**Exhibit10.2**

 

**STATUSED****REVOLVINGCREDIT SUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated June 20, 2001(the “MLA”), is entered into as of February 11, 2003 between **CoBANK, ACB**(“CoBank”)and **DAKOTAGROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the“Company”), and amends and restates the Supplement dated February 15, 2002 andnumbered E539S01A.

 

**SECTION1.  The Revolving Credit Facility.**  On the terms and conditions set forth in theMLA and this Supplement, CoBank agrees to make loans to the Company during theperiod set forth below in an aggregate principal amount not to exceed, at anyone time outstanding, the lesser of $19,000,000.00 (the “Commitment”), or the“Borrowing Base” (as calculated pursuant to the Borrowing Base Report attachedhereto as Exhibit A).  Within the limitsof the Commitment, the Company may borrow, repay and reborrow.

 

**SECTION2.  Purpose.**  The purpose of the Commitment is to financethe inventory and receivables referred to in the Borrowing Base Report.

 

**SECTION3.  Term.**  The term of the Commitment shall be from February 25, 2003, up toand including February 23, 2004, or such later date as CoBank may, in its solediscretion, authorize in writing.

 

**SECTION4.  Interest.**  The Company agrees to pay interest on theunpaid balance of the loans in accordance with one or more of the followinginterest rate options, as selected by the Company:

 

**(A)   Weekly Quoted Variable Rate. **At a rate per annum equal atall times to the rate of interest established by CoBank on the first BusinessDay of each week.  The rate establishedby CoBank shall be effective until the first Business Day of the nextweek.  Each change in the rate shall beapplicable to all balances subject to this option and information about thethen current rate shall be made available upon telephonic request.

 

**(B)  QuotedFixed Rate**.  At a fixedrate per annum to be quoted by CoBank in its sole discretion in eachinstance.  Under this option, rates maybe fixed on such balances and for such periods, as may be agreeable to CoBankin its sole discretion in each instance.

 

The Company shallselect the applicable rate option at the time it requests a loan hereunder andmay, subject to the limitations set forth above, elect to convert balancesbearing interest at the variable rate option to one of the fixed rateoptions.  Upon the expiration of anyfixed rate period, interest shall automatically accrue at the variable rateoption unless the amount fixed is repaid or fixed for an additional period inaccordance with the terms hereof. Notwithstanding the foregoing, unless CoBank otherwise consents in itssole discretion in each instance, rates may not be fixed for periods expiringafter the maturity date of the loans. In the event CoBank consents to one or more balances being fixed for aperiod or periods extending beyond the maturity date of the loans and theCommitment is not renewed, then each such balance shall be due and payable onthe last day of its fixed rate period and the promissory note set forth below shallbe deemed amended accordingly.  Allelections provided for herein shall be made telephonically or in writing andmust be received by 12:00 Noon Company’s local time.  Interest shall be calculated on the actual number of days eachloan is outstanding on the basis of a year consisting of 360 days and shall bepayable monthly in arrears by the 20th day of the following month.

 

**SECTION5.  Promissory Note.**  The Company promises to repay the unpaidprincipal balance of the loans on the last day of the term of theCommitment.  In addition to the above,the Company promises to pay interest on the unpaid principal balance of theloans at the times and in accordance with the provisions set forth in Section 4hereof.  This note replaces andsupersedes, but does not constitute payment of the indebtedness evidenced by,the promissory note set forth in the Supplement being amended and restatedhereby.

 

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**SECTION6.  Borrowing Base Reports, Etc. **The Company agrees tofurnish a Borrowing Base Report to CoBank at such times or intervals as CoBankmay from time to time request.  Untilreceipt of such a request, the Company agrees to furnish a Borrowing BaseReport to CoBank within 45 days after each month end calculating the BorrowingBase as of the last day of the month for which the Report is beingfurnished.  However, if no balance isoutstanding hereunder on the last day of such month, then no Report need befurnished.  Regardless of the frequencyof the reporting, if at any time the amount outstanding under the Commitmentexceeds the Borrowing Base, the Company shall immediately notify CoBank andrepay so much of the loans as is necessary to reduce the amount outstandingunder the Commitment to the limits of the Borrowing Base.

 

**SECTION7.  Letters of Credit. **In addition to loans and ifagreeable to CoBank in its sole discretion in each instance, the Company mayutilize the Commitment to open irrevocable letters of credit for itsaccount.  Each letter of credit shallreduce the amount available under the Commitment by the maximum amount capableof being drawn thereunder.  The rightsand obligations of the parties with respect to each letter of credit will begoverned by the Reimbursement Agreement attached hereto as Exhibit B (whichrights and obligations shall be in addition to the rights and obligations ofthe parties hereunder and under the MLA). Notwithstanding the foregoing or any other provision hereof, the maximumamount capable of being drawn under each letter of credit must be statusedagainst the Borrowing Base in the same manner as if it were a loan, and in theevent that (after repaying all loans) the maximum amount capable of being drawnunder the letters of credit exceeds the Borrowing Base, then the Company shallimmediately notify CoBank and pay to CoBank (to be held as cash collateral) anamount equal to such excess.

 

**SECTION8.  Servicing Fee.**  The Company agrees to pay to CoBank aservicing fee on the average daily balance at the rate of 1/10 of 1% per annum(calculated on a 360 day basis), payable quarterly in arrears by the 20th dayfollowing each calendar quarter.

 

**SECTION9.  Amendment Fee.**  In consideration of the amendment, theCompany agrees to pay to CoBank on the execution hereof, a fee in the amount of$5,000.00.

 

**SECTION 10. Nonpatronage Designation.**  That portion of the loan sold to another financial institutionshall be on a nonpatronage basis. Hence, no patronage shall be paid with respect to such portion of theloan.

 

 

**IN WITNESSWHEREOF,** the parties have caused this Supplement to be executedby their duly authorized officers as of the date shown above.

 
| **CoBANK, ACB** | **DAKOTA GROWERS PASTA COMPANY,   INC.** |
|-----------------|------------------------------------------|
|            |                                     |   |
| By:             |                                     |   | By: | /s/  Thomas Friezen |   |
|            |                                     |   |
| Title:          |                                     |   | Title: | CFO |   |

 

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**CONSOLIDATINGSUPPLEMENT**

**(Variableand Quoted Fixed Rate Term Loan)**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated June 20, 2001(the “MLA”), is entered into as of February 11, 2003, between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the“Company”), and amends and restates the Supplement dated June 20, 2001 andnumbered E539T01.

 

**SECTION1.  Term Loan. **As of the date hereof, CoBank’s obligations toextend credit to the Company under this supplement has expired and the unpaidprincipal balance of the loan is $5,390,000.00.

 

**SECTION2.  Interest. **The Company agrees to pay interest on the unpaidbalance of the loans in accordance with one or more of the following interestrate options, as selected by the Company:

 

**(A)  Weekly Quoted Variable Rate.**  At a rate per annum equal at all times tothe rate of interest established by CoBank on the first Business Day of eachweek.  The rate established by CoBankshall be effective until the first Business Day of the next week.  Each change in the rate shall be applicableto all balances subject to this option and information about the then currentrate shall be made available upon telephonic request.

 

**(B)  Quoted Fixed Rate. **At a fixed rate per annum to be quoted by CoBank inits sole discretion in each instance. Under this option, rates may be fixed on such balances and for suchperiods, as may be agreeable to CoBank in its sole discretion in each instance.

 

The Company shall select the applicable rateoption at the time it requests a loan hereunder and may, subject to thelimitations set forth above, elect to convert balances bearing interest at thevariable rate option to one of the fixed rate options.  Upon the expiration of any fixed rateperiod, interest shall automatically accrue at the variable rate option unlessthe amount fixed is repaid or fixed for an additional period in accordance withthe terms hereof.  Notwithstanding theforegoing, unless CoBank otherwise consents in its sole discretion in eachinstance, rates may not be fixed for periods expiring after the maturity dateof the loans.  In the event CoBankconsents to one or more balances being fixed for a period or periods extendingbeyond the maturity date of the loans and the Commitment is not renewed, theneach such balance shall be due and payable on the last day of its fixed rateperiod and the promissory note set forth below shall be deemed amendedaccordingly.  All elections provided forherein shall be made telephonically or in writing and must be received by 12:00Noon Company’s local time.  Interestshall be calculated on the actual number of days each loan is outstanding onthe basis of a year consisting of 360 days and shall be payable monthly inarrears by the 20th day of the following month.

 

**SECTION3.  Promissory Note. **The Company promises torepay the loan as follows:  (1) in sevenequal, consecutive quarterly installments of $685,000.00, with the first suchinstallment due on March 31, 2003, and the last such installment due onSeptember 30, 2004; and (2) followed by a final installment in an amount equalto the remaining unpaid principal balance of the loans on December 31,2004.  If any installment due date isnot a day on which CoBank is open for business, then such installment shall bedue and payable on the next day on which CoBank is open for business. Inaddition to the above, the Company promises to pay interest on the unpaidprincipal balance of the loan in accordance with the rate options and at thetimes set forth above.  This notereplaces and supersedes, but does not constitute payment of the indebtednessevidenced by, the promissory note set forth in the Supplement being amended andrestated hereby.

 

**SECTION4.  Prepayment. **The Loan may be prepaid inwhole or in part on one CoBank business day’s prior written notice. Unlessotherwise agreed, all prepayments will be applied to principal installments inthe inverse order of their maturity and to such balances, fixed or variable, asCoBank shall specify.

 

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**SECTION5.  Agency Fee.** The Company agrees to pay to CoBank an agencyfee on the average daily balance at the rate of 1/10 of 1% per annum(calculated on a 360 day basis), payable quarterly in arrears by the 20th dayfollowing each calendar quarter.

 

**IN WITNESSWHEREOF,**the parties have caused this Supplement to beexecuted by their duly authorized officers as of the date shown above.

 
| **CoBANK, ACB** | **DAKOTA GROWERS PASTA COMPANY,   INC.** |
|-----------------|------------------------------------------|
|            |                                     |   |
| By:             |                                     |   | By: | /s/  Thomas Friezen |   |
|            |                                     |   |
| Title:          |                                     |   | Title: | CFO |   |

 

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**CONSOLIDATINGSUPPLEMENT**

**(Variableand Quoted Fixed Rate Term Loan)**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated June 20, 2001(the “MLA”), is entered into as of February 11, 2003, between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends and restates the Supplement dated June 20, 2001 andnumbered E539T02.

 

**SECTION1.  Term Loan. **As of the date hereof, CoBank’s obligations toextend credit to the Company under this supplement has expired and the unpaidprincipal balance of the loan is $4,875,000.00.

 

**SECTION2.  Interest. **The Company agrees to pay interest on the unpaidbalance of the loans in accordance with one or more of the following interestrate options, as selected by the Company:

 

**(A)  Weekly Quoted Variable Rate.**  At a rate per annum equal at all times tothe rate of interest established by CoBank on the first Business Day of eachweek.  The rate established by CoBankshall be effective until the first Business Day of the next week.  Each change in the rate shall be applicableto all balances subject to this option and information about the then currentrate shall be made available upon telephonic request.

 

**(B)  Quoted Fixed Rate. **At a fixed rate per annum to be quoted by CoBank inits sole discretion in each instance. Under this option, rates may be fixed on such balances and for suchperiods, as may be agreeable to CoBank in its sole discretion in each instance.

 

The Company shall select the applicable rateoption at the time it requests a loan hereunder and may, subject to thelimitations set forth above, elect to convert balances bearing interest at thevariable rate option to one of the fixed rate options.  Upon the expiration of any fixed rateperiod, interest shall automatically accrue at the variable rate option unlessthe amount fixed is repaid or fixed for an additional period in accordance withthe terms hereof.  Notwithstanding theforegoing, unless CoBank otherwise consents in its sole discretion in eachinstance, rates may not be fixed for periods expiring after the maturity dateof the loans.  In the event CoBankconsents to one or more balances being fixed for a period or periods extendingbeyond the maturity date of the loans and the Commitment is not renewed, theneach such balance shall be due and payable on the last day of its fixed rateperiod and the promissory note set forth below shall be deemed amendedaccordingly.  All elections provided forherein shall be made telephonically or in writing and must be received by 12:00Noon Company’s local time.  Interestshall be calculated on the actual number of days each loan is outstanding onthe basis of a year consisting of 360 days and shall be payable monthly inarrears by the 20th day of the following month.

 

**SECTION3.  Promissory Note. **The Company promises torepay the loan as follows:  (1) in sevenequal, consecutive quarterly installments of $625,000.00, with the first suchinstallment due on March 31, 2003, and the last such installment due onSeptember 30, 2004; and (2) followed by a final installment in an amount equalto the remaining unpaid principal balance of the loans on December 31,2004.  If any installment due date isnot a day on which CoBank is open for business, then such installment shall bedue and payable on the next day on which CoBank is open for business. Inaddition to the above, the Company promises to pay interest on the unpaidprincipal balance of the loan in accordance with the rate options and at thetimes set forth above.  This notereplaces and supersedes, but does not constitute payment of the indebtednessevidenced by, the promissory note set forth in the Supplement being amended andrestated hereby.

 

**SECTION4.  Prepayment. **The Loan may be prepaid inwhole or in part on one CoBank business day’s prior written notice. Unlessotherwise agreed, all prepayments will be applied to principal installments inthe inverse order of their maturity and to such balances, fixed or variable, asCoBank shall specify.

 

**SECTION5.  Agency Fee.** The Company agrees to pay to CoBank an agencyfee on the average daily balance at the rate of 1/10 of 1% per annum(calculated on a 360 day basis), payable quarterly in arrears by the 20th dayfollowing each calendar quarter.

 

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**IN WITNESSWHEREOF,**the parties have caused this Supplement to beexecuted by their duly authorized officers as of the date shown above.

 
| **CoBANK, ACB** | **DAKOTA GROWERS PASTA COMPANY,   INC.** |
|-----------------|------------------------------------------|
|            |                                     |   |
| By:             |                                     |   | By: | /s/  Thomas Friezen |   |
|            |                                     |   |
| Title:          |                                     |   | Title: | CFO |   |

 

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