## QuickLinks

## 

Exhibit 10.26

---

RESTATED MORTGAGE AND SECURITY AGREEMENT
Mortgage Short-Term Redemption
Dated as of September 15, 1998

From
AMERICAN CRYSTAL SUGAR COMPANY
(the "Company")
To
ST. PAUL BANK FOR COOPERATIVES, as Collateral Agent
(the "Mortgagee")

---

Drafted
by and after recording, return to:

Elizabeth
L. Majers, Esq.
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606

Tax
statements for the real property described herein and situate in the State of Minnesota should be sent to:

American
Crystal Sugar Company
101 North Third Street
Moorhead, MN 56560

THIS RESTATED MORTGAGE AND SECURITY AGREEMENT-MORTGAGE-SHORT-TERM REDEMPTION dated as of September 15, 1998 (the or this"Mortgage'),is from AMERICAN CRYSTAL SUGAR COMPANY, a
Minnesota cooperative corporation (the
"Company"), having its principal office at 101 North 3111 Street, Moorhead, Minnesota 56560, to ST. PAUL BANK FOR COOPERATIVES, for itself, and as
Collateral Agent for each of the holders of the hereinafter described Senior Secured Notes and the bank lenders which are signatories to the Credit Facility (collectively, the
"Banks") (together with its permitted successors and assigns, the "Mortgagee") whose post office address
is375Jackson Street, St. Paul, Minnesota 55101-1849 restating the Original Mortgages (as hereinafter defined).

RECITALS:

A. Pursuant to those separate Note Purchase Agreements, each dated as of September15,1998 (collectively, the
"Note Agreements"), entered into by the Company, with each of the Purchasers listed on Schedule A thereto (the
"Noteholders"), the Noteholders will purchase $12,500,000 7.32% Senior Secured Notes, Series A, Due August 31, 2018, $15,000,000 7.37%
Senior Secured Notes, Series B, Due August 31, 2023 and $22,500,000 7.42% Senior Secured Notes, Series C, due August 31, 2028 (collectively, the
"Senior Secured Notes") of the Company.

B.
The Company has entered into that certain Term Loan Agreement dated September 17, 1998, as amended (the "Credit Facility"),
with the Banks, pursuant to which the Banks are providing to the Company various credit facilities. Pursuant to the Credit Facility, the Company may fix the rate of interest for multiple periods,
which rate is currently 6.25%.

The
Company has previously executed and delivered to the St. Paul Bank for Cooperatives various mortgages, as supplemented to date and as recorded in the appropriate county records of
the State of Minnesota and the State of North Dakota (as so supplemented, the "Original Mortgages'). The Saint Paul Bank for Cooperatives is designated as an instrumentality of the United States under
federal law, and as such, all mortgages securing repayment of debt held by the Saint Paul Bank for Cooperatives are exempt from payment of mortgage registration tax pursuant to United States Code,
Title 12, Section 2134 and Minnesota Statutes, Section 287.06. Prior to the date of execution and delivery hereof, St. Paul Bank for Cooperatives was the holder of $231,000,000.00 in
aggregate principal indebtedness secured in part by the Original Mortgages, which principal indebtedness is continuing hereunder and is the same debt secured by this Mortgage, without modification to
the terms thereof The Noteholders are issuing an additional $50,000,000.00 of new indebtedness pursuant to the Note Agreements, which debt is subject to payment of mortgage registration tax, such that
on the date of execution and delivery hereof, the aggregate of principal of all indebtedness issued and secured hereunder, including such continuing and new indebtedness, is $281,000,000.00.

C.
Pursuant to the Intercreditor and Collateral Agency Agreement, dated as of September15, 1998 (the
"Intercreditor and Collateral Agency Agreement") entered into by the Noteholders, the Banks and the Mortgagee, the Mortgagee was appointed as collateral
agent to act on behalf of the Secured Parties (as hereinafter defined) regarding the Collateral (as hereinafter defined) and the obligations of the Company to the Noteholders under the Note Agreements
and under the Senior Note Documents (as hereinafter defined) including, without limitation, the obligations evidenced by the Senior Secured Notes, and the obligations of the Company to the Banks under
the Credit Facility and under the Loan Documents (as hereinafter defined) including, without limitation, the obligations evidenced by the promissory notes issued under the Credit Facility (together
with amendments, modifications and replacements thereof, the "Credit Facility Notes"), and the obligations of the Company to the Additional Creditors
(as hereinafter defined) under the Additional Facilities (as hereinafter defined) are to be securedpari passupursuant to this Mortgage.

D.
All principal, premium and interest and all fees and additional amounts and other sums at any time due and owing from and all other obligations of any nature of the Company now or
hereafter existing, or required to be paid by the Company under the terms of the Senior Secured Notes, the Credit Facility, the Note Agreements, this Mortgage, or any other document, mortgage or
security agreement executed and delivered by the Company pursuant to the Note Agreements or Credit Facility and any extensions, renewals or modifications of any of the above are hereinafter sometimes
referred to as the "Senior Secured Obligations".

E.
The Company is duly authorized under all applicable provisions of law, its Articles of Incorporation and By laws to issue the Senior Secured Notes and the Credit Facility Notes and
to execute and deliver this Mortgage and to mortgage, convey, assign and grant a security interest in the Collateral (as hereinafter defined) to the Mortgagee, as security for the Senior Secured
Obligations and all corporate action and all consents, approvals and other authorizations and all other acts and things necessary to make this Mortgage the valid, binding and legal instrument for the
security of the Senior Secured Obligations have been done and performed.

NOW,
THEREFORE, THIS MORTGAGE WITNESSETH that the Company, in consideration of the premises, the purchase and acceptance of the Senior Secured Notes by the Purchasers, the making of
loans and other financial accommodations by the Banks, and of the sum of Ten Dollars received by the Company from the Mortgagee and other good and valuable consideration, receipt whereof is hereby
acknowledged, and in order to secure the payment of all of the Senior Secured Obligations, the Company does hereby warrant, mortgage, pledge, assign, bargain, hypothecate, convey, grant, transfer,
grant a first perfected security interest in and set over unto the Mortgagee and its successors and assigns, all of its estate, right, title and interest in and to all and singular the following
described properties, rights, interest and privileges and all of the Company's estate, right, title and interest therein, thereto and thereunder, if any (all of which properties hereby mortgaged,
assigned, pledged and in which a first perfected security interest has been granted or intended so to be are hereinafter collectively referred to as the
"Collateral"):

GRANTING CLAUSE FIRST REAL PROPERTY

The parcels of land in Clay County and Polk County in the State of Minnesota and Pembina County and Trail County, in the State of North Dakota described in
Annex A attached hereto and made a part hereof, together with the entire interest of the Company in and to all buildings, structures, improvements and appurtenances now standing, or at any time
hereafter constructed or placed, upon such land, including all right, title and interest of the Company, if any, in and to all building material, building equipment and fixtures of every kind and
nature whatsoever on said land or in any building, structure or improvement now or hereafter standing on said land which are classified as fixtures under applicable law and which are used in
connection with the operation, maintenance or protection of said buildings, structures and improvements as such (including, without limitation, all boilers, air conditioning, ventilating, plumbing,
heating, lighting and electrical systems and apparatus, all communications equipment and intercom systems and apparatus, all sprinkler equipment and apparatus and all elevators and escalators) and the
reversion or reversions, remainder or remainders, in and to said land, and together with the entire interest of the Company in and to all and singular the tenements, hereditaments, easements, rights
of way, rights, privileges and appurtenances to said land, belonging or in anywise appertaining thereto, including, without limitation, the entire right, title and interest of the Company in, to and
under any streets, ways, alleys, gores or strips of land adjoining said land, and all claims or demands whatsoever of the Company either in law or in equity, in possession or expectancy, of, in and to
said land, it being the intention of the parties hereto that, so far as may be permitted by law, all property of the character hereinabove described, which is now owned or is hereafter acquired by the
Company and is affixed or attached or annexed to said land, shall be and


remain or become and constitute a portion of said land and the security covered by and subject to the Lien of this Mortgage, together with all accessions, parts and appurtenances appertaining or
attached thereto and all substitutions, renewals or replacements of and additions, improvements, accessions and accumulations to any and all thereof, and together with all rights, powers, privileges,
options and other benefits of the Company, as lessor, under any leases including the right to collect any and all rents, profits or other income and the present and continuing right to make claim for,
collect, receive and receipt for any and all of such rents, profits or other income (all of which properties are hereinafter referred to as the "Real
Property"'.

GRANTING CLAUSE SECOND TRADE PROPERTY

All materials, furniture, furnishings, machinery, fixtures and equipment now or hereafter erected on or affixed to the Real Property and including, but not
limited to, all heating, plumbing, lighting, water heating, cooking, laundry, refrigerating, incinerating, communications, ventilating and air conditioning
equipment, building signs, disposals, dishwashers, telephone systems, sprinkler systems, fire extinguishing apparatus and equipment, water tanks, engines, machines, boilers, dynamos, stokers,
elevators, motors, cabinets, shades, blinds, partitions, window screens, screen doors, storm windows, awnings, drapes, rugs and other floor coverings, furniture, furnishings, radios and television
sets and wiring and antennae therefor, and all fixtures, accessions and appurtenances thereto, and all renewals or replacements of or substitutions for any of the foregoing, together with all other
goods, equipment, furnishings, fixtures, machinery and furniture owned by the Company now or hereafter attached or affixed to or used in and about the building or buildings now erected or hereafter to
be erected on the Real Property, or otherwise located on the Real Property, and all fixtures, accessions and appurtenances thereto, and all renewals or replacements of or substitutions for any of the
foregoing (all of which properties are hereinafter referred to as "Trade Property").



## 

GRANTING CLAUSE THIRD GENERAL INTANGIBLES

All general intangibles, whether now owned or hereafter acquired or arising, or in which the Company now has or hereafter acquires any rights, including
without limitation all causes of action, goodwill and similar intangibles and all income tax refunds, all privileges, franchises, immunities, licenses (to the extent a security interest can be granted
in particular licenses), permits, similar intangibles, any rights to receive any payments in connection with a termination of any pension plan or employees stock ownership plan or trust established
for the benefit of employees of the Company, patents, patent applications, patent licenses, trademarks, trademark registrations and trademark licenses, and tradenames, and all other intangible
personal property (including things in action) not otherwise covered by this Mortgage (collectively,"General Intangibles").

GRANTING CLAUSE FOURTH CONDEMNATION AWARDS AND PAYMENTS

All judgments, awards of damages, settlements and other compensation heretofore or hereafter made resulting from condemnation proceedings or the taking of the
Real Property or any part thereof or any improvements now or at any time hereafter located thereon or any easement or other appurtenance thereto under the power of eminent domain, or any similar power
or right (including any award from the United States Government at any time after the allowance of the claim therefor, the ascertainment of the amount thereof and the issuance of the warrant for the
payment thereof), whether permanent or temporary, or for any damage (whether caused by such taking or otherwise) to said Real Property or any part thereof or the improvements thereon or any part
thereof, or to any rights appurtenant thereto, including severance and consequential damage, and any award for change of grade of streets (collectively,"Condemnation
Awards").

GRANTING CLAUSE FIFTH PROCEEDS

All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquidated claims, including, without limitation, all
proceeds and payments of insurance related to the Collateral.

EXCEPTED PROPERTY

There is, however, to the extent included in the Lien and operation of this Mortgage, expressly excepted and excluded from the Lien and operation of this
Mortgage the following described property of the Company, now owned or hereafter acquired (herein called"Excepted Property"):



SUBJECT
HOWEVER, as to all property or rights in property at any time subject to the Lien hereof (whether now owned or hereafter acquired), to Permitted Encumbrances, as defined in
§1 hereof.

To
HAVE AND TO HOLD the Collateral unto the Mortgagee and its successors and assigns forever for the purpose of securing performance of each agreement, covenant and warranty of the
Company contained in the Senior Secured Notes, the Credit Facility, this Mortgage, the other Senior Security Documents and the Note Agreements and payment of the Senior Secured Obligations. It is
understood and agreed that this Mortgage is to secure the obligation of the Company to repay, without preference or priority, all Senior Secured Obligations.

PROVIDED,
NEVERTHELESS, and these presents are upon the express condition that if the Company performs the covenants herein contained and the Senior Secured Obligations are paid in
full and all other sums due or payable hereunder, under the Note Agreements, the Credit Facility or under the other Senior Security Documents, the estate, right and interest of the Mortgagee in the
property hereby conveyed and granted a first perfected security interest in shall cease and this Mortgage shall become null and void, but otherwise to remain in full force and effect.

It
is agreed and understood by the parties hereto that:



SECTION
1. DEFINIITIONS.

The
following terms shall have the following meanings for all purposes of this Mortgage:

"Account","Chattel Paper", "Documents", "Equipment", "General Intangibles", "Instruments", "Inventory",
"Patents", "Securities", "Trademarks"and"Tradenames"shall each have the meaning set forth in the Uniform Commercial Code.

"Additional Creditors"shall have the meaning assigned thereto in the Intercreditor and Collateral Agency Agreement.

"Additional Facilities"shall have the meaning assigned thereto in the Intercreditor and Collateral Agency Agreement.

"Capitalized Leases"shall have the meaning assigned thereto in the Note Agreements.

"CERCLA"shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

"Collateral"shall have the meaning assigned thereto in the paragraph immediately preceding the Granting Clause First hereof.

"Company"shall mean American Crystal Sugar Company, a Minnesota cooperative corporation and its successors and assigns.

"Credit Facility Notes"shall have the meaning assigned thereto in Recitals hereof

"Default"shall mean any event which would constitute an Event of Default if all requirements in connection therewith for the giving of
notice, the lapse of time and the happening of any further condition, event or act had been satisfied.

"Eligible Investments"shall mean:



"Environmental Claim"shall mean all claims, however, asserted, by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.

"Environmental Law"shall have the meaning assigned thereto in the Note Agreements.

"Event of Default"shall have the meaning specified in §5.1 hereof

"Funded Debt"shall have the meaning assigned thereto in the Note Agreements.

"GAAP"shall have the meaning assigned thereto in the Note Agreements.

"Governmental Approvals"shall mean any written permit, license, variance, certification, consent, no-action letter,
clearance, exemption or other approval granted by a Governmental Authority.

"Governmental Authority"shall mean any international, foreign, federal, state, regional, county, local or other governmental
authority.

"Hazardous Materials"shall have the meaning assigned thereto in the Note Agreements.

"Impositions"shall have the meaning assigned thereto in §2.7(a) hereof

Intercreditor and Collateral Agency Agreement"shall have the meaning assigned thereto in Recitals hereof

"Lien"shall mean any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional
sale or trust receipt or a lease consignment or bailment for security purposes. The term "Lien" shall include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements) affecting property.

"Material Adverse Effect"shall have the meaning assigned thereto in the Note Agreements.

"Motor Vehicle"shall mean all trucks, trailers, automobiles, rolling stock, forklifts and vehicles of every kind and description,
whether now owned or hereafter acquired by the Company, or in which the Company may acquire an interest.

"Note Agreements"shall have the meaning ascribed to it in the Recitals hereof this Mortgage.

"Notes"and"Note"shall mean the Credit Facility Notes and the Senior Secured Notes.

"Overdue Rate"shall mean the lesser of (a) the maximum interest rate permitted by law and (b) the annual percentage rate
of interest which is established by Citibank, N.A. from time to time as its prime rate plus 2%.

"Permitted Encumbrances"shall mean the liens described in clauses (a) through (j) of §2.8.

"Person"shall mean an individual, partnership, corporation, trust or unincorporated organization.

"RCRA"shall mean the Resource Conservation and Recovery Act, as amended.

"Release"shall have the meaning assigned thereto in the Note Agreements.

"Rentals"shall have the meaning assigned thereto in the Note Agreements.

"Replacement Items of Trade Property"shall have the meaning assigned thereto in §3.3(a)(1) hereof.

"Securities"shall have the meaning assigned thereto in the Note Agreements.

"Secured Parties"shall have the meaning assigned thereto in the Intercreditor and Collateral Agency Agreement.

"Senior Note Documents"shall mean the Note Agreements, the Senior Secured Notes, and all other mortgages, security agreements,
documents, certificates and instruments relating to, arising out of, or in any way connected therewith or any of the transactions contemplated thereby.

"Senior Secured Obligations"shall have the meaning assigned thereto in Recitals hereof

"Senior Security Documents"shall have the meaning assigned to the term "Security Documents" in the Note Agreements.

"Senior Secured Notes"shall have the meaning assigned thereto in the Note Agreements.

"Specified Pledged Stock"shall mean the stock and all other equity interests of St. Paul Bank owned by the Company and subject to the
St. Paul Stock Lien (as defined in the Note Agreements).

"Subsidiary"shall have the meaning assigned thereto in the Note Agreements.

"Trade Property"shall have the meaning ascribed to it in Granting Clause Second of this Mortgage.

"Uniform Commercial Code"shall mean the Uniform Commercial Code as in effect in the States of Minnesota and North Dakota, as amended,
as the case may be.

"Voting Stock"shall mean securities of any class or classes of a corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions),



SECTION 2. GENERAL COVENANTS ANT) WARRANTIES.

The Company covenants, warrants and agrees as follows:

Section 2.1. Agreement and Mortgage Covenants.Each and all of the terms, provisions, restrictions, covenants
and agreements set forth in the Note Agreements and in each and every supplement thereto or amendment thereof which at any time or from time to time may be executed and delivered by the parties
thereto or their successors and assigns, are incorporated herein by reference to the same extent as though each and all of said terms, provisions, restrictions, covenants and agreements were fully set
out herein and as though any amendment or supplement to the Note Agreements and the Credit Facility were fully set out in an amendment or supplement to this Mortgage; and the Company does hereby
covenant and agree well and truly to abide by, perform and be governed and restricted by each and all of the matters provided for by the Note Agreements and the Credit Facility and so incorporated
herein to the same extent and with the same force and effect as if each and all of said terms, provisions, restrictions, covenants and agreements so incorporated herein by reference were set out and
repeated herein at length. Without limiting the foregoing, the Company covenants and agrees to pay all taxes, assessments and governmental charges or levies imposed upon this Mortgage or the Senior
Secured Obligations (other than income taxes of the Mortgagee or of the Secured Parties). If any such sums shall be advanced by the Mortgagee or any Secured Party, they shall bear interest, shall be
paid and shall be secured as provided in §2.9 hereof.

Section 2.2. Ownership of Collateral.The Company covenants and warrants that it has fee simple title to the
Real Property and good and marketable title to the other Collateral hereinbefore conveyed to the Mortgagee free and clear of all liens, charges and encumbrances whatever except Permitted Encumbrances,
and the Company has full right, power and authority to convey, transfer, mortgage and grant a first perfected security interest in the same to the Mortgagee for the uses and purposes in this Mortgage
set forth; and the Company will warrant and defend the title to the Collateral against all claims and demands whatsoever except Permitted Encumbrances.

Section 2.3. Further Assurances.The Company will, at its own expense, do, execute, acknowledge and deliver all
and every further reasonable act, deed, conveyance, transfer and assurance necessary or proper for (a) the better assuring, conveying, assigning and confirming unto the Mortgagee all of the
Collateral, or property intended so to be, whether now owned or hereafter acquired and (b) the perfection of the first security interest provided for in the Collateral whether now owned or
hereafter acquired. The Mortgagee, as secured party, may file one or more financing statements disclosing its security interest in any or all of the Collateral without the Company's signature
appearing thereon. The Company also hereby grants the Mortgagee, as such secured party a power of attorney to execute any such financing statement, or amendments and supplements to financing
statements, on behalf of the Company without notice thereof to the Company, which power of attorney is coupled with an interest and is irrevocable until the Senior Secured Obligations have been fully
satisfied.

Section 2.4. Payment of Principal, Premium and InterestThe Company will duly and punctually pay the principal of, and premium
and interest on all Notes secured hereby according to the terms thereof.

Section 2.5. Maintenance of Collateral, Other Liens, Compliance with Laws, Environmental Matters, Etc.Without limiting the
provisions of the Note Agreements and the Credit Facility,



All
such policies of insurance: (1) shall name the Mortgagee, the Banks, the Noteholders and each other holder of the Senior Secured Notes as additional insureds, as their
interests may appear, (2) in the case of policies covering loss or damage to the Collateral, shall provide that losses, if any, shall be payable solely to the Mortgagee under a standard
mortgage loss payable clause satisfactory to the Mortgagee, (3) shall provide that the Mortgagee's, the Banks' and the Noteholders' interests shall be insured regardless of any breach or
violation by the Company of any warranties, declarations or conditions contained in such policies, (4) the insurers shall waive any right of subrogation of the insurers to any
set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of the Company,(5)such
insurance, as to the interest of the Mortgagee, the Banks and/or the Noteholders, as the case may be, therein, shall not be invalidated by the use or operation of the Collateral for purposes which are
not permitted by such policies, nor by any foreclosures or other proceedings relating to the Collateral, nor by change in title to or ownership of the Collateral, (6) if any premium or
installment is not paid when due, or if such insurance would lapse or be cancelled, terminated or changed for any reason whatsoever, the insurers will promptly notify the Mortgagee and any such lapse,
cancellation, termination or change shall not be effective as to the Mortgagee, the Banks and/or the Noteholders, as the case may be, for 10 Business Days after receipt of such notice, and
(7) appropriate certification shall be made to the Mortgagee by each insurer with respect thereto.

The
Company hereby authorizes the Mortgagee, upon the occurrence and during the continuation of any Event of Default hereunder, at the Mortgagee's option to adjust, compromise and
settle any losses under any insurance afforded, and the Company does hereby irrevocably constitute the Mortgagee, its
officers, agents and attorneys, as its attorneys-in-fact, with full power and authority, upon the occurrence and during the continuation of any Event of Default hereunder, to
effect such adjustment, compromise and/or settlement and to endorse any drafts drawn by an insurer of the Collateral or any part thereof and to do everything necessary to carry out such purposes and
to receive and receipt for any unearned premiums due under policies of such insurance; but unless the Mortgagee elects to adjust, compromise or settle losses as aforesaid, such adjustment, compromise
and/or settlement shall be made by the Company, subject to final approval of the Mortgagee in the case of losses exceeding $5,000,000.





Section 2.8. Limitation on Liens.The Company will not create or incur or suffer to be incurred or to exist, any
mortgage, pledge, security interest, encumbrance, charge or other Lien of any kind upon the Collateral, whether now owned or hereafter acquired, or upon any income or proceeds therefrom, except the
following:



Section 2.9. Advances.If the Company shall fail to comply with the covenants contained herein or contained in
the Note Agreements or the Credit Facility and incorporated herein by reference, the

Mortgagee, without waiving any Default or Event of Default or releasing any obligation, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the
account and at the expense of the Company, and may enter upon the Collateral or any part thereof for such purpose and take all such action thereon as, in the opinion of the Mortgagee, may be necessary
or reasonably appropriate therefore. All sums so paid by the Mortgagee and all costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) so incurred, together with
interest thereon at the Overdue Rate from the date of payment or incurrence, shall be secured hereby and shall be paid by the Company to the Mortgagee on demand. The Mortgagee in making any payment
authorized under this §2.9 relating to taxes or assessments may do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the
accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax Lien or title or claim thereof. The Mortgagee, in performing any act hereunder, shall be
the sole judge of whether the Company is required to perform the same under the terms of this Mortgage and no such advance shall be deemed to relieve the Company from any default hereunder.

Section 2.10. Recordation.The Company will, at its own expense, cause this Mortgage and all supplements hereto
and any financing statements and continuation statements required by the Uniform Commercial Code or other law in respect thereof at all times to be kept recorded and filed at its own expense in such
manner and in such places as may be required by law in order to fully preserve and protect the rights of the Mortgagee hereunder, and will furnish to the Mortgagee promptly after the execution and
delivery of this Mortgage and of each supplement and each financing statement or continuation statement, as the case may be, an opinion of counsel stating that in the opinion of such counsel this
Mortgage or such supplement and/or such financing statement or continuation statement, as the case may be, has been properly recorded or filed for record so as to make effective of record the Lien and
(subject to Permitted Encumbrances) the first perfected security interest intended to be created hereby.

Section 2.11. After-Acquired Property.Any and all property hereafter acquired which is of the kind or nature
described in the Granting Clauses hereof and is or is intended to become a part thereof, shallipso facto,and without any further conveyance,
assignment or act on the part of the Company or the Mortgagee become and be, subject to the Lien and first perfected security interest of this Mortgage as fully and completely as though specifically
described herein; but nevertheless the Company shall from time to time, if requested by the Mortgagee, execute and deliver any and all such further assurances, conveyances and assignments thereof as
the Mortgagee may reasonably require for the purpose of expressly and specifically subjecting to the Lien and first perfected security interest of this Mortgage any and all such property, subject to
Permitted Encumbrances. In the event the Company acquires a material leasehold estate in any property which is of the kind or nature described in the Granting Clauses hereof, such leasehold estate
shall be made subject to a lien and first perfected security interest in favor of the Mortgagee by means of the Company's execution and delivery of a leasehold mortgage and security agreement in form
and substance satisfactory to the Mortgagee. The Company agrees that in the event the Company acquires a leasehold estate as described in this §2.11, the Company will use its
best efforts to promptly obtain from the subject lessor an agreement for the benefit of the Mortgagee,inter alia,providing that the lessor will give
the Mortgagee written notice of any defaults under the subject lease together with the option to cure such defaults and providing for such other requirements as the Mortgagee may reasonably request.



The
Credit Facility and the Note Agreements contemplate that the Company may from time to time, incur additional Funded Debt (each, an "Additional Loan"), subject to the terms and
conditions contained in the Credit Facility and the Note Agreements, and that each Additional Loan will be made pursuant to an Additional Facility, as defined in the Intercreditor and Collateral
Agency Agreement, and evidenced by a promissory note of the Company which will be in the amount of the Additional Loan and which will be secured by this Mortgage. Such promissory notes evidencing the
Additional Loans shall be included within the meaning of "Senior Secured Obligations," provided that:



SECTION 3. POSSESSION, USE AND RELEASE OF COLLATERAL.

Section 3.1. Company's Right of Possession.Provided no Event of Default hereunder has occurred and is
continuing, the Company shall be suffered and permitted to remain in full possession, enjoyment and control of the Collateral subject always to the observance and performance of the terms of this
Mortgage and of the Note Agreements and the Credit Facility.

Section 3.2. Disposition of Certain Trade Property.The Company, so long as no Event of Default hereunder has
occurred and is continuing and subject to the provisions of §3.3 hereof in connection with each replacement, shall have full power, from time to time, in its discretion, and without any
action by or notice to the Mortgagee, to sell, exchange, or otherwise dispose of, any item of Trade Property, at any time subject to the security interest hereof pursuant to the terms of the Note
Agreements, Credit Facility or any Additional Facility or which may have become worn out, unserviceable, obsolete or unnecessary for use in the conduct of its business;provided however,that with respect
to any worn out, unserviceable, obsolete or unnecessary Trade Property except where such item is, in the ordinary
course of business, unnecessary to the conduct of its business, the Company shall contemporaneously replace the same with, or substitute for the same, other items of Trade Property having a value and
utility at least equal to that of the items of Trade Property so replaced, which shall forthwith become, without further action, subject to the security interest of this Mortgage.



Section 3.4. Release of CollateralLoss, Damage to or Destruction of the Collateral and Prepayment of the Notes.Upon
the occurrence of any material loss, damage to or destruction of the Collateral, the Company shall give the Mortgagee, within 30 days after the occurrence thereof; written notice of such
loss, damage or destruction. Such notice shall generally describe the nature and extent of the loss, damage to or destruction of the Collateral and shall include a detailed estimate of the cost of
repair or replacement of such damaged or destroyed Collateral. In the case of any loss, damage to or destruction of the Collateral which results in a prepayment of the Notes in accordance with the
provisions of §4.1 hereof; the Mortgagee shall execute a release in respect of the damaged or destroyed Collateral upon receipt of such prepayment in full,providedno Event of Default hereunder has
occurred and is continuing.

All
determinations of the cost of repair or replacement of the Collateral hereof shall be made by the Company in good faith and shall be evidenced by the delivery of an officer's
certificate or a

resolution of the Board of Directors of the Company certifying the accuracy and reasonableness of such determination. In making such determinations, the Company shall base such calculations on
engineer's, architect's or other objective criteria, including insurance estimates of cost of repair, as shall be reasonably consulted in good faith by the Company.

Section 3.5. Eminent Domain.The Company, immediately upon obtaining knowledge of the institution of any
proceeding for the condemnation of the Collateral or any portion thereof, shall notify the Mortgagee of the pendency of such proceeding. The Mortgagee may participate in any such proceeding, and the
Company from time to time will deliver or cause to be delivered to the Mortgagee all instruments requested by it to permit such participation. Any award or compensation payable to the Company on
account of such condemnation proceeding, if any, shall be paid to the Mortgagee, and such award of compensation shall be retained by the Mortgagee as part of the Collateral and applied in accordance
with §4.1(a) or §4.1(b) hereof The Mortgagee shall be under no obligation to question the amount of the award of compensation and the Mortgagee may accept any such award of
compensation. In any such condemnation proceedings the Mortgagee may be represented by counsel.



SECTION 4. APPLICATION OF INSURANCE AND CERTAIN OTHER MONEYS RECEIVED BY THE MORTGAGEE.

Section 4.1. Insurance Proceeds and Condemnation AwardsThe amounts received by or payable to the
Mortgagee from time to time which constitute insurance proceeds in respect of any damage to or destruction of the Collateral or any part thereof or Condemnation Awards or compensation covering the
Collateral (less the actual costs, fees and expenses incurred in the collection thereof) shall be held by the Mortgagee as part of the Collateral and shall be applied by the Mortgagee as set forth
below:



Section 4.2. Mortgage Title Insurance.Any moneys received by the Mortgagee as payment for any loss under any
policy of mortgage title insurance which was delivered by the Company shall become part of the Collateral.

Section 4.3. Other Proceeds.Any other moneys received by the Mortgagee in connection with the release of the
Collateral shall be held by the Mortgagee as part of the Collateral and shall be applied by the Mortgagee upon the terms and in the manner provided in
§5.3hereof

Section 4.4. Application if Event of Default Exists.If an Event of Default hereunder has occurred and is
continuing, all amounts received by the Mortgagee under this Mortgage, including without limitation, all amounts held pursuant to §4.5 hereof; shall be applied in the manner provided for
in§5.3hereof in respect of proceeds and avails of the Collateral.

Section 4.5. Investment of CollateralAll monies held by the Mortgagee hereunder as Collateral shall be invested and reinvested
by the Mortgagee at the direction of the Company in one or more Eligible Investments. The Mortgagee shall not in any way be held liable by reason of any insufficiency of such invested Collateral
resulting from any loss on any Eligible Investment included therein. All interest earned on such Eligible Investments shall be held by the Mortgagee as Collateral hereunder and shall be invested and
reinvested pursuant to this§4.5.

SECTION 5. DEFAULTS AND REMEDIES THEREFOR.

Section 5.1. Events of Default.The Company acknowledges and agrees, without limitation, that each and all of
the terms and provisions of §11 of the Note Agreements and §13 of the Credit Facility, inclusive, have been and are incorporated into this Mortgage by reference to the same
extent as though fully set out herein and that the term Event of Default wherever used in this Mortgage shall mean either: (a) an Event of Default as defined in the Note Agreements,
(b) an Event of Default as defined in the Credit Facility, or (c) the failure of the Company to comply with any covenant, agreement or warranty contained in this Mortgage within
30 days after the earlier of the date that (1) the Mortgagee shall have given written notice thereof to the Company, or (2) such failure shall first become actually known to a
Responsible Officer of the Company.

Section 5.2. Remedies.When any Event of Default hereunder has occurred and is continuing and pursuant to the
terms and conditions of the Intercreditor and Collateral Agency Agreement, the Mortgagee may exercise any one or more or all, and in any order, of the remedies hereinafter set forth, it being
expressly understood that no remedy herein or in the Intercreditor and Collateral Agency Agreement conferred is intended to be exclusive of any other remedy or remedies; but each and every remedy
shall be cumulative and shall be in addition to every other remedy given herein or now or hereafter existing at law or in equity or by statute:



Section 5.3. Application of Proceeds.The purchase money proceeds and/or avails of any sale of the Collateral,
or any part thereof and the proceeds and the avails of any remedy hereunder shall be paid to and applied as follows:



Section 5.4. Waiver of Extension, Appraisement and Stay Laws.The Company covenants that, upon the occurrence
and the continuance of an Event of Default hereunder and the acceleration of the Notes pursuant to §5.2(a) hereof and to the extent that such rights may then be lawfully waived, it will
not at
any time thereafter insist upon or plead, or in any manner whatever claim or take any benefit or advantage of, any stay or extension law now or at any time hereafter in force, or claim, take or insist
upon any benefit or advantage of or from any law now or hereafter in force providing for the valuation or appraisement of the Collateral or any part thereof prior to any sale or sales thereof to be
made pursuant to any provision herein contained, or to the decree, judgment or order of any court of competent jurisdiction or, after confirmation of any such sale or sales claim or exercise any right
under any statute now or hereafter made or enacted by any state or otherwise to redeem the property so sold or any part thereof, and hereby expressly waives for itself and on behalf of each and every
person who may claim under it, all benefit and advantage of any such law or laws which would otherwise be available to any such Person in connection with the enforcement of any of the Mortgagee's
remedies hereunder; and covenants that it will not in connection with any such enforcement proceedings invoke or utilize any such law or laws or otherwise hinder, delay or impede the execution of any
power herein

granted and delegated to the Mortgagee but will suffer and permit the execution of every such power as though no such law or laws had been made or enacted.

The
Company hereby waives any and all rights of redemption from sale under any order or decree of foreclosure pursuant to rights herein granted, on behalf of the Company, and each and
every Person acquiring any interest in, or title to the Collateral described herein subsequent to the date of this Mortgage, and on behalf of all other Persons to the extent permitted by applicable
law.

Any
sale, whether under any power of sale hereby given or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever, either at
law or in equity, of the Company in and to the property sold and shall be a perpetual bar, both at law and in equity, against the Company, its successors and assigns, and against any and all Persons
claiming the property sold or any part thereof under, by or through the Company, its successors or assigns.

Section 5.5. Effect of Discontinuance of Proceedings.In case the Mortgagee shall have proceeded to enforce any
right under this Mortgage by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued through written notice to the Company by the Mortgagee or shall have been
determined adversely, then and in every such case the Company and the Mortgagee shall be restored to its position and rights hereunder, except with respect to any rights specifically denied in a
proceeding which was adversely determined, as they existed immediately prior to the commencement of such proceedings with respect to the property subject to the Lien and first perfected security
interest of this Mortgage.

Section 5.6. Delay or Omission Not a Waiver.No delay, failure or omission of the Mortgagee to exercise any
right or power arising from any Event of Default on the part of the Company shall exhaust or impair any such right or power or prevent its exercise during the continuance of such Event of Default. No
waiver by the Mortgagee of any such Event of Default, whether such waiver be full or partial, shall extend to or be taken to affect any subsequent Event of Default, or to impair the rights resulting
therefrom, except as may be otherwise provided herein. No right, power or remedy hereunder is intended to be exclusive of any other right, power or remedy but each and every right, power or remedy
shall be cumulative and in addition to any and every other right, power or remedy given hereunder or otherwise existing. Nor shall the giving, taking or enforcement of any other or additional
security, collateral or guaranty for the payment of the indebtedness secured under this Mortgage operate to prejudice, waive or affect the security of this Mortgage or any rights, powers or remedies
hereunder; nor shall the Mortgagee be required to first look to, enforce or exhaust such other or additional security, collateral or guaranties.

Section 5.7. Costs and Expenses of Foreclosure.In any suit to foreclose the Lien or first perfected security
interest hereon there shall be allowed and included as additional Senior Secured Obligations in the decree for sale all expenditures and expenses which may be paid or incurred by or on behalf of the
Mortgagee for reasonable attorney's fees, reasonable appraiser's fees, outlays for documentary and expert evidence, stenographic charges, publication costs and costs (which may be estimated as the
items to be expended after the entry of the decree) of procuring all such abstracts of title, title searches and examination, guarantee policies, and similar data and assurances with respect to title
as the Mortgagee may deem to be reasonably necessary either to prosecute any foreclosure action or to evidence to the bidder at any sale pursuant thereto the true condition of the title to or the
value of the Collateral, all of which expenditures shall become so much additional Senior Secured Obligations which the Company agrees to pay and all of such shall be immediately due and payable with
interest thereon from the date of expenditure until paid at the Overdue Rate.

Section 5.8. Notes to Become Due Upon Sale by Mortgagee.Upon any sale under or by virtue of this Mortgage,
whether pursuant to foreclosure, power of sale or otherwise, the entire unpaid principal amount of the Notes shall, unless the Mortgagee shall expressly declare otherwise or if not previously


declared due and payable, immediately become due and payable, together with interest accrued thereon and premium and/or fees, if any, and all other indebtedness which this Mortgage by its terms
secures, anything contrary in this Mortgage, the Notes or any other instrument serving the Notes to the contrary notwithstanding.

Section 5.9. Remedies Subject to Applicable Law.All rights, remedies, and powers provided by this Section5entitled
"Defaults and Remedies Therefor" may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of
law, and all of the provisions of this Section are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they
will not render this Mortgage invalid, unenforceable, or not entitled to be recorded, registered, or filed under the provisions of any applicable law.

SECTION 6. MISCELLANEOUS.

Section 6.1. Successors and Assigns.Whenever any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all the covenants, premises and agreements in this Mortgage contained by or on behalf of the Company, or by or on behalf of the
Mortgagee, shall bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not.

Section 6.2. Severability.The unenforceability or invalidity of any provision or provisions of this Mortgage
shall not render any other provision or provisions herein contained unenforceable or invalid.

Section 6.3. Addresses for Notices and Demands.All communications provided for herein shall be in writing and
shall be deemed to have been given (unless otherwise required by the specific provisions hereof in respect of any matter) when delivered personally or when deposited in the United States mail,
registered or certified, postage prepaid, or mailed prepaid overnight air courier, addressed as follows:

|If to the Company:   |  | American Crystal Sugar Company
101 North 3rd Street
Moorhead, Minnesota 56560                        
|-------------------- |  | -----------------------------------------------------------------------------------------------------
|If to the Mortgagee: |  | St. Paul Bank for Cooperatives, as Collateral Agent
375 Jackson Street
St. Paul, Minnesota 55101-1849

or
as to either party at such other address as such party may designate by notice duly given in accordance with this Section to the other party.

Section 6.4. Headings and Table of Contents.The headings of the sections of this Mortgage and the table of
contents are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

Section 6.5. Release of Mortgage.This Mortgage shall be a continuing agreement in every respect and shall
remain in full force and effect until all of the Notes, premium, if any, principal and interest thereon and all other Senior Secured Obligations, shall have been fully paid and satisfied and any
commitment of the Noteholders or the Banks to extend any credit to the Company under the Note Agreements or the Credit Facility, respectively, shall have terminated. Upon such termination of the Note
Agreements and the Credit Facility, the Mortgagee shall, upon the request and at the expense of the Company, forthwith release all its liens and security interests hereunder.

Section 6.6. Counterparts.This Mortgage may be executed, edged and delivered in any number of counterparts,
each of such counterparts constituting an original but all together only one Mortgage.

Section 6.7. Agency.Each holder of the Notes, by its execution and delivery of the Intercreditor and Collateral
Agency Agreement, appoints and authorizes the Mortgagee to hold the lien of this Mortgage on the Collateral for the equal and ratable benefit and security of all holders of the Notes, without
preference, priority or distinction of any thereof or any other by reason of difference in time of issuance, sale or delivery of the Notes to such holders. The Mortgagee shall take such actions in
respect of the Collateral (including actions after the occurrence of an Event of Default) as are delegated to the Mortgagee by the terms of the Intercreditor and Collateral Agency Agreement.

Section 6.8. Successor Mortgagee.The Mortgagee may, at any time, by instrument in writing, appoint a successor
or successors to, or discharge and appoint a new Mortgagee in the place of; any Mortgagee named herein or acting hereunder, which instrument, executed and acknowledged by the Mortgagee, and recorded
in the appropriate office of the county wherein the Collateral is situated, shall be conclusive proof of the proper substitution of such successor or successors or new Mortgagee, who shall have all
the estate powers, duties, rights and privileges of the predecessor Mortgagee;provided,that any substitutions pursuant to this §6.8 shall
be made subject to the provisions of the Intercreditor and Collateral Agency Agreement.

Section 6.9. Governing Law.This Mortgage should be construed in accordance with and governed by the laws of the
State of Minnesota;provided, however,that as to any matter involving any portion of the
Collateral consisting of real property located in the State of North Dakota, the laws of the State of North Dakota shall govern.

Section 6.10. Time.Time shall be of the essence of this Mortgage.

Section 6.11. Future Advances.At all times, this Mortgage secures as part of the Senior Secured Obligations the
payment of any and all loan commissions, service charges, liquidated damages, attorney's fees, expenses and advances due to or incurred by the Mortgagee in connection with the Senior Secured
Obligations, all in accordance with the Notes, this Mortgage, the Note Agreements, the Credit Facility, any Additional Credit Facility and any of the Senior Security Documents, together with such
future or additional advances as may be made by the Mortgagee or the holder hereof; at its exclusive option to the Company or its successors or assigns in title, for any purpose,providedthat all such
advances are made within twenty years of the date of this Mortgage.

Section 6.12. Waiver of Jury Trial.The Company and the Mortgagee hereby knowingly, voluntarily and
intentionally waive the right to trial by jury in respect of any litigation based hereon, arising out of, under or in connection with this Mortgage or any other Senior Security Document contemplated
to be executed in connection herewith, or any course of conduct, course of dealings, statements (whether verbal or written) or acts of either party, or any exercise of any party of their respective
rights under this Mortgage or any such Senior Security Document. The Company hereby acknowledges that this waiver of jury trial is a material inducement to the Noteholders in extending credit to the
Company, that the Noteholders would not have extended credit without this waiver of jury trial and that the Company has had an opportunity to consult with an attorney in connection with this waiver of
jury trial and understands the legal affect of this waiver.

Section 6.13. Special Minnesota Provisions.The terms, conditions and provisions of this Section shall apply
solely to the portion of the security herein described which is located in Minnesota and shall govern, control and take precedence with respect to such portion of the security:



IN
WITNESS WHEREOF, the Company has caused this Mortgage to be executed in its behalf by its Treasurer as of the day and year first above written.

| |  | AMERICAN CRYSTAL SUGAR COMPANY                                                                
| |  | ----------------------------------------------------------------------------------------------
| |  | By:                                                                                           
| |  | Address: 101 North 3rd Street
Moorhead, Minnesota 56560
Taxpayer Identification No: 84-0004720

|State of Minnesota |  | ) |  |    
|------------------ |  | - |  | ---
|                   |  | ) |  | ss.
|County of Ramsey   |  | ) |  |    

This
instrument was acknowledged before me on September 22, 1998, by Brian Ingulsrud, as Treasurer of American Crystal Sugar Company, a Minnesota cooperative corporation, on
behalf of the corporation.

| |  |  |  | /s/KAREN R. KEESNotary Public
| |  |  |  | -----------------------------



## QuickLinks

RECITALS:GRANTING CLAUSE FIRST REAL PROPERTYGRANTING CLAUSE SECOND TRADE PROPERTY

GRANTING CLAUSE THIRD GENERAL INTANGIBLESGRANTING CLAUSE FOURTH CONDEMNATION AWARDS AND PAYMENTSGRANTING CLAUSE FIFTH PROCEEDSEXCEPTED PROPERTY