**Exhibit10.5**

 

**TECHNOLOGYSUBLICENSE AGREEMENT**

 

THIS TECHNOLOGY SUBLICENSEAGREEMENT (the “Agreement”) is entered into as of December 26th, 2003, by andbetween DNA DREAMFIELDS COMPANY, LLC, an Ohio limited liability company(“DNA”), and DAKOTA GROWERS PASTA COMPANY, INC., a North Dakota corporation(“Dakota Growers”).

 

W  I  T N  E  S S  E  T H

 

WHEREAS, Dakota Growers,B-New, LLC, an Ohio limited liability company, TechCom Group, LLC, a Floridalimited liability company (“TechCom”), and Buhler, Inc., a Minnesotacorporation, have formed and capitalized DNA for the purposes of, among otherthings, manufacturing in North America and selling globally, low digestiblecarbohydrate pasta, rice and potatoes under the brand name, “Dreamfields” (the“Brand”);

 

WHEREAS, Dakota Growers isin the business of manufacturing, marketing, distributing and selling dry pastaproducts;

 

WHEREAS, Dakota Growers andDNA have entered into a certain Exclusive Manufacturing Agreement (the“Manufacturing Agreement”), dated of even date herewith, pursuant to whichDakota Growers has agreed to manufacture, on an exclusive basis, low digestiblecarbohydrate dry pasta products under the Brand (the “Products”), and DNA hasengaged Dakota Growers to so manufacture, on an exclusive basis, the Products,upon the terms and subject to the conditions of the Manufacturing Agreement;

 

WHEREAS, Dakota Growers andDNA have entered into a certain Trademark License Agreement (the “TrademarkLicense”), dated of even date herewith, pursuant to which DNA has granted toDakota Growers an exclusive license to use the Brand in connection with themanufacture, sale and distribution of the Products, upon the terms and subjectto the conditions of the Trademark License;

 

WHEREAS, Dakota Growers andDNA have entered into a certain Services Agreement (the “Services Agreement”),dated of even date herewith, pursuant to which Dakota Growers has agreed toprovide to DNA, on an exclusive basis, certain administrative, accounting,sales and distribution services to facilitate the sale and distribution of theProducts, upon the terms and subject to the conditions of the ServicesAgreement;

 

WHEREAS, in connection withthe formation and capitalization of DNA and pursuant to the DNA, LLC OperatingAgreement, TechCom granted to DNA an unconditional, irrevocable, royalty-free,perpetual, exclusive and world-wide license to use TechCom’s patent-pendingtechnology (the “Technology”) to market and manufacture the Products (the“TechCom License”), including all improvements to the Technology thereafterdeveloped by TechCom or DNA; and

 

WHEREAS, in order tofacilitate Dakota Growers’ manufacture, on an exclusive basis, of the Products,and the sale and distribution of the Products by Dakota Growers, DNA desires togrant to Dakota Growers an exclusive sublicense to use the Technology tomanufacture the Products in North America.

 

NOW, THEREFORE, inconsideration of the foregoing and the mutual agreements, provisions andcovenants contained in this Agreement, the parties agree as follows:

 

1.                                       Grant of Sublicense. Subject to the terms and conditions of this Agreement, DNA hereby grantsto Dakota Growers an unconditional, irrevocable, royalty-free, perpetual,exclusive, world-wide sublicense to use the Technology, and any and all rightsof use or ownership DNA now or hereafter maintains in and to the Technology,for purposes of manufacturing in North America, and marketing, selling anddistributing globally, the Products (the “Sublicensed Purposes”).  Dakota Growers may, at its expense, makeimprovements to the

 

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Technology, as it deems appropriate, subjectto the prior consent of DNA, and the sublicense granted hereunder shall coversuch improvements, provided Dakota Growers promptly discloses to DNA, inwriting, any improvements to the Technology made by Dakota Growers.  DNA hereby acknowledges and agrees that thesublicense granted hereby is exclusive to Dakota Growers and DNA herebyrepresents and warrants to Dakota Growers that Dakota Growers’ use of theTechnology as contemplated hereby will not infringe upon the intellectualproperty rights of any third party.

 

2.                                       Terms of Use. Dakota Growers hereby acknowledges and agrees that the sublicense of theTechnology is limited to Dakota Growers’ use of the Technology for theSublicensed Purposes, and Dakota Growers hereby agrees to use the Technologyonly for the Sublicensed Purposes, subject to the condition that the Productsmust meet the Specifications (as defined in the Manufacturing Agreement).  DNA shall be permitted, on reasonable noticeand during normal business hours, to enter the premises of Dakota Growers toinspect Dakota Growers’ operations and verify that the Products being manufacturedunder the Sublicense meet the Specifications.

 

3.                                       Foreign Markets; Patents.  IfDakota Growers desires to use the Technology in any market outside of theUnited States of America and patent applications have not yet been filed insuch market, then DNA agrees to pay all expenses and fees required during theperiod Dakota Growers uses the Technology in such market pursuant to suchlicense for the preparation, filing, prosecution, maintenance, annuitiesrelated to any patent application filed, such costs to be paid by DNA withinthirty (30) days of delivery of an invoice and reasonable supportingdocumentation.

 

4.                                       Infringement.  IfDNA or Dakota Growers becomes aware of any infringement or alleged infringementof any patent rights covering the Technology, such party shall immediatelynotify the other party in writing of the name and address of the allegedinfringer, the alleged acts of infringement, and the parties shall work jointlyin good faith to use their reasonable best efforts to prevent infringement anddefend the patents, provided all legal fees to do so shall be paid for by DNA,and any litigation shall be directed by, and legal counsel shall be engaged byDNA, all with consultation by Dakota Growers.

 

5.                                       Assignment.  Dakota Growers shall notsublicense the Technology under this Agreement without the prior writtenconsent of DNA, except that Dakota Growers may sublicense the Technology underthis Agreement to any subsidiary of Dakota Growers without the prior writtenconsent of DNA.  DNA may not transfer orotherwise assign this Agreement without the prior written consent of DakotaGrowers, which consent may be denied in Dakota Growers’ sole and absolutediscretion.  In the event of anyassignment or transfer of the Manufacturing Agreement, the Trademark Licenseand/or the TechCom License, this Agreement shall contemporaneously therewith beautomatically assigned and transferred to the transferee or assignee of theManufacturing Agreement, the Trademark License and/or the TechCom License. Ifthe terms of the TechCom License are modified in any way, DNA shall givewritten notice to Dakota Growers of such modifications and, if Dakota Growersconsents in writing to such modifications, every additional, changed, oraltered term shall contemporaneously therewith be automatically a term of thisAgreement.

 

6.                                       Termination.

 

6.1                                 Dissolution and Insolvency.  Ifeither party hereto (an “Insolvent Party”) makes an assignment for the benefitof its creditors, files a voluntary petition under federal or state bankruptcyor insolvency laws, a receiver or custodian is appointed for that party’sbusiness, or proceedings are instituted against that party under federal orstate bankruptcy or insolvency laws that have not been stayed or dismissedwithin sixty (60) days, this Agreement may be terminated by the party heretoother than the Insolvent Party, with termination effective immediately uponwritten notice to the Insolvent Party.

 

6.2                                 Breach.  If either party (the“Terminating Party”) believes that the other party (the “Defaulting Party”) hasmaterially breached this Agreement, the Terminating Party shall give theDefaulting Party written notice thereof (the “Notice to Cure”).  The Notice to Cure must state the nature ofthe breach in reasonable detail

 

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and that the Terminating Party views suchalleged breach as a basis for terminating this Agreement.  If the Defaulting Party fails to cure thealleged breach within sixty (60) days (the “Cure Period”) after its receipt ofthe Notice to Cure, this Agreement shall, at the option of the TerminatingParty, terminate.  DNA expressly agreesthat the remedies at law for any breach by DNA of the exclusivity provisions ofthis Agreement, including, but not limited to, Section 1 of thisAgreement, would be inadequate and that, in addition to any other remedies thatDakota Growers may have in the event of any such breach, Dakota Growers shallbe entitled to temporary and injunctive relief without the necessity of provingactual damages or posting bond.  DNAacknowledges that Dakota Growers would not enter into this Agreement unless DNAagreed to the exclusivity provisions of this Agreement, including, but notlimited to, Section 1 of this Agreement.

 

6.3                                 This agreement automatically terminates ifboth the Manufacturing Agreement and the Services Agreement areterminated.  In addition, this Agreementmay be terminated by the mutual written consent of each of Licensor andLicensee.

 

6.4                                 Survival.  Termination of this Agreementshall not relieve either party of its obligations under this Agreement or forliability for any breach of this Agreement to the extent any such obligation orliability was incurred or arose prior to or in connection with the termination.

 

7.                                       Relationship of Parties. Except as provided in this Agreement or in any other agreement betweenDakota Growers and DNA, none of the parties will act or represent or holditself out as having authority to act as an agent or partner of the otherparty, or in any way bind or commit the other party to any obligations.  Nothing contained in this Agreement will beconstrued as creating a partnership, joint venture, agency, trust or otherassociation of any kind, each party being individually responsible only for itsobligations as set forth in this Agreement. The employees performing the services contemplated by this Agreementwill remain employees of Dakota Growers, and DNA shall not have anyresponsibility for such employees.

 

8.                                       Force Majeure.  IfDakota Growers is prevented from complying, either totally or in part, with anyof the terms or provisions of this Agreement by reason of war, rebellion, fire,flood, storm or other acts of God, then upon written notice to DNA, theaffected provisions and requirements of this Agreement will be suspended duringthe period of such disability, and Dakota Growers will make all reasonableefforts to remove such disability as soon as practicable and to carry out isobligations under this Agreement after such disability is removed.

 

9.                                       Notices.  Any notice, request, demand,waiver, consent, approval or other communication which is required or permittedto be given to any party hereunder will be in writing and will be deemed givenonly if delivered to the party personally or sent to the party by facsimile(followed by hard copy sent by registered or certified mail) or if sent byreputable overnight courier, addressed to the party at its address set forthbelow:

 

 
| If  to Dakota Growers:                                                                                         |   | If  to DNA:                                                                                             |
|----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                                                           |   |                                                                                                    |
| Dakota  Growers Pasta Company, Inc.                                                                            |   | DNA  Dreamfields Company, LLC                                                                           |
| One  Pasta Avenue  Carrington, ND 58421Attention: Thomas P. Friezen  Tel.: (701) 652 4893  Fax: (701) 652-3701 |   | 14  West Park PlaceOxford, OH 45056  Attention: Mike Crowley  Tel.: (513) 524-9256  Fax: (513) 524-5167 |

 

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| with  a copy to:                                                                                                                    |   | with  a copy to:                                                                                                          |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                |   |                                                                                                                      |
| Lindquist  & Vennum P.L.L.P.                                                                                                    |   | Ulmer  & Berne LLP                                                                                                    |
| 4200  IDS Center  80 South Eighth Street  Minneapolis, MN 55402Attention: Ronald D. McFall  Tel.: (612) 371-3551Fax: (612) 371-3207 |   | 600  Vine Street  Suite 2800  Cincinnati, OH 45201  Attention: Scott P. Kadish  Tel.: (513) 762-6200  Fax: (513) 762-6245 |

 

10.                                 Governing Law. This Agreement shall be governed by and construed in accordance with thelaws of the State of Ohio, without giving effect to the principles of conflictsof law thereof.  ANY LITIGATION BASEDHEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, SHALLBE BROUGHT AND MAINTAINED EXCLUSIVELY: (i) IN THE COURTS OF THE STATE OFMINNESOTA (HENNEPIN COUNTY) OR IN THE UNITED STATES DISTRICT COURT FOR THEDISTRICT OF MINNESOTA, IN THE CASE OF ANY LITIGATION COMMENCED BY DNA; AND (ii)IN THE COURTS OF THE STATE OF OHIO (HAMILTON COUNTY) OR IN THE UNITED STATESDISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO, IN THE CASE OF ANY LITIGATIONCOMMENCED BY DAKOTA GROWERS.  EACH PARTYHEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OFTHE STATE OF MINNESOTA (HENNEPIN COUNTY) AND OF THE UNITED STATES DISTRICTCOURT FOR THE DISTRICT OF MINNESOTA FOR THE PURPOSE OF ANY SUCH LITIGATIONCOMMENCED BY DNA, AND EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TOTHE JURISDICTION OF THE COURTS OF THE STATE OF OHIO (HAMILTON COUNTY) AND OFTHE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO FOR THEPURPOSE OF ANY SUCH LITIGATION COMMENCED BY DAKOTA GROWERS.  EACH OF THE PARTIES FURTHER IRREVOCABLYCONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BYPERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF MINNESOTA AND OHIO,RESPECTIVELY.  THE PARTIES HEREBYEXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANYOBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANYSUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THATANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

11.                                 Entire Agreement. This Agreement constitutes the entire understanding of the parties andsupersedes any prior agreements or understandings, written or oral, between theparties with respect to the subject matter hereof.

 

12.                                 Construction; Interpretation; Severability.  Theparties agree that any rule of law or any legal decision that would requireinterpretation of any claimed ambiguities in this Agreement against the partythat drafted it has no application and is expressly waived.  If any provision, clause or part of thisAgreement, or the application thereof under certain circumstances, is heldinvalid, the remainder of this Agreement, or the application of such provision,clause or part under other circumstances, will not be affected thereby.

 

13.                                 Further Assurances. Each party will cooperate and take such action as may be reasonablyrequested by the other party in order to carry out the provisions and purposeof this Agreement and the transaction contemplated hereby.

 

14.                                 No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties and theirpermitted assigns and nothing in this Agreement, expressed or implied, willgive or be construed to give to any person or entity, other than the partiesand such assigns, any legal or equitable rights hereunder.

 

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15.                                 Amendment and Waiver.  Theparties may, by mutual written agreement, amend this Agreement in any respect,and any party, as to such party, may: (i) extend the time for the performanceof any of the obligations of the other party; (ii) waive any inaccuracies inrepresentations and warranties by the other party; (iii) waive compliance bythe other party with any of the agreements contained herein and performance ofany obligations by the other party; and; (iv) waive the fulfillment of anycondition that is precedent to the performance by such party of any of itsobligations under this agreement.  To beeffective, any such amendment or waiver must be in writing and signed by theparty against whom enforcement of the same is sought.

 

16.                                 Confidentiality. Each party agrees that all information marked as confidential,proprietary, trade secrets, know how, manuals and other information disclosedto it by the other party is confidential and proprietary to the disclosingparty (“Confidential Information”). Confidential Information shall not include information which: (a) is inor hereafter enters the public domain through no fault or action of the partyto which it is disclosed; (b) is obtained by the party to which it is disclosedfrom a third party which is not subject to any legal restriction on its rightto use and disclose such information; (c) is independently developed byemployees of the party to which it is disclosed without use of any ConfidentialInformation of the other party; or (d) is required by law or judicial oradministrative processes to be disclosed. The parties agree not to use any Confidential Information of the otherparty during the term of this Agreement and for a period of three (3) yearsthereafter for any purpose other than as permitted or required for performancehereunder.  Upon termination orexpiration of this Agreement for any reason, the parties shall return to eachother all Confidential Information of the other party in tangible form,including Confidential Information in electronic or magnetic form.

 

17.                                 Counterparts. This Agreement may be executed in one or more counterparts, each ofwhich will be deemed an original, but which together will constitute one andthe same instrument.

 

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INWITNESS WHEREOF, the parties have caused this Technology Sublicense Agreementto be duly executed effective as of the day and year first above written.

 

 
|   | DAKOTA  GROWERS PASTA COMPANY, INC. |
|--------|-------------------------------------|
|   |                                |
|   |                                |
|   |                                |   |
|   | By:                                 |         /s/  Tim Dodd |   |
|   | Its:                                |         President/CEO |   |
|   |                                |
|   |                                |
|   | DNA  DREAMFIELDS COMPANY, LLC       |
|   |                                |
|   |                                |
|   |                                |   |
|   | By:                                 |         /s/  Mike Crowley |   |
|   | Its:                                |         President |   |
|        |                                     |  |  |  |  |

 

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