Document:

Exhibit 10.8.1

 

 

LOAN AGREEMENT

 

Between

 

IOWA FINANCE AUTHORITY

 

and

 

INTERWEST, L.C.

 

**************************************************************************************

 

$5,000,000

IOWA FINANCE AUTHORITY
 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT
 REVENUE BONDS (INTERWEST, L.C.
PROJECT),
 SERIES 2001

 

**************************************************************************************

 

Dated as of November 1, 2001

 

Certain
of the interests of the Iowa Finance Authority, in this Loan Agreement have been
assigned to Wells Fargo Bank Northwest, National Association, as Trustee under
the Trust Indenture dated as of November 1, 2001, from the Iowa Finance
Authority.

 

 

 

INDEX

(The Index is not a
part of the Agreement

but for convenience of reference only.)

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Preambles

  	
   

  	
   

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
   

  	
  General

  	
   

  	
  2

  
	
  Section 1.2

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE LOAN; LOAN PAYMENTS; LETTER OF CREDIT

  AND ADDITIONAL PAYMENTS;

  BORROWER EXECUTIVE AND DELIVER NOTE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Amount and Terms of the Loan; the Note

  	
   

  	
  7

  
	
  Section 2.2

  	
   

  	
  Additional Payments

  	
   

  	
  8

  
	
  Section 2.3

  	
   

  	
  Notes

  	
   

  	
  9

  
	
  Section 2.4

  	
   

  	
  Assignment of Payments and Note

  	
   

  	
  10

  
	
  Section 2.5

  	
   

  	
  Obligations Unconditional

  	
   

  	
  10

  
	
  Section 2.6

  	
   

  	
  Prepayment of Loan and Additional Payments; Moneys
  for Optional Redemption

  	
   

  	
  11

  
	
  Section 2.7

  	
   

  	
  Past Due Loan Payments and Additional Payments

  	
   

  	
  11

  
	
  Section 2.8

  	
   

  	
  Redemption of Bonds

  	
   

  	
  11

  
	
  Section 2.9

  	
   

  	
  Adjustment of Loan Payments in the Event of
  Redemption or Cancellation Of Project Bonds

  	
   

  	
  11

  
	
  Section 2.10

  	
   

  	
  Assignment of Agreement and Revenues

  	
   

  	
  12

  
	
  Section 2.11

  	
   

  	
  Payments to Remarketing Agent

  	
   

  	
  12

  
	
  Section 2.12

  	
   

  	
  Letter of Credit and Confirming Letter of Credit;
  Alternate Letter of Credit and Alternate Confirming Letter of Credit

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACQUISITION, CONSTRUCTION, EQUIPPING AND

  OWNERSHIP OF THE PROJECT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Agreement to Acquire Construct and Equip The Project

  	
   

  	
  14

  
	
  Section 3.2

  	
   

  	
  Completion Date

  	
   

  	
  14

  
	
  Section 3.3

  	
   

  	
  Agreement as to Ownership of Project

  	
   

  	
  15

  
	
  Section 3.4

  	
   

  	
  Use of Project

  	
   

  	
  15

  
	
  Section 3.5

  	
   

  	
  Additional Bonds

  	
   

  	
  15

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ISSUANCE OF BONDS; 

  APPLICATION OF PROCEEDS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Issuance of Bonds; Deposit of Bond Proceeds

  	
   

  	
  16

  
	
  Section 4.2

  	
   

  	
  Disbursements from the Project Fund

  	
   

  	
  16

  
	
  Section 4.3

  	
   

  	
  Obligation of the Parties to Cooperate In Furnishing
  Documents

  	
   

  	
  17

  
	
  Section 4.4

  	
   

  	
  Borrower Required to Pay Costs in Event Project Fund
  Insufficient

  	
   

  	
  18

  
	
  Section 4.5

  	
   

  	
  Investment of Fund Moneys

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MAINTENANCE; INSURANCE; DAMAGE; 

  DESTRUCTION AND EMINENT DOMAIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Maintenance

  	
   

  	
  19

  
	
  Section 5.2

  	
   

  	
  Removal of Portions of Project

  	
   

  	
  19

  
	
  Section 5.3

  	
   

  	
  Option to Release Portion of Project

  	
   

  	
  19

  
	
  Section 5.4

  	
   

  	
  Insurance Required

  	
   

  	
  19

  
	
  Section 5.5

  	
   

  	
  [Reserved]

  	
   

  	
  20

  
	
  Section 5.6

  	
   

  	
  Worker’s Compensation

  	
   

  	
  20

  
	
  Section 5.7

  	
   

  	
  Mechanic’s Liens

  	
   

  	
  20

  
	
  Section 5.8

  	
   

  	
  Damage, Destruction and Eminent Domain

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WARRANTIES, REPRESENTATIONS AND COVENANTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Representations of the Issuer

  	
   

  	
  21

  
	
  Section 6.2

  	
   

  	
  Representations of the Company

  	
   

  	
  21

  
	
  Section 6.3

  	
   

  	
  [Reserved]

  	
   

  	
  22

  
	
  Section 6.4

  	
   

  	
  Financial Statements

  	
   

  	
  23

  
	
  Section 6.5

  	
   

  	
  Borrower’s Approval of Indenture

  	
   

  	
  23

  
	
  Section 6.6

  	
   

  	
  Right of Access

  	
   

  	
  23

  
	
  Section 6.7

  	
   

  	
  Indemnification

  	
   

  	
  23

  
	
  Section 6.8

  	
   

  	
  Borrower Not to Adversely Affect Tax Exempt Status
  of Bond Interest On Project Bonds

  	
   

  	
  23

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ASSIGNMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Assignment by Borrower

  	
   

  	
  25

  
	
  Section 7.2

  	
   

  	
  Assignment by Issuer

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TERMINATION AND PREPAYMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  8.1

  	
   

  	
  Option
  to Terminate

  	
   

  	
  26

  
	
  Section
  8.2

  	
   

  	
  Option
  to Prepay Loan

  	
   

  	
  26

  
	
  Section
  8.3

  	
   

  	
  Obligation
  to Prepay Loan

  	
   

  	
  26

  
	
  Section
  8.4

  	
   

  	
  Notice
  of Prepayment

  	
   

  	
  27

  
	
  Section
  8.5

  	
   

  	
  Prepayment
  Price

  	
   

  	
  27

  
	
  Section
  8.6

  	
   

  	
  Relative
  Position of this Article and Indenture

  	
   

  	
  28

  
	
  Section
  8.7

  	
   

  	
  Concurrent
  Discharge of Note

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EVENT OF DEFAULT AND REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  9.1

  	
   

  	
  Events
  of Default

  	
   

  	
  29

  
	
  Section
  9.2

  	
   

  	
  Remedies
  on Default

  	
   

  	
  30

  
	
  Section
  9.3

  	
   

  	
  No
  Remedy Exclusive

  	
   

  	
  31

  
	
  Section
  9.4

  	
   

  	
  Agreement
  to Pay Attorneys’ Fees And Expenses

  	
   

  	
  31

  
	
  Section
  9.5

  	
   

  	
  No
  Additional Waiver Implied by One Waiver

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section
  10.1

  	
   

  	
  Term
  of Agreement

  	
   

  	
  32

  
	
  Section
  10.2

  	
   

  	
  Amounts
  Remaining in Bond Fund

  	
   

  	
  32

  
	
  Section
  10.3

  	
   

  	
  Notices

  	
   

  	
  32

  
	
  Section
  10.4

  	
   

  	
  Binding
  Effect

  	
   

  	
  32

  
	
  Section
  10.5

  	
   

  	
  Amendments,
  Changes and Modifications

  	
   

  	
  32

  
	
  Section
  10.6

  	
   

  	
  Counterparts

  	
   

  	
  32

  
	
  Section
  10.7

  	
   

  	
  Severability

  	
   

  	
  32

  
	
  Section
  10.8

  	
   

  	
  Captions

  	
   

  	
  33

  
	
  Section
  10.9

  	
   

  	
  Governing
  Law

  	
   

  	
  33

  
	
  Section
  10.10

  	
   

  	
  Selection
  of Alternate Letter of Credit

  	
   

  	
  33

  
	
  Section
  10.11

  	
   

  	
  Continuing
  Obligation

  	
   

  	
  33

  
	
  Section
  10.12

  	
   

  	
  Limitation
  on Issuer’s Liability

  	
   

  	
  33

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
   

  	
   

  	
  A-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
   

  	
   

  	
  B-1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
   

  	
   

  	
  C-1

  

 

iv

 

LOAN AGREEMENT

 

Between

 

IOWA FINANCE AUTHORITY

 

and

 

INTERWEST, L.C.

 

THIS LOAN
AGREEMENT made and entered into as of the 1st day of November, 2001, between
the IOWA FINANCE AUTHORITY, a public instrumentality and agency of the State of
Iowa (hereinafter called the “Issuer”), and operating herein pursuant to the
provisions of the Act (as hereinafter defined), to carry out the public
purposes of the Issuer and the State of Iowa as set forth therein, and
INTERWEST, L.C., an Iowa domestic limited liability company (hereinafter called
the “Borrower”),

 

W I T N E S S E T H

 

WHEREAS, the Act
provides, among other things, for the issuance of revenue bonds to provide
funds to make loans to others to purchase, construct, reconstruct, enlarge,
improve, furnish and equip real or personal property or both, or interests
therein, to serve a public purpose and to benefit the health or general welfare
of the State; and

 

WHEREAS, the
Issuer has found and determined, and hereby finds and determines, that the
Project will serve a public purpose and will be of benefit to the health or
general welfare of the State, and negotiations have been carried on between the
Issuer and the Borrower with respect to the issuance by the Issuer of its
industrial development revenue bonds (hereinafter called the “Project Bonds”)
and the loan of the proceeds derived from the sale of the Project Bonds in
order to assist in the financing of certain manufacturing or processing
components to the Borrower’s soy methyl ester facility comprising the Project
to be owned and operated by the Borrower; and the Issuer has found and
determined, and hereby finds and determines, that the financing of the Project
as hereinabove described will promote the welfare of the people of the State,
stabilize the economy, provide employment, and assist in the development of
commercial activities to the benefit of the people of the State and will
provide additional opportunities for their gainful employment or preservation
of their employment, and that such financing is authorized by, and will be consistent
with and in furtherance of, the provisions of the laws of the State of Iowa,
particularly the Act (as defined herein); and

 

WHEREAS, the
Borrower and the Issuer each have full right and lawful authority to enter into
this Loan Agreement (hereinafter called the “Agreement”, and, when the context
permits, references herein to the Agreement shall be deemed to include the
Agreement as the same may be duly amended, modified or supplemented in
accordance with the provisions hereof) and to perform and observe the
provisions hereof on their respective parts to be performed and observed;

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter contained,
the parties hereto covenant, agree and bind themselves as follows:

 

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1. General.
In addition to the words and terms elsewhere defined in this Agreement, certain
words and terms as used in this Agreement shall have the meanings given to them
by the definitions and descriptions in this Article I unless the context or use
indicates another or different meaning or intent and such definitions shall be
equally applicable to both the singular and plural forms of any of the words
and terms herein defined. Those words and terms not specifically defined herein
and used in this Agreement and Article I as defined words or terms shall have
the meanings set forth in Section 1.01 of the Indenture (as defined herein).

 

Section 1.2. Definitions.
The following words and terms are defined terms under this Agreement:

 

“Act” means the
provisions of Chapter 16 of the Code of Iowa, as amended.

 

“Additional
Payments” means the amounts required to be paid by the provisions of Section
2.2 of this Agreement.

 

“Agreement” means
this Loan Agreement between the Issuer and the Borrower, dated as of November
1, 2001, as the same may be duly amended, modified or supplemented in
accordance with the provisions hereof.

 

“Alternate
Confirming Letter of Credit” means a confirming letter of credit delivered to
the Trustee pursuant to Section 2.12 of this Agreement to replace the
Confirming Letter of Credit then in effect.

 

“Alternate Letter
of Credit” means a Letter of Credit delivered to the Trustee pursuant to
Section 2.12 of this Agreement to replace the Letter of Credit then in effect.

 

“Bonds” means the
Project Bonds and any Additional Bonds issued and to be issued pursuant to the
Indenture.

 

“Bond Fund Payment”
means as to the Project Bonds an amount, if any, equal to the interest accrued
on the Project Bonds from their date to the date of their delivery to the
Original Purchaser and payment therefor, and as to the Additional Bonds the
amount specified in the Bond Resolution authorizing such Additional Bonds,
provided that the Bond Fund Payment for any Additional Bonds shall not be less
than an amount equal to the interest accrued on such Additional Bonds from
their date to the date of delivery of such Additional Bonds to their original
purchaser and payment therefor.

 

“Bond Redemption
Date” means any date, other than an Interest Payment Date, upon which Bonds
shall be redeemed pursuant to the Indenture.

 

2

 

 “Bond Service Charges” for any time period or
with respect to any date means the principal, including interest and redemption
premium, if any, required to be paid by the Issuer on the Bonds for such time
period or on such date.

 

“Borrower” means
InterWest, L.C., an Iowa domestic limited liability company, and its successors
and assigns, including any transferee partnership, corporation or other entity
as provided in Section 7.1 of this Agreement.

 

“Chair” means the
chair of the Issuer

 

“Code” means the
Internal Revenue Code of 1986, as amended. Each reference to a section of the
Code herein shall be deemed to include the United States Treasury Regulations
proposed or in effect with respect thereto and applicable to the Bonds or the
use of the proceeds thereof.

 

“Completion Date”
means the date by which acquisition and installation of the Project is
completed, with such completion to be evidenced by the certificate of the
Authorized Borrower Representative to be furnished with respect to the Project
pursuant to Section 3.2 of this Agreement.

 

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

 

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

 

“Construction
Period” means the period between the date on which the Project Bonds are
delivered to the Original Purchaser and the Completion Date.

 

“Fixed Term” means
the period from the Conversion Date through the Maturity Date.

 

“Indenture” means
the Trust Indenture between the Issuer and the Trustee relating to the issuance
of the Project Bonds, dated November 1, 2001, as amended or supplemented from
time to time.

 

“Independent
Counsel” means any attorney or firm of attorneys acceptable to the Trustee and
to the Issuer and who is not an officer, partner or a full-time employee of the
Issuer or the Borrower, and in the case of a firm, none of the attorneys or
members of which is an officer, partner or a full-time employee of the Issuer
or the Borrower.

 

“Interest Rate for
Advances” means the Default Interest Rate (as defined in the Reimbursement
Agreement), but in no event in excess of the highest annual rate of interest
allowable by law; provided, however, that anything herein to the contrary
notwithstanding the rate of interest on any Loan Payment in default shall not
be less than the rate of interest on the Bonds to which such Loan Payment
relates.

 

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

 

“Loan” means the
loan by the Issuer to the Borrower of the proceeds from the sale of the Project
Bonds to the Original Purchaser as the same may hereafter be increased from the
proceeds from the sale of Additional Bonds.

 

3

 

“Loan Payment Date”
means each Bond Redemption Date, each Interest Payment Date, each Principal
Payment Date, each Mandatory Tender Date, the date upon which any advance
payment of principal or interest is required by the provisions of Section 2.1
of this Agreement, and any date on which any principal of, premium, if any, or
interest on the Bonds shall be due and payable upon mandatory redemption
because of acceleration.

 

“Loan Payments”
means the amounts required to be paid and/or prepaid by the provisions of
Section 2.1 of this Agreement, as the same may hereafter be amended or
supplemented.

 

“Net Proceeds”
means, as to any insurance proceeds or any condemnation award, the amount
remaining after deducting therefrom all expenses (including any fees, charges
and expenses of the Trustee and its counsel as provided in Section 10.02 of the
Indenture) incurred in the collection of such proceeds or award.

 

“Note” or “Notes”
means the promissory note dated the date of the Project Bonds, constituting the
promise of the Borrower to repay the Loan to the Issuer, which Note shall be in
substantially the form attached to this Agreement as Exhibit A, and any
additional promissory note or notes executed and delivered with respect to
Additional Bonds.

 

“Notice Address”
means such addresses as are specified in Section 14.04 of the Indenture, or
such different address, notice of which is given under section 10.3 of this
Agreement, but no such notice shall thereby be required to be sent to more than
two addresses.

 

“Permitted
Investments” means:

 

(a)                    Bonds or other
obligations of the United States of America;

 

(b)                   Bonds or other
obligations, the payment of the principal and interest of which is
unconditionally guaranteed by the United States of America;

 

(c)                    Obligations
issued or guaranteed as to principal and interest by any agency or person
controlled or supervised by and acting as an instrumentality of the United
States of America pursuant to authority granted by the Congress of the United
States of America;

 

(d)                   Securities or
receipts evidencing ownership interests in obligations or specified portions
(such as principal or interest) of obligations described in (a), (b) or (c)
above;

 

(e)                    Commercial or
finance company paper which is rated either P-l or A-l or an equivalent by
Moody’s or S&P (including investments in pools or such commercial or
finance company paper owned by the Trustee or any affiliate of the Trustee);

 

(f)                      obligations
issued by or on behalf of any state of the United States of America, or any
political subdivision of any such state, which are rated at least A2 or A by
Moody’s or S & P, respectively;

 

4

 

(g)                   Funds comprised
of obligations described in (f) above to the extent described in Treasury
Regulation 1.1488(e)(3)(iii), including any such fund managed by the Trustee or
any affiliate of the Trustee; or

 

(h)                   Money market
funds which are rated prime-1 or AAAm (or an equivalent) by Moody’s or S &
P, including any such money market fund managed by the Trustee or any affiliate
of the Trustee.

 

“Person” means an
individual, a partnership, a corporation, a limited liability company, a trust,
an unincorporated organization, a joint-stock company, an association and a
government or any department or agency thereof.

 

“Principal Payment
Date” means, as to the Project Bonds, the first day of each November in the
years in which the Project Bonds mature as provided in the Indenture and any
Bond redemption date, and as to Additional Bonds, the date or dates identified
as such in the Bond Resolution authorizing such Additional Bonds.

 

“Project” means
the real, personal or real and personal property, including undivided or other
interests therein, identified in Exhibits B and C of this Agreement, or in or
pursuant to any amendments thereto or hereto or in the certificate of the
Authorized Borrower Representative, or acquired, constructed or installed as a
replacement or substitution therefor or an addition thereto.

 

“Project Bonds”
means the Bond or Bonds initially issued by the Issuer pursuant to the
Indenture and designated “$5,000,000 Iowa Finance Authority Variable Rate
Demand Industrial Development Revenue Bonds (InterWest, L.C. Project), Series
2001”.

 

“Project Purposes”
means the purposes of a soy methyl ester processing facility.

 

“Project Site”
means the real property described in Exhibit C of this Agreement.

 

“Registered Bonds”
means Bonds registered in the name of the holder.

 

“Secretary” means
the secretary of the Issuer

 

“State” means the
State of Iowa.

 

“Termination Date”
means November 1, 2016, subject to earlier termination as provided in this
Agreement.

 

“Trustee” means
the bank or trust company at the time serving as Trustee under the Indenture.

 

“Unassigned Issuer’s
Rights” means all of the rights of the Issuer to receive Additional Payments
under Section 2.2 hereof, and to be held harmless and indemnified and to be
reimbursed for attorney’s fees and expenses under Sections 6.7 and 9.4,
respectively, hereof.

 

5

 

Any reference
herein to the Issuer, or to any officers thereof, shall include any person or
entity which succeeds to its or their duties or responsibilities pursuant to or
by operation of law. Any reference to a section or provision of the Iowa
Constitution or the Act shall include such section or provision or chapter as
from time to time amended, modified, revised, supplemented, or superseded;
provided, however, that no such change in the Constitution or laws (a) shall
alter the obligation to pay the Bond Service Charges in the amounts and manner,
at the times, and from the sources provided in the Bond Resolution and the
Indenture, except as otherwise herein permitted or (b) shall be deemed
applicable by reason of this provision if such change would in any way
constitute an impairment of the rights of the Issuer, the Bank or the Borrower
under the Agreement or the Indenture.

 

The terms “hereof”,
“hereby”, “hereto”, “hereunder” and similar terms, refer to this Loan
Agreement.

 

6

 

ARTICLE II

 

THE LOAN; LOAN PAYMENTS, LETTER OF CREDIT AND

ADDITIONAL PAYMENTS;

BORROWER TO EXECUTE AND DELIVER NOTE

 

Section 2.1. Amount
and Terms of the Loan; the Note. The Issuer agrees, subject to the terms
and conditions in this Agreement, to lend to the Borrower the proceeds from the
sale of the Project Bonds. Such proceeds (after deducting the Original
Purchaser’s bond discount, if any) shall be deposited with the Trustee and
disbursed, after deducting the Bond Fund Payment as provided in the Indenture,
in accordance with the provisions of Section 4.2 hereof in payment of costs of
the Project and costs of issuance and sale of the Project Bonds. Concurrently
with the issuance of the Project Bonds, the Borrower agrees to and shall
execute and deliver a Note in substantially the form attached hereto as Exhibit
A, evidencing the obligation of the Borrower to repay the Loan made by the
Issuer. Such Note shall be dated the date of authentication and delivery of the
Project Bonds, shall be payable to the order of the Issuer for the principal
amount of the Loan, and shall be payable in the amounts and at the rates set
forth in such Note. Such amounts of principal, interest and premium, if any, shall
together constitute the Loan Payments.

 

The Borrower
shall, simultaneously with the delivery of the Project Bonds and the Note,
deliver or cause to be delivered the Letter of Credit and Confirming Letter of
Credit to the Trustee. The Borrower agrees that it will not, either by its
action or inaction, in any way adversely affect the continuation or
effectiveness of either the Letter of Credit or the Confirming Letter of
Credit.

 

All Loan Payments
made hereunder on account of principal of and interest and any premium on the
Note shall be made directly to the Trustee at its corporate trust office for
the account of the Issuer, for deposit in the Reimbursement Account in the Bond
Fund, in accordance with the terms of the Note; provided, however, that, notwithstanding
anything in this paragraph to the contrary, so long as the Letter of Credit or
an Alternate Letter of Credit consisting of a direct-pay letter of credit with
respect thereto shall be in effect, Loan Payments shall be made by the Borrower
directly to the Bank.

 

The Borrower shall
have the right to prepay the Loan in full or in part and without premium or
penalty but with accrued interest to the date of such prepayment on the amount
prepaid.

 

Prior to
conversion to a Fixed Interest Rate, the Bonds are subject to optional
redemption by the Issuer in whole or in part in the principal amount of $5,000
or any integral multiple thereof (provided that the unredeemed portion of any
Bond redeemed in part shall be $100,000 or more), at the direction of the Borrower,
on any Interest Payment Date, at a redemption price of 100% of the principal
amount to be redeemed, plus interest accrued to the redemption date.

 

In the event of
any such optional prepayment, however, before the Borrower gives the notice in
accordance with Section 8.4 of this Agreement of its intention to exercise its
option to prepay the Loan in whole or in part, the Borrower shall deposit with
the Bank the full amount of the prepayment price, including accrued interest to
the date of prepayment specified in the aforesaid notice, or alternatively,
obtain a written waiver of such deposit requirement from the Bank. The Borrower
shall be required to prepay the Loan in full with accrued interest to the date
of such prepayment on the amount prepaid,

 

7

 

upon the happening of an
event described in Section 8.3 of this Agreement. Any such prepayment pursuant
to said Section 8.3 shall be without premium or penalty. Any such optional or
mandatory prepayment shall be made pursuant to the notice provisions described
in Section 8.4 of this Agreement.

 

In any event, if
the sum of the Loan Payments payable under this Section shall be sufficient to
pay the total amount due with respect to the principal of, premium (if any) and
interest on the Bonds as and when due, and if at any time when said payments
are due the balance in the Bond Fund is insufficient to make such payments, the
Borrower will forthwith pay to the Trustee, for the account of the Issuer for
deposit into the Bond Fund, any such deficiency; provided, that any amount at
any time held by the Trustee in the Bond Fund as the Bond Fund Payment, as
interest earned on moneys held by the Trustee and deposited in the
Reimbursement Account in the Bond Fund and any other moneys in the
Reimbursement Account, as the proceeds of business interruption insurance, or
as a result of the payment of any penalties or liquidated damages received or
withheld under construction contracts and deposited in the Reimbursement Account
in the Bond Fund shall be transferred by the Trustee to the Bank pursuant to
Section 6.08 of the Indenture, and provided further, that if at any time all
the outstanding Bonds are paid and discharged within the meaning of the
Indenture and the Bank has been fully reimbursed under the Reimbursement
Agreement, the Borrower shall not be obligated to make any further Loan
Payments under this Section. All payments made pursuant to this Section shall
be made in such manner and at such times as shall be necessary to assure that
the Trustee shall receive such payments in sufficient time to permit payment of
the amounts of the principal of, and interest and any premium on the Bonds when
the same shall respectively become due and payable.

 

The Issuer and the
Borrower have provided for the payment of the principal of the Project Bonds,
upon maturity, redemption or acceleration, and up to 108 days interest on the
Project Bonds from payments to be made by the Bank to the Trustee pursuant to
the Letter of Credit. Pursuant thereto, the Borrower hereby authorizes the
Trustee to draw under the Letter of Credit the moneys necessary to pay the
principal of and interest on the Project Bonds as they become due, including as
a result of an Event of Taxability. The Issuer and the Borrower authorize the
Trustee to draw moneys, in which moneys the Borrower has no interest, under the
Letter of Credit in an amount sufficient to pay the principal of and interest
on the Project Bonds on the date such principal or interest becomes due. The amount
of such drawings shall be credited against the Borrower’s obligations to make
Loan Payments hereunder and under the Note.

 

Section 2.2. Additional
Payments. The Borrower agrees to make Additional Payments as follows:

 

(a)                    To the Issuer,
as reimbursement for any and all reasonable costs, expenses and liabilities
paid by the Issuer in satisfaction of any obligations of the Borrower hereunder
not performed in accordance with the terms hereof by the Borrower, provided,
however, that the Issuer shall be under no obligation to pay any expenses,
costs or liabilities of the Borrower.

 

(b)                   To the Issuer,
as reimbursement for or prepayment of reasonable expenses paid or to be paid by
the Issuer and requested by the Borrower, or required by this Agreement, or the
Indenture or incurred in enforcing the provisions of this Agreement or the
Indenture, or incurred in defending any action or proceedings with respect to
the Project, this

 

8

 

Agreement, or the
Indenture, or arising out of or based upon any other document related to the
issuance of the Bonds which are not otherwise required to be paid by the
Borrower under this Agreement.

 

(c)                    To the
Trustee, the customary fees and reasonable charges and expenses of the Trustee
as trustee, bond registrar and paying agent, and of any other paying agent on
the Bonds under the Indenture, all as provided in the Indenture, as and when
the same become due.

 

(d)                   To the
Remarketing Agent, the reasonable fees and expenses of the Remarketing Agent
for services rendered in connection with the Project Bonds, including its fees
for remarketing Project Bonds.

 

(e)                    The Borrower
will pay, as the same become due: (i) all taxes and governmental charges of any
kind whatsoever that may at any time be lawfully assessed or levied against or
with respect to the Project or any machinery, equipment, furnishings or other
property installed by the Borrower thereon including, without limiting the
generality of the foregoing, ad valorem taxes or payments in lieu of such taxes
lawfully assessed against the Project; (ii) all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Project; and (iii) all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a lien on the
Project; provided, that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, the Borrower shall be obligated to pay only such installments as are
required to be paid while payments of principal or interest are outstanding
with respect to the Note.

 

If the Borrower
shall first notify the Trustee and the Bank of its intention to do so, the
Borrower may, at its expense and in its own name and behalf or in the name and
behalf of the Issuer, in good faith contest any such taxes, assessments and
other charges and, in the event of any such contest, may permit the taxes,
assessments or other charges so contested to remain unpaid (except where tender
of all or a portion of the taxes, assessments or other charges may be made
without prejudice to the Borrower’s contest regarding same, in which case such
tender shall be made to avoid the imposition of any penalty) during the period
of such contest and any appeal therefrom unless the Trustee or the Bank shall
notify the Borrower that, in the opinion of Independent Counsel, by nonpayment
of any such items the lien of the Indenture or the Mortgage will be materially
endangered or the Project or any material part thereof will be subject to
imminent loss or forfeiture, in which event such taxes, assessments or charges
shall be promptly satisfied and discharged by payment thereof, by furnishing a
bond satisfactory to the Trustee and the Bank, or by payment to a reserve held
by the Trustee.

 

Section 2.3. Notes.
In addition to the Note described in Section 2.1 hereof, a Note or Notes in an
aggregate principal amount equal to the principal amount of any Additional
Bonds will be executed and delivered by the Borrower in a form substantially
similar to the form of the Note attached hereto as Exhibit A, with the
necessary and appropriate variations, omissions and insertions as permitted and
required by this Agreement as amended and supplemented. All Notes shall:

 

(a)       Provide for payments of interest equal to
the payments of interest on the corresponding Bonds;

 

9

 

(b)                   require
payments and/or prepayments of principal and any premium equal to the payments
of principal and any premium on the corresponding Bonds;

 

(c)                    require all
payments on such Notes to be made on or prior to the due dates for the
corresponding payments to be made on the corresponding Bonds;

 

(d)                   contain
optional and mandatory prepayment provisions and provisions in respect of the
optional and mandatory acceleration or prepayment of principal and any premium
corresponding with the redemption provisions of the corresponding Bonds; and

 

(e)                    be on a parity
with all other Notes theretofore or thereafter executed and delivered by the
Borrower pursuant to this Agreement as the same may be amended or supplemented
in connection with issuance of any Bonds, except with respect to draws under
the Letter of Credit.

 

Upon payment in
full of the principal of and interest and any premium on any or all Bonds,
whether at maturity or by redemption or otherwise, and the surrender thereof
to, and cancellation thereof by, the Trustee, or upon provision for the payment
thereof having been made in accordance with the provisions of the Indenture,
the Notes, issued concurrently with such Bonds, of the same maturity, bearing
the same interest rate and in an amount equal to the aggregate principal amount
of such Bonds so surrendered and canceled or for the payment of which provision
has been made, shall be deemed fully paid and the obligations of the Borrower
thereunder terminated and such Notes shall be canceled and surrendered by the
Issuer or the Trustee to the Borrower. Notwithstanding the previous sentence,
in the event that moneys sufficient for such payment have been paid to the
Trustee by the Bank, and amounts are owing to the Bank under the Reimbursement
Agreement, as evidenced by a written certificate of the Bank delivered to the
Trustee, the Trustee shall upon written instructions of the Bank assign all of
its right, title and interest in and to the Notes to the Bank. The Borrower
hereby agrees and consents to such an assignment without defense or set-off by
reason of any dispute between the Borrower and the Trustee. Unless the Borrower
is entitled to a credit under express terms of this Agreement or the Indenture,
all payments on each Note shall be in the full amount required thereunder. Each
Note shall be payable to the Issuer and shall not be negotiated by the Issuer,
except to effect assignment thereof to the Trustee and to any successor trustee
under the Indenture.

 

Section 2.4. Assignment
of Payments and Note. The Issuer will, as security for payment of the
Bonds, concurrently with the issuance of the Bonds, pledge and assign to the
Trustee all right, title and interest of the Issuer in and to the corresponding
Note and the Issuer’s rights under this Agreement to receive the Loan Payments,
including the right to receive payments under such Note (but specifically
excluding Unassigned Issuer’s Rights), and hereby covenants and agrees with the
Borrower to pledge, assign and deliver the Note issued pursuant to Section 2.1
hereof to the Trustee. The Issuer hereby authorizes and directs the Borrower
and the Borrower hereby agrees, to pay all Loan Payments either directly to the
Trustee at its corporate trust office for the account of the Issuer and for
deposit in the Bond Fund or to the Bank. Additional Payments shall be paid
directly to the person or entity to whom or to which they are due.

 

Section 2.5. Obligations
Unconditional. The obligations of the Borrower to make payments pursuant to
this Agreement and to perform and observe the other agreements on its part
contained herein

 

10

 

shall be absolute and
unconditional. Until such time as all conditions provided in the Indenture for
release of the Indenture are met, the Borrower (i) will not suspend or
discontinue any payments pursuant to the Note or Notes or this Agreement, (ii)
will perform and observe all of its other agreements contained in this
Agreement, and (iii) except as provided in Article VIII hereof, will not
terminate this Agreement for any cause including, without limiting the
generality of the foregoing, failure to complete the Project, failure of title
to the Project or Project Site or any portion thereof, any acts or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, or any portion thereof, commercial frustration of
purpose, any change in the tax or other laws or administrative rulings of or
administrative actions by or under authority of the United States of America or
of the State or any failure of the Issuer or the Bank to perform and observe
any agreement, whether expressed or implied, or any duty, liability or
obligation arising out of or connected with this Agreement or the Reimbursement
Agreement, the Indenture or the Tax Agreement.

 

Section 2.6. Prepayment of Loan and Additional
Payments; Moneys for Optional Redemption. The Borrower shall have the
option to prepay all or part (in the principal amount of $5,000 or any integral
multiple thereof, provided that, if in the Variable Rate Period, the remaining
principal amount attributable to Bonds held by any single owner must be
$100,000 or more) of the Loan (i) on the dates and at the prepayment prices
provided in Section 2.1 of this Agreement, (ii) upon depositing sufficient
moneys with the Bank as set forth in said Section 2.1, and (iii) upon giving
notice in accordance with Section 8.4 hereof.

 

Payments required
under the Note shall be accelerated as necessary to correspond with, in time
and amount, payments of principal of and interest and premium, if any, on the
Bonds.

 

Section 2.7. Past
Due Loan Payments and Additional Payments. In the event that the Borrower
should fail to pay a: Loan Payments or Additional Payments, the payment in
default shall continue as an obligation of the Borrower with interest payable
at the Interest Rate for Advances until the amount in default shall have been
fully paid; provided, however, that anything herein to the contrary
notwithstanding the rate of interest on any Loan Payment in default shall not
be less than the rate of interest on the Bonds to which such Loan Payment relates.

 

Section 2.8. Redemption
of Bonds. The Issuer, at the written request at any time of the Borrower
provided that the Borrower shall have deposited sufficient moneys with the Bank
as set forth in Section 2.1 hereof and given notice in accordance with Section
8.4 hereof, and upon provision first made for the Issuer’s reasonable expenses,
if any, shall forthwith take all steps that may be necessary under the
applicable redemption provisions of the Indenture to effect the redemption of
all or part of the then outstanding Bonds, as may be specified by the Borrower,
on the earliest redemption date on which such redemption may be made under such
applicable provisions.

 

Section 2.9. Adjustment
of Loan Payments in the Event of Redemption or Cancellation of Project Bonds.
In the event the Issuer redeems any Project Bonds or in the event the Borrower
delivers to the Trustee any Project Bonds with instructions to cancel said
Bonds, then in that event the principal amount of such Bonds shall be allowed
as a credit against principal payable under the Note in the inverse order of
principal payments due under the Note.

 

11

 

Section 2.10 Assignment
of Agreement and Revenues. To secure the payment of Bond Service Charges,
the Issuer shall assign, by the Indenture, its rights under and interest in
this Agreement (except for the Unassigned Issuer’s Rights) and the Revenues to
the Trustee. The Borrower hereby agrees and consents to those assignments.

 

Section 2.11 Payments
to Remarketing Agent. The Borrower shall pay to the Remarketing Agent on or
before each Interest Payment Date on which the Remarketing Agent is required to
remarket Project Bonds, an amount equal to the amount to be paid by the
Remarketing Agent for the purchase of Project Bonds on such Interest Payment
Date, pursuant to the Indenture, provided that amounts available on such
Interest Payment Date for such payment from either:

 

(i)                        proceeds
of the remarketing of such Project Bonds by the Remarketing Agent, or

 

(ii)                     proceeds of a
draw under the Letter of Credit

 

shall be credited against
the Borrower’s obligation to make payments under this Section 2.11.

 

The Borrower
hereby consents to the appointment of the Remarketing Agent pursuant to and as
specified in Section 3 of the Bond Resolution and Sections 10.11 and 10.12 of
the Indenture.

 

Section 2.12 Letter
of Credit and Confirming Letter of Credit; Alternate Letter of Credit and
Alternate Confirming Letter of Credit.

 

(a)                    From the date
of issuance of the Bonds, the Borrower shall provide security for payment of
the principal of and interest on the Bonds and for payment of the purchase
price of Bonds delivered to the Paying Agent or the Remarketing Agent pursuant
to Section 3.01 of the Indenture by causing the Letter of Credit and the
Confirming Letter of Credit to be delivered to the Trustee. The Borrower hereby
authorizes and directs the Trustee to draw moneys under the Letter of Credit
and, upon the wrongful dishonor by the Bank of any request for payment under the
Letter of Credit, Confirming Letter of Credit in accordance with their terms
and the terms of the Indenture, to the extent necessary to pay the principal
of, premium, if any, and interest on the Bonds when due and to pay the purchase
price of Bonds tendered, as provided in the Indenture.

 

(b)                   The Letter of
Credit and the Confirming Letter of Credit may be extended beyond their then
stated date of expiration as provided in the Reimbursement Agreement. At any
time prior to the Trustee’s giving of notice of mandatory redemption of Bonds
pursuant to Section 3.07C of the Indenture, the Borrower may provide for the
delivery of an Alternate Letter of Credit or Alternate Confirming Letter of
Credit, provided that the Borrower must furnish to the Trustee the opinion of
Bond Counsel required under Section 6.08B(ii) of the Indenture.

 

The Borrower shall
take whatever action may be necessary to maintain the Letter of Credit or an
Alternate Letter of Credit, and the confirming Letter of Credit or any
Alternate Confirming Letter of Credit in full force and effect during the
period required by the Indenture, including the payment to the Bank and the
Confirming Bank of all amounts payable under the Reimbursement Agreement at the
times

 

12

 

and in the amounts
described therein and the payment of any transfer fees required by the Bank or
the Confirming Bank upon any transfer of the Letter of Credit or an Alternate
Letter of Credit, or any Confirming Letter of Credit or any Alternate
Confirming Letter of Credit to any successor Trustee pursuant to the Indenture.

 

13

 

ARTICLE III

 

ACQUISITION, CONSTRUCTION, EQUIPPING AND 

OWNERSHIP OF THE PROJECT

 

Section 3.1. Agreement
to Acquire, Construct and Equip the Project. The Borrower agrees:

 

(a)                    To cause the
Project to be acquired, constructed and equipped, using its best efforts to do
so with all dispatch to secure completion as promptly as is reasonably
feasible, and will use its best efforts to cause the acquisition, construction
and equipping of other facilities and real and personal property the Borrower
reasonably deems necessary in connection with the Project to the end that the
Project will fulfill the Project Purposes.

 

(b)                   To make, execute,
acknowledge and deliver any contracts, orders, receipts, writings and
instructions with any other persons, firms or corporations, and in general do
all things which, in the reasonable business judgment of the Borrower, may be
requisite or proper for acquiring, constructing and equipping the Project.

 

(c)                    Where
economically feasible, to ask, demand, sue for, levy and use its best efforts
to recover and receive such sums of money, debts, dues or other demands
whatsoever in connection with the Project, to which it may be entitled under
any contract, order, receipt, guaranty, warranty, writing or instrument in
connection with any of the foregoing, and to enforce the material provisions of
any contract, agreement, obligation, bond or other security in connection with
the Project. Any amounts received in connection with the foregoing, after
deduction of expenses incurred in such recovery (i) prior to the Completion
Date and full disposition of the Project Fund in accordance with this Agreement
and the Indenture, shall be paid into the Project Fund, or (ii) after the
Completion Date and full disposition of the Project Fund in accordance with
this Agreement and the Indenture shall be used in accordance with Section
4.2(g) hereof, as if such amounts were remaining in the Project Fund after the
Completion Date and after payment of all costs, or provision therefor, had been
made. Notwithstanding the other provisions of this paragraph, any liquidated
damages received from any contractor for failure to complete work on time shall
be paid to the Trustee for deposit in the Reimbursement Account in the Bond
Fund.

 

Section 3.2. Completion
Date. Completion of the improvement and equipping of the Project shall be
evidenced to the Issuer, the Trustee, the Bank and the Borrower by a
certificate signed by the Authorized Borrower Representative stating that,
except for any amounts retained by the Trustee at the direction of the
Authorized Borrower Representative, for any amount of the costs set forth in
Subsections 4.2(a) through (f) hereof not then due and payable, (i)
acquisition, construction and equipping of the Project have been substantially
completed and all labor, services, materials and supplies used in such
acquisition, construction and equipping have been paid for, (ii) all other
facilities necessary in connection with the Project have been acquired,
constructed and equipped and all costs and expenses incurred in connection
therewith have been paid, and (iii) all acquisition, construction and equipping
of the Project and facilities necessary thereto have been accomplished in such
a manner as to conform with all applicable zoning, planning, building,
environmental and other similar regulations of

 

14

 

all governmental authorities
having jurisdiction, and have been accomplished to the satisfaction of the
Borrower so as to permit efficient operation for the Project Purposes. Said
certificate shall also specify the date by which the foregoing three events
have occurred. Notwithstanding the foregoing, such certificate shall state that
it is given without prejudice to any rights against third parties which then
exist or may subsequently arise.

 

Section 3.3. Agreement
as to Ownership of Project. The Issuer and the Borrower agree that, during
the term of this Agreement, title to and the ownership of the Project shall
vest in and remain in and be the sole property of the Borrower.

 

Section 3.4. Use
of Project. The Issuer does hereby covenant and agree that it will not take
any action, or cause any action to be taken, during the term of this Agreement,
other than pursuant to Article IX of this Agreement or Article IX of the
Indenture, to interfere with the Borrower’s ownership of the Project or to
prevent the Borrower from having possession, custody, use and enjoyment of the
Project.

 

Section 3.5. Additional
Bonds. Subject to the provisions of Section 8 of the Bond Resolution for
the Project Bonds, the Borrower and the Issuer agree that one or more series of
Additional Bonds may be issued pursuant to the Indenture.

 

15

 

ARTICLE IV

 

ISSUANCE OF BONDS; 

APPLICATION OF PROCEEDS

 

Section 4.1. Issuance
of Bonds; Deposit of Bond Proceeds. In order to provide funds to make the
Loan and thereby pay for the costs described in Section 4.2 hereof and incurred
under or in connection with this Agreement, concurrently with the delivery to
the Trustee of the Note as provided in Section 2.1 hereof, the Issuer will
issue, sell and deliver the Project Bonds to the Original Purchaser and will
deposit the proceeds (net of the Original Purchaser’s bond discount, if any) of
said Project Bonds, after deducting the Bond Fund Payment as provided in the
Indenture, into the Project Fund. The moneys derived from the proceeds of the
Project Bonds deposited in the Project Fund, pending application as provided in
Section 4.2 hereof, are subject to a lien in favor of the holders of the
Project Bonds as provided in the Indenture.

 

Section 4.2. Disbursements
from the Project Fund. The Issuer has, in the Indenture, authorized and
directed the Trustee to use the moneys in the Project Fund for the
disbursements required by the provisions of this Agreement. Such disbursements
shall be to pay, or, to the extent the Borrower shall have paid, to reimburse
the Borrower, for the following:

 

(a)                    Costs incurred
directly or indirectly for or in connection with the acquisition, construction
or equipping of the Project including but not limited to those for any
feasibility study, preliminary planning and studies, architectural, legal,
engineering and supervisory services, labor, services, materials, grading,
construction, and equipment acquisition and installation, and including
interest on the Bonds during the Construction Period to the extent that such
interest qualifies as or may be treated as “construction period interest” as
defined in the Code.

 

(b)                   Premiums
attributable to all insurance required to be taken out and maintained during
the Construction Period with respect to the Project, the premium on each surety
bond, if any, required with respect to work on the Project, and taxes,
assessments and other charges in respect of the Project, that may become due
and payable during the Construction Period.

 

(c)                    Costs incurred
directly or indirectly in seeking to enforce any remedy against any contractor
or subcontractor in respect of any default under any contract relating to the
Project.

 

(d)                   Financial,
legal, accounting, printing and engraving fees, charges and expenses, and all
other such fees, charges and expenses incurred in connection with the Bonds and
the preparation and delivery of this Agreement, the Indenture, the Mortgage and
related documents.

 

(e)                    Fees and
expenses of the Trustee and of any paying agent properly incurred under the
Indenture that may become due and payable during the Construction Period, and
the initial or acceptance fee of the Trustee.

 

16

 

(f)                      Any other
incidental and necessary costs including without limitation any expenses, fees
and charges, relating to the acquisition, construction or equipping of the
Project, including deposits to the Reimbursement Account in the Bond Fund for
the purpose of reimbursing the Bank for draws under the Letter of Credit to pay
interest during the Construction Period, and including deposits to the Rebate
Fund for the purpose of making any payments required pursuant to the Tax
Agreement; provided, that nothing in this Agreement permits, or shall be
construed to permit, the expenditure of any moneys in the Project Fund for, or
in reimbursement of payments made for, the acquisition of raw materials or
supplies (other than raw materials or supplies used in connection with the
installation of the Project), inventory, or accounts receivable, or for provision
of working capital, including the payment of any principal or interest on any
other secured or unsecured indebtedness incurred by the Borrower in connection
with the Project, and no such expenditure shall be made from the Project Fund.

 

(g)                   All moneys in
the Project Fund (including moneys earned thereon by investment thereof)
remaining after the Completion Date and payment, or provision for payment, in
full of the costs provided for in the preceding subsections of this Section,
then due and payable, shall promptly be deposited in a subaccount (“Subaccount”)
of the Reimbursement Account in the Bond Fund and, at the direction of the
Authorized Borrower Representative, used to (i) reimburse the Bank for draws on
the Letter of Credit to redeem Bonds (if such Bonds are subject to redemption
under applicable provisions hereof or of the Indenture) or (ii) purchase Bonds
in the open market for the purpose of cancellation at prices not exceeding par
plus accrued interest thereon to the date of payment therefor, or (iii) a
combination of the foregoing; provided that amounts approved by the Authorized
Borrower Representative and the Bank shall be retained by the Trustee in the
Project Fund for payment of such costs not then due and payable, and any
balance remaining of such retained funds after full payment of all such costs
shall be used in the manner specified and in the priorities set forth in
clauses (i), (ii) and (iii) of this subsection; and further provided, that if
such moneys remaining in the Project Fund prior to application in the manner
specified in clauses (i), (ii) and (iii) of this subsection exceed 10% of the
aggregate principal amount of the Project Bonds after subtracting the total of
the costs of the issuance, sale and delivery of the Project Bonds, paid out of
Bond proceeds, then the amount by which such moneys remaining in the Project
Fund exceeds the amount specified above shall only be applied by the Borrower
as set forth in clause (i) above to redeem or retire Bonds, or a portion
thereof at the earlier of their next redemption date or date of maturity and
pending such application such amount shall be held in escrow in the Subaccount
in the Reimbursement Account in the Bond Fund and the yield on such escrowed
amount shall not exceed the yield on the Bonds, and provided further that with
regard to such redemption or retirement of Bonds, such excess shall not be
applied to any premium which is paid for such Bonds.

 

Section 4.3. Obligation
of the Parties to Cooperate in Furnishing Documents. The Issuer and the
Borrower agree to cause such approvals and orders to be directed by the
Authorized Borrower Representative to the Trustee as may be necessary to effect
payments out of the Project Fund in accordance with Section 4.2 hereof. The
Issuer’s obligation is subject to any provisions of this

 

17

 

Agreement or the
Indenture requiring additional documentation with respect to payments and shall
not extend beyond the moneys in the Project Fund available for payment under
the terms of the Indenture.

 

Section 4.4. Borrower
Required to Pay Costs in Event Project Fund Insufficient. In the event the
moneys in the Project Fund (including moneys from the proceeds of any
Additional Bonds sold to finance completion of the Project) should not be
sufficient to pay all costs payable therefrom, the Borrower agrees, in order to
fulfill the public purposes for which the Project is to be used, to complete
the acquisition, construction and equipping to be accomplished pursuant hereto
and to pay all costs therefor in full; provided, however, that nothing
contained herein shall impair the Borrower’s rights under Article VIII hereof.
The Issuer does not make any warranty, either expressed or implied, that the
moneys, which will be paid into the Project Fund and which under the provisions
of this Agreement will be available for payment of the costs of the
acquisition, construction and equipping to be accomplished pursuant hereto,
will be sufficient to pay all the costs which will be incurred in that
connection. The Borrower agrees that if after exhaustion of the moneys in the
Project Fund the Borrower should pay pursuant hereto any portion of the said
costs listed in Section 4.2 hereof, it shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee, or the holders of any of
the Bonds, nor shall it be entitled to any diminution in or abatement or
postponement of the Loan Payments.

 

Section 4.5. Investment
of Fund Moneys. Except as otherwise provided in the Indenture or Tax
Regulatory Agreement, any moneys, held as part of the Bond Fund or Project Fund
shall at the written request of the Authorized Borrower Representative be
invested or reinvested by the Trustee in Permitted Investments. The Issuer and
the Borrower jointly and severally covenant that the use of the proceeds of the
Bonds will be restricted in such manner and to such extent, if any, as may be
necessary, after taking into account reasonable expectations at the time of
issuance of the Bonds, so that they will not constitute “arbitrage bonds”
within the meaning of Section 148 of the Code. The Borrower and the Issuer
hereby agree that the gross proceeds of the Project Bonds will be restricted,
invested and rebated as provided in the Tax Agreement. Any officer of the
Issuer having responsibility with respect to the issuance of the Bonds is
authorized and directed, alone or in conjunction with any other officer,
employee or consultant of the Issuer or the Borrower, and upon receipt of
reasonably satisfactory indemnities from the Borrower, to give an appropriate
certificate on behalf of the Issuer, for inclusion in the transcript of
proceedings for the Bonds, setting forth the facts, estimates and circumstances
and reasonable expectations pertaining to said Section 148 and regulations
thereunder, and to cause to be furnished a true transcript of certified
proceedings including all proceedings had with reference to the issuance of the
Bonds along with such other information as is necessary or proper with respect to
the Bonds.

 

18

 

ARTICLE V

 

MAINTENANCE; INSURANCE; DAMAGE;

DESTRUCTION AND EMINENT DOMAIN

 

Section 5.1. Maintenance.
So long as any of the Bonds are outstanding within the meaning of the
Indenture, the Borrower shall in all material respects keep and maintain the
Project, including all appurtenances thereto and any personal property therein
or thereon, in good repair and good operating condition (reasonable wear and
tear excepted).

 

So long as such
shall not be in violation of the Act, and provided there is continued
compliance with applicable laws and regulations of governmental jurisdictions,
the Borrower shall have the right to remodel the Project or make additions,
modifications and improvements thereto, from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes, the cost of
which remodeling, additions, modifications and improvements shall be paid by
the Borrower or, to the extent permitted by the Indenture, from the proceeds of
Additional Bonds, and the same shall, when made, become a part of the Project,
provided, however, that any such remodeling shall not have a material adverse
effect on the value of the Project; and provided further, however, that the
Borrower shall not, except as required by law, remodel the Project or make any
additions, modifications, or improvements thereto which would cause the Project
to fail to meet the requirements of all applicable fire and safety codes.

 

Section 5.2. Removal
of Portions of the Project. The Borrower may remove items of furnishings or
equipment constituting part of the Project only in accordance with the
provisions of the Reimbursement Agreement and the Mortgage.

 

Section 5.3. Option
to Release Portion of Project. The Borrower has the option, with the
consent of the Bank, to release from the lien of the Mortgage any portion of
the land, upon which no buildings, structures, or improvements financed from
Bond proceeds are located, and appurtenances thereto and any equipment and fixtures
which are subject to the lien of the Mortgage provided that an independent
architect or engineer certifies that such real and personal property is not
necessary for the operation of the Project and the release will not interfere
with the use of the Project. To the extent that (i) any of such equipment and
fixtures are necessary for the operation of the Project or (ii) the Borrower
does not desire to purchase any of such equipment and fixtures, and in either
case such equipment and fixtures can be moved to another location on the
Project Site, then such equipment and fixtures shall be moved and shall not be
released hereunder. The purchase price for such release shall be the fair
market value of such property as determined by three independent real estate
appraisers (selected in the manner provided in Section 5.4(1) hereof). The
purchase price will be deposited in the Reimbursement Account in the Bond Fund
and used for the purposes for which the Reimbursement Account in the Bond Fund
was created.

 

Section 5.4. Insurance
Required. The Borrower shall keep the Project, or cause the same to be
kept, continuously insured against such risks, in such amounts and during such
time periods as is provided in the Mortgage and the Reimbursement Agreement.
The Net Proceeds of the insurance carried pursuant hereto shall be paid and
applied as provided in the Mortgage and the Reimbursement Agreement.

 

19

 

Section 5.5
[Reserved]

 

Section 5.6. Worker’s
Compensation Coverage. While the Note and any obligation under the
Reimbursement Agreement remains unpaid, including during the Construction
Period, the Borrower shall maintain or cause to be maintained, in connection
with the Project, the Worker’s Compensation coverage required by the laws of
the State.

 

Section 5.7. Mechanics’
Liens. The Borrower shall not suffer or permit any mechanics, liens to be
filed against the Project, nor against any Loan Payment paid or payable
hereunder, by reason of work, labor, services or materials supplied or claimed
to have been supplied to the Borrower or anyone holding the Project or any part
thereof through or under the Borrower. If any such mechanics’ liens shall at
any time be filed, the Borrower shall, within ninety (90) days after notice of
the filing thereof, cause the same to be discharged of record by payment,
deposit, bond, order of a court of competent jurisdiction or otherwise. The
Borrower shall have the right to contest the validity and the amount of any
such lien by appropriate proceedings timely instituted, provided that the
Borrower (a) gives the Issuer and the Bank written notice of its intention so
to do, (b) diligently prosecutes any such contest, and (c) if requested by the
Issuer or the Bank, furnishes a bond in cash in an amount equal to the amount
required by applicable law, and the Borrower shall not be in default hereunder
for failure to pay or discharge any such lien so long as it is contesting the
same as aforesaid. In lieu of providing the cash required by clause (c) above,
the Borrower may provide the Issuer and the Bank with evidence of a title
insurance policy or endorsement satisfactory to the Bank which policy or
endorsement insures over such lien.

 

Section 5.8. Damage,
Destruction and Eminent Domain. If, prior to full payment of all Bonds
outstanding (or provision for payment thereof having been made in accordance
with the provisions of the Indenture), the Project or any portion thereof is
destroyed or damaged in whole or in part by fire or other casualty, or title to,
or the temporary use of, the Project or any portion thereof shall have been
taken by the exercise of the power of eminent domain, all Net Proceeds from any
insurance policy or any kind of condemnation awards in connection therewith
shall be applied pursuant to the provisions of the Reimbursement Agreement and
the Mortgage.

 

20

 

ARTICLE VI

 

WARRANTIES, REPRESENTATIONS AND SPECIAL COVENANTS

 

Section 6.1 Representations
by the Issuer. The Issuer represents that:

 

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

 

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

 

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

 

(d)                   Prior to the
date of issuance and delivery of the Project Bonds, a public hearing on the
proposal to undertake and finance the Project was duly called and held in
accordance with the Act, at which time all persons who appeared were given an
opportunity to express their views with respect thereto.

 

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

 

Section 6.2 Representations
of the Borrower. The Borrower makes the following representations and
warranties to induce the Issuer to enter into this Agreement:

 

(a)                    The Borrower
is an Iowa domestic limited liability company duly formed and existing, in good
standing under the laws of the State of Iowa, and is not in violation of any
provision of its Articles of Organization or Operating Agreement or any laws of
the State relevant to the transactions contemplated by this Agreement, the Bond
Purchase Agreement, the Remarketing Agreement, the Note, the Mortgage, the
Indenture, the Tax Agreement or the Reimbursement Agreement.

 

(b)                   The Borrower
has full power and authority to execute and deliver this Agreement, the Bond
Purchase Agreement, the Remarketing Agreement, the Mortgage, the Tax Agreement,
the Note and the Reimbursement Agreement and to carry out the transactions
provided for herein and therein. This Agreement, the Bond Purchase Agreement,
the Remarketing Agreement, the Mortgage, the Tax regulatory Agreement,

 

21

 

the Note and the
Reimbursement Agreement have by proper action been duly authorized, executed
and delivered by the Borrower and all steps necessary have been taken to
constitute this Agreement, the Bond Purchase Agreement, the Remarketing Agreement,
the Mortgage, the Tax Agreement, the Note and the Reimbursement Agreement when
executed and delivered by the respective parties thereto, valid and binding
obligations of the Borrower.

 

(c)                    The execution,
delivery and performance by the Borrower of this Agreement, the Bond Purchase
Agreement, the Remarketing Agreement, the Mortgage, the Tax Agreement, the Note
and the Reimbursement Agreement and the consummation of the transactions
contemplated hereby and thereby will not violate any provision of law or
regulation applicable to the Borrower, or of any writ or decree of any court or
governmental instrumentality, or of the Articles of Organization or Operating
Agreement of the Borrower, or of any material mortgage, indenture, contract,
agreement or other material undertaking to which the Borrower is a party or
which is known to the Borrower to purport to be binding upon the Borrower or
upon any of its assets.

 

(d)                   The financing,
acquisition, construction and equipping provided for under this Agreement, and commitments
therefor made by the Issuer, have induced the Borrower to acquire, construct
and equip the equipment constituting the Project which will be used in the
business of the Borrower.

 

(e)                    Acquisition,
construction and equipping in accordance with the Act will be accomplished and
the Project will be used and maintained in such manner as to conform in all
material respects with all applicable zoning, planning, fire, building,
environmental and other regulations, which are material to the operation of the
Project, of all governmental authorities having jurisdiction.

 

(f)                      The Project
is of the type authorized and permitted by the Act. The Project has been and
will be operated and maintained in such manner to conform in all material
respects with all applicable zoning, planning, building, environmental and
other applicable governmental regulations to be consistent with the Act.

 

(g)                   Neither the
Bank nor the Confirming Bank controls the Borrower, either directly or
indirectly through one or more intermediaries. The Borrower does not control
either the Bank or the Confirming Bank, either directly or indirectly, through
one or more intermediaries. “Control” for this purpose has the meaning given to
such term in Section 2(a)(9) of the Investment Company Act of 1940. The
Borrower hereby agrees to provide written notice to the Trustee, the
Remarketing Agent and the Bondholders not less than 30 days prior to the
consummation of any transactions that would result in the Borrower controlling
or being controlled by either the Bank or the Confirming Bank, or any provider
of an Alternate Letter of Credit or Alternate Confirming Letter of Credit.

 

Section 6.3.
[Reserved]

 

22

 

Section 6.4. Financial
Statements. While any indebtedness of the Bonds is outstanding, the
Borrower shall provide the Bank the financial reports and certifications
reasonably required by the Reimbursement Agreement.

 

Section 6.5. Borrower’s
Approval of Indenture. The Indenture has been submitted to the Borrower for
examination, and the Borrower acknowledges, by execution of this Agreement,
that it has approved the Indenture and agrees to be bound by its terms.

 

Section 6.6. Right
of Access. The Borrower agrees that, subject to reasonable security and
safety regulations and to reasonable requirements as to notice and as to
noninterference with the conduct of business at the Project Site, the Issuer,
the Trustee and the Bank and they or any of their respective duly authorized
agents shall have the right at all reasonable times to enter upon and to
examine and inspect the Project. The Borrower further agrees that the Trustee
and the Bank and their duly authorized agents shall have such rights of access
to the Project as may be reasonably necessary to cause to be completed the
acquisition, construction and equipping provided for herein, and thereafter for
the proper maintenance of the Project in the event of failure by the Borrower
to perform its obligations hereunder.

 

Section 6.7. Indemnification.
The Borrower releases the Issuer, the Trustee, the Bank, the Confirming Bank
and the Remarketing Agent from, agrees that the Issuer, the Remarketing Agent,
the Bank, the Confirming Bank and the Trustee shall not be liable for, and
agrees to hold the Issuer, the Trustee, the Bank, the Confirming Bank, the
Original Purchaser and the Remarketing Agent harmless against, any loss or
damage to property, or any injury to or death of any person, that may be
occasioned by any cause whatsoever pertaining to and arising out of the Project
or the use thereof during the Construction Period and while the Borrower is in
possession thereof. The Borrower further agrees to indemnify and save harmless
the Issuer, the Trustee, the Bank, the Confirming Bank, the Original Purchaser,
and the Remarketing Agent against and from any and all cost, liability,
expenses and claims arising from any breach or default on the part of the
Borrower in the performance of any covenant or agreement on the part of the
Borrower to be performed pursuant to the terms of this Agreement, or arising
from any act or failure to act by the Borrower or any of its agents,
contractors, servants, employees, or licensees, or arising from any accident,
injury or damage whatsoever caused to any person, firm or corporation occurring
during the term of this Agreement, on about the Project Site, and from and
against all cost, liability and expenses incurred in or in connection with any
such claim or action or proceeding brought thereon; and in case any action or
proceeding be brought against the Issuer, the Trustee, the Bank, the Confirming
Bank, the Original Purchaser, or the Remarketing Agent by reason of any such
claim, the Borrower upon notice from the Issuer, the Trustee, the Bank, the
Original Purchaser, or the Remarketing Agent covenants to resist or defend such
action or proceedings at the Borrower’s expense. Notwithstanding anything in
this Section 6.7 to the contrary, however, the Borrower’s agreement to
indemnify any other party hereunder shall not apply to any loss or damage to
property, or any injury to or death of any person, or any other cost,
liability, expense or claim that is due to the negligence, reckless conduct or
willful misconduct of such party.

 

Section 6.8. Borrower
Not to Adversely Affect Tax Exempt Status of Interest on Project Bonds. The
Borrower, for the benefit of the Issuer, the Trustee, the Bank and the holders
from time to time of the Project Bonds, hereby represents that it has not
taken, or permitted to be taken on its behalf, and agrees that it will not
take, or permit to be taken on its behalf, any action which would adversely
affect the continued exemption from Federal income taxation of the interest
paid on the Project Bonds, and

 

23

 

that it will take, or
require to be taken, such acts as may from time to time be required under
applicable law or regulation in effect on the date of the original delivery of
the Project Bonds to the Original Purchaser to preserve or maintain the
exemption from Federal income taxation of the interest on the Project Bonds.

 

24

 

ARTICLE VII

 

ASSIGNMENT

 

Section 7.1. Assignment
by Borrower.  This Agreement may be
assigned in whole or in part by the Borrower, with the consent of the Bank but
without the necessity of obtaining the consent of either the Issuer or the
Trustee, provided, however, that no such assignment shall be made otherwise
than in accordance with the Act as from time to time amended, and subject,
however, to each of the following conditions:

 

(a)                    No assignment
(other than with the express written consent of the Bank) shall relieve the
Borrower from primary liability for any of its obligations hereunder, and in
the event of any such assignment the Borrower shall continue to remain
primarily liable for the payment of the Loan Payments and Additional Payments
and for performance and observance of the agreements on its part herein
provided to be performed and observed by it.

 

(b)                   Any assignee
from the Borrower shall assume in writing the obligations of the Borrower
hereunder to the extent of the interest assigned.

 

(c)                    The Borrower
shall, within thirty (30) days after execution thereof, furnish or cause to be
furnished to the Issuer, the Trustee and the Bank a true and complete copy of
each such assignment together with any instrument of assumption.

 

(d)                   Any assignment
from the Borrower shall not materially impair fulfillment of the Project
Purposes to be accomplished by operation of the Project.

 

Upon any such
assignment, the Borrower shall be released from its obligations under this
Agreement to the extent of the interest assumed by the assignee.

 

Section 7.2. Assignment
by the Issuer.  The Issuer shall
assign its rights under and interest in, and pledge the Revenues including,
among other things, Loan Payments received under or pursuant to, this
Agreement, except for the Unassigned Rights of Issuer, along with all of its
right, title and interest in, to and under the Note, to the Trustee pursuant to
the Indenture and the Note, respectively, as security for payment of the
principal of and interest and any premium on the Bonds, and shall not make any
further such assignment or pledge except as may be necessary or required to
enforce or secure payment of principal of and interest and any premium on the
Bonds.

 

25

 

ARTICLE VIII

 

TERMINATION AND PREPAYMENT

 

Section 8.1. Option
to Terminate. The Borrower shall have the option to terminate this
Agreement at any time when (i) the Indenture shall have been satisfied pursuant
to its provisions and (ii) sufficient moneys are on deposit with the Trustee,
the Bank or the Issuer, as appropriate, to meet all Additional Payments due or
to become due through the date on which the last of the Bonds are then
scheduled to be retired or redeemed, or, with respect to Additional Payments to
become due, provisions satisfactory to the Trustee, the Bank and the Issuer are
made for paying such amounts as they come due. Such option shall be exercised
by the Borrower giving the Issuer, the Bank and the Trustee notice of such
termination and such termination shall thereupon become effective.

 

Section 8.2. Option
to Prepay Loan. The Borrower shall have, and is hereby granted the option,
to prepay the Loan in full prior to the Termination Date and prior to the
payment and discharge of all the outstanding Bonds in accordance with the
provisions of the Indenture, if any of the following shall have occurred:

 

(a)                    All or
substantially all of the Project shall be damaged or destroyed and the Borrower
shall determine that it is not practicable or desirable to rebuild, repair or
restore the Project;

 

(b)                   All or
substantially all of the Project shall be condemned or such use or control
thereof shall be taken as to render the Project unsatisfactory to the Borrower
for continued operation; or

 

(c)                    Unreasonable
burdens or excessive liabilities shall be imposed upon the Issuer or the
Borrower with respect to the Project or the operation thereof.

 

The mutual
agreements contained in this Section 8.2 are independent of, and constitute an
agreement separate and distinct from, any and all provisions of this Agreement
and shall be unaffected by any fact or circumstances which might impair or be
alleged to impair the validity of any other provision.

 

The Borrower shall
have, and is hereby granted, an option, upon giving notice in accordance with
Section 8.4 hereof, to prepay all or part (in the principal amount of $5,000 or
any integral multiple thereof, provided that if in the Variable Rate Period the
remaining principal amount attributable to Bonds held by any single owner must
be $100,000 or more) of the Loan Payments due or to become due, subject to such
terms, with such deposit requirements and on the dates and at the prepayment
prices as are set forth in Sections 2.1 and 2.6 hereof.

 

Section 8.3. Obligation
to Prepay Loan. The Borrower shall be obligated to prepay the entire Loan
prior to the expiration of this Agreement and prior to the full payment of the
Bonds (or prior to making provision for payment thereof in accordance with the
Indenture) and to cancel or terminate this Agreement if and when:

 

26

 

(a)                    As a result of
any changes in the Constitution of the State of Iowa or the Constitution of the
United States of America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal) entered after the contest
thereof by the Borrower in good faith, the Note and the obligations evidenced
thereby shall have become void or unenforceable or impossible of performance in
accordance with the intent and purposes of the parties as expressed in the
Agreement; or

 

(b)                   A final
determination by the Internal Revenue Service or a court of competent
jurisdiction as a result of a proceeding in which the Borrower participates to
the degree it deems sufficient, which determination the Borrower, in its
discretion, does not contest by an appropriate proceeding, that, as a result of
a failure by the Borrower to observe any covenant, agreement or representation
by the Borrower in the Agreement, the interest payable on the Bonds or any of
them is includable for federal income tax purposes in the gross income of any
owner or beneficial owner of a Bond (other than an owner who is a “substantial
user” of the Project or a “related person” within the meaning of Section 147(a)
of the Internal Revenue Code of 1986 (the “Code”) and the applicable
regulations thereunder); or

 

(c)                    Upon the
Expiration of the term of the Letter of Credit or the Confirming Letter of
Credit without any delivery of an Alternate Letter of Credit or Alternate
Confirming Letter of Credit, as the case may be, pursuant to Section 2.12 of
this Agreement and the Indenture.

 

Any such
prepayment shall be made in the manner provided in section 2.1 hereof on the
Loan Payment Date corresponding to the Bond Redemption Date fixed in accordance
with the provisions of the Indenture in an amount sufficient to pay the
principal of and interest and any premium on the Bonds to such Bond Redemption
Date.

 

Section 8.4. Notice
of Prepayment.  In order to exercise
an option granted in, or to consummate a prepayment required by, this
Agreement, the Borrower shall, upon satisfying the deposit requirements as set
forth in Section 2.1 hereof, (i) within 60 days following the event authorizing
the exercise of such option or requiring such prepayment, or (ii) at least 30
days prior to the date of the Borrower’s exercise of the option granted in the
last paragraph of Section 8.2 hereof, give notice to the Issuer, the Trustee,
the Remarketing Agent and the Bank, and shall specify therein the date on which
such prepayment is to be made, which date shall be not less than 30 days nor
more than 90 days from the date such notice is mailed, and in case of a
redemption of the Bonds in accordance with the provisions of the Indenture, the
Trustee shall give the required notice of redemption, in which arrangements the
Issuer and the Borrower shall cooperate.

 

Section 8.5. Prepayment
Price.  In the case of prepayment of
the entire Loan pursuant to any provision of this Article, the prepayment price
shall be the sum of the following:

 

(a)                    To the
Trustee, an amount of money equal to the amount of all principal, interest and
any premium required to be paid in connection with the corresponding redemption
of

 

27

 

Bonds under the Indenture
(plus any premium payable with respect to Bonds theretofore redeemed), plus

 

(b)                   to the Trustee
or to the persons to whom Additional Payments are or will be due, an amount of
money equal to the Additional Payments accrued and which will accrue until
final maturity of the Bonds or until the appropriate redemption date if the
Bonds are to be redeemed; provided that this portion of such prepayment price
will be deemed paid if provisions acceptable to the Trustee, the Bank, the
Remarketing Agent and the Issuer are made for paying such Additional Payments
as they become due.

 

Section 8.6. Relative
Position of this Article and Indenture.  The rights and options granted to the Borrower
in this Article shall be and remain prior and superior to the Indenture and may
be exercised whether or not the Borrower is in default hereunder; provided that
such default will not result in nonfulfillment of any condition to the exercise
of any such right or option.

 

Section 8.7. Concurrent
Discharge of Note.  In the event any
of the Bonds shall be paid and discharged pursuant to any provisions of this
Agreement or the Indenture, so that such Bonds are not thereafter outstanding
within the meaning of the Indenture, an equivalent principal amount of the
corresponding Note or Notes shall be deemed fully paid for purposes of this
Agreement and to such extent the obligations of the Borrower thereunder
terminated. In such event, the Issuer or any assignee of the Note or Notes
shall take whatever steps are required to cause such Note or Notes, or the
pertinent installments of the principal sum thereof, to be canceled and deemed
fully paid.

 

28

 

ARTICLE IX

 

EVENTS OF DEFAULT AND REMEDIES

 

Section 9.1. Events
of Default.  The following shall be “events
of default” under this Agreement and the terms “event of default” or “default”
shall mean, whenever they are used in this Agreement, any one or more of the
following events:

 

(a)                    The occurrence
of an event of default as defined in Section 9.01(a) or (b) of the Indenture.

 

(b)                   Failure by the
Borrower to observe and perform any covenant, condition or agreement on its
part to be observed or performed hereunder, including failure to make Loan
Payments as required under Section 2.1 hereof, other than as referred to in
paragraph (a) of this Section, for a period of thirty (30) days after notice of
such failure requesting such failure to be remedied, given to the Borrower by
the Issuer, the Bank or the Trustee, unless the Issuer, the Bank and the
Trustee shall agree in writing to an extension of such time prior to its
expiration; provided, however, that, if such default is curable, and if and so
long as the Borrower is proceeding with due diligence to cure the default such
period shall be extended for an additional 150 days to permit the Borrower to
cure such default.

 

(c)                    Failure by the
Borrower promptly to satisfy or cause to be set aside any execution, garnishment
or attachment of such consequence as will materially impair its ability to
carry out its obligations under this Agreement, or the filing by the Borrower
of a petition for the appointment of a receiver in liquidation or a trustee
with respect to itself or any of its property, or if either makes a voluntary
assignment for the benefit of creditors or files a petition in bankruptcy or
insolvency or for reorganization, compromise, adjustment or other relief under
the laws of the United States or of any state relating to the relief of
debtors; or if any party other than the Borrower shall file a petition for the
appointment of a receiver in liquidation or a trustee with respect to the
Borrower, or shall file a petition against the Borrower in bankruptcy, insolvency,
or for reorganization, compromise, adjustment or other relief under the laws of
the United States or any state relating to the relief of debtors and such
petition shall not be vacated or set aside or stayed within sixty (60) days
from the Borrower receiving notice thereof.

 

(d)                   Any foreclosure
of, or ousting of the Borrower from possession of, the Project or any material
portion thereof under any indenture of mortgage and deed of trust or any other
security interest given by the Borrower, or for any other reason.

 

The provisions of
paragraph (b) of this Section are subject to the following limitations: If by
reason of acts of God; winds; fires; epidemics; landslides; floods; droughts;
famines; strikes; lockouts or other industrial disturbances; acts of public
enemies; acts or orders of any kind of any governmental authority;
insurrection; military action; war, whether or not declared; sabotage; riots;
civil disturbances; explosions; breakage or accident to machinery, transmission
pipes or canals; partial or entire failure of utilities; or any cause or event
not reasonably within the control of the Borrower, the Borrower is

 

29

 

unable in whole or in
part to carry out its agreements on its part herein contained, other than the
obligations on the part of the Borrower to pay Loan Payments, Additional
Payments and to carry insurance and to permit inspection of the Project; the
Borrower shall not be deemed in default for a period of thirty (30) days from the
inception of such inability; provided, however, that, if such default is
curable, and if and so long as the Borrower is proceeding with due diligence to
cure the default such period shall be extended to whatever reasonable period is
required to permit the Borrower to cure such default. The Borrower shall,
however, use its best efforts to remedy with all reasonable dispatch the cause
or causes preventing the Borrower from carrying out its agreements; provided,
that the Borrower shall in no event be required to settle strikes, lockouts or
other industrial disturbances by acceding to the demands of the opposing party
or parties when such course is, in the judgment of the Borrower, not in the
interest of the Borrower.

 

Section 9.2. Remedies
on Default.  Whenever any event of
default under Section 9.1 of this Agreement shall have happened and be
subsisting, any one or more of the following remedial steps may be taken;
provided that in no event shall the Issuer or the Trustee be obligated to take
any step (except as necessary to make timely draws on the Letter of Credit or
the Confirming Letter of Credit) which in its opinion will or might cause it to
expend time or money or otherwise incur liability unless and until satisfactory
indemnity has been furnished to it:

 

(a)                    The Issuer
shall, at the written request of the Trustee if acceleration is declared
pursuant to Section 9.02 of the Indenture, declare all Loan Payments and
Additional Payments payable hereunder for the remainder of the term of this
Agreement to be immediately due and payable, whereupon the same shall become
immediately due and payable.

 

(b)                   In the event
any of the Bonds shall at the time be outstanding and not paid and discharged
in accordance with the provisions of the Indenture, the Issuer or the Trustee
may have access to and inspect, examine and make copies of the books and
records and any and all accounts, data and income tax and other tax returns of
the Borrower, only, however, insofar as they pertain to the Project or Project
Site or any portion thereof, or to the Borrower’s operations of the Project or
at the Project Site.

 

(c)                    The Issuer
may, at the direction of the Bank, pursue all remedies of a creditor under the
laws of the State.

 

(d)                   The Issuer or
the Trustee may, at the direction of the Bank, take whatever action at law or
in equity may appear necessary or desirable to collect the Loan Payments and
Additional Payments then due and thereafter to become due, or to enforce
performance and observance of any obligation, agreement or covenant of the
Borrower under this Agreement.

 

(e)                    The Trustee
may, at the direction of the Bank, exercise all remedies available under the
Indenture.

 

Any amounts collected as
Loan Payments or applicable to Loan Payments and any other amounts which would
be applicable to payment of principal of and interest and any premium on the
Bonds collected pursuant to action taken under this Section shall be paid into
the Bond Fund and applied in accordance

 

30

 

with the provisions of
the Indenture or, if the outstanding Bonds have been paid and discharged in
accordance with the provisions of the Indenture, shall be paid first to the
Bank in satisfaction of any obligations of the Borrower to the Bank under the
Reimbursement Agreement, then as provided in Section 6.13 of the Indenture for
transfers of remaining amounts in the Bond Fund.

 

The provisions of
this Section are subject to the further limitation that the rescission or
annulment of a declaration that all the Bonds outstanding under the Indenture
are immediately due and payable shall also constitute rescission or annulment
of any corresponding declaration made pursuant to paragraph (a) of this Section
and a waiver and rescission of the consequences of such declaration and of the
event of default with respect to which such declaration had been made, provided
that no such waiver or rescission shall extend to or affect any subsequent or
other default or impair any right consequent thereon.

 

Section 9.3. No
Remedy Exclusive.  No remedy
conferred upon or reserved to the Issuer or the Trustee by this Agreement is
intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement or now or hereafter existing at law or
in equity or by statute. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other than such notice
as may be expressly required herein.

 

Section 9.4. Agreement
to Pay Attorneys’ Fees and Expenses.  In the event the Borrower should default under
any of the provisions of this Agreement and the Issuer or the Trustee should
employ attorneys or incur other expenses for the collection of Loan Payments or
the enforcement of performance or observance of any obligation or agreement on
the part of the Borrower contained in this Agreement or in or represented by
the Note, the Borrower shall on demand therefor reimburse the reasonable fee of
such attorneys and such other reasonable expenses so incurred. Any attorneys’
fees required to be paid by the Borrower under this Agreement shall include
attorneys, fees through all proceedings, including, but not limited to,
negotiations, administrative hearings, trials and appeals.

 

Section 9.5. No
Additional Waiver Implied by One Waiver.  In the event any agreement contained in this
Agreement should be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder.

 

31

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1. Term
of Agreement.  This Agreement shall
remain in full force and effect from the date hereof to and including the
Termination Date, or until such time as all of the Bonds shall have been fully
paid (or provision made for such payment pursuant to the Indenture), whichever
shall be earlier; provided, however, that this Agreement may be canceled and
terminated prior to said date if the Borrower shall prepay all of the Loan
pursuant to Article VIII hereof.

 

Section 10.2. Amounts
Remaining in Bond Fund.  Any amounts
in the Bond Fund remaining unclaimed by the holders of Bonds for three years
after the due date (whether at maturity or by redemption or otherwise) thereof,
shall be paid first to the Bank in satisfaction of any outstanding obligations
of the Borrower to the Bank under the Reimbursement Agreement and any amount
remaining thereafter shall be paid to the Borrower by the Trustee. With respect
to the principal of and interest and any premium on the Bonds to be paid from
moneys paid to the Borrower or the Bank pursuant to this Section the holders of
the Bonds entitled to such moneys shall look solely to the Borrower for the
payment of such moneys.

 

Section 10.3. Notices.  All notices, certificates, requests or
other communications hereunder shall be sufficiently given and shall be deemed
given when mailed by registered or certified mail, postage prepaid, addressed
to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Borrower, the Original Purchaser, the Bank, the Remarketing Agent, or the
Trustee shall also be given to the others. The Borrower, the Issuer, the
Original Purchaser, the Bank, the Remarketing Agent, and the Trustee may, by
notice given hereunder, designate a different Notice Address for it other than
the one specified in Section 14.04 of the Indenture.

 

Section 10.4. Binding
Effect.  This Agreement shall inure
to the benefit of and shall be binding upon the Issuer, the Borrower and their
respective successors and assigns, subject, however, to the specific provisions
hereof, and subject to the further limitation that any obligation of the Issuer
created by or arising out of this Agreement shall not be a general debt of the
Issuer or the State or any political subdivision or taxing district thereof,
but shall be payable solely out of the Revenues.

 

Section 10.5. Amendments,
Changes and Modifications.  Except as
otherwise provided in this Agreement or in the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement may not
be effectively amended, changed, modified, altered or terminated without the
prior written consent of the Trustee, the Borrower and the Bank.

 

Section 10.6. Counterparts.  This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and all of
which shall constitute but one and the same Agreement.

 

Section 10.7. Severability.  In case any clause, provision or section
of this Agreement, or any covenant, stipulation, obligation, agreement, act, or
action, or part thereof, made, assumed, entered into, or taken under this
Agreement, or any application thereof, is for any reason held to be illegal,

 

32

 

invalid or inoperable,
such illegality, invalidity, or inoperability shall not affect the remainder
thereof or any other clause, provision or section or any other covenant,
stipulation, obligation, agreement, act or action or part thereof, made,
assumed, entered into, or taken thereunder, which shall at the time be
construed and enforced as if such illegal or invalid or inoperable portion were
not contained therein, nor shall such illegality or invalidity or inoperability
of any application thereof affect any legal and valid and operable application
thereof, from time to time, and each such clause, provision or section,
covenant, stipulation, obligation, agreement, act, or action, or part thereof
shall be deemed to be effective, operative, made, entered into or taken in the
manner and to the full extent from time to time permitted by law.

 

Section 10.8. Captions.
 The captions or headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Agreement.

 

Section 10.9. Governing
Law.  This Agreement shall be deemed
to be a contract made under the laws of the State and for all purposes shall be
governed by and construed in accordance with the laws of the State.

 

Section 10.10. Selection
of Alternate Letter of Credit.  Notwithstanding
anything to the contrary contained herein or in the Indenture, the Borrower
shall have the right to secure an Alternate Letter of Credit or Alternate
Confirming Letter of Credit at any time prior to the issuance of a notice of
redemption of the Bonds due to a termination of the Letter of Credit or the
Confirming Letter of Credit.

 

Section 10.11. Continuing
Obligation.  This Agreement is a
continuing obligation and will (i) be binding upon the Borrower, its successors
and assigns, and (ii) inure to the benefit of and be enforceable by the Issuer
and its successors, transferees and assigns; provided, that the Borrower
may not assign all or any part of this Agreement without the prior written
consent of the Bank. Except as set forth in the preceding sentence and except
with respect to the Bank and the holder(s) of any participation made by the
Bank of this Agreement and the Letter of Credit, no Person not a party to this
Agreement will be entitled to the benefit of this Agreement.

 

Section 10.12. Limitation
on Issuer’s Liability.  It is
understood and agreed by the Borrower and the Holders that no covenant,
provision or agreement of the Issuer herein or in the Bonds or in any other document
executed by the Issuer in connection with the issuance, sale and delivery of
the Bonds, or any obligation herein or therein imposed upon the Issuer or
breach thereof, shall give rise to a pecuniary liability of the Issuer or a
charge against its general credit or general fund or shall obligate the Issuer
financially in any way except with respect to this Agreement and the
application of Revenues therefrom and the proceeds of the Bonds. No failure of
the Issuer to comply with any term, condition, covenant or agreement therein
shall subject the Issuer to liability for any claim for damages, costs or other
financial or pecuniary charges except to the extent that the same can be paid
or recovered from this Agreement or the Revenues or proceeds of the Bonds. No
execution on any claim, demand, cause of action or judgment shall be levied
upon or collected from the general credit or general funds of the Issuer. In
making the agreements, provisions and covenants set forth herein, the Issuer
has not obligated itself except with respect to this Agreement and the
application of the Revenues as hereinabove provided. The Bonds constitute
special obligations of the Issuer, payable solely from the Revenues pledged to
the payment thereof pursuant to this Agreement and the Indenture, and do not
now and shall

 

33

 

never constitute an
indebtedness or a loan of the credit of the Issuer, the State of Iowa or any
political subdivision thereof within the meaning of any constitutional or
statutory provision whatsoever. The Issuer has no taxing power. It is further
understood and agreed by the Borrower and the Holders that the Issuer shall
incur no pecuniary liability hereunder and shall not be liable for any expenses
related hereto. If, notwithstanding the provisions of this Section, the Issuer
incurs any expense, or suffers any losses, claims or damages or incurs any
liabilities, the Borrower will indemnify and hold harmless the Issuer from the
same and will reimburse the Issuer for any legal or other expenses incurred by
the Issuer in relation thereto, and this covenant to indemnify, hold harmless
and reimburse the Issuer shall survive delivery of and payment for the Bonds.

 

34

 

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

 

	
   

  	
   

  	
  IOWA FINANCE AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MICHAEL L.
  TRAMONTINA

  	
   

  
	
   

  	
   

  	
   

  	
        Michael
  L. Tramontina 

        Executive Director

  

 

35

 

	
   

  	
   

  	
  INTERWEST,
  L.C.

  an Iowa domestic limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ NILE RAMSBOTTOM

  	
   

  
	
   

  	
   

  	
   

  	
       Nile Ramsbottom 
      President

  

 

36

 

EXHIBIT A

 

PROMISSORY NOTE

 

 

	
  $5,000,000

  	
  November 15,
  2001

  Ralston, Iowa

  

 

FOR VALUE
RECEIVED, the undersigned borrower, INTERWEST, L.C. (the “Borrower”), promises
to pay to the order of the Iowa Finance Authority (the “Lender”) the principal
sum of FIVE MILLION AND 00/100THS DOLLARS ($5,000,000) and to pay interest on
the unpaid balance of such principal sum, as hereinafter provided, until the
payment of such principal sum has been made or provided for.

 

The Note has been
executed and delivered by the Borrower to the Lender and assigned to Wells
Fargo Bank Northwest, National Association, as Trustee (the “Trustee”) pursuant
to the Loan Agreement (the “Agreement”), dated as of November 1, 2001, between
the Lender and the Borrower. Under the Agreement, the Lender has loaned to the
Borrower the proceeds received from the sale of the Lender’s $5,000,000
Variable Rate Demand Industrial Development Revenue Bonds (InterWest, L.C.
Project), Series 2001, initially dated the date of their authentication and
delivery (the “Bonds”), to assist the Borrower in the financing of the Project
(as defined in the Agreement), which Project is to be owned and operated by the
Borrower. The Borrower has agreed to repay the loan of the proceeds of the
Bonds by making payments (the “Loan Payments”) at the times and in the amounts
set forth in this Note. The Bonds have been issued, concurrently with the
execution and delivery of this Note, pursuant to, and are secured by, the Trust
Indenture (as amended and supplemented from time to time, the “Indenture”),
dated as of November 1, 2001, between the Lender and the Trustee. The Bonds
bear interest from their date at the Applicable Rate, as defined in Appendix A
to this Note, payable on each Interest Payment Date (as defined in the
Indenture), and mature on November 1, 2016.

 

To provide funds
to pay the interest on the Bonds as and when due, the Borrower hereby agrees to
and shall make payments of interest on this Note to the Trustee, or to the
Letter of Credit Bank if so required by the Reimbursement Agreement, as
follows: (a) during the Variable Rate Period (as defined in the Indenture), on
the third (3rd) Business Day prior to February 1, 2002, and on the
third (3rd) Business Day prior to the first day of each successive third
(3rd) month thereafter, in an amount equal to the amount then
estimated by the Trustee to be payable as interest on the Bonds on the next
succeeding quarterly Interest Payment Date; and (b) while the Bonds bear
interest at the Fixed Interest Rate (as defined in the Indenture), on the third
(3rd) Business Day prior to the next succeeding semi-annual Interest
Payment Date, the amount then estimated by the Trustee to be payable as
interest on the Bonds on the next succeeding semi-annual Interest Payment Date;
provided, however, that with respect to such first interest payment on this
Note, the Borrower shall receive a credit against such interest payment equal
to the amount, if any, of money in the Bond Fund (as defined in the Indenture)
representing the Bond Fund Payment (as defined in the Indenture).

 

If payment or
provision for payment in accordance with the Indenture is made in respect of
the principal of and redemption premium, if any, and interest on the Bonds,
this Note shall be deemed paid to the extent of such payment or provision for
payment of Bonds. The Borrower shall receive a credit against its obligation to
make Loan Payments hereunder to the extent that there are amounts already on

 

A-1

 

deposit in the Bond Fund
created by the Indenture (except for moneys drawn on the Letter of Credit or
the Confirming Letter of Credit), and available to pay principal or purchase
price of and premium, if any, and interest on the Bonds pursuant to the Indenture,
and to the extent that Loan Payments are made by the Borrower directly to the
Bank pursuant to the Agreement. Subject to the foregoing, all Loan Payments
shall be in the full amount required hereunder.

 

All Loan Payments
shall be payable in lawful money of the United States of America and shall be
made to the Trustee at its principal corporate trust office for the account of
the Issuer and deposited in the Bond Fund created by the Indenture. Except as
otherwise provided in the Indenture, the Loan Payments shall be used by the
Trustee to pay the principal of and redemption premium, if any, and interest on
the Bonds as and when due or to reimburse the Bank for unreimbursed draws under
the Letter of Credit (as such terms are defined in the Indenture).

 

The obligation of
the Borrower to make the payments required hereunder shall be absolute and
unconditional and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Lender, the Trustee, the Bank
or the Remarketing Agent (as defined in the Indenture) or any other person.

 

This Note is
subject to optional, extraordinary optional and mandatory prepayment upon the
same terms and conditions, on the same date or dates and at the same prepayment
prices, as the Bonds are subject to optional, extraordinary optional and
mandatory redemption, and the Borrower hereby agrees that it will make Loan
Payments hereunder in an amount equal to the principal of and premium, if any,
and interest on the Bonds due and payable on any such redemption date. All
optional prepayments of amounts due under this Note are subject to the requirement
that the Borrower deposit sufficient moneys with the Bank in accordance with
2.1 of the Agreement prior to the Borrower giving notice of its intention to so
prepay pursuant to Section 8.4 of the Agreement. Any such redemption prior to
stated maturity is subject to the obligation of the Borrower to give the Lender
and the Trustee sufficient notice of such redemption as shall enable the Issuer
and the Trustee to take all action necessary under the Indenture to redeem on
the date specified for prepayment a like principal amount of Bonds at the same
redemption price.

 

A-2

 

IN WITNESS
WHEREOF, the Borrower has caused this Note to be executed in its name by its
duly authorized representative as of the date first written above.

 

	
   

  	
   

  	
  INTERWEST, L.C.

  an Iowa domestic limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Name)

  (Title)   

  	
   

  

 

 

The above
Promissory Note is hereby pledged and assigned to the Wells Fargo Bank
Northwest, National Association, as Trustee, without recourse, pursuant to the
Trust Indenture dated as of November 1, 2001 between the Iowa Finance Authority
and the Trustee.

 

	
   

  	
   

  	
  IOWA FINANCE AUTHORITY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: November        ,
  2001

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
        Michael
  L. Tramontina 

        Executive Director

  

 

 

The Borrower
hereby acknowledges and agrees to the aforesaid assignment of this Promissory
Note to the Trustee.

 

	
   

  	
   

  	
  INTERWEST, L.C.

  an Iowa domestic limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Name)

  (Title)   

  	
   

  

 

A-3

 

APPENDIX A

 

As used in this
Note, “Applicable Rate” shall mean at any time the then applicable interest
rate per annum on the Bonds as described below. The capitalized terms not
defined in the Note shall have the meanings ascribed to them in the Indenture.

 

The Bonds will
initially bear interest during the Accrual Period (herein defined) beginning on
the date of initial authentication and delivery of the Bonds. The Bonds will
thereafter bear interest at a Variable Rate per annum, which shall be the
lesser of (i) the Maximum Interest Rate or (ii) a fluctuating per annum rate
equal to the per annum rate for the one-week period commencing on a Thursday
and ending on the Wednesday succeeding such Thursday (the “Accrual Period”)
determined by the Remarketing Agent (herein defined) by 12:00 noon, Portland,
Oregon time, on the Wednesday preceding the day on which the Accrual Period
commences or, if such day of determination is not a Business Day for the
Remarketing Agent, on the next preceding Business Day (the “Determination Date”),
to be equal to (but not more than) the rate required to be borne by the Bonds
for such Accrual Period to produce a bid for the purchase of all the Bonds on
such Determination Date at a price equal to the principal amount thereof plus
accrued interest, if any, thereon from the most recent Interest Payment Date.
Notwithstanding the foregoing, the Accrual Period beginning on the date of
initial authentication and delivery of the Bonds shall commence on such date
and end on Wednesday, November 21, 2001. If for any reason the Variable Rate is
not determined as set forth above on any Determination Date, the interest rate
announced on the preceding Determination Date shall continue in effect. If for
any reason the Variable Rate is not so determined for a second succeeding week
or thereafter, the Variable Rate shall thereafter be determined by the Trustee
and shall be a rate per annum (not to exceed the Maximum Interest Rate) equal
to twenty-five basis points in excess of the then current municipal swap index
as quoted by the Bond Market Association. Interest at the Variable Rate will be
computed on the basis of a year of 365 or 366 days, as appropriate, for the
actual number of days elapsed, and will be payable on the first Thursday of
February, 2002, and on each third month thereafter (each an “Interest Payment
Date”), or, if such day is not a Business Day, on the next succeeding Business
Day, with such interest being initially paid on February 7, 2002.

 

With the prior
written consent of the Bank, and upon receipt by the Trustee of an amendment to
the Letter of Credit increasing the amount available to be drawn for the
payment of accrued interest on the Bonds to two hundred (200) days of accrued
interest on the then existing principal balance of the Bonds at the Fixed
Interest Rate, and upon receipt of an opinion of Bond Counsel that such
conversion will not adversely affect the excludability of interest on the Bonds
from gross income for Federal income tax purposes, on any Interest Payment Date
(if such date is designated by the Borrower as the Conversion Date), the
Borrower may elect to convert the rate on the Bonds to a fixed rate (the “Fixed
Interest Rate”). The Borrower may exercise its conversion option by giving the
Trustee, the Bank, the Confirming Bank, the Paying Agent, the Tender Agent and
the Remarketing Agent written notice of its intention to convert the rate to
the Fixed Interest Rate, at least 50 days prior to the proposed Conversion
Date.

 

Subject to the
provisions of the Indenture, on any Interest Payment Date (if such date is
designated by the Borrower as the Conversion Date), the Borrower may elect to
convert the rate on some or all of the Bonds to a fixed rate.

 

A-4

 

On a day which is
a Business Day at least fifteen (15) days prior to the Conversion Date, the
Remarketing Agent will determine the minimum rate of interest which will be
applicable to the Bonds on the ensuing Conversion Date, and at least twelve
(12) days prior to such Conversion Date the Paying Agent will notify all of the
Bondholders by Mail of the aforesaid minimum rate of interest. Bondholders
shall deliver such Bonds to the Tender Agent on or before the Conversion Date.
On a day which is a Business Day at least seven (7) days prior to the
Conversion Date (the “Rate Determination Date”) the Remarketing Agent shall
determine the Fixed Interest Rate.

 

The Remarketing
Agent shall determine the Fixed Interest Rate on the Rate Determination Date to
be that rate per annum which, if borne by all of the outstanding Bonds through
the Maturity Date, would, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities in which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions), be the interest rate necessary (but which would not exceed
the interest rate necessary) to produce as nearly as practical a par bid for
each outstanding Bond on the Rate Determination Date.

 

A-5

 

EXHIBIT B

 

Project

 

The Project
consists of certain components to the Borrower’s soy methyl ester processing
facility to be acquired, constructed and equipped on the Project Site.

 

B-1

 

EXHIBIT C

 

Project Site

 

 

Lot A of Lot Two (2),
Northeast Quarter of the Northwest Quarter (NE1⁄4 NW1⁄4) and Lot A of Lot One (1),
Southeast Quarter of the Northwest Quarter (SE1⁄4 NW1⁄4), Section Thirty-six (36), Township Eighty-four (84) North,
Range Thirty-three (33) West of the 5th P.M., Carroll County, Iowa.

 

C-1Exhibit 10.8.2

 

REIMBURSEMENT AGREEMENT

 

THIS REIMBURSEMENT AGREEMENT
(“Agreement”) is entered into as
of November 15, 2001 by and between CoBANK,
ACB (“CoBank”), whose
mailing address is 5500 South Quebec Street, Greenwood Village, Colorado 80111
and INTERWEST, L.C., an Iowa limited liability company, whose address is 502 1st
Street, Ralston. Iowa 51459 (“Borrower”).

 

ARTICLE 1                                DEFINED
TERMS.

 

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

 

1.1                                            Advance:
shall have the meaning set forth in Section 2.4.

 

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

 

1.3                                            Authorized
Officer: shall have the meaning set forth in Subsection 8.1.7.

 

1.4                                            Bank
Bonds: shall have the meaning set forth in Section 2.3.

 

1.5                                            Bank
Debt: all amounts owing under the Note, CoBank Equity Interest purchase
obligations of Borrower, funding losses, and all interest, fees, expenses,
charges and other amounts payable by Borrower pursuant to this Agreement and
the other LC Documents to which Borrower is a party or by which Borrower is
bound.

 

1.5A                                   Banking
Day: a day on which CoBank is open for business, dealings in U.S. dollar
deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England.

 

1.6                                            Base
Rate: a rate of interest per annum equal at all times to the rate of
interest established by CoBank from time to time as its National Variable Rate,
which rate is intended by CoBank to be a reference rate and not its lowest
rate. The National Variable Rate will change on the date established by CoBank
as the effective date of any change therein and, upon Borrower’s request,
CoBank agrees to notify Borrower of the then current Rate.

 

1.6A                                   Base
Rate Margin: shall have the meaning set forth in Schedule 2 hereto.

 

1.7                                            Base
Rate Loans: shall have the meaning set forth in Subsection 3.2.1.

 

1.8                                            Bonds:
shall have the meaning set forth in Schedule 1 hereto.

 

1.9                                            Bond
Documents: shall have the meaning set forth in Schedule 1 hereto.

 

1.10                                     Bond
Fund: shall have the meaning set forth in the Bond Trust Indenture.

 

1.11                                     Intentionally
Omitted.

 

1.12                                     Bond
Loan Agreement: shall have the meaning set forth in Schedule 1 hereto.

 

1

 

1.13                                     Intentionally
Omitted.

 

1.14                                     Bond
Payment: is a payment from the Bond Trustee from the Bond Fund.

 

1.15                                     Bond
Transaction: the transaction whereby Borrower executes the Bond Documents
to which it is a party or by which it is bound, takes such actions as is
required of it under the Bond Documents to enable the Bonds to be issued and
marketed.

 

1.16                                     Bond
Trust Indenture: shall have the meaning set forth in Schedule 1
hereto.

 

1.17                                     Bond
Trustee: shall have the meaning set forth in Schedule 1 hereto.

 

1.18                                     Intentionally
Omitted.

 

1.19                                     Intentionally
Omitted.

 

1.20                                     Budget:
shall mean the Project budget delivered by Borrower to CoBank pursuant to Subsection 8.1.21.

 

1.21                                     Building
Codes: shall have the meaning set forth in Subsection 9.15.1.

 

1.22                                     Business
Day: any day other than a Saturday or Sunday and other than a day which is
a Federal legal holiday or a legal holiday for banks in the States of Colorado
or New York.

 

1.23                                     Certificate
of Non-reinstatement: shall have the meaning set forth in Schedule 1
hereto.

 

1.24                                     Closing
Date: that date on which CoBank and Borrower have executed all LC Documents
and on which the conditions for issuance of the Letter of Credit as set forth
in Article 8 of this Agreement have been met.

 

1.25                                     CoBank
Equity Interests: shall have the meaning set forth in Article 5.

 

1.26                                     Intentionally
Omitted.

 

1.27                                     Intentionally
Omitted.

 

1.28                                     Collateral:
shall have the meaning set forth in Schedule 2 hereto.

 

1.29                                     Completion
Date: shall have the meaning set forth in Schedule 2 hereto.

 

1.30                                     Compliance
Certificate: a certificate of an officer or employee of Borrower acceptable
to CoBank setting forth calculations showing compliance with the Financial
Covenants set forth in Schedule 2 hereto.

 

1.31                                     Confirmation
Bank: the issuer of the Confirming Letter of Credit.

 

1.32                                     Confirmation
Reimbursement Agreement: the agreement (in whatever form or forms,
including written, oral, or established by course of dealing) by and between
CoBank and the Confirmation Bank evidencing CoBank’s obligation to reimburse
the Confirmation Bank for the amount of any payments made on or on account of
the Confirming Letter of Credit and to pay to the Confirmation Bank, or
reimburse the Confirmation Bank for, other costs, expenses, charges and other
amounts.

 

2

 

1.33                                     Confirming
Letter of Credit: the letter of credit in favor of the Bond Trustee, or other
written confirmation of the Letter of Credit, in substantially the form
attached hereto as Exhibit 1.33 and including any replacement
therefore.

 

1.34                                     Default
Interest Rate: a rate of interest equal to 400 basis points per annum in
excess of the interest rates that would otherwise be in effect on such loans.

 

1.35                                     Intentionally
Omitted.

 

1.36                                     Disbursement:
shall have the meaning set forth in Section 10.1.

 

1.37                                     Disbursement
Date: shall have the meaning set forth in Section 10.1.

 

1.38                                     Draw
Amount: shall have the meaning set forth in Section 4.1.

 

1.39                                     Draw
Notice: shall have the meaning set forth in Section 4.1.

 

1.40                                     Drawing
Fee: shall have the meaning set forth in Subsection 3.5.3.

 

1.41                                     Environmental
Laws: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended, 42 U.S.C. 9601-9657 (“CERCLA”)
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901-6987 (“RCRA”).

 

1.42                                     Environmental
Regulations: as defined in the definition of Hazardous Substances.

 

1.43                                     Intentionally
Omitted.

 

1.44                                     Event
of Default: shall have the meaning set forth in Article 13.

 

1.45                                     Expiry
Date: shall mean the Initial Expiry Date of the Letter of Credit and, upon
each renewal or extension of the Letter of Credit, the new expiration date
thereof.

 

1.46                                     Facility
Fee: shall have the meaning set forth in Subsection 3.5.1.

 

1.47                                     Intentionally
Omitted.

 

1.48                                     Intentionally
Omitted.

 

1.49                                     Intentionally
Omitted.

 

1.50                                     Intentionally
Omitted.

 

1.51                                     Funding
Loss: shall have the meaning set forth in Section 4.8.

 

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

 

1.53                                     Intentionally
Omitted.

 

1.54                                     Intentionally
Omitted.

 

1.55                                     Guarantor:
shall have the meaning set forth in Schedule 2 hereto.

 

3

 

1.56                                     Guarantor
Collateral: shall have the meaning set forth in Schedule 2

 

1.57                                     Guarantor
Security Documents: shall have the meaning set forth in Schedule 2
hereto.

 

1.58                                     Guaranty:
shall have the meaning set forth in Schedule 2 hereto.

 

1.59                                     Hazardous
Substances: dangerous, toxic or hazardous pollutants, contaminants,
chemicals, wastes, materials or substances, as defined in or governed by the
provisions of any Environmental Laws or any other federal, state or local law,
statute, code, ordinance, regulation, requirement or rule relating thereto
(“Environmental Regulations”), and
also including urea formaldehyde, polychlorinated biphenyls, asbestos,
asbestos-containing materials, nuclear fuel or waste, and petroleum products,
or any other waste, material, substances, pollutant or contaminant which would
subject an owner of property to any damages, penalties or liabilities under any
applicable Environmental Regulations.

 

1.60                                     Indemnified
Parties: shall have the meaning set forth in Section 12.1.

 

1.61                                     Initial
Expiry Date: shall have the meaning set forth in Schedule 2.

 

1.62                                     Initial
Payment Date: shall have the meaning set forth in Schedule 2.

 

1.63                                     Interest
Drawing: shall have the meaning set forth in the Letter of Credit.

 

1.64                                     Interest
Payment: shall have the meaning set forth in Section 4.3.

 

1.65                                     Interest
Rate(s): shall have the meaning set forth in Section 3.2.

 

1.66                                     Intentionally
Omitted.

 

1.67                                     Intentionally
Omitted.

 

1.68                                     Issuer:
shall have the meaning set forth in Schedule 1 hereto.

 

1.69                                     LC
Documents: this Agreement, the Note, any security documents signed by
Borrower, the Guaranty, the Guarantor Security Documents, and other documents
required to grant to CoBank a perfected security interest in the Collateral and
the Guarantor Collateral.

 

1.70                                     LC
Draw: an Interest Drawing, a Principal Drawing, a Premium Drawing, or a
Remarketing Drawing.

 

1.71                                     Letter
of Credit: the letter of credit in favor of the Bond Trustee in substantially
the form attached hereto as Exhibit 1.71, including all
replacements or extensions thereof.

 

1.72                                     Intentionally
Omitted.

 

1.73                                     Licensing
Laws: shall have the meaning set forth in Section 7.5.

 

1.73A         Intentionally
Omitted.

 

1.74                                     Material
Adverse Effect: means (a) a material adverse effect on the financial
condition, results of operation, business or property of Borrower; (b) a
material adverse effect on the ability of Borrower to perform its obligations
under this Agreement and the other LC Documents; or (c)

 

4

 

a material adverse
effect upon the ability of CoBank to enforce its rights and remedies under the
LC Documents.

 

1.75                                     Intentionally
Omitted.

 

1.76                                     Maturity
Date: shall have the meaning set forth in Schedule 2.

 

1.77                                     Maximum
Interest Amount: shall have the meaning set forth in Schedule 1
hereto.

 

1.78                                     Intentionally
Omitted.

 

1.79                                     Maximum
Principal Amount: shall have the meaning set forth in Schedule 1
hereto.

 

1.80                                     Intentionally
Omitted.

 

1.81                                     Note:
the promissory note made as of the date hereof by Borrower payable to the
order of CoBank to evidence Borrower’s obligations under this Agreement to
CoBank, and all amendments, renewals, substitutions and extensions thereof.

 

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

 

1.83                                     Intentionally
Omitted.

 

1.84                                     Payment:
shall have the meaning set forth in Section 4.1.

 

1.85                                     Payment
Due Date: shall have the meaning set forth in Section 4.1.

 

1.86                                     Performance
Date: shall have the meaning set forth in Schedule 2 hereto.

 

1.87                                     Permitted
Encumbrances: shall have the meaning set forth in Section 7.3.

 

1.88                                     Person:
any individual, corporation, limited liability company, association,
partnership, trust, organization, government, governmental agency, or other
entity.

 

1.89                                     Intentionally
Omitted.

 

1.90                                     Pledged
Bonds: shall have the meaning set forth in Section 2.3.

 

1.91                                     Potential
Default: any event, other than an event described in Section 13.1(a) hereof,
which with the giving of notice or lapse of time, or both, would become an
Event of Default.

 

1.92                                     Premium
Drawing: shall have the meaning set forth in the Letter of Credit.

 

1.93                                     Principal
Drawing: shall have the meaning set forth in the Letter of Credit.

 

1.94                                     Project:
shall have the meaning set forth in Schedule 2 hereto.

 

1.95                                     Project
Completion Date: shall have the meaning set forth in Schedule 2
hereto.

 

1.96                                     Project
Costs: shall mean the various categories of costs set forth in the Budget.

 

5

 

1.97                                     Projections:
the projections as described in Schedule 2 hereto, provided to CoBank
with respect to projected operations and financial results of operations of
Borrower in the event of the consummation of the Bond Transaction.

 

1.98                                     Property:
the parcel(s) of real estate and other real estate interests upon which the
Project will be located, as more particularly described in the Security
Documents.

 

1.99                                     Quarter:
the quarters of Borrower’s fiscal year commencing as of January 1, April 1,
July 1 and October 1.

 

1.100                              Intentionally
Omitted.

 

1.101                              Intentionally
Omitted.

 

1.102                              Intentionally
Omitted.

 

1.103                              Intentionally
Omitted.

 

1.104                              Redemption
Dates and Redemption Amounts: shall have the meaning set forth in Schedule 2
hereto.

 

1.105                              Redemption
Notification Dates : shall have the meaning set forth in Schedule 2
hereto.

 

1.106                              Reimbursement
Amount: shall have the meaning set forth in Section 4.2.

 

1.107                              Reimbursement
Notice: shall have the meaning set forth in Section 4.2.

 

1.108                              Remarketing
Agent: shall have the meaning set forth in Schedule 1 hereto.

 

1.109                              Remarketing
Drawing: shall have the meaning set forth in the Letter of Credit.

 

1.110                              Required
Licenses: shall have the meaning set forth in Section 7.12.

 

1.111                              Revenues:
shall have the meaning set forth in the Bond Trust Indenture.

 

1.112                              Intentionally
Omitted.

 

1.113                              Security
Documents: the security agreements, mortgages, deeds of trust, financing
statements, pledge agreements, leasehold assignment and consents, assignments
and/or other security documents executed by Borrower in favor of CoBank to
secure Borrower’s performance of its obligations under the Note and other LC
Documents to which Borrower is a party or by which Borrower is bound with a
lien on the Collateral, in form and substance reasonably acceptable to CoBank.

 

1.114                              Intentionally
Omitted.

 

1.115                              Intentionally
Omitted.

 

1.116                              State
of Formation: shall have the meaning set forth in Schedule 2 hereto.

 

1.117                              Statement
Date: shall have the meaning set forth in Schedule 2 hereto.

 

1.118                              Title
Commitment: shall have the meaning set forth in Subsection 8.1.4.

 

6

 

1.119                              Title
Insurer: shall have the meaning set forth in Subsection 8.1.4.

 

1.120                              Title
Policy: shall have the meaning set forth in Subsection 8.1.4.

 

1.121                              Weighted
Average Interest Rate: for any measurement date, the actual interest
accrued on the Note during the immediately preceding Quarter divided by the
average daily principal balance owing under the Note during such Quarter, with
the result multiplied by four.

 

ARTICLE 2                                ISSUANCE
OF LETTER OF CREDIT/DRAWS.

 

2.1                                            Issuance
of Letter of Credit. CoBank agrees that, upon satisfaction of the
requirements contained in Article 8 hereof, it will issue the Letter of
Credit with an initial expiration date of the Initial Expiry Date in the amount
of the Maximum Principal Amount, plus the Maximum Interest Amount, provided
however such conditions must be satisfied no later than the Performance Date.

 

2.2                                            Renewal
and/or Replacement of Letter of Credit.

 

2.2.1                     Renewal of
Letter of Credit. CoBank agrees to extend the Letter of Credit for
successive periods of 365/366 days from the Initial Expiry Date, or from each
successive Expiry Date, as applicable, unless, at least one-hundred and twenty
(120) days prior to such Initial Expiry Date or the Expiry Date, as applicable,
CoBank notifies Borrower and the Bond Trustee, in writing, to the contrary.

 

2.2.2                     Intentionally
Omitted.

 

2.2.3                     Intentionally
Omitted.

 

2.3                                            Reinstatement
of Letter of Credit. Until the applicable Expiry Date, CoBank agrees to
automatically reinstate the Letter of Credit: (a) by the amount of each
Interest Drawing unless CoBank shall, within three Business Days after such
Interest Drawing, have sent the Bond Trustee a written notice in the form of
the Certificate of Non-reinstatement; and (b) by the amount of each
Remarketing Drawing upon receipt by the Bond Trustee of Bonds in an aggregate
principal amount equal to the unpaid amount of the principal portion of such
Remarketing Drawing which are either (x) registered in the name of Borrower as
pledgor and CoBank as pledgee (“Pledged Bonds”),
or (y) registered in the name of CoBank as owner (“Bank Bonds”).

 

2.4                                            Draws
on Letter of Credit. The amount of each LC Draw shall, as of the date paid
by CoBank and to the extent Borrower has not by such date provided funds to
CoBank to reimburse CoBank for the amount of such LC Draw, be treated as an
advance under the Note (“Advance”),
secured by the Collateral, and repayable by Borrower as provided in this
Agreement and the Note.

 

2.5                                            Draws
on Confirming Letter of Credit. Any amount which CoBank pays to the
Confirmation Bank (a) on account of a draw on the Confirming Letter of
Credit or (b) as a fee, expense reimbursement, charge or other amount
shall, in either case, as of the date paid by CoBank and to the extent Borrower
has not by such date provided funds to CoBank to reimburse CoBank for the
amount of such amount, be treated as an Advance, secured by the Collateral, and
repayable by Borrower as provided in this Agreement and the Note.

 

ARTICLE 3                                INTEREST
AND FEES.

 

3.1                                            Interest.
Amounts owing under the Note, whether on account of an Advance or
otherwise, shall bear interest from the date of such Advance until paid at the
Interest Rate as provided in Section 3.2 hereof.

 

7

 

3.2                                            Interest
Rate Determination. The rate of interest (“Interest
Rate”) applicable to amounts owing under the Note or otherwise under
this Agreement, shall be determined as follows.

 

3.2.1                     Base Rate
Loans. The outstanding principal balance under the Note shall bear interest
at the Base Rate plus the Base Rate Margin (“Base
Rate Loans”).

 

3.2.2                     Intentionally
Omitted.

 

3.2.3                     Intentionally
Omitted.

 

3.3                                            Interest
Calculation. Interest on Base Rate Loans shall be calculated on the actual
number of days each Advance is outstanding on the basis of a year consisting of
360 days. In calculating interest, the Advance Date shall be included and the
date each Advance is repaid shall be excluded.

 

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

 

3.5                                            Fees.
Borrower shall pay the following fees in the amounts and at the times
indicated.

 

3.5.1                     Facility Fee.
Borrower shall pay to CoBank an annual non-refundable facility fee (“Facility Fee”) equal to (a) the sum of
(i) the Maximum Interest Amount, and (ii) the Maximum Principal
Amount, (with such amounts used to calculate such fee after the initial fee
subject to any permitted reduction made after the Closing Date), (b) multiplied
by the Facility Fee Factor specified on Schedule 2 hereto, which amount
shall be paid on the Closing Date and, in advance, on each annual anniversary
of the Closing Date. The Facility Fee shall include the Confirmation Fee as set
forth on Schedule 2 hereto.

 

3.5.2                     Intentionally
Omitted.

 

3.5.3                     Drawing Fee. Borrower
shall pay to CoBank a non-refundable drawing fee (“Drawing Fee”) equal to the Drawing Fee specified on Schedule 2
hereto, which shall be payable at each time of CoBank’s honoring of a draw
under the Letter of Credit.

 

ARTICLE 4                                PAYMENTS.

 

4.1                                            Payments
On Account of LC Draws. No later than the fifth (5th) Business
Day after CoBank notifies Borrower (“Draw
Notice”) of the payment of and amount of (“Draw Amount”) an LC Draw in writing (“Payment Due Date”), Borrower shall,
subject to the application of any amounts paid to CoBank on or in advance of
the date of such LC Draw specifically to pay the amount of such LC Draw, pay to
CoBank such Draw Amount, less any Bond Payment received by CoBank (from Trustee) by such Payment Due Date (“Payment”), unless CoBank, at its
sole discretion, shall provide extended payment terms as specified in such Draw
Notice, in which case, the amount of such Advance shall be payable as provided
in such Draw Notice, provided that the unpaid principal owing on the Note must,
in any event, be paid in full no later than the Maturity Date.

 

4.2                                            Payments
to Confirmation Bank. In the event of:  (a) a
draw on the Confirming Letter of Credit, or (b) payment by CoBank to the
Confirmation Bank of a fee (except to the extent included in the Facility Fee),
expense reimbursement, charge or other amount pursuant to the Confirmation
Reimbursement Agreement, Borrower shall, no later than the second Business Day
after CoBank notifies Borrower in writing of the fact and amount (“Reimbursement Amount”) of such a payment (“Reimbursement Notice”), reimburse CoBank
the full amount thereof with interest thereon at the Base

 

8

 

Rate, unless
CoBank, at its sole discretion, shall provide extended payment terms as
specified in such Reimbursement Notice, in which case, such Reimbursement
Amount shall be payable as provided in such Reimbursement Notice, provided that
such Reimbursement Amount must, in any event, be paid in full no later than the
Maturity Date.

 

4.3                                            Payments
of Interest. Borrower shall pay to CoBank interest (“Interest Payment”): (a) on
Base Rate Loans monthly in arrears on the twentieth (20th) day of
each calendar month beginning the first month after which an Advance occurs;
plus (b) a final payment of the accrued and unpaid Interest on the
Maturity Date. Upon the occurrence and during the continuance of an Event of
Default or Potential Default, at the option of CoBank, interest shall be
payable upon demand by CoBank, and in no event less frequently than monthly.

 

4.4                                            Optional
Redemptions. Borrower shall instruct the Trustee to give notice, in the
name of the Issuer, on or before any Redemption Notification Dates set forth in
Schedule 2 hereof to redeem Bonds on the Redemption Date and in the
Redemption Amounts as set forth in Schedule 2 hereof.

 

4.5                                            Application
of Payments and Interest Payments. Provided no Event of Default or
Potential Default has occurred, Payments shall be applied first to Base Rate
Loans. Upon the occurrence and during the continuance of an Event of Default or
Potential Default, all Payments and Interest Payments shall be applied, as
CoBank in its sole discretion shall determine, to fees, the purchase of CoBank
Equity Interests, interest or principal indebtedness under the Note, or to any
other Bank Debt. The amount of all Advances and other Bank Debt, and all
payments by or on behalf of Borrower of such amounts, shall be entered on the
books of CoBank and such entries shall be presumptive evidence of the unpaid
amounts owing by Borrower and outstanding from time to time under the Note and
other LC Documents to which Borrower is a party or by which Borrower is bound.

 

4.6                                            Payment
Obligations Absolute. The obligations of Borrower under this Agreement
shall be absolute, unconditional and irrevocable, and shall be paid and
performed 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 the Letter of Credit, any of the LC
Documents, the Bonds, the Bond Documents, or any other agreement or instrument
related to any such documents;

 

(b)                                 any
amendment or waiver of or any consent to departure from the terms of the Letter
of Credit or any of the LC Documents or the Bond Documents or any other
agreement or instrument related thereto unless agreed to in writing by CoBank;

 

(c)                                  the
existence of any claim, setoff, defense or other right which the Borrower or
Issuer may have at any time against the Bond Trustee, any beneficiary or any
transferee of the Letter of Credit (or any Person for whom the Bond Trustee,
any such beneficiary or any such transferee may be acting), CoBank, the
Confirmation Bank, or any other Person, whether in connection with this
Agreement, the Letter of Credit, the Confirming Letter of Credit, the
Confirmation Reimbursement Agreement, any of the other LC Documents, the Bonds,
the Bond Documents, or any other agreement or instrument related to such
documents, or in connection with the Project or any unrelated transaction;

 

(d)                                 any
statement, draft, certificate, or any other document presented under the Letter
of Credit or the Confirming 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 (except to the extent acceptance or
reliance upon any such statement, draft or other document is a result of CoBank’s
gross negligence or willful misconduct);

 

9

 

(e)                                  payment
by CoBank of an LC Draw against presentation of a draft or certificate which
does not comply with the terms of the Letter of Credit in any respect which
singly or in the aggregate is immaterial, unless such payment is made as a
result of CoBank’s gross negligence or willful misconduct;

 

(f)                                    the
surrender or impairment of any security for the performance or observance of
the terms of this Agreement, any of the LC Documents, the Bond Documents, or
any other agreement related to such documents; or

 

(g)                                 any
other circumstance, happening or omission whatsoever, whether or not similar to
any of the foregoing, provided that such circumstance, happening or omission is
not a result of CoBank’s gross negligence or willful misconduct.

 

4.7                                            Manner
of Payment. All Payments, Interest Payments, and other payments of amounts
owing hereunder that Borrower is required or permitted to make under the terms
of this Agreement shall be made to CoBank (a) in immediately available
federal funds, to be received no later than 3:00 p.m. Borrower’s local
time of the Business Day on which such payment is due by wire transfer through
Federal Reserve Bank,. Kansas City, Routing Number: 307088754, COBANK ENGWD (or
to such other account as CoBank may designate by notice); and (b) without
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, impost, duties, charges, fees, deductions, withholding,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless Borrower is compelled by law to make
such deduction or withholding.

 

4.8                                            Intentionally
Omitted.

 

ARTICLE 5                                COBANK
EQUITY.

 

5.1                                            Purchase
of CoBank Equity Interests. In the event that, and no later than fifteen
(15) days after, CoBank notifies Borrower in a Draw Notice that Borrower has in
excess of ninety (90) days to reimburse CoBank for a Draw Amount, Borrower
agrees to purchase such equity interests in CoBank (“CoBank Equity Interests”)
as CoBank may from time to time require with respect to each such Draw Amount
in accordance with its bylaws and capital plan as applicable to cooperative
borrowers generally. In connection with the foregoing, Borrower hereby
acknowledges receipt, prior to the execution of this Agreement, of CoBank’s
bylaws, a written description of the terms and conditions under which the
Certificates are issued, CoBank’s Loan-Based Capital Plan, CoBank’s most recent
annual report, and if more recent than CoBank’s latest annual report, its
latest quarterly report.

 

ARTICLE 6                                SECURITY.

 

6.1                                            Borrower’s
Assets. As security for the payment and performance of all obligations of
Borrower to CoBank under the LC Documents, including but not limited to
principal and interest under the Note, CoBank Equity Interest purchases, fees,
funding losses, reimbursements, and all other Bank Debt or obligations of
Borrower under this Agreement or any of the other LC Documents, Borrower shall
grant to, and maintain for, CoBank a lien and security interest, subject only
to Permitted Encumbrances, in all of the Collateral, whether now owned or
hereafter acquired, pursuant to the Security Documents; provided that to the
extent that the Collateral includes the following, Borrower shall grant a
security interest therein only to the extent that a security interest may now
or hereafter be granted in such rights: Borrower’s rights under licenses,
leases, franchises (or granting ordinances), privileges and permits heretofore
or hereafter granted, issued or provided to Borrower by the United States, any
state, or any county, township, municipality, village or other political
subdivision thereof, or by any agency, board, commission or department of any
of the foregoing. Borrower shall execute and deliver to CoBank the Security
Documents to evidence the security interest of CoBank in the Collateral,
together with such financing statements or other documents as CoBank shall
reasonably request.

 

10

 

Borrower shall
also execute such further security agreements, mortgages, deeds of trust,
financing statements, assignments or other documents as CoBank shall reasonably
request, in form and substance as CoBank shall reasonably specify, to
establish, confirm, perfect or provide notice of CoBank’s security interest in
the Collateral. If requested by CoBank: (a) Borrower and CoBank shall
place a legend on any chattel paper included in the Collateral showing CoBank’s
security interest therein; and (b) Borrower shall deliver to CoBank
possession of any instruments and securities included in the Collateral (duly
endorsed to CoBank’s reasonable satisfaction).

 

6.2                                            Pledge
of Remarketing Bonds.

 

(a)                                  As
security for the payment and performance of all obligations of Borrower to
CoBank under the LC Documents, including but not limited to principal and
interest under the Note, CoBank Equity Interest purchases, fees, funding
losses, reimbursements, and all other Bank Debt or obligations of Borrower
under this Agreement or any of the other LC Documents, Borrower hereby agrees
that upon the making of a Remarketing Drawing, Borrower will, except to the
extent that Bank Bonds are registered in the name of CoBank to cover the unpaid
amount of the principal portion of any Remarketing Drawing, deliver or cause to
be delivered forthwith to CoBank, Pledged Bonds free and clear of all other
liens and encumbrances in an aggregate principal amount equal to the principal
portion of such Remarketing Drawing, and Borrower hereby grants to CoBank a
security interest in the Pledged Bonds and in the proceeds thereof.

 

(b)                                 Borrower
hereby agrees to deliver to CoBank all certificates representing the Pledged
Bonds registered in the names of Borrower as pledgor and CoBank as pledgee,
with Borrower’s endorsement when necessary or with appropriate assignments duly
executed in blank. Borrower further agrees to cause the Bond Trustee to enter
into its registration books as the address to which payments of interest with
respect to Pledged Bonds are to be sent, CoBank’s address for notices pursuant
to Subsection 14.4.2 hereof as in effect from time to time.

 

(c)                                  If
Borrower shall become entitled to receive or shall receive any Pledged Bonds,
any payment of interest with respect to the Pledged Bonds by the Issuer, or any
and all other proceeds thereof, Borrower shall accept any such amounts or items
as CoBank’s agent, shall hold them in trust for CoBank, and shall deliver them
forthwith to CoBank in the exact form received, with Borrower’s endorsement
when necessary, in each case with signatures guaranteed, to be held by CoBank,
subject to the terms hereof, as security for the payment and performance of all
obligations of Borrower hereunder and under the other LC Documents, except that
CoBank shall credit all payments and proceeds directly against Borrower’s
obligations under Sections 4.1, 4.2, and 4.3 hereof.

 

(d)                                 All
principal, premium if any, and interest paid on the Pledged Bonds shall be
retained by CoBank (or if received by Borrower shall be forthwith delivered by
it to CoBank in the original form received) and applied by CoBank to the
payment of amounts due CoBank from Borrower hereunder and under the other LC
Documents.

 

(e)                                  If
Borrower makes or causes to be made to CoBank a prepayment or payment of a
Remarketing Drawing pursuant to Subsection 4.1 hereof, or the Remarketing
Agent resells Pledged Bonds on behalf of Borrower and the proceeds thereof are
paid over to CoBank for application to amounts owing by Borrower hereunder,
CoBank agrees to release from the lien of this Agreement and deliver to
Borrower or the Remarketing Agent, as the case may be, Pledged Bonds in an
aggregate principal amount equal to the amount of such prepayment or payment
with respect to principal so made (except to the extent CoBank has reconveyed
Bank Bonds on account of such prepayment or payment), or the principal amount
of the Pledged Bonds so resold.

 

(f)                                    In
addition to the rights and remedies granted to CoBank in this Agreement, CoBank
shall have all of the rights and remedies of a secured party under applicable
law and such other

 

11

 

rights and
remedies as are granted to a secured party in similar situations to the extent
of the security interest granted under Subsection 6.2(a) above.

 

(g)                                 Borrower
shall be liable for the deficiency if the proceeds of any sale or other
disposition of the Pledged Bonds by CoBank are insufficient to pay all amounts
to which CoBank is entitled, including principal and interest as provided
herein, and the reasonable fees of any outside attorneys employed by CoBank to
collect such deficiency.

 

6.3                                            Guarantees.
As additional security for the payment and performance of all obligations
of Borrower to CoBank under the LC Documents, including but not limited to
principal and interest under the Note, CoBank Equity Interest purchases, fees,
funding losses, reimbursements, and all other Bank Debt or obligations of
Borrower under this Agreement or any of the other LC Documents, Borrower shall
cause to be provided a guarantee from Guarantor. Such guarantee shall be in a
form acceptable to CoBank and shall require Guarantor to provide CoBank with an
annual audit within 120 days of Guarantor’s fiscal year end, and require
Guarantor to notify CoBank of any violation of or change to any loan covenant
to which it is subject.

 

ARTICLE 7                                REPRESENTATIONS
AND WARRANTIES.

 

To induce CoBank to issue the Letter of Credit, and recognizing that
CoBank is relying thereon, Borrower represents and warrants as follows:

 

7.1                                            Organization,
Good Standing, Etc. Borrower (a) is duly organized, validly existing,
and in good standing under the laws of its state of organization; (b) is
duly qualified to do business and is in good standing in each jurisdiction in
which the transaction of its business makes such qualification necessary; and (c) has
all requisite corporate and legal power (1) to own and operate its assets
and to carry on its business, (2) to enter into and perform the LC
Documents to which it is a party or by which it is bound, (3) to enter
into and perform the Bond Loan Agreement, and (4) to consummate the Bond
Transaction.

 

7.2                                            Authority,
Due Authorization; Consents. Borrower has full power and authority to
conduct its business as contemplated to be operated from and after the Closing
Date; to execute and deliver under the LC Documents and the Bond Documents to
which Borrower is a party; to perform under the LC Documents and the Bond
Documents by which Borrower is bound; and to consummate the Bond Transaction,
all of which have been duly authorized. All consents or approvals of any Person
which are required to be obtained on or before the Closing Date in connection
with Borrower’s execution, delivery and performance of the LC Documents and the
Bond Documents to which, in either case, Borrower is a party or by which
Borrower is bound, and/or consummation of the Bond Transaction, have been
obtained.

 

7.3                                            Title
to Property. Borrower holds good and marketable title to all of its real
property (other than rights of way, easements and similar interests in real
property which in the aggregate are not material), owns all of its personal
property, and holds all of its leases, free and clear of any lien, pledge,
restriction, or encumbrance, except as disclosed in writing to CoBank or as
disclosed as a permitted exception in the Title Policy insuring the deed of
trust encumbering the Collateral (“Permitted
Encumbrances”).

 

7.4                                            Litigation.
Except as described on Exhibit 7.4 hereto, there are, no
pending legal or governmental actions, proceedings or investigations to which
Borrower is a party or to which any property of Borrower is subject which could
reasonably be expected to result in any Material Adverse

 

12

 

Effect and, to
Borrower’s knowledge, no such actions or proceedings are threatened or
contemplated by governmental authorities or any other Person.

 

7.5                                            No
Violations. The execution, delivery and performance by Borrower of the LC
Documents and the Bond Documents to which, in either case, Borrower is a party
or by which Borrower is bound, and the consummation of the Bond Transaction
will not: (a) violate any provision of Borrower’s Organization Documents,
or any law, rule, regulation, judgment, order or ruling of any court or
governmental agency; (b) violate, conflict with, result in a breach of,
constitute a default under, or with the giving of notice or the expiration of
time or both, constitute a default under, any existing real estate mortgage,
indenture, lease, security agreement, contract, note, instrument or any other
agreements or documents binding on Borrower or affecting its property; or (c) violate,
conflict with, result in a breach of, constitute a default under, or result in
the loss of, or restriction of rights under, any Required License or any order,
law, rule, or regulation under or pursuant to which any Required License was
issued or is maintained (“Licensing Laws”),
where, in the case of (a), (b), and (c) above, any such violation,
conflict, breach, default, loss, or restriction could reasonably be expected to
result in a Material Adverse Effect.

 

7.6                                            Binding
Agreement. Each of the LC Documents and the Bond Documents to which, in
either case, Borrower is a party or by which Borrower is bound, is, or when
executed and delivered, will be, the legal, valid and binding obligation of
Borrower, enforceable in accordance with its terms, subject only to limitations
on enforceability imposed by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors’ rights generally, the
obligations of good faith, fair dealing and commercial reasonableness, and by
general principles of equity.

 

7.7                                            Compliance
with Laws. Borrower is in compliance with all federal, state, and local
laws, rules, regulations, ordinances, codes and orders, including without
limitation all Environmental Laws and all Licensing Laws, with respect to which
noncompliance would result in a Material Adverse Effect.

 

7.8                                            Principal
Place of Business. Borrower’s place of business, or chief executive office
if it has more than one place of business, and the place where the records
required by Section 9.1 hereof are kept, is located at the address shown
for notice to Borrower on Schedule 2 hereto.

 

7.9                                            Consummation
of Bond Transaction. The Bond Transaction and Bond Loan Agreement have been
consummated as of the Closing Date, in accordance with the terms of the Bond
Documents, and all aspects of the Bond Transaction were in compliance with all
applicable laws to Borrower’s knowledge, and all consents required to be
obtained by Borrower in connection therewith, were obtained and: (a) the
time for filing a request for administrative or judicial review, or for
instituting administrative review sua sponte, of such consents shall have
expired without any such filing having been made or notice of such review
having been issued; or (b) in the event of such filing or review sua
sponte, such filing or review shall have been disposed of favorably to the
consent and the time for seeking further relief with respect thereto shall have
expired without any request for such further relief having been filed.

 

7.10                                     Financial
Statements; Projections; No Material Adverse Change.

 

(a)           All financial statements submitted to
CoBank with respect to Borrower fairly presented in all material respects the
operations, financial condition, assets and liabilities as of the dates covered
thereby; and all Projections submitted to CoBank with respect to Borrower
fairly presented in all material respects the projected operations, financial
condition, assets and liabilities as of the dates covered thereby.

 

(b)           To Borrower’s knowledge, (i) no
undisclosed facts existed at the time of submission of any financial statements
to CoBank which, if taken into account, would have resulted in

 

13

 

any material
change in such financial statements; and (ii) no undisclosed facts existed
at the time of submission of the Projections to CoBank which, if taken into
account, would have resulted in any material change in any of the Projections.
The Projections were, at the time of submission, based upon reasonable
estimates and assumptions, all of which were fair in light of then-current
conditions, were prepared on the basis of the assumptions stated therein, and
reflected the reasonable estimate of Borrower of the results of operations and
other information projected therein. To Borrower’s knowledge, as of the date
hereof: (A) there have been no changes in the estimates and assumptions
used in preparing the Projections which, if taken into account, would, in the
aggregate, have a Material Adverse Effect on such Projections, and such
estimates and assumptions are fair in light of the current conditions; (B) no
undisclosed facts exist which, if taken into account, would, in the aggregate,
have a Material Adverse Effect on the Projections; and (C) the Projections
reflect the reasonable estimate of Borrower of the results of operations and other
information projected therein.

 

7.11                                     Payment
of Taxes. Borrower has filed all required federal, state and local tax
returns and has paid all taxes as shown on such returns as they have become
due. Borrower has paid when due all other taxes, assessments or impositions
levied or assessed against Borrower or its business or properties, including,
without limitation, all taxes, assessments, or impositions resulting from the
Bond Transaction, except for such taxes, assessments, or impositions as are
being contested in good faith by appropriate actions or legal proceedings and
as to which Borrower has established adequate reserves therefor in accordance
with GAAP.

 

7.12                                     Licenses
and Approvals. Borrower: (a) has ownership of, or license to use, or
has been issued, all governmental franchises, certificates, approvals, permits,
authorities, agreements, and licenses used or necessary to permit it to own its
properties and to conduct its business (“Required
Licenses”); (b) has taken all action, including the filing of
all reports and requests for extensions or continuation, necessary to maintain
all such Required Licenses, and has not taken or failed to take any action
which, with the giving of notice, or the expiration of time, or both, could
result in any such Required License being withdrawn, revoked, modified, or
limited. Each Required License is in full force and effect, and there is no
outstanding notice of cancellation or termination or, to Borrower’s knowledge,
any threatened cancellation or termination in connection therewith, nor has an
event occurred with respect to any Required License which, with the giving of
notice or passage of time or both, could result in the revocation or
termination thereof or otherwise in any impairment of Borrower’s rights with respect
thereto, which impairment could reasonably be expected to have a Material
Adverse Effect. None of the Required Licenses is subject to any restrictions or
conditions that limit Borrower’s ability to conduct its business in
substantially the manner as presently conducted. No consent, permission,
authorization, order, or license of any governmental authority, is necessary in
connection with the: (i) execution, delivery, performance, or enforcement
of the LC Documents and the Bond Documents to which Borrower is a party or by
which it is bound; and (ii) the consummation of the Bond Transaction and
the Bond Loan Agreement.

 

7.13                                     Intentionally
Omitted.

 

7.14                                     Intentionally
Omitted.

 

7.15                                     Real
Property. Borrower: (a) has all real property interests, including
without limitations fee interests, leasehold interests, easements, licenses and
rights of way which are necessary for the conduct of Borrower’s business,
including without limitation easements, licenses, rights-of-way and leases with
respect to the Project, and (b) does not own any fee interest or leasehold
interest, or any other interest, including without limitation any easements,
rights of way or licenses, in real property, other than as set forth on Exhibit 7.15
hereto.

 

7.16                                     Personal
Property. Borrower has all tangible personal property necessary for the
conduct of Borrower’s business, and all such property is in good operating
condition and repair,

 

14

 

reasonable wear
and tear excepted, and suitable in all material respects for the uses for which
they are being utilized.

 

7.17                                     Regulatory
Proceedings. Borrower has not submitted or filed, or otherwise participated
as a party to, any stipulation, pleading, filing or other proceeding with any
regulatory authority with jurisdiction over Borrower, where such stipulation,
pleading, filing or other proceeding could reasonably be expected to have a
Material Adverse Effect.

 

7.18                                     Environmental
Compliance. Without limiting the provisions of Section 7.7 above, all
property owned or leased by Borrower and all operations conducted by it are,
and upon completion of the Project will be, in compliance in all material
respects with all Laws relating to environmental protection, with respect to
which the failure to comply would have a Material Adverse Effect.

 

7.19                                     Fiscal
Year. Borrower’s fiscal year is as set forth on Schedule 2 hereto.

 

7.20                                     Intentionally
Omitted.

 

7.21                                     Intentionally
Omitted.

 

7.22                                     Disclosure.
To the best of Borrower’s knowledge, after inquiry of all officers of the
Borrower except for the Secretary, the representations and warranties of
Borrower contained in this Article and in the other LC Documents do not
contain any untrue statement of a material fact by Borrower or omit to state a
material fact necessary to make such representations therein not misleading.

 

ARTICLE 8                                CONDITIONS
TO ISSUANCE OF LETTER OF CREDIT.

 

8.1                                            Conditions
to Issuance of Letter of Credit. CoBank’s obligation to issue the Letter of
Credit is subject to satisfaction, in CoBank’s sole discretion, of each of the
following conditions precedent.

 

8.1.1                     Eligibility.
Borrower shall be eligible to borrow from CoBank as determined by CoBank.
Borrower shall 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 Borrower shall be obligated to purchase in connection with the issuance
of the Letter of Credit may not exceed the maximum amount permitted by the
Bylaws at the time the Letter of Credit is issued or renewed.

 

8.1.2                     Bond
Documents. CoBank shall have received duly executed originals of all Bond
Documents.

 

8.1.3                     LC Documents;
and Other Documents. CoBank shall have received: (a) duly executed
originals of the LC Documents; and (b) such other instruments and
documents in which CoBank has been granted a security interest and of which
CoBank is to have possession under the terms of the LC Documents.

 

8.1.4                     Searches; UCC
Filings; Title Insurance; Flood Hazard Certification. CoBank shall have
received: (a) searches of appropriate filing offices showing that (i) no
state or federal tax liens have been filed which remain in effect against
Borrower, (ii) except with respect to Permitted Encumbrances no financing
statements have been filed by any Person other than CoBank, which remain in
effect against the Collateral, (iii) all financing statements necessary to
perfect the security interests granted to CoBank under the LC Documents have
been filed or recorded, to the extent such security interests are capable of
being perfected by such filing; (b) mortgagee’s title insurance
commitments (each a “Title Commitment”)
acceptable to CoBank from one or more insurers acceptable to CoBank (each a “Title Insurer”) committing to issue one or more title
policies (ALTA Loan Policy Form) (each

 

15

 

a “Title Policy”) insuring the lien in favor
of CoBank on the Collateral which constitutes an interest in real property and
has the priority provided in Schedule 2 hereto on such real property,
subject only to Permitted Encumbrances, and (i) deleting the standard
printed exceptions and the gap exception, (ii) containing only such
exceptions to title as are reasonably acceptable to CoBank, and (iii) containing
such other endorsements as CoBank may reasonably require; and (c) evidence
satisfactory to it that each of the real property interests upon which CoBank
is granted a lien by the Security Documents is not located in a flood hazard
area. In addition, in the case of each parcel of real property covered by a
Title Commitment, as of the Closing Date CoBank shall have received from the
Title Insurer a written confirmation acceptable to CoBank confirming that the
Title Insurer is irrevocably committed to issue the Title Policy.

 

8.1.5                     Approvals,
Including Regulatory Approval. CoBank shall have received evidence
satisfactory to it that all consents and approvals of governmental authorities
and third parties which are, with respect to Borrower, necessary for, or
required as a condition of: (a) the validity and enforceability of the LC Documents; (b) creation of and realization
on, CoBank’s lien on the Collateral; and (c) the consummation of
the Bond Transaction, have been obtained and are in full force and effect and
that (i) the time for filing a request for administrative or judicial
review, or for instituting administrative review sua sponte, of such consents
and approvals shall have expired without any such filing having been made or
notice of such review having been issued; or (ii) in the event of such
filing or review sua sponte, such filing or review shall have been disposed of
favorably to the consents and approvals and the time for seeking further relief
with respect thereto shall have expired without any request for such further
relief having been filed.

 

8.1.6                     Intentionally
Omitted.

 

8.1.7                     Evidence of
Organization and Corporate Action. CoBank shall have received in form and
substance satisfactory to CoBank, certified copies of all Organizational
Documents of Borrower and documents evidencing all corporate action taken by
Borrower to authorize (including the specific names and titles of the persons
authorized to so act (each an “Authorized
Officer”)) the execution, delivery and performance of the LC
Documents to which it is a party, and the consummation of the Bond Transaction,
certified to be true and correct by the Secretary or Assistant Secretary of
Borrower.

 

8.1.8                     Legal Opinion
of Counsel. CoBank shall have received written opinions of counsel,
including regulatory counsel where required by CoBank, for Borrower (who shall
be acceptable to CoBank), which shall be in the form attached as Appendix A to
the Bond Purchase Agreement.

 

8.1.9                     Legal Opinion
of Bond Counsel or Other Counsel. CoBank shall have received the written
opinion, in form and content acceptable to CoBank and addressed to CoBank: (a) of
bond counsel covering such matters relating to the Issuer and the Bond
Documents as may be reasonably required by CoBank; and (b) of bond
counsel, or other counsel acceptable to CoBank, to the effect that, in
connection with the offer and sale of the Bonds, it is not necessary to
register the Bonds under the Securities Act of 1933, as amended, or the
securities laws of any state.

 

8.1.10              Member Guarantee.
CoBank shall have received a guarantee from Guarantor in form and substance
satisfactory to CoBank and in accordance with the requirements of Subsection 6.3
above.

 

8.1.11              Intentionally
Omitted.

 

8.1.12              Intentionally
Omitted.

 

16

 

8.1.13              Recording of
Documents: All of the LC Documents required to be recorded or filed to
perfect the security interests and liens granted therein shall be so recorded
and filed.

 

8.1.14              Intentionally
Omitted.

 

8.1.15              Intentionally
Omitted.

 

8.1.16              No Material Change.
No change shall have occurred in the condition or operations of Borrower since
the Statement Date which could reasonably be expected to result in a Material
Adverse Effect.

 

8.1.17              Default. As of
the date of issuance of the Letter of Credit and as of the date of each renewal
of the Letter of Credit pursuant to Subsection 2.2.1 hereof, there shall
exist no Event of Default or Potential Default.

 

8.1.18              Representations and
Warranties. The representations and warranties of Borrower contained in
each of the LC Documents to which it is a party, shall be true and correct in
all material respects on and as of the Closing Date and on and as of the date
of each renewal of the Letter of Credit pursuant to Subsection 2.2.1
hereof, as though made on and as of such date.

 

8.1.19              Consummation of the
Bond Transaction. CoBank shall have received evidence, in form and
substance satisfactory to CoBank that: (a) the Bond Transaction has been
consummated substantially in accordance with the terms and conditions of the
Bond Documents, and in compliance with all applicable laws and regulations; and
(b) the Bonds have been executed and delivered, and all of the Bonds shall
have been sold and the purchase price therefor received by the Bond Trustee, as
required pursuant to the Bond Documents, in both cases, simultaneously with the
issuance of the Letter of Credit.

 

8.1.20              Fees and Expenses.
Borrower shall have paid CoBank, by wire transfer of immediately available
federal funds all fees set forth in Section 3.5 of this Agreement and all fees
and expenses owing by Borrower under Section 14.1 hereof which, in either
case, are due on the Closing Date.

 

8.1.21              Project Budget.
CoBank shall have received a budget in form and substance satisfactory to
CoBank that itemizes the costs and expenses of the Project.

 

8.1.22              Further Assurances.
Borrower shall have provided and/or executed and delivered to CoBank such
further assignments, documents or financing statements, in form and substance
satisfactory to CoBank, that Borrower is to execute and deliver pursuant to the
terms of the LC Documents or as CoBank may reasonably request.

 

ARTICLE 9                                AFFIRMATIVE
COVENANTS.

 

From and after the date of this Agreement and until the Note and other
Bank Debt is indefeasibly paid in full and CoBank has no obligation to honor
any draws under the Letter of Credit, Borrower agrees that it will observe and
comply with, the following covenants for the benefit of CoBank:

 

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

 

17

 

9.2                                            Reports
and Notices. Borrower shall provide to CoBank the following reports,
information and notices.

 

9.2.1                     Annual
Financial Statements. As soon as available, but in no event later than
one-hundred twenty (120) days after the end of any fiscal year of Borrower
occurring during the term hereof annual financial statements of Borrower,
prepared in accordance with GAAP consistently applied which shall: (a) be
audited by independent certified public accountants selected by Borrower which
are reasonably acceptable to CoBank; (b) be accompanied by a report of
such accountants containing an opinion reasonably acceptable to CoBank; (c) be
prepared in reasonable detail and in comparative form; and (d) include a
balance sheet, an income statement, a statement of cash flows, a statement of
stockholders’ equity, and all notes and schedules relating thereto.

 

9.2.2                     Interim
Financial Statements. As soon as available, but in no event more than 45
days after the end of each month, a balance sheet of Borrower as of the end of
such month, a statement of income for Borrower for such period and for the
period year to date, and such other interim statements as CoBank may
specifically request, all prepared in reasonable detail and in comparative form
in accordance with GAAP consistently applied and certified by the Chief
Financial Officer of Borrower (subject to normal year-end adjustments).

 

9.2.2A            Annual Budgets. As
soon as available, but in no event more than 90 days after the end of any
Fiscal Year of Borrower occurring during the term hereof, copies of Borrower’s
annual operating budgets and capital expenditures, which shall be reasonably
acceptable to CoBank.

 

9.2.3                     Additional
Information. With reasonable promptness, such additional financial
information or documentation as CoBank may reasonably request.

 

9.2.4                     Notice of
Default. As soon as the existence of any Event of Default or Potential
Default becomes known to any officer of Borrower other than the Secretary,
Borrower shall promptly give CoBank written notice of such Event of Default or
Potential Default, the nature and status thereof, and the action being taken or
proposed to be taken with respect thereto.

 

9.2.5                     Notice of
Certain Changes. Borrower shall: (a) notify CoBank at least ten (10) Business
Days prior to the occurrence of any change in the name or business form of
Borrower; and (b) take all actions necessary or reasonably requested by
CoBank in order to maintain the perfected status of CoBank’s lien and security
interest (subject only to Permitted Encumbrances) in the Collateral.

 

9.2.6                     Notice of
Non-Environmental Litigation. Promptly after the commencement thereof,
notice of the commencement of all actions, suits, or proceedings before any
court, arbitrator, or governmental department, commission, board, bureau,
agency, or instrumentality affecting Borrower which, if determined adversely to
Borrower, could reasonably be expected to result in a Material Adverse Effect.

 

9.2.7                     Notice of
Material Change. Promptly after any officer of Borrower other than the
Secretary obtains knowledge thereof, notice of any matter which has resulted or
would result in a Material Adverse Effect.

 

9.2.8                     Notice of
Environmental Litigation. Without limiting the provisions of Subsection 9.2.6
hereof, promptly after Borrower’s receipt thereof, notice of the receipt of all
pleadings, orders, complaints, indictments, or other communication alleging a
condition that may require Borrower to undertake or to contribute to a cleanup
or other response under Environmental Regulations, or which seeks penalties,
damages, injunctive relief, or criminal sanctions related to alleged violations
of such laws, or which claims personal injury or property damage to any person
as a result of environmental factors or conditions or which could either cause
Borrower to incur liability (including, but not limited

 

18

 

to, all cleanup or
remediation costs) in excess of $25,000.00, or could, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.

 

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

 

9.2.10              Adverse Action
Regarding Required Licenses. In the event Borrower learns that any
petition, action, investigation, notice of violation or apparent liability,
notice of forfeiture, order to show cause, complaint or proceeding is pending,
or, to Borrower’s knowledge, threatened, to seek to revoke, cancel, suspend,
modify, or limit any of the Required Licenses, Borrower shall provide CoBank
with prompt written notice thereof and shall take, or cause to be taken, all
reasonable measures to contest such action in good faith.

 

9.2.11              Notice of Default Under
Bond Documents. As soon as the existence of any event of default or the
occurrence of an event which with the giving of notice or the passage of time
or both would constitute such an event of default under the Bond Documents
becomes known to any officer of Borrower other than the Secretary, Borrower
shall promptly give CoBank written notice thereof, the nature and status
thereof, and the action being taken or proposed to be taken with respect
thereto.

 

9.3                                            Maintenance
of Existence and Qualification. Borrower shall maintain its existence in
good, standing under the laws of its State of Formation. Borrower will qualify
and remain qualified as a foreign entity in each jurisdiction in which such
qualification is necessary or desirable in view of its business, operations and
properties if such failure would be reasonably expected to result in a Material
Adverse Effect.

 

9.4                                            Compliance
with Legal Requirements and Agreements. Borrower shall: (a) comply
with all laws, rules, regulations and orders applicable to Borrower or its
business; and (b) all agreements, indentures, mortgages, and other
instruments to which it is a party or by which it or any of its property is
bound; provided, however, that the failure of Borrower to comply with this
sentence in any instance shall not constitute an Event of Default unless such
failure would have a Material Adverse Effect.

 

9.5                                            Compliance
with Environmental Laws. Without limiting the provisions of Section 9.4
of this Agreement, Borrower shall comply in all material respects with, and
take all reasonable steps necessary to cause all persons occupying or present
on any properties owned or leased by Borrower to comply with, all Environmental
Regulations, the failure to comply with which would have a Material Adverse
Effect.

 

9.6                                            Taxes.
Borrower shall cause to be paid when due all taxes, assessments, and other
governmental charges upon it, its income, its sales, its properties, and
federal and state taxes withheld from its employees’ earnings, unless such
taxes, assessments, or other governmental charges shall be contested in good
faith by appropriate actions or legal proceedings and Borrower shall establish
adequate reserves therefor in accordance with GAAP.

 

9.7                                            Insurance.
Borrower shall maintain liability, worker’s compensation, business
interruption, boiler and machinery and such other insurance as CoBank may
reasonably require, in amounts and with deductibles or maximum payouts
customarily carried by entities in similar lines of business. Borrower shall
also maintain fidelity coverage (including employee dishonesty) on such
officers and employees and in such amounts as CoBank shall reasonably specify,
or in the absence of any such specification, as customarily carried by
corporations engaged in comparable businesses and comparably situated; provided
that until construction of the Project is substantially completed, Borrower
shall maintain in full force and effect, a policy of builders risk, completed
value, non-reporting form

 

19

 

insurance,
insuring against all risks of casualty loss to the Project in the amount of the
greater of (x) the full replacement cost thereof and (y) the sum of the Maximum
Principal Amount and the Maximum Interest Amount. Such insurance policies shall
contain such reasonable endorsements as CoBank shall from time to time require,
provided that the same are customarily obtained by corporations engaged in
comparable businesses and comparably situated, and all liability policies shall
name CoBank as an additional insured as its interests may appear. All such
insurance policies shall be endorsed with a mortgagee’s or loss payable clause,
as appropriate, in favor of CoBank. The policy or policies evidencing all
insurance referred to in this Section and receipts for the payment of
premiums thereon or certificates of such insurance satisfactory to CoBank shall
be delivered to and held by CoBank. All such insurance policies shall contain a
provision requiring at least ten (10) days’ notice to CoBank prior to any
cancellation for non-payment of premiums and at least forty-five (45) days’
notice to CoBank of cancellation for any other reason or of modification or
non-renewal. No later than forty (40) days prior to expiration, Borrower shall
give CoBank (a) satisfactory written evidence of renewal of all such
policies with premiums paid, or (b) a written report as to the steps being
taken by Borrower to renew or replace all such policies, provided that
notwithstanding the receipt of such written report, CoBank may at any time
thereafter give Borrower written notice to provide CoBank with such evidence as
described in clause (a), in which case Borrower must do so within ten (10) days
of such notice. Borrower agrees to pay all premiums on such insurance as they
become due. Borrower shall give immediate written notice to the insurance
carrier and CoBank of any loss. Borrower hereby authorizes and empowers CoBank
upon the occurrence and during the continuation of an Event of Default, at
CoBank’s option and in CoBank’s sole discretion, to act as attorney-in-fact for
Borrower to make proof of loss, to adjust and compromise any claim under
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom CoBank’s reasonable expenses incurred in the collection of such
proceeds, and all insurance policies of Borrower shall provide that CoBank may
act as Borrower’s attorney-in-fact for such purposes.

 

9.8                                            Title
to Assets and Maintenance. Borrower shall defend and maintain title to all
its material properties and assets where failure to do so would result in a
Material Adverse Effect. Borrower shall keep its assets, both real and
personal, in good order and condition consistent with industry practice and
shall make all necessary repairs, replacements and improvements, where failure
to do so would result in a Material Adverse Effect, so that its business may be
properly and advantageously conducted.

 

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

 

9.10                                     Further
Assurances; Real Property Security Interests. Borrower shall, as may be
required from time to time by CoBank, provide such documents as may be
necessary or desirable in the judgment of CoBank to confirm the security
interest in the Collateral granted to CoBank.

 

9.11                                     Inspection.
Borrower shall permit CoBank or its agents, during normal business hours or at
such other times as the parties may agree, to examine Borrower’s properties
(provided that CoBank and its agents provide Borrower with reasonable advance
notice and abide by reasonable security and safety regulations including
without limitation reasonable requirements adopted by Borrower for sanitation
and regulatory requirements imposed by regulatory agencies having
jurisdiction), books, and

 

20

 

records, and to
discuss Borrower’s affairs, finances, operations, and accounts with its
respective officers, directors, employees, and independent certified public
accountants.

 

9.12                                     Required
Licenses; Permits; Etc. Borrower shall duly and lawfully obtain and
maintain in full force and effect all Required Licenses, where the failure to
do so could reasonably be expected to result in a Material Adverse Effect.

 

9.13                                     Financial
Covenants. Borrower shall comply with the financial covenants set forth in Schedule 2
hereto.

 

9.14                                     Intentionally
Omitted.

 

9.15                                     Construction
Covenants.

 

9.15.1              Construction of
Project. Borrower shall construct the Project, or cause the same to be
constructed, in compliance with all building, fire, zoning, subdivision,
environmental, ecological and other governmental codes, statutes, ordinances,
regulations, orders, permits, approvals and similar requirements applicable
thereto (collectively, the “Building Codes”)
and otherwise in a good workmanlike manner. Borrower shall complete the
construction of the Project on or before the Project Completion Date. The
Project Completion Date may be extended a period of time equal to the period of
the delay and its consequences if completion is delayed due to any cause beyond
Borrower’s control such as an act of God, war (whether or not declared),
insurrection, military action, embargo, riot, civil disturbance, epidemic, act
or failure to act of government, act or omission of the other party, wind,
fire, flood, drought, landslide, explosion, earthquake, accident, power
failure, equipment failure, strike, labor dispute, industrial disturbance,
breakage or accident to machinery, transmission pipes or canals, partial or
entire failure of utilities, restraining order or decree of any court,
sabotage, interruption occasioned by order or requisition of federal, state or
local government, epidemic, or any other cause beyond the control of the
Borrower; provided, however, that, if such default is curable, and if and so
long as the Borrower is proceeding with due diligence to cure the default such
period shall be extended to whatever reasonable period is required to permit
the Borrower to cure such default. The Borrower shall, however, use its best
efforts to remedy with all reasonable dispatch the cause or causes preventing
the Borrower from completing the Project; provided, that the Borrower shall in
no event be required to settle strikes, lockouts or other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is, in the judgment of the Borrower, not in the interest of the
Borrower. Borrower covenants and agrees to pay all costs of the construction
and development of the Project.

 

9.15.2              Intentionally
Omitted.

 

9.15.3              Intentionally
Omitted.

 

9.15.4              CoBank’s Right to
Inspect. In addition to the inspection rights granted to CoBank under Section 9.11
hereof, Borrower will, at all reasonable times and as often as CoBank may
request (provided that CoBank and its agents provide Borrower with reasonable
advance notice and abide by reasonable security and safety regulations
including without limitation reasonable requirements adopted by Borrower for
sanitation and regulatory requirements imposed by regulatory agencies having
jurisdiction), permit any officers, employees and authorized representatives of
CoBank to visit and inspect the Project, to enter upon the Project to inspect
the construction being carried out thereon and all materials to be used in the
construction of the Project, to examine all detailed plans, drawings and
specifications for the Project which are or may be kept on the Property or
elsewhere, to examine and make copies of, or take extracts from, Borrower’s
books of account, records and other papers relating to the Project or any part
thereof, and to discuss Borrower’s business and financial affairs with, and be
advised as to the same by, appropriate representatives having the most complete
or direct knowledge of

 

21

 

such matters. Any
such inspections and/or examinations are for the sole benefit of CoBank and
Borrower shall not be entitled to rely thereon.

 

9.15.5              Liens, Mortgages,
Pledges, Etc. Excepting liens, charges or encumbrances permitted by CoBank
or directly or indirectly in favor of CoBank, Borrower will not allow to exist
any lien, charge or encumbrance of any kind, including, without limitation,
liens of Persons supplying labor or material in connection with the
construction of the Project or other mechanic’s liens, upon, or any security
interest in, the Project, or any part thereof or any property of Borrower located
or to be located on the Property or incorporated or to be incorporated into the
Project. Without the prior written consent of CoBank, Borrower shall not grant
or otherwise create any easement, condition or restriction which burdens the
Project or any part thereof in any material respect. Borrower will deliver to
CoBank on demand any contracts, bills of sale, receipted vouchers or other
documents under which Borrower claims title to any materials or articles used
in the construction of the Project.

 

9.15.6              Delivery and
Execution of Documents. Borrower will at any time and from time to time,
upon CoBank’s request, take (or cause to be taken) any action and execute,
acknowledge and deliver (or cause to be executed, acknowledged and delivered)
any further documents, opinions, mortgages, deeds of trust or other instruments
which may be reasonably necessary in order to carry out the true intent and
purposes of this Agreement.

 

9.15.7              Indemnity. In
addition to the indemnification pursuant to Article 12 hereof, Borrower
shall protect, defend, indemnify and hold the Indemnified Parties harmless from
and against any loss suffered or liability incurred by the Indemnified Parties
on account of any damage to the person or property of the parties hereto or to
third parties by reason of the construction contemplated herein, whether or not
such injury or damage is partly due to the negligence of CoBank or the other
Indemnified Parties; provided that such indemnification is not provided where
such injury or damage is due to the gross negligence or willful misconduct of
the Indemnified Party seeking indemnification. Borrower shall undertake, at its
sole expense and through counsel selected by Borrower and reasonably
satisfactory to CoBank, the defense of the Indemnified Parties in any lawsuit
commenced as the result, or alleged to be the result, of injury or damage
occurring by reason of the construction contemplated herein.

 

9.15.8              Intentionally
Omitted.

 

9.15.9              Intentionally
Omitted.

 

9.15.10       Intentionally Omitted.

 

9.16                                     Additional
Covenants. In addition to the covenants and agreements set forth elsewhere
in this Agreement, Borrower agrees to take the action and/or provide the
documents set forth as Additional Covenants in Schedule 2 hereto.

 

ARTICLE 10                         APPROVAL
OF DISBURSEMENTS UNDER BOND LOAN AGREEMENT.

 

10.1                                     Disbursements.
The proceeds of the Bonds shall be deposited into the Project Fund (as
defined in the Bond Trust Indenture) and disbursed to, or as directed by,
Borrower in periodic payments (each a “Disbursement”)
not more frequently than monthly, by the Bond Trustee under the Bond Loan
Agreement but subject to the approval of CoBank pursuant to the terms of this Article 10,
upon satisfaction of all applicable conditions of this Agreement and subject to
the limitations set forth in this Agreement. Borrower’s request for a
Disbursement shall show the amount of Project Costs that Borrower has incurred
and will pay with such Disbursement or the amount Borrower seeks as
reimbursement, as permitted under the Tax Regulatory Agreement, from such
Disbursement for Project Costs that Borrower has incurred and already paid. The
date on which any Disbursement is made, or is to be made, is hereinafter called
a “Disbursement Date.” Anything to
the contrary notwithstanding, if

 

22

 

an Event of
Default has occurred hereunder, CoBank reserves the right to direct that the
Bond Trustee make Disbursements, or parts thereof, directly to the persons to
whom amounts are then due from Borrower or from any contractor for Project
Costs.

 

10.2                                     Project
Costs.

 

(a)                                  No
amount shall be included in any Disbursement for payment of any of the
categories of Project Costs as disclosed in the Budget if the inclusion of the
same in such Disbursement would cause the total of all amounts included in
Disbursements for such category of Project Costs to exceed the total amount
provided in the Budget for such category of Project Costs, except that with the
prior written approval of CoBank, which approval CoBank shall have no
obligation to give, the amounts provided in the Budget for each of the
categories of Project Costs may be reallocated to other categories of Project
Costs.

 

(b)                                 CoBank
shall have no obligation to approve a Disbursement in connection with materials
which are to be incorporated into the Project prior to their having been
delivered to the Property and incorporated into the Project except for deposits
and prepayments. The foregoing notwithstanding, Disbursements for items of
equipment may be made prior to the installation of such equipment on the
Property and further may be made in installments for the purchase price of such
equipment.

 

10.3                                     Intentionally
Omitted.

 

10.4                                     Additional
Conditions to Disbursements. CoBank’s obligation to approve each
Disbursement pursuant to the Bond Loan Agreement is subject to the fulfillment
to CoBank’s satisfaction of the following additional conditions, in addition to
the other conditions set forth in this Agreement.

 

10.4.1              Representations and
Warranties. All of the representations and warranties of Borrower set forth
in this Agreement and the Bond Documents shall be true and correct in all
material respects as of the Disbursement Date for such Disbursement, and all of
Borrower’s covenants and agreements set forth in this Agreement and the Bond
Documents shall have been performed and complied with in all material respects
on such Disbursement Date.

 

10.4.2              Disbursement
Request. CoBank shall have received, at least three (3) business days
prior to the Disbursement Date for such Disbursement, a written disbursement
request from Borrower in form and detail acceptable to CoBank and dated as of
the same date as the documentation for such Disbursement submitted pursuant to
this Subsection.

 

10.4.3              Lien Waivers. CoBank
shall have been furnished with affidavits, lien waivers or releases
satisfactory to CoBank with respect to the costs of all labor, fuel, equipment
and materials furnished for the Project through the date of the most recent
prior Disbursement request (unless an Event of Default has occurred, in which
event, at the option of CoBank, through the date of the Disbursement request
made pursuant to the foregoing Subsection 10.4.2 hereof), executed by the
party or parties furnishing such labor, fuel, equipment and materials.

 

10.4.4              Intentionally
Omitted.

 

10.4.5              No Default. There
shall exist no Event of Default or Potential Default, on the Disbursement Date
for such Disbursement.

 

10.4.6              Supporting
Documents. With respect to any Disbursement, Borrower shall provide at
CoBank’s request, and CoBank shall have reasonable access to, copies of
invoices, checks, payroll vouchers and other similar evidence supporting all
payments previously made under each

 

23

 

contract and
subcontract; and, with respect to any Disbursement which includes sums for
other Project Costs, CoBank shall have received copies of all supporting
invoices, statements, contracts or other evidence to establish to CoBank’s
satisfaction that such costs for which Disbursements shall have been made have
been paid and that such costs for which the Disbursement is requested have been
paid or are then due and owing.

 

10.4.7              Certification. If
requested by CoBank, CoBank shall have received a current certificate of one or
more professional employed by Borrower and acceptable to CoBank, addressed to
CoBank and in scope, form and substance satisfactory to CoBank, that Borrower
has obtained and kept in full force and effect such permits and governmental
and municipal approvals as may be necessary to comply with all building,
zoning, environmental and ecological requirements relating to the Property, the
Project or the use or occupancy thereof and that all applicable appeal periods
with respect to such permits and approvals have expired.

 

10.4.8              Other Documents. Prior
to the Disbursement Date for such Disbursement, all documents incident thereto
shall be in form and substance satisfactory to CoBank, and CoBank shall have
received copies of all such current budgets and disbursement schedules,
waivers, certificates and other documents as CoBank may from time to time
request in connection with such Disbursement.

 

10.4.9              Personal Property
Acquisition. If such Disbursement is for any equipment or other personal
property, CoBank shall have received invoices for the purchase of such personal
property and evidence satisfactory to CoBank that such personal property is
insured against casualty, loss and theft. In addition, Borrower shall, at the
request of CoBank, provide evidence satisfactory to CoBank that Borrower owns
such personal property free and clear of all liens and encumbrances, and shall
execute and deliver such additional security documents as CoBank determines to
be necessary or appropriate to create and perfect a first and best lien in such
personal property as additional security for the payment of the obligations of
Borrower to CoBank under the LC Documents.

 

10.4.10       Intentionally Omitted.

 

10.5                                     Intentionally
Omitted.

 

10.6                                     Cessation
or Limitation of Disbursements. CoBank’s obligation to approve
Disbursements to Borrower shall be subject to the following additional
conditions and limitations.

 

10.6.1              Completion Date. In
no event shall CoBank be obligated to approve: (a) a Disbursement after
the Completion Date, nor (b) a Disbursement for the Project after the
Project Completion Date.

 

10.6.2              Construction
Progress. If at any time CoBank shall, in its reasonable judgment, estimate
and give notice to Borrower that substantial completion of the Project will not
occur on or before the Project Completion Date, then CoBank shall have no
obligation to approve further Disbursements until such time as Borrower shall
have delivered to CoBank evidence reasonably satisfactory to CoBank that
substantial completion of the Project will occur on or before the Project
Completion Date.

 

10.6.3              Intentionally
Omitted.

 

10.6.4              Quality of Work. If
CoBank should at any time determine that any part of the work performed on the
Project has not been performed in a good and workmanlike manner in any material
respect, whether or not the cost of any such work shall have been included in a
Disbursement theretofore made, then CoBank shall have no obligation to approve
any further Disbursement until such

 

24

 

work is corrected
so as to have been performed in a good and workmanlike manner and CoBank has
received evidence reasonably satisfactory to it of such correction.

 

10.6.5              Building Codes. If
CoBank should at any time determine, exercising its reasonable discretion, that
any part of the work performed on, or materials incorporated into, the Project
does not comply with all Building Codes in any material respect, whether or not
the cost of any such work or materials shall have been included in a
Disbursement theretofore made, then CoBank shall have no obligation to approve
any further Disbursement until such work is corrected, or material is changed,
to cause the same to comply with all Building Codes and CoBank has received
evidence reasonably satisfactory to it of such correction or change and of such
compliance.

 

10.7                                     No
Waiver By Disbursement. The approval by CoBank of any Disbursement request
of Borrower shall not (a) constitute a final, binding approval by CoBank
of any construction of the Project then in place or a waiver of the right of
CoBank to thereafter exercise any rights arising by reason of the noncompliance
of such work with the Building Codes or the failure of such work to have been
performed in a good and workmanlike manner; or (b) constitute a
representation to  Borrower or any
third party, or otherwise be relied upon by Borrower or any third party as
evidence of the compliance of any work on the Project in place with the
Building Codes or that any such work has been performed in a good and
workmanlike manner.

 

ARTICLE 11                         NEGATIVE
COVENANTS.

 

From and after the date of this Agreement until the Note and other Bank
Debt is indefeasibly paid in full and CoBank has no obligation to honor draws
under the Letter of Credit, Borrower agrees that it shall not (except as required
or permitted under the Bond Documents):

 

11.1                                     Borrowings.
Create, incur, assume, or allow to exist, directly or indirectly, any
indebtedness or liability  for borrowed money (including trade or bankers’
acceptances), letters of credit, or the deferred purchase price of property or
services (including capitalized leases), except for: (i) debt to CoBank; (ii) accounts
payable to trade creditors incurred in the ordinary course of business; and (iii) current
operating liabilities (other than for borrowed money) incurred in the ordinary
course of business.

 

11.2                                     Liens.
Create, incur, assume, or allow to exist any mortgage, deed of trust,
pledge, lien (including the lien of an attachment, judgment, or execution),
security interest, or other encumbrance of any kind upon any of its property,
real or personal (collectively, “Liens”) The foregoing restrictions shall not
apply to: (i) Liens in favor of CoBank; (ii) Liens for taxes,
assessments, or governmental charges that are not past due; (iii) Liens
and deposits under workers’ compensation, unemployment insurance, and social
security Laws; (iv) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the ordinary course of business as conducted on the date
hereof; (v) Liens imposed by Law in favor of mechanics, materialmen,
warehousemen, and like persons that secure obligations that are not past due;
and (vi) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal course
of its business or materially impair the value of the property subject thereto.

 

11.3                                     Mergers,
Acquisitions, Etc. Merge or consolidate with any other entity or acquire
all or a material part of the assets of any person or entity, or form or create
any new subsidiary or affiliate, or commence operations under any other name,
organization, or entity, including any joint venture.

 

11.4                                     Transfer
of Assets. Sell, transfer, lease, or otherwise dispose of any of its
assets, except in the ordinary course of business.

 

25

 

11.5                                     Loans.
Lend or advance money, credit, or property to any person or entity, except
for trade credit extended in the ordinary course of business.

 

11.6                                     Contingent
Liabilities. Assume, guarantee, become liable as a surety, endorse,
contingently agree to purchase, or otherwise be or become liable, directly or
indirectly (including, but not limited to, by means of a maintenance agreement,
an asset or stock purchase agreement, or any other agreement designed to ensure
any creditor against loss), for or on account of the obligation of any person
or entity, except by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of Borrower’s
business.

 

11.7                                     Change
in Business. Engage in any business activities or operations substantially
different from or unrelated to Borrower’s present business activities or
operations.

 

ARTICLE 12                         INDEMNIFICATION.

 

12.1                                     General;
Stamp Taxes; Intangibles Tax. Borrower agrees to indemnify and hold CoBank
and the Confirmation Bank and their respective directors, officers, employees,
agents, professional advisers and representatives (“Indemnified Parties”) harmless from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which any
Indemnified Party may incur (or which may be claimed against any such
Indemnified Party by any Person), including reasonable attorneys’ fees incurred
by any Indemnified Party, arising out of or resulting from: (a) the
material inaccuracy of any representation or warranty of Borrower in this
Agreement or the other LC Documents; (b) the material failure of Borrower
to perform or comply with any covenant or obligation of Borrower under this
Agreement or the other LC Documents; (c) the Project or the use thereof
during the Construction Period (as defined in the Bond Loan Agreement) and
while Borrower is in possession thereof or from any accident, injury or damage
whatsoever caused to any Person on or about the Property; or (d) the
exercise by CoBank (or the Confirmation Bank on behalf of CoBank) of any right
or remedy set forth in this Agreement or the other LC Documents, provided that
Borrower shall have no obligation to indemnify any Indemnified Party against
claims, damages, losses, liabilities, costs or expenses to the extent that the
foregoing are the result of the willful misconduct or gross negligence of such
Indemnified Party. In addition, Borrower agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which any Indemnified Party
may incur (or which may be claimed against any such Indemnified Party by any
Person), including reasonable attorneys’ fees incurred by any Indemnified
Party, arising out of or resulting from the imposition or nonpayment by
Borrower of any stamp tax, intangibles tax, or similar tax, including any
amounts owing by virtue of the assertion that the property valuation used to
calculate any such tax was understated. Borrower shall have the right to assume
the defense of any claim as would give rise to Borrower’s indemnification
obligation under this Section with counsel of Borrower’s choosing so long
as such defense is being diligently and properly conducted and Borrower shall
establish to the Indemnified Party’s satisfaction that the amount of such
claims are not, and will not be, material in comparison to the liquid and
unrestricted assets of Borrower available to respond to any award which may be
granted on account of such claim. So long as the conditions of the preceding
sentence are met, the Indemnified Party shall have no further right to
reimbursement of attorney’s fees incurred thereafter. The obligation to
indemnify set forth in this Section shall survive the termination of this
Agreement and other covenants.

 

12.2                                     Indemnification
Relating to Hazardous Substances. Borrower shall not locate, produce,
treat, transport, incorporate, discharge, emit, release, deposit or dispose of
any Hazardous Substance in, upon, under, over or from any property owned or
held by Borrower, except in accordance with all Environmental Regulations;
Borrower shall not permit any Hazardous Substance to be located, produced,
treated, transported, incorporated, discharged, emitted, released, deposited,
disposed of or to escape in, upon, under, over or from any property owned or
held by Borrower, except in accordance with Environmental Regulations; and
Borrower shall comply with all Environmental Regulations which

 

26

 

are applicable to
such property. If CoBank reasonably believes that an Environmental Regulation
has been violated by Borrower’s activities upon property owned or held by
Borrower, and if CoBank so requests, Borrower shall have prepared an
environmental review, audit, assessment and/or report relating to the subject
property, at Borrower’s sole cost and expense, by an engineer or other
environmental expert acceptable to CoBank. If, however, the environmental
review, audit, assessment and/or report reveals that no Environmental
Regulation has been violated, CoBank shall reimburse Borrower for the costs and
expenses of such engineer or other environmental expert in completing such
audit or report, together with interest on such amounts at the Base Interest
Rate from the date expended until repaid. Borrower shall indemnify the
Indemnified Parties against, and shall reimburse the Indemnified Parties for,
any and all claims, demands, judgments, penalties, liabilities, costs, damages
and expenses, including court costs and reasonable attorneys’ fees incurred by
the Indemnified Parties (prior to trial, at trial and on appeal) in any action
against or involving the Indemnified Parties, resulting from any breach of the
foregoing covenants, or from the discovery of any Hazardous Substance in, upon,
under or over, or emanating from, such property, it being the intent of
Borrower and the Indemnified Parties that the Indemnified Parties shall have no
liability or responsibility for damage or injury to human health, the environmental
or natural resources caused by, for abatement and/or clean-up of, or otherwise
with respect to, Hazardous Substances by virtue of the interest of CoBank in
the property created by any documents securing the Note and other Bank Debt
(including without limitation the LC Documents) or as the result of CoBank
exercising any of its rights or remedies with respect thereto, including but
not limited to becoming the owner thereof by foreclosure or conveyance in lieu
of foreclosure. The foregoing covenants of this Section shall be deemed
continuing covenants for the benefit of the Indemnified Parties, and any
successors and assigns of the Indemnified Parties, including but not limited to
the holder of any certificate of purchase, any transferee of the title of
CoBank or any subsequent owner of the property, and shall survive the
satisfaction or release of any lien, any foreclosure of any lien and/or any
acquisition of title to the property or any part thereof by CoBank, or anyone
claiming by, through or under CoBank or Borrower by deed in lieu of foreclosure
or otherwise. Any amounts covered by the foregoing indemnification shall bear
interest from the date incurred at the Default Interest Rate, shall be payable
on demand, and shall be secured by the Collateral. The indemnification and
covenants of this Section shall survive the termination of this Agreement
and other covenants.

 

ARTICLE 13                         EVENTS OF
DEFAULT; RIGHTS AND REMEDIES.

 

13.1                        Events of
Default. The occurrence of any of the following events (each an “Event of Default”) shall, at the option of
CoBank, make the entire Bank Debt immediately due and payable (provided, that
in the case of an Event of Default under Subsection 13.1(f) all
amounts owing under the Note and the other LC Documents shall automatically and
immediately become due and payable without any action by or on behalf of
CoBank), and CoBank may exercise all rights and remedies for the collection of
any amounts outstanding hereunder and take whatever action it deems necessary
to secure itself, all without notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor, or other notices or
demands of any kind or character:

 

(a)                                  Failure
of Borrower to pay when due, whether by acceleration or otherwise, any of the Bank
Debt in accordance with this Agreement or the other LC Documents.

 

(b)                                 Any
representation or warranty set forth in any LC Document, any Bond Document, or
in connection with any transaction contemplated by any such document, shall
prove in any material respect to have been false or misleading when made by
Borrower.

 

(c)                                  Any
default by Borrower in the performance or compliance with the covenants,
promises, conditions or provisions of Sections 9.7, 9.11 and 9.13 of this
Agreement and Sections 11.1, 11.3, 11.4, 11.5, 11.6 and 11.7 of this Agreement.

 

27

 

(d)                                 Any
breach of the covenants set forth in Sections 9.2, 9.4, 9.5, 9.6, 9.7, 9.8,
9.10, 9.11, 9.12, 9.14, 9.15 and 9.16 and Article 10 of this Agreement,
and Section 11.2 of this Agreement, and such failure continues five (5) Business
Days after Borrower learns of such failure to comply, whether by Borrower’s own
discovery or through notice from CoBank.

 

(e)                                  The
failure of Borrower to pay when due any of the following obligations to any
Person other than CoBank, beyond any period of grace under the instrument
creating such obligation: (i) any indebtedness for borrowed money or for
the deferred purchase price of property or services, (ii) any obligations
under leases which have or should have been characterized as capitalized
leases, as determined in accordance with GAAP, or (iii) any contingent
liabilities, such as guaranties, for the obligations of others relating to
indebtedness for borrowed money or for the deferred purchase price of property
or services or relating to obligations under leases which have or should have
been characterized as capitalized leases, as determined in accordance with
GAAP; provided that no such failure will be deemed to be an Event of Default
hereunder unless and until the aggregate amount owing under obligations with
respect to which such failures nave occurred and are continuing is at least
$100,000.00.

 

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

 

(g)                                 Failure
of Borrower to comply with any other provision of this Agreement or the other LC
Documents not constituting an Event of Default under any of the preceding
provisions of this Section 13.1, and such failure continues for thirty
(30) days after Borrower learns of such failure to comply, whether by Borrower’s
own discovery or through notice from CoBank.

 

(h)                                 (i) the
Guaranty or any of the Guarantor Security Documents shall, at any time after
their execution, cease to be in full force and effect, or shall be revoked or
declared null and void, or the validity or enforceability thereof shall be
contested by Guarantor, or Guarantor shall deny any further liability or
obligation thereunder, or Guarantor breaches or is in default under the terms
of the Guaranty or any of the Guarantor Security Documents or any other
agreement with CoBank; (ii) if Guarantor applies for or consents to the
appointment of a trustee or receiver for any part of its properties; any
bankruptcy, reorganization, debt arrangement, dissolution or liquidation
proceeding is commenced or consented to by Guarantor; or any application for
appointment of a receiver or a trustee, or any proceeding for bankruptcy,
reorganization, debt management or liquidation is filed for or commenced
against Guarantor, and is not withdrawn or dismissed within sixty (60) days
thereafter; or (iii) if any representation or warranty by Guarantor set
forth in any LC Document or in connection with any transaction contemplated by
any such document, shall prove in any material respect to have been false or
misleading when made by Guarantor.

 

(i)                                     Upon
the occurrence, and during the continuance, of an event of default under the
Bond Documents.

 

(j)                                     Upon
the filing of a mechanics lien against the Project which is not released within
thirty (30) days of such filing, or in the event CoBank determines, in its sole
discretion, that the Project (i) is not being constructed in a good
workman like manner, (ii) will not be completed by the Project Completion
Date, or (iii) can not be completed for the undrawn portion of the funds
available under the Bond Loan Agreement together with other sources of funding
available to Borrower.

 

(k)                                  Upon
the occurrence, and during the continuance, of an event of default under any
other loan or credit facility extended by CoBank to Borrower.

 

28

 

13.2                                     Rights
With Respect to Bonds. In addition to the remedies set forth elsewhere in
this Article 13, upon the occurrence of an Event of Default, CoBank shall
be entitled to pursue any rights and remedies available to it or to Borrower
under or in connection with the Bond Documents including, without limitation,
causing and paying a full or partial drawing under the Letter of Credit.

 

13.3                                     Rights
With Respect to Construction of Project. In addition to the remedies set
forth elsewhere in this Article 13, upon the occurrence of an Event of
Default, CoBank shall be entitled to take all action it deems appropriate to
obtain completion of the Project, including, without limitation: (a) to
request Disbursements under the Bond Loan Agreement; and (b) take over or
exercise Borrower’s rights under existing contracts for, or let contracts for,
or otherwise proceed with, construction of the Project and pay the costs
thereof out of Disbursements or by advancing its own funds, which funds shall (i) bear
interest at the Default Interest Rate, (ii) be payable by Borrower on
demand, and (iii) be secured by the Collateral.

 

13.4                                     Right
to Demand Collateral Deposit. In addition to the remedies set forth
elsewhere in this Article 13, upon the occurrence of an Event of Default,
CoBank shall be entitled to require that Borrower immediately pay to CoBank an
amount equal to the face amount of the Letter of Credit, as then in effect, to
be held by CoBank as collateral security for Borrower’s obligations hereunder.

 

13.5                                     Additional
Rights and Remedies. In addition to the remedies set forth elsewhere in
this Article 13, upon the occurrence of an Event of Default, CoBank shall
be entitled to exercise all the rights and remedies provided in other LC
Documents and by any applicable law, including, without limitation, the Uniform
Commercial Code as enacted in the state of Colorado or the state where the
Collateral is located at such time, whichever provides CoBank with greater
rights. Each and every right or remedy granted to CoBank pursuant to this
Agreement and the other LC Documents, or allowed CoBank by law or equity, shall
be cumulative. Failure or delay on the part of CoBank to exercise any such
right or remedy shall not operate as a waiver thereof. Any single or partial
exercise by CoBank of any such right or remedy shall not preclude any future
exercise thereof or the exercise of any other right or remedy.

 

13.6                                     Attorney-in-Fact.
For the purposes of facilitating enforcement of the remedies provided in
this Article 13, Borrower hereby irrevocably constitutes and appoints
CoBank as the Borrower’s true and lawful attorney-in-fact, with full power of
substitution, following the occurrence and during the continuance of an Event
of Default, to execute, acknowledge and deliver any instruments and to do and
perform any acts relating to (a) the completion and development of the
Project, the requesting of Disbursements for or on behalf of Borrower in the
name of Borrower and the rights, powers, remedies and authorities granted to
CoBank under this Agreement; and (b) exercise all rights Borrower has
under the Bond Documents to require the Issuer to redeem the Bonds. This power
of attorney shall be deemed to be a power coupled with an interest and is
irrevocable. CoBank, as such attorney-in-fact, shall also have the power to
prosecute and defend all actions or proceedings in connection with or affecting
the Project or any part thereof.

 

ARTICLE 14                         MISCELLANEOUS.

 

14.1                                     Costs
and Expenses. To the extent permitted by law, Borrower agrees to pay to
CoBank, on demand, all out-of-pocket costs and reasonable expenses incurred by
CoBank (including, without limitation, the reasonable fees and expenses of
counsel retained by CoBank) in connection with: (a) the preparation,
negotiation, and execution of the LC Documents and the closing of the
transaction reflected in this Agreement; and (b) the enforcement or
protection of CoBank’s rights under the LC Documents, including without
limitation collection of any of the Bank Debt and the enforcement of any security
interest in the Collateral (regardless of whether such enforcement or
collection is by court action or otherwise), as applicable.

 

29

 

14.2                                     Service
of Process and Consent to Jurisdiction. Borrower hereby agrees that any
litigation with respect to this Agreement or to enforce any judgment obtained
against Borrower for breach of this Agreement or under the Note or other LC
Documents may be brought in the courts of the State of Colorado and in the
United States District Court for the District of Colorado (if applicable
subject matter jurisdictional requirements are present), as CoBank may elect;
and, by execution and delivery of this Agreement, Borrower irrevocably submits
to such jurisdiction.

 

14.3                                     Jury
Waiver. IT IS MUTUALLY AGREED BY AND BETWEEN COBANK AND BORROWER THAT THEY
EACH WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY
EITHER OF THEM AGAINST THE OTHER PARTY ON ANY MATTER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THE COLLECTION OF SUCH SUMS AS MAY BE DUE AND OWING BY
BORROWER UNDER THIS AGREEMENT, THE NOTE, OR THE OTHER LC DOCUMENTS.

 

14.4                                     Notices.
All notices, requests and demands required or permitted under the terms of
this Agreement shall be in writing and (a) shall be addressed as set forth
below or at such other address as either party shall designate in writing, (b) shall
be deemed to have been given or made: (i) if delivered personally,
immediately upon delivery, (ii) if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt, (iii) if
by nationally recognized overnight courier service with instructions to deliver
the next Business Day, one (1) Business Day after sending, and (iv) if
by United States Mail, certified mail, return receipt requested, three (3) days
after mailing.

 

14.4.1              Borrower.

 

As provided on Schedule 2 hereto.

 

14.4.2              CoBank.

 

As provided on Schedule 2 hereto.

 

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

 

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

 

14.7                                     Entire
Agreement. This Agreement (together with all exhibits and schedules hereto
and the MLA, which are incorporated herein by this reference) and the other LC
Documents represent the entire understanding of CoBank and Borrower with
respect to the subject matter hereof and shall replace and supersede any
previous agreements of the parties.

 

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

 

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

 

30

 

14.10                              Amendments.
This Agreement may not be modified or amended unless such modification or
amendment is in writing and is signed by both Borrower and CoBank. Borrower
agrees that it shall reimburse CoBank for all reasonable fees and expenses
incurred by CoBank in retaining outside legal counsel in connection with any
amendment or modification to this Agreement requested by Borrower.

 

14.11                              Capital
Requirements. In the event that the introduction of or any change in (a) any
law or regulation, or (b) the judicial, administrative, or other
governmental interpretation of any law or regulation, or (c) compliance by
CoBank with any guideline or request from any governmental authority (whether
or not having the force of law) has the effect of requiring an increase in the
amount of capital required or expected to be maintained by CoBank, and CoBank
determines that such increase is based in any part upon CoBank’s obligations
hereunder, and other similar obligations, Borrower shall pay to CoBank such
additional amount as shall be certified by CoBank to Borrower to be the net
present value (discounted at the Weighted Average Interest Rate) of (d) the
amount by which such increase in capital reduces the rate of return on capital
which CoBank could have achieved over the period remaining until the Maturity
Date but for such introduction or change, (e) multiplied by the sum of the
Maximum Principal Amount plus the Maximum Interest Amount; provided that if
Borrower pays off all amounts owing to CoBank within ninety (90) days after
being given notice to pay, Borrower shall have no obligation to make any
payment under this Section provided further that Borrower shall be liable
for any funding losses on account of such prepayment. CoBank will notify
Borrower of any event occurring after the date of this Agreement that will
entitle CoBank to compensation pursuant to this Section as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. Determinations by CoBank for purposes of this Section of the
effect of any increase in the amount of capital required to be maintained by
CoBank and of the amount of compensation owed to CoBank under this Section shall
be conclusive, provided that such determinations are made on a reasonable
basis.

 

14.12                              Mutual
Release. Upon full indefeasible payment and satisfaction of the Bank Debt
and Note and the other obligations contained in this Agreement, the parties,
including Borrower and CoBank, shall, except as provided in Article 12
hereof, thereupon automatically each be fully, finally, and forever released
and discharged from any further claim, liability, or obligation in connection
with the Bank Debt.

 

14.13                              Construction
with Bond Loan Agreement. In the event of a conflict between this Agreement
and the Bond Loan Agreement as to provisions in any way bearing upon the rights
or duties of Borrower with respect to CoBank, or upon the rights or duties of
CoBank with respect to Borrower, the provisions of this Agreement shall control
as between CoBank and Borrower.

 

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

 

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

 

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

 

31

 

	
  NO

  	
   

  	
   

  	
  INTERWEST, L.C,

  An Iowa limited liability company

  
	
  [SEAL]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST

  	
  By:

  	
  /s/ NILE
  RAMSBOTTOM, President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  JOHN A. GERKEN

  	
   

  	
  Name:

  	
  Nile
  Ramsbottom

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  John
  A. Gerken

  	
   

  	
  By:

  	
  /s/ BEVERLY
  TIERNEY, Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Attorney

  	
   

  	
  Name:

  	
  Beverly
  Tierney

  	
   

  	
   

  
													

 

	
  [SEAL]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTEST

  	
   

  	
   

  	
  CoBANK, ACB

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ JAMES
  C. MASTERSON

  	
   

  	
  By:

  	
  /s/ MARK
  JACOBSON

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James
  C. Masterson

  	
   

  	
  Name:

  	
  Mark
  Jacobson

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assist.
  Sec.

  	
   

  	
  Title:

  	
  Assistant
  Vice President

  
														

 

32

 

SCHEDULE 1 TO REIMBURSEMENT
AGREEMENT

 

Bonds: shall mean
the Iowa Finance Authority Variable Rate Demand Industrial Development Revenue
Bonds (InterWest, L.C. Project), Series 2001.

 

Bond Documents:
shall mean the Bond Trust Indenture, the Bonds, the Bond Purchase Agreement,
the Remarketing Agreement, the Tax Regulatory Agreement, and the Bond Loan
Agreement.

 

Bond Loan Agreement:
shall mean that document entitled “Loan Agreement” dated as of November 1,
2001, by and between the Issuer and Borrower.

 

Bond Purchase Agreement:
shall mean that document entitled “Bond Purchase Agreement” dated as of November 15,
2001, by and among the Issuer, the Borrower and Merchant Capital, L.L.C.

 

Bond Trust Indenture:
shall mean that document entitled “Trust Indenture” dated as of November 15,
2001, by and between the Issuer and the Bond Trustee.

 

Bond Trustee or Trustee:
shall mean Wells Fargo Bank Northwest, National Association.

 

Borrower: shall
mean InterWest, L.C.

 

Certificate of Non-reinstatement:
shall mean a certificate in the form of Exhibit 5 to the Letter of Credit.

 

Issuer: shall mean
the Iowa Finance Authority.

 

Maximum Interest Amount:
shall mean $147,945.21, which shall be the amount of 108 days’ interest on the
Bonds at the maximum interest rate of 10% per annum.

 

Maximum Principal Amount:
shall mean $5,000,000, or such lesser amount as may be applicable in the event
of the cancellation of any of the Bonds.

 

Remarketing Agent:
shall mean initially W.R. Taylor & Company, LLC.

 

Tax Regulatory Agreement:
shall mean that document entitled “Tax Regulatory Agreement” dated as of November 1,
2001, by and among the Issuer, Borrower and Trustee.

 

SCHEDULE 2 TO REIMBURSEMENT AGREEMENT

 

Base Rate Margin: 0
basis points.

 

Borrower’s Business:
Borrower is presently engaged in, or presently contemplates becoming engaged
in, the following businesses: soy methyl ester processing.

 

Borrower’s Place of Business
(or Chief Executive Office if more than one Place
of Business): is in Ralston, Iowa.

 

Collateral: shall
mean the real and personal property of Borrower, whether now owned or hereafter
acquired, upon which CoBank is to have a first (unless specifically provided
otherwise) lien and security interest, located in Carroll County, Iowa and more
particularly described in a Leasehold Deed of Trust, with respect to the real
property, and a Security Agreement, with respect to the personal property, each
dated as of the date hereof, and each by and between Borrower and CoBank.

 

Completion Date:
shall mean August 31, 2002.

 

Confirmation Fee:
shall be the fee charged by the Confirmation Bank for issuing and maintaining
the Confirming Letter of Credit, which is, as of the date of the initial Confirming
Letter of Credit, 30 basis points.

 

Drawing Fee: shall
mean $0.

 

Facility Fee Factor:
shall mean 200 basis points (2%) (subject to a direct adjustment in the event
of any change in the Confirmation Fee). Also subject to pro rata increase in
the sole and complete discretion of CoBank over the remaining life of the
Letter of Credit if there is an Event of Default under this Agreement.

 

Financial Covenants:
shall mean the following financial covenants:

 

Borrower
shall, on a consolidated basis with West Central Cooperative, maintain at all
times compliance with those financial covenants set for in that Master Loan
Agreement dated November 15, 2001 between West Central Cooperative and
CoBank, as said Master Loan Agreement may be amended from time to time.

 

Fiscal Year:
Borrower’s fiscal year begins on January 1 of each calendar year and ends
on the last day of December of each calendar year.

 

Guarantor: shall
mean West Central Cooperative.

 

Guarantor Collateral:
shall mean the real and personal property of Guarantor, whether now owned or
hereafter acquired, upon which CoBank is to have a first (unless specifically
provided otherwise) lien and security interest.

 

Guaranty: shall
mean that form of guarantee agreement by which Guarantor unconditionally guarantees
Borrower’s obligations to CoBank under this Agreement.

 

Initial Expiry Date:
shall mean November 15, 2002.

 

Maturity Date:
shall mean November 15, 2016.

 

 

Notice to Borrower:
Notice shall be sent to Borrower and CoBank in accordance with the Reimbursement
Agreement as follows:

 

 

	
  Borrower:

  	
   

  	
  InterWest, L.C.

  	
   

  	
  CoBank, ACB

  
	
   

  	
   

  	
  406 First Street

  	
   

  	
  5500 South Quebec Street

  
	
   

  	
   

  	
  P.O. Box 68

  	
   

  	
  P.O. Box 5101

  
	
   

  	
   

  	
  Ralston, Iowa 51459

  	
   

  	
  Denver, Colorado 80217

  
	
   

  	
   

  	
  Att: Nile Ramsbottom

  	
   

  	
  Att: Credit Information 

  Services

  

 

Performance Date:
shall mean November 15, 2001.

 

Project: means the
acquisition and installation of Equipment and/or the construction of
Improvements, which Equipment and Improvements are to be used by Borrower in
connection with a soy methyl ester processing facility located in the County of
Carroll, Iowa.

 

Project Completion Date: the
date by which construction of the Project is to be completed, which shall be no
later than August 31, 2002.

 

Projections: the
projections provided to CoBank with respect to projected operations and
financial results of operations of Borrower in the event of the consummation of
the Bond Transaction and identified as follows: capital expenditures
projections to be provided annually pursuant to Section 9.2.2A of the
Agreement.

 

Redemption Date means
the date each year that Borrower is required to redeem Bonds, beginning November 1,
2002 and each November 1 thereafter through and including November 1,
2016.

 

Redemption Amount means
the total amount of Bonds redeemed on any Redemption Date, which amount for
each year is set forth in Exhibit A hereto.

 

Redemption Notification Date:
shall be the date that is 35 days prior to any Redemption Date.

 

State of Formation: is,
with respect to Borrower, the state of Iowa.

 

Statement Date: shall
mean the date of Borrower’s most recent financial statements provided to
CoBank.

 

 

Exhibit A

To

Schedule 2 to Reimbursement Agreement

 

 

	
  Redemption Date

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  November 1,
  2002

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2003

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2004

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2005

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2006

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2007

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2008

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2009

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2010

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2011

  	
   

  	
  $

  	
  330,000

  	
   

  
	
  November 1,
  2012

  	
   

  	
  $

  	
  340,000

  	
   

  
	
  November 1,
  2013

  	
   

  	
  $

  	
  340,000

  	
   

  
	
  November 1,
  2014

  	
   

  	
  $

  	
  340,000

  	
   

  
	
  November 1,
  2015

  	
   

  	
  $

  	
  340,000

  	
   

  
	
  November 1,
  2016

  	
   

  	
  $

  	
  340,000

  	
   

  

 

 

Exhibit 1.33

Form of Confirming Letter of Credit

 

See Attached

 

 

 

IRREVOCABLE LETTER OF CREDIT

 

Date: November 15, 2001

 

Wells Fargo Bank
Northwest, National Association

1300 SW Fifth Avenue, 11th Floor

MAC P6101-114

Portland, OR 97201

 

Letter
of Credit No. SB104495

 

Attention:
Corporate Trust Department

 

Ladies and
Gentlemen:

 

We are instructed by CoBank, ACB (“CoBank”) to advise you that we have
issued our Irrevocable Letter of Credit in your favor, as Trustee under the
Trust Indenture dated as of November 15, 2001 (the “Indenture”) between
Iowa Finance Authority (the “Issuer”) and you, pursuant to which $5,000,000 in
aggregate principal amount of the Issuer’s Variable Rate Demand Industrial
Development Revenue Bonds (InterWest, L.C. Project), Series 2001 (the “Bonds”)
were issued, and you are hereby irrevocably authorized to draw on Bayerische
Hypo- und Vereinsbank AG, New York Branch, Irrevocable Letter of Credit Number
SB104495 for the account of CoBank, available by your drafts at sight upon the
terms and conditions hereinafter set forth, an aggregate amount not exceeding
US$5,147,945.21, of which (A) an aggregate amount not exceeding Five
Million Dollars (US$5,000,000) may be drawn upon for payment of (i) the
unpaid principal amount of the Bonds, and/or (ii) that portion of the
purchase price of the Bonds corresponding to the principal thereof when
delivered to the Trustee in accordance with the provisions of the Indenture and
the Bonds and which (together with the interest portion of such purchase price
payable on such Bonds pursuant to the provision of the Indenture and the Bonds)
comprises a Remarketing Drawing (as defined below), and (B) an aggregate
amount not exceeding One Hundred Forty-Seven Thousand Nine Hundred Forty-Five
and 21/100 Dollars (US$147,945.21) may be drawn upon for payment of (i) up
to one hundred eight (108) days’ accrued interest on the Bonds at the maximum
interest rate of ten percent (10%) per annum calculated on the basis of the
actual number of days elapsed over a year of 365 or 366 days (as appropriate)
(the “Maximum Interest Coverage”), borne by the Bonds, and/or (ii) that
portion of a Remarketing Drawing corresponding to the interest portion thereof.
The aggregate amount available to be drawn from time to time hereunder is the “Stated
Amount.”

 

This Letter of Credit will expire at 5:00 p.m. New York City time,
on the date (the “Expiration Date”) that is the earliest of: (i) November 15,
2002 (the “Scheduled Expiration Date”) or (ii) the date you surrender this
Letter of Credit to us for cancellation.

 

Funds under this Letter of Credit are available to you against a sight
draft drawn on us, stating on its face: “Drawn under Bayerische Hypo- und
Vereinsbank AG, New York Branch Irrevocable Letter of Credit No. SB104495”
and stating the date for payment of the funds so drawn, accompanied by a
written certificate signed by you in the form of one or more of the Annexes
attached hereto appropriately completed. Presentation of each such draft and
certificate shall be made at our office located at 150 East 42nd
Street New York, N.Y. 10017-4679, between 9:00 a.m. and 5:00 p.m.
(New York City time) or by facsimile transmission to (212) 672-5506, Attention:
Antoinette Wynn and David Chow, on a Business Day (as hereinafter defined). We
hereby agree that each draft drawn under and in compliance with the terms of
this Letter of Credit will be duly honored by us upon delivery of such sight

 

 

draft and the
certificate(s) as specified below if presented at such office on or before the
Expiration Date, as follows:

 

(A)         if the
drawing is being made for payment of principal of the Bonds, whether due upon
maturity, prepayment, acceleration, redemption or otherwise (a “Principal
Drawing”), a written certificate signed by you in the form of Annex I
attached hereto appropriately completed.

 

(B)           if the
drawing is being made for the payment of the “Purchase Price” (as defined in the
Indenture) of the Bonds delivered or deemed delivered to the Trustee for
purchase pursuant to the Indenture (a “Remarketing Drawing”), a written
certificate signed by you in the form of Annex II attached hereto
appropriately completed.

 

(C)           if the
drawing is being made for a payment of interest on the Bonds (an “Interest
Drawing”),  a written certificate
signed by you in the from of Annex III
attached hereto appropriately completed.

 

If a drawing is made by you hereunder at or prior to 2:00 p.m. New
York City time, on a Business Day, and provided that such drawing and the
documents presented in connection therewith conform to the terms and conditions
hereof, payment shall be made to you of the amount specified, in immediately
available funds, by 10:00 a.m. New York City time, on the succeeding
Business Day. If a drawing is made by you hereunder after 2:00 p.m. New
York City time, on a Business Day, and provided that such drawing and the
documents presented in connection therewith conform to the terms and conditions
hereof, payment shall be made to you of the amount specified, in immediately
available funds, by 10:00 a.m. New York City time, on the second Business
Day thereafter. Notwithstanding the foregoing, if a drawing with respect to a
Remarketing Drawing (and accompanying Interest Drawing) is made by you
hereunder at or prior to 11:00 a.m. New York City time on a Business Day,
and provided that such drawing and the documents presented in connection
therewith conform to the terms and conditions hereof, payment shall be made to
you of the amount specified, in immediately available funds, not later than
3:00 p.m. New York City time on the same Business Day. If requested by
you, payment under this Letter of Credit may be made by deposit of immediately
available funds into a designated account that you maintain with us. All
payments under this Letter of Credit shall be made in our own funds.
Notwithstanding any other provisions of this Letter of Credit, payment shall be
deemed to have been made when we have entered such payment instructions on the
Federal Reserve wire or, in the event such payment instructions specify an
account maintained with us, when we have credited such account. For purposes of
this Letter of Credit, a Business Day shall mean any day other than (a) a
Saturday or Sunday or (b) a day on which banks located in New York, New
York are required or authorized by law to be closed.

 

Multiple drawings are permitted on this Letter of Credit, but no
drawing shall exceed the Stated Amount.

 

The Stated Amount of this Letter of Credit shall be automatically,
immediately and permanently reduced as to the amount available for payment with
respect to Principal Drawings, by the amount of any payment by us of a
Principal Drawing and, as to the amount available for payment with respect to
Interest Drawings, by the amount equal to the Maximum Interest Coverage on a
Principal Drawing. The amount available for payment with respect to Interest
Drawings shall also be automatically and immediately reduced by the amount of
any payment by us of an Interest Drawing to the extent made with respect to the
principal amount of Bonds which are not subject to a corresponding Principal
Drawing.

 

The Stated Amount of this Letter of Credit shall further be
automatically and immediately reduced, as to the amount available for payment
with respect to Principal Drawings, by the principal

 

2

 

 

amount of the
Purchase Price of Bonds paid through a Remarketing Drawing and, as to the
amount available for payment with respect to Interest Drawings, by an amount
equal to the interest portion of the Purchase Price of Bonds paid through a
Remarketing Drawing.

 

Only you, as Trustee, or your transferee pursuant to the terms of this
Letter of Credit, may make a drawing under this Letter of Credit. Upon the
payment to you, of the amount specified in a draft drawn hereunder, we will be
fully discharged of our obligation under this Letter of Credit with respect to
such draft and shall not thereafter be obligated to make any further payments
under this Letter of Credit with respect to such draft to you or any other
person who may have made to you or makes to you a demand for payment of
principal of or interest on any Bond. By paying to you an amount demanded in
such draft we make no representation as to the correctness of the amount
demanded in such draft.

 

This Letter of Credit applies only to the payment of (a) principal
of or purchase price for the Bonds and (b) an amount equal to up to one
hundred eight (108) days’ interest accruing on the then-outstanding Bonds, at a
maximum interest rate of ten percent (10%) per annum, on or prior to the
expiration of this Letter of Credit, and does not apply to any interest that
may accrue thereon or any principal or purchase price which may be payable with
respect thereto after such date.

 

Upon the earliest of (i) the honoring by us of any drawing
hereunder equal to the then Stated Amount; (ii) the honoring by CoBank of
the final drawing available to be made under its Irrevocable Letter of Credit No. 00614008
(the “CoBank Letter of Credit”); (iii) your surrender of this Letter of
Credit to us for cancellation as a result of your acceptance of an Alternate
Confirming Letter of Credit (as defined in the Indenture); or (iv) the
Expiration Date, this Letter of Credit shall automatically terminate. This
Letter of Credit is not a confirmation of the CoBank Letter of Credit. We have
been advised by CoBank that (i) for convenience this Letter of Credit is
referred to in the Indenture as a “Confirming Letter of Credit” and (ii) you
do not intend to draw on this Letter of Credit unless and until the CoBank
Letter of Credit has been wrongfully dishonored or repudiated.

 

This Letter of Credit shall be subject to the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce, Publication No. 500 (to the extent that such provisions are
consistent with this Letter of Credit), and, to the extent not inconsistent
therewith, the laws of the State of New York. Communications with respect to
this Letter of Credit shall be in writing and shall be addressed to us at 150
East 42nd Street, New York, N.Y. 10017-4679, Attention: Antoinette
Wynn and David Chow (or at such other address as may be designated by us to you
in a written notice).

 

This Letter of Credit is transferable in its entirety (but not in part)
to any transferee who has succeeded to you as Trustee under the Indenture and
such transferred Letter of Credit may be successively transferred. Transfer of
this Letter of Credit to such transferee shall be effected upon presentation to
us of this original Letter of Credit (including any and all accepted
amendments) accompanied by the transfer form attached hereto as Annex IV.

 

[The remainder of this page intentionally left
blank.]

 

3

 

This Letter of Credit sets forth in full our undertaking to you (but
not your duties and liabilities to us hereunder or otherwise), and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the certificate(s) and
the sight draft(s) referred to herein; and any such reference shall not be
deemed to incorporate herein by reference any document, instrument or agreement
except for such certificate(s) and such sight draft(s).

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYERISCHE
  HYPO- UND 

  VEREINSBANK AG, New York Branch

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Print
  Name: 

  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Print
  Name: 

  Title:

  

 

4

 

Annex I (Principal Drawing) to Bayerische Hypo- und

Vereinsbank AG, New York Branch

Letter of Credit

 

CERTIFICATE FOR THE PAYMENT OF THE PRINCIPAL OF $5,000,000
VARIABLE RATE 

DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (INTERWEST, L.C. PROJECT), 

SERIES 2001 (THE “BONDS”)

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”) hereby certifies to
Bayerische Hypo- und Vereinsbank AG, New York Branch (the “Bank”) with
reference to Letter of Credit No. SB104495 (the “Letter of Credit”; any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit) issued by the Bank in favor of the
Trustee that:

 

(1)                                               The
Trustee is the Trustee under the Indenture for the owners of the Bonds.

 

(2)                                               The
Trustee is making a drawing under the Letter of Credit for the benefit of the
owners of the Bonds and with respect to the payment of principal of the Bonds.

 

(3)                                               The
amount of the sight draft accompanying this Certificate does not exceed the
amount available on the date hereof to be drawn under the Letter of Credit in
respect of the payment of principal of the Bonds.

 

(4)                                               The
amount of the sight draft accompanying this Certificate was computed in
accordance with the terms and conditions of the Bonds and the Indenture.

 

(5)                                               The
amount of the sight draft accompanying this Certificate is equal to the total
amount of principal due on the Bonds as of the date of this Certificate.

 

(6)                                               The
Trustee acknowledges that upon payment of the sight draft accompanying this
Certificate the amount available to be drawn under the Letter of Credit with
respect to the principal of the Bonds shall be reduced by an amount equal to
such payment and shall not be reinstated.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the            
day of                      ,
                 .

 

	
   

  	
  WELLS
  FARGO BANK NORTHWEST,

  NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Print
  Name: 

  Title:

  

 

 

 

Annex II (Remarketing Drawing) to Bayerische Hypo- und

Vereinsbank AG, New York Branch

Letter of Credit

 

CERTIFICATE FOR THE PAYMENT OF THE PURCHASE PRICE OF
$5,000,000 VARIABLE 

RATE DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (INTERWEST, L.C.

PROJECT), SERIES 2001 (THE “BONDS”)

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”) hereby certifies to
Bayerische Hypo- und Vereinsbank AG, New York Branch (the “Bank”) with
reference to Letter of Credit No. SB104495 (the “Letter of Credit”; any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit, except as otherwise noted) issued by the
Bank in favor of the Trustee that:

 

(1)                                               The
Trustee is the Trustee under the Indenture for the owners of the Bonds.

 

(2)                                               The
Trustee is making a drawing under the Letter of Credit for the benefit of the
owners of the Bonds and with respect to the “Purchase Price” (as defined in the
Indenture) of the Bonds which have been duly delivered or deemed delivered to
the Trustee.

 

(3)                                               The
amount of the sight draft accompanying this Certificate does not exceed the
amount available on the date hereof to be drawn under the Letter of Credit in
respect of the payment of the Purchase Price of the Bonds.

 

(4)                                               The
Trustee (a) is in possession of the Bonds (or will be in possession of the
Bonds on the Mandatory Tender Date (as defined in the Indenture)) with an
aggregate principal amount outstanding equal to the portion of the amount of
the draft accompanying this Certificate representing the principal portion of
the Purchase Price of such Bonds and, unless the Bank has notified the Trustee
in writing that it has been reimbursed in full for the amount of this
Remarketing Drawing, the Trustee will deliver or cause to be delivered to the
Bank, or to its designated agent within three (3) Business Days after the
date of this Certificate, a principal amount of such Bonds, registered in the
name of InterWest, L.C. (the “Company”) as pledgor and the Bank or an affiliate
of the Bank as pledgee, equal to the amount of the draft accompanying this
Certificate representing the principal portion of that purchase price of such
Bonds for which the Bank has not been reimbursed on the date of such
Remarketing Drawing; (b) acknowledges the pledge by the Company to the
Bank of the Bonds to be delivered pursuant to subparagraph (a); and (c) agrees
that all payments of principal and interest made on such Bonds shall be made to
the Bank, so long as such party is the pledgee of such Bonds.

 

(5)                                               The
amount of the sight draft accompanying this Certificate was computed in
accordance with the terms and conditions of the Bonds and the Indenture.

 

(6)                                               The
amount of the sight draft accompanying this Certificate is equal to the total
amount of the Purchase Price of the Bonds as of the date of this Certificate.

 

[The remainder of this page intentionally left blank.]

 

 

(7)                                               The
Trustee acknowledges that upon payment of the sight draft accompanying this
Certificate the amount available to be drawn under the Letter of Credit with
respect to the principal of the Bonds shall be reduced by an amount equal to
such payment and shall not be reinstated.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the           
day of                   ,
           .

 

	
   

  	
  WELLS
  FARGO BANK NORTHWEST,

  NATIONAL ASSOCIATION , as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print
  Name:

  Title:

  

 

2

 

Annex III (Interest Drawing) to Bayerische Hypo- und

Vereinsbank AG, New York Branch

Letter of Credit

 

CERTIFICATE FOR THE PAYMENT OF INTEREST ON $5,000,000
VARIABLE RATE DEMAND

INDUSTRIAL DEVELOPMENT REVENUE BONDS (INTERWEST, L.C. PROJECT), SERIES 2001

(THE “BONDS”)

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”) hereby certifies to
Bayerische Hypo- und Vereinsbank AG, New York Branch (the “Bank”) with
reference to Letter of Credit No. SB 104495 (the “Letter of Credit”; any
capitalized term used herein and not defined shall have its respective meaning
as set forth in the Letter of Credit) issued by the Bank in favor of the
Trustee that:

 

(1) The Trustee is the Trustee under the Indenture for the owners
of the Bonds.

 

(2) The Trustee is making a drawing under the Letter of Credit for
the benefit of the owners of the Bonds and with respect to the payment of accrued
and unpaid interest on the Bonds.

 

(3) The amount of the sight draft accompanying this Certificate
does not exceed the amount available on the date hereof to be drawn under the
Letter of Credit in respect of payment of interest accrued on the Bonds on or
prior to the date of the draw.

 

(4) The amount of the sight draft accompanying this Certificate
was computed in accordance with the terms and conditions of the Bonds and the
Indenture and does not exceed $147,945.21.

 

(5) The amount of the sight draft accompanying this Certificate is
equal to the total amount of interest due on the Bonds as of the date of this
Certificate.

 

(6) The Trustee acknowledges that upon payment of the sight draft
accompanying this Certificate the amount available to be drawn under the Letter
of Credit with respect to the interest on the Bonds shall be reduced by an
amount equal to such payment and shall be reduced by an amount equal to such
payment and shall not be reinstated.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the           
day of                     ,
            .

 

 

	
   

  	
  WELLS
  FARGO BANK NORTHWEST, 

  NATIONAL ASSOCIATION, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print
  Name:

  Title:

  

 

Annex IV to Bayerische Hypo- und

Vereinsbank AG, New York Branch

Letter of Credit

 

Bayerische Hypo-
und Vereinsbank AG 

New York Branch 

150 East 42nd Street 

New York, N.Y. 10017-4679

 

Re:                                            Bayerische
Hypo- und Vereinsbank AG New York Branch Letter of Credit No. SB104495

 

Ladies and
Gentlemen:

 

For value received, the undersigned beneficiary hereby irrevocably
transfers to:

 

	
   

  
	
  [Exact Name of Transferee]

  
	
   

  
	
   

  
	
  [Exact Address]

  

 

all rights of the
undersigned beneficiary to draw under the above Letter of Credit in its
entirety. Said transferee has succeeded the undersigned as Trustee under the
Trust Indenture dated as of November 15, 2001 between Iowa Finance
Authority and Wells Fargo Bank Northwest, National Association, as Trustee,
pertaining to the $5,000,000 Variable Rate Demand Industrial Development
Revenue Bonds (InterWest, L.C. Project), Series 2001.

 

By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall
have the sole rights as beneficiary thereof, including sole rights relating to
any amendments (whether increases or extensions or other amendments and whether
now existing or hereafter made). All amendments are to be advised directly to
the transferee without necessity of any consent of or notice to the undersigned
beneficiary.

 

The original Letter of Credit (including any and all accepted
amendments) is returned herewith, and we ask you to either (i) endorse the
transfer on the reverse thereof and forward it directly to the transferee with
your customary notice of transfer or (ii) issue a replacement letter of
credit to the transferee on substantially the same terms and conditions as the
transferred Letter of Credit (in which event the transferred Letter of Credit
shall have no further force or effect).

 

 

	
   

  	
   

  	
  Yours
  very truly,

  
	
  SIGNATURE
  AUTHENTICATED

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Bank)

  	
   

  	
  Signature
  of Beneficiary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Authorized
  Signature)

  	
   

  	
   

  

 

 

Exhibit 1.71 

Form of Letter of Credit

 

See Attached

 

 

 

LETTER OF CREDIT

 

CoBank, ACB,
Irrevocable Letter of

Credit No. 00614008

Dated as of November 15, 2001

 

Wells Fargo Bank
Northwest,

   National Association, as Trustee 

Corporate Trust Department 

1300 SW Fifth Avenue, 11th Floor 

MAC P6101-114 

Portland, OR 97201

 

Attention:     Corporate
Trust Department

 

Ladies and
Gentlemen:

 

CoBank, ACB (sometimes
hereinafter referred to as the “Bank”), hereby establishes in your favor for
the account of InterWest, L.C., an Iowa limited liability company (the “Company”),
its Irrevocable Letter of Credit No. 00614008 this “Letter of Credit”) in
a maximum amount of up to $5,147,945.21 (as more fully described below)
effective immediately and expiring at 4:00 P.M., Mountain Time, on November 15,
2002 (the “Expiration Date”), which Expiration Date shall automatically be
extended for successive terms of one (1) year unless the Bank, at least
one hundred five (105) days prior to the Expiration Date or the end of any
successive renewal term, notifies you and the Company in writing, that the Bank
will not extend the Expiration Date of this Letter of Credit (as used herein,
the Expiration Date shall mean the Expiration Date as extended), unless
terminated earlier in accordance with the provisions hereof or unless extended
by us; provided, however, in no event shall the Expiration Date extend beyond November 15,
2016.

 

This Letter of
Credit is being issued in connection with that certain Trust Indenture (the “Trust
Indenture”) between Iowa Finance Authority (the “Issuer”), and you dated as of November 1,
2001, pursuant to which the Issuer has agreed to authorize, issue and sell
certain Variable Rate Demand Industrial Development Revenue Bonds (InterWest,
L.C. Project) Series 2001 (the “Bonds”) in the aggregate principal amount
of $5,000,000.00, the payment of which is secured by, among other things, this
Letter of Credit. All terms used herein with initial capitalization where not
required by rules of grammar or syntax, but not defined herein, shall have
the meanings ascribed thereto by the Trust Indenture.

 

As used in this
Letter of Credit, the term “Business Day” shall mean any day of the year, other
than a Saturday or Sunday, or a day on which banks located in the city in which
either the principal corporate trust office of the Trustee pursuant to the
Trust Indenture is located or the principal office of the Bank is located is
required or authorized by law to be closed or a day on which The New York Stock
Exchange is closed.

 

You, as Trustee
pursuant to the Trust Indenture, are hereby irrevocably authorized to draw on
us, for the account of the Company, in accordance with the terms and conditions
hereof and

 

 

subject to increases and reductions in amounts as hereinafter set
forth, an aggregate amount not exceeding $5,147,945.21 (the “Stated Amount”),
of which (A) an aggregate amount not exceeding $5,000,000.00 may be drawn
upon for payment of (i) the unpaid principal amount of the Bonds (“Principal
Drawing”), and/or (ii) that portion of the purchase price of the Bonds
corresponding to the principal thereof when delivered to the Trustee in
accordance with the provisions of the Indenture and the Bonds and which
(together with the interest portion of such purchase price payable on such
Bonds pursuant to the provision of the Indenture and the Bonds) comprises a
Remarketing Drawing (as defined below), and (B) an aggregate amount not
exceeding $147,945.21 may be drawn upon for payment of (i) up to
one-hundred and eight (108) days’ accrued interest on the Bonds at the maximum
interest rate of ten percent (10%) per annum calculated on the basis of the
actual number of days elapsed over a 365-day or 366-day year, as applicable,
borne by the Bonds (“Interest Drawing”), and/or (ii) that portion of a
Remarketing Drawing corresponding to the interest portion thereof

 

Funds under this Letter of Credit are only available to you against
your sight draft(s) drawn on us, substantially in the form of Exhibit 1
hereto, stating on their face; “Drawn under CoBank, ACB Letter of Credit No. 00614008”
and upon your presenting to us one or more of the following written
certificates:

 

(A)    If the drawing is being made as a Principal
Drawing for payment of principal of the Bonds whether due upon maturity,
prepayment, acceleration, redemption or otherwise, a written certificate signed
by you in the form of Exhibit 2 attached hereto appropriately completed.

 

(B)    If the drawing is being made for the payment
of the purchase price of the Bonds delivered or deemed delivered to the Trustee
for purchase pursuant to Section 3.04 of the Trust Indenture, a written
certificate signed by you in the form of Exhibit 3 attached hereto
appropriately completed (a “Remarketing Drawing”).

 

(C)    If the drawing is being made as an Interest
Drawing for a payment of interest on the Bonds, a written certificate signed by
you in the form of Exhibit 4 attached hereto appropriately completed.

 

(D)    If the drawing is being made as a Premium
Drawing for a payment of premium on the Bonds, a written certificate signed by
you in the form of Exhibit 9 attached hereto appropriately completed.

 

Presentation of such draft(s) and certificate(s) shall be made on a
Business Day at our office located at 5500 So. Quebec Street, Greenwood
Village, Colorado 80111 (Attention: International Banking Group, Trade
Services, Letter of Credit Department) or any other place in the State of
Colorado which may be designated by us by written notice delivered to you. If
we receive any of your drafts drawn hereunder at such office, all in strict
conformity with the terms and conditions of this Letter of Credit, on or prior
to the termination hereof, we will honor the same and make payment hereunder.
If a draft and certificate are presented to us (which may be by facsimile
followed next day with originals) as aforesaid by 11:00 A.M., Mountain
Time, payment will be made, in immediately available funds on the same Business
Day, otherwise, payment will be made, in immediately available funds, on the
Business Day next following presentment. If requested by you, payment may be
made by deposit of such

 

 

 

funds into a designated bank account that you maintain. All payments
under this Letter of Credit will be made with the Bank’s own funds.

 

Upon payment of a drawing hereunder, the Stated Amount of this Letter
of Credit shall be reduced by the amount of such payment except as follows:

 

(a)           In connection with
any Remarketing Drawing, upon receipt by the Trustee for the benefit of the
Company of Bonds in the aggregate principal amount equal to the unpaid amount
of the principal portion of such Remarketing Drawing, registered in the name of
the Company as pledgor and the Bank as pledgee, your right to draw on us by a
Remarketing Drawing shall automatically be reinstated in an amount equal to the
principal portion plus the interest portion of such Remarketing Drawing, and
this automatic reinstatement of your right to make a Remarketing Drawing shall
be applicable to successive Remarketing Drawings so long as this Letter of
Credit shall have not terminated as set forth below.

 

(b)           In connection with
any Interest Drawing, if you have not received from us within five (5) business
days from the date of your drawing a notice from us in the form of the
certificate attached hereto as Exhibit 5 appropriately completed,
indicating that we have not reinstated the Letter of Credit for all amounts
drawn under such Interest Drawing, your right to draw on us by an Interest
Drawing shall be automatically reinstated in such amount and this automatic
reinstatement of your right to make an Interest Drawing shall be applicable to
successive Interest Drawings so long as this Letter of Credit shall have not
terminated as set forth below.

 

The Stated Amount of this Letter of Credit will be permanently reduced
by the amount of any Principal Drawing and an amount equal to one hundred eight
(108) days’ interest on the amount of such Principal Drawing at a maximum rate
of ten percent (10%) per annum.

 

Only you, as Trustee, or your transferee pursuant to the terms of this
Letter of Credit, may make a drawing under this Letter of Credit. Upon the
payment to you, as Trustee, of the amount specified in a draft drawn hereunder,
we will be fully discharged of our obligation under this Letter of Credit with
respect to such draft and shall not thereafter be obligated to make any further
payments under this Letter of Credit in respect to such draft to you or any other
person who may have made to you or makes to you a demand for payment of
principal of or interest on any Bond. By paying to you an amount demanded in
such draft we make no representation as to the correctness of the amount
demanded in such draft.

 

This Letter of Credit applies only to the payment of (a) principal
of the Bonds and (b) up to one-hundred and eight (108) days’ interest
accruing on the then-outstanding Bonds, at a maximum interest rate of ten
percent (10%) per annum, on or prior to the expiration of this Letter of
Credit, and does not apply to any interest that may accrue thereon or any
principal which may be payable with respect thereto after such date.

 

Upon the earliest of (i) the making by you of the final drawing
available to be made hereunder, (ii) our receipt of a written certificate
signed by your officer and an officer of the Company in the form of Exhibit 6
hereto appropriately completed, stating that: (a) no Bonds are outstanding
within the meaning of the Trust Indenture and (b) such representatives are
duly authorized to sign such certificate on behalf of you and the Company,
respectively, (iii) the date on which an Alternate Letter of Credit (as
defined in the Trust Indenture) becomes the “Letter of Credit” for all purposes
under the Trust Indenture and following our receipt of

 

 

a written certificate signed by your officer and an officer of the
Company in the form of Exhibit 7 hereto appropriately completed: (a) stating
that an Alternate Letter of Credit has been accepted by the Trustee, (b) setting
forth the date on which such Alternate Letter of Credit becomes the “Letter of
Credit” and (c) stating that such representatives are duly authorized to
sign such certificate on behalf of you and the Company, respectively, and (iv) the
Expiration Date, this Letter of Credit shall automatically terminate and be
delivered to us for cancellation.

 

This Letter of Credit is subject to the “Uniform Customs and Practice
for Documentary Credits, International Chamber of Commerce (1993 Revision)” (the
“Uniform Customs”) in effect on the date of issuance or as may be revised from
time to time thereafter. This Letter of Credit shall be deemed to be made under
the laws of the State of Colorado, and shall, as to matters not governed by the
Uniform Customs, be governed by and construed in accordance with the laws of
the State of Colorado.

 

Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at 5500 So. Quebec Street, Greenwood
Village, Colorado, Attention: International Banking Group, Trade Services,
Letter of Credit Department, specifically referring to the number of this
Letter of Credit.

 

Notwithstanding anything in Article 48(g) of the Uniform
Customs to the contrary, this Letter of Credit is transferable in its entirety
to any transferee who has succeeded you as Trustee under the Trust Indenture.
Each letter of credit issued upon any such transfer may be successively
transferred. Transfer of the available balance under this Letter of Credit to
such transferee shall be effected by the presentation to us of this Letter of
Credit accompanied by a certificate substantially in the form of Exhibit 8
attached hereto. Following such presentation, and as soon as this original
Letter of Credit is returned to us and we have been paid our customary transfer
fee, we shall forthwith transfer the same to your transferee or, if so
requested by your transferee, issue an irrevocable letter of credit to your
transferee with provisions therein consistent with those of this Letter of
Credit.

 

This Letter of Credit sets forth in full our undertaking and shall not
in any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Bonds and the Trust Indenture), except only the certificate(s)
and the draft(s) referred to herein; and any such reference shall not be deemed
to incorporate herein by reference any document, instrument or agreement except
for such certificate(s) and such draft(s).

 

 

	
  Very
  truly yours, 

  
	
   

  
	
  COBANK,
  ACB

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  

 

 

EXHIBIT 1

 

SIGHT DRAFT

 

                                 ,
20    

 

FOR VALUE RECEIVED

Pay on Demand to:                                                                                

U.S.                                            Dollars
(U.S. $                         )

Charge to account of CoBank, ACB

Drawn under CoBank, ACB Letter of Credit No. 00614008

 

TO: CoBank, ACB

Attention: International Banking Group.

Trade Services,

Letter of Credit Department 
    5500 So. Quebec Street 
    Englewood, Colorado 80111

 

The sum drawn does not exceed the difference between (I) the maximum
aggregate amount to be drawn under the Letter of Credit less (II) the aggregate
amount of all previous drawings made under the Letter of Credit for which
CoBank, ACB has not reinstated.

 

	
   

  	
  ,

  
	
  as
  Trustee

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

 

EXHIBIT 2

 

CERTIFICATE FOR “PRINCIPAL DRAWING”

(PRINCIPAL UPON MATURITY, PREPAYMENT, ACCELERATION, REDEMPTION OR OTHERWISE)

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”), hereby certifies
to CoBank, ACB (the “Bank”) with reference to CoBank, ACB Irrevocable Letter of
Credit No. 00614008 (the “Letter of Credit,” the capitalized terms defined
therein and not defined herein being used as therein defined)  issued by the Bank in favor of the
Trustee that:

 

(1)           The Trustee is the
Trustee under the Trust Indenture for the holders of the Bonds. The total amount
of Bonds outstanding (as defined in the Trust Indenture) is $                                .

 

(2)           The Trustee is
making a drawing under the Letter of Credit with respect to the payment of
principal upon the Bonds.

 

(3)           The amount of
principal of the Bonds which is due and payable or which will become due and
payable within five (5) Business Days after the date hereof is $                           .
The amount of the draft accompanying this Certificate does not exceed such
amount.

 

(4)           The amount of the
draft accompanying this Certificate, together with the aggregate of all prior
payments made pursuant to drawings under the Letter of Credit for the payment
of the principal of the Bonds, does not exceed $                              .

 

(5)           This is a (partial)
(final) drawing.

 

(6)           The amount of the
draft accompanying this Certificate, was computed in accordance with the terms
and conditions of the Bonds and the Trust Indenture.

 

(7)           Upon receipt by the
Trustee of the amount demanded hereby, (a) the Trustee will apply it
directly to the payment when due of the appropriate amount of principal owing
on account of the Bonds pursuant to the Trust Indenture, (b) no portion of
it shall be applied by the Trustee for any other purpose, and (c) no
portion of it shall be commingled with other funds held by the Trustee. This
drawing is made in accordance with the provisions of the Trust Indenture.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the              
day of                       
20     .

 

	
   

  	
  , as Trustee

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

 

EXHIBIT 3

 

CERTIFICATE FOR “REMARKETING DRAWING”

(PURCHASE PRICE OF BONDS DELIVERED TO TRUSTEE FOR PURCHASE)

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”), hereby certifies
to CoBank, ACB (the “Bank”) with reference to CoBank, ACB Irrevocable Letter of
Credit No. 00614008 (the “Letter of Credit,” the capitalized terms defined
therein and not defined herein being used as therein defined) issued by the
Bank in favor of the Trustee that:

 

(1) The Trustee is the Trustee under the Trust Indenture for the
holders of the Bonds. The total aggregate principal amount of the Bonds
Outstanding (as defined in the Indenture) is $                      .

 

(2) The Trustee is making a drawing under the Letter of Credit to
pay, pursuant to the Indenture, the purchase price of the Bonds which have been
duly delivered to the Trustee for purchase or are deemed to have been so
delivered pursuant to the terms of the Indenture.

 

(3) The Trustee (a) is in possession of the Bonds (or will be
in possession of Bonds on the Tender Date) with an aggregate principal amount
outstanding equal to the portion of the amount of the draft accompanying this
Certificate representing the principal portion of the purchase price of such
Bonds and, unless the Bank has notified the Trustee in writing that it has been
reimbursed in full for the amount of this Remarketing Drawing, the Trustee will
deliver or cause to be delivered to the Bank, or to its designated agent within
three (3) Business Days after the date of this Certificate, a principal
amount of such Bonds, registered in the name of the Company as pledgor and the
Bank or an affiliate of the Bank as pledgee, equal to the amount of the draft
accompanying this Certificate representing the principal portion of the
purchase price of such Bonds for which the Bank has not been reimbursed on the
date of such Remarketing Drawing; (b) acknowledges the pledge by the
Company to the Bank of the Bonds to be delivered pursuant to subparagraph (a);
and (c) agrees that all payments of principal and interest made on such
Bonds shall be made to the Bank, so long as such party is the pledgee of such
Bonds.

 

(4) The aggregate principal amount of the Bonds delivered or
deemed delivered to the Trustee for purchase pursuant to the Trust Indenture is
$                    .
The interest portion of the purchase price for such Bonds, if any, is $                        .
The amount of the draft accompanying this Certificate does not exceed the sum
of such amounts due as the purchase price of such Bonds.

 

(5) The principal amount of the draft accompanying this
Certificate, together with the aggregate of all prior principal payments made
pursuant to Remarketing Drawings which have not been reinstated under the
Letter of Credit for the payment of the principal portion of the purchase price
of the Bonds and Principal Drawings, does not exceed $                     .
The interest amount of the draft accompanying this Certificate, together with
the aggregate of all prior interest payments made pursuant to Remarketing
Drawings which have not been reinstated under the Letter of Credit for the
interest portion of the purchase price of the Bonds and Interest Drawings does
not exceed $             .

 

 

 

(6) Upon receipt by the Trustee of the amount demanded hereby, (a) the
Trustee, will apply it directly for the purpose of payment of the purchase
price of the Bonds referenced in Paragraph 2 hereof, (b) no portion of it
shall be applied by the Trustee for any other purpose, and (c) no portion
of it shall be commingled with other funds held by the Trustee. This drawing is
made in accordance with the provisions of the Indenture.

 

(7) The amount of the draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the
Indenture.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the         day of                       ,
20     .

 

	
   

  	
  ,

  
	
  as
  Trustee

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

 

EXHIBIT 4

 

CERTIFICATE FOR “INTEREST
DRAWING” (ACCRUED INTEREST)

 

The undersigned, a
duly authorized officer of Wells Fargo Bank Northwest, National Association, as
Trustee (the “Trustee”), hereby certifies to CoBank, ACB (the “Bank”) with
reference to  CoBank, ACB
Irrevocable Letter of Credit No. 00614008 (the “Letter of Credit,” the
capitalized terms defined therein and not defined herein being used as therein
defined) issued by the Bank in favor of the Trustee that:

 

(1) The Trustee is the Trustee under the Trust Indenture for the
holders of the Bonds. The total amount of Bonds outstanding (as defined in the
Trust Indenture) is $                       
and the Trustee is making a drawing under the Letter of Credit in respect of
payment of accrued and unpaid interest on the Bonds.

 

(2) Interest on the Bonds which is due and payable or which will
become due and payable within five (5) Business Days after the date hereof
and the amount of the draft accompanying this Certificate does not exceed the
amount available on the date hereof to be drawn under the Letter of Credit in
respect of payment of interest accrued on the Bonds.

 

(3) The amount of interest accrued on the Bonds which is due and
payable or which will become due and payable within five (5) Business Days
after the date hereof and for the payment of which the Trustee does not have
available funds in the Bond Fund (as defined in the Trust Indenture) and which,
pursuant to Section 6.04 of the Trust Indenture, are to be applied to such
payment prior to moneys drawn under the Letter of Credit is $                       .
The amount of the draft accompanying this Certificate does not exceed such
amount due as interest or in respect of interest. This is a (partial) (final)
drawing.

 

(4) The amount of the draft accompanying this Certificate,
together with the aggregate of all prior payments made pursuant to drawings
under the Letter of Credit in respect of the payment of interest accrued on the
Bonds which, as certified to us by the Bank, the Bank has not reinstated, does
not exceed $                       .

 

(5) The amount of the draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Bonds and the Trust
Indenture.

 

(6) Upon receipt by the Trustee of the amount demanded hereby, (a) the
Trustee will apply such amount directly to the payment when due of the
appropriate amount of interest owing on account of the Bonds pursuant to the
Trust Indenture, (b) no portion of such amount shall be applied by the
Trustee for any other purpose, and (c) no portion of such amount shall be
commingled with other funds held by the Trustee. This drawing is made in
accordance with the provisions of the Trust Indenture.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the           
day of                      ,
20     .

 

	
   

  	
  , as Trustee

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

 

 

EXHIBIT 5

 

CERTIFICATE OF NON-REINSTATEMENT OF AMOUNTS AVAILABLE UNDER IRREVOCABLE
LETTER OF CREDIT NO. 00614008

 

The undersigned, a duly authorized officer of CoBank, ACB (the “Bank”),
hereby certifies to the Trustee under the Trust Indenture, dated as of                        ,
2001 between the Iowa Finance Authority and Wells Fargo Bank Northwest,
National Association (the “Trustee”), with reference to CoBank, ACB Irrevocable
Letter of Credit No. 00614008 (the “Letter of Credit,” the capitalized
terms defined therein and not defined herein being used as therein defined)
issued by the Bank in favor of the Trustee that the amount drawn by the Trustee
pursuant to its                        
Drawing dated as of                        
has not been reinstated.

 

Except as herein expressly set forth, all other terms and conditions of
the Letter of Credit remain unchanged.

 

IN WITNESS WHEREOF, the Bank has executed and delivered this
certificate this               
day of                        ,
20     .

 

COBANK, ACB

 

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

 

EXHIBIT 6

 

CERTIFICATE THAT
NO BONDS ARE OUTSTANDING

 

CoBank, ACB

5500 South Quebec Street

Greenwood Village, Colorado 80111

 

Attention:
International Banking Group, Trade Services, Letter of Credit Department

 

Re:                  CoBank,
ACB

Irrevocable Letter of Credit No. 00614008

 

Ladies and
Gentlemen:

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association as Trustee (the “Trustee”), and a duly
authorized officer of InterWest, L.C. (the “Company”), hereby certify to
CoBank, ACB (the “Bank”) with reference to CoBank, ACB Irrevocable Letter of
Credit No. 00614008 (the “Letter of Credit,” the capitalized terms defined
therein and not defined herein being used as therein defined) issued by the
Bank in favor of the Trustee that:

 

(1)                The Trustee is
the Trustee under the Trust Indenture for the holders of the Bonds.

 

(2)                No Bonds are
outstanding within the meaning of the Trust Indenture.

 

(3)                The undersigned
representatives are duly authorized to sign this certificate on behalf of the
Trustee and on behalf of the Company, respectively.

 

IN WITNESS WHEREOF, the Trustee and the Company have executed and
delivered this certificate this               
day of                        ,
20      .

 

                                                                                                                   

 

	
   

  	
   

  	
  , as
  Trustee

  	
   

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

 

EXHIBIT 7

 

CERTIFICATE OF
ACCEPTANCE OF ALTERNATE LETTER OF CREDIT

 

CoBank, ACB

5500 South Quebec Street

Greenwood Village, Colorado 80111

 

Attention:
International Banking Group, Trade Services, Letter of Credit Department

 

Re:                               CoBank,
ACB, Irrevocable Letter of Credit No.                       

 

Ladies and
Gentlemen:

 

The undersigned, a duly authorized officer of Wells Fargo Bank
Northwest, National Association, as Trustee (the “Trustee”), and a duly
authorized officer of InterWest, L.C. (the “Company”), hereby certify to
CoBank, ACB (the “Bank”) with reference to CoBank, ACB Irrevocable Letter of
Credit No. 00614008 (the “Letter of Credit,” (the capitalized terms used
but not defined herein being used as defined in the Letter of Credit) issued by
the Bank in favor of the Trustee that:

 

(1)                The Trustee is
the Trustee under the Trust Indenture for the holders of the Bonds.

 

(2)                An Alternate
Letter of Credit (as defined in the Trust Indenture) has been accepted by the
Trustee.

 

(3)                The date on
which such Alternate Letter of Credit becomes the “Letter of Credit” for all
purposes under the Trust Indenture is                          ,
                       .

 

(4)                The undersigned
representatives are duly authorized to sign this certificate on behalf of the
Trustee and on behalf of the Company, respectively.

 

IN WITNESS WHEREOF, the Trustee and the Company have executed and
delivered this certificate as of the                 
day of                        ,
20     .

 

	
   

  	
  , as
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
										

 

 

EXHIBIT 8

 

CoBank, ACB

5500 South Quebec Street

Greenwood Village, Colorado 80111

 

Attention:
International Banking Group, Trade Services, Letter of Credit Department

 

Re:                  CoBank,
ACB Irrevocable Letter of Credit No.                               

 

Ladies and
Gentlemen:

 

For value
received, the undersigned beneficiary hereby irrevocably transfers to:

(Name of Transferee)

(Address)

 

all rights of the
undersigned beneficiary to draw under the above Letter of Credit in its
entirety.

 

By this transfer,
all rights of the undersigned beneficiary in and to such Letter of Credit are
transferred to the transferee and the transferee shall have sole rights as
beneficiary thereof, including sole rights relating to any amendments, whether
increases or extensions or other amendments and whether now existing or
hereafter made. All amendments are to be advised direct to the transferee
without necessity of any consent of or notice to the undersigned beneficiary.

 

The advice of such
Letter of Credit is returned herewith, along with your customary transfer fee,
and we ask you to endorse the transfer on the reverse thereof and forward it
direct to the transferee with your customary notice of transfer.

 

 

	
  Very
  truly yours,

  
	
   

  
	
   

  	
   

  
	
  Signature
  of Beneficiary

  
	
   

  
	
  SIGNATURE
  AUTHENTICATED

  
	
   

  
	
   

  	
   

  
	
                                                 (Bank)

  
	
   

  
	
   

  	
   

  
	
                                    (Authorized
  Signature)

  

 

EXHIBIT 9

 

CERTIFICATE FOR “PREMIUM
DRAWING”

 

The undersigned, a
duly authorized officer of Wells Fargo Bank Northwest, National Association, as
Trustee (the “Trustee”), hereby certifies to CoBank, ACB (the “Bank”) with
reference to CoBank, ACB Irrevocable Letter of Credit No. 00614008 (the “Letter
of Credit,” the capitalized terms defined therein and not defined herein being
used as therein defined) issued by the Bank in favor of the Trustee that:

 

(1) The
Trustee is the Trustee under the Trust Indenture for the holders of the Bonds.
The total amount of Bonds outstanding (as defined in the Trust Indenture) is $                               

 

(2) The
Trustee is making a drawing under the Letter of Credit in respect of payment of
accrued and unpaid premium on the Bonds.

 

(3) A premium
on the Bonds which is due and payable or which will become due and payable
within five (5) Business Days after the date hereof and the amount of the
draft accompanying this Certificate does not exceed the amount available on the
date hereof to be drawn under the Letter of Credit in respect of payment of
Premium on the Bonds.

 

(4) The
amount of premium on the Bonds which is due and payable or which will become
due and payable within five (5) Business Days after the date hereof and
for the payment of which the Trustee does not have available funds in the Bond
Fund (as defined in the Trust Indenture) and which, pursuant to Section 6.04
of the Trust Indenture, are to be applied to such payment prior to moneys drawn
under the Letter of Credit is $                               .
The amount of the draft accompanying this Certificate does not exceed such
amount due as interest or in respect of premium. This is a (partial) (final)
drawing.

 

(5) The
amount of the draft accompanying this Certificate, together with the aggregate
of all prior payments made pursuant to drawings under the Letter of Credit in
respect of the payment of premium on the Bonds does not exceed $                               .

 

(6) The
amount of the draft accompanying this Certificate was computed in accordance
with the terms and conditions of the Bonds and the Trust Indenture.

 

(7) Upon
receipt by the Trustee of the amount demanded hereby, (a) the Trustee will
apply such amount directly to the payment when due of the appropriate amount of
premium owing on account of the Bonds pursuant to the Trust Indenture, (b) no
portion of such amount shall be applied by the Trustee for any other purpose,
and (c) no portion of such amount shall be commingled with other funds
held by the Trustee. This drawing is made in accordance with the provisions of
the Trust Indenture.

 

IN WITNESS
WHEREOF, the Trustee has executed and delivered this certificate as of the            ,
day of                                ,
20    

 

	
   

  	
  , as
  Trustee

  

 

	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
				

 

Exhibit 7.4 

List of Litigation

 

None.

 

 

Exhibit 7.15

Real Estate Interests

(fee, leasehold, easement, other)

 

Leasehold:
As described in that certain Lease dated October 3, 1995 between West
Central Cooperative and InterWest, L.C.

 

2

 

Evidence of Approvals, Including Regulatory
Approval

(8.1.5)

 

See List of Closing Documents Contained in
Transcript of Proceedings for the Bonds.

 

3

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