Document:

Exhibit 10

Exhibit

10.1

 

Loan

No. E539S01A

 

STATUSED REVOLVING

CREDIT SUPPLEMENT

 

                            THIS

SUPPLEMENT to the Master Loan Agreement dated June 20, 2001,

as amended, (the “MLA”), is entered into as of February 15, 2002 between CoBANK, ACB (“CoBank”)

and DAKOTA

GROWERS PASTA COMPANY, Carrington, North Dakota (the “Company”), and amends

and restates the Supplement dated June 20, 2001 and numbered E539S01.

 

                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 the “Borrowing Base” (as calculated

pursuant to the Borrowing Base Report attached hereto as Exhibit A) or

$19,000,000.00 (the “Commitment”). 

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

March 1, 2002, up to but not including February 25, 2003, 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 principal balance of each loan in accordance with one or more of the

following interest rate options, as selected by the Company:

 

                        (A)      Variable

Rate Option.  At a rate per

annum equal at all times to the rate of interest established by CoBank on the

first Business Day of each week.  The

rate established by CoBank may not exceed CoBank’s National Variable Rate (as

hereinafter defined) on that day plus 1% (100 basis points) and shall be effective

until the first Business Day of the next week. 

Each change in the rate shall be applicable to all balances subject to

this option and information about the then current rate shall be made available

upon telephonic request.  For purposes

hereof, the National Variable Rate shall mean the rate of interest established

by CoBank from time to time as its National Variable Rate, which Rate is

intended by CoBank to be a reference rate and not its lowest rate.  The National Variable Rate will change on

the date established by CoBank as the effective date of any change therein and

CoBank agrees to notify the Company promptly after any such change.

 

                        (B)      Fixed

Rate Option.  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 (including periods extending beyond the

maturity date of the loans (as set forth in Section 5 hereof)) as may be

agreeable to CoBank in its sole discretion in each instance.  In the event CoBank consents to one or more

balances being fixed for a period or periods extending beyond the maturity date

but the Commitment is not renewed, then each such balance shall be due and

payable on the last day of its fixed rate period and Section 5 hereof shall,

for each such balance, be deemed amended accordingly.

 

 

 

The Company shall select the applicable rate

option at the time it requests a loan hereunder and may, on any Business Day,

elect to convert balances bearing interest at the variable rate option to the

fixed rate option.  In addition, prior

to the expiration of any fixed rate period, the Company may, subject to

Section 13 of the MLA, repay any fixed rate balance, convert any fixed

rate balance to the variable rate option, or refix the rate at a new rate to be

quoted by CoBank.  Upon the expiration

of any fixed rate period, the Company may, subject to the terms hereof, refix

the rate or convert the rate to the variable rate option.  In the absence of any such election,

interest shall automatically accrue at the variable rate option.  All elections provided for herein shall be

made telephonically or in writing and must be received by 12:00 noon Company’s

local time.  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.

 

                SECTION

5.         Promissory Note.  The Company promises to repay the unpaid

principal balance of the loans on the first CoBank business day following 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 45 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.         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.

 

                SECTION 8.         Servicing Fee.  The Company agrees to pay to CoBank a

servicing fee on the average daily balance at the rate of 1/10 of 1% per annum

(calculated on a 360 day basis), payable quarterly in arrears by the 20th day

following each calendar quarter.

 

                SECTION

9.         Letters of Credit.  In addition to loans and if agreeable to

CoBank in its sole discretion in each instance, the Company may utilize the

Commitment to open irrevocable letters of credit for its account.  Each letter of credit shall reduce the

amount available under the Commitment by the maximum amount capable of being

drawn thereunder.  The rights and

obligations of the parties with respect to each letter of credit will be

governed by the Reimbursement Agreement attached hereto as Exhibit B (which

rights and obligations shall be in addition to the rights and obligations of

the parties hereunder and under the MLA). 

Notwithstanding the foregoing 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 

 

 

2

 

 

(after repaying all loans) the maximum amount

capable of being drawn under the letters of credit exceeds 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.

 

 

                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

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Rebecca Kennedy

  	

   

  	

  By:

  	

  /s/ Thomas Friezen

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

  Assistant Corporate

  Secretary

  	

   

  	

  Title:

  	

  CFO

  	

   

  
							

 

 

3Exhibit 10

Exhibit

10.2

 

MLA

No. E539B

 

AMENDMENT

 

                THIS

AMENDMENT is entered into as of January 24, 2002, between CoBANK, ACB

(“CoBank”) and DAKOTA GROWERS PASTA COMPANY, Carrington, North Dakota (the

“Company”).

 

BACKGROUND

 

                CoBank

and the Company are parties to a Master Loan Agreement dated June 20, 2001

(such agreement, as previously amended, is hereinafter referred to as the

“MLA”).  CoBank and the Company now

desire to amend the MLA.  For that

reason, and for valuable consideration (the receipt and sufficiency of which

are hereby acknowledged), CoBank and the Company agree as follows:

 

Section

10 (C) of the MLA is hereby amended and restated to read as follows:

 

SECTION 10.       Financial Covenants.  Unless

otherwise agreed to in writing, while this agreement is in effect:

 

        (C)      Debt

Service Coverage Ratio.  The

Company and its consolidated Subsidiary, on a combined basis, will have at the

end of each fiscal year of the Company, a “Debt Service Coverage Ratio” (as

defined below) for that year of not less than 1.25 to 1.  For purposes hereof, the term “Debt Service

Coverage Ratio” shall mean the following (all as calculated for the applicable

year in accordance with GAAP consistently applied):  (i) net income (after taxes), minus cash patronage refunds and

dividends payable in subsequent fiscal year based on the current fiscal year’s

net income, minus non-cash patronage income, minus retains revolved, plus

equity retains, plus depreciation and amortization, plus lease payments, plus

(or minus) extraordinary losses (or gains); to (ii) all principal payments due

within the year on all long-term debt, plus lease payments.

 

Except as set forth in this

amendment, the MLA, including all amendments thereto, shall continue in full

force and effect as written.

 

                IN

WITNESS WHEREOF, the parties have caused this amendment to be

executed by their duly authorized officers as of the date shown above.

 

	

  CoBANK, ACB

  	

  DAKOTA GROWERS PASTA COMPANY

  
	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Rebecca Kennedy

  	

   

  	

  By:

  	

  /s/ Thomas Friezen

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

  Assistant Corporate

  Secretary

  	

   

  	

  Title:

  	

  CFO

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