Document:

Exhibit 10.3

Loan No. RIE539T06A

MULTIPLE ADVANCE TERM LOAN SUPPLEMENT

THIS SUPPLEMENT to the Master Loan Agreement dated May 23,
2005 (the “MLA”), is entered into as of February 14, 2007 between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington, North Dakota (the “Company”),
and amends and restates the Supplement dated May 23, 2005 and numbered
RIE539T06.

SECTION 1.         The Term Loan Commitment.  As of
the date hereof, CoBank’s obligation to extend credit to the Company has
expired and the unpaid principal balance of the loans is $18,000,000.00 (the “Commitment”).

SECTION 2.         Purpose.  The purpose of the loans was and remains to
finance the New Hope new pasta line and to provide working capital to the
Company.

SECTION 3.         Term.  Intentionally
Omitted.

SECTION 4.         Interest.  The Company agrees to pay interest on the
unpaid balance of the loans 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(D) 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
and 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 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)     Quoted Rate.  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, as may be agreeable to CoBank
in its sole discretion in each instance, provided that:  (1) the minimum fixed period shall be 180
days; (2) amounts may be fixed in increments of $500,000.00 or multiples
thereof; and (3) the maximum number of fixes in place at any one time shall be
10.

(C)     LIBOR.  At a fixed rate per annum equal to “LIBOR”
(as hereinafter defined) plus the Performance Pricing Adjustments set forth in
Section 4(D) below.  Under this
option:  (1) rates may be fixed for “Interest
Periods” (as hereinafter defined) of 1, 2, 3 or 6 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 10;
and (4) rates may only be fixed on a “Banking Day” (as hereinafter defined) on
3 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 2 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 or 6 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.

(D)     Performance Pricing Adjustments.  The interest rate spread parameters set forth
in Subsection (A) and(C) 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

  	
   

  	
  + 275 basis points

  	
   

  	
  + 275 basis points

  
	
  Equal to or greater than 3.50 to 1.00 but less than
  4.00 to 1.00

  	
   

  	
  + 250 basis points

  	
   

  	
  + 250 basis points

  
	
  Equal to or greater than 3.00 to 1.00 but less than
  3.50 to 1.00

  	
   

  	
  + 225 basis points

  	
   

  	
  + 225 basis points

  
	
  Equal to or greater than 2.50 to 1.00 but less than
  3.00 to 1.00

  	
   

  	
  + 200 basis points

  	
   

  	
  + 200 basis points

  
	
  Less than 2.50 to 1.00

  	
   

  	
  + 175 basis points

  	
   

  	
  + 175 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 in such a manner as to cause the Company to have to break any fixed
rate balance in order to pay any installment of principal.  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

 2
 

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 3 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 loans as follows:  (1) in two equal,
consecutive quarterly installments of $500,000.00, with the first such
installment due on February 20, 2007, and the last such installment due on May
20, 2007; (2) in 15 equal, consecutive quarterly installments of $1,100,000.00,
with the first such installment due on August 20, 2007, and the last such
installment due on February 20, 2011; and (3) followed by a final installment
in an amount equal to the remaining unpaid principal balance of the loans on
May 20, 2011.  If any installment due
date is not a day on which CoBank is open for business, then such installment
shall be due and payable on the next day on which CoBank is open for
business.  In addition to the above, the
Company promises to pay interest on the unpaid principal balance hereof 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.         Prepayment.  Subject to the broken funding surcharge
provision of the MLA, the Company may on one Business Day’s prior written
notice prepay all or any portion of the loan(s).  Unless otherwise agreed by CoBank, all
prepayments will be applied to principal installments in the inverse order of
their maturity and to such balances, fixed or variable, as CoBank shall
specify.

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

  	
   

  

 

 3Exhibit 10.4

Amendment No. RIE539C

AMENDMENT

TO THE

MASTER
LOAN AGREEMENT

THIS AMENDMENT is entered into as of February 14, 2007, between CoBANK, ACB (“CoBank”) and DAKOTA
GROWERS PASTA COMPANY, INC., Carrington,
North Dakota (the “Company”).

BACKGROUND

CoBank
and the Company are parties to a Master Loan Agreement dated May 23, 2005 (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:

1.             Section 9(E) of the MLA is hereby amended and restated
to read as follows:

SECTION 9.         Negative
Covenants.  Unless
otherwise agreed to in writing by CoBank, while this agreement is in effect the
Company will not and will not permit its Subsidiaries to:

(E)           Loans
and Investments.  Make any
loan or advance to any person or entity, or purchase any capital stock,
obligations or other securities of, make any capital contribution to, or
otherwise invest in any person or entity, or form or create any partnerships or
joint ventures except:  (i) trade credit
extended in the ordinary course of business; (ii) loans and investments by the
Company in the stock or other equities of DNA Dreamfields Company, LLC,
provided that the aggregate amount of all such loans and investments may not
exceed (a) the amount that existed on July 31, 2006, which included an
investment of $6,866,564 and a loan commitment of $5,000,000; and (b) an
additional loan commitment or investment of $1,500,000; (iii) loans and
investments by the Company in the stock and other equities of Primo Piatto,
Inc.; and (iv) other loans and investments in an aggregate principal amount not
to exceed, at any one time outstanding, $1,000,000.00.

2.             Section 10 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:

(A)          Current
Ratio.  The Company and its
consolidated Subsidiaries will have at the end of each fiscal quarter of the
Company a ratio of consolidated current assets to consolidated current
liabilities (both as determined in accordance with GAAP consistently applied)
of not less than 1.20 to 1.

(B)          Maximum
Total Debt to EBITDA.  The
Company and its consolidated Subsidiaries will have at the end of each fiscal
quarter of the Company a ratio of Total Debt to EBITDA of not greater than 4.25
to 1.00.  For purposes hereof:  (1) Total Debt” shall mean the sum of (i) all
indebtedness, obligations and liabilities of the Company with respect to
borrowed money (including the issuance of debt securities), (ii) all
guaranties, endorsements and other contingent obligations of the Company with
respect to indebtedness arising from money borrowed by others, (iii) all
reimbursement and other obligations with respect to letters of credit, bankers
acceptances, customer advances, and other extensions of credit whether or not
representing obligations for borrowed money, (iv) the aggregate of the
principal components of all leases and other agreements for the use,
acquisitions retention of real or personal property which are required to be
capitalized under GAAP, (v) all indebtedness, obligations and liabilities
representing the deferred purchase price of property or services, (vi) all
indebtedness secured by a lien of 

the Property of the Company, whether or not the Company has assumed or
become liable for the payment of such indebtedness, and (vii) all obligations
of the Company under any agreement providing for an interest rate swap, cap,
and floor, contingent participation or other hedging mechanisms with respect to
interest payable on any of the items described above; and (2) “EBITDA” shall
mean (i) net income before provision for incomes taxes for the preceding four
fiscal quarter period ending on such date (the “Four Quarter Period”), plus
(ii) interest expense, including without limitation, implicit interest expense
on capitalized leases for the Four Quarter Period, plus (iii) depreciation
expense, amortization expense, and similar noncash charges for the Four Quarter
Period, plus (iv) any extraordinary, unusual or non-recurring losses or charges
for the Four Quarter Period, minus (v) any gain associated with the sale or
write-down of assets for the Four Quarter Period, minus (vi) any gain from
discontinuance of operations for the Four Quarter Period, minus (vii) any
extraordinary, unusual or non-recurring gains or credits for the Four Quarter
period (all a determined in accordance with GAAP consistently applied).

(C)          Minimum
Fixed Charge Coverage Ratio.  The Company and its consolidated Subsidiaries
will at the end of each fiscal quarter of the Company, a Minimum Fixed Charge
Coverage Ratio of not less than 1.00 to 1.00 through and including April 30,
2008 and 1.15 to 1.00 thereafter .  For
purposes hereof, the Minimum Fixed Charge Coverage Ratio is the ratio of (a)
EBITDA (as defined above) for the Four Quarter Period (as defined above), minus
capital expenditures (excluding capitalized expenses) not funded by debt for
the Four Quarter Period, minus stock repurchases (excluding the $40 million
stock repurchase scheduled to be completed by April 30, 2007) for the Four
Quarter Period, minus equity retirements and dividends declared during the Four
Quarter Period; to (b) interest expense for the Four Quarter Period, plus the
sum of all scheduled principal payments made in respect of the long term debt
for the Four Quarter Period.

(D)          Minimum
Tangible Net Worth.  The Company
and its consolidated Subsidiaries will maintain at the end of each fiscal
quarter of the Company an excess of consolidated “Tangible Assets” (as defined
below) over consolidated total liabilities (as determined in accordance with
GAAP consistently applied) at not less than the sum of (a) $25,000,000.00, plus
(b) 30% of cumulative net income of the Company and its consolidated
subsidiaries beginning with consolidated net income for fiscal year ending July
31, 2007 and accumulating thereafter with consolidated net income at all
subsequent fiscal year ends, plus (c) 100% of all contributed capital received
by the Company and its consolidated subsidiaries after April 30, 2007.  For purposes hereof, “Tangible Assets” shall
mean all assets (as determined in accordance with GAAP consistently applied)
less all assets which would be classified as intangible assets under GAAP
(including, but not limited to, goodwill, patents, trademarks, trade names,
copyrights, and franchises).  In
addition, for purposes of subsection (b) above, “net income” shall not include
any net loss, such that, in the event of a net loss at any fiscal year end,
such net loss shall not reduce the cumulative net income.

3.             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, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/  Edward Irion

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
  CFO

  	
   

  

 

 2

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