Document:

Exhibit 10.1

 

Loan No. RIE539S01F

 

STATUSED REVOLVING CREDIT SUPPLEMENT

 

THIS SUPPLEMENT to
the Master Loan Agreement dated May 23, 2005 (the “MLA”), is entered into
as of December 8, 2008, and effective January 14, 2009 (“Effective
Date”), between CoBANK, ACB (“CoBank”) and DAKOTA GROWERS PASTA COMPANY, INC., Carrington, North Dakota
(the “Company”), and amends and
restates the Supplement dated January 22, 2008 and numbered RIE539S01E.

 

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 Effective Date hereof, up to and
including January 13, 2010, 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)    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(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:  (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)    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 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 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 

 

1

 

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 Subsection (A) and(B) 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 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 

 

2

 

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 30 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 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 1/4 of 1% 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
$9,000.00.

 

3

 

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 10.2

 

Loan No. RIE539T05F

 

NON-REVOLVING CREDIT SUPPLEMENT

Letters of Credit

 

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 January 22, 2008 and numbered RIE539T05E.

 

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,
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 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 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.       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

 

1

 

letter of credit must be in form and content acceptable to CoBank and
must expire no later than the maturity date of the loans.

 

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

  

 

2

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