**Exhibit 10.18**

 

MLA No. E539D

 

**AMENDMENT**

 

 

**THIS AMENDMENT** isentered into as of July 29, 2003, between **CoBANK,ACB**(“CoBank”) and **DAKOTA GROWERSPASTA COMPANY, INC., Carrington, North Dakota** (the “Company”).

 

**BACKGROUND**

 

CoBank and the Company are parties to a Master Loan Agreement datedJune 20, 2001 (such agreement, as previously amended, is hereinafter referredto as the “MLA”).  CoBank and theCompany now desire to amend the MLA. For that reason, and for valuable consideration (the receipt andsufficiency of which are hereby acknowledged), CoBank and the Company agree asfollows:

 

1.      Section 10(A) of the MLA is herebyamended and restated to read as follows:

 

**SECTION 10.  Financial Covenants.**  Unless otherwise agreed to in writing, whilethis agreement is in effect:

 

**(A)Current Ratio.** The Company and its consolidated Subsidiary will, on a combined basis,have at the end of each period for which financial statements are required tobe furnished pursuant to Section 8(H) hereof, a ratio of consolidated currentassets to consolidated current liabilities (both as determined in accordancewith GAAP consistently applied) of not less than 1.20 to 1.0 through andincluding April 30, 2004, and of not less than 1.35 to 1.0 thereafter.

 

2.      Section 10(C) of the MLA is herebyamended and restated to read as follows:

 

**SECTION 10.**  **Financial Covenants.**  Unless otherwise agreed to in writing, whilethis agreement is in effect:

 

**(C) Consolidated Funded Debt toConsolidated Cash Flow Ratio.**  The Company and its consolidated Subsidiary, on a combined basis,will have at the end of each fiscal quarter of the Company, a ConsolidatedFunded Debt to Consolidated Cash Flow of not more than 4.0 to 1.0 calculated ona trailing four quarter basis through and including April 30, 2004, and of notmore than 3.0 to 1.0 thereafter. Consolidated Funded Debt means all debt which would in accordance GAAP,constitute long term debt and including any current portion thereof including:  (a) any debt with a maturity of more thanone year after the creation of such debt, (b) any debt outstanding under arevolving credit or similar agreement providing for borrowings (and renewablesand extensions thereof) which pursuant to its terms would constitute long termdebt in accordance with GAAP, (c) any Capital Lease obligation and (d) anyguarantee with respect to Funded Debt of another person.  Notwithstanding anything to the contrarycontained herein any debt outstanding under a revolving credit or similaragreement providing borrowings which is paid down for a period of 30consecutive days during any 12 months period (and not merely refinanced with ashort term credit facility) will not be deemed to constitute Funded Debt.  Consolidated Cash Flow shall mean the sum ofConsolidated Net Earnings after taxes of the Company and its Subsidiariesplus:  (i) provision for any applicableincome taxes; (ii) depreciation and amortization; and (iii) ConsolidatedInterest Expense for the period.

 

3.             **AmendmentFee.**  In consideration of theamendment, the Company agrees to pay to CoBank on the execution hereof, a feein the amount of $4,500.00.

 

4.             Except as set forth in thisamendment, the MLA, including all amendments thereto, shall continue in fullforce and effect as written.

 

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**IN WITNESS WHEREOF**,the parties have caused this amendment to be executed by their duly authorizedofficers 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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