Exhibit
10.4


 


Loan
No. RIE539T06B


 


MULTIPLE ADVANCE TERM LOAN SUPPLEMENT


 


THIS SUPPLEMENT to the Master Loan Agreement dated May 23,
2005 (the “MLA”), is entered into as of December 8, 2008 between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the “Company”),
and amends and restates the Supplement dated February 14, 2007 and
numbered RIE539T06A.


 


SECTION 1.         The Term
Loan Commitment.  As of the
date hereof, CoBank’s obligation to extend credit to the Company has expired
and the unpaid principal balance of the loans is $10,400,000.00 (the “Commitment”).


 


SECTION 2.         Purpose.  The purpose of the loans was and remains to
finance the New Hope new pasta line and to provide working capital to the
Company.


 


SECTION 3.         Term.  Intentionally Omitted.


 


SECTION 4.         Interest.  The Company agrees to pay interest on the
unpaid balance of the loan(s) 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(D) 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.  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 the 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)    Quoted Rate.  At a fixed rate per annum to be quoted by
CoBank in its sole discretion in each instance. 
Under this option, rates may be fixed on such balances and for such
periods, as may be agreeable to CoBank in its sole discretion in each instance,
provided that:  (1) the minimum fixed period shall be
180 days; (2) amounts may be fixed in increments of $500,000.00 or
multiples thereof; and (3) the maximum number of fixes in place at any one
time shall be ten.


 


(C)    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(D) below. 
Under this option:  (1) rates
may be fixed for “Interest Periods” (as hereinafter defined) of 1, 2, 3, or 6
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 five; and (4) rates may only be fixed on a “Banking
Day” (as hereinafter defined) on three Banking Days’ prior written notice.  For purposes hereof:  (a) “LIBOR” shall mean the rate (rounded
upward to the nearest sixteenth and adjusted for reserves 


 


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required on “Eurocurrency Liabilities” [as hereinafter defined] for
banks subject to “FRB Regulation D” [as herein 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 two 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 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, or 6
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.


 


(D)        Performance
Pricing Adjustments.  The interest
rate spread parameters set forth in Subsection (A) and(C) 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

  	
   

  	
  + 300 basis points

  	
   

  	
  + 300 basis points

  	
   

  
	
  Equal to or greater than 3.50 to 1.00 but less than 4.00 to 1.00

  	
   

  	
  + 275 basis points

  	
   

  	
  + 275 basis points

  	
   

  
	
  Equal to or greater than 3.00 to 1.00 but less than 3.50 to 1.00

  	
   

  	
  + 250 basis points

  	
   

  	
  + 250 basis points

  	
   

  
	
  Equal to or greater than 2.50 to 1.00 but less than 3.00 to 1.00

  	
   

  	
  + 225 basis points

  	
   

  	
  + 225 basis points

  	
   

  
	
  Less than 2.50 to 1.00

  	
   

  	
  + 200 basis points

  	
   

  	
  + 200 basis points

  	
   

  



 


The initial spreads shall be those applicable to Total Debt to EBITDA
of less than 2.50 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 in such a manner
as to cause the Company to have to break any fixed rate balance in order to pay
any installment of principal.  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 


 


2

















 


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
three 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.


 


SECTION 5.         Promissory
Note.  The Company promises to repay
the loans that are outstanding at the time the Commitment expires as
follows:  (1) in nine equal,
consecutive quarterly installments of $1,100,000.00, with the first such
installment due on February 20, 2009, and the last such installment due on
February 20, 2011; and (2) followed by a final installment in an
amount equal to the remaining unpaid principal balance of the loans on May 20,
2011.  If any installment due date is not
a day on which CoBank is open for business, then such installment shall be due
and payable on the next day on which CoBank is open for business.  In addition to the above, the Company
promises to pay interest on the unpaid principal balance hereof 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.         Prepayment.  Subject to the broken funding surcharge
provision of the MLA, the Company may on one Business Day’s prior written
notice prepay all or any portion of the loan(s).  Unless otherwise agreed by CoBank, all
prepayments will be applied to principal installments in the inverse order of
their maturity and to such balances, fixed or variable, as CoBank shall
specify.


 


SECTION 7.         Security.  The Company’s obligations
hereunder and, to the extent related hereto, the MLA, shall be secured as
provided in the Security Section of the MLA, including without limitation
as a future advance under any existing mortgage or deed of trust.


 


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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