Document:

Exhibit 10.22

 

AMENDED AND RESTATED

UNIFORM MEMBER SUGAR MARKETING AGREEMENT

POOL BASIS

 

THIS AGREEMENT is made effective as of September 20,
2007 by and between UNITED SUGARS CORPORATION, a cooperative association
organized under the laws of the State of Minnesota (“UNITED”), and AMERICAN CRYSTAL SUGAR COMPANY, a
cooperative association organized under the laws of the State of Minnesota (“ACSC”).

 

WITNESSETH

 

WHEREAS, ACSC is an association of
agricultural producers or an agricultural producer organized and operated so as
to adhere to the provisions of Section 15(a) of the Agricultural
Marketing Act (12 U.S.C. § 1141j (a)), as amended, and the Capper-Volstead
Act of 1922 (7 U.S.C. §§ 291, 292), and is engaged in the operation of one
or more sugar processing plants for the purpose of producing one or more forms
of refined sugar; and

 

WHEREAS, UNITED is organized and operated so
as to adhere to the provisions of Section 15(a) of the Agricultural
Marketing Act (12 U.S.C. § 1141j (a)), as amended, and the Capper-Volstead
Act of 1922 (7 U.S.C. §§ 291,292), for the mutual help and benefit of its
members (currently United States Sugar Corporation (“USSC”), Minn-Dak Farmers
Cooperative (“MDFC”), and ACSC, and all future members, each a “MEMBER” or
collectively, “MEMBERS”) and for the purposes of acting as a marketing agency
for its MEMBERS and of engaging in the business of marketing the refined sugar
(whether sold in packages or in bulk) produced by its MEMBERS, including but
not limited to, granulated, liquid, blends, and specialty products; and

 

WHEREAS, ACSC is a MEMBER of UNITED and wishes
to participate with other MEMBERS in developing and maintaining a dependable
market for certain products it produces; and

 

WHEREAS, UNITED and ACSC desire to enter into
a membership marketing agreement on a pool basis;

 

NOW, THEREFORE, in consideration of the above,
subject to the respective terms, conditions, and obligations of ACSC and UNITED
herein, UNITED and ACSC agree as follows:

 

1.             Definitions. As used in this Agreement, the
following terms shall have the following meanings:

 

“Allocation” means the amount of sugar a
MEMBER is authorized to market as established by the United States Department
of Agriculture under the Allotment Statute (defined below).

 

“Allotments” means an overall allotment
of sugar processed from domestically produced sugarcane and sugar beets, as
defined and contemplated by the Allotment Statute.

 

 

“Allotment Statute” means the
Agricultural Adjustment Act of 1938 (7 U.S.C. § 359aa et seq. (2007)), and
amendments thereto, or subsequent statutes providing for sugar marketing
allotments.

 

“Assets Costs” shall mean carrying costs
of assets associated with Product shipping, packaging, warehousing (including
all costs historically included by UNITED as warehousing costs), and storage
functions, including depreciation and interest.

 

“Beet Processing Season” means the
period of time generally from September through August during which a
Beet Producer processes beets, thick juice and extract into refined sugar.

 

“Beet Producer” means a MEMBER that
processes sugar beets into refined sugar.

 

“Buyer” is a third party purchaser of
Finished Product from UNITED.

 

“Commingle” means (i) Finished
Product of a MEMBER that is stored by UNITED in a warehouse or stationary storage
facility that is owned or leased by UNITED; or (ii) Product which has been
further processed by UNITED.

 

“Cane Processing Season” means the
period of time generally from mid-October through April during which
time a Cane Producer processes sugarcane into feedstock for a refinery.

 

“Cane Producer” means a MEMBER that
processes cane into refined sugar.

 

“Crop Year” means the crop year
established by the Beet Producers for their own business operations.

 

“Excess Product” means that amount of
Product exceeding a Beet Producer’s Allocation.

 

“Fiscal Year” means the fiscal year of
UNITED, which begins on September 1 and ends on August 31.

 

“Force Majeure” means any (i) fire,
freeze, accident, explosion, construction delay, hurricane, flood, act of God,
inability to obtain electric power or fuel, inability to obtain any required
permits or licenses, government law, directive or regulation; or the effect of
the application of any governmental law, directive or regulation, or any like
contingency, beyond a party’s reasonable ability to control or avoid; and (ii) labor
dispute or strike, from whatever cause arising and regardless of whether the
demands of the employees involved are reasonable and within the affected party’s
power to concede.

 

“Finished Product” or “Finished Products” means those Products that have been
granulated or otherwise made ready for marketing to third parties.

 

“MEMBER” means a member or shareholder
of UNITED who is entitled to vote, presently ACSC, USSC, and MDFC.

 

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“Net Selling Price” means the gross
proceeds realized by UNITED from sales of Products produced by MEMBERS in the
Primary Pool, less expenses directly attributable to the Primary Pool,
including all Operating Costs, charges or expenses attributable to the
marketing and sale of pooled Products, including without limitation salaries,
wages and other benefits of UNITED’s employees, office expense and appropriate
consulting fees, and all costs of transportation of the pooled Products.

 

“Operating Costs” means operating costs
associated with Product shipping, packaging, warehousing (including all costs
historically included by UNITED as warehousing costs) and storage functions,
including without limitation labor (including direct and indirect costs, such
as employee benefits, insurance, etc.), supplies, and utilities.

 

“Pool Year” means the pool year of the
Primary Pool, which coincides with the Fiscal Year of UNITED, which begins on September 1
and ends on August 31.

 

“Primary Pool” means Product of each
MEMBER that is pooled for each Fiscal Year with Products of other MEMBERS as
agreed to in Section 6.1.

 

“Product” or “Products”
means refined sugar produced by a MEMBER, or purchased by a MEMBER or by UNITED
on behalf of a MEMBER, during the term of this Agreement, including, but not
limited to, granulated, liquid, blends, specialty products, standard liquor,
thick juice, extract and other forms of ungranulated sugar.

 

“Pro Rata Share” shall be equal to a
fraction, with each MEMBER’S annual production of Product (on a sugar
equivalent basis) included in the Primary Pool as the numerator and total
annual pool production of Product (on a sugar equivalent basis) for all MEMBERS
included in the Primary Pool as the denominator.

 

“Purchased Sugar” means Product that is
purchased by a MEMBER from a third party or from another MEMBER.

 

“Separate Pool” means
Excess Product or other Product of a MEMBER that is not eligible for the
Primary Pool that is separately handled by UNITED for each Fiscal Year as
agreed to in Section 6.1.

 

“Sidney Storage Facility” means the
approximately 1,910,000 CWT capacity sugar storage facilities that are owned or
accessible by Sidney Sugars Incorporated, a wholly owned subsidiary of ACSC (“SSI”),
in Sidney, Montana.

 

 “Term”
has the meaning set forth in Section 17.

 

“Transgenic” or “Transgenic Variety” means a variety of sugar beet or
sugarcane that contains a gene or genes that has or have been artificially
inserted instead of the plant acquiring the gene or genes through pollination
or standard sugarcane reproduction.

 

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2.             Appointment of
UNITED as Sales Agent.

 

2.1           UNITED
Appointed Sales Agent.  ACSC appoints and
designates UNITED to act as its sole worldwide agent in the sale and marketing
of ACSC Products.  UNITED accepts such
appointment and agrees to act as the sales agent and pool administrator in
accordance with the terms of this Agreement, and subject to Section 19.2
hereof.  ACSC agrees that UNITED may
employ all such persons and agencies as it determines to be necessary to carry
out its obligations under this Agreement. 
It is understood and agreed that UNITED may market Products under the
various trademarks and trade names of ACSC (if any) pursuant to a royalty-free
license agreement with respect to such trademarks and trade names, the form of
which agreement shall be mutually agreed upon by ACSC and UNITED.

 

2.2           UNITED
Authorized to Pass Title.  UNITED agrees, and
is hereby empowered by ACSC, to sell in its own name, and pass title on behalf
of ACSC, all Product during the Term of this Agreement to such purchasers, at
such time or times, at such place or places, in such manner and on such prices
or terms as UNITED determines to be in the best interests of ACSC.

 

2.3           Products not
included in this Agreement.  UNITED shall have
no rights, and nothing herein contained shall be deemed to create rights in
UNITED, in and to any other products produced by ACSC other than Product or
Products as herein defined.

 

2.4           Procurement of
Additional Product.  It is understood
and agreed that UNITED may from time to time procure certain Products from
third parties in order to meet the requirements of sales contracts or as
otherwise determined to be in the best interest of the MEMBERS.  ACSC and UNITED agree that UNITED shall act
as an agent for ACSC in connection with such purchases of Products and that the
costs of acquiring such Products and revenues received from the sale of such
Products shall be included in the Primary Pool.

 

3.             Packaging.  ACSC intends to have the capacity to sell
Product in bulk as well as in packages. 
It is understood that production and packaging constraints may limit the
volume and mix of packages that can be produced at any one time, and,
accordingly, UNITED agrees to coordinate orders for packaged Product taking
into consideration ACSC’s production and packaging limitations.

 

4.             Production and
Delivery.

 

4.1           Timing of
Production.  It is anticipated that ACSC will produce
Finished Products during its campaign on an approximately even monthly
schedule.  However, ACSC acknowledges
that UNITED’s requirements may be greater in certain specified months and less
in others.  Accordingly, subject to
mutual agreement of the parties, UNITED will endeavor to coordinate demands
with ACSC’s production and storage capacities. 
At UNITED’s request, and for an agreed upon payment, ACSC may agree to
maximize its production in any month in order to accommodate customer demand.

 

4.2           Product
Production Schedules.  ACSC shall provide
to UNITED by June 1 of each Fiscal Year during the Term a preliminary
estimated production schedule (specifying volume and dates) of Product for the
next following Fiscal Year and will provide a revised estimated production
schedule of Product by July 1 and each month thereafter of each such year,
reflecting any changes from the June preliminary estimate.  UNITED and ACSC shall jointly

 

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develop a production and delivery schedule
plan for ACSC for each Fiscal Year that will attempt to accommodate, as much as
reasonably possible, the dual goals of maximizing the price to be paid to ACSC
and maximizing production efficiencies, with the objective of selling all of
ACSC’s production of Product each year.

 

4.3           Weekly Delivery
Amounts.  Estimated weekly delivery schedules of
Finished Product, including quantities, and bulk and packaging requirements for
each week of each month, shall be agreed upon by UNITED and ACSC at least seven
(7) days in advance of the month to which they apply.  The parties shall use reasonable efforts,
recognizing customer demand, to accommodate each other in setting such
schedules.

 

5.             Billing and
Collection.  All sales made by UNITED shall be billed on
invoices of UNITED and all receipts shall be collected by UNITED.

 

6.             Pooling of
Product.

 

6.1           Agreement to
Pool Product.  UNITED and ACSC agree that the Products to be
sold by UNITED hereunder shall be pooled for each Fiscal Year with Products of
the other MEMBERS of UNITED in the Primary Pool.  UNITED by action of its Executive Committee
shall have the discretion to create additional pools as deemed reasonably
necessary for the equitable treatment of all MEMBERS and to create accounting
standards for such additional pools.

 

6.2           Adjustments for
Beet Producers.  The amount of Product to be included in the
Primary Pool for a Beet Producer shall be the amount of Product produced by the
Beet Producer during the applicable Crop Year, not to exceed the Beet Producer’s
Allocation.  Any Excess Product of a Beet
Producer shall be marketed as provided in Section 19.2, below.

 

6.3           Adjustments for
Cane Producers.  In order to coordinate the Cane Processing
Season with the Beet Processing Season, the amount of cane Product for a Cane
Producer to be included in the Primary Pool for each Fiscal Year shall be the
amount of cane Product (on a sugar equivalent basis) produced by the Cane
Producer during the applicable Fiscal Year, less the cane Product (on a sugar
equivalent basis) produced by the Cane Producer that was allocated to the prior
Fiscal Year, with the difference multiplied by 1.141.

 

7.             Price for
Product.

 

7.1           Price.  UNITED shall pay to ACSC its Pro Rata Share
of the Net Selling Price for all Products sold by UNITED hereunder.

 

7.2           Timing of Payment
to MEMBERS.  As sales of Finished Product are made by
UNITED from the Primary Pool, the gross cash receipts received by UNITED from
the sale of such Finished Products shall be paid daily to ACSC and each other
Primary Pool participant on the basis of the estimated Pro Rata Share of the
Finished Product, reduced by in-process inventories on hand at the beginning of
the year (which are included in the prior year’s Primary Pool), to be produced
by ACSC and each of the other participants in the Primary Pool during that
Fiscal year.  The formula set forth in Section 6.3
(Adjustments for Cane Producers) shall be utilized to adjust Cane Producer’s
production during the Fiscal Year for the purpose of

 

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determining Cane Producer’s estimated Pro
Rata Share, and the payment of gross cash receipts to Cane Producer shall be
adjusted accordingly.  Because gross cash
receipts are distributed daily, UNITED shall borrow from its line of credit in
order to cover its monthly Operating Costs. 
Such monthly Operating Costs shall be promptly reimbursed to UNITED by
each MEMBER on the same basis described above regarding daily cash
distributions so that each MEMBER pays its Pro Rata Share of the expenses that
are incurred by UNITED during the month.

 

7.3           Adjustments for
Changes to Production Estimates.  The determination
of ACSC’s Pro Rata Share of gross cash receipts shall be based on UNITED’s best
estimate of the amount of Finished Products anticipated to be produced in such
Fiscal Year by ACSC and each other participant in the Primary Pool, and shall
be adjusted by UNITED periodically as production figures are more precisely
determined.  Such adjustments shall
reflect an interest charge to be paid by any Primary Pool participant who has
received excess distributions based on the preliminary production estimates and
such interest shall be paid to the Primary Pool participant(s) who
received less than full distributions. 
For purposes of this paragraph, interest charges shall be the prime rate
as published in the Wall Street Journal on the first business day of each
month.  As soon as exact information and
production figures are available, UNITED shall determine ACSC’s final Pro Rata
Share of the gross cash receipts for the Primary Pool during the Fiscal Year,
and appropriate adjustments, together with interest charges/credits as provided
above, shall be made.  The final
accounting for the Primary Pool shall be made no later than the ninetieth day
following the last day of each Fiscal Year.

 

8.             UNITED’s Books
and Records.  UNITED shall keep accurate records of costs,
sales, and distributions of Primary Pool proceeds in accordance with sound and
generally accepted accounting practices. 
Said records shall be at all reasonable times fully available for
inspection and copying by ACSC or its certified public accountants.  All records of the Primary Pool and any
Separate Pool that is created shall be audited annually by UNITED’s regular
Independent Certified Public Auditors and the audit report made available to
ACSC.

 

9.             Budget of
Marketing Costs.  UNITED shall prepare an annual budget or
estimate of all direct and indirect marketing costs for the Primary Pool.  It is the intention of UNITED to secure
independent financing for costs associated with the marketing of Products as
reflected in the budget.

 

10.           Product
Specifications, Quality Standards and Handling of Products of Substandard
Quality.

 

10.1         Specifications.  ACSC agrees to comply with UNITED’s
Specifications for Products, which specifications prescribe standards and
procedures for quality control, storage, and shipment of Products, and which
are attached hereto as Schedule A.  In
addition, ACSC agrees to comply with UNITED’s Quality Assurance Policy that is
attached hereto as Schedule B.  Any
changes to the specifications or Quality Assurance Policy shall be mutually
agreed upon by UNITED and the MEMBERS.

 

10.2         State and
Federal Regulations.  All Products
delivered to or at the order of UNITED shall conform to quality and other
standards prescribed by applicable state and federal rules and
regulations.

 

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10.3         Substandard
Product.  Product that fails to meet the specifications
or the Quality Assurance Policy and which cannot be sold without discounting
shall be considered substandard for purposes of this Agreement.  Product of substandard quality shall be
withheld from the Primary Pool and marketed by UNITED in a Separate Pool, with
proceeds of the sale of such Product, less all direct and indirect selling
expenses, distributed to the MEMBER that produced such Product; in the
alternative, this MEMBER and UNITED may mutually agree that the Product of
substandard quality may remain in the Primary Pool and the MEMBER will be
charged with the additional costs relating to the substandard quality of the
Product, including any necessary discounts.

 

11.           Storage of
Product.  ACSC shall store its Product as the parties
shall mutually agree; provided, however, that with respect to storage by
MEMBERS or UNITED, the parties shall utilize reasonably available storage
methods that result in the lowest total cost to the Primary Pool.  At the earliest reasonable time after
processing commences in each Fiscal Year and as soon as Product has begun to be
placed in storage, ACSC shall deliver daily Product inventory reports to
UNITED.  All Product included in the
daily inventory shall be included in the Primary Pool for the appropriate
Fiscal Year even though the Product remains on the premises of ACSC.

 

11.1         Portion of
Sidney Storage Facility Controlled by UNITED.  UNITED will have the exclusive right to store
910,000 CWT of sugar in the Sidney Storage Facility (the “UNITED Controlled
Storage”).  UNITED shall be responsible
for reimbursing ACSC for the Asset Costs and Operating Costs of the UNITED
Controlled Storage pursuant to Section 16 hereof.  The parties acknowledge that a portion of
such reimbursable Asset Costs and Operating Costs may include costs charged to
ACSC by a third party.

 

11.2         Portion of Sidney Storage
Facility Controlled by ACSC.

 

11.2.1               ACSC retains the exclusive
rights with respect to that portion of the Sidney Storage Facility not
constituting UNITED Controlled Storage (the “ACSC Controlled Storage”).  In the event UNITED desires to utilize the
ACSC Controlled Storage that is not otherwise being utilized by ACSC, it shall
notify ACSC in writing at least thirty (30) days in advance of the date UNITED
anticipates utilizing such storage.  The
notice shall state the volume of storage UNITED desires and the anticipated
duration of the storage.  ACSC shall
provide a written response to UNITED within fifteen (15) days after receipt of
the notice to confirm whether or not UNITED may utilize the requested portion of
the ACSC Controlled Storage.  UNITED’s
use of the ACSC Controlled Storage shall at all times be subject to the
continuing rights of ACSC as provided in paragraph 11.2.2.

 

11.2.2               In the event UNITED is utilizing
the ACSC Controlled Storage and ACSC desires to exercise its rights to utilize
such storage due to government imposed marketing restrictions or due to higher
than anticipated production output of SSI or ACSC, ACSC shall provide UNITED
with thirty (30) days advance written notice to vacate the portion of the ACSC
Controlled Storage that ACSC desires to utilize and UNITED shall use its

 

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best efforts to vacate the portion of the
ACSC Controlled Storage needed by ACSC. 
In the event that UNITED is unable to vacate all or a portion of the
ACSC Controlled Storage during such thirty-day period due to load-out
limitations at the facility, then, if such action would relieve ACSC’s shortage
of storage, UNITED and ACSC will execute appropriate accounting transfers
between UNITED and ACSC to provide that up to 1,000,0000 CWT of the sugar
stored at the Sidney Storage Facility is being stored for the account of ACSC
rather than for the account of UNITED. 
If UNITED is unable to vacate sufficient storage as required by ACSC and
if the above referenced accounting transfer would not relieve ACSC’s shortage
of storage, then at the conclusion of the thirty-day period, UNITED shall (i) continue
to be responsible for the reimbursement of costs provided in paragraph 11.2.3
of this Agreement; and (ii) shall be obligated to reimburse ACSC for all
storage costs ACSC may incur as a result of not having the ACSC Controlled
Storage available which is over and above the amount ACSC would have incurred
if the storage had been made available to ACSC, including, but not limited to,
packaging, shipping, handling, in and out charges, storage fees, reprocessing,
and other costs associated with ACSC’s use of an outside storage facility.

 

11.2.3               Subject to the provisions set
forth in this paragraph 11.2.3 regarding the calculation of utilization, UNITED
shall reimburse ACSC for the Operating Costs of the ACSC Controlled
Storage.  The parties acknowledge that
ACSC’s Operating Costs shall include actual Operating Costs billed to ACSC by
SSI.  The parties agree that UNITED shall
reimburse ACSC for the Asset Costs of the ACSC Controlled Storage, but that the
Asset Costs shall be based upon the fixed amount of $0.042 per CWT per
month.  With respect to reimbursement for
Operating Costs and Assets Costs, the reimbursement for the ACSC Controlled
Storage shall be based on UNITED’s average monthly utilization (in CWTs) of the
ACSC Controlled Storage.  The average
monthly utilization shall be the sum of the number of CWTs in storage on the
first day and the last day of the month divided by two.

 

12.           Risk of Loss
and Insurance.

 

12.1         Risk of Loss.  ACSC covenants and agrees that it shall bear
the risk of loss of any Product produced by ACSC until the risk of loss for
such Product passes to the Buyer; provided, however, that risk of loss shall pass
to UNITED before delivery to the Buyer if the Product is Commingled.  Regardless of which party bears the risk of
loss, ACSC shall continue to be the owner of its Product until the Product is
sold to the Buyer.  Whenever UNITED shall
have possession or control over such Product prior to sale to the Buyer, UNITED
shall act strictly as custodian thereof in accordance with the provisions of
this Agreement.

 

12.2         ACSC to
Maintain Insurance.  ACSC covenants and
agrees, at its sole cost and at all times during the Term of this Agreement, to
maintain in force during the period for which it bears the risk of loss, (i) an
all risk property insurance policy or policies covering loss, theft or

 

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damage to the Products produced by ACSC in an
amount not less than the full replacement cost thereof; and (ii)  product
liability insurance in an amount required by UNITED from time to time naming
UNITED as an additional insured.

 

12.3         UNITED to
Maintain Insurance.  UNITED covenants
and agrees, at its sole cost and at all times during the Term of this
Agreement, to maintain in force during the period for which it bears the risk
of loss, (i) an all risk property insurance policy or policies covering
loss, theft or damage to the Products in an amount not less than the full
replacement cost thereof; and (ii)  product liability insurance in an
amount approved by UNITED from time to time, naming ACSC as an additional
insured on a primary and noncontributory basis.

 

12.4         Certificates of
Insurance.  Insurance policies shall be taken out with
responsible insurance companies with a Best rating of no less than A-, and such
policies shall not be canceled or materially altered without ten days’ written
notice to UNITED and ACSC.  Each party
shall furnish the other party with certificates of insurance for policies
required hereunder, together with a summary of the terms and conditions of the
policy or policies, and the date on which the same expire.

 

12.5         Waiver of Subrogation.  UNITED and ACSC hereby waive subrogation
rights as to the other party with respect to all insurance coverages.

 

13.           Orders.  Regardless of factory or warehouse
designation, the proceeds from sales orders shall be credited to the Primary
Pool for the appropriate Fiscal Year. 
UNITED shall consider car loadings, points of destination, capacity of
tanks or warehouses, size of inventories stored therein, costs and other
pertinent factors in selecting the factory, warehouse or warehouses from which
delivery shall be made.

 

14.           Logistics
Function.  UNITED shall be responsible for performing
all normal logistics functions relating to the shipment of all Products
produced at ACSC’s plant.  Direct or
indirect costs of UNITED associated with the performance of the logistics functions
related to Products shall be a marketing expense of the Primary Pool.

 

15.           Information
from ACSC.  ACSC shall, whenever requested by UNITED,
furnish to UNITED production and related statistical data for Products prepared
on a daily basis, and shall make its books and records related thereto
available at all reasonable times for inspection by UNITED.  ACSC shall not be required to release
information concerning ACSC’s proprietary processes or costs (other than
reimbursable Asset Costs and Operating Costs) which costs shall be provided in
sufficient detail to satisfy UNITED’s reasonable requirements in connection
with the reimbursements provided for in Section 16 hereof, or other
confidential financial information.  ACSC
further agrees, upon request of UNITED, to furnish UNITED with samples of
Products for grading or selling purposes.

 

16.           Pool Expenses
Incurred by ACSC.

 

16.1         ACSC shall be reimbursed out of the Primary Pool for its
Assets Costs and Operating Costs; provided, however, that storage costs of
thick juice or standard liquor from beets or raw cane sugar refinery feedstock
shall only be reimbursable pursuant to the Storage Reimbursement Guidelines set
forth in Schedule C.

 

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16.2         UNITED shall credit ACSC for its Asset
Costs and Operating Costs within thirty (30) days of submission of ACSC’s
written cost breakdown.  In the event
there is a dispute regarding the amount of such reimbursement, UNITED shall
credit the undisputed amount and if the parties are unable to resolve the
disputed amounts within thirty (30) days from the date payment is due, the
controversy shall be resolved in the manner provided in Section 21 hereof.

 

16.3         ACSC shall, prior to the construction
or installation of any new assets to be charged to the Primary Pool, obtain
approval from UNITED for such construction or installation.

 

17.           Term
of Agreement; Termination.

 

17.1         Term.  The term of this Agreement shall commence on
the date hereof and shall continue through August 31,
2008 (the “Initial Term”) and from Fiscal Year to Fiscal Year
thereafter (the “Renewal Terms”) until terminated as provided herein. “Term”
means the Initial Term and any Renewal Terms.

 

17.2         Termination
by UNITED or ACSC. 
After the end of the Initial Term, either UNITED or ACSC has the right
to terminate this Agreement by giving written notice by registered mail to the
other party of such termination.  Notice
of termination to be effective at the conclusion of a Renewal Term shall be
given prior to May 1 of a given year to be effective on August 31 of
the subsequent year (e.g., notice given on April 30, 2008 is effective August 31,
2009).

 

17.3         Termination
Pursuant to the Bylaws of UNITED.  In the event membership in UNITED is
terminated pursuant to the provisions of the Bylaws of UNITED, ACSC’s
participation in this Agreement shall terminate effective the date of
termination of membership; provided, however, that UNITED shall have the
obligation to purchase from ACSC and ACSC shall have the obligation to sell
Products in the quantities and under the payment terms provided in this
Agreement for the next succeeding twelve (12) month period following
termination; further provided, that in no event shall UNITED or ACSC be
required to take any actions that could jeopardize UNITED’s status as a common
marketing agent under the Capper-Volstead Act.

 

17.4        Performance Following Termination.

 

17.4.1      Following termination of ACSC’s participation in this
Agreement, as provided in Sections 17.2 or 17.3 above, ACSC shall have the
obligation to sell its Pro Rata Share of any Product for which UNITED has, as
of the date of notice of termination, made commitment to deliver to a third
party Buyer, under the payment terms provided for in this Agreement.

 

17.4.2      The rights and obligations with respect to the marketing of
ACSC’s Products shall continue in effect until all of such pooled Products have
been sold by UNITED and ACSC’s Pro Rata Share of the Net Selling Price from
sales of Primary Pool Products produced by UNITED’s MEMBERS during such years
and reimbursable costs and expenses have been distributed.

 

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18.           Representations,
Warranties, and Indemnifications.

 

18.1         Representations
By ACSC. 
ACSC represents and warrants that it is not under contract or obligation
to sell, market, consign or deliver any of the Products committed to the pools
under this Agreement to any other person, firm, association, corporation or
other entity.  Further, ACSC shall defend
and hold harmless UNITED from any costs, claims, liabilities, suits or other
proceedings or actions of any nature or kind whatsoever arising from or
connected with any such prior agreement, contract or arrangement or the
termination or cancellation of any prior agreements, contracts or arrangements.

 

18.2         Representations
By UNITED. 
UNITED represents and warrants that it has the power and authority to
enter into this Agreement, sell the Products committed to the pools and
otherwise to fulfill its obligations under this Agreement.  Further, UNITED shall defend and hold
harmless ACSC and its employees, agents and shareholders, from any costs,
claims, liabilities, suits or other proceedings or actions of any nature or kind
whatsoever arising from or connected with any sales by UNITED of Products
hereunder.

 

18.3         Indemnification
By ACSC. 
ACSC hereby agrees to indemnify and hold harmless, UNITED, its MEMBERS,
and their respective employees, from and against any claims, losses or
liabilities arising out of, or resulting from, the production, on-site storage
or loading of any of ACSC’s Products which are marketed by UNITED pursuant to
this Agreement.

 

18.4         Transgenic
Variety.  At
such time as ACSC decides to grow or permit its members to grow Transgenic
Varieties, written notice of same shall be delivered to UNITED and each of the
MEMBERS.  ACSC acknowledges that if it
grows or its members grow Transgenic Varieties in a given Pool Year, then all
of the Product produced by ACSC during that Pool Year will be considered to be
Transgenic Product.  (The preceding
sentence notwithstanding, sugar produced at Sidney Sugars may, at the option of
ACSC, be excluded from the requirement that all sugar produced by ACSC will be
considered Transgenic Product if ACSC or its members grow Transgenic Varieties
in a given Pool Year.)  ACSC further
acknowledges that UNITED may sell and market both Product produced from
Transgenic plants (“Transgenic Product”) and Product produced from
non-Transgenic plants (“Non-Transgenic Product”).  ACSC and UNITED agree that should
Non-Transgenic Product that is sold by UNITED cause the Net Selling Price of a
MEMBER or MEMBERS  producing
Non-Transgenic Product in any Pool Year to be more than 5% higher than such Net
Selling Price would have been had Non-Transgenic Product not been sold by
UNITED, then any MEMBER producing Non-Transgenic Product shall be compensated
for such difference by receiving its pro rata share of the estimated premium
realized on the sales of Non-Transgenic Product (the “Non-Transgenic Premium”),
all as calculated by UNITED and approved by action of its Executive
Committee.  An illustration of this
calculation is attached hereto as Schedule D. 
UNITED and ACSC agree that the other MEMBERS of UNITED are third party
beneficiaries to the representations and warranties contained in this Section 18.4.

 

18.5         Indemnification
By UNITED. 
UNITED hereby agrees to indemnify and hold harmless, ACSC and its
employees, agents and shareholders, from and against any claims, losses or
liabilities arising out of, or resulting from, the actions or omissions of
UNITED, its employees or agents with respect to the Product, from and after the
time risk of loss of ACSC’s Product transfers.

 

11

 

18.6         Conformance
with Articles and Bylaws.  ACSC accepts and agrees to conform to and
abide by the provisions of the Articles of Incorporation and Bylaws of UNITED
and all amendments thereto during the Term of this Agreement.

 

18.7         Non-Waiver
of Rights.  ACSC
agrees that UNITED shall have all rights and remedies provided by law and in
the Bylaws of UNITED in the event of a breach or threatened breach by ACSC of
this Agreement.

 

19.           Marketing
Allotments and Allocations.

 

19.1         Allocation
is Property of ACSC.  In the event Allotments and Allocations are
implemented pursuant to the Allotment Statute, any Allocation attributable to
ACSC shall be the property of ACSC.

 

19.2          Excess Product.

 

19.2.1      Excess Product of ACSC shall not be included in the Primary
Pool, but will be marketed as follows:

 

19.2.1.1        By UNITED in the
succeeding year’s Primary Pool, subject to the limit of ACSC’s Allocation for
that succeeding year. Any such Excess Product shall be stored and otherwise
handled at the expense of ACSC, although UNITED may provide storage and
handling services. In the event ACSC has Excess Product that is being stored by
UNITED, any direct costs incurred as a result of such storage shall be charged
to ACSC and shall not be shared by other participants in the Primary Pool.

 

19.2.1.2        By ACSC, to a non-Member
processor or to another MEMBER, but not to a domestic user or consumer of sugar
for human consumption; provided, however, that UNITED shall be reimbursed for
all direct costs relating to the storage or handling of any such Product by
UNITED;

 

19.2.1.3        In the alternative, ACSC
and UNITED may mutually agree that Excess Product shall be marketed by UNITED
as part of a Separate Pool that is created for ACSC. If UNITED markets the
Excess Product, ACSC may elect to have the Excess Product marketed by UNITED in
the current year (in the export market or other markets that do not violate the
Allotment Statute) or carried over by UNITED to the next Fiscal Year.

 

19.2.2      In the event ACSC has Product in excess of its Allocation
that is being stored by UNITED, any additional incremental costs incurred as a
result of such storage shall be charged to ACSC as part of the operation of the

 

12

 

separate pool and shall not be shared by
other participants in the Primary Pool.

 

19.3         Net
Selling Price When Allocations Implemented.  In the event of Allotments and Allocations,
Net Selling Price of the Primary Pool and net selling price of the Separate
Pool shall be determined in a manner consistent with the provisions of Section 7
of this Agreement; provided that (i) in the case of the Primary Pool, Net
Selling Price shall be based upon the volume of ACSC’s actual production that
is not in excess of ACSC’s Allocation, and (ii) in the case of a Separate
Pool, net selling price shall be based upon the volume of ACSC’s Product that
is in the Separate Pool.  Purchased Sugar
shall be included in the Pro Rata Share (subject to adjustment pursuant to Section 7.3)
and included in the Primary Pool, but the sum of ACSC’s actual production and
the quantity of Purchased Sugar shall not exceed the Allocation of ACSC.

 

20.           Force
Majeure.

 

20.1         Notification
and Efforts to Minimize.  Neither UNITED nor ACSC shall be liable to
the other for failure to perform any part of this Agreement if such failure
results from the occurrence of an event of Force Majeure, provided that the
party affected by the event (i) notifies the other party of such event
promptly upon learning of the occurrence of the event, such Notice (as
hereinafter defined) to include the anticipated effect of such event on the
performance of such party under this Agreement and (ii) uses its best
efforts to minimize delays and/or non-performance caused by such event.

 

20.2         Release
from Liability. 
Each party shall be completely released from all liability to the other
arising as a consequence of any excused performance caused by an event of Force
Majeure, including, but not limited to, all claims for incidental, special or
consequential damages.

 

21.           Dispute
Resolution.

 

21.1         Agreement
to Arbitrate. 
Any dispute, controversy or claim arising out of or relating to this
Agreement that cannot be resolved amicably between the parties shall be finally
resolved by arbitration in Chicago, Illinois, or such other location as may be
mutually agreed upon, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the “AAA”); provided, however, that the
plaintiff in any claim for damages exceeding $10,000,000 may seek judicial
resolution in any court of competent jurisdiction and shall not be subject to
this Section.  Any arbitration shall be
held before a panel of three (3) arbitrators mutually agreed to between
the parties, one of whom shall be familiar with the sugar industry.  If the parties are unable to agree upon the
selection and appointment of arbitrators within thirty (30) days of a written
demand for arbitration, then arbitrators shall be appointed by the AAA pursuant
to its Commercial Arbitration Rules.

 

21.2         Discovery.  In connection with any such arbitration, the
parties further agree to participate in the exchange of information and
documentation through discovery pursuant to the rules established by the
arbitrators.

 

21.3         Authority
of Arbitrators. 
The arbitrators shall have full authority to render any form of legal or
equitable relief to address the parties’ dispute, including an award of
monetary

 

13

 

damages and/or injunctive relief; provided,
however, that in no event shall the arbitrators have the power to include any
element of punitive or exemplary damages in the arbitration award.  Judgment upon any award for any legal or
equitable relief so rendered by the arbitrators shall be considered final and
binding and may be entered in any state or federal court of competent
jurisdiction.

 

22.           Complete
Agreement.  The parties
agree that this Agreement constitutes the complete agreement of the parties
with respect to the subject matter hereto and there are no oral or other
conditions, promises, representations or inducements in addition to oral
variance with any of the terms hereof, and that this contract represents the
voluntary and clear understanding of both parties fully and completely.  Any prior marketing agreements and any
amendments thereto between UNITED and ACSC are superseded by this Agreement.

 

23.           Assignment.  Neither ACSC nor UNITED may assign this
Agreement without prior written consent of the other party to this Agreement.

 

24.           Waiver
of Breach.  No waiver of a
breach of any of the agreements or provisions contained in this Agreement shall
be construed to be a waiver of any subsequent breach of the same or of any
other provision of this Agreement.

 

25.           Notices.  Whenever notice is required by the terms
hereof, it shall be given in writing by delivery or by certified or registered
mail addressed to the other party at the following address or such other
address as a party shall designate by appropriate notice:

 

	
  If to UNITED:

  
	
   

  
	
  UNITED SUGARS CORPORATION

  
	
  7401 Metro Boulevard, Suite 350

  
	
  Edina, MN 
  55439

  
	
  Attn: 
  President

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  Timothy J. Pabst, Esq.

  
	
  Leonard, Street and Deinard, Professional
  Association

  
	
  150 South Fifth Street, Suite 2300

  
	
  Minneapolis, MN  55402

  
	
   

  
	
  If to ACSC:

  
	
   

  
	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
  101 North Third Street

  
	
  Moorhead, MN  56560

  
	
  Attn: 
  CEO

  

 

If notice is given by mail, it will be effective two (2) days
after mailing.

 

14

 

26.           Construction
of Terms of Agreement; Modification.  The language in all parts of this Agreement
shall be constructed as a whole according to its fair meaning and not strictly
for or against any party hereto. 
Headings in this Agreement are for convenience only and are not
construed as a part of this Agreement or in any defining, limiting or
amplifying the provisions hereof.  This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and shall not be modified in any manner except by an
instrument in writing executed by the parties hereto.  In the event any term, covenant, or condition
herein contained is held to be invalid or void by any court of competent
jurisdiction, the invalidity of any such term, covenant or condition shall in
no way affect any other term, covenant or condition herein contained.

 

27.           Successors
and Assigns.  Subject to
the other provisions of this Agreement, all of the terms, covenants and
conditions of this Agreement shall inure to the benefit of and shall bind the
parties hereto and their successors and assigns.

 

[Signatures
follow on the next page]

 

15

 

IN WITNESS WHEREOF, UNITED and ACSC have executed this Agreement
effective the day and year first above written.

 

	
  UNITED SUGARS CORPORATION

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  
	
  By:

  	
  /s/ John R. Doxie

  	
   

  	
  By:

  	
  /s/ David Berg

  
	
  Its:

  	
  President

  	
   

  	
  Its:

  	
  President

  

 

16

 

Schedule A

{Section 10.1}

 

Specifications for Products

(Attached)

 

17

 

Schedule B

{Section 10.1}

 

Quality Assurance Policy

 

PURPOSE:

 

The purpose of the Quality Assurance function at UNITED is to provide
guidance and direction to operational groups in the development, implementation
and maintenance of Quality Systems.  Quality
Systems are those systems designed to assure products and services of the
Member companies meet the expectations of the targeted customer segments.

 

The Quality Assurance group will accomplish this through development,
implementation and audit of systems and standards that will be developed and
implemented that define customer expectations as well as documenting the
performance of the Member companies against those standards.

 

STRATEGY:

 

The vehicle through which the above will be accomplished will be a
system of documented policies and procedures defining the activities that will
occur within each of the operational groups providing product for sale.

 

The basis for those policies and procedures will be a combination of
FDA requirements as well as standards communicated by UNITED’s primary customer
segments.

 

Policies and procedures that will be defined, include but are not
limited to:

 

Product Safety/Regulatory (FDA):

 

·                  Good
Manufacturing Practices (21 CFR Part 110 of the Food Drug and Cosmetic
Act).

 

·                  HACCP
(Hazards Analysis and Critical Control Points)

 

(The two systems noted above are made up of a
number of audit and process management activities designed to assure the safety
of the product that is produced, stored and distributed by internal facilities
as well as outside agents of the company [i.e. copack facilities, facilities
that produce and ship product under agreement with UNITED and Outside
Distribution Facilities/Public Warehouses]).

 

Product Quality/Functionality

 

·                  Product
Standards for each product sold and distributed through UNITED will be
defined.  Standards (for product as
shipped) will typically be defined by any or all of the following:

 

18

 

·                  Flavor/Odor

·                  Color

·                  Moisture

·                  Ash

·                  Sediment

·                  Visible Specks

·                  Floc

·                  Invert

·                  Specific Rotation

·                  Granulation

·                  Density

·                  Flowability

·                  Pesticides/heavy metals

·                  Specific trace element analysis

As defined by the customer segment
(i.e.bottling and National Formulary)

·                  Microbiology standards

 

·                                          Process
Control Systems/Documentation

 

Process Control
Systems are those control systems by which each producing facility manages
their process to produce product which meet the approved product standards as
shipped.

 

Each Member
facility will document, through a Standard Operating Procedures format, the
methods utilized to assure processes are operated in a consistent controllable
manner.

 

19

 

Schedule C

{Section 16.1}

 

Storage Reimbursement Guidelines - 

Parameters for Including Sugar Juice Tank
Assets and Raw Cane Sugar Storage Assets as an Expense of the Primary Pool

 

A MEMBER shall be reimbursed out of the Primary Pool for its storage
costs of thick juice or standard liquor (collectively referred to as “sugar
juice”) from beets or raw cane sugar refinery feedstock only if, in the
judgment of UNITED, there is a benefit to the Primary Pool.  The assets costs associated with the storage
of sugar juice in tanks and the storage of raw cane sugar refinery feedstock
will be an expense of the Primary Pool when the use/increased use of these
assets at UNITED’s request will lower the overall costs to the Primary
Pool.  Generally, this would happen anytime
UNITED forces increased use of these sugar juice tanks or raw cane sugar
refinery feedstock storage over and above what is already incorporated into the
MEMBER’S annual plant production schedule for that campaign.

 

In the event UNITED requests the use/increased use of assets for the
storage of sugar juice in tanks or the storage of raw cane sugar refinery
feedstock, the Primary Pool shall pay the MEMBER’S asset costs as follows:

 

The storage rate charged by the MEMBER for
the use of sugar juice tanks or raw cane refinery feedstock storage shall be
calculated based upon the percentage of storage utilized by UNITED multiplied
by the MEMBER’S average cost of all sugar juice tanks or raw cane sugar
refinery feedstock storage that are routinely utilized by the MEMBER for
storage of sugar juice or raw cane sugar refinery feedstock.  The storage costs charged by the MEMBER shall
begin the day UNITED requests the MEMBER to start utilizing sugar juice or raw
cane sugar refinery feedstock storage. 
The MEMBER shall be reimbursed for incremental refining costs that
directly result from the reimbursable storage covered by Schedule C.

 

Average costs shall be determined by summing the total of depreciation,
asset costs, property insurance and taxes related to all tanks/buildings
routinely utilized by the MEMBER for storage of sugar juice or raw cane sugar
refinery feedstock.  (All depreciation
and net book values used for calculating asset use fees are based on the
applicable UNITED depreciation guidelines.) 
These total costs are then averaged over the total tank/building
capacity for those applicable tanks/buildings. 
The percent utilization is determined by calculating what percent of the
total tank/building capacity is being utilized each day.  That average percent utilization calculated
for the month is then multiplied times the total per month cost of the
tanks/buildings.

 

20

 

Schedule D

{Section 18.4}

 

Should UNITED market both Transgenic Product and Non-Transgenic
Product, then for each sale of Non-Transgenic Product UNITED will record:

 

·                  the volume of Non-Transgenic Product
sold,

·                  an estimate of the Net Selling Price
for each sale of Non-Transgenic Product,

·                  an estimate of the amount by which
the Net Selling Price on the Non-Transgenic Product sale exceeds the expected
Net Selling Price on a similar sale of Transgenic Product (Non-Transgenic
Premium), and

·                  an estimate of the total amount
of  Non-Transgenic Premium Revenue
(volume of Non-Transgenic Product sales multiplied by the Estimated
Non-Transgenic Premium).

 

UNITED will summarize these sales in a format similar to the following:

 

	
   

  	
   

  	
  Non-

  Transgenic

  Sales Volume

  (cwt)

  	
   

  	
  Estimated

  NSP

  ($/cwt)

  	
   

  	
  Estimated Non-

  Transgenic

  Premium ($/cwt)

  	
   

  	
  Non-

  Transgenic

  Premium

  Revenue($)

  	
   

  
	
  Sept

  	
   

  	
  200,000

  	
   

  	
  $

  	
  26.00

  	
   

  	
  $

  	
  1.50

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Oct

  	
   

  	
  400,000

  	
   

  	
  $

  	
  26.50

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  Nov

  	
   

  	
  600,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Dec

  	
   

  	
  400,000

  	
   

  	
  $

  	
  31.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Jan

  	
   

  	
  500,000

  	
   

  	
  $

  	
  25.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Feb

  	
   

  	
  300,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Mar

  	
   

  	
  700,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,400,000

  	
   

  
	
  April

  	
   

  	
  500,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  May

  	
   

  	
  400,000

  	
   

  	
  $

  	
  27.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  1,600,000

  	
   

  
	
  June

  	
   

  	
  1,200,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  July

  	
   

  	
  700,000

  	
   

  	
  $

  	
  24.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  August

  	
   

  	
  200,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  0.25

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Annual
  Total

  	
   

  	
  6,100,000

  	
   

  	
  $

  	
  25.02

  	
   

  	
  $

  	
  1.91

  	
   

  	
  $

  	
  11,651,000

  	
   

  

 

During each Fiscal Year, United will summarize all costs associated
with segregating Non-Transgenic Product and Transgenic Product to avoid cross
contamination of the two products (Segregation Costs).  Segregation Costs may include, but are not
limited to,  the cost to clean railcars
to assure no cross contamination, the cost to isolate products in storage to
avoid cross contamination, etc.

 

21

 

Since Segregation Costs will have been accounted for in the calculation
of the Net Selling Price each year, the Non-Transgenic producer’s(s’) pro rata
share of Segregation Costs will be added to the Non-Transgenic Premium Revenue
in order to determine what percentage the resulting Non-Transgenic Premium
Revenue is of the Non-Transgenic producer’s(s’) Net Selling Price.

 

At the end of each Fiscal Year, UNITED will divide 1) the total amount
of Non-Transgenic Premium Revenue by 2) the Non-Transgenic producer’s(s’) Net
Selling Price less the total amount of the Non-Transgenic Premium Revenue.  If the total value of the Non-Transgenic
Premium Revenue is more than 5% of the Non-Transgenic producer’s(s’) Net
Selling Price, then the Non-Transgenic Premium Revenue will be distributed on a
pro rata basis to those MEMBERS who produced the Non-Transgenic Sugar.  If the total value of the Non-Transgenic
Premium Revenue is less than 5% of the Non-Transgenic producer’s(s’) Net
Selling Price, then the Non-Transgenic Premium Revenue will not be
redistributed.

 

Example 1

 

Annual sales of Non-Transgenic Product are as follows:

 

	
  Month

  	
   

  	
  Non-Transgenic

  Sales Volume

  (cwt)

  	
   

  	
  Estimated

  NSP

  ($/cwt)

  	
   

  	
  Estimated Non-

  Transgenic

  Premium

  ($/cwt)

  	
   

  	
  Non-

  Transgenic

  Premium

  Revenue ($)

  	
   

  
	
  Sept

  	
   

  	
  200,000

  	
   

  	
  $

  	
  26.00

  	
   

  	
  $

  	
  1.50

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Oct

  	
   

  	
  400,000

  	
   

  	
  $

  	
  26.50

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  400,000

  	
   

  
	
  Nov

  	
   

  	
  600,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Dec

  	
   

  	
  400,000

  	
   

  	
  $

  	
  31.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Jan

  	
   

  	
  500,000

  	
   

  	
  $

  	
  25.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  Feb

  	
   

  	
  300,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Mar

  	
   

  	
  700,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,400,000

  	
   

  
	
  April

  	
   

  	
  500,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  May

  	
   

  	
  400,000

  	
   

  	
  $

  	
  27.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  1,600,000

  	
   

  
	
  June

  	
   

  	
  1,200,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  July

  	
   

  	
  700,000

  	
   

  	
  $

  	
  24.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  August

  	
   

  	
  200,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  0.25

  	
   

  	
  $

  	
  51,000

  	
   

  
	
  Totals

  	
   

  	
  6,100,000

  	
   

  	
  $

  	
  25.02

  	
   

  	
  $

  	
  1.91

  	
   

  	
  $

  	
  11,651,000

  	
   

  

 

22

 

Member Sales Volumes by Product Type

 

	
   

  	
   

  	
  Transgenic
  Volume

  	
   

  	
  Total Annual Volume (cwts)

  Non-Transgenic Volume

  	
   

  	
  Total
  Volume

  	
   

  	
  Member’s Share of

  Total Volume

  	
   

  	
  Member’s Share of Non-

  Transgenic Volume

  	
   

  
	
  Member A

  	
   

  	
  31,000,000

  	
   

  	
  0

  	
   

  	
  31,000,000

  	
   

  	
  62.00

  	
  %

  	
  0.0000

  	
  %

  
	
  Member B

  	
   

  	
  0

  	
   

  	
  13,000,000

  	
   

  	
  13,000,000

  	
   

  	
  26.00

  	
  %

  	
  100.0000

  	
  %

  
	
  Member C

  	
   

  	
  6,000,000

  	
   

  	
  0

  	
   

  	
  6,000,000

  	
   

  	
  12.00

  	
  %

  	
  0.0000

  	
   

  
	
  Total

  	
   

  	
  37,000,000

  	
   

  	
  13,000,000

  	
   

  	
  50,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Sales of Customer-Required Non-Transgenic Sugar

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Volume (cwts)

  	
   

  	
  6,100,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimate
  Non-Transgenic Premium $(/cwt)

  	
   

  	
  $

  	
  1.91

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Transgenic
  Premium Revenue

  	
   

  	
  $

  	
  11,651,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Average
  annual NSP for all volume ($/cwt)

  	
   

  	
  $

  	
  23.23

  	
   

  	
  Premium Included in NSP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Net Selling Price (all volume times avg price)

  	
   

  	
  $

  	
  1,161,500,000

  	
   

  	
  $

  	
  11,651,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member A’s Net
  Selling Price

  	
   

  	
  $

  	
  720,130,000

  	
   

  	
  $

  	
  7,223,620

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member B’s Net
  Selling Price

  	
   

  	
  $

  	
  301,990,000

  	
   

  	
  $

  	
  3,029,260

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member C’s Net
  Selling Price

  	
   

  	
  $

  	
  139,380,000

  	
   

  	
  $

  	
  1,398,120

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual
  Segregation Costs

  	
   

  	
  $

  	
  900,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pro Rata Share of
  Segregation Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member A

  	
   

  	
  $

  	
  558,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member B

  	
   

  	
  $

  	
  234,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member C

  	
   

  	
  $

  	
  108,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Results

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Transgenic Premium Revenue % of
  Non-Transgenic Producer’s(s’) Net Selling Price

  	
   

  	
  3.9786

  	
  %

  	
   

  	
   

  	
   

  	
   

  

 

Result: 
Since the Non-Transgenic Premium Revenue is less than 5% (Example 1
result is 3.9786%) of Non-Transgenic producer’s(s’) Net Selling Price, no
separate distribution of Non-Transgenic Premium Revenue is made to Members
supplying Non-Transgenic Product to UNITED.

 

23

 

Example 2

 

Annual sales of Non-Transgenic Product are as follows:

 

	
  Month

  	
   

  	
  Non- Transgenic

  Sales Volume

  (cwt)

  	
   

  	
  Estimated

  NSP

  ($/cwt)

  	
   

  	
  Estimated Non-

  Transgenic

  Premium

  ($/cwt)

  	
   

  	
  Non-

  Transgenic

  Premium

  Revenue

  ($)

  	
   

  
	
  Sept

  	
   

  	
  200,000

  	
   

  	
  $

  	
  26.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Oct

  	
   

  	
  400,000

  	
   

  	
  $

  	
  26.50

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
  Nov

  	
   

  	
  600,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  2,400,000

  	
   

  
	
  Dec

  	
   

  	
  400,000

  	
   

  	
  $

  	
  31.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  800,000

  	
   

  
	
  Jan

  	
   

  	
  500,000

  	
   

  	
  $

  	
  25.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Feb

  	
   

  	
  300,000

  	
   

  	
  $

  	
  28.00

  	
   

  	
  $

  	
  1.00

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  Mar

  	
   

  	
  700,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  April

  	
   

  	
  500,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  May

  	
   

  	
  400,000

  	
   

  	
  $

  	
  27.00

  	
   

  	
  $

  	
  2.00

  	
   

  	
  $

  	
  800,000

  	
   

  
	
  June

  	
   

  	
  1,200,000

  	
   

  	
  $

  	
  23.00

  	
   

  	
  $

  	
  4.00

  	
   

  	
  $

  	
  4,800,000

  	
   

  
	
  July

  	
   

  	
  700,000

  	
   

  	
  $

  	
  24.00

  	
   

  	
  $

  	
  3.00

  	
   

  	
  $

  	
  2,100,000

  	
   

  
	
  August

  	
   

  	
  200,000

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  2.81

  	
   

  	
  $

  	
  563,000

  	
   

  
	
  Totals

  	
   

  	
  6,100,000

  	
   

  	
  $

  	
  25.02

  	
   

  	
  $

  	
  2.83

  	
   

  	
  $

  	
  17,263,000

  	
   

  

 

24

 

Member Sales Volumes by Product Type

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Transgenic Volume

  	
   

  	
  Total Annual Volume (cwts)

  Non-Transgenic Volume

  	
   

  	
  Total Volume

  	
   

  	
  Member’s Share of

  Total Volume

  	
   

  	
  Member’s Share of Non-

  Transgenic Volume

  	
   

  
	
  Member A

  	
   

  	
  31,000,000

  	
   

  	
  0

  	
   

  	
  31,000,000

  	
   

  	
  62.00

  	
  %

  	
  0.0000

  	
  %

  
	
  Member B

  	
   

  	
  0

  	
   

  	
  13,000,000

  	
   

  	
  13,000,000

  	
   

  	
  26.00

  	
  %

  	
  100.0000

  	
  %

  
	
  Member C

  	
   

  	
  6,000,000

  	
   

  	
  0

  	
   

  	
  6,000,000

  	
   

  	
  12.00

  	
  %

  	
  0.0000

  	
  %

  
	
  Total

  	
   

  	
  37,000,000

  	
   

  	
  13,000,000

  	
   

  	
  50,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Sales of Customer-Required Non-Transgenic
  Sugar

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Volume (cwts)

  	
   

  	
  6,100,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Estimate Non-Transgenic Premium ($/cwt)

  	
   

  	
  $

  	
  2.83

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Transgenic Premium Revenue

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Average annual NSP for all volume ($/cwt)

  	
   

  	
  $

  	
  23.23

  	
   

  	
  Premium
  Included in NSP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Net Selling Price (all volume times avg
  price)

  	
   

  	
  $

  	
  1,161,500,000

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member A’s Net Selling Price

  	
   

  	
  $

  	
  720,130,000

  	
   

  	
  $

  	
  10,703,060

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member B’s Net Selling Price

  	
   

  	
  $

  	
  301,990,000

  	
   

  	
  $

  	
  4,488,380

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member C’s Net Selling Price

  	
   

  	
  $

  	
  139,380,000

  	
   

  	
  $

  	
  2,071,560

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual Segregation Costs

  	
   

  	
  $

  	
  900,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pro Rata Share of Segregation Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member A

  	
   

  	
  $

  	
  558,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member B

  	
   

  	
  $

  	
  234,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Member C

  	
   

  	
  $

  	
  108,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Results

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Non-Transgenic Premium Revenue %
  of Non-Transgenic Producer(s)’ Net Selling Price

  	
   

  	
  5.8859

  	
  %

  	
   

  	
   

  	
   

  	
   

  

 

Example 2 Result: Since Non-Transgenic Premium
Revenue is more than 5% (Example 2 result is 5.8859%) of Non-Transgenic
producer’s(s’) Net Selling Price, the Non-Transgenic Premium Revenue ($17.263
million in this example) is distributed pro rata to MEMBERS supplying
Non-Transgenic Product to UNITED as follows:

 

If, and
only if, Non-Transgenic Premium is > 5% of Non Transgenic Producer(s)’ NSP,
then total Net Selling Price is redistributed as follows:

 

	
   

  	
   

  	
  New Redistributed

  Share of NT Prem

  	
   

  	
  Share of NT

  Premium

  Revenue

  already in NSP

  	
   

  	
  NT Prem returned

  to NT Producer(s)

  	
   

  	
  NT Prem to be

  added to NSP

  	
   

  	
  Return of share of

  Segregation Costs

  	
   

  	
  Added share

  of Segregation

  Costs

  	
   

  	
  NSP Before

  Adjustment

  	
   

  	
  New adjusted

  NSP

  	
   

  	
  New NSP

  per cwt

  	
   

  	
   

  	
   

  
	
  Member A

  	
   

  	
  $

  	
  0

  	
   

  	
  10,703,060

  	
   

  	
  $

  	
  -10,703,060

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  -196,054

  	
   

  	
  $

  	
  720,130,000

  	
   

  	
  709,230,886

  	
   

  	
  $

  	
  22.88

  	
   

  	
  Member A

  	
   

  
	
  Member B

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
  4,488,380

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  12,774,620

  	
   

  	
  $

  	
  234,000

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  301,990,000

  	
   

  	
  314,998,620

  	
   

  	
  $

  	
  24.23

  	
   

  	
  Member B

  	
   

  
	
  Member C

  	
   

  	
  $

  	
  0

  	
   

  	
  2,071,560

  	
   

  	
  $

  	
  -2,071,560

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  -37,946

  	
   

  	
  $

  	
  139,380,000

  	
   

  	
  137,270,494

  	
   

  	
  $

  	
  22.88

  	
   

  	
  Member C

  	
   

  
	
  Total

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
  17,263,000

  	
   

  	
  $

  	
  -12,774,620

  	
   

  	
  $

  	
  12,774,620

  	
   

  	
  $

  	
  234,000

  	
   

  	
  $

  	
  -234,000

  	
   

  	
  $

  	
  1,161,500,000

  	
   

  	
  1,161,500,000

  	
   

  	
  $

  	
  23.23

  	
   

  	
   

  	
   

  

 

25

 

Example
2 Values

 

Assumptions

 

	
   

  	
   

  	
   

  	
   

  	
  Transgenic Volume

  	
   

  	
  Total Annual Volume (cwts)

  Non-Transgenic Volume

  	
   

  	
  Total Annual

  Volume (cwts)

  	
   

  	
  Member’s Share of Total

  Volume

  	
   

  	
  Member’s Share of

  Non-Transgenic Volume

  	
   

  
	
  A

  	
   

  	
  Member Sales Volumes by Product Type

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A

  	
   

  	
  31,000,000

  	
   

  	
  0

  	
   

  	
  31,000,000

  	
   

  	
  62.00

  	
  %

  	
  0.0000

  	
  %

  
	
   

  	
   

  	
  Member B

  	
   

  	
  0

  	
   

  	
  13,000,000

  	
   

  	
  13,000,000

  	
   

  	
  26.00

  	
  %

  	
  100.0000

  	
  %

  
	
   

  	
   

  	
  Member C

  	
   

  	
  6,000,000

  	
   

  	
  0

  	
   

  	
  6,000,000

  	
   

  	
  12.00

  	
  %

  	
  0.0000

  	
  %

  
	
   

  	
   

  	
  Total

  	
   

  	
  37,000,000

  	
   

  	
  13,000,000

  	
   

  	
  50,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  Annual Sales of Customer-Required Non-Transgenic
  Sugar

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annual Volume (cwts)

  	
   

  	
  6,100,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Estimate Non-Transgenic Premium ($/cwt)

  	
   

  	
  $

  	
  2.83

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Non-Transgenic Premium Revenue

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  Average annual NSP for all volume ($/cwt)

  	
   

  	
  $

  	
  23.23

  	
   

  	
  Premium
  Included in NSP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annual Net Selling Price (all volume times avg
  price)

  	
   

  	
  $

  	
  1,161,500,000

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A’s Net Selling Price

  	
   

  	
  $

  	
  720,130,000

  	
   

  	
  $

  	
  10,703,060

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member B’s Net Selling Price

  	
   

  	
  $

  	
  301,990,000

  	
   

  	
  $

  	
  4,488,380

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member C’s Net Selling Price

  	
   

  	
  $

  	
  139,380,000

  	
   

  	
  $

  	
  2,071,560

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  Annual Segregation Costs

  	
   

  	
  $

  	
  900,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pro Rata Share of Segregation Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A

  	
   

  	
  $

  	
  558,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member B

  	
   

  	
  $

  	
  234,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member C

  	
   

  	
  $

  	
  108,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Results

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Non-Transgenic Premium Revenue %
  of Non-Transgenic Producer(s)’ Net Selling Price

  	
   

  	
  5.8859

  	
  %

  	
   

  	
   

  	
   

  	
   

  

 

If, and only if, Non-Transgenic Premium is > 5% of Non
Transgenic Producer(s)’ NSP, then total Net Selling Price is redistributed as
follows:

 

	
   

  	
   

  	
  New Redistributed

  Share of NT Prem

  	
   

  	
  Share of NT Premium

  Revenue already in NSP

  	
   

  	
  NT Prem returned

  to NT Producer(s)

  	
   

  	
  NT Prem to be

  added to NSP

  	
   

  	
  Return of share of

  Segregation Costs

  	
   

  	
  Added share

  of Segregation

  Costs

  	
   

  	
  NSP Before

  Adjustment

  	
   

  	
  New adjusted

  NSP

  	
   

  	
  New NSP

  per cwt

  	
   

  	
   

  	
   

  
	
  Member A

  	
   

  	
  $

  	
  0

  	
   

  	
  10,703,060

  	
   

  	
  $

  	
  -10,703,060

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  -196,054

  	
   

  	
  $

  	
  720,130,000

  	
   

  	
  709,230,886

  	
   

  	
  $

  	
  22.88

  	
   

  	
  Member A

  	
   

  
	
  Member B

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
  4,488,380

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  12,774,620

  	
   

  	
  $

  	
  234,000

  	
   

  	
  $

  	
  0

  	
   

  	
  $301,990,000

  	
   

  	
  314,998,620

  	
   

  	
  $

  	
  24.23

  	
   

  	
  Member B

  	
   

  
	
  Member C

  	
   

  	
  $

  	
  0

  	
   

  	
  2,071,560

  	
   

  	
  $

  	
  -2,071,560

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  -37,946

  	
   

  	
  $139,380,000

  	
   

  	
  137,270,494

  	
   

  	
  $

  	
  22.88

  	
   

  	
  Member C

  	
   

  
	
  Total

  	
   

  	
  $

  	
  17,263,000

  	
   

  	
  17,263,000

  	
   

  	
  $

  	
  -12,774,620

  	
   

  	
  $

  	
  12,774,620

  	
   

  	
  $

  	
  234,000

  	
   

  	
  $

  	
  -234,000

  	
   

  	
  $1,161,500,000

  	
   

  	
  1,161,500,000

  	
   

  	
  $

  	
  23.23

  	
   

  	
   

  	
   

  
																													

 

26

Schedule D of the Member
Marketing Agreement

Variables
are in blue

 

Examples
1 and 2 - Formulas

 

	
  Assumptions

  	
   

  	
  Member Sales Volumes by Product Type

  	
   

  	
  Transgenic Volume

  	
   

  	
  Totoal Annual Volume (cwts)

  Non-Transgenic Volume

  	
   

  	
  Total Volume

  	
   

  	
  Member’s Share of Total

  Volume

  	
   

  	
  Member’s Share of

  Non-Transgenic

  	
   

  
	
  A

  	
   

  	
  Member Sales Volumes by Product Type

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A

  	
   

  	
  31000000

  	
   

  	
  0

  	
   

  	
  =SUM(D10:E10)

  	
   

  	
  =SUM(F10/F13)

  	
   

  	
  =SUM(E10/E13)

  	
   

  
	
   

  	
   

  	
  Member B

  	
   

  	
  0

  	
   

  	
  13000000

  	
   

  	
  =SUM(D11:E11)

  	
   

  	
  =SUM(F11/F13)

  	
   

  	
  =SUM(E11/E13)

  	
   

  
	
   

  	
   

  	
  Member C

  	
   

  	
  6000000

  	
   

  	
  0

  	
   

  	
  =SUM(D12:E12)

  	
   

  	
  =SUM(F12/F13)

  	
   

  	
  =SUM(E12/E13)

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  =SUM(D10:D12)

  	
   

  	
  =SUM(E10:E12)

  	
   

  	
  =SUM(F10:F12)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  Annual Sales of Customer-Required Non-Transgenic
  Sugar

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =IF(H10>0,100%,0)

  	
   

  
	
   

  	
   

  	
  Annual Volume (cwts)

  	
   

  	
  6100000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =IF(H11>0,100%,0)

  	
   

  
	
   

  	
   

  	
  Estimate Non-Transgenic Premium ($/cwt)

  	
   

  	
  2.83

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  =IF(H12>0,100%,0)

  	
   

  
	
   

  	
   

  	
  Non-Transgenic Premium Revenue

  	
   

  	
  =SUM(D16*D17)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C

  	
   

  	
  Average annual NSP for all volume ($/cwt)

  	
   

  	
  $

  	
  23.23

  	
   

  	
  Premium
  Included in NSP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annual Net Selling Price (all volume times avg
  price)

  	
   

  	
  =SUM(F13*D20)

  	
   

  	
  =D18

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A’s Net Selling Price

  	
   

  	
  =SUM(F10*D20)

  	
   

  	
  =SUM(G10*D18)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member B’s Net Selling Price

  	
   

  	
  =SUM(F11*D20)

  	
   

  	
  =SUM(G11*D18)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member C’s Net Selling Price

  	
   

  	
  =SUM(F12*D20)

  	
   

  	
  =SUM(G12*D18)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D

  	
   

  	
  Annual Segregation Costs

  	
   

  	
  900000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pro Rata Share of Segregation Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member A

  	
   

  	
  =SUM((F10/F13)*D26)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member B

  	
   

  	
  =SUM((F11/F13)*D26)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member C

  	
   

  	
  =SUM((F12/F13)*D26)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Results

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Non-Transgenic Premium Revenue% of
  Non-Transgenic Producer(s)’ Net Selling Price

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  =SUM(D18+((H15*D28)+(H16*D29)+(H17*D30)))/(((H15*D22)+(H16*D23)+(H17*D24))-((H15*E22)+(H16*E23)+(H17*E24))-((H15*D28)+(H16*D29)+(H17*D30)))

  	
   

  	
   

  	
   

  
															

 

If, and only if, Non-Transgenic Premium is > 5% of Non
Transgenic Producer(s)’ NSP, then total Net Selling Price is redistributed as
follows:

 

	
   

  	
   

  	
  New Redistributed

  Share of NT Prem

  	
   

  	
  Share of NT
  Premium

  Revenue already in NSP

  	
   

  	
  NT Prem returned

  to NT Producer(s)

  	
   

  	
  NT Prem to be
  added to

  NSP

  	
   

  	
  Return of share of

  Segregation Costs

  	
   

  	
  Added share
  of Segregation Costs

  	
   

  	
  NSP Before

  Adjustment

  	
   

  	
  New adjusted

  NSP

  	
   

  	
  New NSP

  per cwt

  	
   

  	
   

  	
   

  
	
  Member A

  	
   

  	
  =SUM(H10*D18)

  	
   

  	
  =SUM(G10*D18)

  	
   

  	
  =IF(D40=0,-E40,0)

  	
   

  	
  =IF(E40+F40=0,0,D40-E40)

  	
   

  	
  =IF(H10=0,0,D28)

  	
   

  	
  =IF(H40=0,-SUM((H41+H42)*(D10/D13)),0

  	
   

  	
  =D22

  	
   

  	
  =SUM(F40:J40)

  	
   

  	
  =SUM(K40/F10)

  	
   

  	
  Member A

  	
   

  
	
  Member B

  	
   

  	
  =SUM(H11*D18)

  	
   

  	
  =SUM(G11*D18)

  	
   

  	
  =IF(D41=0,-E41,0)

  	
   

  	
  =IF(E41+F41=0,0,D41-E41)

  	
   

  	
  =IF(H11=0,0,D29)

  	
   

  	
  =IF(H41=0,-SUM((H40+H42)*(D11/D13)),0

  	
   

  	
  =D23

  	
   

  	
  =SUM(F41:J41)

  	
   

  	
  =SUM(K41/F11)

  	
   

  	
  Member B

  	
   

  
	
  Member C

  	
   

  	
  =SUM(H12*D18)

  	
   

  	
  =SUM(G12*D18)

  	
   

  	
  =IF(D42=0,-E42,0)

  	
   

  	
  =IF(E42+F42=0,0,D42-E42)

  	
   

  	
  =IF(H12=0,0,D30)

  	
   

  	
  =IF(H42=0,-SUM((H40+H41)*(D12/D13)),0

  	
   

  	
  =D24

  	
   

  	
  =SUM(F42:J42)

  	
   

  	
  =SUM(K42/F12)

  	
   

  	
  Member C

  	
   

  
	
  Total

  	
   

  	
  =SUM(D40:D42)

  	
   

  	
  =SUM(E40:E42)

  	
   

  	
  =SUM(F40:F42)

  	
   

  	
  =SUM(G40:G42)

  	
   

  	
  =SUM(H40:H42)

  	
   

  	
  =SUM(I40:I42)

  	
   

  	
  =SUM(J40:J42)

  	
   

  	
  =SUM(K40:K42)

  	
   

  	
  =SUM(K43/F13)

  	
   

  	
   

  	
   

  

 

27Exhibit 10.23

 

FIFTH AMENDMENT

TO AMENDED AND RESTATED LOAN
AGREEMENT

 

This Fifth Amendment to Amended and Restated Loan
Agreement (“Amendment”) is made as of July 23,
2008, by and among AMERICAN CRYSTAL SUGAR COMPANY, a  Minnesota
cooperative corporation (together with its successors and assigns, the “Borrower”), and COBANK, ACB, an agricultural credit bank (“Lender”).

 

RECITAL

 

This Amendment is made with respect to the Amended and
Restated Loan Agreement made as of the 31st day of July, 2006 (as
amended, modified, supplemented, renewed or restated from time to time, the “Agreement”). 
Capitalized terms that are not defined in this Amendment shall have the
meanings assigned to them in the Agreement. 
The Borrower and the Lender desire to amend certain provisions of the
Agreement as more fully set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and
of the terms and conditions contained in this Amendment, and of any loans or
extensions of credit or other financial accommodations heretofore, now or
hereafter made to or for the benefit of Borrower, the parties agree as follows:

 

1.             Defined
Terms.

 

The following terms set forth in Section 1.1
of the Agreement shall be amended and restated in their entirety as follows:

 

“Commitments”: The Revolving Loan and the Term
Loans.

 

“Loans”: 
The Revolving Loan (sometimes referred to informally by the parties as
T07), Term Loan T01, Term Loan T01NP, Existing Term Loan T03NP, Term Loan T04,
or Term Loan T06 (collectively referred to as the “Loans”).

 

“Loan Documents”:  This Agreement, the Notes, agreements
evidencing the Existing Term Loan T03NP, and the Security Documents.

 

“Note”: 
The Revolving Note, Term Note T01, Term Note T01NP, Term Note T04, Term
Note T06, or any notes evidencing Existing Term Note T03NP (collectively
referred to as the “Notes”).

 

“Revolving Loan Amount”:  An amount which shall not at any time be
greater than Three Hundred Forty Five Million Dollars ($345,000,000), as
determined from time to time according to the terms of the Loan Agreement, or
such lesser amount that may be designated by the Borrower in a written notice
to the Lender, which lesser amount will be effective seven (7) days after
the Lender’s receipt of such written notice.

 

 

“Term Letter of Credit”:  Any Term T06 Letter of Credit or any Term T04
Letter of Credit (collectively referred to as the “Term Letters of Credit”).

 

“Term Loan”: 
The Term Loan T01, Term Loan T01NP, Existing Term Loan T03NP, Term Loan
T04, or Term Loan T06 (collectively, the “Term Loans”).

 

“Term Loan T01 Amount”:  An amount which shall not at any time be
greater than (i) Forty-Eight Million Seven Hundred Seven Thousand Four
Hundred Two Dollars ($48,707,402) through December 30, 2008, (ii) Forty-One
Million Nine Hundred Fifty-Two Thousand Six Hundred Two Dollars ($41,952,602)
from December 31, 2008 through December 30, 2009, provided that,
if Borrower makes the scheduled principal payments referenced in Section 2.7(b),
such Term Loan T01 Amount shall be increased to Forty-Eight Million Seven
Hundred Seven Thousand Four Hundred Two Dollars ($48,707,402) for the period
from December 31, 2008 through December 30, 2009, (iii) Thirty-One
Million Seven Hundred Seven Thousand Four Hundred Two Dollars ($31,707,402) for
the period from December 31, 2009 through December 30, 2010, (iv) Fifteen
Million Eight Hundred Fifty Three Thousand Seven Hundred One Dollars ($15,853,701)
for the period from December 31, 2010 through December 30, 2011, and (iv) Zero
Dollars ($0) at December 31, 2011.

 

“Term Loan T06 Amount”:  An amount which shall not at any time be
greater than Sixty-Five Million Dollars ($65,000,000), as determined from time
to time according to the terms of the Loan Agreement.

 

“Termination Date”:  The earliest of (a) August 1, 2010,
or (b) the date on which the Revolving Commitments are terminated pursuant
to Section 7.2 of the Loan Agreement, provided however, the “Termination
Date” with respect to Term Loan T04 shall be the Term Loan T04 Maturity Date,
unless earlier terminated pursuant to Section 7.2 of the Loan
Agreement.

 

“Term Loan
Availability Period”:  The period
beginning on the Closing Date and ending on August 1, 2010.

 

“Term Loan Maturity
Date”:  December 31, 2011, provided
however, the “Term Loan Maturity Date” with respect to Term Loan T04 shall
be the Term Loan T04 Maturity Date; and provided however, the “Term Loan
Maturity Date” with respect to Term Loan T01NP shall be the Term Loan T01NP
Maturity Date.

 

“Total Revolving
Outstandings”:  As of any date of
determination, the sum of (a) the aggregate unpaid principal balance of
the Revolving Loan outstanding on such date, (b) the aggregate maximum
amount available to be drawn under Seasonal Letters of Credit outstanding on
such date, and (c) the aggregate amount of Unpaid Drawings related to a
Seasonal Letter of Credit on such date.

 

“Total Term
Outstandings”:  As of any date of
determination, the sum of (a) the 

 

2

 

aggregate unpaid
principal balance of Term Loan T01, (b) the aggregate unpaid principal
balance of Term Loan T01NP, (c) the aggregate unpaid principal balance of Existing
Term Loan T03NP, (d) the aggregate unpaid principal balance of Term Loan
T04, (e) the aggregate unpaid principal balance of Term Loan T06, and (f) the
aggregate amount of Unpaid Drawings related to a Term Letter of Credit on such
date.

 

                “Unused Term Loan Amount”:  As of any date of determination, the amount
by which the Term Loan T01 Amount, plus the Term Loan T01NP Amount, plus the Existing
Term Loan T03NP Amount, plus the Term Loan T04 Amount, plus the Term Loan T06
exceeds the Total Term Outstandings.

 

The following terms set
forth in Section 1.1 of the Agreement shall be hereby deleted in
their entirety:

 

“Existing Loans”

 

“Existing Term
Loan T04”

 

“Term Letter of
Credit Commitment Amount”

 

Any remaining reference
in the Agreement made to “Existing Loans” shall be deemed to read “Existing
Term Loan T03NP.”

 

The following terms shall
be added to Section 1.1 of the Agreement:

 

“Term Loan
T01NP Termination Date”:  December 31,
2008.

 

“Term T04
Letter of Credit”:  As defined in Section 2.1(e).

 

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

 

“Term T06 Letter
of Credit Commitment Amount”:  
Twenty Million Dollars ($20,000,000).

 

“Term Loan T04”:  As defined in Section 2.1(e).

 

“Term Loan T04
Amount”:  An amount which shall not
at any time be greater than Sixty One Million Dollars ($61,000,000), as
determined from time to time according to the terms of the Loan Agreement.

 

“Term Loan T04
Termination Date”:  April 30,
2013.

 

2.             Reference to “Term Loan T01 Availability Period” as it
appears in Section 2.1(b) shall be deleted and replaced with
the term “Term Loan Availability Period”.

 

3

 

3.             Reference to “Term Loan T01NP Availability Period” as it
appears in Section 2.1(c) shall be deleted (there being no
remaining availability under Term Loan T01NP).

 

4.             Reference to “Term Loan T06 Availability Period” as it
appears in Section 2.1(d) shall be deleted and replaced with
the term “Term Loan Availability Period”.

 

5.             Section 2.1(e) of the Loan Agreement, Lending
Commitments; Term Loan T04, shall be amended and restated to read in
full as follows:

 

(e)  Term
Loan T04.  Subject to the terms and
conditions hereof, the Lender agrees to make a non-revolving term facility
available to Borrower, jointly and severally, for the purpose of issuing
irrevocable letters of credit for the account of Borrower (each a “Term T04
Letter of Credit”), to issue Term T04 Letters of Credit which replace any
existing letters of credit previously issued under Term T04, to replace any
Term T04 Letters of Credit which are terminated with new Term T04 Letters of
Credit, and for no other purpose, provided that, the aggregate maximum amount
that is capable of being drawn under all outstanding Term T04 Letters of Credit
shall not at any time exceed the Term T04 Amount.  All Term T04 Letters of Credit shall be issued
pursuant to the terms of this Agreement and shall reduce the Term Loan T04
Amount by the maximum amount capable of being drawn under such Term T04 Letters
of Credit.  In the event of any
termination of any Term T04 Letters of Credit, the Term Loan T04 Amount shall
be restored by the maximum amount that was capable of being drawn under such
terminated Term T04 Letters of Credit.  Any
draw under a Term Loan T04 Letter of Credit shall be deemed a Term Loan Advance
pursuant to the terms of this Agreement. 
All Advances made under this Term Loan T04 shall be Base Rate Advances.

 

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

 

(b) Term
Loan T01.  The unpaid principal of
Term Loan T01 shall be payable as follows: 
On December 31, 2008, a principal payment shall be due in an amount
equal to Six Million Seven Hundred Fifty Four Thousand Eight Hundred Dollars
($6,754,000); on December 31, 2009, a principal payment shall be due in an
amount equal to Seventeen Million Dollars ($17,000,000); on December 31,
2010 a principal payment shall be due in an amount equal to one-half (1/2) of
the outstanding principal balance of Term Loan T01 as of the last day of the
Term Loan Availability Period, and any amount of principal or interest
remaining unpaid with respect to Term Loan T01 on the Term Loan Maturity Date
shall be immediately due and payable on such date.

 

7.             Section 2.7(d) of the Loan Agreement, Repayment;
Term Loan T06, shall be amended and restated to read in full as follows:

 

(d) Term
Loan T06.  The unpaid principal of
Term Loan T06 shall be payable as follows: 
On December 31, 2010, a principal payment shall be due in an amount
equal to 

 

4

 

one-half (1/2) of the outstanding principal balance of Term Loan T06 as
of the last day of the Term Loan Availability Period, and any amount of
principal or interest remaining unpaid with respect to Term Loan T06 on the
Term Loan Maturity Date shall be immediately due and payable on such date.

 

8.             A new Section 2.7(e) of the Loan
Agreement, Repayment; Term Loan T04, shall be added to read in
full as follows:

 

(e) Term Loan T04.  Any Unpaid Drawing outstanding under any Term
T04 Letters of Credit as of the Term Loan T04 Maturity Date shall be
immediately due and payable on such date. 
Otherwise, any Advances made by Lender under Term T04 shall be repayable
pursuant to the terms of the Agreement (including without limitation Section 2.12)
and Term Note T04.

 

9.     Section 2.9 of the Loan
Agreement, Letters of Credit, shall be amended and restated to read in
full as follows:

 

Section 2.9 Letters
of Credit.  Upon the terms and
subject to the conditions of this Agreement, the Lender agrees to issue Letters
of Credit for the account of Borrower from time to time between the Closing
Date and thirty (30) days prior to the Termination Date in such amounts as the
Borrower shall request up to an aggregate amount at any time outstanding not
exceeding the Seasonal Letter of Credit Commitment Amount, the Term T06 Letter
of Credit Commitment Amount, or the Term Loan T04 Amount, as applicable; provided
that (i) the face amount of any Seasonal Letter of Credit shall
automatically reduce, dollar for dollar, the amount which Borrower may borrow
as Revolving Loan Advances, (ii) the face amount of any Term T06 Letter of
Credit shall automatically reduce, dollar for dollar, the amount which Borrower
may borrow as Term Loan T06 Advances; (iii) the face amount of any Term
T04 Letter of Credit shall automatically reduce, dollar for dollar, the
aggregate face amount of Letters of Credit which may be issued on behalf of
Borrower under Term Loan T04;  (iv) the
aggregate face amount of all issued and outstanding Seasonal Letters of Credit
shall not exceed $20,000,000; (v) the aggregate face amount of all issued
and outstanding Term T06 Letters of Credit shall not exceed $20,000,000; (vi) the
aggregate face amount of all issued and outstanding Term T04 Letters of Credit
shall not exceed the Term Loan T04 Amount; (vii) no Seasonal Letter of
Credit will be issued in any amount which, after giving effect to such
issuance, would cause Total Revolving Outstandings to exceed the Revolving Loan
Amount, and (viii) no Term T06 Letter of Credit will be issued in any
amount which, after giving effect to such issuance, would cause the aggregate
unpaid principal balance of Term Loan T06 and the aggregate amount of Unpaid
Drawings relating to a Term T06 Letter of Credit to exceed the Term Loan T06
Amount, and (ix) no Term T04 Letter of Credit will be issued in any amount
which, after giving effect to such issuance, would cause the aggregate unpaid
principal balance of Term Loan T04 and the aggregate amount of Unpaid Drawings
relating to a Term T04 Letter of Credit to exceed the Term Loan T04
Amount.  Each Letter of Credit request
shall set forth (i) the face amount and expiry date of such Letter of
Credit; (ii) the beneficiary of such Letter of 

 

5

 

Credit; (iii) the terms thereof; and (iv) such other
information as the Lender may request.

 

10.   Letters of Credit.  For avoidance of doubt, the parties agree
that the Letters of Credit described on Schedule 2.9, which is attached
hereto and incorporated herein by this reference, are all of the Letters of
Credit issued pursuant to the terms of the Agreement as of the date of this
Amendment.

 

11.   Annex I, Pricing Grid (setting
forth Margin Percentages and Percentages for computation of Letter of Credit
Fees and Commitment Fees), attached to the Agreement, is hereby deleted in its
entirety and replaced with Annex 1-A, which is attached hereto and
incorporated herein by this reference. 
Any reference to Annex I in the Agreement shall hereinafter be
deemed to refer to Annex I-A.

 

12.           This Amendment shall be effective as
of its date, conditioned upon (a) the execution and delivery to the Lender
of this Amendment, executed by the Borrower and executed by a “majority of
affected participants” (as such phrase is defined in the participation agreements
between Lender and the Participants); (b) the payment of the amendment
administration fee and the arrangement fee payable to the Lender as agreed to
between the Borrower and the Lender; and (c) an amendment fee in the
amount of $458,707.40 in consideration of this Amendment for the account of
Lender.

 

13.           This Amendment shall be an integral
part of the Agreement, and all of the terms set forth therein are hereby
incorporated in this Amendment by reference, and all terms of this Amendment are
hereby incorporated into said Agreement as if made an original part
thereof.  All of the terms and conditions
of the Agreement, which are not modified in this Amendment, shall remain in
full force and effect.  To the extent the
terms of this Amendment conflict with the terms of the Agreement, the terms of
this Amendment shall control.

 

14.           This Amendment may be executed in
several counterparts, each of which shall be construed together as one
original.  Facsimile signatures on this
Amendment shall be considered as original signatures.

 

[Signature
Page Follow]

 

6

 

IN WITNESS WHEREOF, the
parties hereto have executed this Fifth Amendment to Amended and Restated Loan
Agreement as of the day and year first herein above written.

 

	
   

  	
  AMERICAN CRYSTAL SUGAR COMPANY,

  
	
   

  	
  a  Minnesota
  cooperative corporation, as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Samuel S. M. Wai

  
	
   

  	
  Its:

  	
    Treasurer

  
	
   

  	
   

  
	
   

  	
  COBANK, ACB, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Michael Tousignant

  
	
   

  	
  Its:

  	
    Vice President

  

 

 

{SIGNATURE
PAGE ONE OF ONE TO FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT}

 

7

 

Schedule 2.9

 

Existing Letters of Credit

 

Seasonal Letters of Credit:

 

	
   

  	
   

  	
  Loan Intrnl Ref

  	
   

  	
   

  	
   

  	
  Lc Expire

  	
   

  
	
  Oblgtn No

  	
   

  	
  No

  	
   

  	
  Lc Issd Amt

  	
   

  	
  Dat

  	
   

  
	
  001937627

  	
   

  	
  00614645

  	
   

  	
  $

  	
  6,694,109.59

  	
   

  	
  07/12/09

  	
   

  
	
  001639502

  	
   

  	
  00614321

  	
   

  	
  $

  	
  477,000.00

  	
   

  	
  04/01/09

  	
   

  
	
  001973515

  	
   

  	
  00613621

  	
   

  	
  $

  	
  5,931,164.38

  	
   

  	
  04/13/09

  	
   

  
	
  001639261

  	
   

  	
  00092028

  	
   

  	
  $

  	
  1,490,025.00

  	
   

  	
  11/01/08

  	
   

  
	
   

  	
   

  	
  TOTAL

  	
   

  	
  $

  	
  14,592,298.97

  	
   

  	
   

  	
   

  

 

 

Term T04 Letters of Credit:

 

	
   

  	
   

  	
  Loan Intrnl Ref

  	
   

  	
   

  	
   

  	
  Lc Expire

  	
   

  
	
  Oblgtn No

  	
   

  	
  No

  	
   

  	
  Lc Issd Amt

  	
   

  	
  Dat

  	
   

  
	
  001573594

  	
   

  	
  00096021

  	
   

  	
  $

  	
  16,504,109.59

  	
   

  	
  03/31/09

  	
   

  
	
  002185036

  	
   

  	
  00615176

  	
   

  	
  $

  	
  220,500.00

  	
   

  	
  04/30/09

  	
   

  
	
  001573622

  	
   

  	
  00098002

  	
   

  	
  $

  	
  5,931,165.00

  	
   

  	
  03/31/09

  	
   

  
	
  001573613

  	
   

  	
  00097006

  	
   

  	
  $

  	
  5,673,288.00

  	
   

  	
  03/31/09

  	
   

  
	
  002143222

  	
   

  	
  00613963

  	
   

  	
  $

  	
  100,000.00

  	
   

  	
  08/31/08

  	
   

  
	
  001978866

  	
   

  	
  00614766

  	
   

  	
  $

  	
  4,634,383.56

  	
   

  	
  12/15/08

  	
   

  
	
  002143251

  	
   

  	
  00614984

  	
   

  	
  $

  	
  18,125,589.04

  	
   

  	
  12/13/08

  	
   

  
	
  001573607

  	
   

  	
  00097001

  	
   

  	
  $

  	
  1,031,506.85

  	
   

  	
  03/21/09

  	
   

  
	
  001573586

  	
   

  	
  00096020

  	
   

  	
  $

  	
  1,031,506.85

  	
   

  	
  03/31/09

  	
   

  
	
  002143238

  	
   

  	
  00613430

  	
   

  	
  $

  	
  3,692,794.52

  	
   

  	
  09/01/09

  	
   

  
	
   

  	
   

  	
  TOTAL

  	
   

  	
  $

  	
  56,944,843.41

  	
   

  	
   

  	
   

  

 

Term T06 Letters of Credit:

 

NONE

 

8

 

ANNEX I-A

 

Pricing Grid

 

	
   

  	
   

  	
   

  	
   

  	
  LIBOR Margin 

  (in basis points) 

  Letter of Credit 

  Fees

  	
   

  	
  Base Rate Margin 

  (in basis points)

  	
   

  	
  Commitment Fee 

  (in basis points)

  	
   

  
	
  Tier

  	
   

  	
  Leverage

  Ratio

  	
   

  	
  Revolving 

  Loan

  	
   

  	
  Term 

  Loans

  	
   

  	
  Revolving 

  Loan

  	
   

  	
  Term 

  Loans

  	
   

  	
  Revolving 

  Loan

  	
   

  	
  Term 

  Loans

  	
   

  
	
  1

  	
   

  	
  <1.0
  to 1.0

  	
   

  	
  75.0

  	
   

  	
  75.0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  15.0

  	
   

  	
  15.0

  	
   

  
	
  2

  	
   

  	
  <1.20
  to 1.0 and >1.0 to 1.0

  	
   

  	
  87.5

  	
   

  	
  87.5

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  17.5

  	
   

  	
  17.5

  	
   

  
	
  3

  	
   

  	
  <1.35
  to 1.0 and >1.20 to 1.0

  	
   

  	
  100.0

  	
   

  	
  100.0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  20.0

  	
   

  	
  20.0

  	
   

  
	
  4

  	
   

  	
  >1.35
  to 1.0

  	
   

  	
  125.0

  	
   

  	
  125.0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  25.0

  	
   

  	
  25.0

  	
   

  

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]