**Exhibit10.32**

 

Loan No. Z269S02

 

**STATUSED****REVOLVINGCREDIT SUPPLEMENT**

 

**THIS SUPPLEMENT** tothe Amended and Restated Master Loan Agreement dated July 21, 2003 (the“MLA”), is entered into as of November 7, 2003, between **CoBANK, ACB**(“CoBank”) and**AMERICANCRYSTAL SUGAR COMPANY, Moorhead,Minnesota** (the “Company.

 

**SECTION 1.****                           **Onthe terms and conditions set forth in the MLA and this Supplement, CoBankagrees to make loans to the Company during the period set forth below in anaggregate principal amount not to exceed, at any one time outstanding, thelesser of the “Borrowing Base” (as calculated pursuant to the Borrowing BaseCertificate, the form of this is attached hereto as Exhibit A) or the sum of$45,000,000.00 (the “S02 Commitment”) plus the commitment under the SupplementZ269S01F (the “S01 Commitment”).  Within the limits of the S02 Commitment,but subject to the combined limit of the S02 Commitment and the S01 Commitmentand the limit of the Borrowing Base, the Company may borrow, repay and reborrow.

 

**SECTION 2.****                           ****Purpose.** The purpose ofthe Commitment is to finance the Company’s general corporate purposes and fundworking capital requirements.

 

**SECTION 3.****                            Term. **The term of the Commitment shall be fromthe date hereof, up to and including May 15, 2004, or such later date asCoBank may, in its sole discretion, authorize in writing.

 

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

 

**(A)****                              ****Base Rate Option.**  At a rate perannum at all times equal to the Base Rate. For the purposes hereof, Base Rate means that rate in effect from day today defined 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 Loansshall be:  (a) in minimum amounts of$5,000,000 and incremental multiples of $1,000,000; and (b) made available onany Banking Day.

 

**(B)****                              ****Quoted Rate. **At a fixed rate per annum to bequoted 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, provided that: (1) the maximum fixed period shall be 1 day; and (2) the minimum amountthat may be fixed each time shall be $5,000,000.00.

 

**(C)****                              ****LIBOR Option.**  At a fixedrate equal to “LIBOR” (as hereinafter defined) plus 100 basis points perannum.  Under this option:  (a) rates may be fixed for “InterestPeriods” (as hereinafter defined) of 1, 2, or 3 months, as selected by the Company; (b) the minimum amount that maybe fixed at any one time shall be $5,000,000.00; and (c) rates may only befixed on a “Banking Day” (as hereinafter defined) or, at the option of theCompany, on 3 Banking Days’ prior notice. For purposes hereof: (i) ”LIBOR” shall mean the rate (roundedupward to the nearest sixteenth and adjusted for reserves required on“Eurocurrency Liabilities” (as hereinafter defined) for banks subject to “FRBRegulation D” (as hereinafter defined) or required by any other federal law orregulation) quoted by the British Bankers Association (the “BBA”) at 11:00 a.m.London time 2 Banking Days before the commencement of the

 

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Interest Period for the offering ofU.S. dollar deposits in the London interbank market for the Interest Perioddesignated by the Company, as published by Bloomberg or another majorinformation 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. dollardeposits are being carried out in the London interbank market, and banks areopen 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 rateunder this option and ending on the numerically corresponding day in the nextcalendar month or the month that is 1, 2, or 3 months thereafter, as the casemay be; provided, however, that:  (x) inthe event such ending day is not a Banking Day, such period shall be extendedto the next Banking Day unless such next Banking Day falls in the next calendarmonth, in which case it shall end on the preceding Banking Day; and (y) ifthere is no numerically corresponding day in the month, then such period shallend on the last Banking Day in the relevant month; (iv) “EurocurrencyLiabilities” shall have meaning as set forth in FRB Regulation D; and (v) “FRBRegulation D” shall mean Regulation D as promulgated by the Board of Governorsof the Federal Reserve System, 12 CFR Part 204, as amended.

 

(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 determiningrates of interest for LIBOR rate advances as provided in this Supplement, thenCoBank shall give the Company prompt notice thereof, and so long as suchcondition remains in effect, CoBank shall be under no obligation to make LIBORrate loans, convert Base Rate loans into LIBOR rate loans, or continue LIBORrate loans, and the Company shall, on the last day(s) of the then currentapplicable LIBOR Interest Period(s) for the outstanding LIBOR rate loans,either prepay such LIBOR rate loans or such LIBOR rate loans shallautomatically be converted into a Base Rate loan in accordance with thisSection 4

 

(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 shall immediatelybe canceled (and, in lieu thereof shall be made as a Base Rate loan or QuotedRate loan at the option of the Company), and in the latter event, any suchunlawful 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

 

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directiveregarding capital 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 thisSection then CoBank must make a demand on the Company to make such paymentwithin ninety (90) days of the later of (1) the date on which such capitalcosts 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 selectthe applicable rate option at the time it requests a loan hereunder and may,subject to the limitations set forth above, elect to convert balances bearinginterest at the variable rate option to one of the fixed rate options.  Upon the expiration of any fixed rateperiod, interest shall automatically accrue at the variable rate unless theamount fixed is repaid or fixed for an additional period.  Notwithstanding the foregoing, rates may notbe fixed for periods expiring after the maturity date of the loans.  All elections provided for herein shall bemade telephonically or in writing and must be received by 12:00 Noon Company’slocal time; in the case of LIBOR rate loans, all such elections must be made inwriting.  Interest shall be calculatedon the actual number of days each loan is outstanding on the basis of a yearconsisting of 360 days and shall be payable monthly in arrears by the 20thday of the following month or such other day that CoBank shall require in awritten notice to the Company, and at maturity; provided, however, in the eventthe Company elects to fix all or a portion of the indebtedness outstandingunder the LIBOR interest rate option above, interest shall be payable at thematurity of the interest period and if the LIBOR interest rate fix is for aperiod longer than 3 months, interest on that portion of the indebtednessoutstanding shall be payable quarterly in arrears on each anniversary of thedate the LIBOR interest rate fix was made and at maturity.

 

**SECTION 5.****                            PromissoryNote.**The Company promises to repay the unpaid principal balance of theloans on the first CoBank business day following the last day of the term ofthe Commitment.  In addition to theabove, the Company promises to pay interest on the unpaid principal balance ofthe loans at the times and in accordance with the provisions set forth inSection 4 hereof.

 

**SECTION 6.****                            BorrowingBase Certificate, Etc. **The Companyagrees to furnish a Borrowing Base Certificate to CoBank at such times orintervals as CoBank may from time to time request.  Until receipt of such a request, the Company agrees to furnish aBorrowing Base Certificate to CoBank as soon as available after the end of eachquarter, but in no event more than 5 days after the Company’s quarterly filingwith the Securities Exchange Commission, calculating the Borrowing Base as ofthe last day of the quarter for which the Certificate is being furnished.  However, if no balance is outstandinghereunder on the last day of such period, no Report need be furnished.  Regardless of the frequency of thereporting, if

 

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at any time the amountoutstanding under the Commitment exceeds the Borrowing Base, the Company shallimmediately notify CoBank and repay so much of the loans as is necessary toreduce the amount outstanding under the Commitment to the limits of theBorrowing Base.

 

**SECTION 7.****                            CommitmentFee.**  In consideration of theCommitment, the Company agrees to pay to CoBank a commitment fee on the averagedaily 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 20thday 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.  For purposes of calculating the commitmentfee only, the “Commitment” shall mean the dollar amount specified inSection 1 hereof, irrespective of the Borrowing Base.

 

**SECTION 9.  Facility Fee. **Inconsideration of the Commitment, the Company agrees to pay to CoBank onthe execution hereof, a fee in the amount of $33,750.00.

 

 

**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 |   |

 

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**EXHIBIT “A”**

** **

**[Formof 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 allSubsidiaries which:  (1) arise from thesale and delivery of inventory on ordinary trade terms; (2) are evidenced by aninvoice; (3) are net of any credit, trade or other allowance given to theaccount debtor; (4) are not owing by an account debtor who has become insolventor is the subject of any bankruptcy, reorganization, liquidation or likeproceeding; (5) are not subject to any offset or deduction; (6) are not owingby an affiliate of Company; (7) are not owing by an obligor located outside ofthe U.S. unless the receivable is supported by a letter of credit issued by abank acceptable to the CoBank; 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 determinedon the basis of Net Realizable Value, defined as the expected selling price ofan inventory item less expected costs to complete and dispose, as determined inaccordance 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 – Z269S01F             |   |   |   |   | (f)    |
|                                      |   |   |   |   |   |
| Seasonal Loan – Z269S02              |   |   |   |   | (g)    |
|                                      |   |   |   |   |   |
| Commodity Credit Corp. loans              |   |   |   |   | (h)    |
|                                      |   |   |   |   |   |
| Total Short-term Loans (e+f+g+h)          |   | $      |   |   |   |

 

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