**Exhibit 10.25**

** **

Loan No. Z269T01E

 

**REVOLVING TERM LOAN SUPPLEMENT**

 

**THIS SUPPLEMENT** to the Amended and RestatedMaster Loan Agreement dated July 21, 2003 (the “MLA”) , is entered into as ofAugust 13, 2004, between **CoBank, ACB**(“CoBank”) and **AMERICAN CRYSTAL SUGAR COMPANY, Moorhead,Minnesota** (the “Company”), and amends and restates the Supplementdated July 21, 2003 and numbered Z269T01D.

 

**SECTION 1.** **The Revolving Term Loan Commitment**. 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 $58,276,702.22 at any one time outstanding(the “Commitment”). Within the limits of the Commitment, the Company mayborrow, repay and reborrow.

 

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

 

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

 

**SECTION 4.  Interest.**The Company agrees to pay interest on the unpaid balance of the loans inaccordance with one or more of the following interest rate options, as selectedby the Company:

 

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

 

**(B)    Quoted Rate.**At a fixed rate per annum to be quoted by CoBank in its sole discretion in eachinstance. 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,provided that: (1) the maximum fixed period shall be 1 day; and (2) the minimumamount that may be fixed each time shall be $2,000,000.00.

 

**(C)    LIBOR Option.**At a fixed rate equal to  “LIBOR” (ashereinafter defined) plus 90 basis points per annum (the “LIBOR”  Spread). Under this option: (a) rates may befixed for “Interest Periods” (as hereinafter defined) of 1,2,3, or 6 months, or1 year, as selected by the Company; (b) the minimum amount that may be fixed atany one time shall be $2,000,000.00; and (c) rates may only be fixed on a“Banking Day” (as hereinafter defined) or, at the option of the Company, on 3Banking Days’ prior notice. For purposes hereof: (i) “LIBOR” shall mean therate (rounded upward to the nearest sixteenth and adjusted for reservesrequired on “Eurocurrency Liabilities” (as hereinafter defined) for bankssubject to “FRB Regulation D” (as hereinafter defined) or required by any otherfederal law or regulation) quoted by the British Bankers Association ( the“BBA”) at 11:00 a.m. London time two Banking Days before the commencement ofthe Interest Period for the offering of U.S. dollar deposits in the London interbankmarket for the Interest Period designated by the Company; (ii) “Banking Day”shall mean a day on which CoBank is open for business, dealings in U.S dollardeposits are being carried out in the London interbank market, and banks areopen for business in New York City and London, England;

 

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and (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 2, 3, or 6 months or 1 year thereafter, asthe case may be; provided, however, that: (x) in the event such ending day isnot a Banking Day, such period shall be extended to the next Banking Day unlesssuch next Banking Day falls in the next calendar month, in which case it shallend on the preceding Banking Day; and (y) if there is no numericallycorresponding day in the month, then such period shall end on the last BankingDay in the relevant month; and (v) “FRB Regulation D” shall mean Regulation Das promulgated by the Board of Governors of the Federal Reserve System, 12 CFRPart 204, as amended.

 

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

 

**TREASURY MARGINS**

** **

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

 

The spreadover all of the above indices, including the Floor (Minimum) Rate, may increaseor decrease for future fixed amounts based on the Company’s previous fiscalquarter’s leverage ratio, as follows:

 

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

 

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

 

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

 

The Companyshall select the applicable rate option at the time it requests a loanhereunder and may, subject to the limitations set forth above, elect to convertbalances bearing interest at the variable rate option to one of the fixed rateoptions. Upon the expiration of any fixed rate period, interest shallautomatically accrue at the variable rate option unless the amount fixed isrepaid or fixed for an additional period in accordance with the terms hereof.Notwithstanding the foreging, unless CoBank otherwise consents in its solediscretion in each instance, rates may not be fixed for periods expiring afterthe maturity date of the loans.  In theevent CoBank so consents and the Commitment is not renewed, then each balanceso fixed shall be due and payable on the last day of its fixed rate period, andthe promissory note set forth below shall be deemed amended accordingly. Allelections provided for herein shall be made telephonically or in writing andmust be received by 12:00 noon Company’s local time. Interest shall becalculated on the actual number of days each loan is outstanding on the basisof a year consisting of 360 days and shall be payable quarterly in arrears bythe 20th day of the following month.

 

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

 

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which CoBankis open for business.  In addition to theabove, the Company promises to pay interest on the unpaid principal balancehereof at the times and in accordance with the provisions set forth in Section4 hereof.  This note replaces andsupersedes, but does not constitute payment of the indebtedness evidenced by,the promissory note set forth in the Supplement being amended and restatedhereby.

 

The Company shall be permitted to make special payments, in a minimumamount of $388,500,0.00, 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 and canceled at any time at the option ofCoBank.  The reinstatable commitmentsarising from such special payments shall be subject to the Commitment Fee asdescribed in Section 8 below.

 

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

 

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

 

**SECTION 8. Commitments Arising From Special 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 daily unusedcommitment.  Any such fees incurred shallbe payable on the last day of the calender quarter, in arrears, computed on thebasis of a year of 360 days for the actual number of days elapsed in which suchreinstatable commitments were outstanding.

 

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

 

**SECTION 10. Amendment Fee.** In consideration of the amendment, the Company agrees to pay to CoBankon the execution hereof a fee in the amount of $3,713.48.

 

**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/ Teresa Fountain                |   | By: | /s/ Sam Wai |   |
|            |                               |   |   |   |   |
| Title:          | Assistant Corporate Secretary      |   | Title: | Treasurer |   |

 

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Loan No. Z269T01ENP

 

**REVOLVING TERM LOAN SUPPLEMENT**

 

**THIS SUPPLEMENT** tothe Amended and Restated Master Loan Agreement dated July 21, 2003 (the “MLA”),is entered into as of August 13, 2004, between **CoBANK, ACB**(“CoBank”) and **AMERICAN CRYSTAL SUGAR COMPANY, Moorhead,Minnesota** (the “Company”), and amends and restates the Supplementdated July 21, 2003 and numbered Z269T01DNP.

 

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

 

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

 

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

 

**SECTION 4. Interest.** The Company agrees to pay interest on the unpaid balance of the loans inaccordance with one or more of the following interest rate options, as selectedby the Company:

 

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

 

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

 

**(C)          LIBOROption.**  At afixed rate equal to “LIBOR” (as hereinafter defined) plus 90 basis points perannum (the “LIBOR” Spread).  Under thisoption:  (a) rates may be fixed for“Interest Periods” (as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year,as selected by the Company, (b) the minimum amount that may be fixed at any onetime shall be $2,000,000.00; and (c) rates may only be fixed on a “Banking Day”(as hereinafter defined) or, at the option of the Company, on 3 Banking Days’prior notice.  For purposes hereof:  (i) “LIBOR” shall mean the rate (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 Interest for Periodfor the offering of U.S. dollar deposits in the London interbank market for theInterest Period designated by the Company, as published by Bloomberg or anothermajor information vendor listed on the BBA’s official website; (ii) “BankingDay” shall mean a day on which CoBank is open for business, dealings in U.S.dollar deposits are being carried out in the London interbank market, and banksare open for business in New York City and London, England; (iii) “InterestPeriod” shall mean a period commencing on the day the Company elects to fix arate under this

 

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option and ending on thenumerically corresponding day in the next calendar month or the month that is2, 3 or 6 months or 1 year thereafter, as the case may be; provided, however,that:  (x) in the event such ending dayis not a Banking Day, such period shall be extended to the next Banking Dayunless such next Banking Day falls in the next calendar month, in which case itshall end on the preceding Banking Day; and (y) if there is no numericallycorresponding day in the month, then such period shall end on the last BankingDay in the relevant month; (iv) “Eurocurrency Liabilities” shall have meaningas set forth in FRB Regulation D; and (v) “FRB Regulation D” shall meanRegulation D as promulgated by the Board of Governors of the Federal ReserveSystem, 12 CFR Part 204, as amended.

 

**(D)          Treasury Option**.   At a fixed rate equal to the ApplicableTreasury Margin per annum (as described in terms of basis points (“bps”) in thechart immediately set forth below) above the “U.S. Treasury Rate” (ashereinafter defined).  Under this option,balances of $2,000,000.00 or more may be fixed on or before for periods rangingfrom two years to the final maturity date of the loan, as selected by theCompany.  However, rates may not be fixedin such a manner as to require the Company to have to repay any fixed rate balanceprior to the last day of its fixed rate period in order to pay any installmentof principal.  For purposes hereof, the“U.S. Treasury Rate” shall mean the yield to maturity on U.S. Treasuryinstruments having the same maturity date as the last day of the fixed rateperiod selected by the Company, as calculated from the bid price indicated byTelerate (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 the event Teleratae 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   Co Bank in its sole discretion) |       | 105 bps                                                             | ** ** |

 

The spreadover all of the above indices, including the Floor (Minimum) Rate, may increaseor decrease for future fixed amounts based on the Company’s previous fiscalquarter’s leverage ratio, as follows:

 

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

 

**Leverage Ratio:**   The Company will maintain a leverage ratioof not more than 1.50:1.0. Leverage ratio is long term debt (excluding currentmaturities) calculated in accordance with GAAP plus or minus the differencebetween actual working capital and Minimum Net Working Capital (as defined inthe MLA No. Z269, Section 10, as it may be amended), divided by total membersinvestments plus the estimated unity retains.

 

Changes to theApplicable LIBOR or Treasury Margin shall be made quarterly on the latter ofeither: (a) five business days after the Bank’s receipt of the Company’scertification of compliance with the leverage ratio, or (b) 30 days after theend of each calendar quarter.  If theCompany fails to timely furnish to CoBank the compliance certificate asrequired to be delivered pursuant to the MLA, then the change to the ApplicableLIBOR and Treasury Margin shall be an increase of the highest permitted underthe above chart.

 

The Companyshall select the applicable rate option at the time it requests a loanhereunder and may, subject to the limitations set forth above, elect to convertbalances bearing interest at the variable rate option to one of the fixed rateoptions.  Upon the expiration of anyfixed rate period, interest shall automatically accrue at the variable rateoption unless the amount fixed is repaid or fixed for an additional period inaccordance with the terms hereof. 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.  Inthe event CoBank so consents and the Commitment is not renewed, then eachbalance so fixed shall be due and payable on the last day of its fixed rateperiod, and the promissory note set forth below shall be deemed amendedaccordingly.  All elections provided forherein shall be made telephonically or in writing and must be received by 12:00noon Company’s local time.  Interestshall be calculated on the actual number of days each loan is outstanding onthe basis of a year consisting of 360 days and shall be payable quarterly inarrears by the 20th day of the following month.

 

**SECTION 5.   PromissoryNote.  **TheCompany promises to repay the loans that are outstanding in 5 equal,consecutive annual principal payments of $7,603,420.83, with the first suchpayment due on or before December 31, 2004, and a final principal payment duein an amount equal to the remaining unpaid principal balance on or beforeDecember 31, 2009.  If any installmentdue date is not a day on which CoBank is open for business, then such paymentshall be made on the next day on which CoBank is open for business.  In addition to the above, the Companypromises to pay interest on the unpaid principal balance hereof at the timesand in accordance with the provisions set forth in Section 4

 

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hereof. This note replaces andsupersedes, but does not constitute payment of the indebtedness evidenced by,the promissory note set forth in the Supplement being amended and restatedhereby.

 

The Companyshall 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 paymentsmay be readvanced through the expiration date of the Commitment. Reinstatementmay be denied and canceled at any time at the option of CoBank. Thereinstatable commitments arising from such special payments shall be subject tothe Commitment Fee as described in Section 8 below.

 

**SECTION 6.  Prepayment.** Subject to Section 13 of the MLA, theloans may be prepaid in whole or in part on one CoBank business day’s priorwritten notice. During the term of the Commitment, prepayments shall be appliedto 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.

 

**SECTION 7.  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.

 

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

 

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

 

**SECTION 10.  Amendment Fee.** In consideration of the amendment, theCompany agrees to pay to CoBank on the execution hereof a fee in the amount of$10,583.89.

 

**IN WITNESS WHEREOF,**the parties have causedthis Supplement to be executed by their duly authorized officers as of the dateshown above.

 
| **CoBank,  ACB** | **AMERICAN  CRYSTAL SUGAR COMPANY**        |
|------------------|--------------------------------------------|
| ** **       | ** **                                 |
|             |                                       |
| By:              | /s/ Teresa  Fountain                       |   | By: | /s/ Sam Wai |   |
|             |                                       |   |   |   |   |
| Title:           |   Assistant  Corporate Secretary |   | Title: |   TREASURER |   |

 

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Loan No. Z269T05A

 

**REVOLVING TERM LOAN SUPPLEMENT**

 

**THIS SUPPLEMENT**to the Amended and Restated Master LoanAgreement dated July 21, 2003 (the “MLA”), is entered into as of July 20, 2004,between **CoBANK, ACB** (“CoBank”) and **AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota** (the “Company”),and amends and restates the Supplement dated July 21,2003 and numbered Z269T05.

 

**SECTION 1. The Revolving TermLoan Commitment**. 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 $15,000,000,00 at any one timeoutstanding (the “Commitment”). Within the limits of the Commitment, theCompany may borrow, repay and reborrow.

 

**SECTION 2. Purpose**. The purpose of the Commitment is to providefor short-term commercial and standby letters of credit, and, if the Commitmentunder the Statused Revolving Credit Supplement No. Z269S01G (as it may beamended from time to time) is fully advanced, then to provide for the operatingneeds of the Company.

 

**SECTION 3. Term**. The term of the Commitment shall be fromthe date hereof, up to and including August 1, 2006, or such later date asCoBank may, in its sole discretion, authorize in writing.

 

**SECTION 4. Interest**. The Company agrees to pay interest on theunpaid 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 arate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means thatrate in effect from day to day defined as the “prime rate” as published fromtime to time in the Eastern Edition of The Wall Street Journal as the averageprime lending rate for seventy-five percent (75%) of the United States; thirty(30) largest commercial banks, or if The Wall Street Journal shall ceasepublication or cease publishing the “prime rate” on a regular basis, such otherregularly published average prime rate applicable to such commercial banks asis acceptable to the Lender in its reasonable discretion. Loans for which theBase Rate option is selected are referred to herein as “Base Rate Loans”. BaseRate Loans shall be made available on any Banking Day.

 

**(B)          Quoted Rate**. At a fixed rate per annum to be quoted byCoBank in its 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,provided that: (1) the maximum fixed period shall be 1 day; and (2) the minimumamount that may be fixed each time shall be $2,000,000.00.

 

**(C)          LIBOR Option**. At a fixed rate equal to “LIBOR” (ashereinafter defined) plus 100 basis points per annum.  Under this option: (a) rates may be fixed for“Interest Periods” (as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year,as selected by the Company; (b) the minimum amount that may be fixed at any onetime shall be $2,000,000.00; and (c) rates may only be fixed on a “Banking Day”(as hereinafter defined) or, at the option of the Company, on 3 Banking Days’prior notice.  For purposes hereof: (i) “LIBOR”shall mean the rate (rounded upward to the nearest sixteenth and adjusted forreserves required on “Eurocurrency Liabilities” (as hereinafter defined) forbanks subject to “FRB Regulation D” (as hereinafter defined) or required by anyother federal law or regulation) quoted by the British Bankers Association (the“BBA”) at 11:00 a.m. London time 2 Banking Days before the

 

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commencement of the Interest Period for the offering of U.S. dollardeposits in the London interbank market for the Interest Period designated bythe Company, as published by Bloomberg or another major information vendorlisted on the BBA’s official website; (ii) “Banking Day” shall mean a day onwhich CoBank is open for business, dealings in U.S. dollar deposits are beingcarried out in the London interbank market, and banks are open for business inNew York City and London, England; (iii) “Interest Period” shall mean a periodcommencing on the day the Company elects to fix a rate under this option andending on the numerically corresponding day in the next calendar month or themonth that is 2, 3 or 6 months or 1 year thereafter, as the base may be; provided,however, that: (x) in the event such ending day is not a Banking Day, suchperiod shall be extended to the next Banking Day unless such next Banking Dayfalls in the next calendar month, in which case it shall end on the precedingBanking Day; and (y) if there is no numerically corresponding day in the month,then such period shall end on the last Banking Day in the relevant month; (iv) “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)           Notwithstanding anything herein tothe contrary, if, on or prior to the determination of the LIBOR rate for anyLIBOR Interest Period, CoBank determines (which determination shall beconclusive) that quotations of interest rates in accordance with the definitionof LIBOR rate are not being provided in the relevant amounts or for therelevant maturities for purposes of determining rates of interest for LIBORrate advances as provided in this Supplement, then CoBank shall give theCompany prompt notice thereof, and so long as such condition remains in effect,CoBank shall be under no obligation to make LIBOR rate loans, convert Base Rateloans into LIBOR rate loans, or continue LIBOR rate loans, and the Companyshall, on the last day(s) of the then current applicable LIBOR InterestPeriod(s) for the outstanding LIBOR rate loans, either prepay such LIBOR rateloans or such LIBOR rate loans shall automatically be converted into a BaseRate loan in accordance with this Section 4.

 

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

 

(3)           If CoBank shall determine that, afterthe date hereof, the adoption of any applicable Law, rule or regulationregarding capital adequacy, or any change therein, or any change in theinterpretation or administration thereof by any governmental authority, centralbank or comparable agency charged with the interpretation or administrationthereof, or any request or directive regarding capital adequacy (whether or nothaving the force of law) of any such governmental authority, central

 

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

 

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

 

**SECTION 5. Promissory Note**. The Company promises to repay the loansthat are outstanding at the time the Commitment expires. If any installment duedate is not a day on which CoBank is open for business, then such payment shallbe made on the next day on which CoBank is open for business. In addition tothe above, the Company promises to pay interest on the unpaid principal balancehereof at the times and in accordance with the provisions set forth in Section4 thereof.

 

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

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outstandingbalance on the Commitment in full on demand, or if no demand is made, then anytime on or before the Commitment expiration date of August 1, 2006.

 

**SECTION 7. 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.

 

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

 

 
| **CoBANK, ACB** | **AMERICAN CRYSTAL SUGAR COMPANY** |
|-----------------|------------------------------------|
|            |                               |   |   |   |   |
| By:             | /s/ Michael Tousignant             |   | By: | /s/ Lisa Maloy |   |
| Title:     | VP                                 |   | Title: |  Asst. Secretary |   |
|                 |                                    |  |  |  |  |  |  |

 

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Loan No.Z269T06A

 

**REVOLVING TERM LOAN SUPPLEMENT**

 

**THIS SUPPLEMENT**to the Amended andRestated Master Loan Agreement dated July 21, 2003 (the “MLA”), is entered intoas of July 20, 2004, between **CoBANK**, **ACB** (“CoBank”) and **AMERICANCRYSTAL SUGAR COMPANY**, **Moorhead, Minnesota**(the “Company”), and amends and restates the Supplementdated July 21, 2003 and numbered Z269T06.

 

**SECTION 1.**  **The Revolving Term Loan Commitment.** On the terms and conditions set forth in the MLA and this Supplement,CoBank agrees to make loans to the Company from the date hereof, up to andincluding August 1, 2005, in an aggregate principal amount not to exceed, atany one time outstanding, $15,000,000.00 less the amounts scheduled to berepaid during the period set forth below in Section 5 (the “Commitment”).Within the limits of the Commitment, the Company may borrow, repay andreborrow.

 

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

 

**SECTION 3.**  **Term.** IntentionallyOmitted.

 

**SECTION 4.**  **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)          CoBank Base Rate.**  At a rate per annum equal at all times to therate of interest established by CoBank from time to time as its CoBank BaseRate, which Rate is intended by CoBank to be a reference rate and not itslowest rate. The CoBank Base Rate will change on the date established by CoBankas the effective date of any change therein and CoBank agrees to notify theCompany of any such change.

 

**(B)          Quoted Rate.** At afixed rate per annum to be quoted by CoBank in its sole discretion in eachinstance. 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,provided that: (1) the maximum fixed period shall be 1 day; (2) the minimumamount that may be fixed each time shall be $2,000,000.00.

 

**(C)          LIBOR Option.** At afixed rate equal to “LIBOR” (as hereinafter defined) plus 100 basis points perannum (the “LIBOR Spread”). 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 “Banking Day”(as hereinafter defined) or, at the option of the Company, on 3 Banking Days’prior notice. For purposes hereof: (i) “LIBOR” shall mean the rate (roundedupward to the nearest sixteenth and adjusted for reserves required on “EurocurrencyLiabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”(as hereinafter defined) or required by any other federal law or regulation)quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time2 Banking Days before the commencement of the Interest for Period for theoffering of U.S. dollar deposits in the London interbank market for theInterest Period designated by the Company, as published by Bloomberg or anothermajor

 

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information vendor listed on the BBA’sofficial website; (ii) “Banking Day” shall mean a day on which CoBank is openfor business, dealings in U.S. dollar deposits are being carried out in theLondon interbank market, and banks are open for business in New York City andLondon, England; (iii) “Interest Period” shall mean a period commencing on theday the Company elects to fix a rate under this option and ending on thenumerically corresponding day in the next calendar month or the month that is2, 3 or 6 months or 1 year thereafter, as the case may be; provided, however,that: (x) in the event such ending day is not a Banking Day, such period shallbe extended to the next Banking Day unless such next Banking Day falls in thenext calendar month, in which case it shall end on the preceding Banking Day;and (y) if there is no numerically corresponding day in the month, then suchperiod shall end 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.

 

The LIBOR Spread may increase or decrease forfuture fixed amounts based on the Company’s previous fiscal quarter’s leverageratio, as follows:

 

 
| **LEVERAGE  RATIO**                                             | ** ** | **INCREASE/DECREASE  TO LIBOR SPREAD** | ** ** | **CHANGE TO THE  LIBOR SPREAD (IN  BASIS POINTS)** |
|-----------------------------------------------------------------|------------|----------------------------------------|------------|----------------------------------------------------|
| **(as  defined below)**                                         | ** ** | ** **                             | ** ** | ** **                                         |
| 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 willmaintain a leverage ratio of not more than 1.50:1.0. Leverage ratio is longterm debt (excluding current maturities) calculated in accordance with GAAPplus or minus the difference between actual working capital and Minimum NetWorking Capital (as defined in the MLA No. Z269, Section 10, as it may be amended), divided by total membersinvestments plus the estimated unit retains.

 

Changes to the LIBOR Spread shall be made quarterlyon the latter 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. If the Company fails to timely furnishto CoBank the compliance certificate as required to be delivered pursuant tothe MLA, then the change to the LIBOR Spread shall be an increase of thehighest permitted under the above chart.

 

The Company shall select the applicable rate optionat the time it requests a loan hereunder and may, subject to the limitationsset forth above, elect to convert balances bearing interest at the variablerate option to one of the fixed rate options. Upon the expiration of any fixedrate period, interest shall

 

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automatically accrue atthe variable rate option unless the amount fixed is repaid or fixed for anadditional period in accordance with the terms hereof. Notwithstanding theforegoing, unless CoBank otherwise consents in its sole discretion in eachinstance, rates may not be fixed for periods expiring after the maturity dateof the loans. In the event CoBank consents to one or more balances being fixedfor a period or periods extending beyond the maturity date of the loans and theCommitment is not renewed, then each such balance shall be due and payable onthe last day of its fixed rate period and the promissory note set forth belowshall be deemed amended accordingly. All elections provided for herein shall bemade telephonically or in writing and must be received by 12:00 Noon Company’slocal time. Interest shall be calculated on the actual number of days each loanis outstanding on the basis of a year consisting of 360 days and shall bepayable monthly in arrears by the 20th day of the following month; provided,however, in the event the Company elects to fix all or a portion of theindebtedness outstanding under the LIBOR interest rate option above, interestshall be payable at the maturity of the interest period and if the LIBORinterest rate fix is for a period longer than 3 months, interest on thatportion of the indebtedness outstanding shall be payable quarterly in arrearsby the 20th day of the following month and at maturity.

 

**SECTION 5. Promissory Note**. The Company promises to repayon the dates set forth below, the outstanding principal, if any, that is inexcess of the listed amounts:

 
| **Payment Date**  | ** ** | **Reducing Commitment Amount** | ** **    |
|-------------------|------------|--------------------------------|---------------|
| ** **        | ** ** | ** **                     | ** **    |
| December 31, 2004 |       | $                              | 12,857,142.86 |   |
| December 31, 2005 |       | $                              | 10,714,285.72 |   |
| December 31, 2006 |       | $                              | 8,571,428.58  |   |
| December 31, 2007 |       | $                              | 6,428,571.44  |   |
| December 31, 2008 |       | $                              | 4,285,714.30  |   |
| December 31, 2009 |       | $                              | 2,142,857.16  |   |

 

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

 

**SECTION 6. Prepayment**. Subject to Section 13 of theMLA, the loans may be prepaid in whole or in part on one Business Day’s priorwritten notice. During the term of the Commitment, prepayments shall be appliedto 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.

 

**SECTION 7. Security**. In addition to any othersecurity that may otherwise be required or provided, the Company’s obligationsto CoBank under this Supplement are secured by that Restated Mortgage andSecurity Agreement dated September 15, 1998, from American Crystal SugarCompany to St. Paul Bank for Cooperatives (now known as CoBank as a result ofmerger), as Collateral Agent, as amended on January 31, 2003 by that certainModification Agreement to the Amended and Restated Mortgage and SecurityAgreement.

 

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**SECTION 8. Commitment Fee**. Inconsideration of the Commitment, the Company agrees to pay to CoBank acommitment fee on the average daily unused portion of the Commitment at therate of 20 basis points per annum (calculated on a 360 day basis), payablequarterly in arrears by the 20th day following each calendar quarter. Such feeshall be payable for each calendar quarter (or portion thereof) occurringduring the original or any extended term of the Commitment.

 

**IN WITNESS****WHEREOF**, theparties 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/ Lisa Maloy |   |
| Title:          | VP                                 |   | Title: |  Asst. Secretary |   |
|                 |                                    |  |  |  |  |  |  |

 

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Loan No. Z269S01G 

 

**STATUSEDREVOLVING CREDIT SUPPLEMENT**

 

**THIS SUPPLEMENT**to the Amended and Restated Master LoanAgreement dated July 21, 2003 (the “MLA”), is entered into as of July 20, 2004,between **CoBANK, ACB** (“CoBank”) and **AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota** (the “Company”),and amends and restates the Supplement dated November 7, 2003 and numberedZ269S01F.

 

**SECTION 1. The Revolving CreditFacility**. On theterms and conditions set forth in the MLA and this Supplement, CoBank agrees tomake loans to the Company during the period set forth below in an aggregateprincipal amount not to exceed, at any one time outstanding, the lesser of the “BorrowingBase” (as calculated pursuant to the Borrowing Base Certificate, the form ofthis is attached hereto as Exhibit A) or the sum of $265,000,000.00. Within thelimits of the Commitment, and the limit of the Borrowing Base, the Company mayborrow, repay and reborrow.

 

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

 

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

 

**SECTION 4. Interest**. The Company agrees to pay interest on theunpaid 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 arate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means thatrate in effect from day to day defined as the “prime rate” as published fromtime to time in the Eastern Edition of The Wall Street Journal as the averageprime lending rate for seventy-five percent (75%) of the United States’ thirty(30) largest commercial banks, or if The Wall Street Journal shall ceasepublication or cease publishing the “prime rate” on a regular basis, such otherregularly published average prime rate applicable to such commercial banks asis acceptable to the Lender in its reasonable discretion. Loans for which theBase Rate option is selected are referred to herein as “Base Rate Loans”.  Base Rate Loans shall be: (a) in minimumamounts of $5,000,000 and incremental multiples of $1,000,000; and (b) madeavailable on any Banking Day.

 

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

 

**(C)          LIBOR Option**. At a fixed rate equal to “LIBOR” (ashereinafter defined) plus 100 basis points per annum. Under this option: (a)rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 2, 3or 6 months, or 1 year, as selected by the Company; (b) the minimum amount thatmay be 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 (rounded upward to thenearest sixteenth and adjusted for reserves required on “EurocurrencyLiabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”(as hereinafter defined) or required by any other federal law or regulation)quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time2 Banking Days before the commencement of the Interest Period for the offeringof U.S. dollar deposits in the London interbank

 

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

 

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

 

(2)            If any law, treaty, rule, regulationor determination of a court or governmental authority or any change therein orin the interpretation or application thereof subsequent to the date hereof(each, a “Change in Law”) shall make it unlawful for CoBank to (a) advance anyLIBOR rate loan or (b) maintain all or any portion of a LIBOR rate loan, thenCoBank shall promptly notify the Company thereof. 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. Uponthe occurrence of any of the foregoing events on account of any Change in Law,the Company shall pay to CoBank immediately upon demand such amounts as may benecessary to compensate CoBank for any fees, charges, or other costs incurredor payable by CoBank as a result thereof and which are attributable to anyLIBOR rate loans made available to the Company hereunder.

 

(3)            If CoBank shall determine that,after the date hereof, the adoption of any applicable Law, rule or regulationregarding capital adequacy, or any change therein, or any change in theinterpretation or administration thereof by any governmental authority, centralbank or comparable agency charged with the interpretation or administration,thereof, or any request or directive regarding capital adequacy (whether or nothaving the force of law) of any such

 

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governmentalauthority, central bank or comparable agency, has or would have the effect ofreducing the rate of return on capital of CoBank as a consequence of CoBank’sobligations hereunder to a level below that which CoBank could have achieved butfor such adoption, change, request or directive (taking into consideration itspolicies with respect to capital adequacy existing on the date of thisSupplement) by an amount deemed by CoBank to be material, then from time totime, within fifteen (15) days after demand by CoBank, the Company shall pay toCoBank such additional amount or amounts as will compensate CoBank for suchreduction. CoBank agrees to take reasonable steps to reduce the amount of suchincrease, provided, however, that CoBank shall not be required to take any suchstep, if in CoBank’s sole opinion, CoBank would suffer an economic loss or anynegative legal or regulatory consequences as a result thereof. If CoBank is torequire the Company to make payments under this Section then CoBank must make ademand on the Company to make such payment within, ninety (90) days of thelater of (1) the date on which such capital costs are actually incurred byCoBank, or (2) the date on which CoBank knows, or should have known, that suchcapital costs have been incurred by CoBank.

 

TheCompany shall select the applicable rate option at the time it requests a loanhereunder and may, subject to the limitations set forth above, elect to convertbalances bearing interest at the variable rate option to one of the fixed rateoptions. Upon the expiration of any fixed rate period, interest shallautomatically accrue at the variable rate unless the amount fixed is repaid orfixed for an additional period. Notwithstanding the foregoing, rates may not befixed for periods expiring after the maturity date of the loans. All electionsprovided for herein shall be made telephonically or in writing and must bereceived by 12:00 Noon Company’s local time; in the case of LIBOR rate loans,all such elections must be made in writing. Interest shall be calculated on theactual 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 20th dayof the following month or such other day that CoBank shall require in a writtennotice to the Company, and at maturity; provided, however, in the event theCompany elects to fix all or a portion of the indebtedness outstanding underthe LIBOR interest rate option above, interest shall be payable at the maturityof the interest period and if the LIBOR interest rate fix is for a periodlonger than 3 months, interest on that portion of the indebtedness outstandingshall be payable quarterly in arrears on each anniversary of the date the LIBORinterest rate fix was made and at maturity.

 

**SECTION 5.Promissory Note.**TheCompany promises to repay the unpaid principal balance of the loans on thefirst CoBank business day following the last day of the term of the Commitment.In addition to the above, the Company promises to pay interest on the unpaidprincipal balance of the loans 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.

 

**SECTION 6. Borrowing Base Certificate, Etc.**The Company agrees to furnish a BorrowingBase Certificate to CoBank at such times or intervals as CoBank may from timeto time request. Until receipt of such a request, the Company agrees to furnisha Borrowing 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 outstanding hereunder on the last day of such period,no Report need be furnished. Regardless of the frequency of the reporting, ifat any time the amount outstanding under the Commitment exceeds the lesser ofthe Borrowing Base or $265,000.00, the Company shall immediately notify CoBankand repay so much of the loans as is

 

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necessary to reduce the amount outstanding under the Commitment to thelimits of the lesser of the Borrowing Base or $265,000.00.

 

**SECTION 7. 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. Such fee shall be payable for each calendarquarter (or portion thereof) occurring during the original or any extended termof the Commitment. For purposes of calculating the commitment fee only, the “Commitment”shall mean the dollar amount specified in Section 1 hereof, irrespective of theBorrowing Base.

 

**SECTION 8. Utilization Fee**. For any day on which the outstandingprincipal amount of loans shall be greater than 25% of the Commitment (but nogreater than 50% of the Commitment), the Company shall pay to CoBank autilization fee equal to 0.125% per annum (calculated on a 360 day basis) onthe aggregate amount outstanding on such day. 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 unpaid utilization fees, if any, shall be payablequarterly in arrears by the 20th day following each calendarquarter.

 

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

 
| **CoBANK, ACB** | **AMERICAN CRYSTAL SUGAR COMPANY** |
|-----------------|------------------------------------|
|            |                               |   |   |   |   |
| By:             | /s/ Michael Tousignant             |   | By: | /s/ Lisa Maloy |   |
| Title:          | VP                                 |   | Title: |  Asst. Secretary |   |
|                 |                                    |  |  |  |  |  |  |

 

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