Exhibit 10.2

 

Loan No. RIE539S01E

 

STATUSED REVOLVING CREDIT SUPPLEMENT

 

THIS SUPPLEMENT to the Master Loan Agreement dated May 23, 2005 (the “MLA”), is
entered into as of January 22, 2008 between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the “Company”), and
amends and restates the Supplement dated May 15, 2007 and numbered RIE539S01D.

 

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 $45,000,000.00 (the
“Commitment”), or the “Borrowing Base” (as calculated pursuant to the Borrowing
Base Report attached hereto as Exhibit A).  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
inventory and receivables referred to in the Borrowing Base Report.

 

SECTION 3.         Term.  The term of the Commitment shall be from the date
hereof, up to and including January 15, 2009, 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)      7-Day LIBOR Index Rate.  At a rate (rounded upward to the
nearest 1/100th 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) per annum equal at
all times to the annual rate quoted by the British Bankers Association (the
“BBA”) at 11:00 a.m. London time for the offering of seven (7)-day U.S. dollars
deposits, as published by Bloomberg or another major information vendor listed
on BBA’s official website on the first U.S. Banking Day (as hereinafter defined)
in each week with such rate to change weekly on such day plus the Performance
Pricing Adjustments, if any, set forth in Section 4(C) below.  The rate shall be
reset automatically, without the necessity of notice being provided to the
Company or any other party, on the first U.S. Banking Day of each succeeding
week and each change in the rate shall be applicable to all balances subject to
this option and information about the then current rate shall be made available
upon telephonic request.  For purposes hereof:  (a) “U.S. Banking Day” shall
mean a day on which CoBank is open for business and banks are open for business
in New York, New York; (b) “Eurocurrency Liabilities” shall have meaning as set
forth in “FRB Regulation D”; and (c) “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.

 

        (B)      LIBOR.  At a fixed rate per annum equal to “LIBOR” (as
hereinafter defined), plus the Performance Pricing Adjustments, if any, set
forth in Section 4(C) below.  Under this option:  (1) rates may be fixed for
“Interest Periods” (as hereinafter defined) of 1, 2, 3, 6, 9 or 12 months, as
selected by the Company; (2) amounts may be fixed in increments of $100,000.00
or multiples thereof; (3) the maximum number of fixes in place at any one time
shall be 10; and (4) rates may only be fixed on a “Banking Day” (as hereinafter
defined) on 3 Banking Days’ prior written notice.  For purposes hereof: 
(a) “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

 

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listed on BBA’s official website; (b) “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; (c) “Interest Period” shall mean a period commencing
on the date this option is to take effect and ending on the numerically
corresponding day in the next calendar month or the month that is 2, 3, 6, 9 or
12 months thereafter, as the case may be; provided, however, that:  (i) 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 (ii) if there is no
numerically corresponding day in the month, then such period shall end on the
last Banking Day in the relevant month; (d) “Eurocurrency Liabilities” shall
have meaning as set forth in “FRB Regulation D”; and (e) “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.

 

        (C)      Performance Pricing Adjustments.  The interest rate spread
parameters set forth in Subsection (A) and(B) above shall be either increased or
decreased in accordance with the following schedule:

 

TOTAL DEBT TO EBITDA (MLA,
SECTION 10(B))

 

LIBOR INTEREST RATE
SPREAD

 

7-DAY LIBOR INTEREST
RATE SPREAD

 

 

 

 

 

Equal to or greater than 4.00 to 1.00

 

+ 275 basis points

 

+ 275 basis points

Equal to or greater than 3.50 to 1.00 but less than 4.00 to 1.00

 

+ 250 basis points

 

+ 250 basis points

Equal to or greater than 3.00 to 1.00 but less than 3.50 to 1.00

 

+ 225 basis points

 

+ 225 basis points

Equal to or greater than 2.50 to 1.00 but less than 3.00 to 1.00

 

+ 200 basis points

 

+ 200 basis points

Less than 2.50 to 1.00

 

+ 175 basis points

 

+ 175 basis points

 

The initial spreads shall be those applicable to Total Debt to EBITDA equal to
or greater than 2.50 to 1.00, but less than 3.00 to 1.00.  The applicable
interest rate adjustment shall:  (i) be considered as of each fiscal quarter end
based on the quarterly Compliance Certificate provided by the Company under
Section 8(H)(vii) of the MLA; (ii) become effective as of the first day of the
fiscal quarter following receipt of such information by CoBank, and (iii) shall
be effective on a prospective basis only and shall not affect existing fixed
rate pricing.

 

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, rates may not be fixed for periods
expiring after the maturity date of the loans.  All elections provided for
herein shall be made electronically (if applicable), telephonically or in
writing and must be received by CoBank not later than 12:00 Noon Company’s local
time in order to be considered to have been received on that day; provided,
however, that in the case of LIBOR rate loans, all such elections must be
confirmed in writing upon CoBank’s request.  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 on such other day in such month as CoBank shall require in a
written notice to the Company; 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, at CoBank’s option upon written notice to the
Company, 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 three-month anniversary of the commencement date of such
Interest Period, and at maturity.

 

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SECTION 5.         Promissory Note.  The Company promises to repay the unpaid
principal balance of the loans on 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 Reports, Etc.  The Company agrees to furnish a
Borrowing Base Report 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 Report to CoBank within 30 days after each month end
calculating the Borrowing Base as of the last day of the month for which the
Report is being furnished.  However, if no balance is outstanding hereunder on
the last day of such month, then no Report need be furnished.  Regardless of the
frequency of the reporting, if at any time the amount outstanding under the
Commitment exceeds the Borrowing Base, the Company shall immediately notify
CoBank and repay so much of the loans as is necessary to reduce the amount
outstanding under the Commitment to the limits of the Borrowing Base.

 

SECTION 7.         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 CoBank’s
receipt of a duly completed and executed copy of CoBank’s then current form of
Application and Reimbursement Agreement 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 a loan under the Commitment and shall be repaid in accordance with this
Supplement.  Each letter of credit must be in form and content acceptable to
CoBank and must expire no later than the maturity date of the Commitment. 
Notwithstanding the foregoing or any other provision hereof, the maximum amount
capable of being drawn under each letter of credit must be statused against the
Borrowing Base in the same manner as if it were a loan, and in the event that
(after repaying all loans) the maximum amount capable of being drawn under the
letters of credit exceeds the Borrowing Base, then the Company shall immediately
notify CoBank and pay to CoBank (to be held as cash collateral) an amount equal
to such excess.

 

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 1/4 of 1% per annum (calculated on a
360 day basis), payable quarterly in arrears by the 20th day following each
calendar quarter.  Such fee shall be payable for each quarter (or portion
thereof) occurring during the original or any extended term of the Commitment. 
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 9.         Amendment Fee.  In consideration of the amendment, the
Company agrees to pay to CoBank on the execution hereof a fee in the amount of
$20,000.00.

 

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

 

CoBANK, ACB

DAKOTA GROWERS PASTA COMPANY,
INC.

 

 

 

 

By:

 

 

By:

/s/ Edward Irion

 

 

 

 

Title:

 

 

Title:

CFO

 

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