Exhibit
10.31


 


MLA No. Z269F


 


AMENDED
AND RESTATED

MASTER LOAN AGREEMENT


 


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


 


BACKGROUND


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


SECTION 6.                            Conditions
Precedent.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


SECTION 7.                            Representations
and Warranties.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(H)                               Reports and
Notices.  Furnish to CoBank:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


SECTION 9.                            Negative
Covenants.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ix)                              Debt shall
mean as to any Person: (a) indebtedness or liability of such Person for
borrowed money, or for the deferred purchase price of property or services; (b)
obligations of such Person as lessee under capital leases; (c) obligations of
such Person arising under bankers’ or trade acceptance facilities; (d) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations of such Person to
purchase any of the items included in this definition, to provide funds for
payment, to supply funds to invest in any other Person, or otherwise to assure
a creditor of another Person against loss; (e) all obligations secured by a
lien on property owned by such Person, whether or not the obligations have been
assumed; and (f) all obligations of such Person under any agreement providing
for an interest rate swap, cap, cap and floor, contingent participation or
other hedging mechanisms with respect to interest payable on any of the items
described in this definition.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(xix)                        Subsidiary
shall mean with respect to any Person: (a) any corporation in which such
Person, directly or indirectly, (i) owns more than fifty percent (50%) of the
outstanding stock thereof, or (ii) has the power under ordinary circumstances
to elect at least a majority of the directors thereof, or (b) any partnership,
association, joint venture, limited liability company, or other unincorporated
organization or entity with respect to which such Person, directly or
indirectly, owns an equity interest in an amount sufficient to control the
management thereof.  For purposes of
this Section 10 only, “Subsidiary” shall not include ProGold Limited Liability
Company (“ProGold”) (but only for so long as ProGold’s current lease with
Cargill remains in effect and in good standing) or Crystech.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10

















 


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


 


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


 


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


 


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


 


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


 


SECTION 12.                     Remedies.


 


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


 


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


 


11

















 


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


 


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


 


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


 


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


 


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


 


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


 


12

















 


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


 


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


 


	
  If to CoBank as follows:

  	
  If to the Company, as follows:

  
	
  CoBank, ACB

  	
  American Crystal Sugar Company

  
	
  Corporate Finance

  	
  ATTN: Treasurer

  
	
  P.O. Box 5110

  	
  101 North 3rd Street, Moorhead, Minnesota 56560

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

  	
  FAX#:  (218) 236-4702

  



 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL
  SUGAR COMPANY

  
	
   

  
	
  By

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7/30/03

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  [ILLEGIBLE]

  
							



 


14

















 


Attachment “A”


 


 


AMERICAN CRYSTAL SUGAR COMPANY (ACSC)


AND SUBSIDIARIES


Permitted Borrowings


 


	
  Lender

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commercial Paper

  	
   

  	
  Variable

  Maximum Outstanding: $225 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Minn-Dak Farmers Cooperative

  	
   

  	
  Variable

  	
   

  
	
  Southern Minnesota Beet Sugar Cooperative

  	
   

  	
   

  	
   

  
	
  United States Sugar Corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Private Placement of Debt

  	
   

  	
   

  	
   

  
	
  John Hancock Mutual Life Insurance Co.

  	
   

  	
  $26 million

  	
   

  
	
  John Hancock Variable Life Insurance Co.

  	
   

  	
  $1.5 million

  	
   

  
	
  Paul Revere Life Insurance Company

  	
   

  	
  $22.5 million

  	
   

  
	
  John Hancock Ins. Co.

  	
   

  	
  $20 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Wells Fargo

  	
   

  	
  $1 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commodity Credit Corporation

  	
   

  	
  Variable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  East Grand Forks Pollution Control
  Refunding Series A

  	
   

  	
  $4,090,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  East Grand Forks Industrial Development
  Series B

  	
   

  	
  $915,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1996 Traill County Series A, B & C
  Bonds

  	
   

  	
  $18 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1997 City of Moorhead Bonds

  	
   

  	
  $5.5 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1998 Traill County Bonds

  	
   

  	
  $5.75 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1999 Traill County Bonds

  	
   

  	
  $3.58million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2000 City of East Grand Forks Bonds

  	
   

  	
  $5.75 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Intercompany Loan(s) from ACSC to Sidney
  Sugars

  Incorporated

  	
   

  	
  $60 million

  	
   

  



 

















 


Attachment “B”


 


 


AMERICAN CRYSTAL SUGAR COMPANY (ACSC)


AND SUBSIDIARIES


Permitted Liens


 


	
  Asset

  	
   

  	
  Lien
  Holder

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sugar

  	
   

  	
  Commodity Credit Corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Real Estate, Equipment, Intangibles

  	
   

  	
  CoBank as Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACSC’s Equity in Crystech, LLC

  	
   

  	
  First Union Trust Company, National

  Association, as Collateral Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Pollution
  control Equipment located at ACSC’s

  Moorehead, MN Facility

  	
   

  	
  Security Agreement

  American National Bank and Trust Company

  (now known as Firstar Bank)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Industrial Development Revenue Bond

  	
   

  	
  Security Agreement

  	
   

  
	
  Equipment Located at ACSC’s Moorhead, MN
  Facility

  	
   

  	
  Wells Fargo (successor to Firstar Bank)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Marketing Assets

  	
   

  	
  Minn-Dak Farmers Cooperative

  	
   

  
	
   

  	
   

  	
  Southern Minnesota Beet Sugar Cooperative

  	
   

  
	
   

  	
   

  	
  United States Sugar Corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fixed Assets – Collateral Pool

  	
   

  	
  Private Placement of Debt

  	
   

  
	
   

  	
   

  	
  John Hancock Mutual Life Insurance Co.

  	
   

  
	
   

  	
   

  	
  John Hancock Variable Life Insurance Co.

  	
   

  
	
   

  	
   

  	
  Paul Revere Life Insurance Co.

  	
   

  



 

















 


CoBANK,
ACB


 


COMPLIANCE
CERTIFICATE – CERTIFIED INTERIM FINANCIALS


 


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


 


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


 


	
   

  	
   

  	
  Required

  	
   

  	
  Actual

  
	
  Net Working Capital

  	
   

  	
   

  	
   

  	
   

  
	
  1.                                       Current Assets
  as measured in accordance with GAAP

  2.                                       Current
  Liabilities as measured in accordance with GAAP

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

  	
   

  	
  Minimum Net Working Capital required

  for fiscal quarters other than fiscal year

  end = $15,000,000

  

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

  	
   

  	
  1.

  

  2.

  

  3.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest Coverage Ratio

  	
   

  	
   

  	
   

  	
   

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

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

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

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

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

  	
   

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

  	
   

  	
  1.

  

  2.

  

  3.

  



 

















 


	
   

  	
   

  	
  Required

  	
   

  	
  Actual

  
	
  Long Term Debt to
  Capitalization

  	
   

  	
   

  	
   

  	
   

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

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

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

  	
   

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

  	
   

  	
  1.

  

  2.

  

  3.

  
	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Leverage Ratio (and Term Performance
  Pricing)

  	
   

  	
   

  	
   

  	
   

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

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

  3.                                       Total members
  investments

  4.                                       Estimated unit
  retains

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

   

  	
   

  	
  Maintain a leverage ratio of not more than 1.50:1.0

  	
   

  	
  1.

  

  2.

  

  3.

  

  4.

  

  5.

   

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

  



 


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


 


	
   

  	
  AMERICAN CRYSTAL
  SUGAR COMPANY

  
	
   

  	
  (“Company”)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date

  



 

















 


Loan No. Z269T01D


 


REVOLVING
TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


TREASURY MARGINS


 


	
  FIXED RATE

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  
	
  Two Years

  	
   

  	
  U.S.$ Constant Maturity

  Treasury Rate (“US$CMT”)

  	
   

  	
  125 bps

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

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

  	
   

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

  	
   

  	
  105bps

  



 


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


 


2

















 


	
  LEVERAGE
  RATIO
(as defined below)

  	
   

  	
  INCREASE/DECREASE
TO SPREAD

  	
   

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

  
	
  A. Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

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

  	
   

  	
  None

  	
   

  	
  0

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

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
  D. Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL
  SUGAR COMPANY

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7-30-03

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  [ILLEGIBLE]

  
							



 


4

















 


Loan No. Z269T01DNP 


 


REVOLVING
TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


TREASURY MARGINS


 


	
  FIXED RATE

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD
  OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  
	
  Two
  Years

  	
   

  	
  U.S. $ Constant Maturity

  Treasury (“US$CMT”)

  	
   

  	
  125 bps

  
	
  Three
  Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Four
  Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Five
  Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
  Seven
  Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  
	
  Ten
  Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

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

  	
   

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

  	
   

  	
  105bps

  



 


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


 


2

















 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE/DECREASE

  TO SPREAD

  	
   

  	
  CHANGE TO

  APPLICABLE LIBOR

  and TREASURY

  MARGINS

  (IN BASIS POINTS)

  
	
  A.
  Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

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

  	
   

  	
  None

  	
   

  	
  0

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

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
  D.
  Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL
  SUGAR COMPANY

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7-30-03

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  [ILLEGIBLE]

  
								



 


4

















 


Loan No. Z269T02DNP


 


REVOLVING
TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


TREASURY
MARGINS


 


	
  FIXED RATE

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD
  OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  
	
  Two Years

  	
   

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

  	
   

  	
  125bps

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125bps

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125bps

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125bps

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140bps

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140bps

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

  	
   

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

  	
   

  	
  105bps

  



 


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


 


2

















 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE/DECREASE

  TO SPREAD

  	
   

  	
  CHANGE TO

  APPLICABLE LIBOR

  and TREASURY

  MARGINS

  (IN BASIS POINTS)

  
	
  A.  Equal to or greater than
  1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

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

  	
   

  	
  None

  	
   

  	
  0

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

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
  D.  Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Vice President

  	
   

  	
  Title:

  	
  TREASURER

  



 


4

















 


Loan No. Z269T03BNP


 


SINGLE
ADVANCE TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  



 


2

















 


Loan No. Z269T04A


 


NON-REVOLVING
CREDIT SUPPLEMENT


(Letter of
Credit)


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  



 


2

















 


Loan No. Z269T05


 


REVOLVING TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


(A)                               Base Rate Option.  At a-rate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means
that rate in effect from day to day defined as the “prime rate” as published
from time to time in the Eastern Edition of The Wall Street Journal as the
average prime lending rate for seventy-five percent (75%) of the United States;
thirty (30) largest commercial banks, or if The Wall Street Journal shall cease
publication or cease publishing the “prime rate” on a regular basis, such other
regularly published average prime rate applicable to such commercial banks as
is acceptable to the Lender in its reasonable discretion.  Loans for which the Base Rate option is
selected are referred to herein as “Base Rate Loans”.  Base Rate Loans shall be made available on any Banking Day.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  



 


4

















 


Loan No. Z269T06


 


REVOLVING
TERM LOAN SUPPLEMENT


 


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


 


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


 


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


 


SECTION 3.  Term. 
Intentionally
Omitted.


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE/DECREASE

  TO LIBOR SPREAD

  	
   

  	
  CHANGE TO
  THE

  LIBOR SPREAD (IN

  BASIS POINTS)

  
	
  A.  Equal to or greater than
  1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

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

  	
   

  	
  None

  	
   

  	
  0

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

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
  D.  Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


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


 


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


 


2

















 


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


 


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


 




	
  Payment
  Date

  	
   

  	
  Reducing
  Commitment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  12,857,142.86

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  10,714,285.72

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  8,571,428.58

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  6,428,571.44

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  4,285,714.30

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  2,142,857.16

  	
   

  






 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Tousignant

  	
   

  	
  By:

  	
  /s/ Sam Wai

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  TREASURER

  



 


4

















 


Loan No. Z269S01E 


 


STATUSED
REVOLVING CREDIT SUPPLEMENT


 


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


 


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


 


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


 


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


 


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


 


(A)                                Base Rate Option.  At a rate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means
that rate in effect from day to day defined as the “prime rate” as published
from time to time in the Eastern Edition of The Wall Street Journal as the
average prime lending rate for seventy-five percent (75%) of the
United States’ thirty (30) largest commercial banks, or if The Wall Street
Journal shall cease publication or cease publishing the “prime rate” on a
regular basis, such other regularly published average prime rate applicable to
such commercial banks as is acceptable to the Lender in its reasonable
discretion.  Loans for which the Base
Rate option is selected are referred to herein as “Base Rate Loans”.  Base Rate Loans shall be:  (a) in minimum amounts of $5,000,000 and
incremental multiples of $1,000,000; and (b) made available on any Banking Day.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Teresa Fountain

  	
   

  	
  By:

  	
  /s/ Mark Lembke

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant Corporate Secretary

  	
   

  	
  Title:

  	
  Assistant Treasurer

  



 


4

















 


EXHIBIT “A”


 


[Form of Borrowing Base]

American Crystal Sugar Company


Monthly Borrowing Base

For the month ended
                          


 


	
  Trade Accounts Receivables

  	
   

  	
  $

  	
  @ 80%

  	
  $

  	
   

  
	
  (a)

  	
   

  	
   

  	
   

  	
   

  	
   

  



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


 


	
  Inventory

  	
   

  	
  $

  	
  (b)

  	
   

  	
   

  



 


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


 


	
  Crop Payments due Non-members and members

  	
   

  	
  $

  	
  (c)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Inventory Value (b-c)

  	
   

  	
  $

  	
  @ 75%

  	
  $

  	
   

  
	
  (d)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Borrowing Base (a+d)

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commercial Paper

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
  (e)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seasonal Loan

  	
   

  	
   

  	
   

  	
   

  	
  (f)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commodity Credit Corp. loans

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  $