**Exhibit10.30**

 

 

**No.**Z269D

**FOUTHAMENDMENTTO MASTER LOAN AGREEMENT**

 

 

**THISAMENDMENT** is entered into as of November 6, 2002,between **CoBANK,ACB** (“CoBank”) and **AMERICAN CRYSTAL SUGAR COMPANY**, Moorhead,Minnesota (the “Company”).

 

**BACKGROUND**

 

CoBank and the Company are parties to a Master Loan Agreement datedMarch 31, 2000, (such agreement, as previously amended, is hereinafter referredto as the “MLA”).  By Amendment andWaiver dated as of October 7, 2002, CoBank permitted the Company to establishand capitalize Sidney Sugars Incorporated (“Sidney Sugars”) as a wholly ownedsubsidiary of the Company.  CoBank andthe Company now desire to amend the MLA so that for purposes of measuringcompliance with financial covenants set forth in the MLA and preparation offinancial statements as required by the MLA, the financial results of theCompany and Sidney Sugars be consolidated. CoBank and the Company also desire to amend the MLA to require theCompany to cause Sidney Sugars to adhere to certain affirmative and negativecovenants applicable to the Company. Lastly, CoBank and the Company desire to amend the MLA to substitute onefinancial covenant for another.  Forthese reasons, and for valuable consideration (the receipt and sufficiency ofwhich are hereby acknowledged), CoBank and the Company agree as follows:

 

1.                                       Whilethe MLA is in effect, the Company agrees to cause Sidney Sugars (with respectto itself in place of and in addition to the Company) to comply with thefollowing affirmative covenants set forth in Section 8 of the MLA:  Section 8(B), (C), (D), (E), (F), (G) and(H)(v)-(ix), and to comply with it’s Grower Agreements.

 

2.                                       Whilethe MLA is in effect, the Company agrees that all reports required by Section8(H) shall be prepared on a consolidated basis with the Company’s Subsidiaries,including Sidney Sugars.

 

3.                                       Whilethe MLA is in effect, the Company agrees that it will cause Sidney Sugars (withrespect to itself in place of and in addition to the Company) to comply withthe negative covenants set forth in Section 9, except that (1) guarantees andliens created in connection with a 1998 note purchase agreement between theCompany and the note purchasers relating to the $50,000,000 Senior SecuredGuaranteed Notes and a 2002 note purchase agreement between the Company and thenote purchasers relating to the $20,000,000 Senior Secured Guaranteed Notesshall be permitted provided that said liens shall be shared with CoBank in amanner acceptable to CoBank, (2) loans from the Company to Sydney Sugars as describedin Section 3 of that Amendment and Waiver dated as of October 7, 2002, betweenthe Company and CoBank shall be permitted, and, to the extent that thefollowing would otherwise be prohibited, (3) the lease of sugar processingplants in Torrington, Wyoming, and Hereford, Texas, to Western SugarCooperative and Imperial Sugar Company, respectively.  In addition, CoBank aggress that 

 

----

 

permitted borrowings under Section 9(A) shall include indebtedness ofthe Company incurred in connection with the $20,000,000 Senior SecuredGuaranteet Notes issued pursuant to the 2002 note purchase agreement betweenthe Company and the note purchasrers.

 

4.                                       Whilethe MLA is in effect, the Company agrees that all financial covenants set forthin Section 10 shall be measured on a consolidated basis with the Company’sSubsidiaries, including Sidney Sugars. References in any covenant to the Company shall mean the Company and itsSubsidiaries, including Sidney Sugars.

 

5.                                       Section10(C) of the MLA is hereby amended and restated in its entirety to read asfollows:

 

**(C)  Minimum Average Net FundsPlus Interest Expense**. The Company shall maintain at all times and measuredas of the end of each Fiscal Quarter a minimum ratio of Average Net Funds plusInterest Expense to Interest Expense (both as determined in accordance withGAAP consistently applied) of 2.5:1.  Average Net Funds to Interest Expense shallbe calculated on a rolling twelve (12) quarter basis.  For purposes of this Section 10(C), Interest Expense shall mean:** **the total interest expense of the Borrower and its Subsidiaries(including, without limitation, interest expense on capital leases) and, to theextent not included therein, fees and other charges payable with respect to allDebt), all determined on a consolidated basis in accordance with GAAP.

 

6.                                       Exceptas set forth in this amendment, the MLA shall continue in full force and effectas written.

 

**INWITNESS WHEREOF**, the parties have caused thisamendment to be executed by their duly authorized officers as of the date shownabove.

 
| **CoBANK, ACB** |                         | **AMERICAN CRYSTAL  SUGAR COMPANY** |
|-----------------|------------------------------|-------------------------------------|
|            |                         |                                |   |   |
| By:             |  /s/ Michael Tousignant |                                | By: |  /s/ Sam Wai |
|            |                         |                                |   |   |
| Title:          |  Vice President         |                                | Title: |  Treasurer |

 

2

----

 

**REVOLVING TERM LOANSUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated March31, 2000 (the “MLA”), is entered into as of November 6, 2002, between **CoBANK, ACB**(“CoBank”) and**AMERICANCRYSTAL SUGAR COMPANY**, Moorhead, Minnesota (the “Company”), andamends and restates the Supplement dated March 27, 2002 and numbered Z269T01B.

 

**SECTION1.   The Revolving Term Loan Commitment. **On the terms andconditions set forth in the MLA and this Supplement, CoBank agrees to makeloans to the Company during the period set forth below in an aggregateprincipal amount not to exceed $58,276,702.22 at any one time outstanding (the“Commitment”).  Within the limits of theCommitment, the Company may borrow, repay and reborrow.

 

**SECTION2.   Purpose and Transfer. **The purpose of the Commitment is to finance theoperating needs of the Company.

 

**SECTION3.   Term.  **The term of theCommitment shall be from the date hereof, up to but not including March 30,2003, or such later date as CoBank may, in its sole discretion, authorize inwriting, *provided, however*, thatif the payment due on or before December 31, 2002 (as described in Section 5below) is paid as agreed, and the Company is not otherwise in default, then theterm of the Commitment shall be extended up to, but not including, July, 31,2003.

 

**SECTION4.   Interest.  **The Companyagrees to pay interest on the unpaid balance of the loans in accordance withone or more of the following interest rate options, as selected by the Company:

 

**(A)****                               VariableRate Option.**  At a rate per annum equal at all times to the rateof interest established by CoBank from time to time as its National VariableRate, which Rate is intended by CoBank to be a reference rate and not itslowest rate. The National Variable Rate will change on the date established byCoBank as the effective date of any change therein and CoBank agrees to notifythe Company promptly after any such change.

 

**(B)****                               QuotedRate Option.**  At a fixed rate per annum to be quoted by CoBank inits sole discretion in each instance. Under this option, rates may be fixed on such balances and for suchperiods as may be agreeable to CoBank in its sole discretion in each instance.

 

**(C)****                               LIBOROption.**  At a fixed rate equal to “LIBOR” (as hereinafterdefined) plus the Applicable LIBOR Margin per annum (as described in terms ofbasis points (“bps”) in the chart immediately set forth below).  Under this option:  (a) rates may be fixed for “Interest Periods” (as hereinafterdefined) 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 hereinafterdefined) or, at the option of the Company, on 2 Banking Days’ priornotice.  For purposes hereof:(i) ”LIBOR” shall mean the rate indicated by Telerate (rounded upward tothe nearest thousandth) as having been quoted by the British BankersAssociation at 11:00 a.m. London time on the date the Company elects to fix arate under this option for the offering of U.S. dollar deposits in the Londoninterbank market for the Interest Period designated by the Company; (ii)“Banking Day” shall mean a day on which CoBank is open for business, dealingsin 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 electsto fix a rate under this option (or, at the option of the Company, two BankingDays later) and ending on the numerically corresponding day in the nextcalendar month or the month that is 2, 3 or 6 months or 1 year thereafter, asthe case may be; provided, however, that: (x) in the event such ending day is not a Banking 

 

3

----

 

Day, such period shall be extended to the next Banking Day unless suchnext Banking Day falls in the next calendar month, in which case it shall endon the preceding Banking Day; and (y) if there is no numerically correspondingday in the month, then such period shall end on the last Banking Day in therelevant month.

 

**LIBOR MARGINS**

 
| **FIXED RATE  PRODUCT** |   | **INDEX** |   | **SPREAD OVER INDEX IN BASIS  POINTS (Applicable LIBOR Margin)** |   |
|-------------------------|--------|-----------|--------|------------------------------------------------------------------|--------|
| One Month               |   | LIBOR     |   | 90bps                                                            |   |
| Two Months              |   | LIBOR     |   | 90bps                                                            |   |
| Three Months            |   | LIBOR     |   | 90bps                                                            |   |
| Six Months              |   | LIBOR     |   | 90bps                                                            |   |
| One Year                |   | LIBOR     |   | 90bps                                                            |   |

 

**(D)Treasury Option.**  At a fixed rate equal toApplicable 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 moremay be fixed on or before for periods ranging from two  years to the final maturity date of theloan, as selected by the Company. However, rates may not be fixed in such a manneras to require the Company to have to repay any fixed rate balance prior to thelast 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 maturityon U.S. Treasury instruments having the same maturity date as the last day ofthe fixed rate period selected by the Company, as calculated from the bid priceindicated by Telerate (page 5) at the time the rate is fixed.  If, however, no instrument is indicated forthe maturity selected, then the rate shall be interpolated based on the bidprices quoted for the next longest and shortest maturities so indicated. In theevent Telerate ceases to provide such quotations or materially changes the formor substance of page 5 (as determined by CoBank), then CoBank will notify theCompany and the parties hereto will agree upon a substitute basis for obtainingsuch quotations

 

**TREASURYMARGINS**

 
| **FIXED RATE  PRODUCT**                                              |   | **INDEX**                                                                                |   | **SPREAD  OVER INDEX IN BASIS  POINTS (Applicable Treasury Margin)** |   |
|----------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
| Two Years                                                            |   | U.S.$  Constant Maturity   Treasury Rate (“US$CMT”)                            |   | 125 bps                                                              |   |
| Three Years                                                          |   | US$CMT                                                                                   |   | 125 bps                                                              |   |
| Four Years                                                           |   | US$CMT                                                                                   |   | 125 bps                                                              |   |
| Five Years                                                           |   | US$CMT                                                                                   |   | 125 bps                                                              |   |
| Seven Years                                                          |   | US$CMT                                                                                   |   | 140 bps                                                              |   |
| Ten Years                                                            |   | US$CMT                                                                                   |   | 140 bps                                                              |   |
| Floor  (Minimum) Rate (For Two to Ten Year Fixed Rate Products Only) |   | CoBank’s  cost of funds (as reasonably determined by CoBank in its sole discretion) |   | 105bps                                                               |   |

 

4

----

 

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

 
| **LEVERAGE RATIO (as  defined below)**                                     |   | **INCREASE / DECREASE  TO SPREAD** |   | **CHANGE TO LIBOR and  TREASURY MARGINS  (IN BASIS POINTS)** |   |
|----------------------------------------------------------------------------|--------|------------------------------------|--------|--------------------------------------------------------------|--------|
| A.  Equal to or greater than 1.35:1.00                           |   | Increase                           |   | 20                                                           |   |
| B.  Equal to or greater than 1.20:1.00,  but less than 1.35:1.00 |   | None                               |   | 0                                                            |   |
| C.  Less than 1.20:1.00, but greater than  or equal to 1.00:1.00 |   | Decrease                           |   | 10                                                           |   |
| D.  Less than  1.00:1.00                                              |   | Decrease                           |   | 20                                                           |   |

 

**Leverage Ratio:**The Company will maintain a leverage ratio of not more than 1.50:1.0, andattain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excludingcurrent maturities) calculated in accordance with GAAP plus or minus thedifference between actual working capital and minimum net working capital (asdefined in the MLA No. Z269, Section 10), divided by total members investmentsplus the estimated unit retains.

 

The spread shall be adjusted quarterly on thelatter of either: (a) five business days after the Bank’s receipt of theCompany’s certification of compliance with the leverage ratio, or (b) 30 daysafter the end of each calendar quarter.

 

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

 

**SECTION5.   Promissory Note. **TheCompany promises to repay the loans that are outstanding in annual principalpayments of $9,396,579.17 each due on or before December 31st ofeach year through December 31, 2008, and a final principal payment due on orbefore December 31, 2009.  All 

 

5

----

 

outstanding balances shall be repaid by December 31, 2009. If anyinstallment due date is not a day on which CoBank is open for business, thensuch payment shall be made on the next day on which CoBank is open forbusiness.  In addition to the above, theCompany promises to pay interest on the unpaid principal balance hereof at thetimes and in accordance with the provisions set forth in Section 4 hereof. Thisnote replaces and supersedes, but does not constitute payment of theindebtedness evidenced by, the promissory note set forth in the Supplementbeing amended and restated hereby.

 

The Company shall be permitted to make special payments, in a minimumamount of $388,500.00, on the variable rate portion of this loan, when allshort term financing, including the Company’s seasonal loans, Commodity CreditCorporation loans and other short term loans have been zeroed out.  These special payments may be readvancedthrough the expiration date of the Commitment. Reinstatement may be denied andcanceled at any time at the option of CoBank. The reinstatable commitmentsarising from such special payments shall be subject to the Commitment Fee asdescribed in Section 8 below.

 

**SECTION6.   Prepayment. **Theloans may be prepaid in whole or in part on one CoBank business day’s priorwritten notice.  During the term of theCommitment, prepayments shall be applied to such balances, fixed or variable,as the Company shall specify.  After theexpiration of the term of the Commitment, prepayments shall, unless CoBankotherwise agrees, be applied to principal installments in the inverse order oftheir maturity and to such balances, fixed or variable, as CoBank shallspecify.

 

**SECTION7.   Commitment Fee.**  In consideration of the Commitment, theCompany agrees to pay to CoBank a commitment fee on the average daily unusedportion of the Commitment at the rate of 20 basis points per annum (calculatedon a 360 day basis), payable quarterly in arrears by the 20th day followingeach calendar quarter. Such fee shall be payable for each calendar quarter (orportion thereof) occurring during the original or any extended term of theCommitment.

 

**SECTION8.   ****Commitments Arising FromSpecial Payments.**  Commitments arising as a result of specialpayments described in Section 5 above shall be subject to a commitment fee of25 basis points (0.25%) on an annualized basis, on the average dailycommitment.  Any such fees incurredshall be payable on the last day of the calendar quarter, in arrears, computedon the basis of a year of 360 days for the actual number of days elapsed inwhich such reinstatable commitments were outstanding.

 

**SECTION9.   Security. **Inaddition to any other security that may otherwise be required or provided, theCompany’s obligations under this Supplement are secured by that RestatedMortgage and Security Agreement dated September 15, 1998, from American CrystalSugar Company to St. Paul Bank for Cooperatives (now known as CoBank as aresult of merger), as Collateral Agent.

 

**INWITNESS WHEREOF,** the parties have caused this Supplementto be executed by their duly authorized officers as of the date shown above.

 
| **CoBANK, ACB** |                         | **AMERICAN CRYSTAL  SUGAR COMPANY** |
|-----------------|------------------------------|-------------------------------------|
|            |                         |                                |
|            |                         |                                |   |   |
| By:             |  /s/ Michael Tousignant |                                | By: |  /s/ Sam Wai |
|            |                         |                                |   |   |
| Title:          |  Vice President         |                                | Title: |  Treasurer |

 

6

----

 

**REVOLVING TERM LOANSUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated March31, 2000 (the “MLA”), is entered into as of November 6, 2002, between **CoBANK, ACB**(“CoBank”) and**AMERICANCRYSTAL SUGAR COMPANY**, Moorhead, Minnesota (the “Company”), andamends and restates the Supplement dated March 27, 2002 and numberedZ269T01BNP.

 

**SECTION1.   The Revolving Term Loan Commitment. **On the terms andconditions set forth in the MLA and this Supplement, CoBank agrees to makeloans to the Company during the period set forth below in an aggregateprincipal amount not to exceed $49,079,855.68 at any one time outstanding (the“Commitment”).  Within the limits of theCommitment, the Company may borrow, repay and reborrow.

 

**SECTION2.   Purpose and Transfer. **The purpose of the Commitment is to finance theoperating needs of the Company.

 

**SECTION3.   Term. **Theterm of the Commitment shall be from the date hereof, up to but not includingMarch 30, 2003, or such later date as CoBank may, in its sole discretion,authorize in writing, *provided, however*,that if the payment due on or before December 31, 2002 (as described in Section5 below) is paid as agreed, and the Company is not otherwise in default, thenthe term of the Commitment shall be extended up to, but not including, July,31, 2003.

 

**SECTION4.   Interest.** The Company agrees topay interest on the unpaid balance of the loans in accordance with one or moreof the following interest rate options, as selected by the Company:

 

**(A)****                               VariableRate Option.**  At a rate per annumequal at all times to the rate of interest established by CoBank from time totime as its National Variable Rate, which Rate is intended by CoBank to be areference rate and not its lowest rate. The National Variable Rate will changeon the date established by CoBank as the effective date of any change thereinand CoBank agrees to notify the Company promptly after any such change.

 

**(B)****                               QuotedRate Option.**   At a fixed rate perannum to be quoted by CoBank in its sole discretion in each instance.  Under this option, rates may be fixed onsuch balances and for such periods as may be agreeable to CoBank in its solediscretion in each instance.

 

**(C)****                               LIBOROption.**  At a fixed rate equal to“LIBOR” (as hereinafter defined) plus the Applicable LIBOR Margin per annum (asdescribed in terms of basis points (“bps”) in the chart immediately set forthbelow).  Under this option:  (a) rates may be fixed for “InterestPeriods” (as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, asselected by the Company; (b) the minimum amount that may be fixed at any onetime shall be $2,000,000.00; and (c) rates may only be fixed on a “BankingDay” (as hereinafter defined) or, at the option of the Company, on2 Banking Days’ prior notice.  Forpurposes hereof: (i) ”LIBOR” shall mean the rate indicated by Telerate(rounded upward to the nearest thousandth) as having been quoted by the BritishBankers Association at 11:00 a.m. London time on the date the Company elects tofix a rate under this option for the offering of U.S. dollar deposits in theLondon interbank market for the Interest Period designated by the Company; (ii)“Banking Day” shall mean a day on which CoBank is open for business, dealingsin 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 electsto fix a rate under this option (or, at the option of the Company, two BankingDays later) and ending on the numerically corresponding day in the nextcalendar month or the month that is 2, 3 or 6 months or 1 year thereafter, asthe case may be; provided, however, that: (x) in the event such ending day is not a Banking 

 

7

----

 

Day, such period shall be extended to the next Banking Day unless suchnext Banking Day falls in the next calendar month, in which case it shall endon the preceding Banking Day; and (y) if there is no numerically correspondingday in the month, then such period shall end on the last Banking Day in therelevant month.

 

**LIBORMARGINS**

 
| **FIXED RATE  PRODUCT** |   | **INDEX** |   | **SPREAD  OVER INDEX IN BASIS  POINTS (Applicable LIBOR Margin)** |   |
|-------------------------|--------|-----------|--------|-------------------------------------------------------------------|--------|
| One Month               |   | LIBOR     |   | 90bps                                                             |   |
| Two Months              |   | LIBOR     |   | 90bps                                                             |   |
| Three Months            |   | LIBOR     |   | 90bps                                                             |   |
| Six Months              |   | LIBOR     |   | 90bps                                                             |   |
| One Year                |   | LIBOR     |   | 90bps                                                             |   |

 

**(D)Treasury Option.** At a fixed rate equal to the Applicable Treasury Margin per annum (asdescribed in terms of basis points (“bps”) in the chart immediately set forthbelow) above the “U.S. Treasury Rate” (as hereinafter defined). Under thisoption, balances of $2,000,000.00 or more may be fixed on or before for periodsranging from two years to the final maturity date of the loan, as selected bythe Company. However, rates may not be fixed in such a manner as to require theCompany to have to repay any fixed rate balance prior to the last day of itsfixed rate period in order to pay any installment of principal.  For purposes hereof, the “U.S. TreasuryRate” shall mean the yield to maturity on U.S. Treasury instruments having thesame maturity date as the last day of the fixed rate period selected by theCompany, as calculated from the bid price indicated by Telerate (page 5) at thetime the rate is fixed.  If, however, noinstrument is indicated for the maturity selected, then the rate shall beinterpolated based on the bid prices quoted for the next longest and shortestmaturities so indicated. In the event Telerate ceases to provide suchquotations or materially changes the form or substance of page 5 (as determinedby CoBank), then CoBank will notify the Company and the parties hereto willagree upon a substitute basis for obtaining such quotations.

 

**TREASURY MARGINS**

 
| **FIXED RATE    PRODUCT**                                            |   | **INDEX**                                                                                |   | **SPREAD OVER INDEX IN BASIS  POINTS (Applicable Treasury Margin)** |   |
|----------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
| Two Years                                                            |   | U.S. $  Constant Maturity Treasury (“US$CMT”)                                  |   | 125 bps                                                             |   |
| Three Years                                                          |   | US$CMT                                                                                   |   | 125 bps                                                             |   |
| Four Years                                                           |   | US$CMT                                                                                   |   | 125 bps                                                             |   |
| Five Years                                                           |   | US$CMT                                                                                   |   | 125 bps                                                             |   |
| Seven Years                                                          |   | US$CMT                                                                                   |   | 140 bps                                                             |   |
| Ten Years                                                            |   | US$CMT                                                                                   |   | 140 bps                                                             |   |
| Floor  (Minimum) Rate (For Two to Ten Year Fixed Rate Products Only) |   | CoBank’s  cost of funds (as reasonably determined by CoBank in its sole discretion) |   | 105bps                                                              |   |

 

8

----

 

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

 
| **LEVERAGE RATIO (as  defined below)**                                     |   | **INCREASE / DECREASE  TO SPREAD** |   | **CHANGE TO LIBOR and  TREASURY MARGINS  (IN BASIS POINTS)** |   |
|----------------------------------------------------------------------------|--------|------------------------------------|--------|--------------------------------------------------------------|--------|
| A.  Equal to or greater than 1.35:1.00                           |   | Increase                           |   | 20                                                           |   |
| B.  Equal to or greater than 1.20:1.00,  but less than 1.35:1.00 |   | None                               |   | 0                                                            |   |
| C.  Less than 1.20:1.00, but greater than  or equal to 1.00:1.00 |   | Decrease                           |   | 10                                                           |   |
| D.  Less than  1.00:1.00                                              |   | Decrease                           |   | 20                                                           |   |

 

**Leverage Ratio:**The Company will maintain a leverage ratio of not more than 1.50:1.0, andattain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excludingcurrent maturities) calculated in accordance with GAAP plus or minus thedifference between actual working capital and minimum net working capital (asdefined in the MLA No. Z269, Section 10), divided by total members investmentsplus the estimated unit retains.

 

The spread shall be adjusted quarterly on thelatter of either: (a) five business days after the Bank’s receipt of theCompany’s certification of compliance with the leverage ratio, or (b) 30 daysafter the end of each calendar quarter.

 

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

 

**SECTION5.   Promissory Note. **TheCompany promises to repay the loans that are outstanding in annual principalpayments of $7,603,420.83 each due on or before December 31st ofeach year through December 31, 2007, and a final principal payment due on orbefore December 31, 2008.  All outstandingbalances shall be repaid by December 31, 2008. If any installment due date isnot a day on which CoBank

 

9

----

 

 is open for business, then suchpayment shall be made on the next day on which CoBank is open forbusiness.  In addition to the above, theCompany promises to pay interest on the unpaid principal balance hereof at thetimes and in accordance with the provisions set forth in Section 4 hereof.  This note replaces and supersedes, but doesnot constitute payment of the indebtedness evidenced by, the promissory noteset forth in the Supplement being amended and restated hereby.

 

TheCompany 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 termfinancing, including the Company’s seasonal loans, Commodity Credit Corporationloans and other short term loans have been zeroed out.  These special payments may be readvancedthrough the expiration date of the Commitment. Reinstatement may be denied and canceled at any time at the option ofCoBank. The reinstatable commitments arising from such special payments shallbe subject to the Commitment Fee as described in Section 8 below.

 

**SECTION6.   Prepayment. **Theloans may be prepaid in whole or in part on one CoBank business day’s priorwritten notice.  During the term of theCommitment, prepayments shall be applied to such balances, fixed or variable,as the Company shall specify.  After theexpiration of the term of the Commitment, prepayments shall, unless CoBankotherwise agrees, be applied to principal installments in the inverse order oftheir maturity and to such balances, fixed or variable, as CoBank shallspecify.

 

**SECTION7.   Commitment Fee.**  In consideration of the Commitment, theCompany agrees to pay to CoBank a commitment fee on the average daily unusedportion of the Commitment at the rate of 20 basis points per annum (calculatedon a 360 day basis), payable quarterly in arrears by the 20th day followingeach calendar quarter. Such fee shall be payable for each calendar quarter (orportion thereof) occurring during the original or any extended term of theCommitment.

 

**SECTION8.   ****Commitments Arising FromSpecial Payments.**  Commitments arising as a result of specialpayments described in Section 5 above shall be subject to a commitment fee of25 basis points (0.25%) on an annualized basis, on the average dailycommitment.  Any such fees incurredshall be payable on the last day of the calendar quarter, in arrears, computedon the basis of a year of 360 days for the actual number of days elapsed inwhich such reinstatable commitments were outstanding.

 

**SECTION9.   Security. **Inaddition to any other security that may otherwise be required or provided, theCompany’s obligations under this Supplement are secured by that RestatedMortgage and Security Agreement dated September 15, 1998, from American CrystalSugar Company to St. Paul Bank for Cooperatives (now known as CoBank as aresult of merger), as Collateral Agent.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown above.

 
| **CoBANK, ACB** |                         | **AMERICAN CRYSTAL  SUGAR COMPANY** |
|-----------------|------------------------------|-------------------------------------|
|            |                         |                                |   |   |
|            |                         |                                |   |   |
| By:             |  /s/ Michael Tousignant |                                | By: |  /s/ Sam Wai |
|            |                         |                                |   |   |
| Title:          |  Vice President         |                                | Title: |  Treasurer |

 

10

----

 

**REVOLVING TERM LOANSUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated March31, 2000 (the “MLA”), is entered into as of November 6, 2002, between **CoBANK, ACB**(“CoBank”) and**AMERICANCRYSTAL SUGAR COMPANY**, Moorhead, Minnesota (the “Company”), andamends and restates the Supplement dated March 27, 2002 and numberedZ269T02BNP.

 

**SECTION1.   The Revolving Term Loan Commitment. **On the terms andconditions set forth in the MLA and this Supplement, CoBank agrees to makeloans to the Company during the period set forth below in an aggregateprincipal amount not to exceed $5,012,277.55 at any one time outstanding (the“Commitment”).  Within the limits of theCommitment, the Company may borrow, repay and reborrow, provided, however, noadvances shall be made on this Term Loan, until Term Loan No. Z269T01 (as itmay be amended), has been fully advanced.

 

**SECTION2.   Purpose and Transfer. **The purpose of the Commitment is to finance theoperating needs of the Company.

 

**SECTION3.   Term. **Theterm of the Commitment shall be from the date hereof, up to but not includingMarch 30, 2003, or such later date as CoBank may, in its sole discretion,authorize in writing, *provided, however*,that if the payment due on or before December 31, 2002 (as described in Section5 below) is paid as agreed, and the Company is not otherwise in default, thenthe term of the Commitment shall be extended up to, but not including, July,31, 2003.

 

**SECTION4.   Interest.** The Company agrees topay interest on the unpaid balance of the loans in accordance with one or moreof the following interest rate options, as selected by the Company:

 

**(A)****                               VariableRate Option.**  At a rate per annumequal at all times to the rate of interest established by CoBank from time totime as its National Variable Rate, which Rate is intended by CoBank to be areference rate and not its lowest rate. The National Variable Rate will changeon the date established by CoBank as the effective date of any change thereinand CoBank agrees to notify the Company promptly after any such change.

 

**(B)****                               QuotedRate Option.**   At a fixed rate perannum to be quoted by CoBank in its sole discretion in each instance.  Under this option, rates may be fixed onsuch balances and for such periods as may be agreeable to CoBank in its solediscretion in each instance.

 

**(C)****                               LIBOROption.**  At a fixed rate equal to“LIBOR” (as hereinafter defined) plus the Applicable LIBOR Margin per annum (asdescribed in terms of basis points (“bps”) in the chart immediately set forthbelow).  Under this option:  (a) rates may be fixed for “InterestPeriods” (as hereinafter defined) of 1, 2, 3, or 6 months, or 1 year, asselected by the Company; (b) the minimum amount that may be fixed at any onetime shall be $2,000,000.00; and (c) rates may only be fixed on a “BankingDay” (as hereinafter defined) or, at the option of the Company, on2 Banking Days’ prior notice.  Forpurposes hereof: (i) ”LIBOR” shall mean the rate indicated by Telerate(rounded upward to the nearest thousandth) as having been quoted by the BritishBankers Association at 11:00 a.m. London time on the date the Company elects tofix a rate under this option for the offering of U.S. dollar deposits in theLondon interbank market for the Interest Period designated by the Company; (ii)“Banking Day” shall mean a day on which CoBank is open for business, dealingsin 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 electsto fix a rate under this option (or, at the option of the Company, two BankingDays later) and ending on the numerically corresponding day in the nextcalendar month or the month that is 2, 3 or 6 months or 1 year 

 

11

----

 

thereafter, as the case may be; provided, however, that:  (x) in the event such ending day is not aBanking Day, such period shall be extended to the next Banking Day unless suchnext Banking Day falls in the next calendar month, in which case it shall endon the preceding Banking Day; and (y) if there is no numerically correspondingday in the month, then such period shall end on the last Banking Day in therelevant month.

 

**LIBORMARGINS**

 
| **FIXED RATE   PRODUCT** |   | **INDEX** |   | **SPREAD  OVER INDEX IN BASIS  POINTS (Applicable LIBOR Margin)** |   |
|--------------------------|--------|-----------|--------|-------------------------------------------------------------------|--------|
| One Month                |   | LIBOR     |   | 90bps                                                             |   |
| Two Months               |   | LIBOR     |   | 90bps                                                             |   |
| Three Months             |   | LIBOR     |   | 90bps                                                             |   |
| Six Months               |   | LIBOR     |   | 90bps                                                             |   |
| One Year                 |   | LIBOR     |   | 90bps                                                             |   |

 

**(D)Treasury Option.** At a fixed rate equal to Applicable “Treasury” Margin per annum (asdescribed in terms of basis points (“bps”) in the chart immediately set forthbelow) above the “U.S. Treasury Rate” (as hereinafter defined). Under thisoption, balances of $2,000,000.00 or more may be fixed on or before for periodsranging from two years to the final maturity date of the loan, as selected bythe Company. However, rates may not be fixed in such a manner as to require theCompany to have to repay any fixed rate balance prior to the last day of itsfixed rate period in order to pay any installment of principal. For purposeshereof, 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 fixedrate period selected by the Company, as calculated from the bid price indicatedby Telerate (page 5) at the time the rate is fixed.  If, however, no instrument is indicated for the maturityselected, then the rate shall be interpolated based on the bid prices quotedfor the next longest and shortest maturities so indicated. In the eventTelerate ceases to provide such quotations or materially changes the form orsubstance of page 5 (as determined by CoBank), then CoBank will notify theCompany and the parties hereto will agree upon a substitute basis for obtainingsuch quotations**.**

 

**TREASURYMARGINS**

 
| **FIXED RATE    PRODUCT**                                            |   | **INDEX**                                                                                |   | **SPREAD OVER INDEX IN BASIS  POINTS (Applicable Treasury Margin)** |   |
|----------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
| Two Years                                                            |   | U.S.$ Constant Maturity  Treasury (“US$CMT”)                                   |   | 125bps                                                              |   |
| Three Years                                                          |   | US$CMT                                                                                   |   | 125bps                                                              |   |
| Four Years                                                           |   | US$CMT                                                                                   |   | 125bps                                                              |   |
| Five Years                                                           |   | US$CMT                                                                                   |   | 125bps                                                              |   |
| Seven Years                                                          |   | US$CMT                                                                                   |   | 140bps                                                              |   |
| Ten Years                                                            |   | US$CMT                                                                                   |   | 140bps                                                              |   |
| Floor (Minimum) Rate (For Two to Ten Year Fixed Rate  Products Only) |   | CoBank’s cost of funds (as reasonably determined by  CoBank in its sole discretion) |   | 105bps                                                              |   |

 

12

----

 

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

 
| **LEVERAGE RATIO (as defined  below)**                                     |   | **INCREASE / DECREASE  TO SPREAD** |   | **CHANGE TO LIBOR and  TREASURY MARGINS  (IN BASIS POINTS)** |   |
|----------------------------------------------------------------------------|--------|------------------------------------|--------|--------------------------------------------------------------|--------|
| A.  Equal to or greater than 1.35:1.00                           |   | Increase                           |   | 20                                                           |   |
| B.  Equal to or greater than 1.20:1.00,  but less than 1.35:1.00 |   | None                               |   |  0                                                      |   |
| C.  Less than 1.20:1.00, but greater than  or equal to 1.00:1.00 |   | Decrease                           |   | 10                                                           |   |
| D.  Less than 1.00:1.00                                          |   | Decrease                           |   | 20                                                           |   |

 

**Leverage Ratio:**The Borrower will maintain a leverage ratio of not more than 1.50:1.0, andattain a leverage ratio of not more than 1.40:1.0 on November 30, 2002.  Leverage ratio is long term debt (excludingcurrent maturities) calculated in accordance with GAAP plus or minus thedifference between actual working capital and minimum net working capital (asdefined in the MLA No. Z269, Section 10), divided by total members investmentsplus the estimated unit retains.

 

The spread shall be adjusted quarterly on thelatter of either: (a) five business days after the Bank’s receipt of theBorrower’s certification of compliance with the leverage ratio, or (b) 30 daysafter the end of each calendar quarter.

 

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

 

13

----

 

**SECTION5.   Promissory Note.**The Companypromises to repay the loans that are outstanding in annual principal paymentsof $2,000,000.00 each due on or before December 31st of each yearcommencing in 2002.  All outstandingbalances shall be repaid by December 31, 2009. If any installment due date isnot a day on which CoBank is open for business, then such payment shall be madeon the next day on which CoBank is open for business.  In addition to the above, the Company promises to pay interest onthe unpaid principal balance hereof at the times and in accordance with theprovisions set forth in Section 4 hereof. This note replaces and supersedes,but does not constitute payment of the indebtedness evidenced by, thepromissory note set forth in the Supplement being amended and restated hereby.

 

**SECTION6.   Prepayment. **Theloans may be prepaid in whole or in part on one CoBank business day’s priorwritten notice.  During the term of theCommitment, prepayments shall be applied to such balances, fixed or variable,as the Company shall specify.  After theexpiration of the term of the Commitment, prepayments shall, unless CoBankotherwise agrees, be applied to principal installments in the inverse order oftheir maturity and to such balances, fixed or variable, as CoBank shallspecify.

 

**SECTION7.   Commitment Fee.**  In consideration of the Commitment, theCompany agrees to pay to CoBank a commitment fee on the average daily unusedportion of the Commitment at the rate of 20 basis points per annum (calculatedon a 360 day basis), payable quarterly in arrears by the 20th day followingeach calendar quarter. Such fee shall be payable for each calendar quarter (orportion thereof) occurring during the original or any extended term of theCommitment.

 

**SECTION8.   Letters of Credit**.  In addition to loans, and if agreeable toCoBank in its sole discretion in each instance, the Company may utilize theCommitment to open irrevocable letters of credit for its account.  Each letter of credit shall reduce theamount available under the Commitment by the maximum amount capable of beingdrawn thereunder.  The rights andobligations of the parties with respect to each letter of credit will begoverned by the Reimbursement Agreement attached hereto as Exhibit A (whichrights and obligations shall be in addition to the rights and obligations ofthe parties hereunder and under the MLA). The fee for issuing each letter ofcredit shall be determined at the time of application.

 

**SECTION9.   Security. **Inaddition to any other security that may otherwise be required or provided, theCompany’s obligations under this Supplement are secured by that RestatedMortgage and Security Agreement dated September 15, 1998, from American CrystalSugar Company to St. Paul Bank for Cooperatives (now known as CoBank as aresult of merger), as Collateral Agent.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown above.

 
| **CoBANK, ACB** |                         | **AMERICAN CRYSTAL  SUGAR COMPANY** |
|-----------------|------------------------------|-------------------------------------|
|            |                         |                                |
|            |                         |                                |   |   |
| By:             |  /s/ Michael Tousignant |                                | By: |  /s/ Sam Wai |
|            |                         |                                |   |   |
| Title:          |  Vice President         |                                | Title: |  Treasurer |

 

14

----

 

**ExhibitA**

 

**LETTEROF CREDIT REIMBURSEMENT AGREEMENT**

 

In consideration of CoBank issuing one or more letters of credit (eacha “Credit”) for the Company’s account under the Supplement to which thisagreement is attached (the “Supplement”), the Company agrees as follows:

 

1.                                       TheCompany will pay to CoBank in United States currency and in immediatelyavailable funds the amount of each draft drawn or instrument paid under aCredit.  In addition, the Company agreesto pay to CoBank such fee for issuing each Credit as CoBank shall prescribe, aswell as all customary charges associated with the issuance of a Credit.  If a Credit is payable in a foreign currency,the Company will pay to CoBank an amount in United States currency equivalentto CoBank’s selling rate of exchange for that currency.  In addition to the amounts set forth above,the Company shall pay to CoBank such amounts as CoBank shall determine arenecessary to compensate CoBank for any cost attributable to CoBank issuing orhaving outstanding any Credit resulting from the application of any law orregulation concerning any reserve, assessment, capital adequacy or similarrequirement relating to letters of credit, reimbursement agreements withrespect thereto, or to similar liabilities or assets of banks, whether existingat the time of the issuance of a Credit or adopted thereafter.  Each payment hereunder shall be payable ondemand at the place and manner set forth in the Master Loan Agreement betweenthe parties (the “MLA”) and with interest from the date of demand to the datepaid at CoBank’s National Variable Rate. The Company hereby authorizes CoBank to create a loan under theSupplement bearing interest at the variable rate set forth therein for any sumsowing hereunder.

 

2.                                       NeitherCoBank nor any of its correspondents shall in any way be responsible for theperformance by any beneficiary of its obligations to the Company nor for theform, sufficiency, correctness, genuineness, authority of the person signing,falsification or legal effect of any documents called for under a Credit ifsuch documents on their face appear to be in order.  In addition, CoBank and its correspondents may receive and acceptor pay as complying with the terms of a Credit any drafts, documents, orcertificates, otherwise in order, signed by any person purporting to be anadministrator, executor, trustee in bankruptcy, debtor in possession, assigneefor the benefit of creditors, liquidator, receiver, or other legalrepresentative of the party authorized under a Credit to draw or issue suchinstruments or other documents.

 

3.                                       Inthe event the Credit is a commercial Credit, then, in addition to the otherprovisions hereof, the Company:  (i)agrees to obtain or cause to be in existence insurance on any merchandisedescribed in the Credit against fire and other usual risks and against anyadditional risks which CoBank may request; and (ii) authorizes and empowersCoBank to collect the amount due under any such insurance and apply the sameagainst any of the Company’s obligations to CoBank arising under the Credit or otherwise.  In addition, whether the Credit is acommercial or a standby Credit, the Company represents and warrants that anyrequired import, export or foreign exchange licenses or other governmentalapprovals relevant to the Credit and the merchandise described therein havebeen obtained and that the transactions contemplated thereby are not prohibitedunder any  law, rule, regulation, orderor the like, including the Foreign Assets Control Regulations of theU.S. Department of Treasury.

 

4.                                       Alldirections and correspondence relating to a Credit are to be sent at theCompany’s risk and CoBank does not assume any responsibility for anyinaccuracy, interruption, error, or delay in transmission or delivery by post,telegraph, cable or other electronic means, or for any inaccuracy oftranslation.

 

5.                                       CoBankshall not be responsible for any act, error, neglect, default, omission,insolvency or failure in business of any of its correspondents, and any actiontaken or omitted by CoBank or its correspondents under or in connection with aCredit shall, if taken or omitted with honesty in fact, be binding on theCompany and shall not put CoBank or its correspondents under any resultingliability to the Company.  In no eventshall  CoBank be liable for special,consequential or punitive damages.

 

6.                                       TheCompany will indemnify CoBank against and hold it harmless from all loss, damage,cost, and expense (including attorneys’ fees and expenses) arising out of (i)its issuance of or any other action taken by CoBank in connection with aCredit, other than loss or damage resulting from its gross negligence orwillful misconduct, and (ii) claims or legal proceedings incident to thecollection of amounts owed by the Company hereunder, or the enforcement ofCoBank’s rights or the rights of others under a Credit, including, withoutlimitation, legal proceedings relating to any court order, injunction or otherprocess or decree restraining or seeking to restrain CoBank from paying anyamount under a Credit.

 

15

----

 

7.                                       Inthe event:  (i) the Company fails tomake any payment owing hereunder when the same shall become due and payable;(ii) any covenant or representation or warranty set forth herein is breached;(iii) the “Commitment” (as defined in the Supplement) expires prior to theexpiration date of any Credit; or (iv) an “Event of Default” (as defined in theMLA) occurs under the MLA, then, in any such event, the amount of each Credit,together with any amounts payable by us in connection therewith, shall, atCoBank’s option, become immediately due and payable. To the extent that anyamount paid by the Company pursuant to this Section 7 shall not then be dueunder the terms of a Credit, such payment shall serve as security for theCompany’s obligation to indemnify CoBank for any amounts subsequently disbursedby CoBank pursuant to a Credit.  Furthermore,upon the institution of any legal proceeding described in Section 6(ii) hereof,the Company will, on demand, assign and deliver to CoBank, as security for theCompany’s obligation to indemnify CoBank, cash collateral in an amountsatisfactory to CoBank.

 

8.                                       CoBankshall be fully protected in, and shall incur no liability to the Company foracting upon, any oral, telephonic, facsimile, cable or other electronicinstructions which CoBank in good faith believes to have been given by anyauthorized person.  CoBank may, at itsoption, use any means of verifying any instructions received by it and mayalso, at its option, refuse to act on any oral, telephonic, facsimile, cable orother electronic instructions or any part thereof, without incurring any responsibilityfor any loss, liability or expenses arising out of such refusal.

 

9.                                       TheUniform Customs and Practice as most recently published by the InternationalChamber of Commerce (hereafter called the “UCP”) shall in all respects bedeemed a part hereof as fully as if incorporated herein, and shall apply to theCredits.  To the extent the UCP isinconsistent with the governing law set forth in the MLA, the UCP shallcontrol.

 

16

----

 

**AMENDED AND RESTATEDSTATUSED REVOLVING CREDIT SUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated March31, 2000 (the “MLA”), is entered into as of November 6, 2002, between **CoBANK, ACB**(“CoBank”) and**AMERICANCRYSTAL SUGAR COMPANY**, Moorhead, Minnesota (the “Company”), andamends and restates the Supplement dated March 27, 2002 and numbered Z269S01C.

 

**SECTION1.   The Revolving Credit Facility. **On the terms and conditions set forth inthe MLA and this Supplement, CoBank agrees to make loans to the Company duringthe period set forth below in an aggregate principal amount not to exceed, atany one time outstanding, the lesser of the “Borrowing Base” (as calculatedpursuant to the Borrowing Base Certificate, the form of which is attachedhereto as Exhibit A) or $265,000,000.00 (the “Commitment”). Within the limitsof the Commitment, but subject to the Borrowing Base, the Company may borrow,repay and reborrow.

 

**SECTION2.   **Purpose**.** The purpose of the Commitment is to finance the Company’s generalcorporate purposes, fund working capital requirements, support the Company’scommercial paper program, and issue short-term commercial and standby lettersof credit.  In addition, and to theextent allowed under the Amendment and Waiver to the Master Loan Agreementnumber Z269C dated October 7, 2002, the purpose of the Commitment is to (a)finance the asset purchases under the Asset Purchase Agreement dated October 7,2002, by and among Imperial Sugar Company, Holly Sugar Company, and SidneySugars Incorporated; (b) fund an equity investment in Sidney SugarsIncorporated in an amount not to exceed $7,500,000.00; (c) fund a term loan toSidney Sugars Incorporated in an amount not to exceed $7,500,000.00; (d)provide an intercompany line of credit loan to Sidney Sugars Incorporated in anamount not to exceed $50,000,000.00; (e) fund a secured loan to Western SugarCooperative in an amount not to exceed $1,500,000.00; and (f) provide on behalfof Western Sugar Cooperative a unsecured letter of credit in an amount not toexceed $6,800,000.00.

 

**SECTION3.   Term. **Theterm of the Commitment shall be from the date hereof, up to and including July31, 2003, or such later date as CoBank may, in its sole discretion, authorizein writing.

 

**SECTION4.   Interest. **TheCompany agrees to pay interest on the unpaid balance of the loans in accordancewith one or more of the following interest rate options, as selected by theCompany:

 

**(A)****                               BaseRate Option.**  At a rate per annum atall times equal to the Base Rate.  Forthe purposes hereof, Base Rate means that rate in effect from day to daydefined as the “prime rate” as published from time to time in the EasternEdition of The Wall Street Journal as the average prime lending rate forseventy-five percent (75%) of the United States; thirty (30) largest commercialbanks, or if The Wall Street Journal shall cease publication or ceasepublishing the “prime rate” on a regular basis, such other regularly publishedaverage prime rate applicable to such commercial banks as is acceptable to theLender in its reasonable discretion. Loans for which the Base Rate option is selected are referred to hereinas “Base Rate Loans”.

 

Base Rate Loans shall be:  (a)in minimum amounts of $5,000,000 and incremental multiples of $1,000,000; and(b) made available on any Banking Day. Interest on Base Rate Loans shall be calculated 

 

17

----

 

on the actual number of days each loan is outstanding on the basis of ayear consisting of 360 days and shall be payable monthly in arrears on thetwentieth Banking Day of the following month.

 

**(B)****                              ****Quoted Rate Option.**  At a fixed rate per annum at all times equalto the Quoted Rate.  For the purposeshereof, Quoted Rate means a fixed rate of interest to apply to a loan (referredto herein as a “Quoted Rate Loan”) for a specified period of time not to exceedthirty (30) days quoted by CoBank in its sole discretion.

 

Quoted Rate Loans shall be (i) inminimum amounts of $1,000,000 and incremental multiples of $1,000,000; and (ii)made available on any Banking Day.  TheQuoted Rate may not necessarily be the lowest rate at which CoBank funds atthat time.

 

Interest on Quoted Rate Loans shallbe calculated on the actual number of days each loan is outstanding on thebasis of a year consisting of 360 days and shall be payable monthly in arrearson the twentieth Banking Day of the following month.

 

**(C)****                              ****LIBOR Option.**  At a fixed rate equal to LIBOR plus theApplicable Margin (as defined below). For the purposes hereof, LIBOR means the rate for deposits in U.S.Dollars, with maturities comparable to the selected LIBOR Interest Period, thatappears on the display designed as page “3750” of the Telerate Service (or suchother page as may replace the 3750 page of that service of if the TelerateService shall cease displaying such rates, such other service or services asmay be nominated by the British Bankers’ Association for the purpose ofdisplaying London Interbank Offered Rates for U.S. Dollar deposits), determinedas of 11:00 a.m. London time two Banking Days prior to the commencement of suchLIBOR Interest Period.  “LIBOR InterestPeriod” means a period of one, two, three or six months.  LIBOR pricing will be adjusted for RegulationD reserve requirements.  The ApplicableMargin is 100 basis points.  Loans forwhich the LIBOR option is selected are referred to herein as “LIBOR Loans”.

 

LIBOR Loans shall be:  (a) in a minimum amount of $5,000,000 andincremental multiples of $1,000,000; (b) made available on three Banking Days prior notice; and (c) be for periodsof one, two, three, or six months. Interest on LIBOR Loans shall be calculated on the actual number of dayseach loan is outstanding on the basis of a year consisting of 360 days andshall be payable in arrears upon maturity of the applicable LIBOR InterestPeriod, but no less frequently than quarterly. The LIBOR option shall be subject to the following limitations:

 

(1)                                  Notwithstandinganything herein to the contrary, if, on or prior to the determination of theLIBOR rate for any LIBOR Interest Period, CoBank determines (whichdetermination shall be conclusive) that quotations of interest rates inaccordance with the definition of LIBOR rate are not being provided in therelevant amounts or for the relevant maturities for purposes of determining ratesof interest for LIBOR rate advances as provided in this Supplement, then CoBankshall give the Company prompt notice thereof, and so long as such conditionremains in effect, CoBank shall be under no obligation to make LIBOR rateloans, convert Base Rate loans into LIBOR rate loans, or continue LIBOR rateloans, and the Company shall, on the last day(s) of the then current applicableLIBOR Interest Period(s) for the outstanding LIBOR rate loans, either prepaysuch LIBOR rate loans or such LIBOR rate loans shall automatically be convertedinto a Base Rate loan in accordance with this Section 4.

 

18

----

 

(2)                                  Ifany law, treaty, rule, regulation or determination of a court or governmentalauthority or any change therein or in the interpretation or application thereofsubsequent to the date hereof (each, a “Change in Law”) shall make it unlawfulfor CoBank to (a) advance any LIBOR rate loan or (b) maintain all or anyportion of a LIBOR rate loan, then CoBank shall promptly notify the Companythereof.  In the former event, anyobligation of CoBank to make available any future LIBOR rate loan shallimmediately be canceled (and, in lieu thereof shall be made as a Base Rate loanor Quoted Rate loan at the option of the Company), and in the latter event, anysuch unlawful LIBOR rate loan or portions thereof then outstanding shall beconverted, at the option of the Company, to either a Base Rate loan or a QuotedRate loan; provided, however, that if any such Change in Law shall permit theLIBOR rate to remain in effect until the expiration of the LIBOR rate periodapplicable to any such unlawful LIBOR rate loan, then such LIBOR rate loanshall continue in effect until the expiration of such LIBOR rate period.  Upon the occurrence of any of the foregoingevents on account of any Change in Law, the Company shall pay to CoBankimmediately upon demand such amounts as may be necessary to compensate CoBankfor any fees, charges, or other costs incurred or payable by CoBank as a resultthereof and which are attributable to any LIBOR rate loans made available tothe Company hereunder.

 

(3)                                  IfCoBank shall determine that, after the date hereof, the adoption of anyapplicable Law, rule or regulation regarding capital adequacy, or any changetherein, or any change in the interpretation or administration thereof by anygovernmental authority, central bank or comparable agency charged with theinterpretation or administration thereof, or any request or directive regardingcapital adequacy (whether or not having the force of law) of any suchgovernmental authority, central bank or comparable agency, has or would havethe effect of reducing the rate of return on capital of CoBank as a consequenceof CoBank’s obligations hereunder to a level below that which CoBank could haveachieved but for such adoption, change, request or directive (taking intoconsideration its policies with respect to capital adequacy existing on thedate of this Supplement) by an amount deemed by CoBank to be material, thenfrom time to time, within fifteen (15) days after demand by CoBank, the Companyshall pay to CoBank such additional amount or amounts as will compensate CoBankfor such reduction.  CoBank agrees totake 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 soleopinion, CoBank would suffer an economic loss or any negative legal orregulatory consequences as a result thereof. If CoBank is to require the Company to make payments under this Sectionthen CoBank must make a demand on the Company to make such payment withinninety (90) days of the later of (1) the date on which such capital costs areactually incurred by CoBank, or (2) the date on which CoBank knows, or shouldhave known, that such capital costs have been incurred by CoBank.

 

The Company shall select the applicable rate option at the time itrequests a loan hereunder and may, subject to the limitations set forth above,elect to convert balances bearing interest at the variable rate option to oneof the fixed rate options. Upon the expiration of any fixed rate period,interest shall automatically accrue at the Base Rate unless the amount fixed isrepaid or fixed for an additional period in accordance with the terms hereof.Notwithstanding the foregoing, unless CoBank otherwise consents in its solediscretion in each instance, rates may not be fixed for periods expiring afterthe maturity date of the loan. In the event CoBank so consents and theCommitment is not renewed, then each balance so fixed shall be due and payableon the last day of its fixed rate period, and the promissory note set forthbelow shall be deemed amended accordingly. All elections provided for hereinshall be made telephonically or in writing and must be received by 12:00 noonCompany’s local time.  As used in thisSection 4, “Banking Day” means a day on which CoBank is open for business,dealings in U.S. dollar deposits are being carried out in the London interbankmarket, and banks are open for business in New York City and London, England.

 

**SECTION5.   Promissory Note.**The Companypromises to repay the unpaid principal balance of the loans on the first CoBankbusiness day following the last day of the term of the Commitment.  In addition to the above, the Companypromises to pay interest on the unpaid principal balance of the loans at thetimes and in accordance with the provisions set forth in Section 4 hereof.  This note replaces and 

 

19

----

 

supersedes, but does not constitute payment of the indebtednessevidenced by, the promissory note set forth in the Supplement being amended andrestated hereby.

 

**SECTION6.   Borrowing Base Certificate, Etc. **The Company agrees to furnish aBorrowing Base Certificate to CoBank at such times or intervals as CoBank mayfrom time to time request.  Untilreceipt of such a request, the Company agrees to furnish a Borrowing BaseCertificate to CoBank within 30 days after each month end calculating the BorrowingBase as of the last day of the month for which the Certificate is beingfurnished.  However, if no balance isoutstanding hereunder on the last day of such period, no Report need befurnished.  Regardless of the frequencyof the reporting, if at any time the amount outstanding under the Commitmentexceeds the Borrowing Base, the Company shall immediately notify CoBank andrepay so much of the loans as is necessary to reduce the amount outstandingunder the Commitment to the limits of the Borrowing Base.

 

**SECTION7.   Commitment Fee.**  In consideration of the Commitment, theCompany agrees to pay to CoBank a commitment fee on the average daily unusedportion of the Commitment at the rate of 20 basis points per annum (calculatedon a 360 day basis), payable quarterly in arrears by the 20th dayfollowing each calendar quarter. The unused amount of the Commitment will bethe difference between the Commitment and the sum of the outstanding principalamount of loans under the Commitment and the undrawn face amount of alloutstanding Letters of Credit.

 

**SECTION8.   Utilization Fee. **Forany day on which the outstanding principal amount of loans shall be greaterthan 25% of the Commitment (but no greater than 50% of the Commitment), theCompany 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 suchday.  For any day on which theoutstanding principal amount of loans shall be greater than 50% of theCommitment, 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 outstandingon such day.  Accrued and unpaidutilization fees, if any, shall be payable quarterly in arrears by the 20thday following each calendar quarter.

 

**SECTION9.   Letters of Credit**.  In addition to loans, and if agreeable toCoBank in its sole discretion in each instance, the Company may utilize theCommitment to open irrevocable letters of credit for its account.  Each letter of credit shall reduce theamount available under the Commitment by the maximum amount capable of beingdrawn thereunder.  The rights andobligations of the parties with respect to each letter of credit will begoverned by the Reimbursement Agreement attached hereto as Exhibit B (whichrights and obligations shall be in addition to the rights and obligations ofthe parties hereunder and under the MLA). This Commitment shall expire on July 31, 2003. The fee for issuing eachletter of credit shall be 100 basis points of the face amount of each letter ofcredit, along with an issuance fee to CoBank, for its own account, equal to thegreater of (a) 1/8% of the face amount of the letter of credit, or (b) $2,000.The Company promises to repay the outstanding balance on the Commitment in fullon demand, or if no demand is made, then any time on or before the Commitmentexpiration date of July 31, 2003**.**

 

**SECTION10.   Amendment Fee. **Inconsideration of the amendment, the Company agrees to pay to CoBank on theexecution hereof, a fee in the amount of $135,000.00. (.075% of commitmentprior to increase, $180,000,000.00)

 

**SECTION11.   Loan Origination Fee. **In consideration of the Commitment, the Companyagrees to pay to CoBank on the execution hereof, a loan origination fee in theamount of $65,000.00. (0.10% of the Commitment increase amount $65,000,000.00).

 

20

----

 

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

 
| **CoBANK, ACB** |                         | **AMERICAN CRYSTAL  SUGAR COMPANY** |
|-----------------|------------------------------|-------------------------------------|
|            |                         |                                |   |   |
| By:             |  /s/ Michael Tousignant |                                | By: |  /s/ Sam Wai |
|            |                         |                                |   |   |
| Title:          |  Vice President         |                                | Title: |  Treasurer |

 

 

**EXHIBIT “A”**

** **

**[Formof Borrowing Base]**

**American Crystal Sugar Company**

Monthly Borrowing Base

For the monthended           

 
| Trade Accounts Receivables |   | $ | @ 80% | $ | (a) |
|----------------------------|--------|---|-------|---|-----|

 

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

 
| Inventory |   | $ | (b) |   |   |
|-----------|--------|---|-----|--------|--------|

 

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

 
| Crop Payments due Non-members and members |   | $ | (c) |   |   |
|-------------------------------------------|--------|---|-----|--------|--------|

 
| Net Inventory Value (b-c) |   | $ | @ 75% |   | (d) |
|---------------------------|--------|---|-------|--------|-----|

 
| Borrowing Base (a+d) |   | $ |   | $ |   |
|----------------------|--------|---|--------|---|--------|

 
| Commercial Paper |   | $ |   | $ | (e) |
|------------------|--------|---|--------|---|-----|

 

 

21

----

 
| Seasonal Loan |   |   |   |   | (f) |
|---------------|--------|--------|--------|--------|-----|

 
| Commodity Credit Corp. loans |   |   |   |   | (g) |
|------------------------------|--------|--------|--------|--------|-----|

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

 

 

**ExhibitB**

 

**LETTEROF CREDIT REIMBURSEMENT AGREEMENT**

 

 

Inconsideration of CoBank issuing one or more letters of credit (each a “Credit”)for the Company’s account under the Supplement to which this agreement isattached (the “Supplement”), the Company agrees as follows:

 

1.               The Company willpay to CoBank in United States currency and in immediately available funds theamount of each draft drawn or instrument paid under a Credit.  In addition, the Company agrees to pay toCoBank such fee for issuing each Credit as prescribed in Section 9 ofSupplement number Z269S01C, as well as all customary charges associated withthe issuance of a Credit.  If a Creditis payable in a foreign currency, the Company will pay to CoBank an amount inUnited States currency equivalent to CoBank’s selling rate of exchange for thatcurrency.  In addition to the amountsset forth above, the Company shall pay to CoBank such amounts as CoBank shalldetermine are necessary to compensate CoBank for any cost attributable toCoBank issuing or having outstanding any Credit resulting from the applicationof any law or regulation concerning any reserve, assessment, capital adequacyor similar requirement relating to letters of credit, reimbursement agreementswith respect thereto, or to similar liabilities or assets of banks, whetherexisting at the time of the issuance of a Credit or adopted thereafter.  Each payment hereunder shall be payable ondemand at the place and manner set forth in the Master Loan Agreement betweenthe parties (the “MLA”) and with interest from the date of demand to the datepaid at CoBank’s National Variable Rate. The Company hereby authorizes CoBank to create a loan under theSupplement bearing interest at the variable rate set forth therein for any sumsowing hereunder.

 

2.               Neither CoBank norany of its correspondents shall in any way be responsible for the performanceby any beneficiary of its obligations to the Company nor for the form,sufficiency, correctness, genuineness, authority of the person signing,falsification or legal effect of any documents called for under a Credit ifsuch documents on their face appear to be in order.  In addition, CoBank and its correspondents may receive and acceptor pay as complying with the terms of a Credit any drafts, documents, or certificates,otherwise in order, signed by any person purporting to be an administrator,executor, trustee in bankruptcy, debtor in possession, assignee for the benefitof creditors, liquidator, receiver, or other legal representative of the partyauthorized under a Credit to draw or issue such instruments or other documents.

 

3.               In the event theCredit is a commercial Credit, then, in addition to the other provisionshereof, the Company:  (i) agrees toobtain or cause to be in existence insurance on any merchandise described inthe Credit against fire and other usual risks and against any additional riskswhich CoBank may request; and (ii) authorizes and empowers CoBank to collectthe amount due under any such insurance and apply the same against any of the Company’sobligations to CoBank arising under the Credit or otherwise.  In addition, whether the Credit is acommercial or a standby Credit, the Company represents and warrants that anyrequired import, export or foreign exchange licenses or other governmentalapprovals relevant to the Credit and the merchandise described therein havebeen obtained and that the transactions contemplated thereby are not prohibitedunder any  law, rule, regulation, orderor the like, including the Foreign Assets Control Regulations of theU.S. Department of Treasury.

 

4.               All directions andcorrespondence relating to a Credit are to be sent at the Company’s risk andCoBank does not assume any responsibility for any inaccuracy, interruption,error, or delay in transmission or delivery by post, telegraph, cable or otherelectronic means, or for any inaccuracy of translation.

 

5.               CoBank shall not beresponsible for any act, error, neglect, default, omission, insolvency orfailure in business of any of its correspondents, and any action taken oromitted by CoBank or its correspondents under or in connection with a Creditshall, if taken or omitted with honesty in fact, be binding on the Company andshall not put CoBank or its correspondents under any resulting liability to theCompany.  In no event shall  CoBank be liable for special, consequentialor punitive damages.

 

22

----

 

6.               The Company willindemnify CoBank against and hold it harmless from all loss, damage, cost, andexpense (including attorneys’ fees and expenses) arising out of (i) itsissuance of or any other action taken by CoBank in connection with a Credit,other than loss or damage resulting from its gross negligence or willfulmisconduct, and (ii) claims or legal proceedings incident to the collection ofamounts owed by the Company hereunder, or the enforcement of CoBank’s rights orthe rights of others under a Credit, including, without limitation, legalproceedings relating to any court order, injunction or other process or decreerestraining or seeking to restrain CoBank from paying any amount under aCredit.

 

7.               In the event:  (i) the Company fails to make any paymentowing hereunder when the same shall become due and payable; (ii) any covenantor representation or warranty set forth herein is breached; (iii) the“Commitment” (as defined in the Supplement) expires prior to the expirationdate of any Credit; or (iv) an “Event of Default” (as defined in the MLA)occurs under the MLA, then, in any such event, the amount of each Credit,together with any amounts payable by us in connection therewith, shall, atCoBank’s option, become immediately due and payable. To the extent that anyamount paid by the Company pursuant to this Section 7 shall not then be dueunder the terms of a Credit, such payment shall serve as security for theCompany’s obligation to indemnify CoBank for any amounts subsequently disbursedby CoBank pursuant to a Credit. Furthermore, upon the institution of any legal proceeding described inSection 6(ii) hereof, the Company will, on demand, assign and deliver toCoBank, as security for the Company’s obligation to indemnify CoBank, cashcollateral in an amount satisfactory to CoBank.

 

8.               CoBank shall befully protected in, and shall incur no liability to the Company for actingupon, any oral, telephonic, facsimile, cable or other electronic instructionswhich CoBank in good faith believes to have been given by any authorizedperson.  CoBank may, at its option, useany means of verifying any instructions received by it and may also, at itsoption, refuse to act on any oral, telephonic, facsimile, cable or otherelectronic instructions or any part thereof, without incurring anyresponsibility for any loss, liability or expenses arising out of such refusal.

 

9.               The Uniform Customsand Practice as most recently published by the International Chamber ofCommerce (hereafter called the “UCP”) shall in all respects be deemed a parthereof as fully as if incorporated herein, and shall apply to the Credits.  To the extent the UCP is inconsistent withthe governing law set forth in the MLA, the UCP shall control.

 

23

----