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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