Fiscal Year an internally prepared consolidated and consolidating
balance sheet for the Parent Guarantor and its Subsidiaries as of the close of such month, and
internally prepared consolidated and consolidating statements of operations, retained earnings, and
cash flows for such month and for the period commencing at the close of the previous Fiscal Year
and ending with the close of such month, of the Parent Guarantor and its Subsidiaries (with
comparable information as of the close of and for the corresponding month of the prior Fiscal Year
and for the corresponding portion of such prior Fiscal Year, beginning with the Fiscal Year ending
December 31, 2011), certified by the chief financial Authorized Officer of the Borrower;

     (d) within sixty (60) days after the close of each Fiscal Quarter, a Compliance Certificate
calculated as of the close of such Fiscal Quarter and a brief report containing management’s
discussion and analysis of the financial condition and results of operations of the Parent
Guarantor and its Subsidiaries (together with a report from management of the Borrower
containing management’s discussion and analysis of any changes compared to prior results and the
Projections as updated in accordance with clause (i) of this Section 6.1.1);

     (e) promptly upon request by the Agent from time to time, copies of all detailed financial and
management reports submitted to the Parent Guarantor or any of its Subsidiaries by
its independent public accountants in connection with each annual or interim audit made by
such independent public accountants of the books of the Parent Guarantor or any Subsidiary;

     (f) within ten (10) days after the end of each Fiscal Year of the Borrower, (i) a report
summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan
Party, containing such additional information as the Agent or any Lender may reasonably request and
including a statement that such insurance is in full force and effect and in compliance with
Schedule 4.1.16, and (ii) written evidence of payment of all premiums with respect to each
policy of such insurance;

     (g) within ten (10) days after the execution thereof, a copy of each Major Project Document
(including any Replacement Contract which constitutes a Major Project Document) which is executed
after the Closing Date, certified by an Authorized Officer of the Borrower to be true, correct and
complete, and, if requested by the Agent, within thirty (30) days following such request (or such
longer period as the Agent may agree in its sole discretion), a Project Party

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Consent with respect to such Major Project Document executed by each Project Party which is a party thereto, in form and
substance satisfactory to the Agent; Schedule 5.21 shall be deemed to be amended to include
each such additional Major Project Document as of the date of execution thereof;

     (h) within ten (10) days after the execution thereof, a list of all other Project Documents,
including without limitation, all Contribution Documents, which are executed after the Closing
Date, and if requested by the Agent, copies of such Project Documents, in each case, certified by
an Authorized Officer of the Borrower as being true, correct and complete;

     (i) within ten (10) days after the end of each month prior to the Project Construction
Completion Date, a Monthly Progress Report;

     (j) quarterly during the period occurring prior to the Project Construction Completion Date, a
report of the Independent Engineer containing a review of the Construction Budget and the
Construction Budget, together with forecasts of operating expenses and capital expenditures;

     (k) within sixty (60) days after the end of each Fiscal Year of the Borrower, updates to the
Projections containing projected balance sheets, statements of operations and changes in cash flows
of the Parent Guarantor and its Subsidiaries prepared on a consolidated basis for the current
Fiscal Year and each of the Fiscal Years thereafter through the end of Fiscal Year 2018, prepared
on a monthly basis for the upcoming Fiscal Year and on an annual basis for such Fiscal Years
thereafter, together with (A) supporting details and a statement of underlying assumptions, (B) a
report from management of the Borrower containing management’s discussion and analysis of the
projected financial condition and results of operations of the Parent Guarantor and its
Subsidiaries, (C) projected trends of business and (D) a detailed schedule of Capitalized Lease
Liabilities and outstanding Indebtedness;

     (l) promptly after approval by the Parent Guarantor’s manager, any material updates or
revisions to any business plan described in the preceding clause (j) of this Section 6.1.1;

     (m) after the Project Construction Completion Date, promptly when available and in any event
by the close of business on the first and fifteenth days of each month (or if any such day is not a Business Day, the immediately succeeding Business Day), a completed Borrowing
Base Certificate accurate as of the immediately preceding Business Day, and upon request of the
Agent, all supporting schedules including but not limited to accounts receivable agings, schedule
of cross-aging, schedule of credits past original due date, schedule of contra accounts, schedule
detailing any other ineligible accounts, reconciliation of accounts receivable aging to general
ledger, reconciliation of perpetual inventory to general ledger, including general ledger trial
balance, and listing of supporting documentation for all inventory reserves;

     (n) promptly following receipt thereof by the Borrower, copies of (i) any notice received with
respect to any Major Project Document, (ii) all additional Necessary Project Approvals which have
been obtained with respect to the Project Expansion, and (iii) all proposed or issued Change Orders
(and all recommendations with respect thereto from the General Contractor or the Independent
Engineer);

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     (o) not later than the date the first financial statements required under this Section
6.1.1 are required to be delivered, and promptly thereafter following any change in its
independent public accountants from time to time, the Agent shall have received satisfactory
evidence that the Borrower has delivered a letter to its independent public accountants authorizing
such public accountants to discuss the Parent Guarantor’s and its Subsidiaries’ financial matters
with the Agent and each Lender or any of their representatives so long as a representative of the
Borrower has been given the opportunity to be present at any such discussion;

     (p) promptly (and in any event within three (3) Business Days) following receipt by the
Borrower of information with respect to any Loss or Event of Abandonment, or the commencement or
threat of a condemnation action, a copy of any notice or other information received by the Borrower
with respect to the occurrence thereof, together with such other information and details as the
Agent, the Insurance Consultant or the Independent Engineer may request;

     (q) promptly (and in any event within three (3) Business Days) following the occurrence of a
Cost Overrun or of the occurrence of any event that could reasonably be expected to result in a
Cost Overrun, copies of all reports and other information giving details of such Cost Overrun or
event;

     (r) on or before the Project Construction Completion Date, copies of all Sales and Marketing
Contracts, in each case, certified by an Authorized Officer of the Borrower as being true, correct
and complete; and

     (s) such other information with respect to the financial condition, business, property,
assets, revenues and operations of the Parent Guarantor and any of its Subsidiaries as the Agent or
any Lender may from time to time reasonably request.

     SECTION 6.1.2 Maintenance of Corporate Existence, Etc. Except as permitted by
Section 6.2.10, the Borrower will cause to be done at all times all things necessary to
maintain and preserve the existence of the Borrower as a Delaware limited liability company

     and the Parent Guarantor as a Delaware limited liability company, and shall maintain the
existence of each other Subsidiary.

     SECTION 6.1.3 Foreign Qualification. The Borrower will, and will cause each
Subsidiary to, cause to be done at all times all things necessary to be duly qualified to do
business and be in good standing as a foreign corporation in each jurisdiction where the failure to
so qualify could reasonably be expected to result in a Material Adverse Change, Project Delay or
Cost Overrun.

     SECTION 6.1.4 Payment of Taxes, Etc. The Borrower will, and will cause each
Subsidiary to, pay and discharge, as the same become due and payable, all Charges against it or on
any of its property, as well as claims of any kind which, if unpaid, could reasonably be expected
to become a Lien upon any one of its properties (other than a Permitted Lien); provided,
however, that the foregoing shall not require the Borrower or any such Subsidiary to pay or
discharge any such Charge or claim so long as it shall be diligently contesting the validity

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or amount thereof in good faith by appropriate action or proceedings and shall have set aside on its
books adequate reserves in accordance with GAAP.

     SECTION 6.1.5 Insurance. In addition to any insurance required to be maintained
pursuant to any other Loan Document, the Borrower will, and will cause each Subsidiary to,
maintain, or cause to be maintained, insurance policies meeting the requirements set forth on
Schedule 4.1.16 as determined by the Insurance Consultant in consultation with the Lenders.
Such insurance policies shall be in effect on the Closing Date and the premiums for each such
policy shall be paid as such premiums shall come due. Neither the Borrower nor any of its
Subsidiaries shall borrow upon or otherwise impair its right to receive the proceeds of such
insurance, other than customary financing of annual premiums. In the event of (a) any Loss
resulting from a casualty (other than a Major Loss or a Total Loss), the Agent shall make available
to the Borrower any insurance proceeds received by the Agent in respect of such Loss for the
payment of Permitted Replacement Expenses to repair or replace the property or asset which was the
subject of such Loss if and to the extent that a mandatory prepayment of the Loans in the amount of
such insurance proceeds is not required under Section 3.3.1(e) of this Agreement, and (b)
any Major Loss, the Agent shall make available to the Borrower any insurance proceeds received by
the Agent in respect of such Major Loss for the payment of Major Permitted Replacement Expenses if
and to the extent that a mandatory prepayment of the Loans in the amount of such insurance
proceeds is not required under Section 3.3.1(f) of this Agreement.

     SECTION 6.1.6 Notice of Default, Litigation, Etc. Upon obtaining knowledge thereof,
the Borrower will give prompt written notice (with a description in reasonable detail) to the Agent
of:

     (a) the occurrence of any Default;

     (b) the occurrence of any litigation, arbitration or governmental investigation or proceeding
not previously disclosed in writing by the Borrower to the Lenders which has been instituted or, to
the knowledge of the Borrower, is threatened against, any Loan Party or to which
any of its properties, assets or revenues is subject which, if adversely determined, could
reasonably be expected to result in a Material Adverse Change, Project Delay or Cost Overrun;

     (c) any material development which shall occur in any litigation, arbitration or governmental
investigation or proceeding previously disclosed by the Borrower to the Lenders pursuant to
Section 5.7 which could reasonably be expected to result in a Material Adverse Change,
Project Delay or Cost Overrun;

     (d) the occurrence of any other circumstance which could reasonably be expected to result in a
Material Adverse Change, a Project Delay or a Cost Overrun;

     (e) the occurrence of any Loss, any Event of Abandonment or the commencement or threat of a
condemnation action; and

     (f) the occurrence or expected occurrence of any Reportable Event with respect to any Single
Employer Plan (and a statement of the chief financial Authorized Officer of the Borrower,
describing such event and the action, if any, that the Borrower or any Commonly

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Controlled Entity has taken and proposes to take with respect thereto), or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Pension Plan, the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or
Subsidiary or any Multiemployer Pension Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Single Employer Plan or Multiemployer Pension
Plan, or the receipt of notice by any Loan Party or any Commonly Controlled Entity that the
institution of any such proceedings or the taking of any such action is under consideration or
anticipated, the institution of any proceedings or other action by the Internal Revenue Service or
the Department of Labor with respect to the minimum funding requirements of any Pension Plan, or
the receipt of notice by any Loan Party or any Commonly Controlled Entity that the institution of
any such proceedings or the taking of any such action is under consideration or anticipated, the
occurrence or expected occurrence of any event which could result in the incurrence of
unpredictable contingent event benefits under Section 302 of ERISA or Section 412 of the IRC with
respect to any Pension Plan, any event or condition which could increase the liability of any Loan
Party or any Commonly Controlled Entity with respect to post-retirement welfare benefits under any
Plan, or the occurrence of any other event or condition with respect to any Plan which could
subject the Borrower or any Subsidiary (directly or indirectly) to any tax, penalty, lien or
liability under Title I or Title IV of ERISA, Section 404 or 419 and Chapter 43 of the IRC, or any
other applicable laws, and in each case, such event or condition, together with all other events or
conditions, if any, could subject any Loan Party (directly or indirectly) to any tax, fine,
penalty, lien or other liabilities in amounts which in the aggregate could result in a Material
Adverse Change. The Borrower will deliver to each of the Lenders a true and complete copy of each
annual report (Form 5500) of each Plan (other than a Multiemployer Plan) required to be filed with
the Internal Revenue Service, promptly after the filing thereof.

     SECTION 6.1.7 Books and Records. The Borrower will, and will cause each Subsidiary
to, keep books and records reflecting all of its business affairs and transactions in accordance
with GAAP and permit the Agent and each Lender or any of their respective representatives, at
reasonable times and reasonable intervals upon three (3) Business Days notice, to visit all of its offices, to discuss its financial
matters with its officers and independent public accountants and to examine (and, at the expense of
the Borrower, photocopy extracts from) any of its books or other corporate records. The Agent may
conduct all such field audits of all Inventory and Accounts of the Borrower as the Agent may
reasonably request, all at reasonable times and upon advance notice to Borrower, all such field
audits to be conducted by internal auditors of the Agent or a Lender or by outside auditors of
recognized standing engaged by the Agent, and in form and substance satisfactory to the Agent and
at such intervals as the Agent shall determine. In addition, the Agent may obtain such additional
appraisals of the Collateral, or updates to previously prepared appraisals of the Collateral, in
form and substance satisfactory to the Agent and at such intervals as the Agent shall determine.
The Borrower shall pay any fees and expenses, including, without limitation, any fees of its
independent public accountants and internal or external auditors and appraisers incurred in
connection with the Agent’s or any Lender’s exercise of its rights pursuant to this Section
6.1.7.

     SECTION 6.1.8 Maintenance of Properties, Etc. The Borrower will maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties (real
and personal and including all intangible assets), except obsolete properties which are not used

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or necessary in the conduct of its business, in good working order and condition, ordinary wear and
tear excepted, except where the failure to do so could not reasonably be expected to result in a
Material Adverse Change, Project Delay or Cost Overrun.

     SECTION 6.1.9 Maintenance of Licenses and Permits. The Borrower will maintain and
preserve, and will cause each of its Subsidiaries to maintain and preserve, all Intellectual
Property, rights, permits, licenses, approvals and privileges issued under or arising under any
Requirements of Law, except where the failure to do so could not reasonably be expected to result
in a Material Adverse Change, Project Delay or Cost Overrun.

     SECTION 6.1.10 Employee Plans. The Borrower will, and will cause each of its
Subsidiaries to, comply in all respects with the provisions of ERISA and the IRC which are
applicable to any of the Plans, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Change.

     SECTION 6.1.11 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all applicable Requirements of Law, except where the failure to do so
could not reasonably be expected to result in a Material Adverse Change, Project Delay or Cost
Overrun.

     SECTION 6.1.12 Real Estate. If the Borrower or any of its Subsidiaries shall acquire
a fee or leasehold interest in real estate which the Agent determines to be material to the
Borrower or such Subsidiary, then the Borrower or such Subsidiary, as the case may be, will execute
a first priority Mortgage (subject to Permitted Liens), in form and substance satisfactory to the
Required Lenders, in favor of the Agent, for the benefit of the Secured Parties, and shall deliver
to the Agent such title insurance policies, surveys and landlords’ estoppel agreements with respect thereto as the as the Agent shall reasonably
request.

     SECTION 6.1.13 Deposit Accounts, Securities Accounts and Commodity Accounts. From and
after the Closing Date, the Borrower shall (i) cause all of its Deposit Accounts at all times to be
subject to a Deposit Account Control Agreement in form and substance satisfactory to the Agent;
(ii) cause all of its Securities Accounts at all times to be subject to a Securities Account
Control Agreement in form and substance satisfactory to the Agent; and (iii) cause all of its
Commodity Accounts at all times to be subject to a Commodity Account Control Agreement;
provided, however, that the Borrower may maintain Deposit Accounts which are not
subject to a Deposit Account Control Agreement or other control agreement, to the extent permitted
under Section 6.2.7(a).

     SECTION 6.1.14 Subsidiary Guaranty, Etc. The Borrower shall cause each of its
Subsidiaries now existing or hereafter formed or acquired to unconditionally and irrevocably,
jointly and severally, guaranty all Obligations, and grant Liens on all of its assets and
properties to secure such guaranty, pursuant to such instruments and agreements as the Agent shall
reasonably request and as required under the laws of the applicable jurisdiction, and to provide an
opinion of counsel to such Subsidiary with respect thereto.

     SECTION 6.1.15 Hedge Contract. So long as hedging arrangements are available at
commercially reasonable rates and terms, as determined by the Agent, within ninety (90) days

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after the Closing Date, the Borrower shall obtain, and thereafter shall maintain for the term of this
Agreement, one or more Hedge Contracts for an aggregate notional principal amount of not less than
fifty percent (50%) of the sum of the Term Loan Facility Commitment Amount and the Working Capital
Facility Commitment Amount from time to time, effectively hedging against increases in the
Eurodollar Rate over rates, and on such terms and with such parties, as shall be satisfactory to
the Agent.

     SECTION 6.1.16 Agricultural Inventory. The provisions of this Section 6.1.16
shall apply to Borrower’s Inventory.

     (a) Notices from Farm Products Sellers. Borrower represents and warrants to Agent and
Lenders that Borrower has not, within the one-year period immediately prior to the date hereof,
received written notice pursuant to the applicable provisions of the Food Security Act or pursuant
to the Uniform Commercial Code or any other applicable local laws or otherwise from (i) any of its
suppliers or sellers of Farm Products (individually, a “Farm Products Seller” and
collectively, the “Farm Product Sellers”), (ii) any secured party of any such Farm Products
Seller or (iii) the Secretary of State (or the equivalent official) of any state in which Farm
Products purchased by Borrower are produced, in any case advising or notifying Borrower of the
intention of such Farm Products Seller or other Person to preserve the benefit of any trust
applicable to any property of Borrower established in favor of such Farm Products Seller or other
Person under the provisions of any law or of the existence or claim of a Lien in and to any Farm
Products that may be or have been purchased by Borrower or any related or other property of
Borrower (all of the foregoing, together with any such notices as Borrower may at any time hereafter receive, collectively, the “Food Security Act Notices”). Borrower shall
notify Agent in writing within two (2) Business Days after receipt by Borrower of any applicable or
purportedly applicable Food Security Act Notice or amendment to a previous Food Security Act Notice
or notice of any such other Lien or other claim and provide Agent with a copy of such Food Security
Act Notice or amendment or notice.

     (b) Compliance with Notices. Borrower shall in all respects comply with all
applicable Food Security Act Notices during their periods of effectiveness under the Food Security
Act, including directions to make payments to the Farm Products Sellers by issuing payment
instruments directly to the Farm Products Sellers’ secured party or jointly payable to the Farm
Products Sellers and the Farm Products Sellers’ secured party, as specified in the Food Security
Act Notice, so as to terminate or release the security interest in Farm Products maintained by such
Farm Products Seller or any secured party with respect to the properties of such Farm Products
Seller under the Food Security Act.

     (c) Central Registry. If the aggregate purchase price of Farm Products purchased by
Borrower in any Fiscal Year from Persons who produce Farm Products in any state with a central
filing system certified by the U.S. Secretary of Agriculture exceeds $100,000, Borrower shall
register as a buyer with the Secretary of State of such state (or the designated system operator)
within thirty (30) days after the date on which the aggregate purchase price of such Farm Products
exceeds $100,000. Borrower shall forward promptly to Agent a copy of each such registration as
well as a copy of all relevant portions of the master list periodically distributed by any such
Secretary of State (or the designated system operator).

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     (d) Farm Product Seller Reports. If the aggregate purchase price of Farm Products
purchased by Borrower from Persons who produce Farm Products in any state with a central filing
system certified by the U.S. Secretary of Agriculture exceeds $250,000 during the term of this
Agreement, the Borrower shall thereafter deliver to Agent not later than noon New York time twenty
(20) days after the end of each Fiscal Quarter, a schedule of such Farm Product Sellers which shall
(i) be prepared as of the last day of the immediately preceding Fiscal Quarter, (ii) set forth the
complete legal name and address of each such Farm Product Seller, and (iii) set forth the aggregate
purchase price of all Inventory purchased by Borrower from each such Farm Product Seller during
each of the two immediately preceding Fiscal Quarters.

     (e) Canadian Requirements. Food Security Act Notices (as defined in Section
6.1.16(a) above) shall include all written agreements entered into by Borrower with producer
organizations regarding the withholding of amounts payable to producers pursuant to section 5(1)(d)
of the Advance Payments for Crops Act (Canada) or any other applicable local laws or otherwise
(“Advance Payment Agreements”). Borrower affirms that its representation and warranty in
the first sentence of Section 6.1.16(a) above also applies to Advance Payment Agreements.
Borrower shall notify Agent in writing within two (2) Business Days after Borrower enters into an
Advance Payment Agreement or an amendment to a previous Advance Payment Agreement or notice of any
such other Canadian Lien or other claim and provide Agent with a copy of such Advance Payment
Agreement or amendment or notice. Borrower shall in all respects comply with all Advance Payment
Agreements during their periods of effectiveness under the Advance Payments for Crops Act (Canada)
or other applicable legislation, including directions to make payments to the applicable producer
organization or other parties, as specified in the Advance Payment Agreement, so as to terminate or release any liens or security
interests in Farm Products under the Advance Payments for Crops Act (Canada) or other applicable
legislation.

     SECTION 6.1.17 Major Project Documents. The Borrower shall perform in all material
respects its obligations under, and otherwise comply in all material respects with, each Major
Project Document, other than any Major Project Document which has been replaced with a Replacement
Contract in accordance with the terms of this Agreement, including without limitation, the terms of
this Section 6.1.17. If any Major Project Document has been replaced with a Replacement
Contract, the Borrower shall perform in all material respects its obligations under, and otherwise
comply in all material respects with, each such Replacement Contract.

     SECTION 6.1.18 Project Construction Completion Requirements. Promptly after
completion of the Project Construction Completion Requirements (and in any event not later than the
Project Construction Completion Deadline), the Borrower shall deliver to the Agent a certificate
signed by the Independent Engineer stating that each of the Project Construction Completion
Requirements has been satisfied, which shall be in form and substance satisfactory to the Agent.

     SECTION 6.1.19 Debt Service Reserve Account. On or prior to the Project Construction
Completion Date, the Borrower shall establish the Debt Service Reserve Account in the name of the
Agent and shall deposit or cause to be deposited not less than an amount equal to the Debt Service
Reserve Amount. At all times thereafter, the Borrower shall maintain in the Debt Service Reserve
Account an amount not less than the Debt Service Reserve Amount. For

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the avoidance of doubt, the Borrower may elect to fund the Debt Service Reserve Account on the Project Construction Completion
Date from the proceeds of a Term Loan.

     SECTION 6.2 Negative Covenants. The Borrower agrees that it will perform the
Obligations set forth in this Section 6.2.

     SECTION 6.2.1 Business Activities. The Borrower will not, and will not permit any
Subsidiary to, engage in any business activity, except the construction, operation and maintenance
of the Project, and the processing, storage, marketing, and sale of canola seed, canola oil, canola
meal and other canola products and such research, development and other activities as may be
incidental or related thereto. The Parent Guarantor will not engage in any business activities
other than to hold the membership interests of the Borrower and activities as may be incidental or
related thereto.

     SECTION 6.2.2 Indebtedness. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness other than:

     (a) Indebtedness in respect of the Loans, Letters of Credit and other Obligations;

     (b) Indebtedness in respect of liabilities resulting from (i) endorsements of negotiable
instruments in the ordinary course of business; and (ii) appeal, surety or performance bonds issued
for the account of the Borrower or any of its Subsidiaries in the ordinary course of business;

     (c) Indebtedness existing on the Closing Date and secured by Liens set forth on Schedule
5.13 (“Existing Liens”);

     (d) Permitted Hedge Contracts;

     (e) Sponsor Temporary Working Capital Loans;

     (f) any Sponsor Loan;

     (g) unsecured Indebtedness not to exceed in the aggregate at any one time outstanding,
$1,000,000;

     (h) Capitalized Lease Liabilities and Purchase Money Indebtedness, in addition to the
Indebtedness permitted under clause (c) of this Section 6.2.2, in an amount not to exceed
$500,000 in the aggregate at any time outstanding; and

     (i) Indebtedness secured by Liens permitted by Section 6.2.3(k).

     SECTION 6.2.3 Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets,
whether now owned or hereafter acquired, except:

     (a) Liens securing the Obligations;

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     (b) Liens identified in Schedule 5.13 (“Existing Liens”) evidencing rights of
lessors in leased equipment and/or purchase money liens on specific items of equipment, and any
extensions, renewals or replacements of any such Liens provided that the principal amount
of the obligation secured thereby is not increased and that any such extension, renewal or
replacement is limited to the property originally encumbered thereby.

     (c) Liens for taxes, assessments or other governmental charges or levies not at the time
delinquent or thereafter payable with penalty or being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on
its books;

     (d) Liens of carriers, warehousemen, mechanics, landlords and materialmen and other similar
liens imposed by law incurred in the ordinary course of business for sums not overdue for more than
thirty (30) days or being contested in good faith by appropriate action or proceedings (which
action or proceedings have the effect of preventing the forfeiture or sale of the asset subject to
such Lien) and for which adequate reserves in accordance with GAAP shall have been set aside on its
books;

     (e) Liens (other than Liens arising under ERISA or Section 430(k) of the IRC) incurred in the
ordinary course of business in respect of deposits made in connection with workmen’s compensation,
unemployment insurance or other forms of governmental insurance or benefits, or to secure
performance of tenders, statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on surety, performance or
appeal bonds;

     (f) judgment Liens with respect to judgments to the extent such judgments do not constitute an
Event of Default described in Section 7.1.9;

     (g) Liens which arise by operation of law under Article 2 of the UCC in favor of unpaid
sellers of goods, or Liens in items or any accompanying documents or proceeds arising by operation
of law under Article 4 of the UCC in favor of a collecting bank;

     (h) easements (including, without limitation, reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations, encroachments, variations and other
restrictions, charges or encumbrances (whether or not recorded) affecting the use of property,
which do not materially detract from the value of such property or impair the use thereof;

     (i) Liens securing Indebtedness permitted under clause (e) of Section 6.2.2;

     (j) Liens arising from precautionary UCC Financing Statement filings with respect to operating
leases which are otherwise permitted hereunder;

     (k) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;

     (l) Liens on canola seed Inventory securing Sponsor Temporary Working Capital Loans;

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     (m) customary offset rights of commodity intermediaries with respect to Commodity Accounts
arising under applicable laws or under the terms of any commodity account agreements with
respect to such Commodity Accounts, to the extent consented to in writing by the Agent pursuant
to the terms of any Commodity Account Control Agreement with respect to such Commodity Accounts
or otherwise; and

     (n) other Liens securing Indebtedness in aggregate principal amount not to exceed at any
one time outstanding $500,000.

     SECTION 6.2.4 Financial Covenants. The Borrower hereby covenants and agrees as set
forth below:

     (a) Debt to Adjusted Capitalization Ratio. The Borrower will not permit its Debt to
Adjusted Capitalization Ratio as of the last day of any Fiscal Quarter to be more than 0.60 to
1.00.

     (b) Debt Service Coverage Ratio. The Borrower will not permit its Debt Service
Coverage Ratio to be less than 1.75 to 1.00 as of the last day of any Fiscal Quarter, beginning
with the second full Fiscal Quarter ending after the Project Construction Completion Date,
calculated for the four consecutive Fiscal Quarter period ending on each such date.

     (c) Minimum Net Worth of Borrower. The Borrower will not permit its Net Worth on any
date to be less than $60,000,000.

     SECTION 6.2.5 Capital Expenditures. No Loan Party will, or will permit any Subsidiary
to, make or commit to make any Consolidated Capital Expenditures, except that (a) the Borrower and
its Subsidiaries may make and commit to make Consolidated Capital Expenditures consisting of
Construction Expenses, and (b) in addition to the Consolidated Capital Expenditures permitted under
clause (a) of this Section 6.2.5, following the Project Construction Completion Date the
Borrower and its Subsidiaries may make Consolidated Capital Expenditures during each Fiscal Year in
an amount not to exceed $1,800,000 for any given Fiscal Year; provided, that in the event that the
Borrower and its Subsidiaries do not make Consolidated Capital Expenditures in any given Fiscal
Year in such amount, in addition to such amount for the immediately following Fiscal Year, the
Borrower and its Subsidiaries shall be permitted to make in the immediately following Fiscal Year
Consolidated Capital Expenditures in the amount by which Consolidated Capital Expenditures set
forth below for such preceding Fiscal Year exceeded Consolidated Capital Expenditures made or
committed to be made during such preceding Fiscal Year (but such additional permitted amount shall
not increase any of the amounts set forth below or otherwise form the basis for any increase in
permitted Consolidated Capital Expenditures for any subsequent Fiscal Years).

     SECTION 6.2.6 Lease Obligations. Except for (a) leases in existence on the Closing
Date and described in Schedule 5.26 and any extensions or renewals of Existing Leases in
accordance with their terms (“Existing Leases”), (b) any lease of real or personal property
entered into by the Borrower or any Subsidiary after the Closing Date in the ordinary course of
business and on fair and reasonable terms provided that the aggregate rent payable during any
Fiscal Year under all such leases does not exceed $250,000, and (c) any capital lease, provided

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the Capitalized Lease Liabilities incurred thereunder are permitted under clause (f) of Section
6.2.2, the Borrower will not, and will not permit any Subsidiary to, create or suffer to exist
any obligation for the payment of rent for any property under any lease or agreement to lease
having a term of one year or more; provided, however, that no such lease shall by
its terms subject the Borrower or any Subsidiary to Environmental Liabilities and Costs.

     SECTION 6.2.7 Investments. No Loan Party will, or will permit any Subsidiary to,
make, incur, assume or suffer to exist any Investment in any other Person except:

     (a) Cash Equivalent Investments, provided that the Borrower shall not maintain more than
$250,000 in aggregate value of Cash Equivalent Investments in deposit accounts or securities
accounts that are not subject to a control agreement in favor of the Agent for the benefit of the
Secured Parties;

     (b) deposits for utilities, security deposits under leases, insurance premium deposits and
similar prepaid expenses;

     (c) accounts receivable arising in the ordinary course of business;

     (d) deposit accounts and investment accounts established or required to be maintained under
this Agreement; and

     (e) Investments consisting of Permitted Hedge Contracts.

     SECTION 6.2.8 Restricted Payments, Etc. The Borrower will not declare, pay or make any
dividend or distribution (in cash, property or obligations) on any shares or units of any class of
Stock (now or hereafter outstanding) of the Borrower or on any warrants, options or other rights in
respect of any class of Stock (now or hereafter outstanding) of the Borrower or apply, or permit
any Subsidiary to apply, any of its funds, property or assets to the purchase, redemption, sinking
fund or other retirement of any shares or units of any class of Stock (now or hereafter
outstanding) of the Borrower or any rights, options or warrants to subscribe for or purchase any
shares or units of any class of Stock of the Borrower or make any deposit for any of the foregoing;
provided, however, that so long as (i) no Event of Default has occurred and is
continuing, (ii) the Borrower is in compliance with all financial covenants as determined on a pro
forma basis after giving effect to such distributions, and (iii) after giving effect to such
distribution, the Borrower’s Liquidity is not less than $3,000,000, then (A) so long as the
Borrower is a Pass-Through Entity and the direct or indirect owners of its Stock are directly
responsible for the payment of taxes on income of the Borrower (such direct or indirect owners of
the Borrower’s stock responsible for the payment of such taxes, the “Borrower’s Tax-Paying
Entities”), the Borrower may make distributions from time to time to the owners of its Stock
(for subsequent distribution in the event that such owners of the Borrower’s stock are not
Borrower’s Tax-Paying Entities) in an amount up to the lesser of (x) the “Tax Distributions” as
described in Section 5.6 of the Parent Guarantor’s LLC Agreement, (y) the estimated income tax
liability of the Borrower’s Tax-Paying Entities with respect to the income of the Borrower
(calculated based on a tax rate equal to the highest effective marginal combined federal, state and
local income tax rate of an assumed taxpayer paying taxes in the jurisdictions(s) in which the
Borrower’s Tax-Paying Entities are taxable (as reported by the Borrower to the Agent each year and
consistent

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with any applicable provisions of the Borrower’s Organizational Documents) taking into
account the deductibility of state and local income taxes for federal income tax purposes) arising
solely as a result of the net income of the Borrower attributable to the Borrower’s Tax-Paying
Entities, and (z) forty-one percent (41%) of the adjusted taxable income of the Borrower with
respect to which the Borrower’s Tax-Paying Entities are responsible for paying income taxes (such
distributions, “Permitted Tax Distributions”), provided that such distributions are
made quarterly not more than five (5) Business Days prior to the deadline for such owners of Stock
to file their quarterly estimated income tax returns with the Internal Revenue Service, and (B) on
or after the Project Completion Date the Borrower may make distributions to the owners of its
Stock, solely from amounts on deposit in the Cost Overrun Account, in an aggregate amount not to
exceed the amount by which the amount on deposit in the Cost Overrun Account on the Project
Construction Completion Date exceeds the sum of (i) the amount of all obligations owed with respect
to Construction Expenses which have not yet been paid, and (ii) an amount equal to the Borrower’s reasonable estimate as approved by the Independent Engineer of the costs to
complete the items described on the Punch List Certificate.

     SECTION 6.2.9 Take or Pay Contracts; Sale/Leasebacks.

     (a) No Loan Party will enter into or be a party to any arrangement for the purchase of
materials, supplies, other property or services if such arrangement by its express terms requires
that payment be made by such Loan Party regardless of whether or not such materials, supplies,
other properties or services are delivered or furnished to it; and

     (b) No Loan Party will enter into any arrangement with any Person providing for the leasing by
such Loan Party of any property or assets, which property or assets have been or are to be sold or
transferred by such Loan Party to such Person.

     SECTION 6.2.10 Consolidation, Merger, Subsidiaries, Etc.

     (a) No Loan Party will liquidate or dissolve, consolidate with, or merge into or with, any
other Person, or purchase or otherwise acquire all or substantially all of the assets of any Person
(or of any division or business unit thereof) or otherwise make or agree to make acquisitions;
provided, however, that any Subsidiary of the Borrower may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any other wholly-owned Subsidiary
(so long as the Borrower or such wholly-owned Subsidiary is the surviving Person).

     (b) No Loan Party will create or acquire any Subsidiary or transfer any assets to any
Subsidiary.

     SECTION 6.2.11 Asset Dispositions, Etc. No Loan Party will sell, transfer, lease or
otherwise dispose of, or grant options, warrants or other rights with respect to, any of its assets
to any Person (excluding Liens permitted by Section 6.2.3), unless (a) such disposition
constitutes a disposition of obsolete, surplus or retired assets not used in the business of such
Loan Party, (b) such disposition constitutes the sale of Inventory in the ordinary course of such
Loan Party’s business, or (c) such disposition constitutes the sale of Accounts and related rights
pursuant to the Land O’Lakes Agreements, or (d) the disposition is in the ordinary course of
business and the net book value of the asset to be disposed, together with the net book value of
all other assets

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disposed by all Loan Parties pursuant to this clause (c) during the term of this
Agreement, does not exceed $1,000,000.

     SECTION 6.2.12 Modification of Organizational Documents, Etc. No Loan Party will
consent to any amendment, supplement or other modification of any of the terms or provisions
contained in its Organizational Documents that would adversely effect the Agent’s or the Lender’s
rights under the Loan Documents or such Loan Party’s capacity or ability to meet its obligations
under this Agreement or any Loan Document.

     SECTION 6.2.13 Transactions with Affiliates. No Loan Party will enter into, or cause,
suffer or permit to exist (a) any management contract or arrangement, consulting agreement or
arrangement, contract or arrangement relating to the allocation of revenues, expenses or similar
contract or arrangement requiring any payments to be made by any Loan Party to any Affiliate, or
(b) any other transaction, arrangement or contract with any of its Affiliates which is on terms
which are less favorable to such Loan Party than are obtainable from any Person which is not one of
its Affiliates.

     SECTION 6.2.14 Inconsistent Agreements. No Loan Party will enter into any material
agreement containing any provision which would be violated or breached in any material respect by
any Loan or Letter of Credit or by the performance by such Loan Party of its obligations hereunder
or under any Loan Document.

     SECTION 6.2.15 Change in Accounting Method. No Loan Party will make any change in
accounting treatment and reporting practices except as required by GAAP.

     SECTION 6.2.16 Change in Fiscal Year End. No Loan Party will change its Fiscal Year.

     SECTION 6.2.17 Compliance with ERISA. No Loan Party will take or fail to take any
action with respect to a Plan, including, but not limited to, establishing, amending, or
terminating or withdrawing from any Plan, engaging in any prohibited transaction (within the
meaning of Section 4975 of the IRC or Section 406 or ERISA), or causing any occurrence of any
Reportable Event, or failing to satisfy the minimum funding standard applicable to the Plan for any
plan year within the meaning of Section 412 of the IRC or Section 302 of ERISA), or engaging or
failing to engage in any other activity, which could result in any liabilities under the IRC, ERISA
or any other applicable law, which individually or in the aggregate could result in a Material
Adverse Change.

     SECTION 6.2.18 Amendments to, and Replacement of, Project Documents. The Borrower (i)
will not, and will not permit any Subsidiary to, enter into any amendment, restatement, replacement
or other modification to any Project Document; provided, however, that the Borrower
may, and may permit any Subsidiary to, enter into a Permitted Amendment or a Replacement Contract,
in either case with respect to a Project Document (other than a Project Document which is a Loan
Document), and (ii) will not, and will not permit any Subsidiary to, terminate any Project
Document; provided, however, that no termination of a Project Document (other than
a Project Document which is a Loan Document) shall constitute a Default or an Event of Default if
replaced with a Replacement Contract within sixty (60) days of such termination.

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     SECTION 6.2.19 Change Orders. The Borrower will not enter into any Change Order with
respect to the Construction Contracts without the prior written consent of the Agent, unless the
Borrower certifies, and the Independent Engineer confirms, that (i) such Change Order is
technically feasible, and (ii) such Change Order
could not reasonably be expected to result in a Material Adverse Change, a Project Delay, or a
Cost Overrun.

     SECTION 6.2.20 Anti-Terrorism Laws. No Loan Party will directly or indirectly,
knowingly enter into any material agreements with any person listed on the OFAC Lists. The Borrower
shall notify the Agent as soon as possible if the Borrower has knowledge that the Borrower or any
of its Affiliates or agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement is or becomes a Blocked Person, or (a) is convicted on,
(b) pleads nolo contendere to, (c) is indicted on or (d) is arraigned and held over
on charges involving money laundering or predicate crimes to money laundering. No Loan Party will,
directly or indirectly, (i) conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving of any contribution of funds, goods or services
to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive Order No. 13224,
any similar executive order or other Anti-Terrorism Law, or (iii) engage or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or other Anti-Terrorism
Law.

ARTICLE 7

EVENTS OF DEFAULT

     SECTION 7.1 Events of Default. The term “Event of Default” means any of the events
set forth in this Section 7.1.

     SECTION 7.1.1 Non-Payment of Obligations. Any Loan Party shall default:

     (a) in the payment or prepayment when due of any principal of any Loan;

     (b) in the reimbursement when due of any drawing on any Letter of Credit; or

     (c) in the payment when due of the interest payable in respect of any Loan, the fees required
under Section 2.3 hereof, any letter of credit fees required under Section 3.10.4
hereof, or any other Obligations and such default shall continue unremedied for a period of five
(5) Business Days.

     SECTION 7.1.2 Non-Performance of Certain Covenants. Any Loan Party shall default in
the due performance and observance of any of its obligations under Section 6.1 (other than
Sections 6.1.13 or 6.1.18) and such default shall continue unremedied for a period
of thirty (30) days; or the Borrower shall default in the due performance or observation of any of
its obligations under Sections 6.1.13 and 6.1.18 or Section 6.2;
provided, however, that if with respect to one single fiscal period occurring during the
term of this Agreement and following the Project Construction Completion Date the Borrower fails to
comply with the covenants in Sections 6.2.4 and the Sponsor has made a Financial Covenant
Default Contribution to the

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Borrower, the proceeds of which have been deposited into the Debt Service Reserve Account, then such failure shall not
constitute an Event of Default.

     SECTION 7.1.3 Defaults Under Other Loan Documents; Non-Performance of Other
Obligations. Any “Event of Default” shall occur under the other Loan Documents; or any Loan
Party shall default in the due performance and observance of any other obligation, covenant or
agreement contained herein or in any other Loan Document which the Agent determines is of a type
that can be cured and such default shall continue unremedied for a period of twenty (20) days.

     SECTION 7.1.4 Bankruptcy, Insolvency, Etc. Any Loan Party or the Sponsor shall:

     (a) become insolvent or generally fail to pay, or admit in writing its inability to pay, its
debts as they become due;

     (b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Loan Party or any substantial part of its property of any
thereof, or make a general assignment for the benefit of creditors;

     (c) in the absence of such application, consent or acquiescence, permit or suffer to exist the
appointment of a trustee, receiver, sequestrator or other custodian for such Loan Party or for a
substantial part of its property, and such trustee, receiver, sequestrator or other custodian shall
not be discharged within sixty (60) days;

     (d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, with respect to such Loan Party or the Sponsor, and, if such
case or proceeding is not commenced by it, such case or proceeding shall be consented to or
acquiesced in by such Loan Party or the Sponsor or shall result in the entry of an order for relief
or shall remain for sixty (60) days undismissed; or

     (e) take any corporate or company action authorizing, or in furtherance of, any of the
foregoing.

     SECTION 7.1.5 Breach of Warranty. Any representation or warranty of any Loan Party
hereunder or in any other Loan Document or in any other writing furnished by or on behalf of any
Loan Party to the Agent or any Lender for the purposes of or in connection with this Agreement or
any such Loan Document is or shall be incorrect when made in any material respect.

     SECTION 7.1.6 Default on Other Indebtedness, Etc. (a) Any Indebtedness of any Loan
Party in an aggregate principal amount exceeding $500,000 (i) shall be duly declared to be or shall
become due and payable prior to the stated maturity thereof, or (ii) shall not be paid as and when
the same becomes due and payable including any applicable grace period; or (b) there shall occur
and be continuing any event which constitutes an event of default under any Instrument relating to
any Indebtedness of any Loan Party in an aggregate principal amount exceeding $500,000 the effect
of which is to permit the holder or holders of such Indebtedness, or a trustee, agent or other
representative on behalf of such holder or holders, to cause such Indebtedness to

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become due prior to its stated maturity; or (c) there shall occur under any Hedge Contract an Early Termination Date
(as defined in such Hedge Contract) resulting from (A) any event of default under such Hedge
Contract as to which a Loan Party is the Defaulting Party (as defined in such Hedge Contract) or
(B) any Termination Event (as so defined) under such Hedge Contract as to which a Loan Party is an
Affected Party (as so defined) and, in either event, the Hedge Termination Value owed by such Loan
Party as a result thereof is greater than $500,000.

     SECTION 7.1.7 Failure of Valid, Perfected Lien; Unenforceability of Loan Documents.
The Lien on any Collateral having an aggregate value in excess of $500,000 at any time shall cease
to be valid or perfected at any time after the Closing Date, the Sponsor or any Loan Party shall
assert the invalidity of any Loan Document, or any Loan Document shall be determined by a court of
competent jurisdiction to be unenforceable.

     SECTION 7.1.8 Employee Plans. Any of the following events shall occur with respect to
any Plan: (i) any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan and such “prohibited transaction” could
result in a Material Adverse Change, (ii) any failure to satisfy the minimum funding standard
applicable to the Plan for any plan year (within the meaning of Section 412 of the Code or Section
302 of ERISA), whether or not waived, shall exist with respect to any Single Employer Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the
opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) a notice of intent to terminate any Single Employer Plan for purposes of
Title IV of ERISA is issued by the plan administrator thereof without the prior written consent of
the Required Lenders, or the PBGC shall commence proceedings to terminate any Single Employer Plan,
(v) any Loan Party or any Commonly Controlled Entity shall, or in the opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency,
Reorganization or termination of, a Multiemployer Plan, (vi) any Loan Party or any Commonly
Controlled Entity shall fail to make any quarterly installment payment to a Pension Plan required
under Section 303(j) of ERISA or Section 430 of the Code, (vii) any Loan Party or any Commonly
Controlled Entity shall fail to make any contribution to a Multiemployer Plan which is required
under ERISA, the Code or applicable collective bargaining agreements, or (viii) any other event or
condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through
(viii) above, such event or condition, together with all other such events or conditions, if any,
could subject any Loan Party (directly or indirectly) to any tax, penalty or other liabilities
under Title I or Title IV of ERISA, Section 404 or 419 and Chapter 43 of the IRC or any other
applicable law which in the aggregate could result in a Material Adverse Change.

     SECTION 7.1.9 Judgments. A final judgment which, with other such outstanding final
judgments against any Loan Party (in each case to the extent not covered by insurance), exceeds an
aggregate of $1,000,000, shall be entered against any Loan Party and, within thirty (30) days after entry thereof, such judgment
shall not have been discharged or execution thereof shall have been stayed pending appeal, or,
within thirty (30) days after the expiration of any such stay, such judgment shall not have been
discharged.

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     SECTION 7.1.10 Divestiture. Any order for the breaking up or divestiture of any Loan
Party or any material portion of the assets of any Loan Party shall be entered by the Department of
Justice, the Federal Trade Commission or any other Governmental Authority.

     SECTION 7.1.11 Loss of Permits, Etc. The expiration, loss, termination, cancellation,
revocation, forfeiture, suspension, diminution, impairment of or failure to obtain or renew any
Intellectual Property, right, permit, license or approval, which could reasonably be expected to
result in a Material Adverse Change, a Project Delay or a Cost Overrun; or the entry of any order
of a court enjoining, restraining or otherwise preventing the Borrower from constructing or
operating the Project or preventing any Loan Party from conducting all or any material part of its
business affairs; or the cessation of business or dissolution of any Loan Party.

     SECTION 7.1.12 Event of Abandonment. An Event of Abandonment shall have occurred.

     SECTION 7.1.13 Material Loss. Either (i) a Loss shall have occurred and the amount of
such Loss uncompensated by insurance shall exceed $2,000,000, (ii) a Major Loss shall have occurred
for which the Borrower has undertaken to accomplish a Major Replacement and the Major Replacement
Construction Requirements shall not have been satisfied by the Major Replacement Construction
Deadline, or (iii) a Total Loss shall have occurred.

     SECTION 7.1.14 Force Majeure. There shall occur an event of force majeure under any
Major Project Document and the effect of such event of force majeure is that a Project Party is
excused from performing under such Major Project Document for a period of sixty (60) days or more
if the failure of such Project Party to perform its obligations under such Major Project Document
during such period could reasonably be expected to result in a Material Adverse Change, a Project
Delay or a Cost Overrun, unless a Replacement Contract is entered into within sixty (60) days of
such event.

     SECTION 7.1.15 Default by Third Parties under Project Documents; Insolvency of Project
Party; Termination or Unenforceability of Project Document. (A) A default by any Person
(other than the Borrower) shall occur under any of the Project Documents and such default is not
cured within any applicable cure period, and (i) if occurring prior to the Project Construction
Completion Date, such default could reasonably be expected to result in a Material Adverse Change,
a Project Delay or a Cost Overrun, or (ii) if occurring on or after the Project Construction
Completion Date, such default could reasonably be expected to result in a Material Adverse Change,
(B) either (i) Land O’Lakes shall become subject to a bankruptcy, insolvency or other
similar proceeding, or (ii) any Project Party (other than Land O’Lakes) shall become subject
to a bankruptcy, insolvency or other similar proceeding prior to the Project Construction
Completion Date, or (C) any Project Document is, or is reasonably determined to be, unenforceable,
in each case described in clauses (A), (B) and (C) unless (a) a Replacement Contract is entered
into within sixty (60) days of such default, proceeding or determination, and (b) after giving
effect to any such Replacement Contract, (x) if such Replacement Contract is entered into prior to
the Project Construction Completion Date, it could not reasonably be expected to result in a
Material Adverse Change, a Project Delay or a Cost Overrun based on the terms of such Replacement
Contract, and (y) if such Replacement Contract is entered into on or

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after the Project Construction Completion Date, it could not reasonably be expected to result in a Material Adverse Change.

     SECTION 7.1.16 Default by Borrower under Major Project Documents. The Borrower shall
fail to perform any material obligation, covenant or agreement contained in any Major Project
Document and such default is not cured within any applicable cure period.

     SECTION 7.1.17 Default by Sponsor under Contribution Documents. The Sponsor shall
fail to perform any material obligation, covenant or agreement contained in any Contribution
Document.

     SECTION 7.1.18 Major Environmental Event. A Major Environmental Event shall occur.

     SECTION 7.1.19 Project Delay. A Project Delay shall have occurred.

     SECTION 7.1.20 Change in Control. A Change in Control shall have occurred.

     SECTION 7.1.21 Minimum Tangible Net Worth of Sponsor. The Tangible Net Worth of the
Sponsor on any date shall not be less than $427,000,000.

     SECTION 7.2 Action if Bankruptcy. If any Event of Default described in Section
7.1.4 shall occur, the outstanding principal amount of all outstanding Loans and all other
Obligations automatically shall be and become immediately due and payable, without notice or
demand, and the Borrower will deposit with the Agent, as cash collateral, an amount equal to 105%
of the aggregate undrawn stated amount of all Letters of Credit, which Loan, Obligations and
amounts automatically shall become immediately due and payable by the Borrower and to the extent
paid by the Borrower shall constitute a prepayment under this Agreement, and the Agent may, and
upon the direction of the Required Lenders shall, exercise any and all rights and remedies
available under this Agreement or any other Loan Document, or available at law or in equity, at any
time, in any order and in any combination.

     SECTION 7.3 Action if Other Event of Default. If any Event of Default (other than any
Event of Default described in Section 7.1.4) shall occur for any reason, whether voluntary
or involuntary, and be continuing, the Agent may, and upon the direction of the Required Lenders,
shall (a) declare all or any portion of the outstanding principal amount of the Loans to be due and
payable and any or all other Obligations to be due and payable, whereupon the full unpaid amount of
such Loans and any and all other Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand, or presentment, (b) demand
that the Borrower deposit with the Agent, as cash collateral, an amount equal to 105% of the
aggregate undrawn stated amount of all Letters of Credit, which amount shall become immediately due
and payable by the Borrower and to the extent paid by the Borrower shall constitute a prepayment
under this Agreement, (c) to the extent permitted under any Letter of Credit, require the
beneficiary thereof to draw upon the undrawn stated amount thereof, and (d) exercise any and all
rights and remedies available under this Agreement or any other Loan Document, or available at law
or in equity, at any time, in any order and in any combination.

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     SECTION 7.4 Application of Proceeds Following Default. Notwithstanding anything to
the contrary set forth in this Agreement, following the occurrence of an Event of Default and the
acceleration of the Obligations pursuant to Section 7.2 or Section 7.3, all
proceeds of Collateral and other payments made by any Loan Party, or received from any other
source, shall be applied as follows:

     (a) first, to the payment of all fees, indemnities and expenses of the Agent then due
hereunder or under any of the other Loan Documents until paid in full;

     (b) second, to the payment of all fees of issuers of Letters of Credit then due under clause
(b) of the first sentence in Section 3.10.4 until paid in full;

     (c) third, to the payment of all indemnities and expenses then due to other Secured Parties,
pro rata based on the outstanding amount of indemnities and expenses then due to Secured Parties
until paid in full;

     (d) fourth, pari passu to the payment of (i) all principal and accrued interest on the Loans,
Letter of Credit Obligations (to be held by the Agent as cash collateral in the amount of 105% of
the then outstanding Letter of Credit Obligations), and accrued fees payable to or for the account
of the Lenders (with amounts under this clause (i) applied first to the payment of accrued interest
and fees and then to principal and Letter of Credit Obligations), and (ii) all Obligations in
respect of Secured Hedge Contracts then due to the applicable Qualified Counterparties, until all
such Obligations are paid in full (with amounts under this clause (ii) applied pro rata based on
the outstanding amount of such Obligations in respect of Secured Hedge Contracts); and

     (e) fifth, to pay all other Obligations until all such other Obligations are paid in full, pro
rata based on the outstanding amount of such Obligations;

provided, however, that (i) amounts on deposit in the Debt Service Reserve Account, the Cost
Overrun Account and any other cash collateral accounts held by the Agent or for which the
Agent serves as secured party shall first be applied to the payment of Obligations, other than
Obligations under the Qualified Commodity Hedge Contract, unless the Agent or the Lenders shall
then be precluded by injunction or other legal process from so applying such amounts and (B) if the
Qualified Counterparty to the Qualified Commodity Hedge Contract shall then be entitled, under the
terms of the Qualified Commodity Hedge Contract and any letter of credit or cash furnished to the
Qualified Counterparty to the Qualified Commodity Hedge Contract in support of the obligations of
any Loan Party under the Qualified Commodity Hedge Contract, to draw on such letter of credit or
apply such cash collateral, such Qualified Counterparty shall first have then drawn on such letter
of credit or applied such cash in the maximum amount then permitted unless (x) such Qualified
Counterparty shall then be precluded by injunction or other legal process from so drawing or (y)
the issuer of such letter of credit shall then be subject to bankruptcy or insolvency proceedings
or shall have disavowed, repudiated or dishonored its obligations under such letter of credit.

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ARTICLE 8

THE AGENT

     SECTION 8.1 Actions. Each Lender authorizes the Agent to act on behalf of such Lender
under this Agreement and each other Loan Document and, in the absence of other written instructions
from the Required Lenders received from time to time by the Agent, to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental thereto. Each Lender
(including, without limitation, ING in its capacity as a Lender) agrees (which agreement shall
survive any termination of this Agreement) to indemnify the Agent, severally but not jointly, pro
rata according to such Lender’s aggregate percentage of the Commitments from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement,
the Notes, or any other Loan Document, including the reimbursement of the Agent for all
out-of-pocket expenses (including attorneys’ fees) incurred by the Agent hereunder or in connection
herewith or in enforcing the Obligations of the Loan Parties under this Agreement or any other Loan
Document, in all cases as to which the Agent is not reimbursed by the Loan Parties; provided that
no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements determined by a
court of competent jurisdiction in a final proceeding to have resulted primarily from the Agent’s
gross negligence or willful misconduct. Notwithstanding any other provision of this Agreement to
the contrary, the Agent shall not be required to take any action hereunder or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement or any other Loan
Document, unless it is indemnified to its satisfaction by the Lenders against loss, costs,
liability and expense. If any indemnity in favor of the Agent shall become impaired, it may call
for additional indemnity and cease to do the acts indemnified against until such additional
indemnity is given.

     SECTION 8.2 Funding Reliance, Etc. Unless the Agent shall have been notified by
telephone, confirmed in writing, by any Lender by 5:00 p.m., New York City time, on the day prior to a Borrowing that such Lender will not
make available the amount which would constitute its Term Loan Percentage of the Term Loans and its
Working Capital Facility Percentage of the Working Capital Facility Loans on the date specified
therefor, the Agent may assume that such Lender has made such amount available to the Agent and, in
reliance upon such assumption, make available to the Borrower a corresponding amount;
provided, however, that the Agent shall have no obligation to do so. If such
amount is made available by such Lender to the Agent on a date after the date of such Borrowing,
such Lender shall pay to the Agent on demand interest on such amount at the Federal Funds Rate for
the number of days from and including the date of such Borrowing to the date on which such amount
becomes immediately available to the Agent, together with such other compensatory amounts as may be
required to be paid by such Lender to the Agent pursuant to the Rules for Interbank Compensation of
the Council on International Banking or the Clearinghouse Compensation Committee, as the case may
be, as in effect from time to time. A statement of the Agent submitted to any Lender with respect
to any amounts owing under this Section 8.2 shall be conclusive, in the absence of manifest
error. If such amount is not in fact made available to the Agent by such Lender within three (3)
Business Days after the date of such Borrowing, the Agent shall be entitled to recover

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such amount, with interest thereon at the rate per annum then applicable to the Loans comprising such Borrowing,
within five (5) Business Days after demand, from the Borrower.

     SECTION 8.3 Exculpation. Neither the Agent nor any of its directors, officers,
employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it
under this Agreement, the Notes, or any Loan Document, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence. The Agent shall not be responsible to
any Lender for any recitals, statements, representations or warranties herein or in any certificate
or other document delivered in connection herewith or for the authorization, execution,
effectiveness, genuineness, validity, enforceability, perfection, collectability, or sufficiency of
any of the Loan Documents, the financial condition of any Loan Party or the condition or value of
any of the Collateral, or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of any of the Loan Documents, the
financial condition of or any Loan Party or the existence or possible existence of any Default.
The Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which it believes to be genuine and to have been
presented by a proper Person.

     SECTION 8.4 Successor. The Agent may resign as such at any time upon at least thirty
(30) days prior notice to the Borrower and all Lenders, such resignation not to be effective until
a successor Agent is in place. If the Agent at any time resigns, the Required Lenders may appoint
another Lender as a successor Agent which shall thereupon become the Agent hereunder. If no
successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent’s giving notice of resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be one of
the Lenders or a financial institution reasonably acceptable to the Borrower organized under the
laws of the United States and having a combined capital and surplus of at least $500,000,000, and
which shall not be a Defaulting Lender. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall be entitled to receive from the retiring Agent such documents of
transfer and assignment as such successor Agent may reasonably request, and shall thereupon succeed
to and become vested with all rights, powers, privileges, and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents.

     SECTION 8.5 Loans and other Transactions by the Agent and its Affiliates. The Agent
shall have the same rights and powers with respect to (a) the Loans made by it or any of its
Affiliates, and (b) the Notes held by it or any of its Affiliates, as any Lender and may exercise
the same as if it were not the Agent. ING and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of business with, the
Borrower and its Subsidiaries or any Person who may do business with or own securities of the
Borrower, all as if ING were not the Agent and without any duty to account therefor to the Lenders.

     SECTION 8.6 Credit Decisions. Each Lender acknowledges that it has, independently of
the Agent and each other Lender, and based on such financial information and such other documents,
information and investigations as it has deemed appropriate, made its own credit decision to extend
its Commitments, to make the Loans. Each Lender also acknowledges

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that it will, independently of the Agent and each other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges available to it under this
Agreement or any other Loan Document.

     SECTION 8.7 Copies, Etc. The Agent shall give prompt notice to each Lender of each
notice or request required or permitted to be given to the Agent by the Borrower pursuant to the
terms of this Agreement. The Agent will distribute to each Lender each Instrument received for its
account and copies of all other communications received by the Agent from the Borrower for
distribution to the Lenders by the Agent in accordance with the terms of this Agreement.
Notwithstanding anything herein contained to the contrary, all notices to and communications with
the Borrower under this Agreement and the other Loan Documents shall be effected by the Lenders
through the Agent.

     SECTION 8.8 Collateral Matters.

     Each of the Secured Parties hereby appoints the Agent to act as its collateral agent with
respect to all matters relating to the Collateral and the Security Documents. Each of the Secured
Parties hereby authorizes the Agent to act on behalf of such Secured Party under this Agreement and
the Security Documents and, in the absence of other written instructions from the Required Lenders
received from time to time by the Agent, to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and thereof, together with
such powers as may be reasonably incidental thereto. Each reference herein to the Agent, to the
extent such reference relates to the Collateral, and each reference to the Agent in the Security
Documents, shall refer to the Agent in its capacity as collateral agent to
the Secured Parties. Each of the Secured Parties irrevocably authorizes the Agent, at its
option and in its discretion,

     (a) to release any Lien on any Collateral granted to or held by the Agent under any
Security Document (i) upon termination of the Commitments and each Qualified Commodity Hedge
Contract and payment in full of all Obligations under the Loan Documents and the Qualified
Commodity Hedge Contracts and the expiration or termination of all Letters of Credit, (ii)
that is transferred or to be transferred as part of or in connection with any asset
disposition permitted hereunder or under any other Loan Document, or (iii) as approved in
accordance with Section 9.1;

     (b) to release or subordinate any Lien on any Collateral granted to or held by the
Agent under any Security Document if such Collateral constitutes property of the Borrower
with respect to which a Lien is permitted under clauses (b), (i) or (l) of Section
6.2.3; and

     (c) to execute, deliver and perform its obligations under the Qualified Commodity Hedge
Intercreditor Agreement (and each Secured Party irrevocably acknowledges and agrees that
upon such execution and delivery by the Agent, such Secured Party shall be bound by the
terms thereof).

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Upon request by the Agent at any time, the Required Lenders will confirm in writing the Agent’s
authority to release or subordinate its interest in particular types or items of property pursuant
to this Section 8.8.

ARTICLE 9

MISCELLANEOUS

     SECTION 9.1 Waivers, Amendments, Etc.

     (a) The provisions of this Agreement and of each other Loan Document may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in writing and, (x) in
the case of an amendment or modification, is consented to by the Borrower and the Required Lenders
or (y) in the case of a waiver of any obligation of any Loan Party or of compliance by any Loan
Party with any prohibition contained in this Agreement or any other Loan Document, is consented to
by the Required Lenders; provided, however, that no such amendment, modification or
waiver:

     (i) which would modify any requirement hereunder that any particular action be taken by
all the Lenders or by the Required Lenders shall be effective unless consented to by each
Lender;

     (ii) which would modify this Section 9.1, change the definition of “Required
Lenders,” increase the Working Capital Facility Commitment Amount or the Term Loan Facility
Commitment Amount, change the Working Capital Facility Percentage or the Term Loan Percentage for any Lender, as applicable, reduce any fees payable to the
Lenders described in Article 2 and Article 3, extend the Term Loan Maturity
Date or the Working Capital Facility Maturity Date, or subject any Lender to any additional
obligations shall be made without the consent of each Lender;

     (iii) which would extend the due date for, or reduce the amount of, any payment of
principal on the Term Loans under Section 3.3.1(c), or any interest payable on any
Loan, or any fees payable under this Agreement, or which would reduce the principal amount
of or rate of interest on any Loan or rate of fees accruing under this Agreement, in each
case other than any interest and fees to the extent accruing or payable at the Post-Default
Rate, shall be made without the consent of each Lender affected thereby;

     (iv) which would release or permit the release of all or substantially all of the
Collateral (and the release of Collateral the absence of which would prevent the Borrower
from operating the Project substantially in accordance with the Project Construction
Completion Requirements shall be deemed to constitute a release of all or substantially all
of the Collateral) shall be effective unless consented to by each Lender and by each
Qualified Counterparty to a Qualified Commodity Hedge Contract;

     (v) which would affect adversely the interests, rights, compensation or obligations of
the Agent shall be made without the consent of the Agent; or

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     (vi) which is (A) a Qualified Hedge Related Amendment or (B) an amendment to a Security
Document that disproportionately and adversely affects the rights of a Qualified Hedge
Counterparty (or the Qualified Hedge Counterparties as a class) under such Security Document
relative to the Lenders (provided that such Qualified Hedge Counterparty notifies the Agent
of such disproportionately adverse effect reasonably promptly after receiving written notice
of such proposed amendment, modification or waiver), shall be effective unless consented to
by each Qualified Counterparty to a Qualified Commodity Hedge Contract; or

     (vii) which is a Secured Hedge Related Amendment shall be effective unless consented to
by each Qualified Counterparty.

     (b) No failure or delay on the part of the Agent, any Lender or the holder of any Note in
exercising any power or right under this Agreement or any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in similar or other
circumstances. No waiver or approval by the Agent, any Lender or the holder of any Note under this
Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require
any similar or dissimilar waiver or approval thereafter to be granted hereunder. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove
any amendment, modification or waiver hereunder or under any other Loan Document, nor shall any
amendment, modification or waiver hereunder or under any other Loan Document require the consent or approval of, or execution and delivery by, any Defaulting
Lender in order for such amendment, modification or waiver to be binding upon such Defaulting
Lender, except that the Commitment of such Defaulting Lender may not be increased or extended
without the consent of such Lender.

     (c) If, in connection with any proposed amendment, modification, waiver or termination
pursuant to Section 9.1(a) requiring the consent of all affected Lenders, the consent of
the Required Lenders is obtained, but the consent of other Lenders whose consent is required is not
obtained within ten (10) Business Days after notice from the Agent (any such Lender whose consent
is not obtained being referred to as a “Non-Consenting Lender”), then, so long as Agent is
not a Non-Consenting Lender, at Borrower’s request, Agent, or a Person reasonably acceptable to
Agent, shall have the right (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall sell and assign to Agent or such
Person, all of the Commitments and Obligations of such Non-Consenting Lender for an amount equal to
the principal balance of all Loans and unreimbursed Letter of Credit Obligations held by the
Non-Consenting Lender and all accrued interest and fees and other obligations owing with respect
thereto through the date of sale, such purchase and sale to be consummated pursuant to an executed
Transfer Supplement.

     (d) Neither any Lender nor the Agent shall be under any obligation to marshal any assets in
favor of the Borrower or any other party or against or in payment of any or all of the Obligations.
Recourse for security shall not be required at any time. To the extent that the Borrower makes a
payment or payments to the Agent or the Lenders, or the Agent or the Lenders

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enforces their security interests or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently for any reason invalidated, set
aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     (e) Notwithstanding subsection (a) of this Section 9.1, the provisions of this
Agreement and each other Loan Document may be amended pursuant to an Additional Term Loan Amendment
or an Additional Working Capital Facility Commitment Amendment without the consent of the Required
Lenders, but in accordance with Section 2.1.3 and Section 2.1.5, respectively.

     (f) Except as otherwise expressly provided in Section 9.1(a), no Qualified
Counterparty, in its capacity as a Qualified Counterparty, shall have any rights in connection with
any amendment, modification or waiver of this Agreement or any of the other Loan Documents or the
management, enforcement, or release of any Liens on the Collateral; provided,
however, that the Qualified Counterparty to the Qualified Commodity Hedge Contract shall be
entitled to participate in the management, enforcement and release of any Liens on the Collateral,
in each case as if such Qualified Counterparty were a Lender holding a Commitment and outstanding
principal amount of Loans equal to either (i) prior to the occurrence of a termination of the
Qualified Commodity Hedge Contract, the net amount that would be payable by the Borrower to such
Qualified Counterparty if the Qualified Commodity Hedge Contract were
terminated as of the date its consent is requested or provided, but in no event shall the
amount determined under this clause (i) be deemed to be less than $10,000,000, or (ii) after a
termination of the Qualified Commodity Hedge Contract, the net termination amount then payable by
the Borrower to such Qualified Counterparty thereunder (and for purposes of making any
determination of Required Lenders the aggregate amount of Commitments and Loans outstanding shall
be deemed to be the amount of Commitments and Loans then outstanding plus the amount of Commitments
and Loans deemed to be held by such Qualified Counterparty under clauses (i) or (ii) above as
applicable). In order to be entitled to the rights granted under this Section 9.1(f), the
Qualified Counterparty to the Qualified Commodity Hedge Contract shall provide a certificate to the
Agent as to the amount determined under clauses (i) or (ii) of the immediately preceding sentence,
and the Agent may conclusively rely on such certificate in making any determination of Required
Lenders or other requisite consent of Lenders under this Agreement or any Security Document.

     (g) Notwithstanding subsection (a) of this Section 9.1, and notwithstanding any other
provision of this Agreement and each other Loan Document, neither the Sponsor nor any Affiliate of
the Sponsor, in its capacity as a Lender (in such capacity, a “Sponsor Lender”) shall have
the right (i) to consent to any amendment, modification, waiver, consent or other action with
respect to any of the terms of this Agreement or any other Loan Document (and no Sponsor Lender
shall (nor shall any amount of the Loans held by any Sponsor Lender) be included for purposes of
making a determination of (A) any Lender whose consent would otherwise be required under subsection
(a) of this Section 9.1, (B) the Required Lenders, or (C) any other number or percentage of
Lenders entitled to consent to any amendment, waiver, modification or

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action hereunder); (ii) to require the Agent or any other Lender to undertake any action (or refrain from taking any action)
with respect to this Agreement or any other Loan Document or exercise any remedy (including,
without limitation, any right of set-off) in its capacity as a Lender; (iii) to otherwise vote on
any matter related to this Agreement or any other Loan Document; (iv) to attend any meeting or
participate in any conference call, in each case, with the Agent or any Lender (including with
respect to the exercise of rights and remedies under any Loan Document); (v) to receive any
document, notice, information or communication from the Agent or any Lender (including documents,
information or communications such Lender would otherwise be entitled to receive under the terms of
the Loan Documents in its capacity as Lender); (vi) to make or bring any claim, in its capacity as
a Lender, against the Agent or any Lender with respect to the duties and obligations of the Agent
or any Lender under the Loan Documents; (vii) to exercise any remedies or take other actions
against any Loan Party (other than collectively with the other Lenders); or (viii) to enforce any
right it has under this Agreement as a Lender; provided, however, notwithstanding
the provisions of this subsection (f), no amendment, modification or waiver pursuant to this
Section 9.1 shall (w) deprive any Sponsor Lender of its share of any payments which the
Lenders are entitled to share on a pro rata basis under the Loan Documents, (x) increase the
Commitments of any Sponsor, or extend the due date for, or reduce the principal of or the rate of
interest (other than interest accruing at the Post-Default Rate) on, Loans owing to any Sponsor
Lender, or fees or other amounts payable hereunder or under any other Loan Document to any Sponsor
Lender, (y) without the consent of the Sponsor Lender, if such consent would otherwise be required
under this Section 9.1, release the Borrower from its obligations under this Agreement; or
(z) without the consent of the Sponsor Lender, if such consent would otherwise be required under
this Section 9.1, release all or substantially all of the Collateral (other than in
connection with the exercise of remedies).

     (h) Each Sponsor Lender, solely in its capacity as a Lender, hereby agrees that, if any Loan
Party shall be subject to any voluntary or involuntary proceeding commenced under any federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect
(“Bankruptcy Proceedings”), (i) such Sponsor Lender shall not challenge the limitations on
its right to vote or participate in such Bankruptcy Proceeding set forth in the Loan Documents or
take any step or action in such Bankruptcy Proceeding to object to, impede, or delay the exercise
of any right or the taking of any action by the Agent (or the taking of any action by a third party
that is supported by the Agent) in relation to such Sponsor Lender’s claim with respect to its
Loans and Letter of Credit Obligations (a “Claim”) (including, without limitation,
objecting to any debtor-in-possession financing, use of cash collateral, grant of adequate
protection, sale or disposition of assets, compromise, or plan of reorganization), (ii) such
Sponsor Lender’s Claim shall be non-voting under Sections 1126 and 1129 of the Bankruptcy Code;
(iii) with respect to any matter requiring the vote of the Lenders during the pendency of a
Bankruptcy Proceeding (including, without limitation, voting on any plan of reorganization), the
Loans and Letter of Credit Obligations held by such Sponsor Lender (and any Claim with respect
thereto) shall be deemed to be voted by such Sponsor Lender in the same proportion as the
allocation of voting with respect to such matter by Lenders who are not a Sponsor Lender, so long
as each Sponsor Lender is treated in connection with the exercise of such right or taking of such
action on the same or better terms as the other Lenders. For the avoidance of doubt, the Lenders
and each Sponsor Lender agree and acknowledge that the provisions set forth in this Section
9.1(g) constitute a “subordination agreement” as such term is contemplated by, and utilized in,
Section 510(a) of the Bankruptcy Code, and, as such, would be enforceable for all

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purposes in any case where a Loan Party has filed for Protection under any Bankruptcy Proceeding application to
such Loan Party.

     SECTION 9.2 Notices. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder or under any other Loan Document shall be in writing
(including by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address or facsimile number, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:

	 	 	 
	If to the Agent:

	 	ING Capital LLC

1325 Avenue of the Americas

New York, NY 10019

Attention: Daniel W. Lamprecht

Managing Director

Facsimile No.: 646-424-6390

Telephone No.: 646-424-6871
	 
	 	 
	with a copy to
(which shall not constitute notice):

	 	King & Spalding LLP

1180 Peachtree Street, NE

Atlanta, GA 30309

Attention: Hector E. Llorens, Jr., Esq.

Facsimile No.: 404-572-5128

Telephone No. 404-572-3523
	 
	 	 
	If to the Borrower or the Parent
Guarantor:

	 	PICO Northstar Hallock, LLC

PICO Northstar, LLC

15 Broadway, Suite 600

Fargo, North Dakota 58102

Attention: Neil Juhnke

                 President

Facsimile No.: 701-866-9059

Telephone No. 701-478-5848
	 
	 	 
	with a copy to (which shall
not constitute notice):

	 	PICO Holdings, Inc.

7979 Ivanhoe Ave.

La Jolla, CA 92037

Attention: John Hart

                 Chief Executive Officer

Facsimile No.: 858-456-6480

Telephone No. 858-456-6022
	 
	 	 
	with a copy to (which shall
not constitute notice):

	 	DLA Piper LLP (US)

4365 Executive Drive, Suite 1100

San Diego, CA 92121037

Attention: Marty Lorenzo, Esq.

Facsimile No.: 858-638-5030

Telephone No. 858-677-1430

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	If to any other Lender:

	 	To the address, facsimile number, or telephone
 number specified in its Administrative Questionnaire
	 
	 	 
	If to the Qualified Counterparty to
the Qualified Commodity Hedge
Contract:

	 	To the address, facsimile number, or telephone
 number specified in or as otherwise provided in the Qualified Commodity Hedge Intercreditor
Agreement

or at such other address as any party may designate to any other party by written notice. All such
notices and communications shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; when received, if deposited in the mail, postage prepaid; when
transmission is verified, if telecopied; and on the next Business Day, if timely delivered to an
air courier guaranteeing overnight delivery.

     SECTION 9.3 Costs and Expenses. The Borrower agrees to pay all reasonable
out-of-pocket expenses of the Agent and the Lead Arranger in connection with the negotiation,
preparation, execution, and delivery of this Agreement and each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents, supplements, terminations, releases
or other modifications to this Agreement or any other Loan Document as may from time to time
hereafter be required (including the reasonable fees and expenses of counsel for the Agent and the
Lead Arranger), or of any consultants or other experts retained by the Agent and the Lead Arranger from time to
time in connection therewith) whether or not the transactions contemplated hereby are consummated,
and to pay all expenses of the Agent and the Lead Arranger (including reasonable fees and expenses
of counsel to the Agent and the Lead Arranger, or of any consultants or other experts retained by
the Agent and the Lead Arranger) incurred in connection with the preparation and review of the form
of any Instrument relevant to this Agreement, the Notes or any other Loan Document. The Borrower
also agrees to pay and hold the Agent, the Lead Arranger and the Lenders harmless from any stamp,
documentary, intangibles, transfer or similar taxes or charges, and all recording or filing fees
with respect to the Loan Documents or any payments to be made thereunder and all title insurance
premiums, surveyors costs and valuation fees. The Borrower also agrees to reimburse the Agent, the
Lead Arranger and each Lender upon demand for all out-of-pocket expenses (including attorneys’ fees
and expenses) incurred by the Agent, the Lead Arranger or such Lender in enforcing the Obligations
of the Loan Parties or the Sponsor under this Agreement or any other Loan Document or in connection
with any restructuring or “work-out” of any Obligations.

     SECTION 9.4 Indemnification. In consideration of the execution and delivery of this
Agreement by the Agent and each Lender and the extension of the Commitments, each of the Borrower
and the Parent Guarantor hereby indemnifies, exonerates and holds the Agent, and each Lender, their
respective successors and assigns, each of their respective officers, directors, employees,
partners, attorneys and agents and each of their respective successors and assigns (collectively,
the “Lender Parties”) free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities (including, but not limited to, Environmental

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Liabilities and Costs), damages and expenses (irrespective of whether such Lender Party is a party to the
action for which indemnification hereunder is sought), including attorneys’ fees and disbursements
(the “Indemnified Liabilities”), incurred by the Lender Parties or any of them or asserted
or awarded against the Lender Parties or any of them by any third party or by the Borrower or any
of its Subsidiaries or Affiliates as a result of, or arising out of, or relating to:

     (a) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of any Loan or Letter of Credit;

     (b) the use of any of the proceeds of any Loan or Letter of Credit by the Borrower or any of
its Subsidiaries or any beneficiary of a Letter of Credit for any other purpose;

     (c) any information furnished by the Borrower in connection with the syndication of this
Agreement;

     (d) the making of any claim by any investment banking firm, broker or third party in each case
claiming through the Borrower or any of its Subsidiaries or as a result of their relationship to
such parties that it is entitled to compensation from the Agent or any Lender in connection with
this Agreement;

     (e) the entering into and performance of this Agreement and any other Loan Document by any of
the Lender Parties (other than the breach by such Lender Party of this Agreement);

     (f) the existence of any contaminant, in, under, on or otherwise affecting any property owned,
used, operated, or leased by Borrower or any Subsidiary in the past, present, or future or any
surrounding areas affected by such property, regardless of whether the existence of the contaminant
is related to the past, present, or future operations of the Borrower and its Subsidiaries, or
their predecessors in interest or any other Person; any Environmental Liabilities and Costs related
to any property owned, used, operated, or leased by Borrower or any Subsidiary in the past,
present, or future; any Environmental Liabilities and Costs related to the past, present, or future
operations of the Borrower or any Subsidiaries; any alleged violations of any Environmental Law
related to any property owned, used, operated, or leased by Borrower or any Subsidiary in the past,
present, or future; any alleged violations of any Environmental Law related to the past, present,
or future operations of the Borrower or any Subsidiaries; the performance of any remedial action
that is related to any property owned, used, operated, or leased by Borrower or any Subsidiaries in
the past, present, or future; the performance of any remedial action that is related to the past,
present, or future operations of the Borrower or any Subsidiaries; and the imposition of any Lien
on any property affected by this Agreement or any of the other Loan Documents arising from any
Environmental Liabilities or Costs;

     (g) the breach in any material respect by any Loan Party of any representation or warranty set
forth in this Agreement or any Loan Document;

     (h) the failure of any Loan Party to comply in any material respect with any term, condition,
or covenant set forth in this Agreement or any Loan Document; or

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     (i) any claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not the Agent or any Lender (or any of their respective officers, directors, partners,
employees or agents) is a party thereto;

except for any such Indemnified Liabilities arising for the account of a particular Lender Party by
reason of the relevant Lender Party’s (or its agent’s, employee’s, representative’s or Affiliate’s)
gross negligence or willful misconduct as determined by a final and nonappealable decision of a
court of competent jurisdiction. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The foregoing indemnity shall become effective immediately upon the execution and
delivery hereof and shall remain operative and in full force and effect notwithstanding the
consummation of the transactions contemplated hereunder, the repayment of any of the Loans made
hereunder, the invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of any Lender or the Agent.

     SECTION 9.5 Termination; Survival. All covenants, agreements, representations and
warranties contained herein and in the certificates and instruments delivered in connection with or
pursuant to this Agreement shall continue in full force and effect as long as the principal of or
any accrued interest on the Notes or any fee or any other amounts payable under this Agreement is
outstanding and unpaid and so long as the Commitments have not expired or terminated. The
obligations of the Borrower under Sections 2.5, 3.5, 9.3 and 9.4 in each case survive any
termination of this Agreement and the payment in full of principal, interest and other amounts payable hereunder and under the Notes
and the other Loan Documents. The representations and warranties made by the Borrower in this
Agreement, the Notes and in each other Loan Document shall survive the execution and delivery of
this Agreement, the Notes and each such other Loan Document.

     SECTION 9.6 Severability. Any provision of this Agreement, the Notes or any other
Loan Document 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 of this Agreement, the Notes or such other Loan Document or
affecting the validity or enforceability of such provision in any other jurisdiction.

     SECTION 9.7 Headings. The various headings of this Agreement, the Notes and of each
other Loan Document are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement, the Notes or such other Loan Document or any provisions hereof or
thereof.

     SECTION 9.8 Counterparts, Effectiveness, Etc. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement. This Agreement shall become
effective when counterparts hereof executed on behalf of the Borrower, the Agent and each Lender
shall have been received by the Agent and notice thereof shall have been given by the Agent to the
Borrower and each Lender.

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     SECTION 9.9 Governing Law; Entire Agreement.

     (a) THIS AGREEMENT AND THE NOTES SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the Notes and the other Loan
Documents constitute the entire understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with respect thereto.

     (b) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW
YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RELATED
DOCUMENT, AND EACH HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER
AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING
BROUGHT BY IT AGAINST THE AGENT OR ANY LENDER. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF ANY INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.

     (c) The Borrower hereby irrevocably designates, appoints and empowers National Corporate
Research, Ltd. (“NCR”), whose present address is 10 East 40th Street,
10th Floor, New York NY 10016, as its authorized agent to receive, for and on its behalf
and its property, service of process in the State of New York when and as such legal actions or
proceedings may be brought in the courts of the State of New York or of the United States of
America, and such service of process shall be deemed complete upon the date of delivery thereof to
such agent whether or not such agent gives notice thereof to the Borrower, or upon the earliest of
any other date permitted by applicable law. The Borrower shall furnish the consent of NCR so to
act to the Agent on or prior to the Closing Date. It is understood that a copy of said process
served on such agent will as soon as practicable be forwarded to the Borrower, at its address set
forth below, but its failure to receive such copy shall not affect in any way the service of said
process on said agent as the agent of the Borrower. The Borrower irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or proceeding by the
mailing of the copies thereof by certified mail, return receipt requested, postage prepaid, to it
at its address set forth herein, such service to become effective upon the earlier of (i) the date
ten (10) calendar days after such mailing or (ii) any earlier date permitted by applicable law.
The Borrower agrees that it will at all times continuously maintain an agent to receive service of
process in the State of New York on behalf of itself and its properties and in the event that, for
any reason, the agent named above or its successor shall no longer serve as its agent to receive
service of process in the State of New York on its behalf, it shall promptly appoint a successor so
to serve and shall advise the Agent and the Lenders thereof (and shall furnish to the Agent the
consent of any successor agent so to act). For the avoidance of doubt, the foregoing appointment
of NCR as the Borrower’s agent to receive service of process in the State of New York includes,
without limitation, service of process for all legal actions or proceedings relating to this
Agreement and to each of the Loan Documents to which the Borrower is a party. Nothing in this
Section 9.9

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shall affect the right of the Agent or any Lender to bring proceedings against
the Borrower in the courts of any other jurisdiction or to serve process in any other manner
permitted by applicable law.

     SECTION 9.10 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of all Lenders; and the rights of sale,
assignment and transfer of the Lenders are subject to Section 9.11.

     SECTION 9.11 Sale and Transfers, Participations, Etc.

     (a) Any Lender may at any time assign, syndicate or sell to one or more Participants (other
than a natural person, a Defaulting Lender, the Sponsor or any Affiliate or Subsidiary of the
Sponsor, the Borrower, any other Loan Party, or any Affiliate or Subsidiary of the Borrower or any
other Loan Party) participating interests in any Loan owing to such Lender, any Note held by such
Lender, the Commitment of such Lender, any interest of any Lender in any Letter of Credit
Obligations or any other interest of Lender under this Agreement and any Loan Document. In the
event of any such sale by a Lender of participating interests to a Participant, such Lender’s
obligations under this Agreement shall remain unchanged and such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement and the other Loan Documents and the
Borrower and the Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement and the other Loan Documents. The
Borrower agrees that if amounts outstanding under this Agreement and the Notes are due or unpaid,
or shall have been declared or shall have become due and payable upon the occurrence and
continuance of an Event of Default, each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Note, provided that such right of setoff shall be subject to the
approval of the Required Lenders and to the obligations of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in Section 3.7
as if the Participant were a Lender hereunder. The Borrower also agrees that any Participant shall
be entitled to the benefits of (i) Section 9.4 and (ii) Sections 2.5 and
3.5, with respect to its participation in the Commitments and the Loans outstanding from
time to time; provided, that no Participant shall be entitled to receive any greater amount
pursuant to the Sections referred to in clause (ii) than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred and each Participant shall be subject to
the obligations of such Lender set forth in such Sections. No Lender shall grant any participation
under which the Participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Loan Document except to the extent that such amendment or waiver would (i)
extend the due date for, or reduce the amount of, any payment or prepayment of principal of or
interest on the Loans (except in connection with a waiver of interest at the Post-Default Rate or
the increased amount of fees payable with respect to the Letters of Credit following an Event of
Default (it being understood that a waiver of any Default or Event of Default shall not constitute
a change in the terms of such participation, and that an increase in the Loans shall be permitted
without the consent of any

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Participant if such Participant’s participation is not increased as a
result thereof), (ii) release a substantial part of the Collateral or (iii) consent to the
assignment or transfer by the Borrower of any of its rights or obligations under this Agreement.

     (b) With the consent of the Agent (and, except as provided in clause (f) below, prior to the
occurrence of an Event of Default, with the consent of the Borrower which shall not be unreasonably
withheld or delayed), any Lender may at any time sell to any Purchasing Lender all or any part in a
minimum amount of $1,000,000, of its rights and obligations under this Agreement and the Notes
pursuant to a Transfer Supplement in the form of Exhibit H attached hereto (“Transfer
Supplement”), executed by such Purchasing Lender, such transferor Lender and the Agent. Upon
(i) such execution of such Transfer Supplement, and (ii) delivery of a fully executed copy thereof
to the Borrower, such Purchasing Lender shall for all purposes be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender under this Agreement, to the same extent
as if it were an original party hereto with a Working Capital Facility Percentage and a Term Loan
Percentage as set forth in such Transfer Supplement, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required. Such Transfer Supplement shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of Working Capital Facility Percentages and
Term Loan Percentages arising from the purchase by such Purchasing Lender of all or a portion of
the rights and obligations of such transferor Lender under this Agreement and the Notes. Upon the
consummation of any transfer to a Purchasing Lender pursuant to this paragraph (b), the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that, if required, replacement Notes are issued to
such transferor Lender and new Notes to the Purchasing Lender in the amount equal to their
respective Commitments and outstanding Loans, as appropriately adjusted pursuant to such Transfer
Supplement.

     (c) The Agent shall maintain at its address referred to herein a copy of each Transfer
Supplement delivered to it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loans recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.

     (d) Upon its receipt of a Transfer Supplement executed by a transferor Lender, the Agent and a
Purchasing Lender together with payment by such Purchasing Lender to the Agent, for the account of
the Agent and not for the account of the Lenders, of a registration and processing fee of $3,500,
and the Notes subject to such Transfer Supplement, the Agent shall (i) accept such Transfer
Supplement, (ii) record the information therein in the Register and (iii) give prompt notice of
such acceptance and recordation to the Lenders and the Borrower.

     (e) If, pursuant to this Section 9.11, any interest in this Agreement or any Note is
transferred to any Participant or Purchasing Lender which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the Lender shall cause such
Participant or Purchasing Lender, concurrently with the effectiveness of such transfer, (i) to

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represent to the transferor Lender (for the benefit of the transferor Lender, the Agent and the
Borrower) that under applicable law and treaties no taxes will be required to be withheld by the
Agent, the Borrower or the transferor Lender with respect to any payments to be made to such
Participant or Purchasing Lender in respect of the Loans, (ii) to furnish to the transferor Lender,
the Agent and the Borrower two (2) properly executed original Internal Revenue Service Forms 4224
or 1001 (or any successor forms) and properly executed Internal Revenue Service Forms W-8 and W-9,
as the case may be (wherein such Participant or Purchasing Lender claims entitlement to complete
exemption from the United States federal withholding tax on all interest payments hereunder and all
fees payable under Section 2.3), and (iii) to agree (for the benefit of the transferor
Lender, the Agent and the Borrower) to provide the transferor Lender, the Agent and the Borrower
new Internal Revenue Service Forms 4224 or 1001 upon the expiration or obsolescence of any
previously delivered form or after the occurrence of any event requiring a change in the most
recent forms delivered by it to the transferor Lender, the Agent and the Borrower, and comparable
statements in accordance with applicable United States laws and regulations and amendments duly
executed and completed by such Participant or Purchasing Lender, and to comply from time to time
with all applicable United States laws and regulations with regard to such withholding tax
exemption.

     (f) Notwithstanding anything to the contrary set forth in this Section 9.11, (i) any
Lender may sell to any of its Affiliates, to any Related Fund or to any other Lender or Affiliate
of any other Lender all or any part of its rights and obligations under this Agreement and the
Notes, (ii) any Lender may create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Loans owing to it and the Notes held by
it) in favor of the Federal Reserve Bank in accordance with Regulation A of the F.R.S. Board or in
favor of any other central bank having jurisdiction, and (iii) upon the occurrence and during the
continuance of an Event of Default, any Lender may sell to any Purchasing Lender all or any part of
its rights and obligations under this Agreement and the Notes notwithstanding that the Borrower
does not consent to such sale, provided such Lender has obtained the consent of the Agent (which
consent shall not be unreasonably withheld or delayed) and otherwise meets the requirements of this
Section 9.11. In addition, any Lender may grant a security interest in favor of the
Federal Reserve Bank or any other central bank having jurisdiction in any Loan Document;
provided, however, that no such grant shall release the Lender from any of its
obligations under the Loan Documents or substitute the beneficiary of such grant as a party to any
Loan Document, and no such grant shall require any payments to be made by any Loan Party or grant
to any Person any more extensive rights than those required to be made or granted to such Lender
under the Loan Documents.

     SECTION 9.12 Other Transactions. Nothing contained herein shall preclude the Agent or
any other Lender from engaging in any transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other Person.

     SECTION 9.13 Confidentiality. The Lenders and the Agent shall hold all non-public,
proprietary or confidential information (which has been identified as such by the Borrower)
obtained pursuant to the requirements of this Agreement in accordance with their customary
procedures for handling confidential information of this nature and in accordance with safe and

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sound lending practices; however, the Lenders and the Agent may make disclosure of any such
information to its examiners, Affiliates, outside auditors, counsel, consultants, operators and
other professional advisors in connection with this Agreement or as required by any proposed
syndicate member, transferee or participant in connection with the contemplated transfer of any
Note, Obligations or Commitments or the contemplating granting of a participation therein, as
required or requested by any governmental, banking, taxation or other regulatory authority or
similar body, the rules of any relevant stock exchange or pursuant to any applicable law or
regulation, or in connection with the enforcement hereof or of any other Loan Document or pursuant
to legal process, or to any beneficiary of the grant described in Section 9.11(f);
provided, however, that any such proposed syndicate member or proposed transferee
or participant shall have agreed in writing for the Borrower’s benefit to be bound by the terms of
this Section 9.13. In no event shall any Lender or the Agent be obligated or required to
return any materials furnished to it by the Borrower or any of its Subsidiaries.

     SECTION 9.14 Change in Accounting Principles. If any changes in accounting principles
from those used in the preparation of the financial statements referred to in clause (a) of
Section 5.4 hereafter occur as a result of the promulgation of rules, regulations,
pronouncements or opinions by the Financial Accounting Standards Board or the American Institute of
Certified Public Accountants (or successors thereto or agencies with similar functions) result in a
change in the method of calculation of financial covenants, standards or terms found in this
Agreement, the parties hereto agree to enter into negotiations (and such parties shall act in good faith in such
negotiations) in order to amend such financial covenants, standards or terms so as to equitably
reflect such changes with the desired result that the evaluations of the Borrower’s financial
condition shall be the same after such changes as if such changes had not been made;
provided, however, that, until the parties hereto have reached a definitive
agreement on such amendments the Borrower shall not change its Fiscal Year and the Borrower’s
financial condition and operations shall continue to be evaluated on the same principles as those
used in the preparation of the financial statements referred to in clause (a) of Section
5.4.

     SECTION 9.15 Immunity. To the extent that any Loan Party has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, each of the Loan Parties hereby irrevocably and unconditionally
waives such immunity in respect of its obligations under the Loan Documents and, without limiting
the generality of the foregoing, agrees that the waivers set forth in this Section 9.15
shall have the fullest scope permitted under the Foreign Sovereign Immunities Act of 1976 of the
United States and are intended to be irrevocable for purposes of such Act.

     SECTION 9.16 Waiver of Jury Trial, Etc. THE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE AGENT, SUCH LENDERS OR THE BORROWER.

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THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND SUCH LENDERS ENTERING INTO THIS
AGREEMENT.

     SECTION 9.17 Limitation of Liability. Neither the Agent, the Lenders nor any
Affiliate thereof shall have any liability with respect to, and THE BORROWER HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON, ANY CLAIM FOR ANY SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES SUFFERED BY THE BORROWER IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY
RELATED TO THIS AGREEMENT, THE LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREIN, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH.

     SECTION 9.18 Usury Savings Clause. Notwithstanding anything to the contrary in this
Agreement or any other Loan Document, if at any time any rate of interest accruing on any
Obligation, when aggregated with all amounts payable by any Loan Party under any of the Loan
Documents that are deemed or construed to be interest accrued or accruing on such Obligation under
applicable law, exceeds the highest rate of interest permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable to such Lender with respect
to such Obligation (each a “Maximum Lawful Rate”), then in such event and so long as the
Maximum Lawful Rate would be so exceeded, such rate of interest shall be reduced to the Maximum Lawful Rate;
provided that if at any time thereafter such rate of interest accruing on Obligations held
by such Lender is less than the Maximum Lawful Rate, the Borrower shall continue to pay interest to
such Lender at the Maximum Lawful Rate until such time as the total interest received by such
Lender in respect of the Obligations held by it is equal to the total interest which such Lender
would have received had interest on all Obligations held by such Lender (but for the operation of
this Section 9.18) accrued at the rate otherwise applicable under this Agreement and the
other Loan Documents. Thereafter, interest payable to such Lender in respect of the Obligations
held by it shall accrue at the applicable rate set forth in this Agreement or other Loan Documents
unless and until such rate again exceeds the Maximum Lawful Rate, in which event this Section
9.18 shall again apply. In no event, shall the total interest received by any Lender pursuant
to the terms hereof exceed the amount which such Lender could lawfully have received had interest
been calculated for the full term of this Agreement at the Maximum Lawful Rate. In the event that
the Maximum Lawful Rate is calculated pursuant to this Section 9.18, (a) if required by
applicable law, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made, and (b) if permitted
by applicable law, the Borrower and such Lender shall (i) characterize any non-principal payment as
an expense, fee or premium rather than as interest, (ii) exclude voluntary prepayments and the
effect thereof, and (iii) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the Loans so that interest for
the entire term of the Loans shall not exceed the Maximum Lawful Rate. In the event that a court
of competent jurisdiction, notwithstanding the provisions of this Section 9.18 shall make a
final determination that such Lender has received interest in excess of the Maximum Lawful Rate,
such Lender shall, to the extent permitted by applicable law, promptly apply such excess, first to
any interest due and outstanding under this Agreement and the other Loan Documents, second to any
principal due and payable under this Agreement and the Notes, third to the remaining principal
amount of

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the Notes and fourth to other unpaid Obligations held by such Lender, and thereafter shall refund any excess to the Borrower or as a court of competent jurisdiction may otherwise
order.

     SECTION 9.19 Notice from Agent. Agent hereby notifies the Loan Parties that pursuant
to the requirements of the USA Patriot Act and Agent’s policies and procedures in regard thereto,
Agent is required to obtain, verify and record certain information and documentation that
identifies the Loan Parties, which information includes the name and address of each Loan Party and
such other information that will allow Lender to identify each Loan Party properly in accordance
with the USA Patriot Act.

     Sponsor Non-Recourse. To induce the Sponsor to deliver the Agreement to Contribute
Capital, each of the Agent and the Lenders, for itself and its successors and assigns, acknowledges
and agrees that the Sponsor is not a party to this Agreement and is a legal entity separate from
the Loan Parties, and that the Sponsor has not, and does not, assume any obligations of the Loan
Parties and has no obligation to contribute capital, or otherwise provide financial support, to the
Loan Parties, except as expressly set forth in the Agreement to Contribute Capital or as otherwise
agreed in writing from time to time. Accordingly, except as set forth in the Agreement to
Contribute Capital or as otherwise agreed in writing from time to time, each of the Agent and the
Lenders is electing to enter into this Agreement without reliance upon the creditworthiness of the
Sponsor for repayment of the Loans and other Obligations and without reliance upon any undertakings by the
Sponsor in respect of any of the Project or the Project Improvements. The Sponsor is a third party
beneficiary of this Section 9.20 and is entitled to rely on and enforce this Section
9.20 against the parties to this Agreement. For the purpose of this Section 9.20,
“Sponsor” means and includes the Sponsor and each of its Affiliates (other than the Parent
Guarantor, the Borrower or their respective Subsidiaries, if any). Notwithstanding anything to the
contrary contained in this Section 9.20, the Sponsor shall be fully liable to the Agent and
the Lenders for any deficiency, loss or damage suffered by any Secured Party under the Loan
Documents because of (a) obligations arising under the Agreement to Contribute Capital or as
otherwise agreed in writing from time to time, (b) liability arising from the commission by the
Sponsor or any of its Affiliates (other than the Parent Guarantor, the Borrower or their respective
Subsidiaries, if any) of a criminal act, (c) liability arising from acts involving deliberate
malfeasance, misappropriation of funds, fraud and fraudulent misrepresentation made by the Sponsor
or any Affiliate of the Sponsor (other than the Parent Guarantor, the Borrower or their respective
Subsidiaries, if any), and (d) payment by the Sponsor to the Agent or any Lender which is held to
be a preference or fraudulent conveyance under applicable bankruptcy laws. The Sponsor also shall
be fully liable to the Agent and the Lenders for any and all attorneys’ fees and expenses and court
costs incurred by the Agent or any Lender in connection with any of the matters described in
clauses (a) through (d) of the immediately proceeding sentence. For the avoidance of doubt, the
foregoing shall not be construed to limit in any manner the Sponsor’s obligations under the
Agreement to Contribute Capital or any other agreement entered into by the Sponsor in writing.

[signature pages follow]

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     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to be executed by
their respective officers thereunto duly authorized as of the day and year first above written.

	 	 	 	 	 
	 	PICO NORTHSTAR HALLOCK, LLC,

as the Borrower

 	 
	 	By:  	
 	 
	 	 	John R. Hart 	 
	 	 	Chief Executive Officer 	 
	 
	 	PICO NORTHSTAR, LLC,

as the Parent Guarantor

 	 
	 	By:  	 	 
	 	 	John R. Hart 	 
	 	 	Chief Executive Officer 	 
	 

[Signature Page to Credit Agreement]

 

 

	 	 	 	 	 
	 	ING CAPITAL LLC,

as the Agent and a Lender

 	 
	 	By:  	 	 
	 	 	Keith Alexander 	 
	 	 	Managing Director 	 
	 

[Signature Page to Credit Agreement]

 

 

	 	 	 	 	 
	 	_____________________________,	 
	 	
as a Lender

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Credit Agreement]

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