Document:

Exhibit 10.1

 

FIRST AMENDMENT

to the

CREDIT AGREEMENT

 

THIS
FIRST AMENDMENT (the “Amendment”) to the CREDIT AGREEMENT dated June 19,
2002 (the “Agreement”), is made and entered into as of September 1, 2004,
by and between GREAT PLAINS ETHANOL, L.L.C., a South Dakota limited liability
company (“Borrower”) and AGCOUNTRY FARM CREDIT SERVICES, FLCA (“Lender”).

 

WHEREAS,
Borrower has requested Lender to consent to Indebtedness to AgCountry Farm
Credit Services, PCA (“AgCountry PCA”) in an amount not to exceed $3,000,000
pursuant to the terms of a Promissory Note/Loan Agreement (the “Operating
Note”) secured by Borrower’s assets pursuant to a security agreement (the “PCA
Security Agreement”) and mortgage (the “PCA Mortgage” and along with the
Operating Note and the PCA Security Agreement, the “PCA Loan Documents”), each
dated the date hereof;

 

WHEREAS,
Borrower has provided executed copies of the PCA Loan Documents to Lender;

 

WHEREAS,
Section 7.01 of the Credit Agreement prohibits additional Indebtedness,
and Section 7.02 of the Credit Agreement prohibits additional Liens on any
of Borrower’s assets or property;

 

WHEREAS,
Lender agrees to allow the additional Indebtedness and Liens, and also agrees
to other revisions to the Credit Agreement.

 

NOW,
THEREFORE, in consideration of the terms and conditions set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Borrower and Lender agree as follows:

 

1.
Definitions. Except as otherwise provided herein, capitalized terms used
herein without definition shall have the meanings provided in the Agreement.

 

2.
Consent to Indebtedness and Liens. Notwithstanding Sections 7.01 and
7.02 of the Credit Agreement, and any other provision of any other Loan
Document, Lender hereby consents to additional Indebtedness pursuant to the
Operating Note to AgCountry PCA in the amount of up to $3,000,000, and
Borrower’s granting of a security interest in Borrower’s assets to AgCountry
PCA pursuant to the PCA Security Agreement and the PCA Mortgage. Borrower
acknowledges and agrees that Lender’s consent is based on the terms of the
executed PCA Loan Documents presented to Lender, and that such consent shall be
considered withdrawn in the event any of the PCA Loan Documents is hereafter
amended without Lender’s prior written consent.

 

3.                   Addition of Working Capital Covenant. A new Section 6.05 of the Credit
Agreement is added to provide as follows:

 

 

Section 6.05
Working Capital. Borrower will at all times maintain working capital in
an amount of not less than $5,000,000. For purposes of this Section 6.05,
working capital includes the un-advanced portion of the Revolving Commitment
other than amounts due under the Revolving Notes within 12 months following the
date of determination hereunder.

 

4.                   Representations; Events of Default. In order to induce Lender to execute this
Amendment, the Borrower hereby:

 

(a)  makes and renews to Lender the
representations and warranties set forth in Article IV of the
Agreement; and

 

(b)  certifies to Lender that no Default or Event
of Default has occurred under the Agreement.

 

5.                   Expenses. The Borrower shall pay or reimburse Lender for attorneys’ fees and
costs of the Lender’s legal counsel in connection with the preparation and
execution of this Amendment.

 

6.                   General. On and after the effectiveness of this Amendment, each reference in
the Agreement to “this Agreement,” “hereunder,” “hereof” or words of like
import referring to the Agreement, and each reference in the loan documents to
the Agreement, shall mean the Agreement as amended by this Amendment. The
Agreement, as amended by this Amendment, is and shall continue to be in full
force and effect and is hereby ratified and confirmed in all respects

 

7.                   Counterpart Signatures. This Amendment may be executed by each
party in one or more counterparts, each of which shall be deemed an original
and all of which taken together shall constitute one binding document.

 

[Signature Page Follows]

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREAT
  PLAINS ETHANOL, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Darrin Ihnen

  	
   

  
	
   

  	
   

  	
  Name:

  	
     Darrin Ihnen

  	
   

  
	
   

  	
   

  	
  Title:

  	
    

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
  AGCOUNTRY
  FARM CREDIT SERVICES, FLCA

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Randolph L. Aberle

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Randolph
  L. Aberle

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
													

 

 

	
   

  	
   

  	
   

  	
   

  	
  PROD.

  	
  COLL.

  	
   

  	
   

  
	
  ASSN.

  	
  B.O. NO.

  	
  CIF NO.

  	
  LOAN NO.

  	
  CODE

  	
  CODE

  	
  CUSTOMER NAME

  	
  COMMITMENT AMOUNT

  
	
  72

  	
  65

  	
  1895500

  	
  1117248400

  	
  1011

  	
  04

  	
  Great Plains Ethanol

  	
  $3,000,000.00

  

ADDENDUM TO NOTE/LOAN AGREEMENT

September 1, 2004

 

This Addendum is a part of, and contains
additional terms and conditions for, a Promissory Note/Loan Agreement (“Note”)
dated September 1, 2004, in the principal sum of $3,000,000.00, evidencing
a loan extended by AgCountry Farm Credit Services, PCA (“Lender”) to the
Borrowers.  Unless waived in writing by
the Lender, until all liabilities of the Borrowers under this loan have been
paid and satisfied in full, the Borrowers covenant and agree as follows:

 

1.               COVENANTS: The
following covenants and agreements amend and supplement the Note and the
Security Agreement. To the extent of any inconsistency between the provisions
of the Note or the Security Agreement and this Addendum, this Addendum governs.

 

2.               BORROWING BASE:
Borrower agrees to limit credit available under this line of credit to the
lessor of the Commitment Amount or the FCS Borrowing Base Formula. This formula
is to be calculated quarterly using the most recent inventory, aging accounts
receivable, and hedging account reports. Credit available under the Borrowing
Base Formula, based on current market values, is to be calculated as follows:

 

	
  a.

  	
   

  	
  Inventory -
  unsettled payable X 75%

  	
   

  	
  $

  	
  a

  
	
  b.

  	
   

  	
  Gain/Loss on
  market contracts X 75%

  	
   

  	
  $

  	
  b

  
	
  c.

  	
   

  	
  Hedging
  account balances X 75%

  	
   

  	
  $

  	
  c

  
	
  d.

  	
   

  	
  Accounts
  receivable <90 days X 75%

  	
   

  	
  $

  	
  d

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total Credit
  Available (a+b+c+d)

  	
   

  	
  $

  	
   

  

 

3.               FINANCIAL — MINIMUM
OWNER EQUITY: Borrower(s) shall maintain minimum owner equity percentage of 40%
by 12-31-04 and thereafter. Calculation of such owner equity percentage is made
by dividing the difference between total assets and total liabilities by total
assets and expressing the result as a percentage.

 

4.               FINANCIAL — WORKING
CAPITAL: Borrower will maintain working capital of at least $5,000,000 on
12-31-04 and at all times thereafter. For purposes of determining the amount of
Borrower’s working capital, Borrower may include as working capital all amounts
available for borrowing under the Revolving Term Commitment less the current
portion due.

 

5.               FINANCIAL: By
12/31/04 Borrower agrees to maintain a fixed charge coverage ratio of
1.15:1.00. Fixed charge coverage ratio is defined as: (earnings before
interest, taxes, depreciation and amortization) divided by the sum of: a)
interest; b) mandatory debt retirement; c) cash taxes; d) maintenance capital
expenditures; and e) cash patronage dividends and cash equity retirements to be
measured at fiscal year end.

 

6.               MISCELLANEOUS —
CAPITAL SPENDING LIMITATION DURING TERM OF NOTE: Borrower shall not, during the
term of this Note, without the prior written consent of Lender, make any
expenditure or Incur any indebtedness for tangible capital assets or Incur
obligations for operating or capital leases aggregating more than $500,000 per
year. For this purpose a tangible capital asset is land or a fixed tangible
asset which is depreciable under the Federal Internal Revenue Code.

 

7.               Borrower to insure
business with adequate property casualty insurance and adequate liability
insurance. AgCountry to be named loss payee and additional insured.

 

8.               FINANCIAL REPORTING
— CERTIFIED AUDIT: Within 120 days after the Borrowers fiscal year and annually
thereafter, Borrower shall provide Lender with a written balance sheet of
borrower as of the close of such fiscal year and a written statement of profit
and loss of Borrower for such year, prepared in accordance with generally
accepted principles of accounting and certified by a firm of independent
accountants selected by Borrower but satisfactory to Lender. Such reports shall
be set forth in a format comparing the results of the most recent fiscal year
to those in the prior fiscal year certified report and in all reasonable
details.

 

Page 1 of 2

 

	
   

  	
   

  	
   

  	
   

  	
  PROD.

  	
  COLL.

  	
   

  	
   

  
	
  ASSN.

  	
  B.O. NO.

  	
  CIF NO.

  	
  LOAN NO.

  	
  CODE

  	
  CODE

  	
  CUSTOMER NAME

  	
  COMMITMENT AMOUNT

  
	
  72

  	
  65

  	
  1895500

  	
  1117248400

  	
  1011

  	
  04

  	
  Great Plains Ethanol

  	
  $3,000,000.00

  

ADDENDUM TO
NOTE/LOAN AGREEMENT

September 1, 2004

 

This Addendum is a part of, and contains
additional terms and conditions for, a Promissory Note/Loan Agreement (“Note”)
dated September 1, 2004, in the principal sum of $3,000,000.00, evidencing
a loan extended by AgCountry Farm Credit Services, PCA (“Lender”) to the
Borrowers.  Unless waived in writing by
the Lender, until all liabilities of the Borrowers under this loan have been
paid and satisfied in full, the Borrowers covenant and agree as follows:

 

9.               QUARTERLY FINANCIAL
REPORTING: Within 30 days of the previous quarter-end, Borrower(s) shall
provide lender with the previous quarter-end reports consisting of a balance
sheet, profit and loss statements and other reports requested to monitor
performance.

 

10.         ACCOUNTING METHODS —
Borrower shall not adopt any accounting methods, which are inconsistent with
generally accepted accounting principles (GAAP). To the extent any change in
GAAP affects any computation or determination required to be made pursuant to
this Addendum, such computation or determination shall be made as if such
change in GAAP had not occurred unless the Borrower and Lender agree in writing
to an adjustment to such computation or determination to account for such
change in GAAP. Furthermore, Borrower will not change any accounting methods,
allow any restatement of its earnings, change in depreciation or inventory
methods, or reclassification of balance sheet accounts, including but not
limited to, the sale and leaseback of any asset, without full and immediate
disclosure to Lender. Lender shall have the right to accept or reject any and
all changes that Lender, in its sole discretion, determines are material.
Lender shall also have the right to review and adjust any and all loan
covenants, interest rates and other contract agreements upon determining a
material change has occurred.

 

11.         OTHER INDEBTEDNESS — If
Borrower should fail to pay any indebtedness to any other person or entity for
borrowed money or any long-term obligation when due, or any other event occurs
which, under any agreement or instrument relating to indebtedness or
obligation, has the effect of accelerating or permitting the acceleration of
such indebtedness or obligation; then all Lender obligations become due.

 

12.         DEFAULT EVENT — Borrower
shall be in default if borrower fails to pay any principal or interest or fees
when due and such failure shall continue un-remedied for a period of 10 days.

 

13.         DEFAULT EVENT — Borrower
shall be in default if borrower fails to observe or perform any covenant or
agreement contained in this agreement or other loan documents and such failure
shall remain un-remedied for 30 days after the earlier of: 1) any officer of
Borrower becomes aware of such failure or 2) Lender notifies borrower of such
failure.

 

14.         LIENS AND ENCUMBRANCES —
Lender acknowledges all liens and encumbrances granted by the Borrower to the
Lender under the Credit Agreement dated June 19, 2002 between Borrower and
AgCountry Farm Credit Services, FLCA.

 

15.         TAXES - Borrower to pay
all taxes before they become delinquent.

 

Great Plains Ethanol, LLC,

a South Dakota Limited Liability Company

 

	
  By: 

  	
  /s/ Darrin Ihnen

  	
   

  
	
  (print name)

  	
  Darrin Ihnen

  	
   

  
	
  Title:

  	
   

  	
  Chairman

  	
   

  
							

 

Page 2 of 2

 

 

	
   

  	
   

  	
   

  	
   

  	
  PROD.

  	
  COLL.

  	
   

  	
   

  
	
  ASSN.

  	
  B.O. NO.

  	
  CIF NO.

  	
  LOAN NO.

  	
  CODE

  	
  CODE

  	
  CUSTOMER NAME

  	
  COMMITMENT AMOUNT

  
	
  72

  	
  65

  	
  1895500

  	
  1117248400

  	
  1011

  	
  04

  	
  Great Plains Ethanol, LLC

  	
  $3,000,000.00

  

PROMISSORY
NOTE/LOAN AGREEMENT

 

	
  LENDER: AgCountry Farm Credit
  Services, PCA

  	
   

  	
  DATE:
  September 1,2004

  
	
  171749 8th
  St SW

  	
   

  	
   

  
	
  Fargo 

  	
  North Dakota
  

  	
  58103-0000

  	
   

  
	
  LOAN AMOUNT:
  $3,000,000.00

  	
   

  	
  MATURITY DATE: September 1, 2005

  
	
  TYPE OF
  LOAN: Revolving Line of Credit (RLOC)

  	
   

  	
   

  
	
  STATED
  INTEREST RATE: 5.06%

  	
   

  	
   

  
	
  TYPE OF
  INTEREST RATE: ADJUSTABLE RATE LIBOR BASED

  	
   

  	
   

  
					

 

On the first day of each month the Interest
Rate shall be adjusted by adding a margin of 3.50 percentage points to the
index. This margin shall remain in effect until September 1, 2005, at
which time Lender may change the margin at its discretion, and Lender may
continue to change the margin at successive intervals of 1 year (s) each
thereafter.

 

LOAN PAYMENTS:

Interest payments are due quarterly beginning
on October 1, 2004. The remaining unpaid balance of the loan is payable in
its entirety on the Maturity Date.

 

DRAFT PROGRAM:

Not applicable.

 

COLLATERAL:                          Payment
of the loan is secured by:

All existing
and future security agreements from all or any of the Borrowers (and from third
parties if so intended) to the Lender. All of the covenants and agreements
contained in said security instruments are made a part of this note. The
mortgage(s) or deed(s) of trust dated September 7, 2004, conveying real
estate in the county or counties of Brown, South Dakota.

 

DEFAULT ADD-ON RATE: 2.00 % will be added to
the interest rate that would otherwise be in  effect
for this loan, if Borrowers default as explained in the Additional Provisions.

 

VOTING STOCKHOLDER: Any one stockholder is
authorized by the Borrowers to exercise any voting rights on behalf of members,
subject to applicable bylaws, and to receive effective interest rate
disclosures, unless otherwise agreed in writing between the parties.

 

Borrowers
further agree that a security interest is granted to Lender in all such stock
or participation certificates now owned and hereafter acquired, however
designated or classified, and all equity reserve and allocated surplus in the
Lender or Lender’s parent association, as applicable, to secure the Loans,

 

FOR VALUE RECEIVED, the undersigned Borrowers jointly and severally
promise to pay to the order of the Lender at its office shown above on or
before the Maturity Date the principal sum equal to the Loan Amount together
with interest thereon from dates of disbursement until paid pursuant to the
Lender’s Individual Loan Pricing Program (the “Program”), as provided in the
Additional Provisions. Borrowers grant to the Lender, as security for the
payment of this loan and, if applicable, the other Obligations, as defined in
the Additional Provisions, a present security interest or lien in the property
described above and, if applicable, the other Collateral, as defined in the
Additional Provisions.

 

The Borrowers acknowledge receipt of: a) pertaining to the Lender or
the Lender’s parent association, as applicable, the most recent annual report
and most recent quarterly report, if more recent than the annual report; a copy
of the notice to Borrowers concerning investment, which includes a description
of the terms and conditions under which equity is issued; capitalization bylaws
and b) an Effective Interest Rate Disclosure Statement or a Truth-in-Lending
Disclosure Statement, as applicable.

 

THIS AGREEMENT INCLUDES THE PROVISIONS IN THE
“PROMISSORY NOTE/LOAN AGREEMENT 
ADDITIONAL PROVISIONS,”

 

Great Plains Ethanol, LLC,

a South Dakota Limited Liability Company

 

	
  By: 

  	
  /s/ Darrin Ihnen

  	
   

  
	
  (print name)

  	
  Darrin Ihnen

  	
   

  
	
  Title:

  	
   

  	
  Chairman

  	
   

  
								

 

 

PROMISSORY NOTE/LOAN AGREEMENT

ADDITIONAL PROVISIONS (Page 1 of 4)

 

INDIVIDUAL LOAN PRICING PROGRAM: The Program
provides for charging differential interest rates according to loan classes
determined by criteria adopted by the Lender from time to time, such as type of
loan, purpose, amount, quality, funding costs, operating costs, servicing
costs, and competitive interest rates. There are separate types of loans and
interest rates under the Program, each having a different rate of interest, and
the loans within each class are assigned to an interest rate category. It is
possible that the particular rate for each class of loan may differ among such
geographical areas as may be designated from time to time. In the event that
Borrowers default under the terms or conditions of any promissory note,
membership agreement, mortgage or other security document, or any amendatory
agreement to any of these, the Lender at its option may adjust this loan to any
less favorable interest rate category then offered or maintained by Lender for
loans of this type. The higher interest rate shall become effective immediately
upon placement of this loan into the less favorable interest rate category by
Lender, and the loan may, at the option of Lender, remain in the less favorable
interest rate category for the remaining term of the loan, regardless of
whether Borrowers later cure the default. 
Lender shall not place the loan into a less favorable interest rate
category unless Lender has first given Borrowers written notice of the default,
and Borrowers fail to cure the default within 60 days after Lender has given
the notice. Notice shall be deemed to have been given when Lender places such
notice in the mail for first-class mailing to the last address of Borrowers
known by Lender. In addition to adjusting the loan to a less favorable interest
rate category, Lender may also charge the higher default interest rate
described below.

 

INTEREST RATE: If this is a:

 

(a)              Variable Rate loan,
the initial annual rate of interest is equal to the Stated Interest Rate. The
interest rate is subject to change at any time and by any amount during the
term of the loan and will vary from time to time at the option of the Lender.

 

(b)             Fixed Rate loan, the
annual rate of interest is equal to the Stated Interest Rate. The interest rate
is not subject to change during the term of the loan and will not be increased
or decreased except in the event of default.

 

(c)              Adjustable Rate
Operating loan, the initial annual rate of interest is equal to the Stated
Interest Rate. The interest rate is subject to change at any time and by any
amount during the term of the loan, but only on and after the first adjustment
date, and the rate will not be increased or decreased prior to that date except
in the event of default.

 

(d)             Adjustable Rate loan
or an Adjustable Rate IT loan or an Adjustable Rate Capital RLOC, the Initial
annual rate of interest is equal to the Stated Interest Rate. The Interest rate
is subject to change by any amount during the term of the loan, but only on the
first adjustment date and on dates occurring at the end of the successive
adjustment intervals thereafter, and the rate will not be increased or
decreased during any one such interval except in the event of default.

 

(e)              Adjustable Rate
Prime Rate Based loan, the initial annual rate of interest is equal to the
Stated Interest Rate. The index for adjustments is the prime rate reported on
the tenth day of the month preceding the interest rate change date by the Wall
Street Journal in its daily listing of money rates, defined therein as “the
base rate on corporate loans posted by at least 75 percent of the nation’s 30
largest banks.” If a prime rate is not reported on the tenth day of a month,
the prime rate reported on the first business day preceding the tenth day of
the month will be used. If this index is no longer available, Lender will
select a new index which is based upon comparable information.

 

(f)                Capped Non-Indexed
Variable Rate loan, the initial annual rate of interest is equal to the Stated
interest Rate. The interest rate is subject to change at any time and will vary
from time to time at the option of the Lender. The interest rate is not based
on an index. Except during periods of default when the additional percentage
points specified herein shall be added to increase the interest rate, the
interest rate may not increase or decrease by more than 6.00 percentage points
above or below the initial annual rate of interest on any single change date or
during the term of the Loan.

 

(g)             Fixed Then Indexed Adjustable Rate loan,
the initial annual rate of interest is equal to the Stated Interest Rate. Once
the interest rate changes to an adjustable interest rate at the end of the
fixed interest rate period, the index for adjustments is the estimated weekly
average for one-year bonds funding cost index as reported by the Federal Farm
Credit Banks Funding Corporation at its Web site, found in the Farm Credit
System, Funding Cost Index, Archive sections at http://www.farmcredit-ffcb.com
for that week which contains the date that is 45 days before the date that the
adjustable interest rate is to be initially determined or subsequently
adjusted. If the date that is 45 days before either the expiration date of the
fixed interest rate period or an Adjustment Interval is not a business day, the
Lender shall use that estimated weekly average for one-year bonds funding cost
index for that week which includes that business day which immediately precedes
the 45-day date.  If this index is no
longer available, the Lender will select a new index which is based on comparable
information.  The Lender will give the
Borrower notice of this choice.

 

(h)     Indexed Adjustable Rate
loan, the initial annual rate of interest is equal to the Stated Interest Rate.
The index for adjustments is the estimated weekly average for one-year bonds
funding cost index as reported by the Federal Farm Credit Banks Funding
Corporation at its Web site, found in the Farm Credit System, Funding Cost
Index, Archive sections at http://www.farmcredit-ffcb.com, for that week which
contains the date that is 45 days before a date the interest rate is to be
adjusted. If the date that is 45 days before a date the interest rate is to be
adjusted is not a business day, the Lender shall use that estimated weekly
average for one-year bonds funding cost index for that week which includes that
business day which immediately precedes the 45-day date. If this index is no
longer available, the Lender will select a new Index which is based on
comparable information. The Lender will give the Borrower notice of this choice.

 

(i)                 Adjustable Rate LIBOR Based loan, the
initial annual rate of interest is equal to the Stated Interest Rate. The index
for adjustments is the One Month London Interbank Offered Rate (“One Month
LIBOR”) reported on the tenth day of the month preceding the interest rate
change date by the Wall Street Journal in its daily listing of money rates,
defined therein as “the average of interbank offered rates for dollar deposits
in the London market based on quotations at five major banks.” If a One Month
LIBOR rate is not reported on the tenth day of a month, the One Month LIBOR
rate reported on the first business day preceding the tenth day of the month
will be used. If this index is no longer available, Lender will select a new
index which is based upon comparable information.

 

Interest may be based upon a 360- or 365-day
year as the Lender may determine.

 

DEFAULT RATE
OF INTEREST: Prior to  maturity, if Borrowers default under this document, the
entire unpaid principal balance of the loan, including all advancements, shall
bear interest from the date of default until the default is cured or maturity
of the loan is accelerated by reason of default at a rate equal to the interest
rate for this loan that would otherwise be in effect during the period of default
plus the Default Add-On Rate per annum (the “default rate”), and the amount of
such interest in excess of interest otherwise accruing in the absence of  default shall
be immediately due and payable. At maturity or  upon acceleration of maturity by
reason of default, the entire indebtedness including all principal, interest
and advancements shall bear interest until paid at the default rate in effect
at the time of maturity or acceleration of maturity, as the case may be.

 

DISBURSEMENTS
OF PRINCIPAL: Disbursements of principal may be made at various times at
Borrowers’ request, subject to the provisions of this paragraph. Repayments of
principal under a Revolving Line of Credit reinstate the loan commitment,
subject to the terms of this document, but the total of the unpaid balance of
future advances together with the existing indebtedness hereunder, in the
aggregate at any one time outstanding, shall not exceed the Loan Amount;
otherwise, repayments of principal do not reinstate the loan commitment, and total
disbursements, in the aggregate, shall not exceed the Loan Amount. The Lender
may withhold further disbursements if it determines that (a) the value of the
Collateral is insufficient; (b) loan proceeds have been used for purposes not
approved by the Lender; (c) loan payments have not been made in accordance with
the repayment plan contained in the loan application; or (d) an event has
occurred which entitles the Lender to accelerate maturity of the loan.

 

DRAFT PROGRAM AGREEMENT: If the Draft Program is applicable to this
loan, the Borrowers may draw loan funds using the draft forms furnished by the
Lender, subject to the following terms and conditions:

 

(a)              The Borrowers authorize and direct the
Lender and its duly authorized agents to accept drafts made or drawn by any one
of the Borrowers and to disburse loan funds accordingly, as specified in this
document. The Borrowers may be charged a reasonable fee for this program and
the cost of printing drafts.

 

(b)             The Borrowers jointly
and severally accept responsibility for all disbursements made pursuant to this
authorization and direction. The Lender shall not be obligated to inquire as to
whether the Borrowers have issued specific directions for any particular draft
or to determine whether the Borrowers have received the benefit of the proceeds
of any particular draft before honoring such draft. Drafts may be deposited
directly into the bank account of any one of the Borrowers.

 

(c)              The
minimum amount for which each draft may be written is the Minimum Draft amount.
In the event that Borrowers write an draft for an amount below this minimum,
the Lender may charge Borrowers a reasonable fee for each draft that is not in
compliance.

 

(d)             Drafts may not be
written in excess of the undisbursed loan commitment.  The Lender reserves the right to revoke all
future draft privileges without notice to the Borrowers in the event of an
overdraft and the

 

 

right to reject drafts that are not written
for purposes specified in the loan documents or pursuant to these terms and
conditions.In the event that Lender chooses to honor a draft which exceeds the
available loan commitment, Borrowers are liable for full repayment of the funds
borrowed, plus interest, and Lender may charge Borrowers a reasonable overdraft
fee.

 

(e)              The Borrowers agree
to immediately notify the Lender in the event one or more drafts are lost,
stolen, destroyed or otherwise misused and to indemnify the Lender and hold the
Lender harmless from any loss or claim if any draft is lost, stolen, forged,
altered or otherwise misused if the Lender did not have notice of the same at
least 24 hours prior to honoring such draft.

 

(f)                The Borrowers may
stop payment on a draft by request to the Lender. The Borrowers will be charged
a reasonable fee for each stop-payment order and agree to reimburse the Lender
for all damages, costs and expenses as a result of the Lender’s refusal to
honor such draft. The Lender shall not be liable in the event the draft is
honored following a stop-payment order if such order is not received in
sufficient time to permit dishonor.

 

(g)             This authorization
and direction shall be effective as to this and, with the Lender’s approval,
other existing and future loans to the Borrowers and shall continue in force
and effect until the Lender receives written notice of revocation signed by the
Borrowers, provided the privilege of using drafts may be withdrawn by the
Lender and unused drafts must be surrendered to the Lender on demand.

 

FUNDS HELD PROGRAM: Lender may offer a Funds
Held Program (“Program”) that allows Borrowers to make advance conditional
payments on designated loans. Lender reserves the right, in its discretion, to
amend or terminate the Program. The following terms and conditions apply to all
Program accounts in connection with loans from Lender.

 

(a)              Subject to Lender’s
rights to direct the application of payments, an advance payment made to be
applied to future maturities on a loan will be placed in a Program account
(“Account”) as of the date received. If a special prepayment of principal is
desired, Borrowers must so specify when an advance payment is made.

 

(b)             Interest will accrue
on funds in the Account at such times and at such rates as per Lender’s
Program. Lender may change the interest rate or accrual period from time to
time without notice. The Program may provide for different interest rates for
different categories of loans.

 

(c)              When a loan
installment or other related charge becomes due, funds in the Account for that
loan will be automatically applied on the due date toward payment of the
installment or related charge. Any accrued interest in the Account will be
applied first. If the funds in the Account are not adequate to pay the entire
installment or related charge, Borrowers must pay the difference by the
installment due date.

 

(d)             Funds received after
a loan installment or related charge has been billed will be applied to the
installment or related charge due. Funds received in excess of the billed
installment amount or related charge will be placed in the Account.

 

Even though no installment or related charge is due, Lender may, at its
option, apply funds from the Account without notice to Borrowers as follows:

 

•   Protective
Advances. If Borrowers fail to pay when due other items Borrowers are required
to pay pursuant to any loan document, Lender may apply funds in the Account to
pay them.

 

•            Account
Ceiling. If the Account balance exceeds the unpaid balance on the loan, Lender
may apply the funds in the Account to pay off the loan and will return any
excess funds.

 

•            Transfer
of Security. If Borrowers sell, assign, or transfer any interest in any
collateral for the loan, Lender may apply the funds in the Account to the
remaining loan balance.

 

•            Deceased
Borrowers. If all Borrowers are deceased, Lender may apply the funds in the
Account to the remaining loan balance.

 

•            Termination
of Program. If Lender decides to terminate the Program, it may apply all funds
in the Account to the remaining loan balance effective on the termination date.

 

(e)              Lender may, in its
discretion, permit Borrowers to withdraw funds from the Account in accordance
with Lender’s Program.

 

(f)                Neither the
advance payments nor the accrued interest in an Account are insured by a
governmental agency or instrumentality. If Lender is placed in liquidation,
Borrowers shall be sent by the receiver such notices as required by FCA
regulations then in effect. Such regulations currently provide for advance
notice from the receiver that funds in the Account will be applied to the loan
and that funds in the Account will not earn interest after the receiver is
appointed.

 

LOAN PAYMENTS: If the loan is payable in
installments and the period from the day interest begins to the due date of the
first installment is more than the interval between installments, there may be
an interest only payment due one installment interval prior to the due date of
the first installment, or the interest may be included in the first installment
at the option of the Lender, but if such period is less than the interval
between installments and principal and interest are payable in equal
installments, then the first installment will be decreased by the amount of
interest not yet accrued for that installment. The final installment may be
more or less than preceding installments, if any, and any periodic adjustments
to the interest rate will result in corresponding changes in the amount of
installments, if the loan is payable in installments, or the amount due at
maturity.  The Borrowers may make advance
payments in any amount and at any time without penalty. Prepayments shall, at
the option of the Lender, (a) be held by the Lender and then applied to
installments of principal and interest next scheduled to mature in the order of
maturity, (b) be immediately applied to payment of principal then outstanding,
resulting in a reamortization of the remaining balance of the loan over the
remaining term under the existing payment plan and in a corresponding reduction
in the amount of future installments of principal and interest, or (c) be
immediately applied to payment of principal then outstanding, with, if an
amortized loan, a corresponding reduction in the number of future installments
of principal and interest in the inverse order of maturity, thus discharging
the loan at an earlier date: provided, in any event, the Lender may, at its
option, first apply any such prepayments to the payment of interest accrued to
the date of prepayment.

 

PERSONAL PROPERTY AND FIXTURES: The following
subsections (1) and (2) including the definitions apply, in addition, only if
the collateral described on Promissory Note/Loan Agreement, and each addendum
thereto, is personal property or fixtures:

 

(1)              Obligations and
Collateral. The Borrowers grant to the Lender as security for the payment and
performance of this loan and the other Obligations a security interest in all
of the Borrowers’ rights, title, and interest in the Collateral, including all
rights to transfer an interest in the Collateral. “Obligations” means this loan
and all other loans and advances by the Lender except any loan to which a Basic
Membership and Lending Relationship Agreement (Rural Residence/Country Living
Loans) applies including: (a) existing and future indebtedness, liabilities,
and other obligations of the Borrowers to the Lender of any kind, absolute or
contingent, due or to become due, arising out of existing or future credit
granted by the Lender to the Borrowers, or any one or more of them, and all
extensions and renewals thereof from time to time; and (b) all costs incurred
by the Lender in enforcing its rights under this document with interest,
including attorney’s fees and legal costs. “Collateral” means (a) the property
described on Promissory Note/Loan Agreement and each addendum thereto; (b) all
additions, accessions, replacements, and substitutions of the Collateral and
property of similar type or kind now owned or hereafter acquired by the
Borrowers; and (c) to the extent not included in (a) or (b) as original
Collateral, all products and proceeds of the Collateral. If the Collateral includes
crops now growing or to be grown in North Dakota, the following provision is
part of this document:

 

This security agreement Covers crops now
growing. This security agreement also covers future crops to be grown in the
current year or any year hereafter.

 

The Borrowers
agree to deliver upon the request of the Lender such additional security
instruments as the Lender may deem necessary at any time.

 

(2)              Warranties and
Agreements: The Borrowers warrant and agree that:

 

(a) The
Borrowers are the absolute owners of the Collateral free from any encumbrances,
liens, security interests, or equity interests, except for the security
interest granted herein and except as disclosed by the Borrowers to the Lender
in writing.

 

(b) The
Borrowers shall: (1) care for the Collateral and not permit its value to be
impaired; (2) keep the Collateral free from all encumbrances, liens, and
security interests, other than those created or expressly permitted herein; (3)
defend the Collateral against all claims and legal proceedings by persons other
than the Lender; (4) pay and discharge when due all taxes, license fees,
levies, and other charges upon the Collateral; and (5) immediately inform the
Lender in writing of any change in Borrowers’ address or the location of the Collateral.
Loss of or damage to the Collateral shall not release the Borrowers from any of
the Obligations. Upon demand, the Borrowers will provide additional collateral
acceptable to the Lender.

 

(c) At the
Lender’s request, the Borrower’s shall keep all Collateral and the Lender’s
interest in it insured under policies naming the Lender as loss payee, with
provisions, coverages, amounts and by insurers satisfactory to the Lender, and
the Borrowers shall furnish Lender satisfactory evidence of such insurance.

 

 

(d) The
Borrowers shall pay all expenses which are permitted to be recovered from the
Borrowers by applicable law and, upon request, take any action reasonably
deemed advisable by the Lender to preserve the Collateral or to establish,
determine the priority of, perfect, continue, or enforce the Lender’s interest
in the Collateral.

 

(e) The Lender
is authorized to examine the Collateral at reasonable times.

 

(f) The
Borrowers shall not dispose of any of the Collateral without the authorization
of the Lender and, except as otherwise agreed to in writing by the Lender,
shall apply the proceeds of all dispositions of the Collateral to payment of
this loan.

 

(g)  The Borrowers understand that the
unauthorized disposition of Collateral with intent to defraud the Lender
constitutes a federal criminal offense.

 

(h)  The Borrowers hereby authorize the Lender to
file all financing statements describing the Collateral, and all amendments
thereto, in any offices as the Lender, in its sole discretion, may determine. The
Borrowers hereby also authorize the Lender to file all effective financing
statements describing the Collateral pursuant to 7 U.S.C. section 1631,
and all amendments thereto, in any offices as the Lenders, in its sole
discretion, may determine.

 

(i)  If the Collateral includes federal or state
government program entitlements or payments, the Borrowers shall execute and
deliver to the Lender all assignments, transfers, and other documents required
by the Lender to transfer, convey, and assign to the Lender all such federal
and state government program entitlements, payments, rights to payment whether
or not earned by performance, accounts, general intangibles, and benefits.

 

(j)  All terms in this Agreement that are defined
in the Uniform Commercial Code, as enacted in the state in which Lender’s
office originating this Loan is located and as amended from time to time
(“UCC”), shall have the meanings set forth in the UCC.  The meaning of a term hereunder shall automatically
change on the effective date of each amendment to the definition of such term
in the UCC.

 

(k)  For each Borrower that is not an individual,
the legal name of each such Borrower is as set forth in the Note or an addendum
thereto. None of the Borrowers have used any trade name, assumed name, or other
name except those set forth in the Note or an addendum thereto. The Borrowers
shall give the Lender written notice at least 30 days before the date of (1)
any change in any Borrowers name or (2) any use by any Borrower of another
name.

 

(l)  If any of the Borrowers is a Registered
Organization, as that term is defined in the UCC, all information provided by
the Borrowers to the Lender concerning the state(s) of organization for the
Borrowers is true, accurate, and complete. None of the Borrowers shall change
its state of organization without the prior written consent of the Lender.
Borrowers shall provide the Lender with written notice at least 30 days before
the date any Borrower takes any action to change its state of organization.

 

(m)  If any of the Borrowers is an individual or
an entity that is not a Registered Organization, all information provided by
the Borrowers to the Lender concerning the address of an individual Borrower’s
residence or the address of the chief executive office of an entity that is not
a Registered Organization is true, accurate, and complete. None of the
individual Borrowers shall change that address of residence without providing
written notice to the Lender at least 30 days before the effective date of such
address change. None of the Borrowers that are entities that are not Registered
Organizations shall change that address of the chief executive office without
providing written notice to the Lender at least 30 days before the effective
date of such address change.

 

(n)  To the extent that the Borrowers use proceeds
of the Loan extended by the Lender to purchase Collateral, Borrowers’ repayment
of the Loan shall apply on a “first-in-first-out” basis so that the portion of
the Loan used to purchase a particular item of the Collateral shall be paid in
the chronological order the Borrowers purchased the Collateral.

 

FINANCIAL
RECORDS: The Borrowers agree to maintain complete and accurate financial books
and records for Borrowers’ business, permit access by the Lender and to provide
periodic financial information as requested by Lender in a form acceptable to
Lender.

 

PAYMENTS BY
LENDER: The Lender is authorized but not obligated to pay the following items
and charge them to the loan with interest at the rate(s) then applicable to
this loan: (a) amounts required to pay prior liens on the Collateral; (b) the
cost of insurance carried by the Borrowers in connection with this loan or any
financially related service offered by or through the Lender; (c) appraisal and
title evidence costs, recording and filing fees, and similar items; (d) amounts
required for the Borrowers to acquire and maintain stock or participation
certificates in the Lender or the Lender’s parent association, as applicable;
and (e) any accrued interest hereunder that is not paid when due.

 

EVENTS OF
DEFAULT: Each of the following constitutes a default by Borrowers under this
document: (a) the failure to perform any warranty or agreement contained in
this document or in any instrument securing payment of this loan or related to
this loan; (b) default under any other promissory note executed by the
Borrowers, or any one or more of them, and payable to the Lender except any
note to which a Basic Membership and Lending Relationship Agreement (Rural
Residence/ Country Living Loans) applies; (c) default under any lease executed
by the Borrowers, or any one or more of them, under which the Lender is the
Lessor, and, it shall also be an event of default under this document if an
event of default occurs on any other loan or lease that any of the Borrowers
has with either the Lender’s parent association or any subsidiaries of the
Lender’s parent association; (d) any statement or report furnished by the
Borrowers to the Lender is false in any material respect; (e) any Collateral is
lost, stolen, substantially damaged, destroyed, or, without the Lender’s
consent, sold or encumbered; (f) any of the Borrowers dies, is dissolved,
declares insolvency, is declared insolvent, or is the subject of any proceeding
under any bankruptcy or insolvency law; or (g) the Lender, in good faith, deems
itself insecure or determines that the prospect of payment of this loan or the
prospect of performance of this or any other instrument securing this loan or
relating to it is impaired.

 

LENDER’S REMEDIES:
Lender, in addition to other rights provided in this document or by law or
agreement, may do any one or more of the following if Borrowers default under
this document: (a) declare this loan and any or all other loans to Borrowers or
any one or more of them (except any loan to which a Basic Membership and
Lending Relationship Agreement (Rural Residence/Country Living) applies)
immediately due and payable; (b) as to Collateral which is personal property or
fixtures, exercise all the remedies of a secured party under the Uniform
Commercial Code including without limitation: (1) without notice to the
Borrowers or judicial process peaceably enter upon any premises where the
Collateral is located, take possession of it and remove it from the premises; (2)
require the Borrowers to assemble the Collateral and make it available to the
Lender at a place designated by Lender which is reasonably convenient to both
parties; and (3) use and occupy the Borrowers’ premises to care for livestock
collateral. Crops are perishable and may decline speedily in value and the
Lender at Borrowers’ expense may care for and harvest the crops and dispose of
them at private sale; (4) require Borrowers to reimburse the Lender for
expenses incurred by the Lender in protecting or enforcing its rights under
this document, including without limitation reasonable attorney’s fees and
legal expenses when permitted by law; (5) After deduction of expenses, the
Lender may apply the proceeds of disposition to the Obligations in the order and
amounts it elects.

 

ASSIGNMENT OF LOAN: The Lender may not assign or otherwise transfer
this loan to any party other than AgriBank, FCB and its successors (the
“Bank”), whether absolutely or as collateral security and whether in the
ordinary course of business or otherwise, without the express written consent
of the Bank. If this loan is assigned or otherwise transferred to the Bank or
another institution chartered pursuant to the provisions of the Farm Credit Act
of 1971, as amended, (“Act”) the interest rate hereunder may be established by
such institution in accordance with the provisions of this document. If this
loan is assigned or transferred to a party not chartered under the Act,
notwithstanding any contrary provision in this document, in the absence of
maturity or acceleration the following apply:

 

(a)  If this is a Variable Rate
loan or an Adjustable Rate Operating RLOC, adjustments in the interest rate
will be made only on the dates occurring at successive intervals of one year
each after the first day of the month and year of such assignment based upon an
index and margin. The index will be the weekly average yield on United States
Treasury securities, as made available by the Federal Reserve Board, adjusted
to a constant maturity of one year.

 

(b)  If this is an Adjustable
Rate Capital RLOC or Adjustable Rate IT loan, the interest rate will continue
to be adjusted on the dates and intervals described therein based upon an index
and margin. The index will be the same as for a Variable Rate Loan, except it
will be adjusted to a constant maturity of a length equal to the length of the
interval between adjustments specified above (if U.S. Treasury yield figures
are not available for this length, the U.S. Treasury yield figures which are
available for the closest length of time which is shorter than the interval
between adjustments will be used).

 

(c)  For interest rate
adjustments under (a) and (b), the margin will be the amount by which the
interest rate in effect for this loan at the time of the assignment, in the
absence of default, exceeds the index that would have been effective for the
date that this interest rate was established for this loan (the last previous
repricing date).  The new interest rate
will be calculated by adding the margin to the applicable current index and
rounding the total to the nearest one-

 

 

eighth of one
percent, subject however, to the provision herein for a higher default rate.
The current index will be the most recent index available as of 45 days before
the date the interest rate is to be adjusted. If the applicable index is not
available, the Lender will select a new index which is based upon comparable
information.  The interest rate shall
never exceed the rate permitted by applicable law.

 

(d)  If this is an Adjustable
Rate Prime Rate Based loan, the margin that is used for interest rate
adjustments shall remain fixed for the remaining term of the loan at the margin
amount that is in effect at the time of the assignment.

 

WAIVER: The  Borrowers and other parties to
this transaction (except the Lender), and each of them, whether principal,
surety, guarantor, endorser, or other party, agree to be jointly and severally
bound and, further, waive demand, protest, and notice of demand, protest, or
nonpayment, and agree that the liability of each shall be unconditional without
regard to the liability of any other party and shall not be affected by any
indulgence, extension or extensions of time, renewal, waiver, release of any
party or of any Collateral, or other modifications granted or consented to by
the Lender. The rights and powers granted to the Lender hereunder shall not,
nor shall any provision hereof, be waived except in writing signed by the
Lender, and the provisions hereof shall not be modified, limited, or waived by
any prior or subsequent course of dealing between the parties or between the
Borrowers and third parties or by any usage of trade. To the extent the Bank
gives or has given value to the Lender in reliance hereon, either by way of
loan or discount, the Borrowers hereby waive any and all other defenses or
right of offset which the Borrowers or any of them may or might have against
the Lender when this document is held by the Bank, its collateral custodian, or
the successors or assigns of either.

 

APPOINTMENT OF AGENT: Each of the Borrowers hereby appoints each of the
other Borrowers as agent for the purposes of this loan and, if applicable, the
Obligations and agrees that loan funds, dividends, stock retirement proceeds,
and other distributions may be disbursed to or by order of any one or more of
them. This appointment shall continue until written notice of  termination is received by the Lender.

 

ASSOCIATION MEMBERSHIP: The Borrowers agree to purchase and maintain
stock or participation certificates in the Lender or the Lender’s parent
association, as applicable, in amounts as may be required from time to time
under the Capital Plan adopted by the Board of Directors pursuant to applicable
Bylaws.

 

MODIFICATION:
No modification of this document or any related document shall be enforceable
unless in writing and signed by the party against whom enforcement is
sought.  Oral agreements or commitments
to loan money, extend credit, or to forbear from enforcing repayment of a debt
including promises to extend or renew such debt are not enforceable. To protect
you (the Borrowers) and us (the Lender) from misunderstanding or
disappointment, any agreements we reach covering such matters are contained in
this writing, which is the complete and exclusive statement of the agreement
between us, except as we may later agree in writing to modify it.

 

REPORTING:
Lender, its agents, successors and assigns may report Borrowers’ names and
information regarding this loan and all of Borrowers’ past and future loans to
credit reporting agencies.

 

FOR ILLINOIS
AND MISSOURI LOANS ONLY: Unless you (the Borrowers) provide us (the Lender)
with evidence of the insurance coverage required by your agreement with us, we
may purchase insurance at your expense to protect our interests in your Collateral.
This insurance may, but need not, protect your interests. The coverage that we
purchase may not pay any claim that you make or any claim that is made against
you in connection with the Collateral. You may later cancel any insurance
purchased by us, but only after providing us with evidence that you have
obtained insurance as required by our agreement. If we purchase insurance for
the Collateral, you will be responsible for the costs of that insurance,
including interest and any other charges we may impose in connection with the
placement of the insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance may be added to your
total outstanding balance or obligation. The costs of the insurance may be more
than the cost of insurance you may be able to obtain on your own.

 

POWER OF
ATTORNEY: Borrowers hereby irrevocably appoint the Lender as Borrowers’
attorney-in-fact to act for the Borrowers with full authority in the place and
name of the Borrowers to take any action and to execute any instrument which
the Lender may deem advisable to accomplish the purposes of this Agreement,
including authority - (a) to endorse, collect, sue for, compromise, and receive
any drafts, instruments, documents, or moneys due in connection with the
Collateral; (b) to file any claims or take any action or institute any
proceedings which the Lender may deem desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Lender with respect to
any of the Collateral; (c) to disburse funds including paying insurance
premiums, taxes, liens, and other costs of preserving the Collateral; and (d)
to establish, determine priority of, perfect, continue perfected, preserve,
enforce, or terminate the Lender’s rights and interests under this Agreement.
The Lender may charge its expenses of doing so to any of the Obligations and
the Borrowers shall pay them upon demand with interest from the date each
expense is incurred at the rate in effect on the date each expense is incurred
on the applicable Obligation.

 

AUTHORIZATION FOR ACCESS TO INFORMATION:  Borrowers acknowledge and agree that the verification or
reverification of any information, whether contained in the Borrowers’ loan
application or in any other manner supplied by the Borrowers to the Lender in
connection therewith, may be made at any time by the Lender, its agents,
successors, or assigns, either directly or through a credit reporting agency,
from any source whether named in the Borrowers’ loan application or otherwise
provided to the Lender by the Borrowers.

 

BORROWERS’ PRIVACY DISCLOSURE: Your privacy
is important to us. We want you to know that we hold your financial and other
personal information in strict confidence. Since 1972, Farm Credit Administration
regulations have forbidden the directors and employees of Farm Credit
institutions from disclosing personal borrower information to others without
your consent. We do not sell or trade our customers’ personal information to
marketing companies or information brokers.

 

FCA rules allow us to disclose customer
information to others only in these situations:

 

•  We may give it to another Farm
Credit institution that you do business with.

 

•  We can be a credit reference
for you with other lenders and provide information to a credit bureau or other
consumer  reporting agency.

 

•  We can provide information in
certain types of legal or law enforcement proceedings.

 

•  FCA examiners may review loan
files during regular examinations of our association.

 

•  If one of our employees applies
to become a licensed real estate appraiser, we may give copies of real estate
appraisal reports to the State agency that licenses appraisers when required.
We will first remove as much personal information from the appraisal report as
possible.

 

As a member/owner of this institution, your
privacy and the security of your personal information are vital to our
continued ability to serve your ongoing credit needs.

 

UNAUTHORIZED DISPOSITIONS AND FALSE
STATEMENTS: Borrowers understand that it is a federal crime punishable by fine,
imprisonment, or both to knowingly make any false statements in the Borrowers’
loan application as applicable under the provisions of Title 18, United States
Code, Section 1014. Borrowers also understand that any unauthorized
disposition of Collateral or the making of any false statement or report to the
Lender in connection with a loan could result in civil and criminal
consequences to the Borrowers as applicable under the provisions of Title 18,  United States Code, Sections 658 and 1014.

 

PARTIES BOUND: Each person signing the Note,
other than the Lender, is a Borrower. The Obligations of all Borrowers are
joint and several, and all Borrowers hereby acknowledge receipt of all proceeds
of the Loan. This Agreement benefits the Lender, its successors, and assigns.
This Agreement shall bind the Borrowers, the Borrowers’ heirs, personal
representatives, successors, and assigns, and all persons and parties who
become bound as a Borrower under this Agreement.

 

FEES CHARGED: Lender has authority to charge
and Borrowers agree to pay any reasonable fees and costs charged by Lender to
amend the terms of this Loan. Borrowers give Lender authority to advance such
fees and costs and charge them to the loan. If Borrowers do not immediately
repay such advance, interest at the default rate shall begin to accrue on the
amount advanced. The absence of express authority in this Promissory Note/Loan
Agreement to charge a specific fee or cost to Borrowers shall not be construed
as a prohibition on the charging of such fees or costs.

 

 

	
  ASSN.

  	
  B.O. NO.

  	
  CIF NO.

  	
  LOAN NO.

  	
  PRODUCT CODE

  	
  CUSTOMER NAME

  	
  COMMITMENT AMOUNT

  
	
  72

  	
  65

  	
  1895500

  	
  1117248400

  	
  1011

  	
  Great Plains Ethanol, LLC

  	
  $3,000,000.00

  

EFFECTIVE 
INTEREST RATE AND DISCLOSURE

DATE: September 1, 2004

 

The
disclosures on this page are made pursuant to Section 4.13(a) of the Farm
Credit Act of 1971, as amended, 12 U.S.C. 2199, and are not part of the
contractual agreement between the Borrowers and the Lender.  This Loan is not subject to the
Truth-in-Lending (TIL), 15 U.S.C. 1601 et seq., and the effective rate of
interest described herein is not to be construed as the equivalent of the
annual percentage rate which would be disclosed on a loan subject to TIL.

 

	
  Stated
  Interest Rate

  	
   

  	
  Effective Interest Rate

  	
   

  
	
  The rate of interest currently

  	
   

  	
  The stated rate of interest

  	
   

  
	
  applicable to the Loan

  	
   

  	
  adjusted to take into account

  	
   

  
	
   

  	
   

  	
  loan origination charges and

  	
   

  
	
   

  	
   

  	
  any purchase of stock

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.06

  	
  %

  	
  5.32

  	
  %

  

 

Except with respect to stock
protected under Section 4.9A of the Farm Credit Act of 1971, as amended,
stock that is purchased in the Lender or the Lender’s parent association, as
applicable, is at risk and can only be retired at the discretion of the
association board.  Effective Interest Rate
is calculated as if stock will never be retired.  If stock is retired, as is customary, the
Effective Interest Rate would be lower than the percentage stated above.  It is generally the association’s practice to
retire stock when a Borrower’s loan balance is paid in full or upon full
payment of all of a Borrower’s loans, provided the association has an adequate
capital position.  At this time, the
association’s capital exceeds the regulatory capital requirements.

 

INTEREST RATE PLAN:

(Adjustable Rate LIBOR
Based)  The interest rate is based on an
index plus a margin and may increase during the term of this transaction if
there is an increase in the One Month London Interbank Offered Rate (“One Month
LIBOR”) and/or margin. The index is the One Month LIBOR published on the
applicable date in the Wall Street Journal. 
The margin is set by the Lender and can change at successive intervals
of 1 year(s) each.

 

In the event of default at
any time during the term of the Loan, however, and at maturity, the Loan will
be subject to a higher rate of interest.

 

ADJUSTMENT FACTORS:  The factors which the Lender takes into
account in making adjustments to the interest rate on the Loan (except fixed
rate loans and adjustments based on changes in the prime index or LIBOR index)
include costs of funds, operating expenses, provision for loan losses, capital
requirements, capital sharing, nonearning assets and competitive elements of
the financial environment.  The factors
considered by the Lender may change during the term of the Loan.

 

REPRESENTATIVE EXAMPLES:  These examples show the effect that changes
in the stock requirement and loan origination fees would have on the effective
interest rate of a representative loan with loan level stock.  A $103,000 amortized loan, including a $3,000
or 3% stock requirement, amortized over a 5-year term with level annual
payments, a stated interest rate of 10%, and loan origination charges of $1,000
would have an effective interest rate of 10.85%.  If the loan amount was to remain at $103,000
with a 3% stock requirement, but the loan origination charges increase to
$1,500, the effective interest rate would be 11.06%.

 

LOAN
OPTIONS:  The Lender may offer secured
and unsecured short- and intermediate-term loans including lines of credit,
with maturities up to 7 years or, in some instances, 10 years.  Installments can be paid monthly, quarterly,
semi-annually, annually, or according to other irregular repayment plans as may
be agreed upon by the Borrowers and the Lender. 
Interest rates may be variable at the option of the Lender, fixed for a
specified period and then variable, adjustable at specified intervals with the
rate determined either at Lender’s discretion or in accordance with the prime
index or LIBOR index, or fixed for the term of the Loan.  Some loan options are subject to certain
conditions and are not available to all borrowers for all purposes.  In addition, loan options, including interest
rates, may vary by location and time period. 
The availability of any loan option is subject to change at any time at
the discretion of the Lender.  If the
Lender is an ACA, Lender also offers long-term real estate mortgage loans with
maturities of 10 to 40 years secured by agricultural real estate or rural
homes.  Interest rates may be fixed for
the term of the loan, variable at the option of the Lender, or adjustable at
specified intervals with the rate adjusted either at Lender’s discretion or in
accordance with Federal Farm Credit Banks Funding Corporation rates or the
prime index or LIBOR index.  These real
estate mortgage loan options are subject to the same conditions, limitations,
and varying availability as mentioned above for the short- and
intermediate-term loans.

 

BORROWER
RIGHTS:

1.          At loan
closing, Borrowers shall receive copies of loan documents signed by Borrowers.
Upon request thereafter Borrowers are entitled to copies of documents signed or
delivered by Borrowers, copies of Lender’s or the Lender’s parent association’s
charter and bylaws, as applicable, and copies of Lender’s appraisals of the
collateral.

 

2.          If the loan has an adjustable or variable interest
rate, Borrowers will be notified in writing of any change in interest
rate. The notice will be given not later than any deadline date required by
regulations promulgated by the Farm Credit Administration.

 

3.          If Borrowers’
Loan is in a differential interest rate program, Borrowers may request that
Lender review the Loan to verify that the proper interest rate category has
been assigned, and also to explain in writing to Borrowers the basis for the
interest rate charged and how the credit status of the Borrowers may be
improved to receive a lower interest rate on the Loan.

 

4.          If Lender
places Borrowers’ Loan in nonaccrual status and such action results in an
adverse action being taken against Borrowers (such as revocation of any
undisbursed loan commitment), the Lender shall notify Borrowers in writing of
such change in status and the reasons therefore. If Borrowers were not 

 

 

delinquent in any payments under the Loan at the time and Borrowers’
request to have the Loan reinstated to accrual status is denied, Borrower may
obtain a review of such denial before the Lender’s credit review committee.

 

5.          Lender may not
commence foreclosure or other legal action against any collateral securing the
Loan unless at least 45 days before such commencement Lender has provided
Borrowers with a copy of Lender’s restructuring policy and forms on which
Borrower’s may submit a request for restructuring. If Borrowers’ request for
restructuring is denied, Borrowers may appeal the denial to Lender’s credit
review committee, and may also obtain an independent appraisal of any
collateral (at Borrowers’ expense) for consideration by the credit review
committee.

 

6.          If  Lender acquires agricultural real estate by
enforcement of Lender’s lien, when Lender elects to sell or lease the acquired
property, Borrowers shall have a right of first refusal on the property. Lender
shall notify Borrowers in writing and Borrowers may purchase or lease the
property, as appropriate, at the appraised fair market value or fair rental
value, or if the property is sold by public offering, at the price of the
highest qualified bid.

 

If you have any questions
concerning the information contained on this disclosure page, please contact
your servicing office.EXHIBIT 4.1

 

SUPERGEN, INC.

1998 EMPLOYEE STOCK PURCHASE PLAN

(As Amended Effective March 1, 2004)

 

1.           Purpose.  The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll
deductions.  It is the intention of the
Company to have the Plan qualify as an “Employee Stock Purchase Plan” under
Section 423 of the Internal Revenue Code of 1986, as amended.  The provisions of the Plan, accordingly,
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

2.             Definitions.

(a)           “Board”
shall mean the Board of Directors of the Company.

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

(c)           “Common
Stock” shall mean the common stock of the Company.

(d)           “Company”
shall mean SuperGen, Inc., a Delaware corporation, and any Designated
Subsidiary of the Company.

(e)           “Compensation”
shall mean all base straight time gross earnings, bonuses and commissions,
exclusive of payments for overtime, shift premium and other compensation.

(f)            “Designated
Subsidiary” shall mean any Subsidiary which has been designated by the
Board from time to time in its sole discretion as eligible to participate in
the Plan.

(g)           “Employee”
shall mean any individual who is an Employee of the Company for tax purposes
whose customary employment with the Company is at least twenty (20) hours per
week and more than five (5) months in any calendar year.  For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company.  Where the period of leave exceeds 90 days and
the individual’s right to reemployment is not guaranteed either by statute or
by contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave.

(h)           “Enrollment
Date” shall mean the first day of each Offering Period.

(i)            “Exercise
Date” shall mean the last Trading Day of each Offering Period.

(j)            “Fair
Market Value” shall mean, as of any date, the value of Common Stock
determined as follows:

(1)   If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq 

 

 

SmallCap Market of The Nasdaq
Stock Market, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on such exchange
or system for the last market trading day on the date of such determination, as
reported in The Wall Street Journal or such other
source as the Board deems reliable, or;

(2)   If the
Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean of the closing
bid and asked prices for the Common Stock on the date of such determination, as
reported in The Wall Street Journal or such other source as the Board deems
reliable, or;

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

(k)           “Offering
Period” shall mean a period of approximately six (6) months during which an
option granted pursuant to the Plan may be exercised, commencing on the first
Trading Day on or after May 15 (beginning in 1999) and terminating on the last
Trading Day in the period ending the following November 14, or commencing on
the first Trading Day on or after November 15 (beginning in 1998) and
terminating on the last Trading Day in the period ending the following May 14;
provided, however, that the first Offering Period under the Plan shall commence
on the first Trading Day on or after May 12, 1998, and shall terminate on the
last Trading Day on or before November 14, 1998. The duration of Offering
Periods may be changed pursuant to Section 4 of this Plan.

(l)            “Plan”
shall mean this 1998 Employee Stock Purchase Plan.

(m)          “Purchase
Price” shall mean an amount equal to 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower.

(n)           “Reserves”
shall mean the number of shares of Common Stock covered by each option under
the Plan which have not yet been exercised and the number of shares of Common
Stock which have been authorized for issuance under the Plan but not yet placed
under option.

(o)           “Subsidiary”
shall mean a corporation, domestic or foreign, of which not less than 50% of
the voting shares are held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by the Company or
a Subsidiary.

(p)           “Trading
Day” shall mean a day on which national stock exchanges and the Nasdaq
System are open for trading.

3.             Eligibility.

(a)           Any
Employee who shall be employed by the Company on a given Enrollment Date shall
be eligible to participate in the Plan.

(b)           Any
provisions of the Plan to the contrary notwithstanding, no Employee shall be
granted an option under the Plan (i) to the extent that, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d)

 

2

 

of the Code) would own capital
stock of the Company and/or hold outstanding options to purchase such stock
possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any Subsidiary,
or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans of the Company and its subsidiaries accrues at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding at any
time.

4.             Offering
Periods.  The Plan shall be
implemented by consecutive Offering Periods with a new Offering Period
commencing on the first Trading Day on or after May 15 (beginning in 1999) and
November 15 of each year, or on such other date as the Board shall determine,
and continuing thereafter until terminated in accordance with Section 20
hereof; provided, however, that the first Offering Period under the Plan shall
commence on the first Trading Day on or after May 12, 1998, and shall terminate
on the last Trading Day on or before November 14, 1998.  The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without stockholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

5.             Participation.

(a)           An
eligible Employee may become a participant in the Plan by completing a
subscription agreement authorizing payroll deductions in the form of Exhibit A
to this Plan and filing it with the Company’s payroll office prior to the
applicable Enrollment Date.

(b)           Payroll
deductions for a participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to
which such authorization is applicable, unless sooner terminated by the
participant as provided in Section 10 hereof.

6.             Payroll
Deductions.

(a)           At
the time a participant files his or her subscription agreement, he or she shall
elect to have payroll deductions made on each pay day during the Offering
Period in an amount not exceeding twenty percent (20%) of the Compensation
which he or she receives on each pay day during the Offering Period.

(b)           A
participant may not make any additional payments into such account.

(c)           A
participant may discontinue his or her participation in the Plan as provided in
Section 10 hereof, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period by completing or filing with the Company
a new subscription agreement authorizing a change in payroll deduction
rate.  The Board may, in its discretion,
limit the number of participation rate changes during any Offering Period.  The change in rate shall be effective with
the first full payroll period following five (5) business days after the
Company’s receipt of the new subscription agreement unless the Company elects
to process a given change in participation more

 

3

 

quickly.  A participant’s subscription agreement shall
remain in effect for successive Offering Periods unless terminated as provided
in Section 10 hereof.

(d)           Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the
Code and Section 3(b) hereof, a participant’s payroll deductions may be
decreased to zero percent (0%) at any time during an Offering Period.  Payroll deductions shall recommence at the
rate provided in such participant’s subscription agreement at the beginning of
the first Offering Period which is scheduled to end in the following calendar
year, unless terminated by the participant as provided in Section 10 hereof.

(e)           At
the time the option is exercised, in whole or in part, or at the time some or
all of the Company’s Common Stock issued under the Plan is disposed of, the
participant must make adequate provision for the Company’s federal, state, or
other tax withholding obligations, if any, which arise upon the exercise of the
option or the disposition of the Common Stock. 
At any time, the Company may, but shall not be obligated to, withhold
from the participant’s compensation the amount necessary for the Company to
meet applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable to
sale or early disposition of Common Stock by the Employee.

7.             Grant
of Option.  On the Enrollment Date of
each Offering Period, each eligible Employee participating in such Offering
Period shall be granted an option to purchase on the Exercise Date of such
Offering Period (at the applicable Purchase Price) up to a number of shares of
the Company’s Common Stock determined by dividing such Employee’s payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant’s account as of the Exercise Date by the applicable Purchase Price;
provided that in no event shall an Employee be permitted to purchase during
each Offering Period more than 1,500 shares (subject to any adjustment pursuant
to Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof.  Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof.  The Option shall
expire on the last day of the Offering Period.

8.             Exercise
of Option.  Unless a participant
withdraws from the Plan as provided in Section 10 hereof, his or her option for
the purchase of shares shall be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to option shall be purchased for
such participant at the applicable Purchase Price with the accumulated payroll
deductions in his or her account.  No
fractional shares shall be purchased; any payroll deductions accumulated in a
partici-pant’s account which are not sufficient to purchase a full share shall
be retained in the participant’s account for the subsequent Offering Period,
subject to earlier withdrawal by the participant as provided in Section 10
hereof.  Any other monies left over in a
participant’s account after the Exercise Date shall be returned to the participant.
During a participant’s lifetime, a participant’s option to purchase shares
hereunder is exercisable only by him or her.

9.             Delivery.  As promptly as practicable after each
Exercise Date on which a purchase of shares occurs, the Company shall arrange the
delivery to each participant, as appropriate, of a certificate representing the
shares purchased upon exercise of his or her option.

 

4

 

10.           Withdrawal.

(a)           A
participant may withdraw all but not less than all the payroll deductions
credited to his or her account and not yet used to exercise his or her option
under the Plan at any time by giving written notice to the Company in the form
of Exhibit B to this Plan.  All of the
participant’s payroll deductions credited to his or her account shall be paid
to such participant promptly after receipt of notice of withdrawal and such
participant’s option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period.  If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

(b)           A
participant’s withdrawal from an Offering Period shall not have any effect upon
his or her eligibility to participate in any similar plan which may hereafter
be adopted by the Company or in succeeding Offering Periods which commence
after the termination of the Offering Period from which the participant
withdraws.

11.           Termination
of Employment.  Upon a participant’s
ceasing to be an Employee for any reason, he or she shall be deemed to have
elected to withdraw from the Plan and the payroll deductions credited to such
participant’s account during the Offering Period but not yet used to exercise
the option shall be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 15 hereof, and
such participant’s option shall be automatically terminated.  The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment
shall be treated as continuing to be an Employee for the participant’s
customary number of hours per week of employment during the period in which the
participant is subject to such payment in lieu of notice.

12.           Interest.  No interest shall accrue on the payroll
deductions of a participant in the Plan.

13.           Stock.

(a)           The
maximum number of shares of the Company’s Common Stock which shall be made
available for sale under the Plan shall be five hundred thousand (500,000)
shares, subject to adjustment upon changes in capitalization of the Company as
provided in Section 19 hereof.  If, on a
given Exercise Date, the number of shares with respect to which options are to
be exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

(b)           The
participant shall have no interest or voting right in shares covered by his
option until such option has been exercised.

(c)           Shares
to be delivered to a participant under the Plan shall be registered in the name
of the participant or in the name of the participant and his or her spouse.

 

5

 

14.           Administration.  The Plan shall be administered by the Board
or a committee of members of the Board appointed by the Board.  The Board or its committee shall have full
and exclusive discretionary authority to construe, interpret and apply the
terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan.  Every
finding, decision and determination made by the Board or its committee shall,
to the full extent permitted by law, be final and binding upon all parties.

15.           Designation
of Beneficiary.

(a)           A
participant may file a written designation of a beneficiary who is to receive
any shares and cash, if any, from the participant’s account under the Plan in
the event of such parti-cipant’s death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such participant of such
shares and cash.  In addition, a
participant may file a written designation of a beneficiary who is to receive
any cash from the participant’s account under the Plan in the event of such
participant’s death prior to exercise of the option.  If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

(b)           Such
designation of beneficiary may be changed by the participant at any time by
written notice.  In the event of the
death of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant’s death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

16.           Transferability.  Neither payroll deductions credited to a
participant’s account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant.  Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company
may treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.

17.           Use
of Funds.  All payroll deductions
received or held by the Company under the Plan may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.

18.           Reports.  Individual accounts shall be maintained for
each participant in the Plan.  Statements
of account shall be given to participating Employees at least annually, which
statements shall set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased and the remaining cash balance, if any.

 

6

 

19.           Adjustments Upon Changes in
Capitalization,  Dissolution,
Liquidation, Merger or Asset Sale.

(a)           Changes
in Capitalization.  Subject to any
required action by the stockholders of the Company, the Reserves, the maximum
number of shares each participant may purchase per Offering Period (pursuant to
Section 7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan which has not yet been exercised
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration”.  Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.

(b)           Dissolution
or Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the “New Exercise
Date”), and shall terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the
Board.   The New Exercise Date shall be
before the date of the Company’s proposed dissolution or liquidation.  The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option shall be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

(c)           Merger
or Asset Sale.  In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each outstanding option
shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation
refuses to assume or substitute for the option, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the “New Exercise
Date”).   The New Exercise Date shall be
before the date of the Company’s proposed sale or merger.  The Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that
the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option shall be exercised
automatically on the New Exercise Date, unless prior to such date the participant
has withdrawn from the Offering Period as provided in Section 10 hereof.

20.           Amendment
or Termination.

(a)           The
Board of Directors of the Company may at any time and for any reason terminate
or amend the Plan.  Except as provided in
Section 19 hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board

 

7

 

of Directors on any Exercise
Date if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders. 
Except as provided in Section 19 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant.  To the extent necessary
to comply with Section 423 of the Code (or any other applicable law, regulation
or stock exchange rule), the Company shall obtain stockholder approval in such
a manner and to such a degree as required.

(b)           Without
stockholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Board (or its committee)
shall be entitled to change the Offering Periods, limit the frequency and/or
number of changes in the amount withheld during an Offering Period, establish
the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company’s
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Board
(or its committee) determines in its sole discretion advisable which are
consistent with the Plan.

21.           Notices.  All notices or other communications by a
participant to the Company under or in connection with the Plan shall be deemed
to have been duly given when received in the form specified by the Company at
the location, or by the person, designated by the Company for the receipt
thereof.

22.           Conditions
Upon Issuance of Shares.  Shares
shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares
may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance.

 

As a condition
to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned applicable
provisions of law.

23.           Term
of Plan.  The Plan shall become
effective upon the earlier to occur of its adoption by the Board of Directors
or its approval by the stockholders of the Company.  It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 20 hereof.

 

8

EXHIBIT A

SUPERGEN,
INC.

1998 EMPLOYEE STOCK
PURCHASE PLAN

SUBSCRIPTION AGREEMENT

 

 

	
  o

  	
  Original
  Application (Complete Line 2)

  	
   

  	
  Enrollment
  Date:

  	
   

  
	
  o

  	
  Change in
  Payroll Deduction Rate (Complete Line 3)

  	
   

  	
   

  	
   

  
	
  o

  	
  Change of
  Beneficiary(ies)

  	
   

  	
   

  	
   

  

 

1.                                                                                                                 
hereby elects to participate in the SuperGen, Inc. 1998 Employee Stock Purchase
Plan (the “Employee Stock Purchase Plan”) and subscribes to purchase shares of
the Company’s Common Stock in accordance with this Subscription Agreement and
the Employee Stock Purchase Plan.

2.                                       I
hereby authorize payroll deductions from each paycheck in the amount of $               
or           % of my
Compensation on each payday (from 1% to 20%) during the Offering Period in
accordance with the Employee Stock Purchase Plan.

3.                                       I
hereby authorize a change in payroll deductions from each paycheck to the
amount of $              
or              %
of my Compensation on each payday (from 0% to 20%) during the Offering Period
in accordance with the Employee Stock Purchase Plan.

4.                                       I
understand that said payroll deductions shall be accumulated for the purchase
of shares of Common Stock at the applicable Purchase Price determined in
accordance with the Employee Stock Purchase Plan.  I understand that if I do not withdraw from
an Offering Period, any accumulated payroll deductions will be used to
automatically exercise my option.

5.                                       I
have received a copy of the complete Employee Stock Purchase Plan.  I understand that my participation in the
Employee Stock Purchase Plan is in all respects subject to the terms of the
Plan.  I understand that my ability to
exercise the option under this Subscription Agreement is subject to stockholder
approval of the Employee Stock Purchase Plan.

6.                                       Shares
purchased for me under the Employee Stock Purchase Plan should be issued in the
name(s) of (Employee or Employee and Spouse only):                                                    .

7.                                       I
understand that if I dispose of any shares received by me pursuant to the Plan
within 2 years after the Enrollment Date (the first day of the Offering Period
during which I purchased such shares), I will be treated for federal income tax
purposes as having received ordinary income at the time of such disposition in
an amount equal to the excess of the fair market value of the

 

 

 

shares at the time such shares were purchased by me
over the price which I paid for the shares. 
I hereby agree to notify the Company in writing within 30 days after
the date of any disposition of shares and I will make adequate provision for
Federal, state or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock. 
The Company may, but will not be obligated to, with-hold from my
compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common
Stock by me. If I dispose of such shares at any time after the expiration of
the 2-year holding period, I understand that I will be treated for federal
income tax purposes as having received income only at the time of such
disposition, and that such income will be taxed as ordinary income only to the
extent of an amount equal to the lesser of (1) the excess of the fair market
value of the shares at the time of such disposition over the purchase price
which I paid for the shares, or (2) 15% of the fair market value of the shares
on the first day of the Offering Period. 
The remainder of the gain, if any, recognized on such disposition will
be taxed as capital gain.

8.                                       I
hereby agree to be bound by the terms of the Employee Stock Purchase Plan.  The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in the Employee Stock
Purchase Plan.

9.                                       In
the event of my death, I hereby designate the following as my beneficiary(ies)
to receive all payments and shares due me under the Employee Stock Purchase
Plan:

 

 

	
  NAME:  (Please
  print)

  	
   

  	
   

  	
   

  	 

	
   

  	
  (First)

  	
  (Middle)

  	
  (Last)

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  
	
  Relationship

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employee’s
  Social

  	
   

  	
   

  
	
  Security
  Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Employee’s
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

 

2

 

I UNDERSTAND THAT THIS
SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING
PERIODS UNLESS TERMINATED BY ME.

 

	
  Dated:

  	
   

  
	
   

  	
  Signature of
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Spouse’s
  Signature (If beneficiary other than spouse)

  

 

3

 

EXHIBIT
B

SUPERGEN,
INC.

1998 EMPLOYEE STOCK
PURCHASE PLAN

NOTICE OF WITHDRAWAL

The
undersigned participant in the Offering Period of the SuperGen, Inc. 1998
Employee Stock Purchase Plan which began on            
19      (the “Enrollment Date”) hereby notifies the
Company that he or she hereby withdraws from the Offering Period.  He or she hereby directs the Company to pay
to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period.  The undersigned understands and agrees that
his or her option for such Offering Period will be automatically
terminated.  The undersigned understands
further that no further payroll deductions will be made for the purchase of
shares in the current Offering Period and the undersigned shall be eligible to
participate in succeeding Offering Periods only by delivering to the Company a
new Subscription Agreement.

 

	
   

  	
  Name
  and Address of Participant:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]