**Exhibit10.24**

**AMENDED AND RESTATED LOANAGREEMENT**

**between**

**AMERICAN CRYSTAL SUGARCOMPANY, as Borrower,**

**and**

**COBANK, ACB, as Lender**

**July 31, 2006**

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**TABLE OF CONTENTS**
| ARTICLE I DEFINITIONS AND ACCOUNTING TERMS |   | 1                                                        |
|--------------------------------------------|--------|----------------------------------------------------------|
|                                       |   |                                                     |   |   |
| Section 1.1                                |   | Defined Terms                                            |   | 1 |
| Section 1.2                                |   | Accounting Terms and Calculations                        |   | 14 |
| Section 1.3                                |   | Computation of Time Periods                              |   | 14 |
| Section 1.4                                |   | Other Definitional Terms                                 |   | 14 |
|                                       |   |                                                     |   |   |
| ARTICLE II TERMS OF THE CREDIT FACILITIES  |   | 15                                                       |
|                                       |   |                                                     |   |   |
| Section 2.1                                |   | Lending Commitments                                      |   | 15 |
| Section 2.2                                |   | Existing Loans                                           |   | 16 |
| Section 2.3                                |   | Procedure for Loans                                      |   | 16 |
| Section 2.4                                |   | Notes                                                    |   | 18 |
| Section 2.5                                |   | Conversions and Continuations                            |   | 19 |
| Section 2.6                                |   | Interest Rates, Interest Payments and Default  Interest  |   | 20 |
| Section 2.7                                |   | Repayment                                                |   | 21 |
| Section 2.8                                |   | Prepayments                                              |   | 22 |
| Section 2.9                                |   | Letters of Credit                                        |   | 23 |
| Section 2.10                               |   | Procedures for Letters of Credit                         |   | 23 |
| Section 2.11                               |   | Terms of Letters of Credit                               |   | 23 |
| Section 2.12                               |   | Agreement to Repay Letter of Credit Drawings             |   | 23 |
| Section 2.13                               |   | Obligations Absolute                                     |   | 24 |
| Section 2.14                               |   | Fees                                                     |   | 25 |
| Section 2.15                               |   | Computation                                              |   | 25 |
| Section 2.16                               |   | Payments                                                 |   | 25 |
| Section 2.17                               |   | Use of Loan Proceeds                                     |   | 26 |
| Section 2.18                               |   | Interest Rate Not Ascertainable, Etc.                    |   | 26 |
| Section 2.19                               |   | Increased Cost                                           |   | 27 |
| Section 2.20                               |   | Illegality                                               |   | 27 |
| Section 2.21                               |   | Capital Adequacy                                         |   | 27 |
| Section 2.22                               |   | Funding Losses; LIBOR Rate Advances                      |   | 28 |
| Section 2.23                               |   | Discretion of Lender as to Manner of Funding             |   | 28 |
| Section 2.24                               |   | Broken Funding Surcharge                                 |   | 28 |
| Section 2.25                               |   | Taxes                                                    |   | 29 |
| Section 2.26                               |   | Capitalization                                           |   | 30 |
| Section 2.27                               |   | Security                                                 |   | 30 |
| Section 2.28                               |   | Security Interests                                       |   | 30 |
|                                       |   |                                                     |   |   |
| ARTICLE III CONDITIONS PRECEDENT           |   | 30                                                       |
|                                       |   |                                                     |   |   |
| Section 3.1                                |   | Conditions Precedent to All Loans and Letters of  Credit |   | 30 |

 

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| ARTICLE IV REPRESENTATIONS AND WARRANTIES |   | 33                                              |
|-------------------------------------------|--------|-------------------------------------------------|
|                                      |   |                                            |   |   |
| Section 4.1                               |   | Organization, Standing, Etc.                    |   | 33 |
| Section 4.2                               |   | Authorization and Validity                      |   | 33 |
| Section 4.3                               |   | No Conflict; No Default                         |   | 33 |
| Section 4.4                               |   | Government Consent                              |   | 34 |
| Section 4.5                               |   | Financial Statements and Condition              |   | 34 |
| Section 4.6                               |   | Litigation                                      |   | 34 |
| Section 4.7                               |   | Environmental, Health and Safety Laws           |   | 34 |
| Section 4.8                               |   | ERISA                                           |   | 34 |
| Section 4.9                               |   | Federal Reserve Regulations                     |   | 35 |
| Section 4.10                              |   | Title to Property; Leases; Liens; Subordination |   | 35 |
| Section 4.11                              |   | Taxes                                           |   | 35 |
| Section 4.12                              |   | Trademarks, Patents                             |   | 35 |
| Section 4.13                              |   | Burdensome Restrictions                         |   | 35 |
| Section 4.14                              |   | Force Majeure                                   |   | 35 |
| Section 4.15                              |   | Investment Company Act                          |   | 36 |
| Section 4.16                              |   | Public Utility Holding Company Act              |   | 36 |
| Section 4.17                              |   | Full Disclosure                                 |   | 36 |
| Section 4.18                              |   | Subsidiaries                                    |   | 36 |
| Section 4.19                              |   | Labor Matters                                   |   | 36 |
| Section 4.20                              |   | Solvency                                        |   | 36 |
|                                      |   |                                            |   |   |
| ARTICLE V AFFIRMATIVE COVENANTS           |   | 37                                              |
|                                      |   |                                            |   |   |
| Section 5.1                               |   | Financial Statements and Reports                |   | 37 |
| Section 5.2                               |   | Existence                                       |   | 39 |
| Section 5.3                               |   | Insurance                                       |   | 39 |
| Section 5.4                               |   | Payment of Taxes and Claims                     |   | 39 |
| Section 5.5                               |   | Inspection                                      |   | 39 |
| Section 5.6                               |   | Maintenance of Properties                       |   | 39 |
| Section 5.7                               |   | Books and Records                               |   | 39 |
| Section 5.8                               |   | Compliance                                      |   | 40 |
| Section 5.9                               |   | ERISA                                           |   | 40 |
| Section 5.10                              |   | Environmental Matters; Reporting                |   | 40 |
| Section 5.11                              |   | Further Assurances                              |   | 40 |
| Section 5.12                              |   | Compliance with Terms of Material Contracts     |   | 41 |
| Section 5.13                              |   | Eligibility                                     |   | 41 |
|                                      |   |                                            |   |   |
| ARTICLE VI NEGATIVE COVENANTS             |   | 41                                              |
|                                      |   |                                            |   |   |
| Section 6.1                               |   | Merger                                          |   | 41 |
| Section 6.2                               |   | Disposition of Assets                           |   | 41 |
| Section 6.3                               |   | Plans                                           |   | 41 |
| Section 6.4                               |   | Change in Nature of Business                    |   | 41 |

 

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| Section 6.5                                |   | Subsidiaries                                               |   | 42     |
|--------------------------------------------|--------|------------------------------------------------------------|--------|--------|
| Section 6.6                                |   | Negative Pledges                                           |   | 42     |
| Section 6.7                                |   | Restricted Payments                                        |   | 42     |
| Section 6.8                                |   | Transactions with Affiliates                               |   | 42     |
| Section 6.9                                |   | Accounting Changes                                         |   | 42     |
| Section 6.10                               |   | Subordinated Debt                                          |   | 42     |
| Section 6.11                               |   | Investments                                                |   | 42     |
| Section 6.12                               |   | Indebtedness                                               |   | 43     |
| Section 6.13                               |   | Liens                                                      |   | 44     |
| Section 6.14                               |   | Contingent Liabilities                                     |   | 45     |
| Section 6.15                               |   | Net Working Capital                                        |   | 45     |
| Section 6.16                               |   | Capitalization Ratio                                       |   | 45     |
| Section 6.17                               |   | Interest Coverage Ratio                                    |   | 45     |
|                                       |   |                                                       |   |   |
| ARTICLE VII EVENTS OF DEFAULT AND REMEDIES |   | 45                                                         |
|                                       |   |                                                       |   |   |
| Section 7.1                                |   | Events of Default                                          |   | 45     |
| Section 7.2                                |   | Remedies                                                   |   | 47     |
| Section 7.3                                |   | Offset                                                     |   | 47     |
|                                       |   |                                                       |   |   |
| ARTICLE VIII MISCELLANEOUS                 |   | 48                                                         |
|                                       |   |                                                       |   |   |
| Section 8.1                                |   | Modifications                                              |   | 48     |
| Section 8.2                                |   | Expenses                                                   |   | 48     |
| Section 8.3                                |   | Waivers, etc.                                              |   | 48     |
| Section 8.4                                |   | Notices                                                    |   | 48     |
| Section 8.5                                |   | Taxes                                                      |   | 49     |
| Section 8.6                                |   | Successors and Assigns; Participations; Purchasing  Lender |   | 49     |
| Section 8.7                                |   | Confidentiality of Information                             |   | 50     |
| Section 8.8                                |   | Governing Law and Construction                             |   | 50     |
| Section 8.9                                |   | Consent to Jurisdiction                                    |   | 51     |
| Section 8.10                               |   | Waiver of Jury Trial                                       |   | 51     |
| Section 8.11                               |   | Survival of Agreement                                      |   | 51     |
| Section 8.12                               |   | Indemnification                                            |   | 51     |
| Section 8.13                               |   | Captions                                                   |   | 52     |
| Section 8.14                               |   | Entire Agreement                                           |   | 52     |
| Section 8.15                               |   | Counterparts                                               |   | 52     |
| Section 8.16                               |   | Borrower Acknowledgements                                  |   | 52     |
| Section 8.17                               |   | Relationship Among Borrower                                |   | 53     |
| Section 8.18                               |   | Interest Rate Limitation                                   |   | 55     |

 

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| Annexes         |   |                               |   |   |
|-----------------|--------|------------------------------------|--------|--------|
| Annex I         |   | Pricing Grid                       |   |   |
|            |   |                               |   |   |
| Schedules       |   |                               |   |   |
| Schedule 3.l(a) |   | Landlord/Bailee Locations          |   |   |
| Schedule 4.6    |   | Litigation                         |   |   |
| Schedule 4.7    |   | Environmental Matters              |   |   |
| Schedule 4.18   |   | Subsidiaries                       |   |   |
| Schedule 6.11   |   | Existing Investments               |   |   |
| Schedule 6.12   |   | Existing Indebtedness              |   |   |
| Schedule 6.13   |   | Existing Liens                     |   |   |
| Schedule 6.14   |   | Existing Contingent Obligations    |   |   |
|            |   |                               |   |   |
| Exhibits        |   |                               |   |   |
| Exhibit A-l     |   | Form of Revolving Note             |   |   |
| Exhibit A-2     |   | Form of Term Note T01              |   |   |
| Exhibit A-3     |   | Form of Term Note T01NP            |   |   |
| Exhibit A-4     |   | Form of Term Note T06              |   |   |
| Exhibit B       |   | Borrowing Base Formula             |   |   |
| Exhibit C       |   | Form of Borrowing Base Certificate |   |   |
| Exhibit D       |   | Form of Compliance Certificate     |   |   |
| Exhibit E       |   | Form of Bid Request                |   |   |

 

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**AMENDED AND RESTATED LOANAGREEMENT**

THIS AMENDED AND RESTATEDLOAN AGREEMENT (this “Loan Agreement”), dated as of July 31, 2006, is by andbetween AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation (“Borrower”),and COBANK, ACB, a federally chartered instrumentality under the Farm CreditAct of 1971, as amended (“Lender”). This Loan Agreement amends andrestates that certain Amended and Restated Master Loan Agreement dated as ofJuly 21, 2003, which amended and restated that certain Master Loan Agreementdated as of March 31, 2000.

**ARTICLE IDEFINITIONS AND ACCOUNTING TERMS**

Section 1.1 DefinedTerms. As used in this Agreement the following terms shall have thefollowing respective meanings (and such meanings shall be equally applicable toboth the singular and plural form of the terms defined, as the context mayrequire):

“Adjusted LIBOR Rate”:With respect to each day, the rate (rounded upward, if necessary, to the nextone hundredth of one percent) determined by dividing the LIBOR Rate in effecton such day by 1.00 minus the LIBOR Reserve Percentage.

“Advance”: Anyportion of the outstanding Loans as to which one of the available interest rateoptions and, if pertinent, an Interest Period, is applicable. Subject to theterms and conditions hereof, an Advance may be a LIBOR Rate Advance, a QuotedRate Advance or a Base Rate Advance.

“Affiliate”: Whenused with reference to any Person, (a) each Person that, directly orindirectly, controls, is controlled by or is under common control with, the Personreferred to, (b) each Person which beneficially owns or holds, directly orindirectly, five percent or more of any class of voting Equity Interests of thePerson referred to, (c) each Person, five percent or more of the voting EquityInterests (or if such Person is not a corporation, five percent or more of theequity interest) of which is beneficially owned or held, directly orindirectly, by the Person referred to, and (d) each of such Person’s officers,directors, joint venturers and partners. The term control (including the terms “controlledby” and “under common control with”) means the possession, directly, of thepower to direct or cause the direction of the management and policies of thePerson in question.

“Applicable CommitmentFee Percentage”: The Applicable Margin at which the Term Loan CommitmentFees accrue, as set forth and described in Annex I.

“Applicable Margin”:Subject to the last sentence of this definition, with respect to computation ofthe applicable interest rate or the Applicable Commitment Fee Percentage onAdvances under the Term Loans, as the case may be, the margin payable byBorrower with respect thereto, as set forth and described in Annex I.The initial Applicable Margin shall be

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determined by reference to Borrower’s ComplianceCertificate and related financial statements as of the Closing Date, andcontinuing each Fiscal Quarter thereafter, the Applicable Margin shall bedetermined by the Compliance Certificate required by Section 5.1 as of Borrower’slast Fiscal Quarter; provided, however, that any adjustment inthe Applicable Margin shall not become effective until the Agent shall havereceived the Compliance Certificate and related financial statements relatingto the last Fiscal Quarter end pursuant to Sections 5.1(c) and (d)hereof. If a Compliance Certificate and related financial statements ofBorrower and a related certification of Borrower pursuant to Sections 5.1(c)and (d) necessary to establish the Applicable Margin hereunder are notreceived by the Agent on or prior to the date required pursuant to Sections5.1(c)**and (d) hereof,at the Lender’s sole discretion, the Applicable Margin shall be determined atthe highest level described in Annex I and shall remain in effect untilone Banking Day after such time as the required financial statements arereceived.

“Average InterestExpense”: Interest Expense for the most recent twelve (12) Fiscal Quarters,divided by four (4).

“Average Net FundsGenerated”: The sum of the following for the most recent twelve (12) FiscalQuarters, divided by four (4):

(a)                                  Unitretains, retained patronage, depreciation and amortization, net income fromnon-member business and member business tax timing differences; decrease ininvestments in other cooperatives (excluding Subsidiaries), and net revenuefrom sale of stock,

minus

(b)                                 Increasein investments in other cooperatives (excluding Subsidiaries); net loss fromnon-member business and member business tax timing differences, provision forincome tax, and members’ investment retirements.

“Banking Day”: Anyday of the year on which commercial banks in New York, New York and Denver,Colorado are not required or authorized to close.

“Base Rate”: 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 theaverage prime lending rate for seventy-five percent (75%) of the United States’thirty (30) largest commercial banks. If The Wall Street Journal shallcease publication or cease publishing the “prime rate” on a regular basis, suchother regularly published average prime rate applicable to such commercialbanks as is acceptable to the Lender.

“Base Rate Advance”:An Advance with respect to which the interest rate is determined by referenceto the Base Rate.

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“Board”: The Boardof Governors of the Federal Reserve System or any successor thereto.

“Borrower”: Asdefined in the opening paragraph hereof.

“Borrowing Base”:As determined in accordance with the formula set forth in Exhibit B hereto.

“Borrowing BaseCertificate”: A certificate in the form of Exhibit C hereto.

“Borrowing BaseDeficiency”: At the time of any determination, the amount, if any, by whichTotal Revolving Outstandings exceed the Borrowing Base.

“Broken FundingSurcharge”: As defined in Section 2.24.

“Capital Expenditures”:For any period, the sum of all amounts that would, in accordance with GAAP, beincluded as additions to property, plant and equipment on a consolidatedstatement of cash flows for the Borrower during such period, in respect of (a)the acquisition, construction, improvement, replacement or betterment of land,buildings, machinery, equipment or of any other fixed assets or leaseholds, (b)to the extent related to and not included in (a) above, materials, contractlabor (excluding expenditures properly chargeable to repairs or maintenance inaccordance with GAAP), and (c) other capital expenditures and other usesrecorded as capital expenditures or similar terms having substantially the sameeffect.

“Capitalization”:The sum of shareholders’ equity and Indebtedness.

“Capitalization Ratio”:For any period of determination, the ratio of

(a)                                  longterm debt in accordance with GAAP (excluding current maturities),

to

(b)                                 thesum of long term debt (excluding current maturities) plus equity, all inaccordance with GAAP.

“Capitalized Lease”:A lease of (or other agreement conveying the right to use) real or personalproperty with respect to which at least a portion of the rent or other amountsthereon constitute Capitalized Lease Obligations.

“Capitalized LeaseObligations”: As to any Person, the obligations of such Person to pay rentor other amounts under a lease of (or other agreement conveying the right touse) real or personal property which obligations are required to be classifiedand accounted for as a capital lease on a balance sheet of such Person underGAAP (including Statement of Financial Accounting Standards No. 13 of theFinancial Accounting Standards Board), and, for purposes of

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this Agreement, the amount of such obligations shallbe the capitalized amount thereof, determined in accordance with GAAP(including such Statement No. 13).

“Change of Control”:The occurrence, after the Closing Date, of any of the following circumstances:(a) any Person or two or more Persons acting in concert (other than the currentholders of the Equity Interests of the Borrower) acquiring beneficial ownership(within the meaning of Rule 13d-3 of the Securities and Exchange Commissionunder the Securities Exchange Act of 1934), directly or indirectly, of EquityInterests of the Borrower representing 50% or more of the combined voting powerof all Equity Interests of Borrower entitled to vote in the election ofdirectors; or (b) any Person or two or more Persons acting in concert (otherthan the current holders of the Equity Interests of the Borrower) acquiring bycontract or otherwise, or entering into a contract or arrangement which uponconsummation will result in its or their acquisition of, control over EquityInterests of the Borrower representing 50% or more of the combined voting powerof all Equity Interests of Borrower entitled to vote in the election ofdirectors.

“Charges”: Asdefined in Section 8.18.

“Closing Date”:The date in the opening paragraph hereof.

“CoBank Equities”:As defined in Section 2.27.

“Code”: TheInternal Revenue Code of 1986, as amended.

“Commitments”: TheRevolving Loan, Term Loans and Existing Loans.

“Contingent Obligation”:With respect to any Person at the time of any determination, withoutduplication, any obligation, contingent or otherwise, of such Personguaranteeing or having the economic effect of guaranteeing any Indebtedness ofany other Person (the “primary obligor”) in any manner, whether directly orotherwise: (a) to purchase or pay (or advance or supply funds for the purchaseor payment of) such Indebtedness or to purchase (or to advance or supply fundsfor the purchase of) any direct or indirect security therefor, (b) to purchaseproperty, securities, Equity Interests or services for the purpose of assuringthe owner of such Indebtedness of the payment of such Indebtedness, (c) tomaintain working capital, equity capital or other financial statement conditionof the primary obligor so as to enable the primary obligor to pay suchIndebtedness or otherwise to protect the owner thereof against loss in respectthereof, or (d) entered into for the purpose of assuring in any manner theowner of such Indebtedness of the payment of such Indebtedness or to protectthe owner against loss in respect thereof; provided, that the term “ContingentObligation” shall not include endorsements for collection or deposit, in eachcase in the ordinary course of business.

“Current Assets”:As of any date, the consolidated current assets of the Borrower, determined inaccordance with GAAP.

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“Current Liabilities”:As of any date, the consolidated current liabilities of the Borrower,determined in accordance with GAAP.

“Default”: Theoccurrence or existence of (a) an event which through the passage of time orthe service of notice or both would (assuming no action is taken by theBorrower or any other Person to cure the same) mature into an Event of Default,(b) an event which requires neither the passage of time nor the service ofnotice to mature into an Event of Default, or (c) the occurrence of a breach ora default of any Material Indebtedness.

“Default Rate”:The rate that is equal to the Base Rate then in effect plus two percent (2%).

“Eligible AccountsReceivable:” Accounts Receivables of the Borrower and all Subsidiaries which:(1) arise from the sale and delivery of inventory on ordinary trade terms; (2)are evidenced by an invoice; (3) are net of any credit, trade or otherallowance given to the account debtor; (4) are not owing by an account debtorwho has become insolvent or is the subject of any bankruptcy, reorganization,liquidation or like proceeding; (5) are not subject to any offset or deduction;(6) are not owing by an affiliate of the Borrower; (7) are not owing by anobligor located outside of the U.S. unless the receivable is supported by aletter of credit issued by a bank acceptable to the Lender; and (8) are notgovernment receivables. the above provisions notwithstanding, AccountsReceivables shall also exclude (i) any accounts that are past due more than 90 days,and (ii) any contra account regardless of the date.

“Eligible NetInventory”: Inventory of the Borrower as determined on the basis of “NetRealizable Value,” less crop payments owing to members and non-members of theBorrower. “Net Realizable Value” is defined as the expected selling price of aninventory item less expected costs to complete and dispose, as determined inaccordance with GAAP.

“Equity Interests”:All shares, interests, participation or other equivalents, however designated,of or in a corporation or limited liability company, whether or not voting,including but not limited to common stock, member interests, warrants,preferred stock, convertible debentures, and all agreements, instruments anddocuments convertible, in whole or in part, into any one or more or all of theforegoing.

“ERISA”: TheEmployee Retirement Income Security Act of 1974, as amended.

“Event of Default”:Any event described in Section 7.1.

“Existing Loans”:Existing Term Loan T03NP and Existing Term Loan T04.

“Existing Term LoanT03NP”: As defined in Section 2.2.

“Existing Term LoanT04”: As defined in Section 2.2.

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“Federal Funds Rate”:For any period, a fluctuating interest rate per annum equal for each day duringsuch period to the weighted average of the rates on overnight Federal fundstransactions, with members of the Federal Reserve System arranged by Federalfunds brokers, as published for such day (or, if such day is not a Banking Day,for the next preceding Banking Day) by the Federal Reserve Bank of New York,or, if such rate is not so published for any day that is a Banking Day, theaverage of the quotations for such day on such transactions received by theLender from three Federal funds brokers of recognized standing selected by it.

“Fiscal Quarter”:Each three (3) month period beginning on the first day of each September,December, March and June.

“GAAP”: Generallyaccepted accounting principles set forth in the opinions and pronouncements ofthe Accounting Principles Board of the American Institute of Certified PublicAccountants and statements and pronouncements of the Financial AccountingStandards Board or in such other statements by such other entity as may beapproved by a significant segment of the accounting profession, which areapplicable to the circumstances as of any date of determination.

“Immediately AvailableFunds”: Funds with good value on the day and in the city in which paymentis received.

“Indebtedness”:With respect to any Person at the time of any determination, withoutduplication, all obligations, contingent or otherwise, of such Person which inaccordance with GAAP should be classified upon the balance sheet of such Personas liabilities, but in any event including: (a) all obligations of such Personfor borrowed money (including non-recourse obligations), (b) all obligations ofsuch Person evidenced by bonds, debentures, notes or other similar instruments,(c) all obligations of such Person upon which interest charges are customarilypaid or accrued, (d) all obligations of such Person under conditional sale orother title retention agreements relating to property purchased by such Person,(e) all obligations of such Person issued or assumed as the deferred purchaseprice of property or services, (f) all obligations of others secured by anyLien on property owned or acquired by such Person, whether or not theobligations secured thereby have been assumed, (g) all Capitalized LeaseObligations of such Person, (h) all obligations of such Person in respect ofinterest rate swap agreements, cap or collar agreements, interest rate futuresor option contracts, currency swap agreements, currency futures or optionagreements and other similar contracts (i) all obligations of such Person,actual or contingent, as an account party in respect of letters of credit orbankers’ acceptances, (j) all obligations of any partnership or joint ventureas to which such Person is or may become personally liable, (k) all obligationsof such Person under any Equity Interests issued by such Person, and (1) allContingent Obligations of such Person.

“Indemnitee”: Asdefined in Section 8.12.

“IntercreditorAgreement”: That certain Intercreditor and Collateral Agency Agreementdated as of September 15, 1998, by and among St. Paul Bank for Cooperatives, asCollateral

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Agent, St. Paul Bank for Cooperatives, as Bank Lender,the Noteholders party thereto and the Additional Creditors party thereto.

“Interest CoverageRatio”: For any period of determination, the ratio of

(a)                                  AverageNet Funds Generated plus Average Interest Expense,

to

(b)                                 AverageInterest Expense.

“Interest Expense”:For any period of determination, the aggregate consolidated amount, withoutduplication, of interest paid, accrued or scheduled to be paid in respect ofany Indebtedness of the Borrower and its Subsidiaries, including (a) all butthe principal component of payments in respect of conditional sale contracts,Capitalized Leases and other title retention agreements, (b) commissions,discounts and other fees and charges with respect to letters of credit andbankers’ acceptance financings and (c) net costs under interest rate protectionagreements, in each case determined in accordance with GAAP.

“Interest Period”:With respect to each LIBOR Rate Advance, the period commencing on the date ofsuch Advance or on the last day of the immediately preceding Interest Period,if any, applicable to an outstanding Advance and ending one month, two months,three months, six months or one year thereafter, as the Borrower may elect inthe applicable notice of borrowing, continuation or conversion; providedthat:

(1)           Any Interest Period that wouldotherwise end on a day which is not a LIBOR Banking Day shall be extended tothe next succeeding LIBOR Banking Day unless such LIBOR Banking Day falls inanother calendar month, in which case such Interest Period shall end on thenext preceding LIBOR Banking Day;

(2)           Any Interest Period that begins onthe last LIBOR Banking Day of a calendar month (or a day for which there is nonumerically corresponding day in the calendar month at the end of such InterestPeriod) shall end on the last LIBOR Banking Day of a calendar month; and

(3)           Any Interest Period that wouldotherwise end after the Termination Date shall end on the Termination Date.

For purposes of determining an Interest Period, amonth means a period starting on one day in a calendar month and ending on thenumerically corresponding day in the next calendar month; provided, however,that if there is no numerically corresponding day in the month in which such anInterest Period is to end or if such an Interest Period begins on the lastBanking Day of a calendar month, then such Interest Period shall end on thelast Banking Day of the calendar month in which such Interest Period is to end.

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“Investment”: Theacquisition, purchase, making or holding of any Equity Interests or othersecurity, any loan, advance, contribution to capital, extension of credit(except for trade and customer accounts receivable for inventory sold orservices rendered in the ordinary course of business and payable in accordancewith customary trade terms, and Investments of less than $7,500,000), anyacquisitions of real or personal property (other than real and personalproperty acquired in the ordinary course of business) and any purchase orcommitment or option to purchase Equity Interests, securities or other debt ofor any interest in another Person or any integral part of any business or theassets comprising such business or part thereof and the formation of, or entryinto, any partnership as a limited or general partner or the entry into anyjoint venture. The amount of any Investment shall be the original cost of suchInvestment plus the cost of all additions thereto, without any adjustments forincreases or decreases in value, or write-ups, write-downs or write-offs withrespect to such Investment.

“Lender”: Asdefined in the opening paragraph hereof.

“Letter of Credit”:A Seasonal Letter of Credit, Term Letter of Credit, or both.

“Letter of Credit Fees”:As defined in Section 2.14(c).

“Leverage Ratio”:For any period of determination, the ratio of

(a)                                  Longterm debt (excluding current maturities) calculated in accordance with GAAPplus or minus the difference between actual working capital and minimum NetWorking Capital as required under Section 6.15,

to

(b)                                 totalmembers investments plus estimated unit retains and retained patronage.

“LIBOR Banking Day”:A Banking Day which is also a day for trading by and between banks in UnitedStates dollar deposits in the interbank Eurodollar market and a day on whichbanks are open for business in New York City.

“LIBOR Rate”: Withrespect to each Interest Period applicable to a LIBOR Rate Advance, the averageoffered rate for deposits in United States dollars (rounded upward, ifnecessary, to the next one hundredth of one percent) for delivery of suchdeposits on the first day of such Interest Period, for the number of days insuch Interest Period, which appears on Telerate page 3750 as of 11:00 A.M.,London time (or such other time as of which such rate appears) two LIBORBanking Days prior to the first day of such Interest Period, or the rate forsuch deposits determined by the Lender at such time based on such otherpublished service of general application as shall be selected by the Lender forsuch purpose; provided, that in lieu of determining the rate in theforegoing manner, the Lender may determine the rate based on rates at whichUnited States dollar deposits are offered to the Lender in the interbankEurodollar market at such time for delivery in Immediately Available Funds onthe first day of such Interest

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Period in anamount approximately equal to the Advance by the Lender to which such InterestPeriod is to apply (rounded upward, if necessary, to the next one hundredth ofone percent). “Telerate page 3750” means the display designated as such on theTelerate reporting system operated by Telerate System Incorporated (or suchother page as may replace page 3750 for the purpose of displaying Londoninterbank offered rates of major banks for United States dollar deposits).

“LIBOR Rate Advance”:An Advance with respect to which the interest rate is determined by applyingthe Adjusted LIBOR Rate.

“LIBOR ReservePercentage”: As of any day, that percentage (expressed as a decimal) whichis in effect on such day, as prescribed by the Board for determining themaximum reserve requirement (including any basic, supplemental or emergencyreserves) for a member bank of the Federal Reserve System, with depositscomparable in amount to those held by the Lender, in respect of “EurocurrencyLiabilities” as such term is defined in Regulation D of the Board. The rate ofinterest applicable to any outstanding Revolving Loans shall be adjustedautomatically on and as of the effective date of any change in the LIBORReserve Percentage.

“Lien”: Withrespect to any Person, any security interest, mortgage, pledge, lien, charge,encumbrance, title retention agreement or analogous instrument or device(including the interest of each lessor under any Capitalized Lease), in, of or onany assets or properties of such Person, now owned or hereafter acquired,whether arising by agreement or operation of law.

“Loan”: TheRevolving Loan, Term Loan T01, Term Loan T01NP or Term Loan T06 (collectivelyreferred to as the “Loans”).

“Loan Documents”:This Agreement, the Notes, agreements evidencing the Existing Loans and theSecurity Documents.

“Material AdverseOccurrence”: Any occurrence of whatsoever nature (including, withoutlimitation, any adverse determination in any litigation, arbitration, orgovernmental investigation or proceeding) which has materially and adverselyaffected (a) the financial condition or operations of the Borrower, (b) impairthe ability of the Borrower to perform its obligations under any Loan Document,or any writing executed pursuant thereto, (c) the validity or enforceability ofthe material obligations of the Borrower under any Loan Document, or (d) thetimely payment of the principal of and interest on the Loans or other amountspayable by the Borrower hereunder.

“Material Indebtedness”:Any contractual indebtedness of the Borrower existing at any time of $7,500,000or more.

“Maximum Rate”: Asdefined in Section 8.18.

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“Mortgage”: Thatcertain Restated Mortgage and Security Agreement - Mortgage Short-Term Redemptiondated as of September 15, 1998 from American Crystal Sugar Company to St. PaulBank for Cooperatives (now known as CoBank as a result of merger), asCollateral Agent, which was recorded in Pembina County, North Dakota onSeptember 23, 1998, Document No. 214908, Traill County, North Dakota onSeptember 23, 1998, Document No. 149700, Clay County, Minnesota on September23, 1998, Document No. 515813, and Polk County, Minnesota, on September 23,1998, Document No. 563067, as amended by that certain Modification Agreement toRestated Mortgage and Security Agreement - Mortgage Short-Term Redemption,dated as of January 31, 2003, which was recorded in Pembina County, NorthDakota on February 3, 2003, Document No. 224279, Traill County, North Dakota onFebruary 3, 2003, Document No. 155874, Clay County, Minnesota on February 3,2003, Document No. 572459, and Polk County, Minnesota on February 4, 2003,Document No. 600131, as further amended from time to time.

“Net Working Capital”:As of any date of determination, total Current Assets minus total CurrentLiabilities, on a consolidated basis, determined in accordance with GAAP,consistently applied.

“Note”: TheRevolving Note, Term Note T01, Term Note T01NP or Term Note T06 (collectivelyreferred to as the “Notes”).

“Obligations”: TheBorrower’s obligations in respect of the due and punctual payment of principaland interest on the Notes, Unpaid Drawings and Existing Loans when and as due,whether by acceleration or otherwise, and all fees (including Revolving CommitmentFees), expenses, indemnities, reimbursements and other obligations of theBorrower under this Agreement or any other Loan Document, in all cases whethernow existing or hereafter arising or incurred.

“Other Taxes”: Asdefined in Section 2.25(b).

“Participants”: Asdefined in Section 8.6(b).

“PBGC”: ThePension Benefit Guaranty Corporation, established pursuant to Subtitle A ofTitle IV of ERISA, and any successor thereto or to the functions thereof.

“Person”: Anynatural person, corporation, partnership, limited partnership, limitedliability company, joint venture, firm, association, trust, unincorporatedorganization, government or governmental agency or political subdivision or anyother entity, whether acting in an individual, fiduciary or other capacity.

“Plan”: Eachemployee benefit plan (whether in existence on the Closing Date or thereafterinstituted), as such term is defined in Section 3 of ERISA, maintained for thebenefit of employees, officers or directors of a Borrower.

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“Prepayment Event”:Means:

(a)           any sale, transfer or otherdisposition (including pursuant to a sale and leaseback transaction) of anyproperty or asset of the Borrower, other than dispositions described in clauses(a), (b) and (c) of Section 6.2; or

(b)           any casualty or other insured damageto, or any taking under power of eminent domain or by condemnation or similarproceeding of, any property or asset of the Borrower, but only to the extentthat the net proceeds therefrom have not been applied, or committed pursuant toan agreement (including any purchase orders) to be applied, to repair, restoreor replace such property or asset within 180 days after such event.

“Quoted Rate”: Therate of interest quoted by the Lender in its sole discretion.

“Quoted Rate Offer”:A quote of a fixed interest rate per annum for maximum periods of one (1) dayprovided to Borrower by the Lender in its sole discretion following the receiptby the Lender of a Quoted Rate Request from Borrower.

“Quoted Rate Request”:A request by Borrower to the Lender for a Quoted Rate Offer.

“Regulatory Change”:Any change after the Closing Date in federal, state or foreign laws orregulations or the adoption or making after such date of any interpretations,directives or requests applying to a class of banks including any Lender underany federal, state or foreign laws or regulations (whether or not having theforce of law) by any court or governmental or monetary authority charged withthe interpretation or administration thereof.

“Reportable Event”:A reportable event as defined in Section 4043 of ERISA and the regulationsissued under such Section, with respect to a Plan, excluding, however, suchevents as to which the PBGC by regulation has waived the requirement of Section4043(a) of ERISA that it be notified within 30 days of the occurrence of suchevent, provided that a failure to meet the minimum funding standard of Section412 of the Code and of Section 302 of ERISA shall be a Reportable Eventregardless of the issuance of any waiver in accordance with Section 412(d) ofthe Code.

“Restricted Payments”:With respect to Borrower, collectively, (a) all dividends or otherdistributions of any nature (cash, Equity Interests, assets or otherwise), andall payments on any class of Equity Interests (including warrants, options orrights therefor) issued by the Borrower, whether such Equity Interests areauthorized or outstanding on the Closing Date or at any time thereafter, or (b)any redemption or purchase of, or distribution in respect of, any of theforegoing, whether directly or indirectly (except for the annual revolvment ofunit retains, or retained patronage which occurs in the ordinary course ofbusiness).

“Revolving Loan”:As defined in Section 2.1.

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“Revolving Loan Amount”:An amount which shall not at any time be greater than Three Hundred MillionDollars ($300,000,000), as determined from time to time according to the termsof this Agreement.

“Revolving Loan Date”:The date of the making of any Revolving Loan Advance hereunder.

“Revolving Loan Fees”:As defined in Section 2.14(a).

“Revolving Note”:The promissory note of the Borrower in the form of Exhibit A-l hereto,evidencing the obligation of the Borrower to repay the Revolving Loan.

“Seasonal Letter ofCredit”: An irrevocable letter of credit issued under the Revolving Loanpursuant to this Agreement of the account of Borrower.

“Seasonal Letter ofCredit Commitment Amount”: Twenty Million Dollars ($20,000,000).

“Secured Obligations”:The Obligations, excluding the Revolving Note, Unpaid Drawings related to aSeasonal Letter of Credit, and all fees, including Revolving Loan Fees,associated therewith.

“Security Documents”:The Mortgage and each other agreement, document or instrument pursuant to whichthe Lender is granted a Lien to secure the Secured Obligations, as the same maybe amended, supplemented, extended, restated or otherwise modified from time totime.

“Subordinated Debt”:Any interest bearing Indebtedness of the Borrower, now existing or hereaftercreated, incurred or arising, which is subordinated in right of payment to thepayment of the Obligations.

“Subsidiary”: Withrespect to any Person, (a) any corporation in which such Person, directly orindirectly (i) owns more than 50% of the outstanding stock thereof, or (ii) hasthe power under ordinary circumstances to elect a majority of the directorsthereof, or (b) any partnership, association, joint venture, limited liabilitycompany, or other unincorporated association or entity with respect to whichsuch Person, directly or indirectly, owns an equity interest in an amountsufficient to control the management thereof. For purposes of this LoanAgreement, ProGold Limited Liability Company (“Progold”) (for as long asProGold’s current lease with Cargill remains in effect) and Crystech, L.L.C. (“Crystech”)shall not be deemed a Subsidiary.

“Termination Date”:The earliest of (a) August 1, 2008, and (b) the date on which the RevolvingCommitments are terminated pursuant to Section 7.2 hereof.

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“Term Letter of Credit”:An irrevocable letter of credit issued under Term Loan T06 pursuant to thisAgreement for the account of Borrower.

“Term Letter of CreditCommitment Amount”: Ten Million Dollars ($10,000,000).

“Term Loan”: TheTerm Loan T01, Term Loan T01NP or Term Loan T06 (collectively, the “Term Loans”).

‘Term LoanAvailability Period”: The period beginning on the Closing Date to August 1,2008.

“Term Loan Fees”:As defined in Section 2.14(a).

“Term Loan MaturityDate”: December 31, 2011.

“Term Loan T01”:As defined in Section 2.1.

“Term Loan T01 Amount”:An amount which shall not at any time be greater than Fifty-Eight Million TwoHundred Seventy-Six Thousand Seven Hundred Two Dollars ($58,276,702), asdetermined from time to time according to the terms of this Agreement.

“Term Loan T01NP Loan”:As defined in Section 2.1.

“Term Loan T01NPAmount”: An amount which shall not at any time be greater than Twenty-FiveMillion One Hundred Six Thousand Six Hundred Dollars ($25,106,600), asdetermined from time to time according to the terms of this Agreement.

“Term Loan T06”:As defined in Section 2.1.

“Term Loan T06 Amount”:An amount which shall not at any time be greater than Eighty-Five MillionDollars ($85,000,000), as determined from time to time according to the termsof this Agreement.

“Term Note T01”:The promissory note of the Borrower in the form of Exhibit A-2 hereto,evidencing the obligation of the Borrower to repay the Term Loan T01.

“Term Note T01NP”:The promissory note of the Borrower in the form of Exhibit A-3 hereto,evidencing the obligation of the Borrower to repay the Term Loan T01NP.

“Term Note T06”:The promissory note of the Borrower in the form of Exhibit A-4 hereto,evidencing the obligation of the Borrower to repay the Term Loan T06.

“Total RevolvingOutstandings”: As of any date of determination, the sum of (a) theaggregate unpaid principal balance of the Revolving Loan outstanding on suchdate, (b) the aggregate maximum amount available to be drawn under Letters ofCredit outstanding on such

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date, and (c) the aggregate amount of Unpaid Drawings related to aSeasonal Letter of Credit on such date.

“Total TermOutstandings”: As of any date of determination, the sum of (a) theaggregate unpaid principal balance of Term Loan T01, (b) the aggregate unpaidprincipal balance of Term Loan T01NP, (c) the aggregate unpaid principalbalance of Term Loan T06, and (d) the aggregate amount of Unpaid Drawingsrelated to a Term Letter of Credit on such date.

“Unpaid Drawing”:As defined in Section 2.12.

“Unused Revolving LoanAmount”: As of any date of determination, the amount by which the RevolvingLoan Amount exceeds the Total Revolving Outstandings on such date.

“Unused Term LoanAmount”: As of any date of determination, the amount by which the Term LoanT01 Amount plus the Term Loan T01NP Amount plus the Term Loan T06 Amountexceeds the Total Term Outstandings.

“U.S. Taxes”: Asdefined in Section 2.25(e).

Section 1.2 AccountingTerms and Calculations. Except as may be expressly provided to the contraryherein, all accounting terms used herein shall be interpreted and allaccounting determinations hereunder shall be made in accordance with GAAP. Tothe extent any change in GAAP affects any computation or determination requiredto be made pursuant to this Agreement, such computation or determination shallbe made as if such change in GAAP had not occurred unless the Borrower andRequired Lender agree in writing on an adjustment to such computation ordetermination to account for such change in GAAP.

Section 1.3 Computationof Time Periods. In this Agreement, in the computation of a period of timefrom a specified date to a later specified date, unless otherwise stated theword “from” means “from and including” and the word “to” or “until” each means “tobut excluding”.

Section 1.4 OtherDefinitional Terms. The words “hereof,” “herein” and “hereunder” and wordsof similar import when used in this Agreement shall refer to this Agreement asa whole and not to any particular provision of this Agreement. References toSections, Exhibits, schedules and like references are to this Agreement unlessotherwise expressly provided. The words “include,” “includes” and “including”shall be deemed to be followed by the phrase “without limitation.” Unless thecontext in which used herein otherwise clearly requires, “or” has the inclusivemeaning represented by the phrase “and/or.” All incorporation by reference ofcovenants, terms, definitions or other provisions from other agreements areincorporated into this Agreement as if such provisions were fully set forthherein, and such incorporation shall include all necessary definitions andrelated provisions from such other agreements, and shall survive anytermination of such other agreements until the obligations of the Borrowerunder this Agreement and the Notes are irrevocably paid in full, all Letters ofCredit have expired without

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renewal or been returned to the issuer, and thecommitments of Lender to advance funds to the Borrower are terminated.

**ARTICLE IITERMS OF THE CREDIT FACILITIES**

Section 2.1             LendingCommitments.

(a)           Revolving Loan. Subject to theterms and conditions hereof, the Lender agrees to make a revolving creditfacility available to the Borrower on a revolving basis at any time and fromtime to time from the Closing Date to the Termination Date, during which periodthe Borrower may borrow, repay and reborrow in accordance with the provisionshereof, provided, that no Revolving Loan will be made in any amountwhich, after giving effect thereto, would cause the Total RevolvingOutstandings to exceed the (i) Revolving Loan Amount, or (ii) the BorrowingBase. Revolving Loan Advances may be obtained and maintained, at the electionof the Borrower but subject to the limitations hereof, as LIBOR Rate Advances,Quoted Rate Advances or Base Rate Advances or any combination thereof; provided,however, that no more than five (5) LIBOR Rate Advances may beoutstanding at any one time, and no more than ten (10) Quoted Rate Advances maybe outstanding at any one time under the Revolving Loan.

(b)           Term Loan T01. Subject to theterms and conditions hereof, the Lender agrees to make a revolving termfacility available to the Borrower, jointly and severally, on a revolving basisat any time and from time to time during the Term Loan T01 Availability Period,up to the Term Loan T01 Amount, during which period the Borrower may borrow,repay and reborrow in accordance with the provisions hereof. Term Loan T01Advances may be obtained and maintained, at the election of the Borrower butsubject to the limitations hereof, as LIBOR Rate Advances, Quoted Rate Advancesor Base Rate Advances or any combination thereof; provided, however,that no more than five (5) LIBOR Rate Advances may be outstanding at any onetime, and no more than ten (10) Quoted Rate Advances may be outstanding at anyone time under Term Loan T01.

(c)           Term Loan T01NP. Subject tothe terms and conditions hereof, the Lender agrees to make a revolving termfacility available to the Borrower, jointly and severally, on a revolving basisat any time and from time to time during the Term Loan T01NP AvailabilityPeriod, up to the Term Loan T01NP Amount, during which period the Borrower mayborrow, repay and reborrow in accordance with the provisions hereof. Term LoanT01NP Advances may be obtained and maintained, at the election of the Borrowerbut subject to the limitations hereof, as LIBOR Rate Advances, Quoted RateAdvances or Base Rate Advances or any combination thereof; provided, however,that no more than five (5) LIBOR Rate Advances may be outstanding at any onetime, and no more than ten (10) Quoted Rate Advances may be outstanding at anyone time under Term Loan T01NP.

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(d)           Term Loan T06. Subject to theterms and conditions hereof, the Lender agrees to make a revolving termfacility available to the Borrower, jointly and severally, on a revolving basisat any time and from time to time during the Term Loan T06 Availability Period,up to the Term Loan T06 Amount, during which period the Borrower may borrow, repayand reborrow in accordance with the provisions hereof. Term Loan T06 Advancesmay be obtained and maintained, at the election of the Borrower but subject tothe limitations hereof, as LIBOR Rate Advances, Quoted Rate Advances or BaseRate Advances or any combination thereof; provided, however, thatno more than five (5) LIBOR Rate Advances may be outstanding at any one time,and no more than ten (10) Quoted Rate Advances may be outstanding at any onetime under Term Loan T06.

Section 2.2             Existing Loans. The Lenderhas previously extended to the Borrower (i) the Term Loan T03NP pursuant tothat certain Single Advance Term Loan Supplement dated as of July 21, 2003, andnumbered Z269T03BNP, in the original principal amount of $12,000,000, which hasan unpaid principal balance of $2,400,000, and a maturity date of February 1,2010, and (ii) the Term Loan T04 pursuant to that certain Non-Revolving CreditSupplement dated as of December 12, 2005, and numbered Z269T04B, in theoriginal principal amount of $36,000,000, which has an unpaid principal balanceof $36,000,000, and a maturity date of April 30, 2013. As of the date of thisAgreement, Term Loan T03NP and Term Loan T04 shall become subject to all of theterms and conditions of this Agreement; provided,however, if anyprovision of this Agreement is in conflict with any provision of any Term LoanSupplement, the applicable Term Loan Supplement shall control with respect tosuch provision.

Section 2.3             Procedure for Loans.

(a)           Procedure for Revolving Loan.

(i)            Not later than 11:00 A.M. (Denvertime) two LIBOR Banking Days prior to the requested Revolving Loan Date if theRevolving Loan Advance is requested as a LIBOR Rate Advance, not later than11:00 A.M. (Denver time) one Banking Day prior to the requested Revolving LoanDate if the Revolving Loan Advance is requested as a Quoted Rate Advance, andnot later than 11:00 A.M. (Denver time) on the requested Revolving Loan Date ifthe Revolving Loan Advance is requested as a Base Rate Advance, Borrower’sAgent shall submit to the Lender a written on telephonic request for borrowing,provided that no more than one request for Borrowing may be made on anyBanking Day. Each request for a Revolving Loan Advance hereunder shall beirrevocable and shall be deemed a representation by Borrower that on therequested Revolving Loan Date, and after giving effect to the requestedRevolving Loan Advance, the applicable conditions specified in Article III havebeen and will be satisfied. Each request for a Revolving Loan Advance hereundershall specify (i) the requested Revolving Loan Date, (ii) the amount of theRevolving Loan Advance to be made on such date which shall be in a minimumamount of $5,000,000 or, if more, a whole multiple of $1,000,000 in**excess thereof, (iii) whether suchRevolving

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Loan Advance is to be funded as a LIBOR Rate Advance,Quoted Rate Advance or Base Rate Advance (and, if such Revolving Loan Advanceis to be made with more than one applicable interest rate choice, specifyingthe amount to which each interest rate choice is applicable) and (iv) in thecase of LIBOR Rate Advances, the duration of the initial Interest Periodapplicable thereto. The Lender may rely on any telephone request by theBorrower for Revolving Loan Advances hereunder which it believes in good faithto be genuine; and Borrower hereby waives the right to dispute the Lender’srecord of the terms of such telephone request.

(ii)           The Lender agrees that the Borrowermay from time to time request the Lender to submit an offer to make a RevolvingLoan Advance to the Borrower, provided, however, that the Lender may, but shallhave no obligation to, submit such offer and the Borrower may, but shall haveno obligation to, accept any such offer. A request that the Lender submit anoffer to make a Revolving Loan Advance hereunder shall be referred to herein asa “bid request,” and an offer to make a loan that specifies the loan amount,interest rate and interest period shall be referred to herein as the “bid.” Bidrequests may be made orally or in writing (in the form attached hereto as ExhibitE) but if made orally shall be confirmed promptly by telecopy (facsimile)of a written completed bid request in a form approved by the Lender. Each bidrequest shall specify (A) the amount of the requested Revolving Loan Advance,which amount must be in a minimum amount of $1,000,000 or integral multiplesthereof (or the entire available balance of the Revolving Loan), (B) the dateof the Revolving Loan Advance, and (C) the Interest Period of the Revolving LoanAdvance. The Lender may, in response to a bid request, in its discretion,irrevocably submit to the Borrower, a bid containing an offer to make theRevolving Loan Advance. Each bid, if submitted, must be submitted to theLender, whether orally or in writing, by 10:00 A.M. (Denver time) on the dayfollowing the bid request. Each bid shall specify (X) the amount of theRevolving Loan Advance for which the bid is being made, (Y) the rate ofinterest per annum offered for the Revolving Loan Advance (which shall beexpressed in the form of an index plus any margin), and (Z) the Interest Periodof the Revolving Loan Advance, which date shall not be beyond the TerminationDate. Not later than 11:00 A.M. (Denver time) on the day the Borrower receivesthe Lender’s bid (or at such later time as the Lender may agree), the Borrowershall either reject the bid or accept the bid by giving notice to the Lender bytelephone in either case, confirmed by facsimile. Failure to properly notifythe Lender of an acceptance of the bid may be treated by the Lender as arejection. Any Revolving Loan Advance made as a result of the Borrower’sacceptance of the Lender’s bid (such Revolving Loan Advance to be referred toherein as a “Bid Advance”) shall be subject to the terms of this Agreement. Ifthe Lender has sold participation interests in the Revolving Loan, then BidAdvances by the Lender shall be deemed to reduce only the

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Lender’s pro rata share of the Revolving Loan. the sumof all Bid Advances outstanding may not at any time exceed the lesser of (L)$50,000,000, or (M) the dollar amount of the Lender’s pro rata share of theRevolving Loan (as said amount may be reduced a result of other Revolving LoanAdvances made pursuant to the Revolving Loan).

(b)           Procedure for Term Loans. Notlater than 11:00 A.M. (Denver time) two LIBOR Banking Days prior to therequested Term Loan Date if the Term Loan Advance is requested as a LIBOR RateAdvance, not later than 11:00 A.M. (Denver time) one Banking Day prior to therequested Term Loan Date if the Term Loan Advance is requested as a Quoted RateAdvance, and not later than 11:00 A.M. (Denver time) on the requested Term LoanDate if the Term Loan Advance is requested as a Base Rate Advance, Borrower’sAgent shall submit to the Lender a written or telephonic request for borrowing,provided that no more than one request for Borrowing may be made on anyBanking Day. Each request for a Term Loan Advance hereunder shall beirrevocable and shall be deemed a representation by Borrower that on the requestedTerm Loan Date, and after giving effect to the requested Term Loan Advance, theapplicable conditions specified in Article III have been and will be satisfied.Each request for a Term Loan Advance hereunder shall specify (i) the requestedTerm Loan Date, (ii) the Term Loan to which the Term Loan Advance relates,(iii) the amount of the Term Loan Advance to be made on such date which shallbe in a minimum amount of $2,000,000 or, if more, a whole multiple of $500,000in excess thereof, (iv) whether such Term Loan Advance is to be funded as aLIBOR Rate Advance, Quoted Rate Advance or Base Rate Advance (and, if such TermLoan Advance is to be made with more than one applicable interest rate choice,specifying the amount to which each interest rate choice is applicable) and (v)in the case of LIBOR Rate Advances, the duration of the initial Interest Periodapplicable thereto. The Lender may rely on any telephone request by theBorrower for Term Loan Advances hereunder which it believes in good faith to begenuine; and Borrower hereby waives the right to dispute the Lender’s record ofthe terms of such telephone request.

Section 2.4             Notes. The Revolving Loanshall be evidenced by the Revolving Note payable to the order of the Lender ina principal amount equal to the Revolving Loan Amount. The Term Loans shall beevidenced by the Term Notes payable to the order of the Lender in principalamounts equal to the respective Term Loan Amount. The Lender shall enter in itsledgers and records the amount of the Revolving Loan and each Term Loan, thevarious Advances made, converted or continued and the payments made thereon,and the Lender is authorized by the Borrower to enter on a schedule attached tothe Revolving Note or Term Notes, as appropriate, a record of such RevolvingLoan, Term Loans, Advances and payments; provided, however that the failure bythe Lender to make any such entry or any error in making such entry shall notlimit or otherwise affect the obligation of the Borrower hereunder and on theNotes, and, in all events, the principal amounts owing by the Borrower inrespect of the Revolving Note shall be the aggregate amount of all RevolvingLoan Advances made by the

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Lender less all payments of principal thereof made bythe Borrower, and the principal amount owing by Borrower in respect of the TermNotes shall be aggregate amount of all Term Note Advances made by the Lenderless all payments of principal thereon made by the Borrower.

Section 2.5             Conversions and Continuations.On the terms and subject to the limitations hereof, the Borrower shall have theoption at any time and from time to time to convert all or any portion of theAdvances in respect of the Revolving Loan or the Term Loans into Base RateAdvances, LIBOR Rate Advances or Quoted Rate Advances, or to continue a LIBORRate Advance or Quoted Rate Advance as such; provided, howeverthat a LIBOR Rate Advance may be converted or continued only on the last day ofthe Interest Period applicable thereto, a Quoted Rate Advance may be convertedor continued only on the last day of the fixed rate period set forth in thecorresponding Quoted Rate Offer, and no Advance may be converted or continuedas a LIBOR Rate Advance or a Quoted Rate Advance if a Default or Event ofDefault has occurred and is continuing on the proposed date of continuation orconversion. Advances in respect of the Revolving Loan or Term Loans may beconverted to, or continued as, LIBOR Rate Advances only in a minimum amount of$500,000 or, if more, a whole multiple of $500,000 in excess thereof. Advancesin respect of the Revolving Loan or Term Loans may be converted to, orcontinued as, Quoted Rate Advances only in a minimum amount of $500,000 or, ifmore, a whole multiple of $500,000 in excess thereof. The Borrower shall givethe Lender written notice of any continuation or conversion of any suchAdvances and such notice must be given so as to be received by the Lender notlater than 11:00 A.M. (Denver Time) two LIBOR Banking Days prior to requesteddate of conversion or continuation in the case of the continuation of, orconversion to, LIBOR Rate Advances, not later than 11:00 A.M. (Denver Time) onthe requested date of conversion or continuation in the case of thecontinuation of, or conversion to, Quoted Rate Advances, and not later than11:00 A.M. (Denver Time) on the date of the requested continuation of, orconversion to, Base Rate Advances. Each such notice shall specify (a) theamount to be continued or converted, (b) the date for the continuation orconversion (which must be (i) the last day of the preceding Interest Period forany continuation or conversion of LIBOR Rate Advances, (ii) the last day of thefixed rate period set forth in the corresponding Quoted Rate Offer for anycontinuations or conversion of a Quoted Rate Advance, (iii) a LIBOR Banking Dayin the case of conversions to or continuations as LIBOR Rate Advances, and (iv)a Banking Day in the case of continuations or conversions to Base RateAdvances), and (c) in the case of conversions to or continuations as LIBOR RateAdvances, the Interest Period applicable thereto. Any notice given by theBorrower under this Section shall be irrevocable. If the Borrower shall fail tonotify the Lender of the continuation of any LIBOR Rate Advances within thetime required by this Section, at the option of the Lender, such Advancesshall, on the last day of the Interest Period applicable thereto, automaticallybe converted into Base Rate Advances with the same principal amount. If theBorrower shall fail to notify the Lender of the continuation of any Quoted RateAdvances within the time required by this Section, or if the Lender declines tomake a Quoted Rate Offer with respect to such Quoted Rate Advances and theBorrower has not requested an alternate Advance, such Quoted Rate Advancesshall, on the last day of the fixed rate period applicable thereto,automatically accrue interest at the Base Rate until repaid or converted intoanother Advance.

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Section 2.6             InterestRates, Interest Payments and Default Interest.

(a)           Revolving Loan. Interest shallaccrue and be payable on the Revolving Loan as follows:

(i)            Subject to paragraph (iv) below,each LIBOR Rate Advance shall bear interest on the unpaid principal amountthereof during the Interest Period applicable thereto at a rate per annum equalto the sum of (A) the Adjusted LIBOR Rate for such Interest Period, plus(B) 65 basis points.

(ii)           Subject to paragraph (iv) below, eachQuoted Rate Advance shall bear interest on the unpaid principal amount thereofat a rate per annum equal to the Quoted Rate;

(iii)          Subject to paragraph (iv) below, eachBase Rate Advance shall bear interest on the unpaid principal amount thereof ata varying rate per annum equal to the Base Rate.

(iv)          Upon the occurrence of any Event ofDefault, each Advance in respect of the Revolving Loan shall, at the option ofthe Lender, bear interest until paid in full at a rate per annum equal to theDefault Rate.

(v)           Interest shall be payable (A) withrespect to each LIBOR Rate Advance, on the last day of the Interest Periodapplicable thereto (and, in the case of any LIBOR Rate Advance having anInterest Period greater than three months, on the three month anniversary ofthe first day of such Interest Period); (B) with respect to any Base RateAdvance or Quoted Rate Advance, in arrears on the 20th day of each month; (C)with respect to all Advances, upon any permitted prepayment (on the amountprepaid); and (D) with respect to all Advances, on the Termination Date; providedthat interest under paragraph (a)(iv) of this Section shall be payable ondemand.

(b)           Term Loan. Interest shallaccrue and be payable on the Term Loan as follows:

(i)            Subject to paragraph (iv) below,each LIBOR Rate Advance in respect of the Term Loan shall bear interest on theunpaid principal amount thereof during the Interest Period applicable theretoat a rate per annum equal to the sum of (A) the Adjusted LIBOR Rate for suchInterest Period, plus (B) the Applicable Margin.

(ii)           Subject to paragraph (iv) below, eachQuoted Rate Advance in respect of the Term Loan shall bear interest on theunpaid principal amount thereof at a rate per annum equal to the Quoted Rate.

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(iii)          Subject to paragraph (iv) below, eachBase Rate Advance in respect of the Term Loan shall bear interest on the unpaidprincipal amount thereof at a varying rate per annum equal to the sum of (A)the Base Rate, plus (B) the Applicable Margin.

(iv)          Upon the occurrence of any Event ofDefault, each Term Loan Advance shall, at the option of the Lenders, bearinterest until paid in full at a rate per annum equal to the Default Rate.

(v)           Interest shall be payable (A) withrespect to each LIBOR Rate Advance in respect of the Term Loan, on the last dayof the Interest Period applicable thereto (and, in the case of any LIBOR RateAdvance in respect of the Term Loan having an Interest Period greater thanthree months, on the three month anniversary of the first day of such InterestPeriod); (B) with respect to any Base Rate Advance or Quoted Rate Advance inrespect of the Term Loan in arrears, on the 20th day of each month; (C) withrespect to all Advances, upon any permitted prepayment (on the amount prepaid);and (D) with respect to all Advances, on the Termination Date; providedthat interest under paragraph (b)(iv) of this Section shall be payable ondemand.

Section 2.7             Repayment.

(a)           Revolving Loan. The unpaidprincipal balance of the Revolving Note, together with all accrued and unpaidinterest thereon, shall be due and payable on the Termination Date.

(b)           Term Loan T01. The principalof Term Loan T01 shall be payable in three annual installments in the amount of$9,400,000 due on December 31 of each year beginning December 31, 2008, and anyamount of principal or interest remaining unpaid with respect to Term Loan T01on the Term Loan Maturity Date shall be immediately due and payable on suchdate.

(c)           Term Loan T01NP. The principalof Term Loan T01NP shall be payable in three annual installments in the amountof $7,600,000 due on December 31 of each year beginning December 31, 2008, andany amount of principal or interest remaining unpaid with respect to Term LoanT01NP on the Term Loan Maturity Date shall be immediately due and payable onsuch date.

(d)           Term Loan T06. The unpaidprincipal of Term Loan T06 shall be payable as follows: On December 31, 2008, aprincipal payment shall be due in an amount equal to 25% of the outstandingprincipal balance of Term Loan T06 as of the last day of the Term LoanAvailability Period; the remaining principal balance shall be payable in threeequal annual installments due on December 31 of each year beginning December31, 2009, and any amount of principal or interest remaining unpaid with respectto Term

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Loan T06 on the Term Loan Maturity Date shall beimmediately due and payable on such date.

Section 2.8             Prepayments.

(a)           Mandatory Prepayments forBorrowing Base Deficiency. If at any time a Borrowing Base Deficiencyexists, the Borrower shall immediately pay on the principal of the Advances inrespect of the Revolving Loan an amount equal to such Borrowing BaseDeficiency. Any such payments shall be applied first against Base Rate Advancesand then to Quoted Rate and LIBOR Rate Advances in order starting with theQuoted Rate or LIBOR Rate Advances having the shortest time to the end of theapplicable Interest Period.

(b)           Mandatory Prepayments for aPrepayment Event. If at any time a Prepayment Event occurs, the Borrowershall immediately pay to the Lender the net proceeds realized by suchPrepayment Event and any prepayment fee payable under Section 2.24. Any suchprepayments shall be applied, pro rata, to the Term Loans (first against BaseRate Advances and then to Quoted Rate and LIBOR Rate Advances in order startingwith the Quoted Rate or LIBOR Rate Advances having the shortest time to the endof the applicable Interest Period), second, to any outstanding RevolvingLoans, and third to cash collateralize any issued and outstandingLetters of Credit. All prepayments applied to the Term Loans shall be appliedto the scheduled principal payments on the Term Loans, pro rata, in the inverseorder of their maturities.

(c)           Other Mandatory Prepayments.If at any time Total Revolving Outstandings exceed the Revolving Loan Amount,the Borrower shall immediately repay to the Lender the amount of such excess.Any such prepayments shall be applied to the Revolving Loan.

(d)           Optional Prepayments. TheLoans may be prepaid at any time, in whole or in part, subject to Section 2.24,in minimum amounts of $1,000,000.00, and in integral multiples of $100,000.00(or the entire outstanding balance, if less) on any Banking Day; provided,however, in the event of any prepayment of a LIBOR Rate Advance, Borrower mustprovide three (3) Banking Days’ prior written notice to the Agent. Any suchprepayment must be accompanied by accrued and unpaid interest on the amountprepaid. Amounts paid (unless following an acceleration or upon termination ofthe Revolving Loan in whole) or prepaid on Advances in respect of the RevolvingLoan or the Term Loans under this paragraph (d) may be reborrowed upon theterms and subject to the conditions and limitations of this Agreement. Allprepayments shall be applied to the Loans, as designated by Borrower, and allprepayments on a Term Loan shall be applied to the scheduled principal paymentson such Term Loan in the inverse order of their maturities.

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Section 2.9             Letters of Credit. Upon theterms and subject to the conditions of this Agreement, the Lender agrees toissue Letters of Credit for the account of the Borrower from time to timebetween the Closing Date and thirty (30) days prior to the Termination Date insuch amounts as the Borrower shall request up to an aggregate amount at anytime outstanding not exceeding the Seasonal Letter of Credit Commitment Amountor Term Letter of Credit Commitment Amount, as applicable; provided that(i) the face amount of any Seasonal Letter of Credit shall automaticallyreduce, dollar for dollar, the amount which Borrower may borrow as RevolvingLoan Advances, (ii) the face amount of any Term Letter of Credit shall automaticallyreduce, dollar for dollar, the amount which Borrower may borrow as Term LoanT06 Advances; (iii) the aggregate face amount of all issued and outstandingSeasonal Letters of Credit shall not exceed $20,000,000, (iv) the aggregateamount of all issued and outstanding Letters of Credit shall not exceed$10,000,000, (v) no Seasonal Letter of Credit will be issued in any amountwhich, after giving effect to such issuance, would cause Total RevolvingOutstandings to exceed the Revolving Loan Amount, and (vi) no Term Letter ofCredit will be issued in any amount which, after giving effect to suchissuance, would cause the aggregate unpaid principal balance of Term Loan T06and the aggregate amount of Unpaid Drawings related to a Term Letter of Creditto exceed the Term Loan T06 Amount. Each Letter of Credit request shall setforth (i) the face amount of and expiry date, (ii) the beneficiary, (iii) theterms thereof, and (iv) such other information as the Lender may request.

Section 2.10           Procedures for Letters of Credit.Each request for a Letter of Credit shall be made by the Borrower in writing,by telex, facsimile transmission or electronic conveyance received by theLender by 11:00 A.M. (Denver Time) on a Banking Day that is not less than oneBanking Day preceding the requested date of issuance (which shall also be aBanking Day). Each request for a Letter of Credit shall be deemed arepresentation by the Borrower that on the date of issuance of such Letter ofCredit and after giving effect thereto the applicable conditions specified inArticle III have been and will be satisfied. The Lender may require that suchrequest be made on such letter of credit application and reimbursementagreement form as the Lender may from time to time specify, along with satisfactoryevidence of the authority and incumbency of the officials of the Borrower.

Section 2.11           Terms of Letters of Credit.Letters of Credit shall be issued in support of obligations of the Borrower inaccordance with Section 2.17. Each Seasonal Letter of Credit must expire notlater than the Banking Day preceding the Termination Date, each Term Letter ofCredit must expire not later than the Banking Day preceding the Term LoanMaturity Date, and no Letter of Credit may have a term longer than the underlyingLoan.

Section 2.12           Agreement to Repay Letter ofCredit Drawing. If the Lender has received documents purporting to drawunder a Letter of Credit that the Lender believes conform to the requirementsof such Letter of Credit, or if the Lender has decided that it will comply withthe Borrower’s written or oral request or authorization to pay a drawing on anyLetter of Credit that the Lender does not believe conforms to the requirementsof such Letter of Credit, it will notify the Borrower of that fact. TheBorrower shall reimburse the Lender by 9:30 A.M. (Denver Time) on the day onwhich such drawing is to be paid in Immediately Available Funds

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in an amount equal to the amount of such drawing. Anyamount by which the Borrower has failed to reimburse the Lender for the fullamount of such drawing by 10:00 A.M. on the date on which the Lender in itsnotice indicated that it would pay such drawing, until reimbursed by theBorrower, is an “Unpaid Drawing.”

Section 2.13           Obligations Absolute. The obligationof the Borrower under Section 2.12 to repay the Lender for any amount drawn onany Letter of Credit and to repay the Lender to cover Unpaid Drawings shall beabsolute, unconditional and irrevocable, shall continue for so long as anyLetter of Credit is outstanding notwithstanding any termination of thisAgreement, and shall be paid strictly in accordance with the terms of thisAgreement, under all circumstances whatsoever, including without limitation thefollowing circumstances:

(a)           Any lack of validity or enforceabilityof any Letter of Credit;

(b)           The existence of any claim, setoff,defense or other right which the Borrower may have or claim at any time againstany beneficiary, transferee or holder of any Letter of Credit (or any Personfor whom any such beneficiary, transferee or holder may be acting), the Lenderor the Lender or any other Person, whether in connection with a Letter ofCredit, this Agreement, the transactions contemplated hereby, or any unrelatedtransaction; or

(c)           Any statement or any other documentpresented under any Letter of Credit proving to be forged, fraudulent orinvalid in any respect or any statement therein being untrue or inaccurate inany respect whatsoever.

Neither the Lender nor its officers, directors oremployees shall be liable or responsible for, and the obligations of theBorrower to the Lender shall not be impaired by:

(i)            The use which may be made of anyLetter of Credit or for any acts or omissions of any beneficiary, transferee orholder thereof in connection therewith;

(ii)           The validity or genuineness ofdocuments, or of any endorsements thereon, even if such documents orendorsements should, in fact, prove to be in any or all respects invalid,fraudulent or forged;

(iii)          The acceptance by the Lender ofdocuments that appear on their face to be in order, without responsibility forfurther investigation, regardless of any notice or information to the contrary;or

(iv)          Any other action of the Lender inmaking or failing to make payment under any Letter of Credit if in good faithand in conformity with U.S. or foreign laws, regulations or customs applicablethereto.

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Section 2.14           Fees.

(a)           Loan Fees. The Borrower shallpay to the Lender fees with respect to (i) the Revolving Loan in the amount of$225,000.00 (“Revolving Loan Fees”); (ii) the Term Loan T01 in theamount of $43,708.53; (iii) the Term Loan T01NP in the amount of $18,829,95;and (iv) the Term Loan T06 in the amount of $63,750.00 (“Term Loan Fees”).Such fees are payable on the Closing Date and are not refundable to theBorrower.

(b)           Commitment Fees. The Borrowershall pay to the Lender fees (the “Revolving Commitment Fees”) in anamount determined by multiplying the average daily Unused Revolving Loan Amountby fifteen (15) basis points per annum, based on a 360 day year, for the periodfrom the Closing Date to the Termination Date. The Borrower shall further payto the Lender fees (the “Term Loan Commitment Fees”) in an amountdetermined by applying the Applicable Commitment Fee Percentage to the dailyUnused Term Loan Amount during the Term Loan Availability Period.

Such Revolving Commitment Fees are payable in arrearsquarterly on the last day of each calendar quarter and on the Termination Date.

(c)           Letter of Credit Fees. Foreach Letter of Credit issued, the Borrower shall pay to the Lender in advanceon the date of issuance, fees (“Letter of Credit Fees”) in an amountequal to the greater of (i) $2,500.00, or (ii) the amount determined byapplying a per annum rate to the Applicable Margin for LIBOR Rate Advances inrespect of the Revolving Loan then in effect to the original face amount ofsuch Letter of Credit for the period from the date of issuance to the scheduledexpiration date of such Letter of Credit. In addition to the Letter of CreditFees, the Borrower shall pay to the Lender, on demand, all issuance, amendment,drawing and other fees regularly charged by the Lender to its letter of creditcustomers and all out-of-pocket expenses incurred by the Lender in connectionwith the issuance, amendment, administration or payment of any Letter ofCredit.

Section 2.15           Computation. RevolvingCommitment Fees, Term Loan Commitment Fees, Letter of Credit Fees, interest onthe Revolving Loan, the Term Loans and the Default Rate shall be computed onthe basis of actual days elapsed (or, in the case of Letter of Credit Feeswhich are paid in advance, actual days to elapse) and a year of 360 days.

Section 2.16           Payments. Payments andprepayments of principal of, and interest on, the Notes and all fees, expensesand other obligations under this Agreement payable to the Lender or the Lendershall be made without setoff or counterclaim in Immediately Available Funds notlater than 1:00 P.M. (Denver Time) on the dates called for under this Agreementand the Notes to the Lender at its main office in Denver, Colorado. Fundsreceived after such time shall be deemed to have been received on the nextBanking Day. Whenever any payment to be made hereunder or on the Notes shall bestated to be due on a day which is not a Banking Day, such

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payment shall be made on the next succeeding BankingDay and such extension of time, in the case of a payment of principal, shall beincluded in the computation of any interest on such principal payment; provided,however, that if such extension would cause payment of interest on orprincipal of a LIBOR Rate Advance to be made in the next following calendarmonth, such payment shall be made on the next preceding Banking Day.

Section 2.17           Use of Loan Proceeds. Theproceeds of the Revolving Loan shall be used to refinance the outstandingobligations of Borrower under the Statused Revolving Term Loan Supplement datedJuly 11, 2005, and numbered Z269T07, and to continue to finance Borrower’saccounts receivable and inventory, for the issuance of letters of credit, andto finance the general business purposes of Borrower in a manner not inconflict with any of Borrower’s covenants in this Agreement. The proceeds ofthe Term Loan T01 shall be used to refinance the outstanding obligations of theBorrower under the Revolving Term Loan Supplement dated July 11, 2005, andnumbered Z269T01F, and to continue to finance the Borrower’s operating needs.The proceeds of the Term Loan T01NP shall be used to refinance the outstandingobligations of the Borrower under the Revolving Term Loan Supplement dated July8, 2005, and numbered Z260T01FNP, and to continue to finance the Borrower’soperating needs. The proceeds of the Term Loan T06 shall be used to refinancethe outstanding obligations of the Borrower under the Revolving Term LoanSupplement dated July 11, 2005, and numbered Z269T06C, and to continue tofinance the Borrower’s operating needs. In no event shall the Loan proceeds beused (i) to purchase or carry margin stock (as defined in Regulation U of theBoard) or to extend credit to others for the purpose of purchasing or carryingmargin stock or to refund Indebtedness originally incurred for such purpose, or(ii) for any purpose that entails a violation of, or that is inconsistent with,the provisions of Regulations U or X of the Board.

Section 2.18           Interest Rate Not Ascertainable,Etc. If, on or prior to the date for determining the Adjusted LIBOR Rate inrespect of the Interest Period for any LIBOR Rate Advance, the Lenderdetermines (which determination shall be conclusive and binding, absent error)that:

(a)           deposits in dollars (in theapplicable amount) are not being made available to the Lender in the relevantmarket for such Interest Period, or

(b)           the Adjusted LIBOR Rate will notadequately and fairly reflect the cost to the Lender of funding or maintainingLIBOR Rate Advances for such Interest Period,

the Lender shall forthwith give notice to the Borrowerof such determination, whereupon the obligation of the Lender to make orcontinue, or to convert any Advances to, LIBOR Rate Advances shall be suspendeduntil the Lender notifies the Borrower that the circumstances giving rise tosuch suspension no longer exist. While any such suspension continues, allfurther Advances by the Lender shall be made with an interest rate option towhich such suspension does not apply. No such suspension shall affect theinterest rate then in effect during the applicable Interest Period for anyLIBOR Rate Advance outstanding at the time such suspension is imposed.

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Section 2.19           IncreasedCost. If any Regulatory Change:

(a)           shall subject the Lender to anyadditional tax, duty or other charge with respect to its LIBOR Rate Advances,the Revolving Note, the Term Notes or its obligation to make LIBOR RateAdvances or shall change the basis of taxation of payment to the Lender of theprincipal of or interest on its LIBOR Rate Advances or any other amounts dueunder this Agreement in respect of its LIBOR Rate Advances or its obligation tomake LIBOR Rate Advances (except for changes in the rate of tax on the overallnet income of the Lender imposed by the jurisdiction in which the Lender’sprincipal office located); or

(b)           shall impose, modify or deemapplicable any reserve, special deposit or similar requirement (including withoutlimitation, any such requirement imposed by the Board, but excluding any suchrequirement to the extent included in calculating the applicable Adjusted LIBORRate) against assets of, deposits with or for the account of, or creditextended by, or against Letters of Credit issued by the Lender or shall imposeon the Lender or on the United States market for certificates of deposit or theinterbank Eurodollar market any other condition affecting its****LIBOR Rate Advances, the Revolving Note,the Term Notes or its obligation to make LIBOR Rate Advances or affecting anyLetter of Credit;

and the result of any of the foregoing is to increasethe cost to the Lender of making or maintaining any LIBOR Rate Advance orissuing or maintaining any Letter of Credit, or to reduce the amount of any sumreceived or receivable by the Lender under this Agreement or under theRevolving Note or the Term Notes, then, within 30 days after written notice anddemand by the Lender, which notice shall describe the Regulatory Change, theBorrower shall pay to the Lender such additional amount or amounts as willcompensate such Lender for such increased cost or reduction.

Section 2.20           Illegality. If any Regulatory Changeshall make it unlawful or impossible for the Lender to make,**maintain or fund any LIBOR Rate Advance,the Lender shall notify the Borrower, whereupon the obligation of the Lender tomake or continue, or to convert any Advances to, LIBOR Rate Advances shall besuspended until the Lender notifies the Borrower that the circumstances givingrise to such suspension no longer exist. Before giving any such notice, theLender shall designate a different lending office if such designation willavoid the need for giving such notice and will not, in the judgment of suchLender, be otherwise disadvantageous to such Lender. If the Lender determinesthat it may not lawfully continue to maintain any LIBOR Rate Advances to theend of the applicable Interest Period, all of the affected Advances shall beautomatically converted to Base Rate Advances as of the date of the Lender’snotice.

Section 2.21           Capital Adequacy. In the eventthat any Regulatory Change reduces or shall have the effect of reducing therate of return on the Lender’s capital or the capital of its parent corporation(by an amount the Lender deems material) as a consequence of its Loans

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and/or any Letters of Credit or the Lender’sobligations to make Advances to cover Letters of Credit to a level below thatwhich such the Lender or its parent corporation could have achieved but forsuch Regulatory Change (taking into account the Lender’s policies and thepolicies of its parent corporation with respect to capital adequacy), then theBorrower shall, within 30 days after written notice and demand from the Lender,pay to such Lender additional amounts sufficient to compensate the Lender orits parent corporation for such reduction. Any determination by the Lenderunder this Section and any certificate as to the amount of such reduction givento the Borrower by the Lender shall be final, conclusive and binding for allpurposes, absent error.

Section 2.22           Funding Losses; LIBOR RateAdvances. The Borrower shall compensate the Lender, upon its writtenrequest, for all losses, expenses and liabilities which the Lender may sustain:(i) if for any reason, other than a default by the Lender, a funding of a LIBORRate Advance does not occur on the date specified therefor in the Borrower’srequest or notice as to such Advance under Section 2.2 or 2.4, or (ii) if, forwhatever reason (including, but not limited to, acceleration of the maturity ofAdvances following an Event of Default), any repayment of a LIBOR Rate Advance,or a conversion pursuant to Section 2.20, occurs on any day other than the lastday of the Interest Period applicable thereto. The Lender’s request forcompensation shall set forth the basis for the amount requested and shall befinal, conclusive and binding, unless Borrower contests the request forcompensation within thirty (30) days of such written request.

Section 2.23           Discretion of Lender as to Mannerof Funding. The Lender shall be entitled to fund and maintain its fundingof LIBOR Rate Advances in any manner it may elect, it being understood,however, that for the purposes of this Agreement all determinations hereunder(including, but not limited to, determinations under Section 2.22) shall bemade as if the Lender had actually funded and maintained each LIBOR RateAdvance during the Interest Period for such Advance through the issuance of itscertificates of deposit, or the purchase of deposits, having a maturitycorresponding to the last day of the Interest Period and bearing an interestrate equal to the LIBOR Rate for such Interest Period.

Section 2.24           Broken Funding Surcharge.Notwithstanding any provision contained in this Agreement giving the Borrowerthe right to prepay any loan prior to the date it would otherwise be due andpayable, the Borrower agrees to provide three (3) Business Days’ prior writtennotice for any prepayment of a fixed rate balance and that in the event itrepays any fixed rate balance prior to its scheduled due date or prior to thelast day of the Interest Period applicable thereto (whether such payment ismade voluntarily, as a result of acceleration or otherwise), the Borrower willpay to the Lender a surcharge in an amount which would result in the Lenderbeing made whole (on a present value basis) for the actual or imputed fundinglosses incurred by the Lender as a result thereof. Notwithstanding theforegoing, in the event any fixed rate balance is repaid as a result of theBorrower refinancing the loan with another lender, then in lieu of theforegoing, the Borrower shall pay to the Lender a surcharge of 50% of an amountsufficient (on a present value basis) to enable the Lender to maintain theyield it would have

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earned during the fixed rate period on the amountrepaid. Such surcharges will be calculated in accordance with methodologyestablished by the Lender.

Section 2.25           Taxes.

(a)           Any and all payments by the Borrowerhereunder or under the Notes shall be made free and clear of and withoutdeduction for any and all present or future taxes, levies, imposts, deductions,charges of withholdings, and all liabilities with respect thereto, excluding,in the case of the Lender, taxes imposed on its overall net income andfranchise taxes imposed on it in lieu of net income taxes (all suchnon-excluded taxes, levies, imposts, deductions, charges, withholdings andliabilities in respect of payments hereunder or under the Notes being hereinafterreferred to as “Taxes”).

(b)           The Borrower agree to pay any presentor future stamp or documentary taxes or any other excise or property taxes,charges or similar levies that arise from any payment made hereunder or underthe Notes or from the execution, delivery or registration of, performing under,or otherwise with respect to, this Agreement or the Notes (hereinafter referredto as “Other Taxes”).

(c)           The Borrower shall indemnify theLender for the full amount of Taxes or Other Taxes imposed on or paid by theLender and any penalties, interest and expenses with respect thereto. Paymentson this indemnification shall be made within 30 days from the date the Lendermakes written demand therefor.

(d)           Within 30 days after the date of anypayment of Taxes, the Borrower shall furnish to the Lender, at its addressreferred to on the signature page hereof, a certified copy of a receiptevidencing payment thereof. In the case of any payment hereunder or under theNotes by or on behalf of the Borrower through an account or branch outside theUnited States or by or on behalf of the Borrower by a payor that is not aUnited States person, if the Borrower determine that no Taxes are payable inrespect thereof, the Borrower shall furnish or shall cause such payor to furnish,to the Lender, at such address, an opinion of counsel reasonably acceptable tothe Lender stating that such payment is exempt from Taxes. For purposes of thissubsection (d) and subsection (e), the terms “United States” and “UnitedStates person” shall have the meanings specified in Section 7701 of theInternal Revenue Code.

(e)           If the Borrower shall be required bylaw or regulation to make any deduction, withholding or backup withholding ofany taxes, levies, imposts, duties, fees, liabilities or similar charges of theUnited States of America, any possession or territory of the United States ofAmerica (including the Commonwealth of Puerto Rico) or any area subject to thejurisdiction of the United States of America (“U.S. Taxes”) from anypayments to a Lender pursuant to any Loan Document in respect of theObligations payable to such then or thereafter outstanding, the Borrower shallmake such

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withholdings or deductions and pay the full amountwithheld or deducted to the relevant taxation authority or other authority inaccordance with applicable law.

Section 2.26           Capitalization. The Borroweragrees to purchase such equity in the Lender as the Lender may from time totime require in accordance with its Bylaws.

Section 2.27           Security. Each party hereto acknowledgesthat the Lender has a statutory first Lien on all of the Borrower’s stock andother equities in the Lender (the “CoBank Equities”), respectively,pursuant to 12 U.S.C. § 2131. The Lender’s statutory Lien on the CoBankEquities shall be for the Lender’s sole and exclusive benefit and shall not besubject to this Agreement or any other Loan Document.

Section 2.28           Security Interests. Thepayment and performance of the Secured Obligations shall be secured by theSecurity Documents. The payment of the Revolving Note, Unpaid Drawings relatedto a Seasonal Letter of Credit, and all fees, including Revolving Loan Fees,associated therewith, is unsecured.

**ARTICLE IIICONDITIONS PRECEDENT**

Section 3.1             Conditions Precedent to AllLoans and Letters of Credit. The obligation of the Lender to make any Loanshereunder or to issue each Letter of Credit shall be subject to the fulfillmentof the following conditions on or before the Closing Date:

(a)           Documents. The Lender shallhave received the following:

(i)                                     TheNotes drawn to the order of the Lender executed by a duly authorized officer ofthe Borrower and dated the Closing Date.

(ii)                                  TheSecurity Documents duly executed by the respective parties thereto.

(iii)                               Acertificate of the Secretary or Assistant Secretary (or other appropriateofficer) of the Borrower dated as of the Closing Date and certifying to thefollowing:

(A)                              trueand accurate copy of the corporate resolutions of the Borrower authorizing theexecution, delivery and performance of the Loan Documents to which the Borroweris a party contemplated hereby and thereby;

(B)                                Theincumbency, names, titles and signatures of the officers of the Borrowerauthorized to execute the Loan

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Documents to which the Borrower is a party and torequest Advances;

(C)                                Atrue and accurate copy of the Articles of Incorporation (or the equivalent) ofthe Borrower with all amendments thereto, certified by the appropriategovernmental official of the jurisdiction of organization as of a dateacceptable to the Lender; and

(D)                               A trueand accurate copy of the bylaws (or other constitutive documents) for theBorrower.

(iv)                              Acertificate of good standing for the Borrower in the jurisdiction of itsformation or incorporation and each other jurisdiction where the character ofthe properties owned or leased by the Borrower makes such qualificationnecessary, certified by the appropriate governmental officials as of a dateacceptable to the Lender.

(v)                                 Insurancecertificates in form and substance reasonably satisfactory to the Lender listingthe Lender as loss payee thereof and indicating that the Borrower has obtainedinsurance in compliance with Section 5.3 with respect to each of the businessesand real properties of the Borrower in such amounts and with such carriersreasonably acceptable to the Lender.

(vi)                              Acknowledgmentof this Agreement and any pertinent Security Document by the parties to theIntercreditor Agreement.

(b)           Compliance. The Borrower shallhave performed and complied with all agreements, terms and conditions containedin this Agreement required to be performed or complied with by the Borrowerprior to or simultaneously with the Closing Date.

(c)           Filings, Registrations andRecordings. Each document required by the Security Documents or under lawor reasonably requested by the Lender to be filed, registered or recorded inorder to create in favor of the Lender for the benefit of the Lender, aperfected Lien on the collateral described therein, prior and superior in rightto any other Person (other than with respect to Liens expressly permitted bySection 6.13), shall be in proper form for filing, registration or recordation,any pledged collateral shall have been duly delivered to the Lender, and thepriority and perfection of the Liens created by the Security Documents shallhave been established to the satisfaction of the Lender and its counsel.

(d)           Financial Statements. TheLender shall have received copies of the balance sheet and the relatedstatements of income, retained earnings and cash flows of

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the Borrower for the most recently ended FiscalQuarter ending more than sixty (60) days prior to the Closing Date, the mostrecent management letter issued by Borrower’s certified public accountants, andsuch other information as the Lender may reasonably request. All such financialstatements, including the related schedules and notes thereto, shall have beenprepared in accordance with GAAP

(e)           Other Matters.  All corporate and legal proceedings relatingto the Borrower and all instruments and agreements in connection with thetransactions contemplated by this Agreement shall be satisfactory in scope,form and substance to the Lender and its counsel, and the Lender shall havereceived all information and copies of all documents, including records ofcorporate proceedings, as the Lender or its counsel may reasonably haverequested in connection therewith,  suchdocuments where appropriate to be certified by proper corporate or governmentalauthorities.

(f)            Fees and Expenses. The Lendershall have received for itself and for the account of the Lender all fees andother amounts due and payable by the Borrower on or prior to the Closing Date,including the reasonable fees and expenses of counsel to the Lender payablepursuant to Section 8.2.

(g)           Representations and Warranties.  The representations and warranties containedin Article IV shall be true and correct on and as of the Closing Date and onthe date of each Advance or the date of issuance of each Letter of Credit, withthe same force an effect as if made on such date.

(h)           No Default. No Default orEvent of Default shall have occurred and be continuing on the Closing Date andon the date of each Advance or the date of issuance of each Letter of Credit orwill exist after giving effect to the Advances made on such date or the Lettersof Credit so issued.

(i)            Notices and Requests. TheLender shall have received the Borrower’s request for such Loans as requiredunder Section 2.3 or its application for such Letters of Credit specified underSection 2.10.

Any one or more of the conditions set forth abovewhich have not been satisfied by the Borrower on or prior to the date ofdisbursement of the initial Advance under this Agreement shall not be deemedpermanently waived by the Lender or any Lender unless the Lender or suchLender, as the case may be, shall waive the same in a writing which expresslystates that the waiver is permanent, and in all cases in which the waiver isnot stated to be permanent the Lender or any Lender may at any time subsequentthereto insist upon compliance and satisfaction of any such condition as acondition to any subsequent Advance or Letter of Credit hereunder and failureby the Borrower to comply with any such condition within five (5) Banking Day’swritten notice from the Lender or any Lender to the Borrower shall constitutean Event of Default under this Agreement.

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**ARTICLE IVREPRESENTATIONS AND WARRANTIES**

To induce the Lender toenter into this Agreement and to make the Loans hereunder and to induce theLender to issue Letters of Credit, the Borrower represents and warrants to theLender:

Section 4.1             Organization, Standing, Etc. TheBorrower is a cooperative corporation duly incorporated and validly existingand in good standing under the laws of State of Minnesota. The Borrower has allrequisite power and authority to carry on its business as now conducted, toenter into this Agreement, to issue the Notes and to perform its obligationsunder the Loan Documents. The Borrower (a) holds all certificates of authority,licenses and permits necessary to carry on its business as presently conductedin each jurisdiction in which it is carrying on such business, except where thefailure to hold such certificates, licenses or permits would not constitute aMaterial Adverse Occurrence, and (b) is duly qualified and in good standing asa foreign company or corporation in each jurisdiction in which the character ofthe properties owned, leased or operated by it or the business conducted by itmakes such qualification necessary and the failure so to qualify would permanentlypreclude the Borrower from enforcing its rights with respect to any assets orexpose the Borrower to any Material Adverse Occurrence.

Section 4.2             Authorization and Validity.The execution, delivery and performance by the Borrower of the Loan Documentshave been duly authorized by all necessary corporate action by the Borrower.This Agreement constitutes, and the Notes and other Loan Documents whenexecuted will constitute, the legal, valid and binding obligations of theBorrower, enforceable against the Borrower in accordance with their respectiveterms, subject to limitations as to enforceability which might result frombankruptcy, insolvency, moratorium and other similar laws affecting creditors’rights generally and subject to limitations on the availability of equitableremedies.

Section 4.3             No Conflict: No Default. Theexecution, delivery and performance by the Borrower of the Loan Documents willnot (a) violate any provision of any law, statute, rule or regulation or anyorder, writ, judgment, injunction, decree, determination or award of any court,governmental agency or arbitrator presently in effect having applicability tothe Borrower, (b) violate or contravene any provision of the Articles ofIncorporation or bylaws of the Borrower, or (c) result in a breach of orconstitute a default under any indenture, loan or credit agreement or any otheragreement, lease or instrument to which the Borrower is a party or by which itor any of its properties may be bound or result in the creation of any Lienthereunder. Borrower is not in default under or in violation of any such law,statute, rule or regulation, order, writ, judgment, injunction, decree,determination or award or any such indenture, loan or credit agreement or otheragreement, lease or instrument in any case in which the consequences of suchdefault or violation could constitute a Material Adverse Occurrence.

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Section 4.4             Government Consent. Noorder, consent, approval, license, authorization or validation of, or filing,recording or registration with, or exemption by, any governmental or publicbody or authority is required on the part of the Borrower to authorize, or isrequired in connection with the execution, delivery and performance of, or thelegality, validity, binding effect or enforceability of, the Loan Documents,except for any necessary filing or recordation of or with respect to any of theSecurity Documents.

Section 4.5             Financial Statements andCondition. The Borrower’s audited financial statements as heretoforefurnished to the Lender, have been prepared in accordance with GAAP on aconsistent basis (except for the absence of footnotes and subject to year-endaudit adjustments as to the interim statements) and fairly present thefinancial condition of the Borrower as at such dates and the results of theiroperations and changes in financial position for the respective periods thenended. As of the dates of such financial statements, no Borrower had anymaterial obligation, contingent liability, liability for taxes or long-term leaseobligation which is not reflected in such financial statements or in the notesthereto.

Section 4.6             Litigation. Except asdisclosed on Schedule 4.6, there are no actions, suits or proceedingspending or, to the knowledge of the Borrower, threatened against or affectingthe Borrower or any of its properties before any court or arbitrator, or anygovernmental department, board, agency or other instrumentality which, ifdetermined adversely to the Borrower, would exceed $7,500,000, and there are nounsatisfied judgments against the Borrower, the satisfaction or payment ofwhich would exceed $7,500,000.

Section 4.7             Environmental, Health and SafetyLaws. Except as set out on Schedule 4.7, to Borrower’s knowledgethere does not exist any violation by the Borrower of any applicable federal,state or local law, rule or regulation or order of any government, governmentaldepartment, board, agency or other instrumentality relating to environmental,pollution, health or safety matters which has, will or threatens to impose aliability on Borrower or which has required or would require an expenditure byBorrower to cure in excess of $7,500,000 per violation or $25,000,000 in theaggregate. No property of the Borrower is used for the production, storage ordisposal of hazardous wastes, substances or materials, except for incidentaluses in the ordinary course of business. Borrower has not received any noticeto the effect that any part of its operations or properties is not in materialcompliance with any such law, rule, regulation or order or notice that it orits property is the subject of any governmental investigation evaluatingwhether any remedial action is needed to respond to any release of any toxic orhazardous waste or substance into the environment, which non-compliance orremedial action could reasonably be expected to exceed $7,500,000 peroccurrence or $25,000,000 in the aggregate. Except as set out on Schedule4.7, Borrower has no knowledge that it or its property will become subjectto environmental laws or regulations during the term of this Agreement,compliance with which could reasonably be expected to require CapitalExpenditures that could reasonably be expected to exceed $7,500,000 peroccurrence or $25,000,000 in the aggregate.

Section 4.8             ERISA. Each Plan is insubstantial compliance with all applicable requirements of ERISA and the Codeand with all material applicable rulings and regulations

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issued under the provisions of ERISA and the Codesetting forth those requirements. No Reportable Event has occurred and iscontinuing with respect to any Plan. All of the minimum funding standardsapplicable to such Plans have been satisfied and there exists no event orcondition which would reasonably be expected to result in the institution ofproceedings to terminate any Plan under Section 4042 of ERISA.

Section 4.9             Federal Reserve Regulations.Borrower is not engaged principally or as one of its important activities inthe business of extending credit for the purpose of purchasing or carryingmargin stock (as defined in Regulation U of the Board). The value of all marginstock owned by the Borrower does not constitute more than 25% of the value ofthe assets of the Borrower.

Section 4.10           Title to Property; Leases: Liens;Subordination. The Borrower has (a) good and marketable title to its realproperties and (b) good and sufficient title to, or valid, subsisting andenforceable leasehold interest in, its other material properties, including allreal properties, other properties and assets, referred to as owned by aBorrower in the most recent financial statement referred to in Section 5.1(other than property disposed of since the date of such financial statements inthe ordinary course of business). None of such properties is subject to a Lien,except as allowed under Section 6.13. No Borrower has subordinated any of itsrights under any obligation owing to it to the rights of any other person.

Section 4.11           Taxes. The Borrower has filedall federal, state and local tax returns required to be filed and has paid ormade provision for the payment of all taxes due and payable pursuant to suchreturns and pursuant to any assessments made against it or any of its propertyand all other taxes, fees and other charges imposed on it or any of itsproperty by any governmental authority (other than taxes, fees or charges theamount or validity of which is currently being contested in good faith byappropriate proceedings and with respect to which reserves in accordance withGAAP have been provided on the books of the Borrower). No tax Liens have beenfiled and no material claims are being asserted with respect to any such taxes,fees or charges. The charges, accruals and reserves on the books of theBorrower in respect of taxes and other governmental charges are adequate andthe Borrower knows of no proposed material tax assessment against it or anybasis therefor.

Section 4.12           Trademarks, Patents. TheBorrower possesses or has the right to use all of the patents, trademarks,trade names, service marks and copyrights, and applications therefor, and alltechnology, know-how, processes, methods and designs used in or necessary forthe conduct of its business, without known conflict with the rights of others.

Section 4.13           Burdensome Restriction.Borrower is not a party to or otherwise bound by any indenture, loan or creditagreement or any lease or other agreement or instrument or subject to anycharter, corporate or partnership restriction exceeding $7,500,000.

Section 4.14           Force Majeure. Since the dateof the most recent financial statement referred to in Section 5.1, thebusiness, properties and other assets of the Borrower have not been

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materially and adversely affected in any way as theresult of any fire or other casualty, strike, lockout, or other labor trouble,embargo, sabotage, confiscation, condemnation, riot, civil disturbance,activity of armed forces or act of God.

Section 4.15           Investment Company Act.Borrower is not an “investment company” or a company “controlled” by aninvestment company within the meaning of the Investment Company Act of 1940, asamended.

Section 4.16           Public Utility Holding Company Act.Borrower is not a “holding company” or a “subsidiary company” of a holdingcompany or an “affiliate” of a holding company or of a subsidiary company of aholding company within the meaning of the Public Utility Holding Company Act of1935, as amended.

Section 4.17           Full Disclosure. Subject tothe following sentence, neither the financial statements referred to in Section5.1 nor any other certificate, written statement, exhibit or report furnishedby or on behalf of the Borrower in connection with or pursuant to thisAgreement contains any untrue statement of a material fact or omits to stateany material fact necessary in order to make the statements contained thereinnot misleading. Certificates or statements furnished by or on behalf of theBorrower to the Lender consisting of projections or forecasts of future resultsor events have been prepared in good faith and based on good faith estimatesand assumptions of the management of the Borrower, and the Borrower has noreason to believe that such projections or forecasts are not reasonable.

Section 4.18           Subsidiaries. The Borrower hasno Subsidiaries other than those disclosed to the Lender in Schedule 4.18.

Section 4.19           Labor Matters. There are nopending or threatened strikes, lockouts or slowdowns against either Borrower.Borrower has not been or is not in violation in any material respect of theFair Labor Standards Act or any other applicable Federal, state, local orforeign law dealing with such matters. All payments due from the Borrower onaccount of wages and employee health and welfare insurance and other benefits(in each case, except for de minimus amounts), have been paid or accrued as aliability on the books of the Borrower. The consummation of the transactionscontemplated under the Loan Documents will not give rise to any right oftermination or right of renegotiation on the part of any union under anycollective bargaining agreement to which the Borrower is bound.

Section 4.20           Solvency. After the making ofany Advance and after giving effect thereto, (a) the fair value of the assetsof the Borrower, at a fair valuation, will exceed its debts and liabilities,subordinated, contingent or otherwise; (b) the present fair saleable value ofthe property of the Borrower will be greater than the amount that will berequired to pay the probable liability of its debts and other liabilities,subordinated, contingent or otherwise, as such debts and other liabilities becomeabsolute and matured; (c) the Borrower will be able to pay its debts andliabilities, subordinated, contingent or otherwise, as such debts andliabilities become absolute and matured; and (d) Borrower will not haveunreasonably small capital with which to

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conduct the business in which it is engaged as suchbusiness is proposed to be conducted following the Closing Date.

**ARTICLE VAFFIRMATIVE COVENANTS**

Until any obligation ofthe Lender hereunder to make the Loans and to issue Letters of Credit shallhave expired or been terminated and the Notes and all of the other Obligationshave been paid in full and all outstanding Letters of Credit shall have expiredor the liability of the Lender thereon shall have otherwise been discharged:

Section 5.1             Financial Statements and Reports.The Borrower will furnish to the Lender:

(a)           As soon as available and in any eventwithin 120 days after the end of each fiscal year of the Borrower, theconsolidated and consolidating financial statements of the Borrower and theirconsolidated Subsidiaries consisting of at least statements of income, cashflow and changes in the members’ equity, and a consolidated balance sheet as atthe end of such year, setting forth in each case in comparative formcorresponding figures from the previous annual audit, certified withoutqualification by Eide Bailly, LLP, or another independent certified publicaccountants of recognized national standing selected by the Borrower andreasonably acceptable to the Lender, together with any management letters,management reports or other supplementary comments or reports to the Borrower’sboard of director furnished by such accountants.

(b)           As soon as available and in any eventwithin 5 days after the Borrower’s quarterly filing with the Securities andExchange Commission, unaudited consolidated statements of income, cash flow andchanges in the members’ equity for the Borrower and their consolidatedSubsidiaries for such quarter and for the period from the beginning of suchfiscal year to the end of such quarter, and a consolidated balance sheet of theBorrower as at the end of such quarter, setting forth in comparative formfigures for the corresponding period for the preceding fiscal year, accompaniedby a certificate signed by an officer of the Borrower stating that suchfinancial statements present fairly the financial condition of the Borrower andthat the same have been prepared in accordance with GAAP (except for theabsence of footnotes and subject to year-end audit adjustments as to the interimstatements).

(c)           As soon as practicable and in anyevent within 45 days after the end of each Fiscal Quarter, a ComplianceCertificate in the form attached hereto as Exhibit D signed by anofficer of the Borrower demonstrating in reasonable detail compliance (ornoncompliance, as the case may be) with Section 6.11(h), Section 6.15, Section6.16 and Section 6.17, as of the end of such quarter and stating that as at theend of such quarter there did not exist any Default or Event of Default or, ifsuch Default or Event of

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Default existed, specifying the nature and period ofexistence thereof and what action the Borrower propose to take with respectthereto.

(d)           As soon as practicable and in anyevent within 30 days after the end of each month, a Borrowing Base Certificatesigned by an officer of Borrower, reporting the Borrowing Base as of the lastday of such month.

(e)           As soon as practicable and in anyevent not more than 60 days after the end of any fiscal year, annual budgetsand forecasts of operations, all in reasonable detail and reasonablysatisfactory in scope to the Lender.

(f)            As soon as practicable and in anyevent not more than 60 days after the end of any fiscal year, an annual capitalexpenditure budget. The Borrower will also furnish a revised budget ifincreases of more than 20% over the original capital expenditures budget areapproved by the board of directors.

(g)           With respect to Crystech, annualfinancial statements within 120 days after and as of the end of each fiscalyear substantially in the form of (a) above, and quarterly financial statementswithin 60 days after as of the end of each Fiscal Quarter in the form of (b)above.

(h)           Immediately upon any officer of theBorrower becoming aware of any Default or Event of Default, a written noticefrom the Borrower describing the nature thereof and what action Borrowerpropose to take with respect thereto.

(i)            Immediately upon any officer of theBorrower becoming aware of any matter resulting in expenditures exceeding$7,500,000, a written notice from the Borrower describing the nature thereofand what action Borrower propose to take with respect thereto.

(j)            Immediately upon any officer of theBorrower becoming aware of (i) the commencement of any action, suit,investigation, proceeding or arbitration before any court or arbitrator or anygovernmental department, board, agency or other instrumentality affecting aBorrower or any property of such Person, or to which a Borrower is a party(other than litigation where the insurance insures against the damages claimedand the insurer has assumed defense of the litigation without reservation) andin which an adverse determination or result could reasonably be expected toconstitute a Material Adverse Occurrence; or (ii) any adverse development whichoccurs in any litigation, arbitration or governmental investigation orproceeding previously disclosed by a Borrower which, if determined adversely toa Borrower, could reasonably be expected to result in expenditures exceeding$7,500,000, a written notice from the Borrower describing the nature and statusthereof and what action the Borrower propose to take with respect thereto.

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(k)           From time to time, such otherinformation regarding the business, operation and financial condition of theBorrower as any Lender may reasonably request.

Section 5.2             Existence. The Borrower willmaintain its corporate existence in good standing under the laws of itsjurisdiction of organization and its qualification to transact business in eachjurisdiction where failure so to qualify would permanently preclude theBorrower from enforcing its rights with respect to any material asset or wouldexpose the Borrower to any material liability.

Section 5.3             Insurance. The Borrowershall maintain with financially sound and reputable insurance companies suchinsurance as may be required by law and such other insurance in such amountsand against such hazards as is customary in the case of reputable firms engagedin the same or similar business and similarly situated.

Section 5.4             Payment of Taxes and Claims.The Borrower shall file all tax returns and reports which are required by lawto be filed by it and will pay before they become delinquent all taxes,assessments and governmental charges and levies imposed upon it or its propertyand all claims or demands of any kind (including but not limited to those ofsuppliers, mechanics, carriers, warehouses, landlords and other like Persons)which, if unpaid, might result in the creation of a Lien upon its property; providedthat the foregoing items need not be paid if they are being contested in goodfaith by appropriate proceedings, and as long as the Borrower’s title to itsproperty is not materially adversely affected, its use of such property in theordinary course of its business is not materially interfered with and adequatereserves with respect thereto have been set aside on the Borrower’s books inaccordance with GAAP.

Section 5.5             Inspection. The Borrowershall permit any Person designated by the Lender or any Lender to visit andinspect any of the collateral and the properties, books and financial recordsof the Borrower, to examine and to make copies of the books of accounts andother financial records of the Borrower, and to discuss the affairs, financesand accounts of the Borrower with, and to be advised as to the same by, itsofficers at such reasonable times and intervals as the Lender or any Lender maydesignate. Provided that no Default or Event of Default has occurred and iscontinuing, such inspections shall take place no more frequently than annuallyunless the Borrower first consent to additional inspections.

Section 5.6             Maintenance of Properties.The Borrower will maintain its properties used or useful in the conduct of itsbusiness in good condition, repair and working order, and supplied with allnecessary equipment, and make all necessary repairs, renewals, replacements,betterments and improvements thereto, all as may be necessary so that thebusiness carried on in connection therewith may be properly and advantageouslyconducted at all times.

Section 5.7             Books and Records. TheBorrower will keep adequate and proper records and books of account in whichfull and correct entries will be made of its dealings, business and affairs.

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Section 5.8             Compliance. The Borrowerwill comply in all material respects with all laws, rules, regulations, orders,writs, judgments, injunctions, decrees or awards to which it may be subject; provided,however, that failure so to comply shall not be a breach of thiscovenant if such failure cannot reasonably be expected to constitute a MaterialAdverse Occurrence and the Borrower is acting in good faith and with reasonabledispatch to cure such noncompliance.

Section 5.9             ERISA. The Borrower willmaintain each Plan in compliance with all material applicable requirements ofERISA and of the Code and with all applicable rulings and regulations issuedunder the provisions of ERISA and of the Code.

Section 5.10           Environmental Matters: Reporting.The Borrower will observe and comply with all laws, rules, regulations andorders of any government or government agency relating to health, safety,pollution, hazardous materials or other environmental matters to the extentnon-compliance could result in a material liability or otherwise constitute aMaterial Adverse Occurrence. The Borrower will give the Lender prompt writtennotice of any violation as to any environmental matter by the Borrower and ofthe commencement of any judicial or administrative proceeding relating tohealth, safety or environmental matters (a) in which an adverse determinationor result could result in the revocation of or have a material adverse effecton any operating permits, air emission permits, water discharge permits,hazardous waste permits or other permits held by the Borrower which arematerial to the operations of the Borrower, or (b) which will or threatens toimpose a material liability on the Borrower to any Person or which will requireexpenditures by the Borrower exceeding $7,500,000 to cure any alleged problemor violation.

Section 5.11           Further Assurances. TheBorrower shall promptly correct any defect or error that may be discovered inany Loan Document or in the execution, acknowledgment or recordation thereof.Promptly upon request by the Lender or the Required Lender, the Borrower alsoshall do, execute, acknowledge, deliver, record, re-record, file, re-file,register and re­register, any and all deeds, conveyances, mortgages, deeds oftrust, trust deeds, assignments, estoppel certificates, financing statementsand continuations thereof, notices of assignment, transfers, certificates,assurances and other instruments as the Lender or the Required Lender mayreasonable require from time to time in order: (a) to carry out moreeffectively the purposes of the Loan Documents; (b) to perfect and maintain thevalidity, effectiveness and priority of any security interests intended to becreated by the Loan Documents including, without limitation, the delivery of alandlord waiver from any landlord required by the Lender or the RequiredLender; and (c) to better assure, convey, grant, assign, transfer, preserve,protect and confirm unto the Lender the rights granted now or hereafterintended to be granted to the Lender under any Loan Document or under any otherinstrument executed in connection with any Loan Document or that the Borrowermay be or become bound to convey, mortgage or assign to the Lender for thebenefit of the Lender in order to carry out the intention or facilitate theperformance of the provisions of any Loan Document. The Borrower shall furnishto the Lender evidence reasonably satisfactory to the Lender of every suchrecording, filing or registration.

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Section 5.12           Compliance with Terms of MaterialContracts. The Borrower shall make all payments and otherwise perform allobligations in respect of all material contracts to which the Borrower is aparty, the failure of which would constitute a Material Adverse Occurrence.

Section 5.13           Eligibility. The Borrowershall maintain its status as an entity eligible to borrow from the Lender. Ifrequested, the Borrower agrees to submit any documentation reasonably requestedby the Lender to evidence such eligibility.

**ARTICLE VINEGATIVE COVENANTS**

Until any obligation ofthe Lender hereunder to make the Loans or to issue Letters of Credit shall haveexpired or been terminated and the Notes and all of the other Obligations havebeen paid in full and all outstanding Letters of Credit shall have expired orthe liability of the Lender thereon shall have otherwise been discharged:

Section 6.1             Merger. The Borrower willnot merge or consolidate or enter into any analogous reorganization ortransaction with any Person or liquidate, wind up or dissolve itself (or sufferany liquidation or dissolution).

Section 6.2             Disposition of Assets. TheBorrower will not directly or indirectly, sell, assign, lease, convey, transferor otherwise dispose of (whether in one transaction or a series oftransactions) any property (including accounts and notes receivable, with orwithout recourse) or enter into any agreement to do any of the foregoing,except:

(a)           dispositions of inventory in theordinary course of business;

(b)           dispositions of used, worn-out orobsolete equipment, furniture, furnishings, machinery or fixtures if the valueof such disposed equipment, furniture, furnishings, machinery or fixtures atthe time of disposal is less than $7,500,000 in the aggregate in any fiscalyear; and

(c)           other dispositions of property if thenet book value of the disposed property does not exceed in any fiscal year, 5%of the Borrower’s total consolidated assets as shown on its balance sheet as ofthe end of the immediately preceding fiscal year.

Section 6.3             Plans. The Borrower will notpermit any event to occur or condition to exist which would permit any Plan toterminate under any circumstances which would cause the Lien provided for inSection 4068 of ERISA to attach to any assets of the Borrower.

Section 6.4             Change in Nature of Business.The Borrower will not make any material change in the nature of the business ofthe Borrower, as carried on at the date hereof.

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Section 6.5             Subsidiaries. The Borrowerwill not form or acquire any Person which would thereby become a Subsidiary,with the exception of Investments permitted under Section 6.11.

Section 6.6             Negative Pledges. Except asotherwise permitted hereunder, the Borrower will not enter into any agreement,bond, note or other instrument with or for the benefit of any Person other thanthe Lender which would (i) prohibit the Borrower from granting, or otherwiselimit the ability of the Borrower to grant, to the Lender any Lien on anyassets or properties of the Borrower, or (ii) require the Borrower to grant aLien to any other Person if the Borrower grants any Lien to the Lender.

Section 6.7             Restricted Payments. TheBorrower will not make any Restricted Payments if a Default or Event of Defaulthas occurred and is continuing or if a Default or Event of Default would occuras a result of such Restricted Payment.

Section 6.8             Transactions with Affiliates.The Borrower will not enter into any transaction with any Affiliate of theBorrower, except upon fair and reasonable terms no less favorable than theBorrower would obtain in a comparable arm’s-length transaction with a Personnot an Affiliate.

Section 6.9             Accounting Changes. TheBorrower will not make any significant change in accounting treatment orreporting practices, except as required by GAAP, or change its fiscal year.

Section 6.10           Subordinated Debt. TheBorrower will not (a) make any scheduled payment of the principal of orinterest on any Subordinated Debt that would be prohibited by the terms of suchSubordinated Debt and any related subordination agreement; (b) directly orindirectly make any prepayment on or purchase, redeem or defease anySubordinated Debt or offer to do so (whether such prepayment, purchase orredemption, or offer with respect thereto, is voluntary or mandatory); (c)amend or cancel the subordination provisions applicable to any SubordinatedDebt; (d) take or omit to take any action if as a result of such action oromission the subordination of such Subordinated Debt, or any part thereof, tothe Obligations might be terminated, impaired or adversely affected; or (e)omit to give the Lender prompt notice of any notice received from any holder ofSubordinated Debt, or any trustee therefor, or of any default under anyagreement or instrument relating to any Subordinated Debt by reason whereofsuch Subordinated Debt might become or be declared to be due or payable.

Section 6.11           Investments. The Borrower willnot acquire for value, make, have or hold any Investments, except:

(a)           Investments existing on the date ofthis Agreement and described on Schedule 6.11.

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(b)           Travel advances to managementpersonnel and employees in the ordinary course of business.

(c)           Investments in readily marketabledirect obligations issued or guaranteed by the United States or any agencythereof and supported by the full faith and credit of the United States.

(d)           Certificates of deposit or bankers’acceptances issued by any commercial bank organized under the laws of the UnitedStates or any State thereof which has (i) combined capital and surplus of atleast $100,000,000, and (ii) a credit rating with respect to its unsecuredindebtedness from a nationally recognized rating service that is reasonablysatisfactory to the Lender.

(e)           Commercial paper given the highestrating by a nationally recognized rating service.

(f)            Repurchase agreements relating tosecurities issued or guaranteed as to principal and interest by the UnitedStates of America with a term of not more than seven (7) days; providedall such agreements shall require physical delivery of the securities securingsuch repurchase agreement, except those delivered through the Federal ReserveBook Entry System.

(g)           Other readily marketable Investmentsin debt securities which are reasonably acceptable to the Required Lender.

(h)           Any other Investment if the aggregateconsideration therefor does not exceed $7,500,000.

Any Investments under clauses (c), (d), (e) or (f)above must mature within one year of the acquisition thereof by the Borrower.

Section 6.12           Indebtedness. The Borrowerwill not incur, create, issue, assume or suffer to exist any Indebtedness,except:

(a)           The Obligations.

(b)           Current Liabilities, other than forborrowed money, incurred in the ordinary course of business.

(c)           Indebtedness existing on the date ofthis Agreement and disclosed on Schedule 6.12, but not including anyextension or refinancing thereof.

(d)           Indebtedness secured by Lienspermitted under Section 6.13 hereof and disclosed on Schedule 6.12.

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Section 6.13           Liens. The Borrower will notcreate, incur, assume or suffer to exist any Lien, or enter into, or make anycommitment to enter into, any arrangement for the acquisition of any propertythrough conditional sale, lease-purchase or other title retention agreements,with respect to any property now owned or hereafter acquired by the Borrower,except:

(a)           Liens granted to the Lender under theSecurity Documents to secure the Obligations.

(b)           Liens existing on the date of thisAgreement and disclosed on Schedule 6.13.

(c)           Deposits or pledges to secure paymentof insurance, old age pensions or other social security obligations, in theordinary course of business of the Borrower.

(d)           Liens for taxes, fees, assessmentsand governmental charges not delinquent or to the extent that payment thereforshall not at the time be required to be made in accordance with the provisionsof Section 5.4.

(e)           Liens of carriers, warehousemen,mechanics and materialmen, and other like Liens arising in the ordinary courseof business, for sums not due or to the extent that payment therefor shall notat the time be required to be made in accordance with the provisions of Section5.4.

(f)            Liens incurred or deposits orpledges made or given in connection with, or to secure payment of, indemnity,performance or other similar bonds.

(g)           Liens arising solely by virtue of anystatutory or common law provision relating to banker’s liens, rights of set-offor similar rights and remedies as to deposit accounts or other funds maintainedwith a creditor depository institution; providedthat (i) suchdeposit account is not a dedicated cash collateral account and is not subjectto restriction against access by a Borrower in excess of those set forth byregulations promulgated by the Board, and (ii) such deposit account is notintended by the Borrower to provide collateral to the depository institution.

(h)           The interest of any lessor under anyCapitalized Lease entered into after the Closing Date or purchase money Lienson property acquired after the Closing Date; provided, that, (i) theIndebtedness secured thereby is otherwise permitted by this Agreement and (ii)such Liens are limited to the property acquired and do not secure Indebtednessother than the related Capitalized Lease Obligations or the purchase price ofsuch property.

(i)            Liens created in connection withtransactions permitted under Section 6.12(e) hereof.

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(j)            Lender’s statutory Lien on theCoBank Equities.

Section 6.14           Contingent Liabilities. TheBorrower will not be or become liable on any Contingent Obligations exceptContingent Obligations existing on the date of this Agreement and described on Schedule6.14 and Contingent Obligations for the benefit of the Lender.

Section 6.15           Net Working Capital. As of theend of each Fiscal Quarter, other than fiscal year end, Net Working Capital ofthe Borrower and their consolidated Subsidiaries (excluding ProGold andCrystech) shall not be less than $15,000,000. As of the end of each fiscalyear, Net Working Capital of the Borrower and their consolidated Subsidiariesshall not be less than $35,000,000.

Section 6.16           Capitalization Ratio. As ofthe end of each Fiscal Quarter, the Capitalization Ratio of the Borrower andtheir consolidated Subsidiaries (excluding ProGold and Crystech) shall not bemore than 0.55 to 1.0, on a consolidated basis.

Section 6.17           Interest Coverage Ratio. As ofthe end of each Fiscal Quarter, the Interest Coverage Ratio of the Borrower andtheir consolidated Subsidiaries (excluding ProGold and Crystech) will not beless than 2.5 to 1.0.

**ARTICLE VIIEVENTS OF DEFAULT AND REMEDIES**

Section 7.1             Events of Default. Theoccurrence of any one or more of the following events shall constitute an Eventof Default:

(a)           The Borrower shall fail to make whendue, whether by acceleration or otherwise, any payment of principal of any Noteand such failure to pay shall continue for five (5) Banking Days after the dateon which such payment was due.

(b)           The Borrower shall fail to make whendue, whether by acceleration or otherwise, any payment of interest on any Noteor on or of any other Obligation required to be made to the Lender or anyLender pursuant to this Agreement and such failure to pay shall continue forfive (5) Banking Days after the date on which such payment was due.

(c)           Any representation or warranty madeby or on behalf of the Borrower in this Agreement or any other Loan Document orby or on behalf of the Borrower in any certificate, statement, report ordocument herewith or hereafter furnished to any Lender or the Lender pursuantto this Agreement or any other Loan Document shall prove to have been false ormisleading in any material respect on the date as of which the facts set forthare stated or certified.

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(d)           The Borrower shall fail tocomply with Sections 2,17, 5.2, 5.3 or 5.13 hereofor any Section of Article VI hereof.

(e)           The Borrower shall fail tocomply with any other agreement, covenant, condition,provision or term contained in this Agreement (other than those hereinabove setforth in this Section 7.1) and such failure to comply shall continue for 30calendar days after whichever of the following dates is the earliest:  (i) the date the Borrower or the Borrower give notice of such failure to theLender, (ii) the date the Borrower should have given notice of suchfailure to the Lender pursuant to Section 5.1, or (iii) the date the Lender or any Lender gives notice of suchfailure to the Borrower.

(f)            Any default (howeverdenominated or defined) shall occur under any SecurityDocument.

(g)           The Borrower shall becomeinsolvent or shall generally not pay its debts as they mature or shall applyfor, shall consent to, or shall acquiesce in the appointment of a custodian, trustee or receiver of theBorrower or for a substantial part of the property thereof or, in the absence of such application,consent or acquiescence, a custodian, trustee or receiver shall beappointed for the Borrower or for a substantial part of the property thereofand shall not be discharged within 45 days, or the Borrower shall make an assignment for the benefit of creditors.

(h)           Any bankruptcy, reorganization, debtarrangement or other proceedings under any bankruptcy or insolvency lawshall be instituted by or against the Borrower, and, if instituted against theBorrower, shall have been consented to or acquiesced in by the Borrower, orshall remain undismissed for 60 days, or an order for relief shall have been entered against the Borrower.

(i)            Any dissolution or liquidationproceeding shall be instituted by or against the Borrower, and, if institutedagainst the Borrower, shall be consented to or acquiesced in by the Borrower orshall remain for 45 days undismissed.

(j)            A judgment or judgments for thepayment of money in excess of the sum of $7,500,000 in the aggregateshall be rendered against the Borrower and either (i) the judgment creditorexecutes on such judgment or (ii) such judgment remains unpaid or undischargedfor more than 60 days from the date of entry thereof or such longer periodduring which execution of such judgment shall be stayed during an appeal fromsuch judgment.

(k)           The maturity of any materialinterest-bearing Indebtedness of the Borrower (other than Indebtednessunder this Agreement) shall be accelerated, or the Borrower shall fail to pay any such material Indebtedness when due(after the lapse of any applicable grace period) or, in the case of suchIndebtedness payable on demand, when demanded (after the lapse of anyapplicable grace period), or any event shall occur

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or condition shall exist and shall continue for morethan the period of grace, if any, applicable thereto and shall have the effectof causing, or permitting the holder of any such Indebtedness or any trustee orother Person acting on behalf of such holder to cause, such materialIndebtedness to become due prior to its stated maturity or to realize upon anycollateral given as security therefor. For purposes of this Section,Indebtedness of the Borrower shall be deemed “material” if it exceeds$7,500,000 as to any item of Indebtedness or in the aggregate for all items ofIndebtedness with respect to which any of the events described in this Section7.1(k) has occurred.

(l)            Any execution or attachment shall beissued whereby any substantial part of the property of the Borrower shall betaken or attempted to be taken and the same shall not have been vacated orstayed within 30 days after the issuance thereof.

(m)          Any Security Document shall, at anytime, cease to be in full force and effect or shall be judicially declared nulland void, or the validity or enforceability thereof shall be contested by theBorrower, or the Lender or the Lender shall cease to have a valid and perfectedsecurity interest having the priority contemplated thereunder in all of thecollateral described therein, other than by action or inaction of the Lender orthe Lender if (i) the aggregate value of the collateral affected by any of theforegoing exceeds $1,000,000 and (ii) any of the foregoing shall remainunremedied for twenty (20) days or more after receipt of notice thereof by theBorrower from the Lender.

(n)           Any Change of Control shall occur.

Section7.2             Remedies. If anyEvent of Default described in Sections 7.1 (g), (h) or (i) shall occur, theLoans shall automatically terminate and the Notes and all other Obligationsshall automatically become immediately due and payable, and the Borrower shallwithout demand cash collateralize an amount equal to the aggregate face amountof all outstanding Letters of Credit. Upon the occurrence of any of theforegoing events, the Lender may exercise all rights and remedies under any ofthe Loan Documents, and enforce all rights and remedies under any applicablelaw.

Section7.3             Offset. In additionto the remedies set forth in Section 7.2, upon the occurrence of any Event ofDefault and thereafter while the same be continuing, the Borrower herebyirrevocably authorizes the Lender to set off any Obligations owed to the Lenderagainst all deposits and credits of the Borrower with, and any and all claimsof the Borrower against, the Lender. Such right shall exist whether or not theLender shall have made any demand hereunder or under any other Loan Document,whether or not the Obligations, or any part thereof, or deposits and creditsheld for the account of the Borrower is or are matured or unmatured, andregardless of the existence or adequacy of any collateral, guaranty or anyother security, right or remedy available to the Lender. The Lender agreesthat, as promptly as is reasonably possible after the exercise of any suchsetoff right, it shall notify the Borrower of its exercise of such setoffright; provided, however, that the failure of the Lender toprovide such notice shall not affect the validity of the exercise of suchsetoff rights.  Nothing in this Agreementshall be

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deemed a waiver or prohibition of or restriction on the Lender to allrights of banker’s Lien, setoff and counterclaim available pursuant to law.

**ARTICLE VIII MISCELLANEOUS**

Section8.1             Modifications.Neither this Agreement, any other Loan Document, nor any terms hereof orthereof may be amended, supplemented or modified except in accordance with theprovisions of this Section 8.1. The Lender and the Borrower may, from time totime, (i) enter into written amendments, supplements or modifications heretoand to the other Loan Documents for thepurpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights ofthe Lender or of the Borrower hereunder or thereunder or (ii) waive, on such terms and conditions as the Lendermay specify in such instrument, any of the requirements of this Agreement orthe other Loan Documents or any Default or Event of Default and itsconsequences.

Section8.2             Expenses. Whetheror not the transactions contemplated hereby are consummated, theBorrower agrees to reimburse the Lender upon demand for all reasonableout-of-pocket expenses paid or incurred by the Lender (including the fees andexpenses of outside legal counsel to the Lender, and any filing and recordingcosts) in connection with the negotiation, preparation, approval, review,execution, delivery, administration, amendment, modification and interpretation of this Agreement and the other LoanDocuments and any commitment letters relating thereto. The Borrowershall also reimburse the Lender upon demand for all reasonable out-of-pocketexpenses (including expenses of legal counsel) paid or incurred by the Lender in connection with the collectionand enforcement of this Agreement and any other Loan Document. Theobligations of the Borrower under this Section shall survive any termination ofthis Agreement.

Section 8.3             Waivers, etc. No failure onthe part of the Lender or the holder of a Note to exercise and no delay inexercising any power or right hereunder or under any other Loan Document shalloperate as a waiver thereof; nor shall any single or partial exercise of anypower or right preclude any other or further exercise thereof or the exerciseof any other power or right. The remedies herein and in the other LoanDocuments provided are cumulative and not exclusive of any remedies provided bylaw.

Section8.4             Notices. Exceptwhen telephonic notice is expressly authorized by this Agreement, anynotice or other communication to any party in connection with this Agreementshall be in writing and shall be sent by manual delivery, facsimiletransmission, overnight courier or United States mail (postage prepaid)addressed to such party at the address specified on the signature page hereof, or at such other address as such party shallhave specified to the other partyhereto in writing. All periods of notice shall be measured from the date ofdelivery thereof if manually delivered, from the date of sending thereof ifsent by facsimile transmission, from thefirst Banking Day after the date of sending if sent by overnight courier, orfrom four days

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after the date of mailing if mailed; provided, however,that any notice to the Lender under Article II hereof shall be deemed to havebeen given only when received by the Lender.

Section 8.5             Taxes. The Borrower agrees topay, and save the Lender harmless from all liability for, any stamp orother taxes which may be payable with respect to the execution or delivery ofthis Agreement or the issuance of the Notes, which obligation of the Borrowershall survive the termination of thisAgreement.

Section 8.6             Successorsand Assigns; Participations; Purchasing Lender.

(a)           This Agreement shall be binding upon and inure to the benefit of the Borrower,the Lender, all future holders of the Notes, and their respective successors andassigns, except that the Borrower may notassign or transfer any of their rights or obligations under thisAgreement without the prior written consent of the Lender.

(b)           The Lender may, at any time in the ordinary course of its commercial bankingbusiness and in accordance with applicable law, with the consent of the Lenderand the Borrower (neither of which consents shall be unreasonably withheld ordelayed; and if an Event of Default shall have occurred and be continuing, thenconsent of the Borrower shall not be required), sell to one or more banks orother financial institutions (“Participants”)participating interests in the Revolving Loan, the Term Loans or other Obligations owing to the Lender, the RevolvingNote held by the Lender, any Term Notesheld by the Lender, or any other interest of the Lender hereunder. The Borroweragrees that if amounts outstanding under this Agreement, the RevolvingNote, the Term Notes and the Loan Documents are due and unpaid, or shall havebeen declared or shall have become due andpayable upon the occurrence of an Event of Default, each Participant shall be deemed to have, to theextent permitted by applicable law, the right of setoff in respect ofits participating interest in amounts owing under this Agreement and theRevolving Note, any Term Note or other Loan Document to the same extent as ifthe amount of its participating interest wereowing directly to it as a Lender under this Agreement or the Revolving Note, any Term Note or other Loan Document; provided.that such right of setoff shallbe subject to the obligation of such Participant to share with the Lender, and the Lender agree to share withsuch Participant. The Borrower also agrees that each Participant shallbe entitled to the benefits of Sections 2.19, 2.20, 2.21, 2.22 and 8.2 with respect to its participation inthe Loans; provided, that no Participant shall be entitled toreceive any greater amount pursuant to such subsection than the Lender wouldhave been entitled to receive in respect of the amount of the participationtransferred by the Lender to such Participant had no such transfer occurred.

(c)           The Borrower shall not beliable for any costs incurred by the Lender in effecting any participation under subparagraph (b) of this subsection.

(d)           The Lender may disclose to any Participant and to any prospective Participantany and all financial information in the Lender’s possession concerning the

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Borrower or any of their Subsidiaries which has beendelivered to the Lender by or on behalf of the Borrower or any of theirSubsidiaries pursuant to this Agreement or which has been delivered to the Lender by or on behalf of the Borrower or anyof their Subsidiaries in connection with the Lender’s credit evaluationof the Borrower or any of its Subsidiariesprior to entering into this Agreement, provided that prior to disclosingsuch information, the Lender shallfirst obtain the agreement of such prospective Participant to comply with the provisions of Section 8.7.

(e)           Notwithstandingany other provision in this Agreement, any Lender may at any time createa security interest in, or pledge, all or any portion of its rights under andinterest in this Agreement and any note held by it in favor of any federalreserve bank in accordance with Regulation Aof the Board or U. S. Treasury Regulation 31 CFR § 203.14, and such FederalReserve Bank may enforce such pledge or security interest in any mannerpermitted under applicable law.

Section8.7             Confidentiality ofInformation. The Lender shall use reasonable efforts to assure thatinformation about the Borrower and its operations, affairs and financialcondition, not generally disclosed to the public or to trade and othercreditors, which is furnished to the Lender pursuantto the provisions hereof is used only for the purposes of this Agreement andany other relationship between the Lender and the Borrower and shall notbe divulged to any Person other than theLender, their Affiliates and their respective officers, directors, employeesand agents, except: (a) to their attorneys and accountants, (b) inconnection with the enforcement of the rightsof the Lender hereunder and under the Loan Documents or otherwise in connectionwith applicable litigation, (c) in connection with participations and thesolicitation of prospective participants referred to in the immediatelypreceding Section, (d) if such information is generally available to the public other than as a result of disclosure by theLender, (e) to any direct or indirectcontractual counterparty in any hedging arrangement or such contractualcounterparty’s professional advisor,(f) to any nationally recognized rating agency that requires information aboutthe Lender’s investment portfolio in connection with ratings issued withrespect to the Lender, and (g) as may otherwise be required or requestedby any regulatory authority having jurisdictionover the Lender or by any applicable law, rule, regulation or judicial process,the opinion of the Lender’s counsel concerning the making of such disclosure tobe binding on the parties hereto. The obligations of the Lender under thisSection shall survive payment in full of the Obligations and the termination of the Commitments. The Lender shallnot incur any liability to theBorrower by reason of any disclosure permitted by this Section.

Section 8.8             Governing Law and Construction.THE VALIDITY, CONSTRUCTION AND ENFORCEABILITYOF THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF COLORADO, WITHOUT GIVINGEFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF. Whenever possible, eachprovision of this Agreement and the other Loan Documents and any otherstatement, instrument or transactioncontemplated hereby or thereby or relating hereto or thereto shall beinterpreted in such manner as to be effective and valid under such applicablelaw, but, if any provision of this Agreement, the other Loan Documentsor any other statement, instrument or

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transaction contemplated hereby or thereby orrelating hereto or thereto shall be held to be prohibited or invalid undersuch applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provision or the remaining provisionsof this Agreement, the other Loan Documents or any other statement, instrumentor transaction contemplated hereby or thereby or relating hereto or thereto.

Section8.9             Consent toJurisdiction. AT THE OPTION OF THE LENDER, THIS AGREEMENT AND THEOTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERALCOURT SITTING IN THE CITY OR COUNTY OF DENVER; AND THE BORROWER CONSENTSTO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER COMMENCESANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACTTHEORY ARISING DIRECTLY OR INDIRECTLY FROMTHE RELATIONSHIP CREATED BY THIS AGREEMENT,THE LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS ANDVENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDERAPPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

Section8.10           Waiver of Jury Trial.THE BORROWER AND THE LENDER IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIALBY JURY IN ANY LEGAL PROCEEDING ARISING OUTOF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Section 8.11           Survival of Agreement. Allrepresentations, warranties, covenants and agreement made by the Borrowerherein or in the other Loan Documents and in the certificates or otherinstruments prepared or delivered in connection with or pursuant to thisAgreement or any other Loan Document shall be deemed to have been relied uponby the Lender and shall survive the making of the Loans by the Lender and theexecution and delivery to the Lender by the Borrower of the Notes, regardlessof any investigation made by or on behalf of the Lender, and shall continue in full force and effect aslong as any Obligation is outstanding and unpaid and so long as the Commitmentshave not been terminated; provided, however, that the obligations of the Borrower under Sections 8.2, 8.5 and 8.12 shallsurvive payment in full of the Obligations and the termination of theCommitments.

Section 8.12           Indemnification. Borrower herebyagrees to defend, protect, indemnify and hold harmless the Lender and itsrespective Affiliates and the directors, officers, employees, attorneys andagents of the Lender and its respective Affiliates (each of the foregoing beingan “Indemnitee” and all of theforegoing being collectively the “Indemnitees”‘) from and against any and all claims, actions, damages, liabilities,judgments, costs and expenses (including all reasonable fees and disbursements of counsel which may be incurred inthe investigation or defense of any matter) imposed upon, incurred by orasserted against any Indemnitee, whether direct, indirect or consequential andwhether based on any federal, state, local or foreign laws or

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regulations (including securities laws, environmentallaws, commercial laws and regulations), undercommon law or on equitable cause, or on contract or otherwise:

(a)           by reason of, relating to or in connection with the execution, delivery,performance or enforcement of any Loan Document, any commitmentsrelating thereto, or any transactioncontemplated by any Loan Document; or

(b)           by reason of, relating to or in connection with any credit extended orused under the Loan Documents or any act done or omitted by any Person,or the exercise of any rights or remedies thereunder,including the acquisition of any collateral by the Lender by way offoreclosure of the Lien thereon, deed or bill of sale in lieu of such foreclosure or otherwise;

provided, however, that theBorrower shall not be liable to any Indemnitee for any portion of suchclaims, damages, liabilities and expenses resulting from such Indemnitee’sgross negligence or willful misconduct. Inthe event this indemnity is unenforceable as a matter of law as to a particularmatter or consequence referred to herein, it shall be enforceable to the fullextent permitted by law.

Thisindemnification applies, without limitation, to any act, omission, event or circumstanceexisting or occurring on or prior to the later of the Termination Date or thedate of payment in full of the Obligations, including specifically Obligationsarising under clause (b) of this Section.The indemnification provisions set forth above shall be in addition to anyliability the Borrower may otherwise have. Without prejudice to the survival ofany other obligation of the Borrower hereunder the indemnities andobligations of the Borrower contained in this Section shall survive the paymentin full of the other Obligations.

Section8.13           Captions. Thecaptions or headings herein and any table of contents hereto are forconvenience only and in no way define, limit or describe the scope or intent ofany provision of this Agreement.

Section8.14           Entire Agreement.This Agreement and the other Loan Documents embody the entire agreementand understanding between the Borrower and the Lender with respect to the subject matter hereof and thereof.This Agreement supersedes all prior agreements and understandings relating tothe subject matter hereof. Nothing contained in this Agreement or in any other Loan Document, expressed or implied,is intended to confer upon any Persons other than the parties hereto any rights, remedies, obligations orliabilities hereunder or thereunder.

Section8.15           Counterparts. ThisAgreement may be executed in any number of counterparts, all of whichtaken together shall constitute one and the same instrument, and any of theparties hereto may execute this Agreement by signing any such counterpart.

Section8.16           BorrowerAcknowledgements. The Borrower hereby acknowledges that (a) it hasbeen advised by counsel in the negotiation, execution and delivery of thisAgreement

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and the other Loan Documents, (b) the Lender has nofiduciary relationship to the Borrower, the relationship being solely that ofdebtor and creditor, (c) no joint venture exists between the Borrower and theLender, and (d) the Lender undertakes no responsibility to the Borrower to review or inform the Borrower of any matter inconnection with any phase of the business or operations of the Borrowerand the Borrower shall rely entirely upon its own judgment with respect to its business, and any review,inspection or supervision of, or information supplied to, the Borrowerby the Lender is for the protection of the Lender and neither the Borrower norany third party is entitled to rely thereon.

Section 8.17           RelationshipAmong Borrower.

(a)           Waivers of Defenses.The obligations of the Borrower hereunder shall not be released, in whole or inpart, by any action or thing which might, but for this provision of thisAgreement, be deemed a legal or equitable discharge of a surety or guarantor,other than irrevocable payment and performance in full of the Obligations(except for contingent indemnity and other contingent Obligations not yet dueand payable) at a time after any obligation of the Lender hereunder to make theLoans and to issue Letters of Credit shall have expired or been terminated andall outstanding Letters of Credit shall have expired or the liability of theLender shall have otherwise been discharged. The purpose and intent of this Agreement is that the Obligations constitutethe direct and primary obligations ofthe Borrower and that the covenants, agreements and all obligations ofthe Borrower hereunder be absolute, unconditional and irrevocable. The Borrowershall be and remain liable for any deficiency remaining after foreclosure ofany security agreement or mortgage securing all or any part of the Obligations,whether or not the liability of any other Person for such deficiency isdischarged pursuant to statute, judicialdecision or otherwise.

(b)           Other Transactions. TheLender is expressly authorized to exchange, surrender or release with orwithout consideration any or all collateral and security which may at any timebe placed with it by the Borrower or by any other Person on behalf of theBorrower, or to forward or deliver any or all such collateral and securitydirectly to the Borrower for collection andremittance or for credit. No invalidity, irregularity or unenforceabilityof any security for the Obligations or other recourse with respect theretoshall affect, impair or be a defense to the Borrower’s obligations under thisAgreement. The liabilities of the Borrower hereunder shall not be affected orimpaired by any failure, delay, neglect oromission on the part of the Lender to realize upon any of the Obligationsof any other Borrower to the Lender, or upon any collateral or security for anyor all of the Obligations, nor by the taking by the Lender of (or the failureto take) any guaranty or guaranties to secure the Obligations, nor by thetaking by the Lender of (or the failure totake or the failure to perfect its security interest in or other lien on) collateral or security of any kind. No act oromission of the Lender, whether or not such action or failure to actvaries or increases the risk of, or affects the rights or remedies of the Borrower, shall affect or impair theobligations of the Borrower hereunder.

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(c)           Actions Not Required.  The Borrower, to the extent permitted by applicable law, hereby waives any and all rightto cause a marshaling of the assets or any other action by any court or othergovernmental body with respect thereto or to cause the Lender to proceed against any security for theObligations or any other recourse which the Lender may have with respect thereto and further waives any and allrequirements that the Lender instituteany action or proceeding at law or in equity, or obtain any judgment,against the Borrower or any other Person, or with respect to any collateral security for the Obligations, as a conditionprecedent to making demand on or bringing an action or obtaining and/or enforcing a judgment against, the Borrowerunder this Agreement.

(d)           Application of Payments.Any and all payments upon the Obligations made by the Borrower or by any otherPerson, and/or the proceeds of any or all collateral or security for any of theObligations, may be applied by the Lender on such items of the Obligations asthe Lender may elect.

(e)           Recovery of Payment. Ifany payment received by the Lender and applied to the Obligations issubsequently set aside, recovered, rescinded or required to be returned for anyreason (including, without limitation, the bankruptcy, insolvency or reorganization of the Borrower or any otherobligor), the Obligations to which such payment was applied shall, to the extent permitted by applicable law,be deemed to have continued inexistence, notwithstanding such application, and the Borrower shall be liable for such Obligations as fully as if suchapplication had never been made. References in this Agreement to amounts“irrevocably paid” or to “irrevocable payment” refer to payments that cannot be set aside, recovered, rescinded or required tobe returned for any reason.

(f)            Limitation; Insolvency Laws.As used in this Section 8.17(f): (a) the term “Applicable InsolvencyLaws” means the laws of the United States of America or of any State,province, nation or other governmental unit relating to bankruptcy,reorganization, arrangement, adjustment of debts, relief of debtors,dissolution, insolvency, fraudulent transfers or conveyances or other similarlaws (including, without limitation, 11 U. S. C. §547, §548, §550 and other “avoidance” provisions of Title 11 of theUnited States Code) as applicable in any proceeding in which thevalidity and/or enforceability of this Agreementagainst the Borrower, or any Specified Lien is in issue; and (b) “Specified Lien” means any security interest, mortgage, lienor encumbrance granted by the Borrowersecuring the Obligations, in whole or in part. Notwithstanding any other provision of this Agreement, if, in anyproceeding, a court of competent jurisdiction determines that with respect to the Borrower, this Agreement or anySpecified Lien would, but for theoperation of this Section, be subject to avoidance and/or recovery or be unenforceableby reason of Applicable Insolvency Laws, this Agreement and each such Specified Lien shall be valid and enforceableagainst the Borrower, only to the maximum extent that would not cause this Agreement or such Specified Lien to besubject to avoidance, recovery or unenforceability. To the extent thatany payment to, or realization

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by, the Lender or the Lender on the Obligationsexceeds the limitations of this Section and is otherwise subject to avoidanceand recovery in any such proceeding, the amount subject to avoidance shall in all events be limited to the amount bywhich such actual payment or realization exceeds such limitation, andthis Agreement as limited shall in all events remain in full force and effectand be fully enforceable against the Borrower. This Section is intended solelyto reserve the rights of the Lender against the Borrower, in such proceeding tothe maximum extent permitted by Applicable Insolvency Laws and neither the Borrower, any guarantor of theObligations nor any other Person shall have any right, claim or defense under this Section that would not otherwisebe available under Applicable Insolvency Laws in such proceeding.

Section 8.18           InterestRate Limitation. Notwithstanding anything herein to the contrary, if at anytime the interest rate applicable to any Loan, together with all fees, chargesand other amounts that are treated as interest on such Loan under applicablelaw (collectively, the “Charges”),shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contractedfor, charged, taken, received or reserved by the Lender in accordance withapplicable law, the rate of interest payable in respect of such Loan hereunder,together with all Charges payable in respect thereof, shall be limited to theMaximum Rate and, to the extent lawful, the interest and Charges that wouldhave been payable in respect of such Loan but were not payable as a result ofthe operation of this Section shall be cumulated and the interest and Chargespayable to such Lender in respect of other Loans or periods shall be increased(but not above the Maximum Rate therefor)until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment,shall have been received by such Lender.

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**IN WITNESS WHEREOF,**theparties hereto have caused this Agreement to be executed as of the date first above written.
|        | AMERICAN CRYSTAL SUGAR COMPANY,as Borrower |
|--------|--------------------------------------------|
|   |                                       |   |
|   |                                       |   |
|   | By:                                        | /s/ Samuel S. M.  Wai |   |
|   | Name:                                      | Samuel S. M. Wai |   |
|   | Title:                                     | TREASURER |   |
|        |                                            |  |  |  |  |

 

Address for the BorrowerFor Purposes of Notice:

101North 3rd StreetMoorhead, Minnesota 56560

S-1

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|        | CoBank, ACB, as Lender         |
|--------|--------------------------------|
|   |                           |
|   | By:                            | /s/ Pat Schulz |
|   | Name:                          | Pat Schulz |
|   | Title:                         | Assistant  Corporate Secretary |
|   |                           |   |
|   | Address for funding notices:   |
|   | CoBank, ACB                    |
|   | 5500 South Quebec Street       |
|   | Greenwood Village, CO 80111    |
|   | Attention: Daphne Satriano     |
|   | Fax: (303) 224-2521            |
|   |                           |
|   | Address for all other notices: |
|   |                           |
|   | CoBank, ACB                    |
|   | 5500 South Quebec Street       |
|   | Greenwood Village, CO 80111    |
|   | Attention: Daphne Satriano     |
|   | Fax: (303) 224-2521            |
|        |                                |  |  |  |  |

 

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ANNEX I

**PRICINGGRID**
| ** ** | ** ** | ** **                                | ** ** | **LIBOR Margin  (In basis points)** | ** ** | **Base Rate Margin  (in basis points)** | ** ** | **Commitment Fee  (in basis points)** | ** ** |
|------------|------------|-------------------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------------|------------|------------------------------------------------------|------------|
| **Tier**   | ** ** | **Leverage Ratio**                   | ** ** | **Revolving Loan**                            | ** ** | **Term Loans**                                         | ** ** | **Revolving  Loan**                                  | ** ** | **Term Loans** | ** ** | **Revolving  Loan** | ** ** | **Term Loans** | ** ** |
| 1          |       | <1.0 to l.0                            |       | n/a                                                |       | 65.0                                                        |       | 0                                                    |       | 0 |   | n/a |   | 15.0 |   |
| 2          |       | <1.20 to 1.0  and 31.0 to 1.0     |       | n/a                                                |       | 75.0                                                        |       | 0                                                    |       | 0 |   | n/a |   | 17.5 |   |
| 3          |       | < l.35 to 1.0  and 3  1.20 to 1.0 |       | n/a                                                |       | 87.5                                                        |       | 0                                                    |       | 0 |   | n/a |   | 20.0 |   |
| 4          |       | 3  1.35 to 1.0                       |       | n/a                                                |       | 100.00                                                      |       | 0                                                    |       | 0 |   | n/a |   | 25.0 |   |

 

----

Schedule 3.1(a)

**Landlord/Bailee Locations**

**None**

----

**Schedule 4.6**

**Litigation**

On May 1, 2006 TheAmalgamated Sugar Company LLC (“Amalgamated”) has filed a lawsuit against theU.S. Department of Agriculture (the “USDA”) in Federal Court in the District ofIdaho challenging the USDA’s transfer of sugar marketing allocations to theAmerican Crystal Sugar Company (“ACSC”). The case stems from ACSC’s acquisitionof assets from the Pacific Northwest SugarCompany (“PNSC”) in 2003, and the associated transfer of PNSC’s sugar marketingallocations to ACSC. The case has been in various stages of administrativehearings, the most recent of which resultedin the USDA’s final decision to transfer the marketing allocations toACSC. Amalgamated is challenging the USDA decision in Federal Court. ACSC intends to intervene in the case and play anactive role in the litigation in order to preserve its rights to themarketing allocation. Based on certain assumptions, an adverse ruling in thiscase could have an adverse impact of morethan $7,500,000.00.

----

**Schedule 4.7**

**Environmental Matters**

**None**

----

Schedule 6.11

**Existing Investments**

Investment in CoBank, ACB

Investment in MarketingCooperatives

Investmentin ProGold Limited Liability Company

Investment in Crystech,LLC

Investment in SidneySugars Incorporated

Investment in Crab CreekSugar Company

----

Schedule 6.12

ExistingIndebtedness
| **Lender**                                                                                               | ** ** | **Amount**                       |
|----------------------------------------------------------------------------------------------------------|------------|----------------------------------|
| * *                                                                                                 |       |                             |
| Commercial Paper                                                                                         |       | Variable                         |
| * *                                                                                                 |       | Maximum Outstanding $225 million |
| * *                                                                                                 |       |                             |
| Minn-Dak Farmers Cooperative  Southern Minnesota Beet Sugar Cooperative  United States Sugar Corporation |       | Variable                         |
|                                                                                                     |       |                             |
| Private  Placement of Debt                                                                               |       |                             |
| John Hancock  Mutual Life Insurance Co.                                                                  |       | $26 million                      |
| John Hancock  Variable Life Insurance Co.                                                                |       | $1.5 million                     |
| Paul Revere Life  Insurance Company                                                                      |       | $22.5 million                    |
| John Hancock  Ins. Co.                                                                                   |       | $20 million                      |
|                                                                                                     |       |                             |
| Wells Fargo                                                                                              |       | $1 million                       |
|                                                                                                     |       |                             |
| Commodity Credit  Corporation                                                                            |       | Variable                         |
|                                                                                                     |       |                             |
| East Grand Forks  Pollution Control Refunding Series A                                                   |       | $3,360,000                       |
|                                                                                                     |       |                             |
| East Grand Forks  Industrial Development Series B                                                        |       | $560,000                         |
|                                                                                                     |       |                             |
| 1996 Traill  County Series A, B & C Bonds                                                            |       | $18 million                      |
|                                                                                                     |       |                             |
| 1997 City of  Moorhead Bonds                                                                             |       | $5.5 million                     |
|                                                                                                     |       |                             |
| 1998 Traill  County Bonds                                                                                |       | $5.75 million                    |
|                                                                                                     |       |                             |
| 1999 Traill  County Bonds                                                                                |       | $3.58 million                    |
|                                                                                                     |       |                             |
| 2000 City of  East Grand Forks Bonds                                                                     |       | $5.75 million                    |
|                                                                                                     |       |                             |
| Intercompany  Loan(s) from ACSC to Sidney Sugars Incorporated                                            |       | $60 million                      |
|                                                                                                     |       |                             |
| 2005 EGF  Industrial Bonds                                                                               |       | $6.5 million                     |
|                                                                                                     |       |                             |
| 2005B EGF Solid  Waste Revenue Bonds                                                                     |       | $4.5 million                     |

 

----

Schedule 6.13

Existing Liens
| **Asset**                                                                  | ** ** | **Lienholder**                                                                                                                         |
|----------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                                       |       |                                                                                                                                   |
| Sugar                                                                      |       | Commodity Credit Corporation                                                                                                           |
|                                                                       |       |                                                                                                                                   |
| Real Estate, Equipment, Intangibles                                        |       | CoBank as Collateral Agent                                                                                                             |
|                                                                       |       |                                                                                                                                   |
| ACSC’s Equity in Crystech, LLC                                        |       | First Union Trust Company,  National Association, as Collateral Agent                                                                  |
|                                                                       |       |                                                                                                                                   |
| Pollution Control Equipment located at ACSC’s  Moorehead, MN facility |       | Security Agreement  American National Bank and Trust Company (now known as Firstar Bank)                                               |
|                                                                       |       |                                                                                                                                   |
| Marketing Assets                                                           |       | Minn-Dak Farmers Cooperative  Southern Minnesota Beet Sugar Cooperative  United States Sugar Corporation                               |
|                                                                       |       |                                                                                                                                   |
| Fixed Assets - Collateral Pool                                             |       | Private Placement of DebtJohn Hancock Mutual Life Insurance Co.John Hancock Variable Life  Insurance Co.Paul Revere Life Insurance Co. |

 

----

Schedule 6.14

ContingentObligations

Financial Guaranty onbehalf of Midwest Agri Commodities Company

----

Exhibit A-l

Form of Revolving Note

Attached

----

**REVOLVINGNOTE**
| $300,000,000.00 |   | July 31, 2006    |
|-----------------|--------|------------------|
|            |   | Denver, Colorado |

FORVALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation (the “Borrower”),hereby promises to pay to the order of CoBANK, ACB (the “Lender”), in lawful money of theUnited States of America in Immediately Available Funds (as such term and each other capitalizedterm used herein are defined in the Loan Agreement hereinafter referred to), the principal amount of ThreeHundred Million and 00/100 Dollars($300,000,000.00). or such lesser amount as has actually been advanced underthe Revolving Loan, and interest inlike funds on the unpaid principal amount from time to time outstanding, at the rates and times set forth inthat certain Amended and Restated Loan Agreementdated July 31, 2006, by and between the Borrower and the Lender, as the samemay be amended, modified, supplemented, extended renewed, restated or replacedfrom time to time (the “LoanAgreement”).

Principaland interest shall be payable as set forth in the LoanAgreement, and all principal andinterest remaining unpaid on the Termination Date shall be immediately due and payable.

Thisnote is one of the Notes referred to in the Loan Agreement and is subject toand governed by the Loan Agreement. This maturity of this note is subject toacceleration upon the terms provided in the Loan Agreement.

Shouldany Event of Default occur as provided for in the Loan Agreement, allprincipal and interest outstanding hereunder may be declared immediately dueand payable in accordance with the Loan Agreement. The Borrower and allguarantors and endorsers, for themselves, their legal representatives,successors and assigns, hereby severally waive presentment for payment, protestand demand, notice of protest, demand and dishonor and nonpayment of this note,and consent that the holder may extendthe time of payment or otherwise modify the terms of payment of any part or the whole of theindebtedness evidenced by this note, and such consent shall not alter ordiminish the liability of the Borrower or said guarantors or endorsers. Theundersigned agrees to pay all costs and expenses of collection, includingreasonable attorney’s fees.

Theinterest rate shall at no time exceed the maximum lawful rate (the “MaximumRate”) that may be contracted for,charged, taken, received or reserved in accordance with applicable law, and the rate of interest payable hereunder shall belimited to the Maximum Rate.

THEVALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THESTATE OF COLORADO WITHOUT GIVINGEFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

----

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF)IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTEOR ANY OTHER LOAN DOCUMENT OR THETRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 
| ** ** | **AMERICAN CRYSTAL SUGAR COMPANY,** |
|------------|-------------------------------------|
|       | a Minnesota cooperative corporation |
|       |                                |
|       |                                |
|       | By                                  |   |   |
|       |                                |   |   |
|       | Its                                 |   |   |

 

2

----

Exhibit A-2

Formof Term Note T01

Attached

----

**TERMNOTE TO1**
| $558,276,702.00 |   | July 31, 2006    |
|-----------------|--------|------------------|
|            |   | Denver, Colorado |

FORVALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation (the “Borrower”),hereby promises to pay to the order of CoBANK, ACB (the “Lender”), in lawful money of the United States ofAmerica in Immediately Available Funds(as such term and each other capitalized term used herein are defined in theLoan Agreement hereinafter referredto), the principal amount of Fifty-Eight Million Two Hundred Seventy-SixThousand Seven Hundred Two and 00/100 Dollars ($58,276,702.00), or such lesser amount as has actually been advanced under the TermLoan T01, and interest in like funds on the unpaid principal amount hereof from time to time outstanding, at therates and time set forth in thatcertain Amended and Restated Loan Agreement dated July 31, 2006, by and betweenthe Borrower and the Lender, as thesame may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time(the “Loan Agreement”),

Principaland interest shall be payable as set forth in the Loan Agreement, and all principal and interest remaining unpaid on the TermLoan Maturity Date shall be immediately due and payable.

Thisnote is one of the Notes referred to in the Loan Agreement and is subject toand governed by the Loan Agreement. This note is secured, and itsmaturity is subject to acceleration, in eachcase upon the terms provided in the Loan Agreement.

Shouldany Event of Default occur as provided for in the Loan Agreement, all principaland interest outstanding hereundermay be declared immediately due and payable in accordance with the LoanAgreement The Borrower and all guarantors and endorsers, for themselves, their legal representatives, successors and assigns,hereby severally waive presentment for payment, protest and demand, notice of protest, demand and dishonor andnonpayment of this note, and consentthat the holder may extend the time of payment or otherwise modify the terms ofpayment of any part or the whole ofthe indebtedness evidenced by this note, and such consent shall not alter or diminish the liability of theBorrower or said guarantors or endorsers. The undersigned agrees to pay all costs and expenses of collection, includingreasonable attorney’s fees.

Theinterest rate shall at no time exceed the maximum lawful rate (the “MaximumRate”) that may be contracted for,charged, taken, received or reserved in accordance with applicable law, and the rate of interest payable hereundershall be limited to the Maximum Rate.

THEVALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THESTATE OF COLORADO WITHOUT GIVINGEFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

----

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF)IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTEOR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 
| ** ** | **AMERICAN  CRYSTAL SUGAR COMPANY,**a Minnesota cooperative  corporation |
|------------|--------------------------------------------------------------------------|
|       |                                                                     |
|       |                                                                     |
|       | By                                                                       |   |   |
|       |                                                                     |   |   |
|       | Its                                                                      |   |   |

 

2

----

Exhibit A-3

Form of Term Note T01NP

Attached

----

**TERM NOTE T01NP**
| $25,106,600.00 |   | July 31, 2006    |
|----------------|--------|------------------|
|           |   | Denver, Colorado |

FORVALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation (the “Borrower”),hereby promises to pay to the order of CoBANK, ACB (the “Lender”), in lawful money of the United States ofAmerica in Immediately Available Funds(as such term and each other capitalized term used herein are defined in theLoan Agreement hereinafter referredto), the principal amount of Twenty-Five Million One Hundred Six Thousand SixHundred and 00/100 Dollars ($25,106,600.00), or such lesser amount as has actually been advanced under the Term Loan T01NP,and interest in like funds on the unpaid principal amount hereof from time to time outstanding, at the rates andtime set forth in that certain Amendedand Restated Loan Agreement dated July 31, 2006, by and between the Borrower and the Lender, as the same may beamended, modified, supplemented, extended, renewed, restated or replaced from time to time (the “Loan Agreement”).

Principaland interest shall be payable as set forth in the Loan Agreement, and all principal and interest remaining unpaid on the TermLoan Maturity Date shall be immediately due and payable.

Thisnote is one of the Notes referred to in the Loan Agreement and is subject toand governed by the Loan Agreement. This note is secured, and itsmaturity is subject to acceleration, in eachcase upon the terms provided in the Loan Agreement.

Shouldany Event of Default occur as provided for in the Loan Agreement, all principaland interest outstanding hereundermay be declared immediately due and payable in accordance with the LoanAgreement. The Borrower and all guarantors and endorsers, for themselves, theirlegal representatives, successors and assigns, hereby severally waivepresentment for payment, protest and demand, notice of protest, demand anddishonor and nonpayment of this note, and consent that the holder may extend the time of payment or otherwisemodify the terms of payment of anypart or the whole of the indebtedness evidenced by this note, and such consent shall not alter or diminish the liability of theBorrower or said guarantors or endorsers. The undersigned agrees to pay all costs and expenses of collection, includingreasonable attorney’s fees.

Theinterest rate shall at no time exceed the maximum lawful rate (the “MaximumRate”) that may be contracted for,charged, taken, received or reserved in accordance with applicable law, and the rate of interest payable hereundershall be limited to the Maximum Rate.

THEVALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS NOTE SHALL BE GOVERNED BY THE INTERNAL LAWS OF THESTATE OF COLORADO WITHOUT GIVINGEFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

----

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF)IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTEOR ANY OTHER LOAN DOCUMENT OR THETRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 
|        | **AMERICAN  CRYSTAL SUGAR COMPANY,**a Minnesota cooperative  corporation |
|--------|--------------------------------------------------------------------------|
|   |                                                                     |
|   |                                                                     |
|   | By                                                                       |   |   |
|   |                                                                     |   |   |
|   | Its                                                                      |   |   |

 

2

----

Exhibit A-4

Form of Term Note T06

Attached

----

**TERM NOTE T06**
| $85,000,000.00 |   | July 31, 2006    |
|----------------|--------|------------------|
|           |   | Denver, Colorado |

FORVALUE RECEIVED, AMERICAN CRYSTAL SUGAR COMPANY, a Minnesota cooperative corporation (the “Borrower”‘),hereby promises to pay to the order of Co BANK, ACB (the “Lender”) in lawful money of the United States ofAmerica in Immediately Available Funds(as such term and each other capitalized term used herein are defined in theLoan Agreement hereinafter referredto), the principal amount of Eighty-Five Million and 00/100 Dollars ($85,000,000.00), or such lesser amount ashas actually been advanced under the Term Loan T06, and interest in like funds on the unpaid principal amounthereof from time to time outstanding,at the rates and time set forth in that certain Amended and Restated Loan Agreement dated July 31, 2006, by and between theBorrower and the Lender, as the same may be amended, modified, supplemented, extended, renewed, restated orreplaced from time to time (the “Loan Agreement”).

Principaland interest shall be payable as set forth in the Loan Agreement, and all principal and interest remaining unpaid on the TermLoan Maturity Date shall be immediately due and payable.

Thisnote is one of the Notes referred to in the Loan Agreement and is subject toand governed by the Loan Agreement. This note is secured, and itsmaturity is subject to acceleration, in eachcase upon the terms provided in the Loan Agreement.

Shouldany Event of Default occur as provided for in the Loan Agreement, all principaland interest outstanding hereundermay be declared immediately due and payable in accordance with the LoanAgreement The Borrower and all guarantors and endorsers, for themselves, theirlegal representatives, successors and assigns, hereby severally waivepresentment for payment, protest and demand, notice of protest, demand anddishonor and nonpayment of this note, and consent that the holder may extend the time of payment or otherwisemodify the terms of payment of anypart or the whole of the indebtedness evidenced by this note, and such consent shall not alter or diminish the liability of theBorrower or said guarantors or endorsers. The undersigned agrees to pay all costs and expenses of collection, includingreasonable attorney’s fees.

Theinterest rate shall at no time exceed the maximum lawful rate (the “MaximumRate”) that may be contracted for,charged, taken, received or reserved in accordance with applicable law, and the rate of interest payable hereundershall be limited to the Maximum Rate.

THE VALIDITY, CONSTRUCTIONAND ENFORCEABILITY OF THIS NOTE SHALL BEGOVERNED BY THE INTERNAL LAWS OF THE STATE OF COLORADO WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWSPRINCIPLES THEREOF.

----

THE UNDERSIGNED AND THE HOLDER (BY ITS ACCEPTANCE HEREOF)IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTEOR ANY OTHER LOAN DOCUMENT OR THETRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 
|            | **AMERICAN CRYSTAL SUGAR COMPANY,**a Minnesota cooperative corporation |
|------------|------------------------------------------------------------------------|
| ** ** |                                                                   |
|       |                                                                   |
|       | By                                                                     |   |   |
|       |                                                                   |   |   |
|       | Its                                                                    |   |   |

 

2

----

Exhibit B

BorrowingBase Formula

The Borrowing Base shall bedetermined and computed by calculating the sum of:

80% of Eligible AccountsReceivable; plus

75% of Eligible Net Inventory.

The Borrowing Base shall at notime exceed all “Short-Term Loans” owing by Borrower, “Short-Term Loans”is defined as the sum of the Revolving Loan, outstanding Commodity Credit Corporation loans, and all outstandingcommercial paper.

----

Exhibit C

Formof Borrowing Base Certificate

Attached

----

**Monthly Borrowing Base**

For the month ended                              
| Eligible Accounts  Receivables |   | $ |   | @ 80% |
|--------------------------------|--------|---|--------|-------|
|                           |   | $ |   | (a)   |

 

Eligible Accounts Receivables are defined as those of the Company andall Subsidiaries which: (1) arise from the sale and delivery of inventory onordinary trade terms; (2) are evidenced by an invoice; (3) are net of anycredit, trade or other allowance given to the account debtor; (4) are not owingby an account debtor who has become insolvent or is the subject of anybankruptcy, reorganization, liquidation or like proceeding; (5) are not subjectto any offset or deduction; (6) are not owing by an affiliate of Company; (7)are not owing by an obligor located outside of the U.S. unless the receivableis supported by a letter of credit issued bya bank acceptable to the CoBank; and (8) are not government receivables. Theabove provisions notwithstanding, Trade Receivables shall also exclude(i) any accounts that are past due more than 90 days, and (ii) any contraaccount regardless of the date;
| Inventory |   | $ |   | (b) |
|-----------|--------|---|--------|-----|

 

Inventory asdetermined on the basis of Net Realizable Value, defined as the expectedselling price of an inventory item less expected costs to complete and dispose,as determined in accordance with GAAP.
| Crop Payments due  Non-members and members                                                                                                                                                                            |   | $      | (c)    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                  |   |   |   |
| Net Inventory Value (b-c)                                                                                                                                                                                             |   | $      | @ 75%  |
| $                           (d)                                                |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |
| Borrowing Base (a+d)  $                                                                                                                                                                                               |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |
| Commercial Paper$                            (e)                               |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |
| Statused Revolving Term – RJ0013T07$                            (f)  |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |
| Commodity Credit Corp. loans                                (g) |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |
| Total Short-term Loans (e+f+g)                                                                                                                                                                                        |   | $      |   |

 

----

Exhibit D

Form of Compliance Certificate

Attached

----

**CoBANK, ACB**

**COMPLIANCE CERTIFICATE – CERTIFIED INTERIM FINANCIALS**

This certificate is being furnished to CoBANK, ACB (“CoBank”)to induce CoBank to make and/or continue to make advances to the Company and tocomply with and demonstrate compliance with the terms, covenants, andconditions of the Company’s Amended and Restated Loan Agreement (“LoanAgreement”) and all Promissory Notethereto. The undersigned hereby certifies that: (i) this certificate wasprepared from the books and recordsof the Company, is in agreement with them, and is correct to the best of theundersigned’s knowledge and belief;(ii) no “Event of Default” (as defined in the Loan Agreement) or eventwhich, with the giving of notice and/orthe passage of time and/or the occurrence of any other condition, would ripeninto an Event of Default (a “Potential Default”) shall have occurred andbe continuing, except as disclosed below; and (iii) based upon theundersigned’s review of the attached interimfinancial statement(s) dated as of                                     , to thebestof the undersigned’s knowledge, the attached financial statement(s) areaccurate and complete for the period reflected.

This certificate is attached to and made a part of the Company’s interimfinancial statements for the reportingperiod ending                                                         .
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | ** ** | **Required**                                                                                                                                                                                                        | ** ** | **Actual**                                                                                                                                                                                                                                                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Net Working Capital**

1.   Current Assets as measured in  accordance with GAAP

2.   Current Liabilities asmeasured in accordance with GAAP

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

Minimum Net Working Capital required for fiscal quarters other than fiscal year end-$l5,000,000

 

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

l.                 

2.                   

3.                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |       |                                                                                                                                                                                                                |       |                                                                                                                                                                                                                                                                                                                                         |
| **Interest Coverage Ratio**

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

·    Add; Unit Retains; Depreciation  and amortization; Net income from  non-member business and Member business tax timing differences; Decrease in  Investments in other cooperative (excluding subsidiaries); and Net revenue  from sale of stock,

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

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

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

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

l.                 

2.                   

3.                   |

 

----

 
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | ** ** | **Required**                                                                                                                                                                                                | ** ** | **Actual**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **4.   Long Term Debt to Capitalization**

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

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

3.   Long Term Debt to Capitalization

(1.divided by 2.)

 

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

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

1.                  

2.                   

3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |       |                                                                                                                                                                                                        |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Leverage Ratio (****and****Term Performance Pricing)**

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

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

3.   Total members Investments 

4.   Estimated unit retains 

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

Maintain a leverage ratio of not more than 1.50:1.0.                                                                                                                                                |       | l.                 

2.                   

3.                  

4.                   

5.                  

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

                         |

 

The above calculations and ratios are to be determined on a consolidatedbasis in accordance with the Loan Agreement(which excludes the financial results of ProGold and Crystech from suchcalculations and ratios).
| ** ** | **AMERICAN CRYSTAL SUGAR COMPANY(“Company”)** |
|------------|---------------------------------------------------------|
| ** ** | ** **                                              |
|       |                                                    |
|       |                                                    |
|       | Authorized Signature                                    |
|       |                                                    |
|       |                                                    |
|       | Titles                                                  |
|       |                                                    |
|       |                                                    |
|       | Date                                                    |

 

----

Exhibit E

Form of Bid Request

Attached

----

**AMERICAN CRYSTAL SUGAR COMPANY**

**REQUEST for BID LOAN**

Date                           

To:                              CoBank, ACBAttention: Syndications (MarshallAllen)Fax: 303-740-4021

From:               **American Crystal Sugar Company (“Borrower”)**

Re:                               Bid request for Revolving Loan Advance
| Date  of Borrowing                       |   |
|------------------------------------------|--------|
| Aggregate  Principal Amount of Borrowing |   |

 
| Principal Amount* | ** ** | **Maturity Date*** | ** ** |
|------------------------|------------|-------------------------|------------|
|                   |       |                    |       |
|                   |       |                    |       |
|                   |       |                    |       |

 

----

* Borrower reserves the right toreduce or apportion this amount during the Bid selection process.

* May not extend beyond 8/1/2008maturity date
| ** ** | **AMERICAN CRYSTAL SUGAR COMPANY** |
|------------|------------------------------------|
| ** ** | ** **                         | ** ** |
| ** ** | ** **                         | ** ** |
|       |   By:                         |   |
|       |                               |   |
|       |   Name:                       |   |
|       |                               |   |
|       |   Title:                      |   |

 

Acknowledgement:

BID RATECONFIRMATION

**Borrower accepts offer of bid rate loan under thefollowing terms:**
| Interest  Period |   |
|------------------|--------|
| Amount           |   |
| Interest  Rate   |   |

 
|   By: |   |
|------------|--------|

 

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**FIRST AMENDMENT TO AMENDED ANDRESTATED LOAN AGREEMENT**

**between**

**AMERICAN CRYSTAL SUGAR COMPANY,**

**as Borrower,**

**and**

**CoBANK, ACB,**

**as Lender,**

**datedJuly 31, 2006**

**THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOANAGREEMENT**(this “First Amendment”) is dated to be effectiveas of August 31, 2006, and is by and between AMERICAN CRYSTAL SUGAR COMPANY, aMinnesota cooperative corporation (“Borrower”), and CoBANK, ACB (“Lender”), andamends that certain Amended and Restated Loan Agreement dated July 31, 2006, asamended from time to time (the “Loan Agreement”). All capitalized terms notdefined herein shall have the meanings set forth in the Loan Agreement.

**RECITALS**

Theparties have agreed to modify certain terms and provisions of the LoanAgreement as more fully set forth in this First Amendment.

**NOW, THEREFORE**, in considerationof the foregoing and for good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged by each party, the parties agreeto amend the Loan Agreement in the following respects:

1.             Defined Terms. The followingterms set forth in Section 1.1 of the Loan Agreement shall be amendedand restated in their entirety as follows:

“Quoted Rate Offer”:A quote of a fixed interest rate per annum for minimum periods of one (1) day providedto Borrower by the Lender in its sole discretion following the receipt by theLender of a Quoted Rate Request from Borrower.

“Term Letter of CreditCommitment Amount”: Thirty-Five Million Dollars ($35,000,000).

2.             Section 2.7(b) of the Loan Agreement(Repayment; Term Loan T01), shall be amended and restated to read infull as follows:

(b) Term Loan T01.The principal of Term Loan T01 shall be payable in one annual installment inthe amount of $9,569,300 on December 31, 2006, and in three annual installmentsin the amount of $9,400,000 due on December 31 of each year beginning December31, 2008, and any amount of principal or interest remaining unpaid with respectto Term Loan T01 on the Term Loan Maturity Date shall be immediately due andpayable on such date.

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3.             Section 2.7(c) of the LoanAgreement (Repayment; Term Loan T01NP), shall be amended and restated toread in full as follows:

(c) Term Loan T01NP.The principal of Term Loan T01NP shall be payable in one annual installment inthe amount of $7,430,700 on December 31, 2006, and in three annual installmentsin the amount of $7,600,000 due on December 31 of each year beginning December31, 2008, and any amount of principal or interest remaining unpaid with respectto Term Loan T01NP on the Term Loan Maturity Date shall be immediately due andpayable on such date.

4. Representationsand Warranties. Borrower restates, represents and warrants the representationsand warranties set forth in Article IV of the Loan Agreement as of thedate of this First Amendment.

5. Incorporationof Loan Agreement. This First Amendment shall be an integral part of theLoan Agreement, and all terms of the Loan Agreement are hereby incorporated inthis First Amendment by reference, and all terms of this First Amendment arehereby incorporated into the Loan Agreement as if made an original partthereof.  Except as modified herein, allterms and provisions of the Loan Agreement shall continue in full force andeffect, but to the extent the terms of this First Amendment conflict with theLoan Agreement, the terms of this First Amendment shall control.

INWITNESS WHEREOF, the parties have executed this First Amendment to be effectiveas of the day and year first above written.
|   | AMERICAN CRYSTAL SUGAR COMPANY,  a Minnesota cooperative corporation |
|--------|----------------------------------------------------------------------|
|   |                                                                 |
|   |                                                                 |
|   | By                                                                   | /s/ Samuel S. M.  Wai |   |
|   | Name                                                                 | Samuel S. M. Wai |   |
|   | Title                                                                | Treasurer |   |
|   |                                                                 |   |
|   |                                                                 |   |
|   | CoBANK, ACB                                                          |
|   |                                                                 |
|   |                                                                 |
|   | By                                                                   | /s/ Teresa C.  Fountain |   |
|   | Name                                                                 | Teresa C.  Fountain |   |
|   | Title                                                                | Assistant  Corporate Secretary |   |

 

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