CENEX HARVEST STATES COOPERATIVES (Form: 10-Q, Received: 07/02/2003 15:51:51)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended May 31, 2003.
[ ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .

Commission File Number: 333–17865
Exchange Act filing number 0–50150

CENEX HARVEST STATES COOPERATIVES
(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction
of incorporation or organization)

41-0251095
(IRS Employer
Identification No.)

5500 Cenex Drive
Inver Grove Heights, Minnesota 55077
(Address of principal executive offices and zip code)

(651) 451-5151
(Registrant’s telephone number,
including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date.

Class	Number of shares outstanding at May 31, 2003

NONE	NONE

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of May 31, 2003, August 31, 2002 andMay 31, 2002 (unaudited)	2
Consolidated Statements of Operations for the three months and nine months ended May 31, 2003 and 2002 (unaudited)	3
Consolidated Statements of Cash Flows for the three months and nine months ended May 31, 2003 and 2002 (unaudited)	4
Notes to Consolidated Financial Statements (unaudited)	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	22
Item 4. Controls and Procedures	23
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K	24
SIGNATURE PAGE	25
SECTION 302 CERTIFICATIONS	26

PART I. FINANCIAL INFORMATION

SAFE HARBOR STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties that may cause the Company's actual results to differ materially from the results discussed in the forward-looking statements. These factors include those set forth in Exhibit 99.1, under the caption “Cautionary Statement” to this Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2003.

ITEM 1. FINANCIAL STATEMENTS

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS
	May 31, 2003		August 31, 2002		May 31, 2002

	(dollars in thousands)
CURRENT ASSETS:
Cash and cash equivalents	$	160,198	$	108,192	$	107,324
Receivables		741,047		741,578		659,994
Inventories		678,501		759,663		596,046
Other current assets		194,274		140,944		76,268

Total current assets		1,774,020		1,750,377		1,439,632
INVESTMENTS		528,505		496,607		486,411
PROPERTY, PLANT AND EQUIPMENT		1,095,231		1,057,421		1,037,138
OTHER ASSETS		185,543		177,322		215,350

Total assets	$	3,583,299	$	3,481,727	$	3,178,531

LIABILITIES AND EQUITIES
CURRENT LIABILITIES:
Notes payable	$	321,131	$	332,514	$	275,956
Current portion of long-term debt		14,987		89,032		88,676
Customer credit balances		71,527		26,461		37,975
Customer advance payments		101,534		169,123		98,177
Checks and drafts outstanding		65,291		84,251		63,314
Accounts payable		452,140		517,667		394,609
Accrued expenses		236,081		225,704		166,803
Dividends and equities payable		43,287		56,510		52,343

Total current liabilities		1,305,978		1,501,262		1,177,853
LONG-TERM DEBT		646,153		483,092		486,674
OTHER LIABILITIES		117,404		118,280		106,916
MINORITY INTERESTS IN SUBSIDIARIES		104,491		89,455		96,127
COMMITMENTS AND CONTINGENCIES
EQUITIES		1,409,273		1,289,638		1,310,961

Total liabilities and equities	$	3,583,299	$	3,481,727	$	3,178,531

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For the Three Months Ended May 31,							For the Nine Months Ended May 31,

	2003			2002			2003			2002

	(dollars in thousands)
REVENUES:
Net sales	$	2,287,588		$	1,831,289		$	7,363,346		$	5,563,052
Patronage dividends		1,351			3,028			2,310			4,937
Other revenues		30,122			26,402			93,001			82,126

		2,319,061			1,860,719			7,458,657			5,650,115
Cost of goods sold		2,220,473			1,769,736			7,199,679			5,396,502
Marketing, general and administrative		49,483			50,745			140,703			140,020

OPERATING EARNINGS		49,105			40,238			118,275			113,593
Interest		12,284			10,866			36,533			31,930
Equity income from investments		(30,003	)		(31,915	)		(32,396	)		(33,681	)
Minority interests		5,913			5,851			14,689			11,561

INCOME BEFORE INCOME TAXES		60,911			55,436			99,449			103,783
INCOME TAXES		8,738			8,795			11,020			13,416

NET INCOME	$	52,173		$	46,641		$	88,429		$	90,367

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Three Months Ended May 31,							For the Nine Months Ended May 31,

	2003			2002			2003			2002

	(dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	52,173		$	46,641		$	88,429		$	90,367
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		25,498			25,227			77,132			76,771
Noncash net income from equity investments		(30,003	)		(31,915	)		(32,396	)		(33,681	)
Minority interests		5,913			5,851			14,689			11,561
Adjustment of inventories to market value		—			(6,441	)		—			—
Noncash portion of patronage dividends received		(671	)		(2,014	)		(1,352	)		(3,750	)
(Gain) loss on sale of property, plant and equipment		(466	)		5			(736	)		(2,738	)
Other, net		455			(408	)		2,915			(287	)
Changes in operating assets and liabilities:
Receivables		24,766			(73,885	)		10,635			23,831
Inventories		183,252			12,045			81,162			(95,592	)
Other current assets and other assets		56,255			30,288			(61,796	)		(11,334	)
Customer credit balances		(31,893	)		(25,269	)		45,066			(511	)
Customer advance payments		(58,004	)		15,023			(67,589	)		(10,958	)
Accounts payable and accrued expenses		(13,078	)		82,481			(55,369	)		(87,115	)
Other liabilities		6,103			1,196			(875	)		7,010

Net cash provided by (used in) operating activities		220,300			78,825			99,915			(36,426	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment		(45,092	)		(32,840	)		(122,467	)		(84,745	)
Proceeds from disposition of property, plant and equipment		3,976			1,822			15,901			10,468
Investments		(36,449	)		(9	)		(40,624	)		(6,185	)
Equity investments redeemed		3,341			6,767			31,434			28,141
Investments redeemed		2,532			1,994			5,915			4,022
Changes in notes receivable		(2,754	)		332			(14,270	)		2,740
Acquisition of intangibles		(333	)		(440	)		(767	)		(27,971	)
Distribution to minority owners		—			(401	)		(463	)		(4,752	)
Other investing activities, net		(34	)		21			433			1,082

Net cash used in investing activities		(74,813	)		(22,754	)		(124,908	)		(77,200	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in notes payable		(49,430	)		(22,288	)		(11,383	)		178,761
Long-term debt borrowings		—			—			175,000			30,000
Principal payments on long-term debt		(48,710	)		(4,559	)		(85,989	)		(14,687	)
Payments on derivative instruments		—			—			(7,574	)		—
Changes in checks and drafts outstanding		9,541			(6,222	)		(18,960	)		(24,495	)
Proceeds from sale of preferred stock, net of expenses		(96	)		1,571			82,484			4,429
Redemption of preferred stock		(2,002	)		—			(2,002	)		—
Preferred stock dividends paid		(1,327	)		(83	)		(1,701	)		(93	)
Retirements of equities		(2,042	)		(3,153	)		(26,402	)		(26,340	)
Cash patronage dividends paid		(109	)		(511	)		(26,474	)		(40,083	)

Net cash (used in) provided by financing activities		(94,175	)		(35,245	)		76,999			107,492

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		51,312			20,826			52,006			(6,134	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		108,886			86,498			108,192			113,458

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	160,198		$	107,324		$	160,198		$	107,324

The accompanying notes are an integral part of the consolidated financial statements (unaudited).

CENEX HARVEST STATES COOPERATIVES AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in thousands)

Note 1. Accounting Policies

The unaudited consolidated balance sheets as of May 31, 2003 and 2002, and the statements of operations and cash flows for the three and nine months ended May 31, 2003 and 2002 reflect, in the opinion of management of Cenex Harvest States Cooperatives (CHS or the Company), all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods presented. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full fiscal year because of, among other things, the seasonal nature of the Company’s businesses. The consolidated balance sheet data as of August 31, 2002 has been derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

The consolidated financial statements include the accounts of the Company and all of its wholly-owned and majority-owned subsidiaries and limited liability companies. The effects of all significant intercompany accounts and transactions have been eliminated.

These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended August 31, 2002, included in the Company's Annual Report on Form 10-K and Form 10-K/A filed with the Securities and Exchange Commission on November 25, 2002 and June 27, 2003, respectively.

Goodwill and Other Intangible Assets

The Company had $27.3 million of goodwill as of May 31, 2003. During the three months and nine months then ended, the Company sold certain businesses in the Energy segment and therefore reduced goodwill by $0.2 million and $0.6 million, respectively.

Intangible assets subject to amortization primarily include trademarks, tradenames, customer lists and non-compete agreements, and are amortized on a straight-line basis over their respective useful lives ranging from 2 to 15 years. The gross carrying amount of these intangible assets is $43.2 million with total accumulated amortization of $10.6 million as of May 31, 2003. Intangible assets of $0.8 million were acquired during the nine months ended May 31, 2003. Total amortization expense for intangible assets during the three-month and nine-month periods ended May 31, 2003 was approximately $1.2 million and $3.5 million, respectively. The Company estimates amortization expense for the next five years will approximate $4.0 million annually.

Recent Accounting Pronouncements

The Financial Accounting Standards Board (FASB) issued SFAS No. 143, “Accounting for Asset Retirement Obligations” which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Company is in the process of finalizing its analysis of adopting this standard. The Company’s Energy segment operates oil refineries and related pipelines for which the Company would be subject to Asset Retirement Obligations (ARO) if such assets were to be dismantled. The Company, however, expects to operate its refineries and related pipelines indefinitely. Since the time period to dismantle these assets is indeterminate, a corresponding ARO is not estimable and therefore has not been recorded. The Company continues to assess whether any other ARO’s exist related to its remaining operations, however, based on available information to date, no ARO’s have been identified. As such, the Company believes that the effects of adopting this standard do not have a material effect on the Company.

entity to finance its activities without additional subordinated financial support from other parties. The interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The Company believes that the effects of adopting this standard will not have a material effect on the Company.

On April 30, 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. The new guidance amends SFAS No. 133 for decisions made as part of the Derivatives Implementation Group (“DIG”) process that effectively required amendments to SFAS No. 133, and decisions made in connection with other FASB projects dealing with financial instruments and in connection with implementation issues raised in relation to the application of the definition of a derivative and characteristics of a derivative that contains financing components. In addition, it clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The Company believes that the effects of adopting this standard will not have a material effect on the Company.

In May 2003 the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in certain circumstances). Many of those instruments were previously classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities which are subject to the provisions for the first fiscal period beginning after December 15, 2003. The Statement is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the Statement and still existing at the beginning of the interim period of adoption. The Company believes that the effects of adopting this standard will not have a material effect on the Company.

Note 2. Receivables

	May 31, 2003		August 31, 2002		May 31, 2002

Trade	$	710,524	$	717,888	$	665,483
Other		59,743		49,846		20,838

		770,267		767,734		686,321
Less allowances for doubtful accounts		29,220		26,156		26,327

	$	741,047	$	741,578	$	659,994

Note 3. Inventories

	May 31, 2003		August 31, 2002		May 31, 2002

Grain and oilseed	$	278,480	$	393,095	$	245,606
Energy		232,877		229,981		233,496
Feed and farm supplies		115,747		91,138		94,678
Processed grain and oilseed		50,128		36,264		13,730
Other		1,269		9,185		8,539

	$	678,501	$	759,663	$	596,049

Note 4. Investments

Agriliance, LLC is owned and governed by Land O'Lakes, Inc. (50%) and United Country Brands, LLC (50%). United Country Brands, LLC is owned and governed 50% by the Company and 50% by Farmland Industries, Inc. (Farmland), and was formed solely to hold a 50% interest in Agriliance, LLC. Prior to the transaction described below, the Company's indirect share of earnings (economic interest) in Agriliance, LLC was 25%, which followed the Company's ownership interest. Subsequent to the transaction, the Company's indirect economic interest in Agriliance, LLC does not follow the Company's ownership interest.

In April, 2003, the Company acquired an additional economic interest in the crop protection products business of Agriliance, LLC (the “CPP Business”), which constitutes only a part of Agriliance’s business operations. The Company acquired 13.1% of the CPP Business for a cash payment of $34.3 million. The economic interests in Agriliance, LLC are owned 50% by Land O’Lakes, Inc., 25% plus an additional 13.1% of the CPP Business by the Company and 25% less 13.1% of the CPP Business by Farmland. The governance interests in Agriliance, LLC did not change.

The following provides summarized unaudited financial information for the Company’s unconsolidated significant subsidiaries Ventura Foods, LLC (50% equity ownership) and Agriliance, LLC, for the three-month and nine-month periods as indicated below.

Ventura Foods, LLC

	For the Three Months Ended May 31,					For the Nine Months Ended May 31,

	2003		2002		2003		2002

Net sales	$	296,298	$	253,525	$	858,715	$	750,144
Gross profit		39,779		52,536		119,150		130,634
Net income		12,018		24,434		34,421		50,262

Agriliance, LLC

	For the Three Months Ended May 31,					For the Nine Months Ended May 31,

	2003		2002		2003		2002

Net sales	$	1,402,646	$	1,454,818	$	2,548,766	$	2,694,676
Gross profit		157,972		145,495		251,418		230,826
Net income		81,490		70,856		36,134		17,748

Note 5. Debt

In October 2002, the Company entered into a private placement with several insurance companies for long-term debt in the amount of $175.0 million, which was layered into two series. The first series of $115.0 million has an interest rate of 4.96% and will be repaid in equal semi-annual installments of approximately $8.8 million during the years 2007 through 2013. The second series of $60.0 million has an interest rate of 5.60% and will be repaid in equal semi-annual installments of approximately $4.6 million during fiscal years 2012 through 2018.

In May 2003, the Company established a new 364-day credit facility of $600.0 million committed with a syndication of banks, and on May 31, 2003, the total outstanding on this facility was $320.0 million. Also in May, the Company established a three-year revolving credit facility with a syndication of banks, with $100.0 million committed. There was no outstanding balance on the three-year facility on May 31, 2003.

Note 6. Equities

In January 2003, the Board of Directors authorized the sale and issuance of up to 3,500,000 shares of 8% Cumulative Redeemable Preferred Stock (New Preferred) at a price of $25.00 per share. The Company filed a registration statement on Form S-2 with the Securities and Exchange Commission registering 3,000,000 shares of the New Preferred (with an additional over-allotment option of 450,000

shares granted to the underwriters), which was declared effective on January 27, 2003. The shares were subsequently sold for proceeds of $86.3 million (3,450,000 shares), and are listed on the Nasdaq National Market. Expenses related to the issuance of the New Preferred were $3.8 million.

The Company had previously suspended sales of its 8% Preferred Stock (Old Preferred) after raising $9.5 million (9,454,874 shares), and on February 25, 2003 the Company filed a post-effective amendment to terminate the offering of the Old Preferred shares. On March 5, 2003, the Company’s Board of Directors authorized the redemption and conversion of the Old Preferred shares. A redemption notification and a conversion election form were sent to holders of the Old Preferred shares on March 21, 2003 explaining that on April 25, 2003 all shares of the Old Preferred would be redeemed by the Company for $1 per share unless they were converted into shares of the Company’s New Preferred. The conversion did not change the base liquidation amount or dividend amount of the Old Preferred, since 25 shares of the Old Preferred converted to 1 share of the New Preferred. The total Old Preferred converted to the New Preferred was $7.5 million (7,452,439 shares), and the balance of the Old Preferred (2,002,435 shares) was redeemed in cash at $1 per share. As of May 31, 2003 the Company had $93.7 million (3,748,099 shares) of the New Preferred outstanding.

Note 7. Comprehensive Income

For the three months ended May 31, 2003 and 2002, total comprehensive income amounted to $53.3 million and $47.0 million, respectively. For the nine months ended May 31, 2003 and 2002, total comprehensive income amounted to $83.0 million and $91.0 million, respectively. Accumulated other comprehensive loss on May 31, 2003, August 31, 2002 and May 31, 2002 was $57.4 million, $51.9 million and $1.3 million, respectively. Other comprehensive loss for the nine months ended May 31, 2003 consisted of $6.0 million related to interest rate swap derivative instruments, partially offset by $0.6 million of other minor comprehensive income items.

Note 8. Non-Cash Financing Activities

During the nine months ended May 31, 2003 and 2002 the Company accrued dividends and equities payable of $41.0 million and $45.2 million, respectively.

Note 9. Segment Reporting

The Company manages five business segments, which are based upon products and services, including Agronomy, Energy, Country Operations and Services, Grain Marketing, and Processed Grains and Foods. The Agronomy segment consists of joint ventures, from which the Company derives investment income based upon the profitability of these joint ventures. The Energy Segment derives its revenue through the refining, wholesaling and retailing of petroleum products. Country Operations derives its revenue through the origination and marketing of grain, through the retail sale of petroleum products, agronomy products, feed and farm supplies. Country Operations also derives revenue from service activities related to crop production. Grain Marketing derives its revenue from the sale of grain and oilseed and from service activities conducted at its export terminals. Processed Grains and Foods derives its revenues from the sale of soybean meal and soybean refined oil, from equity income in a wheat milling joint venture, from equity income in a food manufacturing and distributing joint venture, and from the sale of Mexican food products.

The column Reconciling Amounts in the table below represents the elimination of sales between segments. Such transactions are conducted at market prices to more accurately evaluate the profitability of the individual business segments.

The Company assigns certain corporate general and administrative expenses to its business segments based on the business segments use of such services and allocates other services based on factors or considerations relevant to the costs incurred to the different business segments.

Expenses that are incurred at the corporate level for the purpose of the general operation of the Company are allocated to the segments based upon factors which management considers to be non-asymmetrical. Nevertheless, due to efficiencies in scale, cost allocations, and intersegment activity,

management does not represent that these segments, if operated independently, would report the income before taxes and other financial information as presented.

Segment information for the three months and nine months ended May 31, 2003 and 2002 is as follows:

	Agronomy			Energy			Country Operations and Services			Grain Marketing			Processed Grains and Foods			Other			Reconciling Amounts			Total

For the Three Months Ended May 31, 2003
Net sales				$	873,187		$	545,082		$	962,244		$	112,925					$	(205,850	)	$	2,287,588
Patronage dividends	$	(27	)		334			800			136			84		$	24						1,351
Other revenues					3,045			20,379			4,559			970			1,169						30,122

		(27	)		876,566			566,261			966,939			113,979			1,193			(205,850	)		2,319,061
Cost of goods sold					825,972			534,830			960,283			105,238						(205,850	)		2,220,473
Marketing, general and administrative		1,989			15,997			14,064			5,653			10,354			1,426						49,483
Interest		(204	)		4,297			3,891			865			3,404			31						12,284
Equity (income) loss from investments		(22,983	)		(386	)		(72	)		429			(6,990	)		(1	)					(30,003	)
Minority interests					5,581			332															5,913

Income (loss) before income taxes	$	21,171		$	25,105		$	13,216		$	(291	)	$	1,973		$	(263	)	$	—		$	60,911

Capital expenditures				$	22,677		$	3,498		$	1,062		$	17,698		$	157					$	45,092

Depreciation and amortization	$	312		$	14,475		$	4,914		$	1,610		$	3,416		$	771					$	25,498

For the Three Months Ended May 31, 2002
Net sales				$	714,280		$	409,723		$	741,712		$	105,021					$	(139,447	)	$	1,831,289
Patronage dividends	$	(64	)		459			2,185			176			252		$	20						3,028
Other revenues					449			23,468			1,294			992			199						26,402

		(64	)		715,188			435,376			743,182			106,265			219			(139,447	)		1,860,719
Cost of goods sold					668,075			408,570			737,079			95,459						(139,447	)		1,769,736
Marketing, general and administrative		3,921			18,844			11,358			6,179			9,424			1,019						50,745
Interest		(330	)		4,377			4,202			871			2,339			(593	)					10,866
Equity (income) loss from investments		(17,732	)		(64	)		(83	)		(740	)		(13,296	)								(31,915	)
Minority interests					5,687			164															5,851

Income (loss) before income taxes	$	14,077		$	18,269		$	11,165		$	(207	)	$	12,339		$	(207	)	$	—		$	55,436

Capital expenditures				$	11,706		$	5,478		$	7,733		$	7,770		$	153					$	32,840

Depreciation and amortization	$	312		$	14,155		$	5,156		$	1,474		$	3,361		$	769					$	25,227

For the Nine Months Ended May 31, 2003
Net sales				$	2,684,805		$	1,464,980		$	3,574,268		$	355,049					$	(715,756	)	$	7,363,346
Patronage dividends	$	(84	)		397			1,646			162			111		$	78						2,310
Other revenues					7,774			61,364			17,395			2,826			3,642						93,001

		(84	)		2,692,976			1,527,990			3,591,825			357,986			3,720			(715,756	)		7,458,657
Cost of goods sold					2,574,006			1,441,800			3,568,107			331,522						(715,756	)		7,199,679
Marketing, general and administrative		4,707			43,759			41,999			17,636			28,499			4,103						140,703
Interest		(882	)		12,308			11,895			3,747			9,069			396						36,533
Equity (income) loss from investments		(12,953	)		(941	)		(542	)		1,325			(19,284	)		(1	)					(32,396	)
Minority interests					13,786			903															14,689

Income (loss) before income taxes	$	9,044		$	50,058		$	31,935		$	1,010		$	8,180		$	(778	)	$	—		$	99,449

Goodwill assets				$	3,409		$	262					$	23,605								$	27,276

Capital expenditures				$	56,701		$	16,849		$	1,978		$	45,662		$	1,277					$	122,467

Depreciation and amortization	$	935		$	43,523		$	15,668		$	4,820		$	9,818		$	2,368					$	77,132

Total identifiable assets at May 31, 2003	$	281,597		$	1,343,928		$	861,220		$	395,468		$	486,447		$	214,639					$	3,583,299

For the Nine Months Ended May 31, 2002
Net sales				$	1,857,086		$	1,096,478		$	2,730,289		$	394,213					$	(515,014	)	$	5,563,052
Patronage dividends	$	(64	)		907			3,193			528			252		$	121						4,937
Other revenues					3,888			59,750			15,584			1,555			1,349						82,126

		(64	)		1,861,881			1,159,421			2,746,401			396,020			1,470			(515,014	)		5,650,115
Cost of goods sold					1,729,198			1,092,377			2,722,757			367,184						(515,014	)		5,396,502
Marketing, general and administrative		6,725			49,511			35,763			17,246			27,397			3,378						140,020
Interest		(1,063	)		12,677			10,006			3,898			7,328			(916	)					31,930
Equity (income) loss from investments		(6,126	)		1,469			130			(2,705	)		(26,449	)								(33,681	)
Minority interests					11,044			517															11,561

Income (loss) before income taxes	$	400		$	57,982		$	20,628		$	5,205		$	20,560		$	(992	)	$	—		$	103,783

Goodwill assets				$	4,809		$	325					$	23,605								$	28,739

Capital expenditures				$	37,356		$	16,016		$	11,461		$	19,255		$	657					$	84,745

Depreciation and amortization	$	935		$	43,829		$	15,699		$	4,165		$	9,790		$	2,353					$	76,771

Total identifiable assets at May 31, 2002	$	235,241		$	1,301,003		$	750,993		$	292,199		$	396,376		$	202,719					$	3,178,531

Note 10. Commitments and Contingencies

Environmental

The Company, including NCRA, expects to incur capital expenditures related to the Environmental Protection Agency low sulfur fuel regulations required by 2006. These expenditures are expected to be approximately $87.0 million for the Company’s Laurel, Montana refinery and $324.0 million for NCRA’s McPherson, Kansas refinery over the next three years, of which $2.1 million has been spent at the Laurel refinery and $25.6 million has been spent by NCRA at the McPherson refinery as of May 31, 2003. The Company expects to fund the refinery expenditures with a combination of cash, future earnings and additional borrowings.

Gain on Legal Settlements

During the nine months ended May 31, 2003 the Company received cash proceeds and recorded gains of $10.9 million, of which $0.2 million was received during the third quarter ended May 31, 2003, related to legal settlements from several vitamin product suppliers against whom the Company alleged certain price-fixing claims. The Company has recorded these gains in cost of goods sold.

Guarantees

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The interpretation addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. The interpretation also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of the guarantee for obligations the guarantor has undertaken in issuing the guarantee.

The Company makes seasonal and term loans to member cooperatives, and its wholly-owned subsidiary, Fin-Ag, Inc., makes loans for agricultural purposes to individual producers. Some of these loans are sold to CoBank, ACB, and the Company guarantees a portion of the loans sold. In addition, the Company also guarantees certain debt and obligations under contracts for its subsidiaries and members.

The Company’s obligations pursuant to its guarantees as of May 31, 2003 were as follows:

	*(dollars in thousands)*
Subsidiary / Affiliate	Guarantee Maximum Exposure	Exposure on May 31, 2003	Nature of Guarantee	Expiration Date	Triggering Event	Recourse Provisions	Assets Held as Collateral

The Company's Financial Services cooperative loans sold to CoBank, ACB	*	$7,489	10% of the obligations of borrowers (agri cultural cooperatives) under credit agreements for loans sold	None stated, but may be terminated by either party upon 60 days prior notice in regard to future obligations	Credit Agreement Default	Subrogation against borrower	Some or all assets of borrower are held as collateral and should be sufficient to cover guarantee exposure
Fin-Ag, Inc. agricultural loans sold to CoBank, ACB	*	41,773	15% of the obligations of borrowers under credit agreements for some of the loans sold, and 100% of the obligations of borrowers for the remaining loans sold	None stated, but may be terminated by either party upon 90 days prior notice in regard to future obligations	Credit Agreement Default	Subrogation against borrower	Some or all assets of borrower are held as collateral and should be sufficient to cover guarantee exposure
TEMCO, LLC	$7,500	—	Obligations by TEMCO, LLC under credit agreement	None stated	Credit Agreement Default	Subrogation against TEMCO, LLC	None
North Valley Petroleum, LLC	$194	182	Obligations by North Valley Petroleum, LLC under credit agreement	None stated	Credit Agreement Default	Subrogation against North Valley Petroleum, LLC	None
Third parties	*	841	Surety for, or indemnificaton of surety for sales contracts between affiliates and sellers of grain under deferred payment contracts	Annual renewal on December 1st in regard to surety for one third party, otherwise none stated and may be terminated by the Company at any time in regard to future obligations	Nonpayment	Subrogation against affiliates	Some or all assets of borrower are held as collateral but might not be sufficient to cover guarantee exposure

		$50,285

The Company's bank covenants allow for guarantees of up to $150.0 million, but the Company is under no obligation to extend these guarantees. The maximum exposure on any given date is equal to the actual guarantees extended as of that date.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cenex Harvest States Cooperatives (CHS or the Company) is one of the nation’s leading integrated agricultural companies. As a cooperative, the Company is owned by farmers, ranchers and their local cooperatives from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas. CHS buys commodities from, and provides products and services to members and other customers. The Company provides a wide variety of products and services, from initial agricultural inputs such as fuels, farm supplies and crop nutrients, to agricultural outputs that include grains and oilseeds, grain and oilseed processing, and food products.

The Company has five distinct business segments: Agronomy, Energy, Country Operations and Services, Grain Marketing, and Processed Grains and Foods. Summary data for each of these segments for the three months and nine months ended May 31, 2003 and 2002 is shown in Note 9 to the Consolidated Financial Statements.

Many of the Company’s businesses are highly seasonal. As a result, operating income will vary throughout the year, but overall revenues remain fairly constant, partly because the Company does not consolidate revenues in the Agronomy segment. Overall, the Company’s income is generally lowest during the second fiscal quarter and highest during the third fiscal quarter. Certain business segments are subject to varying seasonal fluctuations. For example, Agronomy and Country Operations and Services segments experience higher volumes and income during the spring planting season and in the fall, which corresponds to harvest. The Grain Marketing segment is subject to fluctuations in revenue and earnings based on producer harvests, world grain prices and demand. The Company’s Energy segment generally experiences higher revenues and profitability in certain operating areas, such as refined products in the summer when gasoline and diesel usage is highest. Other energy products, such as propane, typically experience higher revenues and profitability during the winter heating and crop drying seasons.

While the Company’s sales and operating earnings are derived from businesses and operations which are wholly-owned and majority-owned, a portion of business operations are conducted through entities in which the Company holds ownership interests of 50% or less and does not control the operations. The Company accounts for these investments primarily using the equity method of accounting, wherein CHS records as equity income from investments its proportionate share of income or loss reported by the entity, without consolidating the revenues and expenses of the entity in the Company’s consolidated statements of operations. These investments principally include the Company’s 25% ownership in Agriliance, LLC (Agriliance), the 50% ownership in TEMCO, LLC, the 50% ownership in United Harvest, LLC, the 24% ownership in Horizon Milling, LLC (Horizon) and the 50% ownership in Ventura Foods, LLC (Ventura).

Recent Events

In April, 2003, the Company acquired an additional economic interest in the crop protection products business of Agriliance (the “CPP Business”), which constitutes only a part of Agriliance’s business operations. The Company acquired 13.1% of the CPP Business for a cash payment of $34.3 million. The economic interests in Agriliance are owned 50% by Land O’Lakes, Inc., 25% plus an additional 13.1% of the CPP Business by the Company and 25% less 13.1% of the CPP Business by Farmland. The governance interests in Agriliance did not change.

On May 22, 2003, the Company gave notice to Farmland that it will not renew a supply agreement to purchase Farmland’s Coffeyville, Kansas refined fuels production at prevailing market rates. The

non-renewal is effective November 30, 2003. The Company's management is confident that alternative sources of supply will be available and that the non-renewal will not have a material adverse affect on the Company.

Results of Operations

Comparison of the three months ended May 31, 2003 and 2002

Net Income. Consolidated net income for the three months ended May 31, 2003 was $52.2 million compared to $46.6 million for the three months ended May 31, 2002, which represents a $5.6 million (12%) increase. Increased income in the Agronomy, Energy and Country Operations and Services segments were partially offset by decreased income in the Processed Grains and Foods segment compared to the three months ended May 31, 2002.

Net Sales. Consolidated net sales of $2.3 billion for the three months ended May 31, 2003 increased $456.3 million (25%) compared to the three months ended May 31, 2002.

Energy net sales of $850.9 million increased $154.6 million (22%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. Sales for the three months ended May 31, 2003 and 2002 were $873.2 million and $714.3 million, respectively. The Company eliminated all intracompany sales from the Energy segment to the Country Operations and Services segment of $22.3 million and $18.0 million for the three months ended May 31, 2003 and 2002, respectively. The net increase in sales was primarily a result of refined fuels average sales price increase of $0.17 per gallon and a volume increase of 8% compared to the three months ended May 31, 2002. In addition, the average sales price of propane increased $0.18 per gallon, which was offset by a 22% decrease in volume compared to the three months ended May 31, 2002. Refined fuels commodity price increases were primarily the result of higher global crude values. Domestic propane inventories are at extremely low levels coming out of the heating season, which is supporting a higher product price.

Country Operations farm supply sales of $279.3 million increased by $51.0 million (22%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. The increase in farm supply sales is primarily due to increased volumes from a sunflower plant acquisition and improved spring planting conditions as well as price increases compared to the prior three-month period.

Company-wide grain and oilseed net sales of $1.0 billion increased $242.8 million (30%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. Sales for the three months ended May 31, 2003 were $962.2 million and $265.8 million from the Grain Marketing and Country Operations and Services segments, respectively. Sales for the three months ended May 31, 2002 were $741.7 million and $181.4 million from the Grain Marketing and Country Operations and Services segments, respectively. The Company eliminated all intracompany sales from the Country Operations and Services segment to the Grain Marketing segment, of $183.5 million and $121.4 million, for the three months ended May 31, 2003 and 2002, respectively. The net increase in sales was primarily due to an increase of $0.89 per bushel (26%) in the average sales price of all grain and oilseed marketed by the Company and an increase in volume of 4% compared to the three months ended May 31, 2002.

Processed Grains and Foods net sales of $112.9 million increased $7.9 million (8%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. This increase is primarily due to a sales volume increase of 2% and an average sales price increase of $0.03 per pound on refined soybean oil.

Patronage Dividends. Patronage dividends received of $1.4 million decreased $1.7 million (55%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. Patronage dividends from a cooperative were received in June 2003 compared to May 2002.

Other Revenues. Other revenues of $30.1 million increased $3.7 million (14%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. The most significant changes were increased other revenues within the Energy and Grain Marketing segments, which was partially offset by decreased other revenues in the Country Operations and Services segment compared to the three months ended May 31, 2002.

Cost of Goods Sold. Cost of goods sold of $2.2 billion increased $450.7 million (25%) during the three months ended May 31, 2003, compared to the three months ended May 31, 2002. The Energy segment cost of goods sold increased by $157.9 million (24%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. Refined fuels average cost increased by $0.17 per gallon, and volumes increased by 8% compared to the three months ended May 31, 2002, primarily the result of higher global crude values. The average cost of propane increased by $0.19, which was partially offset by a 22% decrease in volumes compared to the three months ended May 31, 2002. The volume decrease was primarily the result of low inventory levels as previously discussed. The cost of all grains and oilseed procured by the Company through its Grain Marketing and Country Operations and Services segments increased $240.4 million (31%) compared to the three months ended May 31, 2002 primarily due to an $0.89 average cost per bushel increase (27%) and a 4% increase in volume. Country Operations and Services segment farm supply cost of goods sold increased by $48.1 million (25%) during the three months ended May 31, 2003 compared to the three months ended May 31, 2002, primarily due to volume increases related to an acquisition of a sunflower plant, and volume and average cost per unit increases on farm supply products. Processed Grains and Foods segment cost of goods sold increased $9.8 million (10%) compared to the three months ended May 31, 2002, primarily due to increased soybean volumes of 2%, which was partially offset by a decrease in the average cost of raw materials of $0.02 per pound on soybeans.

Marketing, General and Administrative. Marketing, general and administrative expenses of $49.5 million for the three months ended May 31, 2003 decreased by $1.3 million (2%) compared to the three months ended May 31, 2002.

Interest. Interest expense of $12.3 million for the three months ended May 31, 2003 increased by $1.4 million (13%) compared to the three months ended May 31, 2002. The average level of short-term borrowings increased $83.6 million and the average short-term interest rate decreased 0.3% during the three months ended May 31, 2003 compared to the three months ended May 31, 2002.

Equity (Income) Loss from Investments. Equity income from investments of $30.0 million for the three months ended May 31, 2003 decreased by $1.9 million (6%) compared to the three months ended May 31, 2002. The decrease in equity income from investments was primarily attributable to decreased earnings from Ventura, a Processed Grains and Foods segment investment and losses in Grain Marketing segment investments due to decreased grain margins compared to May 31, 2002. These decreases were partially offset by increased earnings in Agriliance, an Agronomy segment investment, compared to the three-month period ended May 31, 2002. The Company’s share of Agriliance earnings increased primarily due to the April 2003 purchase of an additional economic interest in Agriliance’s CPP Business, as previously discussed.

Minority Interests. Minority interests of $5.9 million for the three months ended May 31, 2003 increased by $0.1 million (1%) compared to the three months ended May 31, 2002. The net change in minority interests was primarily a result of slightly more profitable operations within the Company’s majority-owned subsidiaries during the three months ended May 31, 2003 compared to the three months ended May 31, 2002. Substantially all minority interests relate to National Cooperative Refinery Association (NCRA), an approximately 74.5% owned subsidiary.

Income Taxes. Income taxes of $8.7 million for the three months ended May 31, 2003 were essentially unchanged compared to the three months ended May 31, 2002. The income taxes and the effective tax rate vary each period based upon profitability and nonpatronage business activity during each of the comparable periods.

Comparison of the nine months ended May 31, 2003 and 2002

Net Income. Consolidated net income for the nine months ended May 31, 2003 was $88.4 million compared to $90.4 million for the nine months ended May 31, 2002, which represents a $2.0 million (2%) decrease. Reduced income in the Energy, Grain Marketing and Processed Grains and Foods segments was partially offset by increased income in the Agronomy and Country Operations and Services segments compared to the nine months ended May 31, 2002.

Net Sales. Consolidated net sales of $7.4 billion for the nine months ended May 31, 2003 increased $1.8 billion (32%) compared to the nine months ended May 31, 2002.

Energy net sales of $2.6 billion increased $806.5 million (45%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Sales for the nine months ended May 31, 2003 and 2002 were $2,684.8 million and $1,857.1 million, respectively. The Company eliminated all intracompany sales from the Energy segment to the Country Operations and Services segment of $69.2 million and $48.0 million for the nine months ended May 31, 2003 and 2002, respectively. The increase was primarily the result of increased refined fuels volumes of 23% and an average sales price increase of $0.20 per gallon compared to the nine months ended May 31, 2002. In addition, propane sales volumes increased 22% and the average sales price increased $0.07 per gallon compared to the nine months ended May 31, 2002. Refined fuels and propane increases were primarily a result of the acquisition of the wholesale energy business of Farmland, as well as all interest in Country Energy, LLC a joint venture formerly with Farmland at a purchase price of $39.2 million. In addition, refined fuels commodity prices increased as a result of higher global crude values compared to the prior year. Propane volumes increased due to a colder winter compared to the prior year.

Country Operations farm supply sales of $553.6 million increased by $98.2 million (22%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. The increase is primarily due to increased volumes from a sunflower plant acquisition and volume and price increases on farm supply products.

Company-wide grain and oilseed net sales of $3.8 billion increased $934.8 million (32%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Sales for the nine months ended May 31, 2003 were $3,574.3 million and $911.4 million from Grain Marketing and Country Operations and Services segments, respectively. Sales for the nine months ended May 31, 2002 were $2,730.3 million and $641.0 million from the Grain Marketing and Country Operations and Services segments, respectively. The Company eliminated all intracompany sales from the Country Operations and Services segment to the Grain Marketing segment, of $646.6 million and $467.0 million, for the nine months ended May 31, 2003 and 2002, respectively. The net increase in sales was primarily due to increases of $1.22 per bushel (36%) in the average sales price of all grain and oilseed marketed by the Company, which was partially offset by a decrease in volume of 2% compared to the nine months ended May 31, 2002.

Processed Grains and Foods net sales of $355.0 million decreased $39.2 million (10%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. The net decrease in sales is primarily due to the formation of Horizon, a joint venture that was formed in January 2002. After that date, the Company has accounted for operating results of Horizon under the equity method of accounting. The Company has a 24% interest in Horizon, and Cargill, Incorporated (Cargill) has a 76% interest. The Company is leasing its five mills and related equipment to Horizon under an operating lease. This decrease was partially offset by increased refined soybean oil sales primarily due to volume increases of 1% and an average price increase of $0.04 per pound on soybeans.

Patronage Dividends. Patronage dividends received of $2.3 million decreased $2.6 million (53%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Patronage dividends from a cooperative were received in June 2003 compared to May 2002.

Other Revenues. Other revenues of $93.0 million increased $10.9 million (13%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. The most significant changes were due to increased service and other revenues in the Country Operations and Services segment compared to the nine months ended May 31, 2002.

Cost of Goods Sold. Cost of goods sold of $7.2 billion increased $1.8 billion (33%) during the nine months ended May 31, 2003, compared to the nine months ended May 31, 2002. Cost of goods sold in the Energy segment increased by $844.8 million (49%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Refined fuels volumes increased by 23% and the average cost increased by $0.21 per gallon compared to the nine months ended May 31, 2002, primarily the result of the acquisition previously discussed and higher global crude values. Propane volumes

increased by 22% and the average cost increased by $0.07 per gallon compared to the nine months ended May 31, 2002, primarily the result of the acquisition previously discussed and a colder winter compared to the prior year. The cost of all grains and oilseeds procured by the Company through its Grain Marketing and Country Operations and Services segments increased $914.1 million (33%) compared to the nine months ended May 31, 2002 primarily due to $1.21 per bushel (36%) increase, which was partially offset by a 2% decrease in volume. Country Operations and Services segment farm supply cost of goods sold increased by $82.8 million (22%) during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002 primarily due to a sunflower plant acquisition and increased average cost per unit on farm supply products. In addition, during the nine months ended May 31, 2003 the Country Operations and Services segment recorded impairments of $3.2 million on its facilities. The increased cost of goods sold in the Country Operations and Services segment was partially offset by $10.9 million of cash received from a class action lawsuit, alleging illegal price fixing against various feed vitamin product suppliers. Cost of goods sold in the Processed Grains and Foods segment decreased by $35.7 million (10%) compared to the nine months ended May 31, 2002, primarily due to the formation of Horizon, as previously discussed, which was partially offset by refined soybean oil volume increases of 1% and cost of raw material increases of $0.02 per pound on soybeans.

Marketing, General and Administrative. Marketing, general and administrative expenses of $140.7 million for the nine months ended May 31, 2003 increased by $0.7 million compared to the nine months ended May 31, 2002. Marketing, general and administrative expenses increased by $1.7 million due to the write-off of the Company’s investment in Farmland primarily in the Country Operations and Services segment. In addition, marketing, general and administrative expense changes in the Country Operations and Services and Energy segments were primarily due to acquisitions.

Interest. Interest expense of $36.5 million for the nine months ended May 31, 2003 increased by $4.6 million (14%) compared to the nine months ended May 31, 2002. The average level of short-term borrowings increased $122.4 million primarily to finance working capital needs, and the average short-term interest rate decreased 0.3% during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Long-term debt borrowings increased due to an additional $175.0 million of private placement debt which was issued in October 2002.

Equity (Income) Loss from Investments. Equity income from investments of $32.4 million for the nine months ended May 31, 2003 decreased by $1.3 million (4%) compared to the nine months ended May 31, 2002. The decrease was primarily attributable to investment losses in the Grain Marketing segment and decreased earnings from Ventura, a Processed Grains and Foods segment investment. The decrease was partially offset by increased earnings from Agriliance, an Agronomy segment investment and Energy segment investments. The Company’s share of Agriliance earnings increased primarily due to the April 2003 purchase of an additional economic interest in Agriliance’s CPP Business, as previously discussed.

Minority Interests. Minority interests of $14.7 million for the nine months ended May 31, 2003 increased by $3.1 million (27%) compared to the nine months ended May 31, 2002. The net change in minority interests was primarily a result of more profitable operations within the Company’s majority-owned subsidiaries during the nine months ended May 31, 2003 compared to the nine months ended May 31, 2002. Substantially all minority interests relate to NCRA, an approximately 74.5% owned subsidiary.

Income Taxes. Income tax expense of $11.0 million for the nine months ended May 31, 2003 decreased $2.4 million (18%) compared to the nine months ended May 31, 2002, resulting in effective tax rates of a 11.1% and 12.9%, respectively. The income taxes and the effective tax rate vary each period based upon profitability and nonpatronage business activity during each of the comparable periods.

Liquidity and Capital Resources

Cash Flows from Operations

Operating activities of the Company provided net cash of $220.3 million and $78.8 million during the three months ended May 31, 2003 and 2002, respectively. For the three-month period ended in 2003,

net income of $52.2 million, net non-cash expenses of $0.7 million and decreased working capital requirements of $167.4 million provided the cash from operating activities. For the three-month period ended in 2002, net income of $46.6 million and decreased working capital requirements of $41.9 million were partially offset by net non-cash income of $9.7 million.

Operating activities of the Company provided net cash of $99.9 million and used net cash of $36.4 million during the nine months ended May 31, 2003 and 2002, respectively. For the nine-month period ended in 2003, net income of $88.4 million and net non-cash expenses of $60.3 million were partially offset by increased working capital requirements of $48.8 million. For the nine-month period ended in 2002, net income of $90.4 million and net non-cash expenses of $47.9 million were exceeded by increased working capital requirements of $174.7 million.

Cash Flows from Investing Activities

For the three months ended May 31, 2003 and 2002, the net cash flows used in the Company's investing activities totaled $74.8 million and $22.8 million, respectively.

The acquisition of property, plant and equipment comprised the primary use of cash totaling $45.1 million and $32.8 million for the three months ended May 31, 2003 and 2002, respectively. For the year ended August 31, 2003 the Company expects to spend approximately $216.8 million for the acquisition of property, plant and equipment, which includes $57.0 million of expenditures for the construction of an oilseed processing facility in Fairmont, Minnesota. Total expenditures related to the construction of the facility are projected to be approximately $80.0 million, of which $60.2 million was used for construction through May 31, 2003. Capital expenditures primarily related to the Environmental Protection Agency low sulfur fuel regulations required by 2006, are expected to be approximately $87.0 million for the Company’s Laurel, Montana refinery and $324.0 million for NCRA’s McPherson, Kansas refinery over the next three years, of which $2.1 million has been spent at the Laurel refinery and $25.6 million has been spent by NCRA at the McPherson refinery as of May 31, 2003. The Company expects to fund the refinery expenditures with a combination of cash, future earnings and additional borrowings.

Investments made during the three months ended May 31, 2003 and 2002 totaled $36.4 million and $9 thousand, respectively. During the three-month period in 2003 the Company paid $34.3 million for the acquisition of an additional economic interest in the CPP Business of Agriliance, as previously discussed.

Acquisitions of intangibles were $0.3 million and $0.4 million for the three months ended May 31, 2003 and 2002, respectively.

During the three months ended May 31, 2003 the changes in notes receivable resulted in a decrease in cash flows of $2.8 million, and during the three months ended May 31, 2002 the changes in notes receivable resulted in an increase in cash flows of $0.3 million.

Partially offsetting cash outlays in investing activities were proceeds from the disposition of property, plant and equipment of $4.0 million and $1.8 million for the three months ended May 31, 2003 and 2002, respectively. Also partially offsetting cash outlays were distributions received from joint ventures and investments totaling $5.9 million and $8.8 million for the three months ended May 31, 2003 and 2002, respectively.

For the nine months ended May 31, 2003 and 2002, the net cash flows used in the Company's investing activities totaled $124.9 million and $77.2 million, respectively.

The acquisition of property, plant and equipment comprised the primary use of cash totaling $122.5 million and $84.7 million for the nine months ended May 31, 2003 and 2002, respectively.

Investments made during the nine months ended May 31, 2003 and 2002 totaled $40.6 million and $6.2 million, respectively. During the nine-month period in 2003 the Company paid $34.3 million for the acquisition of an additional economic interest in the CPP Business of Agriliance, as previously discussed.

Acquisitions of intangibles were $0.8 million and $28.0 million for the nine months ended May 31, 2003 and 2002, respectively. During the nine months ended May 31, 2002, the acquisitions of intangibles

were primarily related to the purchase of Farmland’s interest in its wholesale energy business, as previously discussed, and represents trademarks, tradenames and non-compete agreements.

During the nine months ended May 31, 2003 the changes in notes receivable resulted in a decrease in cash flows of $14.3 million primarily from additional related party notes receivable at NCRA from its minority owners, Growmark, Inc. and MFA Oil Company. During the nine months ended May 31, 2002 the changes in notes receivable resulted in an increase in cash flows of $2.7 million.

Distributions to minority owners for the nine months ended May 31, 2003 and 2002 were $0.5 million and $4.8 million, respectively, and were related to NCRA.

Partially offsetting cash outlays in investing activities were distributions received from joint ventures and investments totaling $37.3 million and $32.2 million for the nine months ended May 31, 2003 and 2002, respectively. Also partially offsetting cash outlays were proceeds from the disposition of property, plant and equipment of $15.9 million and $10.5 million for the nine months ended May 31, 2003 and 2002, respectively.

Cash Flows from Financing Activities

The Company finances its working capital needs through short-term lines of credit with a syndication of banks. In May 2003, the Company established a new 364-day credit facility of $600.0 million committed. In addition to these lines of credit, the Company has a 364-day credit facility dedicated to NCRA, with a syndication of banks in the amount of $30.0 million committed. On May 31, 2003, August 31, 2002 and May 31, 2002, the Company had total short-term indebtedness outstanding on these various facilities and other short-term notes payable totaling $321.1 million, $332.5 million and $276.0 million, respectively. In October 2002, $175.0 million received from private placement proceeds was used to pay down the Company’s 364-day credit facility. In January 2003, $83.0 million of proceeds received from the issuance of the Company’s preferred stock (net of broker commissions of $3.2 million) was also used to pay down the 364-day credit facility.

In June 1998, the Company established a five-year revolving credit facility with a syndication of banks, with $200.0 million committed, which expired in May 2003. The Company had previous outstanding balances on this facility of $75.0 million on August 31, 2002 and on May 31, 2002. Repayments of $45.00 million and $75.0 million were made on this facility during the three months and nine months ended May 31, 2003, respectively.

In May 2003, the Company established a three-year revolving credit facility with a syndication of banks, with $100.0 million committed. There was no outstanding balance on this new credit facility on May 31, 2003.

The Company finances its long-term capital needs, primarily for the acquisition of property, plant and equipment, with long-term agreements with various insurance companies and cooperative banks. In June 1998, the Company established a long-term credit agreement through the cooperative banks. This facility committed $200.0 million of long-term borrowing capacity to the Company, with repayments through fiscal year 2009. The amount outstanding on this credit facility was $139.4 million, $144.3 million and $146.0 million on May 31, 2003, August 31, 2002 and May 31, 2002, respectively. Repayments of $1.6 million and $4.9 million were made on this facility during each of the three months and nine months ended May 31, 2003 and 2002.

Also in June 1998, the Company completed a private placement with several insurance companies for long-term debt in the amount of $225.0 million. Repayments will be made in equal annual installments of $37.5 million each in the years 2008 through 2013.

In January 2001, the Company entered into a note purchase and private shelf agreement with Prudential Insurance Company. The long-term note in the amount of $25.0 million will be repaid in equal annual installments of approximately $3.6 million, in the years 2005 through 2011. A subsequent note for $55.0 million was issued in March 2001, related to the private shelf facility. The $55.0 million note will be repaid in equal annual installments of approximately $7.9 million, in the years 2005 through 2011.

In October 2002, the Company completed a private placement with several insurance companies for long-term debt in the amount of $175.0 million which was layered into two series. The first series of $115.0 million has an interest rate of 4.96% and will be repaid in equal semi-annual installments of approximately $8.8 million during the years 2007 through 2013. The second series of $60.0 million has an interest rate of 5.60% and will be repaid in equal semi-annual installments of approximately $4.6 million during fiscal years 2012 through 2018.

The Company, through NCRA, had revolving term loans outstanding of $15.8 million, $18.0 million and $18.8 million on May 31, 2003, August 31, 2002 and May 31, 2002, respectively. Repayments of $0.8 million and $2.3 million were made during each of the three months and nine months ended May 31, 2003 and 2002.

On May 31, 2003, the Company had total long-term debt outstanding of $661.1 million, of which $170.4 million was bank financing, $480.0 million was private placement proceeds and $10.7 million was industrial development revenue bonds and other notes and contracts payable. The aggregate amount of long-term debt payable presented in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended August 31, 2002 has not materially changed during the nine months ended May 31, 2003 other than for the $75.0 million repayment on the five-year revolver which was classified as a current payable on August 31, 2002, and the $175.0 million of private placement debt discussed previously, of which repayments will not start until 2007. The Company is in compliance with all debt covenants and restrictions as of May 31, 2003.

During the three months ended May 31, 2003 and 2002, the Company received no proceeds from borrowings on a long-term basis, and repaid long-term debt of $48.7 million and $4.6 million, respectively.

During the nine months ended May 31, 2003 and 2002, the Company borrowed on a long-term basis $175.0 million and $30.0 million, respectively, and during the same periods repaid long-term debt of $86.0 million and $14.7 million, respectively.

In accordance with the bylaws and by action of the Board of Directors, annual net earnings from patronage sources are distributed to consenting patrons following the close of each fiscal year. Effective September 1, 2000, patronage refunds are calculated based on earnings for financial statement purposes rather than based on amounts reportable for federal income tax purposes as had been the Company’s practice prior to this date. This change was authorized through a bylaw amendment at the Company’s annual meeting on December 1, 2000. The patronage earnings from the fiscal year ended August 31, 2002 were primarily distributed during the second quarter of the current fiscal year. The cash portion of this distribution, deemed by the Board of Directors to be 30%, was $26.5 million. During the prior fiscal year the Company distributed cash patronage of $40.1 million from the patronage earnings of the fiscal year ended August 31, 2001.

The current equity redemption policy, as authorized by the Board of Directors, allows for the redemption of capital equity certificates held by inactive direct members and patrons and active direct members and patrons at age 72 or death that were of age 61 or older on June 1, 1998. For active direct members and patrons who were of age 60 or younger on June 1, 1998, and member cooperatives, equities that have been outstanding for more than 10 years will be redeemed annually based on a prorata formula where the numerator is dollars available for such purpose as determined by the Board of Directors, and the denominator is the sum of the patronage certificates that have been outstanding for more than 10 years held by such eligible members and patrons. Total redemptions related to the year ended August 31, 2002, to be distributed in fiscal year 2003, are expected to be approximately $30.3 million, of which $26.4 million was redeemed during the nine months ended May 31, 2003. During the nine months ended May 31, 2002 the Company redeemed $26.3 million of equity. Redemptions of equity by the Company during the three-month periods ended May 31, 2003 and 2002 were $2.0 million and $3.2 million, respectively.

registering 3,000,000 shares of the New Preferred (with an additional over-allotment option of 450,000 shares granted to the underwriters), which was declared effective on January 27, 2003. The shares were subsequently sold for proceeds of $86.3 million (3,450,000 shares), and are listed on the Nasdaq National Market. Expenses related to the issuance of the New Preferred were $3.8 million.

Off Balance Sheet Financing Arrangements

Lease Commitments

The Company’s lease commitments presented in Management’s Discussion and Analysis in the Company’s Annual Report on Form 10-K for the year ended August 31, 2002 have not materially changed during the nine months ended May 31, 2003.

Guarantees

The Company is a guarantor for lines of credit for related companies of which $50.3 million was outstanding on May 31, 2003. The Company’s bank covenants allow maximum guarantees of $150.0 million. In addition, the Company’s bank covenants also allow for guarantees dedicated solely for NCRA in the amount of $125.0 million. All outstanding loans with respective creditors are current as of May 31, 2003.

Debt

There is no material off balance sheet debt.

Critical Accounting Policies

The Company’s Critical Accounting Policies are presented in the Company’s Annual Report on Form 10-K for the year ended August 31, 2002.

Effect of Inflation and Foreign Currency Transactions

The Company believes that inflation and foreign currency fluctuations have not had a significant effect on its operations. The Company has recently opened a grain marketing office in Brazil that will impact its exposure to foreign currency fluctuations, but to date, there has been no material effect.

Recent Accounting Pronouncements

Company continues to assess whether any other ARO’s exist related to its remaining operations, however, based on available information to date, no ARO’s have been identified. As such, the Company believes that the effects of adopting this standard do not have a material effect on the Company.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The interpretation addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees. The interpretation also clarifies the requirements related to the recognition of a liability by a guarantor at the inception of the guarantee for obligations the guarantor has undertaken in issuing the guarantee. The Company adopted this interpretation during the quarter ended February 28, 2003.

In January 2003, the FASB issued FASB Interpretation No. 46, “Consolidation of Variable Interest Entities”. The interpretation addresses consolidation of certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The interpretation applies immediately to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest that it acquired before February 1, 2003. The Company believes that the effects of adopting this standard will not have a material effect on the Company.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in certain circumstances). Many of those instruments were previously classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities which are subject to the provisions for the first fiscal period beginning after December 15, 2003. The Statement is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the Statement and still existing at the beginning of the interim period of adoption. The Company believes that the effects of adopting this standard will not have a material effect on the Company.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For the period ended May 31, 2003 the Company did not experience any adverse changes in market risk exposures that materially affect the quantitative and qualitative disclosures presented in the Company’s Annual Report on Form 10-K for the year ended August 31, 2002.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation within 90 days of the filing date of this report, that the Company’s disclosure controls and procedures are adequately designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in applicable rules and forms. There have not been any significant changes in the Company’s internal controls or in other factors that could significantly affect those controls, subsequent to the date of such evaluation, including any corrective actions taken with regard to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8–K

(a) Exhibits

Exhibit	Description

4.1	Resolution amending a previous Preferred Stock Resolution with respect to the record date for payment of dividends for the Company’s 8% Cumulative Redeemable Preferred Stock
10.1	Credit Agreement (Revolving Loan) dated as of May 21, 2003 among Cenex Harvest States Cooperatives, CoBank, ACB, SunTrust Bank, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., BNP Paribas and the Syndication Parties
99.1	Cautionary Statement
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CENEX HARVEST STATES COOPERATIVES
(Registrant)

July 2, 2003	/s/ John Schmitz

(Date)	John Schmitz Executive Vice President and Chief Financial Officer

SECTION 302 CERTIFICATION

I, John D. Johnson, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Cenex Harvest States Cooperatives;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

The registrant’s other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: July 2, 2003

/s/ John D. Johnson
John D. Johnson
President and Chief Executive Officer

SECTION 302 CERTIFICATIONS

I, John Schmitz, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Cenex Harvest States Cooperatives;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

Date: July 2, 2003

/s/ John Schmitz
John Schmitz
Executive Vice President and
Chief Financial Officer

EXHIBIT 4.1

RESOLUTION OF THE BOARD OF DIRECTORS
OF
CENEX HARVEST STATES COOPERATIVES

WHEREAS, on January 7, 2003 the Board of Directors of Cenex Harvest States Cooperatives adopted an Amended and Restated Resolution Creating a Series of Preferred Equity to be Designated 8% Cumulative Redeemable Preferred Stock (the "Preferred Stock Resolution"); and

WHEREAS, effective January 15, 2003, the Board of Directors amended the Preferred Stock Resolution with respect to Payment of Dividends; and

WHEREAS, the Board of Directors desires to further amend the Preferred Stock Resolution with respect to the record date for Payment of Dividends.

NOW, THEREFORE, BE IT RESOLVED, That Section 3(a) of the Preferred Stock Resolution be and hereby is amended to read as follows:

SECTION 3. DIVIDENDS AND DISTRIBUTIONS.

(a) PAYMENT OF DIVIDENDS. The holders of the Preferred Stock shall be entitled to receive quarterly dividends when, as and if declared by the Board of Directors out of funds legally available for such purpose, at the rate of $2.00 per annum per share. Dividends shall be payable on March 31, June 30, September 30 and December 31 of each year (each such date a "Payment Date"), provided that any such Payment Date is a Business Day. A Business Day is any day that is not a Saturday, Sunday or a legal holiday. If any Payment Date is not a Business Day, such dividend shall be payable without interest on the next Business Day. Dividends shall be fully cumulative and shall accumulate without interest from and including the latest of (i) the closing date of the first issuance and sale of shares of Preferred Stock or (ii) the day immediately following the most recent Payment Date as to which dividends have been paid. Dividends shall be paid to holders of record as they appear on the books of the Company ten Business Days prior to the relevant Payment Date. The Company may, in its sole discretion, pay dividends by any one or more of the following means: (x) check mailed to the address of such holder as it appears on the books of the Company,
(y) electronic transfer in accordance with instructions provided by such holder or (z) any other means mutually agreed between the Company and such holder. The amount of dividends payable shall be computed on the basis of a 360-day year of twelve 30-day months. Each payment of dividends will include dividends to and including the relevant Payment Date.

Adopted: 04/09/03

EXHIBIT 10.1

CREDIT AGREEMENT
(REVOLVING LOAN)

BY AND BETWEEN

COBANK, ACB,
AS LEAD ARRANGER, BOOK RUNNER, ADMINISTRATIVE AGENT AND BID AGENT
AND AS A SYNDICATION PARTY,

SUNTRUST BANK, COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK INTERNATIONAL", NEW YORK BRANCH,
AND BNP PARIBAS,
AS CO-SYNDICATION AGENTS AND AS SYNDICATION PARTIES,

U.S. BANK NATIONAL ASSOCIATION, DEERE CREDIT, INC., HARRIS TRUST
AND SAVINGS BANK, AND WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS SENIOR-MANAGING AGENTS AND AS SYNDICATION PARTIES,

THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH, AND FORTIS
CAPITAL CORP.,
AS MANAGING AGENTS AND AS SYNDICATION PARTIES,

NATEXIS BANQUES POPULAIRES, AGFIRST FARM CREDIT BANK, CREDIT
AGRICOLE INDOSUEZ, BANK OF AMERICA, NATIONAL ASSOCIATION, AND
NATIONAL CITY BANK OF INDIANA,
AS SYNDICATION PARTIES,

AND

CENEX HARVEST STATES COOPERATIVES

DATED AS OF MAY 21, 2003

CREDIT AGREEMENT
(REVOLVING LOAN)

THIS AGREEMENT ("CREDIT AGREEMENT") is entered into as of the 21st day of May 2003, by and between COBANK, ACB ("COBANK") for its own benefit as a Syndication Party, and as the Administrative Agent for the benefit of the present and future Syndication Parties (in that capacity "ADMINISTRATIVE AGENT"), the Syndication Parties identified on Schedule 1 hereto, and CENEX HARVEST STATES COOPERATIVES, a cooperative corporation formed under the laws of the State of Minnesota, whose address is 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077 ("BORROWER").

ARTICLE 1. DEFINED TERMS

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

1.1 Additional Costs: shall have the meaning set forth in Section 17.12.

1.2 Adjusted Consolidated Funded Debt: All Consolidated Funded Debt of Borrower and its Consolidated Subsidiaries, plus the net present value of operating leases of Borrower and its Consolidated Subsidiaries as discounted by a rate of 8.0% per annum.

1.3 Administrative Agent: shall initially mean CoBank, ACB.

1.4 Administrative Agent Office: shall mean the address set forth at Subsection 17.4.2, as it may change from time to time by notice to all parties to this Credit Agreement.

1.5 Advance: an advance of funds under either the 364-Day Facility or the 3-Year Facility.

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

1.7 Advance Payment: shall have the meaning set forth in Section 16.1.

1.8 Affected Loans: shall have the meaning set forth in Subsection 6.2.3.

1.9 Affiliate: with respect to any Person means (a) a Subsidiary of such Person, (b) any Person in which such Person, directly or indirectly, owns more than five percent (5.0%) of the outstanding equity thereof, and (c) any Person which, directly or indirectly, (i) owns more than five percent (5.0%) of the outstanding equity of such Person, or (ii) has the power under ordinary circumstances to control the management of such Person.

1.10 Aggregate Commitment: shall mean at any time the 364-Day Commitment plus the 3-Year Commitment.

1.11 Amortization: the total amortization of Borrower and its Consolidated Subsidiaries as measured in accordance with GAAP.

1.12 Annual Operating Budget: means the annual operating budget for Borrower and its Subsidiaries in substantially the form of, and containing substantially the same or similar information as set forth in, the Annual Operating Budget (Business Plan) for Borrower and its Subsidiaries included in the Confidential Information Memorandum dated March 2003 delivered to the Syndication Parties prior to the Closing Date.

1.13 Anti-Terrorism Laws: shall have the meaning set forth in Subsection 10.24.1.

1.14 Applicable Lending Office: means, for each Syndication Party and for each type of Advance, the lending office of such Syndication Party designated as such for such type of Advance on its signature page hereof or in the applicable Syndication Acquisition Agreement or such other office of such Syndication Party as such Syndication Party may from time to time specify to the Administrative Agent and Borrower as the office by which its Advances of such type are to be made and maintained.

1.15 Authorized Officer: shall have the meaning set forth in Subsection 11.1.4.

1.16 Bank Debt: all amounts owing under the Note, fees, Borrower's obligations to purchase Bank Equity Interests, Funding Losses and all interest, expenses, charges and other amounts payable by Borrower pursuant to the Loan Documents.

1.17 Banking Day: any day (a) other than a Saturday or Sunday and other than a day which is a Federal legal holiday or a legal holiday for banks in the States of Colorado, Minnesota, or New York, and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a continuation of or conversion into, or a LIBO Rate Period for, a LIBO Rate Loan, or a notice by Borrower with respect to any such borrowing, payment, prepayment, continuation, conversion, or LIBO Rate Period, on which dealings in U.S. Dollar deposits are carried out in the London interbank market.

1.18 Bank Equity Interests: shall have the meaning set forth in Article 8 hereof.

1.19 Base Rate: a rate of interest per annum equal to the "prime rate" as published from time to time in the Eastern Edition of the WALL STREET JOURNAL as the average prime lending rate for seventy-five percent (75%) of the United States' thirty (30) largest commercial banks, or if the WALL STREET JOURNAL shall cease publication or cease publishing the "prime rate" on a regular basis, such other regularly published average prime rate applicable to such commercial banks as is acceptable to the Administrative Agent in its reasonable discretion, with the consent of Borrower, which consent will not be unreasonably withheld (provided that Borrower's consent shall not be required at any time there has occurred and is continuing a Potential Default or an Event of Default).

1.20 Base Rate Loans: shall have the meaning set forth in Subsection 6.1.1.

1.21 Bid: shall have the meaning set forth in Section 4.4.

1.22 Bid Agent: shall mean CoBank, ACB.

1.23 Bid Maturity Date: shall have the meaning set forth in Section 4.3.

1.24 Bid Request: shall have the meaning set forth in Section 4.3.

1.25 Bid Results Notice: shall have the meaning set forth in Section 4.4.

1.26 Bid Rate: shall have the meaning set forth in Section 4.4.

1.27 Bid Selection Notice: shall have the meaning set forth in Section 4.5.

1.28 Borrower's Account: shall mean Borrower's account #44070 at Wells Fargo Bank, N.A., Minneapolis, Minnesota (ABA #091000019).

1.29 Borrower Benefit Plan: means (a) any "employee benefit plan", as such term is defined in Section 3(3) of ERISA (including any "multiemployer plan" as defined in Section 3(37) of ERISA); (b) any "multiple employer plan" within the meaning of Section 413 of the Code; (c) any "multiple employer welfare arrangement" within the meaning of Section 3(40) of ERISA; (d) a "voluntary employees' beneficiary association" within the meaning of Section 501(a)(9) of the Code; (e) a "welfare benefit fund" within the meaning of Section 419 of the Code; or (f) any employee welfare benefit plan within the meaning of Section 3(1) of ERISA for the benefit of retired or former employees, which is maintained by Borrower or in which Borrower participates or to which Borrower is obligated to contribute.

1.30 Borrowing Notice: shall mean a 364-Day Borrowing Notice or a 3-Year Borrowing Notice, as applicable.

1.31 Borrower Pension Plan: means each Borrower Benefit Plan that is an "employee pension benefit plan" as defined in Section 3(2) of ERISA that is intended to satisfy the requirements of Section 401(a) of the Code.

1.32 Capital Leases: means any lease of property (whether real, personal or mixed) by a Person which has been or should be , in accordance with GAAP, reflected on the balance sheet of such Person as a capital lease.

1.33 Cash Collateral Account: shall have the meaning set forth in Section 5.6.

1.34 CERCLA : shall have the meaning set forth in Section 1.62.

1.35 Change in Law: shall have the meaning set forth in Subsection 6.2.2.

1.36 Closing Date: that date, which must occur on or before May 21, 2003, on which the Administrative Agent, the Bid Agent, the Syndication Parties, and Borrower have executed all Loan Documents to which they are parties and on which the conditions set forth in Section 11.1 of this Credit Agreement have been met.

1.37 Code: means the Internal Revenue Code of 1986.

1.38 Committed LC Request: shall have the meaning set forth in Subsection 5.1.1.

1.39 Committed Letter of Credit: shall mean a letter of credit issued by the Letter of Credit Bank pursuant to the provisions of Sections 5.1 and 5.2 hereof.

1.40 Committed Letter of Credit Fee: for any Fiscal Quarter of Borrower shall be an amount equal to the 3-Year Margin in effect on the first day of such Fiscal Quarter (a) multiplied by the undrawn face amount of each Committed Letter of Credit for each day during such Fiscal Quarter, (b) divided by 360.

1.41 Committed 364-Day Advances: the principal amount of all 364-Day Facility Advances which any Syndication Party is obligated to make as a result of such Syndication Party having received a 364-Day Funding Notice pursuant to
Section 2.2 hereof, but which has not been funded.

1.42 Committed 3-Year Advances: the principal amount of all 3-Year Facility Advances which any Syndication Party is obligated to make as a result of such Syndication Party having received a 3-Year Funding Notice pursuant to Section 3.3 hereof, but which has not been funded.

1.43 Compliance Certificate: a certificate of the chief financial officer of Borrower acceptable to the Administrative Agent and in the form attached hereto as Exhibit 1.43.

1.44 Communications: shall have the meaning set forth in Subsection 17.16.1.

1.45 Consolidated Cash Flow: for any period, the sum of (a) earnings before income taxes of Borrower and its Consolidated Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; plus (b) amounts that have been deducted in the determination of such earnings before income taxes for such period for (i) Consolidated Interest Expense for such period,
(ii) Depreciation for such period, (iii) Amortization for such period, and (iv) extraordinary and/or one-time non-cash losses for such period; minus (c) the amounts that have been included in the determination of such earnings before income taxes for such period for (i) extraordinary and/or one-time income, (ii) non-cash patronage income, and (iii) non-cash equity earnings in joint ventures.

1.46 Consolidated Current Assets: the total current assets of Borrower and its Consolidated Subsidiaries as measured in accordance with GAAP.

1.47 Consolidated Current Liabilities: the total current liabilities of Borrower and its Consolidated Subsidiaries as measured in accordance with GAAP.

1.48 Consolidated Funded Debt: all indebtedness for borrowed money of the Borrower and its Subsidiaries, that is classified as long term debt in accordance with GAAP, and shall include Debt of such maturity created or assumed by the Borrower or any Consolidated Subsidiary either directly or indirectly, including obligations of such maturity secured by liens upon property

of the Borrower or its Consolidated Subsidiaries and upon which such entity customarily pays the interest, and all rental payments under capitalized leases of such maturity.

1.49 Consolidated Interest Expense: for any period, all interest expense of Borrower and its Consolidated Subsidiaries, as determined in accordance with GAAP.

1.50 Consolidated Members' and Patrons' Equity: the amount of equity accounts plus (or minus in the case of a deficit) the amount of surplus and retained earnings accounts of Borrower and its Consolidated Subsidiaries and the minority interest in Subsidiaries, provided that the total amount of intangible assets of Borrower and its Consolidated Subsidiaries (including, without limitation, unamortized debt discount and expense, deferred charges and goodwill) included therein shall not exceed $30,000,000 (and to the extent such intangible assets exceed $30,000,000.00, they will not be included in the calculation of Consolidated Members' and Patrons' Equity); all as determined in accordance with GAAP consistently applied.

1.51 Consolidated Subsidiary: (a) any Subsidiary whose accounts are consolidated with those of Borrower in accordance with GAAP and (b) Ventura Foods, LLC so long as the accounts thereof are required to be consolidated with those of Borrower in accordance with GAAP.

1.52 Contributing Syndication Parties: shall have the meaning set forth in
Section 16.4.

1.53 Control Agreement: means a control agreement, in form and substance satisfactory to the Administrative Agent, executed and delivered by Borrower, the Administrative Agent, and the applicable securities intermediary with respect to a Securities Account (as defined in the Colorado Uniform Commercial Code) or bank with respect to a deposit account.

1.54 Converted LC: shall have the meaning set forth in Section 5.6.

1.55 Debt: means as to any Person: (a) indebtedness or liability of such Person for borrowed money, or for the deferred purchase price of property or services (including trade obligations); (b) obligations of such Person as lessee under capital leases; (c) obligations of such Person arising under bankers' or trade acceptance facilities; (d) all guarantees, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations of such Person to purchase any of the items included in this definition, to provide funds for payment, to supply funds to invest in any other Person, or otherwise to assure a creditor of another Person against loss (without duplication) ; (e) all obligations secured by a lien on property owned by such Person, whether or not the obligations have been assumed; and (f) all obligations of such Person under any agreement providing for an interest rate swap, cap, cap and floor, contingent participation or other hedging mechanisms with respect to interest payable on any of the items described in this definition.

1.56 Default Interest Rate: a rate of interest equal to 200 basis points in excess of the Base Rate which would otherwise be applicable on the Loan.

1.57 Delinquency Interest: shall have the meaning set forth in Section 16.4.

1.58 Delinquent Amount: shall have the meaning set forth in Section 16.4.

1.59 Delinquent Syndication Party: shall have the meaning set forth in
Section 16.4.

1.60 Depreciation: the total depreciation of Borrower and its Consolidated Subsidiaries as measured in accordance with GAAP.

1.61 Embargoed Person: shall have the meaning set forth in Section 12.15.

1.62 Environmental Laws: any federal, state, or local law, statute, ordinance, rule, regulation, administration order, or permit now in effect or hereinafter enacted, pertaining to the public health, safety, industrial hygiene, or the environmental conditions on, under or about any of the real property interests of a Person, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended, 42 U.S.C. 9601-9657 ("CERCLA") and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901-6987 ("RCRA").

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

1.64 ERISA: shall have the meaning set forth in Section 10.10.

1.65 ERISA Affiliate: means any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Borrower or is under common control (within the meaning of Section 414(c) of the Code) with Borrower, provided, however, that for purposes of provisions herein concerning minimum funding obligations (imposed under Section 412 of the Code or Section 302 of ERISA), the term "ERISA Affiliate" shall also include any entity required to be aggregated with Borrower under Section 414(m) or 414(o) of the Code.

1.66 Event of Default: shall have the meaning set forth in Section 15.1.

1.67 Event of Syndication Default: shall have the meaning set forth in Subsection 16.31.1.

1.68 Executive Order: shall have the meaning set forth in Subsection 10.24.1.

1.69 Existing Credit Agreement: shall mean (a) the Credit Agreement (Revolving Credit) dated as of June 1, 1998 among Cenex Harvest States Cooperatives as borrower, St. Paul Bank as co-syndication agent and as a syndication party, CoBank as co-syndication agent, administrative agent, bid agent, and syndication party and the other banks signatory thereto, as amended by (i) the First Amendment to Credit Agreement (Revolving Loan) effective as of May 28, 1999, by the Second Amendment to Credit Agreement (Revolving Loan) dated as of May 23, 2000, by the Third Amendment to Credit Agreement (Revolving Loan) dated as of May 23, 2001, by the Fourth Amendment to Credit Agreement (Revolving Loan) dated as of May 22, 2002, and by the Fifth Amendment to Credit Agreement (Revolving Loan) dated as of February 26, 2003; and (b) the promissory notes, security documents, and other loan documents executed in connection with (a).

1.70 Existing Letters of Credit: The Letters of Credit which have been issued for the benefit of Borrower by one or more of the Syndication Parties and which are outstanding on the Closing Date as listed on Exhibit 1.70 hereto.

1.71 Extended Duration LC: shall have the meaning set forth in Section 5.6.

1.72 Farm Credit System Institution: shall mean any Farm Credit Bank, any Federal land bank association, any production credit association, the banks for cooperatives, and such other institutions as may be a part of the Farm Credit System and chartered by and subject to regulation by the Farm Credit Administration.

1.73 Fiscal Quarter: each three (3) month period beginning on the first day of each of the following months: September, December, March and June.

1.74 Fiscal Year: a year commencing on September 1 and ending on August 31.

1.75 Funded Debt: means, with respect to any Person, at any time, all Debt of such Person in each case maturing by its terms more than one year after the date of creation thereof, or which is renewable or extendible at the option of such Person for a period ending more than one (1) year after the date of creation thereof, and shall include Debt of such maturity created or assumed by such Person either directly or indirectly, including obligations of such maturity secured by liens upon property of such Person and upon which such Person customarily pays the interest, and all obligations of such Person under Capital Leases of such maturity, and the net present value of obligations under Operating Leases as discounted by a rate of 8.0% per annum, and all obligations to reimburse the Letter of Credit Bank or any Syndication Party with respect to all Letters of Credit which support long-term debt, with expiration dates in excess of one year from the date of issuance thereof.

1.76 Funding Losses: shall have the meaning set forth in Section 7.5.

1.77 Funding Loss Notice: shall have the meaning set forth in Section 7.5.

1.78 Funding Share: shall mean the amount of any Advance which each Syndication Party is required to fund, which shall be determined as follows: (a) for an Advance under the 364-Day Facility (other than pursuant to a Bid Advance or an Overnight Advance), the amount of such Advance multiplied by such Syndication Party's Individual 364-Day Pro Rata Share as of the date of the 364-Day Funding Notice for, but without giving effect to, such Advance; (b) for an Advance under the 3-Year Facility (other than pursuant to a Bid Advance), the amount of such Advance multiplied by such Syndication Party's Individual 3-Year Pro Rata Share as of the date of the 3-Year Funding Notice for, but without giving effect to, such Advance; (c) for an Advance under a Bid won by such Syndication Party, the amount of such Bid; and (d) for an Overnight Advance, the amount determined as provided in Section 4.10 hereof.

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

1.80 Good Faith Contest: means the contest of an item if (a) the item is diligently contested in good faith by appropriate proceedings timely instituted,
(b) either the item is (i)

bonded or (ii) adequate reserves are established with respect to the contested item if and to the extent required in accordance with GAAP, (c) during the period of such contest, the enforcement of any contested item is effectively stayed, and (d) the failure to pay or comply with the contested item could not reasonably be expected to result in a Material Adverse Effect.

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

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

1.83 Holdout Lender : shall have the meaning set forth in Section 16.33.

1.84 Indemnified Agency Parties: shall have the meaning set forth in
Section 16.20.

1.85 Indemnified Parties: shall have the meaning set forth in Section 14.1.

1.86 Individual Commitment: shall mean with respect to any Syndication Party, its Individual 3-Year Commitment and/or its Individual 364-Day Commitment, as applicable.

1.87 Individual 364-Day Commitment: shall mean with respect to any Syndication Party the amount shown as its Individual 364-Day Commitment on Schedule 1 hereto, subject to adjustment in the event of the sale of all or a portion of a Syndication Interest in accordance with Section 16.28 hereof, or a reduction in the 364-Day Commitment in accordance with Section 2.8 hereof.

1.88 Individual 3-Year Commitment: shall mean with respect to any Syndication Party the amount shown as its Individual 3-Year Commitment on Schedule 1 hereto, subject to adjustment in the event of the sale of all or a portion of a Syndication Interest in accordance with Section 16.28 hereof, or a reduction in the 3-Year Commitment in accordance with Section 3.8 hereof.

1.89 Individual 364-Day Lending Capacity: shall mean with respect to any Syndication Party the amount at any time of its Individual 364-Day Commitment, less its Individual Outstanding 364-Day Obligations.

1.90 Individual 3-Year Lending Capacity: shall mean with respect to any Syndication Party the amount at any time of its Individual 3-Year Commitment, less its Individual Outstanding 3-Year Obligations.

1.91 Individual Outstanding 364-Day Obligations: shall mean with respect to any Syndication Party the total at any time, without duplication, of (a) the aggregate outstanding principal amount of all 364-Day Advances made by such Syndication Party (including, without duplication, Overnight Advances made by such Syndication Party in its capacity as an Overnight Lender), (b) the aggregate outstanding principal amount of all 364-Day Bid Advances made by such Syndication Party, and (c) all of such Syndication Party's Committed 364-Day Advances.

1.92 Individual Outstanding 3-Year Obligations: shall mean with respect to any Syndication Party the total at any time, without duplication, of (a) the aggregate outstanding principal amount of all 3-Year Advances made by such Syndication Party, (b) the aggregate outstanding principal amount of all 3-Year Bid Advances made by such Syndication Party, (c) the undrawn face amount of all outstanding Negotiated Letters of Credit as to which such Syndication Party is the Issuing Syndication Party, (d) such Syndication Party's 3-Year Pro Rata Share of the undrawn face amount of all outstanding Committed Letters of Credit; and (e) all of such Syndication Party's Committed 3-Year Advances.

1.93 Individual 364-Day Pro Rata Share: shall mean with respect to any Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal points), where the numerator is such Syndication Party's Individual 364-Day Commitment less such Syndication Party's Individual Outstanding 364-Day Obligations; and the denominator is the 364-Day Commitment less the sum of the Individual Outstanding 364-Day Obligations of all of the Syndication Parties, determined (a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on the Banking Day Borrower delivers a 364-Day Borrowing Notice pursuant to which Borrower requests such LIBOR Loan, and (b) in all other cases, 12:00 noon (Central time) on the Banking Day Borrower delivers a 364-Day Borrowing Notice or a Bid Request or requests a Letter of Credit under the 364-Day Facility.

1.94 Individual 3-Year Pro Rata Share: shall mean with respect to any Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal points), where the numerator is such Syndication Party's Individual 3-Year Commitment less such Syndication Party's Individual Outstanding 3-Year Obligations; and the denominator is the 3-Year Commitment less the sum of the Individual Outstanding 3-Year Obligations of all of the Syndication Parties, determined (a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on the Banking Day Borrower delivers a 3-Year Borrowing Notice pursuant to which Borrower requests such LIBOR Loan, and (b) in all other cases, 12:00 noon (Central time) on the Banking Day Borrower delivers a 3-Year Borrowing Notice or requests a Letter of Credit under the 3-Year Facility.

1.95 Intellectual Property: shall have the meaning set forth in Section 10.18.

1.96 Investment: means, with respect to any Person, (a) any loan or advance by such Person to any other Person, (b) the purchase or other acquisition by such Person of any capital stock, obligations or securities of, or any capital contribution to, or investment in, or the acquisition by such Person of all or substantially all of the assets of, or any interest in, any other Person, (c) any performance or standby letter of credit where (i) that Person has the reimbursement obligation to the issuer, and (ii) the proceeds of such letter of credit are to be used for the benefit of any other Person, (d) the agreement by such Person to make funds available for the benefit of another Person to either cover cost overruns incurred in connection with the construction of a project or facility, or to fund a debt service reserve account, (e) the agreement by such Person to

assume, guarantee, endorse or otherwise be or become directly or contingently responsible or liable for the obligations or debts of any other Person (other than by endorsement for collection in the ordinary course of business), (f) an agreement to purchase any obligations, stocks, assets, goods or services but excluding an agreement to purchase any assets, goods or services entered into in the ordinary course of business, (g) an agreement to supply or advance any assets, goods or services not in the ordinary course of business, or (h) an agreement to maintain or cause such Person to maintain a minimum working capital or net worth or otherwise to assure the creditors of any Person against loss.

1.97 Issuance Fee: shall be, with respect to each Committed Letter of Credit, the greater of (a) $2,500.00; or (b) the face amount of such Letter of Credit multiplied by 20 basis points.

1.98 Issuing Syndication Party: shall have the meaning set forth in Section 5.3.

1.99 LC Commitment: shall be $75,000,000.00.

1.100 Letters of Credit: collectively all Committed Letters of Credit, and all Negotiated Letters of Credit, outstanding at any time.

1.101 Letter of Credit Bank: CoBank, ACB.

1.102 LIBO Rate: the rate for deposits in U.S. dollars with maturities comparable to the selected LIBO Rate Period as quoted by the British Bankers' Association for the purpose of displaying London Interbank Offered Rates for U.S. Dollar deposits, determined effective as of 11:00 A.M. (London Time) on the day which is two (2) Banking Days prior to the first day of each LIBO Rate Period, reserve adjusted for Regulation D on a demonstrated basis, with such rate modified by adding the 364-Day Margin or the 3-Year Margin, depending on whether the LIBO Rate Loan is being made under the 364-Day Facility or the 3-Year Facility, respectively.

1.103 LIBO Rate Loan: shall have the meaning set forth in Subsection 6.1.2.

1.104 LIBO Rate Period: shall have the meaning set forth in Subsection 6.1.2.

1.105 LIBO Request: shall have the meaning set forth in Subsection 6.1.2.

1.106 Licensing Laws: shall have the meaning set forth in Section 10.4.

1.107 Lien: means with respect to any asset any mortgage, deed of trust, pledge, security interest, hypothecation, assignment for security purposes, encumbrance, lien (statutory or other), or other security agreement or charge, or encumbrance of any kind or nature whatsoever (including, without limitation, any conditional sale, Capital Lease or other title retention agreement related to such asset).

1.108 Loans: shall mean, collectively, all Bid Rate Advances, all Base Rate Loans, all LIBO Rate Loans, and all Overnight Loans outstanding at any time.

1.109 Loan Documents: this Credit Agreement and the Notes.

1.110 Material Adverse Effect: means a material adverse effect on (a) the financial condition, results of operation, business or property of Borrower; or
(b) on the ability of Borrower to perform its obligations under this Credit Agreement and the other Loan Documents; or (c) on the ability of the Administrative Agent or the Syndication Parties to enforce their rights and remedies against Borrower under the Loan Documents.

1.111 Material Agreements: all agreements of Borrower, the termination or breach of which, based upon Borrower's knowledge as of the date of making any representation with respect thereto, would have a Material Adverse Effect.

1.112 Multiemployer Plan: means a Plan meeting the definition of a "multiemployer plan" in Section 3(37) of ERISA.

1.113 NCRA: shall have the meaning set forth in Section 13.5.

1.114 Negotiated LC Request: shall have the meaning set forth in Subsection 5.1.2.

1.115 Negotiated Letter of Credit: shall mean a letter of credit issued by a Syndication Party pursuant to the provisions of Sections 5.1 and 5.3 hereof and shall include all Existing Letters of Credit as to which such Syndication Party was the Issuing Syndication Party.

1.116 Non-US Lender: shall have the meaning set forth in Section 16.32.

1.117 Note or Notes: the 364-Day Facility Notes and/or the 3-Year Facility Notes, as applicable, and all amendments, renewals, substitutions and extensions thereof.

1.118 OFAC: shall have the meaning set forth in Section 12.15.

1.119 Operating Lease: means any lease of property (whether real, personal or mixed) by a Person under which such Person is lessee, other than a Capital Lease.

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

1.121 Other List: shall have the meaning set forth in Section 12.15.

1.122 Overnight Advance: shall have the meaning set forth in Section 4.10.

1.123 Overnight Advance Request: shall have the meaning set forth in
Section 4.10.

1.124 Overnight Funding Commitment: shall mean $20,000,000.00.

1.125 Overnight Lender: shall mean CoBank.

1.126 Overnight Maturity Date: shall have the meaning set forth in Section 4.10.

1.127 Overnight Rate: shall have the meaning set forth in Section 4.10.

1.128 Payment Account: shall have the meaning set forth in Section 16.11.

1.129 Payment Distribution: shall have the meaning set forth in Section 16.11.

1.130 PBGC: shall have the meaning set forth in Section 10.10.

1.131 Permitted Encumbrance: shall have the meaning set forth in Section 13.3.

1.132 Person: any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, cooperative association, institution, government or governmental agency (whether national, federal, state, provincial, country, city, municipal or otherwise, including without limitation, and instrumentality, division, agency, body or department thereof), or other entity.

1.133 Plan: means any plan, agreement, arrangement or commitment which is an employee benefit plan, as defined in Section 3(3) of ERISA, maintained by Borrower or any Subsidiary or any ERISA Affiliate or with respect to which Borrower or any Subsidiary or any ERISA Affiliate at any relevant time has any liability or obligation to contribute.

1.134 Platform: shall have the meaning set forth in Subsection 17.16.2.

1.135 Potential Default: any event, other than an event described in
Section 15.1(a) hereof, which with the giving of notice or lapse of time, or both, would become an Event of Default.

1.136 Primary Portal: shall have the meaning set forth in Subsection 17.16.2.

1.137 Prohibited Transaction: means any transaction prohibited under
Section 406 of ERISA or Section 4975 of the Code.

1.138 RCRA : shall have the meaning set forth in Section 1.62.

1.139 Regulatory Change: shall have the meaning set forth in Section 17.12.

1.140 Replacement Lender: shall have the meaning set forth in Section 16.33.

1.141 Reportable Event: means any of the events set forth in Section 4043(b) of ERISA or in the regulations thereunder.

1.142 Requested 364-Day Advance: shall mean the amount of Advance requested by Borrower in any 364-Day Borrowing Notice.

1.143 Requested 3-Year Advance: shall mean the amount of Advance requested by Borrower in any 3-Year Borrowing Notice.

1.144 Required Lenders: shall mean Syndication Parties (including Voting Participants) whose aggregate Individual 364-Day Commitments and Individual 3-Year Commitments constitute fifty-one percent (51.0%) of the Aggregate Commitment; provided that the number of Syndication Parties (including Voting Participants) which constitute the Required Lenders must be

the lesser of (i) all, or (ii) no fewer than three (3), if fewer than three (3) Syndication Parties (including Voting Participants) would constitute fifty-one percent (51.0%) of the aggregate Individual 364-Day Commitments and Individual 3-Year Commitments. Pursuant to Section 16.29 hereof, Voting Participants shall, under the circumstances set forth therein, be entitled to voting rights and to be included in determining whether certain action is being taken by the Required Lenders.

1.145 Required License: shall have the meaning set forth in Section 10.09.

1.146 Restricted Subsidiary: shall mean those Subsidiaries identified on Exhibit 1.146 hereto, as it may be amended from time to time with the prior written consent of Borrower, the Administrative Agent and the Required Lenders.

1.147 SDN List: shall have the meaning set forth in Section 12.15.

1.148 Subsidiary: means with respect to any Person: (a) any corporation in which such Person, directly or indirectly, (i) owns more than fifty percent (50%) of the outstanding stock thereof, or (ii) has the power under ordinary circumstances to elect at least a majority of the directors thereof, or (b) any partnership, association, joint venture, limited liability company, or other unincorporated organization or entity, other than Ventura Foods, LLC, with respect to which such Person, (i) directly or indirectly owns more than fifty percent (50%) of the equity interest thereof, or (ii) directly or indirectly owns an equity interest in an amount sufficient to control the management thereof. All of Borrower's Subsidiaries owned as of the Closing Date are set forth on Exhibit 1.148 hereto.

1.149 Successor Agent: such Person as may be appointed as successor to the rights and duties of the Administrative Agent as provided in Section 16.23 of this Credit Agreement.

1.150 Syndication Acquisition Agreement: shall have the meaning set forth in Section 16.28.

1.151 Syndication Interest: shall have the meaning set forth in Section 16.1.

1.152 Syndication Parties: shall mean those entities listed on Schedule 1 hereto as having an Individual 364-Day Commitment and/or an Individual 3-Year Commitment, and such Persons as shall from time to time execute a Syndication Acquisition Agreement substantially in the form of Exhibit 16.28 hereto signifying their election to purchase all or a portion of the Syndication Interest of any Syndication Party, in accordance with Section 16.28 hereof, and to become a Syndication Party hereunder.

1.153 Syndication Party Advance Date: shall have the meaning set forth in
Section 16.2.

1.154 Term Loan Credit Agreement: shall mean that certain Credit Agreement (Term Loan) dated as of June 1, 1998 by and between Borrower and St. Paul Bank, as administrative agent for all syndication parties thereunder, and as a syndication party thereunder, CoBank, and the other syndication parties set forth on the signature pages thereto, as amended from time to time.

1.155 364-Day Advance: shall have the meaning set forth in Subsection 2.1.

1.156 364-Day Availability Period: shall mean the period from the Closing Date until the 364-Day Maturity Date.

1.157 364-Day Bid Advance: shall have the meaning set forth in Section 4.1.

1.158 364-Day Bid Loan: shall have the meaning set forth in Section 4.1.

1.159 364-Day Borrowing Notice: shall have the meaning set forth in Section 2.3.

1.160 364-Day Commitment: shall be $600,000,000.00, subject to reduction as provided in Section 2.8 hereof.

1.161 364-Day Facility: shall mean the loan facility made available to Borrower under Article 2 of this Agreement.

1.162 364-Day Facility Fee Factor: the 364-Day Facility Fee Factor determined as set forth in Schedule 2 hereto and Section 6.6 hereof.

1.163 364-Day Facility Fee: shall have the meaning set forth in Subsection 6.5.1.

1.164 364-Day Facility Note(s): shall have the meaning set forth in Section 2.4.

1.165 364-Day Funding Notice: shall have the meaning set forth in Section 2.3.

1.166 364-Day Margin: the 364-Day Margin determined as set forth in Schedule 2 hereto and Section 6.6 hereto.

1.167 364-Day Maturity Date: [May 20], 2004.

1.168 3-Year Advance: shall have the meaning set forth in Subsection 3.1.

1.169 3-Year Availability Period: shall mean the period from the Closing Date until the 3-Year Maturity Date.

1.170 3-Year Bid Advance: shall have the meaning set forth in Section 4.2.

1.171 3-Year Bid Loan: shall have the meaning set forth in Section 4.2.

1.172 3-Year Borrowing Notice: shall have the meaning set forth in Section 3.3.

1.173 3-Year Commitment: shall be $100,000,000.00, subject to reduction as provided in Section 3.8 hereof.

1.174 3-Year Facility: shall mean the loan facility made available to Borrower under Article 3 of this Agreement.

1.175 3-Year Facility Fee Factor: the 3-Year Facility Fee Factor determined as set forth in Schedule 2 hereto and Section 6.6 hereof.

1.176 3-Year Facility Fee: shall have the meaning set forth in Subsection 6.5.2.

1.177 3-Year Facility Note: shall have the meaning set forth in Section 3.4.

1.178 3-Year Funding Notice: shall have the meaning set forth in Section 3.3.

1.179 3-Year Margin: the 3-Year Margin determined as set forth in Schedule 2 hereto and Section 6.6 hereto.

1.180 3-Year Maturity Date: [May 21], 2006.

1.181 Transfer: shall have the meaning set forth in Section 16.28.

1.182 Voting Participant : shall have the meaning set forth in Section 16.29.

1.183 Wire Instructions: shall have the meaning set forth in Section 16.30.

ARTICLE 2. 364-DAY FACILITY

2.1 364-Day Facility Loan. On the terms and conditions set forth in this Credit Agreement, and so long as no Event of Default or Potential Default has occurred (or if a Potential Default or an Event of Default has occurred, it has been waived in writing by the Administrative Agent pursuant to the provisions of
Section 16.10 hereof), each of the Syndication Parties severally agrees to advance funds under the 364-Day Facility (each a "364-DAY ADVANCE") upon receipt of a 364-Day Funding Notice from time to time during the 364-Day Facility Availability Period, subject to the following limits:

2.1.1 Individual Syndication Party 364-Day Commitment. No Syndication Party shall be required or permitted to make a 364-Day Advance which would exceed its Individual 364-Day Lending Capacity as in effect at the time of the Administrative Agent's receipt of the 364-Day Borrowing Notice requesting such Advance.

2.1.2 Individual Syndication Party 364-Day Pro Rata Share. No Syndication Party shall be required or permitted to fund a 364-Day Advance under the 364-Day Facility in excess of an amount equal to its Individual 364-Day Pro Rata Share multiplied by the amount of the requested 364-Day Advance. Each Syndication Party agrees to fund its Individual 364-Day Pro Rata Share of each 364-Day Advance, except as provided in Section 4.10 hereof regarding Overnight Loans and in Article 4 hereof regarding 364-Day Bid Advances.

2.2 364-Day Commitment. Borrower shall not be entitled to request a 364-Day Advance in an amount which, when added to the aggregate Individual Outstanding 364-Day Obligations of all Syndication Parties, would exceed the 364-Day Commitment.

2.3 364-Day Borrowing Notice; Funding Notice. Borrower shall give the Administrative Agent prior written notice by facsimile (effective upon receipt) of each request for a 364-Day Advance (a) in the case of a Base Rate Loan, on or before 11:00 A.M. (Central time) on

the day of making such Base Rate Loan, and (b) in the case of a LIBO Rate Loan, on or before 11:00 A.M. (Central time) at least three (3) Banking Days prior to the date of making such LIBO Rate Loan. Each notice must be in substantially the form of Exhibit 2.3 hereto ("364-DAY BORROWING NOTICE") and must specify (w) the amount of such 364-Day Advance, (x) the proposed date of making such 364-Day Advance, (y) whether Borrower requests that the 364-Day Advance will bear interest at (i) the Base Rate (the amount that is to bear interest at the Base Rate must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00) or (ii) the LIBO Rate (the amount that is to bear interest at the LIBO Rate must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00), and (z) in the case of a LIBO Rate Loan, the initial LIBO Rate Period applicable thereto. The Administrative Agent shall, on or before 12:00 noon (Central time) of the same Banking Day, notify each Syndication Party ("364-DAY FUNDING NOTICE") of its receipt of each such 364-Day Borrowing Notice and the amount of such Syndication Party's Funding Share thereunder. Not later than 2:00 P.M. (Central time) on the date of a 364-Day Advance, each Syndication Party will make available to the Administrative Agent at the Administrative Agent's Office, in immediately available funds, such Syndication Party's Funding Share of such 364-Day Advance. After the Administrative Agent's receipt of such funds, but not later than 3:00 P.M. (Central time), and upon fulfillment of the applicable conditions set forth in Article 11 hereof, the Administrative Agent will make such 364-Day Advance available to Borrower, in immediately available funds, and will transmit such funds by wire transfer to Borrower's Account.

2.4 364-Day Facility Promissory Notes. Borrower's obligations to each Syndication Party under the 364-Day Facility, including Borrower's payment obligations with respect to all 364-Day Advances made by such Syndication Party, all Overnight Advances made by the Overnight Lender, and all 364-Day Bid Advances made by each Syndication Party shall be evidenced by, and repaid with interest in accordance with, a promissory note of Borrower in substantially the form of Exhibit 2.4 hereto duly completed, in the stated maximum principal amount equal to such Syndication Party's Individual 364-Day Facility Commitment, dated the date of this Credit Agreement, payable to such Syndication Party for the account of its Applicable Lending Office, and maturing as to principal on the 364-Day Maturity Date (each a "364-DAY FACILITY NOTE" and collectively, the "364-DAY FACILITY NOTES").

2.5 Syndication Party Records. Each Syndication Party shall record on its books and records the amount of each 364-Day Advance (including Overnight Advances with respect to those Syndication Parties which are also Overnight Lenders), the rate and interest period applicable thereto, all payments of principal and interest, and the principal balance from time to time outstanding. Each Syndication Party's record thereof shall be prima facie evidence as to all such amounts and shall be binding on Borrower absent manifest error. Notwithstanding the foregoing, Borrower will never be required to pay to any Syndication Party as principal more than the principal amount of the 364-Day Advances, 364-Day Bid Advances, and Overnight Advances funded by such Syndication Party.

2.6 Use of Proceeds. The proceeds of the 364-Day Advances will be used by Borrower for refinancing the revolving credit indebtedness owed by Borrower under the Existing Credit Agreement on the Closing Date, to fund working capital requirements, and for general corporate purposes, and Borrower agrees not to request or use such proceeds for any other purpose. Borrower will not, directly or indirectly, use any part of such proceeds for the purpose of

purchasing or carrying any margin stock within the meaning of Regulation U of the Board of Governors or to extend credit to any Person for the purpose of purchasing or carrying any such margin stock.

2.7 Syndication Party Funding Failure. The failure of any Syndication Party to fund its Funding Share of any requested 364-Day Advance or to fund any 364-Day Bid Advance to be made by it on the date specified for such Advance shall not relieve any other Syndication Party of its obligation (if any) to fund its Funding Share of any Advance on such date, but, except as provided in Sections 4.7 and 4.11 hereof, no Syndication Party shall be responsible for the failure of any other Syndication Party to make any Advance to be made by such other Syndication Party.

2.8 Reduction of 364-Day Commitment. Borrower may, by written facsimile notice to the Administrative Agent on or before 10:00 A.M. (Central time) on any Banking Day, irrevocably reduce the 364-Day Commitment; provided that (a) such reduction must be in multiples of one-million dollars ($1,000,000.00), and (b) Borrower must simultaneously make any principal payment necessary (along with any applicable Funding Losses on account of such principal payment) so that (i) the aggregate amount of the Individual Outstanding 364-Day Obligations of all Syndication Parties does not exceed the reduced 364-Day Commitment on the date of such reduction, and (ii) the Individual Outstanding 364-Day Obligations owing to any Syndication Party do not exceed the Individual 364-Day Commitment of that Syndication Party (after reduction thereof in accordance with the following sentence). In the event the 364-Day Commitment is reduced as provided in the preceding sentence, then the Individual 364-Day Commitment of each Syndication Party shall be reduced in the same proportion as the Individual 364-Day Commitment of such Syndication Party bears to the 364-Day Commitment before such reduction.

ARTICLE 3. 3-YEAR FACILITY

3.1 3-Year Facility Loan. On the terms and conditions set forth in this Credit Agreement, and so long as no Event of Default or Potential Default has occurred (or if a Potential Default or an Event of Default has occurred, it has been waived in writing by the Administrative Agent pursuant to the provisions of
Section 16.10 hereof), each of the Syndication Parties severally agrees to advance funds under the 3-Year Facility (each a "3-YEAR ADVANCE") upon receipt of a 3-Year Funding Notice from time to time during the 3-Year Availability Period, subject to the following limits:

3.1.1 Individual Syndication Party 3-Year Commitment. No Syndication Party shall be required or permitted to make a 3-Year Advance which would exceed its Individual 3-Year Lending Capacity as in effect at the time of the Administrative Agent's receipt of the 3-Year Borrowing Notice requesting such Advance.

3.1.2 Individual Syndication Party 3-Year Pro Rata Share. No Syndication Party shall be required or permitted to fund a 3-Year Advance under the 3-Year Facility in excess of an amount equal to its Individual 3-Year Pro Rata Share multiplied by the amount of the requested 3-Year Advance. Each Syndication Party agrees to fund its Individual 3-Year Pro Rata Share of each 3-Year Advance, except as provided in Article 4 hereof regarding 3-Year Bid Advances.

3.2 3-Year Commitment. Borrower shall not be entitled to request a 3-Year Advance in an amount which, when added to the aggregate Individual Outstanding 3-Year Obligations of all Syndication Parties, would exceed the 3-Year Commitment.

3.3 3-Year Borrowing Notice. Borrower shall give the Administrative Agent prior written notice by facsimile (effective upon receipt) of each request for a 3-Year Advance (a) in the case of a Base Rate Loan, on or before 11:00 A.M. (Central time) on the day of making such Base Rate Loan, and (b) in the case of a LIBO Rate Loan, on or before 11:00 A.M. (Central time) at least three (3) Banking Days prior to the date of making such LIBO Rate Loan. Each notice must be in substantially the form of Exhibit 3.3 hereto ("3-YEAR BORROWING NOTICE") and must specify (w) the amount of such Advance, (x) the proposed date of making such Advance, (y) whether Borrower requests that the Advance will bear interest at (i) the Base Rate (the amount that is to bear interest at the Base Rate must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00) or
(ii) the LIBO Rate (the amount that is to bear interest at the LIBO Rate must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00), and
(z) in the case of a LIBO Rate Loan, the initial LIBO Rate Period applicable thereto. The Administrative Agent shall, on or before 12:00 noon (Central time) of the same Banking Day, notify each Syndication Party ("3-YEAR FUNDING NOTICE") of its receipt of each such 3-Year Borrowing Notice and the amount of such Syndication Party's Funding Share thereunder. Not later than 2:00 P.M. (Central time) on the date of a 3-Year Advance, each Syndication Party will make available to the Administrative Agent at the Administrative Agent's Office, in immediately available funds, such Syndication Party's Funding Share of such 3-Year Advance. After the Administrative Agent's receipt of such funds, but not later than 3:00 P.M. (Central time), and upon fulfillment of the applicable conditions set forth in Article 11 hereof, the Administrative Agent will make such 3-Year Advance available to Borrower, in immediately available funds, and will transmit such funds by wire transfer to Borrower's Account.

3.4 3-Year Facility Promissory Notes. Borrower's obligations to each Syndication Party under the 3-Year Facility, including Borrower's payment obligations with respect to all 3-Year Facility Advances made by each Syndication Party shall be evidenced by, and repaid with interest in accordance with, a promissory note of Borrower in substantially the form of Exhibit 3.4 hereto duly completed, in the stated maximum principal amount equal to such Syndication Party's Individual 3-Year Facility Commitment, dated the date such Syndication Party becomes a Syndication Party, payable to such Syndication Party for the account of its Applicable Lending Office, and maturing as to principal on the 3-Year Maturity Date (each a "3-YEAR FACILITY NOTE" and collectively, the "3-YEAR FACILITY NOTES").

3.5 Syndication Party Records. Each Syndication Party shall record on its books and records the amount of each 3-Year Advance and any unreimbursed obligations to such Syndication Party with respect to payments by such Syndication Party under Negotiated Letters of Credit issued by such Syndication Party made by it hereunder, the rate and interest period applicable thereto, all payments of principal and interest, and the principal balance from time to time outstanding. The Syndication Party's record thereof shall be prima facie evidence as to all such amounts and shall be binding on Borrower absent manifest error. Notwithstanding the foregoing, Borrower will never be required to pay as principal more than the principal amount of the 3-Year Advances and 3-Year Bid Advances funded by such Syndication Party and any

unreimbursed obligations to such Syndication Party with respect to payments by such Syndication Party under Negotiated Letters of Credit issued by such Syndication Party.

3.6 Use of Proceeds. The proceeds of the 3-Year Loans will be used by Borrower for refinancing the revolving credit indebtedness owed by Borrower under the Existing Credit Agreement on the Closing Date, to fund working capital requirements, for general corporate purposes, and to support the issue of Letters of Credit, and Borrower agrees not to request or use such proceeds for any other purpose. Borrower will not, directly or indirectly, use any part of such proceeds for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U of the Board of Governors or to extend credit to any Person for the purpose of purchasing or carrying any such margin stock.

3.7 Syndication Party Funding Failure. The failure of any Syndication Party to fund its Funding Share of any requested 3-Year Advance or 3-Year Bid Advance to be made by it on the date specified for such Advance shall not relieve any other Syndication Party of its obligation (if any) to fund its Funding Share of any Advance on such date, but, except as provided in Sections 4.7 and 4.11 hereof, no Syndication Party shall be responsible for the failure of any other Syndication Party to make any Advance to be made by such other Syndication Party.

3.8 Reduction of 3-Year Commitment. Borrower may, by written facsimile notice to the Administrative Agent on or before 10:00 A.M. (Central time) on any Banking Day, irrevocably reduce the 3-Year Commitment; provided that (a) such reduction must be in multiples of one-million dollars ($1,000,000.00), and (b) Borrower must simultaneously make any principal payment necessary (along with any applicable Funding Losses on account of such principal payment) so that (i) the aggregate amount of the Individual Outstanding 3-Year Obligations of all Syndication Parties does not exceed the reduced 3-Year Commitment on the date of such reduction, and (ii) the Individual Outstanding 3-Year Obligations owing to any Syndication Party do not exceed the Individual 3-Year Commitment of that Syndication Party (after reduction thereof in accordance with the following sentence). In the event the 3-Year Commitment is reduced as provided in the preceding sentence, then the Individual 3-Year Commitment of each Syndication Party shall be reduced in the same proportion as the Individual 3-Year Commitment of such Syndication Party bears to the 3-Year Commitment before such reduction.

ARTICLE 4. BID RATE FACILITY; OVERNIGHT FACILITY

4.1 364-Day Facility Bid Rate Loans. Subject to the terms and conditions of this Agreement, including the procedures set forth in Article 4 hereof, and so long as no Event of Default or Potential Default has occurred (or if a Potential Default or an Event of Default has occurred, it has been waived in writing by the Administrative Agent in accordance with the provisions of Section 16.10 hereof), each Syndication Party may in its sole discretion make Advances (each Advance made by a Syndication Party pursuant to this Section a "364-DAY BID ADVANCE" and the total of such Advances made by the Syndication Parties the "364-DAY BID LOANS") to Borrower from time to time during the 364-Day Facility Availability Period, provided that:

4.1.1 Individual 364-Day Commitment. No Syndication Party shall be permitted to make a 364-Day Bid Rate Advance under the 364-Day Facility which, when added to its aggregate

Individual Outstanding 364-Day Obligations, would exceed such Syndication Party's Individual 364-Day Commitment.

4.1.2 364-Day Commitment. Borrower may not make a 364-Day Bid Request in an amount which, when added to the aggregate Individual Outstanding 364-Day Obligations of all Syndication Parties, would exceed the 364-Day Commitment.

4.1.3 Amounts. Each 364-Day Bid Request shall be in an amount at least equal to five million dollars ($5,000,000) and in integral multiples of one million dollars ($1,000,000), and each 364-Day Bid shall be in an amount at least equal to one million dollars ($1,000,000) or the amount remaining under the Individual 364-Day Commitment of the Syndication Party submitting such 364-Day Bid, if less. Each 364-Day Bid Advance made by a Syndication Party will be in the amount of its Bids, or portions thereof, under the 364-Day Facility that are accepted by Borrower in accordance with Section 4.5 hereof.

4.2 3-Year Facility Bid Rate Loans. Subject to the terms and conditions of this Agreement, including the procedures set forth in Article 4 hereof, each Syndication Party may in its sole discretion make Advances (each Advance made by a Syndication Party pursuant to this Section a "3-YEAR BID ADVANCE" and the total of such Advances made by the Syndication Parties the "3-YEAR BID LOANS") to Borrower from time to time during the 3-Year Facility Availability Period, provided that:

4.2.1 Individual 3-Year Commitment. No Syndication Party shall be permitted to make a 3-Year Bid Rate Advance under the 3-Year Facility which, when added to its aggregate Individual Outstanding 3-Year Obligations, would exceed such Syndication Party's Individual 3-Year Commitment.

4.2.2 3-Year Commitment. Borrower may not make a 3-Year Bid Request in an amount which, when added to the aggregate Individual Outstanding 3-Year Obligations of all Syndication Parties, would exceed the 3-Year Commitment.

4.2.3 Amounts. Each 3-Year Bid Request shall be in an amount at least equal to five million dollars ($5,000,000) and in integral multiples of one million dollars ($1,000,000), and each 3-Year Bid shall be in an amount at least equal to one million dollars ($1,000,000) or the amount remaining under the Individual 3-Year Commitment of the Syndication Party submitting such 3-Year Bid, if less. Each 3-Year Bid Advance made by a Syndication Party will be in the amount of its Bids, or portions thereof, under the 3-Year Facility that are accepted by Borrower in accordance with Section 4.5 hereof.

4.3 Bid Request. No more frequently than once each Banking Day, Borrower may request offers from all Syndication Parties which have an Individual Commitment in the Facility under which the offers are being requested, acting severally and not jointly, to make Bid Advances under such Facility by giving the Bid Agent notice by facsimile (effective upon receipt), substantially in the form of Exhibit 4.3 hereto ("BID REQUEST") on or before 9:00 A.M. (Central time) on the Banking Day the proposed Bid Loan is to be made. By 9:30 A.M. (Central time) of the same Banking Day, the Bid Agent shall, by facsimile transmission, send to all of the Syndication Parties eligible to receive a Bid Request a copy of such Bid Request. Each Bid Request must specify (a) the Facility under which the Bid Advances are being requested, (b) the

total amount of such requested Bid Advances, (c) the individual amount of each requested Bid Advance with a different proposed Bid Maturity Date, (d) the proposed Banking Day of making such Bid Advance (which shall be the same Banking Day on which the Bid Request is submitted), and (e) the proposed maturity dates for such Bid Advances (each a "BID MATURITY DATE") which must be Banking Days and which must not extend (i) more than thirty (30) days beyond the 364-Day Maturity Date or (ii) more than thirty (30) days beyond the 3-Year Maturity Date, as applicable. Borrower may request offers to make more than one Bid Loan (up to a maximum of five (5) Bid Loans in a single Bid Request for each of the two Facilities), each with a different Bid Maturity Date, in a single Bid Request.

4.4 Bid Procedure. Each Syndication Party with an Individual Commitment in the Facility under which the Bid Request is made may, in its sole discretion, submit to the Bid Agent a written quote, substantially in the form of Exhibit 4.4 hereto ("BID"), containing an offer or offers to make one or more Bid Advances in a specified amount or amounts in response to such Bid Request (and may elect to bid with respect to any or all Bid Advances with different Bid Maturity Dates specified in the Bid Request); provided, however, each Syndication Party is limited to one Bid submission per Bid Request (which may cover more than one Bid Maturity Date) and a Syndication Party may not submit a Bid in an amount in excess of such Syndication Party's Individual 364-Day Lending Capacity or Individual 3-Year Lending Capacity, as applicable. A Bid may set forth offers for up to five (5) separate Bid Rates for each of the applicable Bid Advances, provided that each Bid shall specify the aggregate principal amount of Bid Advances for all Bid Maturity Dates that the Syndication Party submitting such Bid is willing to make at the interest rate or rates specified in such Bid (each a "BID RATE") pursuant to such Bid. Each Bid by a Syndication Party (other than by the Bid Agent acting in its capacity as a Syndication Party) must be submitted to the Bid Agent by facsimile not later than 10:15 A.M. (Central time) on the same Banking Day. The Bid Agent, in its capacity as a Syndication Party, may submit Bids; provided such Bids must be finalized not later than 10:00 A.M. (Central time) on the same Banking Day. Each Bid shall be irrevocable. The Bid Agent shall disregard a Bid if it (a) is not substantially in conformity with Exhibit 4.4 hereto, (b) contains qualifying or conditional language, (c) proposes terms other than or in addition to those set forth in the applicable Bid Request, or (d) arrives after the applicable time set forth in this Section. By 10:30 A.M. (Central time) on the same Banking Day, the Bid Agent shall send copies of all Bids to Borrower by facsimile ("BID RESULTS NOTICE").

4.5 Bid Acceptance Procedure. Not later than 11:00 A.M. (Central time) on the same Banking Day, Borrower shall provide to the Bid Agent by facsimile notice, in the form of Exhibit 4.5 hereto, of its acceptance or rejection of each of the Bids submitted to Borrower by the Bid Results Notice ("BID SELECTION NOTICE"). In the case of each acceptance the Bid Selection Notice shall specify the aggregate principal amount of Bid Advances for each of the Bids that are accepted. Regardless of the amounts or interest rates bid by any Syndication Party, Borrower may accept or decline any Bid in whole or in part, provided that
(a) the aggregate principal amount of Bid Advances accepted may not exceed the applicable amount set forth in the related Bid Request, and (b) Borrower may not accept any offer that fails to comply with this Article 4. Bids not accepted by 11:00 A.M. will be irrevocably deemed to have been rejected by Borrower. No later than 12:00 noon (Central time) on the same Banking Day, the Bid Agent shall send, by facsimile, a copy of such Bid Selection Notice to the Administrative Agent and each Syndication Party which submitted a Bid.

4.6 Bid Loan Funding. Not later than 2:00 P.M. (Central time) on the same Banking Day, each Syndication Party that is to make one or more Bid Advances in accordance with the Bid Selection Notice shall make available to the Administrative Agent at the Administrative Agent's Office, in immediately available funds, an amount sufficient to fund such Bid Advances. After the Administrative Agent's receipt of such funds, but not later than 3:00 P.M. (Central time), and upon fulfillment of the applicable conditions set forth in Article 11 hereof, the Administrative Agent will make the proceeds of such Bid Advances available to Borrower, in immediately available funds, and will transmit such funds by wire transfer to Borrower's Account.

4.7 Syndication Party Funding Failure. In the event any Syndication Party fails to make any requested 364-Day Bid Advance or 3-Year Bid Advance to be made by it on the date specified for such Advance, the Administrative Agent (in that capacity) will advance such funds to Borrower on behalf of such Syndication Party in its role and capacity as the Administrative Agent, and therefore notwithstanding limitations, if any, contained herein relating to the Administrative Agent in its role as a Syndication Party, including its Individual 364-Day Commitment, Individual 3-Year Commitment, Individual 364-Day Lending Capacity, or Individual 3-Year Lending Capacity, as applicable. In the event of the funding of any such Advance by the Administrative Agent, the Syndication Party failing to fund such Advance will be treated as a Delinquent Syndication Party under Section 16.4 hereof, and the Administrative Agent will be treated as a Contributing Syndication Party under such Section.

4.8 364-Day Facility Bid Rate Loans - Bid Maturity Date Beyond 364-Day Maturity Date. Notwithstanding any other provision in this Credit Agreement that may be construed to the contrary, in the event that a Syndication Party, at its sole discretion, makes a 364-Day Bid Advance to Borrower with a Bid Maturity Date later than the 364-Day Maturity Date; and (a) (i) the 364-Day Maturity Date is subsequently extended by amendment to this Credit Agreement; and (ii) such Syndication Party does not renew its Individual 364-Day Commitment at a level at least equal to the outstanding amount of such 364-Day Advance, then, in each such case, such outstanding amount will be repaid by Borrower, and accepted by such Syndication Party, on the 364-Day Maturity Date (as in effect prior to such extension thereof) without any liability for Funding Losses on such amount; or
(b) the 364-Day Maturity Date is not subsequently extended by amendment to this Credit Agreement, then, in each such case, such outstanding amount will be repaid by Borrower in accordance with the terms of this Credit Agreement and this Credit Agreement will be deemed to continue in force for the limited purpose of facilitating such payments.

4.9 Failure to Implement Bid Process. In the event the Bid Agent fails to hold an auction pursuant to a proper Bid Request, the Administrative Agent (in that capacity) will make an Advance to Borrower on behalf of all Syndication Parties (with such Advance allocated between the 364-Day Facility and the 3-Year Facility in accordance with the allocations contained in the applicable Bid Request), in the amount of each Bid Advance requested in such Bid Request to bear interest at the then current Base Rate to be repaid out of proceeds of Bid Advances on the next Banking Day, and will cause the Bid Agent to hold the auction for such Bid Advances the following Banking Day.

4.10 Overnight Advances. In addition to Borrower's right to request 364-Day Bid Advances under Section 4.1 hereof, Borrower may, subject to the terms and conditions of this Section, at any time before 2:30 P.M. (Central time) on a Banking Day, request the Overnight Lender to make an Advance to Borrower under the 364-Day Facility on the same Banking Day ("OVERNIGHT ADVANCE") in accordance with the provisions of this Section. Each Banking Day by 10:30 A.M. (Central time) the Overnight Lender shall notify Borrower of the interest rate ("OVERNIGHT RATE") that it will charge on all Overnight Advances made that Banking Day. Borrower's request for an Overnight Advance ("OVERNIGHT ADVANCE REQUEST") may be made orally or in writing by facsimile (if orally, shall be confirmed in writing on the same Banking Day), must be directed to the Overnight Lender, and must specify (a) the amount of such Advance, and (b) the date when such Overnight Advance will be due and payable ("OVERNIGHT MATURITY DATE"), which may not be later than the fifth Banking Day thereafter. If Borrower submits an Overnight Advance Request, the Overnight Lender shall promptly, but not later than 3:30 P.M. on the same Banking Day, fund such Overnight Advance and advise the Administrative Agent in writing of the amount and Overnight Maturity Date of such Overnight Advance. Each Overnight Advance shall bear interest at the applicable Overnight Rate and shall be payable in full, including interest, on the Overnight Maturity Date applicable to such Overnight Advance. Such payment may, at Borrower's discretion, and subject to the conditions of this Credit Agreement, be made by an Advance under the 364-Day Facility or under the 3-Year Facility. Overnight Advances shall be made only by the Overnight Lender. Borrower's entitlement to receive, and the Overnight Lender's obligation to fund, any Overnight Advance shall be subject to the conditions and limitations set forth in Section 2.1 hereof and applicable to 364-Day Advances generally, and, in addition, the aggregate outstanding principal amount of all such Overnight Advances shall not at any time exceed the Overnight Funding Commitment.

4.11 Overnight Lender Funding Failure. In the event the Overnight Lender fails to make any requested Overnight Advance to be made by it on the date specified for such Advance, the Administrative Agent (in that capacity) may, in its sole and absolute discretion and in its role and capacity of the Administrative Agent, advance such funds to Borrower on behalf of such Overnight Lender, notwithstanding limitations, if any, contained herein relating to the Administrative Agent in its role as a Syndication Party, including its Individual 364-Day Commitment or Individual 364-Day Lending Capacity. In the event of any such advance by the Administrative Agent, the Overnight Lender will be treated as a Delinquent Syndication Party under Section 16.4 hereof, and the Administrative Agent will be treated as a Contributing Syndication Party under such Section.

ARTICLE 5. LETTER OF CREDIT FACILITY

5.1 Letter of Credit Request. On the terms and conditions set forth in this Credit Agreement, and so long as no Event of Default or Potential Default has occurred (or if a Potential Default or an Event of Default has occurred, it has been waived in writing by the Administrative Agent in accordance with the provisions of Section 16.10 hereof), Borrower may request the issuance of one or more documentary letters of credit or standby letters of credit as Committed Letters of Credit or as Negotiated Letters of Credit pursuant to the conditions and limitations set forth below.

5.1.1 Request for Committed Letter of Credit. Borrower may request issuance of a Committed Letter of Credit by providing, not later than 12:00 noon (Central time) on a Banking

Day, a written request therefore ("COMMITTED LC REQUEST") to the Administrative Agent and the Letter of Credit Bank. The Committed LC Request shall set forth
(a) the face amount and expiry date, (b) the beneficiary, (c) the terms thereof, and (d) such other information as the Letter of Credit Bank shall request. Committed Letters of Credit shall be issued under the 3-Year Facility. In no event may the expiry date be later than 364 days past the 3-Year Maturity Date.

5.1.2 Request for Negotiated Letter of Credit. Borrower may request issuance of a Negotiated Letter of Credit by (a) providing, no later than 11:00
A.M. (Central time) on a Banking Day, written notice to the Administrative Agent of (i) the face amount and expiry date of each Negotiated Letter of Credit which Borrower desires be issued and (ii) the identity of the Syndication Party or Parties from which Borrower intends to seek each such Negotiated Letter of Credit; (b) receiving written or oral confirmation from the Administrative Agent, to be provided no later than 11:30 A.M. (Central time), that each such Syndication Party has sufficient Individual 3-Year Lending Capacity to issue such Negotiated Letter(s) of Credit; and (c) following receipt of the confirmation described in clause (b) above, but no later than 12:00 noon (Central time), sending a written request ("NEGOTIATED LC REQUEST") to each such Syndication Party requesting issuance of such Negotiated Letter(s) of Credit. Such written request shall set forth (a) the face amount and expiry date, (b) the beneficiary, (c) the terms thereof, and (d) such other information as any such Syndication Party shall request. Negotiated Letters of Credit shall be issued under the 3-Year Facility. In no event may the expiry date be later than 364 days past the 3-Year Maturity Date.

5.1.3 Purpose. Borrower may not request issuance of a Letter of Credit for other than a purpose for which a 3-Year Advance could be requested under
Section 3.6 hereof.

5.1.4 Cash Collateral: In the event Borrower requests issuance or reissuance of a Letter of Credit with an expiry date later than the 3-Year Maturity Date, Borrower shall, as a condition precedent to the issuance or reissuance of such Letter of Credit, comply with the requirements of Section 5.6 hereof.

5.1.5 Notification of the Administrative Agent Regarding Negotiated Letters of Credit. No later than 3:00 P.M. (Central time) on the Banking Day of issuance, reissuance, renewal, permanent reduction, or termination of a Negotiated Letter of Credit, both Borrower and the Issuing Syndication Party shall notify the Administrative Agent by facsimile of such fact, and the face amount (including the reduced face amount, as applicable), expiry date, name of beneficiary, and name of Issuing Syndication Party with respect to such Negotiated Letter of Credit.

5.2 Committed Letters of Credit. No later than 1:00 P.M. (Central time) on the Banking Day of the receipt by the Letter of Credit Bank of a Committed LC Request, it shall, if it approves the form and substance thereof, issue the requested Committed Letter of Credit for any expiry period from seven (7) days to the earlier of (a) 364 days from the date of issuance or (b) 364 days past the 3-Year Maturity Date, subject to the following:

5.2.1 Available Amount. The face amount of the requested Committed Letter of Credit may not exceed the lesser of (a) the amount determined by subtracting the aggregate Individual Outstanding 3-Year Obligations of all Syndication Parties from the 3-Year Commitment, or (b) the amount determined by subtracting the undrawn face amount of all Letters

of Credit and Existing Letters of Credit then outstanding (including any Letter of Credit requested but not yet issued unless the Letter of Credit Bank has declined to issue the Letter of Credit) from the LC Commitment.

5.2.2 Availability. Committed Letters of Credit may be requested for issuance only during the 3-Year Availability Period.

5.2.3 Issuance Fee. Borrower shall pay at the time of the issuance or reissuance of each Committed Letter of Credit the Issuance Fee therefore to be distributed to the Letter of Credit Bank.

5.2.4 Treatment of Draws. Each draw under a Committed Letter of Credit shall be funded by each of the Syndication Parties as an Advance under the 3-Year Facility in accordance with their respective Individual 3-Year Pro Rata Share as of the date of such draw.

5.3 Negotiated Letters of Credit. Any Syndication Party may, in its sole discretion, issue a Negotiated Letter of Credit ("ISSUING SYNDICATION PARTY") for any expiry period from seven (7) days to a date which is 364 days past the 3-Year Maturity Date, upon such terms and conditions as Borrower and such Issuing Syndication Party may agree; provided that (a) all Negotiated Letters of Credit must be issued on a Banking Day, and may be issued no earlier than 11:30
A.M. and no later than 2:30 P.M. (Central time), and (b) the issuance of Negotiated Letters of Credit shall also be subject to the following:

5.3.1 Available Amount. The face amount of the requested Negotiated Letter of Credit may not exceed the lesser of (a) the amount determined by subtracting the aggregate Individual Outstanding 3-Year Obligations of all Syndication Parties from the 3-Year Commitment, (b) an amount which would exceed the Issuing Syndication Party's Individual 3-Year Lending Capacity, or (c) the amount determined by subtracting the undrawn face amount of all Letters of Credit and Existing Letters of Credit then outstanding (including any Committed Letter of Credit requested but not yet issued unless the Letter of Credit Bank has declined to issue the Letter of Credit) from the LC Commitment. Prior to the issuance of a Negotiated Letter of Credit, the Issuing Syndication Party shall confirm with the Administrative Agent that the issuance of such Negotiated Letter of Credit will not result in the limitations set forth in this Subsection being exceeded.

5.3.2 Availability. Negotiated Letters of Credit may be requested for issuance only during the 3-Year Availability Period.

5.3.3 Fees. Borrower will be required to pay only such fees as the Issuing Syndication Party and Borrower agree upon in connection with each such Negotiated Letter of Credit and all such fees shall be collected by, paid to, and retained by the Issuing Syndication Party.

5.3.4 Treatment of Draws. Each draw under a Negotiated Letter of Credit shall be treated as an Advance by the Issuing Syndication Party under the 3-Year Facility and shall bear interest at the Base Rate until paid in full.

5.4 Notice Regarding Negotiated Letters of Credit. No later than 3:00 P.M. (Central time) on the Banking Day of issuance, reissuance, renewal, permanent reduction, or termination of a Negotiated Letter of Credit, both Borrower and the Issuing Syndication Party shall notify the Administrative Agent by facsimile of such fact, and the face amount (including the reduced face amount, as applicable), expiry date, name of beneficiary, and name of Issuing Syndication Party with respect to such Negotiated Letter of Credit.

5.5 Existing Letters of Credit. Borrower and each Syndication Party agree that each Existing Letter of Credit shall, as of the Closing Date, be deemed to have been issued as a Negotiated Letter of Credit under the 3-Year Facility, and that the actual issuer thereof, upon its execution of this Credit Agreement, shall for all purposes be deemed to be the Issuing Syndication Party hereunder with respect to each such Existing Letter of Credit.

5.6 Cash Collateral Account. Upon (a) the occurrence of either the 3-Year Maturity Date or an Event of Default, or (b) the agreement of the Letter of Credit Bank to issue or reissue a Committed Letter of Credit with an expiry date beyond the 3-Year Maturity Date or the agreement of a Syndication Party to issue or reissue a Negotiated Letter of Credit with, in either case, an expiry date beyond the 3-Year Maturity Date (each such Letter of Credit an "EXTENDED DURATION LC"), Borrower shall immediately (l) establish an account, if one has not previously been established, with the Administrative Agent, or with such other financial institution as shall be approved by the Required Lenders ("CASH COLLATERAL ACCOUNT"); (m) deposit by wire transfer funds into such Cash Collateral Account in an amount equal to (i) in the case of clause (a), the undrawn face amount of all Letters of Credit then outstanding, or (ii) in the case of clause (b), the face amount of such Extended Duration LC (except to the extent previously deposited in the case of a reissuance); and (n) take such action, including the execution and delivery (and, where requested, obtaining the execution thereof by third parties) of security documents, Control Agreements, financing statements, and/or such other documents as the Administrative Agent may require, in order to grant to the Administrative Agent, on behalf of the Syndication Parties, a first lien security interest on such Cash Collateral Account and the funds on deposit therein. In the event that Borrower fails or refuses to establish and fund the Cash Collateral Account as required above, the Syndication Parties may, at their discretion, establish such an account in the name of the Administrative Agent and fund such account by a 3-Year Advance in the same way that a draw under any such Letter of Credit would be funded. Notwithstanding any other provision contained in this Credit Agreement or any of the other Loan Documents, (x) draws made against any Committed Letter of Credit that is an Extended Duration LC on or after the date of funding of the Cash Collateral Account with respect to such Extended Duration LC shall, at the sole discretion of the Letter of Credit Bank, be funded out of the funds on deposit in the Cash Collateral Account rather than out of 3-Year Advances; and (y) draws made against any Negotiated Letter of Credit that is an Extended Duration LC on or after the date of funding of the Cash Collateral Account with respect to such Extended Duration LC shall, at the sole discretion of the Issuing Syndication Party, be funded out of the funds on deposit in the Cash Collateral Account rather than as a 3-Year Advance by such Issuing Syndication Party, to the extent that the funds on deposit in the Cash Collateral Account are in excess of the undrawn face amount of all Committed Letters of Credit that are Extended Duration LC's on such date. Any draw under an Extended Duration LC funded as an Advance shall be repaid by Borrower no later than the next Banking Day. Upon receiving proof satisfactory to the Administrative Agent of the termination, reduction in amount, or expiration of any Extended Duration LC, and unless the 3-Year Maturity Date has occurred or an

Event of Default has occurred and is continuing, and so long as there remains on deposit in the Cash Collateral Account funds equal to the undrawn face amount of all Extended Duration LC's which remain outstanding, the Administrative Agent shall within a reasonable time after receiving a written request therefore from Borrower, refund to Borrower an amount equal to the undrawn face amount of such terminated or expired Extended Duration LC or the amount by which the undrawn face amount of such Extended Duration LC has been reduced, as applicable. In the event of the extension of the 3-Year Maturity Date to a date beyond the expiry date of an Extended Duration LC, each Extended Duration LC whose expiry date is no longer later than the 3-Year Maturity Date as so extended ( each hereinafter referred to as a "CONVERTED LC"), shall no longer be deemed to be an Extended Duration LC, and unless an Event of Default has occurred and is continuing, and so long as there remains on deposit in the Cash Collateral Account funds equal to the undrawn face amount of all Extended Duration LC's, excluding each such Converted LC, the Administrative Agent shall within a reasonable time after receipt of a written request therefore from Borrower (which Borrower may send at any time after the effective date of such extension of the 3-Year Maturity Date), refund to Borrower an amount equal to the undrawn face amount of each such Converted LC.

5.7 Reimbursement Obligation Unconditional. All draws under the Letters of Credit are absolutely, unconditionally, and irrevocably reimbursable by Borrower and shall be funded as 3-Year Advances (or as provided otherwise in Section 5.6 hereof), notwithstanding:

(a) any lack of validity or enforceability of the Letter of Credit, any of the documents referenced in the Letter of Credit, or any other agreement or instrument related to any such documents;

(b) the existence of any claim, setoff, defense or other right which Borrower may have at any time against the beneficiary or any transferee of the Letter of Credit (or any person for whom the beneficiary or transferee may be acting);

(c) any statement, draft, certificate, or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect, or any statement therein being untrue or inaccurate in any respect whatsoever or the draw certificate was otherwise unauthorized, it being expressly understood and agreed by Borrower that neither the Letter of Credit Bank nor any Syndication Party (including any Syndication Party issuing a Negotiated Letter of Credit) shall have any liability on account of any lack of authorization or forgery and any recovery from third parties on account of such lack of authorization or such forgery shall be the sole responsibility of Borrower; or

(d) the payment of a draw against presentation of a draft or certificate which does not comply with the terms of the Letter of Credit, unless such payment is made as a result of the gross negligence or willful misconduct of the issuer of the Letter of Credit.

ARTICLE 6. INTEREST AND FEES

6.1 Interest. Except as provided in Article 4 hereof, interest on all Loans shall be calculated as follows:

6.1.1 Base Rate Option. Unless Borrower requests and receives a LIBO Rate Loan pursuant to Subsection 6.1.2 hereof, the outstanding principal balance under the 364-Day Facility Notes and the 3-Year Facility Notes shall bear interest at the Base Rate (each a "BASE RATE LOAN"). Base Rate Loans must be in minimum amounts of $10,000,000.00 and in incremental multiples of $1,000,000.00.

6.1.2 LIBO Rate Option. From time to time, and so long as no Event of Default has occurred and is continuing, at the request of Borrower included in a Borrowing Notice, all or any part of the outstanding principal balance under the 364-Day Facility Notes or the 3-Year Facility Notes may bear interest at the LIBO Rate (each a "LIBO RATE LOAN"); provided that Borrower may have no more than ten (10) LIBO Rate Loans outstanding at any time. To effect this option, the Borrowing Notice must specify (a) the principal amount that is to bear interest at the LIBO Rate, which must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00 and (b) the period selected by Borrower during which the LIBO Rate is to be applied ("LIBO RATE PERIOD"), which may be any period of one, two, three, or six months, but must expire no later than the 364-Day Maturity Date or the 3-Year Maturity Date, as applicable. In addition, Borrower may convert any Base Rate Loan to a LIBO Rate Loan, or continue a LIBO Rate Loan, by making a written request therefore ("LIBO REQUEST") to the Administrative Agent by facsimile at least three (3) Banking Days prior to the first date of the LIBO Rate Period therefore, specifying (y) the principal amount that is to bear interest at the LIBO Rate, which must be a minimum of $10,000,000.00 and in incremental multiples of $1,000,000.00 and (z) the LIBO Rate Period selected by Borrower during which the LIBO Rate is to be applied. The Administrative Agent shall incur no liability in acting upon a request which it believed in good faith had been made by a properly authorized employee of Borrower. Following the expiration of the LIBO Rate Period for any LIBO Rate Loan, interest shall automatically accrue at the Base Rate unless Borrower requests and receives another LIBO Rate Loan as provided in this Subsection.

6.2 Additional Provisions for LIBO Rate Loans.

6.2.1 Limitation on LIBO Rate Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of the LIBO Rate for any LIBO Rate Period:

(a) The Administrative Agent determines (which determination shall be conclusive) that quotations of interest rates in accordance with the definition of LIBO Rate are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for LIBO Rate Loans as provided in this Credit Agreement; or

(b) any Syndication Party determines (which determination shall be conclusive) that the relevant rates of interest referred to in the definition of LIBO Rate upon the basis of which the rate of interest for LIBO Rate Loans for such LIBO Rate Period is to be determined do not adequately cover the cost to the Syndication Parties of making or maintaining such LIBO Rate Loans for such LIBO Rate Period;

then the Administrative Agent shall give Borrower prompt notice thereof, and so long as such condition remains in effect, in the case of clause (a) above, the Syndication Parties, and in the case of clause (b) above, the Syndication Party that makes the determination, shall be under no obligation to make LIBO Rate Loans, convert Base Rate Loans into LIBO Rate Loans, or continue LIBO Rate Loans, and Borrower shall, on the last days of the then current applicable LIBO Rate Periods for the outstanding LIBO Rate Loans, either prepay such LIBO Rate Loans or such LIBO Rate Loans shall automatically be converted into a Base Rate Loan in accordance with Section 6.1 hereof.

6.2.2 LIBO Rate Loan Unlawful. If any law, treaty, rule, regulation or determination of a court or governmental authority or any change therein or in the interpretation or application thereof subsequent to the Closing Date (each, a "CHANGE IN LAW") shall make it unlawful for any of the Syndication Parties to
(a) advance its Funding Share of any LIBO Rate Loan or (b) maintain its share of all or any portion of the LIBO Rate Loans, each such Syndication Party shall promptly, by telephone (in which case it must be promptly followed by a writing) or facsimile, notify the Administrative Agent thereof, and of the reasons therefor and the Administrative Agent shall promptly notify Borrower thereof and shall provide a copy of such written notice to Borrower. In the former event, any obligation of any such Syndication Party to make available its Funding Share of any future LIBO Rate Loan shall immediately be canceled (and, in lieu thereof shall be made as a Base Rate Loan), and in the latter event, any such unlawful LIBO Rate Loans or portions thereof then outstanding shall be converted, at the option of such Syndication Party, to a Base Rate Loan; provided, however, that if any such Change in Law shall permit the LIBO Rate to remain in effect until the expiration of the LIBO Rate Period applicable to any such unlawful LIBO Rate Loan, then such LIBO Rate Loan shall continue in effect until the expiration of such LIBO Rate Period. Upon the occurrence of any of the foregoing events on account of any Change in Law, Borrower shall pay to the Administrative Agent immediately upon demand such amounts as may be necessary to compensate any such Syndication Party for any fees, charges, or other costs incurred or payable by such Syndication Party as a result thereof and which are attributable to any LIBO Rate Loan made available to Borrower hereunder, and any reasonable allocation made by any such Syndication Party among its operations shall be conclusive and binding upon Borrower absent manifest error.

6.2.3 Treatment of Affected Loans. If the obligations of any Syndication Party to make or continue LIBO Rate Loans, or to convert Base Rate Loans into LIBO Rate Loans, are suspended pursuant to Subsection 6.2.1 or 6.2.2 hereof (all LIBO Rate Loans so affected being herein called "AFFECTED LOANS"), such Syndication Party's Affected Loans shall, on the last day(s) of the then current LIBO Rate Period(s) for the Affected Loans (or, in the case of a conversion required by Subsection 6.2.1 or 6.2.2, on such earlier date as such Syndication Party may specify to Borrower), be automatically converted into Base Rate Loans for the account of such Syndication Party. To the extent that such Syndication Party's Affected Loans have been so converted, all payments and prepayments of principal which would otherwise be applied to such Syndication Party's Affected Loans shall be applied instead to its Base Rate Loans. All Advances which would otherwise be made or continued by such Syndication Party as LIBO Rate Loans shall be made or continued instead as Base Rate Loans, and all Base Rate Loans of such Syndication Party which would otherwise be converted into LIBO Rate Loans shall remain as Base Rate Loans.

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

6.4 Interest Calculation. Interest on Base Rate Loans shall be calculated on the actual number of days the principal owing thereunder is outstanding with the daily rate calculated on the basis of a year consisting of 365 or 366 days
(as applicable based on the date of calculating such interest). Interest on (a) LIBO Rate Loans, (b) 364-Day Bid Loans, (c) 3-Year Bid Loans, and (d) Overnight Loans shall be calculated on the actual number of days the principal owing thereunder is outstanding with the daily rate calculated on the basis of a year consisting of 360 days. In calculating interest, the Advance Date shall be included and the date each payment is received shall be excluded.

6.5 Fees. Borrower shall pay or cause to be paid the following fees:

6.5.1 364-Day Facility Fee. A non-refundable fee ("364-DAY FACILITY FEE") calculated in arrears as of the end of each of Borrower's Fiscal Quarters following the Closing Date, until the Loan is paid in full, and the Syndication Parties have no further obligation to make Advances hereunder. The 364-Day Facility Fee for each such period shall be equal to (a) the average daily 364-Day Commitment in effect during such period, (b) multiplied by the average daily 364-Day Facility Fee Factor in effect during such period, as converted to a daily rate using a year of 360 days, (c) with the product there of being further multiplied by the number of days in such period. The 364-Day Facility Fee shall be payable to the Administrative Agent in arrears on the Banking Day coinciding with, or immediately preceding the fifth day after the close of each such Fiscal Quarter, for distribution to each Syndication Party in the ratio that its Individual 364-Day Commitment bears to the 364-Day Commitment as calculated by the Administrative Agent on the last day of each such period.

6.5.2 3-Year Facility Fee. A non-refundable fee ("3-YEAR FACILITY FEE") calculated in arrears as of the end of each of Borrower's Fiscal Quarters following the Closing Date, until the Loan is paid in full, all Letters of Credit are canceled or have expired, and the Syndication Parties have no further obligation to make Advances or issue Letters of Credit hereunder. The 3-Year Facility Fee for each such period shall be equal to (a) the average daily 3-Year Commitment in effect during such period, (b) multiplied by the average daily 3-Year Facility Fee Factor in effect during such period, as converted to a daily rate using a year of 360 days, (c) with the product there of being further multiplied by the number of days in such period. The 3-Year Facility Fee shall be payable to the Administrative Agent in arrears on the Banking Day coinciding with, or immediately preceding the fifth day after the close of each such Fiscal Quarter, for distribution to each Syndication Party in the ratio that its Individual 3-Year Commitment bears to the 3-Year Commitment as calculated by the Administrative Agent on the last day of each such period.

6.5.3 Committed Letter of Credit Fee. Borrower shall pay the non-refundable Committed Letter of Credit Fee calculated in arrears as of the last day of each of Borrower's Fiscal Quarters. The Committed Letter of Credit Fee shall be payable to the Administrative Agent in arrears on the Banking Day coinciding with, or immediately preceding the fifth day after the close of each of Borrower's Fiscal Quarters, for distribution to each Syndication Party in the ratio

that its Individual 3-Year Commitment bears to the 3-Year Commitment as calculated by the Administrative Agent on the last day of each such period.

6.6 364-Day Margin; 3-Year Margin; 364-Day Facility Fee Factor; 3-Year Facility Fee Factor . If the Compliance Certificate with respect to any Fiscal Quarter is not received by the Administrative Agent by the date required as provided in Subsections 12.2.1 and 12.2.2 hereof, the 364-Day Margin; the 3-Year Margin; the 364-Day Facility Fee Factor; and the 3-Year Facility Fee Factor for the period commencing on the first day of the Fiscal Quarter commencing immediately after the Fiscal Quarter for which such Compliance Report was required, shall be 112.5 basis points, 110.0 basis points, 22.5 basis points, and 25.0 basis points, respectively for that entire Fiscal Quarter.

6.7 Special Interest Rates. Notwithstanding the provisions of Section 6.1 hereof, balances of each of the Advances set forth on Exhibit 6.7 hereto as "O/S Balance" shall be treated as 3-Year Advances and shall bear interest at the "Int Yield" set forth in such Exhibit to and including the "Mat Date" set forth in such Exhibit. From and after the "Mat Date" for each such Advance, interest for the unpaid balance of such Advance shall be determined in accordance with
Section 6.1 hereof.

ARTICLE 7. PAYMENTS; FUNDING LOSSES

7.1 Principal Payments. Principal shall be payable under the 364-Day Facility on the 364-Day Maturity Date, and under the 3-Year Facility on the 3-Year Maturity Date; provided that (a) principal owing on all Bid Advances shall be payable on the Bid Maturity Date as provided in the Bid under which such Bid Advance was made, (b) principal owing on all Overnight Advances shall be payable on the applicable Overnight Maturity Date, and (c) prepayments may be made only as provided in Section 7.5 hereof.

7.2 Interest Payments. Interest shall be payable as follows: (a) interest on Base Rate Loans shall be payable monthly in arrears on the first Banking Day of the next month, (b) interest on LIBO Rate Loans shall be payable on the last day of the LIBO Rate Period therefor unless the LIBO Rate Period is longer than three (3) months, in which case interest shall also be payable on each three month anniversary of the first day of the applicable LIBO Rate Period, (c) interest on each Bid Rate Loan shall be payable on the Bid Maturity Date therefor unless the Bid Maturity Date is more than ninety (90) days from the date of the Advance under such Bid Rate Loan, in which case interest shall also be payable every ninety (90) days from the date of the relevant Advance, (d) interest on Overnight Advances shall be payable on the Overnight Maturity Date, and (e) interest on all Loans then accrued and unpaid shall be payable on the 364-Day Maturity Date or 3-Year Maturity Date, as applicable.

7.3 Application of Principal Payments. Principal payments and prepayments shall be applied (a) to principal amounts owing under the 364-Day Facility or the 3-Year Facility, or to Overnight Advances as Borrower directs in writing (provided that Bid Rate Loans under each Facility may not be prepaid), or (b) if Borrower provides no specific direction, then to principal amounts owing under the 364-Day Facility, the 3-Year Facility (other than Bid Rate Loans under the two Facilities), and the Overnight Advances in the ratio of the amount of the outstanding principal balance owed under each, divided by the principal balance owed under all three (excluding Bid Rate Loan balances in both cases). In the case of (a) and (b) and subject to the

provisions of such clauses, payments shall be applied first to Base Rate Loans and then to LIBO Rate Loans unless Borrower directs otherwise in writing. However, upon the occurrence and during the continuance of an Event of Default or Potential Default, all payments shall be applied, first to fees, second to interest, third to principal pro-rata to all Loans, fourth to the Cash Collateral Account, and last to any other Bank Debt.

7.4 Manner of Payment. All payments, including prepayments, that Borrower is required or permitted to make under the terms of this Credit Agreement and the other Loan Documents shall be made to the Administrative Agent in immediately available federal funds, to be received no later than 1:00 P.M. Central time of the Banking Day on which such payment is due (or the following Banking Day if such date is not a Banking Day) by wire transfer through Federal Reserve Bank, Kansas City, Routing Number: 307088754, COBANK ENGWD (or to such other account as the Administrative Agent may designate by notice).

7.4.1 Payments to Be Free and Clear. All sums payable by Borrower under this Credit Agreement and the other Loan Documents shall be paid without setoff or counterclaim and free and clear of, and without any deduction or withholding on account of, any tax imposed, levied, collected, withheld or assessed by or within the United States of America or any political subdivision in or of the United States of America or any other jurisdiction from or to which a payment is made by or on behalf of Borrower or by any federation or organization of which the United States of America or any such jurisdiction is a member at the time of payment (excluding taxes imposed on or measured by the net income or net profits of the recipient of such payment, and franchise taxes imposed in lieu thereof).

7.4.2 Grossing-up of Payments. If Borrower or any other Person is required by law to make any deduction or withholding on account of any such tax from any sum paid or payable by Borrower to the Administrative Agent or any Syndication Party under any of the Loan Documents:

(a) Borrower shall notify the Administrative Agent of any such requirement or any change in any such requirement as soon as Borrower becomes aware of it;

(b) Borrower shall pay any such tax when such tax is due, such payment to be made (if the liability to pay is imposed on Borrower) for its own account or (if that liability is imposed on the Administrative Agent or such Syndication Party, as the case may be) on behalf of and in the name of the Administrative Agent or such Syndication Party;

(c) the sum payable by Borrower in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, the Administrative Agent or such Syndication Party, as the case may be, receives on the due date a net sum equal to what it would have received had no such deduction, withholding or payment been required or made; and

(d) within thirty (30) days after paying any sum from which it is required by law to make any deduction or withholding, and within thirty (30) days after the due date of payment of any tax which it is required by clause (b) above to pay, Borrower shall deliver to the Administrative Agent evidence satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority;

provided that no such additional amount shall be required to be paid to any Syndication Party under clause (c) above except to the extent that any change after the date on which such Syndication Party became a Syndication Party in any such requirement for a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate of such deduction, withholding or payment from that in effect at the date on which such Syndication Party became a Syndication Party, in respect of payments to such Syndication Party

7.5 Voluntary Prepayments. Borrower shall have the right to prepay all or any part of the outstanding principal balance under the Loans at any time in integral multiples of $1,000,000.00 (or the entire outstanding balance, if less) and subject to a $5,000,000.00 minimum prepayment on LIBO Rate Loans (or the entire outstanding balance, if less), on any Banking Day; provided that (a) in the event of prepayment of any LIBO Rate Loan, whether voluntary or on account of acceleration (i) Borrower must provide three (3) Banking Days notice to the Administrative Agent prior to making such prepayment, and (ii) Borrower must, at the time of making such prepayment, pay all accrued but unpaid interest and all Funding Losses applicable to such prepayment, and (b) Borrower shall not have the right to prepay any Bid Loan before the applicable Bid Loan Maturity Date, but if a Bid Loan is deemed prepaid on account of acceleration, Borrower must pay all Funding Losses applicable to such prepayment. Principal amounts prepaid may be reborrowed under the terms and conditions of this Credit Agreement. "FUNDING LOSSES" shall be determined on an individual Syndication Party basis as the amount which would result in such Syndication Party being made whole (on a present value basis) for the actual or imputed funding losses (including, without limitation, any loss, cost or expense incurred by reason of obtaining, liquidating or employing deposits or other funds acquired by such Syndication Party to fund or maintain such LIBO Rate Loan) incurred by such Syndication Party as a result of such payment (regardless of whether the Syndication Party actually funded with such deposits); provided that such amount shall in no event be less than $300.00 with respect to any Syndication Party. In the event of any such payment, each Syndication Party which had funded the LIBO Rate Loan being paid shall, promptly after being notified of such payment, send written notice ("FUNDING LOSS NOTICE") to the Administrative Agent by facsimile setting forth the amount of attributable Funding Losses and the method of calculating the same. The Administrative Agent shall notify Borrower orally or in writing of the amount of such Funding Losses. A determination by a Syndication Party as to the amounts payable pursuant to this Section shall be conclusive absent manifest error.

7.6 Distribution of Principal and Interest Payments. The Administrative Agent shall distribute payments of principal and interest among the Syndication Parties as follows:

7.6.1 Principal and Interest Payments on 364-Day Advances. Principal and interest payments on 364-Day Advances shall be remitted to the Syndication Parties which made the 364-Day Advance to which such payments are applied in the ratio in which they funded such Advance.

7.6.2 Principal and Interest Payments on 3-Year Pro Rata Rate Advances. Principal and interest payments on 3-Year Advances shall be remitted to the Syndication Parties which made the 3-Year Advance to which such payments are applied in the ratio in which they funded such Advance.

7.6.3 Principal and Interest Payments on Bid Rate Advances. Principal and interest payments on Bid Rate Advances shall be remitted to the Syndication Party which made the Bid Rate Advance to which such payments are applied.

7.6.4 Principal and Interest Payments on Overnight Advances. Principal and interest payments on Overnight Advances shall be remitted to the Overnight Lender.

ARTICLE 8. BANK EQUITY INTERESTS

Borrower agrees to purchase such equity interests in CoBank ("BANK EQUITY INTERESTS") as CoBank may from time to time require in accordance with its bylaws and capital plans as applicable to cooperative borrowers generally. In connection with the foregoing, Borrower hereby acknowledges receipt, prior to the execution of this Credit Agreement, of the following with respect to CoBank
(a) the bylaws, (b) a written description of the terms and conditions under which the Bank Equity Interests are issued, (c) the most recent annual report, and if more recent than the latest annual report, the latest quarterly report. CoBank reserves the right to sell participations under the provisions of Section 16.28 on a non-patronage basis.

ARTICLE 9. SECURITY

The obligations of Borrower under this Credit Agreement shall be unsecured, except (a) with respect to the Cash Collateral Account as provided in Section 5.6, and (b) the statutory lien in favor of CoBank, but not any other Syndication Parties, in the Bank Equity Interests.

ARTICLE 10. REPRESENTATIONS AND WARRANTIES

To induce the Syndication Parties to make the Loans and issue Negotiated Letters of Credit, and the Letter of Credit Bank to issue Committed Letters of Credit, and recognizing that the Syndication Parties, the Administrative Agent, the Letter of Credit Bank, and the Bid Agent are relying thereon, Borrower represents and warrants as follows:

10.1 Organization, Good Standing, Etc. Borrower: (a) is duly organized, validly existing, and in good standing under the laws of its state of incorporation; (b) qualifies as a cooperative association under the laws of its state of incorporation; (c) is duly qualified to do business and is in good standing in each jurisdiction in which the transaction of its business makes such qualification necessary, except to the extent that the failure to so qualify has not resulted in, and could not reasonably be expected to cause, a Material Adverse Effect; and (d) has all authority and all requisite corporate and legal power to own and operate its assets and to carry on its business, and to enter into and perform the Loan Documents to which it is a party. Each Subsidiary: (a) is duly organized, validly existing, and in good standing under the laws of its state of incorporation; (b) is duly qualified to do business and is in good standing in each jurisdiction in which the transaction of its business makes such qualification necessary, except to the extent that the failure to so qualify has not resulted in, and could not reasonably be expected to cause, a Material Adverse Effect; and (c) has all authority and all requisite corporate and legal power to own and operate its assets and to carry on its business.

10.2 Corporate Authority, Due Authorization; Consents. Borrower has taken all corporate action necessary to execute, deliver and perform its obligations under the Loan

Documents to which it is a party and to pay off all amounts owing under the Existing Credit Agreement. All consents or approvals of any Person which are necessary for, or are required as a condition of Borrower's execution, delivery and performance of and under the Loan Documents, have been obtained.

10.3 Litigation. Except as described on Exhibit 10.3 hereto, there are no pending legal or governmental actions, proceedings or investigations to which Borrower or any Subsidiary is a party or to which any property of Borrower or any Subsidiary is subject which might reasonably be expected to result in any Material Adverse Effect and, to Borrower's knowledge, no such actions or proceedings are threatened or contemplated by any federal, state, county, or city (or similar unit) governmental agency or any other Person.

10.4 No Violations. The execution, delivery and performance of its obligations under the Loan Documents will not: (a) violate any provision of Borrower's articles of incorporation or bylaws, or any law, rule, regulation (including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System), or any judgment, order or ruling of any court or governmental agency; (b) violate, require consent under (except such consent as has been obtained), conflict with, result in a breach of, constitute a default under, or with the giving of notice or the expiration of time or both, constitute a default under, any existing real estate mortgage, indenture, lease, security agreement, contract, note, instrument or any other agreements or documents binding on Borrower or affecting its property; or (c) violate, conflict with, result in a breach of, constitute a default under, or result in the loss of, or restriction of rights under, any Required License or any order, law, rule, or regulation under or pursuant to which any Required License was issued or is maintained ("LICENSING Laws").

10.5 Binding Agreement. Each of the Loan Documents to which Borrower is a party is, or when executed and delivered, will be, the legal, valid and binding obligation of Borrower, enforceable in accordance with its terms, subject only to limitations on enforceability imposed by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors' rights generally and by general principles of equity.

10.6 Compliance with Laws. Borrower and each Subsidiary are in compliance with all federal, state, and local laws, rules, regulations, ordinances, codes and orders, including without limitation all Environmental Laws and all Licensing Laws, with respect to which noncompliance could reasonably be expected to result in a Material Adverse Effect.

10.7 Principal Place of Business; Place of Organization. Borrower's place of business, or chief executive office if it has more than one place of business, and the place where the records required by Section 12.1 hereof are kept, is located at 5500 Cenex Drive, Inver Grove Heights, Minnesota 55077. Borrower is a cooperative corporation formed under the laws of the State of Minnesota.

10.8 Payment of Taxes. Except as shown on Exhibit 10.8 hereto, Borrower and each Subsidiary have filed all required federal, state and local tax returns and have paid all taxes as shown on such returns as they have become due, and have paid when due all other taxes, assessments or impositions levied or assessed against Borrower or any Subsidiary, or their business or properties, except where the failure to make such filing or payment could not

reasonably be expected to result in a Material Adverse Effect. Exhibit 10.8 specifically indicates all such taxes, if any, which are subject to a Good Faith Contest.

10.9 Licenses and Approvals. Borrower and each Subsidiary have ownership of, or license to use, or have been issued, all trademarks, patents, copyrights, franchises, certificates, approvals, permits, authorities, agreements, and licenses which are used or necessary to permit it to own its properties and to conduct the business as presently being conducted as to which the termination or revocation thereof could reasonably be expected to have a Material Adverse Effect ("REQUIRED LICENSES"). Each Required License is in full force and effect, and there is no outstanding notice of cancellation or termination or, to Borrower's knowledge, any threatened cancellation or termination in connection therewith, nor has an event occurred with respect to any Required License which, with the giving of notice or passage of time or both, could result in the revocation or termination thereof or otherwise in any impairment of Borrower's rights with respect thereto, which impairment could reasonably be expected to have a Material Adverse Effect. No consent, permission, authorization, order, or license of any governmental authority, is necessary in connection with the execution, delivery, performance, or enforcement of and under the Loan Documents to which Borrower is a party except such as have been obtained and are in full force and effect.

10.10 Employee Benefit Plans. Exhibit 10.10 sets forth as of the Closing Date a true and complete list of each Borrower Benefit Plan that is maintained by Borrower or any of its Subsidiaries or in which Borrower or any of its Subsidiaries participates or to which Borrower or any of its Subsidiaries is obligated to contribute, in each case as of the Closing Date. Borrower and its Subsidiaries are in compliance in all material respects with the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder ("ERISA"), to the extent applicable to them, and have not received any notice to the contrary from the Pension Benefit Guaranty Corporation ("PBGC").

10.11 Equity Investments. Borrower does not now own any stock or other voting or equity interest, directly or indirectly, in any Person valued at the greater of book value or market value at $5,000,000 or more, other than: (a) the Bank Equity Interests, and (b) as set forth on Exhibit 10.11.

10.12 Title to Real and Personal Property. Borrower and each Subsidiary have good and marketable title to, or valid leasehold interests in, all of their material properties and assets, real and personal, including the properties and assets and leasehold interests reflected in the financial statements of the Borrower and its Subsidiaries referred to in Section 10.13 hereof, except (a) any properties or assets disposed of in the ordinary course of business, and (b) for defects in title and encumbrances which could not reasonably be expected to result in a Material Adverse Effect; and none of the properties of Borrower or any Restricted Subsidiary are subject to any Lien, except as permitted by
Section 13.3 hereof. All such property is in good operating condition and repair, reasonable wear and tear excepted, and suitable in all material respects for the purposes for which it is being utilized except where their failure to be in good operating condition could not reasonably be expected to result in a Material Adverse Effect. All of the leases of Borrower and each Subsidiary which constitute Material Agreements are in full force and effect and afford Borrower or such Subsidiary peaceful and undisturbed possession of the subject matter thereof.

10.13 Financial Statements. The consolidated balance sheets of Borrower and its Subsidiaries as of August 31, 2002, and the related consolidated statements of operations, cash flows and consolidated statements of capital shares and equities for the Fiscal Year then ended, and the accompanying footnotes, together with the unqualified opinion thereon, dated October 18, 2002 of PricewaterhouseCoopers LLP, independent certified public accountants, copies of which have been furnished to the Administration Agent and the Syndication Parties, fairly present in all material respects the consolidated financial condition of Borrower and its Subsidiaries as at such dates and the results of the consolidated operations of Borrower and its Subsidiaries for the periods covered by such statements, all in accordance with GAAP consistently applied. Since August 31, 2002, there has been no material adverse change in the financial condition, results of operations, business or prospects of Borrower or any of its Subsidiaries. As of the Closing Date, there are no liabilities of Borrower or any of its Subsidiaries, fixed or contingent, which are material but are not reflected in the financial statements of Borrower and its Subsidiaries referred to above or referred to in the notes thereto, other than liabilities arising in the ordinary course of business since August 31, 2002. No information, exhibit, or report furnished by Borrower or any of its Subsidiaries to the Administration Agent or the Syndication Parties in connection with the negotiation of this Credit Agreement contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not materially misleading in light of the circumstances in which they were made and taken together with the other information, exhibits and reports furnished to the Administration Agent and/or the Syndication Parties.

10.14 Environmental Compliance. Except as set forth on Exhibit 10.14 hereto, Borrower and each Subsidiary have obtained all permits, licenses and other authorizations which are required under all applicable Environmental Laws, except to the extent failure to have any such permit, license or authorization could not reasonably be expected to result in a Material Adverse Effect. Except as set forth on Exhibit 10.14 hereto, Borrower and each Subsidiary are in compliance with all Environmental Laws and the terms and conditions of the required permits, licenses and authorizations, and are also in compliance with all other limitations, restrictions, obligations, schedules and timetables contained in those Laws or contained in any plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, except to the extent, in each case, failure to comply has not resulted in, and could not reasonably be expected to result in, a Material Adverse Effect.

10.15 Fiscal Year. Each fiscal year of Borrower begins on September 1 of each calendar year and ends on August 31 of the following calendar year.

10.16 Material Agreements. Neither Borrower nor, to Borrower's knowledge, any other party to any Material Agreement, is in default thereunder, and no facts exist which with the giving of notice or the passage of time, or both, would constitute such a default.

10.17 Regulations U and X. No portion of any Advance will be used for the purpose of purchasing, carrying, or making loans to finance the purchase of, any "margin security" or "margin stock" as such terms are used in Regulations U or X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

10.18 Trademarks, Tradenames, etc. Borrower owns or licenses all patents, trademarks, trade names, service marks and copyrights (collectively, "INTELLECTUAL PROPERTY") that it utilizes in

its business as presently being conducted and as anticipated to be conducted, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect on Borrower. Borrower is not a licensee under any written license for any patent, trademark, tradename, service mark or copyright other than shrinkwrap licenses for "off-the-shelf" software used by Borrower in the conduct of its business. The Intellectual Property is in full force and effect, and Borrower has taken or caused to be taken all action, necessary to maintain the Intellectual Property in full force and effect and has not taken or failed to take or cause to be taken any action which, with the giving of notice, or the expiration of time, or both, could result in any such Intellectual Property being revoked, invalidated, modified, or limited.

10.19 No Default on Outstanding Judgments or Orders. Borrower and each Subsidiary have satisfied all judgments and Borrower and each Subsidiary are not in default with respect to any judgment, writ, injunction, decree, rule or regulation of any court, arbitrator or federal, state, municipal or other Governmental Authority, commission, board, bureau, agency or instrumentality, domestic or foreign, except to the extent such failure to satisfy any or all such judgments or to be in such a default has not resulted in, and could not reasonably be expected to result in, a Material Adverse Effect.

10.20 No Default in Other Agreements. Neither Borrower nor any Subsidiary is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any certificate of incorporation or corporate restriction which has resulted in, or could reasonably be expected to result in, a Material Adverse Effect. Neither Borrower nor any Subsidiary is in default in any respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument where such failure to perform, observe or fulfill has resulted in, or could reasonably be expected to result in, a Material Adverse Effect.

10.21 Acts of God. Neither the business nor the properties of Borrower or any Subsidiary are currently affected by any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) which has resulted in, or could reasonably be expected to result in, a Material Adverse Effect.

10.22 Governmental Regulation. Neither Borrower nor any Subsidiary is subject to regulation under the Public Utility Holding Company Act of 1935, the Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power Act or any statute or regulation, in each case, limiting its ability to incur indebtedness for money borrowed as contemplated hereby.

10.23 Labor Matters and Labor Agreements. Except as set forth in Exhibit 10.23 hereto: (a) As of the Closing Date, there are no collective bargaining agreements or other labor agreements covering any employees of Borrower or any Subsidiary the termination, cessation, or breach of which could reasonably be expected to result in a Material Adverse Effect, and a true and correct copy of each such agreement will be furnished to the Administrative Agent upon its written request from time to time. (b) There is no organizing activity involving Borrower pending or, to Borrower's knowledge, threatened by any labor union or group of employees. (c) There are, to Borrower's knowledge, no representation proceedings pending or threatened with the National Labor Relations Board, and no labor organization or group of employees of Borrower has made a pending demand for recognition. (d) There are no complaints or charges against Borrower pending or, to Borrower's knowledge threatened to be filed with any federal, state, local or foreign

court, governmental agency or arbitrator based on, arising out of, in connection with, or otherwise relating to the employment or termination of employment by Borrower of any individual. (e) There are no strikes or other labor disputes against Borrower that are pending or, to Borrower's knowledge, threatened. (f) Hours worked by and payment made to employees of Borrower or any Subsidiary have not been in violation of the Fair Labor Standards Act (29 U.S.C. ss. 201 et seq.) or any other applicable law dealing with such matters. The representations made in clauses (b) through (f) of this Section are made with respect to those occurrences described which could, considered in the aggregate, reasonably be expected to have a Material Adverse Effect.

10.24 Anti-Terrorism Laws.

10.24.1 Violation of Law. Neither the Borrower nor, to the knowledge of Borrower, any of its Subsidiaries, is in violation of any laws relating to terrorism or money laundering ("ANTI-TERRORISM LAWS"), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 ("EXECUTIVE ORDER"), and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56.

10.24.2 Classification. Neither Borrower nor, to the knowledge of Borrower, any of its Subsidiaries, or their respective brokers or other agents acting or benefiting in any capacity in connection with the Loans, is any of the following:

(a) a Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(b) a Person or entity owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(c) a Person or entity with which any Syndication Party is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(d) a Person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order; or

(e) a Person or entity that is named as a "specially designated national and blocked person" on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list.

10.24.3 Conduct of Business. Neither Borrower nor to the knowledge of Borrower, any of its brokers or other agents acting in any capacity in connection with the Loans (a) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in clause (b) of Subsection 10.24.2 above, (b) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (c) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

10.25 Disclosure. The representations and warranties contained in this Article 10 and in the other Loan Documents or in any financial statements provided to the Administrative Agent do not contain any untrue statement of a material fact or omit to state a material fact necessary to make such representations or warranties not misleading; and all projections provided to the Administrative Agent were prepared in good faith based on reasonable assumptions.

ARTICLE 11. CONDITIONS TO ADVANCES

11.1 Conditions to Closing. The obligation of the Syndication Parties to make any Advances or issue any Negotiated Letters of Credit, and the obligation of the Letter of Credit Bank to issue any Committed Letters of Credit hereunder are subject to satisfaction, in the sole discretion of the Administrative Agent and the Syndication Parties (except that satisfaction of Subsection 11.1.6 shall be determined in the reasonable discretion of the Administrative Agent and the Syndication Parties), of each of the following conditions precedent:

11.1.1 Loan Documents. The Administrative Agent shall have received duly executed originals of the Loan Documents.

11.1.2 Approvals. The Administrative Agent shall have received evidence satisfactory to it that all consents and approvals of governmental authorities and third parties which are with respect to Borrower, necessary for, or required as a condition of: (a) the repayment of the amounts owed under the Existing Credit Agreement; and (b) the validity and enforceability of the Loan Documents to which it is a party.

11.1.3 Organizational Documents. The Administrative Agent shall have received: (a) good standing certificate, dated no more than thirty (30) days prior to the Closing Date, for Borrower for its state of incorporation; (b) a copy of the articles of incorporation of Borrower certified by the Secretary of State of its state of organization; and (c) a copy of the bylaws of Borrower, certified as true and complete by the Secretary or Assistant Secretary of Borrower.

11.1.4 Evidence of Corporate Action. The Administrative Agent shall have received in form and substance satisfactory to the Administrative Agent:
(a) documents evidencing all corporate action taken by Borrower to authorize (including the specific names and titles of the persons authorized to so act (each an "AUTHORIZED OFFICER")) the execution, delivery and performance of the Loan Documents to which it is a party, certified to be true and correct by the Secretary or Assistant Secretary of Borrower; and (b) a certificate of the Secretary or Assistant Secretary of Borrower, dated the Closing Date, certifying the names and true signatures of the Authorized Officers.

11.1.5 Evidence of Insurance. Borrower shall have provided the Administrative Agent with insurance certificates and such other evidence, in form and substance satisfactory to the Administrative Agent, of all insurance required to be maintained by it under the Loan Documents.

11.1.6 Appointment of Agent for Service. The Administrative Agent shall have received evidence satisfactory to the Administrative Agent that Borrower has appointed The Corporation Company to serve as its agent for service of process at their Denver, Colorado office

(presently at 1675 Broadway), and that The Corporation Company has accepted such appointment by Borrower.

11.1.7 No Material Change. No change shall have occurred in the condition or operations of Borrower since August 31, 2002 which could reasonably be expected to result in a Material Adverse Effect.

11.1.8 Fees and Expenses. Borrower shall have paid the Administrative Agent, by wire transfer of immediately available federal funds all fees set forth in Section 6.5 hereof and any other fees owing to the Administrative Agent which are due on the Closing Date, and all expenses owing pursuant to Section 17.1 hereof.

11.1.9 Bank Equity Interest Purchase Obligation. Borrower shall have purchased such Bank Equity Interests as CoBank may require pursuant to Article 8 hereof.

11.1.10 Opinion of Counsel. Borrower shall have provided a favorable opinion of its counsel addressed to the Administrative Agent and each of the present and future Syndication Parties, covering such matters as the Administrative Agent may reasonably require.

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

11.2 Conditions to Advances and to Issuance of Letters of Credit. The Syndication Parties' obligation to fund each Advance or to issue a Negotiated Letter of Credit, and the obligation of the Letter of Credit Bank to issue Committed Letters of Credit is subject to the satisfaction, in the sole discretion of the Administrative Agent and the Syndication Parties, of each of the following conditions precedent, as well as those set forth in Section 11.1 hereof, and each request by Borrower for an Advance or Letter of Credit shall constitute a representation by Borrower, upon which the Administrative Agent may rely, that the conditions set forth in Subsections 11.2.1 and 11.2.2 hereof have been satisfied:

11.2.1 Cancellation of Existing Credit Agreement. All amounts owing under the Existing Credit Agreement shall be paid in full and the Existing Credit Agreement canceled and terminated by all parties thereto and all liens in connection therewith released or terminated.

11.2.2 Default. As of the Advance Date or the issuance date of a Letter of Credit, as the case may be, no Event of Default or Potential Default shall have occurred and be continuing, and the disbursing of the amount of the Advance requested shall not result in an Event of Default or Potential Default.

11.2.3 Representations and Warranties. The representations and warranties of Borrower herein shall be true and correct in all material respects on and as of the date on which the Advance is to be made or the Letter of Credit is to be issued as though made on such date. Borrower shall have paid the Administrative Agent, by wire transfer of immediately available U.S.

funds all fees set forth in Section 6.5 hereof which are then due and payable, including all expenses owing pursuant to Section 17.1 hereof.

ARTICLE 12. AFFIRMATIVE COVENANTS

From and after the date of this Credit Agreement and until the Bank Debt is indefeasibly paid in full, all Letters of Credit and Existing Letters of Credit have expired, and the Syndication Parties have no obligation to make any Advance or issue a Negotiated Letter of Credit, and the Letter of Credit Bank has no obligation to issue any Committed Letters of Credit hereunder, Borrower agrees that it will observe and comply with the following covenants for the benefit of the Administrative Agent, the Syndication Parties, and the Letter of Credit Bank:

12.1 Books and Records. Borrower shall at all times keep, and cause each Subsidiary to keep, proper books of record and account, in which correct and complete entries shall be made of all its dealings, in accordance with GAAP.

12.2 Reports and Notices. Borrower shall provide to the Administrative Agent the following reports, information and notices:

12.2.1 Annual Financial Statements. As soon as available, but in no event later than one hundred and twenty (120) days after the end of any Fiscal Year of Borrower occurring during the term hereof one copy of the audit report for such year and accompanying consolidated financial statements (including all footnotes thereto), including a consolidated balance sheet, a consolidated statement of earnings, a consolidated statement of capital, and a consolidated statement of cash flow for the Borrower and its Subsidiaries, showing in comparative form the figures for the previous Fiscal Year, all in reasonable detail, prepared in conformance with GAAP consistently applied and certified without qualification by PricewaterhouseCoopers, or other independent public accountants of nationally recognized standing selected by the Borrower and satisfactory to the Administrative Agent, and to be accompanied by a copy of the management letter of such accountants addressed to the board of directors of Borrower related to such annual audit; and annual financial statements of Borrower. Delivery to the Administrative Agent within the time period specified above of copies of Borrower's Annual Report on Form 10-K as prepared and filed in accordance with the requirements of the Securities Exchange Commission shall be deemed to satisfy the requirements of this Subsection if accompanied by the required unqualified accountant's certification. Such annual financial statements or Form 10-K's required pursuant to this Subsection shall be accompanied by a Compliance Certificate signed by Borrower's Chief Financial Officer or other officer of Borrower acceptable to the Administrative Agent.

12.2.2 Quarterly Financial Statements. As soon as available but in no event more than forty-five (45) days after the end of each Fiscal Quarter (except the last Fiscal Quarter of Borrower's Fiscal Year) the following financial statements or other information concerning the operations of Borrower and its Subsidiaries for such Fiscal Quarter, the Fiscal Year to date, and for the corresponding periods of the preceding Fiscal Year, all prepared in accordance with GAAP consistently applied: (a) a consolidated balance sheet, (b) a consolidated summary of earnings, (c) a consolidated statement of cash flows, and (d) such other statements as the Administrative Agent may reasonably request. Delivery to the Administrative Agent within the time period specified above of copies of Borrower's Quarterly Report on Form 10-Q as prepared and filed in accordance with the requirements of the Securities Exchange Commission shall be deemed to satisfy the

requirements of this Subsection other than clause (d) hereof. Such quarterly financial statements or Form 10-Q's required pursuant to this Subsection shall be accompanied by a Compliance Certificate signed by Borrower's Chief Financial Officer or other officer of Borrower acceptable to the Administrative Agent (subject to normal year end adjustments).

12.2.3 Notice of Default. As soon as the existence of any Event of Default or Potential Default becomes known to any officer of Borrower, prompt written notice of such Event of Default or Potential Default, the nature and status thereof, and the action being taken or proposed to be taken with respect thereto.

12.2.4 ERISA Reports. As soon as possible and in any event within twenty (20) days after Borrower knows or has reason to know that any Reportable Event or Prohibited Transaction has occurred with respect to any Plan or that the PBGC or Borrower or any Subsidiary has instituted or will institute proceedings under Title IV of ERISA to terminate any Plan, or that Borrower, any Subsidiary or any ERISA Affiliate has completely or partially withdrawn from a Multiemployer Plan, or that a Plan which is a Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA) or is terminating, a certificate of Borrower's Chief Financial Officer setting forth details as to such Reportable Event or Prohibited Transaction or Plan termination or withdrawal or reorganization or insolvency and the action Borrower or such Subsidiary proposes to take with respect thereto, provided, however, that notwithstanding the foregoing, no reporting is required under this subsection (6) unless the matter(s), individually or in the aggregate, result, or could be reasonably expected to result, in aggregate obligations or liabilities of Borrower and/or the Subsidiaries in excess of ten million dollars ($10,000,000).

12.2.5 Notice of Litigation. Promptly after the commencement thereof, notice of all actions, suits, arbitration and any other proceedings before any Governmental Authority, affecting Borrower or any Subsidiary which, if determined adversely to Borrower or any Subsidiary, could reasonably be expected to require Borrower or any Subsidiary to have to pay or deliver assets having a value of ten million dollars ($10,000,000) or more (whether or not the claim is covered by insurance) or could reasonably be expected to result in a Material Adverse Effect.

12.2.6 Notice of Material Adverse Effect. Promptly after Borrower obtains knowledge thereof, notice of any matter which, alone or when considered together with other matters, has resulted or could reasonably be expected to result in, a Material Adverse Effect.

12.2.7 Notice of Environmental Proceedings. Without limiting the provisions of Subsection 12.2.5 hereof, promptly after Borrower's receipt thereof, notice of the receipt of all pleadings, orders, complaints, indictments, or other communication alleging a condition that may require Borrower or any Subsidiary to undertake or to contribute to a cleanup or other response under Environmental Regulations, or which seeks penalties, damages, injunctive relief, or criminal sanctions related to alleged violations of such laws, or which claims personal injury or property damage to any person as a result of environmental factors or conditions or which, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

12.2.8 Regulatory and Other Notices. Promptly after Borrower's receipt thereof, copies of any notices or other communications received from any Governmental Authority with

respect to any matter or proceeding the effect of which could reasonably be expected to have a Material Adverse Effect.

12.2.9 Adverse Action Regarding Required Licenses. As soon as Borrower learns that any petition, action, investigation, notice of violation or apparent liability, notice of forfeiture, order to show cause, complaint or proceeding is pending, or, to the best of Borrower's knowledge, threatened, to seek to revoke, cancel, suspend, modify, or limit any of the Required Licenses, prompt written notice thereof and Borrower shall contest any such action in a Good Faith Contest.

12.2.10 Budget. Promptly upon becoming available and in any event within thirty (30) days after the beginning of each Fiscal Year, a copy of the Annual Operating Budget for the next succeeding Fiscal Year and for each Fiscal Year through the 3-Year Maturity Date approved by Borrower's board of directors, together with the assumptions and projections on which such budget is based and a copy of forecasts of operations and capital expenditures (including investments) for each Fiscal Year; provided that the first such Annual Operating Budget shall not be required until September 30, 2003. In addition, if any material changes are made to such budget or projections or forecasts during the year, then Borrower will furnish copies to the Administrative Agent of any such changes promptly after such changes have been approved.

12.2.11 Additional Information. With reasonable promptness, such other information respecting the condition or operations, financial or otherwise, of Borrower or any Subsidiary as the Administrative Agent or any Syndication Party may from time to time reasonably request.

12.3 Maintenance of Existence and Qualification. Borrower shall, and shall cause each Subsidiary to, maintain its corporate existence in good standing under the laws of its state of organization. Borrower shall, and shall cause each Subsidiary to, qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is necessary in view of its business, operations and properties except where the failure to so qualify has not and could not reasonably be expected to result in a Material Adverse Effect.

12.4 Compliance with Legal Requirements and Agreements. Borrower shall, and shall cause each Subsidiary to: (a) comply with all laws, rules, regulations and orders applicable to Borrower (or such Subsidiary, as applicable) or its business unless such failure to comply is the subject of a Good Faith Contest; and (b) comply with all agreements, indentures, mortgages, and other instruments to which it (or any Subsidiary, as applicable) is a party or by which it or any of its (or any Subsidiary, or any of such Subsidiary's, as applicable) property is bound; provided, however, that the failure of Borrower to comply with this sentence in any instance not directly involving the Administrative Agent or a Syndication Party shall not constitute an Event of Default unless such failure could reasonably be expected to have a Material Adverse Effect.

12.5 Compliance with Environmental Laws. Without limiting the provisions of
Section 12.4 of this Credit Agreement, Borrower shall, and shall cause Subsidiary to, comply in all material respects with, and take all reasonable steps necessary to cause all persons occupying or present on any properties owned or leased by Borrower (or any Subsidiary, as applicable) to comply with, all Environmental Regulations, the failure to comply with which would have a Material Adverse Effect or unless such failure to comply is the subject of a Good Faith Contest.

12.6 Taxes. Borrower shall pay or cause to be paid, and shall cause each Subsidiary to pay, when due all taxes, assessments, and other governmental charges upon it, its income, its sales, its properties (or upon Subsidiary and its income, sales, and properties, as applicable), and federal and state taxes withheld from its (or Subsidiary's, as applicable) employees' earnings, unless
(a) the failure to pay such taxes, assessments, or other governmental charges could not reasonably be expected to result in a Material Adverse Effect, or (b) such taxes, assessments, or other governmental charges are the subject of a Good Faith Contest and Borrower has established adequate reserves therefor in accordance with GAAP.

12.7 Insurance. Borrower shall maintain, and cause each Subsidiary to maintain, insurance with one or more financially sound and reputable insurance carrier or carriers reasonably acceptable to the Administrative Agent, in such amounts (including deductibles) and covering such risks (including fidelity coverage) as are usually carried by companies engaged in the same or a similar business and similarly situated, provided, however, that Borrower may, to the extent permitted by Law, provide for appropriate self-insurance with respect to workers' compensation. At the request of Administrative Agent, copies of all policies (or such other proof of compliance with this Section as may be reasonably satisfactory) shall be delivered to the Administrative Agent. All such insurance policies shall contain a provision requiring at least ten (10) days' notice to Borrower prior to any cancellation for non-payment of premiums and at least forty-five (45) days' notice to Borrower of cancellation for any other reason or of non-renewal. With respect to all such insurance policies, Borrower shall provide the Administrative Agent with (a) within ten (10) days after obtaining such knowledge, written notice of any material modification of which it has knowledge; and (b) one or more certificates of insurance which shall include the agreement of the broker/insuror representative providing such certificates to provide to the Administrative Agent at least ten (10) days' notice prior to any cancellation of any such insurance policies for non-payment of premiums and at least forty-five (45) days' notice prior to cancellation of any such insurance policies for any other reason, and of non-renewal or material modification of any such insurance policies. No later than forty (40) days prior to expiration, Borrower shall give the Administrative Agent (x) satisfactory written evidence of renewal of all such policies with premiums paid, or (y) a written report as to the steps being taken by Borrower to renew or replace all such policies, provided that notwithstanding the receipt of such written report, the Administrative Agent may at any time thereafter give Borrower written notice to provide the Administrative Agent with such evidence as described in clause
(x), in which case Borrower must do so within ten (10) days of such notice. Borrower agrees to pay all premiums on such insurance as they become due (including grace periods), and will not permit any condition to exist which would wholly or partially invalidate any insurance thereon.

12.8 Maintenance of Properties. Borrower shall maintain, keep and preserve, and cause each Subsidiary to maintain, keep and preserve, all of its material properties (tangible and intangible) necessary or used in the proper conduct of its business in good working order and condition, ordinary wear and tear excepted, and shall cause to be made all repairs, renewals, replacements, betterments and improvements thereof, all as in the sole judgment of Borrower may be reasonably necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times.

12.9 Payment of Liabilities. Borrower shall pay, and shall cause its Subsidiaries to pay, all liabilities (including, without limitation: (a) any indebtedness for borrowed money or for the

deferred purchase price of property or services; (b) any obligations under leases which have or should have been characterized as Capital Leases; and (c) any contingent liabilities, such as guaranties, for the obligations of others relating to indebtedness for borrowed money or for the deferred purchase price of property or services or relating to obligations under leases which have or should have been characterized as Capital Leases) as they become due beyond any period of grace under the instrument creating such liabilities, unless (with the exception of the Bank Debt) (a) the failure to pay such liabilities within such time period could not reasonably be expected to result in a Material Adverse Effect, or (b) they are contested in good faith by appropriate actions or legal proceedings, Borrower establishes adequate reserves therefor in accordance with GAAP, and such contesting will not result in a Material Adverse Effect.

12.10 Inspection. Borrower shall permit, and cause its Subsidiaries to permit, the Administrative Agent or any Syndication Party or their agents, during normal business hours or at such other times as the parties may agree, to inspect the assets and operations of Borrower and its Subsidiaries and to examine, and make copies of or abstracts from, Borrower's properties, books, and records, and to discuss the affairs, finances, operations, and accounts of Borrower and its Subsidiaries with their respective officers, directors, employees, and independent certified public accountants (and by this provision Borrower authorizes said accountants to discuss with the Administrative Agent or any Syndication Party or their agents the finances and affairs of Borrower); provided, that, in the case of each meeting with the independent accountants Borrower is given an opportunity to have a representative present at such meeting.

12.11 Required Licenses; Permits; Intellectual Property; Etc. Borrower shall duly and lawfully obtain and maintain in full force and effect, and shall cause its Subsidiaries to obtain and maintain in full force and effect, all Required Licenses and Intellectual Property as appropriate for the business being conducted and properties owned by Borrower or such Subsidiaries at any given time.

12.12 ERISA. Borrower shall make or cause to be made, and cause each Subsidiary to make or cause to be made, all payments or contributions to all Borrower Pension Plans covered by Title IV of ERISA, which are necessary to enable those Borrower Pension Plans to continuously meet all minimum funding standards or requirements.

12.13 Maintenance of Commodity Position. Borrower shall protect its commodity inventory holdings or commitments to buy or sell commodities against adverse price movements, including the taking of equal and opposite positions in the cash and futures markets, to minimize losses and protect margins in commodity production, storage, processing and marketing as is recognized as financially sound and reputable by prudent business persons in the commodity business.

12.14 Financial Covenants. Borrower shall maintain the following financial covenants:

12.14.1 Working Capital. Borrower shall have at all times Consolidated Current Assets minus Consolidated Current Liabilities of not less than $200,000,000.

12.14.2 Consolidated Funded Debt to Consolidated Cash Flow. Borrower shall have at all times and measured as of the end of each Fiscal Quarter, a ratio of Consolidated

Funded Debt divided by Consolidated Cash Flow of no greater than 3.00 to 1.00 as measured on the previous consecutive four Fiscal Quarters.

12.14.3 Adjusted Consolidated Funded Debt to Consolidated Members' and Patrons' Equity. Borrower shall not permit the ratio of Adjusted Consolidated Funded Debt to Consolidated Members' and Patrons' Equity to exceed at any time .80 to 1.00.

12.15 Embargoed Person. At all times throughout the term of the Loans, (a) none of the funds or assets of Borrower that are used to repay the Loans shall constitute property of, or shall be beneficially owned directly or, to the knowledge of Borrower, indirectly by, any Person subject to sanctions or trade restrictions under United States law ("EMBARGOED PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List of Specially Designated Nationals and Blocked Persons" (the "SDN LIST") maintained by the Office of Foreign Assets Control ("OFAC"), U.S. Department of the Treasury, and/or to the knowledge of Borrower, as of the date thereof, based upon reasonable inquiry by Borrower, on any other similar list ("OTHER LIST") maintained by OFAC pursuant to any authorizing statute including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. ss.ss. 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or regulation promulgated thereunder, with the result that the investment in Borrower (whether directly or indirectly), is prohibited by law, or the Loans made by the Syndication Parties would be in violation of law, or (2) the Executive Order, any related enabling legislation or any other similar Executive Orders, and (b) no Embargoed Person shall have any direct interest, and to the knowledge of Borrower, as of the date hereof, based upon reasonable inquiry by Borrower, indirect interest, of any nature whatsoever in Borrower, with the result that the investment in Borrower (whether directly or indirectly), is prohibited by law or the Loans are in violation of law.

12.16 Anti-Money Laundering. At all times throughout the term of the Loans, to the knowledge of Borrower, as of the date hereof, based upon reasonable inquiry by Borrower, none of the funds of Borrower, that are used to repay the Loans shall be derived from any unlawful activity, with the result that the investment in Borrower (whether directly or indirectly), is prohibited by law or the Loans would be in violation of law.

ARTICLE 13. NEGATIVE COVENANTS

From and after the date of this Credit Agreement until the Bank Debt is indefeasibly paid in full, all Letters of Credit and Existing Letters of Credit have expired or been fully drawn, the Syndication Parties have no obligation to make any Advance or issue any Negotiated Letter of Credit, and the Letter of Credit Bank has no obligation to issue any Committed Letters of Credit hereunder, Borrower agrees that it will observe and comply with the following covenants:

13.1 Borrowing. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) create, incur, assume or permit to exist, directly or indirectly, any Debt, except for: (a) Debt of Borrower arising under this Credit Agreement and the other Loan Documents; (b) trade payables arising in the ordinary course of business; (c) Capital Leases in existence from time to time;
(d) current operating liabilities (other than for borrowed money) incurred in the ordinary course of business; (e) unsecured Debt arising under uncommitted lines of credit; provided that the maximum principal amount that may be outstanding at any one time shall not exceed $50,000,000.00; (f) Debt in existence on the date hereof as set forth in Exhibit 13.1

attached hereto; (g) unsecured long-term Debt; (h) Debt of Borrower incurred pursuant to the Term Loan Credit Agreement; (i) documentary and standby letters of credit issued at the request of Borrower or any Restricted Subsidiary by a financial institution other than the Letter of Credit Bank or a Syndication Party, provided the aggregate principal amount outstanding under such letters of credit together with the undrawn face amount under all of the Letters of Credit does not exceed $75,000,000, and provided further that the aggregate principal amount outstanding under such letters of credit together with all 3-Year Advances, the undrawn face amount of all the Letters of Credit and unreimbursed obligations with respect to payments made under all the Letters of Credit shall not exceed the 3-Year Commitment; and (j) such other Debt agreed upon in writing between Borrower and the Syndication Parties.

13.2 No Other Businesses. Borrower shall not engage in any material respects in any business activity or operations other than operations or activities (a) in the agriculture industry, (b) in the food industry, or (c) which are not substantially different from or are related to its present business activities or operations.

13.3 Liens. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) create, incur, assume or suffer to exist any mortgage, pledge, lien, charge or other encumbrance on, or any security interest in, any of its real or personal properties (including, without limitation, leasehold interests, leasehold improvements and any other interest in real property or fixtures), now owned or hereafter acquired, except the following Liens ("PERMITTED ENCUMBRANCES"):

(a) Liens for taxes or assessments or other charges or levies of any Governmental Authority, that are not delinquent or if delinquent (i) are the subject of a Good Faith Contest but in no event past the time when a penalty would be incurred, and (ii) the aggregate amount of liabilities so secured (including interest and penalties) does not exceed $10,000,000 at any one time outstanding;

(b) Liens imposed by Law, such as mechanic's, worker's, repairman's, miner's, agister's, attorney's, materialmen's, landlord's, warehousemen's and carrier's Liens and other similar Liens which are securing obligations incurred in the ordinary course of business for sums not yet due and payable or if due and payable which are the subject of a Good Faith Contest;

(c) Liens under workers' compensation, unemployment insurance, social security or similar legislation (other than ERISA), or to secure payments of premiums for insurance purchased in the ordinary course of business, or to secure the performance of tenders, statutory obligations, surety and appearance bonds and bids, bonds for release of an attachment, stay of execution or injunction, leases, government contracts, performance and return-of-money bonds and other similar obligations, all of which are incurred in the ordinary course of business of Borrower or the Restricted Subsidiary, as applicable, and not in connection with the borrowing of money;

(d) Any attachment or judgment Lien, the time for appeal or petition for rehearing of which shall not have expired or in respect of which Borrower or the Restricted Subsidiary is protected in all material respects by insurance or for the payment of which adequate reserves have been established, provided that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are the subject of a Good Faith Contest, and provided further that the aggregate amount of liabilities of Borrower and its Restricted

Subsidiaries so secured (including interest and penalties) shall not be in excess of $10,000,000.00 at any one time outstanding;

(e) Easements, rights-of-way, restrictions, encroachments, covenants, servitudes, zoning and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use and enjoyment by Borrower or any Restricted Subsidiary of the property or assets encumbered thereby in the normal course of its business or materially impair the value of the property subject thereto;

(f) Liens arising in the ordinary course of business and created in connection with amounts on deposit in charge card and like accounts (such as Visa or MasterCard);

(g) Liens on land, buildings and equipment existing at the time of their acquisition or Liens to secure the payment of all or any part of the purchase price of such land, buildings or equipment or to secure Funded Debt incurred prior to, at the time of, or within one-hundred eighty (180) days after the acquisition of such property for the purpose of financing all or any part of the purchase price thereof, provided that any such Liens shall not encumber any other property of Borrower or its Restricted Subsidiaries;

(h) Liens assumed in connection with permitted mergers and acquisitions, but only to the extent that such Liens shall secure only Funded Debt and shall not encumber any other property of Borrower or any Restricted Subsidiary;

(i) Liens on financed property created or incurred in connection with leases, mortgages, conditional sales contracts, security interests or arrangements for the retention of title entered into by Borrower or any of its Restricted Subsidiaries to secure "industrial revenue bonds" as defined in
Section 103(b)(2) of the Code and treated as obligations described in legislation similar to the provisions of said Sections of the Code enacted in any State of the United States or Puerto Rico, which are issued to finance property useful and intended to be used in carrying on the business of Borrower or any of its Restricted Subsidiaries, provided that upon creation of any such Lien Borrower or such Restricted Subsidiary shall incur Funded Debt secured thereby in conformity with the provisions of Section 13.1 hereof;

(j) Liens on property or assets of a Restricted Subsidiary to secure Debt of such Restricted Subsidiary to Borrower;

(k) Liens of CoBank and other cooperatives, respectively, on Investments by Borrower in the stock, participation certificates, or allocated reserves of CoBank or other cooperatives, respectively, owned by Borrower;

(l) All precautionary filings of financing statements under the Uniform Commercial Code which cover property that is made available to or used by Borrower or any Restricted Subsidiary pursuant to the terms of an Operating Lease or Capital Lease;

(m) Liens securing its reimbursement obligations under any letter of credit issued in connection with the acquisition of an asset; provided that
(i) the lien attaches only to such asset, and (ii) the lien is released upon satisfaction of such reimbursement obligation; and

(n) Liens to secure and provide credit support, up to a maximum of $25,000,000.00, for regulated exchange or over-the-counter hedging transactions.

13.4 Sale of Assets. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) sell, convey, assign, lease or otherwise transfer or dispose of, voluntarily, by operation of law or otherwise, any material part of its now owned or hereafter acquired assets during any twelve (12) month period commencing September 1, 2002 and each September 1 thereafter, except: (a) the sale of inventory, equipment and fixtures disposed of in the ordinary course of business, (b) the sale or other disposition of assets no longer necessary or useful for the conduct of its business, and (c) leases of assets to an entity in which Borrower has at least a fifty-percent (50%) interest in ownership, profits, and governance. For purposes of this Section, "material part" shall mean ten percent (10%) or more of the lesser of the book value or the market value of the assets of Borrower or such Restricted Subsidiary as shown on the balance sheets thereof as of the August 31 immediately preceding each such twelve (12) month measurement period.

13.5 Liabilities of Others. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) assume, guarantee, become liable as a surety, endorse, contingently agree to purchase, or otherwise be or become liable, directly or indirectly (including, but not limited to, by means of a maintenance agreement, an asset or stock purchase agreement, or any other agreement designed to ensure any creditor against loss), for or on account of the obligation of any Person, except (a) by the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of the Borrower's or any Restricted Subsidiary's business, (b) guarantees made from time to time, whether in existence on the Closing Date or made subsequent thereto, by Borrower and its Restricted Subsidiaries in the ordinary course of their respective businesses with respect to the liabilities and obligations of Persons other than National Cooperative Refinery Association ("NCRA"); provided, however, that the aggregate amount of all indebtedness guaranteed under this clause (b) shall not exceed $150,000,000.00 in the aggregate, and (c) guarantees made by Borrower from time to time, whether in existence on the Closing Date or made subsequent thereto, of liabilities and obligations of NCRA for Funded Debt of NCRA, provided that the maximum amount of liabilities of NCRA guaranteed pursuant to this clause (c), when added to the amount of Investments by Borrower pursuant to clause (i) of Subsection 13.8 hereof, shall not exceed $125,000,000.00.

13.6 Loans. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) lend or advance money, credit, or property to any Person, except for (a) loans to Restricted Subsidiaries; (b) trade credit extended in the ordinary course of business and advances against the purchase price for the purchase by Borrower of goods or services in the ordinary course of business;
(c) loans made by Borrower to its members on open account maintained by such members with Borrower or made by Borrower to its members pursuant to its Affiliate Financing CoBank Participation Program; and (d) loans made by Fin-Ag, Inc. to agricultural producers, provided that at all times on and after May 21, 2003, the aggregate outstanding principal amount of all such loans retained by Borrower and Fin-Ag, Inc. under clauses (c) and (d) of this Section shall not exceed $110,000,000.00.

13.7 Merger; Acquisitions; Business Form; Etc. Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) merge or consolidate with any entity, or acquire all or substantially all of the assets of any person or entity, or form or create any new Subsidiary (other

than a Restricted Subsidiary formed by Borrower), change its business form from a cooperative corporation, or commence operations under any other name, organization, or entity, including any joint venture; provided, however,

(a) The foregoing shall not prevent any consolidation, acquisition, or merger if after giving effect thereto:

(i) The book value of Borrower and its subsidiaries does not increase due to all such mergers, consolidations or acquisitions by an aggregate amount in excess of $100,000,000.00 in any Fiscal Year of Borrower;

(ii) Borrower is the surviving entity; and

(iii) No Event of Default or Potential Default shall have occurred and be continuing.

(b) The foregoing shall not prevent Borrower from forming or creating any new Subsidiary provided:

(i) The Investment in such Subsidiary does not violate any provision of Section 13.8 hereof; and

(ii) Such Subsidiary shall not acquire all or substantially all of the assets of any Person except through an acquisition, consolidation, or merger satisfying the requirements of clause (a) of this Section.

13.8 Investments. Except for the purchase of Bank Equity Interests, Borrower shall not (nor shall it permit any of its Restricted Subsidiaries to) own, purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, or otherwise make an Investment in, any Person, except that Borrower and the Restricted Subsidiaries may own, purchase or acquire:

(a) commercial paper maturing not in excess of one year from the date of acquisition and rated P1 by Moody's Investors Service, Inc. or A1 by Standard & Poor's Corporation on the date of acquisition;

(b) certificates of deposit in North American commercial banks rated C or better by Keefe, Bruyette & Woods, Inc. or 3 or better by Cates Consulting Analysts, maturing not in excess of one year from the date of acquisition;

(c) obligations of the United States government or any agency thereof, the obligations of which are guaranteed by the United States government, maturing, in each case, not in excess of one year from the date of acquisition;

(d) repurchase agreements of any bank or trust company incorporated under the laws of the United States of America or any state thereof and fully secured by a pledge of obligations issued or fully and unconditionally guaranteed by the United States government;

(e) Investments permitted under Sections 13.5, 13.6, and 13.7;

(f) Investments in Persons, which are not Restricted Subsidiaries, identified, including the book value of each such Investment, on Exhibit 13.8(f) hereto; provided that the amount of such Investment shall not increase above the amount shown in Exhibit 13.8(f),except for (i) property and cash contributions made between March 31, 2003 and the Closing Date and not shown in Exhibit 13.8(f), and (ii) Investments made pursuant to clauses (h) through (k) of this Section subsequent to the Closing Date;

(g) Investments (by Borrower) in the Restricted Subsidiaries;

(h) Investments in the form of non-cash patronage dividends in any Person;

(i) Investments in NCRA in addition to (1) non-cash patronage dividends, and (2) those Investments in NCRA by Borrower prior to the Closing Date, as shown, by amount and date, on Exhibit 13.8(i) hereto, provided that the maximum amount of Investments in NCRA subsequent to the Closing Date pursuant to this clause (i), when added to the aggregate amount of obligations and liabilities of NCRA guaranteed by Borrower pursuant to clause (c) of Subsection 13.5 hereof, shall not exceed $125,000,000.00;

(j) Investments in Ventura Foods, LLC in addition to those Investments in Ventura Foods, LLC by Borrower prior to the Closing Date, as shown, by amount and date, on Exhibit 13.8(j) hereto, provided that the maximum amount of Investments in Ventura Foods, LLC subsequent to the Closing Date pursuant to this clause (j) shall not exceed $75,000,000.00; and

(k) Investments, in addition to those permitted by clauses (a) through (j) above, in an aggregate amount not exceeding $110,000,000.00.

13.9 Transactions With Related Parties. Borrower shall not purchase, acquire, provide, or sell any equipment, other personal property, real property or services from or to any Subsidiary (other than a Restricted Subsidiary), except in the ordinary course and pursuant to the reasonable requirements of Borrower's business and upon fair and reasonable terms no less favorable than would be obtained by Borrower in a comparable arm's-length transaction with an unrelated Person.

13.10 Patronage Refunds, etc. Borrower shall not, directly or indirectly, in any Fiscal Year (a) declare or pay any cash patronage refunds to patrons or members which in the aggregate exceed 20% of Borrower's consolidated net patronage income for the Fiscal Year of Borrower preceding the Fiscal Year in which such patronage refunds are to be paid, (b) directly or indirectly redeem or otherwise retire its equity, or (c) make any cash distributions of any kind or character in respect of its equity, unless, in the case of (a), (b), or (c),
(i) at the time of taking such action no Event of Default or Potential Default exists hereunder and (ii) after giving effect thereto no Event of Default or Potential Default would exist hereunder.

13.11 Change in Fiscal Year. Borrower shall not change its Fiscal Year from a year ending on August 31 unless required to do so by the Internal Revenue Service, in which case Borrower agrees to such amendment of the terms Fiscal Quarter and Fiscal Year, as used herein, as the Administrative Agent reasonably deems necessary.

13.12 ERISA. Borrower shall not: (a) engage in or permit any transaction which could result in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA) or in the imposition of an excise tax pursuant to Section 4975 of the Code with respect to any Borrower Benefit Plan; (b) engage in or permit any transaction or other event which could result in a "reportable event"( as such term is defined in Section 4043 of ERISA) for any Borrower Pension Plan; (c) fail to make full payment when due of all amounts which, under the provisions of any Borrower Benefit Plan, Borrower is required to pay as contributions thereto; (d) permit to exist any "accumulated funding deficiency" (as such term is defined in Section 302 of ERISA) as of the end of any Fiscal Year, in excess of $25,000,000.00, whether or not waived, with respect to any Borrower Pension Plan; (e) fail to make any payments to any Multiemployer Plan that Borrower may be required to make under any agreement relating to such Multiemployer Plan or any law pertaining thereto; or (f) terminate any Borrower Pension Plan in a manner which could result in the imposition of a lien on any property of Borrower pursuant to Section 4068 of ERISA. Borrower shall not terminate any Borrower Pension Plan so as to result in any liability to the PBGC.

13.13 Anti-Terrorism Law. Borrower shall not (a) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in Subsection 10.24.2 above, (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti-Terrorism Law, or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law (and Borrower shall deliver to the Administrative Agent any certification or other evidence requested from time to time by the Administrative Agent in its reasonable discretion, confirming Borrower' compliance with this Section).

ARTICLE 14. INDEMNIFICATION

14.1 General; Stamp Taxes; Intangibles Tax. Borrower agrees to indemnify and hold the Administrative Agent and each Syndication Party and their directors, officers, employees, agents, professional advisers and representatives ("INDEMNIFIED PARTIES") harmless from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever which the Administrative Agent or any other Indemnified Party may incur (or which may be claimed against any such Indemnified Party by any Person), including attorneys' fees incurred by any Indemnified Party, arising out of or resulting from: (a) the material inaccuracy of any representation or warranty of or with respect to Borrower in this Credit Agreement or the other Loan Documents; (b) the material failure of Borrower to perform or comply with any covenant or obligation of Borrower under this Credit Agreement or the other Loan Documents; (c) the exercise by the Administrative Agent of any right or remedy set forth in this Credit Agreement or the other Loan Documents; or (d) all acts or omissions of the beneficiary of any Letter of Credit, and for such purposes, such beneficiary shall be deemed Borrower's agent; provided that Borrower shall have no obligation to indemnify any Indemnified Party against claims, damages, losses, liabilities, costs or expenses to the extent that a court of competent jurisdiction renders a final non-appealable determination that the foregoing are solely the result of the willful misconduct or gross negligence of such Indemnified Party. In addition, Borrower agrees to indemnify and hold the Indemnified Parties harmless from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever which the Administrative Agent or any other Indemnified Party may incur (or which

may be claimed against any such Indemnified Party by any Person), including attorneys' fees incurred by any Indemnified Party, arising out of or resulting from the imposition or nonpayment by Borrower of any stamp tax, intangibles tax, or similar tax imposed by any state, including any amounts owing by virtue of the assertion that the property valuation used to calculate any such tax was understated. Borrower shall have the right to assume the defense of any claim as would give rise to Borrower's indemnification obligation under this Section with counsel of Borrower's choosing so long as such defense is being diligently and properly conducted and Borrower shall establish to the Indemnified Party's satisfaction that the amount of such claims are not, and will not be, material in comparison to the liquid and unrestricted assets of Borrower available to respond to any award which may be granted on account of such claim. So long as the conditions of the preceding sentence are met, Indemnified Party shall have no further right to reimbursement of attorneys' fees incurred thereafter. The obligation to indemnify set forth in this Section shall survive the termination of this Credit Agreement and other covenants.

14.2 Indemnification Relating to Hazardous Substances. Borrower shall not locate, produce, treat, transport, incorporate, discharge, emit, release, deposit or dispose of any Hazardous Substance in, upon, under, over or from any property owned or held by Borrower, except in accordance with all Environmental Regulations; Borrower shall not permit any Hazardous Substance to be located, produced, treated, transported, incorporated, discharged, emitted, released, deposited, disposed of or to escape in, upon, under, over or from any property owned or held by Borrower, except in accordance with Environmental Regulations; and Borrower shall comply with all Environmental Regulations which are applicable to such property. Borrower shall indemnify the Indemnified Parties against, and shall reimburse the Indemnified Parties for, any and all claims, demands, judgments, penalties, liabilities, costs, damages and expenses, including court costs and attorneys' fees incurred by the Indemnified Parties (prior to trial, at trial and on appeal) in any action against or involving the Indemnified Parties, resulting from any breach of the foregoing covenants in this Section or the covenants in Section 12.5 hereof, or from the discovery of any Hazardous Substance in, upon, under or over, or emanating from, such property, it being the intent of Borrower and the Indemnified Parties that the Indemnified Parties shall have no liability or responsibility for damage or injury to human health, the environmental or natural resources caused by, for abatement and/or clean-up of, or otherwise with respect to, Hazardous Substances as the result of the Administrative Agent or any Syndication Party exercising any of its rights or remedies with respect thereto, including but not limited to becoming the owner thereof by foreclosure or conveyance in lieu of foreclosure of a judgment lien; provided that such indemnification as it applies to the exercise by the Administrative Agent or any Syndication Party of its rights or remedies with respect to the Loan Documents shall not apply to claims arising solely with respect to Hazardous Substances brought onto such property by the Administrative Agent or such Syndication Party while engaged in activities other than operations substantially the same as the operations previously conducted on such property by Borrower. The foregoing covenants of this Section shall be deemed continuing covenants for the benefit of the Indemnified Parties, and any successors and assigns of the Indemnified Parties, including but not limited to, any transferee of the title of the Administrative Agent or any Syndication Party or any subsequent owner of the property, and shall survive the satisfaction or release of any lien, any foreclosure of any lien and/or any acquisition of title to the property or any part thereof by the Administrative Agent or any Syndication Party, or anyone claiming by, through or under the Administrative Agent or any Syndication Party or Borrower by deed in lieu of foreclosure or otherwise. Any amounts covered by the foregoing indemnification shall bear interest from the date incurred at the

Default Interest Rate, shall be payable on demand, and shall be secured by the Security Documents. The indemnification and covenants of this Section shall survive the termination of this Credit Agreement and other covenants.

ARTICLE 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES

15.1 Events of Default. The occurrence of any of the following events (each an "EVENT OF DEFAULT") shall, at the option of the Administrative Agent, make the entire Bank Debt immediately due and payable (provided, that in the case of an Event of Default under Subsection 15.1(f) all amounts owing under the Notes and the other Loan Documents shall automatically and immediately become due and payable without any action by or on behalf of the Administrative Agent), and the Administrative Agent may exercise all rights and remedies for the collection of any amounts outstanding hereunder and take whatever action it deems necessary to secure itself, all without notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character:

(a) Failure of Borrower to pay (i) when due, whether by acceleration or otherwise, any principal in accordance with this Credit Agreement or the other Loan Documents, or (ii) within five (5) days of the date when due, whether by acceleration or otherwise, any interest or amounts other than principal in accordance with this Credit Agreement or the other Loan Documents.

(b) Any representation or warranty set forth in any Loan Document, any Borrowing Notice, any financial statements or reports or projections or forecasts, or in connection with any transaction contemplated by any such document, shall prove in any material respect to have been false or misleading when made or furnished by Borrower.

(c) Any default by Borrower in the performance or compliance with the covenants, promises, conditions or provisions of Sections 12.7 (only if such default is with respect to the last sentence of such Section), 12.10, 12.14, 12.15, 12.16, 13.1, 13.4, 13.5, 13.7, 13.10, or 13.13 of this Credit Agreement; provided that a default under Subsection 12.14.1 hereof shall not constitute an Event of Default nor a Potential Default if Borrower is in compliance with such Subsection within five (5) Banking Days after the earlier of (i) the date on which Borrower discovers that it is not in compliance with such test, or (ii) the date by which Borrower is required by Subsections 12.2.1 or 12.2.2 hereof to provide quarterly or year-end financial statements and/or Compliance Certificates to the Administrative Agent.

(d) Any default by Borrower in the performance or compliance with the covenants, promises, conditions or provisions of Sections 12.2, 12.4, 12.5, 12.6, 12.7 (except as provided in clause (c) of this Section), 12.8, 12.9, (except as provided in Section 15.1(e)), 12.11, 12.12, 12.13, 13.3, 13.6, 13.8, 13.9, or 13.11 of this Credit Agreement, and such failure continues for fifteen
(15) days after Borrower learns of such failure to comply, whether by Borrower's own discovery or through notice from the Administrative Agent.

(e) The failure of Borrower to pay when due, or failure to perform or observe any other obligation or condition with respect to any of the following obligations to any Person, beyond any period of grace under the instrument creating such obligation: (i) any indebtedness for borrowed money or for the deferred purchase price of property or services,

(ii) any obligations under leases which have or should have been characterized as Capital Leases, or (iii) any contingent liabilities, such as guaranties, for the obligations of others relating to indebtedness for borrowed money or for the deferred purchase price of property or services or relating to obligations under leases which have or should have been characterized as Capital Leases; provided that no such failure will be deemed to be an Event of Default hereunder unless and until the aggregate amount owing under obligations with respect to which such failures have occurred and are continuing is at least $10,000,000.00.

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

(g) Failure of Borrower to comply with any other provision of this Credit Agreement or the other Loan Documents not constituting an Event of Default under any of the preceding subparagraphs of this Section 15.1, and such failure continues for thirty (30) days after Borrower learns of such failure to comply, whether by Borrower's own discovery or through notice from the Administrative Agent.

(h) The entry of one or more judgments in an aggregate amount in excess of $5,000,000.00 against Borrower not stayed, discharged or paid within thirty (30) days after entry.

(i) The occurrence of an "Event of Default" under the Term Loan Credit Agreement.

15.2 No Advance. The Syndication Parties shall have no obligation to make any Advance or issue any Negotiated Letter of Credit, and the Letter of Credit Bank shall have no obligation to issue a Committed Letter of Credit if a Potential Default or an Event of Default shall occur and be continuing.

15.3 Rights and Remedies. In addition to the remedies set forth in Section 15.1 and 15.2 hereof, upon the occurrence of an Event of Default, the Administrative Agent shall be entitled to exercise, subject to the provisions of
Section 16.8 hereof, all the rights and remedies provided in the Loan Documents and by any applicable law. Each and every right or remedy granted to the Administrative Agent pursuant to this Credit Agreement and the other Loan Documents, or allowed the Administrative Agent by law or equity, shall be cumulative. Failure or delay on the part of the Administrative Agent to exercise any such right or remedy shall not operate as a waiver thereof. Any single or partial exercise by the Administrative Agent of any such right or remedy shall not preclude any future exercise thereof or the exercise of any other right or remedy.

ARTICLE 16. AGENCY AGREEMENT

16.1 Funding of Syndication Interest. Each Syndication Party, severally but not jointly, hereby irrevocably agrees to fund its Funding Share of the Advances ("ADVANCE PAYMENT") as determined pursuant to the terms and conditions contained herein and in particular, Articles 2, 3,

4, and 5 hereof. Each Syndication Party's interest ("SYNDICATION INTEREST") in each Advance hereunder shall be without recourse to the Administrative Agent or any other Syndication Party and shall not be construed as a loan from any Syndication Party to the Administrative Agent or any other Syndication Party.

16.2 Syndication Parties' Obligations to Remit Funds. Each Syndication Party agrees to remit its Funding Share of each Advance to the Administrative Agent as, and within the time deadlines ("SYNDICATION PARTY ADVANCE DATE"), required in this Credit Agreement. Unless the Administrative Agent shall have received notice from a Syndication Party prior to the date on which such Syndication Party is to provide funds to the Administrative Agent for an Advance to be made by such Syndication Party that such Syndication Party will not make available to the Administrative Agent such funds, the Administrative Agent may assume that such Syndication Party has made such funds available to the Administrative Agent on the date of such Advance in accordance with the terms of this Credit Agreement and the Administrative Agent in its sole discretion may, but shall not be obligated to, in reliance upon such assumption, make available to Borrower on such date a corresponding amount. If and to the extent such Syndication Party shall not have made such funds available to the Administrative Agent by 2:00 P.M. (Central time) on the Banking Day due, such Syndication Party agrees to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to Borrower until the Banking Day such amount is repaid to the Administrative Agent (assuming payment is received by the Administrative Agent at or prior to 2:00 P.M. (Central time), and until the next Banking Day if payment is not received until after 2:00 P.M.), at the customary rate set by the Administrative Agent for the correction of errors among banks for three (3) Banking Days and thereafter at the Base Rate. If such Syndication Party shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Syndication Party's Advance for purposes of this Credit Agreement. If such Syndication Party does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify Borrower, and Borrower shall immediately pay such corresponding amount to the Administrative Agent with the interest thereon, for each day from the date such amount is made available to Borrower until the date such amount is repaid to the Administrative Agent, at the rate of interest applicable at the time to such Advance at the time.

16.3 Notices to Administrative Agent. On or prior to 3:00 P.M. (Central time) on each Banking Day, each Syndication Party will provide the Administrative Agent with the information required by Section 5.4 hereof regarding each Negotiated Letter of Credit issued by such Syndication Party, and all payments or reimbursements made to such Syndication Party on account of Negotiated Letters of Credit on such Banking Day.

16.4 Syndication Party's Failure to Remit Funds. If a Syndication Party ("DELINQUENT SYNDICATION PARTY") fails to remit (a) its Funding Share, (b) its 364-Day Bid Advance, or (c) its 3-Year Bid Advance, in full by the date and time required (the unpaid amount of any such payment being hereinafter referred to as the "DELINQUENT AMOUNT"), in addition to any other remedies available hereunder, any other Syndication Party or Syndication Parties may, but shall not be obligated to, advance the Delinquent Amount (the Syndication Party or Syndication Parties which advance such Delinquent Amount are referred to as the "CONTRIBUTING SYNDICATION PARTIES"), in which case (a) the Delinquent Amount which any Contributing Syndication Party advances shall

be treated as a loan to the Delinquent Syndication Party and shall not be counted in determining the Individual Outstanding 364-Day Obligations or Individual Outstanding 3-Year Obligations, as applicable, of any Contributing Syndication Party, and (b) the Delinquent Syndication Party shall be obligated to pay to the Administrative Agent, for the account of the Contributing Syndication Parties, interest on the Delinquent Amount at a rate of interest equal to the rate of interest which Borrower is obligated to pay on the Delinquent Amount plus 200 basis points ("DELINQUENCY INTEREST") until the Delinquent Syndication Party remits the full Delinquent Amount and remits all Delinquency Interest to the Administrative Agent, which will distribute such payments to the Contributing Syndication Parties (pro rata based on the amount of the Delinquent Amount which each of them (if more than one) advanced) on the same Banking Day as such payments are received by the Administrative Agent if received no later than 2:00 P.M. (Central time) or the next Banking Day if received by the Administrative Agent thereafter. In addition, the Contributing Syndication Parties shall be entitled to share, on the same pro rata basis, and the Administrative Agent shall pay over to them, for application against Delinquency Interest and the Delinquent Amount, the Delinquent Syndication Party's Payment Distribution and any fee distributions or distributions made under Section 16.11 hereof until the Delinquent Amount and all Delinquency Interest have been paid in full. For voting purposes the Administrative Agent shall readjust the Individual Commitments of such Delinquent Syndication Party and the Contributing Syndication Parties from time to time first to reflect the advance of the Delinquent Amount by the Contributing Syndication Parties, and then to reflect the full or partial reimbursement to the Contributing Syndication Parties of such Delinquent Amount. As between the Delinquent Syndication Party and the Contributing Syndication Parties, the Delinquent Syndication Party's interest in its Notes shall be deemed to have been partially assigned to the Contributing Syndication Parties in the amount of the Delinquent Amount and Delinquency Interest owing to the Contributing Syndication Parties from time to time. This Section shall also be applicable to Advances funded by the Administrative Agent (y) under Section 4.9 hereof, in which case the Administrative Agent, in its capacity as such, shall be deemed to be the Contributing Syndication Party, and (z) under Section 4.11 hereof, in which case the Administrative Agent, in its capacity as such, shall be deemed to be the Contributing Syndication Party and the Overnight Lender shall be deemed to be the Delinquent Syndication Party. For the purposes of calculating interest owed by a Delinquent Syndication Party, payments received on other than a Banking Day shall be deemed to have been received on the next Banking Day, and payments received after 2:00 P.M. (Central time) shall be deemed to have been received on the next Banking Day.

16.5 Agency Appointment. Each of the Syndication Parties hereby designates and appoints the Administrative Agent to act as agent to service and collect the Loans and its respective Notes and to take such action on behalf of such Syndication Party with respect to the Loans and such Notes, and to execute such powers and to perform such duties, as specifically delegated or required herein, as well as to exercise such powers and to perform such duties as are reasonably incident thereto, and to receive and benefit from such fees and indemnifications as are provided for or set forth herein, until such time as a successor is appointed and qualified to act as the Administrative Agent.

16.6 Power and Authority of the Administrative Agent. Without limiting the generality of the power and authority vested in the Administrative Agent pursuant to Section 16.5 hereof, the power and authority vested in the Administrative Agent includes, but is not limited to, the following:

16.6.1 Advice. To solicit the advice and assistance of each of the Syndication Parties and Voting Participants concerning the administration of the Loans and the exercise by the Administrative Agent of its various rights, remedies, powers, and discretions with respect thereto. As to any matters not expressly provided for by this Credit Agreement or any other Loan Document, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions signed by all of the Syndication Parties or the Required Lenders, as the case may be (and including in each such case, Voting Participants), and any action taken or failure to act pursuant thereto shall be binding on all of the Syndication Parties, Voting Participants, and the Administrative Agent.

16.6.2 Documents. To execute, seal, acknowledge, and deliver as the Administrative Agent, all such instruments as may be appropriate in connection with the administration of the Loans and the exercise by the Administrative Agent of its various rights with respect thereto.

16.6.3 Proceedings. To initiate, prosecute, defend, and to participate in, actions and proceedings in its name as the Administrative Agent for the ratable benefit of the Syndication Parties.

16.6.4 Retain Professionals. To retain attorneys, accountants, and other professionals to provide advice and professional services to the Administrative Agent, with their fees and expenses reimbursable to the Administrative Agent by Syndication Parties pursuant to Section 16.19 hereof.

16.6.5 Incidental Powers. To exercise powers reasonably incident to the Administrative Agent's discharge of its duties enumerated in Section 16.7 hereof.

16.7 Duties of the Administrative Agent. The duties of the Administrative Agent hereunder shall consist of the following:

16.7.1 Possession of Documents. To safekeep one original of each of the Loan Documents other than the Notes (which will be in the possession of the Syndication Party named as payee therein).

16.7.2 Distribute Payments. To receive and distribute to the Syndication Parties payments made by Borrower pursuant to the Loan Documents, as provided in Article 7 hereof. Unless the Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to any Syndication Party hereunder that Borrower will not make such payment in full, the Administrative Agent may assume that Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent in its sole discretion may, but shall not be obligated to, in reliance upon such assumption, cause to be distributed to each Syndication Party on such due date an amount equal to the amount then due such Syndication Party. If and to the extent Borrower shall not have so made such payment in full to the Administrative Agent, each Syndication Party shall repay to the Administrative Agent forthwith on demand such amount distributed to such Syndication Party together with interest thereon, for each day from the date such amount is distributed to such Syndication Party until the date such Syndication Party repays such amount to the Administrative Agent at the customary rate set by the

Administrative Agent for the correction of errors among banks for three (3) Banking Days and thereafter at the Base Rate.

16.7.3 Loan Administration. Subject to the provisions of Section 16.10 hereof, to, on behalf of and for the ratable benefit of all Syndication Parties, in accordance with customary banking practices, exercise all rights, powers, privileges, and discretion to which the Administrative Agent is entitled to administer the Loans, including, without limitation: (a) monitor all borrowing activity, issuances of Letters of Credit, Individual Commitment balances, and maturity dates of all LIBO Rate Loans; (b) monitor and report Credit Agreement and covenant compliance, and coordinate required credit actions by the Syndication Parties (including Voting Participants where applicable); (c) manage the process for future waivers and amendments if modifications to the Credit Agreement are required; and (d) administer, record, and process all assignments to be made for the current and future Syndication Parties (including the preparation of a revised Schedule 1 to replace the previous Schedule 1).

16.7.4 Determination of Individual Lending Capacity and Individual Pro Rata Shares. The Administrative Agent shall (a) on or before 10:00 A.M. and again at 12:30 P.M. (Central time) on each Banking Day calculate the respective Individual 364-Day Lending Capacity and the respective Individual 3-Year Lending Capacity of each Syndication Party, which 10:00 A.M. calculation shall be in effect until 12:30 P.M. of the same Banking Day and which 12:30 P.M. calculation shall be in effect until 10:00 A.M. of the next succeeding Banking Day; and (b) on or before 12:00 noon (Central time) on each Banking Day calculate the respective Individual 364-Day Pro Rata Share and the respective Individual 3-Year Pro Rata Share of each Syndication Party, which calculation shall be in effect until 12:00 noon of the next succeeding Banking Day.

16.7.5 Forwarding of Information. The Administrative Agent shall, within a reasonable time after receipt thereof, forward to the Syndication Parties and Voting Participants notices and reports provided to the Administrative Agent by Borrower pursuant to Section 12.2 hereof.

16.8 Action Upon Default. Each Syndication Party agrees that upon its learning of any facts which would constitute a Potential Default or Event of Default, it shall promptly notify the Administrative Agent by a writing designated as a notice of default specifying in detail the nature of such facts and default, and the Administrative Agent shall promptly send a copy of such notice to all other Syndication Parties. The Administrative Agent shall be entitled to assume that no Event of Default or Potential Default has occurred or is continuing unless an officer thereof primarily responsible for the Administrative Agent's duties as such with respect to the Loans or primarily responsible for the credit relationship between the Administrative Agent and Borrower has actual knowledge of facts which would result in or constitute a Potential Default or Event of Default, or has received written notice from Borrower of such fact, or has received written notice of default from a Syndication Party. In the event the Administrative Agent has obtained actual knowledge (in the manner described above) or received written notice of the occurrence of a Potential Default or Event of Default as provided in the preceding sentences, the Administrative Agent may, but is not required to exercise or refrain from exercising any rights which may be available under the Loan Documents or at law on account of such occurrence and shall be entitled to use its discretion with respect to exercising or refraining from exercising any such rights, unless and until the Administrative Agent has received specific written instruction from the Required Lenders to refrain from exercising such rights or to take specific designated action, in which case

it shall follow such instruction; provided that the Administrative Agent shall not be required to take any action which will subject it to personal liability, or which is or may be contrary to any provision of the Loan Documents or applicable law. The Administrative Agent shall not be subject to any liability by reason of its acting or refraining from acting pursuant to any such instruction.

16.8.1 Indemnification as Condition to Action. Except for action expressly required of the Administrative Agent hereunder, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall have received further assurances (which may include cash collateral) of the indemnification obligations of the Syndication Parties under Section 16.20 hereof in respect of any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

16.9 Bid Agent's Appointment, Power, Authority, Duties and Resignation or Removal. Each of the Syndication Parties hereby designates and appoints the Bid Agent to act as such and to take such action on behalf of such Syndication Party with respect to the acceptance and processing of Bid Requests and Bids as provided herein, as well as to exercise such powers and to perform such duties as are reasonably incident thereto, and to receive and benefit from such fees and indemnifications as are provided for or set forth herein, until such time as a successor is appointed and qualified to act as the Bid Agent. The Bid Agent shall have such duties as specified in this Credit Agreement. The resignation, removal, and designation of a successor for, the Bid Agent shall be in accordance with the procedures set forth in Section 16.23 hereof with respect to the Administrative Agent.

16.10 Consent Required for Certain Actions. Notwithstanding the fact that this Credit Agreement may otherwise provide that the Administrative Agent may act at its discretion, the Administrative Agent may not take any of the following actions (nor may the Syndication Parties take the action described in Subsection 16.10.1(a)) with respect to, or under, the Loan Documents without the prior written consent, given after notification by the Administrative Agent of its intention to take any such action (or notification by such Syndication Parties as are proposing the action described in Subsection 16.10.1(a) of their intention to do so), of:

16.10.1 Unanimous. Each of the Syndication Parties and Voting Participants before:

(a) Amending the definition of Required Lenders as set forth herein or this Subsection 16.10.1; or

(b) Amending Section 7.6 hereof.

16.10.2 Facility Lenders.

(a) Each of the Syndication Parties and Voting Participants with Individual 364-Day Commitments before:

(i) Agreeing to an increase in the 364-Day Commitment, or any Syndication Party's share thereof, or an extension of the 364-Day Maturity Date; or

(ii) Agreeing to a reduction in the amount, or to a delay in the due date, of any payment by Borrower of interest, principal, or fees with respect to the 364-Day Facility; provided, however, this restriction shall not apply to a delay in payment granted by the Administrative Agent in the ordinary course of administration of the Loans and the exercise of reasonable judgment, so long as such payment delay does not exceed five (5) days.

(b) Each of the Syndication Parties and Voting Participants with Individual 3-Year Commitments before:

(i) Agreeing to an increase in the 3-Year Commitment, or any Syndication Party's share thereof, or an extension of the 3-Year Maturity Date; or

(ii) Agreeing to a reduction in the amount, or to a delay in the due date, of any payment by Borrower of interest, principal, or fees with respect to the 3-Year Facility; provided, however, this restriction shall not apply to a delay in payment granted by the Administrative Agent in the ordinary course of administration of the Loans and the exercise of reasonable judgment, so long as such payment delay does not exceed five (5) days.

16.10.3 Required Lenders. The Required Lenders before:

(a) Consenting to any action, amendment, or granting any waiver not covered in Subsections 16.10.1 or 16.10.2; or

(b) Agreeing to amend Article 16 of this Credit Agreement (other than Subsections 16.10.1 or 16.10.2).

16.10.4 Action Without Vote. Notwithstanding any other provisions of this Section, the Administrative Agent or, with respect to Subsection 16.10.4(b) hereof, the Letter of Credit Bank and the Administrative Agent, may take the following actions without obtaining the consent of the Syndication Parties or the Voting Participants:

(a) Determining (i) whether the conditions to an Advance have been met, and (ii) the amount of such Advance;

(b) Determining (i) whether the conditions and procedures as set forth in Article 5 hereof for issuance of a Committed Letter of Credit have been properly satisfied and (ii) the amount of such Letter of Credit;

(c) Determining whether the Bid Advance conditions and procedures as set forth in Article 4 hereof have been properly satisfied.

16.10.5 Voting Participants. Under the circumstances set forth in
Section 16.29 hereof, each Voting Participant shall be accorded voting rights as though such Person was a Syndication Party, and in such case the voting rights of the Syndication Party from which such Voting Participant acquired its participation interest shall be reduced accordingly.

If no written consent or denial is received from a Syndication Party or a Voting Participant within five (5) Banking Days after written notice of any proposed action as described in this Section is delivered to such Syndication Party or Voting Participant by the Administrative Agent, such Syndication Party or Voting Participant shall be conclusively deemed to have consented thereto for the purposes of this Section.

16.11 Distribution of Principal and Interest. The Administrative Agent will receive and accept all payments (including prepayments) of principal and interest made by Borrower on the Loans and the Notes and will hold all such payments in trust for the benefit of all appropriate present and future Syndication Parties, and, if requested in writing by the Required Lenders, in an account segregated from the Administrative Agent's other funds and accounts ("PAYMENT ACCOUNT"). After the receipt by the Administrative Agent of any payment representing interest or principal on the Loans, the Administrative Agent shall remit to the appropriate (depending upon whether the payment was made with respect to the 364-Day Facility and/or the 3-Year Facility) Syndication Party its share of such payment as provided in Article 7 hereof, ("PAYMENT DISTRIBUTION") no later than 3:00 P.M. (Central time) on the same Banking Day as such payment is received by the Administrative Agent if received no later than 1:00 P.M. (Central time) or the next Banking Day if received by the Administrative Agent thereafter. Any Syndication Party's rights to its Payment Distribution shall be subject to the rights of any Contributing Syndication Parties to such amounts as set forth in Section 16.4 hereof.

16.12 Distribution of Certain Amounts. The Administrative Agent shall (a) receive and hold in trust for the benefit of all present and future Syndication Parties, in the Payment Account and, if requested in writing by the Required Lenders, segregated from the Administrative Agent's other funds and accounts and
(b) shall remit to the Syndication Parties, as indicated, the amounts described below:

16.12.1 Funding Losses. To each Syndication Party the amount of any Funding Losses paid by Borrower to the Administrative Agent in connection with a prepayment of any portion of a LIBO Rate Loan or a Bid Loan, in accordance with the Funding Loss Notice such Syndication Party provided to the Administrative Agent, no later than 3:00 P.M. (Central time) on the same Banking Day that payment of such Funding Losses is received by the Administrative Agent, if received no later than 1:00 P.M. (Central time), or the next Banking Day if received by the Administrative Agent thereafter.

16.12.2 Fees. To each Syndication Party its share of any 364-Day Facility Fees and 3-Year Facility Fees paid by Borrower to the Administrative Agent, no later than 3:00 P.M. (Central time) on the same Banking Day that payment of such fees is received by the Administrative Agent, if received no later than 1:00 P.M. (Central time), or the next Banking Day if received by the Administrative Agent thereafter.

16.13 Possession of Loan Documents. The Loan Documents (other than the Notes) shall be held by the Administrative Agent in its name, for the ratable benefit of itself and the other Syndication Parties without preference or priority.

16.14 Collateral Application. The Syndication Parties shall have no interest in any other loans made to Borrower by any other Syndication Party other than the Loans, or in any property taken as security for any other loan or loans made to Borrower by any other Syndication Party, or

in any property now or hereinafter in the possession or control of any other Syndication Party, which may be or become security for the Loans solely by reason of the provisions of a security instrument that would cause such security instrument and the property covered thereby to secure generally all indebtedness owing by Borrower to such other Syndication Party. Notwithstanding the foregoing, to the extent such other Syndication Party applies such funds or the proceeds of such property to reduction of one or more of the Loans, such other Syndication Party shall share such funds or proceeds with all Syndication Parties according to their respective Individual Commitments. In the event that any Syndication Party shall obtain payment, whether partial or full, from any source in respect of one or more of the Loans, including without limitation payment by reason of the exercise of a right of offset, banker's lien, general lien, or counterclaim, such Syndication Party shall promptly make such adjustments (which may include payment in cash or the purchase of further Syndication Interests or participations in the Loans) to the end that such excess payment shall be shared with all other Syndication Parties in accordance with their respective Individual Commitments. Notwithstanding any of the foregoing provisions of this Section or Article 9 hereof, no Syndication Party other than CoBank shall have any right to, or to the proceeds of, or any right to the application to any amount owing to such Syndication Party hereunder of any the proceeds of, any Bank Equity Interests issued to Borrower by CoBank or on account of any statutory lien held by CoBank on such Bank Equity Interests.

16.15 Amounts Required to be Returned. If the Administrative Agent makes any payment to a Syndication Party in anticipation of the receipt of final funds from Borrower, and such funds are not received from Borrower, or if excess funds are paid by the Administrative Agent to any Syndication Party as the result of a miscalculation by the Administrative Agent, then such Syndication Party shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent any such amounts, plus interest thereon (from the day such amounts were transferred by the Administrative Agent to the Syndication Party to, but not including, the day such amounts are returned by Syndication Party) at a rate per annum equal to the customary rate set by the Administrative Agent for the correction of errors among banks for three (3) Banking Days and thereafter at the Base Rate. If the Administrative Agent is required at any time to return to Borrower or a trustee, receiver, liquidator, custodian, or similar official any portion of the payments made by Borrower to the Administrative Agent, whether pursuant to any bankruptcy or insolvency law or otherwise, then each Syndication Party shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent any such payments transferred to such Syndication Party by the Administrative Agent but without interest or penalty (unless the Administrative Agent is required to pay interest or penalty on such amounts to the person recovering such payments).

16.16 Reports and Information to Syndication Parties. The Administrative Agent shall use reasonable efforts to provide to the Syndication Parties, as soon as practicable after actual knowledge thereof is acquired by an officer thereof primarily responsible for the Administrative Agent's duties as such with respect to the Loans or primarily responsible for the credit relationship between the Administrative Agent and Borrower, any material factual information which has a material adverse effect on the creditworthiness of Borrower, and Borrower hereby authorizes such disclosure by the Administrative Agent to the Syndication Parties (and by the Syndication Parties to any of their participants). Failure of the Administrative Agent to provide the information referred to in this Section or in Subsection 16.7.5 hereof shall not result in any liability upon, or right to make a claim against, the Administrative Agent except where a court of competent

jurisdiction renders a final non-appealable determination that such failure is a result of the willful misconduct or gross negligence of the Administrative Agent. Syndication Parties acknowledge and agree that all information and reports received pursuant to this Credit Agreement will be received in confidence in connection with their Syndication Interest, and that such information and reports constitute confidential information and shall not, without the prior written consent of the Administrative Agent or Borrower (which consent will not be unreasonably withheld, provided that Borrower shall have no consent rights upon the occurrence and during the continuance of an Event of Default), be (a) disclosed to any third party (other than the Administrative Agent, another Syndication Party or potential Syndication Party, or a participant or potential participant in the interest of a Syndication Party, which disclosure is hereby approved by Borrower), except pursuant to appropriate legal or regulatory process, or (b) used by the Syndication Party except in connection with the Loans and its Syndication Interest.

16.17 Standard of Care. The Administrative Agent shall not be liable to Syndication Parties for any error in judgment or for any action taken or not taken by the Administrative Agent or its agents, except to the extent that a court of competent jurisdiction renders a final non-appealable determination that any of the foregoing resulted from the gross negligence or willful misconduct of the Administrative Agent. Subject to the preceding sentence, the Administrative Agent will exercise the same care in administering the Loans and the Loan Documents as it exercises for similar loans which it holds for its own account and risk, and the Administrative Agent shall not have any further responsibility to the Syndication Parties. Without limiting the foregoing, the Administrative Agent may rely on the advice of counsel concerning legal matters and on any written document it believes to be genuine and correct and to have been signed or sent by the proper Person or Persons.

16.18 No Trust Relationship. Neither the execution of this Credit Agreement, nor the sharing in the Loans, nor the holding of the Loan Documents in its name by the Administrative Agent, nor the management and administration of the Loans and Loan Documents by the Administrative Agent (including the obligation to hold certain payments and proceeds in the Payment Account in trust for the Syndication Parties), nor any other right, duty or obligation of the Administrative Agent under or pursuant to this Credit Agreement is intended to be or create, and none of the foregoing shall be construed to be or create, any express, implied or constructive trust relationship between the Administrative Agent and any Syndication Party. Each Syndication Party hereby agrees and stipulates that the Administrative Agent is not acting as trustee for such Syndication Party with respect to the Loans, this Credit Agreement, or any aspect of either, or in any other respect.

16.19 Sharing of Costs and Expenses. To the extent not paid by Borrower, each Syndication Party will promptly upon demand reimburse the Administrative Agent for its proportionate share (based on the ratio of the total of its Individual Commitments to the sum of the 364-Day Commitment and the 3-Year Commitment), for all reasonable costs, disbursements, and expenses incurred by the Administrative Agent on or after the date of this Credit Agreement for legal, accounting, consulting, and other services rendered to the Administrative Agent in its role as the Administrative Agent in the administration of the Loans, interpreting the Loan Documents, and protecting, enforcing, or otherwise exercising any rights, both before and after default by Borrower under the Loan Documents, and including, without limitation, all costs and expenses incurred in connection with any bankruptcy proceedings and the exercise of any remedies with

respect to the Cash Collateral Account or otherwise; provided, however, that the costs and expenses to be shared in accordance with this Section shall not include any costs or expenses incurred by the Administrative Agent solely as a Syndication Party in connection with the Loans, nor to the Administrative Agent's internal costs and expenses.

16.20 Syndication Parties' Indemnification of the Administrative Agent and Bid Agent. Each of the Syndication Parties agree to indemnify the Administrative Agent, including any Successor Agent, and the Bid Agent, and their respective directors, officers, employees, agents, professional advisers and representatives ("INDEMNIFIED AGENCY PARTIES"), (to the extent not reimbursed by Borrower, and without in any way limiting the obligation of Borrower to do so), ratably (based on the ratio of the total of its Individual Commitments to the sum of the 364-Day Commitment and the 3-Year Commitment), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans and/or the expiration or termination of this Credit Agreement) be imposed on, incurred by or asserted against the Administrative Agent or the Bid Agent (or any of the Indemnified Agency Parties while acting for the Administrative Agent or for any Successor Agent) in any way relating to or arising out of this Credit Agreement or the Loan Documents, or the performance of the duties of the Administrative Agent or the Bid Agent hereunder or thereunder or any action taken or omitted while acting in the capacity of the Administrative Agent or the Bid Agent under or in connection with any of the foregoing; provided that the Syndication Parties shall not be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of an Indemnified Agency Party to the extent that a court of competent jurisdiction renders a final non-appealable determination that the foregoing are the result of the willful misconduct or gross negligence of such Indemnified Agency Party. The agreements and obligations in this Section shall survive the payment of the Loans and the expiration or termination of this Credit Agreement.

16.21 Books and Records. The Administrative Agent shall maintain such books of account and records relating to the Loans as it maintains with respect to other loans of similar type and amount, and which shall clearly and accurately reflect the Syndication Interest of each Syndication Party. The Syndication Parties, or their agents, may inspect such books of account and records at all reasonable times during the Administrative Agent's regular business hours.

16.22 Administrative Agent Fee. The Administrative Agent and any Successor Agent shall be entitled to such fee as agreed upon between Borrower and the Administrative Agent for acting as the Administrative Agent.

16.23 The Administrative Agent's Resignation or Removal. The Administrative Agent may resign at any time by giving at least sixty (60) days' prior written notice of its intention to do so to each of the Syndication Parties and Borrower. After the receipt of such notice, the Required Lenders shall appoint a successor ("SUCCESSOR AGENT"). If (a) no Successor Agent shall have been so appointed which is either (i) a Syndication Party, or (ii) if not a Syndication Party, which is a Person approved by Borrower, such approval not to be unreasonably withheld (provided that Borrower shall have no approval rights upon the occurrence and during the continuance of an Event of Default), or (b) if such Successor Agent has not accepted such appointment, in either case within forty-five (45) days after the retiring Administrative Agent's giving of such notice of resignation, then the retiring Administrative Agent may, after consulting with, but without

obtaining the approval of, Borrower, appoint a Successor Agent which shall be a bank or a trust company organized under the laws of the United States of America or any state thereof and having a combined capital, surplus and undivided profit of at least $250,000,000. Any Administrative Agent may be removed upon the written demand of the Required Lenders, which demand shall also appoint a Successor Agent. Upon the appointment of a Successor Agent hereunder, (a) the term "Administrative Agent" shall for all purposes of this Credit Agreement thereafter mean such Successor Agent, and (b) the Successor Agent shall notify Borrower of its identity and of the information called for in Subsection 17.4.2 hereof. After any retiring Administrative Agent's resignation hereunder as the Administrative Agent, or the removal hereunder of any Administrative Agent, the provisions of this Credit Agreement shall continue to inure to the benefit of such Administrative Agent as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Credit Agreement.

16.24 Representations and Warranties of All Parties. The Administrative Agent, the Bid Agent, and each Syndication Party represents and warrants that:
(a) the execution and delivery of, and performance of its obligations under, this Credit Agreement is within its power and has been duly authorized by all necessary corporate and other action by it; (b) this Credit Agreement is in compliance with all applicable laws and regulations promulgated under such laws and does not conflict with nor constitute a breach of its charter or by-laws nor any agreements by which it is bound, and does not violate any judgment, decree or governmental or administrative order, rule or regulation applicable to it;
(c) no approval, authorization or other action by, or declaration to or filing with, any governmental or administrative authority or any other Person is required to be obtained or made by it in connection with the execution and delivery of, and performance of its obligations under, this Credit Agreement; and (d) this Credit Agreement has been duly executed by it, and constitutes the legal, valid, and binding obligation of such Person, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally and general equitable principles (regardless of whether such enforceability is considered in a proceeding at law or in equity). Each Syndication Party that is a state or national bank represents and warrants that the act of entering into and performing its obligations under this Credit Agreement has been approved by its board of directors or its loan committee and such action was duly noted in the written minutes of the meeting of such board or committee, and that it will, upon the Administrative Agent's written request, furnish the Administrative Agent with a certified copy of such minutes or an excerpt therefrom reflecting such approval.

16.25 Representations and Warranties of CoBank. Except as expressly set forth in Section 16.24 hereof, CoBank, in its role as a Syndication Party and as the Administrative Agent, makes no express or implied representation or warranty and assumes no responsibilities with respect to the due authorization, execution, or delivery of the Loan Documents; the accuracy of any information, statements, or certificates provided by Borrower, the legality, validity, or enforceability of the Loan Documents; the filing or recording of any document; the collectibility of the Loans; the performance by Borrower of any of its obligations under the Loan Documents; or the financial condition or solvency of Borrower or any other party obligated with respect to the Loans or the Loan Documents.

16.26 Syndication Parties' Independent Credit Analysis. Each Syndication Party acknowledges receipt of true and correct copies of all Loan Documents (other than any Note

payable to another Syndication Party) from the Administrative Agent. Each Syndication Party agrees and represents that it has relied upon its independent review (a) of the Loan Documents, and (b) any information independently acquired by such Syndication Party from Borrower or otherwise in making its decision to acquire an interest in the Loans independently and without reliance on the Administrative Agent. Each Syndication Party represents and warrants that it has obtained such information as it deems necessary (including any information such Syndication Party independently obtained from Borrower or others) prior to making its decision to acquire an interest in the Loans. Each Syndication Party further agrees and represents that it has made its own independent analysis and appraisal of and investigation into each Borrower's authority, business, operations, financial and other condition, creditworthiness, and ability to perform its obligations under the Loan Documents and has relied on such review in making its decision to acquire an interest in the Loans. Each Syndication Party agrees that it will continue to rely solely upon its independent review of the facts and circumstances related to Borrower, and without reliance upon the Administrative Agent, in making future decisions with respect to all matters under or in connection with the Loan Documents and the Loans. The Administrative Agent assumes no responsibility for the financial condition of Borrower or for the performance of Borrower's obligations under the Loan Documents. Except as otherwise expressly provided herein, no Syndication Party shall have any duty or responsibility to furnish to any other Syndication Parties any credit or other information concerning Borrower which may come into its possession.

16.27 No Joint Venture or Partnership. Neither the execution of this Credit Agreement, the sharing in the Loans, nor any agreement to share in payments or losses arising as a result of this transaction is intended to be or to create, and the foregoing shall not be construed to be, any partnership, joint venture or other joint enterprise between the Administrative Agent and any Syndication Party, nor between or among any of the Syndication Parties.

16.28 Purchase for Own Account; Restrictions on Transfer; Participations. Each Syndication Party represents that it has acquired and is retaining its interest in the Loans for its own account in the ordinary course of its banking or financing business and not with a view toward the sale, distribution, further participation, or transfer thereof. Each Syndication Party other than CoBank agrees that it will not sell, assign, convey or otherwise dispose of ("TRANSFER") to any Person, or create or permit to exist any lien or security interest on all or any part of its interest in the Loans, without the prior written consent of the Administrative Agent and Borrower (which consent will not be unreasonably withheld, provided that Borrower shall have no approval rights upon the occurrence and during the continuance of an Event of Default); provided that: (a) any such Transfer (except a Transfer to another Syndication Party or a Transfer by CoBank) must be in a minimum amount of $5,000,000.00; (b) each Syndication Party must maintain an Individual Commitment of no less than $5,000,000.00, unless it Transfers its entire Syndication Interest; (c) the transferee must execute an agreement substantially in the form of Exhibit 16.28 hereto ("SYNDICATION ACQUISITION AGREEMENT") and assume all of the transferor's obligations hereunder and execute such documents as the Administrative Agent may reasonably require; and (d) the Syndication Party making such Transfer must pay, or cause the transferee to pay, the Administrative Agent an assignment fee of $3,500.00. Any Syndication Party may participate any part of its interest in the Loans to any Person with the prior written consent of the Administrative Agent and Borrower (which consent will not be unreasonably withheld, provided that Borrower shall have no approval rights upon the occurrence and during the continuance of an Event of

Default), provided that no such consent shall be required where the participant is a Person at least fifty percent (50%) the equity interest in which is owned by such Syndication Party or which owns at least fifty percent (50%) of the equity interest in such Syndication Party or at least fifty percent (50%) of the equity interest of which is owned by the same Person which owns at least fifty percent (50%) of the equity interest of such Syndication Party, and each Syndication Party understands and agrees that in the event of any such participation: (x) its obligations hereunder will not change on account of such participation; (y) the participant will have no rights under this Credit Agreement, including, without limitation, voting rights (except as provided in
Section 16.29 hereof with respect to Voting Participants) or the right to receive payments or distributions; and (z) the Administrative Agent shall continue to deal directly with the Syndication Party with respect to the Loans (including with respect to voting rights, except as provided in Section 16.29 hereof with respect to Voting Participants) as though no participation had been granted and will not be obligated to deal directly with any participant (except as provided in Section 16.29 hereof with respect to Voting Participants). Notwithstanding any provision contained herein to the contrary, any Syndication Party may at any time pledge or assign all or any portion of its interest in the Loans to any Federal Reserve Bank or the Federal Farm Credit Bank in accordance with applicable law. CoBank reserves the right to sell participations on a non-patronage basis.

16.29 Certain Participants' Voting Rights. Any Farm Credit System Institution which (a) has acquired and, at any time of determination maintains, a participation interest in the minimum aggregate amount of $5,000,000.00 in a particular Syndication Party's Syndication Interest; and (b) has been designated in writing by such Syndication Party to the Administrative Agent as having such entitlement (such designation to include for such participant, its name, contact information, and dollar participation amount) (each a "VOTING PARTICIPANT"), shall be entitled to vote (and such Syndication Party's voting rights shall be correspondingly reduced), on a dollar basis, as if such Voting Participant were a Syndication Party, on any matter requiring or allowing a Syndication Party, to provide or withhold its consent, or to otherwise vote on any proposed action. The voting rights of any Syndication Party so designating a Voting Participant shall be reduced by an equivalent dollar amount.

16.30 Method of Making Payments. Payment and transfer of all amounts owing or to be paid or remitted hereunder, including, without limitation, payment of the Advance Payment by Syndication Parties, and distribution of principal or interest payments or fees or other amounts by the Administrative Agent, shall be by wire transfer in accordance with the instructions contained on Exhibit 16.30 hereto ("WIRE INSTRUCTIONS").

16.31 Events of Syndication Default/Remedies.

16.31.1 Syndication Party Default. Any of the following occurrences, failures or acts, with respect to any of the Syndication Parties shall constitute an "EVENT OF SYNDICATION DEFAULT" hereunder by such party: (a) if any representation or warranty made by such party in this Credit Agreement shall be found to have been untrue in any material respect; (b) if such party fails to make any distributions or payments required under this Credit Agreement within five (5) days of the date required; (c) if such party breaches any other covenant, agreement, or provision of this Credit Agreement which breach shall have continued uncured for a period of thirty (30) consecutive days after such breach first occurs, unless a shorter period is required to avoid prejudicing the rights and position of the other Syndication Parties; (d) if any agency having

supervisory authority over such party, or any creditors thereof, shall file a petition to reorganize or liquidate such party pursuant to any applicable federal or state law or regulation and such petition shall not be discharged or denied within fifteen (15) days after the date on which it is filed; (e) if by the order of a court of competent jurisdiction or by any appropriate supervisory agency, a receiver, trustee or liquidator shall be appointed for such party or for all or any material part of its property or if such party shall be declared insolvent; or (f) if such party shall be dissolved, or shall make an assignment for the benefit of its creditors, or shall file a petition seeking to take advantage of any debtors' act, including the bankruptcy act, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or liquidator of all or any material part of its property.

16.31.2 Remedies. Upon the occurrence of an Event of Syndication Default, the non-defaulting Syndication Parties, acting by, or through the direction of, a simple majority (determined based on the ratio of (a) the total of their Individual Commitments to (b)(i) the sum of the 364-Day Commitment and the 3-Year Commitment less (ii) the Individual Commitments of the defaulting Syndication Party) of the non-defaulting Syndication Parties, may, in addition to any other remedy specifically set forth in this Credit Agreement, have and exercise any and all remedies available generally at law or equity, including the right to damages and to specific performance.

16.32 Withholding Taxes. Each Syndication Party represents that under the applicable law in effect as of the date it becomes a Syndication Party, it is entitled to receive any payments to be made to it hereunder without the withholding of any tax and will furnish to the Administrative Agent and to Borrower such forms, certifications, statements and other documents as the Administrative Agent or Borrower may request from time to time to evidence such Syndication Party's exemption from the withholding of any tax imposed by any jurisdiction or to enable the Administrative Agent or Borrower, as the case may be, to comply with any applicable laws or regulations relating thereto. Without limiting the effect of the foregoing, each Syndication Party that was not created or organized under the laws of the United States of America or any state or other political subdivision thereof ("NON-US LENDER"), shall, on the Closing Date, or upon its becoming a Syndication Party (for Persons that were not Syndication Parties on the Closing Date), furnish to the Administrative Agent and Borrower two original copies of IRS Form W-8BEN, W-8ECI, 4224, or Form 1001, as appropriate, (or any successor forms), or such other forms, certifications, statements of exemption, or documents as may be required by the IRS or by the Administrative Agent or Borrower, in their reasonable discretion, duly executed and completed by such Syndication Party, to establish, and as evidence of, such Syndication Party's exemption from the withholding of United States tax with respect to any payments to such Syndication Party of interest or fees payable under any of the Loan documents. Further, each Non-US Lender hereby agrees, from time to time after the initial delivery by such Syndication Party of such forms, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered obsolete or inaccurate in any material respect, that such Syndication Party shall promptly (a) deliver to the Administrative Agent and to Borrower two original copies of renewals, amendments or additional or successor forms, properly completed and duly executed by such Syndication Party, together with any other certificate or statement of exemption required in order to confirm or establish that such Syndication Party is not subject to United States withholding tax with respect to payments to such Syndication Party under the Loan Documents or (b) notify the Administrative Agent and Borrower of its inability to deliver any such forms,

certificates or other evidence. Notwithstanding anything herein to the contrary, Borrower shall not be obligated to make any payments hereunder to such Syndication Party until such Syndication Party shall have furnished to the Administrative Agent and Borrower each requested form, certification, statement or document.

16.33 Replacement of Holdout Lender. If any action to be taken by the Syndication Parties or the Administrative Agent hereunder requires the unanimous consent, authorization, or agreement of all Syndication Parties, and a Syndication Party ("HOLDOUT LENDER") fails to give its consent, authorization, or agreement, then the Administrative Agent, upon at least five (5) Banking Days prior irrevocable notice to the Holdout Lender, may permanently replace the Holdout Lender with one or more substitute Syndication Parties (each, a "REPLACEMENT LENDER"), and the Holdout Lender shall have no right to refuse to be replaced hereunder. Such notice to replace the Holdout Lender shall specify an effective date for such replacement, which date shall not be later than fifteen (15) Banking Days after the date such notice is given. Prior to the effective date of such replacement, the Holdout Lender and each Replacement Lender shall execute and deliver a Syndication Acquisition Agreement, subject only to the Holdout Lender being repaid its full share of the outstanding Bank Debt without any premium, discount, or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver any such Syndication Acquisition Agreement prior to the effective date of such replacement, the Holdout Lender shall be deemed to have executed and delivered such Syndication Acquisition Agreement. The replacement of any Holdout Lender shall be made in accordance with the terms of Section 16.28 hereof. Until such time as the Replacement Lenders shall have acquired all of the Syndication Interest of the Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender shall remain obligated to provide the Holdout Lender's Funding Share of Advances.

16.34 Amendments Concerning Agency Function. Neither the Administrative Agent nor the Bid Agent shall be bound by any waiver, amendment, supplement or modification of this Credit Agreement or any other Loan Document which affects its duties hereunder or thereunder unless it shall have given its prior written consent thereto.

16.35 Further Assurances. The Administrative Agent and each Syndication Party agree to take whatever steps and execute such documents as may be reasonable and necessary to implement this Article 16 and to carry out fully the intent thereof.

ARTICLE 17. MISCELLANEOUS

17.1 Costs and Expenses. To the extent permitted by law, Borrower agrees to pay to the Administrative Agent and the Syndication Parties, on demand, all out-of-pocket costs and expenses (a) incurred by the Administrative Agent (including, without limitation, the reasonable fees and expenses of counsel retained by the Administrative Agent, and including fees and expenses incurred for consulting, appraisal, engineering, inspection, and environmental assessment services) in connection with the preparation, negotiation, and execution of the Loan Documents and the transactions contemplated thereby, and processing the Borrowing Notices; and (b) incurred by the Administrative Agent or any Syndication Party (including, without limitation, the reasonable fees and expenses of counsel retained by the Administrative Agent and the Syndication Parties) in connection with the enforcement or protection of the Syndication Parties' rights under the Loan Documents upon the occurrence of an Event of Default or upon the

commencement of an action by Borrower against the Administrative Agent or any Syndication Party, including without limitation collection of the Loan (regardless of whether such enforcement or collection is by court action or otherwise). Borrower shall not be obligated to pay the costs or expenses of any Person whose only interest in the Loan is as a holder of a participation interest. In addition, To the extent permitted by law, Borrower agrees to pay to the Bid Agent, on demand, all out-of-pocket costs and expenses incurred by the Bid Agent in connection with the processing of Bid Rate Loans, including the Bid Requests, Bids, Bid Results Notices, and Bid Selection Notices and the procedures related thereto.

17.2 Service of Process and Consent to Jurisdiction. Borrower and each Syndication Party hereby agrees that any litigation with respect to this Credit Agreement or to enforce any judgment obtained against such Person for breach of this Credit Agreement or under the Notes or other Loan Documents may be brought in the courts of the State of Colorado and in the United States District Court for the District of Colorado (if applicable subject matter jurisdictional requirements are present), as the Administrative Agent may elect; and, by execution and delivery of this Credit Agreement, Borrower and each Syndication Party irrevocably submits to such jurisdiction. With respect to litigation concerning this Credit Agreement or under the Notes or other Loan Documents within the jurisdiction of the courts of the State of Colorado or the United States District Court for the District of Colorado, Borrower and each Syndication Party hereby irrevocably appoints, until six (6) months after the expiration of the 3-Year Maturity Date (as it may be extended at anytime), The Corporation Company, or such other Person as it may designate to the Administrative Agent, in each case with offices in Denver, Colorado and otherwise reasonably acceptable to the Administrative Agent to serve as the agent of Borrower or such Syndication Party to receive for and on its behalf at such agent's Denver, Colorado office, service of process, which service may be made by mailing a copy of any summons or other legal process to such Person in care of such agent. Borrower and each Syndication Party agrees that it shall maintain a duly appointed agent in Colorado for service of summons and other legal process as long as it remains obligated under this Credit Agreement and shall keep the Administrative Agent advised in writing of the identity and location of such agent. The receipt by such agent and/or by Borrower or such Syndication Party, as applicable, of such summons or other legal process in any such litigation shall be deemed personal service and acceptance by Borrower or such Syndication Party, as applicable, for all purposes of such litigation.

17.3 Jury Waiver. IT IS MUTUALLY AGREED BY AND BETWEEN THE ADMINISTRATIVE AGENT, THE BID AGENT, EACH SYNDICATION PARTY, AND BORROWER THAT THEY EACH WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY OF THEM AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS.

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

Banking Day after sending, and (iv) if by United States Mail, certified mail, return receipt requested, five (5) days after mailing.

17.4.1 Borrower:

Cenex Harvest States Cooperatives 5500 Cenex Drive
Inver Grove Heights, Minnesota 55077 FAX: (612) 451-4554
Attention: Vice President Finance e-mail address: jschmitz@chsco-ops.com

with a copy to:

Cenex Harvest States Cooperatives 5500 Cenex Drive
Inver Grove Heights, Minnesota 55077 FAX: (612) 451-4554
Attention: General Counsel
e-mail address: dkastelic@chsco-ops.com

17.4.2 Administrative Agent:

CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111 FAX: (303) 694-5830
Attention: Administrative Agent e-mail address: abahr@cobank.com

17.4.3 Bid Agent:

CoBank, ACB
5500 South Quebec Street
Greenwood Village, Colorado 80111 FAX: (303) 740-4100
Attention: Bid Agent

17.4.4 Syndication Parties:

See signature pages hereto.

17.5 Liability of Administrative Agent and Bid Agent. Neither the Administrative Agent nor the Bid Agent shall have any liabilities or responsibilities to Borrower or any Subsidiary on account of the failure of any Syndication Party to perform its obligations hereunder or to any Syndication Party on account of the failure of Borrower or any Subsidiary to perform their respective obligations hereunder or under any other Loan Document.

17.6 Successors and Assigns. This Credit Agreement shall be binding upon and inure to the benefit of Borrower, the Administrative Agent, the Bid Agent, and the Syndication Parties, and their respective successors and assigns, except that Borrower may not assign or transfer its rights or obligations hereunder without the prior written consent of all of the Syndication Parties.

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

17.8 Entire Agreement. This Credit Agreement (together with all exhibits hereto, which are incorporated herein by this reference) and the other Loan Documents represent the entire understanding of the Administrative Agent, the Bid Agent, each Syndication Party, and Borrower with respect to the subject matter hereof and shall replace and supersede any previous agreements of the parties with respect to the subject matter hereof.

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

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

17.11 Complete Agreement; Amendments. THIS CREDIT AGREEMENT, THE NOTES, AND
THE OTHER LOAN DOCUMENTS ARE INTENDED BY THE PARTIES HERETO TO BE A COMPLETE AND FINAL EXPRESSION OF THEIR AGREEMENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT. THE ADMINISTRATIVE AGENT, THE BID AGENT, EACH SYNDICATION PARTY, AND BORROWER ACKNOWLEDGE AND AGREE THAT NO UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN THEM WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. This Credit Agreement may not be modified or amended unless such modification or amendment is in writing and is signed by Borrower, the Administrative Agent, the Bid Agent, and all Syndication Parties (and each Syndication Party hereby agrees to execute any such amendment approved pursuant to Section 16.10 hereof). Borrower agrees that it shall reimburse the Administrative Agent for all fees and expenses incurred by the Administrative Agent in retaining outside legal counsel in connection with any amendment or modification to this Credit Agreement requested by Borrower.

17.12 Additional Costs of Maintaining Loan. Borrower shall pay to the Administrative Agent from time to time such amounts as the Administrative Agent may determine to be necessary to compensate any Syndication Party for any increase in costs to such Syndication Party which the Administrative Agent determines, based on information presented to it by such Syndication Party, are attributable to such Syndication Party's making or maintaining an Advance hereunder or its obligation to make such Advance, or any reduction in any amount receivable by such Syndication Party under this Credit Agreement or the Notes payable to it in respect to such Advance or such

obligation (such increases in costs and reductions in amounts receivable being herein called "ADDITIONAL COSTS"), resulting from any change after the date of this Credit Agreement in United States federal, state, municipal, or foreign laws or regulations (including Regulation D of the Federal Reserve Board), or the adoption or making after such date of any interpretations, directives, or requirements applying to a class of banks including such Syndication Party of or under any United States federal, state, municipal, or foreign laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof ("REGULATORY CHANGE"), which: (a) changes the basis of taxation of any amounts payable to such Syndication Party under this Credit Agreement or the Notes payable to such Syndication Party in respect of such Advance (other than taxes imposed on the overall net income of such Syndication Party); or (b) imposes or modifies any reserve, special deposit, or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Syndication Party; or (c) imposes any other condition affecting this Credit Agreement or the Notes payable to such Syndication Party (or any of such extensions of credit or liabilities). The Administrative Agent will notify Borrower of any event occurring after the date of this Credit Agreement which will entitle such Syndication Party to compensation pursuant to this Section as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. The Administrative Agent shall include with such notice, a certificate from such Syndication Party setting forth in reasonable detail the calculation of the amount of such compensation. Determinations by the Administrative Agent for purposes of this Section of the effect of any Regulatory Change on the costs of such Syndication Party of making or maintaining an Advance or on amounts receivable by such Syndication Party in respect of Advances, and of the additional amounts required to compensate such Syndication Party in respect of any Additional Costs, shall be conclusive absent manifest error, provided that such determinations are made on a reasonable basis.

17.13 Capital Requirements. In the event that the introduction of or any change in: (a) any law or regulation; or (b) the judicial, administrative, or other governmental interpretation of any law or regulation; or (c) compliance by any Syndication Party or any corporation controlling any such Syndication Party with any guideline or request from any governmental authority (whether or not having the force of law) has the effect of requiring an increase in the amount of capital required or expected to be maintained by such Syndication Party or any corporation controlling such Syndication Party, and such Syndication Party certifies that such increase is based in any part upon such Syndication Party's obligations hereunder with respect to the 364-Day Facility and/or the 3-Year Facility, and other similar obligations, Borrower shall pay to such Syndication Party such additional amount as shall be certified by such Syndication Party to the Administrative Agent and to Borrower to be the net present value (discounted at the Base Rate) of (a) the amount by which such increase in capital reduces the rate of return on capital which such Syndication Party could have achieved over the period remaining until the 364-Day Maturity Date or the 3-Year Maturity Date, as applicable (depending upon which Facility or Facilities such claim to increase costs is based), but for such introduction or change, (b) multiplied by
(i) such Syndication Party's Individual 364-Day Commitment or (ii) such Syndication Party's Individual 3-Year Commitment, as applicable. The Administrative Agent will notify Borrower of any event occurring after the date of this Credit Agreement that will entitle any such Syndication Party to compensation pursuant to this Section as promptly as practicable after it obtains knowledge thereof and of such Syndication Party's determination to request such compensation. The Administrative Agent shall include with such notice, a certificate from such Syndication Party

setting forth in reasonable detail the calculation of the amount of such compensation. Determinations by any Syndication Party for purposes of this
Section of the effect of any increase in the amount of capital required to be maintained by any such Syndication Party and of the amount of compensation owed to any such Syndication Party under this Section shall be conclusive absent manifest error, provided that such determinations are made on a reasonable basis.

17.14 Replacement Notes. Upon receipt by Borrower of evidence satisfactory to it of: (a) the loss, theft, destruction or mutilation of any Note, and (in case of loss, theft or destruction) of the agreement of the Syndication Party to which the Note was payable to indemnify Borrower, and upon surrender and cancellation of such Note, if mutilated; or (b) the assignment by any Syndication Party of its interest hereunder and the Notes relating thereto, or any portion thereof, pursuant to this Credit Agreement, then Borrower will pay any unpaid principal and interest (and Funding Losses, if applicable) then or previously due and payable on such Notes and will (upon delivery of such Notes for cancellation, unless covered by subparagraph (a) of this Section) deliver in lieu of each such Note a new Note or, in the case of an assignment of a portion of any such Syndication Party's Syndication Interest, new Notes, for any remaining balance.

17.15 Patronage Payments. Borrower acknowledges and agrees that: (a) only that portion of the Loan represented by CoBank's Individual 364-Day Pro Rata Share and/or CoBank's Individual 3-Year Pro Rata Share which is retained by CoBank for its own account is entitled to patronage distributions in accordance with CoBank's bylaws and its practices and procedures related to patronage distribution; and (b) any patronage, or similar, payments to which Borrower is entitled on account its ownership of Bank Equity Interests or otherwise will not be based on any portion of CoBank's interest in the Loans in which CoBank has at any time granted a participation interest.

17.16 Direct Website Communications; Electronic Mail Communications

17.16.1 Delivery.

(a) Borrower hereby agrees that it will provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent pursuant to this Credit Agreement and any other Loan Document, including, without limitation, all notices, requests, financial statements, financial and other reports, certificates and other information materials, but, subject to the provisions of Subsection 17.16.3 hereof, excluding any such communication that (i) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Credit Agreement prior to the scheduled date therefor,
(iii) provides notice of any Potential Default or Event of Default under this Credit Agreement or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Credit Agreement and/or any borrowing, issuance or reissuance of a Letter of Credit, or other extension of credit hereunder (all such non-excluded communications collectively, the "COMMUNICATIONS"), by transmitting the Communications in an electronic/soft medium and in a format acceptable to the Administrative Agent as follows (A) all financial statements to closing@cobank.com and (B) all other Communications to mtousignant@cobank.com. In addition, Borrower agrees to continue to provide the Communications to the Administrative Agent in the manner specified in this Credit

Agreement but only to the extent requested by the Administrative Agent. Receipt of the Communications by the Administrative Agent at the appropriate e-mail address as set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of this Credit Agreement and any other Loan Documents. Nothing in this Section 17.16 shall prejudice the right of the Administrative Agent or any Syndication Party to give any notice or other communication pursuant to this Credit Agreement or any other Loan Document in any other manner specified in this Credit Agreement or any other Loan Document.

(b) Each Syndication Party agrees that receipt of e-mail notification that such Communications have been posted pursuant to Subsection 17.16.2 below at the e-mail address(es) set forth beneath such Syndication Party's name on its signature page hereto or pursuant to the notice provisions of any Syndication Acquisition Agreement shall constitute effective delivery of the Communications to such Syndication Party for purposes of this Credit Agreement and any other Loan Document. Each Syndication Party further agrees to notify the Administrative Agent in writing (including by electronic communication) promptly of any change in its e-mail address or any extended disruption in its internet delivery services.

17.16.2 Posting. Borrower further agrees that the Administrative Agent may make the Communications available to the Syndication Parties by posting the Communications on "Intralinks" ("PLATFORM"), the Administrative Agent's internet delivery system that is part of Intralinks, Inc.'s primary web portal (the "PRIMARY PORTAL"). The Primary Portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis. Borrower acknowledges that the distribution of Communications through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution.

17.16.3 Additional Communications. The Administrative Agent reserves the right and Borrower and each Syndication Party consents and agrees thereto, to, upon written notice to Borrower and all Syndication Parties, implement and require use of a secure system whereby any notices or other communications required or permitted by this Credit Agreement, but which are not specifically covered by Subsection 17.16.1 hereof, and including, without limitation, Borrowing Notices, Funding Notices, Bid Requests, Bids, Bid Results Notices, Bid Selection Notices, notices of Overnight Rates, Overnight Advance Requests, and any communication described in clauses (i) through (iv) of Subsection 17.16.1(a) hereof, shall be sent and received via electronic mail to the e-mail addresses described in Subsection 17.16.1(b) hereof.

17.16.4 Disclaimer. The Communications transmitted pursuant to this
Section 17.16 and the Platform are provided "as is" and "as available." CoBank does not warrant the accuracy, adequacy or completeness of the Communications or the Platform and CoBank expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by CoBank in connection with the Communications or the Platform.

17.16.5 Termination. The provisions of this Section 17.16 shall automatically terminate on the date that CoBank, ACB ceases to be the Administrative Agent under this Credit Agreement.

17.17 Mutual Release. Upon full indefeasible payment and satisfaction of the Bank Debt and Notes and the other obligations contained in this Credit Agreement, the parties, including Borrower, the Administrative Agent, the Bid Agent, and each Syndication Party shall, except as provided in Article 14 hereof and except with respect to Borrower's reimbursement obligation to the issuer of each Letter of Credit with an expiry date beyond the 3-Year Maturity Date, thereupon automatically each be fully, finally, and forever released and discharged from any further claim, liability, or obligation in connection with the Bank Debt.

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

17.19 Counterparts. This Credit Agreement may be executed by the parties hereto in separate counterparts, each of which, when so executed and delivered, shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all of the parties hereto. Telefax or facsimile copies of documents or signature pages bearing original signatures, and executed documents or signature pages delivered by telefax or facsimile, shall, in each such instance, be deemed to be, and shall constitute and be treated as, an original signed document or counterpart, as applicable. Any party delivering an executed counterpart of this Credit Agreement by telefacsimile also shall deliver an original executed counterpart of this Credit Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Credit Agreement.

17.20 Confidentiality. Each Syndication Party shall maintain the confidential nature of, and shall not use or disclose, any of Borrower's financial information, confidential information or trade secrets without first obtaining Borrower's written consent. Nothing in this Section shall require any Syndication Party to obtain such consent after there is an Event of Default. The obligations of the Syndication Parties shall in no event apply to: (a) providing information about Borrower to any financial institution contemplated or described in Sections 16.7, 16.16, and 16.28 hereof or to such Syndication Party's parent holding company or any of such Syndication Party's Affiliates;
(b) any situation in which any Syndication Party is required by Law or required by any Governmental Authority to disclose information; (c) providing information to counsel to any Syndication Party in connection with the transactions contemplated by the Loan Documents; (d) providing information to independent auditors retained by the such Syndication Party; (e) any information that is in or becomes part of the public domain otherwise than through a wrongful act of such Syndication Party or any of its employees or agents thereof; (f) any information that is in the possession of any Syndication Party prior to receipt thereof from Borrower or any other Person known to such Syndication Party to be acting on behalf of Borrower; (g) any information that is independently developed by any Syndication Party; and (h) any information that is

disclosed to any Syndication Party by a third party that has no obligation of confidentiality with respect to the information disclosed. A Syndication Party's confidentiality requirements continue after it is no longer a Syndication Party under this Credit Agreement. Notwithstanding any provision to the contrary in this Credit Agreement, the Administrative Agent and each Syndication Party (and each employee, representative, or other agent thereof) may disclose to any and all Persons, without limitations of any kind, the tax treatment and tax structure of the transaction described in this Credit Agreement and all materials of any kind (including opinions or other tax analyses), if any, that are provided to the Administrative Agent or such Syndication Party relating to such tax treatment and tax structure. Nothing in the preceding sentence shall be taken as an indication that such transaction would, but for such sentence, be deemed to be a "reportable transaction" as defined in Treasury Regulation
Section 1.6011-4.

[SIGNATURE PAGES COMMENCE ON THE NEXT PAGE]

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

BORROWER:

CENEX HARVEST STATES COOPERATIVES, a
cooperative corporation formed under the
laws of the State of Minnesota

By:

Name: John Schmitz Title: Executive Vice President Finance and Administration, and Chief Financial Officer

ADMINISTRATIVE AGENT:

COBANK, ACB

By:

Name: Michael Tousignant Title: Vice President

BID AGENT:

CoBANK, ACB

By:

Name: Michael Tousignant Title: Vice President

SYNDICATION PARTIES:

COBANK, ACB

By:

Name: Michael Tousignant Title: Vice President

Contact Name: Michael Tousignant Title: Vice President Address: 5500 South Quebec Street Greenwood Village, CO 80111 Phone No.: 303/694-5838 Fax No.: 303/694-5830 E-mail: mtousignant@cobank.com Individual 364-Day Commitment: $132,857,140.00 Individual 3-Year Commitment: $22,142,860.00 Payment Instructions:

CoBank, ACB
ABA No.: 307088754
Acct. Name: CoBank, ACB
Account No.: 22274433
Attn:
Reference: Cenex Harvest States

SYNDICATION PARTIES:

SUNTRUST BANK

By:

Name: Michael Lapresi Title:

Contact Name: Douglas O'Bryan Title: Associate Address: 303 Peachtree Street Atlanta, GA 30308 Phone No.: 404/724-3163 Fax No.: 404/230-5305 E-mail: douglas.o'bryan@suntrust.com Individual 364-Day Commitment: $50,571,429.00 Individual 3-Year Commitment: $8,428,571.00 Payment Instructions:

SunTrust Bank
ABA No.: 061000104
Acct. Name: Corporate Banking Operations
Support
Account No.: 9088000112
Reference: Cenex Harvest States

SYNDICATION PARTIES:

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK INTERNATIONAL" NEW YORK BRANCH

By:

Name:

Title:

By:

Name:

Title:

Contact Name: Peter Glawe
Title: Assistant Vice President - Credit Analyst
Address: 245 Park Avenue
New York, NY 10167
Phone No.: 312/408-8224
Fax No.: 312/408-8240
E-mail: peter.glawe@chi.rabobank.com
Individual 364-Day Commitment: $50,571,429.00
Individual 3-Year Commitment: $8,428,571.00
Payment Instructions:
Bank of New York
ABA No.: 021 000 018
Acct. Name: Rabobank Nederland
Account No.: 802-6002-533
Reference: Cenex Harvest

SYNDICATION PARTIES:

BNP PARIBAS

By:

Name: Marcie Weiss Title: Managing Director

By:
Name: Guillaume de La Ville Title: Vice President

Contact Name: Guillaume de La Ville Title: Vice President Address: 787 Seventh Avenue New York, NY 10019 Phone No.: 212/841-2067 Fax No.: 212/841-2536 E-mail: guillaume.delaville@americas.bnpparibas.com Individual 364-Day Commitment: $50,571,429.00 Individual 3-Year Commitment: $8,428,571.00 Payment Instructions:
BNP PARIBAS, NEW YORK
ABA No.: 026 007 689 Acct. Name: Loan Servicing Clearing Account Account No.: 103130 00103 Reference: Cenex Harvest

SYNDICATION PARTIES:

U.S. BANK NATIONAL ASSOCIATION

By:

Name: Kathi L. Hatch Title: Assistant Vice President

Contact Name: Kathi L. Hatch Title: Assistant Vice President Address: 950 17th Street Denver, CO 80202 Phone No.: 303/585-4926 Fax No.: 303/585-4732 E-mail: kathi.hatch@usbank.com Individual 364-Day Commitment: $38,571,429.00 Individual 3-Year Commitment: $6,428,571.00 Payment Instructions:

U.S. Bank
ABA No.: 123000220
Acct. Name: PL-7 Commercial Loan
Servicing West
Account No.: 00340012160600
Reference: Participation Specialist, Loan
#6349061459-Cenex Harvest

SYNDICATION PARTIES:

DEERE CREDIT, INC.

By:

Name: Jack Harris Title: Manager Credit Operations/Administration

Contact Name: Jack Harris Title: Manager Credit Operations/Administration Address: 6400 NW 86th Street P.O. Box 6650 - Dept. 140 Johnston, IA 50131-6650 Phone No.: 515/267-4349 Fax No.: 515/267-4020 E-mail: harrisjack@johndeere.com Individual 364-Day Commitment: $38,571,429.00 Individual 3-Year Commitment: $6,428,571.00 Payment Instructions:

Bank One Chicago, IL
ABA No.: 071000013
Acct. Name: Deere Credit Services
Account No.: 51-52135
Reference: Cenex

SYNDICATION PARTIES:

HARRIS TRUST AND SAVINGS BANK

By:

Name:

Title:

Contact Name: Robert H. Wolohan
Title: Vice President
Address: 111 West Monroe Street
Chicago, IL 60603
Phone No.: 312/461-6149
Fax No.: 312/293-4280
E-mail: Robert.wolohan@harrisbank.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
Harris Trust and Savings Bank Chicago, IL
ABA No.: 071 000 288
Acct. Name: Harris Nesbitt
Account No.: 109 215 4 Credit Services
Reference: Cenex Harvest States Cooperative
Notify: Violetta Smith 461-3715

SYNDICATION PARTIES:

THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH

By:

Name: Patrick McCue Title: Vice President & Manager

Contact Name: Patrick McCue Title: Vice President & Manager Address: 227 West Monroe, Suite 2300 Chicago, IL 60606 Phone No.: 952/473-6110 Fax No.: 952/473-5152 E-mail: pmccue@btmna.com Individual 364-Day Commitment: $29,142,857.00 Individual 3-Year Commitment: $4,857,143.00 Payment Instructions:

The Bank of Tokyo-Mitsubishi, Ltd., Chicago
Branch
ABA No.: 071002341
Acct. Name: The Bank of Tokyo-Misubishi,
Ltd., Chicago Branch
Account No.: 1525720230
Reference: Cenex Harvest States

SYNDICATION PARTIES:

FORTIS CAPITAL CORP.

By:

Name: Edward Aldrich Title: Director

Contact Name: Edward Aldrich Title: Director Address: 301 Tresser Boulevard Stamford, CT 06901-3239 Phone No.: 203/705-5725 Fax No.: 203/705-5924 E-mail: Edward.Aldrich@fortiscapitalusa.com Individual 364-Day Commitment: $29,142,857.00 Individual 3-Year Commitment: $4,857,143.00 Payment Instructions:

J.P. Morgan-Chase New York
ABA No.: 021-000-021
Acct. Name: Fortis Capital Corp.
Account No.: 001-1-624-418
Reference: GCG - Cenex Harvest States

SYNDICATION PARTIES:

NATEXIS BANQUES POPULAIRES

By:

Name: Stephen Jendras Title: Vice President

By:
Name: Guillaume de Parscau Title:

Contact Name: Stephen Jendras Title: Vice President Address: 1251 Avenue of the Americas 34th Floor New York, NY 10020 Phone No.: 212/872-5157 Fax No.: 212/354-9095 E-mail: steve.jendras@nyc.nxlop.com Individual 364-Day Commitment: $25,714,286.00 Individual 3-Year Commitment: $4,285,714.00 Payment Instructions:

Chase Manhattan Bank, New York, NY
ABA No.: 021-000-021
Acct. Name: In favor of Natexis Banques
Populaires
Account No.: 544-7-75330
Reference: For further credit to Cenex Harvest
States Account No. 101899

SYNDICATION PARTIES:

AGFIRST FARM CREDIT BANK

By:

Name: Bruce B. Fortner Title: Vice President

Contact Name: Bruce B. Fortner Title: Vice President Address: P.O. Box 1499 Columbia, SC 29202 Phone No.: 803/753-2452 Fax No.: 803/254-4219 E-mail: bfortner@agfirst.com Individual 364-Day Commitment: $25,714,286.00 Individual 3-Year Commitment: $4,285,714.00 Payment Instructions:

AgFirst Farm Credit Bank
ABA No.: 053905974
Acct. Name: Beneficiary Field 4200
Account No.: 7993209210
Reference: Cenex

SYNDICATION PARTIES:

CREDIT AGRICOLE INDOSUEZ

By:

Name: Theodore D. Tice Title: Vice President & Relationship Manager

By:
Name: Ray Falkenberg Title:

Contact Name: Theodore D. Tice Title: Vice President & Relationship Manager Address: 55 E. Monroe Street Chicago, IL 60603-5702 Phone No.: 312/917-7463 Fax No.: 312/372-3724 E-mail: ttice@us.ca-indosuez.com Individual 364-Day Commitment: $21,428,571.00 Individual 3-Year Commitment: $3,571,429.00 Payment Instructions:

Citibank, New York, New York
ABA No.: 021-000-089
Acct. Name: Credit Agricole Indosuez -
Chicago Branch
Account No.: 36023853
Reference: Cenex Harvest States

SYNDICATION PARTIES:

BANK OF AMERICA, N.A.

By:

Name: Rachel Li Title: Vice President

Contact Name: Rachel Li Title: Vice President Address: 231 S. LaSalle Street Chicago, IL 60697 Phone No.: 312/828-6279 Fax No.: 312/828-7393 E-mail: RACHEL.J.LI@bankofamerica.com Individual 364-Day Commitment: $17,142,857.00 Individual 3-Year Commitment: $2,857,143.00 Payment Instructions:
Bank of America N.A.

ABA No.: 08-1000032
Acct. Name: Commercial Loan Service
Center, St. Louis, MO
Account No.: 109823-0001000
Reference: Attn: Torethia Merriwether

SYNDICATION PARTIES:

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:

Name:

Title:

Contact Name: Scott D. Bjelde
Title: Vice President/Sr. Banker
Address: Sixth & Marquette
MAC-N9305-031
Minneapolis, MN 55479
Phone No.: 612/667-6126
Fax No.: 612/667-2276
E-mail: Scott.D.Bjelde@wellsfargo.com
Individual 364-Day Commitment: $38,571,429.00
Individual 3-Year Commitment: $6,428,571.00
Payment Instructions:
Wells Fargo Bank, N.A.
ABA No.: 121-000-248
Acct. Name: MEMSYN/Commercial Banking
Service Center
Account No.: 0271-2507201
Reference: Cenex Harvest States

SYNDICATION PARTIES:

NATIONAL CITY BANK OF INDIANA

By:

Name: Michael D. Hurst Title: Senior Vice President

Contact Name: Michael D. Hurst Title: Senior Vice President Address: 101 W. Washington Street, Suite 200 E Indianapolis, IN 46255 Phone No.: 317/267-3723 Fax No.: 317/267-7441 E-mail: Michael.Hurst@nationalcity.com Individual 364-Day Commitment: $12,857,143.00 Individual 3-Year Commitment: $2,142,857.00 Payment Instructions:

National City Bank of Indiana
ABA No.: 074000065
Acct. Name: Cenex Harvest States
Account No.: GL 151804
Reference: Att: Commercial Loan
#1526986323

xxi

                                TABLE OF CONTENTS

ARTICLE 1. DEFINED TERMS......................................................2

    1.1 Additional Costs......................................................2

    1.2 Adjusted Consolidated Funded Debt.....................................2

    1.3 Administrative Agent..................................................2

    1.4 Administrative Agent Office...........................................2

    1.5 Advance...............................................................2

    1.6 Advance Date..........................................................2

    1.7 Advance Payment.......................................................2

    1.8 Affected Loans........................................................2

    1.9 Affiliate.............................................................2

    1.10 Aggregate Commitment.................................................3

    1.11 Amortization.........................................................3

    1.12 Annual Operating Budget..............................................3

    1.13 Anti-Terrorism Laws..................................................3

    1.14 Applicable Lending Office............................................3

    1.15 Authorized Officer...................................................3

    1.16 Bank Debt............................................................3

    1.17 Banking Day..........................................................3

    1.18 Bank Equity Interests................................................3

    1.19 Base Rate............................................................3

    1.20 Base Rate Loans......................................................3

    1.21 Bid..................................................................4

    1.22 Bid Agent............................................................4

    1.23 Bid Maturity Date....................................................4


                                       i

    1.24 Bid Request..........................................................4

    1.25 Bid Results Notice...................................................4

    1.26 Bid Rate.............................................................4

    1.27 Bid Selection Notice.................................................4

    1.28 Borrower's Account...................................................4

    1.29 Borrower Benefit Plan................................................4

    1.30 Borrowing Notice.....................................................4

    1.31 Borrower Pension Plan................................................4

    1.32 Capital Leases.......................................................4

    1.33 Cash Collateral Account..............................................4

    1.34 CERCLA...............................................................4

    1.35 Change in Law........................................................4

    1.36 Closing Date.........................................................4

    1.37 Code.................................................................5

    1.38 Committed LC Request.................................................5

    1.39 Committed Letter of Credit...........................................5

    1.40 Committed Letter of Credit Fee.......................................5

    1.41 Committed 364-Day Advances...........................................5

    1.42 Committed 3-Year Advances............................................5

    1.43 Compliance Certificate...............................................5

    1.44 Communications.......................................................5

    1.45 Consolidated Cash Flow...............................................5

    1.46 Consolidated Current Assets..........................................5

    1.47 Consolidated Current Liabilities.....................................5

    1.48 Consolidated Funded Debt.............................................5


                                       ii

    1.49 Consolidated Interest Expense........................................6

    1.50 Consolidated Members' and Patrons' Equity............................6

    1.51 Consolidated Subsidiary..............................................6

    1.52 Contributing Syndication Parties.....................................6

    1.53 Control Agreement....................................................6

    1.54 Converted LC.........................................................6

    1.55 Debt.................................................................6

    1.56 Default Interest Rate................................................6

    1.57 Delinquency Interest.................................................6

    1.58 Delinquent Amount....................................................6

    1.59 Delinquent Syndication Party.........................................7

    1.60 Depreciation.........................................................7

    1.61 Embargoed Person.....................................................7

    1.62 Environmental Laws...................................................7

    1.63 Environmental Regulations............................................7

    1.64 ERISA................................................................7

    1.65 ERISA Affiliate......................................................7

    1.66 Event of Default.....................................................7

    1.67 Event of Syndication Default.........................................7

    1.68 Executive Order......................................................7

    1.69 Existing Credit Agreement............................................7

    1.70 Existing Letters of Credit...........................................8

    1.71 Extended Duration LC.................................................8

    1.72 Farm Credit System Institution.......................................8

    1.73 Fiscal Quarter.......................................................8


                                      iii

    1.74 Fiscal Year..........................................................8

    1.75 Funded Debt..........................................................8

    1.76 Funding Losses.......................................................8

    1.77 Funding Loss Notice..................................................8

    1.78 Funding Share........................................................8

    1.79 GAAP.................................................................8

    1.80 Good Faith Contest...................................................8

    1.81 Governmental Authority...............................................9

    1.82 Hazardous Substances.................................................9

    1.83 Holdout Lender.......................................................9

    1.84 Indemnified Agency Parties...........................................9

    1.85 Indemnified Parties..................................................9

    1.86 Individual Commitment................................................9

    1.87 Individual 364-Day Commitment........................................9

    1.88 Individual 3-Year Commitment.........................................9

    1.89 Individual 364-Day Lending Capacity..................................9

    1.90 Individual 3-Year Lending Capacity...................................9

    1.91 Individual Outstanding 364-Day Obligations..........................10

    1.92 Individual Outstanding 3-Year Obligations...........................10

    1.93 Individual 364-Day Pro Rata Share...................................10

    1.94 Individual 3-Year Pro Rata Share....................................10

    1.95 Intellectual Property...............................................10

    1.96 Investment..........................................................10

    1.97 Issuance Fee........................................................11

    1.98 Issuing Syndication Party...........................................11


                                       iv

    1.99 LC Commitment.......................................................11

    1.100 Letters of Credit..................................................11

    1.101 Letter of Credit Bank..............................................11

    1.102 LIBO Rate..........................................................11

    1.103 LIBO Rate Loan.....................................................11

    1.104 LIBO Rate Period...................................................11

    1.105 LIBO Request.......................................................11

    1.106 Licensing Laws.....................................................11

    1.107 Lien...............................................................11

    1.108 Loans..............................................................11

    1.109 Loan Documents.....................................................11

    1.110 Material Adverse Effect............................................12

    1.111 Material Agreements................................................12

    1.112 Multiemployer Plan.................................................12

    1.113 NCRA...............................................................12

    1.114 Negotiated LC Request..............................................12

    1.115 Negotiated Letter of Credit........................................12

    1.116 Non-US Lender......................................................12

    1.117 Note or Notes......................................................12

    1.118 OFAC...............................................................12

    1.119 Operating Lease....................................................12

    1.120 Organization Documents.............................................12

    1.121 Other List.........................................................12

    1.122 Overnight Advance..................................................12

    1.123 Overnight Advance Request..........................................12


                                       v

    1.124 Overnight Funding Commitment.......................................12

    1.125 Overnight Lender...................................................12

    1.126 Overnight Maturity Date............................................12

    1.127 Overnight Rate.....................................................12

    1.128 Payment Account....................................................13

    1.129 Payment Distribution...............................................13

    1.130 PBGC...............................................................13

    1.131 Permitted Encumbrance..............................................13

    1.132 Person.............................................................13

    1.133 Plan...............................................................13

    1.134 Platform...........................................................13

    1.135 Potential Default..................................................13

    1.136 Primary Portal.....................................................13

    1.137 Prohibited Transaction.............................................13

    1.138 RCRA...............................................................13

    1.139 Regulatory Change..................................................13

    1.140 Replacement Lender.................................................13

    1.141 Reportable Event...................................................13

    1.142 Requested 364-Day Advance..........................................13

    1.143 Requested 3-Year Advance...........................................13

    1.144 Required Lenders...................................................13

    1.145 Required License...................................................14

    1.146 Restricted Subsidiary..............................................14

    1.147 SDN List...........................................................14

    1.148 Subsidiary.........................................................14


                                       vi

    1.149 Successor Agent....................................................14

    1.150 Syndication Acquisition Agreement..................................14

    1.151 Syndication Interest...............................................14

    1.152 Syndication Parties................................................14

    1.153 Syndication Party Advance Date.....................................14

    1.154 Term Loan Credit Agreement.........................................14

    1.155 364-Day Advance....................................................15

    1.156 364-Day Availability Period........................................15

    1.157 364-Day Bid Advance................................................15

    1.158 364-Day Bid Loan...................................................15

    1.159 364-Day Borrowing Notice...........................................15

    1.160 364-Day Commitment.................................................15

    1.161 364-Day Facility...................................................15

    1.162 364-Day Facility Fee Factor........................................15

    1.163 364-Day Facility Fee...............................................15

    1.164 364-Day Facility Note(s)...........................................15

    1.165 364-Day Funding Notice.............................................15

    1.166 364-Day Margin.....................................................15

    1.167 364-Day Maturity Date..............................................15

    1.168 3-Year Advance.....................................................15

    1.169 3-Year Availability Period.........................................15

    1.170 3-Year Bid Advance.................................................15

    1.171 3-Year Bid Loan....................................................15

    1.172 3-Year Borrowing Notice............................................15

    1.173 3-Year Commitment..................................................15


                                      vii

    1.174 3-Year Facility....................................................15

    1.175 3-Year Facility Fee Factor.........................................16

    1.176 3-Year Facility Fee................................................16

    1.177 3-Year Facility Note...............................................16

    1.178 3-Year Funding Notice..............................................16

    1.179 3-Year Margin......................................................16

    1.180 3-Year Maturity Date...............................................16

    1.181 Transfer...........................................................16

    1.182 Voting Participant.................................................16

    1.183 Wire Instructions..................................................16

ARTICLE 2. 364-DAY FACILITY..................................................16

    2.1 364-Day Facility Loan................................................16

        2.1.1 Individual Syndication Party 364-Day Commitment................16

        2.1.2 Individual Syndication Party 364-Day Pro Rata Share............16

    2.2 364-Day Commitment...................................................16

    2.3 364-Day Borrowing Notice; Funding Notice.............................16

    2.4 364-Day Facility Promissory Notes....................................17

    2.5 Syndication Party Records............................................17

    2.6 Use of Proceeds......................................................17

    2.7 Syndication Party Funding Failure....................................18

    2.8 Reduction of 364-Day Commitment......................................18

ARTICLE 3. 3-YEAR FACILITY...................................................18

    3.1 3-Year Facility Loan.................................................18

        3.1.1 Individual Syndication Party 3-Year Commitment.................18

        3.1.2 Individual Syndication Party 3-Year Pro Rata Share.............18


                                      viii

    3.2 3-Year Commitment....................................................19

    3.3 3-Year Borrowing Notice..............................................19

    3.4 3-Year Facility Promissory Notes.....................................19

    3.5 Syndication Party Records............................................19

    3.6 Use of Proceeds......................................................20

    3.7 Syndication Party Funding Failure....................................20

    3.8 Reduction of 3-Year Commitment.......................................20

ARTICLE 4. BID RATE FACILITY; OVERNIGHT FACILITY.............................20

    4.1 364-Day Facility Bid Rate Loans......................................20

        4.1.1 Individual 364-Day Commitment..................................20

        4.1.2 364-Day Commitment.............................................21

        4.1.3 Amounts........................................................21

    4.2 3-Year Facility Bid Rate Loans.......................................21

        4.2.1 Individual 3-Year Commitment...................................21

        4.2.2 3-Year Commitment..............................................21

        4.2.3 Amounts........................................................21

    4.3 Bid Request..........................................................21

    4.4 Bid Procedure........................................................22

    4.5 Bid Acceptance Procedure.............................................22

    4.6 Bid Loan Funding.....................................................23

    4.7 Syndication Party Funding Failure....................................23

    4.8 364-Day Facility Bid Rate Loans - Bid Maturity Date Beyond
        364-Day Maturity Date................................................23

    4.9 Failure to Implement Bid Process.....................................23

    4.10 Overnight Advances..................................................24


                                       ix

    4.11 Overnight Lender Funding Failure....................................24

ARTICLE 5. LETTER OF CREDIT FACILITY.........................................24

    5.1 Letter of Credit Request.............................................24

        5.1.1 Request for Committed Letter of Credit.........................24

        5.1.2 Request for Negotiated Letter of Credit........................25

        5.1.3 Purpose........................................................25

        5.1.4 Cash Collateral................................................25

        5.1.5 Notification of the Administrative Agent Regarding
              Negotiated Letters of Credit...................................25

    5.2 Committed Letters of Credit..........................................25

        5.2.1 Available Amount...............................................25

        5.2.2 Availability...................................................26

        5.2.3 Treatment of Draws.............................................26

    5.3 Negotiated Letters of Credit.........................................26

        5.3.1 Available Amount...............................................26

        5.3.2 Availability...................................................26

        5.3.3 Fees...........................................................26

        5.3.4 Treatment of Draws.............................................26

    5.4 Notice Regarding Negotiated Letters of Credit........................27

    5.5 Existing Letters of Credit...........................................27

    5.6 Cash Collateral Account..............................................27

    5.7 Reimbursement Obligation Unconditional...............................28

ARTICLE 6. INTEREST AND FEES.................................................29

    6.1 Interest.............................................................29

        6.1.1 Base Rate Option...............................................29


                                       x

        6.1.2 LIBO Rate Option...............................................29

    6.2 Additional Provisions for LIBO Rate Loans............................29

        6.2.1 Limitation on LIBO Rate Loans..................................29

        6.2.2 LIBO Rate Loan Unlawful........................................30

        6.2.3 Treatment of Affected Loans....................................30

    6.3 Default Interest Rate................................................31

    6.4 Interest Calculation.................................................31

    6.5 Fees.................................................................31

        6.5.1 364-Day Facility Fee...........................................31

        6.5.2 3-Year Facility Fee............................................31

        6.5.3 Committed Letter of Credit Fee.................................31

    6.6 364-Day Margin; 3-Year Margin; 364-Day Facility Fee Factor;
        3-Year Facility Fee Factor...........................................32

    6.7 Special Interest Rates...............................................32

ARTICLE 7. PAYMENTS; FUNDING LOSSES..........................................32

    7.1 Principal Payments...................................................32

    7.2 Interest Payments....................................................32

    7.3 Application of Principal Payments....................................32

    7.4 Manner of Payment....................................................33

        7.4.1 Payments to Be Free and Clear..................................33

        7.4.2 Grossing-up of Payments........................................33

    7.5 Voluntary Prepayments................................................34

    7.6 Distribution of Principal and Interest Payments......................34

        7.6.1 Principal and Interest Payments on 364-Day Advances............34

        7.6.2 Principal and Interest Payments on 3-Year
              Pro Rata Rate Advances.........................................34


                                       xi

        7.6.3 Principal and Interest Payments on Bid Rate Advances...........35

        7.6.4 Principal and Interest Payments on Overnight Advances..........35

ARTICLE 8. BANK EQUITY INTERESTS.............................................35

ARTICLE 9. SECURITY..........................................................35

ARTICLE 10. REPRESENTATIONS AND WARRANTIES...................................35

    10.1 Organization, Good Standing, Etc....................................35

    10.2 Corporate Authority, Due Authorization; Consents....................35

    10.3 Litigation..........................................................36

    10.4 No Violations.......................................................36

    10.5 Binding Agreement...................................................36

    10.6 Compliance with Laws................................................36

    10.7 Principal Place of Business; Place of Organization..................36

    10.8 Payment of Taxes....................................................36

    10.9 Licenses and Approvals..............................................37

    10.10 Employee Benefit Plans.............................................37

    10.11 Equity Investments.................................................37

    10.12 Title to Real and Personal Property................................37

    10.13 Financial Statements...............................................38

    10.14 Environmental Compliance...........................................38

    10.15 Fiscal Year........................................................38

    10.16 Material Agreements................................................38

    10.17 Regulations U and X................................................38

    10.18 Trademarks, Tradenames, etc........................................38

    10.19 No Default on Outstanding Judgments or Orders......................39

    10.20 No Default in Other Agreements.....................................39


                                      xii

    10.21 Acts of God........................................................39

    10.22 Governmental Regulation............................................39

    10.23 Labor Matters and Labor Agreements.................................39

    10.24 Anti-Terrorism Laws................................................40

        10.24.1 Violation of Law.............................................40

        10.24.2 Classification...............................................40

        10.24.3 Conduct of Business..........................................40

    10.25 Disclosure.........................................................41

ARTICLE 11. CONDITIONS TO ADVANCES...........................................41

    11.1 Conditions to Closing...............................................41

        11.1.1 Loan Documents................................................41

        11.1.2 Approvals.....................................................41

        11.1.3 Organizational Documents......................................41

        11.1.4 Evidence of Corporate Action..................................41

        11.1.5 Evidence of Insurance.........................................41

        11.1.6 Appointment of Agent for Service..............................41

        11.1.7 No Material Change............................................42

        11.1.8 Fees and Expenses.............................................42

        11.1.9 Bank Equity Interest Purchase Obligation......................42

        11.1.10 Opinion of Counsel...........................................42

        11.1.11 Further Assurances...........................................42

    11.2 Conditions to Advances and to Issuance of Letters of Credit.........42

        11.2.1 Cancellation of Existing Credit Agreement.....................42

        11.2.2 Default.......................................................42

        11.2.3 Representations and Warranties................................42


                                      xiii

ARTICLE 12. AFFIRMATIVE COVENANTS............................................43

    12.1 Books and Records...................................................43

    12.2 Reports and Notices.................................................43

        12.2.1 Annual Financial Statements...................................43

        12.2.2 Quarterly Financial Statements................................43

        12.2.3 Notice of Default.............................................44

        12.2.4 ERISA Reports.................................................44

        12.2.5 Notice of Litigation..........................................44

        12.2.6 Notice of Material Adverse Effect.............................44

        12.2.7 Notice of Environmental Proceedings...........................44

        12.2.8 Regulatory and Other Notices..................................44

        12.2.9 Adverse Action Regarding Required Licenses....................45

        12.2.10 Budget.......................................................45

        12.2.11 Additional Information.......................................45

    12.3 Maintenance of Existence and Qualification..........................45

    12.4 Compliance with Legal Requirements and Agreements...................45

    12.5 Compliance with Environmental Laws..................................45

    12.6 Taxes...............................................................46

    12.7 Insurance...........................................................46

    12.8 Maintenance of Properties...........................................46

    12.9 Payment of Liabilities..............................................46

    12.10 Inspection.........................................................47

    12.11 Required Licenses; Permits; Intellectual Property; Etc.............47

    12.12 ERISA..............................................................47

    12.13 Maintenance of Commodity Position..................................47


                                      xiv

    12.14 Financial Covenants................................................47

        12.14.1 Working Capital..............................................47

        12.14.2 Consolidated Funded Debt to Consolidated Cash Flow...........47

        12.14.3 Adjusted Consolidated Funded Debt to Consolidated
                Members' and Patrons' Equity.................................48

    12.15 Embargoed Person...................................................48

    12.16 Anti-Money Laundering..............................................48

ARTICLE 13. NEGATIVE COVENANTS...............................................48

    13.1 Borrowing...........................................................48

    13.2 No Other Businesses.................................................49

    13.3 Liens...............................................................49

    13.4 Sale of Assets......................................................51

    13.5 Liabilities of Others...............................................51

    13.6 Loans...............................................................51

    13.7 Merger; Acquisitions; Business Form; Etc............................51

    13.8 Investments.........................................................52

    13.9 Transactions With Related Parties...................................53

    13.10 Patronage Refunds, etc.............................................53

    13.11 Change in Fiscal Year..............................................53

    13.12 ERISA..............................................................54

    13.13 Anti-Terrorism Law.................................................54

ARTICLE 14. INDEMNIFICATION..................................................54

    14.1 General; Stamp Taxes; Intangibles Tax...............................54

    14.2 Indemnification Relating to Hazardous Substances....................55

ARTICLE 15. EVENTS OF DEFAULT; RIGHTS AND REMEDIES...........................56


                                       xv

    15.1 Events of Default...................................................56

    15.2 No Advance..........................................................57

    15.3 Rights and Remedies.................................................57

ARTICLE 16. AGENCY AGREEMENT.................................................57

    16.1 Funding of Syndication Interest.....................................57

    16.2 Syndication Parties' Obligations to Remit Funds.....................58

    16.3 Notices to Administrative Agent.....................................58

    16.4 Syndication Party's Failure to Remit Funds..........................58

    16.5 Agency Appointment..................................................59

    16.6 Power and Authority of the Administrative Agent.....................59

        16.6.1 Advice........................................................60

        16.6.2 Documents.....................................................60

        16.6.3 Proceedings...................................................60

        16.6.4 Retain Professionals..........................................60

        16.6.5 Incidental Powers.............................................60

    16.7 Duties of the Administrative Agent..................................60

        16.7.1 Possession of Documents.......................................60

        16.7.2 Distribute Payments...........................................60

        16.7.3 Loan Administration...........................................61

        16.7.4 Determination of Individual Lending Capacity and
               Individual Pro Rata Shares....................................61

        16.7.5 Forwarding of Information.....................................61

    16.8 Action Upon Default.................................................61

        16.8.1 Indemnification as Condition to Action........................62

    16.9 Bid Agent's Appointment, Power, Authority, Duties and
         Resignation or Removal..............................................62


                                      xvi

    16.10 Consent Required for Certain Actions...............................62

        16.10.1 Unanimous....................................................62

        16.10.2 Facility Lenders.............................................62

        16.10.3 Required Lenders.............................................63

        16.10.4 Action Without Vote..........................................63

        16.10.5 Voting Participants..........................................63

    16.11 Distribution of Principal and Interest.............................64

    16.12 Distribution of Certain Amounts....................................64

        16.12.1 Funding Losses...............................................64

        16.12.2 Fees.........................................................64

    16.13 Possession of Loan Documents.......................................64

    16.14 Collateral Application.............................................64

    16.15 Amounts Required to be Returned....................................65

    16.16 Reports and Information to Syndication Parties.....................65

    16.17 Standard of Care...................................................66

    16.18 No Trust Relationship..............................................66

    16.19 Sharing of Costs and Expenses......................................66

    16.20 Syndication Parties' Indemnification of the
          Administrative Agent and Bid Agent.................................67

    16.21 Books and Records..................................................67

    16.22 Administrative Agent Fee...........................................67

    16.23 The Administrative Agent's Resignation or Removal..................67

    16.24 Representations and Warranties of All Parties......................68

    16.25 Representations and Warranties of CoBank...........................68

    16.26 Syndication Parties' Independent Credit Analysis...................68


                                      xvii

    16.27 No Joint Venture or Partnership....................................69

    16.28 Purchase for Own Account; Restrictions on
          Transfer; Participations...........................................69

    16.29 Certain Participants' Voting Rights................................70

    16.30 Method of Making Payments..........................................70

    16.31 Events of Syndication Default/Remedies.............................70

        16.31.1 Syndication Party Default....................................70

        16.31.2 Remedies.....................................................71

    16.32 Withholding Taxes..................................................71

    16.33 Replacement of Holdout Lender......................................72

    16.34 Amendments Concerning Agency Function..............................72

    16.35 Further Assurances.................................................72

ARTICLE 17. MISCELLANEOUS....................................................72

    17.1 Costs and Expenses..................................................72

    17.2 Service of Process and Consent to Jurisdiction......................73

    17.3 Jury Waiver.........................................................73

    17.4 Notices.............................................................73

        17.4.1 Borrower......................................................74

        17.4.2 Administrative Agent..........................................74

        17.4.3 Bid Agent.....................................................74

        17.4.4 Syndication Parties...........................................74

    17.5 Liability of Administrative Agent and Bid Agent.....................74

    17.6 Successors and Assigns..............................................75

    17.7 Severability........................................................75

    17.8 Entire Agreement....................................................75

    17.9 Applicable Law......................................................75


                                     xviii

    17.10 Captions...........................................................75

    17.11 Complete Agreement; Amendments.....................................75

    17.12 Additional Costs of Maintaining Loan...............................75

    17.13 Capital Requirements...............................................76

    17.14 Replacement Notes..................................................77

    17.15 Patronage Payments.................................................77

    17.16 Direct Website Communications; Electronic Mail
          Communications.....................................................77

        17.16.1 Delivery.....................................................77

        17.16.2 Posting......................................................78

        17.16.3 Additional Communications....................................78

        17.16.4 Disclaimer...................................................78

        17.16.5 Termination..................................................79

    17.17 Mutual Release.....................................................79

    17.18 Liberal Construction...............................................79

    17.19 Counterparts.......................................................79

    17.20 Confidentiality....................................................79

xix

EXHIBITS

Exhibit 1.43      Compliance Certificate

Exhibit 1.70      Existing Letters of Credit

Exhibit 1.146     List of Restricted Subsidiaries

Exhibit 1.148     List of Subsidiaries

Exhibit 2.3       364-Day Borrowing Notice

Exhibit 2.4       364-Day Facility Note Form

Exhibit 3.3       3-Year Borrowing Notice

Exhibit 3.4       3-Year Facility Note Form

Exhibit 4.3       Bid Request Form (364-Day Facility)
                  Bid Request Form (3-Year Facility)

Exhibit 4.4       Bid Form (364-Day Facility)
                  Bid Form (3-Year Facility)

Exhibit 4.5       Bid Selection Notice (364-Day Facility)
                  Bid Selection Notice (3-Year Facility)

Exhibit 6.7       Special Interest Rates

Exhibit 10.3      Litigation

Exhibit 10.8      Payment of Taxes

Exhibit 10.10     Employee Benefit Plans

Exhibit 10.11     Equity Investments

Exhibit 10.14     Environmental Compliance

Exhibit 10.23     Labor Matters and Agreements

Exhibit 13.1      Existing Indebtedness

Exhibit 13.8(f)   Existing Investments (excluding Restricted Subsidiaries)

Exhibit 13.8(i)   Investment in NCRA

Exhibit 13.8(j)   Investment in Ventura Foods, LLC

Exhibit 16.28     Syndication Acquisition Agreement

Exhibit 16.30     Wire Instructions

Schedule 1        Syndication Parties and Individual Commitments

Schedule 2        Applicable Margins; Facility Fee Factors

xxi

EXHIBIT 99.1

CAUTIONARY STATEMENT

Cenex Harvest States Cooperatives (the “Company”, “we”, “our”, “us”) and its representatives and agents may from time to time make written or oral “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995 (the Act). Words and phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” and similar expressions identify forward-looking statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made.

The Company’s forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. This Cautionary Statement is for the purpose of qualifying for the “safe harbor” provisions of the Act and is intended to be a readily available written document that contains factors which could cause results to differ materially from those projected in the forward-looking statements. The following matters, among others, may have a material adverse effect on the business, financial condition, liquidity, results of operations or prospects, financial or otherwise, of the Company. Reference to this Cautionary Statement in the context of a forward-looking statement shall be deemed to be a statement that any one or more of the following factors may cause actual results to differ materially from those which might be projected, forecasted, estimated or budgeted by the Company in the forward-looking statement or statements:

The following factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any forward-looking statement. The foregoing review of factors pursuant to the Act should not be construed as exhaustive or as an admission regarding the adequacy of disclosures made by the Company prior to the effective date of the Act.

The Company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances.

Our revenues and operating results could be adversely affected by changes in commodity prices. Our revenues and earnings are affected by market prices for commodities such as crude oil, natural gas, grain, oilseeds, and flour. Commodity prices generally are affected by a wide range of factors beyond our control, including the weather, disease, insect damage, drought, the availability and adequacy of supply, government regulation and policies, and general political and economic conditions. Increases in market prices for commodities that we purchase without a corresponding increase in the prices of our products or our sales volume or a decrease in our other operating expenses could reduce our revenues and net income. We are also exposed to fluctuating commodity prices as the result of our inventories of commodities, typically grain and crude oil, and purchase and sale contracts at fixed or partially fixed prices. At any time, our inventory levels and unfulfilled fixed or partially fixed price contract obligations may be substantial.

Our operating results could be adversely affected if our members were to do business with others rather than with us. We do not have an exclusive relationship with our members and our members are not obligated to supply us with their products or purchase products from us. Our members often have a variety of distribution outlets and product sources available to them. If our members were to sell their products to other purchasers or purchase products from other sellers, our revenues would decline and our results of operations could be adversely affected.

We participate in highly competitive business markets in which we may not be able to continue to compete successfully. We operate in several highly competitive business segments. Competitive factors include price, service level, proximity to markets, product quality and marketing. In some of our business segments, such as Energy, we compete with companies that are larger, better known and have greater marketing, financial, personnel and other resources. Our competitors may succeed in developing new or enhanced products that are better than ours, and may be more successful in marketing and selling their products than we are with ours. As a result, we may not be able to continue to compete successfully with our competitors.

Changes in federal income tax laws or in our tax status could increase our tax liability and reduce our net income. Current federal income tax laws, regulations and interpretations regarding the taxation

of cooperatives, which allow us to exclude income generated through business with or for a member (patronage income) from our taxable income, could be changed. If this occurred, or if in the future we were not eligible to be taxed as a cooperative, our tax liability would significantly increase and our net income significantly decrease.

We incur significant costs in complying with applicable laws and regulations. Any failure to make the capital investments necessary to comply with these laws and regulations could expose us to financial liability. We are subject to numerous federal, state and local provisions regulating our business and operations. We incur and expect to incur significant capital and operating expenses to comply with these laws and regulations, but may be unable to pass on those expenses to customers without experiencing volume and margin losses. For example, in the next three years, we anticipate spending approximately $324 million at NCRA’s McPherson, Kansas refinery and $87 million at our Laurel, Montana refinery on upgrading the facilities, largely to comply with regulations requiring the reduction of sulfur levels in refined petroleum products, of which $2.1 million has been spent at the Laurel refinery and $25.6 million has been spent by NCRA at the McPherson refinery as of May 31, 2003.

We establish reserves for the future cost of meeting known compliance obligations, such as remediation of identified environmental issues. However, these reserves may prove inadequate to meet our actual liability. Moreover, amended, new or more stringent requirements, stricter interpretations of existing requirements or the future discovery of currently unknown compliance issues may require us to make material expenditures or subject us to liabilities that we currently do not anticipate.

Our failure to comply with applicable laws and regulations could subject us to administrative penalties and injunctive relief, civil remedies including fines and injunctions, and recalls of our products. We cannot predict what impact, if any, future laws or regulations may have on our potential business and operations.

Environmental liabilities could adversely affect our results and financial condition. Many of our current and former facilities have been in operation for many years and, over that time, we and other operators of those facilities have generated, used, stored and disposed of substances or wastes that are or might be considered hazardous under applicable environmental laws, including chemicals and fuels stored in underground and above-ground tanks. Any past or future actions in violation of those environmental laws could subject us to administrative penalties, fines and injunctions. Moreover, future or unknown past releases of hazardous substances could subject us to private lawsuits claiming damages and to adverse publicity.

Actual or perceived quality, safety or health risks associated with our products could subject us to liability and damage our business and reputation. If any of our food products became adulterated or misbranded, we would need to recall those items and could experience product liability claims if consumers were injured as a result. A widespread product recall or a significant product liability judgment could cause our products to be unavailable for a period of time or a loss of consumer confidence in our products. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. In addition, general public perceptions regarding the quality, safety or health risks associated with particular food products, such as the concern in some quarters regarding genetically modified crops, could reduce demand and prices for some of the products associated with our businesses. To the extent that consumer preferences evolve away from products that our members or we produce for health or other reasons, such as the growing demand for organic food products, and we are unable to develop products that satisfy new consumer preferences, there will be a decreased demand for our products.

Our operations are subject to business interruptions and casualty losses; we do not insure against all potential losses and could be seriously harmed by unexpected liabilities. Our operations are subject to business interruptions due to unanticipated events such as explosions, fires, pipeline interruptions, transportation delays, equipment failures, crude oil or refined product spills, inclement weather or labor disputes. For example:

•	Our oil refineries and other facilities are potential targets for terrorist attacks that could halt or discontinue production.
•	Our inability to negotiate acceptable contracts with unionized workers in our operations could result in strikes or work stoppages.
•	The significant inventories that we carry could be damaged or destroyed by catastrophic events, extreme weather conditions or contamination.

We maintain insurance against many, but not all, potential losses or liabilities arising from these operating hazards, but uninsured losses or losses above our coverage limits are possible. Uninsured losses and liabilities arising from operating hazards could have a material adverse effect on our financial position or results of operations.

Our cooperative structure limits our ability to access equity capital. As a cooperative, we may not sell common equity in our company. In addition, existing laws and our articles of incorporation and bylaws contain limitations on dividends of 8% of any preferred stock that we may issue. These limitations restrict our ability to raise equity capital and may adversely affect our ability to compete with enterprises that do not face similar restrictions.

Consolidation among the producers of products we purchase and customers for products we sell could adversely affect our revenues and operating results. Consolidation has occurred among the producers of products we purchase, including crude oil and grain. Consolidation could increase the price of these products and allow suppliers to negotiate pricing and other contract terms that are less favorable to us. Consolidation also may increase the competition among consumers of these products to enter into supply relationships with a smaller number of producers.

Consolidation among purchasers of our products and in wholesale and retail distribution channels has resulted in a smaller customer base for our products and intensified the competition for these customers. For example, ongoing consolidation among distributors and brokers of food products and food retailers has altered the buying patterns of these businesses, as they have increasingly elected to work with product suppliers who can meet their needs nationwide rather than just regionally or locally. If these distributors, brokers, and retailers elect not to purchase our products, our sales volumes, revenues, and profitability could be significantly reduced.

Fluctuations in prices for crude oil and refined fuel products may adversely affect our earnings. Prices for crude oil and for gasoline, diesel fuel, and other refined petroleum products fluctuate widely. The profitability of our energy operations depends largely on the margin between the cost of crude oil that we refine and the selling prices that we obtain for our refined products. Factors influencing these prices, many of which are beyond our control, include:

•	levels of worldwide and domestic supplies;
•	capacities of domestic and foreign refineries;
•	the ability of the members of OPEC to agree to and maintain oil price and production controls, and the price and level of foreign imports generally;
•	political instability or armed conflict in oil-producing regions;
•	the level of consumer demand;
•	the price and availability of alternative fuels;
•	the availability of pipeline capacity; and

•	domestic and foreign governmental regulations and taxes.

The long-term effects of these and other conditions on the prices of crude oil and refined petroleum products are uncertain and ever-changing. Accordingly, we expect our margins on and the profitability of our energy business to fluctuate, possibly significantly, over time.

If our customers chose alternatives to our refined petroleum products our revenues and profits may decline. Numerous alternative energy sources currently are being developed that could serve as alternatives to our gasoline, diesel fuel and other refined petroleum products. If any of these alternative products become more economically viable or preferable to our products for environmental or other reasons, demand for our energy products would decline. Demand for our gasoline, diesel fuel and other refined petroleum products also could be adversely affected by increased fuel efficiencies.

Our agronomy business is depressed and could continue to underperform in the future. Demand for agronomy products in general has been adversely affected in recent years by drought and poor weather conditions, depressed grain prices, idle acreage and development of insect and disease-resistant crops. These factors could cause Agriliance, LLC, an agronomy marketing and distribution venture in which we own a minority interest, to be unable to operate at profitable margins. In addition, these and other factors, including fluctuations in the price of natural gas and other raw materials, an increase in recent years in domestic and foreign production of fertilizer and intense competition within the industry, in particular from lower-cost foreign producers, have created particular pressure on producers of fertilizers. As a result, CF Industries, Inc. a fertilizer manufacturer in which we hold a minority cooperative interest, has suffered significant losses in recent years as it has incurred increased prices for raw materials but has been unable to pass those increased costs on to its customers.

Technological improvements in agriculture could decrease the demand for our agronomy products. Improved technological advances in agriculture could decrease the demand for crop nutrients, and other crop input products and services. Genetically engineered seeds that resist disease and insects or meet certain nutritional requirements could affect the demand for crop nutrients and crop protection products, as well as the demand for fuel to operate application equipment.

We operate some of our business through joint ventures in which our rights to control business decisions are limited. Several parts of our business, including in particular our agronomy business segment and portions of our grain marketing, wheat milling and foods businesses, are operated through joint ventures with unaffiliated third parties. Operating a business through a joint venture means that we have less control over business decisions than we have in our wholly owned businesses. In particular, we generally cannot act on major business initiatives in our joint ventures without the consent of the other party or parties in that venture.

EXHIBIT 99.2

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Cenex Harvest States Cooperatives (the “Company”), on Form 10-Q for the period ended May 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John D. Johnson, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ John D. Johnson
John D. Johnson
President and Chief Executive Officer
July 2, 2003

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Cenex Harvest States Cooperatives and will be retained by Cenex Harvest States Cooperatives and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 99.3

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Cenex Harvest States Cooperatives (the “Company”), on Form 10-Q for the period ended May 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Schmitz, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ John Schmitz
John Schmitz
Executive Vice President and
Chief Financial Officer
July 2, 2003