Exhibit 10.2


 


Loan No. RIE539T05C


 


NON-REVOLVING
CREDIT SUPPLEMENT


(Letters
of Credit)


 


THIS
SUPPLEMENT to the
Master Loan Agreement dated May 23,
2005 (the “MLA”), is entered into as of May 26, 2006 between CoBANK, ACB (“CoBank”)
and DAKOTA GROWERS PASTA COMPANY, INC., Carrington,
North Dakota (the “Company”), and amends and restates the Supplement
dated May 23, 2005 and numbered RIE539T05B.


 


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 $750,000.00 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, 2007,
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 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.         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.


 


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/ Gary J. Sloan

  	
   

  	
  By:

  	
  /s/ Tim Dodd

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  President / CEO