**Exhibit10.2**

 

Loan No. RIE539S01

 

**STATUSED****REVOLVINGCREDIT SUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated February 24, 2004 (the “MLA”), isentered into as of February 24,2004 (“Effective Date”),between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends andrestates the Supplement dated February 11, 2003 and numbered E539S01B.

 

**SECTION 1.****                            TheRevolving Credit Facility.**  On theterms and conditions set forth in the MLA and this Supplement, CoBank agrees tomake loans to the Company during the period set forth below in an aggregateprincipal amount not to exceed, at any one time outstanding, the lesser of $25,000,000.00 (the “Commitment”), orthe “Borrowing Base” (as calculated pursuant to the Borrowing Base Reportattached hereto as Exhibit A).  Withinthe 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 referredto in the Borrowing Base Report.

 

**SECTION 3.****                            Term.**  The term of the Commitment shall be from the Effective Date hereof, up toand including February 21, 2005,or such later date as CoBank may, in its sole discretion, authorize inwriting.  

 

**SECTION 4.****                            Interest.**  TheCompany agrees to pay interest on the unpaid balance of the loans in accordancewith one or more of the following interest rate options, as selected by theCompany:

 

**(A)****                  ****Weekly Quoted Variable Rate.**  At arate per annum equal at all times to the rate of interest established by CoBankon the first Business Day of each week. The rate established by CoBank shall be effective until the firstBusiness Day of the next week.  Eachchange in the rate shall be applicable to all balances subject to this optionand information about the then current rate shall be made available upontelephonic request.

 

**(B)****                  ****Quoted Rate.**  At afixed rate 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, provided that:  (1) the minimum fixed period shall be 30days; (2) amounts may be fixed in increments of $500,000.00 or multiplesthereof; and (3) the maximum number of fixes in place at any one time shall be10.

 

The Company shall select the applicable rate option at the time itrequests a loan hereunder and may, subject to the limitations set forth above,elect to convert balances bearing interest at the variable rate option to oneof the fixed rate options.  Upon theexpiration of any fixed rate period, interest shall automatically accrue at thevariable rate option unless the amount fixed is repaid or fixed for anadditional period in accordance with the terms hereof.  Notwithstanding the foregoing, rates may notbe fixed for periods expiring after the maturity date of the loans.  All elections provided for herein shall be madetelephonically or in writing and must be received by 12:00 Noon Company’s localtime.  Interest shall be calculated onthe actual number of days each loan is outstanding on the basis of a yearconsisting of 360 days and shall be payable monthly in arrears by the 20th dayof the following month or on such other day in such month as CoBank shallrequire in a written notice to the Company.

 

**SECTION 5.****                            PromissoryNote.**  The Company promises to repaythe unpaid principal 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 inSection 4 hereof.  This note replaces and supersedes, but doesnot constitute payment of the indebtedness evidenced by, the promissory noteset forth in the Supplement being amended and restated hereby.

 

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**SECTION 6.****                            BorrowingBase Reports, Etc. **The Companyagrees to furnish a Borrowing Base Report to CoBank at such times or intervals asCoBank may from time to time request. Until receipt of such a request, the Company agrees to furnish aBorrowing Base Report to CoBank within 50days after each month end calculating the Borrowing Base as of the last day ofthe month for which the Report is being furnished.  However, if no balance is outstanding hereunder on the last dayof such month, then no Report need be furnished.  Regardless of the frequency of the reporting, if at any time theamount outstanding under the Commitment exceeds the Borrowing Base, the Companyshall immediately notify CoBank and repay so much of the loans as is necessaryto reduce the amount outstanding under the Commitment to the limits of theBorrowing Base.  

 

**SECTION 7.****                            Lettersof Credit. **If agreeable to CoBankin its sole discretion in each instance, in addition to loans, the Company mayutilize the Commitment to open irrevocable letters of credit for itsaccount.  Each letter of credit will beissued within a reasonable period of time after receipt of a duly completed andexecuted copy of CoBank’s then current form of application or, if applicable,in accordance with the terms of any CoTrade Agreement between the parties, andshall reduce the amount available under the Commitment by the maximum amountcapable of being drawn thereunder.  Anydraw under any letter of credit issued hereunder shall be deemed an advanceunder the Commitment.  Each letter ofcredit must be in form and content acceptable to CoBank and must expire nolater than the maturity date of the loans. 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.

 

**SECTION 9.****                           ****Servicing Fee.**  TheCompany agrees to pay to CoBank a servicing fee on the average daily balancefor each calendar quarter at the rate of 1/10 of 1% per annum (calculated on a360 day basis), payable quarterly in arrears by the 20th day following suchcalendar quarter.

 

**SECTION 8.****                           ****Amendment Fee.**  Inconsideration of the amendment, the Company agrees to pay to CoBank on theexecution hereof a fee in the amount of $6,000.00.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown 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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Loan No. RIE539T01

 

**CONSOLIDATINGSUPPLEMENT**

**(Variable and Quoted Fixed Rate Term Loan)**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated February 24, 2004 (the “MLA”), isentered into as of February 24,2004 between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends andrestates the Supplement dated February 11, 2003 and numbered E539T01A.

 

**SECTION 1.****                           ****The Term Loan Commitment.**  Asof the date hereof, CoBank’s obligations to extend credit to the Company hasexpired and the unpaid principal balance of the loans is $2,650,000.00.

 

**SECTION 2.****                            Purpose. **Thepurpose of the loans was and remains to finance the construction of the pastaplant.

 

**SECTION 3.****                            Term.**  IntentionallyOmitted.

 

**SECTION 4.****                            Interest.**  TheCompany agrees to pay interest on the unpaid balance of the loans in accordancewith one or more of the following interest rate options, as selected by theCompany:

 

**(A)****                  ****Weekly Quoted Variable Rate.**  At arate per annum equal at all times to the rate of interest established by CoBankon the first Business Day of each week. The rate established by CoBank shall be effective until the firstBusiness Day of the next week.  Eachchange in the rate shall be applicable to all balances subject to this optionand information about the then current rate shall be made available upontelephonic request.

 

**(B)****                  ****Quoted Rate.**  At afixed rate 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, provided that:  (1) the minimum fixed period shall be 180days; (2) amounts may be fixed in increments of $100,000.00 or multiplesthereof; and (3) the maximum number of fixes in place at any one time shall be5.

 

The Company shall select the applicable rate option at the time itrequests a loan hereunder and may, subject to the limitations set forth above,elect to convert balances bearing interest at the variable rate option to oneof the fixed rate options.  Upon theexpiration of any fixed rate period, interest shall automatically accrue at thevariable rate option provided for above unless the amount fixed is repaid orfixed for an additional period in accordance with the terms hereof.  Notwithstanding the foregoing, rates may notbe fixed in such a manner as to cause the Company to have to break any fixedrate balance in order to pay any installment of principal.  All elections provided for herein shall bemade telephonically or in writing and must be received by 12:00 Noon Company’slocal time.  Interest shall becalculated on the actual number of days each loan is outstanding on the basisof a year consisting of 360 days and shall be payable monthly in arrears by the20th day of the following month or on such other day in such month as CoBankshall require in a written notice to the Company. 

 

**SECTION 5.****                            PromissoryNote.**  The Company promises to repaythe loans as follows:  (1) in three equal, consecutive quarterlyinstallments of $685,000.00, with the first such installment due onMarch 31, 2004, and the last such installment due on September 30,2004; and (2) followed by a final installment in an amount equal to theremaining unpaid principal balance of the loans on December 31, 2004.  If any installment due date is not a day onwhich CoBank is open for business, then such installment shall be due andpayable on the next day on which CoBank is open for business.  In addition to the above, the Companypromises to pay interest on the unpaid principal balance hereof at the timesand in accordance with the provisions set forth in Section 4 hereof.  Thisnote replaces and supersedes, but does not constitute payment of theindebtedness evidenced by, the promissory note set forth in the Supplementbeing amended and restated hereby.

 

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**SECTION 6.****                            Prepayment. **Subjectto the broken funding surcharge provision of the MLA, the Company may on oneBusiness Day’s prior written notice prepay all or any portion of theloan(s).  Unless otherwise agreed byCoBank, all prepayments will be applied to principal installments in theinverse order of their maturity and to such balances, fixed or variable, asCoBank shall specify.

 

**SECTION 7.****                           ****Patronage Designation.** Notwithstanding Section 21 of the MLA, loans hereunder shall be ona patronage basis, regardless of any participation interest sold.

 

**SECTION 8.****                           ****Agency Fee.**  The Companyagrees to pay to CoBank an agency fee on the average daily balance for eachcalendar quarter at the rate of 1/10 of 1% per annum (calculated on a 360 daybasis), payable quarterly in arrears by the 20th day following such calendarquarter.

 

**INWITNESS WHEREOF,** the parties have caused this Supplementto 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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Loan No. RIE539T02

 

**CONSOLIDATINGSUPPLEMENT**

**(Variable and Quoted Fixed Rate Term Loan)**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated February 24, 2004 (the “MLA”), isentered into as of February 24,2004 between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends andrestates the Supplement dated February 11, 2003 and numbered E539T02A.

 

**SECTION 1.****                           ****The Term Loan Commitment.**  Asof the date hereof, CoBank’s obligations to extend credit to the Company hasexpired and the unpaid principal balance of the loans is $2,375,000.00.

 

**SECTION 2.****                            Purpose. **Thepurpose of the loans was and remains to finance the mill and pasta lineexpansion (the Project).

 

**SECTION 3.****                            Term.**  IntentionallyOmitted.

 

**SECTION 4.****                            Interest.**  TheCompany agrees to pay interest on the unpaid balance of the loans in accordancewith one or more of the following interest rate options, as selected by theCompany:

 

**(A)****                  ****Weekly Quoted Variable Rate.**  At arate per annum equal at all times to the rate of interest established by CoBankon the first Business Day of each week. The rate established by CoBank shall be effective until the firstBusiness Day of the next week.  Eachchange in the rate shall be applicable to all balances subject to this optionand information about the then current rate shall be made available upontelephonic request.

 

**(B)****                  ****Quoted Rate.**  At afixed rate 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, provided that:  (1) the minimum fixed period shall be 180days; (2) amounts may be fixed in increments of $100,000.00 or multiplesthereof; and (3) the maximum number of fixes in place at any one time shall be5.

 

The Company shall select the applicable rate option at the time itrequests a loan hereunder and may, subject to the limitations set forth above,elect to convert balances bearing interest at the variable rate option to oneof the fixed rate options.  Upon theexpiration of any fixed rate period, interest shall automatically accrue at thevariable rate option provided for above unless the amount fixed is repaid orfixed for an additional period in accordance with the terms hereof.  Notwithstanding the foregoing, rates may notbe fixed in such a manner as to cause the Company to have to break any fixedrate balance in order to pay any installment of principal.  All elections provided for herein shall bemade telephonically or in writing and must be received by 12:00 Noon Company’slocal time.  Interest shall be calculatedon the actual number of days each loan is outstanding on the basis of a yearconsisting of 360 days and shall be payable monthly in arrears by the 20th dayof the following month or on such other day in such month as CoBank shallrequire in a written notice to the Company.

 

**SECTION 5.****                            PromissoryNote.**  The Company promises to repaythe loans as follows:  (1) in three equal, consecutive quarterlyinstallments of $625,000.00, with the first such installment due onMarch 31, 2004, and the last such installment due on September 30,2004; and (2) followed by a final installment in an amount equal to theremaining unpaid principal balance of the loans on December 31, 2004.  If any installment due date is not a day onwhich CoBank is open for business, then such installment shall be due andpayable on the next day on which CoBank is open for business.  In addition to the above, the Companypromises to pay interest on the unpaid principal balance hereof at the timesand in accordance with the provisions set forth in Section 4 hereof.  Thisnote replaces and supersedes, but does not constitute payment of theindebtedness evidenced by, the promissory note set forth in the Supplementbeing amended and restated hereby.

 

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**SECTION 6.****                            Prepayment. **Subjectto the broken funding surcharge provision of the MLA, the Company may on oneBusiness Day’s prior written notice prepay all or any portion of theloan(s).  Unless otherwise agreed byCoBank, all prepayments will be applied to principal installments in theinverse order of their maturity and to such balances, fixed or variable, asCoBank shall specify.

 

**SECTION 7.****                           ****Patronage Designation.** Notwithstanding Section 21 of the MLA, loans hereunder shall be ona patronage basis, regardless of any participation interest sold.

 

**SECTION 8.****                           ****Agency Fee.**  The Companyagrees to pay to CoBank an agency fee on the average daily balance for eachcalendar quarter at the rate of 1/10 of 1% per annum (calculated on a 360 daybasis), payable quarterly in arrears by the 20th day following such calendarquarter.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown 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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Loan No. RIE539T03

 

**SINGLEADVANCE TERM LOAN SUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated February 24, 2004 (the “MLA”), isentered into as of February 24,2004 between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends andrestates the Supplement dated June 20, 2001 and numbered E539T03.

 

**SECTION 1.****                           ****The Term Loan Commitment.**  Asof the date hereof, CoBank’s obligations to extend credit to the Company hasexpired and the unpaid principal balance of the loans is $6,000,000.00.

 

**SECTION 2.****                            Purpose.**  Thepurpose of the loans was and remains to finance the acquisition of PrimoPiatto, Inc.

 

**SECTION 3.****                            Interest.**  Theunpaid principal balance of the loan shall bear interest at 5.71% perannum.  Interest shall be calculated onthe actual number of days the loan is outstanding on the basis of a yearconsisting of 360 days, and shall be payable monthly in arrears by the 20th dayof the following month. 

 

**SECTION 4.****                            PromissoryNote.**  The Company promises to repaythe loan in five equal, consecutiveannual installments of $1,200,000.00, with the first such installment due onSeptember 30, 2004, and the last such installment due onSeptember 30, 2008.  If anyinstallment due date is not a day on which CoBank is open for business, thensuch installment shall be due and payable on the next day on which CoBank isopen for business.  In addition to theabove, the Company promises to pay interest on the unpaid principal balance ofthe loan at the rate and at the times set forth above.  Thisnote replaces and supersedes, but does not constitute payment of theindebtedness evidenced by, the promissory note set forth in the Supplementbeing amended and restated hereby.

 

**SECTION 5.****                            Prepayment. **Subjectto the broken funding surcharge provision of the MLA, the Company may on oneBusiness Day’s prior written notice prepay all or any portion of theloan(s).  Unless otherwise agreed byCoBank, all prepayments will be applied to principal installments in theinverse order of their maturity and to such balances, fixed or variable, asCoBank shall specify.

 

**SECTION 6.****                           ****Agency Fee.** The Companyagrees to pay to CoBank an agency fee on the average daily balance for eachcalendar quarter at the rate of 1/10 of 1% per annum (calculated on a 360 daybasis), payable quarterly in arrears by the 20th day following such calendarquarter.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown 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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Loan No. RIE539T04

 

**SINGLEADVANCE TERM LOAN SUPPLEMENT**

 

**THISSUPPLEMENT** to the Master Loan Agreement dated February 24, 2004 (the “MLA”), isentered into as of February 24,2004 between **CoBANK, ACB**(“CoBank”) and **DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota**(the “Company”), and amends andrestates the Supplement dated June 20, 2001 and numbered E539T04.

 

**SECTION 1.****                            TheTerm Loan Commitment.**  On the termsand conditions set forth in the MLA, CoBank agrees to make a loan to theCompany in an amount not to exceed $6,000,000.00(the “Commitment”).  The available Commitment shall be decreasedby $1,200,000.00 on the 31st day of each December.  The Commitment shall expire upon any advance being made hereunder(regardless of amount) or at 12:00 Noon (Company’s local time) on December 31, 2008, whichever occursearlier, or on such later date as CoBank may, in its sole discretion,authorize in writing.

 

**SECTION 2.****                            Purpose.**  The purpose of the Commitment is to finance the Bank of North Dakota draws on theletter of credit in its favor in accordance with the terms and conditionsthereof.

 

**SECTION 3.****                           ****Availability.**  Theloan will be made available as provided in Section 2 of the MLA.

 

**SECTION ****4.****                            Interest.**  Theunpaid principal balance of each loan shall bear interest at a rate per annumequal at all times to 2% (200 basis points) above the rate of interestestablished by CoBank from time to time as its CoBank Base Rate, which Rate isintended by CoBank to be a reference rate and not its lowest rate.  The CoBank Base Rate will change on the dateestablished by CoBank as the effective date of any change therein and CoBankagrees to notify the Company promptly after any such change.  Interest shall be calculated on the actualnumber of days each loan is outstanding on the basis of a year consisting of360 days and shall be payable on demand.  

 

**SECTION ****5.****                            PromissoryNote.**  The Company promises to repaythe loan on demand.  In addition to the above, the Companypromises to pay interest on the unpaid principal balance of the loan on demandat the rate 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.

 

**SECTION 6.****                           ****Nonpatronage Designation.** Notwithstanding Section 21 of the MLA, the loan shall be on anonpatronage basis.  Hence, no patronageshall be paid with respect to such loan.

 

**INWITNESS WHEREOF,** the parties have caused thisSupplement to be executed by their duly authorized officers as of the dateshown 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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