Exhibit 10.24

AMENDED AND RESTATED LOAN AGREEMENT

between

AMERICAN CRYSTAL SUGAR COMPANY,
as Borrower,

and

COBANK, ACB,
as Lender

July 31, 2006

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TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

 

1

 

 

 

 

 

Section 1.1

 

Defined Terms

 

1

Section 1.2

 

Accounting Terms and Calculations

 

14

Section 1.3

 

Computation of Time Periods

 

14

Section 1.4

 

Other Definitional Terms

 

14

 

 

 

 

 

ARTICLE II TERMS OF THE CREDIT FACILITIES

 

15

 

 

 

 

 

Section 2.1

 

Lending Commitments

 

15

Section 2.2

 

Existing Loans

 

16

Section 2.3

 

Procedure for Loans

 

16

Section 2.4

 

Notes

 

18

Section 2.5

 

Conversions and Continuations

 

19

Section 2.6

 

Interest Rates, Interest Payments and Default Interest

 

20

Section 2.7

 

Repayment

 

21

Section 2.8

 

Prepayments

 

22

Section 2.9

 

Letters of Credit

 

23

Section 2.10

 

Procedures for Letters of Credit

 

23

Section 2.11

 

Terms of Letters of Credit

 

23

Section 2.12

 

Agreement to Repay Letter of Credit Drawings

 

23

Section 2.13

 

Obligations Absolute

 

24

Section 2.14

 

Fees

 

25

Section 2.15

 

Computation

 

25

Section 2.16

 

Payments

 

25

Section 2.17

 

Use of Loan Proceeds

 

26

Section 2.18

 

Interest Rate Not Ascertainable, Etc.

 

26

Section 2.19

 

Increased Cost

 

27

Section 2.20

 

Illegality

 

27

Section 2.21

 

Capital Adequacy

 

27

Section 2.22

 

Funding Losses; LIBOR Rate Advances

 

28

Section 2.23

 

Discretion of Lender as to Manner of Funding

 

28

Section 2.24

 

Broken Funding Surcharge

 

28

Section 2.25

 

Taxes

 

29

Section 2.26

 

Capitalization

 

30

Section 2.27

 

Security

 

30

Section 2.28

 

Security Interests

 

30

 

 

 

 

 

ARTICLE III CONDITIONS PRECEDENT

 

30

 

 

 

 

 

Section 3.1

 

Conditions Precedent to All Loans and Letters of Credit

 

30

 

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ARTICLE IV REPRESENTATIONS AND WARRANTIES

 

33

 

 

 

 

 

Section 4.1

 

Organization, Standing, Etc.

 

33

Section 4.2

 

Authorization and Validity

 

33

Section 4.3

 

No Conflict; No Default

 

33

Section 4.4

 

Government Consent

 

34

Section 4.5

 

Financial Statements and Condition

 

34

Section 4.6

 

Litigation

 

34

Section 4.7

 

Environmental, Health and Safety Laws

 

34

Section 4.8

 

ERISA

 

34

Section 4.9

 

Federal Reserve Regulations

 

35

Section 4.10

 

Title to Property; Leases; Liens; Subordination

 

35

Section 4.11

 

Taxes

 

35

Section 4.12

 

Trademarks, Patents

 

35

Section 4.13

 

Burdensome Restrictions

 

35

Section 4.14

 

Force Majeure

 

35

Section 4.15

 

Investment Company Act

 

36

Section 4.16

 

Public Utility Holding Company Act

 

36

Section 4.17

 

Full Disclosure

 

36

Section 4.18

 

Subsidiaries

 

36

Section 4.19

 

Labor Matters

 

36

Section 4.20

 

Solvency

 

36

 

 

 

 

 

ARTICLE V AFFIRMATIVE COVENANTS

 

37

 

 

 

 

 

Section 5.1

 

Financial Statements and Reports

 

37

Section 5.2

 

Existence

 

39

Section 5.3

 

Insurance

 

39

Section 5.4

 

Payment of Taxes and Claims

 

39

Section 5.5

 

Inspection

 

39

Section 5.6

 

Maintenance of Properties

 

39

Section 5.7

 

Books and Records

 

39

Section 5.8

 

Compliance

 

40

Section 5.9

 

ERISA

 

40

Section 5.10

 

Environmental Matters; Reporting

 

40

Section 5.11

 

Further Assurances

 

40

Section 5.12

 

Compliance with Terms of Material Contracts

 

41

Section 5.13

 

Eligibility

 

41

 

 

 

 

 

ARTICLE VI NEGATIVE COVENANTS

 

41

 

 

 

 

 

Section 6.1

 

Merger

 

41

Section 6.2

 

Disposition of Assets

 

41

Section 6.3

 

Plans

 

41

Section 6.4

 

Change in Nature of Business

 

41

 

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Section 6.5

 

Subsidiaries

 

42

Section 6.6

 

Negative Pledges

 

42

Section 6.7

 

Restricted Payments

 

42

Section 6.8

 

Transactions with Affiliates

 

42

Section 6.9

 

Accounting Changes

 

42

Section 6.10

 

Subordinated Debt

 

42

Section 6.11

 

Investments

 

42

Section 6.12

 

Indebtedness

 

43

Section 6.13

 

Liens

 

44

Section 6.14

 

Contingent Liabilities

 

45

Section 6.15

 

Net Working Capital

 

45

Section 6.16

 

Capitalization Ratio

 

45

Section 6.17

 

Interest Coverage Ratio

 

45

 

 

 

 

 

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES

 

45

 

 

 

 

 

Section 7.1

 

Events of Default

 

45

Section 7.2

 

Remedies

 

47

Section 7.3

 

Offset

 

47

 

 

 

 

 

ARTICLE VIII MISCELLANEOUS

 

48

 

 

 

 

 

Section 8.1

 

Modifications

 

48

Section 8.2

 

Expenses

 

48

Section 8.3

 

Waivers, etc.

 

48

Section 8.4

 

Notices

 

48

Section 8.5

 

Taxes

 

49

Section 8.6

 

Successors and Assigns; Participations; Purchasing Lender

 

49

Section 8.7

 

Confidentiality of Information

 

50

Section 8.8

 

Governing Law and Construction

 

50

Section 8.9

 

Consent to Jurisdiction

 

51

Section 8.10

 

Waiver of Jury Trial

 

51

Section 8.11

 

Survival of Agreement

 

51

Section 8.12

 

Indemnification

 

51

Section 8.13

 

Captions

 

52

Section 8.14

 

Entire Agreement

 

52

Section 8.15

 

Counterparts

 

52

Section 8.16

 

Borrower Acknowledgements

 

52

Section 8.17

 

Relationship Among Borrower

 

53

Section 8.18

 

Interest Rate Limitation

 

55

 

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Annexes

 

 

 

 

Annex I

 

Pricing Grid

 

 

 

 

 

 

 

Schedules

 

 

 

 

Schedule 3.l(a)

 

Landlord/Bailee Locations

 

 

Schedule 4.6

 

Litigation

 

 

Schedule 4.7

 

Environmental Matters

 

 

Schedule 4.18

 

Subsidiaries

 

 

Schedule 6.11

 

Existing Investments

 

 

Schedule 6.12

 

Existing Indebtedness

 

 

Schedule 6.13

 

Existing Liens

 

 

Schedule 6.14

 

Existing Contingent Obligations

 

 

 

 

 

 

 

Exhibits

 

 

 

 

Exhibit A-l

 

Form of Revolving Note

 

 

Exhibit A-2

 

Form of Term Note T01

 

 

Exhibit A-3

 

Form of Term Note T01NP

 

 

Exhibit A-4

 

Form of Term Note T06

 

 

Exhibit B

 

Borrowing Base Formula

 

 

Exhibit C

 

Form of Borrowing Base Certificate

 

 

Exhibit D

 

Form of Compliance Certificate

 

 

Exhibit E

 

Form of Bid Request

 

 

 

iv

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AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT (this “Loan Agreement”), dated as of
July 31, 2006, is by and between AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota
cooperative corporation (“Borrower”), and COBANK, ACB, a federally chartered
instrumentality under the Farm Credit Act of 1971, as amended (“Lender”). This
Loan Agreement amends and restates that certain Amended and Restated Master Loan
Agreement dated as of July 21, 2003, which amended and restated that certain
Master Loan Agreement dated as of March 31, 2000.

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

Section 1.1 Defined Terms. As used in this Agreement the following terms shall
have the following respective meanings (and such meanings shall be equally
applicable to both the singular and plural form of the terms defined, as the
context may require):

“Adjusted LIBOR Rate”: With respect to each day, the rate (rounded upward, if
necessary, to the next one hundredth of one percent) determined by dividing the
LIBOR Rate in effect on such day by 1.00 minus the LIBOR Reserve Percentage.

“Advance”: Any portion of the outstanding Loans as to which one of the available
interest rate options and, if pertinent, an Interest Period, is applicable.
Subject to the terms and conditions hereof, an Advance may be a LIBOR Rate
Advance, a Quoted Rate Advance or a Base Rate Advance.

“Affiliate”: When used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person which beneficially owns or holds,
directly or indirectly, five percent or more of any class of voting Equity
Interests of the Person referred to, (c) each Person, five percent or more of
the voting Equity Interests (or if such Person is not a corporation, five
percent or more of the equity interest) of which is beneficially owned or held,
directly or indirectly, by the Person referred to, and (d) each of such Person’s
officers, directors, joint venturers and partners. The term control (including
the terms “controlled by” and “under common control with”) means the possession,
directly, of the power to direct or cause the direction of the management and
policies of the Person in question.

“Applicable Commitment Fee Percentage”: The Applicable Margin at which the Term
Loan Commitment Fees accrue, as set forth and described in Annex I.

“Applicable Margin”: Subject to the last sentence of this definition, with
respect to computation of the applicable interest rate or the Applicable
Commitment Fee Percentage on Advances under the Term Loans, as the case may be,
the margin payable by Borrower with respect thereto, as set forth and described
in Annex I. The initial Applicable Margin shall be

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determined by reference to Borrower’s Compliance Certificate and related
financial statements as of the Closing Date, and continuing each Fiscal Quarter
thereafter, the Applicable Margin shall be determined by the Compliance
Certificate required by Section 5.1 as of Borrower’s last Fiscal Quarter;
provided, however, that any adjustment in the Applicable Margin shall not become
effective until the Agent shall have received the Compliance Certificate and
related financial statements relating to the last Fiscal Quarter end pursuant to
Sections 5.1(c) and (d) hereof. If a Compliance Certificate and related
financial statements of Borrower and a related certification of Borrower
pursuant to Sections 5.1(c) and (d) necessary to establish the Applicable Margin
hereunder are not received by the Agent on or prior to the date required
pursuant to Sections 5.1(c) and (d) hereof, at the Lender’s sole discretion, the
Applicable Margin shall be determined at the highest level described in Annex I
and shall remain in effect until one Banking Day after such time as the required
financial statements are received.

“Average Interest Expense”: Interest Expense for the most recent twelve (12)
Fiscal Quarters, divided by four (4).

“Average Net Funds Generated”: The sum of the following for the most recent
twelve (12) Fiscal Quarters, divided by four (4):

(a)                                  Unit retains, retained patronage,
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

(b)                                 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.

“Banking Day”: Any day of the year on which commercial banks in New York, New
York and Denver, Colorado are not required or authorized to close.

“Base Rate”: 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. 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.

“Base Rate Advance”: An Advance with respect to which the interest rate is
determined by reference to the Base Rate.

2

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“Board”: The Board of Governors of the Federal Reserve System or any successor
thereto.

“Borrower”: As defined in the opening paragraph hereof.

“Borrowing Base”: As determined in accordance with the formula set forth in
Exhibit B hereto.

“Borrowing Base Certificate”: A certificate in the form of Exhibit C hereto.

“Borrowing Base Deficiency”: At the time of any determination, the amount, if
any, by which Total Revolving Outstandings exceed the Borrowing Base.

“Broken Funding Surcharge”: As defined in Section 2.24.

“Capital Expenditures”: For any period, the sum of all amounts that would, in
accordance with GAAP, be included as additions to property, plant and equipment
on a consolidated statement of cash flows for the Borrower during such period,
in respect of (a) the acquisition, construction, improvement, replacement or
betterment of land, buildings, machinery, equipment or of any other fixed assets
or leaseholds, (b) to the extent related to and not included in (a) above,
materials, contract labor (excluding expenditures properly chargeable to repairs
or maintenance in accordance with GAAP), and (c) other capital expenditures and
other uses recorded as capital expenditures or similar terms having
substantially the same effect.

“Capitalization”: The sum of shareholders’ equity and Indebtedness.

“Capitalization Ratio”: For any period of determination, the ratio of

(a)                                  long term debt in accordance with GAAP
(excluding current maturities),

to

(b)                                 the sum of long term debt (excluding current
maturities) plus equity, all in accordance with GAAP.

“Capitalized Lease”: A lease of (or other agreement conveying the right to use)
real or personal property with respect to which at least a portion of the rent
or other amounts thereon constitute Capitalized Lease Obligations.

“Capitalized Lease Obligations”: As to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board), and, for purposes
of

3

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this Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP (including such Statement No. 13).

“Change of Control”: The occurrence, after the Closing Date, of any of the
following circumstances: (a) any Person or two or more Persons acting in concert
(other than the current holders of the Equity Interests of the Borrower)
acquiring beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Equity Interests of the Borrower representing 50% or
more of the combined voting power of all Equity Interests of Borrower entitled
to vote in the election of directors; or (b) any Person or two or more Persons
acting in concert (other than the current holders of the Equity Interests of the
Borrower) acquiring by contract or otherwise, or entering into a contract or
arrangement which upon consummation will result in its or their acquisition of,
control over Equity Interests of the Borrower representing 50% or more of the
combined voting power of all Equity Interests of Borrower entitled to vote in
the election of directors.

“Charges”: As defined in Section 8.18.

“Closing Date”: The date in the opening paragraph hereof.

“CoBank Equities”: As defined in Section 2.27.

“Code”: The Internal Revenue Code of 1986, as amended.

“Commitments”: The Revolving Loan, Term Loans and Existing Loans.

“Contingent Obligation”: With respect to any Person at the time of any
determination, without duplication, any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the “primary obligor”) in any manner, whether
directly or otherwise: (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or to purchase (or to advance or
supply funds for the purchase of) any direct or indirect security therefor, (b)
to purchase property, securities, Equity Interests or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness,
(c) to maintain working capital, equity capital or other financial statement
condition of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or otherwise to protect the owner thereof against loss in respect
thereof, or (d) entered into for the purpose of assuring in any manner the owner
of such Indebtedness of the payment of such Indebtedness or to protect the owner
against loss in respect thereof; provided, that the term “Contingent Obligation”
shall not include endorsements for collection or deposit, in each case in the
ordinary course of business.

“Current Assets”: As of any date, the consolidated current assets of the
Borrower, determined in accordance with GAAP.

4

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“Current Liabilities”: As of any date, the consolidated current liabilities of
the Borrower, determined in accordance with GAAP.

“Default”: The occurrence or existence of (a) an event which through the passage
of time or the service of notice or both would (assuming no action is taken by
the Borrower or any other Person to cure the same) mature into an Event of
Default, (b) an event which requires neither the passage of time nor the service
of notice to mature into an Event of Default, or (c) the occurrence of a breach
or a default of any Material Indebtedness.

“Default Rate”: The rate that is equal to the Base Rate then in effect plus two
percent (2%).

“Eligible Accounts Receivable:” Accounts Receivables of the Borrower 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 the Borrower;
(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
Lender; and (8) are not government receivables. the above provisions
notwithstanding, Accounts Receivables shall also exclude (i) any accounts that
are past due more than 90 days, and (ii) any contra account regardless of the
date.

“Eligible Net Inventory”: Inventory of the Borrower as determined on the basis
of “Net Realizable Value,” less crop payments owing to members and non-members
of the Borrower. “Net Realizable Value” is defined as the expected selling price
of an inventory item less expected costs to complete and dispose, as determined
in accordance with GAAP.

“Equity Interests”: All shares, interests, participation or other equivalents,
however designated, of or in a corporation or limited liability company, whether
or not voting, including but not limited to common stock, member interests,
warrants, preferred stock, convertible debentures, and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
or all of the foregoing.

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.

“Event of Default”: Any event described in Section 7.1.

“Existing Loans”: Existing Term Loan T03NP and Existing Term Loan T04.

“Existing Term Loan T03NP”: As defined in Section 2.2.

“Existing Term Loan T04”: As defined in Section 2.2.

5

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“Federal Funds Rate”: For any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on
overnight Federal funds transactions, with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Banking Day, for the next preceding Banking Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a
Banking Day, the average of the quotations for such day on such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.

“Fiscal Quarter”: Each three (3) month period beginning on the first day of each
September, December, March and June.

“GAAP”: Generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of any date of determination.

“Immediately Available Funds”: Funds with good value on the day and in the city
in which payment is received.

“Indebtedness”: With respect to any Person at the time of any determination,
without duplication, all obligations, contingent or otherwise, of such Person
which in accordance with GAAP should be classified upon the balance sheet of
such Person as liabilities, but in any event including: (a) all obligations of
such Person for borrowed money (including non-recourse obligations), (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid or accrued, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person, (e) all obligations of such Person issued or assumed
as the deferred purchase price of property or services, (f) all obligations of
others secured by any Lien on property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all Capitalized
Lease Obligations of such Person, (h) all obligations of such Person in respect
of interest rate swap agreements, cap or collar agreements, interest rate
futures or option contracts, currency swap agreements, currency futures or
option agreements and other similar contracts (i) all obligations of such
Person, actual or contingent, as an account party in respect of letters of
credit or bankers’ acceptances, (j) all obligations of any partnership or joint
venture as to which such Person is or may become personally liable, (k) all
obligations of such Person under any Equity Interests issued by such Person, and
(1) all Contingent Obligations of such Person.

“Indemnitee”: As defined in Section 8.12.

“Intercreditor Agreement”: That certain Intercreditor and Collateral Agency
Agreement dated as of September 15, 1998, by and among St. Paul Bank for
Cooperatives, as Collateral

6

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Agent, St. Paul Bank for Cooperatives, as Bank Lender, the Noteholders party
thereto and the Additional Creditors party thereto.

“Interest Coverage Ratio”: For any period of determination, the ratio of

(a)                                  Average Net Funds Generated plus Average
Interest Expense,

to

(b)                                 Average Interest Expense.

“Interest Expense”: For any period of determination, the aggregate consolidated
amount, without duplication, of interest paid, accrued or scheduled to be paid
in respect of any Indebtedness of the Borrower and its Subsidiaries, including
(a) all but the principal component of payments in respect of conditional sale
contracts, Capitalized Leases and other title retention agreements, (b)
commissions, discounts and other fees and charges with respect to letters of
credit and bankers’ acceptance financings and (c) net costs under interest rate
protection agreements, in each case determined in accordance with GAAP.

“Interest Period”: With respect to each LIBOR Rate Advance, the period
commencing on the date of such Advance or on the last day of the immediately
preceding Interest Period, if any, applicable to an outstanding Advance and
ending one month, two months, three months, six months or one year thereafter,
as the Borrower may elect in the applicable notice of borrowing, continuation or
conversion; provided that:

(1)           Any Interest Period that would otherwise end on a day which is not
a LIBOR Banking Day shall be extended to the next succeeding LIBOR Banking Day
unless such LIBOR Banking Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding LIBOR Banking Day;

(2)           Any Interest Period that begins on the last LIBOR Banking Day of a
calendar month (or a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on the last
LIBOR Banking Day of a calendar month; and

(3)           Any Interest Period that would otherwise end after the Termination
Date shall end on the Termination Date.

For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided, however, that if there is no numerically
corresponding day in the month in which such an Interest Period is to end or if
such an Interest Period begins on the last Banking Day of a calendar month, then
such Interest Period shall end on the last Banking Day of the calendar month in
which such Interest Period is to end.

7

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“Investment”: The acquisition, purchase, making or holding of any Equity
Interests or other security, any loan, advance, contribution to capital,
extension of credit (except for trade and customer accounts receivable for
inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms, and Investments of less than
$7,500,000), any acquisitions of real or personal property (other than real and
personal property acquired in the ordinary course of business) and any purchase
or commitment or option to purchase Equity Interests, securities or other debt
of or any interest in another Person or any integral part of any business or the
assets comprising such business or part thereof and the formation of, or entry
into, any partnership as a limited or general partner or the entry into any
joint venture. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

“Lender”: As defined in the opening paragraph hereof.

“Letter of Credit”: A Seasonal Letter of Credit, Term Letter of Credit, or both.

“Letter of Credit Fees”: As defined in Section 2.14(c).

“Leverage Ratio”: For any period of determination, the ratio of

(a)                                  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 required under
Section 6.15,

to

(b)                                 total members investments plus estimated
unit retains and retained patronage.

“LIBOR Banking Day”: A Banking Day which is also a day for trading by and
between banks in United States dollar deposits in the interbank Eurodollar
market and a day on which banks are open for business in New York City.

“LIBOR Rate”: With respect to each Interest Period applicable to a LIBOR Rate
Advance, the average offered rate for deposits in United States dollars (rounded
upward, if necessary, to the next one hundredth of one percent) for delivery of
such deposits on the first day of such Interest Period, for the number of days
in such Interest Period, which appears on Telerate page 3750 as of 11:00 A.M.,
London time (or such other time as of which such rate appears) two LIBOR Banking
Days prior to the first day of such Interest Period, or the rate for such
deposits determined by the Lender at such time based on such other published
service of general application as shall be selected by the Lender for such
purpose; provided, that in lieu of determining the rate in the foregoing manner,
the Lender may determine the rate based on rates at which United States dollar
deposits are offered to the Lender in the interbank Eurodollar market at such
time for delivery in Immediately Available Funds on the first day of such
Interest

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Period in an amount approximately equal to the Advance by the Lender to which
such Interest Period is to apply (rounded upward, if necessary, to the next one
hundredth of one percent). “Telerate page 3750” means the display designated as
such on the Telerate reporting system operated by Telerate System Incorporated
(or such other page as may replace page 3750 for the purpose of displaying
London interbank offered rates of major banks for United States dollar
deposits).

“LIBOR Rate Advance”: An Advance with respect to which the interest rate is
determined by applying the Adjusted LIBOR Rate.

“LIBOR Reserve Percentage”: As of any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board for
determining the maximum reserve requirement (including any basic, supplemental
or emergency reserves) for a member bank of the Federal Reserve System, with
deposits comparable in amount to those held by the Lender, in respect of
“Eurocurrency Liabilities” as such term is defined in Regulation D of the Board.
The rate of interest applicable to any outstanding Revolving Loans shall be
adjusted automatically on and as of the effective date of any change in the
LIBOR Reserve Percentage.

“Lien”: With respect to any Person, any security interest, mortgage, pledge,
lien, charge, encumbrance, title retention agreement or analogous instrument or
device (including the interest of each lessor under any Capitalized Lease), in,
of or on any assets or properties of such Person, now owned or hereafter
acquired, whether arising by agreement or operation of law.

“Loan”: The Revolving Loan, Term Loan T01, Term Loan T01NP or Term Loan T06
(collectively referred to as the “Loans”).

“Loan Documents”: This Agreement, the Notes, agreements evidencing the Existing
Loans and the Security Documents.

“Material Adverse Occurrence”: Any occurrence of whatsoever nature (including,
without limitation, any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding) which has materially and adversely
affected (a) the financial condition or operations of the Borrower, (b) impair
the ability of the Borrower to perform its obligations under any Loan Document,
or any writing executed pursuant thereto, (c) the validity or enforceability of
the material obligations of the Borrower under any Loan Document, or (d) the
timely payment of the principal of and interest on the Loans or other amounts
payable by the Borrower hereunder.

“Material Indebtedness”: Any contractual indebtedness of the Borrower existing
at any time of $7,500,000 or more.

“Maximum Rate”: As defined in Section 8.18.

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“Mortgage”: That certain Restated Mortgage and Security Agreement - Mortgage
Short-Term Redemption dated as of 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, which was recorded in Pembina County, North Dakota
on September 23, 1998, Document No. 214908, Traill County, North Dakota on
September 23, 1998, Document No. 149700, Clay County, Minnesota on September 23,
1998, Document No. 515813, and Polk County, Minnesota, on September 23, 1998,
Document No. 563067, as amended by that certain Modification Agreement to
Restated Mortgage and Security Agreement - Mortgage Short-Term Redemption, dated
as of January 31, 2003, which was recorded in Pembina County, North Dakota on
February 3, 2003, Document No. 224279, Traill County, North Dakota on February
3, 2003, Document No. 155874, Clay County, Minnesota on February 3, 2003,
Document No. 572459, and Polk County, Minnesota on February 4, 2003, Document
No. 600131, as further amended from time to time.

“Net Working Capital”: As of any date of determination, total Current Assets
minus total Current Liabilities, on a consolidated basis, determined in
accordance with GAAP, consistently applied.

“Note”: The Revolving Note, Term Note T01, Term Note T01NP or Term Note T06
(collectively referred to as the “Notes”).

“Obligations”: The Borrower’s obligations in respect of the due and punctual
payment of principal and interest on the Notes, Unpaid Drawings and Existing
Loans when and as due, whether by acceleration or otherwise, and all fees
(including Revolving Commitment Fees), expenses, indemnities, reimbursements and
other obligations of the Borrower under this Agreement or any other Loan
Document, in all cases whether now existing or hereafter arising or incurred.

“Other Taxes”: As defined in Section 2.25(b).

“Participants”: As defined in Section 8.6(b).

“PBGC”: The Pension Benefit Guaranty Corporation, established pursuant to
Subtitle A of Title IV of ERISA, and any successor thereto or to the functions
thereof.

“Person”: Any natural person, corporation, partnership, limited partnership,
limited liability company, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.

“Plan”: Each employee benefit plan (whether in existence on the Closing Date or
thereafter instituted), as such term is defined in Section 3 of ERISA,
maintained for the benefit of employees, officers or directors of a Borrower.

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“Prepayment Event”: Means:

(a)           any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Borrower, other
than dispositions described in clauses (a), (b) and (c) of Section 6.2; or

(b)           any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower, but only to the extent that the net proceeds therefrom
have not been applied, or committed pursuant to an agreement (including any
purchase orders) to be applied, to repair, restore or replace such property or
asset within 180 days after such event.

“Quoted Rate”: The rate of interest quoted by the Lender in its sole discretion.

“Quoted Rate Offer”: A quote of a fixed interest rate per annum for maximum
periods of one (1) day provided to Borrower by the Lender in its sole discretion
following the receipt by the Lender of a Quoted Rate Request from Borrower.

“Quoted Rate Request”: A request by Borrower to the Lender for a Quoted Rate
Offer.

“Regulatory Change”: Any change after the Closing Date in federal, state or
foreign laws or regulations or the adoption or making after such date of any
interpretations, directives or requests applying to a class of banks including
any Lender under any federal, state or foreign laws or regulations (whether or
not having the force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.

“Reportable Event”: A reportable event as defined in Section 4043 of ERISA and
the regulations issued under such Section, with respect to a Plan, excluding,
however, such events as to which the PBGC by regulation has waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable Event regardless of the issuance of any waiver in accordance with
Section 412(d) of the Code.

“Restricted Payments”: With respect to Borrower, collectively, (a) all dividends
or other distributions of any nature (cash, Equity Interests, assets or
otherwise), and all payments on any class of Equity Interests (including
warrants, options or rights therefor) issued by the Borrower, whether such
Equity Interests are authorized or outstanding on the Closing Date or at any
time thereafter, or (b) any redemption or purchase of, or distribution in
respect of, any of the foregoing, whether directly or indirectly (except for the
annual revolvment of unit retains, or retained patronage which occurs in the
ordinary course of business).

“Revolving Loan”: As defined in Section 2.1.

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“Revolving Loan Amount”: An amount which shall not at any time be greater than
Three Hundred Million Dollars ($300,000,000), as determined from time to time
according to the terms of this Agreement.

“Revolving Loan Date”: The date of the making of any Revolving Loan Advance
hereunder.

“Revolving Loan Fees”: As defined in Section 2.14(a).

“Revolving Note”: The promissory note of the Borrower in the form of Exhibit A-l
hereto, evidencing the obligation of the Borrower to repay the Revolving Loan.

“Seasonal Letter of Credit”: An irrevocable letter of credit issued under the
Revolving Loan pursuant to this Agreement of the account of Borrower.

“Seasonal Letter of Credit Commitment Amount”: Twenty Million Dollars
($20,000,000).

“Secured Obligations”: The Obligations, excluding the Revolving Note, Unpaid
Drawings related to a Seasonal Letter of Credit, and all fees, including
Revolving Loan Fees, associated therewith.

“Security Documents”: The Mortgage and each other agreement, document or
instrument pursuant to which the Lender is granted a Lien to secure the Secured
Obligations, as the same may be amended, supplemented, extended, restated or
otherwise modified from time to time.

“Subordinated Debt”: Any interest bearing Indebtedness of the Borrower, now
existing or hereafter created, incurred or arising, which is subordinated in
right of payment to the payment of the Obligations.

“Subsidiary”: With respect to any Person, (a) any corporation in which such
Person, directly or indirectly (i) owns more than 50% of the outstanding stock
thereof, or (ii) has the power under ordinary circumstances to elect a majority
of the directors thereof, or (b) any partnership, association, joint venture,
limited liability company, or other unincorporated association 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
Loan Agreement, ProGold Limited Liability Company (“Progold”) (for as long as
ProGold’s current lease with Cargill remains in effect) and Crystech, L.L.C.
(“Crystech”) shall not be deemed a Subsidiary.

“Termination Date”: The earliest of (a) August 1, 2008, and (b) the date on
which the Revolving Commitments are terminated pursuant to Section 7.2 hereof.

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“Term Letter of Credit”: An irrevocable letter of credit issued under Term Loan
T06 pursuant to this Agreement for the account of Borrower.

“Term Letter of Credit Commitment Amount”: Ten Million Dollars ($10,000,000).

“Term Loan”: The Term Loan T01, Term Loan T01NP or Term Loan T06 (collectively,
the “Term Loans”).

‘Term Loan Availability Period”: The period beginning on the Closing Date to
August 1, 2008.

“Term Loan Fees”: As defined in Section 2.14(a).

“Term Loan Maturity Date”: December 31, 2011.

“Term Loan T01”: As defined in Section 2.1.

“Term Loan T01 Amount”: An amount which shall not at any time be greater than
Fifty-Eight Million Two Hundred Seventy-Six Thousand Seven Hundred Two Dollars
($58,276,702), as determined from time to time according to the terms of this
Agreement.

“Term Loan T01NP Loan”: As defined in Section 2.1.

“Term Loan T01NP Amount”: An amount which shall not at any time be greater than
Twenty-Five Million One Hundred Six Thousand Six Hundred Dollars ($25,106,600),
as determined from time to time according to the terms of this Agreement.

“Term Loan T06”: As defined in Section 2.1.

“Term Loan T06 Amount”: An amount which shall not at any time be greater than
Eighty-Five Million Dollars ($85,000,000), as determined from time to time
according to the terms of this Agreement.

“Term Note T01”: The promissory note of the Borrower in the form of Exhibit A-2
hereto, evidencing the obligation of the Borrower to repay the Term Loan T01.

“Term Note T01NP”: The promissory note of the Borrower in the form of Exhibit
A-3 hereto, evidencing the obligation of the Borrower to repay the Term Loan
T01NP.

“Term Note T06”: The promissory note of the Borrower in the form of Exhibit A-4
hereto, evidencing the obligation of the Borrower to repay the Term Loan T06.

“Total Revolving Outstandings”: As of any date of determination, the sum of (a)
the aggregate unpaid principal balance of the Revolving Loan outstanding on such
date, (b) the aggregate maximum amount available to be drawn under Letters of
Credit outstanding on such

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date, and (c) the aggregate amount of Unpaid Drawings related to a Seasonal
Letter of Credit on such date.

“Total Term Outstandings”: As of any date of determination, the sum of (a) the
aggregate unpaid principal balance of Term Loan T01, (b) the aggregate unpaid
principal balance of Term Loan T01NP, (c) the aggregate unpaid principal balance
of Term Loan T06, and (d) the aggregate amount of Unpaid Drawings related to a
Term Letter of Credit on such date.

“Unpaid Drawing”: As defined in Section 2.12.

“Unused Revolving Loan Amount”: As of any date of determination, the amount by
which the Revolving Loan Amount exceeds the Total Revolving Outstandings on such
date.

“Unused Term Loan Amount”: As of any date of determination, the amount by which
the Term Loan T01 Amount plus the Term Loan T01NP Amount plus the Term Loan T06
Amount exceeds the Total Term Outstandings.

“U.S. Taxes”: As defined in Section 2.25(e).

Section 1.2 Accounting Terms and Calculations. Except as may be expressly
provided to the contrary herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with GAAP. To the extent any change in GAAP affects any computation
or determination required to be made pursuant to this Agreement, such
computation or determination shall be made as if such change in GAAP had not
occurred unless the Borrower and Required Lender agree in writing on an
adjustment to such computation or determination to account for such change in
GAAP.

Section 1.3 Computation of Time Periods. In this Agreement, in the computation
of a period of time from a specified date to a later specified date, unless
otherwise stated the word “from” means “from and including” and the word “to” or
“until” each means “to but excluding”.

Section 1.4 Other Definitional Terms. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. References to Sections, Exhibits, schedules and like references are
to this Agreement unless otherwise expressly provided. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” Unless the context in which used herein otherwise clearly requires,
“or” has the inclusive meaning represented by the phrase “and/or.” All
incorporation by reference of covenants, terms, definitions or other provisions
from other agreements are incorporated into this Agreement as if such provisions
were fully set forth herein, and such incorporation shall include all necessary
definitions and related provisions from such other agreements, and shall survive
any termination of such other agreements until the obligations of the Borrower
under this Agreement and the Notes are irrevocably paid in full, all Letters of
Credit have expired without

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renewal or been returned to the issuer, and the commitments of Lender to advance
funds to the Borrower are terminated.

ARTICLE II
TERMS OF THE CREDIT FACILITIES

Section 2.1             Lending Commitments.

(a)           Revolving Loan. Subject to the terms and conditions hereof, the
Lender agrees to make a revolving credit facility available to the Borrower on a
revolving basis at any time and from time to time from the Closing Date to the
Termination Date, during which period the Borrower may borrow, repay and
reborrow in accordance with the provisions hereof, provided, that no Revolving
Loan will be made in any amount which, after giving effect thereto, would cause
the Total Revolving Outstandings to exceed the (i) Revolving Loan Amount, or
(ii) the Borrowing Base. Revolving Loan Advances may be obtained and maintained,
at the election of the Borrower but subject to the limitations hereof, as LIBOR
Rate Advances, Quoted Rate Advances or Base Rate Advances or any combination
thereof; provided, however, that no more than five (5) LIBOR Rate Advances may
be outstanding at any one time, and no more than ten (10) Quoted Rate Advances
may be outstanding at any one time under the Revolving Loan.

(b)           Term Loan T01. Subject to the terms and conditions hereof, the
Lender agrees to make a revolving term facility available to the Borrower,
jointly and severally, on a revolving basis at any time and from time to time
during the Term Loan T01 Availability Period, up to the Term Loan T01 Amount,
during which period the Borrower may borrow, repay and reborrow in accordance
with the provisions hereof. Term Loan T01 Advances may be obtained and
maintained, at the election of the Borrower but subject to the limitations
hereof, as LIBOR Rate Advances, Quoted Rate Advances or Base Rate Advances or
any combination thereof; provided, however, that no more than five (5) LIBOR
Rate Advances may be outstanding at any one time, and no more than ten (10)
Quoted Rate Advances may be outstanding at any one time under Term Loan T01.

(c)           Term Loan T01NP. Subject to the terms and conditions hereof, the
Lender agrees to make a revolving term facility available to the Borrower,
jointly and severally, on a revolving basis at any time and from time to time
during the Term Loan T01NP Availability Period, up to the Term Loan T01NP
Amount, during which period the Borrower may borrow, repay and reborrow in
accordance with the provisions hereof. Term Loan T01NP Advances may be obtained
and maintained, at the election of the Borrower but subject to the limitations
hereof, as LIBOR Rate Advances, Quoted Rate Advances or Base Rate Advances or
any combination thereof; provided, however, that no more than five (5) LIBOR
Rate Advances may be outstanding at any one time, and no more than ten (10)
Quoted Rate Advances may be outstanding at any one time under Term Loan T01NP.

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(d)           Term Loan T06. Subject to the terms and conditions hereof, the
Lender agrees to make a revolving term facility available to the Borrower,
jointly and severally, on a revolving basis at any time and from time to time
during the Term Loan T06 Availability Period, up to the Term Loan T06 Amount,
during which period the Borrower may borrow, repay and reborrow in accordance
with the provisions hereof. Term Loan T06 Advances may be obtained and
maintained, at the election of the Borrower but subject to the limitations
hereof, as LIBOR Rate Advances, Quoted Rate Advances or Base Rate Advances or
any combination thereof; provided, however, that no more than five (5) LIBOR
Rate Advances may be outstanding at any one time, and no more than ten (10)
Quoted Rate Advances may be outstanding at any one time under Term Loan T06.

Section 2.2             Existing Loans. The Lender has previously extended to
the Borrower (i) the Term Loan T03NP pursuant to that certain Single Advance
Term Loan Supplement dated as of July 21, 2003, and numbered Z269T03BNP, in the
original principal amount of $12,000,000, which has an unpaid principal balance
of $2,400,000, and a maturity date of February 1, 2010, and (ii) the Term Loan
T04 pursuant to that certain Non-Revolving Credit Supplement dated as of
December 12, 2005, and numbered Z269T04B, in the original principal amount of
$36,000,000, which has an unpaid principal balance of $36,000,000, and a
maturity date of April 30, 2013. As of the date of this Agreement, Term Loan
T03NP and Term Loan T04 shall become subject to all of the terms and conditions
of this Agreement; provided, however, if any provision of this Agreement is in
conflict with any provision of any Term Loan Supplement, the applicable Term
Loan Supplement shall control with respect to such provision.

Section 2.3             Procedure for Loans.

(a)           Procedure for Revolving Loan.

(i)            Not later than 11:00 A.M. (Denver time) two LIBOR Banking Days
prior to the requested Revolving Loan Date if the Revolving Loan Advance is
requested as a LIBOR Rate Advance, not later than 11:00 A.M. (Denver time) one
Banking Day prior to the requested Revolving Loan Date if the Revolving Loan
Advance is requested as a Quoted Rate Advance, and not later than 11:00 A.M.
(Denver time) on the requested Revolving Loan Date if the Revolving Loan Advance
is requested as a Base Rate Advance, Borrower’s Agent shall submit to the Lender
a written on telephonic request for borrowing, provided that no more than one
request for Borrowing may be made on any Banking Day. Each request for a
Revolving Loan Advance hereunder shall be irrevocable and shall be deemed a
representation by Borrower that on the requested Revolving Loan Date, and after
giving effect to the requested Revolving Loan Advance, the applicable conditions
specified in Article III have been and will be satisfied. Each request for a
Revolving Loan Advance hereunder shall specify (i) the requested Revolving Loan
Date, (ii) the amount of the Revolving Loan Advance to be made on such date
which shall be in a minimum amount of $5,000,000 or, if more, a whole multiple
of $1,000,000 in excess thereof, (iii) whether such Revolving

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Loan Advance is to be funded as a LIBOR Rate Advance, Quoted Rate Advance or
Base Rate Advance (and, if such Revolving Loan Advance is to be made with more
than one applicable interest rate choice, specifying the amount to which each
interest rate choice is applicable) and (iv) in the case of LIBOR Rate Advances,
the duration of the initial Interest Period applicable thereto. The Lender may
rely on any telephone request by the Borrower for Revolving Loan Advances
hereunder which it believes in good faith to be genuine; and Borrower hereby
waives the right to dispute the Lender’s record of the terms of such telephone
request.

(ii)           The Lender agrees that the Borrower may from time to time request
the Lender to submit an offer to make a Revolving Loan Advance to the Borrower,
provided, however, that the Lender may, but shall have no obligation to, submit
such offer and the Borrower may, but shall have no obligation to, accept any
such offer. A request that the Lender submit an offer to make a Revolving Loan
Advance hereunder shall be referred to herein as a “bid request,” and an offer
to make a loan that specifies the loan amount, interest rate and interest period
shall be referred to herein as the “bid.” Bid requests may be made orally or in
writing (in the form attached hereto as Exhibit E) but if made orally shall be
confirmed promptly by telecopy (facsimile) of a written completed bid request in
a form approved by the Lender. Each bid request shall specify (A) the amount of
the requested Revolving Loan Advance, which amount must be in a minimum amount
of $1,000,000 or integral multiples thereof (or the entire available balance of
the Revolving Loan), (B) the date of the Revolving Loan Advance, and (C) the
Interest Period of the Revolving Loan Advance. The Lender may, in response to a
bid request, in its discretion, irrevocably submit to the Borrower, a bid
containing an offer to make the Revolving Loan Advance. Each bid, if submitted,
must be submitted to the Lender, whether orally or in writing, by 10:00 A.M.
(Denver time) on the day following the bid request. Each bid shall specify (X)
the amount of the Revolving Loan Advance for which the bid is being made, (Y)
the rate of interest per annum offered for the Revolving Loan Advance (which
shall be expressed in the form of an index plus any margin), and (Z) the
Interest Period of the Revolving Loan Advance, which date shall not be beyond
the Termination Date. Not later than 11:00 A.M. (Denver time) on the day the
Borrower receives the Lender’s bid (or at such later time as the Lender may
agree), the Borrower shall either reject the bid or accept the bid by giving
notice to the Lender by telephone in either case, confirmed by facsimile.
Failure to properly notify the Lender of an acceptance of the bid may be treated
by the Lender as a rejection. Any Revolving Loan Advance made as a result of the
Borrower’s acceptance of the Lender’s bid (such Revolving Loan Advance to be
referred to herein as a “Bid Advance”) shall be subject to the terms of this
Agreement. If the Lender has sold participation interests in the Revolving Loan,
then Bid Advances by the Lender shall be deemed to reduce only the

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Lender’s pro rata share of the Revolving Loan. the sum of all Bid Advances
outstanding may not at any time exceed the lesser of (L) $50,000,000, or (M) the
dollar amount of the Lender’s pro rata share of the Revolving Loan (as said
amount may be reduced a result of other Revolving Loan Advances made pursuant to
the Revolving Loan).

(b)           Procedure for Term Loans. Not later than 11:00 A.M. (Denver time)
two LIBOR Banking Days prior to the requested Term Loan Date if the Term Loan
Advance is requested as a LIBOR Rate Advance, not later than 11:00 A.M. (Denver
time) one Banking Day prior to the requested Term Loan Date if the Term Loan
Advance is requested as a Quoted Rate Advance, and not later than 11:00 A.M.
(Denver time) on the requested Term Loan Date if the Term Loan Advance is
requested as a Base Rate Advance, Borrower’s Agent shall submit to the Lender a
written or telephonic request for borrowing, provided that no more than one
request for Borrowing may be made on any Banking Day. Each request for a Term
Loan Advance hereunder shall be irrevocable and shall be deemed a representation
by Borrower that on the requested Term Loan Date, and after giving effect to the
requested Term Loan Advance, the applicable conditions specified in Article III
have been and will be satisfied. Each request for a Term Loan Advance hereunder
shall specify (i) the requested Term Loan Date, (ii) the Term Loan to which the
Term Loan Advance relates, (iii) the amount of the Term Loan Advance to be made
on such date which shall be in a minimum amount of $2,000,000 or, if more, a
whole multiple of $500,000 in excess thereof, (iv) whether such Term Loan
Advance is to be funded as a LIBOR Rate Advance, Quoted Rate Advance or Base
Rate Advance (and, if such Term Loan Advance is to be made with more than one
applicable interest rate choice, specifying the amount to which each interest
rate choice is applicable) and (v) in the case of LIBOR Rate Advances, the
duration of the initial Interest Period applicable thereto. The Lender may rely
on any telephone request by the Borrower for Term Loan Advances hereunder which
it believes in good faith to be genuine; and Borrower hereby waives the right to
dispute the Lender’s record of the terms of such telephone request.

Section 2.4             Notes. The Revolving Loan shall be evidenced by the
Revolving Note payable to the order of the Lender in a principal amount equal to
the Revolving Loan Amount. The Term Loans shall be evidenced by the Term Notes
payable to the order of the Lender in principal amounts equal to the respective
Term Loan Amount. The Lender shall enter in its ledgers and records the amount
of the Revolving Loan and each Term Loan, the various Advances made, converted
or continued and the payments made thereon, and the Lender is authorized by the
Borrower to enter on a schedule attached to the Revolving Note or Term Notes, as
appropriate, a record of such Revolving Loan, Term Loans, Advances and payments;
provided, however that the failure by the Lender to make any such entry or any
error in making such entry shall not limit or otherwise affect the obligation of
the Borrower hereunder and on the Notes, and, in all events, the principal
amounts owing by the Borrower in respect of the Revolving Note shall be the
aggregate amount of all Revolving Loan Advances made by the

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Lender less all payments of principal thereof made by the Borrower, and the
principal amount owing by Borrower in respect of the Term Notes shall be
aggregate amount of all Term Note Advances made by the Lender less all payments
of principal thereon made by the Borrower.

Section 2.5             Conversions and Continuations. On the terms and subject
to the limitations hereof, the Borrower shall have the option at any time and
from time to time to convert all or any portion of the Advances in respect of
the Revolving Loan or the Term Loans into Base Rate Advances, LIBOR Rate
Advances or Quoted Rate Advances, or to continue a LIBOR Rate Advance or Quoted
Rate Advance as such; provided, however that a LIBOR Rate Advance may be
converted or continued only on the last day of the Interest Period applicable
thereto, a Quoted Rate Advance may be converted or continued only on the last
day of the fixed rate period set forth in the corresponding Quoted Rate Offer,
and no Advance may be converted or continued as a LIBOR Rate Advance or a Quoted
Rate Advance if a Default or Event of Default has occurred and is continuing on
the proposed date of continuation or conversion. Advances in respect of the
Revolving Loan or Term Loans may be converted to, or continued as, LIBOR Rate
Advances only in a minimum amount of $500,000 or, if more, a whole multiple of
$500,000 in excess thereof. Advances in respect of the Revolving Loan or Term
Loans may be converted to, or continued as, Quoted Rate Advances only in a
minimum amount of $500,000 or, if more, a whole multiple of $500,000 in excess
thereof. The Borrower shall give the Lender written notice of any continuation
or conversion of any such Advances and such notice must be given so as to be
received by the Lender not later than 11:00 A.M. (Denver Time) two LIBOR Banking
Days prior to requested date of conversion or continuation in the case of the
continuation of, or conversion to, LIBOR Rate Advances, not later than 11:00
A.M. (Denver Time) on the requested date of conversion or continuation in the
case of the continuation of, or conversion to, Quoted Rate Advances, and not
later than 11:00 A.M. (Denver Time) on the date of the requested continuation
of, or conversion to, Base Rate Advances. Each such notice shall specify (a) the
amount to be continued or converted, (b) the date for the continuation or
conversion (which must be (i) the last day of the preceding Interest Period for
any continuation or conversion of LIBOR Rate Advances, (ii) the last day of the
fixed rate period set forth in the corresponding Quoted Rate Offer for any
continuations or conversion of a Quoted Rate Advance, (iii) a LIBOR Banking Day
in the case of conversions to or continuations as LIBOR Rate Advances, and (iv)
a Banking Day in the case of continuations or conversions to Base Rate
Advances), and (c) in the case of conversions to or continuations as LIBOR Rate
Advances, the Interest Period applicable thereto. Any notice given by the
Borrower under this Section shall be irrevocable. If the Borrower shall fail to
notify the Lender of the continuation of any LIBOR Rate Advances within the time
required by this Section, at the option of the Lender, such Advances shall, on
the last day of the Interest Period applicable thereto, automatically be
converted into Base Rate Advances with the same principal amount. If the
Borrower shall fail to notify the Lender of the continuation of any Quoted Rate
Advances within the time required by this Section, or if the Lender declines to
make a Quoted Rate Offer with respect to such Quoted Rate Advances and the
Borrower has not requested an alternate Advance, such Quoted Rate Advances
shall, on the last day of the fixed rate period applicable thereto,
automatically accrue interest at the Base Rate until repaid or converted into
another Advance.

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Section 2.6             Interest Rates, Interest Payments and Default Interest.

(a)           Revolving Loan. Interest shall accrue and be payable on the
Revolving Loan as follows:

(i)            Subject to paragraph (iv) below, each LIBOR Rate Advance shall
bear interest on the unpaid principal amount thereof during the Interest Period
applicable thereto at a rate per annum equal to the sum of (A) the Adjusted
LIBOR Rate for such Interest Period, plus (B) 65 basis points.

(ii)           Subject to paragraph (iv) below, each Quoted Rate Advance shall
bear interest on the unpaid principal amount thereof at a rate per annum equal
to the Quoted Rate;

(iii)          Subject to paragraph (iv) below, each Base Rate Advance shall
bear interest on the unpaid principal amount thereof at a varying rate per annum
equal to the Base Rate.

(iv)          Upon the occurrence of any Event of Default, each Advance in
respect of the Revolving Loan shall, at the option of the Lender, bear interest
until paid in full at a rate per annum equal to the Default Rate.

(v)           Interest shall be payable (A) with respect to each LIBOR Rate
Advance, on the last day of the Interest Period applicable thereto (and, in the
case of any LIBOR Rate Advance having an Interest Period greater than three
months, on the three month anniversary of the first day of such Interest
Period); (B) with respect to any Base Rate Advance or Quoted Rate Advance, in
arrears on the 20th day of each month; (C) with respect to all Advances, upon
any permitted prepayment (on the amount prepaid); and (D) with respect to all
Advances, on the Termination Date; provided that interest under paragraph
(a)(iv) of this Section shall be payable on demand.

(b)           Term Loan. Interest shall accrue and be payable on the Term Loan
as follows:

(i)            Subject to paragraph (iv) below, each LIBOR Rate Advance in
respect of the Term Loan shall bear interest on the unpaid principal amount
thereof during the Interest Period applicable thereto at a rate per annum equal
to the sum of (A) the Adjusted LIBOR Rate for such Interest Period, plus (B) the
Applicable Margin.

(ii)           Subject to paragraph (iv) below, each Quoted Rate Advance in
respect of the Term Loan shall bear interest on the unpaid principal amount
thereof at a rate per annum equal to the Quoted Rate.

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(iii)          Subject to paragraph (iv) below, each Base Rate Advance in
respect of the Term Loan shall bear interest on the unpaid principal amount
thereof at a varying rate per annum equal to the sum of (A) the Base Rate, plus
(B) the Applicable Margin.

(iv)          Upon the occurrence of any Event of Default, each Term Loan
Advance shall, at the option of the Lenders, bear interest until paid in full at
a rate per annum equal to the Default Rate.

(v)           Interest shall be payable (A) with respect to each LIBOR Rate
Advance in respect of the Term Loan, on the last day of the Interest Period
applicable thereto (and, in the case of any LIBOR Rate Advance in respect of the
Term Loan having an Interest Period greater than three months, on the three
month anniversary of the first day of such Interest Period); (B) with respect to
any Base Rate Advance or Quoted Rate Advance in respect of the Term Loan in
arrears, on the 20th day of each month; (C) with respect to all Advances, upon
any permitted prepayment (on the amount prepaid); and (D) with respect to all
Advances, on the Termination Date; provided that interest under paragraph
(b)(iv) of this Section shall be payable on demand.

Section 2.7             Repayment.

(a)           Revolving Loan. The unpaid principal balance of the Revolving
Note, together with all accrued and unpaid interest thereon, shall be due and
payable on the Termination Date.

(b)           Term Loan T01. The principal of Term Loan T01 shall be payable in
three annual installments in the amount of $9,400,000 due on December 31 of each
year beginning December 31, 2008, and any amount of principal or interest
remaining unpaid with respect to Term Loan T01 on the Term Loan Maturity Date
shall be immediately due and payable on such date.

(c)           Term Loan T01NP. The principal of Term Loan T01NP shall be payable
in three annual installments in the amount of $7,600,000 due on December 31 of
each year beginning December 31, 2008, and any amount of principal or interest
remaining unpaid with respect to Term Loan T01NP on the Term Loan Maturity Date
shall be immediately due and payable on such date.

(d)           Term Loan T06. The unpaid principal of Term Loan T06 shall be
payable as follows: On December 31, 2008, a principal payment shall be due in an
amount equal to 25% of the outstanding principal balance of Term Loan T06 as of
the last day of the Term Loan Availability Period; the remaining principal
balance shall be payable in three equal annual installments due on December 31
of each year beginning December 31, 2009, and any amount of principal or
interest remaining unpaid with respect to Term

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Loan T06 on the Term Loan Maturity Date shall be immediately due and payable on
such date.

Section 2.8             Prepayments.

(a)           Mandatory Prepayments for Borrowing Base Deficiency. If at any
time a Borrowing Base Deficiency exists, the Borrower shall immediately pay on
the principal of the Advances in respect of the Revolving Loan an amount equal
to such Borrowing Base Deficiency. Any such payments shall be applied first
against Base Rate Advances and then to Quoted Rate and LIBOR Rate Advances in
order starting with the Quoted Rate or LIBOR Rate Advances having the shortest
time to the end of the applicable Interest Period.

(b)           Mandatory Prepayments for a Prepayment Event. If at any time a
Prepayment Event occurs, the Borrower shall immediately pay to the Lender the
net proceeds realized by such Prepayment Event and any prepayment fee payable
under Section 2.24. Any such prepayments shall be applied, pro rata, to the Term
Loans (first against Base Rate Advances and then to Quoted Rate and LIBOR Rate
Advances in order starting with the Quoted Rate or LIBOR Rate Advances having
the shortest time to the end of the applicable Interest Period), second, to any
outstanding Revolving Loans, and third to cash collateralize any issued and
outstanding Letters of Credit. All prepayments applied to the Term Loans shall
be applied to the scheduled principal payments on the Term Loans, pro rata, in
the inverse order of their maturities.

(c)           Other Mandatory Prepayments. If at any time Total Revolving
Outstandings exceed the Revolving Loan Amount, the Borrower shall immediately
repay to the Lender the amount of such excess. Any such prepayments shall be
applied to the Revolving Loan.

(d)           Optional Prepayments. The Loans may be prepaid at any time, in
whole or in part, subject to Section 2.24, in minimum amounts of $1,000,000.00,
and in integral multiples of $100,000.00 (or the entire outstanding balance, if
less) on any Banking Day; provided, however, in the event of any prepayment of a
LIBOR Rate Advance, Borrower must provide three (3) Banking Days’ prior written
notice to the Agent. Any such prepayment must be accompanied by accrued and
unpaid interest on the amount prepaid. Amounts paid (unless following an
acceleration or upon termination of the Revolving Loan in whole) or prepaid on
Advances in respect of the Revolving Loan or the Term Loans under this paragraph
(d) may be reborrowed upon the terms and subject to the conditions and
limitations of this Agreement. All prepayments shall be applied to the Loans, as
designated by Borrower, and all prepayments on a Term Loan shall be applied to
the scheduled principal payments on such Term Loan in the inverse order of their
maturities.

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Section 2.9             Letters of Credit. Upon the terms and subject to the
conditions of this Agreement, the Lender agrees to issue Letters of Credit for
the account of the Borrower from time to time between the Closing Date and
thirty (30) days prior to the Termination Date in such amounts as the Borrower
shall request up to an aggregate amount at any time outstanding not exceeding
the Seasonal Letter of Credit Commitment Amount or Term Letter of Credit
Commitment Amount, as applicable; provided that (i) the face amount of any
Seasonal Letter of Credit shall automatically reduce, dollar for dollar, the
amount which Borrower may borrow as Revolving Loan Advances, (ii) the face
amount of any Term Letter of Credit shall automatically reduce, dollar for
dollar, the amount which Borrower may borrow as Term Loan T06 Advances; (iii)
the aggregate face amount of all issued and outstanding Seasonal Letters of
Credit shall not exceed $20,000,000, (iv) the aggregate amount of all issued and
outstanding Letters of Credit shall not exceed $10,000,000, (v) no Seasonal
Letter of Credit will be issued in any amount which, after giving effect to such
issuance, would cause Total Revolving Outstandings to exceed the Revolving Loan
Amount, and (vi) no Term Letter of Credit will be issued in any amount which,
after giving effect to such issuance, would cause the aggregate unpaid principal
balance of Term Loan T06 and the aggregate amount of Unpaid Drawings related to
a Term Letter of Credit to exceed the Term Loan T06 Amount. Each Letter of
Credit request shall set forth (i) the face amount of and expiry date, (ii) the
beneficiary, (iii) the terms thereof, and (iv) such other information as the
Lender may request.

Section 2.10           Procedures for Letters of Credit. Each request for a
Letter of Credit shall be made by the Borrower in writing, by telex, facsimile
transmission or electronic conveyance received by the Lender by 11:00 A.M.
(Denver Time) on a Banking Day that is not less than one Banking Day preceding
the requested date of issuance (which shall also be a Banking Day). Each request
for a Letter of Credit shall be deemed a representation by the Borrower that on
the date of issuance of such Letter of Credit and after giving effect thereto
the applicable conditions specified in Article III have been and will be
satisfied. The Lender may require that such request be made on such letter of
credit application and reimbursement agreement form as the Lender may from time
to time specify, along with satisfactory evidence of the authority and
incumbency of the officials of the Borrower.

Section 2.11           Terms of Letters of Credit. Letters of Credit shall be
issued in support of obligations of the Borrower in accordance with Section
2.17. Each Seasonal Letter of Credit must expire not later than the Banking Day
preceding the Termination Date, each Term Letter of Credit must expire not later
than the Banking Day preceding the Term Loan Maturity Date, and no Letter of
Credit may have a term longer than the underlying Loan.

Section 2.12           Agreement to Repay Letter of Credit Drawing. If the
Lender has received documents purporting to draw under a Letter of Credit that
the Lender believes conform to the requirements of such Letter of Credit, or if
the Lender has decided that it will comply with the Borrower’s written or oral
request or authorization to pay a drawing on any Letter of Credit that the
Lender does not believe conforms to the requirements of such Letter of Credit,
it will notify the Borrower of that fact. The Borrower shall reimburse the
Lender by 9:30 A.M. (Denver Time) on the day on which such drawing is to be paid
in Immediately Available Funds

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in an amount equal to the amount of such drawing. Any amount by which the
Borrower has failed to reimburse the Lender for the full amount of such drawing
by 10:00 A.M. on the date on which the Lender in its notice indicated that it
would pay such drawing, until reimbursed by the Borrower, is an “Unpaid
Drawing.”

Section 2.13           Obligations Absolute. The obligation of the Borrower
under Section 2.12 to repay the Lender for any amount drawn on any Letter of
Credit and to repay the Lender to cover Unpaid Drawings shall be absolute,
unconditional and irrevocable, shall continue for so long as any Letter of
Credit is outstanding notwithstanding any termination of this Agreement, and
shall be paid strictly in accordance with the terms of this Agreement, under all
circumstances whatsoever, including without limitation the following
circumstances:

(a)           Any lack of validity or enforceability of any Letter of Credit;

(b)           The existence of any claim, setoff, defense or other right which
the Borrower may have or claim at any time against any beneficiary, transferee
or holder of any Letter of Credit (or any Person for whom any such beneficiary,
transferee or holder may be acting), the Lender or the Lender or any other
Person, whether in connection with a Letter of Credit, this Agreement, the
transactions contemplated hereby, or any unrelated transaction; or

(c)           Any statement or any other document presented under any Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever.

Neither the Lender nor its officers, directors or employees shall be liable or
responsible for, and the obligations of the Borrower to the Lender shall not be
impaired by:

(i)            The use which may be made of any Letter of Credit or for any acts
or omissions of any beneficiary, transferee or holder thereof in connection
therewith;

(ii)           The validity or genuineness of documents, or of any endorsements
thereon, even if such documents or endorsements should, in fact, prove to be in
any or all respects invalid, fraudulent or forged;

(iii)          The acceptance by the Lender of documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary; or

(iv)          Any other action of the Lender in making or failing to make
payment under any Letter of Credit if in good faith and in conformity with U.S.
or foreign laws, regulations or customs applicable thereto.

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Section 2.14           Fees.

(a)           Loan Fees. The Borrower shall pay to the Lender fees with respect
to (i) the Revolving Loan in the amount of $225,000.00 (“Revolving Loan Fees”);
(ii) the Term Loan T01 in the amount of $43,708.53; (iii) the Term Loan T01NP in
the amount of $18,829,95; and (iv) the Term Loan T06 in the amount of $63,750.00
(“Term Loan Fees”). Such fees are payable on the Closing Date and are not
refundable to the Borrower.

(b)           Commitment Fees. The Borrower shall pay to the Lender fees (the
“Revolving Commitment Fees”) in an amount determined by multiplying the average
daily Unused Revolving Loan Amount by fifteen (15) basis points per annum, based
on a 360 day year, for the period from the Closing Date to the Termination Date.
The Borrower shall further pay to the Lender fees (the “Term Loan Commitment
Fees”) in an amount determined by applying the Applicable Commitment Fee
Percentage to the daily Unused Term Loan Amount during the Term Loan
Availability Period.

Such Revolving Commitment Fees are payable in arrears quarterly on the last day
of each calendar quarter and on the Termination Date.

(c)           Letter of Credit Fees. For each Letter of Credit issued, the
Borrower shall pay to the Lender in advance on the date of issuance, fees
(“Letter of Credit Fees”) in an amount equal to the greater of (i) $2,500.00, or
(ii) the amount determined by applying a per annum rate to the Applicable Margin
for LIBOR Rate Advances in respect of the Revolving Loan then in effect to the
original face amount of such Letter of Credit for the period from the date of
issuance to the scheduled expiration date of such Letter of Credit. In addition
to the Letter of Credit Fees, the Borrower shall pay to the Lender, on demand,
all issuance, amendment, drawing and other fees regularly charged by the Lender
to its letter of credit customers and all out-of-pocket expenses incurred by the
Lender in connection with the issuance, amendment, administration or payment of
any Letter of Credit.

Section 2.15           Computation. Revolving Commitment Fees, Term Loan
Commitment Fees, Letter of Credit Fees, interest on the Revolving Loan, the Term
Loans and the Default Rate shall be computed on the basis of actual days elapsed
(or, in the case of Letter of Credit Fees which are paid in advance, actual days
to elapse) and a year of 360 days.

Section 2.16           Payments. Payments and prepayments of principal of, and
interest on, the Notes and all fees, expenses and other obligations under this
Agreement payable to the Lender or the Lender shall be made without setoff or
counterclaim in Immediately Available Funds not later than 1:00 P.M. (Denver
Time) on the dates called for under this Agreement and the Notes to the Lender
at its main office in Denver, Colorado. Funds received after such time shall be
deemed to have been received on the next Banking Day. Whenever any payment to be
made hereunder or on the Notes shall be stated to be due on a day which is not a
Banking Day, such

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payment shall be made on the next succeeding Banking Day and such extension of
time, in the case of a payment of principal, shall be included in the
computation of any interest on such principal payment; provided, however, that
if such extension would cause payment of interest on or principal of a LIBOR
Rate Advance to be made in the next following calendar month, such payment shall
be made on the next preceding Banking Day.

Section 2.17           Use of Loan Proceeds. The proceeds of the Revolving Loan
shall be used to refinance the outstanding obligations of Borrower under the
Statused Revolving Term Loan Supplement dated July 11, 2005, and numbered
Z269T07, and to continue to finance Borrower’s accounts receivable and
inventory, for the issuance of letters of credit, and to finance the general
business purposes of Borrower in a manner not in conflict with any of Borrower’s
covenants in this Agreement. The proceeds of the Term Loan T01 shall be used to
refinance the outstanding obligations of the Borrower under the Revolving Term
Loan Supplement dated July 11, 2005, and numbered Z269T01F, and to continue to
finance the Borrower’s operating needs. The proceeds of the Term Loan T01NP
shall be used to refinance the outstanding obligations of the Borrower under the
Revolving Term Loan Supplement dated July 8, 2005, and numbered Z260T01FNP, and
to continue to finance the Borrower’s operating needs. The proceeds of the Term
Loan T06 shall be used to refinance the outstanding obligations of the Borrower
under the Revolving Term Loan Supplement dated July 11, 2005, and numbered
Z269T06C, and to continue to finance the Borrower’s operating needs. In no event
shall the Loan proceeds be used (i) to purchase or carry margin stock (as
defined in Regulation U of the Board) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund Indebtedness
originally incurred for such purpose, or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of Regulations U or X
of the Board.

Section 2.18           Interest Rate Not Ascertainable, Etc. If, on or prior to
the date for determining the Adjusted LIBOR Rate in respect of the Interest
Period for any LIBOR Rate Advance, the Lender determines (which determination
shall be conclusive and binding, absent error) that:

(a)           deposits in dollars (in the applicable amount) are not being made
available to the Lender in the relevant market for such Interest Period, or

(b)           the Adjusted LIBOR Rate will not adequately and fairly reflect the
cost to the Lender of funding or maintaining LIBOR Rate Advances for such
Interest Period,

the Lender shall forthwith give notice to the Borrower of such determination,
whereupon the obligation of the Lender to make or continue, or to convert any
Advances to, LIBOR Rate Advances shall be suspended until the Lender notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist. While any such suspension continues, all further Advances by the Lender
shall be made with an interest rate option to which such suspension does not
apply. No such suspension shall affect the interest rate then in effect during
the applicable Interest Period for any LIBOR Rate Advance outstanding at the
time such suspension is imposed.

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Section 2.19           Increased Cost. If any Regulatory Change:

(a)           shall subject the Lender to any additional tax, duty or other
charge with respect to its LIBOR Rate Advances, the Revolving Note, the Term
Notes or its obligation to make LIBOR Rate Advances or shall change the basis of
taxation of payment to the Lender of the principal of or interest on its LIBOR
Rate Advances or any other amounts due under this Agreement in respect of its
LIBOR Rate Advances or its obligation to make LIBOR Rate Advances (except for
changes in the rate of tax on the overall net income of the Lender imposed by
the jurisdiction in which the Lender’s principal office located); or

(b)           shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including without limitation, any such
requirement imposed by the Board, but excluding any such requirement to the
extent included in calculating the applicable Adjusted LIBOR Rate) against
assets of, deposits with or for the account of, or credit extended by, or
against Letters of Credit issued by the Lender or shall impose on the Lender or
on the United States market for certificates of deposit or the interbank
Eurodollar market any other condition affecting its LIBOR Rate Advances, the
Revolving Note, the Term Notes or its obligation to make LIBOR Rate Advances or
affecting any Letter of Credit;

and the result of any of the foregoing is to increase the cost to the Lender of
making or maintaining any LIBOR Rate Advance or issuing or maintaining any
Letter of Credit, or to reduce the amount of any sum received or receivable by
the Lender under this Agreement or under the Revolving Note or the Term Notes,
then, within 30 days after written notice and demand by the Lender, which notice
shall describe the Regulatory Change, the Borrower shall pay to the Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction.

Section 2.20           Illegality. If any Regulatory Change shall make it
unlawful or impossible for the Lender to make, maintain or fund any LIBOR Rate
Advance, the Lender shall notify the Borrower, whereupon the obligation of the
Lender to make or continue, or to convert any Advances to, LIBOR Rate Advances
shall be suspended until the Lender notifies the Borrower that the circumstances
giving rise to such suspension no longer exist. Before giving any such notice,
the Lender shall designate a different lending office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender. If the Lender determines
that it may not lawfully continue to maintain any LIBOR Rate Advances to the end
of the applicable Interest Period, all of the affected Advances shall be
automatically converted to Base Rate Advances as of the date of the Lender’s
notice.

Section 2.21           Capital Adequacy. In the event that any Regulatory Change
reduces or shall have the effect of reducing the rate of return on the Lender’s
capital or the capital of its parent corporation (by an amount the Lender deems
material) as a consequence of its Loans

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and/or any Letters of Credit or the Lender’s obligations to make Advances to
cover Letters of Credit to a level below that which such the Lender or its
parent corporation could have achieved but for such Regulatory Change (taking
into account the Lender’s policies and the policies of its parent corporation
with respect to capital adequacy), then the Borrower shall, within 30 days after
written notice and demand from the Lender, pay to such Lender additional amounts
sufficient to compensate the Lender or its parent corporation for such
reduction. Any determination by the Lender under this Section and any
certificate as to the amount of such reduction given to the Borrower by the
Lender shall be final, conclusive and binding for all purposes, absent error.

Section 2.22           Funding Losses; LIBOR Rate Advances. The Borrower shall
compensate the Lender, upon its written request, for all losses, expenses and
liabilities which the Lender may sustain: (i) if for any reason, other than a
default by the Lender, a funding of a LIBOR Rate Advance does not occur on the
date specified therefor in the Borrower’s request or notice as to such Advance
under Section 2.2 or 2.4, or (ii) if, for whatever reason (including, but not
limited to, acceleration of the maturity of Advances following an Event of
Default), any repayment of a LIBOR Rate Advance, or a conversion pursuant to
Section 2.20, occurs on any day other than the last day of the Interest Period
applicable thereto. The Lender’s request for compensation shall set forth the
basis for the amount requested and shall be final, conclusive and binding,
unless Borrower contests the request for compensation within thirty (30) days of
such written request.

Section 2.23           Discretion of Lender as to Manner of Funding. The Lender
shall be entitled to fund and maintain its funding of LIBOR Rate Advances in any
manner it may elect, it being understood, however, that for the purposes of this
Agreement all determinations hereunder (including, but not limited to,
determinations under Section 2.22) shall be made as if the Lender had actually
funded and maintained each LIBOR Rate Advance during the Interest Period for
such Advance through the issuance of its certificates of deposit, or the
purchase of deposits, having a maturity corresponding to the last day of the
Interest Period and bearing an interest rate equal to the LIBOR Rate for such
Interest Period.

Section 2.24           Broken Funding Surcharge. Notwithstanding any provision
contained in this Agreement giving the Borrower the right to prepay any loan
prior to the date it would otherwise be due and payable, the Borrower agrees to
provide three (3) 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 Interest Period
applicable thereto (whether such payment is made voluntarily, as a result of
acceleration or otherwise), the Borrower will pay to the Lender a surcharge in
an amount which would result in the Lender being made whole (on a present value
basis) for the actual or imputed funding losses incurred by the Lender as a
result thereof. Notwithstanding the foregoing, in the event any fixed rate
balance is repaid as a result of the Borrower refinancing the loan with another
lender, then in lieu of the foregoing, the Borrower shall pay to the Lender a
surcharge of 50% of an amount sufficient (on a present value basis) to enable
the Lender to maintain the yield it would have

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earned during the fixed rate period on the amount repaid. Such surcharges will
be calculated in accordance with methodology established by the Lender.

Section 2.25           Taxes.

(a)           Any and all payments by the Borrower hereunder or under the Notes
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges of withholdings, and all
liabilities with respect thereto, excluding, in the case of the Lender, taxes
imposed on its overall net income and franchise taxes imposed on it in lieu of
net income taxes (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes being hereinafter referred to as “Taxes”).

(b)           The Borrower agree to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, performing under, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as “Other
Taxes”).

(c)           The Borrower shall indemnify the Lender for the full amount of
Taxes or Other Taxes imposed on or paid by the Lender and any penalties,
interest and expenses with respect thereto. Payments on this indemnification
shall be made within 30 days from the date the Lender makes written demand
therefor.

(d)           Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Lender, at its address referred to on the
signature page hereof, a certified copy of a receipt evidencing payment thereof.
In the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determine that no Taxes are payable in respect thereof, the Borrower
shall furnish or shall cause such payor to furnish, to the Lender, at such
address, an opinion of counsel reasonably acceptable to the Lender stating that
such payment is exempt from Taxes. For purposes of this subsection (d) and
subsection (e), the terms “United States” and “United States person” shall have
the meanings specified in Section 7701 of the Internal Revenue Code.

(e)           If the Borrower shall be required by law or regulation to make any
deduction, withholding or backup withholding of any taxes, levies, imposts,
duties, fees, liabilities or similar charges of the United States of America,
any possession or territory of the United States of America (including the
Commonwealth of Puerto Rico) or any area subject to the jurisdiction of the
United States of America (“U.S. Taxes”) from any payments to a Lender pursuant
to any Loan Document in respect of the Obligations payable to such then or
thereafter outstanding, the Borrower shall make such

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withholdings or deductions and pay the full amount withheld or deducted to the
relevant taxation authority or other authority in accordance with applicable
law.

Section 2.26           Capitalization. The Borrower agrees to purchase such
equity in the Lender as the Lender may from time to time require in accordance
with its Bylaws.

Section 2.27           Security. Each party hereto acknowledges that the Lender
has a statutory first Lien on all of the Borrower’s stock and other equities in
the Lender (the “CoBank Equities”), respectively, pursuant to 12 U.S.C. § 2131.
The Lender’s statutory Lien on the CoBank Equities shall be for the Lender’s
sole and exclusive benefit and shall not be subject to this Agreement or any
other Loan Document.

Section 2.28           Security Interests. The payment and performance of the
Secured Obligations shall be secured by the Security Documents. The payment of
the Revolving Note, Unpaid Drawings related to a Seasonal Letter of Credit, and
all fees, including Revolving Loan Fees, associated therewith, is unsecured.

ARTICLE III
CONDITIONS PRECEDENT

Section 3.1             Conditions Precedent to All Loans and Letters of Credit.
The obligation of the Lender to make any Loans hereunder or to issue each Letter
of Credit shall be subject to the fulfillment of the following conditions on or
before the Closing Date:

(a)           Documents. The Lender shall have received the following:

(i)                                     The Notes drawn to the order of the
Lender executed by a duly authorized officer of the Borrower and dated the
Closing Date.

(ii)                                  The Security Documents duly executed by
the respective parties thereto.

(iii)                               A certificate of the Secretary or Assistant
Secretary (or other appropriate officer) of the Borrower dated as of the Closing
Date and certifying to the following:

(A)                              true and accurate copy of the corporate
resolutions of the Borrower authorizing the execution, delivery and performance
of the Loan Documents to which the Borrower is a party contemplated hereby and
thereby;

(B)                                The incumbency, names, titles and signatures
of the officers of the Borrower authorized to execute the Loan

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Documents to which the Borrower is a party and to request Advances;

(C)                                A true and accurate copy of the Articles of
Incorporation (or the equivalent) of the Borrower with all amendments thereto,
certified by the appropriate governmental official of the jurisdiction of
organization as of a date acceptable to the Lender; and

(D)                               A true and accurate copy of the bylaws (or
other constitutive documents) for the Borrower.

(iv)                              A certificate of good standing for the
Borrower in the jurisdiction of its formation or incorporation and each other
jurisdiction where the character of the properties owned or leased by the
Borrower makes such qualification necessary, certified by the appropriate
governmental officials as of a date acceptable to the Lender.

(v)                                 Insurance certificates in form and substance
reasonably satisfactory to the Lender listing the Lender as loss payee thereof
and indicating that the Borrower has obtained insurance in compliance with
Section 5.3 with respect to each of the businesses and real properties of the
Borrower in such amounts and with such carriers reasonably acceptable to the
Lender.

(vi)                              Acknowledgment of this Agreement and any
pertinent Security Document by the parties to the Intercreditor Agreement.

(b)           Compliance. The Borrower shall have performed and complied with
all agreements, terms and conditions contained in this Agreement required to be
performed or complied with by the Borrower prior to or simultaneously with the
Closing Date.

(c)           Filings, Registrations and Recordings. Each document required by
the Security Documents or under law or reasonably requested by the Lender to be
filed, registered or recorded in order to create in favor of the Lender for the
benefit of the Lender, a perfected Lien on the collateral described therein,
prior and superior in right to any other Person (other than with respect to
Liens expressly permitted by Section 6.13), shall be in proper form for filing,
registration or recordation, any pledged collateral shall have been duly
delivered to the Lender, and the priority and perfection of the Liens created by
the Security Documents shall have been established to the satisfaction of the
Lender and its counsel.

(d)           Financial Statements. The Lender shall have received copies of the
balance sheet and the related statements of income, retained earnings and cash
flows of

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the Borrower for the most recently ended Fiscal Quarter ending more than sixty
(60) days prior to the Closing Date, the most recent management letter issued by
Borrower’s certified public accountants, and such other information as the
Lender may reasonably request. All such financial statements, including the
related schedules and notes thereto, shall have been prepared in accordance with
GAAP

(e)           Other Matters.  All corporate and legal proceedings relating to
the Borrower and all instruments and agreements in connection with the
transactions contemplated by this Agreement shall be satisfactory in scope, form
and substance to the Lender and its counsel, and the Lender shall have received
all information and copies of all documents, including records of corporate
proceedings, as the Lender or its counsel may reasonably have requested in
connection therewith,  such documents where appropriate to be certified by
proper corporate or governmental authorities.

(f)            Fees and Expenses. The Lender shall have received for itself and
for the account of the Lender all fees and other amounts due and payable by the
Borrower on or prior to the Closing Date, including the reasonable fees and
expenses of counsel to the Lender payable pursuant to Section 8.2.

(g)           Representations and Warranties.  The representations and
warranties contained in Article IV shall be true and correct on and as of the
Closing Date and on the date of each Advance or the date of issuance of each
Letter of Credit, with the same force an effect as if made on such date.

(h)           No Default. No Default or Event of Default shall have occurred and
be continuing on the Closing Date and on the date of each Advance or the date of
issuance of each Letter of Credit or will exist after giving effect to the
Advances made on such date or the Letters of Credit so issued.

(i)            Notices and Requests. The Lender shall have received the
Borrower’s request for such Loans as required under Section 2.3 or its
application for such Letters of Credit specified under Section 2.10.

Any one or more of the conditions set forth above which have not been satisfied
by the Borrower on or prior to the date of disbursement of the initial Advance
under this Agreement shall not be deemed permanently waived by the Lender or any
Lender unless the Lender or such Lender, as the case may be, shall waive the
same in a writing which expressly states that the waiver is permanent, and in
all cases in which the waiver is not stated to be permanent the Lender or any
Lender may at any time subsequent thereto insist upon compliance and
satisfaction of any such condition as a condition to any subsequent Advance or
Letter of Credit hereunder and failure by the Borrower to comply with any such
condition within five (5) Banking Day’s written notice from the Lender or any
Lender to the Borrower shall constitute an Event of Default under this
Agreement.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES

To induce the Lender to enter into this Agreement and to make the Loans
hereunder and to induce the Lender to issue Letters of Credit, the Borrower
represents and warrants to the Lender:

Section 4.1             Organization, Standing, Etc. The Borrower is a
cooperative corporation duly incorporated and validly existing and in good
standing under the laws of State of Minnesota. The Borrower has all requisite
power and authority to carry on its business as now conducted, to enter into
this Agreement, to issue the Notes and to perform its obligations under the Loan
Documents. The Borrower (a) holds all certificates of authority, licenses and
permits necessary to carry on its business as presently conducted in each
jurisdiction in which it is carrying on such business, except where the failure
to hold such certificates, licenses or permits would not constitute a Material
Adverse Occurrence, and (b) is duly qualified and in good standing as a foreign
company or corporation in each jurisdiction in which the character of the
properties owned, leased or operated by it or the business conducted by it makes
such qualification necessary and the failure so to qualify would permanently
preclude the Borrower from enforcing its rights with respect to any assets or
expose the Borrower to any Material Adverse Occurrence.

Section 4.2             Authorization and Validity. The execution, delivery and
performance by the Borrower of the Loan Documents have been duly authorized by
all necessary corporate action by the Borrower. This Agreement constitutes, and
the Notes and other Loan Documents when executed will constitute, the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

Section 4.3             No Conflict: No Default. The execution, delivery and
performance by the Borrower of the Loan Documents will not (a) violate any
provision of any law, statute, rule or regulation or any order, writ, judgment,
injunction, decree, determination or award of any court, governmental agency or
arbitrator presently in effect having applicability to the Borrower, (b) violate
or contravene any provision of the Articles of Incorporation or bylaws of the
Borrower, or (c) result in a breach of or constitute a default under any
indenture, loan or credit agreement or any other agreement, lease or instrument
to which the Borrower is a party or by which it or any of its properties may be
bound or result in the creation of any Lien thereunder. Borrower is not in
default under or in violation of any such law, statute, rule or regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, loan or credit agreement or other agreement, lease or instrument in
any case in which the consequences of such default or violation could constitute
a Material Adverse Occurrence.

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Section 4.4             Government Consent. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority is required
on the part of the Borrower to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Loan Documents, except for any necessary filing
or recordation of or with respect to any of the Security Documents.

Section 4.5             Financial Statements and Condition. The Borrower’s
audited financial statements as heretofore furnished to the Lender, have been
prepared in accordance with GAAP on a consistent basis (except for the absence
of footnotes and subject to year-end audit adjustments as to the interim
statements) and fairly present the financial condition of the Borrower as at
such dates and the results of their operations and changes in financial position
for the respective periods then ended. As of the dates of such financial
statements, no Borrower had any material obligation, contingent liability,
liability for taxes or long-term lease obligation which is not reflected in such
financial statements or in the notes thereto.

Section 4.6             Litigation. Except as disclosed on Schedule 4.6, there
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its properties
before any court or arbitrator, or any governmental department, board, agency or
other instrumentality which, if determined adversely to the Borrower, would
exceed $7,500,000, and there are no unsatisfied judgments against the Borrower,
the satisfaction or payment of which would exceed $7,500,000.

Section 4.7             Environmental, Health and Safety Laws. Except as set out
on Schedule 4.7, to Borrower’s knowledge there does not exist any violation by
the Borrower of any applicable federal, state or local law, rule or regulation
or order of any government, governmental department, board, agency or other
instrumentality relating to environmental, pollution, health or safety matters
which has, will or threatens to impose a liability on Borrower or which has
required or would require an expenditure by Borrower to cure in excess of
$7,500,000 per violation or $25,000,000 in the aggregate. No property of the
Borrower is used for the production, storage or disposal of hazardous wastes,
substances or materials, except for incidental uses in the ordinary course of
business. Borrower has not received any notice to the effect that any part of
its operations or properties is not in material compliance with any such law,
rule, regulation or order or notice that it or its property is the subject of
any governmental investigation evaluating whether any remedial action is needed
to respond to any release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to exceed $7,500,000 per occurrence or $25,000,000 in the aggregate.
Except as set out on Schedule 4.7, Borrower has no knowledge that it or its
property will become subject to environmental laws or regulations during the
term of this Agreement, compliance with which could reasonably be expected to
require Capital Expenditures that could reasonably be expected to exceed
$7,500,000 per occurrence or $25,000,000 in the aggregate.

Section 4.8             ERISA. Each Plan is in substantial compliance with all
applicable requirements of ERISA and the Code and with all material applicable
rulings and regulations

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issued under the provisions of ERISA and the Code setting forth those
requirements. No Reportable Event has occurred and is continuing with respect to
any Plan. All of the minimum funding standards applicable to such Plans have
been satisfied and there exists no event or condition which would reasonably be
expected to result in the institution of proceedings to terminate any Plan under
Section 4042 of ERISA.

Section 4.9             Federal Reserve Regulations. Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying margin stock (as defined in
Regulation U of the Board). The value of all margin stock owned by the Borrower
does not constitute more than 25% of the value of the assets of the Borrower.

Section 4.10           Title to Property; Leases: Liens; Subordination. The
Borrower has (a) good and marketable title to its real properties and (b) good
and sufficient title to, or valid, subsisting and enforceable leasehold interest
in, its other material properties, including all real properties, other
properties and assets, referred to as owned by a Borrower in the most recent
financial statement referred to in Section 5.1 (other than property disposed of
since the date of such financial statements in the ordinary course of business).
None of such properties is subject to a Lien, except as allowed under Section
6.13. No Borrower has subordinated any of its rights under any obligation owing
to it to the rights of any other person.

Section 4.11           Taxes. The Borrower has filed all federal, state and
local tax returns required to be filed and has paid or made provision for the
payment of all taxes due and payable pursuant to such returns and pursuant to
any assessments made against it or any of its property and all other taxes, fees
and other charges imposed on it or any of its property by any governmental
authority (other than taxes, fees or charges the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books of the Borrower). No tax Liens have been filed and no material claims are
being asserted with respect to any such taxes, fees or charges. The charges,
accruals and reserves on the books of the Borrower in respect of taxes and other
governmental charges are adequate and the Borrower knows of no proposed material
tax assessment against it or any basis therefor.

Section 4.12           Trademarks, Patents. The Borrower possesses or has the
right to use all of the patents, trademarks, trade names, service marks and
copyrights, and applications therefor, and all technology, know-how, processes,
methods and designs used in or necessary for the conduct of its business,
without known conflict with the rights of others.

Section 4.13           Burdensome Restriction. Borrower is not a party to or
otherwise bound by any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter, corporate or partnership
restriction exceeding $7,500,000.

Section 4.14           Force Majeure. Since the date of the most recent
financial statement referred to in Section 5.1, the business, properties and
other assets of the Borrower have not been

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materially and adversely affected in any way as the result of any fire or other
casualty, strike, lockout, or other labor trouble, embargo, sabotage,
confiscation, condemnation, riot, civil disturbance, activity of armed forces or
act of God.

Section 4.15           Investment Company Act. Borrower is not an “investment
company” or a company “controlled” by an investment company within the meaning
of the Investment Company Act of 1940, as amended.

Section 4.16           Public Utility Holding Company Act. Borrower is not a
“holding company” or a “subsidiary company” of a holding company or an
“affiliate” of a holding company or of a subsidiary company of a holding company
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.

Section 4.17           Full Disclosure. Subject to the following sentence,
neither the financial statements referred to in Section 5.1 nor any other
certificate, written statement, exhibit or report furnished by or on behalf of
the Borrower in connection with or pursuant to this Agreement contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained therein not misleading.
Certificates or statements furnished by or on behalf of the Borrower to the
Lender consisting of projections or forecasts of future results or events have
been prepared in good faith and based on good faith estimates and assumptions of
the management of the Borrower, and the Borrower has no reason to believe that
such projections or forecasts are not reasonable.

Section 4.18           Subsidiaries. The Borrower has no Subsidiaries other than
those disclosed to the Lender in Schedule 4.18.

Section 4.19           Labor Matters. There are no pending or threatened
strikes, lockouts or slowdowns against either Borrower. Borrower has not been or
is not in violation in any material respect of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such
matters. All payments due from the Borrower on account of wages and employee
health and welfare insurance and other benefits (in each case, except for de
minimus amounts), have been paid or accrued as a liability on the books of the
Borrower. The consummation of the transactions contemplated under the Loan
Documents will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower is bound.

Section 4.20           Solvency. After the making of any Advance and after
giving effect thereto, (a) the fair value of the assets of the Borrower, at a
fair valuation, will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of the
Borrower will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) the Borrower will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) Borrower will not have unreasonably small capital with which to

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conduct the business in which it is engaged as such business is proposed to be
conducted following the Closing Date.

ARTICLE V
AFFIRMATIVE COVENANTS

Until any obligation of the Lender hereunder to make the Loans and to issue
Letters of Credit shall have expired or been terminated and the Notes and all of
the other Obligations have been paid in full and all outstanding Letters of
Credit shall have expired or the liability of the Lender thereon shall have
otherwise been discharged:

Section 5.1             Financial Statements and Reports. The Borrower will
furnish to the Lender:

(a)           As soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, the consolidated and consolidating
financial statements of the Borrower and their consolidated Subsidiaries
consisting of at least statements of income, cash flow and changes in the
members’ equity, and a consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding figures from the
previous annual audit, certified without qualification by Eide Bailly, LLP, or
another independent certified public accountants of recognized national standing
selected by the Borrower and reasonably acceptable to the Lender, together with
any management letters, management reports or other supplementary comments or
reports to the Borrower’s board of director furnished by such accountants.

(b)           As soon as available and in any event within 5 days after the
Borrower’s quarterly filing with the Securities and Exchange Commission,
unaudited consolidated statements of income, cash flow and changes in the
members’ equity for the Borrower and their consolidated Subsidiaries for such
quarter and for the period from the beginning of such fiscal year to the end of
such quarter, and a consolidated balance sheet of the Borrower as at the end of
such quarter, setting forth in comparative form figures for the corresponding
period for the preceding fiscal year, accompanied by a certificate signed by an
officer of the Borrower stating that such financial statements present fairly
the financial condition of the Borrower and that the same have been prepared in
accordance with GAAP (except for the absence of footnotes and subject to
year-end audit adjustments as to the interim statements).

(c)           As soon as practicable and in any event within 45 days after the
end of each Fiscal Quarter, a Compliance Certificate in the form attached hereto
as Exhibit D signed by an officer of the Borrower demonstrating in reasonable
detail compliance (or noncompliance, as the case may be) with Section 6.11(h),
Section 6.15, Section 6.16 and Section 6.17, as of the end of such quarter and
stating that as at the end of such quarter there did not exist any Default or
Event of Default or, if such Default or Event of

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Default existed, specifying the nature and period of existence thereof and what
action the Borrower propose to take with respect thereto.

(d)           As soon as practicable and in any event within 30 days after the
end of each month, a Borrowing Base Certificate signed by an officer of
Borrower, reporting the Borrowing Base as of the last day of such month.

(e)           As soon as practicable and in any event not more than 60 days
after the end of any fiscal year, annual budgets and forecasts of operations,
all in reasonable detail and reasonably satisfactory in scope to the Lender.

(f)            As soon as practicable and in any event not more than 60 days
after the end of any fiscal year, an annual capital expenditure budget. The
Borrower will also furnish a revised budget if increases of more than 20% over
the original capital expenditures budget are approved by the board of directors.

(g)           With respect to Crystech, annual financial statements within 120
days after and as of the end of each fiscal year substantially in the form of
(a) above, and quarterly financial statements within 60 days after as of the end
of each Fiscal Quarter in the form of (b) above.

(h)           Immediately upon any officer of the Borrower becoming aware of any
Default or Event of Default, a written notice from the Borrower describing the
nature thereof and what action Borrower propose to take with respect thereto.

(i)            Immediately upon any officer of the Borrower becoming aware of
any matter resulting in expenditures exceeding $7,500,000, a written notice from
the Borrower describing the nature thereof and what action Borrower propose to
take with respect thereto.

(j)            Immediately upon any officer of the Borrower becoming aware of
(i) the commencement of any action, suit, investigation, proceeding or
arbitration before any court or arbitrator or any governmental department,
board, agency or other instrumentality affecting a Borrower or any property of
such Person, or to which a Borrower is a party (other than litigation where the
insurance insures against the damages claimed and the insurer has assumed
defense of the litigation without reservation) and in which an adverse
determination or result could reasonably be expected to constitute a Material
Adverse Occurrence; or (ii) any adverse development which occurs in any
litigation, arbitration or governmental investigation or proceeding previously
disclosed by a Borrower which, if determined adversely to a Borrower, could
reasonably be expected to result in expenditures exceeding $7,500,000, a written
notice from the Borrower describing the nature and status thereof and what
action the Borrower propose to take with respect thereto.

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(k)           From time to time, such other information regarding the business,
operation and financial condition of the Borrower as any Lender may reasonably
request.

Section 5.2             Existence. The Borrower will maintain its corporate
existence in good standing under the laws of its jurisdiction of organization
and its qualification to transact business in each jurisdiction where failure so
to qualify would permanently preclude the Borrower from enforcing its rights
with respect to any material asset or would expose the Borrower to any material
liability.

Section 5.3             Insurance. The Borrower shall maintain with financially
sound and reputable insurance companies such insurance as may be required by law
and such other insurance in such amounts and against such hazards as is
customary in the case of reputable firms engaged in the same or similar business
and similarly situated.

Section 5.4             Payment of Taxes and Claims. The Borrower shall file all
tax returns and reports which are required by law to be filed by it and will pay
before they become delinquent all taxes, assessments and governmental charges
and levies imposed upon it or its property and all claims or demands of any kind
(including but not limited to those of suppliers, mechanics, carriers,
warehouses, landlords and other like Persons) which, if unpaid, might result in
the creation of a Lien upon its property; provided that the foregoing items need
not be paid if they are being contested in good faith by appropriate
proceedings, and as long as the Borrower’s title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its business is not materially interfered with and adequate reserves with
respect thereto have been set aside on the Borrower’s books in accordance with
GAAP.

Section 5.5             Inspection. The Borrower shall permit any Person
designated by the Lender or any Lender to visit and inspect any of the
collateral and the properties, books and financial records of the Borrower, to
examine and to make copies of the books of accounts and other financial records
of the Borrower, and to discuss the affairs, finances and accounts of the
Borrower with, and to be advised as to the same by, its officers at such
reasonable times and intervals as the Lender or any Lender may designate.
Provided that no Default or Event of Default has occurred and is continuing,
such inspections shall take place no more frequently than annually unless the
Borrower first consent to additional inspections.

Section 5.6             Maintenance of Properties. The Borrower will maintain
its properties used or useful in the conduct of its business in good condition,
repair and working order, and supplied with all necessary equipment, and make
all necessary repairs, renewals, replacements, betterments and improvements
thereto, all as may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.

Section 5.7             Books and Records. The Borrower will keep adequate and
proper records and books of account in which full and correct entries will be
made of its dealings, business and affairs.

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Section 5.8             Compliance. The Borrower will comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject; provided, however,
that failure so to comply shall not be a breach of this covenant if such failure
cannot reasonably be expected to constitute a Material Adverse Occurrence and
the Borrower is acting in good faith and with reasonable dispatch to cure such
noncompliance.

Section 5.9             ERISA. The Borrower will maintain each Plan in
compliance with all material applicable requirements of ERISA and of the Code
and with all applicable rulings and regulations issued under the provisions of
ERISA and of the Code.

Section 5.10           Environmental Matters: Reporting. The Borrower will
observe and comply with all laws, rules, regulations and orders of any
government or government agency relating to health, safety, pollution, hazardous
materials or other environmental matters to the extent non-compliance could
result in a material liability or otherwise constitute a Material Adverse
Occurrence. The Borrower will give the Lender prompt written notice of any
violation as to any environmental matter by the Borrower and of the commencement
of any judicial or administrative proceeding relating to health, safety or
environmental matters (a) in which an adverse determination or result could
result in the revocation of or have a material adverse effect on any operating
permits, air emission permits, water discharge permits, hazardous waste permits
or other permits held by the Borrower which are material to the operations of
the Borrower, or (b) which will or threatens to impose a material liability on
the Borrower to any Person or which will require expenditures by the Borrower
exceeding $7,500,000 to cure any alleged problem or violation.

Section 5.11           Further Assurances. The Borrower shall promptly correct
any defect or error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation thereof. Promptly upon request by the
Lender or the Required Lender, the Borrower also shall do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re­register, any and all
deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments,
estoppel certificates, financing statements and continuations thereof, notices
of assignment, transfers, certificates, assurances and other instruments as the
Lender or the Required Lender may reasonable require from time to time in order:
(a) to carry out more effectively the purposes of the Loan Documents; (b) to
perfect and maintain the validity, effectiveness and priority of any security
interests intended to be created by the Loan Documents including, without
limitation, the delivery of a landlord waiver from any landlord required by the
Lender or the Required Lender; and (c) to better assure, convey, grant, assign,
transfer, preserve, protect and confirm unto the Lender the rights granted now
or hereafter intended to be granted to the Lender under any Loan Document or
under any other instrument executed in connection with any Loan Document or that
the Borrower may be or become bound to convey, mortgage or assign to the Lender
for the benefit of the Lender in order to carry out the intention or facilitate
the performance of the provisions of any Loan Document. The Borrower shall
furnish to the Lender evidence reasonably satisfactory to the Lender of every
such recording, filing or registration.

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Section 5.12           Compliance with Terms of Material Contracts. The Borrower
shall make all payments and otherwise perform all obligations in respect of all
material contracts to which the Borrower is a party, the failure of which would
constitute a Material Adverse Occurrence.

Section 5.13           Eligibility. The Borrower shall maintain its status as an
entity eligible to borrow from the Lender. If requested, the Borrower agrees to
submit any documentation reasonably requested by the Lender to evidence such
eligibility.

ARTICLE VI
NEGATIVE COVENANTS

Until any obligation of the Lender hereunder to make the Loans or to issue
Letters of Credit shall have expired or been terminated and the Notes and all of
the other Obligations have been paid in full and all outstanding Letters of
Credit shall have expired or the liability of the Lender thereon shall have
otherwise been discharged:

Section 6.1             Merger. The Borrower will not merge or consolidate or
enter into any analogous reorganization or transaction with any Person or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution).

Section 6.2             Disposition of Assets. The Borrower will not directly or
indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) any property (including
accounts and notes receivable, with or without recourse) or enter into any
agreement to do any of the foregoing, except:

(a)           dispositions of inventory in the ordinary course of business;

(b)           dispositions of used, worn-out or obsolete equipment, furniture,
furnishings, machinery or fixtures if the value of such disposed equipment,
furniture, furnishings, machinery or fixtures at the time of disposal is less
than $7,500,000 in the aggregate in any fiscal year; and

(c)           other dispositions of property if the net book value of the
disposed property does not exceed in any fiscal year, 5% of the Borrower’s total
consolidated assets as shown on its balance sheet as of the end of the
immediately preceding fiscal year.

Section 6.3             Plans. The Borrower will not permit any event to occur
or condition to exist which would permit any Plan to terminate under any
circumstances which would cause the Lien provided for in Section 4068 of ERISA
to attach to any assets of the Borrower.

Section 6.4             Change in Nature of Business. The Borrower will not make
any material change in the nature of the business of the Borrower, as carried on
at the date hereof.

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Section 6.5             Subsidiaries. The Borrower will not form or acquire any
Person which would thereby become a Subsidiary, with the exception of
Investments permitted under Section 6.11.

Section 6.6             Negative Pledges. Except as otherwise permitted
hereunder, the Borrower will not enter into any agreement, bond, note or other
instrument with or for the benefit of any Person other than the Lender which
would (i) prohibit the Borrower from granting, or otherwise limit the ability of
the Borrower to grant, to the Lender any Lien on any assets or properties of the
Borrower, or (ii) require the Borrower to grant a Lien to any other Person if
the Borrower grants any Lien to the Lender.

Section 6.7             Restricted Payments. The Borrower will not make any
Restricted Payments if a Default or Event of Default has occurred and is
continuing or if a Default or Event of Default would occur as a result of such
Restricted Payment.

Section 6.8             Transactions with Affiliates. The Borrower will not
enter into any transaction with any Affiliate of the Borrower, except upon fair
and reasonable terms no less favorable than the Borrower would obtain in a
comparable arm’s-length transaction with a Person not an Affiliate.

Section 6.9             Accounting Changes. The Borrower will not make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or change its fiscal year.

Section 6.10           Subordinated Debt. The Borrower will not (a) make any
scheduled payment of the principal of or interest on any Subordinated Debt that
would be prohibited by the terms of such Subordinated Debt and any related
subordination agreement; (b) directly or indirectly make any prepayment on or
purchase, redeem or defease any Subordinated Debt or offer to do so (whether
such prepayment, purchase or redemption, or offer with respect thereto, is
voluntary or mandatory); (c) amend or cancel the subordination provisions
applicable to any Subordinated Debt; (d) take or omit to take any action if as a
result of such action or omission the subordination of such Subordinated Debt,
or any part thereof, to the Obligations might be terminated, impaired or
adversely affected; or (e) omit to give the Lender prompt notice of any notice
received from any holder of Subordinated Debt, or any trustee therefor, or of
any default under any agreement or instrument relating to any Subordinated Debt
by reason whereof such Subordinated Debt might become or be declared to be due
or payable.

Section 6.11           Investments. The Borrower will not acquire for value,
make, have or hold any Investments, except:

(a)           Investments existing on the date of this Agreement and described
on Schedule 6.11.

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(b)           Travel advances to management personnel and employees in the
ordinary course of business.

(c)           Investments in readily marketable direct obligations issued or
guaranteed by the United States or any agency thereof and supported by the full
faith and credit of the United States.

(d)           Certificates of deposit or bankers’ acceptances issued by any
commercial bank organized under the laws of the United States or any State
thereof which has (i) combined capital and surplus of at least $100,000,000, and
(ii) a credit rating with respect to its unsecured indebtedness from a
nationally recognized rating service that is reasonably satisfactory to the
Lender.

(e)           Commercial paper given the highest rating by a nationally
recognized rating service.

(f)            Repurchase agreements relating to securities issued or guaranteed
as to principal and interest by the United States of America with a term of not
more than seven (7) days; provided all such agreements shall require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System.

(g)           Other readily marketable Investments in debt securities which are
reasonably acceptable to the Required Lender.

(h)           Any other Investment if the aggregate consideration therefor does
not exceed $7,500,000.

Any Investments under clauses (c), (d), (e) or (f) above must mature within one
year of the acquisition thereof by the Borrower.

Section 6.12           Indebtedness. The Borrower will not incur, create, issue,
assume or suffer to exist any Indebtedness, except:

(a)           The Obligations.

(b)           Current Liabilities, other than for borrowed money, incurred in
the ordinary course of business.

(c)           Indebtedness existing on the date of this Agreement and disclosed
on Schedule 6.12, but not including any extension or refinancing thereof.

(d)           Indebtedness secured by Liens permitted under Section 6.13 hereof
and disclosed on Schedule 6.12.

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Section 6.13           Liens. The Borrower will not create, incur, assume or
suffer to exist any Lien, or enter into, or make any commitment to enter into,
any arrangement for the acquisition of any property through conditional sale,
lease-purchase or other title retention agreements, with respect to any property
now owned or hereafter acquired by the Borrower, except:

(a)           Liens granted to the Lender under the Security Documents to secure
the Obligations.

(b)           Liens existing on the date of this Agreement and disclosed on
Schedule 6.13.

(c)           Deposits or pledges to secure payment of insurance, old age
pensions or other social security obligations, in the ordinary course of
business of the Borrower.

(d)           Liens for taxes, fees, assessments and governmental charges not
delinquent or to the extent that payment therefor shall not at the time be
required to be made in accordance with the provisions of Section 5.4.

(e)           Liens of carriers, warehousemen, mechanics and materialmen, and
other like Liens arising in the ordinary course of business, for sums not due or
to the extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of Section 5.4.

(f)            Liens incurred or deposits or pledges made or given in connection
with, or to secure payment of, indemnity, performance or other similar bonds.

(g)           Liens arising solely by virtue of any statutory or common law
provision relating to banker’s liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restriction against
access by a Borrower in excess of those set forth by regulations promulgated by
the Board, and (ii) such deposit account is not intended by the Borrower to
provide collateral to the depository institution.

(h)           The interest of any lessor under any Capitalized Lease entered
into after the Closing Date or purchase money Liens on property acquired after
the Closing Date; provided, that, (i) the Indebtedness secured thereby is
otherwise permitted by this Agreement and (ii) such Liens are limited to the
property acquired and do not secure Indebtedness other than the related
Capitalized Lease Obligations or the purchase price of such property.

(i)            Liens created in connection with transactions permitted under
Section 6.12(e) hereof.

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(j)            Lender’s statutory Lien on the CoBank Equities.

Section 6.14           Contingent Liabilities. The Borrower will not be or
become liable on any Contingent Obligations except Contingent Obligations
existing on the date of this Agreement and described on Schedule 6.14 and
Contingent Obligations for the benefit of the Lender.

Section 6.15           Net Working Capital. As of the end of each Fiscal
Quarter, other than fiscal year end, Net Working Capital of the Borrower and
their consolidated Subsidiaries (excluding ProGold and Crystech) shall not be
less than $15,000,000. As of the end of each fiscal year, Net Working Capital of
the Borrower and their consolidated Subsidiaries shall not be less than
$35,000,000.

Section 6.16           Capitalization Ratio. As of the end of each Fiscal
Quarter, the Capitalization Ratio of the Borrower and their consolidated
Subsidiaries (excluding ProGold and Crystech) shall not be more than 0.55 to
1.0, on a consolidated basis.

Section 6.17           Interest Coverage Ratio. As of the end of each Fiscal
Quarter, the Interest Coverage Ratio of the Borrower and their consolidated
Subsidiaries (excluding ProGold and Crystech) will not be less than 2.5 to 1.0.

ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES

Section 7.1             Events of Default. The occurrence of any one or more of
the following events shall constitute an Event of Default:

(a)           The Borrower shall fail to make when due, whether by acceleration
or otherwise, any payment of principal of any Note and such failure to pay shall
continue for five (5) Banking Days after the date on which such payment was due.

(b)           The Borrower shall fail to make when due, whether by acceleration
or otherwise, any payment of interest on any Note or on or of any other
Obligation required to be made to the Lender or any Lender pursuant to this
Agreement and such failure to pay shall continue for five (5) Banking Days after
the date on which such payment was due.

(c)           Any representation or warranty made by or on behalf of the
Borrower in this Agreement or any other Loan Document or by or on behalf of the
Borrower in any certificate, statement, report or document herewith or hereafter
furnished to any Lender or the Lender pursuant to this Agreement or any other
Loan Document shall prove to have been false or misleading in any material
respect on the date as of which the facts set forth are stated or certified.

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(d)           The Borrower shall fail to comply with Sections 2,17, 5.2, 5.3 or
5.13 hereof or any Section of Article VI hereof.

(e)           The Borrower shall fail to comply with any other agreement,
covenant, condition, provision or term contained in this Agreement (other than
those hereinabove set forth in this Section 7.1) and such failure to comply
shall continue for 30 calendar days after whichever of the following dates is
the earliest:  (i) the date the Borrower or the Borrower give notice of such
failure to the Lender, (ii) the date the Borrower should have given notice of
such failure to the Lender pursuant to Section 5.1, or (iii) the date the Lender
or any Lender gives notice of such failure to the Borrower.

(f)            Any default (however denominated or defined) shall occur under
any Security Document.

(g)           The Borrower shall become insolvent or shall generally not pay its
debts as they mature or shall apply for, shall consent to, or shall acquiesce in
the appointment of a custodian, trustee or receiver of the Borrower or for a
substantial part of the property thereof or, in the absence of such application,
consent or acquiescence, a custodian, trustee or receiver shall be appointed for
the Borrower or for a substantial part of the property thereof and shall not be
discharged within 45 days, or the Borrower shall make an assignment for the
benefit of creditors.

(h)           Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted by or
against the Borrower, and, if instituted against the Borrower, shall have been
consented to or acquiesced in by the Borrower, or shall remain undismissed for
60 days, or an order for relief shall have been entered against the Borrower.

(i)            Any dissolution or liquidation proceeding shall be instituted by
or against the Borrower, and, if instituted against the Borrower, shall be
consented to or acquiesced in by the Borrower or shall remain for 45 days
undismissed.

(j)            A judgment or judgments for the payment of money in excess of the
sum of $7,500,000 in the aggregate shall be rendered against the Borrower and
either (i) the judgment creditor executes on such judgment or (ii) such judgment
remains unpaid or undischarged for more than 60 days from the date of entry
thereof or such longer period during which execution of such judgment shall be
stayed during an appeal from such judgment.

(k)           The maturity of any material interest-bearing Indebtedness of the
Borrower (other than Indebtedness under this Agreement) shall be accelerated, or
the Borrower shall fail to pay any such material Indebtedness when due (after
the lapse of any applicable grace period) or, in the case of such Indebtedness
payable on demand, when demanded (after the lapse of any applicable grace
period), or any event shall occur

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or condition shall exist and shall continue for more than the period of grace,
if any, applicable thereto and shall have the effect of causing, or permitting
the holder of any such Indebtedness or any trustee or other Person acting on
behalf of such holder to cause, such material Indebtedness to become due prior
to its stated maturity or to realize upon any collateral given as security
therefor. For purposes of this Section, Indebtedness of the Borrower shall be
deemed “material” if it exceeds $7,500,000 as to any item of Indebtedness or in
the aggregate for all items of Indebtedness with respect to which any of the
events described in this Section 7.1(k) has occurred.

(l)            Any execution or attachment shall be issued whereby any
substantial part of the property of the Borrower shall be taken or attempted to
be taken and the same shall not have been vacated or stayed within 30 days after
the issuance thereof.

(m)          Any Security Document shall, at any time, cease to be in full force
and effect or shall be judicially declared null and void, or the validity or
enforceability thereof shall be contested by the Borrower, or the Lender or the
Lender shall cease to have a valid and perfected security interest having the
priority contemplated thereunder in all of the collateral described therein,
other than by action or inaction of the Lender or the Lender if (i) the
aggregate value of the collateral affected by any of the foregoing exceeds
$1,000,000 and (ii) any of the foregoing shall remain unremedied for twenty (20)
days or more after receipt of notice thereof by the Borrower from the Lender.

(n)           Any Change of Control shall occur.

Section 7.2             Remedies. If any Event of Default described in Sections
7.1 (g), (h) or (i) shall occur, the Loans shall automatically terminate and the
Notes and all other Obligations shall automatically become immediately due and
payable, and the Borrower shall without demand cash collateralize an amount
equal to the aggregate face amount of all outstanding Letters of Credit. Upon
the occurrence of any of the foregoing events, the Lender may exercise all
rights and remedies under any of the Loan Documents, and enforce all rights and
remedies under any applicable law.

Section 7.3             Offset. In addition to the remedies set forth in Section
7.2, upon the occurrence of any Event of Default and thereafter while the same
be continuing, the Borrower hereby irrevocably authorizes the Lender to set off
any Obligations owed to the Lender against all deposits and credits of the
Borrower with, and any and all claims of the Borrower against, the Lender. Such
right shall exist whether or not the Lender shall have made any demand hereunder
or under any other Loan Document, whether or not the Obligations, or any part
thereof, or deposits and credits held for the account of the Borrower is or are
matured or unmatured, and regardless of the existence or adequacy of any
collateral, guaranty or any other security, right or remedy available to the
Lender. The Lender agrees that, as promptly as is reasonably possible after the
exercise of any such setoff right, it shall notify the Borrower of its exercise
of such setoff right; provided, however, that the failure of the Lender to
provide such notice shall not affect the validity of the exercise of such setoff
rights.  Nothing in this Agreement shall be

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deemed a waiver or prohibition of or restriction on the Lender to all rights of
banker’s Lien, setoff and counterclaim available pursuant to law.

ARTICLE VIII
MISCELLANEOUS

Section 8.1             Modifications. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 8.1. The
Lender and the Borrower may, from time to time, (i) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lender or of the Borrower
hereunder or thereunder or (ii) waive, on such terms and conditions as the
Lender may specify in such instrument, any of the requirements of this Agreement
or the other Loan Documents or any Default or Event of Default and its
consequences.

Section 8.2             Expenses. Whether or not the transactions contemplated
hereby are consummated, the Borrower agrees to reimburse the Lender upon demand
for all reasonable out-of-pocket expenses paid or incurred by the Lender
(including the fees and expenses of outside legal counsel to the Lender, and any
filing and recording costs) in connection with the negotiation, preparation,
approval, review, execution, delivery, administration, amendment, modification
and interpretation of this Agreement and the other Loan Documents and any
commitment letters relating thereto. The Borrower shall also reimburse the
Lender upon demand for all reasonable out-of-pocket expenses (including expenses
of legal counsel) paid or incurred by the Lender in connection with the
collection and enforcement of this Agreement and any other Loan Document. The
obligations of the Borrower under this Section shall survive any termination of
this Agreement.

Section 8.3             Waivers, etc. No failure on the part of the Lender or
the holder of a Note to exercise and no delay in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
The remedies herein and in the other Loan Documents provided are cumulative and
not exclusive of any remedies provided by law.

Section 8.4             Notices. Except when telephonic notice is expressly
authorized by this Agreement, any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing. All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by facsimile transmission, from the first Banking Day
after the date of sending if sent by overnight courier, or from four days

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after the date of mailing if mailed; provided, however, that any notice to the
Lender under Article II hereof shall be deemed to have been given only when
received by the Lender.

Section 8.5             Taxes. The Borrower agrees to pay, and save the Lender
harmless from all liability for, any stamp or other taxes which may be payable
with respect to the execution or delivery of this Agreement or the issuance of
the Notes, which obligation of the Borrower shall survive the termination of
this Agreement.

Section 8.6             Successors and Assigns; Participations; Purchasing
Lender.

(a)           This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lender, all future holders of the Notes, and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of their rights or obligations under this Agreement without the prior written
consent of the Lender.

(b)           The Lender may, at any time in the ordinary course of its
commercial banking business and in accordance with applicable law, with the
consent of the Lender and the Borrower (neither of which consents shall be
unreasonably withheld or delayed; and if an Event of Default shall have occurred
and be continuing, then consent of the Borrower shall not be required), sell to
one or more banks or other financial institutions (“Participants”) participating
interests in the Revolving Loan, the Term Loans or other Obligations owing to
the Lender, the Revolving Note held by the Lender, any Term Notes held by the
Lender, or any other interest of the Lender hereunder. The Borrower agrees that
if amounts outstanding under this Agreement, the Revolving Note, the Term Notes
and the Loan Documents are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have, to the extent permitted by applicable law,
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and the Revolving Note, any Term Note or other Loan
Document to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or the Revolving Note, any
Term Note or other Loan Document; provided. that such right of setoff shall be
subject to the obligation of such Participant to share with the Lender, and the
Lender agree to share with such Participant. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.19, 2.20, 2.21, 2.22
and 8.2 with respect to its participation in the Loans; provided, that no
Participant shall be entitled to receive any greater amount pursuant to such
subsection than the Lender would have been entitled to receive in respect of the
amount of the participation transferred by the Lender to such Participant had no
such transfer occurred.

(c)           The Borrower shall not be liable for any costs incurred by the
Lender in effecting any participation under subparagraph (b) of this subsection.

(d)           The Lender may disclose to any Participant and to any prospective
Participant any and all financial information in the Lender’s possession
concerning the

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Borrower or any of their Subsidiaries which has been delivered to the Lender by
or on behalf of the Borrower or any of their Subsidiaries pursuant to this
Agreement or which has been delivered to the Lender by or on behalf of the
Borrower or any of their Subsidiaries in connection with the Lender’s credit
evaluation of the Borrower or any of its Subsidiaries prior to entering into
this Agreement, provided that prior to disclosing such information, the Lender
shall first obtain the agreement of such prospective Participant to comply with
the provisions of Section 8.7.

(e)           Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and any note held by it in favor
of any federal reserve bank in accordance with Regulation A of the Board or U.
S. Treasury Regulation 31 CFR § 203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.

Section 8.7             Confidentiality of Information. The Lender shall use
reasonable efforts to assure that information about the Borrower and its
operations, affairs and financial condition, not generally disclosed to the
public or to trade and other creditors, which is furnished to the Lender
pursuant to the provisions hereof is used only for the purposes of this
Agreement and any other relationship between the Lender and the Borrower and
shall not be divulged to any Person other than the Lender, their Affiliates and
their respective officers, directors, employees and agents, except: (a) to their
attorneys and accountants, (b) in connection with the enforcement of the rights
of the Lender hereunder and under the Loan Documents or otherwise in connection
with applicable litigation, (c) in connection with participations and the
solicitation of prospective participants referred to in the immediately
preceding Section, (d) if such information is generally available to the public
other than as a result of disclosure by the Lender, (e) to any direct or
indirect contractual counterparty in any hedging arrangement or such contractual
counterparty’s professional advisor, (f) to any nationally recognized rating
agency that requires information about the Lender’s investment portfolio in
connection with ratings issued with respect to the Lender, and (g) as may
otherwise be required or requested by any regulatory authority having
jurisdiction over the Lender or by any applicable law, rule, regulation or
judicial process, the opinion of the Lender’s counsel concerning the making of
such disclosure to be binding on the parties hereto. The obligations of the
Lender under this Section shall survive payment in full of the Obligations and
the termination of the Commitments. The Lender shall not incur any liability to
the Borrower by reason of any disclosure permitted by this Section.

Section 8.8             Governing Law and Construction. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS PRINCIPLES THEREOF. Whenever possible, each provision of this
Agreement and the other Loan Documents and any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto shall
be interpreted in such manner as to be effective and valid under such applicable
law, but, if any provision of this Agreement, the other Loan Documents or any
other statement, instrument or

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transaction contemplated hereby or thereby or relating hereto or thereto shall
be held to be prohibited or invalid under such applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement, the other Loan Documents or any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto.

Section 8.9             Consent to Jurisdiction. AT THE OPTION OF THE LENDER,
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT
SITTING IN THE CITY OR COUNTY OF DENVER; AND THE BORROWER CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY
OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE LENDER AT ITS
OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

Section 8.10           Waiver of Jury Trial. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 8.11           Survival of Agreement. All representations, warranties,
covenants and agreement made by the Borrower herein or in the other Loan
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be deemed to have been relied upon by the Lender and shall survive the making of
the Loans by the Lender and the execution and delivery to the Lender by the
Borrower of the Notes, regardless of any investigation made by or on behalf of
the Lender, and shall continue in full force and effect as long as any
Obligation is outstanding and unpaid and so long as the Commitments have not
been terminated; provided, however, that the obligations of the Borrower under
Sections 8.2, 8.5 and 8.12 shall survive payment in full of the Obligations and
the termination of the Commitments.

Section 8.12           Indemnification. Borrower hereby agrees to defend,
protect, indemnify and hold harmless the Lender and its respective Affiliates
and the directors, officers, employees, attorneys and agents of the Lender and
its respective Affiliates (each of the foregoing being an “Indemnitee” and all
of the foregoing being collectively the “Indemnitees”‘) from and against any and
all claims, actions, damages, liabilities, judgments, costs and expenses
(including all reasonable fees and disbursements of counsel which may be
incurred in the investigation or defense of any matter) imposed upon, incurred
by or asserted against any Indemnitee, whether direct, indirect or consequential
and whether based on any federal, state, local or foreign laws or

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regulations (including securities laws, environmental laws, commercial laws and
regulations), under common law or on equitable cause, or on contract or
otherwise:

(a)           by reason of, relating to or in connection with the execution,
delivery, performance or enforcement of any Loan Document, any commitments
relating thereto, or any transaction contemplated by any Loan Document; or

(b)           by reason of, relating to or in connection with any credit
extended or used under the Loan Documents or any act done or omitted by any
Person, or the exercise of any rights or remedies thereunder, including the
acquisition of any collateral by the Lender by way of foreclosure of the Lien
thereon, deed or bill of sale in lieu of such foreclosure or otherwise;

provided, however, that the Borrower shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee’s gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or
consequence referred to herein, it shall be enforceable to the full extent
permitted by law.

This indemnification applies, without limitation, to any act, omission, event or
circumstance existing or occurring on or prior to the later of the Termination
Date or the date of payment in full of the Obligations, including specifically
Obligations arising under clause (b) of this Section. The indemnification
provisions set forth above shall be in addition to any liability the Borrower
may otherwise have. Without prejudice to the survival of any other obligation of
the Borrower hereunder the indemnities and obligations of the Borrower contained
in this Section shall survive the payment in full of the other Obligations.

Section 8.13           Captions. The captions or headings herein and any table
of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.

Section 8.14           Entire Agreement. This Agreement and the other Loan
Documents embody the entire agreement and understanding between the Borrower and
the Lender with respect to the subject matter hereof and thereof. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Nothing contained in this Agreement or in any other Loan
Document, expressed or implied, is intended to confer upon any Persons other
than the parties hereto any rights, remedies, obligations or liabilities
hereunder or thereunder.

Section 8.15           Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.

Section 8.16           Borrower Acknowledgements. The Borrower hereby
acknowledges that (a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement

52

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and the other Loan Documents, (b) the Lender has no fiduciary relationship to
the Borrower, the relationship being solely that of debtor and creditor, (c) no
joint venture exists between the Borrower and the Lender, and (d) the Lender
undertakes no responsibility to the Borrower to review or inform the Borrower of
any matter in connection with any phase of the business or operations of the
Borrower and the Borrower shall rely entirely upon its own judgment with respect
to its business, and any review, inspection or supervision of, or information
supplied to, the Borrower by the Lender is for the protection of the Lender and
neither the Borrower nor any third party is entitled to rely thereon.

Section 8.17           Relationship Among Borrower.

(a)           Waivers of Defenses. The obligations of the Borrower hereunder
shall not be released, in whole or in part, by any action or thing which might,
but for this provision of this Agreement, be deemed a legal or equitable
discharge of a surety or guarantor, other than irrevocable payment and
performance in full of the Obligations (except for contingent indemnity and
other contingent Obligations not yet due and payable) at a time after any
obligation of the Lender hereunder to make the Loans and to issue Letters of
Credit shall have expired or been terminated and all outstanding Letters of
Credit shall have expired or the liability of the Lender shall have otherwise
been discharged. The purpose and intent of this Agreement is that the
Obligations constitute the direct and primary obligations of the Borrower and
that the covenants, agreements and all obligations of the Borrower hereunder be
absolute, unconditional and irrevocable. The Borrower shall be and remain liable
for any deficiency remaining after foreclosure of any security agreement or
mortgage securing all or any part of the Obligations, whether or not the
liability of any other Person for such deficiency is discharged pursuant to
statute, judicial decision or otherwise.

(b)           Other Transactions. The Lender is expressly authorized to
exchange, surrender or release with or without consideration any or all
collateral and security which may at any time be placed with it by the Borrower
or by any other Person on behalf of the Borrower, or to forward or deliver any
or all such collateral and security directly to the Borrower for collection and
remittance or for credit. No invalidity, irregularity or unenforceability of any
security for the Obligations or other recourse with respect thereto shall
affect, impair or be a defense to the Borrower’s obligations under this
Agreement. The liabilities of the Borrower hereunder shall not be affected or
impaired by any failure, delay, neglect or omission on the part of the Lender to
realize upon any of the Obligations of any other Borrower to the Lender, or upon
any collateral or security for any or all of the Obligations, nor by the taking
by the Lender of (or the failure to take) any guaranty or guaranties to secure
the Obligations, nor by the taking by the Lender of (or the failure to take or
the failure to perfect its security interest in or other lien on) collateral or
security of any kind. No act or omission of the Lender, whether or not such
action or failure to act varies or increases the risk of, or affects the rights
or remedies of the Borrower, shall affect or impair the obligations of the
Borrower hereunder.

53

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

(c)           Actions Not Required.  The Borrower, to the extent permitted by
applicable law, hereby waives any and all right to cause a marshaling of the
assets or any other action by any court or other governmental body with respect
thereto or to cause the Lender to proceed against any security for the
Obligations or any other recourse which the Lender may have with respect thereto
and further waives any and all requirements that the Lender institute any action
or proceeding at law or in equity, or obtain any judgment, against the Borrower
or any other Person, or with respect to any collateral security for the
Obligations, as a condition precedent to making demand on or bringing an action
or obtaining and/or enforcing a judgment against, the Borrower under this
Agreement.

(d)           Application of Payments. Any and all payments upon the Obligations
made by the Borrower or by any other Person, and/or the proceeds of any or all
collateral or security for any of the Obligations, may be applied by the Lender
on such items of the Obligations as the Lender may elect.

(e)           Recovery of Payment. If any payment received by the Lender and
applied to the Obligations is subsequently set aside, recovered, rescinded or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Borrower or any other obligor),
the Obligations to which such payment was applied shall, to the extent permitted
by applicable law, be deemed to have continued in existence, notwithstanding
such application, and the Borrower shall be liable for such Obligations as fully
as if such application had never been made. References in this Agreement to
amounts “irrevocably paid” or to “irrevocable payment” refer to payments that
cannot be set aside, recovered, rescinded or required to be returned for any
reason.

(f)            Limitation; Insolvency Laws. As used in this Section 8.17(f): (a)
the term “Applicable Insolvency Laws” means the laws of the United States of
America or of any State, province, nation or other governmental unit relating to
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U. S. C. §547, §548, §550 and other
“avoidance” provisions of Title 11 of the United States Code) as applicable in
any proceeding in which the validity and/or enforceability of this Agreement
against the Borrower, or any Specified Lien is in issue; and (b) “Specified
Lien” means any security interest, mortgage, lien or encumbrance granted by the
Borrower securing the Obligations, in whole or in part. Notwithstanding any
other provision of this Agreement, if, in any proceeding, a court of competent
jurisdiction determines that with respect to the Borrower, this Agreement or any
Specified Lien would, but for the operation of this Section, be subject to
avoidance and/or recovery or be unenforceable by reason of Applicable Insolvency
Laws, this Agreement and each such Specified Lien shall be valid and enforceable
against the Borrower, only to the maximum extent that would not cause this
Agreement or such Specified Lien to be subject to avoidance, recovery or
unenforceability. To the extent that any payment to, or realization

54

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

by, the Lender or the Lender on the Obligations exceeds the limitations of this
Section and is otherwise subject to avoidance and recovery in any such
proceeding, the amount subject to avoidance shall in all events be limited to
the amount by which such actual payment or realization exceeds such limitation,
and this Agreement as limited shall in all events remain in full force and
effect and be fully enforceable against the Borrower. This Section is intended
solely to reserve the rights of the Lender against the Borrower, in such
proceeding to the maximum extent permitted by Applicable Insolvency Laws and
neither the Borrower, any guarantor of the Obligations nor any other Person
shall have any right, claim or defense under this Section that would not
otherwise be available under Applicable Insolvency Laws in such proceeding.

Section 8.18           Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively, the “Charges”), shall exceed
the maximum lawful rate (the “Maximum Rate”) that may be contracted for,
charged, taken, received or reserved by the Lender in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

55

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

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

AMERICAN CRYSTAL SUGAR COMPANY,
as Borrower

 

 

 

 

 

 

 

By:

/s/ Samuel S. M. Wai

 

 

Name:

Samuel S. M. Wai

 

 

Title:

TREASURER

 

 

Address for the Borrower
For Purposes of Notice:

101 North 3rd Street
Moorhead, Minnesota 56560

S-1

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

CoBank, ACB, as Lender

 

 

 

By:

/s/ Pat Schulz

 

Name:

Pat Schulz

 

Title:

Assistant Corporate Secretary

 

 

 

 

Address for funding notices:

 

CoBank, ACB

 

5500 South Quebec Street

 

Greenwood Village, CO 80111

 

Attention: Daphne Satriano

 

Fax: (303) 224-2521

 

 

 

Address for all other notices:

 

 

 

CoBank, ACB

 

5500 South Quebec Street

 

Greenwood Village, CO 80111

 

Attention: Daphne Satriano

 

Fax: (303) 224-2521

 

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

ANNEX I

PRICING GRID

 

 

 

 

LIBOR Margin
(In basis points)

 

Base Rate Margin
(in basis points)

 

Commitment Fee
(in basis points)

 

Tier

 

Leverage Ratio

 

Revolving Loan

 

Term Loans

 

Revolving
Loan

 

Term Loans

 

Revolving
Loan

 

Term Loans

 

1

 

<1.0 to l.0

 

n/a

 

65.0

 

0

 

0

 

n/a

 

15.0

 

2

 

<1.20 to 1.0 and ³1.0 to 1.0

 

n/a

 

75.0

 

0

 

0

 

n/a

 

17.5

 

3

 

< l.35 to 1.0 and ³ 1.20 to 1.0

 

n/a

 

87.5

 

0

 

0

 

n/a

 

20.0

 

4

 

³ 1.35 to 1.0

 

n/a

 

100.00

 

0

 

0

 

n/a

 

25.0

 

 

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

Schedule 3.1(a)

Landlord/Bailee Locations

None

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

Schedule 4.6

Litigation

On May 1, 2006 The Amalgamated Sugar Company LLC (“Amalgamated”) has filed a
lawsuit against the U.S. Department of Agriculture (the “USDA”) in Federal Court
in the District of Idaho challenging the USDA’s transfer of sugar marketing
allocations to the American Crystal Sugar Company (“ACSC”). The case stems from
ACSC’s acquisition of assets from the Pacific Northwest Sugar Company (“PNSC”)
in 2003, and the associated transfer of PNSC’s sugar marketing allocations to
ACSC. The case has been in various stages of administrative hearings, the most
recent of which resulted in the USDA’s final decision to transfer the marketing
allocations to ACSC. Amalgamated is challenging the USDA decision in Federal
Court. ACSC intends to intervene in the case and play an active role in the
litigation in order to preserve its rights to the marketing allocation. Based on
certain assumptions, an adverse ruling in this case could have an adverse impact
of more than $7,500,000.00.

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

Schedule 4.7

Environmental Matters

None

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

Schedule 6.11

Existing Investments

Investment in CoBank, ACB

Investment in Marketing Cooperatives

Investment in ProGold Limited Liability Company

Investment in Crystech, LLC

Investment in Sidney Sugars Incorporated

Investment in Crab Creek Sugar Company

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

Schedule 6.12

Existing Indebtedness

Lender

 

Amount

 

 

 

Commercial Paper

 

Variable

 

 

Maximum Outstanding $225 million

 

 

 

Minn-Dak Farmers Cooperative
Southern Minnesota Beet Sugar Cooperative
United States Sugar Corporation

 

Variable

 

 

 

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

 

$3,360,000

 

 

 

East Grand Forks Industrial Development Series B

 

$560,000

 

 

 

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

 

$3.58 million

 

 

 

2000 City of East Grand Forks Bonds

 

$5.75 million

 

 

 

Intercompany Loan(s) from ACSC to Sidney Sugars Incorporated

 

$60 million

 

 

 

2005 EGF Industrial Bonds

 

$6.5 million

 

 

 

2005B EGF Solid Waste Revenue Bonds

 

$4.5 million

 

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

Schedule 6.13

Existing Liens

Asset

 

Lienholder

 

 

 

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)

 

 

 

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.

 

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

Schedule 6.14

Contingent Obligations

Financial Guaranty on behalf of Midwest Agri Commodities Company

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

Exhibit A-l

Form of Revolving Note

Attached

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

REVOLVING NOTE

$300,000,000.00

 

July 31, 2006

 

 

Denver, Colorado

FOR VALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative
corporation (the “Borrower”), hereby promises to pay to the order of CoBANK, ACB
(the “Lender”), in lawful money of the United States of America in Immediately
Available Funds (as such term and each other capitalized term used herein are
defined in the Loan Agreement hereinafter referred to), the principal amount of
Three Hundred Million and 00/100 Dollars ($300,000,000.00). or such lesser
amount as has actually been advanced under the Revolving Loan, and interest in
like funds on the unpaid principal amount from time to time outstanding, at the
rates and times set forth in that certain Amended and Restated Loan Agreement
dated July 31, 2006, by and between the Borrower and the Lender, as the same may
be amended, modified, supplemented, extended renewed, restated or replaced from
time to time (the “Loan Agreement”).

Principal and interest shall be payable as set forth in the Loan Agreement, and
all principal and interest remaining unpaid on the Termination Date shall be
immediately due and payable.

This note is one of the Notes referred to in the Loan Agreement and is subject
to and governed by the Loan Agreement. This maturity of this note is subject to
acceleration upon the terms provided in the Loan Agreement.

Should any Event of Default occur as provided for in the Loan Agreement, all
principal and interest outstanding hereunder may be declared immediately due and
payable in accordance with the Loan Agreement. The Borrower and all guarantors
and endorsers, for themselves, their legal representatives, successors and
assigns, hereby severally waive presentment for payment, protest and demand,
notice of protest, demand and dishonor and nonpayment of this note, and consent
that the holder may extend the time of payment or otherwise modify the terms of
payment of any part or the whole of the indebtedness evidenced by this note, and
such consent shall not alter or diminish the liability of the Borrower or said
guarantors or endorsers. The undersigned agrees to pay all costs and expenses of
collection, including reasonable attorney’s fees.

The interest rate shall at no time exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved in
accordance with applicable law, and the rate of interest payable hereunder shall
be limited to the Maximum Rate.

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF COLORADO WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

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

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF) IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

 

AMERICAN CRYSTAL SUGAR COMPANY,

 

a Minnesota cooperative corporation

 

 

 

 

 

By

 

 

 

 

 

 

 

Its

 

 

 

2

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

Exhibit A-2

Form of Term Note T01

Attached

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

TERM NOTE TO1

$558,276,702.00

 

July 31, 2006

 

 

Denver, Colorado

FOR VALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative
corporation (the “Borrower”), hereby promises to pay to the order of CoBANK, ACB
(the “Lender”), in lawful money of the United States of America in Immediately
Available Funds (as such term and each other capitalized term used herein are
defined in the Loan Agreement hereinafter referred to), the principal amount of
Fifty-Eight Million Two Hundred Seventy-Six Thousand Seven Hundred Two and
00/100 Dollars ($58,276,702.00), or such lesser amount as has actually been
advanced under the Term Loan T01, and interest in like funds on the unpaid
principal amount hereof from time to time outstanding, at the rates and time set
forth in that certain Amended and Restated Loan Agreement dated July 31, 2006,
by and between the Borrower and the Lender, as the same may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to
time (the “Loan Agreement”),

Principal and interest shall be payable as set forth in the Loan Agreement, and
all principal and interest remaining unpaid on the Term Loan Maturity Date shall
be immediately due and payable.

This note is one of the Notes referred to in the Loan Agreement and is subject
to and governed by the Loan Agreement. This note is secured, and its maturity is
subject to acceleration, in each case upon the terms provided in the Loan
Agreement.

Should any Event of Default occur as provided for in the Loan Agreement, all
principal and interest outstanding hereunder may be declared immediately due and
payable in accordance with the Loan Agreement The Borrower and all guarantors
and endorsers, for themselves, their legal representatives, successors and
assigns, hereby severally waive presentment for payment, protest and demand,
notice of protest, demand and dishonor and nonpayment of this note, and consent
that the holder may extend the time of payment or otherwise modify the terms of
payment of any part or the whole of the indebtedness evidenced by this note, and
such consent shall not alter or diminish the liability of the Borrower or said
guarantors or endorsers. The undersigned agrees to pay all costs and expenses of
collection, including reasonable attorney’s fees.

The interest rate shall at no time exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved in
accordance with applicable law, and the rate of interest payable hereunder shall
be limited to the Maximum Rate.

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF COLORADO WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

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

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF) IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

 

AMERICAN CRYSTAL SUGAR COMPANY,
a Minnesota cooperative corporation

 

 

 

 

 

By

 

 

 

 

 

 

 

Its

 

 

 

2

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

Exhibit A-3

Form of Term Note T01NP

Attached

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

TERM NOTE T01NP

$25,106,600.00

 

July 31, 2006

 

 

Denver, Colorado

FOR VALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative
corporation (the “Borrower”), hereby promises to pay to the order of CoBANK, ACB
(the “Lender”), in lawful money of the United States of America in Immediately
Available Funds (as such term and each other capitalized term used herein are
defined in the Loan Agreement hereinafter referred to), the principal amount of
Twenty-Five Million One Hundred Six Thousand Six Hundred and 00/100 Dollars
($25,106,600.00), or such lesser amount as has actually been advanced under the
Term Loan T01NP, and interest in like funds on the unpaid principal amount
hereof from time to time outstanding, at the rates and time set forth in that
certain Amended and Restated Loan Agreement dated July 31, 2006, by and between
the Borrower and the Lender, as the same may be amended, modified, supplemented,
extended, renewed, restated or replaced from time to time (the “Loan
Agreement”).

Principal and interest shall be payable as set forth in the Loan Agreement, and
all principal and interest remaining unpaid on the Term Loan Maturity Date shall
be immediately due and payable.

This note is one of the Notes referred to in the Loan Agreement and is subject
to and governed by the Loan Agreement. This note is secured, and its maturity is
subject to acceleration, in each case upon the terms provided in the Loan
Agreement.

Should any Event of Default occur as provided for in the Loan Agreement, all
principal and interest outstanding hereunder may be declared immediately due and
payable in accordance with the Loan Agreement. The Borrower and all guarantors
and endorsers, for themselves, their legal representatives, successors and
assigns, hereby severally waive presentment for payment, protest and demand,
notice of protest, demand and dishonor and nonpayment of this note, and consent
that the holder may extend the time of payment or otherwise modify the terms of
payment of any part or the whole of the indebtedness evidenced by this note, and
such consent shall not alter or diminish the liability of the Borrower or said
guarantors or endorsers. The undersigned agrees to pay all costs and expenses of
collection, including reasonable attorney’s fees.

The interest rate shall at no time exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved in
accordance with applicable law, and the rate of interest payable hereunder shall
be limited to the Maximum Rate.

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF COLORADO WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

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

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF) IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

AMERICAN CRYSTAL SUGAR COMPANY,
a Minnesota cooperative corporation

 

 

 

 

 

By

 

 

 

 

 

 

 

Its

 

 

 

2

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

Exhibit A-4

Form of Term Note T06

Attached

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

TERM NOTE T06

$85,000,000.00

 

July 31, 2006

 

 

Denver, Colorado

FOR VALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative
corporation (the “Borrower”‘), hereby promises to pay to the order of Co BANK,
ACB (the “Lender”) in lawful money of the United States of America in
Immediately Available Funds (as such term and each other capitalized term used
herein are defined in the Loan Agreement hereinafter referred to), the principal
amount of Eighty-Five Million and 00/100 Dollars ($85,000,000.00), or such
lesser amount as has actually been advanced under the Term Loan T06, and
interest in like funds on the unpaid principal amount hereof from time to time
outstanding, at the rates and time set forth in that certain Amended and
Restated Loan Agreement dated July 31, 2006, by and between the Borrower and the
Lender, as the same may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time (the “Loan Agreement”).

Principal and interest shall be payable as set forth in the Loan Agreement, and
all principal and interest remaining unpaid on the Term Loan Maturity Date shall
be immediately due and payable.

This note is one of the Notes referred to in the Loan Agreement and is subject
to and governed by the Loan Agreement. This note is secured, and its maturity is
subject to acceleration, in each case upon the terms provided in the Loan
Agreement.

Should any Event of Default occur as provided for in the Loan Agreement, all
principal and interest outstanding hereunder may be declared immediately due and
payable in accordance with the Loan Agreement The Borrower and all guarantors
and endorsers, for themselves, their legal representatives, successors and
assigns, hereby severally waive presentment for payment, protest and demand,
notice of protest, demand and dishonor and nonpayment of this note, and consent
that the holder may extend the time of payment or otherwise modify the terms of
payment of any part or the whole of the indebtedness evidenced by this note, and
such consent shall not alter or diminish the liability of the Borrower or said
guarantors or endorsers. The undersigned agrees to pay all costs and expenses of
collection, including reasonable attorney’s fees.

The interest rate shall at no time exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved in
accordance with applicable law, and the rate of interest payable hereunder shall
be limited to the Maximum Rate.

THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF COLORADO WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

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

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF) IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

 

AMERICAN CRYSTAL SUGAR COMPANY,
a Minnesota cooperative corporation

 

 

 

 

 

By

 

 

 

 

 

 

 

Its

 

 

 

2

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

Exhibit B

Borrowing Base Formula

The Borrowing Base shall be determined and computed by calculating the sum of:

80% of Eligible Accounts Receivable; plus

75% of Eligible Net Inventory.

The Borrowing Base shall at no time exceed all “Short-Term Loans” owing by
Borrower, “Short-Term Loans” is defined as the sum of the Revolving Loan,
outstanding Commodity Credit Corporation loans, and all outstanding commercial
paper.

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

Exhibit C

Form of Borrowing Base Certificate

Attached

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

Monthly Borrowing Base

For the month ended                              

Eligible Accounts Receivables

 

$

 

@ 80%

 

 

$

 

(a)

 

Eligible 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)

 

 

 

 

 

 

 

Statused Revolving Term – RJ0013T07
$                            (f)

 

 

 

 

 

 

 

Commodity Credit Corp. loans
                              (g)

 

 

 

 

 

 

 

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

 

$

 

 

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Exhibit D

Form of Compliance Certificate

Attached

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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 Amended and Restated Loan Agreement (“Loan Agreement”) and all
Promissory Note 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 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 asmeasured in accordance with GAAP

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

 

 

Minimum Net Working Capital required for fiscal quarters other than fiscal year
end-$l5,000,000

 

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

 

 

l.                 

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 cooperative (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
difference; 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,
alldetermined 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.

 

 

l.                 

2.                   

3.                  

 

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

 

 

 

Required

 

Actual

4.   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.)

 

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

 

 

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.                  

 

 

 

 

 

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.

 

l.                 

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 the Loan Agreement (which excludes the financial results of
ProGold and Crystech from such calculations and ratios).

 

AMERICAN CRYSTAL SUGAR COMPANY
(“Company”)

 

 

 

 

 

 

 

Authorized Signature

 

 

 

 

 

Titles

 

 

 

 

 

Date

 

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

Exhibit E

Form of Bid Request

Attached

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

AMERICAN CRYSTAL SUGAR COMPANY

REQUEST for BID LOAN

Date                          

To:                              CoBank, ACB
Attention: Syndications (Marshall Allen)
Fax: 303-740-4021

From:                American Crystal Sugar Company (“Borrower”)

Re:                               Bid request for Revolving Loan Advance

Date of Borrowing

 

Aggregate Principal Amount of Borrowing

 

 

Principal Amount*

 

Maturity Date*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

* Borrower reserves the right to reduce or apportion this amount during the Bid
selection process.

* May not extend beyond 8/1/2008 maturity date

 

AMERICAN CRYSTAL SUGAR COMPANY

 

 

 

 

 

 

 

  By:

 

 

 

 

 

  Name:

 

 

 

 

 

  Title:

 

 

Acknowledgement:

BID RATE CONFIRMATION

Borrower accepts offer of bid rate loan under the following terms:

Interest Period

 

Amount

 

Interest Rate

 

 

  By:

 

 

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

FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT

between

AMERICAN CRYSTAL SUGAR COMPANY,

as Borrower,

and

CoBANK, ACB,

as Lender,

dated July 31, 2006

THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “First
Amendment”) is dated to be effective as of August 31, 2006, and is by and
between AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation
(“Borrower”), and CoBANK, ACB (“Lender”), and amends that certain Amended and
Restated Loan Agreement dated July 31, 2006, as amended from time to time (the
“Loan Agreement”). All capitalized terms not defined herein shall have the
meanings set forth in the Loan Agreement.

RECITALS

The parties have agreed to modify certain terms and provisions of the Loan
Agreement as more fully set forth in this First Amendment.

NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each party, the parties agree to amend the Loan Agreement in the following
respects:

1.             Defined Terms. The following terms set forth in Section 1.1 of
the Loan Agreement shall be amended and restated in their entirety as follows:

“Quoted Rate Offer”: A quote of a fixed interest rate per annum for minimum
periods of one (1) day provided to Borrower by the Lender in its sole discretion
following the receipt by the Lender of a Quoted Rate Request from Borrower.

“Term Letter of Credit Commitment Amount”: Thirty-Five Million Dollars
($35,000,000).

2.             Section 2.7(b) of the Loan Agreement (Repayment; Term Loan T01),
shall be amended and restated to read in full as follows:

(b) Term Loan T01. The principal of Term Loan T01 shall be payable in one annual
installment in the amount of $9,569,300 on December 31, 2006, and in three
annual installments in the amount of $9,400,000 due on December 31 of each year
beginning December 31, 2008, and any amount of principal or interest remaining
unpaid with respect to Term Loan T01 on the Term Loan Maturity Date shall be
immediately due and payable on such date.

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

3.             Section 2.7(c) of the Loan Agreement (Repayment; Term Loan
T01NP), shall be amended and restated to read in full as follows:

(c) Term Loan T01NP. The principal of Term Loan T01NP shall be payable in one
annual installment in the amount of $7,430,700 on December 31, 2006, and in
three annual installments in the amount of $7,600,000 due on December 31 of each
year beginning December 31, 2008, and any amount of principal or interest
remaining unpaid with respect to Term Loan T01NP on the Term Loan Maturity Date
shall be immediately due and payable on such date.

4. Representations and Warranties. Borrower restates, represents and warrants
the representations and warranties set forth in Article IV of the Loan Agreement
as of the date of this First Amendment.

5. Incorporation of Loan Agreement. This First Amendment shall be an integral
part of the Loan Agreement, and all terms of the Loan Agreement are hereby
incorporated in this First Amendment by reference, and all terms of this First
Amendment are hereby incorporated into the Loan Agreement as if made an original
part thereof.  Except as modified herein, all terms and provisions of the Loan
Agreement shall continue in full force and effect, but to the extent the terms
of this First Amendment conflict with the Loan Agreement, the terms of this
First Amendment shall control.

IN WITNESS WHEREOF, the parties have executed this First Amendment to be
effective as of the day and year first above written.

 

AMERICAN CRYSTAL SUGAR COMPANY,
a Minnesota cooperative corporation

 

 

 

 

 

By

/s/ Samuel S. M. Wai

 

 

Name

Samuel S. M. Wai

 

 

Title

Treasurer

 

 

 

 

 

 

 

 

CoBANK, ACB

 

 

 

 

 

By

/s/ Teresa C. Fountain

 

 

Name

Teresa C. Fountain

 

 

Title

Assistant Corporate Secretary

 

 

2

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