Exhibit

10.30




 




 




No.

Z269D




FOUTH

AMENDMENT


TO MASTER LOAN AGREEMENT




 




 




THIS

AMENDMENT is entered into as of November 6, 2002,

between CoBANK,

ACB (“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead,

Minnesota (the “Company”).




 




BACKGROUND




 




CoBank and the Company are parties to a Master Loan Agreement dated

March 31, 2000, (such agreement, as previously amended, is hereinafter referred

to as the “MLA”).  By Amendment and

Waiver dated as of October 7, 2002, CoBank permitted the Company to establish

and capitalize Sidney Sugars Incorporated (“Sidney Sugars”) as a wholly owned

subsidiary of the Company.  CoBank and

the Company now desire to amend the MLA so that for purposes of measuring

compliance with financial covenants set forth in the MLA and preparation of

financial statements as required by the MLA, the financial results of the

Company and Sidney Sugars be consolidated. 

CoBank and the Company also desire to amend the MLA to require the

Company to cause Sidney Sugars to adhere to certain affirmative and negative

covenants applicable to the Company. 

Lastly, CoBank and the Company desire to amend the MLA to substitute one

financial covenant for another.  For

these reasons, and for valuable consideration (the receipt and sufficiency of

which are hereby acknowledged), CoBank and the Company agree as follows:




 




1.                                       While

the MLA is in effect, the Company agrees to cause Sidney Sugars (with respect

to itself in place of and in addition to the Company) to comply with the

following affirmative covenants set forth in Section 8 of the MLA:  Section 8(B), (C), (D), (E), (F), (G) and

(H)(v)-(ix), and to comply with it’s Grower Agreements.




 




2.                                       While

the MLA is in effect, the Company agrees that all reports required by Section

8(H) shall be prepared on a consolidated basis with the Company’s Subsidiaries,

including Sidney Sugars.




 




3.                                       While

the MLA is in effect, the Company agrees that it will cause Sidney Sugars (with

respect to itself in place of and in addition to the Company) to comply with

the negative covenants set forth in Section 9, except that (1) guarantees and

liens created in connection with a 1998 note purchase agreement between the

Company and the note purchasers relating to the $50,000,000 Senior Secured

Guaranteed Notes and a 2002 note purchase agreement between the Company and the

note purchasers relating to the $20,000,000 Senior Secured Guaranteed Notes

shall be permitted provided that said liens shall be shared with CoBank in a

manner acceptable to CoBank, (2) loans from the Company to Sydney Sugars as described

in Section 3 of that Amendment and Waiver dated as of October 7, 2002, between

the Company and CoBank shall be permitted, and, to the extent that the

following would otherwise be prohibited, (3) the lease of sugar processing

plants in Torrington, Wyoming, and Hereford, Texas, to Western Sugar

Cooperative and Imperial Sugar Company, respectively.  In addition, CoBank aggress that 




 





























 




permitted borrowings under Section 9(A) shall include indebtedness of

the Company incurred in connection with the $20,000,000 Senior Secured

Guaranteet Notes issued pursuant to the 2002 note purchase agreement between

the Company and the note purchasrers.




 




4.                                       While

the MLA is in effect, the Company agrees that all financial covenants set forth

in Section 10 shall be measured on a consolidated basis with the Company’s

Subsidiaries, including Sidney Sugars. 

References in any covenant to the Company shall mean the Company and its

Subsidiaries, including Sidney Sugars.




 




5.                                       Section

10(C) of the MLA is hereby amended and restated in its entirety to read as

follows:




 




(C)  Minimum Average Net Funds

Plus Interest Expense. The Company shall maintain at all times and measured

as of the end of each Fiscal Quarter a minimum ratio of Average Net Funds plus

Interest Expense to Interest Expense (both as determined in accordance with

GAAP consistently applied) of 2.5:1.  Average Net Funds to Interest Expense shall

be calculated on a rolling twelve (12) quarter basis.  For purposes of this Section 10(C), Interest Expense shall mean:  the total interest expense of the Borrower and its Subsidiaries

(including, without limitation, interest expense on capital leases) and, to the

extent not included therein, fees and other charges payable with respect to all

Debt), all determined on a consolidated basis in accordance with GAAP.




 




6.                                       Except

as set forth in this amendment, the MLA shall continue in full force and effect

as written.




 




IN

WITNESS WHEREOF, the parties have caused this

amendment to be executed by their duly authorized officers as of the date shown

above.




 




	

  CoBANK, ACB


  	

   


  	

  AMERICAN CRYSTAL

  SUGAR COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ Michael Tousignant


  	

   


  	

  By:


  	

   /s/ Sam Wai


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   Vice President


  	

   


  	

  Title:


  	

   Treasurer


  





 




2





























 




REVOLVING TERM LOAN

SUPPLEMENT




 




THIS

SUPPLEMENT to the Master Loan Agreement dated March

31, 2000 (the “MLA”), is entered into as of November 6, 2002, between CoBANK, ACB (“CoBank”) and

AMERICAN

CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and

amends and restates the Supplement dated March 27, 2002 and numbered Z269T01B.




 




SECTION

1.   The Revolving Term Loan Commitment.  On the terms and

conditions set forth in the MLA and this Supplement, CoBank agrees to make

loans to the Company during the period set forth below in an aggregate

principal amount not to exceed $58,276,702.22 at any one time outstanding (the

“Commitment”).  Within the limits of the

Commitment, the Company may borrow, repay and reborrow.




 




SECTION

2.   Purpose and Transfer. 

The purpose of the Commitment is to finance the

operating needs of the Company.




 




SECTION

3.   Term.  The term of the

Commitment shall be from the date hereof, up to but not including March 30,

2003, or such later date as CoBank may, in its sole discretion, authorize in

writing, provided, however, that

if the payment due on or before December 31, 2002 (as described in Section 5

below) is paid as agreed, and the Company is not otherwise in default, then the

term of the Commitment shall be extended up to, but not including, July, 31,

2003.




 




SECTION

4.   Interest.  The Company

agrees to pay interest on the unpaid balance of the loans in accordance with

one or more of the following interest rate options, as selected by the Company:




 




(A)                               Variable

Rate Option.  At a rate per annum equal at all times to the rate

of interest established by CoBank from time to time as its National Variable

Rate, which Rate is intended by CoBank to be a reference rate and not its

lowest rate. The National Variable Rate will change on the date established by

CoBank as the effective date of any change therein and CoBank agrees to notify

the Company promptly after any such change.




 




(B)                               Quoted

Rate Option.  At a fixed rate per annum to be quoted by CoBank in

its sole discretion in each instance. 

Under this option, rates may be fixed on such balances and for such

periods as may be agreeable to CoBank in its sole discretion in each instance.




 




(C)                               LIBOR

Option.  At a fixed rate equal to “LIBOR” (as hereinafter

defined) plus the Applicable LIBOR Margin per annum (as described in terms of

basis points (“bps”) in the chart immediately set forth below).  Under this option:  (a) rates may be fixed for “Interest Periods” (as hereinafter

defined) of 1, 2, 3, or 6 months, or 1 year, as selected by the Company; (b)

the minimum amount that may be fixed at any one time shall be $2,000,000.00;

and (c) rates may only be fixed on a “Banking Day” (as hereinafter

defined) or, at the option of the Company, on 2 Banking Days’ prior

notice.  For purposes hereof:

(i) ”LIBOR” shall mean the rate indicated by Telerate (rounded upward to

the nearest thousandth) as having been quoted by the British Bankers

Association at 11:00 a.m. London time on the date the Company elects to fix a

rate under this option for the offering of U.S. dollar deposits in the London

interbank market for the Interest Period designated by the Company; (ii)

“Banking Day” shall mean a day on which CoBank is open for business, dealings

in U.S. dollar deposits are being carried out in the London interbank market,

and banks are open for business in New York City and London, England; and (iii)

“Interest Period” shall mean a period commencing on the day the Company elects

to fix a rate under this option (or, at the option of the Company, two Banking

Days later) and ending on the numerically corresponding day in the next

calendar month or the month that is 2, 3 or 6 months or 1 year thereafter, as

the case may be; provided, however, that: 

(x) in the event such ending day is not a Banking 




 




3





























 




Day, such period shall be extended to the next Banking Day unless such

next Banking Day falls in the next calendar month, in which case it shall end

on the preceding Banking Day; and (y) if there is no numerically corresponding

day in the month, then such period shall end on the last Banking Day in the

relevant month.




 




LIBOR MARGINS




 




	

  FIXED RATE


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD OVER INDEX IN BASIS


  POINTS (Applicable LIBOR Margin)


  	

   


  
	

  One Month


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Two Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Three Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Six Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  One Year


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  





 




(D)

Treasury Option.  At a fixed rate equal to

Applicable Treasury Margin per annum (as described in terms of basis points

(“bps”) in the chart immediately set forth below) above the “U.S. Treasury Rate”

(as hereinafter defined). Under this option, balances of $2,000,000.00 or more

may be fixed on or before for periods ranging from two  years to the final maturity date of the

loan, as selected by the Company. However, rates may not be fixed in such a manner

as to require the Company to have to repay any fixed rate balance prior to the

last day of its fixed rate period in order to pay any installment of principal.

For purposes hereof, the “U.S. Treasury Rate” shall mean the yield to maturity

on U.S. Treasury instruments having the same maturity date as the last day of

the fixed rate period selected by the Company, as calculated from the bid price

indicated by Telerate (page 5) at the time the rate is fixed.  If, however, no instrument is indicated for

the maturity selected, then the rate shall be interpolated based on the bid

prices quoted for the next longest and shortest maturities so indicated. In the

event Telerate ceases to provide such quotations or materially changes the form

or substance of page 5 (as determined by CoBank), then CoBank will notify the

Company and the parties hereto will agree upon a substitute basis for obtaining

such quotations




 




TREASURY

MARGINS




 




	

  FIXED RATE


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD

  OVER INDEX IN BASIS


  POINTS (Applicable Treasury Margin)


  	

   


  
	

  Two Years


  	

   


  	

  U.S.$

  Constant Maturity 


  Treasury Rate (“US$CMT”)


  	

   


  	

  125 bps


  	

   


  
	

  Three Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Four Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Five Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Seven Years


  	

   


  	

  US$CMT


  	

   


  	

  140 bps


  	

   


  
	

  Ten Years


  	

   


  	

  US$CMT


  	

   


  	

  140 bps


  	

   


  
	

  Floor

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


  	

   


  	

  CoBank’s

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


  	

   


  	

  105bps


  	

   


  





 




4





























 




The spread over all of the above indices, including

the Floor (Minimum) Rate, may increase or decrease for future fixed amounts based on the Company’s previous fiscal

quarter’s leverage ratio, as follows:




 




	

  LEVERAGE RATIO (as


  defined below)


  	

   


  	

  INCREASE / DECREASE


  TO SPREAD


  	

   


  	

  CHANGE TO LIBOR and


  TREASURY MARGINS


  (IN BASIS POINTS)


  	

   


  
	

  A.  Equal to or greater than 1.35:1.00


  	

   


  	

  Increase


  	

   


  	

  20


  	

   


  
	

  B.  Equal to or greater than 1.20:1.00,

  but less than 1.35:1.00


  	

   


  	

  None


  	

   


  	

  0


  	

   


  
	

  C.  Less than 1.20:1.00, but greater than

  or equal to 1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  10


  	

   


  
	

  D.  Less than

  1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  20


  	

   


  





 




Leverage Ratio:

The Company will maintain a leverage ratio of not more than 1.50:1.0, and

attain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excluding

current maturities) calculated in accordance with GAAP plus or minus the

difference between actual working capital and minimum net working capital (as

defined in the MLA No. Z269, Section 10), divided by total members investments

plus the estimated unit retains.




 




The spread shall be adjusted quarterly on the

latter of either: (a) five business days after the Bank’s receipt of the

Company’s certification of compliance with the leverage ratio, or (b) 30 days

after the end of each calendar quarter.




 




The Company shall select the applicable rate option at the time it

requests a loan hereunder and may, subject to the limitations set forth above,

elect to convert balances bearing interest at the variable rate option to one

of the fixed rate options. Upon the expiration of any fixed rate period, interest

shall automatically accrue at the variable rate option unless the amount fixed

is repaid or fixed for an additional period in accordance with the terms

hereof. Notwithstanding the foregoing, unless CoBank otherwise consents in its

sole discretion in each instance, rates may not be fixed for periods expiring

after the maturity date of the loans. In the event CoBank so consents and the

Commitment is not renewed, then each balance so fixed shall be due and payable

on the last day of its fixed rate period, and the promissory note set forth

below shall be deemed amended accordingly. All elections provided for herein

shall be made telephonically or in writing and must be received by 12:00 noon

Company’s local time. Interest shall be calculated on the actual number of days

each loan is outstanding on the basis of a year consisting of 360 days and

shall be payable quarterly in arrears by the 20th day of the following month.




 




SECTION

5.   Promissory Note.  The

Company promises to repay the loans that are outstanding in annual principal

payments of $9,396,579.17 each due on or before December 31st of

each year through December 31, 2008, and a final principal payment due on or

before December 31, 2009.  All 




 




5





























 




outstanding balances shall be repaid by December 31, 2009. If any

installment due date is not a day on which CoBank is open for business, then

such payment shall be made on the next day on which CoBank is open for

business.  In addition to the above, the

Company promises to pay interest on the unpaid principal balance hereof at the

times and in accordance with the provisions set forth in Section 4 hereof. This

note replaces and supersedes, but does not constitute payment of the

indebtedness evidenced by, the promissory note set forth in the Supplement

being amended and restated hereby.




 




The Company shall be permitted to make special payments, in a minimum

amount of $388,500.00, on the variable rate portion of this loan, when all

short term financing, including the Company’s seasonal loans, Commodity Credit

Corporation loans and other short term loans have been zeroed out.  These special payments may be readvanced

through the expiration date of the Commitment. Reinstatement may be denied and

canceled at any time at the option of CoBank. The reinstatable commitments

arising from such special payments shall be subject to the Commitment Fee as

described in Section 8 below.




 




SECTION

6.   Prepayment.  The

loans may be prepaid in whole or in part on one CoBank business day’s prior

written notice.  During the term of the

Commitment, prepayments shall be applied to such balances, fixed or variable,

as the Company shall specify.  After the

expiration of the term of the Commitment, prepayments shall, unless CoBank

otherwise agrees, be applied to principal installments in the inverse order of

their maturity and to such balances, fixed or variable, as CoBank shall

specify.




 




SECTION

7.   Commitment Fee.  In consideration of the Commitment, the

Company agrees to pay to CoBank a commitment fee on the average daily unused

portion of the Commitment at the rate of 20 basis points per annum (calculated

on a 360 day basis), payable quarterly in arrears by the 20th day following

each calendar quarter. Such fee shall be payable for each calendar quarter (or

portion thereof) occurring during the original or any extended term of the

Commitment.




 




SECTION

8.   Commitments Arising From

Special Payments.  Commitments arising as a result of special

payments described in Section 5 above shall be subject to a commitment fee of

25 basis points (0.25%) on an annualized basis, on the average daily

commitment.  Any such fees incurred

shall be payable on the last day of the calendar quarter, in arrears, computed

on the basis of a year of 360 days for the actual number of days elapsed in

which such reinstatable commitments were outstanding.




 




SECTION

9.   Security.  In

addition to any other security that may otherwise be required or provided, the

Company’s obligations under this Supplement are secured by that Restated

Mortgage and Security Agreement dated September 15, 1998, from American Crystal

Sugar Company to St. Paul Bank for Cooperatives (now known as CoBank as a

result of merger), as Collateral Agent.




 




IN

WITNESS WHEREOF, the parties have caused this Supplement

to be executed by their duly authorized officers as of the date shown above.




 




	

  CoBANK, ACB


  	

   


  	

  AMERICAN CRYSTAL

  SUGAR COMPANY


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ Michael Tousignant


  	

   


  	

  By:


  	

   /s/ Sam Wai


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   Vice President


  	

   


  	

  Title:


  	

   Treasurer


  





 




6





























 




REVOLVING TERM LOAN

SUPPLEMENT




 




THIS

SUPPLEMENT to the Master Loan Agreement dated March

31, 2000 (the “MLA”), is entered into as of November 6, 2002, between CoBANK, ACB (“CoBank”) and

AMERICAN

CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and

amends and restates the Supplement dated March 27, 2002 and numbered

Z269T01BNP.




 




SECTION

1.   The Revolving Term Loan Commitment.  On the terms and

conditions set forth in the MLA and this Supplement, CoBank agrees to make

loans to the Company during the period set forth below in an aggregate

principal amount not to exceed $49,079,855.68 at any one time outstanding (the

“Commitment”).  Within the limits of the

Commitment, the Company may borrow, repay and reborrow.




 




SECTION

2.   Purpose and Transfer. 

The purpose of the Commitment is to finance the

operating needs of the Company.




 




SECTION

3.   Term.  The

term of the Commitment shall be from the date hereof, up to but not including

March 30, 2003, or such later date as CoBank may, in its sole discretion,

authorize in writing, provided, however,

that if the payment due on or before December 31, 2002 (as described in Section

5 below) is paid as agreed, and the Company is not otherwise in default, then

the term of the Commitment shall be extended up to, but not including, July,

31, 2003.




 




SECTION

4.   Interest. The Company agrees to

pay interest on the unpaid balance of the loans in accordance with one or more

of the following interest rate options, as selected by the Company:




 




(A)                               Variable

Rate Option.  At a rate per annum

equal at all times to the rate of interest established by CoBank from time to

time as its National Variable Rate, which Rate is intended by CoBank to be a

reference rate and not its lowest rate. The National Variable Rate will change

on the date established by CoBank as the effective date of any change therein

and CoBank agrees to notify the Company promptly after any such change.




 




(B)                               Quoted

Rate Option.   At a fixed rate per

annum to be quoted by CoBank in its sole discretion in each instance.  Under this option, rates may be fixed on

such balances and for such periods as may be agreeable to CoBank in its sole

discretion in each instance.




 




(C)                               LIBOR

Option.  At a fixed rate equal to

“LIBOR” (as hereinafter defined) plus the Applicable LIBOR Margin per annum (as

described in terms of basis points (“bps”) in the chart immediately set forth

below).  Under this option:  (a) rates may be fixed for “Interest

Periods” (as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, as

selected by the Company; (b) the minimum amount that may be fixed at any one

time shall be $2,000,000.00; and (c) rates may only be fixed on a “Banking

Day” (as hereinafter defined) or, at the option of the Company, on

2 Banking Days’ prior notice.  For

purposes hereof: (i) ”LIBOR” shall mean the rate indicated by Telerate

(rounded upward to the nearest thousandth) as having been quoted by the British

Bankers Association at 11:00 a.m. London time on the date the Company elects to

fix a rate under this option for the offering of U.S. dollar deposits in the

London interbank market for the Interest Period designated by the Company; (ii)

“Banking Day” shall mean a day on which CoBank is open for business, dealings

in U.S. dollar deposits are being carried out in the London interbank market,

and banks are open for business in New York City and London, England; and (iii)

“Interest Period” shall mean a period commencing on the day the Company elects

to fix a rate under this option (or, at the option of the Company, two Banking

Days later) and ending on the numerically corresponding day in the next

calendar month or the month that is 2, 3 or 6 months or 1 year thereafter, as

the case may be; provided, however, that: 

(x) in the event such ending day is not a Banking 




 




7





























 




Day, such period shall be extended to the next Banking Day unless such

next Banking Day falls in the next calendar month, in which case it shall end

on the preceding Banking Day; and (y) if there is no numerically corresponding

day in the month, then such period shall end on the last Banking Day in the

relevant month.




 




LIBOR

MARGINS




 




	

  FIXED RATE


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD

  OVER INDEX IN BASIS


  POINTS (Applicable LIBOR Margin)


  	

   


  
	

  One Month


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Two Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Three Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Six Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  One Year


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  





 




(D)

Treasury Option. 

At a fixed rate equal to the Applicable Treasury Margin per annum (as

described in terms of basis points (“bps”) in the chart immediately set forth

below) above the “U.S. Treasury Rate” (as hereinafter defined). Under this

option, balances of $2,000,000.00 or more may be fixed on or before for periods

ranging from two years to the final maturity date of the loan, as selected by

the Company. However, rates may not be fixed in such a manner as to require the

Company to have to repay any fixed rate balance prior to the last day of its

fixed rate period in order to pay any installment of principal.  For purposes hereof, the “U.S. Treasury

Rate” shall mean the yield to maturity on U.S. Treasury instruments having the

same maturity date as the last day of the fixed rate period selected by the

Company, as calculated from the bid price indicated by Telerate (page 5) at the

time the rate is fixed.  If, however, no

instrument is indicated for the maturity selected, then the rate shall be

interpolated based on the bid prices quoted for the next longest and shortest

maturities so indicated. In the event Telerate ceases to provide such

quotations or materially changes the form or substance of page 5 (as determined

by CoBank), then CoBank will notify the Company and the parties hereto will

agree upon a substitute basis for obtaining such quotations.




 




TREASURY MARGINS




 




	

  FIXED RATE

  


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD OVER INDEX IN BASIS


  POINTS (Applicable Treasury Margin)


  	

   


  
	

  Two Years


  	

   


  	

  U.S. $

  Constant Maturity Treasury (“US$CMT”)


  	

   


  	

  125 bps


  	

   


  
	

  Three Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Four Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Five Years


  	

   


  	

  US$CMT


  	

   


  	

  125 bps


  	

   


  
	

  Seven Years 


  	

   


  	

  US$CMT


  	

   


  	

  140 bps


  	

   


  
	

  Ten Years


  	

   


  	

  US$CMT


  	

   


  	

  140 bps


  	

   


  
	

  Floor

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


  	

   


  	

  CoBank’s

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


  	

   


  	

  105bps


  	

   


  





 




8





























 




The spread over all of the above indices, including

the Floor (Minimum) Rate, may increase or decrease for future fixed amounts based on the Company’s previous fiscal

quarter’s leverage ratio, as follows:




 




	

  LEVERAGE RATIO (as


  defined below)


  	

   


  	

  INCREASE / DECREASE


  TO SPREAD


  	

   


  	

  CHANGE TO LIBOR and


  TREASURY MARGINS


  (IN BASIS POINTS)


  	

   


  
	

  A.  Equal to or greater than 1.35:1.00


  	

   


  	

  Increase


  	

   


  	

  20


  	

   


  
	

  B.  Equal to or greater than 1.20:1.00,

  but less than 1.35:1.00


  	

   


  	

  None


  	

   


  	

  0


  	

   


  
	

  C.  Less than 1.20:1.00, but greater than

  or equal to 1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  10


  	

   


  
	

  D.  Less than

  1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  20


  	

   


  





 




Leverage Ratio:

The Company will maintain a leverage ratio of not more than 1.50:1.0, and

attain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excluding

current maturities) calculated in accordance with GAAP plus or minus the

difference between actual working capital and minimum net working capital (as

defined in the MLA No. Z269, Section 10), divided by total members investments

plus the estimated unit retains.




 




The spread shall be adjusted quarterly on the

latter of either: (a) five business days after the Bank’s receipt of the

Company’s certification of compliance with the leverage ratio, or (b) 30 days

after the end of each calendar quarter.




 




The Company shall select the applicable rate option at the time it

requests a loan hereunder and may, subject to the limitations set forth above,

elect to convert balances bearing interest at the variable rate option to one

of the fixed rate options. Upon the expiration of any fixed rate period,

interest shall automatically accrue at the variable rate option unless the

amount fixed is repaid or fixed for an additional period in accordance with the

terms hereof. Notwithstanding the foregoing, unless CoBank otherwise consents

in its sole discretion in each instance, rates may not be fixed for periods

expiring after the maturity date of the loans. In the event CoBank so consents

and the Commitment is not renewed, then each balance so fixed shall be due and

payable on the last day of its fixed rate period, and the promissory note set

forth below shall be deemed amended accordingly. All elections provided for

herein shall be made telephonically or in writing and must be received by 12:00

noon Company’s local time. Interest shall be calculated on the actual number of

days each loan is outstanding on the basis of a year consisting of 360 days and

shall be payable quarterly in arrears by the 20th day of the following month.




 




SECTION

5.   Promissory Note.  The

Company promises to repay the loans that are outstanding in annual principal

payments of $7,603,420.83 each due on or before December 31st of

each year through December 31, 2007, and a final principal payment due on or

before December 31, 2008.  All outstanding

balances shall be repaid by December 31, 2008. If any installment due date is

not a day on which CoBank




 




9





























 




 is open for business, then such

payment shall be made on the next day on which CoBank is open for

business.  In addition to the above, the

Company promises to pay interest on the unpaid principal balance hereof at the

times and in accordance with the provisions set forth in Section 4 hereof.  This note replaces and supersedes, but does

not constitute payment of the indebtedness evidenced by, the promissory note

set forth in the Supplement being amended and restated hereby.




 




The

Company shall be permitted to make special payments, in a minimum amount of

$111,500.00, on the variable rate portion of this loan, when all short term

financing, including the Company’s seasonal loans, Commodity Credit Corporation

loans and other short term loans have been zeroed out.  These special payments may be readvanced

through the expiration date of the Commitment. 

Reinstatement may be denied and canceled at any time at the option of

CoBank. The reinstatable commitments arising from such special payments shall

be subject to the Commitment Fee as described in Section 8 below.




 




SECTION

6.   Prepayment.  The

loans may be prepaid in whole or in part on one CoBank business day’s prior

written notice.  During the term of the

Commitment, prepayments shall be applied to such balances, fixed or variable,

as the Company shall specify.  After the

expiration of the term of the Commitment, prepayments shall, unless CoBank

otherwise agrees, be applied to principal installments in the inverse order of

their maturity and to such balances, fixed or variable, as CoBank shall

specify.




 




SECTION

7.   Commitment Fee.  In consideration of the Commitment, the

Company agrees to pay to CoBank a commitment fee on the average daily unused

portion of the Commitment at the rate of 20 basis points per annum (calculated

on a 360 day basis), payable quarterly in arrears by the 20th day following

each calendar quarter. Such fee shall be payable for each calendar quarter (or

portion thereof) occurring during the original or any extended term of the

Commitment.




 




SECTION

8.   Commitments Arising From

Special Payments.  Commitments arising as a result of special

payments described in Section 5 above shall be subject to a commitment fee of

25 basis points (0.25%) on an annualized basis, on the average daily

commitment.  Any such fees incurred

shall be payable on the last day of the calendar quarter, in arrears, computed

on the basis of a year of 360 days for the actual number of days elapsed in

which such reinstatable commitments were outstanding.




 




SECTION

9.   Security.  In

addition to any other security that may otherwise be required or provided, the

Company’s obligations under this Supplement are secured by that Restated

Mortgage and Security Agreement dated September 15, 1998, from American Crystal

Sugar Company to St. Paul Bank for Cooperatives (now known as CoBank as a

result of merger), as Collateral Agent.




 




IN

WITNESS WHEREOF, the parties have caused this

Supplement to be executed by their duly authorized officers as of the date

shown above.




 




	

  CoBANK, ACB


  	

   


  	

  AMERICAN CRYSTAL

  SUGAR COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ Michael Tousignant


  	

   


  	

  By:


  	

   /s/ Sam Wai


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   Vice President


  	

   


  	

  Title:


  	

   Treasurer


  





 




10





























 




REVOLVING TERM LOAN

SUPPLEMENT




 




THIS

SUPPLEMENT to the Master Loan Agreement dated March

31, 2000 (the “MLA”), is entered into as of November 6, 2002, between CoBANK, ACB (“CoBank”) and

AMERICAN

CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and

amends and restates the Supplement dated March 27, 2002 and numbered

Z269T02BNP.




 




SECTION

1.   The Revolving Term Loan Commitment.  On the terms and

conditions set forth in the MLA and this Supplement, CoBank agrees to make

loans to the Company during the period set forth below in an aggregate

principal amount not to exceed $5,012,277.55 at any one time outstanding (the

“Commitment”).  Within the limits of the

Commitment, the Company may borrow, repay and reborrow, provided, however, no

advances shall be made on this Term Loan, until Term Loan No. Z269T01 (as it

may be amended), has been fully advanced.




 




SECTION

2.   Purpose and Transfer. 

The purpose of the Commitment is to finance the

operating needs of the Company.




 




SECTION

3.   Term.  The

term of the Commitment shall be from the date hereof, up to but not including

March 30, 2003, or such later date as CoBank may, in its sole discretion,

authorize in writing, provided, however,

that if the payment due on or before December 31, 2002 (as described in Section

5 below) is paid as agreed, and the Company is not otherwise in default, then

the term of the Commitment shall be extended up to, but not including, July,

31, 2003.




 




SECTION

4.   Interest. The Company agrees to

pay interest on the unpaid balance of the loans in accordance with one or more

of the following interest rate options, as selected by the Company:




 




(A)                               Variable

Rate Option.  At a rate per annum

equal at all times to the rate of interest established by CoBank from time to

time as its National Variable Rate, which Rate is intended by CoBank to be a

reference rate and not its lowest rate. The National Variable Rate will change

on the date established by CoBank as the effective date of any change therein

and CoBank agrees to notify the Company promptly after any such change.




 




(B)                               Quoted

Rate Option.   At a fixed rate per

annum to be quoted by CoBank in its sole discretion in each instance.  Under this option, rates may be fixed on

such balances and for such periods as may be agreeable to CoBank in its sole

discretion in each instance.




 




(C)                               LIBOR

Option.  At a fixed rate equal to

“LIBOR” (as hereinafter defined) plus the Applicable LIBOR Margin per annum (as

described in terms of basis points (“bps”) in the chart immediately set forth

below).  Under this option:  (a) rates may be fixed for “Interest

Periods” (as hereinafter defined) of 1, 2, 3, or 6 months, or 1 year, as

selected by the Company; (b) the minimum amount that may be fixed at any one

time shall be $2,000,000.00; and (c) rates may only be fixed on a “Banking

Day” (as hereinafter defined) or, at the option of the Company, on

2 Banking Days’ prior notice.  For

purposes hereof: (i) ”LIBOR” shall mean the rate indicated by Telerate

(rounded upward to the nearest thousandth) as having been quoted by the British

Bankers Association at 11:00 a.m. London time on the date the Company elects to

fix a rate under this option for the offering of U.S. dollar deposits in the

London interbank market for the Interest Period designated by the Company; (ii)

“Banking Day” shall mean a day on which CoBank is open for business, dealings

in U.S. dollar deposits are being carried out in the London interbank market,

and banks are open for business in New York City and London, England; and (iii)

“Interest Period” shall mean a period commencing on the day the Company elects

to fix a rate under this option (or, at the option of the Company, two Banking

Days later) and ending on the numerically corresponding day in the next

calendar month or the month that is 2, 3 or 6 months or 1 year 




 




11





























 




thereafter, as the case may be; provided, however, that:  (x) in the event such ending day is not a

Banking Day, such period shall be extended to the next Banking Day unless such

next Banking Day falls in the next calendar month, in which case it shall end

on the preceding Banking Day; and (y) if there is no numerically corresponding

day in the month, then such period shall end on the last Banking Day in the

relevant month.




 




LIBOR

MARGINS




 




	

  FIXED RATE 


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD

  OVER INDEX IN BASIS


  POINTS (Applicable LIBOR Margin)


  	

   


  
	

  One Month


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Two Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Three Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  Six Months


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  
	

  One Year


  	

   


  	

  LIBOR


  	

   


  	

  90bps


  	

   


  





 




(D)

Treasury Option. 

At a fixed rate equal to Applicable “Treasury” Margin per annum (as

described in terms of basis points (“bps”) in the chart immediately set forth

below) above the “U.S. Treasury Rate” (as hereinafter defined). Under this

option, balances of $2,000,000.00 or more may be fixed on or before for periods

ranging from two years to the final maturity date of the loan, as selected by

the Company. However, rates may not be fixed in such a manner as to require the

Company to have to repay any fixed rate balance prior to the last day of its

fixed rate period in order to pay any installment of principal. For purposes

hereof, the “U.S. Treasury Rate” shall mean the yield to maturity on U.S.

Treasury instruments having the same maturity date as the last day of the fixed

rate period selected by the Company, as calculated from the bid price indicated

by Telerate (page 5) at the time the rate is fixed.  If, however, no instrument is indicated for the maturity

selected, then the rate shall be interpolated based on the bid prices quoted

for the next longest and shortest maturities so indicated. In the event

Telerate ceases to provide such quotations or materially changes the form or

substance of page 5 (as determined by CoBank), then CoBank will notify the

Company and the parties hereto will agree upon a substitute basis for obtaining

such quotations.




 




TREASURY

MARGINS




 




	

  FIXED RATE

  


  PRODUCT


  	

   


  	

  INDEX


  	

   


  	

  SPREAD OVER INDEX IN BASIS


  POINTS (Applicable Treasury Margin)


  	

   


  
	

  Two Years


  	

   


  	

  U.S.$ Constant Maturity


  Treasury (“US$CMT”)


  	

   


  	

  125bps


  	

   


  
	

  Three Years


  	

   


  	

  US$CMT


  	

   


  	

  125bps


  	

   


  
	

  Four Years


  	

   


  	

  US$CMT


  	

   


  	

  125bps


  	

   


  
	

  Five Years


  	

   


  	

  US$CMT


  	

   


  	

  125bps


  	

   


  
	

  Seven Years 


  	

   


  	

  US$CMT


  	

   


  	

  140bps


  	

   


  
	

  Ten Years


  	

   


  	

  US$CMT


  	

   


  	

  140bps


  	

   


  
	

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

  Products Only)


  	

   


  	

  CoBank’s cost of funds (as reasonably determined by

  CoBank in its sole discretion)


  	

   


  	

  105bps


  	

   


  





 




12





























 




The spread over all of the above indices, including

the Floor (Minimum) Rate, may increase or decrease for future fixed amounts  based

on the Borrower’s previous fiscal quarter’s leverage ratio, as follows:




 




	

  LEVERAGE RATIO (as defined


  below)


  	

   


  	

  INCREASE / DECREASE


  TO SPREAD


  	

   


  	

  CHANGE TO LIBOR and


  TREASURY MARGINS


  (IN BASIS POINTS)


  	

   


  
	

  A.  Equal to or greater than 1.35:1.00


  	

   


  	

  Increase


  	

   


  	

  20


  	

   


  
	

  B.  Equal to or greater than 1.20:1.00,

  but less than 1.35:1.00


  	

   


  	

  None


  	

   


  	

   0


  	

   


  
	

  C.  Less than 1.20:1.00, but greater than

  or equal to 1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  10


  	

   


  
	

  D.  Less than 1.00:1.00


  	

   


  	

  Decrease


  	

   


  	

  20


  	

   


  





 




Leverage Ratio:

The Borrower will maintain a leverage ratio of not more than 1.50:1.0, and

attain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excluding

current maturities) calculated in accordance with GAAP plus or minus the

difference between actual working capital and minimum net working capital (as

defined in the MLA No. Z269, Section 10), divided by total members investments

plus the estimated unit retains.




 




The spread shall be adjusted quarterly on the

latter of either: (a) five business days after the Bank’s receipt of the

Borrower’s certification of compliance with the leverage ratio, or (b) 30 days

after the end of each calendar quarter.




 




The Company shall select the applicable rate option at the time it

requests a loan hereunder and may, subject to the limitations set forth above,

elect to convert balances bearing interest at the variable rate option to one

of the fixed rate options. Upon the expiration of any fixed rate period, interest

shall automatically accrue at the variable rate option unless the amount fixed

is repaid or fixed for an additional period in accordance with the terms

hereof. Notwithstanding the foregoing, unless CoBank otherwise consents in its

sole discretion in each instance, rates may not be fixed for periods expiring

after the maturity date of the loans. In the event CoBank so consents and the

Commitment is not renewed, then each balance so fixed shall be due and payable

on the last day of its fixed rate period, and the promissory note set forth

below shall be deemed amended accordingly. All elections provided for herein

shall be made telephonically or in writing and must be received by 12:00 noon

Company’s local time. Interest shall be calculated on the actual number of days

each loan is outstanding on the basis of a year consisting of 360 days and

shall be payable quarterly in arrears by the 20th day of the following month.




 




13





























 




SECTION

5.   Promissory Note. The Company

promises to repay the loans that are outstanding in annual principal payments

of $2,000,000.00 each due on or before December 31st of each year

commencing in 2002.  All outstanding

balances shall be repaid by December 31, 2009. If any installment due date is

not a day on which CoBank is open for business, then such payment shall be made

on the next day on which CoBank is open for business.  In addition to the above, the Company promises to pay interest on

the unpaid principal balance hereof at the times and in accordance with the

provisions set forth in Section 4 hereof. This note replaces and supersedes,

but does not constitute payment of the indebtedness evidenced by, the

promissory note set forth in the Supplement being amended and restated hereby.




 




SECTION

6.   Prepayment.  The

loans may be prepaid in whole or in part on one CoBank business day’s prior

written notice.  During the term of the

Commitment, prepayments shall be applied to such balances, fixed or variable,

as the Company shall specify.  After the

expiration of the term of the Commitment, prepayments shall, unless CoBank

otherwise agrees, be applied to principal installments in the inverse order of

their maturity and to such balances, fixed or variable, as CoBank shall

specify.




 




SECTION

7.   Commitment Fee.  In consideration of the Commitment, the

Company agrees to pay to CoBank a commitment fee on the average daily unused

portion of the Commitment at the rate of 20 basis points per annum (calculated

on a 360 day basis), payable quarterly in arrears by the 20th day following

each calendar quarter. Such fee shall be payable for each calendar quarter (or

portion thereof) occurring during the original or any extended term of the

Commitment.




 




SECTION

8.   Letters of Credit.  In addition to loans, and if agreeable to

CoBank in its sole discretion in each instance, the Company may utilize the

Commitment to open irrevocable letters of credit for its account.  Each letter of credit shall reduce the

amount available under the Commitment by the maximum amount capable of being

drawn thereunder.  The rights and

obligations of the parties with respect to each letter of credit will be

governed by the Reimbursement Agreement attached hereto as Exhibit A (which

rights and obligations shall be in addition to the rights and obligations of

the parties hereunder and under the MLA). The fee for issuing each letter of

credit shall be determined at the time of application.




 




SECTION

9.   Security.  In

addition to any other security that may otherwise be required or provided, the

Company’s obligations under this Supplement are secured by that Restated

Mortgage and Security Agreement dated September 15, 1998, from American Crystal

Sugar Company to St. Paul Bank for Cooperatives (now known as CoBank as a

result of merger), as Collateral Agent.




 




IN

WITNESS WHEREOF, the parties have caused this

Supplement to be executed by their duly authorized officers as of the date

shown above.




 




	

  CoBANK, ACB


  	

   


  	

  AMERICAN CRYSTAL

  SUGAR COMPANY


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ Michael Tousignant


  	

   


  	

  By:


  	

   /s/ Sam Wai


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   Vice President


  	

   


  	

  Title:


  	

   Treasurer


  





 




14





























 




Exhibit

A




 




LETTER

OF CREDIT REIMBURSEMENT AGREEMENT




 




In consideration of CoBank issuing one or more letters of credit (each

a “Credit”) for the Company’s account under the Supplement to which this

agreement is attached (the “Supplement”), the Company agrees as follows:




 




1.                                       The

Company will pay to CoBank in United States currency and in immediately

available funds the amount of each draft drawn or instrument paid under a

Credit.  In addition, the Company agrees

to pay to CoBank such fee for issuing each Credit as CoBank shall prescribe, as

well as all customary charges associated with the issuance of a Credit.  If a Credit is payable in a foreign currency,

the Company will pay to CoBank an amount in United States currency equivalent

to CoBank’s selling rate of exchange for that currency.  In addition to the amounts set forth above,

the Company shall pay to CoBank such amounts as CoBank shall determine are

necessary to compensate CoBank for any cost attributable to CoBank issuing or

having outstanding any Credit resulting from the application of any law or

regulation concerning any reserve, assessment, capital adequacy or similar

requirement relating to letters of credit, reimbursement agreements with

respect thereto, or to similar liabilities or assets of banks, whether existing

at the time of the issuance of a Credit or adopted thereafter.  Each payment hereunder shall be payable on

demand at the place and manner set forth in the Master Loan Agreement between

the parties (the “MLA”) and with interest from the date of demand to the date

paid at CoBank’s National Variable Rate. 

The Company hereby authorizes CoBank to create a loan under the

Supplement bearing interest at the variable rate set forth therein for any sums

owing hereunder.




 




2.                                       Neither

CoBank nor any of its correspondents shall in any way be responsible for the

performance by any beneficiary of its obligations to the Company nor for the

form, sufficiency, correctness, genuineness, authority of the person signing,

falsification or legal effect of any documents called for under a Credit if

such documents on their face appear to be in order.  In addition, CoBank and its correspondents may receive and accept

or pay as complying with the terms of a Credit any drafts, documents, or

certificates, otherwise in order, signed by any person purporting to be an

administrator, executor, trustee in bankruptcy, debtor in possession, assignee

for the benefit of creditors, liquidator, receiver, or other legal

representative of the party authorized under a Credit to draw or issue such

instruments or other documents.




 




3.                                       In

the event the Credit is a commercial Credit, then, in addition to the other

provisions hereof, the Company:  (i)

agrees to obtain or cause to be in existence insurance on any merchandise

described in the Credit against fire and other usual risks and against any

additional risks which CoBank may request; and (ii) authorizes and empowers

CoBank to collect the amount due under any such insurance and apply the same

against any of the Company’s 

obligations to CoBank arising under the Credit or otherwise.  In addition, whether the Credit is a

commercial or a standby Credit, the Company represents and warrants that any

required import, export or foreign exchange licenses or other governmental

approvals relevant to the Credit and the merchandise described therein have

been obtained and that the transactions contemplated thereby are not prohibited

under any  law, rule, regulation, order

or the like, including the Foreign Assets Control Regulations of the

U.S. Department of Treasury.




 




4.                                       All

directions and correspondence relating to a Credit are to be sent at the

Company’s risk and CoBank does not assume any responsibility for any

inaccuracy, interruption, error, or delay in transmission or delivery by post,

telegraph, cable or other electronic means, or for any inaccuracy of

translation.




 




5.                                       CoBank

shall not be responsible for any act, error, neglect, default, omission,

insolvency or failure in business of any of its correspondents, and any action

taken or omitted by CoBank or its correspondents under or in connection with a

Credit shall, if taken or omitted with honesty in fact, be binding on the

Company and shall not put CoBank or its correspondents under any resulting

liability to the Company.  In no event

shall  CoBank be liable for special,

consequential or punitive damages.




 




6.                                       The

Company will indemnify CoBank against and hold it harmless from all loss, damage,

cost, and expense (including attorneys’ fees and expenses) arising out of (i)

its issuance of or any other action taken by CoBank in connection with a

Credit, other than loss or damage resulting from its gross negligence or

willful misconduct, and (ii) claims or legal proceedings incident to the

collection of amounts owed by the Company hereunder, or the enforcement of

CoBank’s rights or the rights of others under a Credit, including, without

limitation, legal proceedings relating to any court order, injunction or other

process or decree restraining or seeking to restrain CoBank from paying any

amount under a Credit.




 




15





























 




7.                                       In

the event:  (i) the Company fails to

make any payment owing hereunder when the same shall become due and payable;

(ii) any covenant or representation or warranty set forth herein is breached;

(iii) the “Commitment” (as defined in the Supplement) expires prior to the

expiration date of any Credit; or (iv) an “Event of Default” (as defined in the

MLA) occurs under the MLA, then, in any such event, the amount of each Credit,

together with any amounts payable by us in connection therewith, shall, at

CoBank’s option, become immediately due and payable. To the extent that any

amount paid by the Company pursuant to this Section 7 shall not then be due

under the terms of a Credit, such payment shall serve as security for the

Company’s obligation to indemnify CoBank for any amounts subsequently disbursed

by CoBank pursuant to a Credit.  Furthermore,

upon the institution of any legal proceeding described in Section 6(ii) hereof,

the Company will, on demand, assign and deliver to CoBank, as security for the

Company’s obligation to indemnify CoBank, cash collateral in an amount

satisfactory to CoBank.




 




8.                                       CoBank

shall be fully protected in, and shall incur no liability to the Company for

acting upon, any oral, telephonic, facsimile, cable or other electronic

instructions which CoBank in good faith believes to have been given by any

authorized person.  CoBank may, at its

option, use any means of verifying any instructions received by it and may

also, at its option, refuse to act on any oral, telephonic, facsimile, cable or

other electronic instructions or any part thereof, without incurring any responsibility

for any loss, liability or expenses arising out of such refusal.




 




9.                                       The

Uniform Customs and Practice as most recently published by the International

Chamber of Commerce (hereafter called the “UCP”) shall in all respects be

deemed a part hereof as fully as if incorporated herein, and shall apply to the

Credits.  To the extent the UCP is

inconsistent with the governing law set forth in the MLA, the UCP shall

control.




 




16





























 




AMENDED AND RESTATED


STATUSED REVOLVING CREDIT SUPPLEMENT




 




THIS

SUPPLEMENT to the Master Loan Agreement dated March

31, 2000 (the “MLA”), is entered into as of November 6, 2002, between CoBANK, ACB (“CoBank”) and

AMERICAN

CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and

amends and restates the Supplement dated March 27, 2002 and numbered Z269S01C.




 




SECTION

1.   The Revolving Credit Facility.  On the terms and conditions set forth in

the MLA and this Supplement, CoBank agrees to make loans to the Company during

the period set forth below in an aggregate principal amount not to exceed, at

any one time outstanding, the lesser of the “Borrowing Base” (as calculated

pursuant to the Borrowing Base Certificate, the form of which is attached

hereto as Exhibit A) or $265,000,000.00 (the “Commitment”). Within the limits

of the Commitment, but subject to the Borrowing Base, the Company may borrow,

repay and reborrow.




 




SECTION

2.   Purpose.  The purpose of the Commitment is to finance the Company’s general

corporate purposes, fund working capital requirements, support the Company’s

commercial paper program, and issue short-term commercial and standby letters

of credit.  In addition, and to the

extent allowed under the Amendment and Waiver to the Master Loan Agreement

number Z269C dated October 7, 2002, the purpose of the Commitment is to (a)

finance the asset purchases under the Asset Purchase Agreement dated October 7,

2002, by and among Imperial Sugar Company, Holly Sugar Company, and Sidney

Sugars Incorporated; (b) fund an equity investment in Sidney Sugars

Incorporated in an amount not to exceed $7,500,000.00; (c) fund a term loan to

Sidney Sugars Incorporated in an amount not to exceed $7,500,000.00; (d)

provide an intercompany line of credit loan to Sidney Sugars Incorporated in an

amount not to exceed $50,000,000.00; (e) fund a secured loan to Western Sugar

Cooperative in an amount not to exceed $1,500,000.00; and (f) provide on behalf

of Western Sugar Cooperative a unsecured letter of credit in an amount not to

exceed $6,800,000.00.




 




SECTION

3.   Term.  The

term of the Commitment shall be from the date hereof, up to and including July

31, 2003, or such later date as CoBank may, in its sole discretion, authorize

in writing.




 




SECTION

4.   Interest.  The

Company agrees to pay interest on the unpaid balance of the loans in accordance

with one or more of the following interest rate options, as selected by the

Company:




 




(A)                               Base

Rate Option.  At a rate per annum at

all times equal to the Base Rate.  For

the purposes hereof, Base Rate means that rate in effect from day to day

defined as the “prime rate” as published from time to time in the Eastern

Edition of The Wall Street Journal as the average prime lending rate for

seventy-five percent (75%) of the United States; thirty (30) largest commercial

banks, or if The Wall Street Journal shall cease publication or cease

publishing the “prime rate” on a regular basis, such other regularly published

average prime rate applicable to such commercial banks as is acceptable to the

Lender in its reasonable discretion. 

Loans for which the Base Rate option is selected are referred to herein

as “Base Rate Loans”.




 




Base Rate Loans shall be:  (a)

in minimum amounts of $5,000,000 and incremental multiples of $1,000,000; and

(b) made available on any Banking Day. 

Interest on Base Rate Loans shall be calculated 




 




17





























 




on the actual number of days each loan is outstanding on the basis of a

year consisting of 360 days and shall be payable monthly in arrears on the

twentieth Banking Day of the following month.




 




(B)                               Quoted Rate Option.  At a fixed rate per annum at all times equal

to the Quoted Rate.  For the purposes

hereof, Quoted Rate means a fixed rate of interest to apply to a loan (referred

to herein as a “Quoted Rate Loan”) for a specified period of time not to exceed

thirty (30) days quoted by CoBank in its sole discretion.




 




Quoted Rate Loans shall be (i) in

minimum amounts of $1,000,000 and incremental multiples of $1,000,000; and (ii)

made available on any Banking Day.  The

Quoted Rate may not necessarily be the lowest rate at which CoBank funds at

that time.




 




Interest on Quoted Rate Loans shall

be calculated on the actual number of days each loan is outstanding on the

basis of a year consisting of 360 days and shall be payable monthly in arrears

on the twentieth Banking Day of the following month.




 




(C)                               LIBOR Option.  At a fixed rate equal to LIBOR plus the

Applicable Margin (as defined below). 

For the purposes hereof, LIBOR means the rate for deposits in U.S.

Dollars, with maturities comparable to the selected LIBOR Interest Period, that

appears on the display designed as page “3750” of the Telerate Service (or such

other page as may replace the 3750 page of that service of if the Telerate

Service shall cease displaying such rates, such other service or services as

may be nominated by the British Bankers’ Association for the purpose of

displaying London Interbank Offered Rates for U.S. Dollar deposits), determined

as of 11:00 a.m. London time two Banking Days prior to the commencement of such

LIBOR Interest Period.  “LIBOR Interest

Period” means a period of one, two, three or six months.  LIBOR pricing will be adjusted for Regulation

D reserve requirements.  The Applicable

Margin is 100 basis points.  Loans for

which the LIBOR option is selected are referred to herein as “LIBOR Loans”.




 




LIBOR Loans shall be:  (a) in a minimum amount of $5,000,000 and

incremental multiples of $1,000,000; 

(b) made available on three Banking Days prior notice; and (c) be for periods

of one, two, three, or six months. 

Interest on LIBOR Loans shall be calculated on the actual number of days

each loan is outstanding on the basis of a year consisting of 360 days and

shall be payable in arrears upon maturity of the applicable LIBOR Interest

Period, but no less frequently than quarterly. 

The LIBOR option shall be subject to the following limitations:




 




(1)                                  Notwithstanding

anything herein to the contrary, if, on or prior to the determination of the

LIBOR rate for any LIBOR Interest Period, CoBank determines (which

determination shall be conclusive) that quotations of interest rates in

accordance with the definition of LIBOR rate are not being provided in the

relevant amounts or for the relevant maturities for purposes of determining rates

of interest for LIBOR rate advances as provided in this Supplement, then CoBank

shall give the Company prompt notice thereof, and so long as such condition

remains in effect, CoBank shall be under no obligation to make LIBOR rate

loans, convert Base Rate loans into LIBOR rate loans, or continue LIBOR rate

loans, and the Company shall, on the last day(s) of the then current applicable

LIBOR Interest Period(s) for the outstanding LIBOR rate loans, either prepay

such LIBOR rate loans or such LIBOR rate loans shall automatically be converted

into a Base Rate loan in accordance with this Section 4.




 




18





























 




(2)                                  If

any law, treaty, rule, regulation or determination of a court or governmental

authority or any change therein or in the interpretation or application thereof

subsequent to the date hereof (each, a “Change in Law”) shall make it unlawful

for CoBank to (a) advance any LIBOR rate loan or (b) maintain all or any

portion of a LIBOR rate loan, then CoBank shall promptly notify the Company

thereof.  In the former event, any

obligation of CoBank to make available any future LIBOR rate loan shall

immediately be canceled (and, in lieu thereof shall be made as a Base Rate loan

or Quoted Rate loan at the option of the Company), and in the latter event, any

such unlawful LIBOR rate loan or portions thereof then outstanding shall be

converted, at the option of the Company, to either a Base Rate loan or a Quoted

Rate loan; provided, however, that if any such Change in Law shall permit the

LIBOR rate to remain in effect until the expiration of the LIBOR rate period

applicable to any such unlawful LIBOR rate loan, then such LIBOR rate loan

shall continue in effect until the expiration of such LIBOR rate period.  Upon the occurrence of any of the foregoing

events on account of any Change in Law, the Company shall pay to CoBank

immediately upon demand such amounts as may be necessary to compensate CoBank

for any fees, charges, or other costs incurred or payable by CoBank as a result

thereof and which are attributable to any LIBOR rate loans made available to

the Company hereunder.




 




(3)                                  If

CoBank shall determine that, after the date hereof, the adoption of any

applicable Law, rule or regulation regarding capital adequacy, or any change

therein, or any change in the interpretation or administration thereof by any

governmental authority, central bank or comparable agency charged with the

interpretation or administration thereof, or any request or directive regarding

capital adequacy (whether or not having the force of law) of any such

governmental authority, central bank or comparable agency, has or would have

the effect of reducing the rate of return on capital of CoBank as a consequence

of CoBank’s obligations hereunder to a level below that which CoBank could have

achieved but for such adoption, change, request or directive (taking into

consideration its policies with respect to capital adequacy existing on the

date of this Supplement) by an amount deemed by CoBank to be material, then

from time to time, within fifteen (15) days after demand by CoBank, the Company

shall pay to CoBank such additional amount or amounts as will compensate CoBank

for such reduction.  CoBank agrees to

take reasonable steps to reduce the amount of such increase, provided, however,

that CoBank shall not be required to take any such step, if in CoBank’s sole

opinion, CoBank would suffer an economic loss or any negative legal or

regulatory consequences as a result thereof. 

If CoBank is to require the Company to make payments under this Section

then CoBank must make a demand on the Company to make such payment within

ninety (90) days of the later of (1) the date on which such capital costs are

actually incurred by CoBank, or (2) the date on which CoBank knows, or should

have known, that such capital costs have been incurred by CoBank.




 




The Company shall select the applicable rate option at the time it

requests a loan hereunder and may, subject to the limitations set forth above,

elect to convert balances bearing interest at the variable rate option to one

of the fixed rate options. Upon the expiration of any fixed rate period,

interest shall automatically accrue at the Base Rate unless the amount fixed is

repaid or fixed for an additional period in accordance with the terms hereof.

Notwithstanding the foregoing, unless CoBank otherwise consents in its sole

discretion in each instance, rates may not be fixed for periods expiring after

the maturity date of the loan. In the event CoBank so consents and the

Commitment is not renewed, then each balance so fixed shall be due and payable

on the last day of its fixed rate period, and the promissory note set forth

below shall be deemed amended accordingly. All elections provided for herein

shall be made telephonically or in writing and must be received by 12:00 noon

Company’s local time.  As used in this

Section 4, “Banking Day” means a day on which CoBank is open for business,

dealings in U.S. dollar deposits are being carried out in the London interbank

market, and banks are open for business in New York City and London, England.




 




SECTION

5.   Promissory Note. The Company

promises to repay the unpaid principal balance of the loans on the first CoBank

business day following the last day of the term of the Commitment.  In addition to the above, the Company

promises to pay interest on the unpaid principal balance of the loans at the

times and in accordance with the provisions set forth in Section 4 hereof.  This note replaces and 




 




19





























 




supersedes, but does not constitute payment of the indebtedness

evidenced by, the promissory note set forth in the Supplement being amended and

restated hereby.




 




SECTION

6.   Borrowing Base Certificate, Etc.  The Company agrees to furnish a

Borrowing Base Certificate to CoBank at such times or intervals as CoBank may

from time to time request.  Until

receipt of such a request, the Company agrees to furnish a Borrowing Base

Certificate to CoBank within 30 days after each month end calculating the Borrowing

Base as of the last day of the month for which the Certificate is being

furnished.  However, if no balance is

outstanding hereunder on the last day of such period, no Report need be

furnished.  Regardless of the frequency

of the reporting, if at any time the amount outstanding under the Commitment

exceeds the Borrowing Base, the Company shall immediately notify CoBank and

repay so much of the loans as is necessary to reduce the amount outstanding

under the Commitment to the limits of the Borrowing Base.




 




SECTION

7.   Commitment Fee.  In consideration of the Commitment, the

Company agrees to pay to CoBank a commitment fee on the average daily unused

portion of the Commitment at the rate of 20 basis points per annum (calculated

on a 360 day basis), payable quarterly in arrears by the 20th day

following each calendar quarter. The unused amount of the Commitment will be

the difference between the Commitment and the sum of the outstanding principal

amount of loans under the Commitment and the undrawn face amount of all

outstanding Letters of Credit.




 




SECTION

8.   Utilization Fee.  For

any day on which the outstanding principal amount of loans shall be greater

than 25% of the Commitment (but no greater than 50% of the Commitment), the

Company shall pay to CoBank a utilization fee equal to 0.125% per annum

(calculated on a 360 day basis) on the aggregate amount outstanding on such

day.  For any day on which the

outstanding principal amount of loans shall be greater than 50% of the

Commitment, the Company shall pay to CoBank a utilization fee equal to 0.25%

per annum (calculated on a 360 day basis) on the aggregate amount outstanding

on such day.  Accrued and unpaid

utilization fees, if any, shall be payable quarterly in arrears by the 20th

day following each calendar quarter.




 




SECTION

9.   Letters of Credit.  In addition to loans, and if agreeable to

CoBank in its sole discretion in each instance, the Company may utilize the

Commitment to open irrevocable letters of credit for its account.  Each letter of credit shall reduce the

amount available under the Commitment by the maximum amount capable of being

drawn thereunder.  The rights and

obligations of the parties with respect to each letter of credit will be

governed by the Reimbursement Agreement attached hereto as Exhibit B (which

rights and obligations shall be in addition to the rights and obligations of

the parties hereunder and under the MLA). 

This Commitment shall expire on July 31, 2003. The fee for issuing each

letter of credit shall be 100 basis points of the face amount of each letter of

credit, along with an issuance fee to CoBank, for its own account, equal to the

greater of (a) 1/8% of the face amount of the letter of credit, or (b) $2,000.

The Company promises to repay the outstanding balance on the Commitment in full

on demand, or if no demand is made, then any time on or before the Commitment

expiration date of July 31, 2003.




 




SECTION

10.   Amendment Fee.  In

consideration of the amendment, the Company agrees to pay to CoBank on the

execution hereof, a fee in the amount of $135,000.00. (.075% of commitment

prior to increase, $180,000,000.00)




 




SECTION

11.   Loan Origination Fee. 

In consideration of the Commitment, the Company

agrees to pay to CoBank on the execution hereof, a loan origination fee in the

amount of $65,000.00. (0.10% of the Commitment increase amount $65,000,000.00).




 




20





























 




IN WITNESS WHEREOF,

the parties have caused this Supplement to be executed by their duly authorized

officers as of the date shown above.




 




	

  CoBANK, ACB


  	

   


  	

  AMERICAN CRYSTAL

  SUGAR COMPANY


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ Michael Tousignant


  	

   


  	

  By:


  	

   /s/ Sam Wai


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   Vice President


  	

   


  	

  Title:


  	

   Treasurer


  





 




 




EXHIBIT “A”




 




[Form

of Borrowing Base]




American Crystal Sugar Company




Monthly Borrowing Base




For the month

ended           




 




	

  Trade Accounts Receivables


  	

   


  	

  $


  	

  @ 80%


  	

  $


  	

  (a)


  





 




Trade Accounts Receivables are

defined as those of the Borrower and all Guarantors 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

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, 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)


  





 




 




21





























 




	

  Seasonal Loan


  	

   


  	

   


  	

   


  	

   


  	

  (f)


  





 




	

  Commodity Credit Corp. loans


  	

   


  	

   


  	

   


  	

   


  	

  (g)


  





 




	

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


  	

  $


  	

   


  	

   


  	

   


  	

   


  





 




 




Exhibit

B




 




LETTER

OF CREDIT REIMBURSEMENT AGREEMENT




 




 




In

consideration of CoBank issuing one or more letters of credit (each a “Credit”)

for the Company’s account under the Supplement to which this agreement is

attached (the “Supplement”), the Company agrees as follows:




 




1.               The Company will

pay to CoBank in United States currency and in immediately available funds the

amount of each draft drawn or instrument paid under a Credit.  In addition, the Company agrees to pay to

CoBank such fee for issuing each Credit as prescribed in Section 9 of

Supplement number Z269S01C, as well as all customary charges associated with

the issuance of a Credit.  If a Credit

is payable in a foreign currency, the Company will pay to CoBank an amount in

United States currency equivalent to CoBank’s selling rate of exchange for that

currency.  In addition to the amounts

set forth above, the Company shall pay to CoBank such amounts as CoBank shall

determine are necessary to compensate CoBank for any cost attributable to

CoBank issuing or having outstanding any Credit resulting from the application

of any law or regulation concerning any reserve, assessment, capital adequacy

or similar requirement relating to letters of credit, reimbursement agreements

with respect thereto, or to similar liabilities or assets of banks, whether

existing at the time of the issuance of a Credit or adopted thereafter.  Each payment hereunder shall be payable on

demand at the place and manner set forth in the Master Loan Agreement between

the parties (the “MLA”) and with interest from the date of demand to the date

paid at CoBank’s National Variable Rate. 

The Company hereby authorizes CoBank to create a loan under the

Supplement bearing interest at the variable rate set forth therein for any sums

owing hereunder.




 




2.               Neither CoBank nor

any of its correspondents shall in any way be responsible for the performance

by any beneficiary of its obligations to the Company nor for the form,

sufficiency, correctness, genuineness, authority of the person signing,

falsification or legal effect of any documents called for under a Credit if

such documents on their face appear to be in order.  In addition, CoBank and its correspondents may receive and accept

or pay as complying with the terms of a Credit any drafts, documents, or certificates,

otherwise in order, signed by any person purporting to be an administrator,

executor, trustee in bankruptcy, debtor in possession, assignee for the benefit

of creditors, liquidator, receiver, or other legal representative of the party

authorized under a Credit to draw or issue such instruments or other documents.




 




3.               In the event the

Credit is a commercial Credit, then, in addition to the other provisions

hereof, the Company:  (i) agrees to

obtain or cause to be in existence insurance on any merchandise described in

the Credit against fire and other usual risks and against any additional risks

which CoBank may request; and (ii) authorizes and empowers CoBank to collect

the amount due under any such insurance and apply the same against any of the Company’s

obligations to CoBank arising under the Credit or otherwise.  In addition, whether the Credit is a

commercial or a standby Credit, the Company represents and warrants that any

required import, export or foreign exchange licenses or other governmental

approvals relevant to the Credit and the merchandise described therein have

been obtained and that the transactions contemplated thereby are not prohibited

under any  law, rule, regulation, order

or the like, including the Foreign Assets Control Regulations of the

U.S. Department of Treasury.




 




4.               All directions and

correspondence relating to a Credit are to be sent at the Company’s risk and

CoBank does not assume any responsibility for any inaccuracy, interruption,

error, or delay in transmission or delivery by post, telegraph, cable or other

electronic means, or for any inaccuracy of translation.




 




5.               CoBank shall not be

responsible for any act, error, neglect, default, omission, insolvency or

failure in business of any of its correspondents, and any action taken or

omitted by CoBank or its correspondents under or in connection with a Credit

shall, if taken or omitted with honesty in fact, be binding on the Company and

shall not put CoBank or its correspondents under any resulting liability to the

Company.  In no event shall  CoBank be liable for special, consequential

or punitive damages.




 




22





























 




6.               The Company will

indemnify CoBank against and hold it harmless from all loss, damage, cost, and

expense (including attorneys’ fees and expenses) arising out of (i) its

issuance of or any other action taken by CoBank in connection with a Credit,

other than loss or damage resulting from its gross negligence or willful

misconduct, and (ii) claims or legal proceedings incident to the collection of

amounts owed by the Company hereunder, or the enforcement of CoBank’s rights or

the rights of others under a Credit, including, without limitation, legal

proceedings relating to any court order, injunction or other process or decree

restraining or seeking to restrain CoBank from paying any amount under a

Credit.




 




7.               In the event:  (i) the Company fails to make any payment

owing hereunder when the same shall become due and payable; (ii) any covenant

or representation or warranty set forth herein is breached; (iii) the

“Commitment” (as defined in the Supplement) expires prior to the expiration

date of any Credit; or (iv) an “Event of Default” (as defined in the MLA)

occurs under the MLA, then, in any such event, the amount of each Credit,

together with any amounts payable by us in connection therewith, shall, at

CoBank’s option, become immediately due and payable. To the extent that any

amount paid by the Company pursuant to this Section 7 shall not then be due

under the terms of a Credit, such payment shall serve as security for the

Company’s obligation to indemnify CoBank for any amounts subsequently disbursed

by CoBank pursuant to a Credit. 

Furthermore, upon the institution of any legal proceeding described in

Section 6(ii) hereof, the Company will, on demand, assign and deliver to

CoBank, as security for the Company’s obligation to indemnify CoBank, cash

collateral in an amount satisfactory to CoBank.




 




8.               CoBank shall be

fully protected in, and shall incur no liability to the Company for acting

upon, any oral, telephonic, facsimile, cable or other electronic instructions

which CoBank in good faith believes to have been given by any authorized

person.  CoBank may, at its option, use

any means of verifying any instructions received by it and may also, at its

option, refuse to act on any oral, telephonic, facsimile, cable or other

electronic instructions or any part thereof, without incurring any

responsibility for any loss, liability or expenses arising out of such refusal.




 




9.               The Uniform Customs

and Practice as most recently published by the International Chamber of

Commerce (hereafter called the “UCP”) shall in all respects be deemed a part

hereof as fully as if incorporated herein, and shall apply to the Credits.  To the extent the UCP is inconsistent with

the governing law set forth in the MLA, the UCP shall control.




 




23