Document:

EXHIBIT 10

EXHIBIT 10.2 

FORM OF SUBSCRIPTION AGREEMENT 

Elderwatch, Inc.

2881 North Pine Island Road, Building 65,

Suite 203, Sunrise FL 33322

Gentlemen: 

1. Pursuant to the terms of the offer made by Elderwatch, Inc. (the "Company"), the undersigned hereby tenders this subscription and applies for the purchase of the number of shares ("Shares") of the Company set forth on the signature page hereto, at a purchase price of US$50,000 per 200,000 shares of common stock of Elderwatch, Inc. ($0.25  per share). 

The Company is offering a minimum of two hundred thousand Shares ($50,000) and a maximum of sight hundred thousand Shares ($200,000) (the "Offering"). 

The subscriber is sending: (1) an executed copy of this Subscription Agreement; and (2) EITHER A CHECK IN US FUNDS made out to "Joseph I. Emas as Escrow Agent"  (the “Escrow Agent”) for the full amount of the purchase price for the Shares for which the undersigned is subscribing to: 

Joseph I. Emas

1224 Washington Avenue 

Miami Beach, Florida 33139 

Reference: (Your Name) for Elderwatch, Inc. 

OR 

The subscriber may WIRE TRANSFER immediately available U.S. funds for the full amount of the purchase price of the Shares for which the undersigned is subscribing plus all wire transfer fees to: 

Wachovia Bank

Surfside, Florida

 Account:  Joseph I. Emas, P.A.

                Attorney-at-Law

Account Number:  2000015545590

Reference: (Your Name) for Elderwatch, Inc. 

The Escrow Agent shall deposit all subscription funds received into a non-interest bearing attorney’s trust account in accordance with the requirements of the Florida Bar.

If the Company does not complete the Minimum Offering within 90 days from the Effective Date, the Escrow Agent shall forthwith return each subscriber’s respective subscription funds.

If the Company completes the Minimum Offering within 90 days from the Effective Date and provides the Escrow Agent with certificates representing the shares of common stock subscribed for by the Subscribers, the Escrow Agent shall forthwith release the subscription funds to the Company

3. The Company has filed, a registration statement on Form SB-2 (the "Registration Statement") or such other form as shall be available registering the common shares and sales may be made pursuant to an effective prospectus, a copy of which has been made available to the investor to be used in accordance with the Plan of Distribution instructions in the prospectus.

4. The undersigned understands that the Company may, in its sole discretion, reject this subscription, in whole or in part, and/or reduce this subscription in any amount and to any extent, whether or not pro rata reductions are made of any other investor's subscription. 

5. Neither this Subscription Agreement nor any of the rights of the undersigned hereunder may be transferred or assigned by the undersigned. 

6. Except as otherwise provided herein, this Subscription Agreement (i) may only be modified by a written instrument executed by the undersigned and the Company; (ii) sets forth the entire agreement of the undersigned and the Company with respect to the subject matter hereof; (iii) shall be governed by the laws of the State of Florida applicable to contracts made and to be wholly performed therein; and (iv) shall inure to the benefit of, and be binding upon the Company and the undersigned and their respective heirs, legal representatives, successors and permitted assigns. 

7 Unless the context otherwise requires, all personal pronouns used in this Subscription Agreement, whether in the masculine, feminine or neuter gender, shall include all other genders. 

8. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or mailed by certified or registered mail, return receipt requested, postage prepaid, as follows: if to the undersigned, to the address set forth on the signature page hereto; and if to the Company, to the address listed above or to such other address as the Company or the undersigned shall have designated to the other by like notice. 

SIGNATURE PAGE 

IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement this ______ day of _________________ 2004. 

 Number of Shares Subscribed for _________________________________ 

	ORGANIZATION SIGNATURE:                 INDIVIDUAL SIGNATURE:

__________________________________      ______________________________________

Print name of Organization                        Signature

By: _______________________________     ______________________________________

      Name:                                       Print Name

      Title:

                                        ______________________________________

                                        Additional Signature of Joint Owner

                                        _______________________________________

                                                  Print Name

(ALLSUBSCRIBERS SHOULD PLEASE PRINT INFORMATION BELOW EXACTLY   

AS YOU WISH IT TO APPEAR IN THE RECORDS OF 

	                                  THE COMPANY)

____________________________________    ______________________________________

Name                                    Social Security Number of Individual

                                        or other Taxpayer I.D. Number

Address:                                Address for notices if different:

____________________________________    ______________________________________

Number and Street                       Number and Street

____________________________________    ______________________________________

  

City State Zip Code City State Zip Code 

Please check the box to indicate form of ownership (if applicable): 

	TENANTS-IN-COMMON    JOINT TENANTS WITH RIGHT OF       COMMUNITY PROPERTY

(Both Parties must   SURVIVORSHIP                      (Both Parties must sign

sign above)          (Both Parties must sign above)    above)

The subscriber is sending: (1) an executed copy of this Subscription Agreement; and (2) EITHER A CHECK IN US FUNDS made out to "Joseph I. Emas as Escrow Agent"  (the “Escrow Agent”) for the full amount of the purchase price for the Shares for which the undersigned is subscribing to: 

Joseph I. Emas

1224 Washington Avenue 

Miami Beach, Florida 33139 

Reference: (Your Name) for Elderwatch, Inc. 

OR 

The subscriber may WIRE TRANSFER immediately available U.S. funds for the full amount of the purchase price of the Shares for which the undersigned is subscribing plus all wire transfer fees to: 

Wachovia Bank

Surfside, Florida

 Account:  Joseph I. Emas, P.A.

                Attorney-at-Law

Account Number:  2000015545590

Reference: (Your Name) for Elderwatch, Inc. 

ACCEPTANCE OF SUBSCRIPTION 

The foregoing subscription is hereby accepted by Elderwatch, Inc. this ____ day of __________________, 2004, for __________________________ Shares. 

ELDERWATCH, INC. 

By: _____________________________ 

Name: 

                                                           
Title:Exhibit 10.25

 

Loan No. Z269T01E

 

REVOLVING TERM LOAN SUPPLEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

TREASURY MARGINS

 

	
  FIXED RATE 

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD OVER INDEX IN BASIS 

  POINTS (Applicable Treasury Margin)

  	
   

  
	
  Two Years

  	
   

  	
  U.S.$ Constant Maturity 

  Treasury Rate (“US$CMT”)

  	
   

  	
  125
  bps

  	
   

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

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

  	
   

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

  	
   

  	
  105 bps

  	
   

  

 

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

 

2

 

	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE/DECREASE 

  TO SPREAD

  	
   

  	
  CHANGE TO 

  APPLICABLE LIBOR 

  and TREASURY

  MARGINS 

  (IN BASIS POINTS)

  	
   

  
	
  A. Equal to
  or greater than, 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

  	
   

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

  	
   

  	
  None

  	
   

  	
  0

  	
   

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

  	
   

  	
  Decrease

  	
   

  	
  10

  	
   

  
	
  D. Less than
  1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  	
   

  

 

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

 

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

 

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

 

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

 

3

 

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

 

The Company shall be permitted to make special payments, in a minimum
amount of $388,500,0.00, on the variable rate portion of this loan, when all
short term financing, including the Company’s seasonal loans, Commodity Credit
Corporation loans and other short term loans have been zeroed out.  These special payments may be readvanced
through the expiration date of the Commitment. 
Reinstatement may be denied and canceled at any time at the option of
CoBank.  The reinstatable commitments
arising from such special payments shall be subject to the Commitment Fee as
described in Section 8 below.

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  CoBank, ACB

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Teresa Fountain

  	
   

  	
  By:

  	
  /s/ Sam Wai

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant Corporate Secretary

  	
   

  	
  Title:

  	
  Treasurer

  	
   

  

 

4

 

Loan No. Z269T01ENP

 

REVOLVING TERM LOAN SUPPLEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

TREASURY MARGINS

 

	
  FIXED RATE 

  PRODUCT

  	
   

  	
  INDEX

  	
   

  	
  SPREAD OVER INDEX IN BASIS

  POINTS (Applicable Treasury Margin)

  	
   

  
	
  Two Years

  	
   

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

  	
   

  	
  125 bps

  	
   

  
	
  Three Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Four Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Five Years

  	
   

  	
  US$CMT

  	
   

  	
  125 bps

  	
   

  
	
  Seven Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

  
	
  Ten Years

  	
   

  	
  US$CMT

  	
   

  	
  140 bps

  	
   

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

  	
   

  	
  CoBank’s
  cost of funds (as reasonably determined by 

  Co Bank in its sole discretion)

  	
   

  	
  105 bps

  	
   

  

 

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

 

2

 

	
  LEVERAGE RATIO

  (as defined below)

  	
   

  	
  INCREASE / DECREASE 

  TO SPREAD

  	
   

  	
  CHANGE TO

  APPLICABLE LIBOR

  and TREASURY

  MARGINS

  (IN BASIS POINTS)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A. Equal to
  or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

  	
   

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

  	
   

  	
  None

  	
   

  	
  0

  	
   

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

  	
   

  	
  Decrease

  	
   

  	
  10

  	
   

  
	
  D. Less than
  1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  	
   

  

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  CoBank,
  ACB

  	
  AMERICAN
  CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Teresa
  Fountain

  	
   

  	
  By:

  	
  /s/ Sam Wai

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    Assistant
  Corporate Secretary

  	
   

  	
  Title: 

  	
    TREASURER

  	
   

  

 

4

 

Loan No. Z269T05A

 

REVOLVING TERM LOAN SUPPLEMENT

 

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

 

SECTION 1. The Revolving Term
Loan Commitment. On
the terms and conditions set forth in the MLA and this Supplement, CoBank
agrees to make loans to the Company during the period set forth below in an
aggregate principal amount not to exceed $15,000,000,00 at any one time
outstanding (the “Commitment”). Within the limits of the Commitment, the
Company may borrow, repay and reborrow.

 

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

 

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

 

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

 

(A)          Base Rate Option.  At a
rate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means that
rate in effect from day to day defined as the “prime rate” as published from
time to time in the Eastern Edition of The Wall Street Journal as the average
prime lending rate for seventy-five percent (75%) of the United States; thirty
(30) largest commercial banks, or if The Wall Street Journal shall cease
publication or cease publishing the “prime rate” on a regular basis, such other
regularly published average prime rate applicable to such commercial banks as
is acceptable to the Lender in its reasonable discretion. Loans for which the
Base Rate option is selected are referred to herein as “Base Rate Loans”. Base
Rate Loans shall be made available on any Banking Day.

 

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

 

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

 

 

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

 

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

 

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

 

(3)           If CoBank shall determine that, after
the date hereof, the adoption of any applicable Law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central

 

2

 

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

 

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

 

SECTION 5. Promissory Note. The Company promises to repay the loans
that are outstanding at the time the Commitment expires. If any installment due
date is not a day on which CoBank is open for business, then such payment shall
be made on the next day on which CoBank is open for business. In addition to
the above, the Company promises to pay interest on the unpaid principal balance
hereof at the times and in accordance with the provisions set forth in Section
4 thereof.

 

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

3

 

outstanding
balance on the Commitment in full on demand, or if no demand is made, then any
time on or before the Commitment expiration date of August 1, 2006.

 

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

 

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

 

 

	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Michael Tousignant

  	
   

  	
  By: 

  	
  /s/ Lisa Maloy

  	
   

  
	
  Title:  

  	
  VP

  	
   

  	
  Title:

  	
   Asst. Secretary

  	
   

  
								

 

4

 

Loan No.
Z269T06A

 

REVOLVING TERM LOAN SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and
Restated Master Loan Agreement dated July 21, 2003 (the “MLA”), is entered into
as of July 20, 2004, between CoBANK, ACB (“CoBank”) and AMERICAN
CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”), and amends and restates the Supplement
dated July 21, 2003 and numbered Z269T06.

 

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

 

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

 

SECTION 3.  Term. Intentionally
Omitted.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

 

	
  LEVERAGE
  RATIO

  	
   

  	
  INCREASE/DECREASE

  TO LIBOR SPREAD

  	
   

  	
  CHANGE TO THE

  LIBOR SPREAD (IN

  BASIS POINTS)

  
	
  (as
  defined below)

  	
   

  	
   

  	
   

  	
   

  
	
  A. Equal to or greater than 1.35:1.00

  	
   

  	
  Increase

  	
   

  	
  20

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

  	
   

  	
  None

  	
   

  	
  0

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

  	
   

  	
  Decrease

  	
   

  	
  10

  
	
  D. Less than 1.00:1.00

  	
   

  	
  Decrease

  	
   

  	
  20

  

 

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

 

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

 

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

 

2

 

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

 

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

 

	
  Payment Date

  	
   

  	
  Reducing Commitment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  12,857,142.86

  	
   

  
	
  December 31, 2005

  	
   

  	
  $

  	
  10,714,285.72

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  8,571,428.58

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  6,428,571.44

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  4,285,714.30

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  2,142,857.16

  	
   

  

 

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

 

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

 

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

 

3

 

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

 

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

 

	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Michael Tousignant

  	
   

  	
  By: 

  	
  /s/ Lisa Maloy

  	
   

  
	
  Title:

  	
  VP

  	
   

  	
  Title:

  	
   Asst. Secretary

  	
   

  
								

 

4

 

Loan No. Z269S01G 

 

STATUSED
REVOLVING CREDIT SUPPLEMENT

 

THIS SUPPLEMENT to the Amended and Restated Master Loan
Agreement dated July 21, 2003 (the “MLA”), is entered into as of July 20, 2004,
between CoBANK, ACB (“CoBank”) and AMERICAN CRYSTAL SUGAR COMPANY, Moorhead, Minnesota (the “Company”),
and amends and restates the Supplement dated November 7, 2003 and numbered
Z269S01F.

 

SECTION 1. The Revolving Credit
Facility. On the
terms and conditions set forth in the MLA and this Supplement, CoBank agrees to
make loans to the Company during the period set forth below in an aggregate
principal amount not to exceed, at any one time outstanding, the lesser of the “Borrowing
Base” (as calculated pursuant to the Borrowing Base Certificate, the form of
this is attached hereto as Exhibit A) or the sum of $265,000,000.00. Within the
limits of the Commitment, and the limit of the Borrowing Base, the Company may
borrow, repay and reborrow.

 

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

 

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

 

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

 

(A)          Base Rate Option.  At a
rate per annum at all times equal to the Base Rate.  For the purposes hereof, Base Rate means that
rate in effect from day to day defined as the “prime rate” as published from
time to time in the Eastern Edition of The Wall Street Journal as the average
prime lending rate for seventy-five percent (75%) of the United States’ thirty
(30) largest commercial banks, or if The Wall Street Journal shall cease
publication or cease publishing the “prime rate” on a regular basis, such other
regularly published average prime rate applicable to such commercial banks as
is acceptable to the Lender in its reasonable discretion. Loans for which the
Base Rate option is selected are referred to herein as “Base Rate Loans”.  Base Rate Loans shall be: (a) in minimum
amounts of $5,000,000 and incremental multiples of $1,000,000; and (b) made
available on any Banking Day.

 

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

 

(C)          LIBOR Option. At a fixed rate equal to “LIBOR” (as
hereinafter defined) plus 100 basis points per annum. Under this option: (a)
rates may be fixed for “Interest Periods” (as hereinafter defined) of 1, 2, 3
or 6 months, or 1 year, as selected by the Company; (b) the minimum amount that
may be fixed at any one time shall be $5,000,000.00; and (c) rates may only be
fixed on a “Banking Day” (as hereinafter defined) or, at the option of the
Company, on 3 Banking Days’ prior notice. 
For purposes hereof: (i) “LIBOR” shall mean the rate (rounded upward to the
nearest sixteenth and adjusted for reserves required on “Eurocurrency
Liabilities” (as hereinafter defined) for banks subject to “FRB Regulation D”
(as hereinafter defined) or required by any other federal law or regulation)
quoted by the British Bankers Association (the “BBA”) at 11:00 a.m. London time
2 Banking Days before the commencement of the Interest Period for the offering
of U.S. dollar deposits in the London interbank

 

 

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

 

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

 

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

 

(3)            If CoBank shall determine that,
after the date hereof, the adoption of any applicable Law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration,
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such

 

2

 

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

 

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

 

SECTION 5.
Promissory Note. The
Company promises to repay the unpaid principal balance of the loans on the
first CoBank business day following the last day of the term of the Commitment.
In addition to the above, the Company promises to pay interest on the unpaid
principal balance of the loans at the times and in accordance with the
provisions set forth in Section 4 hereof. This note replaces and supersedes,
but does not constitute payment of the indebtedness evidenced by, the
promissory note set forth in the Supplement being amended and restated hereby.

 

SECTION 6. Borrowing Base Certificate, Etc. The Company agrees to furnish a Borrowing
Base Certificate to CoBank at such times or intervals as CoBank may from time
to time request. Until receipt of such a request, the Company agrees to furnish
a Borrowing Base Certificate to CoBank as soon as available after the end of each
quarter, but in no event more than 5 days after the Company’s quarterly filing
with the Securities Exchange Commission, calculating the Borrowing Base as of
the last day of the quarter for which the Certificate is being furnished.
However, if no balance is outstanding hereunder on the last day of such period,
no Report need be furnished. Regardless of the frequency of the reporting, if
at any time the amount outstanding under the Commitment exceeds the lesser of
the Borrowing Base or $265,000.00, the Company shall immediately notify CoBank
and repay so much of the loans as is

 

3

 

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

 

SECTION 7. Commitment Fee. In consideration of the Commitment, the
Company agrees to pay to CoBank a commitment fee on the average daily unused
portion of the Commitment at the rate of 20 basis points per annum (calculated
on a 360 day basis), payable quarterly in arrears by the 20th day
following each calendar quarter. Such fee shall be payable for each calendar
quarter (or portion thereof) occurring during the original or any extended term
of the Commitment. For purposes of calculating the commitment fee only, the “Commitment”
shall mean the dollar amount specified in Section 1 hereof, irrespective of the
Borrowing Base.

 

SECTION 8. Utilization Fee. For any day on which the outstanding
principal amount of loans shall be greater than 25% of the Commitment (but no
greater than 50% of the Commitment), the Company shall pay to CoBank a
utilization fee equal to 0.125% per annum (calculated on a 360 day basis) on
the aggregate amount outstanding on such day. For any day on which the
outstanding principal amount of loans shall be greater than 50% of the
Commitment, the Company shall pay to CoBank a utilization fee equal to 0.25%
per annum (calculated on a 360 day basis) on the aggregate amount outstanding
on such day. Accrued and unpaid utilization fees, if any, shall be payable
quarterly in arrears by the 20th day following each calendar
quarter.

 

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

 

	
  CoBANK, ACB

  	
  AMERICAN CRYSTAL SUGAR COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Michael Tousignant

  	
   

  	
  By: 

  	
  /s/ Lisa Maloy

  	
   

  
	
  Title:

  	
  VP

  	
   

  	
  Title:

  	
   Asst. Secretary

  	
   

  
								

 

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