Exhibit 10.3


 


Loan No. RIE539T05


 


NON-REVOLVING
CREDIT SUPPLEMENT


(Letters
of Credit)


 


THIS
SUPPLEMENT to the Master Loan Agreement dated February 24, 2004 (the “MLA”), is
entered into as of February 24,
2004 between CoBANK, ACB (“CoBank”) and DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota
(the “Company”), and amends and
restates the Supplement dated October 28, 2003 and numbered E539T05.


 


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 $350,000.00
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,
2005, 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 demand.  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.


 


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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/
  Teresa L. Fountain

  	
   

  	
  By:

  	
  /s/
  Thomas Friezen

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assistant
  Corporate Secretary

  	
   

  	
  Title:

  	
  CFO

  	
   

  






 


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