Exhibit 10.24


 


Loan
No. Z269T01F


 


REVOLVING TERM LOAN
SUPPLEMENT


 


THIS SUPPLEMENT to the Amended and Restated Master Loan
Agreement dated July 21, 2003 (the “MLA”), is entered into as of July 11,
2005, between CoBANK,  ACB (“CoBank”) and AMERICAN
CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and
amends and restates the Supplement dated August 13, 2004 and numbered
Z269T01E.


 


SECTION 1.         The
Revolving Term Loan Commitment.  On
the terms and conditions set forth in the MLA and this Supplement, CoBank
agrees to make loans to the Company during the period set forth below in an
aggregate principal amount not to exceed $58,276,702.22 at any one time
outstanding (the “Commitment”). Within the limits of the Commitment, the
Company may borrow, repay and reborrow.


 


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


 


SECTION 3.         Term. 
The term of the Commitment shall be from the date hereof, up to and including
August 1, 2006, or such later date as CoBank may, in its sole discretion,
authorise in writing.


 


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


 


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


 


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


 


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


 





















 


and (iii) “Interest Period” shall mean a period commencing on the
day the Company elects to fix a rate under this option and ending on the
numerically corresponding day in the next calendar month or the month that is
2, 3, or 6 months or 1 year thereafter, as the case may be; provided, however,
that: (x) in the event such ending day is not a Banking Day, such period shall
be extended to the next Banking Day unless such next Banking Day falls in the
next calendar month, in which case it shall end on the preceding Banking Day;
and (y) if there is no numerically corresponding day in the month, then such
period shall end on the last Banking Day in the relevant month; and (v) “FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.


 


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


 


TREASURY
MARGINS


 


	
  FIXED RATE

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Two Years

  	
   

  	
  U.S.$ Constant Maturity Treasury Rate (“US$CMT”)

  	
   

  	
  125 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Floor (Minimum) Rate (For Two to Ten Year
  Fixed Rate Products Only)

  	
   

  	
  CoBank’s cost of funds (as reasonably determined by CoBank in its
  sole discretion)

  	
   

  	
  105 bps

  	
   

  



 


The spread over all of the above indices, including
the Floor (Minimum) Rate, may increase or decrease for future fixed amounts
based on the Company’s previous fiscal quarter’s leverage ratio, as follows;


 


2





















 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE / DECREASE

  TO SPREAD

  	
   

  	
  CHANGE TO

  APPLICABLE LIBOR

  and TREASURY

  MARGINS

  (IN BASIS POINTS)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. Equal to or greater than 1.20: 1.00, but less than 1.35:1.00

  	
   

  	
  None

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  	
   

  



 


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


 


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


 


The Company shall select the applicable rate option
at the time it requests a loan hereunder and may, subject to the limitations
set forth above, elect to convert balances bearing interest at the variable
rate option to one of the fixed rate options. Upon the expiration of any fixed
rate period, interest shall automatically accrue at the variable rate option
unless the amount fixed is repaid or fixed for an additional period in
accordance with the terms hereof. Notwithstanding the foregoing, unless CoBank
otherwise consents in its sole discretion in each instance, rates may not be
fixed for periods expiring after the maturity date of the loans. In the event
CoBank so consents and the Commitment is not renewed, then each balance so
fixed shall be due and payable on the last day of its fixed rate period, and
the promissory note set forth below shall be deemed amended accordingly. All
elections provided for herein shall be made telephonically or in writing and
must be received by 12:00 noon Company’s local time. Interest shall be
calculated on the actual number of days each loan is outstanding on the basis
of a year consisting of 360 days and shall be payable quarterly in arrears by
the 20th day of the following month,


 


SECTION 5.          Promissory Note.  The Company promises to repay the bans that
are outstanding in 4 equal, consecutive annual principal payments of
$9,396,579.17, with the first such payment due on or before December 31,
2006, and a final principal payment due in an amount equal to the remaining
unpaid principal balance on or before December 31, 2010. If any
installment due date is not a day on which CoBank is open for business, then
such payment shall be made on the next day on


 


3





















 


which CoBank is open for business. In addition to the above, the
Company promises to pay interest on the unpaid principal balance hereof at the
times and in accordance with the provisions set forth in Section 4 hereof.
This note replaces and supersedes, but does not constitute payment of the
indebtedness evidenced by, the promissory note set forth in the Supplement
being amended and restated hereby.


 


The Company shall be permitted to make special
payments, in a minimum amount of $388,500,00, on the variable rate portion of
this loan, when all short term financing, including the Company’s seasonal
loans, Commodity Credit Corporation loans and other short term loans have been
zeroed out. These special payments may be readvanced through the expiration
date of the Commitment. Reinstatement may be denied and canceled at any time at
the option of CoBank. The reinstatable commitments arising from such special
payments shall be subject to the Commitment Fee as described in Section 8
below.


 


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


 


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


 


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


 


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


 


SECTION 10.       Amendment Fee.   In consideration of the amendment, the
Company agrees to pay to CoBank on the execution hereof a fee in the amount of
$9,396,58.


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Pat
  Schulz

  	
   

  	
   

  	
  By:

  	
     /s/  Sam
  Wai

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Corporate Secretary

  	
   

  	
   

  	
  Title:

  	
     Treasurer

  	
   

  



 


4





















 


Loan No.
Z269T01FNP


 


REVOLVING
TERM LOAN SUPPLEMENT


 


THIS SUPPLEMENT to the Amended and Restated
Master Loan Agreement dated July 21, 2003 (the “MLA”), is entered, into as
of July 8, 2005, between CoBANK, ACB
(“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead,
Minnesota (the “Company”), and amends and restates the Supplement
dated August 13, 2004 and numbered Z269T01ENP.


 


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


 


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


 


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


 


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


 


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


 


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


 


(C)          LIBOR Option. 
At a fixed rate equal to “LIBOR” (as hereinafter defined) plus 90 basis
points per annum (the “LIBOR” Spread). Under this option:  (a) rates may be fixed for “Interest Periods”
(as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, as selected by the
Company; (b) the minimum amount that may he fixed at any one time shall be
$2,000,000.00; and (c) rates may only be fixed on a “Banking Day” (as
hereinafter defined) or, at the option of the Company, on 3 Banking Days’ prior
notice.  For purposes hereof: (i) “LIBOR”
shall mean the rate (rounded upward to the nearest sixteenth and adjusted for
reserves required on “Eurocurrency Liabilities” (as hereinafter defined) for banks
subject to “PRB Regulation D” (as hereinafter defined) or required by any other
federal law or regulation) quoted by the British Bankers Association (the “BBA”)
at 11:00 a.m. London time 2 Banking Days before the commencement of the
Interest for Period for the offering of U.S. dollar deposits in the London
interbank market for the Interest Period designated by the Company, as
published by Bloomberg or another major information vendor listed on the BBA’s
official website; (ii) “Banking Day” shall mean a day on which CoBank is
open for business, dealings in U.S. dollar deposits are being carried out in
the London interbank market, and banks are open for business in New York City
and London, England; (iii) “Interest Period” shall mean a period commencing on
the day the Company elects to fix a rate under this


 





















 


option and ending on the numerically corresponding day in the next
calendar month or the month that is 2, 3 or 6 months or 1 year thereafter, as
the case may be; provided, however, that: (x) in the event such ending day is
not a Banking Day, such period shall be extended to the next Banking Day unless
such next Banking Day falls in the next calendar month, in which case it shall
end on the preceding Banking Day; and (y) if there is no numerically
corresponding day in the month, then such period shall end on the last Banking
Day in the relevant month; (iv) “Eurocurrency Liabilities” shall have
meaning as set forth in FRB Regulation D; and (v) “FRB Regulation D” shall
mean Regulation D as promulgated by the Board of Governors of the Federal
Reserve System, 12 CFR Part 204, as amended.


 


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


 


TREASURY
MARGINS


 


	
  FIXED RATE

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Two Years

  	
   

  	
  U.S. $ Constant Maturity

  Treasury (“US$CMT”)

  	
   

  	
  125 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Floor (Minimum) Rate (For Two to Ten Year
  Fixed Rate Products Only)

  	
   

  	
  CoBank’s cost of funds (as reasonably determined by CoBank in its
  sole discretion)

  	
   

  	
  105 bps

  



 


The spread over all of the above indices, including
the Floor (Minimum) Rate, may increase or decrease for future fixed amounts
based on the Company’s previous fiscal quarter’s leverage ratio, as follows:


 


2





















 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE / DECREASE

  TO SPREAD

  	
   

  	
  CHANGE TO

  APPLICABLE LIBOR

  and TREASURY

  MARGINS

  (IN BASIS POINTS)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00

  	
   

  	
  None

  	
   

  	
  0

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


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


 


The Company shall select the applicable rate
option at the time it requests a loan hereunder and may, subject to the
limitations set forth above, elect to convert balances bearing interest at the
variable rate option to one of the fixed rate options. Upon the expiration of
any fixed rate period, interest shall automatically accrue at the variable rate
option unless the amount fixed is repaid or fixed for an additional period in
accordance with the terms hereof. Notwithstanding the foregoing, unless CoBank
otherwise consents in its sole discretion in each instance, rates may not be
fixed for periods expiring after the maturity date of the loans. In the event
CoBank so consents and the Commitment is not renewed, then each balance so
fixed shall be due and payable on the last day of its fixed rate period, and
the promissory note set forth below shall be deemed amended accordingly. All
elections provided for herein shall be made telephonically or in writing and
must be received by 12:00 noon Company’s local time. Interest shall be
calculated on the actual number of days each loan is outstanding on the basis
of a year consisting of 360 days and shall be payable quarterly in arrears by
the 20th day of the following month.


 


SECTION 5.          Promissory Note.   The
Company promises to repay the loans that are outstanding in 3 equal,
consecutive annual principal payments of $7,603,420.83, with the first such
payment due on or before December 31, 2006, and a final principal payment
due in an amount equal to the remaining unpaid principal balance on or before December 31,
2009. If any installment due date is not a day on which CoBank is open for
business, then such payment shall be made on the next day on which CoBank is
open for business. In addition to the above, the Company promises to pay
interest on the unpaid principal balance hereof at the times and in accordance
with the provisions set forth in Section


 


3





















 


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


 


The Company shall be permitted to make special
payments, in a minimum amount of $111,500.00, on the variable rate portion of
this loan, when all short term financing, including the Company’s seasonal
loans, Commodity Credit Corporation loans and other short term loans have been
zeroed out. These special payments may be readvanced through the expiration
date of the Commitment. Reinstatement may be denied and canceled at any time at
the option of CoBank. The reinstatable commitments arising from such special
payments shall be subject to the Commitment Fee as described in Section 8
below.


 


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


 


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


 


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


 


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


 


SECTION 10.       Amendment Fee.   In
consideration of the amendment, the Company agrees to pay to CoBank on the
execution hereof a fee in the amount of $7,603.42.


 


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


 


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Pat
  Schulz

  	
   

  	
   

  	
  By:

  	
     /s/  Sam
  Wai

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Corporate Secretary

  	
   

  	
   

  	
  Title:

  	
     Treasurer

  	
   

  



 


4





















 


Loan No. Z269T06C


 


REVOLVING TERM LOAN
SUPPLEMENT


 


THIS SUPPLEMENT to the Amended and Restated Master Loan
Agreement dated July 21, 2003 (the “MLA”), is entered into as of July 11,
2005, between CoBANK, ACB (“CoBank”)
and AMERICAN  CRYSTAL SUGAR COMPANY,  Moorhead,  Minnesota
(the “Company”), and amends and restates the Supplement dated September 8,
2004, and numbered Z269T06B.


 


SECTION 1.         The Revolving Term Loan Commitment.  On the terms and conditions set forth in the
MLA and this Supplement, CoBank agrees to make loans to the Company from the
date hereof, up to and including August 1, 2006, in an aggregate principal
amount not to exceed, at any one time outstanding, $35,000,000.00 less the
amounts scheduled to be repaid during the period set forth below in Section 5
(the “Commitment”). Within the limits of the Commitment, the Company may
borrow, repay and reborrow.


 


SECTION 2.         Purpose. 
The purpose of the Commitment is to finance the operating needs and
general corporate purposes of the Company and provide for short-term commercial
and standby letters of credit.


 


SECTION 3.         Term. 
Intentionally Omitted.


 


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


 


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


 


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


 


(C)          LIBOR
Option.  At a fixed rate equal to “LIBOR” (as
hereinafter defined) plus 100 basis points per annum (the “LIBOR Spread”).
Under this option: (a) rates may be fixed for “Interest Periods” (as
hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, as selected by the
Company; (b) the minimum amount that may be fixed at any one time shall be
$2,000,000.00; and (c) rates may only be fixed on a “Banking Day” (as
hereinafter defined) or, at the option of the Company, on 3 Banking Days’ prior
notice. For purposes hereof: (i) “LIBOR” shall mean the rate (rounded
upward to the nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as hereinafter defined) or required by any other federal law or regulation)
quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time
2 Banking Days before the commencement of the Interest for Period for the
offering of U.S. dollar deposits in the London interbank market for the
Interest Period designated by the Company, as published by Bloomberg or another
major information vendor listed on the BBA’s official website; (ii) “Banking
Day” shall mean a day on which CoBank is open for business, dealings in U.S.
dollar deposits are being carried out in the London interbank market, and banks
are open for business in New York City and London, England; (iii) “Interest


 





















 


Period” shall mean a period commencing on the day the Company elects to
fix a rate under this option and ending on the numerically corresponding day in
the next calendar month or the month that is 2, 3 or 6 months or 1 year
thereafter, as the case may be; provided, however, that: (x) in the event such
ending day is not a Banking Day, such period shall be extended to the next
Banking Day unless such next Banking Day falls in the next calendar month, in
which case it shall end on the preceding Banking Day; and (y) if there is no
numerically corresponding day in the month, then such period shall end on the
last Banking Day in the relevant month; (iv) “Eurocurrency Liabilities”
shall have meaning as set forth in FRB Regulation D; and (v) “FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.


 


The L1BOR Spread may increase or decrease for future fixed amounts
based on the Company’s previous fiscal quarter’s leverage ratio, as follows:


 


	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE/DECREASE

  TO LIBOR SPREAD

  	
   

  	
  CHANGE TO THE

  LIBOR SPREAD (IN

  BASIS POINTS)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B. Equal to or greater than 1.20:1.00, but less than 1.35:1.00

  	
   

  	
  None

  	
   

  	
  0

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C. Less than 1.20:1.00, but greater than or equal to 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D. Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  



 


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


 


Changes to the LIBOR Spread shall be made quarterly on the latter of
either: (a) five business days after the Bank’s receipt of the Company’s
certification of compliance with the leverage ratio, or (b) 30 days after
the end of each calendar quarter. If the Company fails to timely furnish to
CoBank the compliance certificate as required to be delivered pursuant to the
MLA, then the change to the LIBOR Spread shall be an increase of the highest
permitted under the above chart.


 


The Company shall select the applicable rate option at the time it
requests a loan hereunder and may, subject to the limitations set forth above,
elect to convert balances bearing interest at the variable rate option to one
of the fixed rate options. Upon the expiration of any fixed rate period,
interest shall automatically accrue at the variable rate option unless the
amount fixed is repaid or fixed for an additional period in accordance with the
terms hereof.  Notwithstanding the
foregoing, unless CoBank otherwise consents in its sole discretion in each
instance, rates may not be fixed for periods expiring after the maturity date
of the loans. In the event CoBank consents to one or more balances being fixed
for a period or periods extending beyond the maturity date of the loans and the
Commitment is not renewed, then each such balance shall be due and payable on
the last day of its fixed rate period and the promissory note set


 


2





















 


forth below shall be deemed amended accordingly. All elections provided
for herein shall be made telephonically or in writing and must be received by
12:00 Noon Company’s local time. Interest shall be calculated on the actual
number of days each loan is outstanding on the basis of a year consisting of
360 days and shall be payable monthly in arrears by the 20th day of the
following month; provided, however, in the event the Company elects to fix all
or a portion of the indebtedness outstanding under the LIBOR interest rate
option above, interest shall be payable at the maturity of the interest period
and if the LIBOR interest rate fix is for a period longer than 3 months,
interest on that portion of the indebtedness outstanding shall be payable
quarterly in arrears by the 20th day of the following month and at maturity.


 


SECTION 5.          Promissory Note. 
The Company promises to repay on the dates set forth below, the outstanding
principal, if any, that is in excess of the listed amounts:


 


	
  Payment Date

  	
   

  	
  Reducing Commitment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  29,166,666.67

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  23,333,333.34

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  17,500,000.01

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  11,666,666.68

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  5,833,333.35

  	
   

  



 


followed by a final installment in an amount equal to the remaining
unpaid principal balance of the loans on December 31, 2011. This note
replaces and supersedes, but does not constitute payment of the indebtedness
evidenced by, the promissory note set forth in the Supplement being amended and
restated hereby.


 


SECTION 6.          Prepayment.  Subject to Section 13 of the MLA, the
loans may be prepaid in whole or in part on one Business Day’s prior written
notice. During the term of the Commitment, prepayments shall be applied to such
balances, fixed or variable, as the Company shall specify. After the expiration
of the term of the Commitment, prepayments shall, unless CoBank otherwise
agrees, be applied to principal installments in the inverse order of their
maturity and to such balances, fixed or variable, as CoBank shall specify.


 


SECTION 7.          Security.  In addition to any other security that may
otherwise be required or provided, the Company’s obligations to CoBank under
this Supplement are secured by that Restated Mortgage and Security Agreement
dated September 15, 1998, from American Crystal Sugar Company to St. Paul
Bank for Cooperatives (now known as CoBank as a result of merger), as
Collateral Agent, as amended on January 31, 2003 by that certain
Modification Agreement to the Amended and Restated Mortgage and Security
Agreement.


 


SECTION 8.          Commitment Fee. 
In consideration of the Commitment, the Company agrees to pay to CoBank
a commitment fee on the average daily unused portion of the Commitment at the
rate of 20 basis points per annum (calculated on a 360 day basis), payable
quarterly in arrears by the 20th day following each calendar quarter. Such fee
shall be payable for each quarter (or portion thereof) occurring during the
original or any extended term of the Commitment.


 


3





















 


SECTION 9.         Amendment Fee.  In consideration of the amendment, the Company
agrees to pay to CoBank on the execution hereof a fee in
the amount of $15,000.00.


 


SECTION 10.       Loan Origination Fee.  In consideration of the Commitment, the Company agrees to pay to CoBank
on the execution hereof a loan origination fee in the amount of $20,000.00.


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Pat
  Schulz

  	
   

  	
   

  	
  By:

  	
     /s/  Sam
  Wai

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Corporate Secretary

  	
   

  	
   

  	
  Title:

  	
     Treasurer

  	
   

  



 


4





















 


Loan No. Z269T07


 


STATUSED
REVOLVING TERM LOAN SUPPLEMENT


 


THIS SUPPLEMENT to the Master Loan Agreement dated July 21,
2003 (the “MLA”), is entered into as of July 11, 2005, between CoBANK, ACB (“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY,  Moorhead,  Minnesota
(the “Company”).


 


SECTION 1.         The Revolving Credit Facility.  On the terms and conditions set forth in the
MLA and this Supplement, CoBank agrees to make loans to the Company during the
period set forth below in an aggregate principal amount not to exceed, at any
one time outstanding, the lesser of the “Borrowing Base” (as calculated
pursuant to the Borrowing Base Certificate, the form of this is attached hereto
as Exhibit A) or the sum of $280,000,000.00. Within the limits of the
Commitment, and the limit of the Borrowing Base, the Company may borrow, repay
and reborrow.


 


SECTION 2.         Purpose.  The purpose of the Commitment is to finance
the Company’s general corporate purposes, fund working capital requirements,
support the Company’s commercial paper program, provide for short-term commercial
and standby letters of credit and to renew, extend, and refinance the Company’s
obligations to CoBank under the Statused Revolving Credit Supplement dated July 20,
2004 and numbered Z269S01G, as amended, and the Revolving Term Loan Supplement
dated July 20, 2004 and numbered Z269T05A (the “Existing Agreements”). The
Company agrees that on the date when all conditions precedent to CoBank’s
obligation to extend credit hereunder have been satisfied: (a) the
principal balance outstanding under the Existing Agreements shall be
transferred to and charged against the Commitment; (b) all obligations
relating to letters of credit issued and outstanding under the Existing
Agreements shall be transferred to and continued as if letters of credit had
been issued under this Supplement; (c) all accrued obligations of the
Company under the Existing Agreements for the payment of interest or other
charges shall survive such cancellation and be transferred to and become part
of the Company’s obligations under this Supplement as if fully set forth
herein; and (d) the Existing Agreements and the promissory note set forth
in or executed in connection therewith shall be deemed replaced and superseded,
but the indebtedness evidenced by such notes shall not be deemed to have been
paid off, by this Supplement and the MLA. 
In addition, in the event any balances bearing interest at a fixed rate
are outstanding on the date such loans are being transferred hereto, then such
balances shall continue to be subject to such rates for the remaining agreed
upon fixed rate periods but shall otherwise be subject to the terms hereof.


 


SECTION 3.         Term. 
The term of the Commitment shall be from the date hereof, up to and
including August 1, 2007, or such later date as CoBank may, in its sole
discretion, authorize in writing.


 


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


 


(A)          Base Rate Option. 
At a rate per annum at all times equal to the Base Rate. For the
purposes hereof, Base Rate means that rate in effect from day to day defined as
the “prime rate” as published from time to time in the Eastern Edition of The
Wall Street Journal as the average prime lending rate for seventy-five percent
(75%) of the United States’ thirty (30) largest commercial banks, or


 





















 


if The Wall Street Journal shall cease publication or cease publishing
the “prime rate” on a regular basis, such other regularly published average prime
rate applicable to such commercial banks as is acceptable to the Lender in its
reasonable discretion. Loans for which the Base Rate option is selected are
referred to herein as “Base Rate Loans”. Base Rate Loans shall be: (a) in
minimum amounts of $5,000,000.00 and incremental multiples of $1,000,000.00;
and (b) made available on any Banking Day.


 


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


 


(C)          LIBOR Option. 
At a fixed rate equal to “LIBOR” (as hereinafter defined) plus 75 basis
points per annum. Under this option: (a) rates may be fixed for “Interest
Periods” (as hereinafter defined) of 1, 2, 3 or 6 months, or 1 year, as
selected by the Company; (b) the minimum amount that may be fixed at any
one time shall be $5,000,000.00; and (c) rates may only be fixed on a “Banking
Day” (as hereinafter defined) or, at the option of the Company, on 3 Banking
Days’ prior notice.  For purposes hereof:
(i) “LIBOR” shall mean the rate (rounded upward to the nearest sixteenth
and adjusted for reserves required on “Eurocurrency Liabilities” (as
hereinafter defined) for banks subject to “FRB Regulation D” (as hereinafter
defined) or required by any other federal law or regulation) quoted by the British
Bankers Association (the “BBA”) at 11:00 a.m. London time 2 Banking Days
before the commencement of the Interest Period for the offering of U.S. dollar
deposits in the London interbank market for the Interest Period designated by the
Company, as published by Bloomberg or another major information vendor listed
on the BBA’s official website; (ii) “Banking Day” shall mean a day on
which CoBank is open for business, dealings in U.S. dollar deposits are being
carried out in the London interbank market, and banks are open for business in
New York City and London, England; (iii) “Interest Period” shall mean a
period commencing on the day the Company elects to fix a rate under this option
and ending on the numerically corresponding day in the next calendar month or
the month that is 2, 3 or 6 months or 1 year thereafter, as the case may be;
provided, however, that:  (x) in the
event such ending day is not a Banking Day, such period shall be extended to
the next Banking Day unless such next Banking Day falls in the next calendar
month, in which case it shall end on the preceding Banking Day; and (y) if
there is no numerically corresponding day in the month, then such period shall
end on the last Banking Day in the relevant month; (iv) “Eurocurrency
Liabilities” shall have meaning as set forth in FRB Regulation D; and (v) “FRB
Regulation D” shall mean Regulation D as promulgated by the Board of Governors
of the Federal Reserve System, 12 CFR Part 204, as amended.


 


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


 


2





















 


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


 


(3)           If
CoBank shall determine that, after the date hereof, the adoption of any applicable
Law, rule or regulation regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on capital of CoBank as a consequence
of CoBank’s obligations hereunder to a level below that which CoBank could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy existing on the
date of this Supplement) by an amount deemed by CoBank to be material, then
from time to time, within fifteen (15) days after demand by CoBank, the Company
shall pay to CoBank such additional amount or amounts as will compensate CoBank
for such reduction.  CoBank agrees to
take reasonable steps to reduce the amount of such increase, provided, however,
that CoBank shall not be required to take any such step, if in CoBank’s sole
opinion, CoBank would suffer an economic loss or any negative legal or
regulatory consequences as a result thereof. 
If CoBank is to require the Company to make payments under this Section then
CoBank must make a demand on the Company to make such payment within ninety
(90) days of the later of (1) the date on which such capital costs are
actually incurred by CoBank, or (2) the date on which CoBank knows, or should
have known, that such capital costs have been incurred by CoBank.


 


The Company shall select the applicable rate option at the time it
requests a loan hereunder and may, subject to the limitations set forth above,
elect to convert balances bearing interest at the variable rate option to one
of the fixed rate options. Upon the expiration of any fixed rate period,
interest shall automatically accrue at the variable rate unless the amount
fixed is repaid or fixed for an additional period. Notwithstanding the
foregoing, rates may not be fixed for periods expiring after the maturity date
of the loans. All elections provided for herein shall be made telephonically or
in writing and must be received by 12:00 Noon Company’s local time; in the case
of LIBOR rate loans, all such elections must be made in writing. Interest shall
be calculated on the actual number of days each loan is outstanding on the
basis of a year consisting of 360 days and shall be payable monthly in arrears
by the 20th day of the following month or such other day that CoBank shall
require in a written notice to the Company, and at


 


3





















 


maturity; provided, however, in the event the Company elects to fix all
or a portion of the indebtedness
outstanding under the LIBOR interest rate option above, interest shall be
payable at the maturity of the interest period and if the LIBOR interest rate
fix is for a period longer than 3 months, interest on that portion of the
indebtedness outstanding shall be payable quarterly in arrears on each
anniversary of the date the LIBOR interest rate fix was made and at maturity.


 


SECTION 5.         Promissory
Note.  Notwithstanding anything to the contrary
herein, any loan taken by the Company pursuant to this Commitment shall be
repaid on or before the earlier of (i) 360 days following the date that
funds are advanced to the Company hereunder, or (ii) the expiration of
this Commitment on August 1, 2007. If any installment due date is not a
day on which CoBank is open for business, then such payment shall be made on
the next day on which CoBank is open for business. In addition to the above,
the Company promises to pay interest on the unpaid principal balance hereof at
the times and in accordance with the provisions set forth in Section 4
hereof.


 


SECTION 6.         Borrowing Base Certificate, Etc. 
The Company agrees to furnish a Borrowing Base Certificate to CoBank at
such times or intervals as CoBank may from time to time request. Until receipt
of such a request, the Company agrees to furnish a Borrowing Base Certificate
to CoBank as soon as available after the end of each quarter, but in no event
more than 5 days after the Company’s quarterly filing with the Securities
Exchange Commission, calculating the Borrowing Base as of the last day of the
quarter for which the Certificate is being furnished. However, if no balance is
outstanding hereunder on the last day of such period, no Report need be
furnished. Regardless of the frequency of the reporting, if at any time the
amount outstanding under the Commitment exceeds the lesser of the Borrowing
Base or $280,000,000.00, the Company shall immediately notify CoBank and repay
so much of the loans as is necessary to reduce the amount outstanding under the
Commitment to the limits of the lesser of the Borrowing Base or
$280,000,000.00.


 


SECTION 7.         Prepayment.  Subject to the broken funding surcharge
provision of the MLA, the Company may on one Business Day’s prior written
notice prepay all or any portion of the loan(s). During the term of the
Commitment, prepayments shall be applied to such balances, fixed or variable,
as the Company shall specify. After the expiration of the term of the Commitment,
prepayments shall, unless CoBank otherwise agrees, be applied to principal
installments in the inverse order of their maturity and to such balances, fixed
or variable, as CoBank shall specify.


 


SECTION 8.         Letters
of Credit.  If agreeable to CoBank in its sole
discretion in each instance, in addition to loans, the Company may utilize the
Commitment to open irrevocable letters of credit for its account. Each letter
of credit will be issued within a reasonable period of time after receipt of a
duly completed and executed copy of CoBank’s then current form of application
(or, if applicable, in accordance with the terms of any CoTrade Agreement
between the parties), and shall reduce the amount available under the
Commitment by the maximum amount capable of being drawn thereunder.  Any draw under any letter of credit issued
hereunder shall be deemed an advance under the Commitment. Each letter of
credit must be in form and content acceptable to CoBank in its sole discretion,
must expire no later than the time the Commitment expires. The fee for issuing
each letter of credit shall be 75 basis points of the face amount of each
letter of credit, along with an issuance fee to CoBank, for its own account,
equal to the greater of (a) 1/8% of the face amount of the letter of
credit, or (b) $2,000.00, payable by the Company at or before issuance or
as otherwise agreed. The Company promises to repay


 


4





















 


the outstanding balance on the Commitment in full on demand, or if no demand
is made, then any time on or before the Commitment expiration date of August 1,
2007.


 


SECTION 9.         Bid Borrowing.


 


(A)  General. 
CoBank agrees that the Company may from time to time request CoBank to submit
an offer to make a loan to the Company, provided, however, that CoBank may, but
shall have no obligation to, submit such offer, and the Company may, but shall
have no obligation to, accept any such offer. A request that CoBank submit an
offer to make a loan hereunder shall be referred to herein as a “bid request”, and an offer to make a loan that specifies the
loan amount, interest rate and maturity shall be referred to herein as the “bid”. Bid requests may be made orally or in writing (in a
form approved by CoBank) but if made orally shall be confirmed promptly by
telecopy (facsimile) of a written completed bid request in a form approved by
CoBank. Each bid request shall specify (a) the amount of the requested loan,
which amount must be a minimum amount of $1,000,000.00 or integral multiples
thereof (or the entire available balance of the Commitment), (b) the date
of the loan, and (c) the maturity date or Interest Period of the loan,
CoBank may, in response to a bid request, in its discretion, irrevocably submit
to the Company a bid containing an offer to make the loan.  Each bid, if submitted, must be submitted to
the Company, whether orally or in writing, by 10:00 a.m. (Denver,
Colorado, time) on the day following the bid request. Each bid shall specify
(x) the amount of the loan for which such bid is being made, (y) the rate of
interest per annum offered for the loan (which may be expressed in the form of
an index plus any margin), and (z) the maturity date or Interest Period of the
loan, which date shall not be beyond the term of the Commitment. Not later than
11:00 a.m. (Denver, Colorado, time) on the day the Company receives CoBank’s
bid (or at such later time as CoBank may agree), the Company shall either
reject the bid or accept the bid by giving notice to CoBank by telephone in either
case, confirmed by facsimile. Failure to properly notify CoBank of an
acceptance of the bid may be treated by CoBank as a rejection. Any loan made as
result of the Company’s acceptance of CoBank’s bid (such loan to be referred to
herein as a “bid loan”) shall be subject to the terms of the MLA, this
Supplement and all other Loan Documents entered into by the Company in
connection with the MLA.


 


(B)  Limitations. 
If CoBank has sold participation interests in the Commitment, then bid loans
by CoBank shall be deemed to reduce only CoBank’s pro rata share of the total
Commitment. The sum of all bid loans outstanding may not at any time exceed the
leaser of (a) $50,000,000.00 or (b) the dollar amount of CoBank’s pro
rata share of the Commitment (as said amount may be reduced as a result of
other loans made pursuant to the Commitment).


 


SECTION 10.       Consent of Participants. 
CoBank has sold Participation interests in the Loan Documents to the
following Participants: Ag Country PCS; AgFirst, FCB; First Farm Credit
Services; Wells Fargo Bank, N.A. (formerly Norwest Bank of North Dakota); U.S.
AgBank, FCB; and The Bank of Tokyo-Mitsubishi, Ltd.


 


SECTION 11.       Security.  Except for CoBank’s lieu on the Company’s
equity in CoBank, the Company’s obligations hereunder and, to the extent
related hereto, the MLA, shall be unsecured.


 


SECTION 12.       Commitment
Fee.  In consideration of the Commitment, the
Company agrees to pay to CoBank a commitment fee on the average daily unused
portion of the Commitment at the rate of 15 basis points per annum (calculated
on a 360 day basis), payable quarterly in arrears by the 20th day


 


5





















 


following each calendar quarter. Such fee shall be payable for each
quarter (or portion thereof) occurring during the original or any extended term
of the Commitment.


 


SECTION 13.       Loan Origination Fee.   In
consideration of the Commitment, the Company agrees to pay to CoBank on the
execution hereof a loan origination fee in the amount of $210,000.00.


 


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


 


	
  CoBANK, ACB

  	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/  Pat
  Schulz

  	
   

  	
   

  	
  By:

  	
     /s/  Sam
  Wai

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Corporate Secretary

  	
   

  	
   

  	
  Title:

  	
     Treasurer

  	
   

  



 


6





















 


EXHIBIT “A”


 


[Form of Borrowing
Base]


American
Crystal Sugar Company


Monthly Borrowing Base

For the month ended
                   


 


 


	
  Trade Accounts Receivables

  	
   

  	
  $                                       

  	
  @ 80%

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $                                         

  	
  (a)

  



 


Trade Accounts Receivables are defined as those of the Company and 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 other allowance given to the account debtor; (4) are
not owing by an account debtor who 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 Company; (7) are not owing by an obligor located outside of the U.S.
unless the receivable is supported by a letter of credit issued by a bank
acceptable to the CoBank; and (8) are not government receivables. The
above provisions notwithstanding, Trade Receivables shall also exclude (i) any
accounts that are past due more than 90 days, and (ii) any contra account
regardless of the date;


 


	
  Inventory

  	
   

  	
  $

  	
  (b)

  



 


Inventory as determined on the basis of Net Realizable Value, defined
as the expected selling 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

  	
   

  	
   

  	
   

  
	
  $                               (c)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Statused Revolving Term – RI0013T07

  	
   

  	
   

  	
   

  
	
  $                               (f)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Commodity Credit Corp. loans

  	
   

  	
   

  	
   

  
	
                                       (g)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Short-term Loans (e+f+g)

  	
   

  	
  $