Document:

EXHIBIT 10.1

                                 Promissory Note

                                 PROMISSORY NOTE                       US$ 1,000
                                 ---------------

For value received,  Medina Coffee,  Inc.  ("Medina"),  promises to pay to Harry
Miller ("Mr.  Miller"),  the sum of US$ 1,000 Dollars (the "Debt").  The Debt is
without interest.

Medina agrees to repay the Debt on demand.  Mr. Miller is under no obligation to
renegotiate the terms of repayment or to defer payments.

Medina  agrees that if it fails to repay the Debt as  required  under this Note,
Mr. Miller may,  without  notice,  proceed to exercise any and all of the rights
and remedies  under this Note or at law or in equity,  on the  occurrence of any
such  default or at any other time.  Mr.  Miller may exercise any and all rights
which will be cumulative and not mutually exclusive.

Medina  understands  that failure to repay the Debt in accordance with this Note
will be considered a default.  If Note is placed in the hands of an attorney for
collection  after  default,  Medina  agrees to pay  reasonable  attorneys'  fees
actually incurred, plus costs.

The entire Debt is  immediately  due and payable in the event of the  following:
insolvency of Medina; if bankruptcy  proceedings are instituted  against Medina;
dissolution of Medina; or in the event there is any deterioration,  depreciation
or impairment in the value of the assets of Medina.

This Note is to be  governed by and  construed  in  accordance  with the laws of
Washington State.

Date:    October 5 , 1999
                ---

                                     MEDINA COFFEE, INC.

                                     /s/ Harry Miller
                                     ----------------------------------
                                     By: Harry Miller, Sole Officer & Director

                                       45EXHIBIT 10.2

                              Consent of Accountant

                             BARRY L. FRIEDMAN, P.C.
                           Certified Public Accountant

1582 Tulita Drive                                          Office (702) 361-8414
Las Vegas, Nevada 89123                                   Fax No. (702) 896-0278

                                                                 January 5, 2001

To Whom It May Concern:

The firm of Barry L. Friedman, P.C., Certified Public Accountant consents to the
inclusion of my report of January 5, 2001, on the Financial Statements of Medina
Coffee,  Inc. as of December 31, 2000,  in any filings that are necessary now or
in the near future with the U.S. Securities and Exchange Commission.

Very truly yours,

/s/Barry L. Friedman
-------------------------------
Barry L. Friedman
Certified Public Accountant

                                       46Prepared by MerrillDirect

Exhibit
10.1

CONFIDENTIAL
TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE COMMISSION.

CoBANK, ACB

Loan Agreement

Borrower:

DAKOTA GROWERS PASTA COMPANY

CARRINGTON, NORTH DAKOTA

	
  New Loan
  
  

  
  	 
  	
  Present Loans
  
  

  
  
	
  $15,000,000.00
  - Seasonal Loan
  	 
  	
  $9,600,000.00
  
  	
   - Term Loan
  
	 
  	 
  	
  [9,600,000.00] 
  	
   - Letter of Credit Commitment
  
	 
  	 
  	
  6,000,000.00 
  	
   - Term Loan
  
	 
  	 
  	
  7,375,000.00 
  
  

  
  	
   - Construction Term Loan
  
	 
  	 
  	
  $22,975,000.00
  	 
  

 

	 
  	
  Total Loans
  
  

  
  
	 
  	
  $15,000,000.00
  	
   - Seasonal Loan, Note No. A637S01A
  
	 
  	
  9,600,000.00
  	
   - Term Loan, Note No. 39181NP*
  
	 
  	
  [9,600,000.00
  	
  ]
  - Letter of Credit Commitment, Note No. 39182NP*/**
  
	 
  	
  6,000,000.00
  	
   - Term Loan, Note No. 33061
  
	 
  	
  7,375,000.00
  
  

  
  	
   – Construction Term Loan, Note No. 35062
  
	 
  	
  $37,975,000.00
  	
   – Total
  

* NP indicates a non-patronage note.

**
Note No. 39182NP will only be used to repay Note No. 39181NP.

The maximum total indebtedness hereunder
will not exceed $37,975,00.00.

CoBank,
ACB (the “Bank”) and Borrower agree to the above loans (the “Loans”) to the
Borrower.  The Borrower’s present
indebtedness to the Bank and/or commitments outstanding (entitled Present Loans
in the above heading) are consolidated and are made subject to all the terms
and conditions of this loan agreement.

I. PURPOSE

The
proceeds of the Loans shall be used as follows:

	
  A.
  	
  The
  Seasonal Loan shall be used for general operating purposes, and to refinance
  Seasonal Loan, Note No. A637S01.

  
	
  B.
  	
  Term
  Loan, Note No. 39181NP, was used to refinance Term Loan, Note No. 39180.

  
	
  C.
  	
  Letter
  of Credit Commitment, Note No. 39182NP shall be used in the event that the
  Bank of North Dakota draws on the letter of credit in its favor in accordance
  with the terms and conditions thereof.

  
	
  D.
  	
  Term
  Loan, Note No. 33061, was used to finance the construction of the pasta
  plant.

  
	
  E.
  	
  Construction
  Term Loan, Note No. 35062, was used to finance the mill and pasta line
  expansion (the “Project”).

  

 

II. NOTES AND SECURITY

Advances
under this loan agreement, together with any existing indebtedness of the
Borrower to the Bank, shall be evidenced by a promissory note or notes
acceptable to the Bank, and shall be secured to the extent of all collateral
presently held by the Bank; including but not limited to, all real estate
mortgages and security agreements, as well as a perfected first security
interest in all of the Borrower’s personal property in Kentucky.

All
property under lien to the Bank as security for the Loans shall be collateral
for all indebtedness of the Borrower to the Bank.

III. LIMITATION ON ADVANCES

	
  A.
  	
  The
  total Seasonal Loan outstanding under this or any loan agreement between the
  Bank and the Borrower shall not exceed the amount shown in the above heading.

  
	
  B.
  	
  Advances
  on the Seasonal Loan shall not exceed the sum of the following collateral
  values based on collateral reports to be submitted monthly (or more often at
  Borrower’s discretion) in such form as required by the Bank:

  
	 
  	
  1.
  	
  Eighty
  percent (80%) of accounts receivable acceptable to the Bank and not older
  than forty-five (45) days from the date of invoice.

  
	 
  	
  2.
  	
  Sixty-five
  percent (65%) of the value under generally accepted accounting principles
  (GAAP) of owned inventories of grain, semolina, flours, millfeeds,
  ingredients, and finished pasta.

  
	
  C.
  	
  Advances
  on Letter of Credit Commitment, Note No. 39182NP shall support a letter of
  credit issued by the Bank in favor of Bank of North Dakota.  The letter of credit is in a current
  amount not to exceed $9,600,000.

  

IV. INTEREST

	
  A.
  	
  All
  Seasonal Loan balances hereunder shall bear interest at a variable rate of
  interest per annum as determined by the Bank (the “Applicable Rate”)(which
  was 8.22% as of December 5, 2000), which rate may vary from time to time in
  relationship to the Bank’s cost of funds; provided, however, the fixed
  amounts (as defined in the “FIXED RATE SEASONAL ADVANCES AND MATURITIES”
  section of this loan agreement) shall bear such rates of interest as
  described in the statements.  Variable
  rate balances (i.e., balances other than fixed amounts) under this Paragraph
  A shall be subject to Paragraph C of this Section IV.

  
	
  B.
  	
  All
  outstanding Term Loan balances, excluding Note Nos. 39181NP and 39182NP,
  shall bear interest at a variable rate of interest per annum as determined by
  the Bank (the “Applicable Rate”)(which was 8.61% as of December 5, 2000);
  which rate may vary from time to time in relationship to the Bank’s cost of
  funds; provided, however, the fixed amounts (as defined in the “CUSTOMER
  MANAGED FIXED RATE TERM ADVANCES AND MATURITIES” section of this loan
  agreement) shall bear such rates of interest as described in the
  statements.  Variable rate balances
  (i.e., balances other than fixed amounts) under this Paragraph B shall be
  subject to Paragraph C of this Section IV.
  

 

 

	
  C.
  	
  This
  paragraph applies to (and only to) variable rate Seasonal and Term Loan
  balances (excluding balances under Note Nos. 39181NP and 39182NP) .  During any time that the Borrower is not
  in compliance with the current ratio and debt service coverage ratio
  conditions (as defined in Section IX., paragraphs D and F, respectively, and
  measured at the times specified therein), all such variable rate balances
  shall bear interest at a rate *** basis points (***%) above the respective
  Applicable Rate.  During any time that
  the Borrower is in compliance with such current ratio and debt service
  coverage ratio conditions, the interest rate shall be increased or decreased
  (or, as applicable, not changed) in accordance with the following Incentive
  Interest Rate Matrix based on the Leverage Ratio (as defined in Section IX, Paragraph
  D and measured at the times specified therein):
  

 

	
  Incentive Interest Rate
  Matrix
  
  

  
  
	
  LEVERAGE RATIO
  
  

  
  	
  INCREASE / DECREASE TO
  INTEREST RATE
  
  

  
  	
  CHANGE TO INTEREST RATE IN
  BASIS POINTS
  
  

  
  
	
  Greater than ***%
  	
  ***
  	
  ***
  
	
  Greater than ***%
  and less than or equal to ***%
  	
  ***
  	
  ***
  
	
  Greater than ***%
  and less than or equal to ***%
  	
  ***
  	
  ***
  
	
  Greater than ***%
  and less than or equal to ***%
  	
  ***
  	
  ***
  
	
  Less than or
  equal to ***%
  	
  ***
  	
  ***
  

(*
- Confidential treatment requested.)

The
interest rate change shall occur within one month after the Bank’s receipt of
the monthly compliance report.

	
  D.
  	
  The
  interest rate on Term Loan, Note No. 39181NP shall be fixed to maturity at
  5.71% per annum.  The interest rate on
  Term Loan, Note No. 39181NP, shall not be subject to Paragraph C of this
  Section IV.

  
	
  E.
  	
  Any
  outstanding draws under the Letter of Credit Commitment, Note No. 39182NP,
  shall bear interest at the variable rate per annum equal to the highest prime rate, as published in The Wall Street
  Journal Money Rate section, plus 200 basis points (2.0%). 
  Interest rate changes will take place within seven business days from
  the time of publication in The Wall Street Journal.  The interest rate on Letter of Credit
  Commitment, Note No. 39182NP shall not be subject to Paragraph C of this
  Section IV.

  
	
  F.
  	
  Interest
  on the Loans shall be payable on the 20th day of each month and shall be
  calculated on the actual number of days each Loan is outstanding on the basis
  of a year consisting of 360 days, provided, however, that interest on
  fixed-rate balances outstanding as of the date of this loan agreement shall
  be paid on the 20th day of the first month of each calendar quarter and shall
  be calculated on the actual number of days outstanding on the basis of a year
  consisting of 365 days.

  

V. FEES

	
  A.
  	
  The
  Term Loans, except for Letter of Credit Commitment, Note No. 39182NP, shall
  be subject to an agency fee of 10 basis points (0.10%) on an annualized
  basis, on the daily outstanding balances and commitments payable on the last
  day of each calendar quarter, in arrears.

  
	
  B.
  	
  The
  Letter of Credit Commitment, Note No. 39182NP shall be subject to a
  commitment fee of 62.5 basis points (0.625%) on an annualized basis (based on
  a year consisting of 360 days), on the daily outstanding commitments payable
  on the last day of each calendar quarter, in arrears.  This commitment fee shall be on a
  non-patronage basis.
  

VI. FIXED RATE SEASONAL ADVANCES AND MATURITIES

In
accordance with and subject to the Bank’s Fixed Rate Seasonal Loan Program, and
subject to the Bank’s overall program funding limitations, it is agreed the
interest rate may be fixed on any seasonal loan indebtedness (the “fixed
amount”) made under this loan agreement as follows:

	
  A.
  	
  The
  minimum fixed amount shall be $100,000.

  
	
  B.
  	
  Each
  fixed amount and each selected pricing maturity date will be treated as a
  separate indebtedness for interest rate designation and interest billing
  purposes.

  
	
  C.
  	
  Fixed
  amount pricing maturities shall not be less than 30 days nor greater than 180
  days from the day of advance to be based on the maturity selection of the
  Borrower; however, all fixed amounts shall have pricing maturities no later
  than June 30, 2002.

  
	
  D.
  	
  The
  Borrower may receive same day interest rate quotes if a firm request is
  placed and accepted by the Bank before 12:01 p.m. (Central Time) on any
  business day.  A firm request is one
  placed by telephone or in writing by an authorized representative of the
  Borrower.

  
	
  E.
  	
  Fixed
  amounts shall be automatically converted to the variable rate seasonal loan
  at maturity.

  
	
  F.
  	
  Fixed
  amounts cannot be repaid or repriced by the Borrower prior to their
  respective pricing maturity dates without being subject to prepayment
  penalties.  Such penalties shall be
  determined according to a methodology specified by the Bank which preserves
  the Bank’s yield on the fixed amount prepaid or repriced and which is based
  upon the difference between the Bank’s cost of like funds to pricing maturity
  at the time of prepayment and the existing fixed rate on the fixed amount.

  
	
  G.
  	
  Each
  fixed amount shall be summarized in the Daily Activity Statement (the
  “statement”) to the Borrower.  Each
  statement shall reference and confirm at least the following:

  
	 
  	
  1.
  	
  Note
  No. A637S01A.

  
	 
  	
  2.
  	
  The
  fixed amount and its Contract No.

  
	 
  	
  3.
  	
  The
  rate of interest.

  
	 
  	
  4.
  	
  The
  effective date.

  
	 
  	
  5.
  	
  The
  pricing maturity date.

  
	
  H.
  	
  The
  Borrower agrees that the statement shall verify the understanding reached by
  the parties, and that the Borrower shall be bound by the statement without
  its signature; provided, however, if there is an error reflected in the
  statement, the Borrower shall notify the Bank of the error within five days
  after receipt of the statement and an appropriate correction will be made.

  
	
  I.
  	
  If
  there is a question on the interest rate applicable to the fixed amount, the
  rate as established by the Bank for such amounts shall be controlling.

  
	
  J.
  	
  Section
  IV., paragraph C. shall not apply to this Section VI., “FIXED RATE SEASONAL
  ADVANCES AND MATURITIES.”
  

 

VII. CUSTOMER MANAGED FIXED RATE TERM ADVANCES AND MATURITIES

In
accordance with and subject to the Bank’s Customer Managed Fixed Rate Term
Program and subject to the Bank’s overall program funding limitations, it is
agreed the interest rate may be fixed on any term loan indebtedness (the “fixed
amount”) under this loan agreement as follows:

	
  A.
  	
  The
  minimum fixed amount shall be $1,000,000.

  
	
  B.
  	
  Each
  fixed amount and each selected pricing maturity date shall be treated as a
  separate indebtedness for interest rate designation and interest billing
  purposes.

  
	
  C.
  	
  Fixed
  amount pricing maturities shall be for a minimum maturity of 60 days and a
  maximum of maturity.

  
	
  D.
  	
  The
  Borrower shall have indebtedness under the variable rate term interest rate
  program or priced maturing fixed amounts against which to apply scheduled
  term loan payments as set forth in the “REPAYMENT” section of this loan
  agreement.

  
	
  E.
  	
  The
  Borrower’s selection of loan interest rate quotes and pricing maturities must
  be communicated to the Bank by 2:00 p.m. (Central Time) on the day prior to
  the fixed amount advance.  If this
  selection deadline is not met, maturing fixed amounts shall automatically
  convert to the variable rate term loan.

  
	
  F.
  	
  Fixed
  amounts cannot be repaid or repriced by the Borrower prior to their
  respective pricing maturity dates without being subject to prepayment
  penalties.  Such penalties shall be
  determined according to a methodology specified by the Bank which preserves
  the Bank’s yield on the fixed amount prepaid or repriced and which is based
  upon the difference between the Bank’s cost of like funds to pricing maturity
  at the time of prepayment and the existing fixed rate on the fixed amount.

  
	
  G.
  	
  Each
  fixed amount shall be summarized in the Daily Activity Statement (the
  “statement”) to the Borrower.  Each
  statement shall reference and confirm the following:

  
	 
  	
  1.
  	
  Note Nos. 33061 or 35062.

  
	 
  	
  2.
  	
  The
  fixed amount and its Contract No.

  
	 
  	
  3.
  	
  The
  rate of interest.

  
	 
  	
  4.
  	
  The
  effective date.

  
	 
  	
  5.
  	
  The
  pricing maturity date.

  
	
  H.
  	
  The
  Borrower agrees that the statement shall verify the understanding reached by
  the parties, and that the Borrower shall be bound by the statement without
  its signature; provided, however, if there is an error reflected in the
  statement, the Borrower shall notify the Bank of the error within five days
  after receipt of the statement and an appropriate correction will be made.

  
	
  I.
  	
  If
  there is a question on the interest rate applicable to the fixed amount, the
  rate as established by the Bank for such amounts shall be controlling.

  
	
  J.
  	
  Section
  IV., paragraph C. shall not apply to this Section VII., “CUSTOMER MANAGED
  FIXED RATE TERM ADVANCES AND MATURITIES.”

  

 

VIII. REPRESENTATIONS AND WARRANTIES

The
Borrower represents and warrants that:

	
  A.
  	
  The
  Borrower and its subsidiary Primo Piatto, Inc. (PPI) are duly organized,
  existing and in good standing under the laws of North Dakota and Minnesota,
  respectively.  They have the power to
  own their properties and to carry on their business as now being conducted.  They are duly qualified to do business and
  are in good standing in each jurisdiction in which the transaction of their
  business makes such qualification necessary, except where the failure to so
  qualify would not have a material adverse effect on their business,
  operations, or properties, taken as a whole.

  
	
  B.
  	
  The
  Borrower has full power and authority to execute, deliver, and perform under
  the terms of this loan agreement and the Borrower and PPI each has full power
  and authority to execute, deliver and perform under the terms of the notes,
  the security agreements, mortgages, and guaranty (collectively referred to as
  the “Loan and Security Documents”) and all other documents and agreements
  contemplated by this loan agreement, all of which have been duly authorized
  by each respective party.

  
	
  C.
  	
  All
  consents or approvals of any person which are necessary for, or are required
  as a condition of, the execution, delivery, and performance under the terms
  of the Loan and Security Documents have been obtained.

  
	
  D.
  	
  The
  Loan and Security Documents each constitutes the legal, valid, and binding
  obligation of the Borrower and PPI, enforceable against the Borrower and PPI,
  in accordance with its respective terms.

  
	
  E.
  	
  To
  the best of the Borrower’s knowledge, there are no pending legal or
  governmental actions, proceedings, or investigations to which the Borrower or
  PPI is a party, or to which any property of the Borrower or PPI is subject,
  which might result in any material adverse change in the business or
  financial condition of the Borrower or PPI, and to the best of the Borrower’s
  knowledge, no such actions or proceedings are threatened or contemplated by
  governmental authorities or any other person.

  
	
  F.
  	
  There
  is no provision of the Borrower’s articles of incorporation or bylaws and, to
  the best of the Borrower’s knowledge after due inquiry, no provision of any
  existing real estate mortgage, indenture, lease, security agreement,
  contract, note, instrument, or any other agreement or document binding on the
  Borrower or PPI, or affecting their properties, which would conflict with or
  in any way prevent the execution, delivery, or performance of the Loan and
  Security Documents by the Borrower or PPI.

  
	
  G.
  	
  To
  the best of the Borrower’s knowledge, the Borrower and PPI each has duly and
  lawfully obtained, and is duly and lawfully maintaining in effect, all
  material, licenses, certificates, permits, qualifications, authorizations,
  and approvals which are required or necessary for the operation of its
  business, whether federal, state, or local.

  
	
  H.
  	
  To
  the best of the Borrower’s knowledge, neither the Borrower nor PPI has (1)
  any direct or contingent liability for any obligation of any other person and
  (2) any obligation to make a loan or advance to any person or to own,
  purchase, or acquire any stock, obligations, or securities of, or any other
  interests in, or to make any capital contribution to, any person.
  

 

IX. FINANCIAL CONDITIONS

While
this loan agreement is in effect, the Borrower agrees to comply with the
following financial conditions:

	
  A.
  	
  Cash
  Patronage: The Borrower will pay cash patronage
  in amounts necessary to qualify its patronage refunds as a qualified
  patronage dividend as defined in the Internal Revenue Code.

  
	
  B.
  	
  Dividends
  and Revolvement of Equities: The Borrower may not revolve, or
  otherwise pay out, any dividends or owner equity if such action would cause
  one or more of “FINANCIAL CONDITIONS” C., D., or E. under this loan agreement
  to be in a noncompliance position, without the prior written consent of the
  Bank, which consent will not be unreasonably withheld.

  
	
  C.
  	
  Current
  Ratio: The Borrower will maintain a current ratio (current
  assets divided by current liabilities) of not less than 1.35:1, measured at
  each month end.

  
	
  D.
  	
  Leverage
  Ratio:  The Borrower will
  maintain a leverage ratio (The sum of Long Term Liabilities minus Deferred
  Taxes Payable plus the Present Value of Operating Leases divided by Net
  Worth) of not greater than 1.10:1.0, measured at each month end.  Long Term Liabilities may be adjusted to
  reflect a current ratio of 1.35:1.

  
	
  E.
  	
  Debt
  Service Coverage Ratio: The Borrower will maintain a debt
  service coverage ratio of not less than 1.50:1, measured for the previous
  twelve month period ending July 31 of each year.  The debt service coverage ratio shall be calculated as follows:
  

 

	
  After-tax
  net income
  	 
  
	 
  	 
  
	
  Add:
  	
  Depreciation
  and Amortization Expense
  
	 
  	
  Capital
  Retains
  
	
  Subtract:
  	
  Non
  Cash Patronage Income
  
	 
  	
  Cash
  Patronage or Dividend Payable in Subsequent Fiscal Year based on the Current
  Fiscal Year’s Net Income
  
	 
  	
  Extraordinary
  Gains or Losses, after taxes income or expense
  
	 
  	
  Gain
  or (Loss) on Asset Sales
  
	 
  	
  Retains
  Revolved
  
	
  Equal
  to:
  	
  Adjusted
  Cashflows from Operations
  
	
  Divided
  by:
  	
  Prior
  period current portion of Long Term Liabilities plus
  
	 
  	
  Prior
  period current portion of Capitalized Leases
  
	
  Equals:
  	
  Debt
  Service Coverage Ratio
  

 

X. GENERAL CONDITIONS

While
this loan agreement is in effect, the Borrower agrees to comply with the
following conditions:

	
  A.
  	
  Eligibility
  Status: The Borrower will maintain its status as an eligible
  borrower as defined in the Farm Credit Act of 1971, as amended (12 U.S.C.
  2129).

  
	
  B.
  	
  Stock
  Investment: The Borrower will purchase equities
  of the Bank in such amounts as prescribed by the Bank’s capital plan and any
  amendments to the plan.

  
	
  C.
  	
  Non-Patronage
  Loans: Term Loan, Note No. 39181NP and Letter of Credit
  Commitment, Note No. 39182NP shall be non-patronage loans.  The Borrower foregoes any opportunity to
  purchase Bank equities or receive allocations of patronage earnings on Term
  Loan, Note No. 39181NP and Letter of Credit Commitment, Note No. 39182NP.
  

 

 

	
  D.
  	
  Insurance: The
  Borrower and PPI will maintain:

  
	 
  	
  1.
  	
  Business
  and property insurance with financially sound insurers, in amounts sufficient
  to protect the Loans.

  
	 
  	
  2.
  	
  Flood
  insurance as may be required by the Bank in accordance with applicable law
  including, but not limited to, regulations of the Farm Credit Administration.

  
	 
  	
  3.
  	
  All
  appropriate grain licenses and all required grain buyers’ and warehouse
  bonds.

  
	
  E.
  	
  Financial
  Information: The Borrower will furnish the Bank
  audited annual financial statements prepared in accordance with Generally
  Accepted Accounting Principles (“GAAP”), and acceptable auditors’ reports,
  within 120 days after the end of each fiscal year, annual operating budgets
  within 60 days after the end of each fiscal year; monthly financial
  statements prepared in accordance with GAAP within 45 days after the end of
  each month, and such other information as the Bank may request relative to
  the Borrower’s business, and permit such examination of its books and records
  as the Bank may specify.  The Borrower
  also agrees that parties preparing such financial information are authorized
  to release to the Bank such financial information as the Bank may request.

  
	
  F.
  	
  Collateral
  Reports: The Borrower will furnish the Bank collateral reports to
  be submitted in such form and frequency as required by the Bank.

  
	
  G.
  	
  Negative
  Pledge, Merger, etc.: The Borrower will not mortgage,
  pledge, assign, or grant security interests in any assets to any other party
  without the prior written consent of the Bank, which consent will not be unreasonably withheld, or allow to
  exist any non-consensual or statutory lien or judgment against it or its
  assets.  The Borrower will not sell,
  lease or dispose of its assets except in the ordinary course of business.  The Borrower will not merge or consolidate
  with any other entity, or form or create any new subsidiary, or purchase all
  or a material part of the assets of any person or entity, or commence
  operations under any other name or organization. 

  
	
  H.
  	
  Corporate
  Documents: The Borrower will not amend its
  articles of incorporation, by-laws, growers agreement, nor its grain delivery
  payment policies without the prior written consent of the Bank, which consent
  will not be unreasonably withheld.

  
	
  I.
  	
  Environmental
  Representations, Conditions, and Indemnity Clause: Except
  as disclosed in writing to the Bank, the Borrower and PPI represents and
  agrees to the following:

  
	 
  	
  1.
  	
  Hazardous
  Material Notice: The Borrower represents that it has
  not received a notice from any governmental agency or other persons nor is
  there any present or threatened suit, investigation, or other proceeding,
  with regard to Hazardous Materials (defined in paragraph 7 below) on, in, or
  affecting its owned or leased property. 
  It shall immediately give the Bank oral and written notice if it
  receives such a notice.

  
	 
  	
  2.
  	
  No
  Violation of Environmental Laws: The Borrower has not and will not
  violate any federal, state, or local environmental laws relating to or
  affecting its owned or leased property, which violation would have a material
  affect on the Borrower’s business or materially affects the value of the
  collateral.

  
	 
  	
  3.
  	
  No
  Releases of Hazardous Material: There has been no release, nor shall
  the Borrower permit any release, of such nature requiring notification to
  proper authorities of any Hazardous Material onto the Borrower’s owned or
  leased property.

  

 

 

	 
  	
  4.
  	
  Storage
  Tank Registered; No Leaks: All above ground and underground
  storage tanks have been duly registered with all applicable federal, state
  and local government authorities.  The
  Borrower has no knowledge of any leaks from any of its above ground or
  underground storage tanks.

  
	 
  	
  5.
  	
  Investigation
  of Released Hazardous Materials: If there is a suspected release of
  Hazardous Materials, the Borrower shall, at its own expense conduct all
  investigations, testing, and other actions, including an environmental audit
  made at the Bank’s request, necessary to determine the extent (if any) of the
  release of Hazardous Materials and to clean up and remove all Hazardous
  Material in accordance with environmental laws.

  
	 
  	
  6.
  	
  Indemnity: The
  Borrower agrees to indemnify, hold harmless, and defend the Bank against all
  claims of whatever kind (including attorneys’, consultants’, and experts’
  fees) paid or asserted against the Bank as a direct result of the Borrower’s
  violation of any environmental law. 
  This indemnity shall continue for the benefit of the Bank after the
  termination of this loan agreement or other loan or security documents.

  
	 
  	
  7.
  	
  Definition:
  Hazardous Material is defined as any toxic, radioactive, or hazardous
  substance, material, waste, pollutant, emission, or contaminant, including
  but not limited to: (a) asbestos, (b) urea formaldehyde, (c) the group of
  organic compounds known as polychlorinated biphenyls (PCBs), (d) any
  petroleum product and byproduct including but not limited to gasoline, fuel
  oil, crude oil, and the various constituents of such products, and (e)
  pesticides, fertilizers, and other agricultural chemicals.
  

 

XI. REPAYMENT

The
indebtedness arising from the Loans shall be repaid as follows:

	
  A.
  	
  The
  Seasonal Loan, Note No. A637S01A, of not to exceed $15,000,000 shall mature
  on December 31, 2001; provided, however, the Borrower shall make such
  payments from time to time as may be required to maintain the loan within the
  limits set forth in the “LIMITATION ON ADVANCES” section of this loan
  agreement; provided further, any balances outstanding under the fixed rate
  seasonal loan provisions shall mature as specified in the statement.  Any outstanding fixed amounts as of
  December 31, 2001 shall be repaid no later than June 30, 2002.

  
	
  B.
  	
  The
  present Term Loan, Note No. 39181NP, of $9,600,000, shall be repaid by annual
  principal payments of One Million Two Hundred Thousand Dollars ($1,200,000)
  each, to be remitted to the Bank on or before September 30 of each year.  All outstanding balances shall be repaid
  by September 30, 2008.

  
	
  C.
  	
  Advances
  made in support of Letter of Credit Commitment, Note No. 39182NP, of not to
  exceed $9,600,000, shall be payable on demand.

  
	
  D.
  	
  The
  present Term Loan, Note No. 33061, of $6,000,000 shall be repaid by quarterly
  principal payments of Six Hundred Eighty-Five Thousand Dollars ($685,000)
  each, to be remitted to the Bank on or before March 31, June 30, September
  30, and December 31 of each year, commencing on September 30, 2001; provided,
  however, that if the Borrower is not in default, it shall not be required to
  make payments that would accelerate the repayment of fixed interest rate
  balances.  All outstanding balances
  shall be repaid by December 31, 2004.
  

 

 

	
  E.
  	
  The
  present Construction Term Loan, Note No. 35062, of $7,3750,000 shall be
  repaid by quarterly principal payments of Six Hundred Twenty-Five Thousand
  Dollars ($625,000) each, to be remitted to the Bank on or before March 31,
  June 30, September 30, and December 31 of each year; provided, however, that
  if the Borrower is not in default, it shall not be required to make payments
  that would accelerate the repayment of fixed interest rate balances.  All outstanding balances shall be repaid
  by December 31, 2004.
  

In
the absence of instructions from the Borrower, or if the Borrower is in
default, the Bank, at its discretion, may apply repayments to the reduction of
any of the indebtedness outstanding between the Bank and the Borrower.

XII. LATE FEE PENALTY

Payments
received twenty (20) calendar days after the scheduled repayment date are
subject to a late payment penalty equal to 1% of the past due amount but not
less than $25.00 per transaction.

XIII. EXPIRATION

The
unadvanced portion of the Loans shall be cancelled as indicated below;
provided, however, the Bank may, at its option, extend the expiration date of
the Loans and the maturity date of the Seasonal Loan without notice to or
consent of the Borrower.

Seasonal
Loan, Note No. A637S01A - December 31, 2001.

Letter of Credit Commitment, Note No. 39182NP - December 31, 2008, subject to
decreased amounts provided for in the letter of credit.

XIV. REINSTATEMENT

In
order to facilitate repayments and reborrowings under this loan agreement, the
Bank is authorized to reinstate all sums repaid on the Seasonal Loan through
the expiration date specified in this loan agreement; provided, however, that
the total amount outstanding under this loan agreement shall not exceed the
face amount of the Seasonal Loan; and provided, further, that the right of the
Borrower to such reinstatement may be denied and cancelled at any time at the
option of the Bank.

XV. DEFAULT PROVISION

If
the Borrower shall fail to pay when due any amount on any of the Loans under
this loan agreement, or on any other indebtedness of the Borrower to the Bank,
or fail to observe or perform any of the provisions or representations of this
loan agreement, or of any security agreement, mortgage, or other security
document, or shall be subject to the jurisdiction of a bankruptcy court whether
by a voluntary filing or involuntary action, or shall be in default of the Note
Purchase Agreement executed by Borrower dated as of July 15, 1998, or any of
the documents evidencing such Note Purchase Agreement or securing the
obligation thereunder, the Borrower shall be in default.  When the Borrower is in default, the Bank
may declare by written notice to the Borrower that the Loans and other
indebtedness are immediately due and payable. 
The Bank may then terminate its commitment to lend and cancel any
reinstatement rights provided to the Borrower under this loan agreement, and
proceed to enforce payment and exercise any or all of the rights afforded to
the Bank by law or agreement.  Upon
demand, and as permitted by law, the Borrower shall reimburse the Bank for all
attorneys’ fees and costs incurred by the Bank in protecting or enforcing its
rights or collateral, including reasonable attorneys’ fees incurred by the Bank
in a bankruptcy or receivership proceeding or in enforcing any judgment against
the Borrower.

XVI. ACCEPTANCE

This
loan agreement is the full agreement under the terms and conditions of the
Loans.  It shall not be modified except
in writing, and shall not become effective unless the Borrower shall, within 90
days from date, signify its acceptance of these terms and conditions by signing
and returning a copy of this loan agreement to the Bank.

BY
DIRECTION of the loan committee this 5th day of December, 2000.

CoBank, ACB

By
___________________________________

Its
___________________________________

ACCEPTED
AND AGREED TO:

DAKOTA GROWERS PASTA COMPANY

CARRINGTON, NORTH DAKOTA

By
__________________________________

Its
_________________________________

Date
________________________________

ACKNOWLEDGED
BY AND AGREED TO 

AS TO SECTION VIII; AND SECTION X., 

PARAGRAPHS D. AND I.:

PRIMO PIATTO, INC.

NEW HOPE, MINNESOTA

By
_________________________________

Its
_________________________________

Date
_______________________________

 

NONNEGOTIABLE NOTE OF

DAKOTA GROWERS PASTA COMPANY

CARRINGTON, NORTH DAKOTA

Note No. A637S01A

	
  $15,000,000.00
  	
  December 5, 2000
  

                    For
value received, the undersigned (“Maker”) promises to pay to CoBank, ACB, (the
“Bank”), at its office in the City of Denver, Colorado, the sum of Fifteen
Million and no/100 Dollars ($15,000,000.00) with interest on the unpaid balance
at a variable rate of interest which may increase or decrease as the Bank may,
from time to time, determine as provided in the Loan Agreement of even date
between the Maker and the Bank.  The
unpaid balance of this note, with accrued interest, and required equity
purchases, may be paid at any time subject to a prepayment penalty, if any, in
accordance with the terms of the Loan Agreement between the Bank and Maker.

                    This
note shall at all times evidence and constitute prima facie proof of the
indebtedness of the Maker to the Bank or its successors or assigns, of such
amount of money (not in excess of the amount of the principal indebtedness
stated above plus accrued interest and required equity purchases) as shown to
be owing by the records of the Bank, or its successors or assigns.

                    In
the event that suit is brought on this note, the Maker agrees to pay such
reasonable attorneys’ fees and costs of collection as permitted by law to be
charged.

                    The
Maker hereby waives presentment for payment, demand, protest, notice of
protest, and notice of dishonor and nonpayment of this note.

                    If
requested by the Bank, its successors or assigns, the Maker agrees to deliver
in substitution for this note, a negotiable note for the amount of the unpaid
balance of Maker’s indebtedness, plus accrued interest and required equity
purchases.

	 
  	
  DAKOTA
  GROWERS PASTA COMPANY

  
	 
  	
  By___________________________
  
	 
  	
                        Its President

  
	 
  	
  By___________________________
  
	 
  	
                        Its Secretary

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