Exhibit 10.3

 

Loan No. RIE539T05

 

NON-REVOLVING CREDIT SUPPLEMENT

(Letters of Credit)

 

THIS SUPPLEMENT to the Master Loan Agreement dated February 24, 2004 (the
“MLA”), is entered into as of February 24, 2004 between CoBANK, ACB (“CoBank”)
and DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the
“Company”), and amends and restates the Supplement dated October 28, 2003 and
numbered E539T05.

 

SECTION 1.                            The Non-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 $350,000.00 at any one time outstanding (the
“Commitment”).  Within the limits of the Commitment, amounts borrowed and later
repaid may not be reborrowed.

 

SECTION 2.                            Purpose.  The purpose of the Commitment is
to reimburse CoBank for any drafts that it may honor under letter(s) of credit
issued hereunder (“Letter of Credit”).  If CoBank honors any such drafts
submitted under a Letter of Credit, Company hereby irrevocably authorizes CoBank
to make a loan hereunder to reimburse CoBank for such draft payments.

 

SECTION 3.                            Term.  The term of the Commitment shall be
from the date hereof, up to and including September 30, 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 loan(s) in accordance with the following
interest rate:

 

CoBank Base Rate.  At a rate per annum equal at all times to 2% above 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.  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.

 

SECTION 5.                            Promissory Note.  The Company promises to
repay the unpaid principal balance of the loans on demand.  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.                            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 and must expire no later than the maturity date of the loans.

 

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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:

/S/ TERESA L. FOUNTAIN

 

BY:

/S/ THOMAS FRIEZEN

 

 

 

 

 

 

 

TITLE:

ASSISTANT CORPORATE SECRETARY

 

TITLE:

CFO

 

 

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