CENEX HARVEST STATES COOPERATIVES
EXHIBIT 10.2 AGREEMENT OF DISSOLUTION
<DOCUMENT>
<TYPE>EX-10
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<FILENAME>cenex010535_ex10-2.txt
<DESCRIPTION>EXHIBIT 10.2 AGREEMENT OF DISSOLUTION
<TEXT>

                                                                    Exhibit 10.2


                            AGREEMENT OF DISSOLUTION

          This AGREEMENT OF DISSOLUTION (this "Agreement") made and entered into
as of 11:59 p.m. on the 31st day of December, 2000, by and among NATIONAL
COOPERATIVE REFINERY ASSOCIATION, a Kansas cooperative marketing association
("NCRA"); FARMLAND INDUSTRIES, INC., a Kansas cooperative corporation
("Farmland"); and COOPERATIVE REFINING, LLC, a Delaware limited liability
company (the "Company"). NCRA, Farmland and the Company also are referred to
herein collectively as the "Parties" and individually as a "Party."

          WHEREAS, NCRA is the owner of a refinery and related assets located at
McPherson, Kansas (the "NCRA Refinery"); and Farmland is the owner of a refinery
and related assets located at Coffeyville, Kansas (the "Coffeyville Refinery");

          WHEREAS, in 1999, NCRA and Farmland established the Company for the
purpose of operating the above-mentioned assets; and, as of September 1, 1999,
NCRA and Farmland entered into that certain Limited Liability Company Agreement
(the "LLC Agreement") relating to the Company;

          WHEREAS, the Parties, on September 1, 1999, entered into that certain
Refinery Operating and Product Output Purchase Agreement (the "Refinery
Agreement") to provide for the operation by the Company of the above-mentioned
assets and for certain related matters and that certain Personnel Lease
Agreement (the "Personnel Lease Agreement");

          WHEREAS, in accordance with the LLC Agreement, the managers of the
Company have agreed to dissolve and liquidate the Company effective at 11:59
p.m. on December 31, 2000; and

          WHEREAS, the Parties wish to enter into this Agreement to provide for
the timely and orderly dissolution of the Company.

          NOW, THEREFORE, in consideration of the foregoing and the respective
covenants and agreements of the Parties contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto hereby acree as follows:

                                   ARTICLE I:
                                   DEFINITIONS

          Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for the purposes of this Agreement, have the meanings
herein specified.

          "Act" means the Delaware Limited Liability Company Act, as amended
from time to time.

          "Capital Account" shall have the meaning assigned to such term in the
LLC Agreement.

          "Farmland Assets" shall have the meaning assigned to such term in the
Refinery Agreement plus all additional equipment and other assets utilized by or
located at Farmland's refinery in Coffeyville, Kansas.

          "Farmland Contracts" shall have the meaning assigned to such term in
the Refinery Agreement.

          "Manager" shall have the meaning assigned to such term in the LLC
Agreement.

          "Membership Interest" shall have the meaning assigned to such term in
the LLC Agreement.

          "Members" shall have the meaning assigned to such term in the LLC
Agreement.


<PAGE>


          "NCRA Assets" shall have the meaning assigned to such term in the
Refinery Agreement plus all additional equipment and other assets utilized by or
located at NCRA's refinery in McPherson, Kansas.

          "NCRA Contracts" shall have the meaning assigned to such term in the
Refinery Agreement.

          "Other Dissolution Agreements" collectively means the Crude Oil
Purchase Agreement between NCRA and Farmland attached hereto as Exhibit A, the
Accounting Services Agreement between NCRA and Farmland attached hereto as
Exhibit B, the Employee Lease Agreement between NCRA and Farmland to be attached
hereto as Exhibit C, and the Equipment Lease Agreement between NCRA and Farmland
to be attached hereto as Exhibit D.

          "Unit" shall have the meaning assigned to such term in the LLC
Agreement.

                                   ARTICLE II:
                     DISSOLUTION AND LIQUIDATION OF COMPANY

          SECTION 2.1. Agreement of Dissolution. Pursuant to Section 14.1(b) of
the LLC Agreement and ss. 18-801(3) of the Act, the Parties agree that the
Company shall be dissolved effective as of 11:59 p.m. on December 31, 2000 (the
"Effective Time") in accordance with the provisions of this Agreement and the
LLC Agreement.

          SECTION 2.2. Liquidation and Winding Up. The Company shall be
liquidated and the Managers shall wind up the affairs of the Company. The
Managers shall promptly proceed to the liquidation of the Company and, in
settling the accounts of the Company, the assets and the property of the Company
shall be distributed, subject to Section 14.4 of the LLC Agreement, in the
following order of priority:

          (a) To the payment of all debts and liabilities of the Company in the
order of priority as provided by law (other than outstanding loans from a
Member);

          (b) To the establishment of any reserves deemed necessary by the
Managers for any contingent liabilities or obligations of the Company;

          (c) To the repayment of any outstanding loans from a Member to the
Company;

          (d) To the Members in proportion to and to the extent of their
respective Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods; and

          (e) The balance, if any, to the Members pro rata in accordance with
the number of Units owned by each Member.

Notwithstanding the foregoing, however, (1) no payment, repayment or
distribution of any kind (collectively, a "Liquidating Distribution") shall be
made to Farmland, NCRA, any member of NCRA, or any affiliate thereof
(collectively, the "Company Affiliates") unless such Liquidating Distribution to
the Company Affiliate is approved by both Farmland and NCRA, which approval
shall not be unreasonably withheld or delayed, and (2) all Liquidating
Distributions to the Company Affiliates shall be made subject to the audit
described in Section 2.11 of this Agreement. The Parties shall cooperate to make
interim Liquidating Distributions to the Members as promptly as possible so as
to minimize the amount of cash held by the Company during the liquidation and
winding up of the Company. The Parties anticipate that the first such interim
Liquidating Distribution will occur on or before February 2, 2001.

          SECTION 2.3. Division of Assets.

         (a) Farmland Assets and NCRA Assets. Effective as of the Effective
Time, the Farmland Assets shall be returned back to Farmland's exclusive control
and the NCRA Assets shall be returned back to NCRA's exclusive control.

         (b) Inventories. As of the Effective Time, the Company has inventories
of crude oil, other raw materials, work-in-process and finished products
(collectively, the "Inventory"). The Parties acknowledge and agree


<PAGE>


Farmland's Inventory requirements to operate the Coffeyville Refinery are
greater than NCRA's Inventory requirements to operate the NCRA Refinery.
Therefore, effective as of the Effective Time,

          (1)       The levels of Inventory contributed by NCRA and Farmland to
                    the Company shall be re-distributed back to NCRA and
                    Farmland, and then

          (2)       Any excess levels of Inventory shall be sold by the Company
                    to NCRA and Farmland based upon the location of the
                    Inventory and the operational need for the Inventory, with
                    the cash paid by NCRA and Farmland being placed into the
                    cash balance of the Company for distribution in accordance
                    with Section 2.2 of this Agreement.

         SCHEDULE 2.3 attached hereto and incorporated herein sets forth
spreadsheets that generally depict the aforementioned distribution and sale of
Inventory.

          SECTION 2.4. Assignment of Contracts from Company to Members.
Effective as of the Effective Time, the Company hereby assigns and conveys to
NCRA the NCRA Contracts, including without limitation the operating permits,
licenses, contracts and leases listed on Schedule 2.4(a) attached hereto.
Effective as of the Effective Time, the Company hereby assigns and conveys to
Farmland the Farmland Contracts, including without limitation the operating
permits, licenses, contracts and leases listed on Schedule 2.4(b) attached
hereto. In consideration of such assignment, NRCA and Farmland hereby assumes
and agrees to be bound by and to perform, observe and comply with all of the
terms, covenants, conditions, undertakings and other provisions of each such
contract assigned them from and after the Effective Time, in the same manner and
with the same force and effect as of NCRA or Farmland, as the case may be, had
originally executed such contracts. In the event an operating permit, license,
lease or other agreement of the Company is not listed on either Schedule 2.4(a)
or 2.4(b), then such operating permit, license, lease or agreement shall be
assigned from the Company to the Member whose refinery utilized such operating
permit, license, lease or agreement. The Parties hereto shall use their best
efforts to obtain any necessary consent of a third party to the assignment of
any of the operating permits, licenses, leases or other agreements hereunder.

          SECTION 2.5. Termination of Refinery Agreement. As provided in Section
22.3 of the Refinery Agreement, the Refinery Agreement shall terminate as of the
Effective Time.

          SECTION 2.6. Interconnect Payments to Members. The Parties hereto
shall consummate the asset transfers and payment obligations set forth Schedule
2.6 attached hereto and incorporated herein by this reference relating the
purchase and sale of certain products between the Coffeyville Refinery and
Farmland's fertilizer plant located in Coffeyville, Kansas (the "Fertilizer
Plant").

          SECTION 2.7. Allocation of Liabilities. NCRA shall be solely
responsible for all past, present and future losses, claims, damages and
liabilities of any kind, including but not limited to environmental liability
arising out of or imposed by all federal, state or local environmental laws,
administrative regulations or ordinances, relating to the NCRA Assets during the
period the NCRA Assets were operated by CRLLC. Farmland shall be solely
responsible for all past, present and future losses, claims, damages and
liabilities of any kind, including but not limited to environmental liability
arising out of or imposed by all federal, state or local environmental laws,
administrative regulations or ordinances, relating to the Farmland Assets during
the period the Farmland Assets were operated by CRLLC.

          SECTION 2.8. Return of Confidential Information. Prior to the Closing
Date, NCRA and Farmland shall each redeliver to the other all documents,
agreements, financial data, notes, analyses, compilations, studies and other
materials ("Evaluation Materials") that each received from the other, or their
member owners, in connection with the formation of the Company and/or the
proposed merger of Farmland and Cenex Harvest States Cooperatives. Each Party
shall destroy or caused to be destroyed all notes, discs, tapes and other
writings and materials prepared by or on behalf of it or its representatives
based on the Evaluation Materials and shall at the request of the other Party
deliver an affidavit executed by one of its responsible officers expressly
affirming such destruction.

          SECTION 2.9. Termination of Personnel Lease Agreement. In accordance
with Section 7 of the Personnel Lease Agreement, the Personnel Lease Agreement
shall terminate as of the Effective Time.


<PAGE>


          SECTION 2.10. Loans to Members. To the extent the Company has made any
loans to NCRA (the "NCRA Loans") or any loans to any member of NCRA or any
affiliate of NCRA or any member of NCRA (the "NCRA Affiliate Loans"), the NCRA
Loans and the NCRA Affiliate Loans shall be immediately due and payable, and
NCRA shall immediately (a) repay the NCRA Loans and (b) exercise commercially
reasonable efforts to cause to the prompt repayment of the NCRA Affiliate Loans.

          SECTION 2.11. Further Assurances. Following the Effective Time, the
Parties shall execute, acknowledge, deliver and file, or cause to be executed,
acknowledged, delivered and filed, such additional instruments, documents,
conveyances or assurances, and take, or cause to be taken, such other actions,
including without limitation all reasonable efforts to obtain such third party
consents, as shall be necessary or may be reasonably requested by any other
Party, to confirm, assure or otherwise fully effect the purposes, terms and
conditions of this Agreement; provided, however, that the Company shall not
execute, acknowledge, deliver, file or otherwise take any action contemplated by
this Section without obtaining the prior approval of both NCRA and Farmland,
which approval shall not be unreasonable withheld or delayed. To this end, the
Parties acknowledge and agree that execution and delivery of the Other
Dissolution Agreements, in such form and content as shall be mutually acceptable
to both NCRA and Farmland, is a condition precedent to this Agreement and, thus,
in the event any Other Dissolution Agreement is not executed and delivered by
both NCRA and Farmland, then this Agreement and any Other Dissolution Agreement
so executed and delivered shall be void AB INITIO and shall have no force or
effect whatsoever.

          SECTION 2.12. Audit. The Parties acknowledge that the employees of
NCRA generally have been providing the accounting-related services to the
Company and will perform similar services in connection with the dissolution and
liquidation of the Company. In connection with the dissolution and liquidation
of the Company, Farmland shall have the right, until a date occurring six (6)
months after the final Liquidating Distribution is made and the final financial
statements of the Company have been prepared and distributed to the Members,
upon at least five (5) business days prior notice to NCRA during business hours,
to inspect and audit, or cause to be inspected and audited, the business
records, bookkeeping and accounting records relating thereto. The Company and
NCRA shall fully cooperate with representatives of Farmland and its
representatives and advisors in connection with any such inspection or audit.
All costs incurred by Farmland in connection with the audit or inspection shall
be borne by Farmland, and all costs incurred by the Company and NCRA in
connection with the audit or inspection shall be borne by NCRA; provided,
however, that in the event a material discrepancy is found in connection with
the audit, then the Party causing the material discrepancy shall reimburse the
other Party all of that party's reasonable out-of-pocket costs incurred in
connection with the audit or inspection. For purposes of this Section, "material
discrepancy" shall mean a discrepancy greater than two hundred fifty thousand
dollars ($250,000.00).

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

          SECTION 3.1. Representations and Warranties of the Members. Each of
NCRA and Farmland (collectively, the "Members" and individually, a "Member")
represents and warrants as of the date of this Agreement to the other Member and
the Company as follows:

          (a) Such Member has the requisite power and authority (whether
corporate or otherwise) and legal capacity to enter into, and to carry out its
obligations under, this Agreement.

          (b) The execution and delivery by such Member of this Agreement and
the consummation by such Member of the transactions contemplated hereby have
been duly authorized prior to the date of this Agreement by all necessary action
on the part of such Member.

          (c) This Agreement has been duly executed and delivered by such Member
and constitutes a valid and binding obligation enforceable against such Member
in accordance with its terms.

          (d) Such Member is not subject to, or obligated under, any provision
of (i) any agreement, arrangement or understanding, (ii) any license, franchise
or permit or (iii) any law, regulation, order, judgment or decree that would be
breached or violated, or in respect of which a right of termination or
acceleration or any encumbrance on any of such Member's assets would be created,
by such Member's execution, delivery and


<PAGE>


performance of this Agreement or the consummation of the transactions
contemplated hereby, except for such agreements as to which a Member has
previously obtained the consent of the other party or parties thereto.

          (e) Other than in connection with the assignment or transfer of
environmental-related permits or licenses or other permits, licenses, contracts
or leases, no authorization, consent or approval of, waiver or exemption by, or
filing or registration with, any public body, court, third party or authority is
necessary on such Member's part, which has not previously been obtained by such
Member for the consummation of the transactions contemplated by this Agreement.

          (f) Such Member is not presently engaged in, nor to its knowledge,
threatened with or aware of, any situation which could subject it to any
litigation (including appeals of lower courts decisions), arbitration claim or
other legal proceedings or governmental or any other investigation relating to
its affairs or any of its respective properties, assets, or shareholders, which
questions the validity or enforceability of this Agreement, the LLC Agreement,
the Refinery Agreement, or any related agreements, or which could prevent,
hinder or delay the consummation of the transactions contemplated by this
Agreement.

                                   ARTICLE IV
                                   INDEMNITIES

          SECTION 4.1. Indemnification. Each Party shall indemnify, defend and
hold each other Party, and its respective officers, directors, managers, and
employees ("Indemnitee") harmless from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
without limitation, attorney's fees and expenses) imposed upon, incurred by or
asserted against the Indemnitee that are caused by, are attributable to, result
from or arise out of (i) any liability allocated to the indemnifying Party
pursuant to Section 2.7 of this Agreement, (ii) the indemnifying Party's breach
of any provision of this Agreement, or (iii) the indemnifying Party's breach of
any Other Dissolution Agreement.

          SECTION 4.2. Indemnification Procedures; Survival.

          (a) Promptly after receipt by an Indemnitee of notice of the
commencement of any action that may result in a claim for indemnification
pursuant to Section 4.1, the Indemnitee shall notify the indemnifying Party in
writing within thirty (30) days thereafter; PROVIDED, HOWEVER, that any omission
so to notify the indemnifying Party will not relieve it of any liability for
indemnification hereunder as to the particular item for which indemnification
may then be sought (except to the extent that the failure to give notice shall
have been materially prejudicial to the indemnifying Party) nor from any other
liability that it may have to any Indemnitee. The indemnifying Party shall have
the right to assume sole and exclusive control of the defense of any claim for
indemnification pursuant to Section 4.1, including the choice and direction of
any legal counsel.

          (b) An Indemnitee shall have the right to employ separate counsel in
any action as to which indemnification may be sought under any provision of this
Agreement and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee unless (i) the
indemnifying Party has agreed in writing to pay such fees and expenses, (ii) the
indemnifying Party has failed to assume the defense thereof and employ counsel
within a reasonable period of time after being given the notice required above,
or (iii) the Indemnitee shall have been advised by its counsel that
representation of such Indemnitee and other Parties by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or not
such representation by the same counsel has been proposed) due to actual or
potential differing interests between them. It is understood, however, that to
the extent more than one Indemnitee is entitled to employ separate counsel at
the indemnifying Party's expense pursuant to clause (iii) above, the
indemnifying Party shall, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys at any time for all such
Indemnitees having actual or potential differing interests with the indemnifying
Party, unless but only to the extent the Indemnitees have actual or potential
differing interests with each other.

         (c) The indemnifying Party shall not be liable for any settlement of
 any such action effected without its written consent, but if settled with such
 written consent, or if there is a final judgment against the Indemnitee in


<PAGE>


any such action, the indemnifying Party agrees to and hold harmless the
Indemnitee to the extent provided above from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment.

          (d) The indemnification obligations set forth in Section 4.1 and this
Section 4.2 shall survive the termination of this Agreement for a period of five
(5) years.

                                    ARTICLE V
                            MISCELLANEOUS PROVISIONS

          SECTION 5.1. Notice. Any notices permitted or required to be given
under this Agreement shall be in writing, and shall be addressed to the Parties
hereto as follows:

         For NCRA:                  National Cooperative Refining Association
                                    1391 Iron Horse Road
                                    P.O. Box 1404
                                    McPherson, Kansas 67460
                                    Attention: President
                                    Fax: (316) 241-9130

         For Farmland:              Farmland Industries, Inc.
                                    3315 North Oak Trafficway
                                    P.O. Box 7305 Dept. 62
                                    Kansas City, Missouri 64116
                                    Attention: General Counsel
                                    Fax: (816) 459-5902

Either Farmland or NCRA may from time to time change its address for service
hereunder on written notice to the other Party. Any notice shall:

          (a) if delivered by hand delivery, be deemed to have been given or
made at the time of delivery as acknowledged by signature of the receiving
Party;

          (b) if sent by telecopy, telex, telecommunication device or other
similar form of communication or by overnight private courier service, be deemed
to have been given or made on the working day following the day on which it was
received; and

          (c) if mailed by certified or registered mail, return receipt
requested, postage prepaid, be deemed to have been given or made, four (4) days
after deposit in the United States Mail.

          SECTION 5.2. Confidentiality. Any information heretofore or hereafter
disclosed or obtained in connection with this Agreement concerning the business,
operations, affairs or financial condition of any Party hereto shall be kept
confidential except as otherwise required by law or legal process or except to
the extent that it (i) is or has been disclosed to any lender or lessor or
governmental official or the respective attorneys, accountants and financial
advisers of any Party hereto, or (ii) is or hereafter becomes lawfully
obtainable from other sources or to the extent that such duty as to
confidentiality is waived in writing by the Party to whom the confidential
information relates, or (iii) was known to the receiving Party as of the time of
its disclosure, or (iv) independently developed by the receiving Party without
reference to the confidential information.

          SECTION 5.3. Dispute Resolution. In the event of any dispute or
controversy arising out of or related to this Agreement, or the breach thereof,
including the interpretation of any provision of this Agreement which cannot be
resolved informally by the Members, or regarding the Company, the ownership of
the Company or the Company's business, the Members shall first make a good faith
effort to promptly resolve such dispute. If the Members are unable to reach
agreement with respect to such discrepancy, then such dispute shall be resolved
by binding arbitration administered by the American Arbitration Association in
accordance with its Commercial Arbitration Rules then in effect, except as such
rules may be modified by this Agreement or by the mutual consent of the


<PAGE>


Members. Any arbitration proceeding conducted hereunder shall alternate
locations between the greater metropolitan areas of Kansas City, Missouri and
Wichita, Kansas, with the first such arbitration proceeding to be conducted at
such location as is specified by the Member requesting the arbitration
proceeding. Any award rendered in the arbitration proceeding shall be final and
binding upon the Members and a judgment thereon may be entered in any court
having competent jurisdiction. Each Member shall bear its own expenses in
connection with the arbitration; provided, however, that the fees and expenses
of the arbitrator and all other expenses of the arbitration shall be borne
equally by the Members. The arbitration proceedings shall be governed by the
laws of the State of Kansas. The arbitrator shall be selected from a list of
five (5) arbitrators provided by the American Arbitration Association. Alternate
strikes shall be made to the list commencing with the Member requesting
arbitration until a single name remains. That individual shall be the arbitrator
for the matter. After the arbitrator has been selected, the Members may obtain
reasonable discovery in advance of the arbitration by way of: (i) exchange of
copies of all documents in the possession, custody or control of a Member and
relevant to the matter in dispute; (ii) written interrogatories for the purpose
of determining the name and address of each witness proposed to be called by a
Member and a brief description of the relevant information each such witness is
expected to provide; and (iii) such further discovery, including dispositions,
as the arbitrator may determine is appropriate after taking into consideration
the nature of the dispute and the amount in controversy. To the extent possible,
the arbitration hearing shall be conducted within sixty (60) days after
selection of the arbitrator, and the arbitrator shall render a decision within
twenty (20) days after the conclusion of the hearing. Post-hearing briefs shall
be permitted. The arbitration award shall be in writing and shall specify the
factual and legal basis for the award.

          SECTION 5.4. Amendments. Unless otherwise provided herein, no changes,
alteration or modifications to this Agreement shall be effective unless in
writing and signed by the respective duly authorized representatives of the
Parties hereto.

          SECTION 5.5. Successors and Assigns. This Agreement shall enure to the
benefit of and be binding upon the legal representatives, permitted assigns and
successors of the Parties hereto.

         SECTION 5.6. Entire Agreement. This Agreement, along with any Exhibits
and/or Schedules attached hereto or incorporated herein and the Other
Dissolution Agreements, constitutes the entire agreement between the Parties
with respect to the dissolution of the Company and supersedes all prior
negotiations and agreements thereto, written or oral.

          SECTION 5.7. Headlines. The headings in this Agreement are for
convenience only and shall not be considered in the interpretation of the
Agreement.

          SECTION 5.8. Industry Practices. This Agreement shall be construed in
accordance with accepted oil industry terminology and practices.

          SECTION 5.9. Severability. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, is held invalid or unenforceable,
the remaining portion of such provision and the remaining provisions shall
remain in full force and effect.

          SECTION 5.10. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Kansas, without reference
to conflict of laws principles of said state.

          IN WITNESS WHEREOF, the Parties have executed and delivered this
Agreement as of the date set forth above.

NATIONAL COOPERATIVE                           FARMLAND INDUSTRIES, INC.
REFINING ASSOCIATION

By:      /s/ James S. Loving                   By:      /s/ Robert B. Terry
         -------------------------                      ------------------------
Name:    James S. Loving                       Name:    Robert B. Terry
         -------------------------                      ------------------------
Title:   President                             Title:   Executive Vice President
         -------------------------                      ------------------------
                                                        Administrative Group and
                                                        General Counsel


<PAGE>


COOPERATIVE REFINING, L.L.C.

By:      /s/James S. Loving
         -------------------------
Name:    James S. Loving
         -------------------------
Title:   President
         -------------------------

<PAGE>


                                  SCHEDULE 2.6

                              INTERCONNECT PAYMENTS

          (1) Oxygen. The Company shall pay to Farmland ninety dollars ($90.00)
per short ton ("ST") of oxygen transferred from the Fertilizer Plant to the
Coffeyville Refinery on or before the Effective Time.

          (2) Nitrogen. The Company shall pay to Farmland twenty-five and
nine-tenths cents ($0.259) per 100 standard cubic feet of nitrogen transferred
from the Fertilizer Plant to the Coffeyville Refinery on or before the Effective
Time.

          (3) Coke. Farmland shall pay to the Company ten dollars ($10.00) per
ton of petroleum coke transferred from the Coffeyville Refinery to the
Fertilizer Plant on or before the Effective Time.

          (4) Instrument Air. The Company shall pay to Farmland one hundred
forty-four thousand dollars ($144,000) for the instrument air transferred from
the Fertilizer Plant to the Coffeyville Refinery from May 1, 2000 to the
Effective Time.

          (5)     Steam.

          (a) Farmland shall pay to the Company the Variable Steam Price (as
hereinafter defined) per one thousand (1,000) pounds of steam transferred from
the Coffeyville Refinery to the Fertilizer Plant on or before the Effective
Time.

          (b) The Company shall pay to Farmland the Variable Steam Price per one
thousand (1,000) pounds of steam transferred from the Fertilizer Plant to the
Coffeyville Refinery on or before the Effective Time, but only for steam so
transferred during periods in which the Coffeyville Refinery was not flaring
excess refinery fuel gas.

          (c)     Variable Steam Price.

                  (1) Flaring. During periods in which the Coffeyville Refinery
          was flaring excess refinery fuel gas, the Variable Steam Price per one
          thousand (1,000) pounds of steam shall equal three and six hundred
          forty-five one thousandths cents ($0.03645).

                  (2) No Flaring. During periods in which the Coffeyville
          Refinery was not flaring excess refinery fuel gas, the Variable Steam
          Price per one thousand (1,000) pounds of steam shall equal the product
          of (a) the Natural Gas Price (as hereinafter defined), multiplied by
          (b) one and two thousand two hundred thirty-six ten-thousandths
          (1.2236).

          (d) Natural Gas Price. The term "Natural Gas Price" shall mean (1) if
the daily volumes of steam transferred are available for the days in a calendar
month in which the refinery was not flaring excess refinery fuel gas
("Non-Flaring Days"), the daily closing price for natural gas for such
Non-Flaring Day measured in dollars per one million standard cubic feet
("$/mmscf"), or (2) if the daily volumes of steam transferred are not available
for Non-Flaring Days in a calendar month, the average of all daily closing
prices for natural gas for such Non-Flaring Days measured in $/mmscf for the
calendar month.


<PAGE>


                                    EXHIBIT A

                          CRUDE OIL PURCHASE AGREEMENT

This Crude Oil Purchase Agreement ("Agreement") is made and entered into as of
the lst day of January, 2001, by and between FARMLAND INDUSTRIES, INC., a Kansas
cooperative corporation ("Farmland"), and NATIONAL COOPERATIVE REFINING
ASSOCIATION, a Kansas cooperative marketing association ("NCRA"). Farmland and
NCRA also are referred to herein collectively as the "Parties" and individually
as a "Party".

                                    RECITALS

A.       NCRA is the owner and operator of a refinery and related assets located
         at McPherson, Kansas (the "NCRA Refinery"), and Farmland is the owner
         and operator of a refinery and related assets located at Coffeyville,
         Kansas (the "Coffeyville Refinery").

B.       In 1999, NCRA and Farmland formed Cooperative Refining, LLC, a Delaware
         limited liability company ("CRLLC") for the purpose of jointly
         operating the NCRA Refinery and the Coffeyville Refinery.

C.       In connection with the agreement of NCRA and Farmland to dissolve CRLLC
         effective December 31, 2000, NCRA and Farmland agreed that after the
         effective date of the dissolution of CRLLC, the purchase of lease crude
         oil from the mid-Kansas counties identified on Exhibit A attached
         hereto and incorporated herein by this reference (such counties being
         referred to collectively as the "Mid-Kansas Counties" and such lease
         crude oil from the Mid-Kansas Counties being referred to collectively
         as the "Crude Oil") shall be made by NCRA for the joint benefit of NCRA
         and Farmland pursuant to the terms and conditions set forth in this
         Agreement.

D.       NCRA hereby agrees to offer to sell and deliver to Farmland, and
         Farmland is hereby given the option, but not the obligation, to
         purchase and accept delivery from NCRA the quantity of the Crude Oil
         acquired directly from time to time by NCRA or by an Affiliate (as
         defined in Section 15.03) of NCRA, and not acquired through a bulk
         purchase from a reseller of Crude Oil, on the terms and conditions set
         forth below.

                                    AGREEMENT

1.       TERM AND TERMINATION

         1.01     This Agreement shall be effective from January 1, 2001, and
                  shall continue until terminated in accordance with this
                  Section.

         1.02     This Agreement may be terminated at the option of a Party in
                  the event of:

               (a)  A material breach of this Agreement by the other Party,
                    except for the failure of Farmland to make a timely payment
                    for the purchase of Crude Oil under Section l.02(g), and
                    such breach has not been cured by such Party within thirty
                    (30) days after receipt of written notice thereof from the
                    non-breaching Party or, in the case of a breach that is not
                    reasonably feasible to effect a cure within said 30-day
                    period, within ninety (90) days after such receipt provided
                    that the breaching Party diligently prosecutes the cure of
                    such breach;

               (b)  The mutual agreement of the Parties;

               (c)  The appointment of a receiver for the other Party or any
                    part of its property, the assignment for the benefit of
                    creditors of the other Party, or the commencement of a
                    proceeding under any bankruptcy, insolvency, reorganization,
                    arrangement or other law relating to the relief of debtors
                    by or against the other Party; provided, however, that if
                    any such appointment or proceeding is initiated without the
                    consent or application of the other Party, such appointment
                    or proceeding shall not constitute a termination event under
                    this Agreement until the same shall have remained


<PAGE>


                    in effect for sixty (60) days;

               (d)  At any time by Farmland;

               (e)  Upon the Other Party's refinery (e.g., in the case of NCRA,
                    the NCRA Refinery, or in the case of Farmland, the
                    Coffeyville Refinery) ceasing to process crude oil other
                    than as a result of (i) Force Majeure or (ii) the temporary
                    shutdown thereof for maintenance, capital improvements or
                    other reasons;

               (f)  After December 31, 2005, upon at least six months' prior
                    notice of either Party;

               (g)  Farmland is one or more days late in making payments to NCRA
                    for the purchase of Crude Oil under this Agreement (other
                    than payments disputed in good faith); unless such failure
                    to make a timely payment is the result of an unintended
                    clerical error or third party error in the transmission of
                    payment. Upon NCRA's notice of such failure to make a timely
                    payment due to an unintended clerical error or third party
                    error, Farmland shall then make payment, together with
                    interest thereon at a rate of interest per annum equal to
                    five percent (5%) above 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, within one (1) business day after receipt
                    of notice thereof from NCRA; or

               (h)  The letter of credit required to be provided to NCRA
                    pursuant to Section 7.03 shall cease to be in full force and
                    effect and Farmland shall not provide NCRA with a
                    replacement letter of credit meeting the requirements set
                    forth in Section 7.03 within thirty (30) days after receipt
                    of written notice from NCRA that the then existing letter of
                    credit has ceased.

         1.03     The Parties acknowledge and agree that in the event this
                  Agreement is terminated, then immediately after such
                  termination NCRA effectively should be placed in a position to
                  continue to acquire sixty-six and twenty-eight one hundredths
                  percent (66.28%) (the "NCRA Share"), and Farmland effectively
                  should be placed in a position to continue to acquire
                  thirty-three and seventy-two one hundredths percent (33.72%)
                  (the "Farmland Share"), of the Crude Oil generally acquired by
                  NCRA and the NCRA Affiliates under this Agreement prior to the
                  termination thereof (the "Intended Termination Result"), but
                  that the Intended Termination Result may prove to be
                  impractical. Therefore, upon any such termination or, if
                  earlier, upon notice of any such termination (the "Trigger
                  Date"), the Parties shall meet promptly, but in no event later
                  than ten (10) business days thereafter, to negotiate in good
                  faith a fair and equitable arrangement to effect the Intended
                  Termination Result effective as of the date of such
                  termination. At any time during such negotiations, however,
                  either Party may elect to cause a "draft" process to occur
                  whereby the division orders and pay lists associated with the
                  Crude Oil accounts (the "Leases") comprising the Crude Oil
                  Acquisition Business (as defined herein) shall be allocated to
                  NCRA and Farmland in proportion to the NCRA Share and the
                  Farmland Share (the "Draft").

          1.04    The Draft, whether initiated by Farmland or NCRA pursuant to
                  Section 1.03, shall occur at the offices of NCRA on such date
                  consisting of a normal business day and at such time during
                  normal business hours as Farmland shall set forth in a notice
                  to NCRA; provided, however, that in no event shall the Draft
                  begin on a date occurring more than one hundred thirty (130)
                  days after the Trigger Date. The Draft shall begin by Farmland
                  first choosing Leases representing a specified daily
                  production of Crude Oil of up to three percent (3%) of the
                  total to be "drafted," followed by NCRA then choosing Leases
                  representing its proportional equivalent of up to said daily
                  production, and so on until all Leases have been chosen and
                  assigned to either Farmland or NCRA, as the case may be,
                  whereupon Farmland shall have been assigned Leases
                  representing a daily production of Crude Oil equal to the
                  Farmland Share of the total daily production of Crude Oil
                  represented by the Leases, and NCRA shall have been assigned
                  Leases representing a daily production of Crude Oil equal to
                  the NCRA Share of the total daily production of Crude Oil
                  represented by all Leases.


<PAGE>


          1.05    Upon completion of the Draft, NCRA shall prepare and send
                  written notices to the appropriate person or persons
                  respecting each Lease assigned to Farmland in the Draft (the
                  "Farmland Leases"), in such form and content as Farmland shall
                  reasonably require, that the applicable Lease has been
                  assigned by NCRA to Farmland and that, effective as of the
                  first day of the month following the Draft Closing Date (as
                  defined herein) (the "Draft Effective Date"), Farmland shall
                  assume all existing agreements of NCRA respecting the Lease
                  and shall purchase the Crude Oil produced in connection with
                  the Lease.

         1.06     The term "Draft Closing Date" shall mean the date on which the
                  Draft Closing (as defined herein) shall occur, which date
                  shall be as set forth in a notice given by Farmland to NCRA;
                  provided, however, that in no event shall the Draft Closing
                  Date occur later than the last day of month occurring six (6)
                  months after the Trigger Date.

         1.07     The term "Draft Closing" shall mean the execution and delivery
                  of the agreements, documents and other instruments to
                  consummate the transactions to occur in connection with the
                  Draft and the termination of this Agreement.

         1.08     For the period beginning upon the Trigger Date and ending upon
                  the commencement of the Draft, Farmland shall be afforded the
                  opportunity to conduct a due diligence review of all lease
                  crude accounts of NCRA in the Mid-Kansas Counties, and NCRA
                  shall cooperate fully with the due diligence review.

         1.09     After the Trigger Date and until the Draft Effective Date,
                  NCRA shall continue to own, operate, manage, preserve and
                  maintain the Crude Oil acquisition business to be operated by
                  NCRA under this Agreement (the "Crude Oil Acquisition
                  Business"), including without limitation the sale of Crude Oil
                  to Farmland in accordance with the terms hereof.

         1.10     After the Trigger Date, Farmland likely will commence various
                  activities intended to enable Farmland to operate a Crude Oil
                  acquisition business (the "Farmland Transition Activities").
                  After the Trigger Date and until the Draft Effective Date,
                  NCRA shall cooperate with Farmland in connection with
                  Farmland's post-termination transition activities, including:

                  (a)      NCRA shall negotiate in good faith with Farmland to
                           sell to Farmland such crude oil gathering assets
                           (excluding pipelines) of NCRA and the NCRA
                           Affiliates, so that when such assets are combined
                           with any assets owned or leased by Farmland but then
                           utilized in the Crude Oil Acquisition Business,
                           Farmland will have approximately thirty-three and
                           seventy-two one hundredths percent (33.72%) of the
                           assets utilized in the Crude Oil Acquisition
                           Business; and

                  (b)      in efforts to afford Farmland a reasonable
                           opportunity to obtain the services of approximately
                           thirty-three and seventy-two one hundredths percent
                           (33.72%) of the employees of NCRA and the NCRA
                           Affiliates that are part of the Crude Oil Acquisition
                           Business, NCRA shall make such employees available to
                           meet with Farmland, at such times and locations as
                           Farmland may reasonably request, to discuss future
                           employment with Farmland

         1.11     At the Draft Closing, the Parties shall execute and deliver to
                  each other the following:

                  (a)      (i) in the event that NCRA terminates this Agreement
                           pursuant to Section 1.02(f) or Farmland terminates
                           this Agreement pursuant to Section 1.02(a), a
                           Non-Compete Agreement, in such form and content as
                           Farmland shall reasonably require, that provides that
                           NCRA and the NCRA Affiliates shall not, directly or
                           indirectly, purchase or solicit the purchase of crude
                           oil from the Farmland Leases for a period of time
                           ending one (1) year after the Draft Effective Date,
                           or (ii) in the event this Agreement is terminated
                           otherwise, a Non-Compete Agreement, in such form and
                           content as each Party shall reasonably require, that
                           provides that the other Party and its Affiliates
                           shall not, directly


<PAGE>


                           or indirectly, purchase or solicit the purchase of
                           crude oil from the Farmland Leases or the NCRA
                           Leases, as the case may be, for a period of time
                           ending one (1) year after the Draft Effective Date.

                  (b)      an Assignment and Bill of Sale from NCRA to Farmland,
                           in such form and content as Farmland shall reasonably
                           require, covering the Purchased Assets and the
                           Farmland Leases.

                  (c)      such other agreements, documents and other
                           instruments as Farmland may reasonably request to
                           effect the assignment of the Farmland Leases to
                           Farmland, the purchase of the Purchased Assets by
                           Farmland and the other transactions to occur in
                           connection with the Draft Closing.

         1.12     After the Draft Closing, NCRA shall execute and deliver to
                  Farmland such other agreements, documents and other
                  instruments as Farmland may reasonably request to affect the
                  assignment of the Farmland Leases to Farmland, the purchase of
                  the Purchased Assets by Farmland and the other transactions
                  associated with the Draft Closing.

         1.13     During the term of this Agreement, Farmland covenants and
                  agrees not to purchase Crude Oil in the Mid-Kansas Counties,
                  other than through bulk purchases of crude oil from resellers
                  of Crude Oil.

2.       PROCEDURE FOR EXERCISE OF OPTION: QUANTITY

         2.01     On or before 5:00 p.m. (Central Time) on the tenth (10th) day
                  of the month prior to each month in which NCRA will be
                  offering to sell and deliver Crude Oil to Farmland, NCRA shall
                  provide Farmland written notice of NCRA's best estimate of the
                  quantity of Crude Oil that NCRA and any Affiliate of NCRA
                  expects to purchase directly (but not through a bulk purchase
                  from a reseller of Crude Oil) during the immediately following
                  month (the "Estimate Notice"). On or before the fifteenth
                  (15th) day of the month prior to the month in which Farmland
                  intends to exercise its option to purchase, Farmland shall by
                  5:00 P.M. Central Time, provide NCRA written notice of the
                  quantity of Crude Oil that Farmland will purchase (the
                  "Purchase Notice").

         2.02     During the term of this Agreement, NCRA offers to sell and
                  deliver thirty-three and seventy-two one hundredths percent
                  (33.72%) of the Crude Oil directly purchased (but not through
                  a bulk purchase from a reseller of Crude Oil) by NCRA or any
                  Affiliate in a given month in the Mid-Kansas Counties (the
                  "Farmland Maximum Percentage"), and Farmland shall have the
                  option to purchase and receive any quantity of such Crude Oil
                  up to the Farmland Maximum Percentage of such Crude Oil. The
                  actual quantity of Crude Oil delivered to NCRA and Farmland
                  shall be subject to, without duplication, (a) all applicable
                  loss allowances on pipelines or other crude gathering or
                  transportation systems (collectively, "Pipelines") that are
                  not operated or controlled by NCRA or any Affiliate of NCRA,
                  (b) actual gains or losses on Pipelines that are operated or
                  controlled by NCRA or an Affiliate of NCRA, and (c) all
                  applicable gains or losses on trucks (collectively, the
                  "Allowances"). In the event Farmland fails to provide the
                  Purchase Notice to NCRA by the deadline established in Section
                  2.01, Farmland shall be deemed to have provided a notice to
                  purchase the Farmland Maximum Percentage of such Crude Oil.
                  Farmland shall have no right to carryover any portion of the
                  unused percentage from a particular month.

         2.03     The quantity of Crude Oil delivered hereunder shall be
                  determined by use of 100% tank tables, or mutually acceptable
                  automatic measuring equipment, with customary adjustments to
                  volume and density to 60(degree) F temperature and full
                  deduction of BS&W, as adjusted by any applicable Allowances.
                  The Parties agree to conduct an accounting of quantities
                  delivered to Farmland on no greater than a quarterly basis.

         2.04     During the term of this Agreement and through the Draft
                  Effective Date, NCRA shall exercise its commercially
                  reasonable efforts to operate the Crude Oil Acquisition
                  Business efficiently and to


<PAGE>


                  maximize the economic benefit to both Parties. NCRA shall
                  provide Farmland with such monthly and other reports as
                  Farmland may reasonably request regarding the Crude Oil
                  Acquisition Business and otherwise keep Farmland reasonably
                  informed as to the quantity of Crude Oil purchased each month,
                  but in any event, NCRA shall notify Farmland promptly upon
                  NCRA's belief that actual purchases for a given month will be
                  less than, or exceed, the estimated purchases for such month
                  by more than ten percent (10%).

3.       DELIVERY POINT: TITLE AND RISK OF LOSS

         3.01     NCRA shall deliver or cause to be delivered the Crude Oil to
                  be purchased and sold hereunder to Farmland at Lyons, Kansas,
                  Phillipsburg, Kansas, Valley Center, Kansas, McPherson, Kansas
                  or any other delivery point designation that Farmland may
                  reasonably designate from time to time (the "Delivery Points")
                  and in such quantities as Farmland may reasonably specify from
                  time to time; provided that NCRA shall not be obligated to
                  incur any capital expenditures to create a Delivery Point not
                  othenvise in existence on or after the effective date hereof.
                  NCRA and Farmland shall work together to schedule deliveries
                  of Crude Oil for each month and, unless the parties otherwise
                  agree, NCRA shall operate the Crude Oil Acquisition Business
                  so deliveries of Crude Oil to Farmland hereunder shall occur
                  on a relatively consistent and uniform basis during each month
                  in proportion to the percentage of Crude Oil that Farmland
                  purchases. For pricing purposes only, however, total volume
                  delivered during each month shall be deemed to have been
                  delivered at an average daily rate during that month.

         3.02     Farmland will accept delivery of the Crude Oil upon completion
                  of measurement of the Crude Oil by pipeline meter. Title to
                  the Crude Oil and risk of loss shall pass from NCRA to
                  Farmland upon completion of such measurements at the Delivery
                  Point.

         3.03     Farmland may from time to time give NCRA notice of Farmland's
                  election to cause a portion of the Crude Oil to be purchased
                  by Farmland hereunder to be delivered to NCRA at McPherson,
                  Kansas, whereupon NCRA shall provide to Farmland, in exchange
                  for the Crude Oil so delivered to NCRA, the same quantity of
                  Crude Oil at any Pipeline trading point location reasonably
                  designated by Farmland in said notice.

4.       PRICE

         4.01     The purchase price per barrel of Crude Oil sold by NCRA to
                  Farmland hereunder shall be equal to the sum of (a) the Crude
                  Oil Price, plus (b) the Transportation Charges.

         4.02     For purposes hereof, the term "Crude Oil Price" shall mean the
                  average price per barrel of Crude Oil paid by NCRA in its
                  operation of the Crude Oil Acquisition Business during the
                  month of delivery.

         4.03     For the purposes hereof, the term "Transportation Charges"
                  shall mean the sum of (a) the applicable Average Pipeline
                  Tariff for actual barrels delivered at each Delivery Point,
                  plus (b) the quotient of (1) the total direct, out-of-pocket
                  costs reasonably incurred by NCRA in its operation of the
                  Crude Oil Acquisition Business during the month of delivery
                  (including any reasonable costs or expenses associated with
                  any damage to property or injury, sickness, disease or death
                  to persons arising out of or in connection with any acts or
                  omissions of NCRA or any officer, director, Affiliate, agent,
                  employee, representative or advisor (each a "Representative")
                  of NCRA in connection with the operation of the Crude Oil
                  Acquisition Business, but not arising out of or in connection
                  with the gross negligence, malfeasance or willful misconduct
                  of NCRA or any NCRA Representative), divided by (2) the total
                  number of barrels of Crude Oil purchased by NCRA in its
                  operation of the Crude Oil Acquisition Business during the
                  month of delivery, subject to any applicable Allowances.

         4.04     For purposes hereof, the term "Average Pipeline Tariff" shall
                  mean the then applicable weighted


<PAGE>


                  average pipeline tariff to the then applicable Delivery
                  Points, determined based upon the quantities of Crude Oil for
                  each pipeline origin listed in Exhibit B with the weighted
                  average pipeline tariff calculation set forth in Exhibit B and
                  incorporated herein by this reference, provided that either
                  Party may require the re-determination of the Average Pipeline
                  Tariff, effective upon any change in any applicable published
                  pipeline tariff. The Parties agree that as of the date of this
                  Agreement, the Average Pipeline Tariff is as follows:

                           Destination                Average Pipeline Tariff
                           -----------                -----------------------
                           Lyons, KS                  $0.4948
                           Phillipsburg, KS           $0.2000
                           Valley Center, KS          $0.5611
                           McPherson, KS              $0.5377

         4.05     NCRA shall reimburse Farmland for the reasonable direct costs
                  incurred by Farmland in connection with the Crude Oil
                  Acquisition Business gathering operations (e.g. employee
                  costs, asset lease costs, etc., excluding, however, pipeline
                  operations), which costs will in turn be included in the costs
                  described in Section 4.03(b)(1) used in the calculation of the
                  overall Crude Oil purchase price set forth in Section 4.01.

5.       FARMLAND EMPLOYEE

         A Farmland employee (currently Lee Couture) shall continue to have a
         meaningful and appropriate management role concerning the trucking
         operations of the Crude Oil Acquisition Business, and any significant
         changes to said role will first be discussed by the Parties. The
         Parties also acknowledge that Mr. Couture will have a management role
         associated with Farmland's Pipeline operations and operation of the
         Phillipsburg Refinery and, thus, in accordance with the terms of the
         Employee Lease Agreement, NCRA shall be obligated to reimburse Farmland
         for only one-half (1/2) of the costs of Farmland associated with Mr.
         Couture.

6.       FARMLAND'S RIGHT TO AUDIT: DISPUTE RESOLUTION

         6.01     Farmland shall have the right, from time to time, upon at
                  least five (5) business days prior notice to NCRA during
                  business hours to inspect and audit, or cause to be inspected
                  and audited, the business records, bookkeeping and accounting
                  records which relate to the Crude Oil Acquisition Business.
                  NCRA shall fully cooperate with representatives of Farmland
                  and its representatives and advisors in connection with any
                  such inspection or audit. All costs incurred by Farmland in
                  connection with the audit or inspection shall be borne by
                  Farmland, and all costs incurred by NCRA in connection with
                  the audit or inspection shall be borne by NCRA; provided,
                  however, that in the event a material discrepancy is found in
                  connection with the audit, then NCRA shall reimburse Farmland
                  all of its reasonable out-of-pocket costs incurred in
                  connection with the audit or inspection. For purposes of this
                  Section, "material discrepancy" shall mean a discrepancy
                  greater than two hundred fifty thousand dollars ($250,000.00),
                  excluding any accrual to actual adjustments.

         6.02     In the event of any dispute or controversy arising out of or
                  related to this Agreement, or the breach thereof; including
                  the interpretation of any provision of this Agreement which
                  cannot be resolved informally by the Parties, the Parties
                  shall first make a good faith effort to promptly resolve such
                  dispute. If the Parties are unable to reach agreement with
                  respect to such discrepancy, then such dispute shall be
                  resolved by binding arbitration administered by the American
                  Arbitration Association in accordance with its Commercial
                  Arbitration Rules then in effect, except as such rules may be
                  modified by this Agreement or by the mutual consent of the
                  Parties. Any arbitration proceeding conducted hereunder shall
                  alternate locations between the greater metropolitan areas of
                  Kansas City, Missouri and Wichita, Kansas, with the first such
                  arbitration proceeding to be conducted at such location as is
                  specified by the Party requesting the arbitration proceeding.
                  Any award rendered in the arbitration proceeding shall be
                  final and binding upon the Parties and a judgment thereon may
                  be entered in any court having competent


<PAGE>


                  jurisdiction. Each Party shall bear its own expenses in
                  connection with the arbitration; provided, however, that the
                  fees and expenses of the arbitrator and all other expenses of
                  the arbitration shall be borne equally by the Parties. The
                  arbitration proceedings shall be governed by the laws of the
                  State of Kansas. The arbitrator shall be selected from a list
                  of five (5) arbitrators provided by the American Arbitration
                  Association. Alternate strikes shall be made to the list
                  commencing with the Party requesting arbitration until a
                  single name remains. That individual shall be the arbitrator
                  for the matter. After the arbitrator has been selected, the
                  Parties may obtain reasonable discovery in advance of the
                  arbitration by way of: (i) exchange of copies of all documents
                  in the possession, custody or control of a Party and relevant
                  to the matter in dispute; (ii) written interrogatories for the
                  purpose of determining the name and address of each witness
                  proposed to be called by a Party and a brief description of
                  the relevant information each such witness is expected to
                  provide; and (iii) such further discovery, including
                  dispositions, as the arbitrator may determine is appropriate
                  after taking into consideration the nature of the dispute and
                  the amount in controversy. To the extent possible, the
                  arbitration hearing shall be conducted within sixty (60) days
                  after selection of the arbitrator, and the arbitrator shall
                  render a decision within twenty (20) days after the conclusion
                  of the hearing. Post-hearing briefs shall be permitted. The
                  arbitration award shall be in writing and shall specify the
                  factual and legal basis for the award.

7.       PAYMENT

         7.01     NCRA shall invoice Farmland promptly after the end of each
                  month for deliveries made during that month, but in no event
                  later than the fifteenth (15th) day of the following month,
                  and subject to Section 7.02, payment shall be made by Farmland
                  by electronic funds transfer by the twentieth (20th) day of
                  the month following delivery of such Crude Oil to Farmland. In
                  the event that Farmland fails to receive an invoice on or
                  before the fifteenth (15th) day of the applicable month, then
                  Farmland shall be granted one additional business day to make
                  the required payment for each day that the invoice is late.
                  Invoices shall be forwarded promptly to:

                            Farmland Industries, Inc.
                            3315 North Oak Trafficway
                            P.O. Box 7305 Dept. 11
                            Kansas City, Missouri 64116
                            Attention: Manager, Petroleum Accounting
                            Fax: 816.459.5944

                  with a copy to:

                            Farmland Industries, Inc.
                            3315 North Oak Trafficway
                            P.O. Box 7305 Dept. 160
                            Kansas City, Missouri 64116
                            Attention: Vice President - Treasurer
                            Fax: 816.459.5961

         7.02     If the date for payment of any monies under this Agreement
                  falls on a Saturday or on a bank holiday, then payment shall
                  be due on the first previous business day. If the date for
                  payment of any monies under this Agreement falls on a Sunday
                  or a Monday bank holiday, then payment shall be due on the
                  next business day.

          7.03    Farmland shall post a letter of credit in the total sum of
                  Eight Million Dollars ($8,000,000.00) ("Letter of Credit") to
                  support its payment obligations hereunder. Farmland's
                  obligation to provide the Letter of Credit to NCRA shall cease
                  in the event Farmland reports net income on a consolidated
                  basis for the then most recently completed fiscal year and an
                  EBITDA to Net Interest Expense ratio of at least 1.6 (the
                  "Financial Covenants"). Within one-hundred-twenty (120) days
                  after the end of each fiscal year, Farmland shall evidence its
                  compliance, or its failure to comply, with the Financial
                  Covenants by providing NCRA a copy of Farmland's audited
                  financial


<PAGE>


                  statements and a certificate signed by Farmland's Chief
                  Financial Officer or Treasurer certifying Farmland's
                  compliance with the Financial Covenants. In the event Farmland
                  fails to satisfy any of the Financial Covenants at the end of
                  any fiscal year, then Farmland shall continue to provide or,
                  if Farmland was not obligated to provide the Letter of Credit
                  to NCRA with respect to the immediately preceding fiscal year,
                  provide no later than one hundred twenty (120) days after the
                  then most recently completed fiscal year, the Letter of Credit
                  to NCRA until such time that Farmland satisfies the Financial
                  Covenants as set forth above. If NCRA shall not have received
                  evidence of Farmland's compliance with the Financial Covenants
                  on or before one hundred twenty (120) days after the end of a
                  fiscal year, then Farmland shall be deemed not to have
                  satisfied the Financial Covenants with respect to such fiscal
                  year.

8.        FORCE MAJEURE

          8.01    In the event of the occurrence of a Force Majeure event which
                  prevents performance hereunder, the Party or Parties whose
                  performance is thereby prevented or delayed shall, unless
                  otherwise provided below, be relieved of any obligation or
                  liability under the terms of this Agreement until the
                  expiration of a reasonable time after termination of the force
                  majeure event.

          8.02    "Force Majeure" means an event which is unforeseen and beyond
                  the reasonable control of the Party that either prevents the
                  Party from delivering the affected volume or prevents the
                  Party from accepting delivery of the affected volume. The
                  following are the only instances that will be recognized as
                  Force Majeure events hereunder: earthquakes; floods;
                  landslides; civil disturbances; sabotage; acts of public
                  enemies; war; blockades; insurrections; riots; epidemics; the
                  act of any government or other authority or statutory
                  undertaking; the inability to obtain or the curtailment of
                  electric power, water or fuel; strikes, lockouts or other
                  disruptions; fires; explosions; breakdowns or failure of pipe,
                  plant, machinery or equipment; apportionment of applicable
                  carriers; contamination or poisoning of catalyst and/or
                  solvent or biological treatment facilities; and any other
                  event which is unforeseen and beyond the reasonable control of
                  the Party that either prevents the Party from delivering the
                  affected volume or prevents the Party from accepting the
                  delivery the affected volume.

          8.03    A lack of funds, the availability of a more attractive market,
                  or inefficiencies in operations do not constitute events of
                  Force Majeure.

          8.04    The Party claiming the Force Majeure event agrees to notify in
                  writing the other Party of the occurrence of the Force Majeure
                  event as soon as possible, but in any event within twenty (20)
                  business days after the occurrence of the Force Majeure event;
                  otherwise the claim for Force Majeure shall be deemed waived.
                  The Party whose performance is prevented hereunder by a Force
                  Majeure event shall diligently endeavor to mitigate and remedy
                  the situation with all reasonable dispatch.

9.        TITLE AND WARRANTIES

          9.01    NCRA makes no other warranty, expressed or implied, concerning
                  the Crude Oil purchased and sold hereunder beyond any warranty
                  provided by the lease operator. Notwithstanding the foregoing,
                  however, NCRA represents and warrants (a) that it will use its
                  best efforts to ensure that all lease crude oil sold to
                  Farmland hereunder shall be Crude Oil and (b) that, upon each
                  sale, Farmland shall be vested with good and marketable title
                  to the lease crude oil sold, free and clear of all liens,
                  claims and encumbrances.

10.       LIABILITY AND INDEMNITY

          10.01   NCRA shall not, in any case other than in connection with the
                  gross negligence or willful misconduct of NCRA and NCRA's
                  indemnity obligations hereunder, be liable for any special,
                  incidental, consequential, indirect or other similar damages,
                  including, but not limited to, lost profits, arising from its
                  obligations under this Agreement. Notwithstanding the
                  foregoing,


<PAGE>


                  however, Farmland and NCRA acknowledge and agree that in the
                  event that NCRA fails to provide, or offer to provide,
                  Farmland with the quantity of Crude Oil that NCRA is obligated
                  to provide, or offer to provide, hereunder, then Farmland
                  shall sustain substantial damages associated with its crude
                  oil refining business, but the exact amount of such damages
                  would be impractical or extremely difficult to ascertain.
                  Therefore, in the event of any such failure that has not been
                  fully cured by NCRA within sixty (60) days after Farmland
                  notifies NCRA of such failure, NCRA shall pay to Farmland, as
                  liquidated damages and not as a penalty, an amount equal to
                  the product of (a) the difference between (1) the Cushing
                  Crude Oil Price, minus (2) the Crude Oil Price, multiplied by
                  (b) the number of barrels of Crude Oil that NCRA failed to
                  provide, or offer to provide, hereunder in the applicable
                  period, multiplied by (c) three (3).

          10.02   For purposes hereunder, the term "Cushing Crude Oil Price"
                  shall mean, for a given month, the sum of (a) Koch Petroleum's
                  posted price for West Texas/New Mexico intermediate crude oil
                  for the month of delivery, plus (b) the average P-plus price
                  published by Platt's Oilgram Price Report from the 26th day of
                  the month that is two months prior to the applicable month of
                  delivery through the 25th day of the month that is immediately
                  preceding the applicable month of delivery; provided, however,
                  that if Koch Petroleum ceases to post a price for West
                  Texas/New Mexico Intermediate crude oil or if Platts Oilgram
                  Price Report ceases to publish a P-plus price, then the
                  Parties shall negotiate in good faith a mutually agreeable
                  alternative price index formula to determine the Cushing Crude
                  Oil Price.

          10.03   Subject to Section 4.03 herein, Farmland shall not, in any
                  case, be liable for any costs or expenses associated with any
                  damage to property or injury, sickness, disease or death to
                  third persons arising out of or in any way connected with any
                  acts or omissions of NCRA in connection with NCRA's operation
                  of the Crude Oil Acquisition Business, and NCRA shall
                  indemnify and hold Farmland and the Farmland Representatives
                  harmless from and against any and all losses, costs (including
                  but not limited to attorneys' fees and expenses), damages,
                  liabilities, fines, penalties, expenses, claims, demands,
                  actions, suits and judgments for, arising out of, or
                  attributable to any damage to property or injury, sickness,
                  disease or death to third persons arising out of or anyway
                  connected with any acts or omissions of NCRA in connection
                  with the operation of the Crude Oil Acquisition Business.

11.       APPLICATION OF LAW

          11.01   This Agreement shall be interpreted in accordance with and
                  governed by the laws of the State of Kansas, without reference
                  to conflict of laws principles or said state.

12.       BUSINESS ETHICS

          12.01   Neither party, nor their duly authorized representatives are
                  permitted to take any action hereunder which would constitute
                  a breach of any law. All activities and transactions performed
                  by the parties and their duly authorized representatives shall
                  be carried out in good faith and in a proper and truthful
                  manner, and any records or other documents relating to such
                  activities and transactions shall contain a true and proper
                  account of the facts and circumstances pertaining thereto.

13.       TAXES

          13.01   Each Party shall be liable for their respective percentage of
                  any taxes imposed on the Crude Oil purchased.

14.       NOTICES

          14.01   Any notices permitted or required to be given under this
                  Agreement shall be in writing and shall be addressed to the
                  parties hereto as follows:


<PAGE>


                  For NCRA:        National Cooperative Refining Association
                                   1391 Iron Horse Road
                                   P.O. Box 1404
                                   McPherson, Kansas 67460
                                   Attention: Vice President, Supply and Trading
                                   Fax: (316) 241-5562

                  For Farmland:

                           (i)     For invoices required under Section 7, as
                                   provided therein.

                           (ii)    For the Estimate Notice and any other
                                   notices required under Section 2 hereof, as
                                   follows:

                                   Farmland Industries, Inc.
                                   c/o National Cooperative Refining Association
                                   1391 Iron Horse Road
                                   P.O. Box 1404
                                   McPherson, Kansas 67460
                                   Attention: Mr. Patrick Quinn
                                   Fax: 316.241.9269

                           (iii)   For all other notices required hereunder, as
                                   follows:

                                   Farmland Industries, Inc.
                                   3315 North Oak Trafficway
                                   P.O. Box 7305 Dept. 11
                                   Kansas City, Missouri 64116
                                   Attention: General Counsel
                                   Fax: 816.459.5902

                          with a copy to:

                                   Farmland Industries, Inc.
                                   3315 North Oak Trafficway
                                   P.O. Box 7305 Dept. 160
                                   Kansas City, Missouri 64116
                                   Attention: Vice President - Treasurer
                                   Fax: 816.459.5961

                          Either Farmland or NCRA may from time to time change
                          its address for service hereunder on written notice to
                          the other party.

         14.02   Any notice shall:

         1)       If delivered by hand delivery, be deemed to have been given or
                  made at the time of delivery as acknowledged by signature of
                  the receiving party;

         2)       If sent by telecopy, telex, telecommunication device or other
                  similar form of communication or by any overnight private
                  courier service, be deemed to have been given or made on the
                  working day on which it was received; and

         3)       If mailed by certified or registered mail, returned receipt
                  requested, postage prepaid, be deemed to have been given or
                  made, four (4) days after deposit in the United States mail.

15.      ASSIGNMENT


<PAGE>


          15.01   Either party may assign this Agreement in whole or in part to
                  an Affiliate or may cause any or all of its obligations to be
                  performed by an Affiliate. Except as otherwise provided
                  hereunder, any attempt by either party to assign its rights or
                  delegate its duties under this Agreement in whole or in part
                  to a non-Affiliate without prior written consent of the other
                  party shall be ineffective to the extent consistent with the
                  law.

          15.02   For purposes of this Agreement, the term "Affiliate" shall
                  mean a corporation, partnership, limited liability company or
                  any other person or entity which controls, is controlled by,
                  or under common control with either Farmland or NCRA, as the
                  case may be.

          15.03   Notwithstanding the foregoing provisions of this Article 15,
                  in the event Farmland desires to transfer its ownership
                  interest in the Coffeyville Refinery during the term of this
                  Agreement, then Farmland may assign this Agreement to the
                  transferee of the Coffeyville Refinery without the consent of
                  NCRA, and upon such transferee assuming this Agreement and
                  Farmland's obligations hereunder, Farmland shall not be liable
                  for the performance of its obligations hereunder from and
                  after the date of such assignment, and NCRA shall return to
                  Farmland any Letter of Credit then issued in favor of NCRA
                  under Section 7.03 together with a written statement signed by
                  an authorized officer of NCRA in form and content reasonably
                  acceptable to Farmland to the effect that the issuer of the
                  Letter of Credit may cancel the Letter of Credit. Further, in
                  lieu of the requirements of Section 7.03, the assignee shall
                  provide NCRA credit terms or support comparable to whatever
                  credit terms and support are required of it from other bulk
                  crude oil suppliers. Any assignee of Farmland shall be
                  required to provide NCRA information on a quarterly basis
                  regarding its credit terms and support requirements from its
                  bulk crude oil suppliers.

16.       GENERAL

          16.01   Amendments. Unless otherwise provided herein, no changes,
                  alteration or modifications to this Agreement shall be
                  effective unless in writing and signed by the respective duly
                  authorized representatives of the Parties hereto.

          16.02   Successors and Assigns. This Agreement shall enure to the
                  benefit of and be binding upon the legal representatives,
                  permitted assigns and successors of the parties hereto.

          16.03   Entire Agreement. This Agreement, along with its Exhibits and
                  Schedules, constitutes the entire agreement between the
                  parties with respect to the Crude Oil Acquisition Business and
                  supersedes all prior negotiations and agreements thereto,
                  written or oral.

          16.04   Headings. The headings in this Agreement are for convenience
                  only and shall not be considered in the interpretation of the
                  Agreement.

          16.05   Industry Practices. This Agreement shall be construed in
                  accordance with accepted oil industry terminology and
                  practices.

          16.06   Severability. If any provision or any portion of any provision
                  of this Agreement or the application of any such provision or
                  any portion thereof to any person or circumstance, is held
                  invalid or unenforceable, the remaining portion of such
                  provision and the remaining provisions shall remain in full
                  force and effect.

          16.07   Effect of Termination. Except (a) with respect to Sections
                  1.03, 6.01, 6.02, 9.01, 10.01, 10.02, 10.03, 12.01, 15.01, and
                  15.03, (b) as otherwise provided herein with respect to
                  obligations which are contemplated by their terms to survive
                  any termination of this Agreement, and (c) any agreements,
                  obligations or liabilities of any Party arising from any
                  default, breach or failure to perform by such Party under any
                  provision of this Agreement prior to any termination of this
                  Agreement, upon the termination of this Agreement pursuant to
                  the provisions hereof, all further obligations of each Party
                  to the other Party hereunder shall terminate.


<PAGE>


          16.08   Independent Contractor. The Parties acknowledge and agree that
                  NCRA shall not be an agent or representative of Farmland with
                  respect to any matter related to this Agreement, and Farmland
                  shall not be an agent or representative of NCRA with respect
                  to any matter related to this Agreement. This Agreement shall
                  not be deemed to create a partnership, joint venture, or any
                  other joint enterprise of any kind whatsoever between NCRA and
                  Farmland.

          IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth above.

NATIONAL COOPERATIVE                                  FARMLAND INDUSTRIES, INC.
   REFINING ASSOCIATION

By:_______________________                            By:_______________________
Name:_____________________                            Name:_____________________
Title:____________________                            Title:____________________
</TEXT>
</DOCUMENT>
