Exhibit 10.31

 

MLA No. Z269F

 

AMENDED AND RESTATED
MASTER LOAN AGREEMENT

 

THIS AMENDED AND RESTATED MASTER LOAN AGREEMENT (“Agreement”) is entered into as
of July 21, 2003, between CoBANK, ACB (“CoBank”) and AMERICAN CRYSTAL SUGAR
COMPANY, Moorhead, Minnesota (the “Company”), and amends and restates that
Master Loan Agreement dated as of March 31, 2000.

 

BACKGROUND

 

CoBank and the Company are parties to a Master Loan Agreement dated March 31,
2000 and numbered Z269 (as previously amended, the “Existing Agreement”). 
Pursuant to the terms of the Existing Agreement, the parties entered into one or
more Supplements thereto to evidence specific loans from CoBank to the Company.
CoBank and the Company now desire to amend and restate the Existing Agreement
and to apply such new agreement to the existing Supplements, as well as any new
Supplements that may be issued hereunder to evidence any new loans that CoBank
may make to the Company.  For that reason and for valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), CoBank and the
Company hereby agree that the Existing Agreement shall be amended and restated
to read as follows:

 

SECTION 1.                            Supplements.  In the event the Company
desires to borrow from CoBank and CoBank is willing to lend to the Company, or
in the event CoBank and the Company desire to consolidate any existing loans
hereunder, the parties will enter into a Supplement to this Agreement (a
“Supplement”).  Each Supplement will set forth the amount of the loan, the
purpose of the loan, the interest rate or rate options applicable to that loan,
the repayment terms of the loan, and any other terms and conditions applicable
to that particular loan.  Each loan will be governed by the terms and conditions
contained in this Agreement and in the Supplement relating to the loan.

 

SECTION 2.                            Availability.  Loans will be made
available on any day on which CoBank and the Federal Reserve Banks are open for
business upon the telephonic or written request of the Company. Requests for
loans must be received no later than 12:00 noon Company’s local time on the date
the loan is desired. Loans will be made available by wire transfer of
immediately available funds to such account or accounts as may be authorized by
the Company. The Company shall furnish to CoBank a duly completed and executed
copy of a CoBank Delegation and Wire and Electronic Transfer Authorization Form,
and CoBank shall be entitled to rely on (and shall incur no liability to the
Company in acting on) any request or direction furnished in accordance with the
terms thereof.

 

SECTION 3.                            Repayment.  The Company’s obligation to
repay each loan shall be evidenced by the promissory note set forth in the
Supplement relating to that loan or by such replacement note as CoBank shall
require. CoBank shall maintain a record of all loans, the interest accrued
thereon, and all payments made with respect thereto, and such record shall,
absent proof of manifest error, be conclusive evidence of the outstanding
principal and interest on the loans. All payments shall be made by wire transfer
of immediately available funds or by check. Wire transfers shall be made to ABA
No. 307088754 for advice to and credit of CoBANK (or to such other account as
CoBank may direct by notice). The Company shall give CoBank telephonic notice no
later than 12:00 noon Company’s local time of its intent to pay by wire and
funds received after 3:00 p.m. Company’s local time shall be credited on the
next business day. Checks shall be mailed to CoBank, Department 167, Denver,
Colorado, 80291-0167

 

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(or to such other place as CoBank may direct by notice). Credit for payment by
check will not be given until the latter of: (a) the day on which CoBank
receives immediately available funds; or (b) the next business day after receipt
of the check.

 

SECTION 4.                            Capitalization. The Company agrees to
purchase such equity in CoBank as CoBank may from time to time require in
accordance with its Bylaws. However, the maximum amount of equity which the
Company shall be obligated to purchase in connection with any loan may not
exceed the maximum amount permitted by the Bylaws at the time the Supplement
relating to that loan is entered into or such loan is renewed or refinanced by
CoBank.

 

SECTION 5.                            Security.  The Company’s obligations under
this Agreement, all Supplements (whenever executed), and all instruments and
documents contemplated hereby or thereby, shall be secured by a statutory first
lien on all equity which the Company may now own or hereafter acquire in CoBank.
This security shall be in addition to any other security that may otherwise be
required or provided.

 

SECTION 6.                            Conditions Precedent.

 

(A)                               Conditions to Initial Supplement.  CoBank’s
obligation to extend credit under the initial Supplement hereto is subject to
the conditions precedent that CoBank receive, in form and substance satisfactory
to CoBank, each of the following:

 

(i)                                    This Agreement, Etc.  A duly executed
copy of this Agreement and all instruments and documents contemplated hereby.

 

(ii)                                Opinion of Counsel.  A favorable opinion
from the Company’s counsel addressed to CoBank covering each matter as CoBank
may reasonably require.

 

(iii)                            Evidence of Authority.  Such certified board
resolutions, evidence of incumbency, and other evidence that CoBank may require
that the Supplement, all instruments and documents executed in connection
therewith, and, in the case of initial Supplement hereto, this Agreement and all
instruments and documents executed in connection herewith, have been duly
authorized and executed.

 

(B)                               Conditions to Each Supplement.  CoBank’s
obligation to extend credit under each Supplement, including the initial
Supplement, is subject to the conditions precedent that CoBank receive, in form
and content satisfactory to CoBank, each of the following:

 

(i)                                    Supplement.  A duly executed copy of the
Supplement and all instruments and documents contemplated thereby.

 

(ii)                                Fees and Other Charges.  All fees and other
charges specifically permitted by this Agreement or the Supplements, as well as
reasonable expenses for outside counsel.

 

(iii)                            Evidence of Perfection, Etc. Such evidence as
CoBank may require that CoBank has a duly perfected first priority lien on all
security for the Company’s obligations, and that the Company is in compliance
with Section 8(D) hereof.

 

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(C)                               Conditions to Each Loan.  CoBank’s obligation
under each Supplement to make any loan to the Company thereunder is subject to
the condition that no “Event of Default” (as defined in Section 11 hereof) or
event that with the giving of notice and/or the passage of time would become an
Event of Default hereunder (a “Potential Default”), shall have occurred and be
continuing.

 

SECTION 7.                            Representations and Warranties.

 

(A)                               Compliance With Agreement. The Company
represents and warrants to CoBank that as of the date of this Agreement the
Company and, to the extent contemplated hereunder, each Subsidiary (as defined
in Section 10(D)(xix) below), is in compliance with all of the terms of this
Agreement, and no Event of Default or Potential Default exists hereunder.

 

(B)                               Each Supplement.  The execution by the Company
of each Supplement hereto shall constitute a representation and warranty to
CoBank that:

 

(i)                                    Applications.  Each representation and
warranty and all information set forth in any application or other documents
submitted in connection with, or to induce CoBank to enter into, such
Supplement, is correct in all material respects as of the date of the
Supplement.

 

(ii)                                Conflicting Agreements, Etc.  This
Agreement, the Supplements, and all security and other instruments and documents
relating hereto and thereto (collectively, at any time, the “Loan Documents”),
do not conflict with, or require the consent of any party to, any other
Agreement to which the Company is a party or by which it or its property may be
bound or affected, and do not conflict with any provision of the Company’s
bylaws, articles of incorporation, or other organizational documents.

 

(iii)                            Compliance.  The Company and, to the extent
contemplated hereunder, each Subsidiary, is in compliance with all of the terms
of the Loan Documents (including, without limitation, Section 8(A) of this
Agreement on eligibility to borrow from CoBank).

 

(iv)                               Binding Agreement.  The Loan Documents create
legal, valid, and binding obligations of the Company that are enforceable in
accordance with their terms, except to the extent that enforcement may be
limited by applicable bankruptcy, insolvency, or similar laws affecting
creditors’ rights generally.

 

SECTION 8.                            Affirmative Covenants.  Unless otherwise
agreed to in writing by CoBank, while this Agreement is in effect, the Company
agrees to, and with respect to Subsections 8(B) through 8(G) and 8(H)(v)-(ix)
hereof, agrees to cause each Subsidiary to:

 

(A)                               Eligibility.  Maintain its status as an entity
eligible to borrow from CoBank.

 

(B)                               Corporate Existence, Licenses. Etc.  (i)
Preserve and keep in full force and effect its existence and good standing in
the jurisdiction of its incorporation or formation; (ii) qualify and remain
qualified to transact business in all jurisdictions where such qualification is
required; and (iii) obtain and maintain all licenses, certificates, permits,
authorizations, approvals, and the like which are material to the conduct of its
business or required by law, rule, regulation, ordinance, code, order, and the
like (collectively, “Laws”).

 

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(C)                               Compliance with Laws.  Comply in all material
respects with all applicable Laws, including, without limitation, all Laws
relating to environmental protection and any patron or member investment program
that it may have. In addition, the Company agrees to cause all Persons occupying
or present on any of its properties, and to cause each Subsidiary to cause all
Persons occupying or present on any of its properties, to comply in all material
respects with all environmental protection Laws.

 

(D)                               Insurance.  Maintain insurance with insurance
companies or associations acceptable to CoBank in such amounts and covering such
risks as are usually carried by companies engaged in the same or similar
business and similarly situated, and make such increases in the type or amount
of coverage as CoBank may request. All such policies insuring any collateral for
the Company’s obligations to CoBank shall have mortgagee or lender loss payable
clauses or endorsements in form and content acceptable to CoBank. At CoBank’s
request, all policies (or such other proof of compliance with this Subsection as
may be satisfactory to CoBank) shall be delivered to CoBank.

 

(E)                                 Property Maintenance.  Maintain all of its
property that is necessary to or useful in the proper conduct of its business in
good working condition, ordinary wear and tear excepted.

 

(F)                                 Books and Records.  Keep adequate records
and books of account in which complete entries will be made in accordance with
generally accepted accounting principles (“GAAP”) consistently applied.

 

(G)                               Inspection.  Permit CoBank or its agents, upon
reasonable notice and during normal business hours or at such other times as the
parties may agree, to examine its properties, books, and records, and to discuss
its affairs, finances, and accounts, with its respective officers, directors,
employees, and independent certified public accountants.

 

(H)                               Reports and Notices.  Furnish to CoBank:

 

(i)                                    Annual Financial Statements.  As soon as
available, but in no event more than 120 days after the end of each fiscal year
of the Company occurring during the term hereof, annual financial statements of
the Company and its consolidated Subsidiaries, if any, prepared in accordance
with GAAP consistently applied. Such financial statements shall: (a) be audited
by independent certified public accountants selected by the Company and
acceptable to CoBank; (b) be accompanied by a report of such accountants
containing an opinion thereon acceptable to CoBank; (c) be prepared in
reasonable detail and in comparative form; and (d) include a balance sheet, a
statement of income, a statement of retained earnings, a statement of cash
flows, and all notes and schedules relating thereto.

 

(ii)                                Interim Financial Statements.  As soon as
available after the end of each quarter, but in no event more than 5 days after
the Company’s quarterly filing with the Securities Exchange Commission, a
balance sheet of the Company and its consolidated Subsidiaries, if any, as of
the end of such fiscal quarter, a statement of income for the Company and its
consolidated Subsidiaries, if any, for such period and for the period year to
date, and such other interim statements as CoBank may specifically request, all
prepared in reasonable detail and in comparative form in accordance with GAAP
consistently applied.

 

(iii)                            Annual Budgets.  As soon as available, but in
no event more than 60 days after the end of any fiscal year of the Company
occurring during the term hereof, copies of the Company’s annual budgets and
forecasts of operations.

 

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(iv)                               Capital Expenditures Budget:  The Company
will furnish an annual capital expenditure budget, within 60 days after the end
of each fiscal year. The Company will also furnish a revised budget if increases
over the original capital expenditure budget are approved by the board of
directors.

 

(v)                                   Notice of Default.  Promptly after
becoming aware thereof, notice of the occurrence of an Event of Default or a
Potential Default.

 

(vi)                               Notice of Non-Environmental Litigation. 
Promptly after the commencement thereof, notice of the commencement of all
actions, suits, or proceedings before any court, arbitrator, or governmental
department, commission, board, bureau, agency, or instrumentality affecting the
Company or any Subsidiary which, if determined adversely to the Company or any
such Subsidiary, could have a material adverse effect on the financial
condition, properties, profits, or operations of the Company or any such
Subsidiary.

 

(vii)                           Notice of Environmental Litigation, Etc. 
Promptly after receipt thereof, notice of the receipt of all pleadings, orders,
complaints, indictments, or any other communication alleging a condition that
may require the Company or any Subsidiary to undertake or to contribute to a
cleanup or other response under environmental Laws, or which seek penalties,
damages, injunctive relief, or criminal sanctions related to alleged violations
of such Laws, or which claim personal injury or property damage to any person as
a result of environmental factors or conditions. Notwithstanding the preceding
sentence, notice shall be required only if costs, damages and/or penalties
associated with an alleged condition or violation of Law exceed or are expected
to exceed $7,500,000.00 or if any criminal activity is alleged.

 

(viii)                       Bylaws and Articles.  Promptly after any change in
the Company’s bylaws or articles of incorporation (or like documents), copies of
all such changes, certified by the Company’s Secretary.

 

(ix)                              Other Information.  Such other information
regarding the condition or operations, financial or otherwise, of the Company or
any Subsidiary as CoBank may from time to time reasonably request, including but
not limited to copies of all pleadings, notices, and communications referred to
in Subsections 8(H)(vi) and (vii) above.

 

(x)                                  Officer Certificate.  A quarterly officers
certificate within 45 days of each fiscal quarter end, in a form acceptable to
CoBank, certified by an officer of the Company, that measures compliance with
Minimum Net Working Capital; Interest Coverage Ratio and Long Term Debt to
Capitalization. (Section 10 (A) & (B) & (C)).

 

(I)                                    Grower Agreements.  The Company shall
abide by the terms and conditions of its member grower agreements; make no
material amendments or changes to the agreements without the written consent of
the Bank; and extend the agreements for an additional five years when the
current contracts expire.

 

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(J)                                 Crystech, L.L.C.  (“Crystech”). Cause to be
furnished to CoBank:

 

(i)                                    Annual Financial Statements. As soon as
available, but in no event more than 120 days after the end of each fiscal year
of Crystech occurring during the term hereof, annual financial statements of
Crystech prepared in accordance with GAAP consistently applied. Such financial
statements shall: (a) be audited by independent certified public accountants
selected by Crystech and acceptable to CoBank; (b) be accompanied by a report of
such accountants containing an opinion thereon acceptable to CoBank; (c) be
prepared in reasonable detail and in comparative form; and (d) include a balance
sheet, a statement of income, a statement of retained earnings, a statement of
cash flows, and all notes and schedules relating thereto.

 

(ii)                                Interim Financial Statements. As soon as
available, but in no event more than 60 days after the end of each quarter, a
balance sheet of Crystech as of the end of such fiscal quarter, a statement of
income for Crystech for such period and for the period year to date, and such
other interim statements as CoBank may specifically request, all prepared in
reasonable detail and in comparative form in accordance with GAAP consistently
applied.

 

(iii)                            Examinations. Such examination of Crystech’s
books and records as CoBank may reasonably request.

 

SECTION 9.                            Negative Covenants.

 

(A)                               Unless otherwise agreed to in writing by
CoBank, while this Agreement is in effect, the Company shall not, and shall not
permit its Subsidiaries to:

 

(i)                                    Borrowings.  Create, incur, assume, or
allow to exist, directly or indirectly, any indebtedness or liability for
borrowed money (including trade or bankers’ acceptances), letters of credit, or
the deferred purchase price of property or services (including capitalized
leases), except for: (a) debt to CoBank; (b) accounts payable to trade creditors
incurred in the ordinary course of business; (c) current operating liabilities
(other than for borrowed money) incurred in the ordinary course of business; (d)
indebtedness incurred in connection with the $20,000,000 Senior Secured
Guaranteed Notes issued pursuant to the 2002 Note Purchase Agreement between the
Company and the note purchasers named therein; (e) indebtedness incurred in
connection with the $50,000,000 Senior Secured Guaranteed Notes issued pursuant
to the 1998 Note Purchase Agreement between the Company and the note purchasers
named therein (with the 2002 Note Purchase Agreement and the 1998 Note Purchase
Agreement referred to collectively as the “Note Purchase Agreements”); (f)
intercompany debt between the Company and its wholly owned Subsidiary, Sidney
Sugars Incorporated (“Sidney”), in amounts not to exceed an aggregate of
$60,000,000.00 at any one time for the purpose of meeting Sidney’s working
capital needs; and (g) permitted borrowings identified on Attachment A.

 

(ii)                                Liens.  Create, incur, assume, or allow to
exist any mortgage, deed of trust, pledge, lien (including the lien of an
attachment, judgment, or execution), security interest, or other encumbrance of
any kind upon any of its property, real or personal (collectively, “Liens”). The
foregoing restrictions shall not apply to: (a) Liens in favor of CoBank; (b)
Liens for taxes, assessments, or governmental charges that are not past due; (c)
Liens and deposits under workers’ compensation, unemployment insurance, and
social security Laws; (d) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the

 

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ordinary course of business as conducted on the date hereof; (e) Liens imposed
by Law in favor of mechanics, materialmen, warehousemen, and like persons that
secure obligations that are not past due or that are being contested in good
faith by the Company or Subsidiary, as applicable; (f) Liens created in
connection with the Note Purchase Agreements described in subsection 9(A)(i)
above (provided that said Liens shall be shared with CoBank in a manner
acceptable to CoBank); and (g) easements, rights-of-way, restrictions, and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use, and enjoyment of the property or assets encumbered thereby
in the normal course of its business or materially impair the value of the
property subject thereto except for the permitted Liens identified on Attachment
B, without the prior written consent of the Bank.  In addition, the Company
agrees that it will not agree to a negative pledge with any other lender or
third party.

 

(iii)                            Mergers, Acquisitions, Etc.  Merge or
consolidate with any other entity or acquire all or a material part of the
assets of any person or entity, or, except upon advance written notice to
CoBank, form or create any new subsidiary or affiliate, or commence operations
under any other name, organization, or entity, including any joint venture;
provided, however, the Company and any of its Subsidiaries can merge or
consolidate with or into each other as long as the Company is the surviving
entity.

 

(iv)                               Transfer of Assets.  Sell, transfer, lease,
or otherwise dispose of any of its assets, except in the ordinary course of
business; provided however, the following shall not be prohibited: (a) the lease
of sugar processing plants in Torrington, Wyoming and Hereford, Texas, to
Western Sugar Cooperative and Imperial Sugar Company or a wholly-owned
subsidiary of the Company, respectively; (b) the sale of the Hereford, Texas
facility; and (c) the sale of excess real property associated with the Sidney,
Montana facility.

 

(v)                                   Loans.  Lend or advance money, credit, or
property to any person or entity, except for (a) trade credit extended in the
ordinary course of business; (b) certain inter-company loans made pursuant to
Intercompany Loan/Security Agreement dated August 31, 1997 and successor
agreements; and (c) intercompany line of credit loans from the Company to
Sidney, in amounts not to exceed an aggregate of $60,000,000.00 at any one time
for the purpose of meeting Sidney’s working capital needs.

 

(vi)                               Contingent Liabilities.  Assume, guarantee,
become liable as a surety, endorse, contingently agree to purchase, or otherwise
be or become liable, directly or indirectly (including, but not limited to, by
means of a maintenance agreement, an asset or stock purchase agreement, or any
other agreement designed to ensure any creditor against loss), for or on account
of the obligation of any person or entity, except by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of the Company’s or Subsidiaries’ business and except for (1)
any liability on account of a Company guaranty of the indebtedness of Midwest
Agri Commodities; and (2) any guarantees created in connection with the Note
Purchase Agreements described in subsection 9(A)(i) above.

 

(vii)                           Change in Business.  Engage in any business
activities or operations substantially different from or unrelated to the
Company’s present business activities or operations.

 

(B)                               Notwithstanding anything in this Section 9 to
the contrary, the prohibitions set forth in this section shall apply only to any
act or transaction by the Company, including any Subsidiary, deemed “material”.
An act or transaction shall be deemed material only if the amount or value of
the act or transaction exceeds $7,500,000.00. This materiality standard shall
not apply to subsection (A)(ii), which

 

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subsection shall apply without reference to the materiality of the Lien (but
subject to exceptions noted therein), and subsection (A)(vii), which subsection
shall apply without reference to the materiality of any business activities or
operations substantially different from or unrelated to the Company’s or any
Subsidiary’s present business activities or operations.

 

SECTION 10.                     Financial Covenants.  Unless otherwise agreed to
in writing, while this Agreement is in effect:

 

(A)                               Minimum Net Working Capital.  The Company and
its Subsidiaries, on a consolidated basis, shall have (1) at the end of each
fiscal quarter, other than fiscal year end, an excess of current assets over
current liabilities (both as determined in accordance with GAAP consistently
applied) of not less than $15,000,000.00; and (2) at the end of each fiscal
year, an excess of current assets over current liabilities (both as determined
in accordance with GAAP consistently applied) of not less than $35,000,000.00.

 

(B)                               Long Term Debt to Capitalization.  The Company
and its Subsidiaries, on a consolidated basis, shall maintain at all times and
measured as of the end of each Fiscal Quarter a ratio of Long Term Debt divided
by the sum of Long Term Debt plus Equity of no greater than fifty-five percent
(55%).

 

(C)                               Interest Coverage Ratio.  The Company and its
Subsidiaries, on a consolidated basis, shall maintain at all times, and measured
as of the end of each Fiscal Quarter, a minimum ratio of Average Net Funds
Generated plus Average Interest Expense to Average Interest Expense of 2.5:1

 

(D)                               Definitions.  For purposes of this Section 10
and this Agreement, the following terms shall be defined as follows:

 

(i)                                    Average Interest Expense shall mean the
total interest expense of the Company and its Subsidiaries (including, without
limitation, interest expense on capital leases and, to the extent not included
therein, fees and other charges payable with respect to all Debt), all
determined on a consolidated basis in accordance with GAAP, for the most recent
twelve (12) Fiscal Quarters divided by four (4).

 

(ii)                                Average Net Funds Generated shall mean the
sum of the following for the most recent twelve (12) Fiscal Quarters divided by
four (4):

 

Add:  Unit Retains; Depreciation and amortization; Net income from non-member
business and member business tax timing differences; Decrease in investments in
other cooperatives (excluding subsidiaries); and Net revenue from sale of stock.

 

Minus:  Increase in investments in other cooperatives (excluding subsidiaries);
Net loss from non-member business and member business tax timing differences;
Provision for income tax; and Members’ investment retirements.

 

(iii)                            Borrowing Base shall mean a maximum dollar
amount available to the Company under the terms of the Commitment (as set forth
in a Supplement) as determined on the basis of the most recent Borrowing Base
Certificate.

 

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(iv)                               Borrowing Base Certificate shall mean a
certification of the value of specified assets of the Company used in computing
the Borrowing Base prepared in a form acceptable to CoBank.

 

(v)                                   Capitalization shall mean the sum of Long
Term Debt plus Equity as determined in accordance with GAAP.

 

(vi)                               Current Assets. The current assets of the
Company and its Subsidiaries as measured in accordance with GAAP.

 

(vii)                           Current Liability shall mean the current
liabilities of the Company and its Subsidiaries as measured in accordance with
GAAP.

 

(viii)                       Depreciation shall mean total depreciation of the
Company and its Subsidiaries as measured in accordance with GAAP.

 

(ix)                              Debt shall mean as to any Person: (a)
indebtedness or liability of such Person for borrowed money, or for the deferred
purchase price of property or services; (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; (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.

 

(x)                                  Equity shall mean total equity of the
Company and its Subsidiaries as measured in accordance with GAAP.

 

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

 

(xii)                          Fiscal Year shall mean a year commencing on
September 1 and ending on August 31.

 

(xiii)                      GAAP shall mean generally accepted accounting
principles in effect from time to time.

 

(xiv)                         Interest Expense shall mean current cost of
borrowing funds that is shown as a financial expense in the income statement and
as measured in accordance with GAAP.

 

(xv)                             Long Term Debt shall mean long term debt
(excluding current maturities) as determined in accordance with GAAP.

 

(xvi)                         Net Realizable Value shall mean the expected
selling price of an inventory item less expected costs to complete and dispose,
as determined in accordance with GAAP.

 

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(xvii)                     Net Working Capital shall mean the Total Current
Assets minus the Total Current Liabilities of the Company and its Subsidiaries
as determined in accordance with GAAP accounting principles, consistently
applied.

 

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

 

(xix)                        Subsidiary shall mean 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 with respect to which
such Person, directly or indirectly, owns an equity interest in an amount
sufficient to control the management thereof.  For purposes of this Section 10
only, “Subsidiary” shall not include ProGold Limited Liability Company
(“ProGold”) (but only for so long as ProGold’s current lease with Cargill
remains in effect and in good standing) or Crystech.

 

SECTION 11.                     Events of Default.  Each of the following shall
constitute an “Event of Default” under this Agreement:

 

(A)                               Payment Default.  The Company should fail to
make any payment to, or to purchase any equity in, CoBank when due. Any payment
received by CoBank after its due date shall not be subject to an increase in the
interest rate, as provided for in Section 12 below, if the Company is not
responsible for the payment delay.

 

(B)                               Representations and Warranties.  Any
representation or warranty made or deemed made by the Company herein or in any
Supplement, application, agreement, certificate, or other document related to or
furnished in connection with this Agreement or any Supplement, shall prove to
have been false or misleading in any material respect on or as of the date made
or deemed made.

 

(C)                               Certain Affirmative Covenants.  The Company
or, to the extent required hereunder, any Subsidiary should fail to perform or
comply with Sections 8(A) through 8(H)(ii), 8(H)(viii), or any reporting
covenant set forth in any Supplement hereto, and such failure continues for 15
days after written notice thereof shall have been delivered by CoBank to the
Company.

 

(D)                               Other Covenants and Agreements.  The Company
or, to the extent required hereunder, any Subsidiary should fail to perform or
comply with any other covenant or agreement contained herein or in any other
Loan Document or shall use the proceeds of any loan for an unauthorized purpose.

 

(E)                                 Cross-Default.  The Company should, after
any applicable grace period, breach or be in default under the terms of any
other agreement between the Company and CoBank.

 

(F)                                 Other Indebtedness.  The Company or, to the
extent required hereunder, any Subsidiary should fail to pay when due any
indebtedness to any other person or entity for borrowed money or any long-term
obligation for the deferred purchase price of property (including any
capitalized lease), or any other event occurs which, under any agreement or
instrument relating to such indebtedness or obligation,

 

10

--------------------------------------------------------------------------------

 

has the effect of accelerating or permitting the acceleration of such
indebtedness or obligation, whether or not such indebtedness or obligation is
actually accelerated or the right to accelerate is conditioned on the giving of
notice, the passage of time, or otherwise.

 

(G)                               Judgments.  A judgment, decree, or order for
the payment of money shall be rendered against the Company or any Subsidiary in
an amount which, if enforced, would have a material adverse effect on the
financial condition, profits or operations of the Company, or a Lien prohibited
under Section 9(B) hereof shall have been obtained and shall continue in effect
for a period of 20 consecutive days without being discharged, satisfied, or
stayed pending appeal.

 

(H)                               Insolvency, Etc.  The Company or any
Subsidiary shall: (i) become insolvent or shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
come due; or (ii) suspend its business operations or a material part thereof or
make an assignment for the benefit of creditors; or (iii) apply for, consent to,
or acquiesce in the appointment of a trustee, receiver, or other custodian for
it or any of its property or, in the absence of such application, consent, or
acquiescence, a trustee, receiver, or other custodian is so appointed; or (iv)
commence or have commenced against it any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution, or liquidation
Law of any jurisdiction.

 

(I)                                    Material Adverse Change.  Any material
adverse change occurs, as reasonably determined by CoBank, in the Company’s
financial condition, results of operation, or ability to perform its obligations
hereunder or under any instrument or document contemplated hereby.

 

(J)                                 Guaranties.  The Company’s agreement to
guaranty, assume, or provide surety of other entities’ financial obligations
shall not exceed an aggregate amount greater than 10% of the Company’s net
worth, without the Bank’s prior written consent.

 

SECTION 12.                     Remedies.

 

(A)                               Rights.  Upon the occurrence and during the
continuance of an Event of Default or any Potential Default, CoBank shall have
no obligation to continue to extend credit to the Company and may discontinue
doing so at any time without prior notice.  CoBank shall promptly notify the
Company subsequent to any action to discontinue extending credit to the Company.
In addition, upon the occurrence and during the continuance of any Event of
Default, CoBank may, upon notice to the Company, terminate any commitment and
declare the entire unpaid principal balance of the loans, all accrued interest
thereon, and all other amounts payable under this Agreement, all Supplements,
and the other Loan Documents to be immediately due and payable. Upon such a
declaration, the unpaid principal balance of the loans and all such other
amounts shall become immediately due and payable, without protest, presentment,
demand, or further notice of any kind, all of which are hereby expressly waived
by the Company. In addition, upon such an acceleration:

 

(i)                                    Enforcement.  CoBank may proceed to
protect, exercise, and enforce such rights and remedies as may be provided by
this Agreement, any other Loan Document or under Law.  Each and every one of
such rights and remedies shall be cumulative and may be exercised from time to
time, and no failure on the part of CoBank to exercise, and no delay in
exercising, any right or remedy shall operate as a waiver thereof, and no single
or partial exercise of any right or remedy shall preclude any other or future
exercise thereof, or the exercise of any other right. Without limiting the
foregoing, CoBank may hold

 

11

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and/or set off and apply against the Company’s obligations to CoBank the
proceeds of any equity in CoBank, any cash collateral held by CoBank, or any
balances held by CoBank for the Company’s account (whether or not such balances
are then due).

 

(ii)                                Application of Funds.  CoBank may apply all
payments received by it to the Company’s obligations to CoBank in such order and
manner as CoBank may elect in its sole discretion.

 

(B)                               Default Interest Rate.  In addition to the
rights and remedies set forth above: (i) if the Company fails to purchase any
equity in CoBank when required or fails to make any payment to CoBank when due,
then at CoBank’s option in each instance, such payment shall bear interest from
the date due to the date paid at 4% per annum in excess of the rate(s) of
interest that would otherwise be in effect on that loan; and (ii) after the
maturity of any loan (whether as a result of acceleration or otherwise), the
unpaid principal balance of such loan (including without limitation, principal,
interest, fees and expenses) shall automatically bear interest at 4% per annum
in excess of the rate(s) of interest that would otherwise be in effect on that
loan. All interest provided for herein shall be payable on demand and shall be
calculated on the basis of a year consisting of 360 days.

 

SECTION 13.                     Broken Funding Surcharge.  Notwithstanding any
provision contained in any Supplement giving the Company the right to repay any
loan prior to the date it would otherwise be due and payable, the Company agrees
to provide three Business Days’ prior written notice for any prepayment of a
fixed rate balance and that in the event it repays any fixed rate balance prior
to its scheduled due date or prior to the last day of the fixed rate period
applicable thereto (whether such payment is made voluntarily, as a result of an
acceleration, or otherwise), the Company will pay to CoBank a surcharge in an
amount which would result in CoBank being made whole (on a present value basis)
for the actual or imputed funding losses incurred by CoBank as a result thereof 
Notwithstanding the foregoing, in the event any fixed rate balance is repaid as
a result of the Company refinancing the loan with another lender or by other
means, then in lieu of the foregoing, the Company shall pay to CoBank a
surcharge in an amount sufficient (on a present value basis) to enable CoBank to
maintain the yield it would have earned during the fixed rate period on the
amount repaid. Such surcharges will be calculated in accordance with methodology
established by CoBank (a copy of which will be made available to the Company
upon request).

 

SECTION 14.                     Complete Agreement, Amendments.  This Agreement,
all Supplements, and all other instruments and documents contemplated hereby and
thereby, are intended by the parties to be a complete and final expression of
their agreement. No amendment, modification, or waiver of any provision hereof
or thereof, and no consent to any departure by the Company herefrom or
therefrom, shall be effective unless approved by CoBank and contained in a
writing signed by or on behalf of CoBank, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given. In the event this Agreement is amended or restated, each such
amendment or restatement shall be applicable to all Supplements hereto.

 

SECTION 15.                     Other Types of Credit.  From time to time,
CoBank may issue letters of credit or extend other types of credit to or for the
account of the Company.  In the event the parties desire to do so under the
terms of this Agreement, such extensions of credit may be set forth in any
Supplement hereto and this Agreement shall be applicable thereto.

 

12

--------------------------------------------------------------------------------

 

SECTION 16.                     Applicable Law.  Except to the extent governed
by applicable federal law, this Agreement and each Supplement shall be governed
by and construed in accordance with the laws of the State of Colorado, without
reference to choice of law doctrine.

 

SECTION 17.                     Notices.  All notices hereunder shall be in
writing and shall be deemed to be duly given upon delivery if personally
delivered or sent by telegram or facsimile transmission, or 3 days after mailing
if sent by express, certified or registered mail, to the parties at the
following addresses (or such other address for a party as shall be specified by
like notice):

 

If to CoBank as follows:

If to the Company, as follows:

CoBank, ACB

American Crystal Sugar Company

Corporate Finance

ATTN: Treasurer

P.O. Box 5110

101 North 3rd Street, Moorhead, Minnesota 56560

Denver, Colorado 80217 – Fax # (303) 694-5830

FAX#:  (218) 236-4702

 

SECTION 18.                     Taxes and Expenses.  To the extent allowed by
law, the Company agrees to pay all reasonable out-of-pocket costs and expenses
(including the fees and expenses of counsel retained by CoBank) incurred by
CoBank in connection with the origination, administration, collection, and
enforcement of this Agreement and the other Loan Documents, including, without
limitation, all costs and expenses incurred in perfecting, maintaining,
determining the priority of, and releasing any security for the Company’s
obligations to CoBank, and any stamp, intangible, transfer, or like tax payable
in connection with this Agreement or any other Loan Document.

 

SECTION 19.                     Effectiveness and Severability.  This Agreement
shall continue in effect until: (i) all indebtedness and obligations of the
Company under this Agreement, all Supplements, and all other Loan Documents
shall have been paid or satisfied; (ii) CoBank has no commitment to extend
credit to or for the account of the Company under any Supplement; and (iii)
either party sends written notice to the other terminating this Agreement. Any
provision of this Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof.

 

SECTION 20.                     Successors and Assigns.  This Agreement, each
Supplement, and the other Loan Documents shall be binding upon and inure to the
benefit of the Company and CoBank and their respective successors and assigns,
except that the Company may not assign or transfer its rights or obligations
under this Agreement, any Supplement or any other Loan Document without the
prior written consent of CoBank.

 

SECTION 21.                     Participations.  From time to time, CoBank may
sell to one or more banks, financial institutions or other lenders a
participation in one or more of the loans or other extensions of credit made
pursuant to this agreement.  However, no such participation shall relieve CoBank
of any commitment made to the Company under any Supplement hereto.  In
connection with the foregoing, CoBank may disclose information concerning the
Company and its Subsidiaries to any participant or prospective participant,
provided that such participant or prospective participant agrees to keep such
information confidential.  CoBank agrees that all Loans that are made by CoBank
and that are retained for its own

 

13

--------------------------------------------------------------------------------

 

account and are not included in a sale of participation interest shall be
entitled to patronage distributions in accordance with the bylaws of CoBank and
its practices and procedures related to patronage distribution. Accordingly, all
Loans that are included in a sale of participation interest shall not be
entitled to patronage distributions.  A sale of participation interest may
include certain voting rights of the participants regarding the loans hereunder
(including without limitation the administration, servicing and enforcement
thereof). CoBank agrees to give written notification to the Company of any sale
of participation interests.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

AMERICAN CRYSTAL SUGAR COMPANY

 

By

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

 

 

Title

Vice President

 

Title:

TREASURER

 

 

 

 

 

 

 

 

 

 

 

7/30/03

 

 

 

 

 

[ILLEGIBLE]

 

14

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Attachment “A”

 

 

AMERICAN CRYSTAL SUGAR COMPANY (ACSC)

AND SUBSIDIARIES

Permitted Borrowings

 

Lender

 

Amount

 

 

 

 

 

Commercial Paper

 

Variable
Maximum Outstanding: $225 million

 

 

 

 

 

Minn-Dak Farmers Cooperative

 

Variable

 

Southern Minnesota Beet Sugar Cooperative

 

 

 

United States Sugar Corporation

 

 

 

 

 

 

 

Private Placement of Debt

 

 

 

John Hancock Mutual Life Insurance Co.

 

$26 million

 

John Hancock Variable Life Insurance Co.

 

$1.5 million

 

Paul Revere Life Insurance Company

 

$22.5 million

 

John Hancock Ins. Co.

 

$20 million

 

 

 

 

 

Wells Fargo

 

$1 million

 

 

 

 

 

Commodity Credit Corporation

 

Variable

 

 

 

 

 

East Grand Forks Pollution Control Refunding Series A

 

$4,090,000

 

 

 

 

 

East Grand Forks Industrial Development Series B

 

$915,000

 

 

 

 

 

1996 Traill County Series A, B & C Bonds

 

$18 million

 

 

 

 

 

1997 City of Moorhead Bonds

 

$5.5 million

 

 

 

 

 

1998 Traill County Bonds

 

$5.75 million

 

 

 

 

 

1999 Traill County Bonds

 

$3.58million

 

 

 

 

 

2000 City of East Grand Forks Bonds

 

$5.75 million

 

 

 

 

 

Intercompany Loan(s) from ACSC to Sidney Sugars
Incorporated

 

$60 million

 

 

--------------------------------------------------------------------------------

 

Attachment “B”

 

 

AMERICAN CRYSTAL SUGAR COMPANY (ACSC)

AND SUBSIDIARIES

Permitted Liens

 

Asset

 

Lien Holder

 

 

 

 

 

Sugar

 

Commodity Credit Corporation

 

 

 

 

 

Real Estate, Equipment, Intangibles

 

CoBank as Collateral Agent

 

 

 

 

 

ACSC’s Equity in Crystech, LLC

 

First Union Trust Company, National
Association, as Collateral Agent

 

 

 

 

 

Pollution control Equipment located at ACSC’s
Moorehead, MN Facility

 

Security Agreement
American National Bank and Trust Company
(now known as Firstar Bank)

 

 

 

 

 

Industrial Development Revenue Bond

 

Security Agreement

 

Equipment Located at ACSC’s Moorhead, MN Facility

 

Wells Fargo (successor to Firstar Bank)

 

 

 

 

 

Marketing Assets

 

Minn-Dak Farmers Cooperative

 

 

 

Southern Minnesota Beet Sugar Cooperative

 

 

 

United States Sugar Corporation

 

 

 

 

 

Fixed Assets – Collateral Pool

 

Private Placement of Debt

 

 

 

John Hancock Mutual Life Insurance Co.

 

 

 

John Hancock Variable Life Insurance Co.

 

 

 

Paul Revere Life Insurance Co.

 

 

--------------------------------------------------------------------------------

 

CoBANK, ACB

 

COMPLIANCE CERTIFICATE – CERTIFIED INTERIM FINANCIALS

 

This certificate is being furnished to CoBANK, ACB (“CoBank”) to induce CoBank
to make and/or continue to make advances to the Company and to comply with and
demonstrate compliance with the terms, covenants, and conditions of the
Company’s Master Loan Agreement and all Promissory Note and Supplements thereto.
The undersigned hereby certifies that: (i) this certificate was prepared from
the books and records of the Company, is in agreement with them, and is correct
to the best of the undersigned’s knowledge and belief; (ii) no “Event of
Default” (as defined in the Master Loan Agreement) or event which, with the
giving of notice and/or the passage of time and/or the occurrence of any other
condition, would ripen into an Event of Default (a “Potential Default”) shall
have occurred and be continuing, except as disclosed below; and (iii) based upon
the undersigned’s review of the attached interim financial statement(s) dated as
of                             , to the best of the undersigned’s knowledge, the
attached financial statement(s) are accurate and complete for the period
reflected.

 

This certificate is attached to and made a part of the Company’s interim
financial statements for the reporting period ending
                           .

 

 

 

Required

 

Actual

Net Working Capital

 

 

 

 

1.                                       Current Assets as measured in
accordance with GAAP

2.                                       Current Liabilities as measured in
accordance with GAAP

3.                                       Net Working Capital (1. minus 2.)

 

Minimum Net Working Capital required
for fiscal quarters other than fiscal year
end = $15,000,000

Minimum Net Working Capital required for fiscal year end = $35,000,000

 

1.

2.

3.

 

 

 

 

 

Interest Coverage Ratio

 

 

 

 

1.                                       Average Net Funds Generated which is
the sum of the following for the most recent 12 Fiscal Quarters divided by 4.

•                                          Add: Unit Retains; Depreciation and
amortization; Net income from non-member business and Member business tax timing
differences; Decrease in investments in other cooperatives (excluding
subsidiaries); and Net revenue from sale of stock.

•                                          Minus: Increase in investments in
other cooperatives (excluding subsidiaries); Net loss from non-member business
and member business tax timing differences; Provision for income tax; and
Members’ investment retirements.

2.                                       Average Interest Expense defined as the
total interest expense of the Company and its Subsidiaries (including, without
limitation, interest expense on capital leases) and fees and other charges
payable with respect to all Debt, all determined on a consolidated basis in
accordance with GAAP for the most recent 12-Fiscal Quarters divided by 4.

3.                                       Interest Coverage Ratio (Sum of 1. and
2., divided by 2.)

 

Maintain at all times, and measured as of the end of each Fiscal Quarter, a
minimum ratio of Average Net Funds Generated plus Average Interest Expense to
Average Interest Expense of at least 2.5:1.0.

 

1.

2.

3.

 

--------------------------------------------------------------------------------

 

 

 

Required

 

Actual

Long Term Debt to Capitalization

 

 

 

 

1.                                       Long Term Debt (excluding current
maturities) calculated in accordance with GAAP

2.                                       The sum of Long Term Debt plus Equity
as determined in accordance with GAAP

3.                                       Long Term Debt to Capitalization (1.
divided by 2.)

 

Maintain at all times and measured as of the end of each Fiscal Quarter the
ratio of Long Term Debt divided by the sum of Long Term Debt plus Equity of no
greater than fifty-five percent (55%).

 

1.

2.

3.

 

 

 

 

 

Note: For purposes of this calculation the long term debt and equity associated
with the consolidation of Pro Gold LLC are to be excluded.

 

 

 

 

 

 

 

 

 

Leverage Ratio (and Term Performance Pricing)

 

 

 

 

1.                                       Long Term Debt (excluding current
maturities) calculated in accordance with GAAP

2.                                       Plus or minus the difference between
actual working capital and $35,000,000

3.                                       Total members investments

4.                                       Estimated unit retains

5.                                       Leverage Ratio (The sum of 1. plus or
minus 2. divided by the sum of 3. plus 4.)

 

 

Maintain a leverage ratio of not more than 1.50:1.0

 

1.

2.

3.

4.

5.

 

Based upon the previous fiscal quarter’s Leverage Ratio, the Company is entitled
to the following change in the LIBOR and TREASURY Margins:

 

The above calculations and ratios are to be determined on a consolidated basis
in accordance with Section 10 of the Master Loan Agreement (which excludes the
financial results of ProGold and Crystech from such calculations and ratios).

 

 

AMERICAN CRYSTAL SUGAR COMPANY

 

(“Company”)

 

 

 

 

 

Authorized Signature

 

 

 

 

 

Title

 

 

 

 

 

Date

 

--------------------------------------------------------------------------------

 

Loan No. Z269T01D

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 the (“MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”), and amends and restates the Supplement dated November 6, 2002 and
numbered Z269T01C.

 

SECTION 1.                            The Revolving Term Loan Commitment.  On
the terms and conditions set forth in the MLA and this Supplement, CoBank agrees
to make loans to the Company during the period set forth below in an aggregate
principal amount not to exceed $58,276,702.22 at any one time outstanding (the
“Commitment”). Within the limits of the Commitment, the Company may borrow,
repay and reborrow.

 

SECTION 2.                            Purpose.  The purpose of the Commitment is
to finance the operating needs of the Company.

 

SECTION 3.                            Term.  The term of the Commitment shall be
from the date hereof, up to and including August 1, 2004, or such later date as
CoBank may, in its sole discretion, authorize in writing.

 

SECTION 4.                            Interest.  The Company agrees to pay
interest on the unpaid balance of the loans in accordance with one or more of
the following interest rate options, as selected by the Company:

 

(A)                               CoBank Base Rate.  At a rate per annum equal
at all times to the rate of interest established by CoBank from time to time as
its CoBank Base Rate, which Rate is intended by CoBank to be a reference rate
and not its lowest rate. The CoBank Base Rate will change on the date
established by CoBank as the effective date of any change therein and CoBank
agrees to notify the Company of any such change.

 

(B)                               Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance. Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that: (1) the maximum
fixed period shall be 1 day; and (2) the minimum amount that may be fixed each
time shall be $2,000,000.00.

 

(C)                               LIBOR Option.  At a fixed rate equal to
“LIBOR” (as hereinafter defined) plus 90 basis points per annum (the “LIBOR”
Spread). Under this option: (a) rates may be fixed for “Interest Periods” (as
hereinafter defined) of 1, 2, 3, or 6 months, or 1 year, as selected by the
Company; (b) the minimum amount that may be fixed at any one time shall be
$2,000,000.00; and (c) rates may only be fixed on a “Banking Day” (as
hereinafter defined) or, at the option of the Company, on 3 Banking Days’ prior
notice. For purposes hereof: (i) “LIBOR” shall mean the rate (rounded upward to
the nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as hereinafter defined) or required by any other federal law or regulation)
quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time
two Banking Days before the commencement of the Interest Period for the offering
of U.S. dollar deposits in the London interbank market for the Interest Period
designated by the Company; (ii) “Banking Day” shall mean a day on which CoBank
is open for business, dealings in U.S. dollar deposits are being carried out in
the London interbank market, and banks are open for business in New York City
and London, England; and (iii) “Interest Period” shall mean a period commencing
on the day the Company elects to fix a rate under this option and ending on the
numerically corresponding day in the next calendar month or the month that is 2,
3, or 6 months or 1 year thereafter, as the case may be; provided, however,
that: (x) in the event such

 

--------------------------------------------------------------------------------

 

ending day is not a Banking Day, such period shall be extended to the next
Banking Day unless such next Banking Day falls in the next calendar month, in
which case it shall end on the preceding Banking Day; and (y) if there is no
numerically corresponding day in the month, then such period shall end on the
last Banking Day in the relevant month; and (v) “FRB Regulation D” shall mean
Regulation D as promulgated by the Board of Governors of the Federal Reserve
System, 12 CFR Part 204, as amended.

 

(D)                               Treasury Option. At a fixed rate equal to
Applicable Treasury Margin per annum (as described in terms of basis points
(“bps”) in the chart immediately set forth below) above the “U.S. Treasury Rate”
(as hereinafter defined). Under this option, balances of $2,000,000.00 or more
may be fixed on or before for periods ranging from two years to the final
maturity date of the loan, as selected by the Company. However, rates may not be
fixed in such a manner as to require the Company to have to repay any fixed rate
balance prior to the last day of its fixed rate period in order to pay any
installment of principal. For purposes hereof, the “U.S. Treasury Rate” shall
mean the yield to maturity on U.S. Treasury instruments having the same maturity
date as the last day of the fixed rate period selected by the Company, as
calculated from the bid price indicated by Telerate (page 5) at the time the
rate is fixed. If, however, no instrument is indicated for the maturity
selected, then the rate shall be interpolated based on the bid prices quoted for
the next longest and shortest maturities so indicated. In the event Telerate
ceases to provide such quotations or materially changes the form or substance of
page 5 (as determined by CoBank), then CoBank will notify the Company and the
parties hereto will agree upon a substitute basis for obtaining such quotations

 

TREASURY MARGINS

 

FIXED RATE
PRODUCT

 

INDEX

 

SPREAD OVER INDEX IN BASIS
POINTS (Applicable Treasury Margin)

Two Years

 

U.S.$ Constant Maturity
Treasury Rate (“US$CMT”)

 

125 bps

Three Years

 

US$CMT

 

125 bps

Four Years

 

US$CMT

 

125 bps

Five Years

 

US$CMT

 

125 bps

Seven Years

 

US$CMT

 

140 bps

Ten Years

 

US$CMT

 

140 bps

Floor (Minimum) Rate (For Two to Ten Year Fixed Rate Products Only)

 

CoBank’s cost of funds (as reasonably determined by CoBank in its sole
discretion)

 

105bps

 

The spread over all of the above indices, including the Floor (Minimum) Rate,
may increase or decrease for future fixed amounts based on the Company’s
previous fiscal quarter’s leverage ratio, as follows:

 

2

--------------------------------------------------------------------------------

 

LEVERAGE RATIO
(as defined below)

 

INCREASE/DECREASE
TO SPREAD

 

CHANGE TO
APPLICABLE LIBOR
and TREASURY
MARGINS
(IN BASIS POINTS)

A. Equal to or greater than 1.35:1.00

 

Increase

 

20

B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00

 

None

 

0

C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

 

Decrease

 

10

D. Less than 1.00:1.00

 

Decrease

 

20

 

Leverage Ratio: The Company will maintain a leverage ratio of not more than
1.50:1.0. Leverage ratio is long term (excluding current maturities) calculated
in accordance with GAAP plus or minus the difference between actual working
capital and Minimum Net Working Capital (as defined in the MLA No. Z269, Section
10, as it may be amended), divided by total members investments plus the
estimated unit retains.

 

Changes to the Applicable LIBOR or Treasury Margin shall be made quarterly on
the latter of either: (a) five business days after the Bank’s receipt of the
Company’s certification of compliance with the leverage ratio, or (b) 30 days
after the end of each calendar quarter. If the Company fails to timely furnish
to CoBank the compliance certificate as required to be delivered pursuant to the
MLA, then the change to the Applicable LIBOR and Treasury Margin shall be an
increase of the highest permitted under the above chart.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, unless CoBank otherwise consents in its sole
discretion in each instance, rates may not be fixed for periods expiring after
the maturity date of the loans. In the event CoBank so consents and the
Commitment is not renewed, then each balance so fixed shall be due and payable
on the last day of its fixed rate period, and the promissory note set forth
below shall be deemed amended accordingly. All elections provided for herein
shall be made telephonically or in writing and must be received by 12:00 noon
Company’s local time. Interest shall be calculated on the actual number of days
each loan is outstanding on the basis of a year consisting of 360 days and shall
be payable quarterly in arrears by the 20th day of the following month.

 

SECTION 5.                            Promissory Note.  The Company promises to
repay the loans that are outstanding in 6 equal, consecutive annual principal
payments of $9,396,579.17 with the first such payment due on or before December
31, 2004, and a final principal payment due in an amount equal to the remaining
unpaid principal balance on or before December 31, 2010. If any installment due
date is not a day on which CoBank is open for business, then such payment shall
be made on the next day on

 

3

--------------------------------------------------------------------------------

 

which CoBank is open for business.  In addition to the above, the Company
promises to pay interest on the unpaid principal balance hereof at the times and
in accordance with the provisions set forth in Section 4 hereof.  This note
replaces and supersedes, but does not constitute payment of the indebtedness
evidenced by, the promissory note set forth in the Supplement being amended and
restated hereby.

 

The Company shall be permitted to make special payments, in a minimum amount of
$388,500.00 on the variable rate portion of this loan, when all short term
financing, including the Company’s seasonal loans, Commodity Credit Corporation
loans and other short term loans have been zeroed out.  These special payments
may be readvanced through the expiration date of the Commitment. Reinstatement
may be denied and canceled at any time at the option of CoBank.  The
reinstatable commitments arising from such special payments shall be subject to
the Commitment Fee as described in Section 8 below.

 

SECTION 6.                            Prepayment.  Subject to Section 13 of the
MLA, the loans may be prepaid in whole or in part on one CoBank business day’s
prior written notice.  During the term of the Commitment, prepayments shall be
applied to such balances, fixed or variable, as the Company shall specify. 
After the expiration of the term of the Commitment, prepayments shall, unless
CoBank otherwise agrees, be applied to principal installments in the inverse
order of their maturity and to such balances, fixed or variable, as CoBank shall
specify.

 

SECTION 7.                            Commitment Fee.  In consideration of the
Commitment, the Company agrees to pay to CoBank a commitment fee on the average
daily unused portion of the Commitment at the rate of 20 basis points per annum
(calculated on a 360 day basis), payable quarterly in arrears by the 20th day
following each calendar quarter. Such fee shall be payable for each quarter (or
portion thereof) occurring during the original or any extended term of the
Commitment.

 

SECTION 8.                            Commitments Arising From Special Payments.
 Commitments arising as a result of special payments described in Section 5
above shall be subject to a commitment fee of 25 basis points (0.25%) on an
annualized basis, on the average daily unused commitment.  Any such fees
incurred shall be payable on the last day of the calendar quarter, in arrears,
computed on the basis of a year of 360 days for the actual number of days
elapsed in which such reinstatable commitments were outstanding.

 

SECTION 9.                            Security.  In addition to any other
security that may otherwise be required or provided, the Company’s obligations
to CoBank under this Supplement are secured by that Restated Mortgage and
Security Agreement dated September 15, 1998, from American Crystal Sugar Company
to St. Paul Bank for Cooperatives (now known as CoBank as a result of merger),
as Collateral Agent, as amended on January 31, 2003 by that certain Modification
Agreement to the Amended and Restated Mortgage and Security Agreement.

 

SECTION 10.                     Amendment Fee.  In consideration of the
amendment, the Company agrees to pay to CoBank on the execution hereof a fee in
the amount of $9,396.58.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

AMERICAN CRYSTAL SUGAR COMPANY

 

 

By:

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

 

 

 

 

 

 

 

 

 

 

7-30-03

 

 

 

 

 

[ILLEGIBLE]

 

4

--------------------------------------------------------------------------------

 

Loan No. Z269T01DNP

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”), and amends and restates the Supplement dated November 6, 2002 and
numbered Z269T01CNP.

 

SECTION 1.                            The Revolving Term Loan Commitment. On the
terms and conditions set forth in the MLA and this Supplement, CoBank agrees to
make loans to the Company during the period set forth below in an aggregate
principal amount not to exceed $49,079,855.68 at any one time outstanding (the
“Commitment”). Within the limits of the Commitment, the Company may borrow,
repay and reborrow.

 

SECTION 2.                           Purpose. The purpose of the Commitment is
to finance the operating needs of the Company.

 

SECTION 3.                           Term. The term of the Commitment shall be
from the date hereof, up to and including August 1, 2004, or such later date as
CoBank may, in its sole discretion, authorize in writing.

 

SECTION 4.                           Interest. The Company agrees to pay
interest on the unpaid balance of the loans in accordance with one or more of
the following interest rate options, as selected by the Company:

 

(A)                              CoBank Base Rate.  At a rate per annum equal at
all times to the rate of interest established by CoBank from time to time as its
CoBank Base Rate, which Rate is intended by CoBank to be a reference rate and
not its lowest rate. The CoBank Base Rate will change on the date established by
CoBank as the effective date of any change therein and CoBank agrees to notify
the Company of any such change.

 

(B)                              Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance.   Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that:  (1) the maximum
fixed period shall be 1 day; and (2) the minimum amount that may be fixed each
time shall be $2,000,000.00.

 

(C)                              LIBOR Option.  At a fixed rate equal to “LIBOR”
(as hereinafter defined) plus 90 basis points per annum (the “LIBOR Spread”).
Under this option: (a) rates may be fixed for “Interest Periods” (as hereinafter
defined) of 1, 2, 3 or 6 months, or 1 year, as selected by the Company; (b) the
minimum amount that may be fixed at any one time shall be $2,000,000.00; and (c)
rates may only be fixed on a “Banking Day” (as hereinafter defined) or, at the
option of the Company, on 3 Banking Days’ prior notice.   For purposes hereof:
(i) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on “Eurocurrency Liabilities” (as herein after
defined) for banks subject to “FRB Regulation D” (as herein after defined) or
required by any other federal law or regulation) quoted by the British Bankers
Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days before the
commencement of the Interest for Period for the offering of U.S. dollar deposits
in the London interbank market for the Interest Period designated by the
Company, as published by Bloomberg or another major information vendor listed on
the BBA’s official website; (ii) “Banking Day” shall mean a day on which CoBank
is open for business, dealings in U.S. dollar deposits are being carried out in
the London interbank market, and banks are open for business in New York City
and London, England; (iii) “Interest Period” shall mean a period commencing on
the day the Company elects to fix a rate under this option and ending on the
numerically corresponding day in the next calendar month or the month that is 2,
3 or 6

 

--------------------------------------------------------------------------------

 

months or 1 year thereafter, as the case may be: provided, however, that: (x) in
the event such ending day is not a Banking Day, such period shall be extended to
the next Banking Day unless such next Banking Day falls in the next calendar
month, in which case it shall end on the preceding Banking Day; and (y) if there
is no numerically corresponding day in the month, then such period shall end on
the last Banking Day in the relevant month; (iv) “Eurocurrency Liabilities”
shall have meaning as set forth in FRB Regulation D; and (v) “FRB Regulation D”
shall mean Regulation D as promulgated by the Board of Governors of the Federal
Reserve System, 12 CFR Part 204, as amended.

 

(D) Treasury Option. At a fixed rate equal to Applicable Treasury Margin per
annum (as described in terms of basis points (“bps”) in the chart immediately
set forth below) above the “U.S. Treasury Rate” (as hereinafter defined). Under
this option, balances of $2,000,000.00 or more may be fixed on or before for
periods ranging from two years to the final maturity date of the loan, as
selected by the Company. However, rates may not be fixed in such a manner as to
require the Company to have to repay any fixed rate balance prior to the last
day of its fixed rate period in order to pay any installment of principal. For
purposes hereof, the “U.S. Treasury Rate” shall mean the yield to maturity on
U.S. Treasury instruments having the same maturity date as the last day of the
fixed rate period selected by the Company, as calculated from the bid price
indicated by Telerate (page 5) at the time the rate is fixed. If, however, no
instrument is indicated for the maturity selected, then the rate shall be
interpolated based on the bid prices quoted for the next longest and shortest
maturities so indicated. In the event Telerate ceases to provide such quotations
or materially changes the form or substance of page 5 (as determined by CoBank),
then CoBank will notify the Company and the parties hereto will agree upon a
substitute basis for obtaining such quotations.

 

TREASURY MARGINS

 

FIXED RATE
PRODUCT

 

INDEX

 

SPREAD OVER INDEX IN BASIS
POINTS (Applicable Treasury Margin)

Two Years

 

U.S. $ Constant Maturity
Treasury (“US$CMT”)

 

125 bps

Three Years

 

US$CMT

 

125 bps

Four Years

 

US$CMT

 

125 bps

Five Years

 

US$CMT

 

125 bps

Seven Years

 

US$CMT

 

140 bps

Ten Years

 

US$CMT

 

140 bps

Floor (Minimum) Rate (For Two to Ten Year Fixed Rate Products Only)

 

CoBank’s cost of funds (as reasonably determined by CoBank in its sole
discretion)

 

105bps

 

The spread over all of the above indices, including the Floor (Minimum) Rate,
may increase or decrease for future fixed amounts based on the Company’s
previous fiscal quarter’s leverage ratio, as follows:

 

2

--------------------------------------------------------------------------------

 

LEVERAGE RATIO
(as defined below)

 

INCREASE/DECREASE
TO SPREAD

 

CHANGE TO
APPLICABLE LIBOR
and TREASURY
MARGINS
(IN BASIS POINTS)

A. Equal to or greater than 1.35:1.00

 

Increase

 

20

B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00

 

None

 

0

C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

 

Decrease

 

10

D. Less than 1.00:1.00

 

Decrease

 

20

 

Leverage Ratio: The Company will maintain a leverage ratio of not more than
1.50:1.0. Leverage ratio is long term debt (excluding current maturities)
calculated in accordance with GAAP plus or minus the difference between actual
working capital and Minimum Net Working Capital (as defined in the MLA No. Z269,
Section 10, as it may be amended), divided by total members investments plus the
estimated unit retains.

 

Changes to the Applicable LIBOR or Treasury Margin shall be made quarterly on
the latter of either: (a) five business days after the Bank’s receipt of the
Company’s certification of compliance with the leverage ratio, or (b) 30 days
after the end of each calendar quarter. If the Company fails to timely furnish
to CoBank the compliance certificate as required to be delivered pursuant to the
MLA, then the change to the Applicable LIBOR and Treasury Margin shall be an
increase of the highest permitted under the above chart.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, unless CoBank otherwise consents in its sole
discretion in each instance, rates may not be fixed for periods expiring after
the maturity date of the loans. In the event CoBank so consents and the
Commitment is not renewed, then each balance so fixed shall be due and payable
on the last day of its fixed rate period, and the promissory note set forth
below shall be deemed amended accordingly. All elections provided for herein
shall be made telephonically or in writing and must be received by 12:00 noon
Company’s local time. Interest shall be calculated on the actual number of days
each loan is outstanding on the basis of a year consisting of 360 days and shall
be payable quarterly in arrears by the 20th day of the following month.

 

SECTION 5.                            Promissory Note.  The Company promises to
repay the loans that are outstanding in 6 equal, consecutive annual principal
payments of $7,603,420.83, with the first such payment due on or before December
31, 2003, and a final principal payment due in an amount equal to the remaining
unpaid principal balance on or before December 31, 2009.  If any installment due
date is not a day on which CoBank is open for business, then such payment shall
be made on the next day on which CoBank is open for business. In addition to the
above, the Company promises to pay interest on the unpaid principal balance
hereof at the times and in accordance with the provisions set forth in Section 4
hereof. This note replaces and supersedes, but does not constitute payment of
the indebtedness evidenced by, the promissory note set forth in the Supplement
being amended and restated hereby.

 

3

--------------------------------------------------------------------------------

 

The Company shall be permitted to make special payments, in a minimum amount of
$111,500.00, on the variable rate portion of this loan, when all short term
financing, including the Company’s seasonal loans, Commodity Credit Corporation
loans and other short term loans have been zeroed out.  These special payments
may be readvanced through the expiration date of the Commitment.  Reinstatement
may be denied and canceled at any time at the option of CoBank.  The
reinstatable commitments arising from such special payments shall be subject to
the Commitment Fee as described in Section 8 below.

 

SECTION 6.                            Prepayment.  Subject to Section 13 of the
MLA, the loans may be prepaid in whole or in part on one CoBank business day’s
prior written notice. During the term of the Commitment, prepayments shall be
applied to such balances, fixed or variable, as the Company shall specify. After
the expiration of the term of the Commitment, prepayments shall, unless CoBank
otherwise agrees, be applied to principal installments in the inverse order of
their maturity and to such balances, fixed or variable, as CoBank shall specify.

 

SECTION 7.                            Commitment Fee.  In consideration of the
Commitment, the Company agrees to pay to CoBank a commitment fee on the average
daily unused portion of the Commitment at the rate of 20 basis points per annum
(calculated on a 360 day basis), payable quarterly in arrears by the 20th day
following each calendar quarter. Such fee shall be payable for each calendar
quarter (or portion thereof) occurring during the original or any extended term
of the Commitment.

 

SECTION 8.                            Commitments Arising From Special
Payments.  Commitments arising as a result of special payments described in
Section 5 above shall be subject to a commitment fee of 25 basis points (0.25%)
on an annualized basis, on the average daily unused commitment.  Any such fees
incurred shall be payable on the last day of the calendar quarter, in arrears,
computed on the basis of a year of 360 days for the actual number of days
elapsed in which such reinstatable commitments were outstanding.

 

SECTION 9.                            Security.  In addition to any other
security that may otherwise be required or provided, the Company’s obligations
to CoBank under this Supplement are secured by that Restated Mortgage and
Security Agreement dated September 15, 1998, from American Crystal Sugar Company
to St. Paul Bank for Cooperatives (now known as CoBank as a result of merger),
as Collateral Agent, as amended on January 31, 2003 by that certain Modification
Agreement to the Amended and Restated Mortgage and Security Agreement.

 

SECTION 10.                     Amendment Fee.  In consideration of the
amendment, the Company agrees to pay to CoBank on the execution hereof a fee in
the amount of $7,603.43.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

AMERICAN CRYSTAL SUGAR COMPANY

 

 

By:

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

 

 

 

 

 

 

 

 

 

 

7-30-03

 

 

 

 

 

[ILLEGIBLE]

 

4

--------------------------------------------------------------------------------

 

Loan No. Z269T02DNP

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”), and amends and restates the Supplement dated November 6, 2002 and
numbered Z269T02C NP.

 

SECTION 1.  The Revolving Term Loan Commitment.  On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to exceed
$5,012,277.55 at any one time outstanding (the “Commitment”).  Within the limits
of the Commitment, the Company may borrow, repay and reborrow, provided,
however, no advances shall be made on this Term Loan, until Term Loan No.
Z269T01D, (as it may be amended), has been fully advanced.

 

SECTION 2.  Purpose and Transfer.  The purpose of the Commitment is to finance
the operating needs of the Company.

 

SECTION 3.  Term.  The term of the Commitment shall be from the date hereof, up
to and including July 31, 2003, or such later date as CoBank may, in its sole
discretion, authorize in writing.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance
of the loans in accordance with one or more of the following interest rate
options, as selected by the Company:

 

(A)                              CoBank Base Rate.  At a rate per annum equal at
all times to the rate of interest established by CoBank from time to time as its
CoBank Base Rate, which Rate is intended by CoBank to be a reference rate and
not its lowest rate.  The CoBank Base Rate will change on the date established
by CoBank as the effective date of any change therein and CoBank agrees to
notify the Company of any such change.

 

(B)                              Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance.  Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that:  (1) the maximum
fixed period shall be 1 day; and (2) the minimum amount that may be fixed each
time shall be $2,000,000.00.

 

(C)                              LIBOR Option.  At a fixed rate equal to “LIBOR”
(as hereinafter defined) plus 90 basis points per annum (the “LIBOR Spread”). 
Under this option: (a) rates may be fixed for “Interest Periods” (as hereinafter
defined) of 1, 2, 3 or 6 months, or 1 year, as selected by the Company; (b) the
minimum amount that may be fixed at any one time shall be $2,000,000.00; and (c)
rates may only be fixed on a “Banking Day” (as hereinafter defined) or, at the
option of the Company, on 3 Banking Days’ prior notice.  For purposes hereof:
(i) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on “Eurocurrency Liabilities” (as herein after
defined) for banks subject to “FRB Regulation D” (as herein after defined) or
required by any other federal law or regulation) quoted by the British Bankers
Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days before the
commencement of the Interest for Period for the offering of U.S. dollar deposits
in the London interbank market for the Interest Period designated by the
Company, as published by Bloomberg or another major information vendor listed on
the BBA’s official website; (ii) “Banking Day” shall mean a day on which CoBank
is open for business, dealings in U.S. dollar deposits are being carried out in
the London interbank market, and banks are open for business in New York City
and London, England; (iii) “Interest Period” shall mean a period commencing on
the day the Company elects to fix a rate under this

 

--------------------------------------------------------------------------------

 

option and ending on the numerically corresponding day in the next calendar
month or the month that is 2, 3 or 6 months or 1 year thereafter, as the case
may be; provided, however, that: (x) in the event such ending day is not a
Banking Day, such period shall be extended to the next Banking Day unless such
next Banking Day falls in the next calendar month, in which case it shall end on
the preceding Banking Day; and (y) if there is no numerically corresponding day
in the month, then such period shall end on the last Banking Day in the relevant
month; (iv) “Eurocurrency Liabilities” shall have meaning as set forth in FRB
Regulation D; and (v) “FRB Regulation D” shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.

 

(D) Treasury Option.  At a fixed rate equal to Applicable “Treasury” Margin per
annum (as described in terms of basis points (“bps”) in the chart immediately
set forth below) above the “U.S. Treasury Rate” (as hereinafter defined).  Under
this option, balances of $2,000,000.00 or more may be fixed on or before for
periods ranging from two years to the final maturity date of the loan, as
selected by the Company.  However, rates may not be fixed in such a manner as to
require the Company to have to repay any fixed rate balance prior to the last
day of its fixed rate period in order to pay any installment of principal.  For
purposes hereof, the “U.S. Treasury Rate” shall mean the yield to maturity on
U.S. Treasury instruments having the same maturity date as the last day of the
fixed rate period selected by the Company, as calculated from the bid price
indicated by Telerate (page 5) at the time the rate is fixed.  If, however, no
instrument is indicated for the maturity selected, then the rate shall be
interpolated based on the bid prices quoted for the next longest and shortest
maturities so indicated.  In the event Telerate ceases to provide such
quotations or materially changes the form or substance of page 5 (as determined
by CoBank), then CoBank will notify the Company and the parties hereto will
agree upon a substitute basis for obtaining such quotations.

 

TREASURY MARGINS

 

FIXED RATE
PRODUCT

 

INDEX

 

SPREAD OVER INDEX IN BASIS
POINTS (Applicable Treasury Margin)

Two Years

 

U.S.$ Constant Maturity Treasury (“US$CMT”)

 

125bps

Three Years

 

US$CMT

 

125bps

Four Years

 

US$CMT

 

125bps

Five Years

 

US$CMT

 

125bps

Seven Years

 

US$CMT

 

140bps

Ten Years

 

US$CMT

 

140bps

Floor (Minimum) Rate (For Two to Ten Year Fixed Rate Products Only)

 

CoBank’s cost of funds (as reasonably determined by CoBank in its sole
discretion)

 

105bps

 

The spread over all of the above indices, including the Floor (Minimum) Rate,
may increase or decrease for future fixed amounts based on the Borrower’s
previous fiscal quarter’s leverage ratio, as follows:

 

2

--------------------------------------------------------------------------------

 

LEVERAGE RATIO
(as defined below)

 

INCREASE/DECREASE
TO SPREAD

 

CHANGE TO
APPLICABLE LIBOR
and TREASURY
MARGINS
(IN BASIS POINTS)

A.  Equal to or greater than 1.35:1.00

 

Increase

 

20

B.  Equal to or greater than 1.20:1.00, but less than 1.35:1.00

 

None

 

0

C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

 

Decrease

 

10

D.  Less than 1.00:1.00

 

Decrease

 

20

 

Leverage Ratio: The Company will maintain a leverage ratio of not more than
1.50:1.0.  Leverage ratio is long term debt (excluding current maturities)
calculated in accordance with GAAP plus or minus the difference between actual
working capital and Minimum Net Working Capital (as defined in the MLA No. Z269,
Section 10, as it may be amended), divided by total members investments plus the
estimated unit retains.

 

Changes to the Applicable LIBOR or Treasury Margin shall be made quarterly on
the latter of either: (a) five business days after the Bank’s receipt of the
Company’s certification of compliance with the leverage ratio, or (b) 30 days
after the end of each calendar quarter.  If the Company fails to timely furnish
to CoBank the compliance certificate as required to be delivered pursuant to the
MLA, then the change to the Applicable LIBOR and Treasury Margin shall be an
increase of the highest permitted under the above chart.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options.  Upon the expiration of any fixed rate period, interest
shall automatically accrue at the variable rate option unless the amount fixed
is repaid or fixed for an additional period in accordance with the terms
hereof.  Notwithstanding the foregoing, unless CoBank otherwise consents in its
sole discretion in each instance, rates may not be fixed for periods expiring
after the maturity date of the loans.  In the event CoBank so consents and the
Commitment is not renewed, then each balance so fixed shall be due and payable
on the last day of its fixed rate period, and the promissory note set forth
below shall be deemed amended accordingly.  All elections provided for herein
shall be made telephonically or in writing and must be received by 12:00 noon
Company’s local time.  Interest shall be calculated on the actual number of days
each loan is outstanding on the basis of a year consisting of 360 days and shall
be payable quarterly in arrears by the 20th day of the following month.

 

SECTION 5.  Promissory Note.  The Company promises to repay the loans that are
outstanding in 2 equal, consecutive annual principal payments of $2,000,000.00,
with the first such payment due on or before December 31, 2003, and the second
such payment due on or before December 31, 2004, and a final principal payment
due in an amount equal to the remaining unpaid principal balance on or before
December 31, 2005.  If any installment due date is not a day on which

 

3

--------------------------------------------------------------------------------

 

CoBank is open for business, then such payment shall be made on the next day on
which CoBank is open for business.  In addition to the above, the Company
promises to pay interest on the unpaid principal balance hereof at the times and
in accordance with the provisions set forth in Section 4 hereof.  This note
replaces and supersedes, but does not constitute payment of the indebtedness
evidenced by, the promissory note set forth in the Supplement being amended and
restated hereby.

 

SECTION 6.  Prepayment.  Subject to Section 13 of the MLA, the loans may be
prepaid in whole or in part on one CoBank business day’s prior written notice. 
During the term of the Commitment, prepayments shall be applied to such
balances, fixed or variable, as the Company shall specify.  After the expiration
of the term of the Commitment, prepayments shall, unless CoBank otherwise
agrees, be applied to principal installments in the inverse order of their
maturity and to such balances, fixed or variable, as CoBank shall specify.

 

SECTION 7.  Commitment Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 20 basis points per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter.  Such fee shall be payable for each calendar quarter (or portion
thereof) occurring during the original or any extended term of the Commitment.

 

SECTION 8.  Letters of Credit.  If agreeable to CoBank in its sole discretion in
each instance, in addition to loans, the Company may utilize the Commitment to
open irrevocable letters of credit for its account.  Each letter of credit will
be issued within a reasonable period of time after receipt of a duly completed
and executed copy of CoBank’s then current form of application (or, if
applicable, in accordance with the terms of any CoTrade-Agreement between the
parties), and shall reduce the amount available under the Commitment by the
maximum amount capable of being drawn thereunder.  Any draw under any letter of
credit issued hereunder shall be deemed an advance under the Commitment.  Each
letter of credit must be in form and content acceptable to CoBank in its sole
discretion, must expire no later than the maturity date of the loans.  There
shall be a fee for issuing each letter of Credit that shall be determined by
CoBank at the time of application and paid by the Company at or before issuance
or as otherwise agreed.

 

SECTION 9.  Security.  In addition to any other security that may otherwise be
required or provided, the Company’s obligations to CoBank under this Supplement
are secured by that Restated Mortgage and Security Agreement dated September 15,
1998, from American Crystal Sugar Company to St. Paul Bank for Cooperatives (now
known as CoBank as a result of merger), as Collateral Agent, as amended on
January 31, 2003 by that certain Modification Agreement to the Amended and
Restated Mortgage and Security Agreement.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

 

 

 

By:

  /s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

Title:

  Vice President

 

Title:

TREASURER

 

4

--------------------------------------------------------------------------------

 

Loan No. Z269T03BNP

 

SINGLE ADVANCE TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated as of
July 21, 2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK,
ACB (“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”), and amends and restates the Supplement dated April 21, 2000 and
numbered Z269T03A NP (the “Existing Supplement”).

 

SECTION 1.  The Term Loan.  This Supplement is to evidence a term loan to the
Company in the original principal commitment amount of $12,000,000.00 (the
“Loan”).  The Loan was originally evidenced by Note No. 30800NP (the “Note”) and
was subject to the terms of that certain Note Agreement dated December 5, 1994
by and among the Company, CoBank’s predecessor (the St. Paul Bank for
Cooperatives), and Bank of North Dakota (the “Note Agreement”).  The Note was
replaced by the Existing Supplement.  The outstanding principal balance of the
Loan as of the date hereof is $4,800,000.00.

 

SECTION 2.  Purpose and Transfer.  The purpose of this Supplement is to replace
the Existing Supplement and transfer the indebtedness evidenced thereby to this
Supplement.  As of the date of this Supplement, the Existing Supplement shall be
deemed replaced and superseded, but the indebtedness evidenced by the Existing
Supplement shall not be deemed to have been paid off by this Supplement.  The
Note Agreement shall continue to remain in full force and effect except that any
reference to the “Loan” shall be deemed to mean the indebtedness evidenced by
this Supplement, and any reference to “Loan Agreement” shall be deemed a
reference to the MLA.  To the extent that the Note Agreement may be inconsistent
with the terms of this Supplement or the MLA, the terms of the Note Agreement
shall control.  All security given-to secure the Note shall secure this
Supplement.

 

SECTION 3.  Availability.  The date for permitting advances under the Note has
expired.  There is no further availability.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance
of the Loan at such rate or rates as determined in accordance with the terms of
the Note Agreement.  As of the date hereof the interest rate is fixed at 6.34%
per annum and shall remain fixed at such rate for the period as provided for in
the Note Agreement.  All other matters regarding the calculation and payment of
interest shall be in accordance with the terms of the Note Agreement (including,
without limitation, the terms applicable to prepayment of fixed rate loans prior
to pricing maturity dates).

 

SECTION 5.  Promissory Note.  The Company promises to repay the Loan in
accordance with the repayment terms of the Note Agreement.  If any installment
due date is not a day on which CoBank is open for business, then such payment
shall be made on the next day on which CoBank is open for business.  In addition
to the above, the Company promises to pay interest on the unpaid principal
balance hereof at the times and in accordance with the terms of the Note
Agreement.  This note replaces and supersedes, but does not constitute payment
of the indebtedness evidenced by, the promissory note set forth in the
Supplement being amended and restated hereby.

 

--------------------------------------------------------------------------------

 

SECTION 6.  Prepayment.  Subject to the terms of the Note Agreement, the Loan
may be prepaid in whole or in part on one CoBank business day’s prior written
notice.

 

SECTION 7.  Security.  In addition to any other security that may otherwise be
required or provided, the Company’s obligations to CoBank under this Supplement
are secured by that Restated Mortgage and Security Agreement dated September 15,
1998, from American Crystal Sugar Company to St. Paul Bank for Cooperatives (now
known as CoBank as a result of merger), as Collateral Agent, as amended on
January 31, 2003 by that certain Modification Agreement to the Amended and
Restated Mortgage and Security Agreement.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

 

 

 

By:

 /s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

2

--------------------------------------------------------------------------------

 

Loan No. Z269T04A

 

NON-REVOLVING CREDIT SUPPLEMENT

(Letter of Credit)

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”) and amends and restates the Supplement dated March 31, 2000 and
numbered Z269T04 (the “Existing Supplement”).

 

SECTION 1.  The Non-Revolving Credit Facility.  On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to exceed
$31,000,000.00 at any one time outstanding (the “Commitment”).  Amounts borrowed
and later repaid may not be reborrowed.

 

SECTION 2.  Purpose.  The purpose of the Commitment is to reimburse CoBank in
the event of draws on letters of credit issued by CoBank (or its predecessor)
for the benefit of the Company, and to renew, extend and refinance the Company’s
obligations to CoBank under the Existing Supplement.

 

SECTION 3.  Term.  The term of the Commitment shall be from the date hereof, up
to and including April 30, 2013 (the “Maturity Date”), or such later date as
CoBank may, in its sole discretion, authorize in writing.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid
principal balance of the loan(s), in accordance with the following interest
rate:

 

CoBank Base Rate.  The unpaid principal balance shall bear interest at a rate
per annum equal at all times to the rate of interest established by CoBank from
time to time as its CoBank Base Rate, which Rate is intended by CoBank to be a
reference and not its lowest rate.  The CoBank Base Rate will change on the date
established by CoBank as the effective date of any change therein and CoBank
agrees to notify the Company of any such change.

 

Interest shall be calculated on the actual number of days each loan is
outstanding on the basis of a year consisting of 360 days and shall be payable
monthly in arrears by the 20th day of the following month or such other date
that CoBank shall require in a written notice to the Company.

 

SECTION 5.  Promissory Note.  The Company promises to repay the unpaid principal
balance of the loans on demand, or if no demand is made, then any time on or
before the Commitment expiration date.  In addition to the above, the Company
promises to pay interest on the unpaid principal balance of the loans at the
times and in accordance with the provisions set forth in Section 4 hereof.

 

SECTION 6.  Letters of Credit.  If agreeable to CoBank in its sole discretion in
each instance, in addition to loans, the Company may utilize the Commitment to
open irrevocable letters of credit for its account.  Each letter of credit will
be issued within a reasonable period of time after receipt of a duly completed
and executed copy of CoBank’s then current form of application (or, if
applicable, in accordance with the terms of any CoTrade Agreement between the
parties), and shall reduce the amount available under the Commitment by the
maximum amount capable of being drawn thereunder.  Any draw under any letter of
credit issued hereunder shall be deemed an advance under the Commitment.  Each

 

--------------------------------------------------------------------------------

 

letter of credit must be in form and content acceptable to CoBank in its sole
discretion, must expire no later than the Maturity Date. There shall be a fee
for issuing each letter of Credit that shall be determined by CoBank at the time
of application and paid by the Company at or before issuance or as otherwise
agreed.

 

SECTION 7.  Security.  In addition to any other security that may otherwise be
required or provided, the Company’s obligations to CoBank under this Supplement
are secured by that Restated Mortgage and Security Agreement dated September 15,
1998, from American Crystal Sugar Company to St. Paul Bank for Cooperatives (now
known as CoBank as a result of merger), as Collateral Agent, as amended on
January 31, 2003 by that certain Modification Agreement to the Amended and
Restated Mortgage and Security Agreement.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

By:

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

2

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Loan No. Z269T05

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”).

 

SECTION 1.  The Revolving Term Loan Commitment.  On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to exceed
$15,000,000.00 at any one time outstanding (the “Commitment”).  Within the
limits of the Commitment, the Company may borrow, repay and reborrow.

 

SECTION 2.  Purpose.  The purpose of the Commitment is to provide for short-term
commercial and standby letters of credit, and, if the Commitment under the
Statused Revolving Credit Supplement No. Z269S01E (as it may be amended from
time to time) is fully advanced, then to provide for the operating needs of the
Company.

 

SECTION 3.  Term.  The term of the Commitment shall be from the date hereof, up
to and including August 1, 2005, or such later date as CoBank may, in its sole
discretion, authorize in writing.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance
of the loans in accordance with one or more of the following interest rate
options, as selected by the Company:

 

(A)                               Base Rate Option.  At a-rate per annum at all
times equal to the Base Rate.  For the purposes hereof, Base Rate means that
rate in effect from day to day defined as 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 Lender in its reasonable discretion.  Loans for which the Base
Rate option is selected are referred to herein as “Base Rate Loans”.  Base Rate
Loans shall be made available on any Banking Day.

 

(B)                               Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance.  Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that:  (1) the maximum
fixed period shall be 1 day; and (2) the minimum amount that may be fixed each
time shall be $2,000,000.00.

 

(C)                               LIBOR Option.  At a fixed rate equal to
“LIBOR” (as hereinafter defined) plus 100 basis points per annum.  Under this
option:  (a) rates may be fixed for “Interest Periods” (as hereinafter defined)
of 1, 2, 3 or 6 months, or 1 year, as selected by the Company; (b) the minimum
amount that may be fixed at any one time shall be $2,000,000.00; and (c) rates
may only be fixed on a “Banking Day” (as hereinafter defined) or, at the option
of the Company, on 3 Banking Days’ prior notice.  For purposes hereof: (i)
“LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on  “Eurocurrency Liabilities” (as hereinafter
defined) for banks subject to  “FRB Regulation D” (as hereinafter defined) or
required by any other federal law or regulation) quoted by the British Bankers
Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days before the
commencement of the Interest for Period for the offering of U.S. dollar deposits
in the London interbank market for the Interest Period designated by the
Company, as published by Bloomberg or another major

 

--------------------------------------------------------------------------------

 

information vendor listed on the BBA’s official website; (ii) “Banking Day”
shall mean a day on which CoBank is open for business, dealings in U.S. dollar
deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England; (iii) “Interest Period”
shall mean a period commencing on the day the Company elects to fix a rate under
this option and ending on the numerically corresponding day in the next calendar
month or the month that is 2, 3 or 6 months or 1 year thereafter, as the case
may be; provided, however, that: (x) in the event such ending day is not a
Banking Day, such period shall be extended to the next Banking Day unless such
next Banking Day falls in the next calendar month, in which case it shall end on
the preceding Banking Day; and (y) if there is no numerically corresponding day
in the month, then such period shall end on the last Banking Day in the relevant
month: (iv) “Eurocurrency Liabilities” shall have meaning as set forth in FRB
Regulation D; and (v) “FRB Regulation D” shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.

 

(1)                                 Notwithstanding anything herein to the
contrary, if, on or prior to the determination of the LIBOR rate for any LIBOR
Interest Period, CoBank determines (which determination shall be conclusive)
that quotations of interest rates in accordance with the definition of LIBOR
rate are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for LIBOR rate advances
as provided in this Supplement, then CoBank shall give the Company prompt notice
thereof, and so long as such condition remains in effect, CoBank shall be under
no obligation to make LIBOR rate loans, convert Base Rate loans into LIBOR rate
loans, or continue LIBOR rate loans, and the Company shall, on the last day(s)
of the then current applicable LIBOR Interest Period(s) for the outstanding
LIBOR rate loans, either prepay such LIBOR rate loans or such LIBOR rate loans
shall automatically be converted into a Base Rate loan in accordance with this
Section 4.

 

(2)                                 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 date hereof (each, a
“Change in Law”) shall make it unlawful for CoBank to (a) advance any LIBOR rate
loan or (b) maintain all or any portion of a LIBOR rate loan, then CoBank shall
promptly notify the Company thereof.  In the former event, any obligation of
CoBank to make available any future LIBOR rate loan shall immediately be
canceled (and, in lieu thereof shall be made as a Base Rate loan or Quoted Rate
loan at the option of the Company), and in the latter event, any such unlawful
LIBOR rate loan or portions thereof then outstanding shall be converted, at the
option of the Company, to either a Base Rate loan or a Quoted Rate loan;
provided, however, that if any such Change in Law shall permit the LIBOR rate to
remain in effect until the expiration of the LIBOR rate period applicable to any
such unlawful LIBOR rate loan, then such LIBOR rate loan shall continue in
effect until the expiration of such LIBOR rate period.  Upon the occurrence of
any of the foregoing events on account of any Change in Law, the Company shall
pay to CoBank immediately upon demand such amounts as may be necessary to
compensate CoBank for any fees, charges, or other costs incurred or payable by
CoBank as a result thereof and which are attributable to any LIBOR rate loans
made available to the Company hereunder.

 

(3)                                 If CoBank shall determine that, after the
date hereof, the adoption of any applicable Law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such governmental authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on capital of CoBank as a
consequence of CoBank’s obligations hereunder to a level below that which CoBank
could

 

2

--------------------------------------------------------------------------------

 

have achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy existing on the date
of this Supplement) by an amount deemed by CoBank to be material, then from time
to time, within fifteen (15) days after demand by CoBank, the Company shall pay
to CoBank such additional amount or amounts as will compensate CoBank for such
reduction.  CoBank agrees to take reasonable steps to reduce the amount of such
increase, provided, however, that CoBank shall not be required to take any such
step, if in CoBank’s sole opinion, CoBank would suffer an economic loss or any
negative legal or regulatory consequences as a result thereof.  If CoBank is to
require the Company to make payments under this Section then CoBank must make a
demand on the Company to make such payment within ninety (90) days of the later
of (1) the date on which such capital costs are actually incurred by CoBank, or
(2) the date on which CoBank knows, or should have known, that such capital
costs have been incurred by CoBank.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options.  Upon the expiration of any fixed rate period, interest
shall automatically accrue at the variable rate unless the amount fixed is
repaid or fixed for an additional period.  Notwithstanding the foregoing, rates
may not be fixed for periods expiring after the maturity date of the loans.  All
elections provided for herein shall be made telephonically or in writing and
must be received by 12:00 Noon Company’s local time; in the case of LIBOR rate
loans, all such elections must be made in writing.  Interest shall be calculated
on the actual number of days each loan is outstanding on the basis of a year
consisting of 360 days and shall be payable monthly in arrears by the 20th day
of the following month or such other day that CoBank shall require in a written
notice to the Company, and at maturity; provided, however, in the event the
Company elects to fix all or a portion of the indebtedness outstanding under the
LIBOR interest rate option above, interest shall be payable at the maturity of
the interest period and if the LIBOR interest rate fix is for a period longer
than 3 months, interest on that portion of the indebtedness outstanding shall be
payable quarterly in arrears on each anniversary of the date the LIBOR interest
rate fix was made and at maturity.

 

SECTION 5.  Promissory Note.  The Company promises to repay the loans that are
outstanding at the time the Commitment expires.  If any installment due date is
not a day on which CoBank is open for business, then such payment shall be made
on the next day on which CoBank is open for business.  In addition to the above,
the Company promises to pay interest on the unpaid principal balance hereof at
the times and in accordance with the provisions set forth in Section 4 thereof.

 

SECTION 6.  Letters of Credit.  If agreeable to CoBank in its sole discretion in
each instance, in addition to loans, the Company may utilize the Commitment to
open irrevocable letters of credit for its account.  Each letter of credit will
be issued within a reasonable period of time after receipt of a duly completed
and executed copy of CoBank’s then current form of application (or, if
applicable, in accordance with the terms of any CoTrade Agreement between the
parties), and shall reduce the amount available under the Commitment by the
maximum amount capable of being drawn thereunder.  Any draw under any letter of
credit issued hereunder shall be deemed an advance under the Commitment.  Each
letter of credit must be in form and content acceptable to CoBank in its sole
discretion, must expire no later than the time the Commitment expires.  The fee
for issuing each letter of credit shall be 100 basis points of the face amount
of each letter of credit, along with an issuance fee to CoBank, for its own
account, equal to the greater of (a) 1/8% of the face amount of the letter of
credit, or (b) $2,000, payable by the Company at or before issuance or as
otherwise agreed.  The Company promises to repay the outstanding balance on the
Commitment in full on demand, or if no demand is made, then any time on or
before the Commitment expiration date of August 1, 2005.

 

3

--------------------------------------------------------------------------------

 

SECTION 7.  Commitment Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 20 basis points per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter.  Such fee shall be payable for each calendar quarter (or portion
thereof) occurring during the original or any extended term of the Commitment.

 

SECTION 8.  Loan Origination Fee.  In consideration of the Commitment, the
Company agrees to pay to CoBank on the execution hereof a loan origination fee
in the amount of $11,250.00.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

By:

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

4

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Loan No. Z269T06

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”).

 

SECTION 1.  The Revolving Term Loan Commitment.  On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
from the date hereof, up to and including August 1, 2004, in an aggregate
principal amount not to exceed, at any one time outstanding, $15,000,000.00 less
the amounts scheduled to be repaid during the period set forth below in
Section 5 (the “Commitment”).  Within the limits of the Commitment, the Company
may borrow, repay and reborrow.

 

SECTION 2.  Purpose.  The purpose of the Commitment is to finance the operating
needs of the Company.

 

SECTION 3.  Term.  Intentionally Omitted.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance
of the loans in accordance with one or more of the following interest rate
options, as selected by the Company.

 

(A)                               CoBank Base Rate.  At a rate per annum equal
at all times to the rate of interest established by CoBank from time to time as
its CoBank Base Rate, which Rate is intended by CoBank to be a reference rate
and not its lowest rate.  The CoBank Base Rate will change on the date
established by CoBank as the effective date of any change therein and CoBank
agrees to notify the Company of any such change.

 

(B)                               Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance.  Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that: (1) the maximum
fixed period shall be 1 day; (2) the minimum amount that may be fixed each time
shall be $2,000,000.00.

 

(C)                               LIBOR Option.  At a fixed rate equal to
“LIBOR” (as hereinafter defined) plus 100 basis points per annum (the “LIBOR
Spread”).  Under this option: (a) rates may be fixed for “Interest Periods” (as
hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, as selected by the
Company; (b) the minimum amount that may be fixed at any one time shall be
$2,000,000.00; and (c) rates may only be fixed on a “Banking Day” (as
hereinafter defined) or, at the option of the Company, on 3 Banking Days’ prior
notice.  For purposes hereof: (i) “LIBOR” shall mean the rate (rounded upward to
the nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as hereinafter defined) or required by any other federal law or regulation)
quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time
2 Banking Days before the commencement of the Interest for Period for the
offering of U.S. dollar deposits in the London interbank market for the Interest
Period designated by the Company, as published by Bloomberg or another major
information vendor listed on the BBA’s official website; (ii) “Banking Day”
shall mean a day on which CoBank is open for business, dealings in U.S. dollar
deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England; (iii) “Interest Period”
shall mean a period commencing on the day the Company elects to fix a rate under
this option

 

--------------------------------------------------------------------------------

 

and ending on the numerically corresponding day in the next calendar month or
the month that is 2, 3 or 6 months or 1 year thereafter, as the case may be;
provided, however, that: (x) in the event such ending day is not a Banking Day,
such period shall be extended to the next Banking Day unless such next Banking
Day falls in the next calendar month, in which case it shall end on the
preceding Banking Day; and (y) if there is no numerically corresponding day in
the month, then such period shall end on the last Banking Day in the relevant
month; (iv) “Eurocurrency Liabilities” shall have meaning as set forth in FRB
Regulation D; and (v) “FRB Regulation D” shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.

 

The LIBOR Spread may increase or decrease for future fixed amounts based on the
Company’s previous fiscal quarter’s leverage ratio, as follows:

 

LEVERAGE RATIO
(as defined below)

 

INCREASE/DECREASE
TO LIBOR SPREAD

 

CHANGE TO THE
LIBOR SPREAD (IN
BASIS POINTS)

A.  Equal to or greater than 1.35:1.00

 

Increase

 

20

B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00

 

None

 

0

C.  Less than 1.20:1.00, but greater than or equal to 1.00:1.00

 

Decrease

 

10

D.  Less than 1.00:1.00

 

Decrease

 

20

 

Leverage Ratio: The Company will maintain a leverage ratio of not more than
1.50:1.0. Leverage ratio is long term debt (excluding current maturities)
calculated in accordance with GAAP plus or minus the difference between actual
working capital and Minimum Net Working Capital (as defined in the MLA No. Z269,
Section 10, as it may be amended), divided by total members investments plus the
estimated unit retains.

 

Changes to the LIBOR Spread shall be made quarterly on the latter of either: (a)
five business days after the Bank’s receipt of the Company’s certification of
compliance with the leverage ratio, or (b) 30 days after the end of each
calendar quarter.  If the Company fails to timely furnish to CoBank the
compliance certificate as required to be delivered pursuant to the MLA, then the
change to the LIBOR Spread shall be an increase of the highest permitted under
the above chart.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options.  Upon the expiration of any fixed rate period, interest
shall automatically accrue at the variable rate option unless the amount fixed
is repaid or fixed for an additional period in accordance with the terms
hereof.  Notwithstanding the foregoing, unless CoBank otherwise consents in its
sole discretion in each instance, rates may not be fixed for periods expiring
after the maturity date of the loans.  In the event CoBank consents to one or
more balances being fixed for a period or periods extending beyond the maturity
date of the loans and the Commitment is not renewed, then each such balance
shall be due and payable on the last day of its fixed rate period and the
promissory note set

 

2

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forth below shall be deemed amended accordingly.  All elections provided for
herein shall be made telephonically or in writing and must be received by 12:00
Noon Company’s local time.  Interest shall be calculated on the actual number of
days each loan is outstanding on the basis of a year consisting of 360 days and
shall be payable monthly in arrears by the 20th day of the following month;
provided, however, in the event the Company elects to fix all or a portion of
the indebtedness outstanding under the LIBOR interest rate option above,
interest shall be payable at the maturity of the interest period and if the
LIBOR interest rate fix is for a period longer than 3 months, interest on that
portion of the indebtedness outstanding shall be payable quarterly in arrears by
the 20th day of the following month and at maturity.

 

SECTION 5.  Promissory Note.  The Company promises to repay on the dates set
forth below, the outstanding principal, if any, that is in excess of the listed
amounts:

 

Payment Date

 

Reducing Commitment Amount

 

 

 

 

 

December 31, 2004

 

$

12,857,142.86

 

December 31, 2005

 

$

10,714,285.72

 

December 31, 2006

 

$

8,571,428.58

 

December 31, 2007

 

$

6,428,571.44

 

December 31, 2008

 

$

4,285,714.30

 

December 31, 2009

 

$

2,142,857.16

 

 

followed by a final installment in an amount equal to the remaining unpaid
principal balance of the loans on December 31, 2010.

 

SECTION 6.  Prepayment.  Subject to Section 13 of the MLA, the loans may be
prepaid in whole or in part on one CoBank business day’s prior written notice. 
During the term of the Commitment, prepayments shall be applied to such
balances, fixed or variable, as the Company shall specify.  After the expiration
of the term of the Commitment, prepayments shall, unless CoBank otherwise
agrees, be applied to principal installments in the inverse order of their
maturity and to such balances, fixed or variable, as CoBank shall specify.

 

SECTION 7.  Security.  In addition to any other security that may otherwise be
required or provided, the Company’s obligations to CoBank under this Supplement
are secured by that Restated Mortgage and Security Agreement dated September 15,
1998, from American Crystal Sugar Company to St. Paul Bank for Cooperatives (now
known as CoBank as a result of merger), as Collateral Agent, as amended on
January 31, 2003 by that certain Modification Agreement to the Amended and
Restated Mortgage and Security Agreement.

 

SECTION 8.  Commitment Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 20 basis points per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter.  Such fee shall be payable for each calendar quarter (or portion
thereof) occurring during the original or any extended term of the Commitment.

 

3

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SECTION 9.  Origination Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank on the execution hereof a loan origination fee in the
amount of $15,000.00.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

By:

/s/ Michael Tousignant

 

By:

/s/ Sam Wai

 

 

 

 

 

Title:

Vice President

 

Title:

TREASURER

 

4

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Loan No. Z269S01E

 

STATUSED REVOLVING CREDIT SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 21, 2003, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the
“Company”), and amends and restates the Supplement dated November 6, 2002 and
numbered Z269S01D.

 

SECTION 1.  The Revolving Credit Facility.  On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to
exceed, at any one time outstanding, the lesser of the “Borrowing Base” (as
calculated pursuant to the Borrowing Base Certificate, the form of which is
attached hereto as Exhibit A) or $235,000,000.00 (the “Commitment”).  Within the
limits of the Commitment, but subject to the Borrowing Base, the Company may
borrow, repay and reborrow.

 

SECTION 2.  Purpose.  The purpose of the Commitment is to finance the Company’s
general corporate purposes, fund working capital requirements, and support the
Company’s commercial paper program.

 

SECTION 3.  Term.  The term of the Commitment shall be from the date hereof, up
to and including August 1, 2004, or such later date as CoBank may, in its sole
discretion, authorize in writing.

 

SECTION 4.  Interest.  The Company agrees to pay interest on the unpaid balance
of the loans in accordance with one or more of the following interest rate
options, as selected by the Company:

 

(A)                                Base Rate Option.  At a rate per annum at all
times equal to the Base Rate.  For the purposes hereof, Base Rate means that
rate in effect from day to day defined as 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 Lender in its reasonable discretion.  Loans for which the Base
Rate option is selected are referred to herein as “Base Rate Loans”.  Base Rate
Loans shall be:  (a) in minimum amounts of $5,000,000 and incremental multiples
of $1,000,000; and (b) made available on any Banking Day.

 

(B)                               Quoted Rate.  At a fixed rate per annum to be
quoted by CoBank in its sole discretion in each instance.  Under this option,
rates may be fixed on such balances and for such periods, as may be agreeable to
CoBank in its sole discretion in each instance, provided that: (1) the maximum
fixed period shall be 1 day; and (2) the minimum amount that may be fixed each
time shall be $5,000,000.00.

 

(C)                                LIBOR Option.  At a fixed rate equal to
“LIBOR” (as hereinafter defined) plus 100 basis points per annum.  Under this
option: (a) rates may be fixed for “Interest Periods” (as hereinafter defined)
of 1, 2, 3 or 6 months, or 1 year, as selected by the Company; (b) the minimum
amount that may be fixed at any one time shall be $5,000,000.00; and (c) rates
may only be fixed on a “Banking Day” (as hereinafter defined) or, at the option
of the Company, on 3 Banking Days’ prior notice.  For purposes hereof: (i)
“LIBOR” shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on “Eurocurrency Liabilities” (as hereinafter
defined) for banks subject to “FRB Regulation D” (as hereinafter defined) or
required by any other federal law or regulation) quoted by the British Bankers
Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days before the
commencement of the Interest Period for the offering of U.S. dollar deposits in
the London interbank market for the Interest Period designated by the Company,
as published by Bloomberg or another major

 

--------------------------------------------------------------------------------

 

information vendor listed on the BBA’s official website; (ii) “Banking Day”
shall mean a day on which CoBank is open for business, dealings in U.S. dollar
deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England; (iii) “Interest Period”
shall mean a period commencing on the day the Company elects to fix a rate under
this option and ending on the numerically corresponding day in the next calendar
month or the month that is 2, 3 or 6 months or 1 year thereafter, as the case
may be; provided, however, that: (x) in the event such ending day is not a
Banking Day, such period shall be extended to the next Banking Day unless such
next Banking Day falls in the next calendar month, in which case it shall end on
the preceding Banking Day; and (y) if there is no numerically corresponding day
in the month, then such period shall end on the last Banking Day in the relevant
month; (iv) “Eurocurrency Liabilities” shall have meaning as set forth in FRB
Regulation D; and (v) “FRB Regulation D” shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.

 

(1)                                    Notwithstanding anything herein to the
contrary, if, on or prior to the determination of the LIBOR rate for any LIBOR
Interest Period, CoBank determines (which determination shall be conclusive)
that quotations of interest rates in accordance with the definition of LIBOR
rate are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for LIBOR rate advances
as provided in this Supplement, then CoBank shall give the Company prompt notice
thereof, and so long as such condition remains in effect, CoBank shall be under
no obligation to make LIBOR rate loans, convert Base Rate loans into LIBOR rate
loans, or continue LIBOR rate loans, and the Company shall, on the last day(s)
of the then current applicable LIBOR Interest Period(s) for the outstanding
LIBOR rate loans, either prepay such LIBOR rate loans or such LIBOR rate loans
shall automatically be converted into a Base Rate loan in accordance with this
Section 4

 

(2)                                    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 date hereof (each, a
“Change in Law”) shall make it unlawful for CoBank to (a) advance any LIBOR rate
loan or (b) maintain all or any portion of a LIBOR rate loan, then CoBank shall
promptly notify the Company thereof.  In the former event, any obligation of
CoBank to make available any future LIBOR rate loan shall immediately be
canceled (and, in lieu thereof shall be made as a Base Rate loan or Quoted Rate
loan at the option of the Company), and in the latter event, any such unlawful
LIBOR rate loan or portions thereof then outstanding shall be converted, at the
option of the Company, to either a Base Rate loan or a Quoted Rate loan;
provided, however, that if any such Change in Law shall permit the LIBOR rate to
remain in effect until the expiration of the LIBOR rate period applicable to any
such unlawful LIBOR rate loan, then such LIBOR rate loan shall continue in
effect until the expiration of such LIBOR rate period.  Upon the occurrence of
any of the foregoing events on account of any Change in Law, the Company shall
pay to CoBank immediately upon demand such amounts as may be necessary to
compensate CoBank for any fees, charges, or other costs incurred or payable by
CoBank as a result thereof and which are attributable to any LIBOR rate loans
made available to the Company hereunder.

 

(3)                                If CoBank shall determine that, after the
date hereof, the adoption of any applicable Law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such governmental authority, central bank or comparable agency, has or
would have the effect of

 

2

--------------------------------------------------------------------------------

 

reducing the rate of return on capital of CoBank as a consequence of CoBank’s
obligations hereunder to a level below that which CoBank could have achieved but
for such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy existing on the date of this
Supplement) by an amount deemed by CoBank to be material, then from time to
time, within fifteen (15) days after demand by CoBank, the Company shall pay to
CoBank such additional amount or amounts as will compensate CoBank for such
reduction.  CoBank agrees to take reasonable steps to reduce the amount of such
increase, provided, however, that CoBank shall not be required to take any such
step, if in CoBank’s sole opinion, CoBank would suffer an economic loss or any
negative legal or regulatory consequences as a result thereof.  If CoBank is to
require the Company to make payments under this Section then CoBank must make a
demand on the Company to make such payment within ninety (90) days of the later
of (1) the date on which such capital costs are actually incurred by CoBank, or
(2) the date on which CoBank knows, or should have known, that such capital
costs have been incurred by CoBank.

 

The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options.  Upon the expiration of any fixed rate period, interest
shall automatically accrue at the variable rate unless the amount fixed is
repaid or fixed for an additional period.  Notwithstanding the foregoing, rates
may not be fixed for periods expiring after the maturity date of the loans.  All
elections provided for herein shall be made telephonically or in writing and
must be received by 12:00 Noon Company’s local time; in the case of LIBOR rate
loans, all such elections must be made in writing.  Interest shall be calculated
on the actual number of days each loan is outstanding on the basis of a year
consisting of 360 days and shall be payable monthly in arrears by the 20th day
of the following month or such other day that CoBank shall require in a written
notice to the Company, and at maturity; provided, however, in the event the
Company elects to fix all or a portion of the indebtedness outstanding under the
LIBOR interest rate option above, interest shall be payable at the maturity of
the interest period and if the LIBOR interest rate fix is for a period longer
than 3 months, interest on that portion of the indebtedness outstanding shall be
payable quarterly in arrears on each anniversary of the date the LIBOR interest
rate fix was made and at maturity.

 

SECTION 5.  Promissory Note.  The Company promises to repay the unpaid principal
balance of the loans on the first CoBank business day following the last day of
the term of the Commitment.  In addition to the above, the Company promises to
pay interest on the unpaid principal balance of the loans at the times and in
accordance with the provisions set forth in Section 4 hereof.  This note
replaces and supersedes, but does not constitute payment of the indebtedness
evidenced by, the promissory note set forth in the Supplement being amended and
restated hereby.

 

SECTION 6.  Borrowing Base Certificate, Etc.  The Company agrees to furnish a
Borrowing Base Certificate to CoBank at such times or intervals as CoBank may
from time to time request.  Until receipt of such a request, the Company agrees
to furnish a Borrowing Base Certificate to CoBank as soon as available after the
end of each quarter, but in no event more than 5 days after the Company’s
quarterly filing with the Securities Exchange Commission, calculating the
Borrowing Base as of the last day of the quarter for which the Certificate is
being furnished.  However, if no balance is outstanding hereunder on the last
day of such period, no Report need be furnished.  Regardless of the frequency of
the reporting, if

 

3

--------------------------------------------------------------------------------

 

at any time the amount outstanding under the Commitment exceeds the Borrowing
Base, the Company shall immediately notify CoBank and repay so much of the loans
as is necessary to reduce the amount outstanding under the Commitment to the
limits of the Borrowing Base.

 

SECTION 7.  Commitment Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 20 basis points per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter.  Such fee shall be payable for each calendar quarter (or portion
thereof) occurring during the original or any extended term of the Commitment.

 

SECTION 8.  Utilization Fee.  For any day on which the outstanding principal
amount of loans shall be greater than 25% of the Commitment (but no greater than
50% of the Commitment), the Company shall pay to CoBank a utilization fee equal
to 0.125% per annum (calculated on a 360 day basis) on the aggregate amount
outstanding on such day.  For any day on which the outstanding principal amount
of loans shall be greater than 50% of the Commitment, the Company shall pay to
CoBank a utilization fee equal to 0.25% per annum (calculated on a 360 day
basis) on the aggregate amount outstanding on such day.  Accrued and unpaid
utilization fees, if any, shall be payable quarterly in arrears by the 20th day
following each calendar quarter.

 

SECTION 9.  Facility Fee.  In consideration of the Commitment, the Company
agrees to pay to CoBank on the execution hereof, a fee in the amount of
$176,250.00.

 

IN WITNESS WHEREOF, the parties have caused this Supplement to be executed by
their duly authorized officers as of the date shown above.

 

CoBANK, ACB

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

By:

/s/ Teresa Fountain

 

By:

/s/ Mark Lembke

 

 

 

 

 

Title:

Assistant Corporate Secretary

 

Title:

Assistant Treasurer

 

4

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EXHIBIT “A”

 

[Form of Borrowing Base]
American Crystal Sugar Company

Monthly Borrowing Base
For the month ended                           

 

Trade Accounts Receivables

 

$

@ 80%

$

 

(a)

 

 

 

 

 

Trade Accounts Receivables are defined as those of the Company and all
Subsidiaries which: (1) arise from the sale and delivery of inventory on
ordinary trade terms; (2) are evidenced by an invoice; (3) are net of any
credit, trade or other allowance given to the account debtor; (4) are not owing
by an account debtor who has become insolvent or is the subject of any
bankruptcy, reorganization, liquidation or like proceeding; (5) are not subject
to any offset or deduction; (6) are not owing by an affiliate of Company; (7)
are not owing by an obligor located outside of the U.S. unless the receivable is
supported by a letter of credit issued by a bank acceptable to the CoBank; and
(8) are not government receivables.  The above provisions notwithstanding, Trade
Receivables shall also exclude (i) any accounts that are past due more than 90
days, and (ii) any contra account regardless of the date;

 

Inventory

 

$

(b)

 

 

 

Inventory as determined on the basis of Net Realizable Value, defined as the
expected selling price of an inventory item less expected costs to complete and
dispose, as determined in accordance with GAAP.

 

Crop Payments due Non-members and members

 

$

(c)

 

 

 

 

 

 

 

 

Net Inventory Value (b-c)

 

$

@ 75%

$

 

(d)

 

 

 

 

 

 

 

 

 

 

 

Borrowing Base (a+d)

 

 

 

$

 

 

 

 

 

 

 

Commercial Paper

 

 

 

$

 

(e)

 

 

 

 

 

 

 

 

 

 

 

Seasonal Loan

 

 

 

 

(f)

 

 

 

 

 

 

Commodity Credit Corp. loans

 

 

 

 

 

(g)

 

 

 

 

 

 

 

 

 

 

 

Total Short-term Loans (e+f+g)

 

$

 

 

 

 

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