Document:

Exhibit 10.2

 

Loan No. RIE539S01G

 

STATUSED REVOLVING CREDIT SUPPLEMENT

 

THIS SUPPLEMENT to the Master Loan Agreement dated January 13,
2010 (the “MLA”), is entered into as of January 13, 2010 between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the “Company”), and amends
and restates the Supplement dated December 8, 2008 and numbered RIE539S01F.

 

SECTION 1.         The
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, at any
one time outstanding, the lesser of $45,000,000.00 (the “Commitment”), or the “Borrowing
Base” (as calculated pursuant to the Borrowing Base Report attached hereto as Exhibit A).  Within the 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 referred to in the
Borrowing Base Report.

 

SECTION 3.         Term.  The term of the Commitment
shall be from the date hereof, up to and including January 11, 2011, 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 one or
more of the following interest rate options, as selected by the Company:

 

(A)      One-Month 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 rate quoted by the British Bankers Association
(the “BBA”) at 11:00 a.m. London time for the offering of one (1)-month
U.S. dollars deposits, as published by Bloomberg or another major information
vender 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 set forth in Section 4(C) 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:  (1) “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; (2) “Eurocurrency Liabilities”
shall have the meaning as set forth in “FRB Regulation D”; and (3) “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)      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(C) below.  Under this
option:  (1) rates may be fixed for “Interest
Periods” (as hereinafter defined) of 1, 2, 3, 6, 9, or 12

 

1

 

months as selected by the Company; (2) amounts may be fixed in
increments of $500,000.00 or multiples thereof; (3) the maximum number of
fixes in place at any one time shall be ten; 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 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, 6, 9, or 12 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.

 

(C)      Performance Pricing
Adjustments.  The interest
rate spread parameters set forth in Subsections (A) and (B) above
shall be either increased or decreased in accordance with the following
schedule:

 

	
  Maximum Total Debt to

  EBITDA (MLA, Section

  10(B))

  	
   

  	
  Applicable Spread

  	
   

  
	
  > 4.00 to 1.00

  	
   

  	
  + 3.00

  	
  %

  
	
  > 3.50
  to 1.00 but < 4.00 to 1.00

  	
   

  	
  + 2.75

  	
  %

  
	
  > 3.00
  to 1.00 but < 3.50 to 1.00

  	
   

  	
  + 2.50

  	
  %

  
	
  > 2.50
  to 1.00 but < 3.00 to 1.00

  	
   

  	
  + 2.25

  	
  %

  
	
  < 2.50 to 1.00

  	
   

  	
  + 2.00

  	
  %

  

 

The
applicable interest rate adjustment shall: 
(1) be considered as of each fiscal quarter end based on the
quarterly Compliance Certificate provided by the Company under Section 8(H)(7) of
the MLA; (2) become effective as of the first day of the fiscal quarter
following receipt of such information by CoBank; and (3) 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, 

 

2

 

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 for periods expiring after the maturity date of the
loans.  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 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 unpaid principal balance of the loans on the last day of the term of the
Commitment.  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.         Borrowing
Base Reports, Etc.  The Company
agrees to furnish a Borrowing Base Report to CoBank at such times or intervals
as CoBank may from time to time request. 
Until receipt of such a request, the Company agrees to furnish a
Borrowing Base Report to CoBank within 50 days after each month end calculating
the Borrowing Base as of the last day of the month for which the report is
being furnished.  However, if no
balance is outstanding hereunder on the last day of such month, then no Report
need be furnished.  Regardless
of the frequency of the reporting, if at any time the amount outstanding under
the Commitment exceeds the Borrowing Base, the Company shall immediately notify
CoBank and repay so much of the loans as is necessary to reduce the amount
outstanding under the Commitment to the limits of the Borrowing Base.

 

SECTION 7.         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 CoBank’s receipt of a duly completed and
executed copy of CoBank’s then current form of Application and Reimbursement
Agreement 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 a loan under the Commitment and shall be repaid in
accordance with this Supplement.  Each
letter of credit must be in form and content acceptable to CoBank and must
expire no later than the maturity date of the Commitment.  Notwithstanding the forgoing or any other
provision hereof, the maximum amount capable of being drawn under each letter
of credit must be statused against the Borrowing Base in the same manner as if
it were a loan, and in the event that (after repaying all loans) the maximum
amount capable of being drawn under the letters of credit exceeds the

 

3

 

Borrowing
Base, then the Company shall immediately notify CoBank and pay to CoBank (to be
held as cash collateral) an amount equal to such excess.

 

SECTION 8.         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.

 

SECTION 9.         Commitment
Fee.  In consideration of the
Commitment, the Company agrees to pay to CoBank a commitment fee on the average
daily unused portion of the Commitment at the rate of 0.25% per annum
(calculated on a 360-day basis), payable quarterly in arrears by the 20th day
following each calendar quarter.  Such
fee shall be payable for each quarter (or portion thereof) occurring during the
original or any extended term of the Commitment.  For purposes of calculating the commitment
fee only, the “Commitment” shall mean the dollar amount specified in Section 1
hereof, irrespective of the Borrowing Base.

 

SECTION 10.       Amendment
Fee.  In consideration of the
amendment, the Company agrees to pay to CoBank on the execution hereof a fee in
the amount of $5,000.00.

 

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

  

 

4Exhibit 10.3

 

Loan No. RIE539T05G

 

NON-REVOLVING CREDIT SUPPLEMENT

Letters of Credit

 

THIS SUPPLEMENT to the Master Loan Agreement dated January 13,
2010 (the “MLA”), is entered into as of January 13, 2010 between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the “Company”), and amends
and restates the Supplement dated December 8, 2008 and numbered RIE539T05F.

 

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, the 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, 2012, 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 2.00%
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 the last day of the term of the
Commitment.  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.

 

1

 

SECTION 6.         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

  

 

2

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