<PAGE>



                            COAL TRANSPORTATION AGREEMENT

    THIS AGREEMENT is made and entered into this 25th day of August, 1995, by 
and between Northern Coal Transportation Company, an Oregon corporation with 
an office in Gillette, Wyoming ("Northern"), and American Crystal Sugar 
Company, a Minnesota cooperative with offices at 101 North Third Street, 
Moorhead, Minnesota 56560 ("Shipper").

                                       RECITALS

    1.   Concurrent with this Coal Transportation Agreement ("Agreement"), 
Kennecott Energy Company, for and on behalf of Spring Creek Coal Company, has 
executed a Coal Supply Agreement with Shipper (the "Coal Supply Agreement") 
for the sale and purchase of coal from the Spring Creek Mine (the "Mine") to 
Shipper.  The coal is to be used in Shipper's sugar factories in East Grand 
Forks, Moorhead and Crookston, Minnesota, in Drayton and Hillsboro, North 
Dakota, and possibly in Progold LLC's Wahpeton, North Dakota, sugar factory. 
In this Agreement, these sugar factories shall be referred to collectively as 
the "Sugar Factories" or individually as a "Sugar Factory." Capitalized terms 
not otherwise defined in this Agreement will have the meaning set forth in 
the Coal Supply Agreement.

<PAGE>

    2.   The Coal Supply Agreement contemplates the establishment of a
transportation system that can take delivery at the Point of Delivery (as that
term is defined in Section 5.01 of the Coal Supply Agreement) of estimated
requirements of coal in approximately equal weekly and monthly amounts and
transport those amounts to the Sugar Factories.

    3.   Shipper has appointed United Sugars Corporation, a Minnesota company
with offices at 1700 Eleventh Street, Moorhead, Minnesota ("USC") to act as its
agent in procuring and facilitating the transportation of coal to the Sugar
Factories.  USC has the authority and is acting on behalf of Shipper in
relation to the transportation of coal under the Coal Supply Agreement.  USC
will be acting on behalf of Shipper under this Agreement.

    4.   Northern desires to enter into a contract with Shipper to arrange for
the transportation of coal called for by the Coal Supply Agreement and to
perform all of the obligations of Shipper with respect to the transportation of
coal required by the Coal Supply Agreement.

    NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties set forth below, the parties to this Agreement agree as follows:

                                          2
<PAGE>

    SECTION 1.     TERM; CAMPAIGN SEASONS.

         1.01      TERM. The term of this Agreement shall commence on July
1,1995 ("the Effective Date"), and shall continue to July 31, 2005. 

         1.02      CAMPAIGN SEASONS. Shipments under the Coal Supply 
Agreement have been divided into periods of approximately ten months 
commencing on or about August 15 and continuing until about May 31 of the 
following calendar year, with the last such period running from about August 
15, 2004, to about May 31, 2005.  These ten-month periods of coal deliveries 
shall be referred to in this Agreement as "Campaign Seasons." The Campaign 
Season for ProGold LLC is contemplated to be year-round.

    SECTION 2.     SHIPMENTS.

         2.01      DESCRIPTION OF TRANSPORTATION SYSTEM.  Northern agrees to
transport from the Spring Creek Mine to the Sugar Factories the estimated annual
requirements under the Coal Supply Agreement in approximately equal weekly and
monthly amounts.  The coal is to be delivered to Shipper FOB Point of Delivery.
The Coal Supply Agreement anticipates that deliveries in the first months of a
Campaign Season will be larger to allow Shipper sufficient time to build
stockpiles at each Sugar Factory.  Northern will design the system to allow
Shipper Substantial flexibility to increase or decrease the amount of coal
delivered

                                          3

<PAGE>

to a Sugar Factory by each unit train (when broken into segments), subject to
the tonnage minimum stated in Section 2.09 of this Agreement.  However, Shipper
may not stop a unit train from cycling except in the event of a force majeure as
provided in Section 5 of this Agreement, since such interruptions greatly
increase the difficulty of transportation management.  Northern reserves the
right to tender trains of not more than 80 cars in total or 115,000 tons of 
coal in total per calendar month consisting of the total cars to Shipper 
and/or Minn-Dak Farmers Cooperative (""Minn-Dak") for the destination Sugar 
Factories and Minn-Dak's Sugar Factory so that following telephonic notice to 
Shipper of such limitation aforesaid Northern shall not be required to tender 
trains totaling 80 cars or 115,000 tons per calendar month under this 
Agreement to both Minn-Dak and Shipper, until such time as Northern gives 
telephonic notice to Shipper that the limitation no longer applies.  There 
will be a stop at Fargo, North Dakota, for removal of cars to be delivered to 
Moorhead and Wahpeton, North Dakota. Shipper may not require Northern to 
continue more than 75 cars to Grand Forks, North Dakota.  At origin, Northern 
may place all cars for delivery via Fargo, North Dakota, at the head of the 
train.  A detailed description of the transportation system, as set forth

                                          4
<PAGE>

Northern's agreement with the Burlington Northern Railroad (the "Carrier"), is
set forth in Exhibit A.

         2.02      RESPONSIBILITIES CONCERNING DELIVERY - Northern shall
deliver coal to the Sugar Factories.  Northern will deliver coal in railcars
directly to sidings on Shipper's property at the Sugar Factories. Northern will,
on Shipper's behalf, fully pursue all claims against third parties for loss of
the coal in any given railcar from the time that the railcar is completely
loaded at the Spring Creek Mine until the railcar is on property at a Sugar
Factory.

         2.03      COORDINATION.  Northern shall be responsible for arranging
all transportation and for coordinating with Spring Creek Coal Company the
arrival of railroad trains for loading at the Point of Delivery (as defined in
Section 5.01 of the Coal Supply Agreement).  Northern shall use reasonable
efforts to schedule arrivals of trains at the Point of Delivery such that coal
can be delivered in approximately equal monthly amounts during any Campaign
Season; provided that deliveries in the first months of a Campaign Season will
be larger to allow Shipper to build stockpiles at each of the Sugar Factories.
Weekly shipments will be in substantially equal quantities consistent with the
monthly delivery quantity.


                                          5
<PAGE>

         2.04      NOTICE OF CHANGES IN TRAIN SEGMENTS. If Shipper desires to
alter the size of train segments to be transported to any Sugar Factory during a
Campaign Season, Shipper may notify Northern by mail or by telephone, telegraph
or other electronic means.  Any electronic notice shall be confirmed in writing
within ten (10) days.  Requested changes in the size of train segments to be
transported to any Sugar Factory will be implemented for the first train loaded
more than 24 hours after notice is received; provided that Northern shall not be
obligated to provide unit trains of more than 80 cars or fewer than 55 cars,
which trains are comprised -of Shipper and Minn-Dak cars.  Subject to system
limitations, a train segment that has left the Mine may be reconsigned to a
different Sugar Factory.  Shipper shall monitor and control its coal stockpiles
so that requested increases or decreases in the size of train segments delivered
to the Sugar Factories will not result in a unit train with more than 80 cars or
fewer than 55 cars which may be combined with Minn-Dak shipments.  USC will act
on Shipper's behalf in coordinating unit train composition with Minn-Dak and
Northern.

         2.05      RIGHT TO TRANSPORT EXCESS COAL.  To maintain the efficient
operation of its transportation system, Northern may transport from the Spring
Creek Mine to the Sugar Factories


                                          6
<PAGE>

up to 12 percent more than Shipper's estimated or amended coal requirements in
any month, as contemplated by Section 3.03 of the Coal Supply Agreement.
Shipper agrees to accept and pay for the transportation of such coal, provided
that Shipper shall not be required to pay transportation for more coal than it
has requested during any Campaign Season, subject to the minimum tonnage stated
in Section 2.09 of this Agreement.

         2.06      EXTENDED CAMPAIGN SEASON.  Under Section 3.02 (b) of the
Coal Supply Agreement, Shipper may extend any Campaign Season by three months
before August 15 or after May 31 of such Campaign Season upon six weeks written
notice to Spring Creek Coal Company.  If Shipper chooses to extend any Campaign
Season, it shall also be required to give Northern six weeks written notice and
Shipper shall pay Northern for any increased transportation costs as specified
in Section 2.08 of this Agreement.

         2.07      UNLOADING.  Shipper agrees to provide facilities at the
Sugar Factories to permit delivery by Northern of segments of a train.  Said
facilities shall be designed and constructed for carload unloading.  Northern
will place the loaded cars on a siding on Shipper's property.  The Shipper will
complete unloading operation at its own expense.  The Shipper shall exercise
reasonable care and caution when unloading.-Cl


                                          7
<PAGE>

railcars at their facilities and will insure that railcar doors are closed with
latches in the locked position, with cargo hoppers free and clear of any foreign
debris.  The Shipper shall pay for the actual costs incurred by Northern in
respect of any failure of Shipper to exercise such reasonable care and caution,
including any origin demurrage incurred by Northern as a result thereof.  
Plant-personnel are responsible to notify USC, who will in turn notify 
Northern, of any problems or deficiencies found concerning the railcars.  
When a train reaches a Sugar Factory, the coal shall be unloaded from each 
railcar within five (5) full days of the date of the arrival of such railcar 
to ensure that at least 55 empty railcars- are available at all times to make 
up unit trains.  In the event that railcars are not unloaded within the time 
specified above, Northern reserves the right to charge a mutually acceptable 
demurrage rate on each such railcar.

         2.08      CHANGES IN TRANSPORTATION SYSTEM.  Shipper acknowledges that
changes in the transportation system including, but not limited to, (i)
reconsignment, of train segments from one Sugar Factory to another; (ii) any
break in the unit train cycle due to failure to unload railcars or other reasons
caused by Shipper; (iii) any extension of the Campaign Season as provided in
Section 2.06 of this Agreement, and (iv) Carriers Line Abandonment as set forth
in Section 7.01 may result in changes

                                          8
<PAGE>
                                             *CONFIDENTIAL TREATMENT REQUESTED*

in Northern's railcar and other costs as set forth in Exhibit A. Unless excused
by Section 5, Shipper agrees to pay all such changes in transportation costs
caused by or attributable to Shipper or USC.  Northern WILL be responsible for
changes in transportation costs caused by or attributable to Northern.  Northern
will be responsible for changes in transportation costs caused by or
attributable to Northern.

         2.09      FREIGHT COSTS DUE TO QUANTITY VARIATIONS.

              (a)  Shipper acknowledges that if it takes delivery of less 
than a total of ** tons of coal in any Campaign Season, Northern may incur 
additional freight costs.  If in any Campaign Season (1) Shipper and Minn-Dak 
take combined deliveries of less than a cumulative total of ** tons of coal, 
and (2) Shipper takes delivery of less than a cumulative total of ** tons of 
coal, Shipper agrees to pay Northern an amount representing liquidated 
damages (and not a penalty) as defined and specified in Exhibit B. Such 
cumulative minimum volumes of coal will be reduced as excused or permitted by 
Sections 2.09(b) or 5 of the Shipper's and Minn-Dak Coal Transportation 
Agreements.

              (b)  Notwithstanding the provisions of Section 5 of this 
Agreement, the cumulative minimum volume of coal to be transported during 
each Campaign Season during the term hereof shall be reduced if, after the 
exhaustion of all other commer-

                                          9
<PAGE>
                                             *CONFIDENTIAL TREATMENT REQUESTED*

cially reasonable efforts by Shipper which are coordinated with Northern, 
Shipper installs gas-fired pulp dryers at any one or more of its processing 
facilities in order to comply with air particulate emission regulatory 
requirements.  Shipper shall notify Northern of its intention to convert any 
of its coal-fired pulp dryers to gas-fired pulp dryers and the effective date 
of such conversion(s) under this Section.  Upon the effective date of such 
conversion(s), the annual minimum volume requirements of coal to be shipped 
hereunder by Shipper shall be reduced as follows.

     Conversion of Pulp                        Results on Reduction in Annual
     Dryers at ....                                 Minimum Volume of......

     Crookston                                           **   Tons/Year
     Drayton                                             **   Tons/Year
     East Grand Forks                                    **   Tons/Year
     Hillsboro                                           **   Tons/Year
     Moorhead                                            **   Tons/Year

This reduction in annual minimum volume shall be proportionately reduced in 
the first year of the conversion to reflect the portion of the year with 
respect to which the reduction is to be effective.

         2.10      FROZEN COAL.  Shipper assumes the risk that coal may 
freeze in transit between the Spring Creek Mine or any source of Substitute 
Coal and the Sugar Factories.  No price

                                          10

<PAGE>

adjustment or delay in unloading shall be allowed for frozen coal.

         2.10      SOLE REPRESENTATIVE.     For the purpose of proper and
efficient communications, it is expressly understood between Northern and the
Shipper that Northern is the sole representative of Shipper, USC and the Sugar
Companies for all services stated or contemplated in this Agreement and that all
communication, verbal or written, relating in any way to the rates, terms,
conditions, and performance of this Agreement be accomplished solely between
Northern, Northern Mine's Representative and Carrier.  The only exception to the
above will involve day-to-day communications between USC or the Sugar Companies
it represents and the Carrier pertaining to or relating to railcar switching
from and to the Sugar Factories or such switching of destination related
operations.

         SECTION 3.     TRANSPORTATION COSTS; ADJUSTMENTS; BILLING AND PAYMENT



         3.01      TRANSPORTATION COSTS.  Shipper will pay Northern the sum 
of (a) the transportation costs as set out in Exhibit C and as adjusted 
pursuant to Section 3.03, below, plus (b) any increased costs caused by 
changes in the transportation system under Section 2.08 which are caused by 
Shipper, plus


                                          11

<PAGE>


(c) any increased costs caused by Quantity Variations under Section 2.09 
(together called "Transportation Costs").

         3.02      WEIGHING.  Loaded cars will not be weighed by Northern. 
Weights to be used for the assessment of transportation charges shall be 
those ascertained by Spring Creek Coal Company at the Spring Creek Mine 
pursuant to Section 5.04(b) of the Coal Supply Agreement.

         3.03      ADJUSTMENT FOR CHANGES IN TRANSPORTATION COSTS.  The 
Transportation Costs shall be adjusted quarterly by adding to them the 
product of (a) the applicable Transportation Costs shown on Exhibit C, 
multiplied by (b) the percentage change of seventy percent (70%) GDP FW most 
recent quarterly growth rate (described in Exhibit D) effective October 1, 
1995, provided always that the Transporation Costs shall not reduce below 
those set forth in Exhibit C hereto.  In the event the GDP FW is 
discontinued, the successor tariff or index applicable to Northern's 
transporation agreements with the Carrier (as outlined in Exhibit D) shall 
apply for purposes of this provision.

         3.04      BILLING AND PAYMENT.  Northern shall invoice Shipper 
semimonthly for Transportation Costs.  Payment shall be due on each invoice 
within twenty (20) days after the date of the invoice by check or wire 
transfer to Northern's account, as follows:

                                          12

<PAGE>



                          *CONFIDENTIAL TREATMENT REQUESTED*


    Wire Transfer:

         BANK:          First Security Bank of Utah
         ABA No:        124000012
         Account No:       **
         Account Name:  Northern Coal Transportation

    Check:

         Account Name:  Northern Coal Transportation
         Account No.:      **
         Address:       P.O. Box 26094
                        Salt Lake City, Utah 84126-0094

All amounts due for which payment is not timely made shall bear interest from 
the date on which payment became due at the then prevailing prime interest 
rate quoted by Morgan Guaranty Trust Company plus two percent per annum.  All 
invoiced amounts shall be subject, however, to subsequent adjustment wherever 
this Agreement specifically so provides, and no interest shall be payable to 
either party with respect to the amounts of such adjustments.  If payment is 
not made when due, Northern may give Shipper written notice of such past due 
payment.  Three days after such notice is effective, pursuant to Section 
7.08, Northern may suspend transportation until the invoice, including any 
interest and any increased transportation costs caused by the suspension of 
deliveries, has been paid.  If the invoice is not paid within 15 days after 
Northern's notice becomes effective, Shipper's failure to make payment when 
due shall constitute a

                                          13

<PAGE>

material breach of this Agreement by Shipper, and Northern may, at its sole 
option, cancel this Agreement.

         3.05      ADJUSTMENTS.  The parties recognize that at the time each 
invoice for Transportation Costs is prepared, it may not be possible to 
calculate definitively the costs and other adjustment factors applicable to 
the calendar half-month for which such invoice is rendered; each invoice 
will, therefore, be based upon the most current data reasonably available at 
the time of invoicing.  Upon receipt of information permitting determination 
of price adjustments, Northern shall prepare and furnish to Shipper a 
supplemental invoice reflecting that information. Northern or Shipper shall, 
within fifteen (15) days after mailing of such supplemental invoice, pay the 
sum required by such invoice as above provided.

         3.06      FINALITY OF INVOICES.  Except as otherwise expressly 
provided in this Agreement, any invoice that is not contested within 
twenty-four (24) months after the date thereof shall be deemed correct and 
final.

         3.07      RECORDS AND AUDITS.  Northern shall keep accurate records 
and books of accounts showing all data relating to Transportation Costs for 
purposes of this Agreement.  At the election of Shipper, once each fiscal 
year of Northern, Northern shall make such records and books of account 
covering the



                                          14
<PAGE>



                          *CONFIDENTIAL TREATMENT REQUESTED*

preceding fiscal year available for audit at Northern's Offices during 
Northern's normal office hours.  Such audits shall be prepared and certified 
to by a nationally recognized firm of certified public accountants to be 
selected by Shipper and Shipper shall bear the expenses of the audit.  The 
findings of the audit will be binding on the parties absent a finding of 
material error in the audit which is brought to the attention of Northern 
within 90 days after submission of the audit results to Northern by Shipper.  
If the audit discloses that an overpayment or an underpayment has been made, 
the amount thereof shall promptly be paid to the party to whom it is owed by 
the other party.  Shipper shall have the option of having the audit prepared 
by Northern's independent auditors as part of the regular annual audit of 
Northern's books and records.  In such event, only those expenses in excess 
of Northern's normal audit expenses will be borne by Shipper.  The accounting 
firm conducting the audit shall be bound not to disclose and shall treat as 
confidential any and all proprietary information of Northern furnished to or 
examined by such firm in connection with the audit.

         3.08      TERMINATION.     Shipper may terminate this Agreement at 
any time upon giving at least ** notice in writing to Northern.  In the event 
of such termination, Shipper shall pay, as liquidated damages and not as a 
penalty, **



                                          15

<PAGE>

                          *CONFIDENTIAL TREATMENT REQUESTED*

(**) of the lowest effective Transportation Costs for a Sugar Factory, as set 
forth in Exhibit C and as adjusted pursuant to Section 3.03 in effect on the 
last day of the Campaign Season, times the tonnage requirement of ** tons per 
Campaign Season, as adjusted pursuant to Sections 2.09(b) and 5, for the 
remaining term of this Agreement less all tons shipped during the Campaign 
Season in which the notice of termination is given.

    SECTION 4.     LIABILITY AND INDEMNIFICATION.

         4.01      LIABILITY FOR PROPERTY DAMAGE AND PERSONAL INJURY.  Each 
party shall assume and be responsible for any liability for loss and damage 
to property and for personal injury, including death, to any person caused by 
the negligence of that party and arising out of or connected with performance 
of this Agreement.

         4.02      JOINT LIABILITY.  If liability is due to the joint and 
concurring negligence of the parties, it shall be shared by them 
proportionately on the basis of the negligence of each party involved.

         4.03      LIMITATION ON LIABILITY.  IN NO EVENT SHALL EITHER PARTY 
HAVE LIABILITY TO THE OTHER PARTY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES 
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT.

                                          16
<PAGE>


                           *CONFIDENTIAL TREATMENT REQUESTED*

    SECTION 5.     FORCE MAJEURE.

         (a)  If either party is unable to meet any of its obligations under
this Agreement as a result of flood, earthquake, storm, or other act of God,
fire, derailment, accident, strike, lockout, boycotts, picketing, shortages of
or inability to obtain electric power, raw materials, railcars or machinery,
mechanical breakdown in facilities, war, insurrection, riot, catastrophic sugar
beet or corn crop failure (as applicable), railroad line abandonment, act of
government or governmental agency, or due to any cause beyond the reasonable
control of either party, including the inability of a Sugar Factory, the Mine
and/or the Carrier to meet its obligations for reasons whether similar or
dissimilar to the foregoing and whether foreseeable or unforeseeable" such event
will be deemed an event of force majeure.  In addition, it shall be deemed an
event of force majeure in the event Shipper is unable to burn Northern's coal
due to ash-fouling, sulfur dioxide emissions, or other legally enforceable
environmental restrictions, or either party permanently closes or experiences
partial failure or nonoperation of any of its facilities lasting a minimum of
seven (7) days as a result of reasons beyond the control of such party.  In the
event of force majeure, the obligations of the parties, other than payment for
Transportation Costs incurred, shall be

                                          17
<PAGE>

suspended for the duration of the event of force majeure, provided that
reasonable notice is given.  No suspension or reduction for reason of force
majeure shall invalidate the remainder of this Agreement; but on removal of the
cause, shipments shall resume at the specified rate; deficiencies in shipments
so caused shall not be made up except by mutual consent.  If an event of force
majeure prevents the performance of either party for a period of one year or
more despite that party's efforts to eliminate the force majeure event and to
mitigate its impact, then the party not claiming an event of force majeure may
terminate this Agreement by providing at least thirty (30) days written notice
of termination to the other party.  The provisions of this Section shall not
excuse either party from performing unless that party gives a reasonable notice
to the other party of the occurrence of an, event of force
majeure.

    (b)  For the purposes of any partial or total event of Force Majeure under
this Agreement, it will be presumed that, except for the event, total loading of
coal onto trains at the mine and total deliveries to Shipper by Northern at the
Sugar Factories would have been 3650 Tons per Campaign Season day, under the
500,000 Ton Minimum Volume Requirement, for each continuous hour period.  Lie
Minimum Tonnaqe Requirement of 416,66-1 tons

                                          18

<PAGE>


(subject to reduction as provided herein) will be proportionately reduced per
Campaign Season day for each Force Majeure day claimed as follows:

                             Minimum Tonnage Requirement
    DESTINED WHEN TO:                  500,000 TONS
     -----------------                  ------------

    Redco, ND                            575 Tons
    Wilds, MN                            560 Tons
    Drayton, 4TD                         575 Tons
    Bingham, MN                          540 Tons
    East Grand Forks, MN                 750 Tons
    Wahpeton, ND                         650 Tons

    (c)  For the purposes of this Section 5, the Shipper destination Sugar
Factories are those located at the destination named in Exhibit C.

    SECTION 6.      DISPUTES.

    In the event any dispute arises between the parties concerning any issue of
law or fact arising out of this Agreement, it shall be settled by arbitration
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award may be entered in any court having
jurisdiction over the matter.

    The parties to the arbitration shall be entitled to such discovery as would
be available to them under the Federal Rules of Civil Procedure, and the
arbitrators will have all the authority of a court under such Rules incidental
to such discovery, Including but not limited to orders to produce documents or


                                          19
<PAGE>

other materials and orders to appear and submit to deposition and to impose
appropriate sanctions, including but not limited to awarding sanctions against a
party for failure to comply with any order.

    The arbitration panel shall consist of three arbitrators, one appointed by
Northern, one by Shipper and the third by the arbitrators appointed by Northern
and Shipper.  If the partyappointed arbitrators cannot agree within 15 days
after their appointment on appointment of a third person, then the third person
shall be appointed by the American Arbitration Associa-    tion.

    SECTION 7.     GENERAL PROVISIONS.

         7.01 LINE ABANDONMENT. The terms of this Agreement in no WAY 
obligate carrier or Northern to continue ownership, maintenance (including 
Weight standards), or operation of any rail lines.  Northern will not be 
liable for any consequential damages or increased transportation costs that 
may be incurred by Shipper as the result of carrier's discontinuation of 
ownership, maintenance (including Weight standards), or operation of any rail 
lines.  If Shipper fails to meet its Minimum Tonnage Requirements due to 
lawful cessation of service or abandonment of any ral lines during the term 
of this Agreement, as the sole remedy of: Shipper, the rates on all coal 
whhich moved in accor-


                                          20
<PAGE>

dance with this Agreement during the then current Campaign Season shall be
determined as if the Minimum Tonnage Requirement had been met.

         7.02      WAIVER.  Failure of either party at any time to require
performance of any provision of this Agreement shall not limit that party's
right to enforce the provisions, nor shall any waiver of any breach of any
provision be a waiver of any succeeding breach of the provision itself or of
any other provision.

         7.03      HEADINGS.  The headings in this Agreement are included only
for convenience and shall not control or affect the meaning or construction of
this Agreement.

         7.04      ENTIRE AGREEMENT.  This Agreement is the entire agreement 
between the parties. There are no other provisions, representations, 
warranties or understandings, express or implied.  No modification, variation 
or amendment of this Agreement shall be of any force or effect unless it is 
in writing and signed by all the parties.

         7.05      BINDING AFFECT.  This Agreement shall be binding upon and
inure to the benefit of the parties, their respective successors and assigns.


                                          21
<PAGE>

         7.06      GOVERNING LAW.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Minnesota.

         7.07      COUNTERPARTS.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.

         7.08      NOTICES.  Notices under this Agreement shall be in writing
and shall be effective when actually delivered.  If mailed, a notice shall be
deemed effective five (5) days after mailing as registered or certified mail,
postage prepaid, directed to the other party as set out below.  If via
telefacsimile, a notice shall be deemed effective upon receipt of the successful
telefax transmission report, directed to the other party as set out below.

         NORTHERN       NORTHERN COAL TRANSPORTATION COMPANY
                        Attn: Contract Administration
                        505 South Gillette Avenue
                        Gillette, Wyoming 82716
                                  or
                        Caller Box 3009
                        Gillette, Wyoming 82717-3009
                        Fax No.  (307)687-6009

         SHIPPER        AMERICAN CRYSTAL SUGAR COMPANY
                        Attn: Vice President, Operations
                        101 North Third Street
                        Moorhead, Minnesota 56560
                        Fax No.  (218)236-4494


                                          22
<PAGE>

The addresses and fax numbers of any party may be changed by giving notice in
writing at any time to the other party.

         7.08      CONFIDENTIALLITY.  Any nonpublic information, oral or
written, including the contents of this Agreement and any related agreement,
disclosed by a party to the other shall be considered confidential information,
and such information shall not be disclosed to any third party, other than to
Northern's parent corporation, USC, ProGold, or the employees, accountants,
attorneys, and lenders of such parties, and will be kept secret and confidential
during the term of this Agreement.

    IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
Effective Date set forth above.


                                       NORTHERN COAL TRANSPORTATION COMPANY


                                       By /s/ ILLEGIBLE
                                         --------------------------------------
                                       Title  V.P. Marketing & Sales
                                            -----------------------------------


                                       AMERICAN CRYSTAL SUGAR COMPANY


                                       By /s/ Marcus F. Richardson
                                         --------------------------------------
                                       Title  CO.O.
                                            -----------------------------------


                                          23
<PAGE>

                          *CONFIDENTIAL TREATMENT REQUESTED*

                                      EXHIBIT A
                            DESCRIPTION OF TRANSPORTATION
               (AS EXCERPTED FROM THE AGREEMENT BETWEEN THE BURLINGTON
             NORTHERN RAILROAD AND NORTHERN COAL TRANSPORTATION COMPNAY)

    Trains of not less than ** or more than ** Northern cars will be tendered 
at Origin destined to Grand Forks, North Dakota, with a stop at Fargo, North 
Dakota, for removal of cars to be delivered to destinations via Fargo, North 
Dakota.  All cars for delivery via Fargo, North Dakota, will be loaded at the 
head end of the train by Northern.

    Before tendering each shipment to Carrier at Origin, Northern will 
specify on the Bill of Lading the car number, the number of cars and the 
loaded weight to be delivered to each Destination.  Loaded trains will be 
divided into segments as previously designated by Northern on the Bill of 
Lading and the segments will be delivered by the Carrier to the specified 
Destinations.  Carrier will deliver each segment to a siding on Receiver's 
property at each destination to which delivery is to be made.  Empty cars 
shall be stored on Receiver's property at each Destination until picked up by 
Carrier.  Carrier shall be responsible for making up trains of empty cars for 
movement to Origin.  Northern agrees to pay for line-haul transportation at 
the Effective Rates and for Accessorial Services at the Effective Charges.

    At request of Northern, Carrier will permit a change in the Destination 
shown on the Bill of Lading to another Destination after departure from 
Origin if instructions are received by Carrier, as set forth below before 
arrival of train at Fargo, North Dakota, or Grand Forks, North Dakota.  A 
diversion charge of ** per car will apply when cars are so diverted.  When 
instructions to divert cars are received after arrival of train at Fargo, 
North Dakota, a diversion charge of ** per each diverted car will apply.

    Services provided by Carrier which are included in the Base Freight 
Component include line-haul transportation of Coal from Origin to 
Destination, operating trains through loading facilities at Origin, placing 
the loaded cars on a siding on Receiver's property at Destination, returning 
empty Northern-furnished cars to the Origin loading facilities, storing and 
handling Northern-owned spare cars as replacement for bad order cars and 
providing all motive power, necessary cabooses (if required) and related

                                          24
<PAGE>

                                              *CONFIDENTIAL TREATMENT REQUESTED*

transportation facilities and equipment.  Carrier assumes full responsibility 
and risk for the efficient scheduling of such operations.

    If it is determined by the Carrier that ** empty cars are not available 
at Grand Forks, North Dakota, and origin for return movement to the Origin 
for loading, Carrier will notify Northern.  Northern will instruct Carrier 
whether to release the motive power at a charge of ** or to let train return 
to Origin with the empty cars available at Grand Forks, North Dakota, plus 
whatever empty cars Northern may instruct the Carrier to pick up en route to 
Origin.  An additional charge of ** will apply to restart the cycle.

    Carrier agrees to perform, and Northern agrees to pay for, certain 
Accessorial Services as directed by Northern.

    Northern may discontinue any train cycle by giving Carrier at least 24 
hours advance notice.  The following charges shall apply for each such 
interruption to the train cycle:

      (a)  ** , which shall include release of motive power  and crew; and ** 
           for restarting of train cycle. An, additional ** per 24-hour period 
           or fraction thereof will apply for the storage of Seller cars on 
           Carrier track, or

      (b)  ** , which shall include release of motive power and crew; and ** 
           for restarting a train cycle provided that Northern cars are stored 
           on private track directly accessible to Carrier.














                                          25
<PAGE>

                                              *CONFIDENTIAL TREATMENT REQUESTED*

                                      EXHIBIT B
                                  LIQUIDATED DAMAGES

    If, for reasons other than termination of the Agreement as provided in 
Section 3.08, (1) Shipper and Minn-Dak fail to tender to Northern at least ** 
tons combined in the Campaign Season as adjusted in Sections 2.09(b) and 5 of 
the Shipper's and MinnDak's Coal Transportation Agreements and (2) Shipper 
fails to tender to Northern at least ** tons as adjusted in Sections 2.09(b) 
and 5 during the Campaign Season, liquidated damages to Northern shall be 
paid to Northern as follows: ** of the lowest Effective Transportation Costs 
for any Shipper Sugar Factory, as set forth in Exhibit C and as adjusted 
pursuant to Section 3.03, in effect on the last day of the Campaign Season, 
times the difference between the tons actually delivered to ACS during that 
Campaign Season and ** tons, as adjusted by Sections 2.09(b) and 5.



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<PAGE>

                                              *CONFIDENTIAL TREATMENT REQUESTED*

                                      EXHIBIT C


                    TRANSPORTATION COSTS, INCLUDING FREIGHT COST
                 AND RAILCAR COST (Effective July 1, 1995, per Ton)


                                                                Base
    Plant Site                                          Transportation Costs
    ----------                                          --------------------

    East Grand Forks                                        **  Per Net Ton

    Crookston                                               **  Per Net Ton

    Drayton                                                 **  Per Net Ton

    Moorhead                                                **  Per Net Ton

    Hillsboro                                               **  Per Net Ton










                                          27
<PAGE>


                                      EXHIBIT D
                           ADJUSTMENT OF RATES AND CHARGES

    Except as otherwise provided in this Agreement, the rates and charges set 
forth in Section 2.08 and Exhibit A of this Agreement, including the Base 
Rate(s) set forth in Exhibit C, shall be adjusted quarterly, upward or 
downward, by an amount equal to seventy percent (70%) of the GDP FW most 
recent quarterly growth rate, to produce the Effective Transportation Costs 
as described in Exhibits A and C.

    Adjustments shall become effective quarterly on January 1, April 1, July 
1, and October 1 of each calendar year, with the first adjustment to become 
effective on October 1, 1995.  Northern shall notify USC in writing of all 
adjustments and furnish supporting calculations prior to the effective date 
of the adjustment, or, as soon thereafter as the information necessary to 
calculate the adjustment is made by the Carrier. The new Transportation Costs 
so determined shall be applicable retroactive to the adjustment date in 
question.

    The percentage change shall be equal to the "Previous Quarter's GDP FW 
Index" minus the "Next Previous Quarter's GDP EW Index," divided by the 
"Next Previous Quarter's GDP FW Index" for each current adjustment time 
period.  An example of the quarterly percentage change calculation is 
described below:

    ((Q3 1994 - Q2 1994))/Q2 1994

    ((130.3 - 129.4)/129.4 = .0069552 rounded to .00696)

    The quarterly GDP FW index percentage change (in decimal) will be 
multiplied by seventy percent (70%) to produce the Adjustment Percentage 
Change (in decimal).  The previous quarterly Transportation Costs are 
multiplied by the Adjustment Percentage Change to produce the "Change 
Amount." The previous Transportation Costs plus the Change Amount equals the 
new quarter's Transportation Costs.

Example:
      Adjustment Percentage Change (decimal):
                .0000696 TIMES .70 = .00487 rounded = .0049
      Change Amount:
               $10.00 (Previous Effective Rate) X .0049 = $0.45 rounded = $0.05














                                          28
<PAGE>


     New Transportation Cost:
         $10.00 (Previous Transportation Cost) + $0.05 (Change
         Amount) = $10.05

Source:     U.S. Department of Commerce
            Survey of Current Business
            Table 7.1 for GDP Fixed Weight

                                         Survey of Current
     Adjustment Period                    Business Issue
     -----------------                   -----------------
     First Quarter                            October
     Second Quarter                           January
     Third Quarter                            April
     Fourth Quarter                           July

     All calculated numbers shall be rounded to the nearest fifth digit after 
the decimal point (i.e., .00001499 = .00001). All final adjustment 
computations shall be rounded to the nearest whole one cent by going to the 
lower one cent when computations result in a balance of less than one-half 
cent and to the next higher whole one cent when computations result in a 
balance of one-half cent or more.

     It is the intent of the parties that the adjustment index (the GDP FW) 
reflects changes in railroad input costs. If the U.S. Department of Commerce 
or any successor organizations cease to publish the GDP FW index required for 
the calculations outlined in this Section, the parties shall mutually 
determine and agree upon the most appropriate substitute index or indices 
which most closely matches the economic structure (that is, to measure 
changes in railroad input costs) of the discontinued index or indices to be 
used for adjustments for the remainder of the Agreement term immediately 
following such action. If the parties do not come to an agreement as to the 
substitute index or indices by an adjustment date, the Transportation Costs 
shall not be adjusted until such time as the index or indices are agreed to, 
at which time a retroactive adjustment shall be made retroactive to said 
adjustment date. If the parties do not come to an agreement as to the 
substitute index or indices by 60 days following an adjustment date, the 
provision of Section 6 shall apply.

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