Document:

Exhibit 10.1

 

Execution Copy

 

CREDIT AGREEMENT

 

 

Among

 

GOLDEN OVAL EGGS, LLC,

as a Borrower and as the Borrowers’ Agent,

 

MIDWEST INVESTORS OF IOWA, COOPERATIVE

as a Borrower,

 

COBANK, ACB,

as a Lender and as Administrative Agent,

 

METROPOLITAN LIFE INSURANCE COMPANY,

as a Lender,

 

and

 

THE OTHER LENDERS FROM TIME TO TIME PARTY HERETO

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Defined Terms

  	
   

  
	
  Section 1.2

  	
  Accounting Terms and Calculations

  	
   

  
	
  Section 1.3

  	
  Computation of Time Periods

  	
   

  
	
  Section 1.4

  	
  Other Definitional Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II TERMS OF THE CREDIT FACILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Lending Commitments

  	
   

  
	
  Section 2.2

  	
  Procedure for Loans

  	
   

  
	
  Section
  2.3

  	
  Notes

  	
   

  
	
  Section 2.4

  	
  Conversions and Continuations

  	
   

  
	
  Section 2.5

  	
  Interest
  Rates, Interest Payments and Default Interest

  	
   

  
	
  Section 2.6

  	
  Repayment

  	
   

  
	
  Section 2.7

  	
  Prepayments

  	
   

  
	
  Section 2.8

  	
  Letters of Credit

  	
   

  
	
  Section 2.9

  	
  Procedures for Letters of Credit

  	
   

  
	
  Section 2.10

  	
  Terms of Letters of Credit

  	
   

  
	
  Section 2.11

  	
  Agreement
  to Repay Letter of Credit Drawings

  	
   

  
	
  Section 2.12

  	
  Obligations Absolute

  	
   

  
	
  Section 2.13

  	
  Fees

  	
   

  
	
  Section 2.14

  	
  Computation

  	
   

  
	
  Section 2.15

  	
  Payments

  	
   

  
	
  Section 2.16

  	
  Use of Loan Proceeds

  	
   

  
	
  Section 2.17

  	
  Interest Rate Not Ascertainable, Etc

  	
   

  
	
  Section 2.18

  	
  Increased Cost

  	
   

  
	
  Section 2.19

  	
  Illegality

  	
   

  
	
  Section 2.20

  	
  Capital Adequacy

  	
   

  
	
  Section 2.21

  	
  Funding
  Losses; Quoted Rate and LIBOR Rate Advances

  	
   

  
	
  Section 2.22

  	
  Discretion of Lenders as to Manner of
  Funding

  	
   

  
	
  Section 2.23

  	
  Prepayment of Term Loans

  	
   

  
	
  Section 2.24

  	
  Replacement of Certain Lenders

  	
   

  
	
  Section 2.25

  	
  Taxes

  	
   

  
	
  Section 2.26

  	
  Capitalization

  	
   

  
	
  Section 2.27

  	
  Security

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III CONDITIONS PRECEDENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Conditions of Initial Transaction

  	
   

  
	
  Section 3.2

  	
  Conditions
  Precedent to the Tranche A2 and Tranch B2 Term Loans

  	
   

  

 

i

 

	
  Section 3.3

  	
  Conditions
  Precedent to All Loans and Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Organization,
  Standing, Etc.

  	
   

  
	
  Section 4.2

  	
  Authorization
  and Validity

  	
   

  
	
  Section 4.3

  	
  No
  Conflict; No Default

  	
   

  
	
  Section 4.4

  	
  Government
  Consent

  	
   

  
	
  Section 4.5

  	
  Financial
  Statements and Condition

  	
   

  
	
  Section 4.6

  	
  Litigation

  	
   

  
	
  Section 4.7

  	
  Environmental,
  Health and Safety Laws

  	
   

  
	
  Section 4.8

  	
  ERISA

  	
   

  
	
  Section 4.9

  	
  Federal
  Reserve Regulations

  	
   

  
	
  Section 4.10

  	
  Title
  to Property; Leases; Liens; Subordination

  	
   

  
	
  Section 4.11

  	
  Taxes

  	
   

  
	
  Section 4.12

  	
  Trademarks,
  Patents

  	
   

  
	
  Section 4.13

  	
  Burdensome
  Restrictions

  	
   

  
	
  Section 4.14

  	
  Force
  Majeure

  	
   

  
	
  Section 4.15

  	
  Investment
  Company Act

  	
   

  
	
  Section 4.16

  	
  Public
  Utility Holding Company Act

  	
   

  
	
  Section 4.17

  	
  Full
  Disclosure

  	
   

  
	
  Section 4.18

  	
  Subsidiaries

  	
   

  
	
  Section 4.19

  	
  Labor
  Matters

  	
   

  
	
  Section 4.20

  	
  Security
  Documents

  	
   

  
	
  Section 4.21

  	
  Solvency

  	
   

  
	
  Section 4.22

  	
  Conversion

  	
   

  
	
  Section 4.23

  	
  Eligibility

  	
   

  
	
  Section 4.24

  	
  Material
  Contract

  	
   

  
	
  Section 4.25

  	
  Applicable
  Permits

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Financial
  Statements and Reports

  	
   

  
	
  Section 5.2

  	
  Existence

  	
   

  
	
  Section 5.3

  	
  Insurance

  	
   

  
	
  Section 5.4

  	
  Payment
  of Taxes and Claims

  	
   

  
	
  Section 5.5

  	
  Inspection

  	
   

  
	
  Section 5.6

  	
  Maintenance
  of Properties

  	
   

  
	
  Section 5.7

  	
  Books
  and Records

  	
   

  
	
  Section 5.8

  	
  Compliance

  	
   

  
	
  Section 5.9

  	
  ERISA

  	
   

  
	
  Section 5.10

  	
  Environmental
  Matters; Reporting

  	
   

  
	
  Section 5.11

  	
  Further
  Assurances

  	
   

  
	
  Section 5.12

  	
  Compliance
  with Terms of Material Contracts

  	
   

  
	
  Section 5.13

  	
  Construction

  	
   

  

 

ii

 

	
  ARTICLE VI NEGATIVE COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Merger

  	
   

  
	
  Section 6.2

  	
  Disposition
  of Assets

  	
   

  
	
  Section 6.3

  	
  Plans

  	
   

  
	
  Section 6.4

  	
  Change
  in Nature of Business

  	
   

  
	
  Section 6.5

  	
  Subsidiaries

  	
   

  
	
  Section 6.6

  	
  Negative
  Pledges

  	
   

  
	
  Section 6.7

  	
  Restricted
  Payments

  	
   

  
	
  Section 6.8

  	
  Transactions
  with Affiliates

  	
   

  
	
  Section 6.9

  	
  Accounting
  Changes

  	
   

  
	
  Section 6.10

  	
  Subordinated
  Debt

  	
   

  
	
  Section 6.11

  	
  Investments

  	
   

  
	
  Section 6.12

  	
  Indebtedness

  	
   

  
	
  Section 6.13

  	
  Liens

  	
   

  
	
  Section 6.14

  	
  Contingent
  Liabilities

  	
   

  
	
  Section 6.15

  	
  Tangible
  Net Worth

  	
   

  
	
  Section 6.16

  	
  Current
  Ratio

  	
   

  
	
  Section 6.17

  	
  Working
  Capital

  	
   

  
	
  Section 6.18

  	
  Leverage
  Ratio

  	
   

  
	
  Section 6.19

  	
  Fixed
  Charge Coverage Ratio

  	
   

  
	
  Section 6.20

  	
  Operating
  Leases

  	
   

  
	
  Section 6.21

  	
  Risk
  Management

  	
   

  
	
  Section 6.22

  	
  Material
  Contracts

  	
   

  
	
  Section 6.23

  	
  Eligibility

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Events
  of Default

  	
   

  
	
  Section 7.2

  	
  Remedies

  	
   

  
	
  Section 7.3

  	
  Offset

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII THE ADMINISTRATIVE AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Appointment
  and Authorization

  	
   

  
	
  Section 8.2

  	
  Note
  Holders

  	
   

  
	
  Section 8.3

  	
  Consultation
  With Counsel

  	
   

  
	
  Section 8.4

  	
  Loan
  Documents

  	
   

  
	
  Section 8.5

  	
  CoBank
  and Affiliates

  	
   

  
	
  Section 8.6

  	
  Action
  by Administrative Agent

  	
   

  
	
  Section 8.7

  	
  Credit
  Analysis

  	
   

  
	
  Section 8.8

  	
  Notices
  of Event of Default, Etc.

  	
   

  
	
  Section 8.9

  	
  Indemnification

  	
   

  
	
  Section 8.10

  	
  Payments
  and Collections

  	
   

  
	
  Section 8.11

  	
  Sharing
  of Payments

  	
   

  

 

iii

 

	
  Section 8.12

  	
  Advice
  to Lenders

  	
   

  
	
  Section 8.13

  	
  Defaulting
  Lender

  	
   

  
	
  Section 8.14

  	
  Resignation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Modifications

  	
   

  
	
  Section 9.2

  	
  Expenses

  	
   

  
	
  Section 9.3

  	
  Waivers,
  etc.

  	
   

  
	
  Section 9.4

  	
  Notices

  	
   

  
	
  Section 9.5

  	
  Taxes

  	
   

  
	
  Section 9.6

  	
  Successors
  and Assigns; Participations; Purchasing Lenders

  	
   

  
	
  Section 9.7

  	
  Confidentiality
  of Information

  	
   

  
	
  Section 9.8

  	
  Governing
  Law and Construction

  	
   

  
	
  Section 9.9

  	
  Consent
  to Jurisdiction

  	
   

  
	
  Section 9.10

  	
  Waiver
  of Jury Trial

  	
   

  
	
  Section 9.11

  	
  Survival
  of Agreement

  	
   

  
	
  Section 9.12

  	
  Indemnification

  	
   

  
	
  Section 9.13

  	
  Captions

  	
   

  
	
  Section 9.14

  	
  Entire
  Agreement

  	
   

  
	
  Section 9.15

  	
  Counterparts

  	
   

  
	
  Section 9.16

  	
  Borrower
  Acknowledgements

  	
   

  
	
  Section 9.17

  	
  Appointment
  of and Acceptance by Borrowers’ Agent

  	
   

  
	
  Section 9.18

  	
  Relationship
  Among Borrowers

  	
   

  
	
  Section 9.19

  	
  Interest
  Rate Limitation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annexes

  	
   

  	
   

  
	
  Annex I

  	
  Pricing Grid

  	
   

  
	
  Annex II

  	
  Risk Management Grid

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
  Schedule
  3.1(a)

  	
  Landlord/Bailee
  Locations

  	
   

  
	
  Schedule
  3.1(k)

  	
  Material
  Contracts

  	
   

  
	
  Schedule 3.1(l)

  	
  Applicable
  Permits

  	
   

  
	
  Schedule 4.6

  	
  Litigation

  	
   

  
	
  Schedule 4.7

  	
  Environmental
  Matters

  	
   

  
	
  Schedule
  6.11

  	
  Existing
  Investments

  	
   

  
	
  Schedule
  6.12

  	
  Existing
  Indebtedness

  	
   

  
	
  Schedule
  6.13

  	
  Existing
  Liens

  	
   

  
	
  Schedule
  6.14

  	
  Existing
  Contingent Obligations

  	
   

  

 

iv

 

	
  Exhibits

  	
   

  	
   

  
	
  Exhibit A-1

  	
   

  	
  Form of
  Revolving Note

  
	
  Exhibit A-2

  	
   

  	
  Form of Term
  Notes

  
	
  Exhibit B

  	
   

  	
  Form of
  Security Agreement

  
	
  Exhibit C

  	
   

  	
  Form of
  Mortgage

  
	
  Exhibit D

  	
   

  	
  Thompson
  Complex Site Description

  
	
  Exhibit E

  	
   

  	
  Borrowing Base
  Formula

  
	
  Exhibit F

  	
   

  	
  Form of
  Borrowing Base Certificate

  
	
  Exhibit G

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit H

  	
   

  	
  Form of
  Assignment Agreement

  
	
  Exhibit I

  	
   

  	
  Form of
  Environmental Indemnity

  
	
  Exhibit J

  	
   

  	
  Form of
  Contract Assignment

  

 

v

 

Execution Copy

 

CREDIT AGREEMENT

 

THIS CREDIT
AGREEMENT, dated as of September 13, 2004, is by and between GOLDEN OVAL EGGS,
LLC, a limited liability company organized under the laws of the State of
Delaware, and MIDWEST INVESTORS OF IOWA, COOPERATIVE, a cooperative organized
under the laws of the State of Iowa (individually, a “Borrower” and,
collectively, the “Borrowers”), the banks and other financial
institutions or entities which are signatories hereto (individually, a “Lender”
and, collectively, the “Lenders”), COBANK, ACB, a federally charted
instrumentality under the Farm Credit Act of 1971, as amended, one of the
Lenders, as agent for the Lenders (in such capacity, the “Administrative
Agent”), and METROPOLITAN LIFE INSURANCE COMPANY, as a Lender.

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1 Defined Terms.  As used in this Agreement the following terms
shall have the following respective meanings (and such meanings shall be
equally applicable to both the singular and plural form of the terms defined,
as the context may require):

 

“Adjusted
LIBOR Rate”:  With respect to each
day, the rate (rounded upward, if necessary, to the next one sixteenth of one
percent) determined by dividing the LIBOR Rate in effect on such day by 1.00
minus the LIBOR Reserve Percentage.

 

“Adjusted
Dividend Accrual”:  For any period of
determination, fifty percent (50%) of the consolidated net income of the
Borrowers’ Agent, as adjusted from time to time to reflect actual dividends or
cash patronages.

 

“Administrative
Agent”:  As defined in the opening
paragraph hereof.

 

“Advance”:  Any portion of the outstanding Revolving
Loans or Term Loans by a Lender as to which one of the available interest rate
options and, if pertinent, an Interest Period, is applicable.  Subject to the terms and conditions hereof,
an Advance may be a Tranche A Advance, a Quoted Rate Advance, a LIBOR Rate
Advance or a Base Rate Advance.

 

“Affiliate”:  When used with reference to any Person, (a)
each Person that, directly or indirectly, controls, is controlled by or is
under common control with, the Person referred to, (b) each Person which
beneficially owns or holds, directly or indirectly, five percent or more of any
class of voting Equity Interests of the Person referred to, (c) each Person,
five percent or more of the voting Equity Interests (or if such Person is not a
corporation, five percent or more of the equity interest) of which is
beneficially owned or held, directly or indirectly, by the Person referred to,
and (d) each of such Person’s officers, directors, joint venturers and
partners.  The term control (including
the terms “controlled by” and “under common control with”) means the
possession, directly, of the power to direct or cause the direction of the
management and policies of the Person in question.

 

 

“Aggregate
Revolving Commitment Amounts”:  As of
any date, the sum of the Revolving Commitment Amounts of all the Revolving
Lenders.

 

“Applicable
Commitment Fee Percentage”:  The
Applicable Margin at which the Revolving Commitment Fees accrue.

 

“Applicable
Lending Office”:  For each Lender and
for each type of Advance, the office of such Lender identified as such Lender’s
Applicable Lending Office on the signature pages hereof or such other domestic
or foreign office of such Lender (or of an Affiliate of such Lender) as such
Lender may specify from time to time, by notice given pursuant to Section 9.4,
to the Administrative Agent and the Borrowers’ Agent as the office by which its
Advances of such type are to be made and maintained.

 

“Applicable
Margin”: Subject to the last sentence of this definition, with respect to
computation of the applicable interest rate or the Applicable Commitment Fee
Percentage on Advances or Commitments under the Revolving Loans or Tranche B
Term Loans or the Letter of Credit Fee, as the case may be, the margin payable
by the Borrowers with respect thereto, as set forth and described in Annex I,
established as of the first day of each Fiscal Quarter after the Compliance
Certificate required by Section 5.1 is delivered as of the last day of the next
preceding Fiscal Quarter (i.e. adjustments shall be made one Fiscal Quarter in
arrears); provided, however, that any adjustment in the
Applicable Margin shall not become effective until the Administrative Agent
shall have received the Compliance Certificate and related financial statements
relating to the last day of such next preceding Fiscal Quarter pursuant to Sections
5.1(c) and (d) hereof.  If a
Compliance Certificate and related financial statements of the Borrowers’ Agent
and a related certification of the Borrowers’ Agent pursuant to Sections
5.1(c) and (d) necessary to establish the Applicable Margin
hereunder are not received by the Administrative Agent on or prior to the date
required pursuant to Sections 5.1(c) and (d) hereof, the
Applicable Margin shall be determined at the highest level described in Annex
I and shall remain in effect until one Business Day after such time as the
required financial statements are received.

 

“Applicable
Permits”: Any permit, license or similar authorization of or from a
governmental agency or political subdivision that is necessary to be obtained
by or on behalf of a Borrower at the time the determination is made to
construct, operate, maintain, own or lease the Thompson Complex, including with
respect to the Phase II Thompson Construction and the Phase III Thompson
Construction.

 

“Assignees”:
As defined in Section 9.6(c).

 

“Assignment
Agreement”: As defined in Section 9.6(c).

 

“Base Rate”:  The rate of interest per annum from time to
time established by CoBank as its “CoBank Base Rate.” CoBank may lend to its
customers at rates that are at, above or below the Base Rate.  For purposes of determining any interest rate
hereunder or under any other Loan

 

2

 

Document which
is based on the Base Rate, such interest rate shall change as and when the Base
Rate shall change.

 

“Base Rate
Advance”:  An Advance with respect to
which the interest rate is determined by reference to the Base Rate.

 

“Bear
Stearns Interest Rate Swap Agreement”: 
That certain Fixed Income Derivative Amended Confirmation, Reference
NE87521, dated May 17, 2000 between Bear Stearns and Borrowers’ Agent.

 

“Board”:  The Board of Governors of the Federal Reserve
System or any successor thereto.

 

“Borrower”:  As defined in the opening paragraph hereof.

 

“Borrowers’
Agent”:  Golden Oval Eggs, LLC, a
limited liability company organized under the laws of the State of Delaware.

 

“Borrowing
Base”:  As determined in accordance
with the formula set forth in Exhibit E hereto.

 

“Borrowing
Base Certificate”:  A certificate in
the form of Exhibit F hereto.

 

“Borrowing
Base Deficiency”:  At the time of any
determination, the amount, if any, by which Total Revolving Outstandings exceed
the Borrowing Base.

 

“Business
Day”:  Any day (other than a
Saturday, Sunday or legal holiday in the State of Colorado or the State of
Iowa) on which banks are permitted to be open in Denver, Colorado or Des
Moines, Iowa.

 

“Capital Expenditures”:  For any period, the sum of all amounts that
would, in accordance with GAAP, be included as additions to property, plant and
equipment on a consolidated statement of cash flows for the Borrowers’ Agent
during such period, in respect of (a) the acquisition, construction,
improvement, replacement or betterment of land, buildings, machinery, equipment
or of any other fixed assets or leaseholds, (b) to the extent related to and
not included in (a) above, materials, contract labor (excluding expenditures
properly chargeable to repairs or maintenance in accordance with GAAP), and (c)
other capital expenditures and other uses recorded as capital expenditures or
similar terms having substantially the same effect, but excluding (i) layer
purchases, (ii) capitalized expenses and (iii) expenditures incurred in
connection with the Phase II Thompson Construction and the Phase III Thompson
Construction.

 

“Capital
Lease”:  A lease of (or other
agreement conveying the right to use) real or personal property with respect to
which at least a portion of the rent or other amounts thereon constitute
Capital Lease Obligations.

 

3

 

“Capital
Lease Obligations”:  As to any
Person, the obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) real or personal
property which obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including Statement
of Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board), and, for purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in accordance with GAAP
(including such Statement No. 13).

 

“Change of
Control”:  The occurrence, after the
Closing Date, of any of the following circumstances: (a) any Person or two or
more Persons acting in concert (other than the current holders of the Equity
Interests of the Borrowers’ Agent) acquiring beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of Equity Interests
of the Borrowers’ Agent representing 50% or more of the combined voting power
of all Equity Interests of Borrowers’ Agent entitled to vote in the election of
directors; or (b) any Person or two or more Persons acting in concert (other
than the current holders of the Equity Interests of the Borrowers’ Agent)
acquiring by contract or otherwise, or entering into a contract or arrangement
which upon consummation will result in its or their acquisition of, control
over Equity Interests of any Borrower representing 50% or more of the combined
voting power of all Equity Interests of Borrowers’ Agent entitled to vote in
the election of directors.  For the
avoidance of doubt, acquiring membership interests in Borrowers’ Agent pursuant
to an offering does not constitute “acting in concert” for purpose of this
definition.

 

“Charges”:  As defined in Section 9.19.

 

“Closing
Date”:  Any Business Day between the
date of this Agreement and October 31, 2004 selected by the Borrowers for the
making of the first Loans hereunder; provided, that all the conditions
precedent to the obligation of the Lenders to make such Loans, as set forth in
Article III, have been, or, on such Closing Date, will be, satisfied.  The Borrowers’ Agent shall give the
Administrative Agent not less than 5 Business Days prior notice of the day
selected as the Closing Date.

 

“CoBank”:  CoBank, ACB in its capacity as one of the
Lenders hereunder.

 

“CoBank
Equities”:  As defined in Section
2.27.

 

“Code”:  The Internal Revenue Code of 1986, as
amended.

 

“Commitments”:  The Revolving Commitment and the Term Loan
Commitments.

 

“Construction
Plans”:  The plans, construction
budget and construction schedule for the Phase II Thompson Construction and the
Phase III Thompson Construction, as submitted to the Administrative Agent and
approved by the Lenders in accordance with Section 3.1.

 

4

 

“Contingent
Obligation”:  With respect to any
Person at the time of any determination, without duplication, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or otherwise: (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or to purchase (or to advance or supply funds for the purchase of) any direct
or indirect security therefor, (b) to purchase property, securities, Equity
Interests or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (c) to maintain working
capital, equity capital or other financial statement condition of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or
otherwise to protect the owner thereof against loss in respect thereof, or (d)
entered into for the purpose of assuring in any manner the owner of such
Indebtedness of the payment of such Indebtedness or to protect the owner
against loss in respect thereof; provided, that the term “Contingent
Obligation” shall not include endorsements for collection or deposit, in each
case in the ordinary course of business.

 

“Contract
Assignment”:  The Assignment of
Contracts in the form of Exhibit J executed by the Borrowers’ Agent with
respect to each Material Contract identified on Schedule 3.1(k).

 

“Conversion”:  The conversion of Midwest Investors of
Minnesota, a Minnesota cooperative, to Golden Oval Eggs, LLC, a Delaware
limited liability company.

 

“Current
Assets”:  As of any date, the
consolidated current assets of the Borrowers’ Agent, determined in accordance
with GAAP.

 

“Current
Liabilities”:  As of any date, the
consolidated current liabilities of the Borrowers, determined in accordance
with GAAP.

 

“Default”:  Any event which, with the giving of notice
(whether such notice is required under Section 7.1, or under another provision
of this Agreement, or otherwise) or lapse of time, or both, would constitute an
Event of Default.

 

“Default
Rate”:  The sum of the interest rate
per annum otherwise applicable to an Advance plus five percent (5%).

 

“Defaulting
Lender”: at any time, any Lender that, at such time (a) has failed to make
a Revolving Loan or its Term Loan or any Advances thereunder required pursuant
to the terms of this Agreement, including the funding of any participation in
accordance with the terms of this Agreement, (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to
the terms of this Agreement, or (c) has been deemed insolvent or has become
subject to a bankruptcy, receivership or insolvency proceeding, or to a
receiver, trustee or similar official.

 

“EBITDA”:  For any period of determination, the
consolidated net income of the Borrowers’ Agent before extraordinary gains or
losses, deductions for income taxes, Interest Expense, non- layer depreciation
and amortization, all as determined in accordance with GAAP.

 

5

 

“Environmental
Indemnity”:  The Unsecured
Environmental Indemnity by the Borrowers in favor of the Lenders, in the form
of Exhibit I.

 

“Equity
Interests”: All shares, interests, participation or other equivalents,
however designated, of or in a corporation or limited liability company,
whether or not voting, including but not limited to common stock, member
interests, warrants, preferred stock, convertible debentures, and all
agreements, instruments and documents convertible, in whole or in part, into
any one or more or all of the foregoing.

 

“ERISA”:  The Employee Retirement Income Security Act
of 1974, as amended.

 

“ERISA
Affiliate”:  Any trade or business
(whether or not incorporated) that is a member of a group of which the Borrower
is a member and which is treated as a single employer under Section 414 of the
Code.

 

“Event of
Default”:  Any event described in
Section 7.1.

 

“Federal
Funds Rate”:  For any period, a
fluctuating interest rate per annum equal for each day during such period to
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, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

 

“Final
Tranche 2 Advances”:  The third and
final Advances made by the Tranche A2 Term Lenders or Tranche B2 Term Lenders
after the First Tranche 2 Advances and Second Tranche 2 Advances have been
made, which Advances shall be in a maximum aggregate amount equal to (i) with
respect to the Tranche A2 Term Loans, the Tranche A2 Term Loan Commitment
Amount minus the First Tranche 2 Advances made by the Tranche A2 Term
Lenders minus the aggregate amount of the Second Tranche 2 Advances made
by the Tranche A2 Term Lenders, and (ii) with respect to the Tranche B2 Term
Loans, the Tranche B2 Term Loan Commitment Amount minus the First
Tranche 2 Advances made by the Tranche B2 Term Lenders minus the
aggregate amount of the Second Tranche 2 Advances made by the Tranche B2 Term
Lenders.

 

“First
Tranche 2 Advance”: The initial Advance of the Tranche A2 Term Loans and
the Tranche B2 Term Loans, which Advances shall be in a maximum amount of
$6,700,000 and $3,300,000, respectively.

 

“Fiscal
Quarter”:  Each three (3) month
period ending November 30, February 28 (or 29, as the case may be), May 31, and
August 31.

 

“Fixed
Charge Coverage Ratio”:  For any
period of determination, the ratio of

 

6

 

(a)                                  EBITDA
minus Capital Expenditures not financed with Indebtedness minus
Equity Interest re-purchases by the Borrowers’ Agent, minus equity retirements
by the Borrowers’ Agent, minus Adjusted Dividend Accrual,

 

to

 

(b)                                 the
sum of Interest Expense and all required principal payments with respect to
Total Liabilities (including but not limited to all payments with respect to
Capital Lease Obligations of the Borrowers’ Agent),

 

in each case
determined for said period on a consolidated basis in accordance with GAAP.

 

“Funded
Debt”:  At the time of determination,
the amount on a consolidated basis of all Indebtedness of the Borrowers’ Agent
for borrowed money or the deferred purchase price of property, or that bears
interest on such date, plus the face amount of any letter of credit for which
the Borrowers’ Agent is the account party.

 

“GAAP”:  Generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of any
date of determination.

 

“Immediately
Available Funds”:  Funds with good
value on the day and in the city in which payment is received.

 

“Indebtedness”:  With respect to any Person at the time of any
determination, without duplication, all obligations, contingent or otherwise,
of such Person which in accordance with GAAP should be classified upon the
balance sheet of such Person as liabilities, but in any event including: (a)
all obligations of such Person for borrowed money (including non-recourse
obligations), (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid or accrued, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (e) all obligations
of such Person issued or assumed as the deferred purchase price of property or
services, (f) all obligations of others secured by any Lien on property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (g) all Capital Lease Obligations of such Person, (h) all
obligations of such Person in respect of interest rate swap agreements, cap or
collar agreements, interest rate futures or option contracts, currency swap
agreements, currency futures or option agreements and other similar contracts,
excluding the Bear Stearns Interest Rate Swap Agreement, (i) all obligations of
such Person, actual or contingent, as an account party in respect of letters of
credit or bankers’ acceptances, (j) all obligations of any partnership or joint
venture as to which such Person is or may become

 

7

 

personally
liable, (k) all obligations of such Person under any Equity Interests issue by
such Person, and (l) all Contingent Obligations of such Person.

 

“Indemnitee”:
 As defined in Section 9.12.

 

“Interest
Expense”:  For any period of
determination, the aggregate consolidated amount, without duplication, of
interest paid, accrued or scheduled to be paid in respect of any Indebtedness
of the Borrowers’ Agent, including (a) all but the principal component of
payments in respect of conditional sale contracts, Capital Leases and other
title retention agreements, (b) commissions, discounts and other fees and
charges with respect to letters of credit and bankers’ acceptance financings
and (c) net costs under interest rate protection agreements, in each case
determined in accordance with GAAP.

 

“Interest
Period”:  With respect to each LIBOR
Rate Advance, the period commencing on the date of such Advance or on the last
day of the immediately preceding Interest Period, if any, applicable to an
outstanding Advance and ending one, two, three or six months thereafter, as the
Borrowers may elect in the applicable notice of borrowing, continuation or
conversion; provided that:

 

(1)                                  Any
Interest Period that would otherwise end on a day which is not a LIBOR Business
Day shall be extended to the next succeeding LIBOR Business Day unless such
LIBOR Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day;

 

(2)                                  Any
Interest Period that begins on the last LIBOR Business Day of a calendar month
(or a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR Business
Day of a calendar month; and

 

(3)                                  Any
Interest Period that would otherwise end after the Termination Date shall end
on the Termination Date.

 

For purposes
of determining an Interest Period, a month means a period starting on one day
in a calendar month and ending on the numerically corresponding day in the next
calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest Period is
to end or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last Business Day of
the calendar month in which such Interest Period is to end.

 

“Investment”:  The acquisition, purchase, making or holding
of any Equity Interests or other security, any loan, advance, contribution to
capital, extension of credit (except for trade and customer accounts receivable
for inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms), any acquisitions of real or
personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase Equity Interests, securities or

 

8

 

other debt of
or any interest in another Person or any integral part of any business or the
assets comprising such business or part thereof and the formation of, or entry
into, any partnership as a limited or general partner or the entry into any
joint venture.  The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or decreases in value,
or write- ups, write-downs or write-offs with respect to such Investment.

 

“Lender”:  As defined in the opening paragraph hereof.

 

“Letter of
Credit”:  An irrevocable letter of
credit issued by the Administrative Agent pursuant to this Agreement for the
account of a Borrower.

 

“Letter of
Credit Bank”:  CoBank, ACB.

 

“Letter of
Credit Commitment Amount”: 
$2,000,000.00.

 

“Letter of
Credit Fee”:  As defined in Section
2.13(d).

 

“Leverage
Ratio”:  At the time of any
determination, the ratio of (a) Funded Debt to (b) EBITDA.

 

“LIBOR
Business Day”:  A Business Day which
is also a day for trading by and between banks in United States dollar deposits
in the interbank Eurodollar market and a day on which banks are open for
business in New York City.

 

“LIBOR Rate”:  With respect to each Interest Period
applicable to a LIBOR Rate Advance, the average offered rate for deposits in
United States dollars (rounded upward, if necessary, to the nearest 1/16 of 1%)
for delivery of such deposits on the first day of such Interest Period, for the
number of days in such Interest Period, which appears on Telerate page 3750 as
of 11:00 A.M., London time (or such other time as of which such rate appears)
two LIBOR Business Days prior to the first day of such Interest Period, or the
rate for such deposits determined by the Administrative Agent at such time
based on such other published service of general application as shall be
selected by the Administrative Agent for such purpose; provided, that in
lieu of determining the rate in the foregoing manner, the Administrative Agent
may determine the rate based on rates at which United States dollar deposits
are offered to the Administrative Agent in the interbank Eurodollar market at
such time for delivery in Immediately Available Funds on the first day of such
Interest Period in an amount approximately equal to the Advance by the
Administrative Agent to which such Interest Period is to apply (rounded upward,
if necessary, to the nearest 1/16 of 1%). 
“Telerate page 3750” means the display designated as such on the
Telerate reporting system operated by Telerate System Incorporated (or such
other page as may replace page 3750 for the purpose of displaying London
interbank offered rates of major banks for United States dollar deposits).

 

“LIBOR Rate
Advance”:  An Advance with respect to
which the interest rate is determined by reference to the Adjusted LIBOR Rate.

 

9

 

“LIBOR
Reserve Percentage”:  As of any day,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve requirement
(including any basic, supplemental or emergency reserves) for a member bank of
the Federal Reserve System, with deposits comparable in amount to those held by
the Lender, in respect of “Eurocurrency Liabilities” as such term is defined in
Regulation D of the Board. The rate of interest applicable to any outstanding
Revolving Loans shall be adjusted automatically on and as of the effective date
of any change in the LIBOR Reserve Percentage.

 

“Lien”:  With respect to any Person, any security
interest, mortgage, pledge, lien, charge, encumbrance, title retention
agreement or analogous instrument or device (including the interest of each
lessor under any Capital Lease), in, of or on any assets or properties of such
Person, now owned or hereafter acquired, whether arising by agreement or
operation of law.

 

“Loan”:
A Revolving Loan or a Term Loan.

 

“Loan
Documents”: This Agreement, the Notes, any Rate Protection Agreement and
the Security Documents.

 

“Margin
Assignment”:  An Assignment of
Hedging Account and Futures Contract in the form of Exhibit B to the
Security Agreement, executed by the Borrowers’ Agent.

 

“Material
Adverse Occurrence”:  Any occurrence
of whatsoever nature (including, without limitation, any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding)
which could reasonably be expected to materially and adversely affect (a) the
financial condition or operations of the Borrowers, (b) impair the ability of
any Borrower to perform its obligations under any Loan Document, or any writing
executed pursuant thereto, (c) the validity or enforceability of the material
obligations of any Borrower under any Loan Document, (d) the rights and
remedies of the Lenders or the Administrative Agent against any Borrower, (e)
the timely payment of the principal of and interest on the Loans or other
amounts payable by the Borrowers hereunder, or (f) the validity of the joint
and several nature of the obligations of the Borrowers with respect to all of
the Obligations.

 

“Material
Contracts”:  All contracts that are
material to the ongoing and continued operations of the Borrowers’ Agent’s
business operations at the Thompson Complex, including all material products
marketing agreements (including egg and manure marketing agreements) and all
material supply agreements.

 

“Maximum
Rate”:  As defined in Section 9.19.

 

“Mortgage”:  The Mortgage executed by Midwest Investors of
Iowa, Cooperative, in the form of Exhibit C hereto, encumbering, inter alia, the Thompson Complex Site.

 

“Net
Present Value”:  With respect to a
prepayment of a Term Note, the amount of each prospective payment of principal
and interest that, without such prepayment, could otherwise have been received
by the applicable Lender over the shorter of the remaining contractual life of

 

10

 

its Term Note
or next repricing date, discounted at a rate equal to (i) the yield of U.S.
Treasury Notes that shall be imputed, by linear interpolation, from the current
weekly yield of those United States Treasury Notes having a maturity as close
as practicable to that of each specific payment of principal and/or interest,
as published in the most recent Federal Reserve Statistical Release H.15 (519)
or any successor publication, plus (ii) 0.75%.

 

“Note”:  A Term Note or a Revolving Note.

 

“Obligations”:  The Borrowers’ obligations in respect of the
due and punctual payment of principal and interest on the Notes and Unpaid
Drawings when and as due, whether by acceleration or otherwise and all fees
(including Revolving Commitment Fees), expenses, indemnities, reimbursements
and other obligations of the Borrowers under this Agreement or any other Loan
Document, and the Rate Protection Obligations, in all cases whether now
existing or hereafter arising or incurred.

 

“Operating
Lease”:  For any Person, a lease of
property that would not be classified as a Capital Lease, other than a lease
under which such Person is the lessor.

 

“Other Taxes”:  As defined in Section 2.25(b).

 

“Participants”:  As defined in Section 9.6(b).

 

“PBGC”:  The Pension Benefit Guaranty Corporation,
established pursuant to Subtitle A of Title IV of ERISA, and any successor
thereto or to the functions thereof.

 

“Permitted
Encumbrances”:  Encumbrances
affecting the Thompson Complex Site that are permitted in accordance with the
terms of the Mortgage and, with respect to any other property of the Borrowers,
encumbrances in the nature of zoning restrictions, easements and rights or
restrictions on the use of real property and landlord’s Liens under leases on
the premises rented that do not materially detract from the value of such
property or impair the use thereof in the business of a Borrower.

 

“Person”:  Any natural person, corporation, partnership,
limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an individual,
fiduciary or other capacity.

 

“Phase II
Thompson Construction”:  As defined
in Section 3.2(f)(i).

 

“Phase III
Thompson Construction”:  The
construction of commercial facilities at the Thompson Complex, excluding the
Phase II Thompson Construction, that is commenced by or on behalf of the
Borrowers’ Agent following the Closing Date, as set forth in the Construction
Plans.

 

11

 

“Plan”:  Each employee benefit plan (whether in
existence on the Closing Date or thereafter instituted), as such term is
defined in Section 3 of ERISA, maintained for the benefit of employees,
officers or directors of a Borrower or of any ERISA Affiliate.

 

“Prepayment
Event”:  Means:

 

(a)                                  any
sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of any Borrower, other than dispositions
described in clauses (a), (b) and (c) of Section 6.2; or

 

(b)                                 any
casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of
any Borrower, but only to the extent that the net proceeds therefrom have not
been applied, or committed pursuant to an agreement (including any purchase
orders) to be applied, to repair, restore or replace such property or asset
within 180 days after such event.

 

“Prepayment
Fee”:  As defined in Section 2.23.

 

“Quoted
Rate”:  The fixed interest rate per
annum quoted by CoBank in it its sole discretion and set forth in a Quoted Rate
Offer that has been accepted by the Borrower, which rate shall apply only to
the specific amounts with the specific maturities set forth in the Quoted Rate
Offer.

 

“Quoted
Rate Offer”:  A quote of a fixed
interest rate per annum provided to the Borrowers by CoBank in its sole
discretion following the receipt by CoBank of a Quoted Rate Request from the
Borrowers’ Agent.  Rates may be fixed by
CoBank on such balances and for such periods as determined by CoBank in its
sole discretion in each instance, provided that the minimum fixed period
shall be 30 days for any Quoted Rate Advances for Revolving Loans and 180 days
for any Quoted Rate Advances for Tranche B Term Loans.  The Quoted Rate Offer may, in the sole
discretion of CoBank, include the Weekly Quoted Variable Rate.

 

“Quoted
Rate Request”:  A request by
Borrowers’ Agent to CoBank for a Quoted Rate Offer.

 

“Rate
Protection Agreement”:  Any interest
rate swap, cap or option agreement, or any other agreement pursuant to which
any Borrower hedges interest rate risk with respect to a portion of the
Obligations, entered into by any Borrower with a Rate Protection Provider.

 

“Rate
Protection Obligations”:  The
liabilities, indebtedness and obligations of any Borrower, if any, to any Rate
Protection Provider under a Rate Protection Agreement.

 

“Rate
Protection Provider”:  Any Lender, or
any Affiliate of any Lender, that is the counterparty of any Borrower under any
Rate Protection Agreement.

 

12

 

“Regulatory
Change”:  Any change after the
Closing Date in federal, state or foreign laws or regulations or the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including any Lender under any federal, state or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

 

“Replaced
Lender”:  As defined in Section 2.24.

 

“Replacement
Lender”:  As defined in Section 2.24.

 

“Reportable
Event”:  A reportable event as
defined in Section 4043 of ERISA and the regulations issued under such Section,
with respect to a Plan, excluding, however, such events as to which the PBGC by
regulation has waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided that a
failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any waiver in accordance with Section 412(d) of the Code.

 

“Required
Lenders”:  At any time, Lenders,
other than Defaulting Lenders, holding at least 66.67% of the aggregate unpaid
principal amount of the Notes, excluding Notes held by Defaulting Lenders or,
if no Loans are at the time outstanding hereunder, Lenders other than
Defaulting Lenders whose Total Percentages aggregate at least 66.67% (with
Total Percentages being computed without reference to the Revolving Commitment
Amounts and Term Loan Commitment Amounts of Defaulting Lenders), provided
that, if at any date of determination, there are two Lenders, the “Required
Lenders” shall constitute 100% or the Lenders other than Defaulting Lenders.

 

“Restricted
Payments”:  With respect to
Borrowers’ Agent, collectively, (a) all dividends or other distributions of any
nature (cash, Equity Interests, assets or otherwise), and all payments on any
class of Equity Interests (including warrants, options or rights therefor)
issued by such Borrower, whether such Equity Interests are authorized or
outstanding on the Closing Date or at any time thereafter, or (b) any
redemption or purchase of, or distribution in respect of, any of the foregoing,
whether directly or indirectly.

 

“Revolving
Commitment”:  With respect to a
Revolving Lender, the agreement of such Lender to make Revolving Loans to the
Borrowers in an aggregate principal amount outstanding at any time not to
exceed such Revolving Lender’s Revolving Commitment Amount upon the terms and subject
to the conditions and limitations of this Agreement.

 

“Revolving
Commitment Amount”:  With respect to
a Revolving Lender, initially the amount set opposite such Revolving Lender’s
name on the signature page hereof as its Revolving Commitment Amount, if any.

 

“Revolving
Commitment Fees”:  As defined in
Section 2.13(b).

 

13

 

“Revolving
Lender”:  Each Lender that has a
Revolving Loan or holds a Revolving Commitment.

 

“Revolving
Loan”:  As defined in Section 2.1.

 

“Revolving
Loan Date”:  The date of the making
of any Revolving Loans hereunder.

 

“Revolving
Notes”:  The promissory notes of the
Borrowers in the form of Exhibit A-1 hereto, evidencing the obligation
of the Borrowers to repay the Revolving Loans, and “Revolving Note” means any
one of such promissory notes issued hereunder without distinction.

 

“Second
Tranche 2 Advance”:  The second
Advances of the Tranche A2 Term Loans and the Tranche B2 Term Loans, which
Advances shall be in a maximum amount of $6,700,000 and $3,300,000,
respectively.

 

“Security
Agreement”:  The Security Agreement
executed by the Borrowers in the form of Exhibit B hereto.

 

“Security
Documents”:  The Security Agreement,
the Contract Assignment, any Margin Assignments, the Mortgage and each other
agreement, document or instrument pursuant to which the Administrative Agent is
granted a Lien to secure the Obligations, as the same may be amended,
supplemented, extended, restated or otherwise modified from time to time.

 

“Series
2000 Bonds”:  Corporate Bond Series
2000 bearing variable interest and due 2002-2015.

 

“Subordinated
Debt”:  Any Indebtedness of any
Borrower, now existing or hereafter created, incurred or arising, which is
subordinated in right of payment to the payment of the Obligations in a manner
and to an extent (a) that Required Lenders have approved in writing prior to
the creation of such Indebtedness, or (b) as to any Indebtedness of any
Borrower existing on the date of this Agreement, that Required Lenders have
approved as Subordinated Debt in a writing delivered by Required Lenders to the
Borrowers’ Agent on or prior to the Closing Date.

 

“Subsidiary”:  Any corporation or other entity of which
Equity Interests having ordinary voting power for the election of a majority of
the board of directors or other Persons performing similar functions are owned
by any Borrower either directly or through one or more Subsidiaries.

 

“Tangible
Net Worth”:  As of any date of
determination, the sum of the amounts set forth on the balance sheet of the
Borrowers as the aggregate equity of the members of the Borrowers, less the
book value of all intangible assets of the Borrowers, including all such items
as goodwill, trademarks, trade names, service marks, copyrights, patents,
licenses, unamortized debt discount and expenses, deferred tax assets and the
excess of the purchase price of the assets of any business acquired by the
Borrowers over the book value of such assets.

 

14

 

“Term
Lenders”:  Collectively, the Tranche
A Term Lenders and the Tranche B Term Lenders.

 

“Term Loan”:  Collectively, the Tranche A Term Loans and
the Tranche B Term Loans.

 

“Term Loan
Commitment”:  With respect to any
Lender, the agreement of such Lender to make a Term Loan to the Borrowers in an
amount equal to such Lender’s Term Loan Commitment Amount.

 

“Term Loan
Commitment Amount”:  With respect to
any Lender, the aggregate amount of such Lender’s Tranche A1 Term Loan
Commitment Amount, Tranche A2 Term Loan Commitment Amount, Tranche B1 Term Loan
Commitment Amount and Tranche B2 Term Loan Commitment Amount.

 

“Term Loan
Date”:  The date of the making of any
Term Loans hereunder.

 

“Term Loan
Maturity Date”:  The later of the
Tranche A1 Maturity Date, the Tranche A2 Maturity Date, the Tranche B1 Maturity
Date and the Tranche B2 Maturity Date.

 

“Term Loan
Percentage”:  With respect to any
Lender, the percentage equivalent of a fraction, the numerator of which is the
amount of the Term Loan Commitment of such Lender and the denominator of which
is the sum of the Term Loan Commitments of all the Lenders.

 

“Term Notes”:  The promissory notes of the Borrowers in the
form of Exhibit A-2 hereto, evidencing the obligation of the Borrowers
to repay the Term Loans, and “Term Note” means any one of such promissory notes
without distinction.

 

“Termination
Date”:  The earlier of (a) the one
year anniversary of the Closing Date, and (b) the date on which the Revolving
Commitments are terminated pursuant to Section 7.2 hereof, provided that
at the written request of the Borrowers’ Agent to the Administrative Agent, the
Revolving Commitment may be renewed for any number of successive one-year
periods in the sole discretion of the Revolving Lenders, in which case the
Termination Date shall be extended for a period corresponding to each such
renewal, if any.

 

“Thompson
Complex”:  The Borrowers’ Agent’s
layer facility located on the Thompson Complex Site.

 

“Thompson
Complex Site”:  The approximately
240-acre site located in Winnebago County, Iowa, owned in fee simple by Midwest
Investors of Iowa, Cooperative and leased to Borrowers’ Agent, on which the
Thompson Complex is located, as more particularly described on Exhibit D
hereto.

 

“Total
Percentage”:  With respect to any
Lender, the percentage equivalent of a fraction, the numerator of which is the
sum of the Revolving Commitment Amount of such Lender and

 

15

 

the Term Loan
Commitment Amount of such Lender and the denominator of which is the sum of the
Revolving Commitment Amounts and Term Loan Commitment Amounts of all the
Lenders.

 

“Total
Revolving Outstandings”:  As of any
date of determination, the sum of (a) the aggregate unpaid principal balance of
Revolving Loans outstanding on such date, (b) the aggregate maximum amount
available to be drawn under Letters of Credit outstanding on such date and (c)
the aggregate amount of Unpaid Drawings on such date.

 

“Total Term
Outstandings”:  As o f any date of
determination, the sum of (a) the aggregate unpaid principal balance of the
Term Loans outstanding on such date and (b) the aggregate unpaid principal
balance of any another term Indebtedness of the Borrowers outstanding on such
date.

 

“Tranche A
Advances”:  A Tranche A1 Advance or a
Tranche A2 Advance.

 

“Tranche A
Term Lenders”:  Collectively, the
Tranche A1 Term Lenders and the Tranche A2 Term Lenders.

 

“Tranche A
Term Loans ”:  Collectively, the
Tranche A1 Term Loans and the Tranche A2 Term Loans.

 

“Tranche A1
Advance”:  An Advance with respect to
which the interest rate is determined by reference to the Tranche A1 Rate.

 

“Tranche A1
Maturity Date”:  September 20, 2014.

 

“Tranche A1
Rate”:  A rate of interest per annum
equal to the sum of 2.40% plus the interpolated yield of a 5.04-Year
U.S. Treasury Note as of 12:00 P.M. Central (i) five (5) Business Days prior to
the Closing Date or (ii) such other date not more than 45 days prior to the
Closing Date as the Borrowers’ Agent may request.

 

“Tranche A1
Term Lender”:  Each Lender that has a
Tranche A1 Term Loan or holds a Tranche A1 Term Loan Commitment.

 

“Tranche A1
Term Loan”:  As defined in Section
2.1.

 

“Tranche A1
Term Loan Commitment ”:  With respect
to any Tranche A1 Term Lender, the agreement of such Lender to make a Tranche
A1 Term Loan to the Borrowers in an amount equal to such Lender’s Tranche A1
Term Loan Commitment Amount upon the terms and subject to the conditions of
this Agreement.

 

“Tranche A1
Term Loan Commitment Amount”:  With
respect to a Lender, the amount set opposite such Lender’s name on the
signature pages hereof as its Tranche A1 Term Loan Commitment Amount, if any.

 

16

 

“Tranche A2
Advance”:  An Advance with respect to
which the interest rate is determined by reference to the Tranche A2 Rate.

 

“Tranche A2
Maturity Date”:  December 20, 2015.

 

“Tranche A2
Rate”:  A rate of interest per annum
equal to the sum of 2.40% plus the interpolated yield of a 5.76-Year
U.S. Treasury Note as of 12:00 P.M. Central (i) five (5) Business Days prior to
the Term Loan Date for the First Tranche 2 Advance in respect of the Tranche A2
Term Loans or (ii) such other date not more than 45 days prior to such Term
Loan Date as the Borrowers’ Agent may request in writing; provided, however,
that, in accordance with Section 3.2(f)(iii)(B), upon the Second Tranche 2
Advance and the Final Tranche 2 Advance in respect of the Tranche A2 Term
Loans, the interest rate applicable to the Tranche A2 Term Loans shall be
adjusted to proportionally blend the then existing Tranche A2 Rate with the
Tranche A2 Rate for the Second Tranche 2 Advance and, if applicable, the Final
Tranche 2 Advance in respect of the Tranche A2 Term Loans in order to provide
an interest rate applicable thereafter to the aggregate principal amount
outstanding of the Tranche A2 Term Loans. 
The Tranche A2 Rate shall be determined in accordance with this
Agreement by the Tranche A2 Term Lenders in their absolute discretion absent
manifest error.

 

“Tranche A2
Term Lender”:  Each Lender that has a
Tranche A2 Term Loan or holds a Tranche A2 Term Loan Commitment.

 

“Tranche A2
Term Loan”:  As defined in Section
2.1.

 

“Tranche A2
Term Loan Commitment”:  With respect
to any Tranche A2 Term Lender, the agreement of such Lender to make a Tranche
A2 Term Loan to the Borrowers in an amount equal to such Lender’s Tranche A2
Term Loan Commitment Amount upon the terms and subject to the conditions of
this Agreement.

 

“Tranche A2
Term Loan Commitment Amount”:  With
respect to a Lender, the amount set opposite such Lender’s name on the
signature pages hereof as its Tranche A2 Term Loan Commitment Amount, if any.

 

“Tranche B
Term Lenders”:  Collectively, the Tranche
B1 Term Lenders and the Tranche B2 Term Lenders.

 

“Tranche B
Term Loans”:  Collectively, the
Tranche B1 Term Loans and the Tranche B2 Term Loans.

 

“Tranche B1
Maturity Date”:  September 20, 2014.

 

“Tranche B1
Term Lender”:  Each Lender that has a
Tranche B1 Term Loan or holds a Tranche B1 Term Loan Commitment.

 

“Tranche B1
Term Loan”:  As defined in Section
2.1.

 

17

 

“Tranche B1
Term Loan Commitment”:  With respect
to any Tranche B1 Term Lender, the agreement of such Lender to make a Tranche
B1 Term Loan to the Borrowers in an amount equal to such Lender’s Tranche B1
Term Loan Commitment Amount upon the terms and subject to the conditions of
this Agreement.

 

“Tranche B1
Term Loan Commitment Amount”:  With
respect to a Lender, the amount set opposite such Lender’s name on the
signature pages hereof as its Tranche B1 Term Loan Commitment Amount, if any.

 

“Tranche B2
Maturity Date”:  December 20, 2015.

 

“Tranche B2
Term Lender”:  Each Lender that has a
Tranche B2 Term Loan or holds a Tranche B2 Term Loan Commitment.

 

“Tranche B2
Term Loan”:  As defined in Section
2.1.

 

“Tranche B2
Term Loan Commitment”:  With respect
to any Tranche B2 Term Lender, the agreement of such Lender to make a Tranche
B2 Term Loan to the Borrowers in an amount equal to such Lender’s Tranche B2
Term Loan Commitment Amount upon the terms and subject to the conditions of
this Agreement.

 

“Tranche B2
Term Loan Commitment Amount”:  With
respect to a Lender, the amount set opposite such Lender’s name on the
signature pages hereof as its Tranche B2 Term Loan Commitment Amount.

 

“Tranche 2
Availability Period”:  The period
commencing on the later of (i) November 1, 2004 and (ii) the Business Day
immediately following the day on which the Phase II Thompson Construction has
been completed and ending on January 20, 2006.

 

“Unpaid
Drawing”:  As defined in Section
2.11.

 

“Unused
Revolving Commitment”:  With respect
to any Lender as of any date of determination, the amount by which such
Lender’s Revolving Commitment Amount exceeds such Lender’s Revolving Percentage
of the Total Revolving Outstandings on such date minus the aggregate
maximum amount to be drawn on any Letters of Credit outstanding on such date.

 

“U.S. Taxes”:
 As defined in Section 2.25(f).

 

“Weekly
Quoted Variable Rate”:  A rate per
annum equal at all times to the rate of interested established by CoBank on the
first Business Day of each week.  The
rate established by CoBank shall be effective until the first Business Day of
the next week.  Each change in the rate
shall be applicable to all balances subject to the Weekly Quoted Variable Rate
and information about the then current rate shall be made available upon
telephonic request by the Borrowers’ Agent.

 

18

 

“Working
Capital”:  The amount of the excess,
if any, of the Current Assets over the Current Liabilities of the Borrowers’
Agent on a consolidated basis.

 

Section 1.2                                      Accounting
Terms and Calculations. 
Except as may be expressly provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.  To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred unless the Borrowers and Required Lenders agree in writing on an
adjustment to such computation or determination to account for such change in
GAAP.

 

Section 1.3                                      Computation
of Time Periods.  In this
Agreement, in the computation of a period of time from a specified date to a
later specified date, unless otherwise stated the word “from” means “from and
including” and the word “to” or “until” each means “to but excluding”.

 

Section 1.4                                      Other
Definitional Terms. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.  References to Sections,
Exhibits, schedules and like references are to this Agreement unless otherwise
expressly provided.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation.”  Unless the context
in which used herein otherwise clearly requires, “or” has the inclusive meaning
represented by the phrase “and/or.”  All
incorporation by reference of covenants, terms, definitions or other provisions
from other agreements are incorporated into this Agreement as if such
provisions were fully set forth herein, and such incorporation shall include
all necessary definitions and related provisions from such other agreements but
including only amendments thereto agreed to by the Required Lenders (unless
otherwise provided herein or therein), and shall survive any termination of
such other agreements until the obligations of the Borrowers under this
Agreement and the Notes are irrevocably paid in full, all Letters of Credit
have expired without renewal or been returned to the Letter of Credit Bank, and
the commitments of any Lender to advance funds to any Borrower are terminated.

 

ARTICLE II

TERMS OF THE CREDIT FACILITIES

 

Part A —  Terms of Lending

 

Section 2.1                                      Lending
Commitments.

 

(a)                                  Revolving
Credit.  Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make a revolving
credit facility available as loans (each, a “Revolving Loan” and,
collectively, the “Revolving Loans”) to the Borrowers, jointly and severally,
on a revolving basis at any time and from time to time from the Closing Date to
the Termination Date, during which period the Borrowers may borrow, repay and
reborrow in accordance with the provisions hereof, provided, that no

 

19

 

Revolving Loan
will be made in any amount which, after giving effect thereto, would cause the
Total Revolving Outstandings to exceed lesser of (i) the Aggregate Revolving
Commitment Amounts, or (ii) the Borrowing Base. 
Revolving Loans hereunder shall be made by the several Revolving Lenders
ratably in the proportion of their respective Revolving Commitment
Amounts.  Revolving Loans may be obtained
and maintained, at the election of the Borrowers’ Agent but subject to the limitations
hereof, as Base Rate Advances, LIBOR Rate Advances or Quoted Rate Advances or
any combination thereof; provided, however, that no more than
five (5) LIBOR Rate Advances and no more than five (5) Quoted Rate Advances may
be outstanding at any one time.

 

(b)                                 Term
Loans.  Subject to the terms and
conditions hereof, (a) each Tranche A1 Term Lender severally agrees to make a
term loan (a “Tranche A1 Term Loan”) to the Borrowers, jointly and
severally, on the Closing Date in an amount from each Tranche A1 Term Lender
equal to its Tranche A1 Term Loan Commitment Amount, (b) each Tranche B1 Term
Lender severally agrees to make a term loan (a “Tranche B1 Term Loan”)
to the Borrowers, jointly and severally, on the Closing Date in an amount from
each Tranche B1 Term Lender equal to its Tranche B1 Term Loan Commitment
Amount, (c) each Tranche A2 Term Lender severally agrees to make term loans
(each, a “Tranche A2 Term Loan” and, collectively, the “Tranche A2
Term Loans”) to the Borrowers, jointly and severally, from time to time
during the Tranche 2 Availability Period, in an aggregate amount not to exceed
its Tranche A2 Term Loan Commitment Amount, and (d) each Tranche B2 Term Lender
severally agrees to make term loans (each, a “Tranche B2 Term Loan” and,
collectively, the “Tranche B2 Term Loans”) to the Borrowers, jointly and
severally, from time to time during the Tranche 2 Availability Period, in an
aggregate amount not to exceed its Tranche B2 Term Loan Commitment Amount.  Tranche A1 Term Loans may be obtained and
maintained only as Tranche A1 Advances. 
Tranche A2 Term Loans may be obtained and maintained only as Tranche A2
Advances.  Tranche B Term Loans may be
obtained and maintained, at the election of the Borrowers’ Agent but subject to
the limitations hereof, as Base Rate Advances, LIBOR Rate Advances or Quoted
Rate Advances, or any combination thereof; provided, however,
that no more than five (5) LIBOR Rate Advances and no more than five (5) Quoted
Rate Advances may be outstanding at any one time.

 

Notwithstanding
any provision hereof, this Agreement and the Revolving Commitments shall
terminate and no Lender shall have any obligation hereunder if the Tranche A1
and Tranche B1 Term Loans hereunder have not been made by November 15, 2004, provided,
however, that the obligations of the Borrowers under Section 9.2 shall
survive any such termination.

 

Section 2.2                                      Procedure
for Loans.

 

(a)                                  Procedure
for Revolving Loans.  Not later than
11:00 A.M. (Central time) three LIBOR Business Days prior to the requested Revolving
Loan Date if the Revolving Loans (or any portion thereof) are requested as
LIBOR Rate Advances and not later than 11:00 A.M. (Central time) on the
requested Revolving Loan Date if the Revolving Loans

 

20

 

are requested
as Quoted Rate Advances or Base Rate Advances, Borrowers’ Agent shall submit to
the Administrative Agent a written or telephonic request for borrowing, provided
that no more than one request for Borrowing may be made on any Business Day.  Each request for Revolving Loans hereunder
shall be irrevocable and shall be deemed a representation by each Borrower that
on the requested Revolving Loan Date and after giving effect to the requested
Revolving Loans the applicable conditions specified in Article III have been
and will be satisfied.  Each request for
Revolving Loans hereunder shall specify (i) the requested Revolving Loan Date,
(ii) the aggregate amount of Revolving Loans to be made on such date which
shall be in a minimum amount of $200,000 or, if more, a whole multiple of
$100,000 in excess thereof, provided that no minimums shall apply if the
Revolving Loans are funded as Quoted Rate Loans for which the Quoted Rate is
the Weekly Quoted Variable Rate, (iii) whether such Revolving Loans are to be
funded as Base Rate Advances, LIBOR Rate Advances or Quoted Rate Advances (and,
if such Revolving Loans are to be made with more than one applicable interest
rate choice, specifying the amount to which each interest rate choice is
applicable) and (iv) in the case of LIBOR Rate Advances, the duration of the
initial Interest Period applicable thereto. 
The Administrative Agent may rely on any telephone request by the
Borrowers’ Agent for Revolving Loans hereunder which it believes in good faith
to be genuine; and each Borrower hereby waives the right to dispute the
Administrative Agent’s record of the terms of such telephone request.  The Administrative Agent shall promptly
notify each other Revolving Lender of the receipt of such request, the matters
specified therein, and of such Lender’s ratable share of the requested
Revolving Loans.  On the date of the
requested Revolving Loans, each Lender shall provide its share of the requested
Revolving Loans to the Administrative Agent in Immediately Available Funds not
later than 1:00 P.M. (Central time). 
Unless the Administrative Agent determines that any applicable condition
specified in Article III has not been satisfied, the Administrative Agent will
make available to the Borrowers at the Administrative Agent’s principal office
in Minneapolis, MN in Immediately Available Funds not later than 3:00 P.M.
(Central time) on the requested Revolving Loan Date the amount of the requested
Revolving Loans.  If the Administrative
Agent has made a Revolving Loan to the Borrowers on behalf of a Revolving
Lender but has not received the amount of such Revolving Loan from such Lender
by the time herein required, such Lender shall pay interest to the
Administrative Agent on the amount so advanced at the Federal Funds Rate from
the date of such Revolving Loan to the date funds are received by the
Administrative Agent from such Lender, such interest to be payable with such
remittance from such Lender of the principal amount of such Revolving Loan (provided,
however, that the Administrative Agent shall not make any Revolving Loan
on behalf of a Lender if the Administrative Agent has received prior notice
from such Lender that it will not make such Revolving Loan).  If the Administrative Agent does not receive
payment from such Lender by the next Business Day after the date of any
Revolving Loan, the Administrative Agent shall be entitled to recover such
Revolving Loan, with interest thereon at the rate (or rates) then applicable to
such Revolving Loan, on demand, from the Borrowers, without prejudice to the
Administrative Agent’s and the Borrowers’

 

21

 

rights against
such Lender.  If such Lender pays the
Administrative Agent the amount herein required with interest at the Federal
Funds Rate before the Administrative Agent has recovered from the Borrowers,
such Lender shall be entitled to the interest payable by the Borrowers with
respect to the Revolving Loan in question accruing from the date the
Administrative Agent made such Revolving Loan.

 

(b)                                 Procedure
for Term Loans.  Not later than 11:00
A.M. (Central time) three LIBOR Business Days prior to the requested Term Loan
Date (which, for Tranche A1 Term Loans and Tranche B1 Term Loans shall be the
Closing Date) if the Term Loans are requested as LIBOR Rate Advances and not
later than 11:00 A.M. (Central time) on the requested Term Loan Date (which,
for Tranche A1 Term Loans and Tranche B1 Term Loans, shall be the Closing Date)
if the Term Loans are requested as Tranche A Advances, Base Rate Advances or
Quoted Rate Advances, the Borrowers’ Agent shall submit to the Administrative
Agent a written request for borrowing. 
Such request for Term Loans hereunder shall be irrevocable and shall be
deemed a representation by each Borrower that on the requested Term Loan Date
and after giving effect to the requested Term Loans the applicable conditions
specified in Article III have been and will be satisfied.  Each request for Term Loans hereunder shall
specify (i) the requested Term Loan Date, (ii) the aggregate amount of Term
Loans to be made on such date which shall be in a minimum amount of $200,000
or, if more, a whole multiple of $100,000 in excess thereof, (iii) the type of
Advance the Term Loans are to be funded as (and, if such Term Loans are to be
made with more than type of Advance, specifying the amount to which each type
of Advance is applicable) and (iv) in the case of LIBOR Rate Advances, the
duration of the initial Interest Period applicable thereto.  The Administrative Agent shall promptly
notify each other Term Lender of the receipt of such request, the matters
specified therein, and of such Lender’s ratable share of the requested Term
Loans.  On the date of the requested Term
Loans, each Lender shall provide its share of the requested Term Loans to the
Administrative Agent in Immediately Available Funds not later than 1:00 P.M.
(Central time).  Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make
available to the Borrowers at the Administrative Agent’s principal office in
Minneapolis, MN in Immediately Available Funds not later than 3:00 P.M.
(Central time) on the requested Term Loan Date the amount of the requested Term
Loans.  If the Administrative Agent has
made a Term Loan to the Borrowers on behalf of a Term Lender but has not
received the amount of such Term Loan from such Lender by the time herein
required, such Lender shall pay interest to the Administrative Agent on the
amount so advanced at the Federal Funds Rate from the date of such Term Loan to
the date funds are received by the Administrative Agent from such Lender, such
interest to be payable with such remittance from such Lender of the principal
amount of such Term Loan (provided, however, that the
Administrative Agent shall not make any Term Loan on behalf of a Lender if the
Administrative Agent has received prior notice from such Lender that it will
not make such Term Loan).  If the
Administrative Agent does not receive payment from such Lender by the next
Business Day after the date of any Term Loan, the Administrative Agent shall be
entitled to recover such Term Loan, with interest

 

22

 

thereon at the
rate (or rates) then applicable to such Term Loan, on demand, from the
Borrowers, without prejudice to the Administrative Agent’s and the Borrowers’
rights against such Lender.  If such
Lender pays the Administrative Agent the amount herein required with interest
at the Federal Funds Rate before the Administrative Agent has recovered from
the Borrowers, such Lender shall be entitled to the interest payable by the
Borrowers with respect to the Term Loan in question accruing from the date the
Administrative Agent made such Term Loan.

 

Section 2.3                                      Notes.  The Revolving Loans of each Lender shall be
evidenced by a single Revolving Note payable to the order of such Lender in a
principal amount equal to such Lender’s Revolving Commitment Amount originally
in effect. The Term Loans of each Lender shall be evidenced by Term Notes
payable to the order of such Lender in the principal amount equal to such
Lender’s Tranche A1 Term Loan Commitment Amount, Tranche A2 Term Loan
Commitment Amount, Tranche B1 Term Loan Commitment Amount or Tranche B2 Term
Loan Commitment Amount, as applicable. 
Upon receipt of each Lender’s Notes from the Borrowers, the
Administrative Agent shall mail such Notes to such Lender.  Each Lender shall enter in its ledgers and
records the amount of its Term Loans and each Revolving Loan, the various
Advances made, converted or continued and the payments made thereon, and each
Lender is authorized by the each Borrower to enter on a schedule attached to
its Term Notes or Revolving Note, as appropriate, a record of such Term Loans,
Revolving Loans, Advances and payments; provided, however that the failure by
any Lender to make any such entry or any error in making such entry shall not
limit or otherwise affect the obligation of the Borrowers hereunder and on the
Notes, and, in all events, the principal amounts owing by the Borrowers in
respect of the Revolving Note shall be the aggregate amount of all Revolving
Loans made by the Lenders less all payments of principal thereof made by the
Borrowers and the principal amount owing by the Borrowers in respect of the
Term Notes shall be the aggregate amount of all Term Loans made by the Lenders
less all payments of principal thereof made by the Borrowers.

 

Section 2.4                                      Conversions
and Continuations.  Tranche A
Advances may not be converted into any other type of Advance and no other type
of Advance may be converted into a Tranche A Advance.  On the terms and subject to the limitations
hereof, the Borrowers shall have the option at any time and from time to time
to convert all or any portion of the Advances in respect of the Revolving Loans
or the Tranche B Term Loans into Base Rate Advances, LIBOR Rate Advances or
Quoted Rate Advances, or to continue a LIBOR Rate Advance or Quoted Rate
Advance as such; provided, however that a LIBOR Rate Advance may
be converted or continued only on the last day of the Interest Period
applicable thereto, a Quoted Rate Advance may be converted or continued only on
the last day of the fixed rate period set forth in the corresponding Quoted
Rate Offer and no Advance may be converted or continued as a LIBOR Rate Advance
or a Quoted Rate Advance if a Default or Event of Default has occurred and is
continuing on the proposed date of continuation or conversion.  Advances in respect of the Revolving Loans or
Tranche B Term Loans may be converted to, or continued as, LIBOR Rate Advances
or Quoted Rate Advances only in integral multiples, as to the aggregate amount
of the Advances of all Lenders so converted or continued, of $200,000.  The Borrowers’ Agent shall give the
Administrative Agent written notice of any continuation or conversion of any
such

 

23

 

Advances and
such notice must be given so as to be received by the Administrative Agent not
later than 11:00 A.M. (Central time) three LIBOR Business Days prior to
requested date of conversion or continuation in the case of the continuation
of, or conversion to, LIBOR Rate Advances and not later than 11:00 A.M.
(Central time) on the date of the requested continuation of, or conversion to,
Quoted Rate Advances or Base Rate Advances. 
Each such notice shall specify (a) the amount to be continued or
converted, (b) the date for the continuation or conversion (which must be (i)
the last day of the preceding Interest Period for any continuation or
conversion of LIBOR Rate Advances, (ii) the last day of the fixed rate period
set forth in the corresponding Quoted Rate Offer for any continuation or
conversion of a Quoted Rate Advance, (iii) a LIBOR Business Day in the case of
conversions to or continuations as LIBOR Rate Advances, and (iv) a Business Day
in the case of continuations or conversions to Quoted Rate Advances or Base
Rate Advances), and (c) in the case of conversions to or continuations as LIBOR
Rate Advances, the Interest Period applicable thereto.  Any notice given by the Borrowers’ Agent
under this Section shall be irrevocable. 
If the Borrowers’ Agent shall fail to notify the Administrative Agent of
the continuation of any LIBOR Rate Advances within the time required by this
Section, at the option of the Administrative Agent, such Advances shall, on the
last day of the Interest Period applicable thereto, (A) automatically be
continued as LIBOR Rate Advances with the same principal amount and the same
Interest Period or (B) automatically be converted into Base Rate Advances with
the same principal amount.  If the
Borrowers’ Agent shall fail to notify the Administrative Agent of the
continuation of any Quoted Rate Advances within the time required by this Section,
or if CoBank declines to make a Quoted Rate Offer with respect to such Quote
Rate Advances and the Borrowers’ Agent has not requested an alternative
Advance, such Quoted Rate Advances shall, on the last day of the fixed rate
period applicable thereto, automatically accrue interest at the Weekly Quoted
Variable Rate until repaid or converted into another Advance.

 

Section 2.5                                      Interest
Rates, Interest Payments and Default Interest.

 

(a)                                  The
Revolving Loans.  Interest shall
accrue and be payable on the Revolving Loans as follows:

 

(i)                                     Subject
to paragraph (iv) below, each LIBOR Rate Advance shall bear interest on the
unpaid principal amount thereof during the Interest Period applicable thereto
at a rate per annum equal to the sum of (A) the Adjusted LIBOR Rate for such
Interest Period, plus (B) the Applicable Margin.

 

(ii)                                  Subject
to paragraph (iv) below, each Quoted Rate Advance shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Quoted Rate.

 

(iii)                               Subject
to paragraph (iv) below, each Base Rate Advance shall bear interest on the
unpaid principal amount thereof at a varying rate per annum equal to the sum of
(A) the Base Rate, plus (B) the Applicable Margin.

 

24

 

(iv)                              Upon
the occurrence of any Event of Default, each Advance in respect of the
Revolving Loans shall, at the option of the Revolving Lenders, bear interest
until paid in full at a rate per annum equal to the Default Rate.

 

(v)                                 Interest
shall be payable (A) with respect to each LIBOR Rate Advance, on the last day
of the Interest Period applicable thereto (and, in the case of any LIBOR Rate
Advance having an Interest Period greater than three months, on the three month
anniversary of the first day of such Interest Period); (B) with respect to any
Base Rate Advance or Quoted Rate Advance, on the twentieth (20th)
day of each month; (C) with respect to all Advances, upon any permitted
prepayment (on the amount prepaid); and (D) with respect to all Advances, on
the Termination Date; provided that interest under paragraph (a)(iv) of
this Section shall be payable on demand.

 

(b)                                 The
Term Loans.  Interest shall accrue
and be payable on the Term Loans as follows:

 

(i)                                     Subject
to paragraph (vi) below, each Tranche A1 Advance shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Tranche A1
Rate.

 

(ii)                                  Subject
to paragraph (vi) below, each Tranche A2 Advance shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Tranche A2
Rate.

 

(iii)                               Subject
to paragraph (vi) below, each LIBOR Rate Advance in respect of the Tranche B
Term Loans shall bear interest on the unpaid principal amount thereof during
the Interest Period applicable thereto at a rate per annum equal to the sum of
(A) the Adjusted LIBOR Rate for such Interest Period, plus (B) the
Applicable Margin.

 

(iv)                              Subject
to paragraph (vi) below, each Quoted Rate Advance in respect of the Tranche B
Term Loans shall bear interest on the unpaid principal amount thereof at a rate
per annum equal to the Quoted Rate.

 

(v)                                 Subject
to paragraph (vi) below, each Base Rate Advance in respect of the Tranche B Tem
Loans shall bear interest on the unpaid principal amount thereof at a varying
rate per annum equal to the sum of (A) the Base Rate, plus (B) the
Applicable Margin.

 

(vi)                              Upon
the occurrence of any Event of Default, each Tranche A Advance shall, upon
thirty (30) days notice to the Borrowers from the Tranche A Term Lenders, and
each Advance in respect of the Tranche B Term Loans shall, upon thirty (30)
days written notice to the Borrowers from the Tranche B Term

 

25

 

Lenders, bear
interest until paid in full or until such Event of Default is cured at a rate
per annum equal to the Default Rate.

 

(vii)                           Interest
shall be payable (A) with respect to each LIBOR Rate Advance in respect of the
Tranche B Term Loans, on the last day of the Interest Period applicable thereto
(and, in the case of any LIBOR Rate Advance in respect of the Tranche B Term
Loans having an Interest Period greater than three months, on the three month
anniversary of the first day of such Interest Period); (B) with respect to any
Base Rate Advance in respect of the Tranche B Term Loans in arrears, on the
twentieth (20th) day of each month; (C) with respect to all
Advances, upon any permitted prepayment (on the amount prepaid); and (D) with
respect to all Advances, on the Termination Date; provided that interest
under paragraph (a)(iv) of this Section shall be payable on demand.

 

Section 2.6                                      Repayment.

 

(a)                                  Revolving
Loans.  The unpaid principal balance
of all Revolving Notes, together with all accrued and unpaid interest thereon,
shall be due and payable on the Termination Date.

 

(b)                                 Term
Loans.  The principal of each Term
Loan shall be payable monthly as follows:

 

(i)                                     Tranche
A1 Term Loans.  The Borrowers shall
make principal payments for application to the Tranche A1 Term Loans in the
amount of $122,500 on the twentieth (20th) day of each month
commencing on October 20, 2004, provided that in the event that any
amount of principal or interest remains unpaid with respect to the Tranche A1
Term Loans on the Tranche A1 Maturity Date, such remaining amounts shall be due
and payable in full on such date;

 

(ii)                                  Tranche
A2 Term Loans.  The Borrowers shall
make principal payments for application to the Tranche A2 Term Loans in the
amount of $127,500 on the twentieth (20th) day of each month
commencing on January 20, 2006, provided that in the event that any
amount of principal or interest remains unpaid with respect to the Tranche A2
Term Loans on the Tranche A2 Maturity Date, such remaining amounts shall be due
and payable in full on such date;

 

(iii)                               Tranche
B1 Term Loans.  The Borrowers shall
make principal payments for application to the Tranche B1 Term Loans in the
amount of $60,833.33 on the twentieth (20th) day of each month
commencing on October 20, 2004, provided that in the event that any
amount of principal or interest remains unpaid with respect to the Tranche B1
Term Loans on the Tranche B1 Maturity Date, such remaining amounts shall be due
and payable in full on such date; and

 

26

 

(iv)                              Tranche
B2 Term Loans.  The Borrowers shall
make principal payments for application to the Tranche B2 Term Loans in the
amount of $64,166.66 on the twentieth (20th) day of each month
commencing on January 20, 2006, provided that in the event that any
amount of principal or interest remains unpaid with respect to the Tranche B2
Term Loans on the Tranche B2 Maturity Date, such remaining amounts shall be due
and payable in full on such date.

 

Amounts paid on the Term Notes may not be
reborrowed.

 

Section 2.7                                      Prepayments.

 

(a)                                  Mandatory
Prepayments for Borrowing Base Deficiency.  If at any time a Borrowing Base Deficiency
exists, the Borrowers shall immediately pay on the principal of the Advances in
respect of the Revolving Loans an amount equal to such Borrowing Base
Deficiency.  Any such payments shall be
applied first against Base Rate Advances and then to Quoted Rate and LIBOR Rate
Advances in order starting with the Quoted Rate or LIBOR Rate Advances having
the shortest time to the end of the applicable Interest Period.  Amounts paid on the Advances under this
paragraph (a) shall be for the account of each Revolving Lender in proportion
to its share of outstanding Revolving Loans.

 

(b)                                 Mandatory
Prepayments for a Prepayment Event. 
If at any time a Prepayment Event occurs, the Borrowers shall
immediately pay to the Administrative Agent for the ratable benefit of the
Lenders the net proceeds realized by such Prepayment Event and any prepayment
fee payable under Section 2.23.  Any such
prepayments shall be applied first, to the Term Loans, and second,
to any outstanding Revolving Loans.  All
prepayments applied to the Term Loans shall be applied to the scheduled
principal payments on the Term Loans in the inverse order of their maturities.

 

(c)                                  Other
Mandatory Prepayments.  If at any
time Total Revolving Outstandings exceed the Aggregate Revolving Commitment
Amounts, the Borrowers shall immediately repay to the Administrative Agent for
the account of the Revolving Lenders the amount of such excess.  Any such payments shall be applied first against
Base Rate Advances and then to Quoted Rate and LIBOR Rate Advances in order
starting with the Quoted Rate or LIBOR Rate Advances having the shortest time
to the end of the applicable Interest Period.

 

(d)                                 Optional
Prepayments.   The Term Loans may be
prepaid only in accordance with Section 2.23. 
The Borrowers may prepay Base Rate Advances in respect of the Revolving
Loans, in whole or in part, at any time, without premium or penalty.  Any such prepayment must be accompanied by
accrued and unpaid interest on the amount prepaid.  Each partial prepayment shall be in a minimum
aggregate amount for all the Lenders of $200,000 or a whole integral of
$100,000 in excess thereof.  Except upon
an acceleration following an Event of Default or upon termination of the
Revolving

 

27

 

Commitments in
whole, the Borrowers may pay LIBOR Rate Advances only on the last day of the
Interest Period applicable thereto.  The
Borrowers may prepay Quote Rate Advances in respect of the Revolving Loans only
if permitted by the Quoted Rate Offer. 
Amounts paid (unless following an acceleration or upon termination of
the Revolving Commitments in whole) or prepaid on Advances in respect of the
Revolving Loans under this paragraph (d) may be reborrowed upon the terms and
subject to the conditions and limitations of this Agreement.  Amounts paid or prepaid on the Advances under
this paragraph (d) shall be for the account of each Revolving Lender in
proportion to its share of outstanding Revolving Loans.

 

Part B — Terms
of the Letter of Credit Facility

 

Section 2.8                                      Letters
of Credit.  Upon the terms and
subject to the conditions of this Agreement, the Letter of Credit Bank agrees
to issue Letters of Credit for the account of the Borrowers from time to time
between the Closing Date and thirty (30) days prior to the Termination Date in
such amounts as the Borrowers’ Agent shall request up to an aggregate amount at
any time outstanding not exceeding the Letter of Credit Commitment Amount; provided
that no Letter of Credit will be issued in any amount which, after giving
effect to such issuance, would cause Total Revolving Outstandings to exceed the
lesser of (a) the Aggregate Revolving Commitment Amounts, or (b) the Borrowing
Base.

 

Section 2.9                                      Procedures
for Letters of Credit.  Each
request for a Letter of Credit shall be made by the Borrowers’ Agent in
writing, by telex, facsimile transmission or electronic conveyance received by
the Letter of Credit Bank by 11:00 A.M. (Central time) on a Business Day that
is not less than one Business Day preceding the requested date of issuance
(which shall also be a Business Day). 
Each request for a Letter of Credit shall be deemed a representation by
the each Borrower that on the date of issuance of such Letter of Credit and
after giving effect thereto the applicable conditions specified in Article III
have been and will be satisfied.  The
Letter of Credit Bank may require that such request be made on such letter of
credit application and reimbursement agreement form as the Letter of Credit
Bank may from time to time specify, along with satisfactory evidence of the
authority and incumbency of the officials of the Borrowers’ Agent making such
request.  The Letter of Credit Bank shall
promptly notify the other Revolving Lenders of the receipt of the request and
the matters specified therein.  On the
date of each issuance of a Letter of Credit the Letter of Credit Bank shall
send notice to the other Revolving Lenders of such issuance, accompanied by a
copy of the Letter or Letters of Credit so issued.

 

Section 2.10                                Terms
of Letters of Credit.  Letters
of Credit shall be issued in support of obligations of the Borrowers’ Agent in
accordance with Section 2.16.  Unless the
proposed Letter of Credit is cash collateralized, each Letter of Credit must
expire not later than the Business Day preceding the Termination Date and no
Letter of Credit may have a term longer than 12 months.

 

28

 

Section 2.11                                Agreement
to Repay Letter of Credit Drawings. 
If the Letter of Credit Bank has received documents purporting to draw
under a Letter of Credit that the Letter of Credit Bank believes conform to the
requirements of the Letter of Credit, or if the Letter of Credit Bank has
decided that it will comply with the Borrowers’ Agent written or oral request
or authorization to pay a drawing on any Letter of Credit that the Letter of
Credit Bank does not believe conforms to the requirements of the Letter of
Credit, it will notify the Borrowers’ Agent of that fact.  The Borrowers shall reimburse the Letter of
Credit Bank by 9:30 A.M. (Central time) on the day on which such drawing is to
be paid in Immediately Available Funds in an amount equal to the amount of such
drawing.  Any amount by which the
Borrowers have failed to reimburse the Letter of Credit Bank for the full
amount of such drawing by 10:00 A.M. on the date on which the Letter of Credit
Bank in its notice indicated that it would pay such drawing, until reimbursed
by the Borrowers, is an “Unpaid Drawing.”

 

Section 2.12                                Obligations
Absolute.  The obligation of
the Borrowers under Section 2.11 to repay the Letter of Credit Bank for any
amount drawn on any Letter of Credit and to repay the Revolving Lenders to
cover Unpaid Drawings shall be absolute, unconditional and irrevocable, shall
continue for so long as any Letter of Credit is outstanding notwithstanding any
termination of this Agreement, and shall be paid strictly in accordance with
the terms of this Agreement, under all circumstances whatsoever, including
without limitation the following circumstances:

 

(a)                                  Any
lack of validity or enforceability of any Letter of Credit;

 

(b)                                 The
existence of any claim, setoff, defense or other right which any Borrower may
have or claim at any time against any beneficiary, transferee or holder of any
Letter of Credit (or any Person for whom any such beneficiary, transferee or
holder may be acting), the Letter of Credit Bank or any Lender or any other
Person, whether in connection with a Letter of Credit, this Agreement, the
transactions contemplated hereby, or any unrelated transaction; or

 

(c)                                  Any
statement 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 whatsoever.

 

Neither the
Letter of Credit Bank nor any Lender nor officers, directors or employees of
any thereof shall be liable or responsible for, and the obligations of the
Borrowers to the Letter of Credit Bank and the Lenders shall not be impaired
by:

 

(i)                                     The
use which may be made of any Letter of Credit or for any acts or omissions of
any beneficiary, transferee or holder thereof in connection therewith;

 

(ii)                                  The
validity, sufficiency or genuineness of documents, or of any endorsements
thereon, even if such documents or endorsements should, in fact, prove to be in
any or all respects invalid, insufficient, fraudulent or forged;

 

29

 

(iii)                               The
acceptance by the Letter of Credit Bank of documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary; or

 

(iv)                              Any
other action of the Letter of Credit Bank in making or failing to make payment
under any Letter of Credit if in good faith and in conformity with U.S. or
foreign laws, regulations or customs applicable thereto.

 

Notwithstanding
the foregoing, the Borrowers shall have a claim against the Letter of Credit
Bank, and the Letter of Credit Bank shall be liable to the Borrowers, to the
extent, but only to the extent, of any direct, as opposed to consequential,
damages suffered by the Borrowers which were caused by the Letter of Credit
Bank’s willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms thereof.

 

Part C  —  General

 

Section 2.13                                Fees.

 

(a)                                  Closing
Fees.  The Borrowers shall pay to the
Administrative Agent for the benefit of the Lenders a non-refundable closing
fee in the amount of $240,000 (the “Closing Fee”).  Fifty percent (50%) of the Closing Fee shall
have been paid prior to the Closing Date. 
The remaining fifty percent (50%) shall be due and payable on the
Closing Date.

 

(b)                                 Revolving
Commitment Fee.  The Borrowers shall
pay to the Administrative Agent for the account of each Revolving Lender fees
(the “Revolving Commitment Fees”) in an amount determined by applying
the Applicable Commitment Fee Percentage to the average daily Unused Revolving
Commitment of such Lender for the period from the Closing Date to the
Termination Date.  Such Revolving
Commitment Fees are payable in arrears quarterly on the last day of each
calendar quarter and on the Termination Date.

 

(c)                                  Administrative
Agent’s Fees.  On or before the Closing
Date, the Borrowers will pay to the Administrative Agent the fees set forth in
the separate letter agreement dated the date hereof between the Administrative
Agent and the Borrowers.

 

(d)                                 Letter
of Credit Fees.  For each Letter of
Credit issued, the Borrowers shall pay to the Administrative Agent for the
account of the Revolving Lenders, in advance on the date of issuance, a fee (a
“Letter of Credit Fee”) in an amount equal to the greater of (i) $1,000
and (ii) the amount determined by applying a per annum rate equal to the
Applicable Margin for LIBOR Rate Advances in respect of the Revolving Loans
then in effect to the original face amount of the Letter of Credit for the
period from the date of issuance to the scheduled expiration date of such Letter
of Credit.  In addition to

 

30

 

the Letter of
Credit Fee, the Borrowers shall pay to the Letter of Credit Bank, on demand,
all issuance, amendment, drawing and other fees regularly charged by the Letter
of Credit Bank to its letter of credit customers and all out-of-pocket expenses
incurred by the Letter of Credit Bank in connection with the issuance,
amendment, administration or payment of any Letter of Credit.

 

Section 2.14                                Computation.
 Revolving Commitment Fees, Letter
of Credit Fees, interest on Revolving Loans and Term Loans and the Default Rate
shall be computed on the basis of actual days elapsed (or, in the case of
Letter of Credit Fees which are paid in advance, actual days to elapse) and a
year of 360 days.

 

Section 2.15                                Payments.
 Payments and prepayments of
principal of, and interest on, the Notes and all fees, expenses and other
obligations under this Agreement payable to the Administrative Agent or the
Lenders shall be made without setoff or counterclaim in Immediately Available
Funds not later than 1:00 P.M. (Central time) on the dates called for under
this Agreement and the Notes to the Administrative Agent at its main office in
Minneapolis, Minnesota.  Funds received
after such time shall be deemed to have been received on the next Business
Day.  The Administrative Agent will
distribute in like funds to each Lender its ratable share of each such payment
of principal, interest and fees received by the Administrative Agent for the
account of the Lenders on Business Day or deemed Business Day that such funds
were received by the Administrative Agent. 
Whenever any payment to be made hereunder or on the Notes shall be
stated to be due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time, in the
case of a payment of principal, shall be included in the computation of any
interest on such principal payment; provided, however, that if
such extension would cause payment of interest on or principal of a LIBOR Rate
Advance to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.

 

Section 2.16                                Use
of Loan Proceeds.  The
proceeds of the Term Loans shall be used for refinancing the Series 2000 Bonds,
the Phase II Thompson Construction, the Phase III Thompson Construction and
working capital for the Borrowers’ Agent. 
The proceeds of the Revolving Loans shall be used for the general
business purposes of the Borrowers’ Agent in a manner not in conflict with any
of the Borrowers’ covenants in this Agreement. 
In no event shall the Loan proceeds be used (i) to purchase, or
refinance the purchase price of, the Thompson Complex Site, (ii) to purchase or
carry margin stock (as defined in Regulation U of the Board) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund Indebtedness originally incurred for such purpose, or (iii) for any
purpose that entail a violation of, or that is inconsistent with, the
provisions of Regulations U or X of the Board.

 

Section 2.17                                Interest
Rate Not Ascertainable, Etc.  If, on or prior to the date for determining
the Adjusted LIBOR Rate in respect of the Interest Period for any LIBOR Rate
Advance, any Revolving Lender or Term B Lender determines (which determination
shall be conclusive and binding, absent error) that:

 

31

 

(a)                                  deposits
in dollars (in the applicable amount) are not being made available to such
Lender in the relevant market for such Interest Period, or

 

(b)                                 the
Adjusted LIBOR Rate will not adequately and fairly reflect the cost to such
Lender of funding or maintaining LIBOR Rate Advances for such Interest Period,

 

such Lender
shall forthwith give notice to the Borrowers’ Agent and the other Revolving
Lenders or Term B Lenders, as the case may be, of such determination, whereupon
the obligation of such Lender to make or continue, or to convert any Advances
to, LIBOR Rate Advances shall be suspended until such Lender notifies the
Borrowers’ Agent and the Administrative Agent that the circumstances giving
rise to such suspension no longer exist. 
While any such suspension continues, all further Advances by such Lender
shall be made with an interest rate option to which such suspension does not
apply.  No such suspension shall affect
the interest rate then in effect during the applicable Interest Period for any
LIBOR Rate Advance outstanding at the time such suspension is imposed.

 

Section 2.18                                Increased
Cost.  If any Regulatory
Change:

 

(a)                                  shall
subject any Revolving Lender or Term B Lender (or its Applicable Lending
Office) to any tax, duty or other charge with respect to its LIBOR Rate
Advances, its Revolving or Term B Note or its obligation to make LIBOR Rate
Advances or shall change the basis of taxation of payment to any Lender (or its
Applicable Lending Office) of the principal of or interest on its LIBOR Rate
Advances or any other amounts due under this Agreement in respect of its LIBOR
Rate Advances or its obligation to make LIBOR Rate Advances (except for changes
in the rate of tax on the overall net income of such Lender or its Applicable
Lending Office imposed by the jurisdiction in which such Lender’s principal
office or Applicable Lending Office is located); or

 

(b)                                 shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, any such requirement imposed by the
Board, but excluding any such requirement to the extent included in calculating
the applicable Adjusted LIBOR Rate) against assets of, deposits with or for the
account of, or credit extended by, any such Lender’s Applicable Lending Office
or against Letters of Credit issued by the Letter of Credit Bank or shall
impose on any such Lender (or its Applicable Lending Office) or on the United
States market for certificates of deposit or the interbank Eurodollar market
any other condition affecting its LIBOR Rate Advances, its Revolving or Term B
Note or its obligation to make LIBOR Rate Advances or affecting any Letter of
Credit;

 

and the result
of any of the foregoing is to increase the cost to such Lender (or its
Applicable Lending Office) of making or maintaining any LIBOR Rate Advance or
issuing or maintaining any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Lender (or its Applicable Lending Office) under
this Agreement or under its Revolving or Term B Note, then, within 30 days
after demand by such Lender (with a copy to the Administrative Agent), the

 

32

 

Borrowers
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction.  Each Revolving and Term B Lender will
promptly notify the Borrowers’ Agent and the Administrative Agent of any event
of which it has knowledge, occurring after the date hereof, which will entitle
such Lender to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Lender, be otherwise disadvantageous to such Lender.  A certificate of any Revolving and Term B
Lender claiming compensation under this Section, setting forth the additional
amount or amounts to be paid to it hereunder and stating in reasonable detail
the basis for the charge and the method of computation, shall be conclusive in
the absence of error.  In determining
such amount, such Lender may use any reasonable averaging and attribution
methods.  Failure on the part of any
Revolving and Term B Lender to demand compensation for any increased costs or
reduction in amounts received or receivable with respect to any Interest Period
shall not constitute a waiver of such Lender’s rights to demand compensation
for any increased costs or reduction in amounts received or receivable in any
subsequent Interest Period.

 

Section 2.19                                Illegality.  If any Regulatory Change shall make it
unlawful or impossible for any Revolving and Term B Lender to make, maintain or
fund any LIBOR Rate Advance, such Lender shall notify the Borrowers’ Agent and
the Administrative Agent, whereupon the obligation of such Lender to make or
continue, or to convert any Advances to, LIBOR Rate Advances shall be suspended
until such Lender notifies the Borrowers’ Agent and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist.  Before giving any such notice, such Lender
shall designate a different Applicable Lending Office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender.  If any Revolving and Term B Lender determines
that it may not lawfully continue to maintain any LIBOR Rate Advances to the
end of the applicable Interest Period, all of the affected Advances shall be
automatically converted to Base Rate Advances as of the date of such Lender’s
notice, and upon such conversion the Borrowers shall indemnify such Lender in
accordance with Section 2.23.

 

Section 2.20                                Capital
Adequacy.  In the event that
any Regulatory Change reduces or shall have the effect of reducing the rate of
return on any Revolving or Term B Lender’s capital or the capital of its parent
corporation (by an amount such Lender deems material) as a consequence of its
Commitments and/or its Loans and/or any Letters of Credit or any Revolving
Lender’s obligations to make Advances to cover Letters of Credit to a level
below that which such Lender or its parent corporation could have achieved but
for such Regulatory Change (taking into account such Lender’s policies and the
policies of its parent corporation with respect to capital adequacy), then the
Borrowers shall, within 30 days after written notice and demand from such
Lender (with a copy to the Administrative Agent), pay to such Lender additional
amounts sufficient to compensate such Lender or its parent corporation for such
reduction.  Any determination by any
Revolving or Term B Lender under this Section and any certificate as to the
amount of such reduction given to the Borrowers’ Agent by such Lender shall be
final, conclusive and binding for all purposes, absent error.

 

33

 

Section 2.21                                Funding
Losses; Quoted Rate and LIBOR Rate Advances.  The Borrowers shall compensate each Revolving
or Term B Lender, upon its written request, for all losses, expenses and
liabilities (including any interest paid by such Lender to lenders of funds
borrowed by it to make or carry LIBOR Rate Advances to the extent not recovered
by such Lender in connection with the re-employment of such funds and including
loss of anticipated profits) which such Lender may sustain:  (i) if for any reason, other than a default
by such Lender, a funding of a LIBOR Rate Advance does not occur on the date
specified therefor in the Borrowers’ Agent’s request or notice as to such
Advance under Section 2.2 or 2.4, or (ii) if, for whatever reason (including,
but not limited to, acceleration of the maturity of Advances following an Event
of Default), any repayment of a LIBOR Rate Advance, or a conversion pursuant to
Section 2.19, occurs on any day other than the last day of the Interest Period
applicable thereto.  A Revolving or Term B
Lender’s request for compensation shall set forth the basis for the amount
requested and shall be final, conclusive and binding, absent error.

 

Section 2.22                                Discretion
of Lenders as to Manner of Funding.  Each Revolving and Term B Lender shall be
entitled to fund and maintain its funding of LIBOR Rate Advances in any manner
it may elect, it being understood, however, that for the purposes of this
Agreement all determinations hereunder (including, but not limited to,
determinations under Section 2.21) shall be made as if such Lender had actually
funded and maintained each LIBOR Rate Advance during the Interest Period for
such Advance through the issuance of its certificates of deposit, or the
purchase of deposits, having a maturity corresponding to the last day of the
Interest Period and bearing an interest rate equal to the LIBOR Rate for such
Interest Period.

 

Section 2.23                                Prepayment
of Term Loans.  The
Borrowers may prepay the principal amount of the Term Loans only if such
payment is accompanied by accrued and unpaid interest on the amount paid and a
prepayment fee (the “Prepayment Fee”) equal to (i) the Net Present Value
of such Lender’s Term Note to be prepaid minus (ii) the portion of its
Term Note to be prepaid.  If the
Borrowers fail to pay any Prepayment Fee when due, the amount of such
Prepayment Fee shall thereafter bear interest until paid at the Default
Rate.  Each partial principal prepayment
shall be in a minimum amount of the lesser of (i) $200,000 or a whole integral
of $100,000 in excess thereof and (ii) the entire remaining principal balance
of the Term Loans, and shall be applied to the principal installments in
inverse order of their maturity.  Except
upon an acceleration following an Event of Default or upon termination of the
Term Loan Commitments in whole, the Borrowers may pay LIBOR Rate Advances only
on the last day of the Interest Period applicable thereto.  Amounts paid or prepaid on the Term Notes
under this Section shall be for the account of each Lender in proportion to its
share of outstanding Term Loans, and shall be paid or prepaid ratably among the
Term A Loans and the Term B Loans. 
Amounts paid or prepaid on the Term Loans may not be reborrowed.

 

Section 2.24                                Replacement
of Certain Lenders.  If
any Lender shall become affected by any of the changes or events described in  Section 2.17, 2.18, 2.19 or 2.20 (any such
Lender hereinafter referred to as a “Replaced Lender”) and shall give
notice to the Borrowers for any increased cost or amounts thereunder, the
Borrowers may, so long as no Event of Default has occurred and is continuing,
upon at least five (5) Business Days’ notice to the Administrative

 

34

 

Agent and such
Replaced Lender by the Borrowers’ Agent, designate a replacement lender (a “Replacement
Lender”) reasonably acceptable to the Administrative Agent, to which such
Replaced Lender shall, subject to its receipt (unless a later date for the
remittance thereof shall be agreed upon by the Borrowers and the Replaced
Lender) of all amounts due and owing to such Replaced Lender under Section
2.17, 2.18, 2.19 or 2.20 assign all (but not less than all) of its rights,
obligations, Loans, Revolving Loan Commitment and Term Loan Commitment pursuant
to an Assignment Agreement; provided, that all amounts owed to such
Replaced Lender by the Borrowers (except liabilities which by the terms hereof
survive the payment in full of the Loans and termination of this Agreement)
shall be paid in full as of the date of such assignment.  Upon any assignment by any Lender pursuant to
this Section becoming effective, the Replacement Lender shall thereupon be
deemed to be a “Lender” for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a “Lender” for all purposes of this
Agreement and shall have no further rights or obligations hereunder (other than
pursuant to Section 2.17, 2.18, 2.19 or 2.20 while such Replaced Lender was a
Lender).  No Prepayment Fee shall be
payable as a result of replacement of a Lender under this Section 2.24.

 

Section 2.25                                Taxes.

 

(a)                                  Any
and all payments by the Borrowers hereunder or under the Notes shall be made
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges of withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender
and the Administrative Agent, taxes imposed on its overall net income and
franchise taxes imposed on it in lieu of net income taxes (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as “Taxes”).

 

(b)                                 The
Borrowers agree to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies that arise from any
payment made hereunder or under the Notes or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes (hereinafter referred to as “Other Taxes”).

 

(c)                                  The
Borrowers shall indemnify each Lender and the Administrative Agent for the full
amount of Taxes or Other Taxes imposed on or paid by such Lender or the
Administrative Agent and any penalties, interest and expenses with respect
thereto.  Payments on this
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent makes written demand therefor.

 

(d)                                 Within
30 days after the date of any payment of Taxes, the Borrowers shall furnish to
the Administrative Agent, at its address referred to on the signature page
hereof, a certified copy of a receipt evidencing payment thereof.  In the case of any payment hereunder or under
the Notes by or on behalf of the Borrowers through an account or branch outside
the United States or by or on behalf of the Borrowers by a

 

35

 

payor that is
not a United States person, if the Borrowers determine that no Taxes are
payable in respect thereof, the Borrowers shall furnish or shall cause such
payor to furnish, to the Administrative Agent, at such address, an opinion of
counsel reasonably acceptable to the Administrative Agent stating that such
payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms “United States” and “United States person”
shall have the meanings specified in Section 7701 of the Internal Revenue Code.

 

(e)                                  Each
Lender, as of the date in becomes a party hereto, represents to the Borrowers
and the Administrative Agent that it is either (i) a corporation organized
under the laws of the United States or any State thereof or (ii) is entitled to
complete exemption from United States withholding tax imposed on or with
respect to any payments, including fees, to be made pursuant to this Agreement
(x) under an applicable provision of a tax convention to which the United
States is a party or (y) because it is acting through a branch, agency or
office in the United States and any payment to be received by it hereunder is
effectively connected with a trade or business in the United States.  Each Lender that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers’ Agent and the Administrative Agent, on or before the
day on which such Lender becomes a Lender, a duly completed and signed copy of
either Form W-8BEN or Form W-8ECI of the United States Internal Revenue
Service.  Form W-8BEN shall include the
foreign Lender’s United States taxpayer identification number if required under
the current regulations to claim exemption from withholding pursuant to a tax
convention.  Thereafter and from time to
time, each such Lender shall submit to the Borrowers’ Agent and the
Administrative Agent such additional duly completed and signed copies of one or
the other of such forms (or such successor forms as shall be adopted from time
to time by the relevant United States taxing authorities) as may be (i)
reasonably requested by the Borrowers’ Agent or the Administrative Agent and
(ii) required and permitted under then-current United States law or regulations
to avoid United States withholding taxes on payments in respect of all payments
to be received by such Lender hereunder. 
Upon the request of the Borrowers’ Agent or the Administrative Agent,
each Lender that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrowers’ Agent and the
Administrative Agent a certificate on Internal Revenue Service Form W-9 or such
substitute form as is reasonably satisfactory to the Borrowers’ Agent and the
Administrative Agent to the effect that it is such a United States person.

 

(f)                                    If
any Borrower shall be required by law or regulation to make any deduction,
withholding or backup withholding of any taxes, levies, imposts, duties, fees,
liabilities or similar charges of the United States of America, any possession
or territory of the United States of America (including the Commonwealth of
Puerto Rico) or any area subject to the jurisdiction of the United States of
America (“U.S. Taxes”) from any payments to a Lender pursuant to any
Loan Document in respect of the Obligations payable to such then or thereafter
outstanding, such Borrower shall make such

 

36

 

withholdings
or deductions and pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law.

 

Section 2.26                                Capitalization.  Borrowers’ Agent agrees to purchase
such equity in CoBank as CoBank may from time to time require in accordance
with its Bylaws.  However, the maximum
amount of equity which each Borrower shall be obligated to purchase in
connection with any Loan may not exceed the maximum amount permitted by the
Bylaws at the time that Loan is entered into or such Loan is renewed or
refinanced by CoBank.

 

Section 2.27                                Security.  Each party hereto acknowledges that
CoBank has a statutory first Lien on all of the Borrowers’ Agent’s stock and
other equities in CoBank (the “CoBank Equities”) pursuant to 12 U.S.C. §
2131.  Accordingly, and notwithstanding
any other provision of this Agreement or any other Loan Document to the
contrary:

 

(a)                                  CoBank’s
statutory Lien on the CoBank Equities shall be for CoBank’s sole and exclusive
benefit and shall not be subject to this Agreement or any other Loan Document
nor shall the CoBank Equities (or the proceeds thereof) be subject to pro rata
sharing hereunder;

 

(b)                                 CoBank
shall have no obligation to retire the CoBank equities upon the Borrowers’ default
or at any other time, either for application to the Obligations or otherwise;
and

 

(c)                                  the
CoBank Equities shall not be offset against the Obligations to CoBank for
purposes of determining the Lenders’ pro rata shares hereunder.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.1                                      Conditions
of Initial Transaction. 
The making of the Tranche A1 and Tranche B1 Term Loans and the initial
Revolving Loans and the issuance of the initial Letter of Credit shall be
subject to the prior or simultaneous fulfillment of the following conditions:

 

(a)                                  Documents.  The Administrative Agent shall have received
the following in sufficient counterparts (except for the Notes) for each
Lender:

 

(i)                                       A Revolving Note, a Tranche A1 Term Note, a
Tranche A2 Term Note, a Tranche B1 Term Note and a Tranche B2 Term Note drawn
to the order of each applicable Lender, executed by a duly authorized officer
of the Borrowers and dated the Closing Date.

 

(ii)                                  The
Security Documents duly executed by the respective parties thereto and dated the
Closing Date.

 

37

 

(iii)                               The
Environmental Indemnity duly executed by the Borrowers and dated the Closing
Date.

 

(iv)                              A
certificate of the Secretary or Assistant Secretary (or other appropriate
officer) of each Borrower dated as of the Closing Date and certifying to the
following:

 

(A)                              A
true and accurate copy of the limited liability company or corporate
resolutions of such Borrower authorizing the execution, delivery and
performance of the Loan Documents to which such Borrower is a party
contemplated hereby and thereby;

 

(B)                                The
incumbency, names, titles and signatures of the officers of such Borrower
authorized to execute the Loan Documents to which such Borrower is a party and
to request Advances;

 

(C)                                A true
and accurate copy of the Certificate of Formation or Articles of Incorporation
(or the equivalent) of such Borrower with all amendments thereto, certified by
the appropriate governmental official of the jurisdiction of organization as of
a date acceptable to the Administrative Agent; and

 

(D)                               A
true and accurate copy of the operating agreement or bylaws (or other
constitutive documents) for such Borrower.

 

(v)                                 A
certificate of good standing for each Borrower in the jurisdiction of its
formation or incorporation and, with respect to the Borrowers’ Agent, in the
States of Iowa and Minnesota and each other jurisdiction where the character of
the properties owned or leased by such Borrower makes such qualification
necessary, certified by the appropriate governmental officials as of a date
acceptable to the Administrative Agent.

 

(vi)                              A
certificate dated the Closing Date of the chief executive officer or chief
financial officer of each Borrower certifying as to the matters set forth in
Sections 3.3 (a) and  (b) below.

 

(vii)                           The
initial Borrowing Base Certificate, as of the last day of the most recent month
end prior to the Closing Date.

 

(viii)                        Insurance
certificates in form and substance reasonably satisfactory to the Lenders
listing the Administrative Agent as loss payee thereof and indicating that the
Borrower has obtained insurance in compliance with Section 5.3 with respect to
each of the businesses and real properties of the Borrowers in such amounts and
with such carriers reasonably acceptable to the Lenders.

 

38

 

(ix)                                Landlord’s
waivers and/or bailee’s waivers for locations identified on Schedule 3.1(a).

 

(b)                                 Opinions.  The Administrative Agent shall have received
an executed legal opinion of Lindquist & Vennum and Belin Lamson McCormick
Zumbach Flynn, counsel to the Borrowers, dated the Closing Date, delivered to
the Administrative Agent in sufficient counterparts for each Lender and in form
and substance reasonably satisfactory to the Lenders.

 

(c)                                  Compliance.  Each Borrower shall have performed and
complied with all agreements, terms and conditions contained in this Agreement
required to be performed or complied with by such Borrower prior to or
simultaneously with the Closing Date.

 

(d)                                 Lien
Searches.  The Administrative Agent
shall have received the results of a recent lien search in each of the
jurisdictions where the assets of the Borrowers are located, and such search
shall reveal no Liens on any of the assets of the Borrowers except for those
Liens permitted by Section 6.13 or discharged on or prior to the Closing Date
pursuant to a document reasonably satisfactory to the Administrative Agent.

 

(e)                                  Environmental
Matters.  The Administrative Agent
shall have received a Phase I environmental site assessment with respect to the
Thompson Complex Site prepared by the Borrowers’ environmental consultant,
along with a corresponding reliance letter from such environmental consultant,
confirming that no hazardous substances were found in, on or under the Thompson
Complex Site and the Lenders shall otherwise be satisfied in all respects with
an environmental due diligence investigation of the Borrowers, including with
respect to the Thompson Complex and the Thompson Complex Site.

 

(f)                                    Title
Insurance.  The Administrative Agent
shall have received a commitment for a mortgagee’s title insurance policy or
marked up unconditional binder for such insurance (or equivalent thereof
reasonably satisfactory to the Administrative Agent) .  Such policy shall (i) be in an amount
reasonably satisfactory to the Lenders; (ii) be issued at ordinary rates; (iii)
insure that the Mortgage insured thereby creates a valid first Lien on the
mortgaged property described therein free and clear of all defects and
encumbrances, except as disclosed therein; (iv) name the Administrative Agent
for the benefit of the Lenders as the insured thereunder; (v) be in the form of
ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent thereof
reasonably satisfactory to the Administrative Agent); (vi) contain such
endorsements and affirmative coverage as the Administrative Agent may
reasonably request and (vii) be issued by a title company reasonably
satisfactory to the Administrative Agent (including any such title companies
acting as coinsurers or reinsurers, at the option of the Administrative
Agent).  The Administrative Agent shall
have received evidence reasonably satisfactory to it that all premiums in
respect of each such policy, all charges for mortgage recording tax, and all
related expenses, if any, have been paid.

 

39

 

(g)                                 A.L.T.A.
Survey.  The Administrative Agent
shall have received an as-built A.L.T.A. survey of the Thompson Complex Site,
reasonably satisfactory in form and substance to the Administrative Agent,
reasonably current and certified to the Administrative Agent for the benefit of
the Lenders and the title company issuing the mortgagee’s title insurance
policy by a licensed surveyor reasonably satisfactory to the Administrative
Agent, showing (i) the locations on the Thompson Complex Site of all the
buildings, structures and other improvements and the established building
setback lines, (ii) the lines of streets abutting the Thompson Complex Site and
width thereof, (iii) all access and other easements appurtenant to the Thompson
Complex Site, (iv) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the Thompson Complex
Site, whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor, (v) any encroachments on any adjoining
property by the building structures and improvements on the Thompson Complex
Site, (vi) if the Thompson Complex Site is described as being on a filed map, a
legend relating the survey to said map, and (vii) the flood zone designations,
if any, in which such Thompson Complex Site is located.

 

(h)                                 Risk
Management Policy.  The
Administrative Agent shall have received a Risk Management Policy for the
Borrowers’ Agent that (i) has been approved by the Borrowers’ Agent’s board of
directors, (ii) addresses ingredients (corn and soybean meal) utilized in the
operations of the Borrowers’ Agent’s operations and the finished egg products
therefrom and (iii) is in form and substance reasonably satisfactory to the
Lenders.

 

(i)                                     Pricing
Report.  The Administrative Agent
shall have received a Pricing Report from the Borrowers’ Agent that is
effective as of a date not more than three Business Days prior to the Closing
Date, in form and substance reasonably satisfactory to the Lenders.

 

(j)                                     Construction
Plans.  The Administrative Agent
shall have received a copy of the Construction Plans and such other documents
and information (including, without limitation, Applicable Permits, easements
and other data) relating to the Phase II Thompson Construction and the Phase
III Thompson Construction as any Lender may reasonably request, all of which
shall be in form and substance reasonably satisfactory to the Lenders.

 

(k)                                  Material
Contracts.  The Borrowers shall have
delivered to the Administrative Agent true and complete copies of each Material
Contract identified on Schedule 3.1(k), including any supplements or amendments
thereto, and a certificate of an authorized officer of Borrowers’ Agent
certifying that all such Material Contracts are true, complete and correct and
are on the Closing Date in full force and effect and that neither the Borrowers’
Agent nor, to the Borrowers’ Agent’s knowledge, any other party to any such
Material Contract is or, but for the passage of time or giving of notice or
both, will be in breach of any material obligation thereunder.

 

40

 

(l)                                     Applicable
Permits.  The Borrowers shall have
obtained or caused to be obtained all Applicable Permits identified on Part I
of Schedule 3.1(l) and the Borrowers shall have delivered or caused to be
delivered to the Administrative Agent true and correct copies of each such
Applicable Permit and a certificate of an authorized officer of the Borrowers’
Agent certifying that all such Applicable Permits have been obtained, and are
in full force and effect, not subject to any then current legal proceeding or
to any unsatisfied condition that could reasonably be expected to allow
material modification or revocation, and all applicable appeal periods with respect
thereto shall have expired.

 

(m)                               Filings,
Registrations and Recordings.  Each
document (including any Uniform Commercial Code or CNS financing statement)
required by the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent for the benefit of the Lenders, a perfected
Lien on the collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by Section
6.13), shall be in proper form for filing, registration or recordation, any
pledged collateral shall have been duly delivered to the Administrative Agent,
and the priority and perfection of the Liens created by the Security Documents
shall have been established to the satisfaction of the Administrative Agent and
its counsel.

 

(n)                                 Existing
Indebtedness.  The Administrative
Agent shall have received evidence reasonably satisfactory to the Lenders that
all Indebtedness of the Borrowers other than Indebtedness permitted to remain
outstanding after the Closing Date pursuant to this Agreement shall have been
repaid or will be repaid with the proceeds of the Term A1 Loan and Term B1 Loan
and the initial Advance under the Revolving Loan to be made on the Closing
Date.

 

(o)                                 Conversion.  The Administrative Agent shall have received
evidence reasonably satisfactory to the Lenders that the Conversion has been
completed, all required filings, notices and approvals related thereto have
been made, given or received, and all financial, accounting and tax aspects of
the Conversion shall be reasonably acceptable to the Lenders.

 

(p)                                 No
Adverse Change.  Since May 31, 2004,
in the judgment of the Lenders, no Material Adverse Occurrence shall have
occurred.

 

(q)                                 Other
Matters.  All corporate and legal
proceedings relating to the Borrowers and all instruments and agreements in
connection with the transactions contemplated by this Agreement shall be
satisfactory in scope, form and substance to the Administrative Agent, the
Lenders and the Administrative Agent’s counsel, and the Administrative Agent
shall have received all information and copies of all documents, including
records of corporate proceedings, as any Lender or such counsel may reasonably
have requested in connection therewith, such documents where appropriate to be
certified by proper corporate or governmental authorities.

 

41

 

(r)                                    Fees
and Expenses.  The Administrative
Agent shall have received for itself and for the account of the Lenders all
fees and other amounts due and payable by the Borrowers on or prior to the
Closing Date, including the reasonable fees and expenses of counsel to the
Administrative Agent payable pursuant to Section 9.2.

 

Any one or
more of the conditions set forth above which have not been satisfied by the
Borrowers on or prior to the date of disbursement of the initial Loan under
this Agreement shall not be deemed permanently waived by the Administrative
Agent or any Lender unless the Administrative Agent or such Lender, as the case
may be, shall waive the same in a writing which expressly states that the
waiver is permanent, and in all cases in which the waiver is not stated to be
permanent the Administrative Agent or any Lender may at any time subsequent
thereto insist upon compliance and satisfaction of any such condition as a
condition to any subsequent Loan or Letter of Credit hereunder and failure by
the Borrowers to comply with any such condition within five (5) Business Day’s
written notice from the Administrative Agent or any Lender to the Borrowers’
Agent shall constitute an Event of Default under this Agreement.

 

Section 3.2                                      Conditions
Precedent to the Tranche A2 and Tranch B2 Term Loans.  The obligations of the Tranche A Term Lenders
and the Tranche B Term Lenders to make the Tranche A2 Term Loans and Tranche B2
Term Loans hereunder shall be subject to the fulfillment of the following
conditions:

 

(a)                                  Initial
Loans.  The conditions to the making
of the Tranche A1 and Tranche B1 Term Loans and the initial Revolving Loans set
forth in Section 3.1 shall have been satisfied or waived by the Lenders and the
Tranche A1 and Tranche B1 Term Loans shall have been made.

 

(b)                                 No
Default; Representations and Warranties.  The Administrative Agent shall have received a
certificate dated the requested borrowing date of the chief executive officer
or chief financial officer of each Borrower certifying as to the matters set
forth in Sections 3.3 (a) and  (b) below.

 

(c)                                  Appraisal.  The Administrative Agent shall have received
a real property appraisal of the Thompson Complex Site, on an as-built basis,
which appraisal shall be in form and substance reasonably satisfactory to the
Lenders.

 

(d)                                 Title
Policy Endorsement.  The Borrowers’
Agent shall provide, or the Administrative Agent shall be adequately assured
that the title insurer is committed at the time of each Advance in respect of
the Tranche A2 Term Loans and Tranche B2 Term Loans to issue to the
Administrative Agent a date-down endorsement of the mortgagee’s title policy to
the date of such Advances, insuring or otherwise establishing to the
satisfaction of the Administrative Agent the continuing first priority of the
Mortgage (subject only to Permitted Encumbrances and Liens permitted in
accordance with Sections 6.13(b), (d) and (e).

 

42

 

(e)                                  Lien
Releases.  The Borrowers’ Agent shall
have delivered to the Administrative Agent duly executed acknowledgments of
payments and releases of mechanics’ and materialmen’s liens, in form and
substance reasonably satisfactory to the Administrative Agent, from each
contractor and subcontractor thereof for all work, services, materials,
including equipment and fixtures of all kinds, done, previously performed or
furnished in connection with the Phase II Thompson Construction or Phase III
Thompson Construction, that has a cost or value of over $5,000.

 

(f)                                    Additional
Advance Limitations.  The obligation
of the Tranche A Term Lenders and the Tranche B Term Lenders to make the First
Tranche 2 Advances, the Second Tranche 2 Advances and the Final Tranche 2
Advances shall be subject to the following additional conditions, as
applicable:

 

(i)                                     With
respect to the First Tranche 2 Advances, the Administrative Agent shall have
received evidence reasonably satisfactory to the Lenders that (i) the
construction of the Layer Barns 51, 52 and 53 at the Thompson Complex has been
completed and such Layer Barns have been stocked, (ii) the construction of the new
feedmill at the Thompson Complex has been completed and such feedmill is
operational, and (iii) the construction of the new eggshell dryer at the
Thompson Complex has been completed and such dryer is operational
(collectively, the “Phase II Thompson Construction”), in each case
substantially in accordance with the Construction Plans;

 

(ii)                                  With
respect to the Second Tranche 2 Advances, the First Trache 2 Advances shall
have been made and the Borrowers’ Agent shall have delivered to the
Administrative Agent three duplicate originals of a USPAP appraisal of the
Thompson Complex Site (including the Thompson Complex) by the Mentor Group (the
“Appraisal”), in form and substance reasonably satisfactory to the
Lenders, demonstrating that, after giving effect to the requested Second
Tranche 2 Advances, the Total Term Outstandings do not exceed 65% of the
pro-rata appraised value of the completed portion of the Phase II Thompson
Construction and the Phase III Thompson Construction;

 

(iii)                               With
respect to the Final Tranche 2 Advances, the Administrative Agent shall have
received (A)  evidence reasonably
satisfactory to the Lenders that the Phase III Thompson Construction has been
completed substantially in accordance with the Construction Plans, (B) copies
of each Applicable Permit not previously delivered to the Administrative Agent,
(C) an updated as-built A.L.T.A. survey of the Mortgaged Property showing all
improvements added in connection with the Phase II Thompson Construction and
the Phase III Thompson Construction, and (D) an Appraisal in form and substance
reasonably satisfactory to the Lenders, demonstrating that after giving effect
to the requested Final Tranche 2 Advances, the Total Term Outstandings do not
exceed 65% of the pro-

 

43

 

rata appraised
value of the completed portion of the Phase II Thompson Construction and the
Phase III Thompson Construction; and

 

(iv)                              With
respect to the Second Tranche 2 Advances and the Final Tranche 2 Advances in
respect of the Tranche A2 Term Loans, the Borrowers’ Agent shall have selected
the Business Day upon which the Tranche A2 Rate applicable to the Second
Tranche 2 Advance or the Final Tranche 2 Advance, as applicable, in respect of
the Tranche A2 Term Loans shall be determined by providing written notice to
the Administrative Agent not later than 12:00 P.M. Central on the date so
selected, which must be not more than 45 days prior to the date of the Second
Tranche 2 Advance or the Final Tranche 2 Advance, as applicable; provided,
however, that in the event the Borrowers’ Agent fails to provide such
written notice on or prior to the fifth (5th) Business Day prior to
the date of the Second Tranche 2 Advance or the Final Tranche 2 Advance, as
applicable, such interest rate shall be determined as of 1:00 P.M. Central by
the Tranche A2 Term Lenders from an on-line market service determined by the
Tranche A2 Term Lenders; provided  further that in either event
the Borrowers’ Agent shall have, in its request for borrowing delivered
pursuant to Section 2.2(b), acknowledged and unconditionally accepted the
Tranche A2 Rate applicable to such Second Tranche 2 Advance or Final Tranche 2
Advance, as applicable, and such blended Tranche A2 Rate thereafter applicable
to the Advances in respect of the Tranche A2 Term Loans.

 

Section 3.3                                      Conditions
Precedent to All Loans and Letters of Credit.  The obligation of the Lenders to make any
Loans hereunder (including the Term Loans and the initial Revolving Loans) and
of the Letter of Credit Bank to issue each Letter of Credit (including the
initial Letter of Credit) shall be subject to the fulfillment of the following
conditions:

 

(a)                                  Representations
and Warranties.  The representations
and warranties contained in Article IV shall be true and correct on and as of
the Closing Date and on the date of each Revolving Loan or the date of issuance
of each Letter of Credit, with the same force an effect as if made on such
date.

 

(b)                                 No
Default.  No Default or Event of
Default shall have occurred and be continuing on the Closing Date and on the
date of each Revolving Loan, the date of each Term Loan or the date of issuance
of each Letter of Credit or will exist after giving effect to the Revolving
Loans or Term Loans made on such date or the Letters of Credit so issued.

 

(c)                                  Notices
and Requests.  The Administrative
Agent shall have received the Borrowers’ Agent’s request for such Loans as
required under Section 2.2 or its application for such Letters of Credit
specified under Section 2.9.

 

44

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES

 

To induce the
Lenders to enter into this Agreement and to make Loans hereunder and to induce
the Letter of Credit Bank to issue Letters of Credit, each Borrower represents
and warrants to the Lenders and the Letter of Credit Bank for itself and each
other Borrower:

 

Section 4.1                                      Organization,
Standing, Etc.  Midwest Investors of
Iowa, Cooperative is a cooperative association duly incorporated and validly
existing and in good standing under the laws of State of Iowa.  Golden Oval Eggs, LLC is a limited liability
company duly organized and validly existing and in good standing under the laws
of the State of Delaware.  Each Borrower
has all requisite power and authority to carry on its business as now
conducted, to enter into this Agreement, to issue the Notes and to perform its
obligations under the Loan Documents. 
Each Borrower (a) holds all certificates of authority, licenses and
permits necessary to carry on its business as presently conducted in each
jurisdiction in which it is carrying on such business, except where the failure
to hold such certificates, licenses or permits would not constitute a Material
Adverse Occurrence, and (b) is duly qualified and in good standing as a foreign
company or corporation in each jurisdiction in which the character of the
properties owned, leased or operated by it or the business conducted by it
makes such qualification necessary and the failure so to qualify would
permanently preclude such Borrower from enforcing its rights with respect to
any assets or expose such Borrower to any Material Adverse Occurrence.

 

Section 4.2                                      Authorization
and Validity.  The execution,
delivery and performance by each Borrower of the Loan Documents have been duly
authorized by all necessary corporate or company action by such Borrower.  This Agreement constitutes, and the Notes and
other Loan Documents when executed will constitute, the legal, valid and
binding obligations of each Borrower, enforceable against such Borrower in
accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

 

Section 4.3                                      No
Conflict; No Default.  The execution,
delivery and performance by each Borrower of the Loan Documents will not (a)
violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to
such Borrower, (b) violate or contravene any provision of the Certificate of
Formation, Articles of Incorporation, bylaws or limited liability company
agreement, as applicable, of such Borrower, or (c) result in a breach of or
constitute a default under any indenture, loan or credit agreement or any other
agreement, lease or instrument to which such Borrower is a party or by which it
or any of its properties may be bound or result in the creation of any Lien
thereunder.  No Borrower is in default
under or in violation of any such law, statute, rule or regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, loan or credit agreement or

 

45

 

other
agreement, lease or instrument in any case in which the consequences of such
default or violation could constitute a Material Adverse Occurrence.

 

Section 4.4                                      Government
Consent.  No order, consent,
approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority is required on the part of any Borrower to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, the Loan Documents, except for
any necessary filing or recordation of or with respect to any of the Security Documents.

 

Section 4.5                                      Financial
Statements and Condition.  The
Borrowers’ audited consolidated financial statements as at August 31, 2003 and
their unaudited financial statements as at May 31, 2004, as heretofore
furnished to the Lenders, have been prepared in accordance with GAAP on a
consistent basis (except for the absence of footnotes and subject to year-end
audit adjustments as to the interim statements) and fairly present the
financial condition of the Borrowers as at such dates and the results of their
operations and changes in financial position for the respective periods then
ended.  As of the dates of such financial
statements, no Borrower had any material obligation, contingent liability,
liability for taxes or long-term lease obligation which is not reflected in
such financial statements or in the notes thereto.  Since February 29, 2004 and after giving
effect to the Conversion, there has been no Material Adverse Occurrence.

 

Section 4.6                                      Litigation.  Except as disclosed on Schedule 4.6,
there are no actions, suits or proceedings pending or, to the knowledge of any
Borrower, threatened against or affecting any Borrower or any of their
properties before any court or arbitrator, or any governmental department,
board, agency or other instrumentality which, if determined adversely to any
Borrower, would constitute a Material Adverse Occurrence, and there are no
unsatisfied judgments against any Borrower, the satisfaction or payment of
which would constitute a Material Adverse Occurrence.

 

Section 4.7                                      Environmental,
Health and Safety Laws.  There does
not exist any violation by any Borrower of any applicable federal, state or
local law, rule or regulation or order of any government, governmental
department, board, agency or other instrumentality relating to environmental,
pollution, health or safety matters which has, will or threatens to impose a
material liability on a Borrower or which has required or would require a
material expenditure by a Borrower to cure. 
No property of any Borrower is used for the production, storage or
disposal of hazardous wastes, substances or materials.  No Borrower has received any notice to the
effect that any part of its operations or properties is not in material
compliance with any such law, rule, regulation or order or notice that it or
its property is the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to any release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to constitute a Material Adverse
Occurrence.  Except as set out on Schedule
4.7, no Borrower has knowledge that it or its property will become subject
to environmental laws or regulations during the term of this Agreement, compliance
with which

 

46

 

could
reasonably be expected to require Capital Expenditures that could reasonably be
expected to constitute a Material Adverse Occurrence.

 

Section 4.8                                      ERISA.  Each Plan is in substantial compliance with
all applicable requirements of ERISA and the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and the
Code setting forth those requirements.  No
Reportable Event has occurred and is continuing with respect to any Plan.  All of the minimum funding standards
applicable to such Plans have been satisfied and there exists no event or
condition which would reasonably be expected to result in the institution of
proceedings to terminate any Plan under Section 4042 of ERISA.

 

Section 4.9                                      Federal
Reserve Regulations.  No Borrower 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 Regulation U of the Board). 
The value of all margin stock owned by each Borrower does not constitute
more than 25% of the value of the assets of such Borrower.

 

Section 4.10                                Title
to Property; Leases; Liens; Subordination. 
Each Borrower has (a) good and marketable title to its real properties
and (b) good and sufficient title to, or valid, subsisting and enforceable
leasehold interest in, its other material properties, including all real
properties, other properties and assets, referred to as owned by a Borrower in
the most recent financial statement referred to in Section 5.1 (other than
property disposed of since the date of such financial statements in the
ordinary course of business).  None of
such properties is subject to a Lien, except as allowed under Section
6.13.  No Borrower has subordinated any
of its rights under any obligation owing to it to the rights of any other
person.

 

Section 4.11                                Taxes.  Each Borrower has filed all federal, state
and local tax returns required to be filed and has paid or made provision for
the payment of all taxes due and payable pursuant to such returns and pursuant
to any assessments made against it or any of its property and all other taxes,
fees and other charges imposed on it or any of its property by any governmental
authority (other than taxes, fees or charges the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books of such Borrower).  No tax Liens
have been filed and no material claims are being asserted with respect to any
such taxes, fees or charges.  The
charges, accruals and reserves on the books of the Borrowers in respect of
taxes and other governmental charges are adequate and the Borrowers know of no
proposed material tax assessment against it or any basis therefor.

 

Section 4.12                                Trademarks,
Patents.  Each Borrower possesses or
has the right to use all of the patents, trademarks, trade names, service marks
and copyrights, and applications therefor, and all technology, know-how,
processes, methods and designs used in or necessary for the conduct of its
business, without known conflict with the rights of others.

 

47

 

Section 4.13                                Burdensome
Restrictions.  No Borrower is a party
to or otherwise bound by any indenture, loan or credit agreement or any lease
or other agreement or instrument or subject to any charter, corporate or
partnership restriction which would foreseeably constitute a Material Adverse
Occurrence.

 

Section 4.14                                Force
Majeure.  Since the date of the most
recent financial statement referred to in Section 5.1, the business, properties
and other assets of the Borrowers have not been materially and adversely
affected in any way as the result of any fire or other casualty, strike,
lockout, or other labor trouble, embargo, sabotage, confiscation, condemnation,
riot, civil disturbance, activity of armed forces or act of God.

 

Section 4.15                                Investment
Company Act.  No Borrower is an “investment
company” or a company “controlled” by an investment company within the meaning
of the Investment Company Act of 1940, as amended.

 

Section 4.16                                Public
Utility Holding Company Act.  No
Borrower is a “holding company” or a “subsidiary company” of a holding company
or an “affiliate” of a holding company or of a subsidiary company of a holding
company within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

Section 4.17                                Full
Disclosure.  Subject to the following
sentence, neither the financial statements referred to in Section 5.1 nor any
other certificate, written statement, exhibit or report furnished by or on
behalf of the Borrowers in connection with or pursuant to this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained therein not
misleading.  Certificates or statements
furnished by or on behalf of the Borrowers to the Lenders consisting of
projections or forecasts of future results or events have been prepared in good
faith and based on good faith estimates and assumptions of the management of
the Borrower, and the Borrowers have no reason to believe that such projections
or forecasts are not reasonable.

 

Section 4.18                                Subsidiaries.  No Borrower has any Subsidiaries.

 

Section 4.19                                Labor
Matters.  There are no pending or
threatened strikes, lockouts or slowdowns against either Borrower.  No Borrower has been or is in violation in
any material respect of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments
due from any Borrower on account of wages and employee health and welfare
insurance and other benefits (in each case, except for de minimus amounts),
have been paid or accrued as a liability on the books of such Borrower.  The consummation of the transactions
contemplated under the Loan Documents will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Borrower is bound.

 

48

 

Section 4.20                                Security
Documents.

 

(a)                                  The
Security Agreement, when executed in accordance with this Agreement, is
effective to create in favor of the Administrative Agent for the benefit of the
Lenders, a legal, valid and enforceable Lien on the collateral described
therein and the proceeds thereof, and when financing statements in appropriate
form are filed with the Secretary of State of Iowa, the Secretary of State of
Delaware and in Minnesota, the Security Agreement shall constitute a fully
perfected Lien on, and security interest in, the collateral described therein
and the proceeds thereof to the extent a security interest may be perfected by
filing under the applicable Uniform Commercial Code, in each case prior and
superior in right to any other Person (except with respect to Liens permitted
by Sections 6.13(b) and Liens permitted by Section 6.13(c) and (g) that have
priority by operation of law).

 

(b)                                 The
Mortgage, when executed in accordance with this Agreement, is effective to
create in favor of the Administrative Agent for the benefit of the Lenders, a
legal, valid and enforceable Lien on the mortgaged property described therein
and the proceeds thereof, and when the Mortgage is filed in the applicable
office of Winnebago County, Iowa, such Mortgage shall constitute a fully
perfected Lien of record on, and security interest in, the mortgaged property
described therein and the proceeds thereof, as security for the Obligations,
prior and superior in right to any other Person (except with respect to
Permitted Encumbrances and Liens permitted by Sections 6.13(b) and (d)).

 

Section 4.21                                Solvency.  After the making of any Loan and after giving
effect thereto, (a) the fair value of the assets of each Borrower, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each Borrower
will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
each Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) no Borrower will have unreasonably small capital with which to
conduct the business in which it is engaged as such business is proposed to be
conducted following the Closing Date.

 

Section 4.22                                Conversion.  (a) 
The Conversion has been completed, (b) there are no orders, consents,
approvals, licenses, authorizations or validations of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority required in connection with the Conversion that have not been
obtained or made by the Borrowers’ Agent, and (c) the Conversion did not cause
the default or loss of status under any order, consent, approval, license,
authorization or validation of, or filing, recoding or registration with, or
exemption by, any governmental or public body or authority that is necessary or
desirable for the operation of the Borrowers’ Agent’s business or that would
otherwise constitute a Material Adverse Occurrence.

 

49

 

Section 4.23                                Eligibility.  As of the Closing Date, (i) each Borrower is
eligible to borrow from CoBank, and (ii) the percentage of voting control of
the Borrowers’ Agent held by producers or cooperatives is 100%.

 

Section 4.24                                Material
Contract.  Each Material Contract in
effect on the Closing Date is identified on Schedule 3.1(k) and copies of each
such Material Contract have been delivered to the Administrative Agent.  Except as has been previously disclosed to
the Administrative Agent in writing, none of such Material Contracts has been
amended, modified or terminated.

 

Section 4.25                                Applicable
Permits.  There are no permits
required for the construction, operation or maintenance of the Thompson Complex
other than the Applicable Permits identified on Schedule 3.1(l).  Except as disclosed therein, each Applicable
Permit identified on Part I of Schedule 3.1(l) is in full force and effect and
is not subject to any current legal proceeding or any unsatisfied condition
that could reasonably be expected to allow material modification or revocation
of such permit, and all applicable appeal periods with respect thereto shall
have expired.  Each Applicable Permit
identified in Part II of Schedule 3.1(l) is timely obtainable prior to the time
the Borrowers’ Agent requires such permit and is of a type that is routinely
granted upon application.  The Borrowers
are in compliance in all material respects with all Applicable Permits.

 

ARTICLE
V

AFFIRMATIVE COVENANTS

 

Until any
obligation of the Lenders hereunder to make the Term Loans and Revolving Loans
and of the Letter of Credit Bank to issue Letters of Credit shall have expired
or been terminated and the Notes and all of the other Obligations have been
paid in full and all outstanding Letters of Credit shall have expired or the
liability of the Letter of Credit Bank thereon shall have otherwise been
discharged:

 

Section 5.1                                      Financial
Statements and Reports.  The
Borrowers’ Agent will furnish to the Lenders:

 

(a)                                  As
soon as available and in any event within 90 days after the end of each fiscal
year of the Borrowers’ Agent (including the fiscal year that ended August 31,
2004), the consolidated financial statements of the Borrowers’ Agent consisting
of at least statements of income, cash flow and changes in the members’ equity,
and a consolidated balance sheet as at the end of such year, setting forth in
each case in comparative form corresponding figures from the previous annual audit,
certified without qualification by Moore Stephens Frost or another independent
certified public accountants of recognized national standing selected by the
Borrowers and reasonably acceptable to the Administrative Agent, together with
(a) any management letters, management reports or other supplementary comments
or reports to the Borrowers’ Agent or its board of directors furnished by such
accountants and (b) a letter from such

 

50

 

accountants
addressed to the Lenders acknowledging that the Lenders are extending credit in
reliance on such financial statements and authorizing such reliance.

 

(b)                                 Together
with the audited financial statements required under Section 5.1(a), a
statement by the accounting firm performing such audit to the effect that it
has reviewed this Agreement and that in the course of performing its
examination nothing came to its attention that caused it to believe that any
Default or Event of Default exists, or, if such Default or Event of Default
exists, describing its nature.

 

(c)                                  As
soon as available and in any event within 45 days after the end of each month,
unaudited consolidated statements of income, cash flow and changes in the
members’ equity for the Borrowers’ Agent for such month and for the period from
the beginning of such fiscal year to the end of such month, and a consolidated
balance sheet of the Borrowers’ Agent as at the end of such month, setting
forth in comparative form figures for the corresponding period for the preceding
fiscal year, accompanied by a certificate signed by the chief financial officer
of the Borrowers’ Agent stating that such financial statements present fairly
the financial condition of the Borrowers’ Agent and that the same have been
prepared in accordance with GAAP (except for the absence of footnotes and
subject to year-end audit adjustments as to the interim statements).

 

(d)                                 As
soon as practicable and in any event within 45 days after the end of each
fiscal quarter, a Compliance Certificate in the form attached hereto as Exhibit
G signed by the chief financial officer of the Borrowers’ Agent
demonstrating in reasonable detail compliance (or noncompliance, as the case
may be) with Section 6.15, Section 6.16, Section 6.17, Section 6.18, Section
6.19 and Section 6.21, as at the end of such quarter and stating that as at the
end of such quarter there did not exist any Default or Event of Default or, if
such Default or Event of Default existed, specifying the nature and period of
existence thereof and what action the Borrowers propose to take with respect
thereto.

 

(e)                                  As
soon as practicable and in any event within 45 days after the end of each
month, a Borrowing Base Certificate signed by the chief financial officer of
the Borrowers’ Agent, reporting the Borrowing Base as of the last day of the
month just ended.

 

(f)                                    As
soon as practicable and in any event within 90 days after the beginning of each
fiscal year of the Borrowers’ Agent, statements of forecasted consolidated
income for the Borrowers’ Agent for each fiscal month in such fiscal year and a
forecasted consolidated balance sheet of the Borrowers’ Agent, together with
supporting assumptions, as at the end of each fiscal month, all in reasonable
detail and reasonably satisfactory in scope to the Lenders.

 

(g)                                 Immediately
upon any officer or manager of any Borrower becoming aware of any Default or
Event of Default, a written notice from the Borrowers’ Agent

 

51

 

describing the
nature thereof and what action Borrowers propose to take with respect thereto.

 

(h)                                 Immediately
upon any officer or manager of a Borrower becoming aware of any matter that has
resulted or is reasonably likely to result in a Material Adverse Occurrence, a
written notice from the Borrowers’ Agent describing the nature thereof and what
action Borrowers propose to take with respect thereto.

 

(i)                                     Immediately
upon any officer or manager of a Borrower becoming aware of (i) the
commencement of any action, suit, investigation, proceeding or arbitration
before any court or arbitrator or any governmental department, board, agency or
other instrumentality affecting a Borrower or any property of such Person, or
to which a Borrower is a party (other than litigation where the insurance
insures against the damages claimed and the insurer has assumed defense of the
litigation without reservation) and in which an adverse determination or result
could reasonably be expected to constitute a Material Adverse Occurrence; or
(ii) any adverse development which occurs in any litigation, arbitration or
governmental investigation or proceeding previously disclosed by a Borrower
which, if determined adversely to a Borrower, could reasonably be expected to
constitute a Material Adverse Occurrence, a written notice from the Borrowers’
Agent describing the nature and status thereof and what action the Borrowers
propose to take with respect thereto.

 

(j)                                     Promptly
upon the mailing or filing thereof, copies of all financial statements, reports
and proxy statements mailed to any Borrower’s members or shareholders, and
copies of all registration statements, periodic reports and other documents
filed with the Securities and Exchange Commission (or any successor thereto) or
any national securities exchange.

 

(k)                                  From
time to time, such other information regarding the business, operation and
financial condition of any Borrower as any Lender may reasonably request.

 

Section 5.2                                      Existence.  Each Borrower will maintain its corporate or
company existence (as the case may be) in good standing under the laws of its
jurisdiction of organization and its qualification to transact business in each
jurisdiction where failure so to qualify would permanently preclude such
Borrower from enforcing its rights with respect to any material asset or would
expose such Borrower to any material liability.

 

Section 5.3                                      Insurance.  Each Borrower shall maintain with financially
sound and reputable insurance companies such insurance as may be required by
law and such other insurance in such amounts and against such hazards as is
customary in the case of reputable firms engaged in the same or similar
business and similarly situated.

 

Section 5.4                                      Payment
of Taxes and Claims.  Each Borrower
shall file all tax returns and reports which are required by law to be filed by
it and will pay before they become delinquent all

 

52

 

taxes,
assessments and governmental charges and levies imposed upon it or its property
and all claims or demands of any kind (including but not limited to those of
suppliers, mechanics, carriers, warehouses, landlords and other like Persons)
which, if unpaid, might result in the creation of a Lien upon its property; provided
that the foregoing items need not be paid if they are being contested in good
faith by appropriate proceedings, and as long as such Borrower’s title to its
property is not materially adversely affected, its use of such property in the
ordinary course of its business is not materially interfered with and adequate
reserves with respect thereto have been set aside on such Borrower’s books in
accordance with GAAP.

 

Section 5.5                                      Inspection.  Each Borrower shall permit any Person
designated by the Administrative Agent or any Lender to visit and inspect any
of the properties, books and financial records of such Borrower, to examine and
to make copies of the books of accounts and other financial records of such
Borrower, and to discuss the affairs, finances and accounts of such Borrower
with, and to be advised as to the same by, its officers and managers at such
reasonable times and intervals as the Administrative Agent or any Lender may
designate.

 

Section 5.6                                      Maintenance
of Properties.  Each Borrower will
maintain its properties used or useful in the conduct of its business in good
condition, repair and working order, and supplied with all necessary equipment,
and make all necessary repairs, renewals, replacements, betterments and
improvements thereto, all as may be necessary so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times.

 

Section 5.7                                      Books
and Records.  Each Borrower will keep
adequate and proper records and books of account in which full and correct
entries will be made of its dealings, business and affairs.

 

Section 5.8                                      Compliance.  Each Borrower (a) will comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, (b) obtain on or
before the time required all Applicable Permits identified on Part II of
Schedule 3.1(l) and, (c) will maintain and comply in all material respects with
all Applicable Permits; provided, however, that failure to so
comply, obtain or maintain shall not be a breach of this covenant if such
failure cannot reasonably be expected to constitute a Material Adverse
Occurrence and such Borrower is acting in good faith and with reasonable
dispatch to cure such failure.

 

Section 5.9                                      ERISA.  Each Borrower will maintain each Plan in
compliance with all material applicable requirements of ERISA and of the Code
and with all applicable rulings and regulations issued under the provisions of
ERISA and of the Code.

 

Section 5.10                                Environmental
Matters; Reporting.  Each Borrower
will observe and comply with all laws, rules, regulations and orders of any
government or government agency relating to health, safety, pollution,
hazardous materials or other environmental matters to the extent non-compliance
could result in a material liability or otherwise constitute a Material Adverse
Occurrence.  No Borrower shall use its
property (including any portion of the

 

53

 

Thompson
Complex or the Thompson Complex Site) for the production, storage or disposal
of hazardous substances, wastes or materials. 
The Borrowers’ Agent will give the Administrative Agent prompt written
notice of any violation as to any environmental matter by any Borrower and of
the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (a) in which an adverse determination
or result could result in the revocation of or have a material adverse effect
on any operating permits, air emission permits, water discharge permits,
hazardous waste permits or other permits held by any Borrower which are
material to the operations of such Borrower, including the Applicable Permits,
or (b) which will or threatens to impose a material liability on such Borrower
to any Person or which will require a material expenditure by the Borrower to
cure any alleged problem or violation.

 

Section 5.11                                Further
Assurances.  Each Borrower shall
promptly correct any defect or error that may be discovered in any Loan
Document or in the execution, acknowledgment or recordation thereof.  Promptly upon request by the Administrative
Agent or the Required Lenders, each Borrower also shall do, execute,
acknowledge, deliver, record, re-record, file, refile, register and
re-register, any and all deeds, conveyances, mortgages, deeds of trust, trust
deeds, assignments, estoppel certificates, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments as the Administrative Agent or the Required
Lenders may reasonable require from time to time in order: (a) to carry out
more effectively the purposes of the Loan Documents; (b) to perfect and
maintain the validity, effectiveness and priority of any security interests
intended to be created by the Loan Documents including, without limitation, the
delivery of a landlord waiver from any landlord required by the Administrative
Agent or the Required Lenders; and (c) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm unto the Lenders the rights granted now
or hereafter intended to be granted to the Lenders under any Loan Document or
under any other instrument executed in connection with any Loan Document or
that any Borrower may be or become bound to convey, mortgage or assign to the
Administrative Agent for the benefit of the Lenders in order to carry out the
intention or facilitate the performance of the provisions of any Loan
Document.  The Borrowers’ Agent shall
furnish to the Administrative Agent evidence reasonably satisfactory to the
Administrative Agent of every such recording, filing or registration.

 

Section 5.12                                Compliance
with Terms of Material Contracts. 
Each Borrower shall make all payments and otherwise perform all
obligations in respect of all Material Contracts to which such Borrower is a
party and shall promptly provide the Administrative Agent with copies of any
notices of default under any Material Contract given or received by any
Borrower.

 

Section 5.13                                Construction.  The Borrowers’ Agent shall complete the Phase
II Thompson Construction and the Phase III Thompson Construction in a timely
and diligent manner, substantially in accordance with the Construction Plans.

 

54

 

ARTICLE
VI

NEGATIVE COVENANTS

 

Until any
obligation of the Lenders hereunder to make the Term Loans and Revolving Loans
and of the Letter of Credit Bank to issue Letters of Credit shall have expired
or been terminated and the Notes and all of the other Obligations have been
paid in full and all outstanding Letters of Credit shall have expired or the
liability of the Letter of Credit Bank thereon shall have otherwise been
discharged:

 

Section 6.1                                      Merger.  No Borrower will merge or consolidate or
enter into any analogous reorganization or transaction with any Person or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution).

 

Section 6.2                                      Disposition
of Assets.  No Borrower will directly
or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) any property
(including accounts and notes receivable, with or without recourse) or enter
into any agreement to do any of the foregoing, except:

 

(a)                                  dispositions
of inventory in the ordinary course of business;

 

(b)                                 dispositions
of used, worn-out or obsolete equipment, furniture, furnishings, machinery or
fixtures if (i) such equipment, furniture, furnishings, machinery or fixtures
is replaced by property of equal kind and value, or (ii) if the value of such
disposed equipment, furniture, furnishings, machinery or fixtures at the time
of disposal is less than $150,000 for any single transaction or less than
$300,000 in the aggregate in any fiscal year; and

 

(c)                                  other
dispositions of property if the net book value of the disposed property does
not exceed (i) in any fiscal year, 10% of such Borrower’s total consolidated
assets as shown on its balance sheet as of the end of the immediately preceding
fiscal year, or for its most recent prior fiscal quarter, or (ii) in the
aggregate during the term of this Agreement, 30% of such Borrower’s total
consolidated assets as shown on its balance sheet as of the Closing Date, in
each case unless the proceeds from such disposition are reinvested within
twelve (12) months of such disposition to purchase other property useful and intended
to be used in the business of the Borrowers’ Agent.

 

Section 6.3                                      Plans.  No Borrower will permit any event to occur or
condition to exist which would permit any Plan to terminate under any
circumstances which would cause the Lien provided for in Section 4068 of ERISA
to attach to any assets of any Borrower.

 

Section 6.4                                      Change
in Nature of Business.  No Borrower
will make any material change in the nature of the business of such Borrower,
as carried on at the date hereof.

 

55

 

Section 6.5                                      Subsidiaries.  No Borrower will form or acquire any
corporation which would thereby become a Subsidiary.

 

Section 6.6                                      Negative
Pledges.  No Borrower will enter into
any agreement, bond, note or other instrument with or for the benefit of any
Person other than the Lenders which would (i) prohibit such Borrower from
granting, or otherwise limit the ability of the such Borrower to grant, to the
Lenders any Lien on any assets or properties of such Borrower, or (ii) require
such Borrower to grant a Lien to any other Person if such Borrower grants any
Lien to the Lenders.

 

Section 6.7                                      Restricted
Payments.  No Borrower will make any
Restricted Payments if a Default or Event of Default has occurred and is
continuing or if a Default or Event of Default would occur as a result of such
Restricted Payment.

 

Section 6.8                                      Transactions
with Affiliates.  No Borrower will
enter into any transaction with any Affiliate of such Borrower, except upon
fair and reasonable terms no less favorable than such Borrower would obtain in
a comparable arm’s- length transaction with a Person not an Affiliate.

 

Section 6.9                                      Accounting
Changes.  No Borrower will make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change its fiscal year.

 

Section 6.10                                Subordinated
Debt.  No Borrower will (a) make any
scheduled payment of the principal of or interest on any Subordinated Debt that
would be prohibited by the terms of such Subordinated Debt and any related
subordination agreement; (b) directly or indirectly make any prepayment on or
purchase, redeem or defease any Subordinated Debt or offer to do so (whether
such prepayment, purchase or redemption, or offer with respect thereto, is
voluntary or mandatory); (c) amend or cancel the subordination provisions
applicable to any Subordinated Debt; (d) take or omit to take any action if as
a result of such action or omission the subordination of such Subordinated
Debt, or any part thereof, to the Obligations might be terminated, impaired or
adversely affected; or (e) omit to give the Administrative Agent prompt notice
of any notice received from any holder of Subordinated Debt, or any trustee
therefor, or of any default under any agreement or instrument relating to any Subordinated
Debt by reason whereof such Subordinated Debt might become or be declared to be
due or payable.

 

Section 6.11                                Investments.  No Borrower will acquire for value, make,
have or hold any Investments, except:

 

(a)                                  Investments
existing on the date of this Agreement and described on Schedule 6.11.

 

(b)                                 Travel
advances to management personnel and employees in the ordinary course of
business.

 

56

 

(c)                                  Investments
in readily marketable direct obligations issued or guaranteed by the United
States or any agency thereof and supported by the full faith and credit of the
United States.

 

(d)                                 Certificates
of deposit or bankers’ acceptances issued by any commercial bank organized
under the laws of the United States or any State thereof which has (i) combined
capital and surplus of at least $100,000,000, and (ii) a credit rating with
respect to its unsecured indebtedness from a nationally recognized rating
service that is reasonably satisfactory to the Administrative Agent.

 

(e)                                  Commercial
paper given the highest rating by a nationally recognized rating service.

 

(f)                                    Repurchase
agreements relating to securities issued or guaranteed as to principal and
interest by the United States of America with a term of not more than seven (7)
days; provided all such agreements shall require physical delivery of
the securities securing such repurchase agreement, except those delivered
through the Federal Reserve Book Entry System

 

(g)                                 Other
readily marketable Investments in debt securities which are reasonably
acceptable to the Required Lenders.

 

(h)                                 Any
other Investment if the aggregate consideration therefor does not exceed
$500,000.

 

Any
Investments under clauses (c), (d), (e) or (f) above must mature within one
year of the acquisition thereof by the Borrower.

 

Section 6.12                                Indebtedness.  The Borrower will not incur, create, issue,
assume or suffer to exist any Indebtedness, except:

 

(a)                                  The
Obligations.

 

(b)                                 Current
Liabilities, other than for borrowed money, incurred in the ordinary course of
business.

 

(c)                                  Indebtedness
existing on the date of this Agreement and disclosed on Schedule 6.12,
but not including any extension or refinancing thereof.

 

(d)                                 Indebtedness
secured by Liens permitted under Section 6.13 hereof.

 

Section 6.13                                Liens.  No Borrower will create, incur, assume or
suffer to exist any Lien, or enter into, or make any commitment to enter into,
any arrangement for the acquisition of any property through conditional sale,
lease-purchase or other title retention agreements, with respect to any
property now owned or hereafter acquired by the Borrower, except:

 

57

 

(a)                                  Liens
granted to the Administrative Agent and the Lenders under the Security
Documents to secure the Obligations.

 

(b)                                 Liens
existing on the date of this Agreement and disclosed on Schedule 6.13.

 

(c)                                  Deposits
or pledges to secure payment of workers’ compensation, unemployment insurance,
old age pensions or other social security obligations, in the ordinary course
of business of the Borrower.

 

(d)                                 Liens
for taxes, fees, assessments and governmental charges not delinquent or to the
extent that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 5.4.

 

(e)                                  Liens
of carriers, warehousemen, mechanics and materialmen, and other like Liens
arising in the ordinary course of business, for sums not due or to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 5.4.

 

(f)                                    Liens
incurred or deposits or pledges made or given in connection with, or to secure
payment of, indemnity, performance or other similar bonds.

 

(g)                                 Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor depository institution; provided
that (i) such deposit account is not a dedicated cash collateral account
and is not subject to restriction against access by a Borrower in excess of
those set forth by regulations promulgated by the Board, and (ii) such deposit
account is not intended by the Borrower to provide collateral to the depository
institution.

 

(h)                                 Permitted
Encumbrances.

 

(i)                                     The
interest of any lessor under any Capital Lease entered into after the Closing
Date or purchase money Liens on property acquired after the Closing Date;
provided, that, (i) the Indebtedness secured thereby is otherwise permitted by
this Agreement and (ii) such Liens are limited to the property acquired and do
not secure Indebtedness other than the related Capital Lease Obligations or the
purchase price of such property.

 

(j)                                     CoBank’s
statutory Lien on the CoBank Equities.

 

Section 6.14                                Contingent
Liabilities.  No Borrower will be or
become liable on any Contingent Obligations except Contingent Obligations
existing on the date of this Agreement and described on Schedule 6.14 and
Contingent Obligations for the benefit of the Lenders.

 

58

 

Section 6.15                                Tangible
Net Worth.  The Borrower’s Agent will
not permit its Tangible Net Worth at any time to be less than $28,800,000 plus
forty percent (40%) of net earnings for such period plus one hundred
percent (100%) of equity contributed at any time.

 

Section 6.16                                Current
Ratio.  The Borrower’s Agent will not
permit the ratio of its Current Assets to its Current Liabilities to be less
than 1.25 to 1.0 at any time.

 

Section 6.17                                Working
Capital. The Borrower’s Agent will not permit its Working Capital to be
less than $7,000,000 at any time.

 

Section 6.18                                Leverage
Ratio.  The Borrower’s Agent will not
permit the Leverage Ratio, as of the last day of any fiscal quarter for the
four consecutive fiscal quarters ending on that date, to be more than (a) for
the period from the Closing Date to May 31, 2006, 4.25 to 1.0, or (b) for the
period from the June 1, 2006 to the Term Loan Maturity Date, 4.00 to 1.0.

 

Section 6.19                                Fixed
Charge Coverage Ratio.  The Borrower’s
Agent will not permit the Fixed Charge Coverage Ratio, as of the last day of
any fiscal quarter for the four consecutive fiscal quarters ending on that
date, to be less than 1.15 to 1.0.

 

Section 6.20                                Operating
Leases.  No Borrower will enter into
any Operating Lease that would cause the aggregate lease payments for all
Operating Leases of the Borrowers to exceed $500,000 on a consolidated basis
per fiscal year of the Borrowers’ Agent, provided that rents paid by any
Borrower for real property consisting solely of land shall not be included in
such calculation.

 

Section 6.21                                Risk
Management.  From and after the first
fiscal quarter following the date on which the Final Tranche 2 Advances have
been made, the Borrowers’ Agent shall not fail to have the minimum required
percentage of finished egg products under contract as set forth and described
on Annex II, established as of the first day of each fiscal quarter
after the Compliance Certificate required by Section 5.1 is delivered.

 

Section 6.22                                Material
Contracts.  No Borrower shall amend
or modify a Material Contract in any material respect, or terminate a Material
Contract, without the prior written consent of the Required Lenders.

 

Section 6.23                                Eligibility.  No Borrower will take any action that causes
it to become ineligible to borrow from CoBank.

 

ARTICLE
VII

EVENTS OF DEFAULT AND REMEDIES

 

Section 7.1                                      Events
of Default.  The occurrence of any
one or more of the following events shall constitute an Event of Default:

 

59

 

(a)                                  The
Borrowers shall fail to make when due, whether by acceleration or otherwise,
any payment of principal of any Note.

 

(b)                                 The
Borrowers shall fail to make when due, whether by acceleration or otherwise,
any payment of interest on any Note or on or of any other Obligation required
to be made to the Administrative Agent, the Letter of Credit Bank or any Lender
pursuant to this Agreement and such failure to pay shall continue for five (5)
Business Days after the date on which such payment was due.

 

(c)                                  Any
representation or warranty made by or on behalf of any Borrower in this
Agreement or any other Loan Document or by or on behalf of any Borrower in any
certificate, statement, report or document herewith or hereafter furnished to
any Lender or the Administrative Agent pursuant to this Agreement or any other
Loan Document shall prove to have been false or misleading in any material
respect on the date as of which the facts set forth are stated or certified.

 

(d)                                 Any
Borrower shall fail to comply with Sections 2.16, 5.2 or 5.3 hereof or any
Section of Article VI hereof.

 

(e)                                  Any
Borrower shall fail to comply with any other agreement, covenant, condition,
provision or term contained in this Agreement (other than those hereinabove set
forth in this Section 7.1) and such failure to comply shall continue for 30
calendar days after whichever of the following dates is the earliest:  (i) the date any Borrower or the Borrowers’
Agent gives notice of such failure to the Lenders, (ii) the date any Borrower
should have given notice of such failure to the Administrative Agent pursuant
to Section 5.1, or (iii) the date the Administrative Agent or any Lender gives
notice of such failure to the Borrower.

 

(f)                                    Any
default (however denominated or defined) shall occur under any Security
Document.

 

(g)                                 Any
Borrower shall become insolvent or shall generally not pay its debts as they
mature or shall apply for, shall consent to, or shall acquiesce in the
appointment of a custodian, trustee or receiver of such Borrower or for a
substantial part of the property thereof or, in the absence of such
application, consent or acquiescence, a custodian, trustee or receiver shall be
appointed for any Borrower or for a substantial part of the property thereof
and shall not be discharged within 45 days, or any Borrower shall make an
assignment for the benefit of creditors.

 

(h)                                 Any
bankruptcy, reorganization, debt arrangement or other proceedings under any
bankruptcy or insolvency law shall be instituted by or against any Borrower,
and, if instituted against any Borrower, shall have been consented to or
acquiesced in by such Borrower, or shall remain undismissed for 60 days, or an
order for relief shall have been entered against such Borrower.

 

60

 

(i)                                     Any
dissolution or liquidation proceeding shall be instituted by or against any
Borrower, and, if instituted against any Borrower, shall be consented to or
acquiesced in by such Borrower or shall remain for 45 days undismissed.

 

(j)                                     A
judgment or judgments for the payment of money in excess of the sum of $250,000
in the aggregate shall be rendered against any Borrower and either (i) the
judgment creditor executes on such judgment or (ii) such judgment remains
unpaid or undischarged for more than 60 days from the date of entry thereof or
such longer period during which execution of such judgment shall be stayed
during an appeal from such judgment.

 

(k)                                  The
maturity of any material Indebtedness of any Borrower (other than Indebtedness
under this Agreement) shall be accelerated, or any Borrower shall fail to pay
any such material Indebtedness when due (after the lapse of any applicable
grace period) or, in the case of such Indebtedness payable on demand, when
demanded (after the lapse of any applicable grace period), or any event shall
occur or condition shall exist and shall continue for more than the period of
grace, if any, applicable thereto and shall have the effect of causing, or
permitting the holder of any such Indebtedness or any trustee or other Person
acting on behalf of such holder to cause, such material Indebtedness to become
due prior to its stated maturity or to realize upon any collateral given as
security therefor.  For purposes of this
Section, Indebtedness of any Borrower shall be deemed “material” if it exceeds
$1,000,000 as to any item of Indebtedness or in the aggregate for all items of
Indebtedness with respect to which any of the events described in this Section
7.1(k) has occurred.

 

(l)                                     Any
execution or attachment shall be issued whereby any substantial part of the
property of any Borrower shall be taken or attempted to be taken and the same
shall not have been vacated or stayed within 30 days after the issuance
thereof.

 

(m)                               Any
Security Document shall, at any time, cease to be in full force and effect or
shall be judicially declared null and void, or the validity or enforceability
thereof shall be contested by any Borrower, or the Administrative Agent or the
Lenders shall cease to have a valid and perfected security interest having the
priority contemplated thereunder in all of the collateral described therein,
other than by action or inaction of the Administrative Agent or the Lenders if
(i) the aggregate value of the collateral affected by any of the foregoing
exceeds $150,000 and (ii) any of the foregoing shall remain unremedied for ten
(10) days or more after receipt of notice thereof by the Borrowers’ Agent from
the Administrative Agent.

 

(n)                                 Any
Change of Control shall occur.

 

Section 7.2                                      Remedies.  If (a) any Event of Default described in Sections
7.1 (g), (h) or (i) shall occur, the Commitments shall automatically terminate
and the Notes and all other Obligations shall automatically become immediately
due and payable, and the Borrowers shall

 

61

 

without demand
cash collateralize an amount equal to the aggregate face amount of all
outstanding Letters of Credit; or (b) any other Event of Default shall occur
and be continuing, then, upon receipt by the Administrative Agent of a request
in writing from the Required Lenders, the Administrative Agent shall take any
of the following actions so requested: (i) declare the Commitments terminated,
whereupon the Commitments shall terminate, (ii) declare the outstanding unpaid
principal balance of the Notes, the accrued and unpaid interest thereon and all
other Obligations to be forthwith due and payable, whereupon the Notes, all
accrued and unpaid interest thereon and all such Obligations shall immediately
become due and payable, in each case without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived, anything in
this Agreement or in the Notes to the contrary notwithstanding, and (iii)
demand that the Borrowers cash collateralize an amount equal to the aggregate face
amount of all outstanding Letters of Credit.  Upon the occurrence of any of the events
described in clause (a) of the preceding sentence, or upon the occurrence of
any of the events described in clause (b) of the preceding sentence when so
requested by the Required Lenders, the Administrative Agent may exercise all
rights and remedies under any of the Loan Documents, and enforce all rights and
remedies under any applicable law.

 

Section 7.3                                      Offset.  In addition to the remedies set forth in
Section 7.2, upon the occurrence of any Event of Default and thereafter while
the same be continuing, each Borrower hereby irrevocably authorizes each Lender
to set off any Obligations owed to such Lender against all deposits and credits
of such Borrower with, and any and all claims of such Borrower against, such
Lender.  Such right shall exist whether
or not such Lender shall have made any demand hereunder or under any other Loan
Document, whether or not the Obligations, or any part thereof, or deposits and
credits held for the account of the Borrowers is or are matured or unmatured,
and regardless of the existence or adequacy of any collateral, guaranty or any
other security, right or remedy available to such Lender or the Lenders.  Each Lender agrees that, as promptly as is
reasonably possible after the exercise of any such setoff right, it shall
notify the Borrowers’ Agent of its exercise of such setoff right; provided,
however, that the failure of any Lender to provide such notice shall not
affect the validity of the exercise of such setoff rights.  Nothing in this Agreement shall be deemed a
waiver or prohibition of or restriction on any Lender to all rights of banker’s
Lien, setoff and counterclaim available pursuant to law.

 

ARTICLE
VIII

THE ADMINISTRATIVE AGENT

 

The following
provisions shall govern the relationship of the Administrative Agent with the
Lenders.

 

Section 8.1                                      Appointment
and Authorization.  Each
Lender appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such respective powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto.  Neither the Administrative Agent nor any of
its directors, officers or employees shall be liable for any action

 

62

 

taken
or omitted to be taken by it under or in connection with the Loan Documents,
except for its own gross negligence or willful misconduct.  The Administrative Agent shall act as an
independent contractor in performing its obligations as Administrative Agent
hereunder.  The duties of the
Administrative Agent shall be mechanical and administrative in nature, and
nothing herein contained shall be deemed to create any fiduciary relationship
among or between the Administrative Agent, any Borrower or the Lenders.

 

Section 8.2                                      Note
Holders.  The Administrative Agent
may treat the payee of any Note as the holder thereof until written notice of
transfer shall have been filed with it, signed by such payee and in form
reasonably satisfactory to the Administrative Agent.

 

Section 8.3                                      Consultation
With Counsel. 
The Administrative Agent may consult with legal counsel selected by it
and shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.

 

Section 8.4                                      Loan
Documents.  The Administrative Agent
shall not be responsible to any Lender for any recitals, statements,
representations or warranties in any Loan Document or be under a duty to
examine or pass upon the validity, effectiveness, genuineness or value of any
of the Loan Documents or any other instrument or document furnished pursuant
thereto, and the Administrative Agent shall be entitled to assume that the same
are valid, effective and genuine and what they purport to be.

 

Section 8.5                                      CoBank
and Affiliates.  With respect
to its Commitments and the Loans made by it, CoBank shall have the same rights
and powers under the Loan Documents as any other Lender and may exercise the
same as though it were not the Administrative Agent consistent with the terms
thereof, and CoBank and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower as if it were not
the Administrative Agent.

 

Section 8.6                                      Action
by Administrative Agent.  Except
as may otherwise be expressly stated in this Agreement, the Administrative
Agent shall be entitled to use its discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, or with
respect to taking or refraining from taking any action or actions which it may
be able to take under or in respect of, the Loan Documents.  The Administrative Agent shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all holders of Notes; provided, however,
that the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
the Loan Documents or applicable law.  The
Administrative Agent shall incur no liability under or in respect of any of the
Loan Documents by acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by it to be genuine or authentic or to be
signed by the proper party or parties and to be consistent with the terms of
this Agreement.

 

63

 

Section 8.7                                      Credit
Analysis.  Each Lender has
made, and shall continue to make, its own independent investigation or
evaluation of the operations, business, property and condition, financial and
otherwise, of any Borrower in connection with entering into this Agreement and
has made its own appraisal of the creditworthiness of each Borrower.  Except as explicitly provided herein, the
Administrative Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect to such operations, business, property, condition or
creditworthiness, whether such information comes into its possession on or
before the first Event of Default or at any time thereafter.

 

Section 8.8                                      Notices
of Event of Default, Etc.  In the
event that the Administrative Agent shall have acquired actual knowledge of any
Event of Default or Default, the Administrative Agent shall promptly give
notice thereof to the Lenders.  The
Administrative Agent shall not be deemed to have knowledge or notice of any
Default or Event of Default, except with respect to actual defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or a Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “Notice of Default”.

 

Section 8.9                                      Indemnification.  Each Lender agrees to indemnify the
Administrative Agent, as Administrative Agent (to the extent not reimbursed by
the Borrower), ratably according to such Lender’s share of the aggregate
Revolving and Term Loan Commitment Amounts 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 be imposed on or incurred by the Administrative Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the
Administrative Agent under the Loan Documents, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s gross negligence or willful
misconduct.  No payment by any Lender
under this Section shall relieve the Borrower of any of its obligations under
this Agreement.

 

Section 8.10                                Payments
and Collections.  All funds received
by the Administrative Agent in respect of any payments made by any Borrower on
the Tranche A Term Notes shall be distributed forthwith by the Administrative
Agent among the Tranche A Term Lenders, in like currency and funds as received,
ratably according to each such Lender’s Term Loan Percentage.  All funds received by the Administrative
Agent in respect of any payments made by any Borrower on the Tranche B Term
Notes shall be distributed forthwith by the Administrative Agent among the
Tranche B Term Lenders, in like currency and funds as received, ratably
according to each such Lender’s Term Loan Percentage.  All funds received by the Administrative
Agent in respect of any payments made by any Borrower on the Revolving Notes,
Revolving Commitment Fees or Letter of Credit Fees shall be distributed
forthwith by the Administrative Agent among the Revolving Lenders, in like
currency and funds as received, ratably according to each such Lender’s
Revolving Percentage.

 

64

 

(a)                                  Personal
Property.  After any Event of Default
has occurred, all funds received by the Administrative Agent as realization on
collateral that constitutes personal property (excluding any machinery and
equipment that are fixtures to any real estate) shall (except as may otherwise
be required by law) be distributed by the Administrative Agent in the following
order: (a) first, to the Administrative Agent in an amount equal to the
amounts, if any, as are necessary to pay the costs and expenses (including
reasonable attorneys’ fees) incurred by the Administrative Agent in connection
with any enforcement action or collection proceeding in relation to the
relevant personal property collateral, (b) second, to the Lenders, ratably
in an amount equal to the amounts, if any, as are necessary to pay the costs
and expenses (including reasonable attorneys’ fees) incurred by each Lender in
connection with any enforcement action or collection proceeding in relation to
the relevant personal property collateral, (c) third, to the Revolving
Lenders in an amount up to but not exceeding the amount of principal then
outstanding in respect of the Revolving Loans and any portion of the
Obligations relating thereto and any accrued and unpaid interest thereon
(including any interest that, but for the provisions of the Bankruptcy Code
would have accrued on such amounts), (d) fourth, to the Term Lenders
ratably, in an amount up to but not exceeding the amount of the principal of
the Obligations then outstanding and any accrued but unpaid interest thereon
(including any interest that, but for the provisions of the Bankruptcy Code
would have accrued on such amounts), (e) fifth, to the Lenders, ratably,
in an amount up to but not exceeding the amount of any other Obligations then
outstanding, and (f) sixth, the remainder, if any, to the Borrowers’
Agent for the benefit of the Borrowers or as a court of competent jurisdiction
may otherwise direct.

 

(b)                                 Real
Property.  After any Event of Default
has occurred, all funds received by the Administrative Agent as realization on
collateral that constitutes real property (including any machinery and
equipment that are fixtures to such real property) shall (except as may
otherwise be required by law) be distributed by the Administrative Agent in the
following order: (a) first, to the Administrative Agent in an amount
equal to the amounts, if any, as are necessary to pay the costs and expenses
(including reasonable attorneys’ fees) incurred by the Administrative Agent in
connection with any enforcement action or collection proceeding in relation to
the relevant real property collateral, (b) second, to the Lenders,
ratably in an amount equal the amounts, if any, as are necessary to pay the
costs and expenses (including reasonable attorneys’ fees) incurred by each
Lender in connection with any enforcement action or collection proceeding in
relation to the relevant real property collateral, (c) third, to the
Term Lenders ratably, in an amount up to but not exceeding the amount the
amount of the principal of the Obligations then outstanding and any accrued but
unpaid interest thereon (including any interest that, but for the provisions of
the Bankruptcy Code would have accrued on such amounts), (d) fourth, to
the Revolving Lenders in an amount up to but not exceeding the amount of
principal then outstanding in respect of the Revolving Loans and any portion of
the Obligations relating thereto and any accrued and unpaid interest thereon
(including any interest that, but for the provisions of the Bankruptcy Code
would have accrued on such amounts), (e) fifth, to the Lenders, ratably,
in an amount up to but

 

65

 

not
exceeding the amount of any other Obligations then outstanding, and (f) sixth,
the remainder, if any, to the Borrowers’ Agent for the benefit of the Borrowers
or as a court of competent jurisdiction may otherwise direct.

 

(c)                                  General.  After any Event of Default has occurred, all
funds received by the Administrative Agent, whether as payments by the
Borrowers or as realization on collateral not constituting personal property or
real property (which shall be distributed in accordance with subsections (a)
and (b) of this Section 8.10, as applicable) or on any guaranties, shall
(except as may otherwise be required by law) be distributed by the
Administrative Agent in the following order: (a) first, to the
Administrative Agent in an amount equal to the amounts, if any, as are
necessary to pay the costs and expenses (including reasonable attorneys’ fees)
incurred by the Administrative Agent in connection with any enforcement action
or collection proceeding hereunder, (b) second, to the Lenders, ratably
in an amount equal the amounts, if any, as are necessary to pay the costs and
expenses (including reasonable attorneys’ fees) incurred by each Lender in
connection with any enforcement action or collection proceeding, (c) third,
to the Lenders in an amount up to but not exceeding the amount of principal
then outstanding on the Obligations and any accrued and unpaid interest thereon
(including any interest that, but for the provisions of the Bankruptcy Code
would have accrued on such amounts), (d) fourth, to the Lenders,
ratably, in an amount up to but not exceeding the amount of any other
Obligations then outstanding, and (e) fifth, the remainder, if any, to
the Borrowers’ Agent for the benefit of the Borrowers or as a court of
competent jurisdiction may otherwise direct.

 

Section 8.11                                Sharing
of Payments.  If any Lender
shall receive and retain any payment, voluntary or involuntary, whether by
setoff, application of deposit balance or security, or otherwise, in respect of
Indebtedness under this Agreement or the Notes in excess of such Lender’s share
thereof as determined under this Agreement, then such Lender shall purchase
from the other Lenders for cash and at face value and without recourse, such
participation in the Notes held by such other Lenders as shall be necessary to
cause such excess payment to be shared ratably as aforesaid with such other
Lenders; provided, that if such excess payment or part thereof is
thereafter recovered from such purchasing Lender, the related purchases from
the other Lenders shall be rescinded ratably and the purchase price restored as
to the portion of such excess payment so recovered, but without interest.  Subject to the participation purchase
obligation above, each Lender agrees to exercise any and all rights of setoff,
counterclaim or banker’s lien first fully against any Notes and participations
therein held by such Lender, next to any other Indebtedness of the Borrowers to
such Lender arising under or pursuant to this Agreement and to any
participations held by such Lender in Indebtedness of the Borrowers arising
under or pursuant to this Agreement, and only then to any other Indebtedness of
any Borrower to such Lender.

 

Section 8.12                                Advice
to Lenders.  The
Administrative Agent shall forward to the Lenders copies of all notices,
financial reports and other material communications received hereunder from the
Borrowers by it as Administrative Agent, excluding, however, notices,

 

66

 

reports
and communications which by the terms hereof are to be furnished by the
Borrowers directly to each Lender.

 

Section 8.13                                Defaulting
Lender.

 

(a)                                  Remedies
Against a Defaulting Lender.  In addition to the rights and remedies that
may be available to the Administrative Agent or the Borrowers’ Agent under this
Agreement or applicable law, if at any time a Lender is a Defaulting Lender
such Defaulting Lender’s right to participate in the administration of the
Loans, this Agreement and the other Loan Documents, including without
limitation, any right to vote in respect of, to consent to or to direct any
action or inaction of the Administrative Agent or to be taken into account in
the calculation of the Required Lenders, shall be suspended while such Lender
remains a Defaulting Lender.  If a Lender
is a Defaulting Lender because it has failed to make timely payment to the Administrative
Agent of any amount required to be paid to the Administrative Agent hereunder
(without giving effect to any notice or cure periods), in addition to other
rights and remedies which the Administrative Agent or the Borrower may have
under the immediately preceding provisions or otherwise, the Administrative
Agent shall be entitled (i) to collect interest from such Defaulting Lender on
such delinquent payment for the period from the date on which the payment was
due until the date on which the payment is made at the overnight Federal Funds
rate, (ii) to withhold or setoff and to apply in satisfaction of the defaulted
payment and any related interest, any amounts otherwise payable to such
Defaulting Lender under this Agreement or any other Loan Document until such
defaulted payment and related interest has been paid in full and such default
no longer exists and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest.  Any amounts
received by the Administrative Agent in respect of a Defaulting Lender’s Loans
shall not be paid to such Defaulting Lender and shall be held uninvested by the
Administrative Agent and either applied against the purchase price of such
Loans under the following subsection (b) or paid to such Defaulting Lender upon
the default of such Defaulting Lender being cured.

 

(b)                                 Purchase
from Defaulting Lender.  Any Lender
that is not a Defaulting Lender shall have the right, but not the obligation,
in its sole discretion, to acquire all of a Defaulting Lender’s Commitments.  If more than one Lender exercises such right,
each such Lender shall have the right to acquire such proportion of such
Defaulting Lender’s Commitments on a pro rata basis.  Upon any such purchase, the Defaulting Lender’s
interest in its Loans and its rights hereunder (but not its liability in
respect thereof or under the Loan Documents or this Agreement to the extent the
same relate to the period prior to the effective date of the purchase) shall
terminate on the date of purchase, and the Defaulting Lender shall promptly
execute all documents reasonably requested to surrender and transfer such
interest to the purchaser thereof subject to and in accordance with the requirements
set forth in 9.6, including an Assignment in form reasonably acceptable to the
Administrative Agent.  The purchase price
for the Commitments of a Defaulting Lender shall be equal to the amount of the
principal balance of the Loans

 

67

 

outstanding
and owed by the Borrower to the Defaulting Lender.  The purchaser shall pay to the Defaulting
Lender in Immediately Available Funds on the date of such purchase the
principal of and accrued and unpaid interest and fees on the Loans made by such
Defaulting Lender hereunder (it being understood that such accrued and unpaid
interest and fees may be paid pro rata to the purchasing Lender and the
Defaulting Lender by the Administrative Agent at a subsequent date upon receipt
of payment of such amounts from the Borrower). 
Prior to payment of such purchase price to a Defaulting Lender, the
Administrative Agent shall apply against such purchase price any amounts
retained by the Administrative Agent pursuant to the last sentence of the
immediately preceding subsection (a).  The
Defaulting Lender shall be entitled to receive amounts owed to it by the
Borrower under the Loan Documents which accrued prior to the date of the
default by the Defaulting Lender, to the extent the same are received by the
Administrative Agent from or on behalf of the Borrower.  There shall be no recourse against any Lender
or the Administrative Agent for the payment of such sums except to the extent
of the receipt of payments from any other party or in respect of the Loans.

 

Section 8.14                                Resignation.  If at any time CoBank shall deem it
advisable, in its sole discretion, it may submit to each of the Lenders and the
Borrowers’ Agent a written notification of its resignation as Administrative
Agent under this Agreement, such resignation to be effective upon the
appointment of a successor Administrative Agent, but in no event later than 30
days from the date of such notice.  Upon
submission of such notice, the Required Lenders may appoint a successor
Administrative Agent.

 

ARTICLE
IX

MISCELLANEOUS

 

Section 9.1                                      Modifications.  Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 9.1.  The Required Lenders and
each Borrower party to the relevant Loan Document may, or with the written
consent of the Required Lenders, the Administrative Agent and each such
Borrower may, from time to time, (i) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the Lenders or of the Borrowers hereunder or
thereunder or (ii) waive, on such terms and conditions as the Required Lenders
or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, no such amendment, modification, waiver or consent shall:

 

(a)                                  Reduce
the rate or extend the time of payment of interest thereon, or reduce the
amount of the principal thereof, or modify any of the provisions of any Note
with respect to the payment or repayment thereof, without the consent of the
holder of each Note so affected; or

 

68

 

(b)                                 Increase
the amount or extend the time of any Commitment of any Lender, without the
consent of such Lender; or

 

(c)                                  Reduce
the rate or extend the time of payment of any fee payable to a Lender, without
the consent of the Lender affected; or

 

(d)                                 Except
as may otherwise be expressly provided in any of the other Loan Documents,
release any material portion of collateral securing, or any guaranties for, all
or any part of the Obligations without the consent of all the Lenders; or

 

(e)                                  Amend
the definition of Required Lenders or otherwise reduce the percentage of the
Lenders required to approve or effectuate any such amendment, modification,
waiver, or consent, without the consent of all the Lenders; or

 

(f)                                    Require
the consent of any Lender (i) other than the Revolving Lenders if such
amendment, waiver or consent relates solely to the Revolving Loans, (ii) other
than the Tranche A Term Lenders if such amendment, waiver or consent relates
solely to the Tranche A Term Loans, or (iii) other the Tranche B Term Lenders
if such amendment, waiver or consent relates solely to the Tranche B Term Loans

 

(g)                                 Amend
any of the foregoing Subsections (a) through (f) of this Section or this
Subsection (g) without the consent of all the Lenders; or

 

(h)                                 Amend
any provision of this Agreement relating to the Administrative Agent (in its
capacity as agent for the Lenders) without the consent of the Administrative
Agent; or

 

(i)                                     Amend
any provision of this Agreement relating to the issuance of Letters of Credit
without the consent of the Administrative Agent.

 

Section 9.2                                      Expenses.  Whether or not the transactions contemplated
hereby are consummated, the Borrowers agree to reimburse the Administrative
Agent upon demand for all reasonable out-of-pocket expenses paid or incurred by
the Administrative Agent (including the fees and expenses of Dorsey &
Whitney LLP, counsel to the Administrative Agent, and any filing and recording
costs) in connection with the negotiation, preparation, approval, review,
execution, delivery, administration, amendment, modification and interpretation
of this Agreement and the other Loan Documents and any commitment letters
relating thereto.  The Borrowers shall
also reimburse the Administrative Agent and each Lender upon demand for all
reasonable out-of-pocket expenses (including expenses of legal counsel) paid or
incurred by the Administrative Agent or any Lender in connection with the
collection and enforcement of this Agreement and any other Loan Document.  The obligations of the Borrowers under this
Section shall survive any termination of this Agreement.

 

Section 9.3                                      Waivers,
etc.  No failure on the part of the
Administrative Agent or the holder of a Note to exercise and no delay in
exercising any power or right hereunder or under

 

69

 

any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.  The remedies herein and in the other Loan
Documents provided are cumulative and not exclusive of any remedies provided by
law.

 

Section 9.4                                      Notices.  Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. 
All periods of notice shall be measured from the date of delivery
thereof if manually delivered, from the date of sending thereof if sent by
facsimile transmission, from the first Business Day after the date of sending
if sent by overnight courier, or from four days after the date of mailing if
mailed; provided, however, that any notice to the Administrative
Agent or any Lender under Article II hereof shall be deemed to have been given
only when received by the Administrative Agent or such Lender.

 

Section 9.5                                      Taxes.  The Borrowers agrees to pay, and save the
Administrative Agent and the Lenders harmless from all liability for, any stamp
or other taxes which may be payable with respect to the execution or delivery
of this Agreement or the issuance of the Notes, which obligation of the
Borrowers shall survive the termination of this Agreement.

 

Section 9.6                                      Successors
and Assigns; Participations; Purchasing Lenders.

 

(a)                                  This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Administrative Agent, the Lenders, all future holders of the Notes, and their
respective successors and assigns, except that the Borrowers may not assign or
transfer any of their rights or obligations under this Agreement without the
prior written consent of each Lender.

 

(b)                                 Any
Lender may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or more banks or other
financial institutions (“Participants”) participating interests in a minimum
amount of $250,000 in any Revolving Loan or any Term Loan or other Obligation
owing to such Lender, any Revolving Note or any Term Note held by such Lender,
and any Revolving Commitment or any Term Loan Commitment of such Lender, or any
other interest of such Lender hereunder. 
In the event of any such sale by any Lender of participating interests
to a Participant, (i) such Lender’s obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible for the performance thereof, (iii) such Lender shall
remain the holder of any such Revolving Note or any such Term Note for all
purposes under this Agreement, (iv) the Borrowers, the Borrowers’ Agent and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and (v) the agreement pursuant to which such

 

70

 

Participant
acquires its participating interest herein shall provide that such Lender shall
retain the sole right and responsibility to enforce the Obligations, including,
without limitation the right to consent or agree to any amendment,
modification, consent or waiver with respect to this Agreement or any other
Loan Document, provided that such agreement may provide that such Lender will
not consent or agree to any such amendment, modification, consent or waiver
with respect to the matters set forth in Sections 9.1(a) through (e) without the
prior consent of such Participant.  Each
Borrower agrees that if amounts outstanding under this Agreement, the Revolving
Notes, the Term Notes and the Loan Documents are due and unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have, to the extent
permitted by applicable law, the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Revolving
Note, any Term Note or other Loan Document 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 Revolving Note, any Term Note or other Loan Document; provided,
that such right of setoff shall be subject to the obligation of such
Participant to share with the Lenders, and the Lenders agree to share with such
Participant, as provided in Section 8.11. 
Each Borrower also agrees that each Participant shall be entitled to the
benefits of Sections 2.18, 2.19, 2.20, 2.21 and 9.2 with respect to its
participation in the Revolving Commitments, Term Loan Commitments, Revolving
Loans and Term Loans; provided, that no Participant shall be entitled to
receive any greater amount pursuant to such subsections 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.

 

(c)                                  Each
Lender may, from time to time, with the consent of the Administrative Agent and
the Borrowers’ Agent (neither of which consents shall be unreasonably withheld
or delayed; and if an Event of Default shall have occurred and be continuing,
then consent of the Borrowers’ Agent shall not be required), assign to other
lenders (“Assignees”) all or part of its rights or obligations hereunder
or under any Loan Document in a minimum amount of $1,000,000 evidenced by any
Revolving Note then held by that Lender, together with equivalent proportions
of its Revolving Commitment, any Term Note then held by that Lender, its Term
Loan Commitment pursuant to written agreements executed by such assigning
Lender, such Assignee(s), the Borrowers and the Administrative Agent in
substantially the form of Exhibit H, which agreements shall specify in
each instance the portion of the Obligations evidenced by the Revolving Notes
and Term Notes which is to be assigned to each Assignee and the portion of the
Revolving Commitment and Term Loan Commitment of such Lender to be assumed by
each Assignee (each, an “Assignment Agreement”); provided, however,
that the assigning Lender must pay to the Administrative Agent a processing and
recordation fee of $3,500 per assignment. 
Upon the execution of each Assignment Agreement by the assigning Lender,
the relevant Assignee, the Borrowers and the Administrative Agent, payment to
the assigning Lender by such Assignee of the purchase price for the portion of
the Obligations being acquired by it and receipt by the Borrowers’ Agent of a
copy of

 

71

 

the relevant
Assignment Agreement, (x) such Assignee lender shall thereupon become a “Lender”
for all purposes of this Agreement with a pro rata share of the Revolving
Commitment and a Term Loan Commitment in the amount set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded a
Lender under this Agreement, (y) such assigning Lender shall have no further
liability for funding the portion of its Commitment assumed by such Assignee
and (z) the address for notices to such Assignee shall be as specified in the
Assignment Agreement executed by it.  Concurrently
with the execution and delivery of each Assignment Agreement, the assigning
Lender shall surrender to the Administrative Agent the Revolving Note and Term
Note a portion of which is being assigned, and the Borrowers shall execute and
deliver a Revolving Note and Term Note to the Assignee in the amount of its
Revolving Commitment and its Term Loan Commitment, respectively, and a new
Revolving Note and Term Note to the assigning Lender in the amount of its
Revolving Commitment and Term Loan Commitment, respectively, after giving
effect to the reduction occasioned by such assignment, all such Notes to
constitute “Revolving Notes” and “Term Notes” for all purposes of this
Agreement and of the other Loan Documents.

 

(d)                                 The
Borrowers shall not be liable for any costs incurred by the Lenders in
effecting any participation under subparagraph (b) of this subsection or by the
Lenders in effecting any assignment under subparagraph (c) of this subsection
except with respect to the Administrative Agent as provided in this Section
9.6.

 

(e)                                  Each
Lender may disclose to any Assignee or Participant and to any prospective
Assignee or Participant any and all financial information in such Lender’s
possession concerning the Borrowers or any of their Subsidiaries (if any) which
has been delivered to such Lender by or on behalf of the Borrowers or any of
their Subsidiaries pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrowers or any of their Subsidiaries in
connection with such Lender’s credit evaluation of such Borrower or any of its
Subsidiaries prior to entering into this Agreement, provided that prior
to disclosing such information, such Lender shall first obtain the agreement of
such prospective Assignee or Participant to comply with the provisions of
Section 9.7.

 

(f)                                    Notwithstanding
any other provision in this Agreement, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and
interest in this Agreement and any note held by it in favor of any federal
reserve bank in accordance with Regulation A of the Board or U.  S.  Treasury
Regulation 31 CFR § 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.

 

(g)                                 Notwithstanding
any other provision in this Agreement, (i) all Revolving Loan, Term Loan or
other Obligations owing to CoBank hereunder that are retained by CoBank for its
own account and are not part of a sale of a participation interest or the
assignment of any rights or obligations under the Loan Documents, shall be
entitled to

 

72

 

patronage
distributions in accordance with the bylaws of CoBank and its practices and
procedures related to patronage distributions and (ii) any Revolving Loan, Term
Loan or other Obligations owing to CoBank hereunder that are not retained by
CoBank for its own account and are part of a sale of a participation interest
or the assignment of any rights or obligations under the Loan Documents, shall
not be entitled to any such patronage distributions.

 

Section 9.7                                      Confidentiality
of Information.  The
Administrative Agent and each Lender shall use reasonable efforts to assure
that information about the Borrower and its operations, affairs and financial
condition, not generally disclosed to the public or to trade and other
creditors, which is furnished to the Administrative Agent or such Lender
pursuant to the provisions hereof is used only for the purposes of this
Agreement and any other relationship between such Lender and the Borrower and
shall not be divulged to any Person other than the Lender, their Affiliates and
their respective officers, directors, employees and agents, except: (a) to
their attorneys and accountants, (b) in connection with the enforcement of the
rights of the Administrative Agent and the Lenders hereunder and under the Loan
Documents or otherwise in connection with applicable litigation, (c) in
connection with assignments and participations and the solicitation of
prospective assignees and participants referred to in the immediately preceding
Section, (d) if such information is generally available to the public other
than as a result of disclosure by the Administrative Agent or any Lender, (e)
to any direct or indirect contractual counterparty in any hedging arrangement
or such contractual counterparty’s professional advisor, (f) to any nationally
recognized rating agency that requires information about any Lender’s
investment portfolio in connection with ratings issued with respect to such Lender,
and (g) as may otherwise be required or requested by any regulatory authority having
jurisdiction over the Administrative Agent or any Lender or by any applicable
law, rule, regulation or judicial process, the opinion of any Lender’s counsel
concerning the making of such disclosure to be binding on the parties hereto.  No Lender shall incur any liability to the
Borrower by reason of any disclosure permitted by this Section.

 

Section 9.8                                      Governing
Law and Construction.  THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF.  Whenever
possible, each provision of this Agreement and the other Loan Documents and any
other statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto shall be interpreted in such manner as to be effective and
valid under such applicable law, but, if any provision of this Agreement, the
other Loan Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be held to
be prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement, the other Loan Documents or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto.

 

73

 

Section 9.9                                      Consent
to Jurisdiction.  AT THE
OPTION OF THE ADMINISTRATIVE AGENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
MAY BE ENFORCED IN ANY FEDERAL COURT OR COLORADO STATE COURT SITTING IN CITY OR
COUNTY OF DENVER; AND EACH BORROWER CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT.  IN THE
EVENT ANY BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER
ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT, THE ADMINISTRATIVE AGENT AT ITS OPTION
SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND
VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER
APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

 

Section 9.10                                Waiver
of Jury Trial.  EACH BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

 

Section 9.11                                Survival
of Agreement.  All
representations, warranties, covenants and agreement made by each Borrower
herein or in the other Loan Documents and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be deemed to have been relied upon by the Lenders and
shall survive the making of the Loans by the Lenders and the execution and
delivery to the Lenders by the Borrowers of the Notes, regardless of any
investigation made by or on behalf of the Lenders, and shall continue in full
force and effect as long as any Obligation is outstanding and unpaid and so
long as the Commitments have not been terminated; provided, however, that the
obligations of the under 9.2, 9.5 and 9.12 shall survive payment in full of the
Obligations and the termination of the Commitments.

 

Section 9.12                                Indemnification.  The Borrowers hereby agree to defend,
protect, indemnify and hold harmless the Administrative Agent and the Lenders
and their respective Affiliates and the directors, officers, employees,
attorneys and agents of the Administrative Agent and the Lenders and their
respective Affiliates (each of the foregoing being an “Indemnitee” and
all of the foregoing being collectively the “Indemnitees”) from and
against any and all claims, actions, damages, liabilities, judgments, costs and
expenses (including all reasonable fees and disbursements of counsel which may
be incurred in the investigation or defense of any matter) imposed upon,
incurred by or asserted against any Indemnitee, whether direct, indirect or
consequential and whether based on any federal, state, local or foreign laws or
regulations (including securities laws, environmental laws, commercial laws and
regulations), under common law or on equitable cause, or on contract or
otherwise:

 

74

 

(a)                                  by
reason of, relating to or in connection with the execution, delivery, performance
or enforcement of any Loan Document, any commitments relating thereto, or any
transaction contemplated by any Loan Document; or

 

(b)                                 by
reason of, relating to or in connection with any credit extended or used under
the Loan Documents or any act done or omitted by any Person, or the exercise of
any rights or remedies thereunder, including the acquisition of any collateral
by the Lenders by way of foreclosure of the Lien thereon, deed or bill of sale
in lieu of such foreclosure or otherwise;

 

provided,
however, that the Borrowers shall not be liable to any Indemnitee for any
portion of such claims, damages, liabilities and expenses resulting from such
Indemnitee’s gross negligence or willful misconduct.  In the event this indemnity is unenforceable
as a matter of law as to a particular matter or consequence referred to herein,
it shall be enforceable to the full extent permitted by law.

 

This
indemnification applies, without limitation, to any act, omission, event or
circumstance existing or occurring on or prior to the later of the Termination
Date or the date of payment in full of the Obligations, including specifically
Obligations arising under clause (b) of this Section.  The indemnification provisions set forth
above shall be in addition to any liability the Borrowers may otherwise have.  Without prejudice to the survival of any
other obligation of the Borrowers hereunder the indemnities and obligations of
the Borrowers contained in this Section shall survive the payment in full of
the other Obligations.

 

Section 9.13                                Captions.  The captions or headings herein and any table
of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.

 

Section 9.14                                Entire
Agreement.  This Agreement and
the other Loan Documents embody the entire agreement and understanding between
the Borrowers, the Administrative Agent and the Lenders with respect to the
subject matter hereof and thereof.  This
Agreement supersedes all prior agreements and understandings relating to the
subject matter hereof.  Nothing contained
in this Agreement or in any other Loan Document, expressed or implied, is
intended to confer upon any Persons other than the parties hereto any rights,
remedies, obligations or liabilities hereunder or thereunder.

 

Section 9.15                                Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

 

Section 9.16                                Borrower
Acknowledgements.  Each Borrower
hereby acknowledges that (a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents, (b)
neither the Administrative Agent nor any Lender has any fiduciary relationship
to such Borrower, the relationship being solely that of debtor and creditor,

 

75

 

(c) no joint
venture exists between such Borrower and the Administrative Agent or any
Lender, and (d) neither the Administrative Agent nor any Lender undertakes any
responsibility to such Borrower to review or inform such Borrower of any matter
in connection with any phase of the business or operations of such Borrower and
such Borrower shall rely entirely upon its own judgment with respect to its
business, and any review, inspection or supervision of, or information supplied
to, the Borrowers by the Administrative Agent or any Lender is for the
protection of the Lenders and neither such Borrower nor any third party is
entitled to rely thereon.

 

Section 9.17                                Appointment
of and Acceptance by Borrowers’ Agent.  Midwest Investors of Iowa, Cooperative hereby
appoints and authorizes the Borrowers’ Agent to take such action as its agent
on its behalf and to exercise such powers under the Loan Documents as are
delegated to the Borrowers’ Agent by the terms thereof, together with such
power that are reasonably incidental thereto, and Golden Oval Eggs, LLC hereby
accepts such appointment.

 

Section 9.18                                Relationship
Among Borrowers.

 

(a)                                  JOINT
AND SEVERAL LIABILITY.  EACH BORROWER AGREES THAT IT IS LIABLE,
JOINTLY AND SEVERALLY WITH EACH OTHER BORROWER, FOR THE PAYMENT OF ALL
OBLIGATIONS OF THE BORROWERS UNDER THIS AGREEMENT, AND THAT THE LENDERS AND THE
ADMINISTRATIVE AGENT CAN ENFORCE SUCH OBLIGATIONS AGAINST ANY OR ALL BORROWERS,
IN THE LENDERS’ OR THE ADMINISTRATIVE AGENT’S SOLE AND UNLIMITED DISCRETION.

 

(b)                                 Waivers
of Defenses.  The obligations of the
Borrowers hereunder shall not be released, in whole or in part, by any action
or thing which might, but for this provision of this Agreement, be deemed a
legal or equitable discharge of a surety or guarantor, other than irrevocable
payment and performance in full of the Obligations (except for contingent
indemnity and other contingent Obligations not yet due and payable) at a time
after any obligation of the Lenders hereunder to make the Term Loans and
Revolving Loans and of the Letter of Credit Bank to issue Letters of Credit shall
have expired or been terminated and all outstanding Letters of Credit shall
have expired or the liability of the Letter of Credit Bank thereon shall have
otherwise been discharged.  The purpose
and intent of this Agreement is that the Obligations constitute the direct and
primary obligations of each Borrower and that the covenants, agreements and all
obligations of each Borrower hereunder be absolute, unconditional and
irrevocable.  Each Borrower shall be and
remain liable for any deficiency remaining after foreclosure of any mortgage,
deed of trust or security agreement securing all or any part of the
Obligations, whether or not the liability of any other Person for such
deficiency is discharged pursuant to statute, judicial decision or otherwise.

 

(c)                                  Other
Transactions.  The Lenders and the
Administrative Agent are expressly authorized to exchange, surrender or release
with or without consideration any

 

76

 

or
all collateral and security which may at any time be placed with it by the
Borrowers or by any other Person on behalf of the Borrowers, or to forward or
deliver any or all such collateral and security directly to the Borrowers for
collection and remittance or for credit. 
No invalidity, irregularity or unenforceability of any security for the
Obligations or other recourse with respect thereto shall affect, impair or be a
defense to the Borrowers’ obligations under this Agreement.  The liabilities of each Borrower hereunder
shall not be affected or impaired by any failure, delay, neglect or omission on
the part of any Lender or the Administrative Agent to realize upon any of the
Obligations of any other Borrower to the Lenders or the Administrative Agent,
or upon any collateral or security for any or all of the Obligations, nor by
the taking by any Lender or the Administrative Agent of (or the failure to
take) any guaranty or guaranties to secure the Obligations, nor by the taking
by any Lender or the Administrative Agent of (or the failure to take or the
failure to perfect its security interest in or other lien on) collateral or
security of any kind.  No act or omission
of any Lender or the Administrative Agent, whether or not such action or
failure to act varies or increases the risk of, or affects the rights or
remedies of a Borrower, shall affect or impair the obligations of the Borrowers
hereunder.

 

(d)                                 Actions
Not Required.  Each Borrower, to the
extent permitted by applicable law, hereby waives any and all right to cause a
marshaling of the assets of any other Borrower or any other action by any court
or other governmental body with respect thereto or to cause any Lender or the
Administrative Agent to proceed against any security for the Obligations or any
other recourse which any Lender or the Administrative Agent may have with
respect thereto and further waives any and all requirements that any Lender or
the Administrative Agent institute any action or proceeding at law or in
equity, or obtain any judgment, against any other Borrower or any other Person,
or with respect to any collateral security for the Obligations, as a condition
precedent to making demand on or bringing an action or obtaining and/or
enforcing a judgment against, such Borrower under this Agreement.

 

(e)                                  No
Subrogation.  Notwithstanding any
payment or payments made by any Borrower hereunder or any setoff or application
of funds of any Borrower by any Lender or the Administrative Agent, such
Borrower shall not be entitled to be subrogated to any of the rights of any
Lender or the Administrative Agent against any other Borrower or any other
guarantor or any collateral security or guaranty or right of offset held by any
Lender or the Administrative Agent for the payment of the Obligations, nor
shall such Borrower seek or be entitled to seek any contribution or
reimbursement from any other Borrower or any other guarantor in respect of
payments made by such Borrower hereunder, until all amounts owing to the
Lenders and the Administrative Agent by the Borrowers on account of the
Obligations are irrevocably paid in full. 
If any amount shall be paid to a Borrower on account of such subrogation
rights at any time when all of the Obligations shall not have been irrevocably
paid in full, such amount shall be held by that Borrower in trust for the
Lenders and the Administrative Agent, segregated from other funds of that
Borrower, and shall, forthwith upon receipt by the Borrower, be turned over

 

77

 

to
the Administrative Agent in the exact form received by the Borrower (duly
indorsed by the Borrower to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.

 

(f)                                    Application
of Payments.  Any and all payments
upon the Obligations made by the Borrowers or by any other Person, and/or the
proceeds of any or all collateral or security for any of the Obligations,
may be applied by the Lenders on such items of the Obligations as the Lenders
may elect.

 

(g)                                 Recovery
of Payment.  If any payment received
by the Lenders or the Administrative Agent and applied to the Obligations is
subsequently set aside, recovered, rescinded or required to be returned for any
reason (including, without limitation, the bankruptcy, insolvency or
reorganization of a Borrower or any other obligor), the Obligations to which
such payment was applied shall, to the extent permitted by applicable law, be
deemed to have continued in existence, notwithstanding such application, and each
Borrower shall be jointly and severally liable for such Obligations as fully as
if such application had never been made. 
References in this Agreement to amounts “irrevocably paid” or to “irrevocable
payment” refer to payments that cannot be set aside, recovered, rescinded or
required to be returned for any reason.

 

(h)                                 Borrowers’
Financial Condition.  Each Borrower
is familiar with the financial condition of the other Borrowers, and each
Borrower has executed and delivered this Agreement based on that Borrower’s own
judgment and not in reliance upon any statement or representation of the
Lenders or the Administrative Agent.  The
Lenders and the Administrative Agent shall have no obligation to provide any
Borrower with any advice whatsoever or to inform any Borrower at any time of
any Lender’s actions, evaluations or conclusions on the financial condition or
any other matter concerning the Borrowers.

 

(i)                                     Bankruptcy
of the Borrowers.  Each Borrower
expressly agrees that, to the extent permitted by applicable law, the
liabilities and obligations of that Borrower under this Agreement shall not in
any way be impaired or otherwise affected by the institution by or against any
other Borrower or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the relief
of debtors and that any discharge of any of the Obligations pursuant to any
such bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of that Borrower under this
Agreement, and that upon the institution of any of the above actions, such
obligations shall be enforceable against that Borrower.

 

(j)                                     Limitation;
Insolvency Laws.  As used in this
Section 9.18(j): (a) the term “Applicable Insolvency Laws” means the
laws of the United States of America or of any State, province, nation or other
governmental unit relating to bankruptcy, reorganization,

 

78

 

arrangement,
adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent
transfers or conveyances or other similar laws (including, without limitation,
11 U. S. C. §547, §548, §550 and other “avoidance” provisions of Title 11 of
the United Stated Code) as applicable in any proceeding in which the validity
and/or enforceability of this Agreement against any Borrower, or any Specified
Lien is in issue; and (b) “Specified Lien” means any security interest, mortgage,
lien or encumbrance granted by any Borrower securing the Obligations, in whole
or in part.  Notwithstanding any other
provision of this Agreement, if, in any proceeding, a court of competent
jurisdiction determines that with respect to any Borrower, this Agreement or
any Specified Lien would, but for the operation of this Section, be subject to
avoidance and/or recovery or be unenforceable by reason of Applicable
Insolvency Laws, this Agreement and each such Specified Lien shall be valid and
enforceable against such Borrower, only to the maximum extent that would not
cause this Agreement or such Specified Lien to be subject to avoidance,
recovery or unenforceability.  To the
extent that any payment to, or realization by, the Lenders or the Administrative
Agent on the Obligations exceeds the limitations of this Section and is
otherwise subject to avoidance and recovery in any such proceeding, the amount
subject to avoidance shall in all events be limited to the amount by which such
actual payment or realization exceeds such limitation, and this Agreement as
limited shall in all events remain in full force and effect and be fully
enforceable against such Borrower.  This
Section is intended solely to reserve the rights of the Lenders and the
Administrative Agent hereunder against each Borrower, in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws and neither the
Borrowers, any guarantor of the Obligations nor any other Person shall have any
right, claim or defense under this Section that would not otherwise be
available under Applicable Insolvency Laws in such proceeding.

 

Section 9.19                                Interest
Rate Limitation.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively, the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) that may be
contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.

 

[The next page is the signature page.]

 

79

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the date first above written.

 

	
   

  	
  GOLDEN OVAL EGGS, LLC,

  
	
   

  	
  as a Borrower and the Borrowers’ Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Doug Leifermann

  	
   

  
	
   

  	
  Name:

  	
    Doug Leifermann

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Vice President & Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIDWEST INVESTORS OF IOWA,

  
	
   

  	
  COOPERATIVE,

  
	
   

  	
  as a Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Doug Leifermann

  	
   

  
	
   

  	
  Name:

  	
    Doug Leifermann

  	
   

  
	
   

  	
  Title:

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address for the Borrowers

  	
   

  
	
  For Purposes of Notice:

  	
   

  
	
   

  	
   

  
	
  340 Dupont Avenue N.E.

  	
   

  
	
  P.O. Box 615

  	
   

  
	
  Renville, MN 56284

  	
   

  
	
  Fax: (320) 329-3276

  	
   

  
	
  Attention: Doug Leifermann, Vice

  	
   

  
	
  President – Finance

  	
   

  

 

S-1

 

Commitment Amounts

	
  Revolving:

  	
  $10,000,000

  	
  COBANK, ACB,

  
	
  Tranche A1 Term:

  	
  N/A

  	
  as a Lender and as the Administrative

  
	
  Tranche A2 Term:

  	
  N/A

  	
  Agent

  
	
  Tranche B1 Term:

  	
  $7,300,000

  	
   

  
	
  Tranche B2 Term:

  	
  $7,700,000

  	
  By:

  	
   

  	
    /s/ Gary Sloan

  	
   

  
	
   

  	
  Name:

  	
    Gary Sloan

  	
   

  
	
   

  	
  Title:

  	
   

  	
    Senior Loan Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for funding notices:

  
	
   

  	
  5500 South Quebec Street

  
	
   

  	
  Greenwood Village, CO 80111

  
	
   

  	
  P.O. Box 5110

  
	
   

  	
  Denver, CO 80217

  
	
   

  	
  Attention:

  
	
   

  	
  Fax: (303) 740-4002

  
	
   

  	
   

  
	
   

  	
  Address for all other notices:

  
	
   

  	
  1600 Colonnade

  
	
   

  	
  5500 Wayzata Boulevard

  
	
   

  	
  Minneapolis, MN 55416-1252

  
	
   

  	
  Fax: (763) 765-2720

  
	
   

  	
  Attention: Gary J. Sloan

  
	
   

  	
   

  
	
   

  	
   

  
	
  Revolving:

  	
  N/A

  	
  METROPOLITAN LIFE INSURANCE

  
	
  Tranche A1 Term:

  	
  $14,700,000

  	
  COMPANY, as a Bank

  
	
  Tranche A2 Term:

  	
  $15,300,000

  	
   

  
	
  Tranche B1 Term:

  	
  N/A

  	
  By:

  	
   

  	
    /s/ Daniel A. O’Neill

  	
   

  
	
  Tranche B2 Term:

  	
  N/A

  	
  Name:

  	
    Daniel A. O’Neill

  	
   

  
	
   

  	
  Title:

  	
   

  	
    Assistant Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for funding notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for all other notices:

  
	
   

  	
  4401 Westown Parkway

  
	
   

  	
  Suite 220

  
	
   

  	
  West Des Moines, IA 50266

  
	
   

  	
  Fax: (515) 223-0757

  
	
   

  	
  Attention: Tony Jennings

  
									

 

S-2

 

ANNEX I

 

PRICING GRID

 

Revolving Loans

 

	
  Leverage Ratio

  	
   

  	
  LIBOR

  Applicable Margin

  	
   

  	
  Base Rate

  Applicable Margin

  	
   

  	
  Applicable Commitment

  Fee Percentage

  	
   

  
	
  Less than 1.25 to 1.00

  	
   

  	
  1.00

  	
  %

  	
  (1.50

  	
  )%

  	
  0.200

  	
  %

  
	
  Greater than or equal to 1.25 to 1.00 but
  less than 2.25 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  (1.25

  	
  )%

  	
  0.250

  	
  %

  
	
  Greater than or equal to 2.25 to 1.00 but
  less than 3.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  (0.75

  	
  )%

  	
  0.375

  	
  %

  
	
  Greater than or equal to 3.00 to 1.00 but
  less than 3.75 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  (0.25

  	
  )%

  	
  0.375

  	
  %

  
	
  Greater than or equal to 3.75 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  0.25

  	
  %

  	
  0.375

  	
  %

  

 

Term B
Loans

 

	
  Leverage
  Ratio

  	
   

  	
  LIBOR

  Applicable Margin

  	
   

  	
  Base
  Rate

  Applicable Margin

  	
    

  
	
  Less than 1.25 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  (1.35

  	
  )%

  
	
  Greater than or equal to 1.25 to 1.00 but
  less than 2.25 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  (1.10

  	
  )%

  
	
  Greater than or equal to 2.25 to 1.00 but
  less than 3.00 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  (0.60

  	
  )%

  
	
  Greater than or equal to 3.00 to 1.00 but
  less than 3.75 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  (0.10

  	
  )%

  
	
  Greater than or equal to 3.75 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  0.40

  	
  %

  

 

 

ANNEX II

 

RISK MANAGEMENT GRID

 

	
  Current Ratio

  	
   

  	
  Minimum Percentage of Eggs Contracted

  	
   

  
	
  Greater than
  or equal to 1.25 to 1.00 but less than 1.50 to 1.00

  	
   

  	
  > 50

  	
  %

  
	
  Greater than
  or equal to 1.50 to 1.00 but less than 2.00 to 1.00

  	
   

  	
  > 40

  	
  %

  
	
  Greater than
  or equal to 2.00 to 1.00

  	
   

  	
  > 30

  	
  %Prepared and filed by St Ives Burrups

	Option Certificate Number: Certif. #

Optionee: Name

Page 1	Exhibit 10.1

PROGENICS PHARMACEUTICALS, INC.

Non-Qualified Stock Option Agreement

Option Certificate Number:

     This agreement is made of this Issue date by and between Progenics Pharmaceuticals, Inc., a Delaware corporation, including any of its subsidiaries (the “Company”) and Name (the “Optionee”).

Specific Terms of the Option

     Subject to the terms and conditions hereinafter set forth and the terms and conditions of the Progenics Pharmaceuticals, Inc. Amended 1996 Stock Incentive Plan (the “Plan”), Progenics Pharmaceuticals, Inc., a Delaware corporation (the “Company”) hereby grants the Optionee the following option to purchase Common Stock, par value $0.0013 per share (the “Stock”) of the Company.

		
1.	
Date of Grant of Option: Issue date
	 	 	 

		
2.	
An Option for # Shares shares of COMMON stock (the “Stock”)
	 	 	 

		
3.	
Option Exercise Price (per share): Price
	 	 	 

		
4.	
Term of Option: Subject to Section 8, this Option expires Expiry date at 5:00 p.m. Eastern Time.
	 	 	 

		
5.	
Exercise Schedule: Provided that on the dates set forth below the Optionee is still employed by the Company or, if the Optionee is not employed by the Company the Optionee is still actively involved in the Company (as determined by the Board of Directors), the Option will become exercisable as follows and as provided in Section 8 below:
		 	 
		 	 

	Date
on or after	Total Option Shares Subject to Exercise
	Incremental	Cumulative
	Date 1	Vest 1	Vest 1
	Date 2	Vest 1	Vest 2
	Date 3	Vest 1	Vest 3
	Date 4	Vest 1	Vest 4
	Date 5	Vest 1	# Shares

OPTIONEE’S SIGNATURE: ______________________________________
DATE: ____________

	 	Optionee’s
address:	Name
	 	 	Street
	 	 	City, St & zip
	 	 	 
	 	Optionee’s Social Security Number:
    SS #

 

 

Back to Contents

	Option Certificate Number: Certif.
        #

      Optionee: Name

      Page 2	 

 

OTHER TERMS OF THE OPTION

     WHEREAS, the Company has instituted a program entitled “Progenics Pharmaceuticals, Inc. Amended 1996 Stock Incentive Plan” 

     WHEREAS, the Board of Directors (“the Board”) has authorized the grant of stock options upon certain terms and conditions set forth below; and 

     WHEREAS, the Board has authorized the grant of this stock option pursuant and subject to the terms of the Plan, a copy of which is available from the Company and is hereby incorporated herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the Company and the Optionee agree as set forth on the first page hereof and as follows:

     6.      Grant.   Pursuant and subject to the Plan, the Company does hereby grant to the Optionee a non-qualified stock option (the “Option”) to purchase from the Company the number of shares of its Common Stock, $.0013 par value per share (“Stock”) set forth in Section 2 on the first page hereof upon the terms and conditions set forth in the Plan and upon the additional terms and conditions contained herein.  This Option is a non-qualified stock option and is not intended to qualify for special federal income tax treatment as an “incentive stock option” pursuant to Section 422A of the Internal Revenue Code of 1986, as
amended.

          7.      Option Price.   This Option may be exercised at the option price per share of Stock set forth in Section 3 on page 1 hereof, subject to adjustment as provided herein and in the Plan.

          8.      Term and Exercisability of Option.   This Option shall expire on the date determined pursuant to Section 4 on page 1 hereof and shall be exercisable prior to that date in accordance with and subject to the conditions set forth in the Plan and those conditions, if any, set forth in Section 5 on page 1 hereof.  In addition, in the event that before this Option has been exercised in full, the Optionee ceases to be an employee of the Company for any reason other than death or a termination for dishonesty or other “cause” as provided in Section 6.5 of the Plan, the Optionee may exercise this Option to the extent that he might have exercised
it on the date of termination of his employment, during the period ending on the earlier of (i) the date on which the Option expires in accordance with Section 4 of this Agreement or (ii) three months after the date of termination of the Optionee’s employment by the Company.  In the event of the death of the Optionee before this Option has been exercised in full, the personal representative of the Optionee may exercise this Option to the extent that the Optionee might have exercised it on the date of his death, during the period ending on the earlier of (i) the date on which the Option expires in accordance with Section 4 of this Agreement or (ii) the first anniversary of the date of the Optionee’s death.

     9.      Method of Exercise.   To the extent that the right to purchase shares of Stock has accrued hereunder, this Option may be exercised from time to time by written notice to the Company in the form attached hereto as Exhibit 1, stating the number of shares with respect to which this Option is being exercised, and accompanied by payment in full of the option price for the number of shares to be delivered by means of payment acceptable to the Company in accordance with Section 6.3 of the Plan.  As soon as practicable after its receipt of such notice, the Company shall, without transfer or issue tax to the Optionee (or other person entitled to exercise this Option), deliver to the
Optionee (or other person entitled to exercise this Option), at the principal executive offices of the Company or such other place as shall be mutually acceptable, a certificate or certificates for such shares out of theretofore authorized but unissued shares or reacquired shares of its Stock as the Company may elect; provided, however, that the time of such delivery may be postponed by the Company for such period as may be required for it with reasonable diligence to comply with any applicable requirements of law.  Payment of the option price may be made in cash or cash equivalents, or, in accordance with the terms and conditions of Section 6.3 of the Plan, in whole or in part in shares of Common Stock of the Company; provided, however, that the Board reserves the right upon receipt of
any written notice of exercise from the Optionee to require payment in cash with respect to the shares contemplated in such notice.  If the Optionee (or other person entitled to exercise this Option) fails to pay for and accept delivery of all of the shares specified in such notice upon tender of delivery thereof, his right to exercise this Option with respect to such shares not paid for may be terminated by the Company.

 

 
Back to Contents

	Option Certificate Number: Certif.
        #

      Optionee: Name

      Page 3	 

 

     10.      Withholding Taxes.   The Optionee hereby agrees, as a condition to any exercise of this Option, to provide to the Company an amount sufficient to satisfy its obligation to withhold certain federal, state and local taxes arising by reason of such exercise (the “Withholding Amount”) by (a) authorizing the Company to withhold the Withholding Amount from his cash compensation, or (b) remitting the Withholding Amount to the Company in cash; provided that to the extent that the Withholding Amount is not provided by one or a combination of such methods, the Company in its discretion may refuse to issue such Stock or may withhold from the Stock delivered upon
exercise of this Option that number of shares having a fair market value, on the date of exercise, sufficient to eliminate any deficiency in the Withholding Amount.

     11.      Transferability.   Solely to the extent approved by the Compensation Committee of the Company’s Board of Directors this option may be transferred to members of the Optionee’s immediate family, charitable institutions, or trusts or partnerships whose beneficiaries are any of the foregoing, and/or to such persons or entities as may be approved by the Committee, subject to the condition that the Committee be satisfied that such transfer is being made for estate or tax planning purposes or for gratuitous purposes, without consideration (other than nominal consideration) being received therefore.

     12.      Compliance with Securities Act.   The Company shall not be obligated to sell or issue any shares of Stock or other securities pursuant to the exercise of this Option unless the shares of Stock or other securities with respect to which this Option is being exercised are at that time effectively registered or exempt from registration under the Securities Act of 1933, as amended, and applicable state securities laws.  In the event shares or other securities shall be issued which shall not be so registered, the Optionee hereby represents, warrants and agrees that he will receive such shares or other securities for investment and not with a view to their resale or distribution, and
will execute an appropriate investment letter satisfactory to the Company and its counsel.

     13.      Legends.   The Optionee hereby acknowledges that the stock certificate or certificates evidencing shares of Stock or other securities issued pursuant to any exercise of this Option will bear a legend setting forth the restrictions on their transferability described in Section 12 hereof and, if applicable to this Option, in Section 13.4 of the Plan. 

     14.      Rights as Stockholder.   The optionee shall have no rights as a stockholder with respect to any shares covered by this Option until the date of issuance of a stock certificate to him for such shares.  No adjustment shall be made for dividends or the rights for which the record date is prior to the date such stock certificate is issued.

     15.      Termination or Amendment of Plan.   The Board of Directors may terminate or amend the Plan at any time, but no such termination or amendment will affect rights and obligations under this Option.

     16.      Effect Upon Employment.   Nothing in this Option or the Plan shall be construed to impose any obligation upon the Company to employ the Optionee or to retain the Optionee in its employ.

     17.      Time for Acceptance.   Unless the Optionee shall evidence his acceptance of this Option by execution of this Agreement within seven (7) days after its delivery to him, the Option and this Agreement shall be null and void.

     18.      General Provisions.

     A.      Amendment; Waivers.   This Agreement, including the Plan, contains the full and complete understanding and agreement of the parties hereto as to the subject matter hereof and may not be modified or amended, nor may any provision hereof be waived, except by a further written agreement duly signed by each of the parties.  The waiver by either of the parties hereto of any provision hereof in any instance shall not operate as a waiver of any other provision hereof or in any other instance. 

     B.      Binding Effect.   This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, representatives, successors and assigns. 

 

 
Back to Contents

	Option Certificate Number: Certif.
        #

      Optionee: Name

      Page 4	 

 

     C.      Construction.   This Agreement is to be construed in accordance with the terms of the Plan.  In case of any conflict between the Plan and this Agreement, the Plan shall control.  The titles of the sections of this Agreement and of the Plan are included for convenience only and shall not be construed as modifying or affecting their provisions.  The masculine gender shall include both sexes; the singular shall include the plural and the plural the singular unless the context otherwise requires.

     D.      Notices.   Any notice in connection with this Agreement shall be deemed to have been properly delivered if it is in writing and is delivered in hand or sent be registered mail to the party addressed as follows, unless another address has been substituted by notice so given:

 

			
	 	To the Optionee:	To his address as listed on the books of
    the Company.
	 	 	 
	 	To the Company:	Progenics Pharmaceuticals,
    Inc.
	 	 	777 Old Saw Mill River Road

    Tarrytown, NY 10591

    Attn: Treasurer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]