Document:

Exhibit 10.1

EXECUTION COPY

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE
AGREEMENT (this “Agreement”) is dated as of February 9, 2007 by and
between DAKOTA GROWERS PASTA COMPANY, INC., a North Dakota corporation (the “Company”),
and MVC CAPITAL, INC., a Delaware corporation (“MVC”), and La Bella
Holdings, LLC, a Delaware limited liability company (“LBH”) (MVC and LBH
are each individually referred to herein as a “Purchaser” and
collectively referred to herein as “Purchasers”).

SECTION 1

Sale of
Common Stock

1.1          Sale/Purchase of Common Stock.  (a) Subject to the terms and conditions
hereof, including Section 1.2, the Company has offered, and will issue
and sell (the “Offering”) (i) to LBH, and LBH will buy from the Company,
1,000,000 shares of Common Stock, par value $.01 per share, of the Company (the
“Common Stock”), for a purchase price of $10.00 per share and an
aggregate purchase price of $10,000,000, and (ii) to MVC, and MVC will buy from
the Company, 1,000,000 shares of Series F Convertible Preferred Stock, par
value $.01 per share, of the Company (the “Preferred Stock”), for a
purchase price of $10.00 per share and an aggregate purchase price of
$10,000,000.  The obligations of
Purchasers under this Section 1.1(a) shall be several and not joint.

(b)           The
Preferred Stock shall have the rights, preferences and privileges set forth in
the Certificate of Designation attached hereto as Exhibit A (the “Certificate
of Designation”), which shall be filed on or prior to the Closing Date (as
defined below) by the Company with the Secretary of State of North Dakota.  The shares of Common Stock and Preferred
Stock to be issued and sold by the Company and purchased by Purchasers pursuant
to this Agreement are herein referred to as the “Shares.”

1.2          Adjustment
to Purchase of Common Stock.  To the extent that existing
common stockholders tender fewer than 4 million shares of Common Stock under
the Repurchase (as defined below), the number of shares of Common Stock and
Preferred Stock to be purchased by LBH and MVC, respectively, under this
Agreement shall be reduced to the product of (i) 1,000,000 and (ii) the
quotient of (A) the lesser of (1) the amount of proceeds necessary to effect
the Repurchase (excluding any fees and expenses in connection therewith) or (2)
$39,200,000 and (B) $39,200,000.  In the
event that the number of shares of Common Stock and Preferred Stock to be
purchased by LBH and MVC, respectively, is reduced according to the terms of
this Section 1.2, the purchase price of such shares to be paid by LBH and MVC
shall be determined by multiplying $10.00 per share by the number of shares to
be purchased according to the formula set forth in the preceding sentence.

1.3          Registration.  The
Shares will be offered and sold without registration under the Securities Act
of 1933, as amended (the “Securities Act”), in reliance upon the
exemption from registration provided by Section 4(2) of the Securities Act and
Regulation D thereunder.  Each Purchaser
(and any subsequent transferee) will be entitled to the benefits of a
Registration Rights Agreement, by and between the Company and such Purchaser,
in the form attached hereto as Exhibit B (each, a “Registration
Rights Agreement”), to be executed upon the Closing (as defined below).

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SECTION 2

Closing;
Delivery

2.1.         Closing.  The closing of the purchase and
sale of the Shares hereunder (the “Closing”) shall be held in a manner
and at such place or places as the Company and Purchasers may agree.  The Closing shall occur promptly after the
satisfactions of all conditions to closing set forth below in Sections 6 and 7,
which date the parties intend not be more than 2 months after the signing of
this Agreement, and may be completed by the electronic transfer of documents,
with original documents to follow at the earliest practical time.  The date of the Closing is hereinafter
referred to as the “Closing Date.”

2.2.         Delivery.  At
the Closing, or within a reasonable period of time thereafter, the Company will
cause its transfer agent to deliver to each Purchaser at such Purchaser’s
address confirmation that the Shares sold to the Purchaser pursuant hereto have
been registered in the Purchaser’s name in the records of stock ownership of
the Company, against payment of the purchase price therefor by wire transfer
per the Company’s wiring instructions.

2.3.         Knowledge Defined.  For
purposes of this Agreement, a party will be deemed to have “knowledge”
of a particular fact or other matter if any individual who is serving as an
officer or director of such party is, or at any time was, actually aware of
such fact or other matter; provided,
however, the Company shall not be deemed to have “knowledge” of a
fact or other matter solely by virtue of the director designated by MVC being
aware of such fact or other matter.

SECTION 3

Representations and Warranties of the Company

The Company represents, warrants and covenants to
Purchasers as follows, subject to those matters set forth in the Company’s
Disclosure Schedules to Stock Purchase Agreement attached hereto and made a
part hereof (the “Disclosure Schedules”):

3.1.         Organization and
Standing; Articles and By-Laws.  (a) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of North Dakota.  The
Company’s wholly-owned subsidiary, Primo Piatto, Inc., is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota.  The Company has the requisite
power and authority to own and operate its properties and assets and to carry
on its business as presently conducted and as now proposed to be
conducted.  The Company is qualified to
do business as a foreign corporation in all jurisdictions where the ownership
of its properties and assets and the conduct of its business require such
qualification, except where the failure to be so qualified will not have a
material adverse effect on the business of the Company, as such business is now
conducted.  The Company’s wholly-owned
subsidiary, Primo Piatto, Inc. is qualified to do business as a foreign
corporation in all jurisdictions where the ownership of its properties and
assets and the conduct of its business requires such qualification, except
where the failure to be so qualified will not have a material adverse effect on
the business of Primo Piatto, Inc., as such business is now conducted.

(b)           The Company has
furnished, or as soon as practicable, and in no event later than the day
immediately prior to Closing, will furnish, to each Purchaser true and correct
copies of the Company’s Certificate of Incorporation, as amended and as in
effect on the date hereof (the “Certificate of Incorporation”) and
certified by the Secretary of State of the State of North Dakota within the
preceding 10 business days, and the Company’s Bylaws, as in effect on the date
hereof (the “Bylaws”) certified by the Company’s Secretary.

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3.2.         Corporate Power.  The
Company has all requisite legal and corporate power and authority to execute
and deliver this Agreement and each of the Registration Rights Agreements (the
Registration Rights Agreement and this Agreement being collectively referred to
as the “Transaction Agreements”), and to sell and issue the
Shares as set forth in this Agreement, and to carry out and perform its
obligations under the Transaction Agreements.

3.3.         Subsidiaries.  Except
for its membership in DNA Dreamfields Company, LLC, an Ohio limited liability
company, and its ownership of all of the issued and outstanding shares of Primo
Piatto, Inc., the Company has no subsidiaries, and, except as shown in the
footnotes to the Company’s financial statements as included in the “SEC Reports”
(as that term is defined below), does not otherwise own or control, directly or
indirectly, any material equity interest in any corporation, partnership,
limited liability company, association, joint venture or business entity.

3.4.         Capitalization.  (a) Without
giving effect to the transactions contemplated by this Agreement or the filing
of the Certificate of Designation, the authorized and outstanding capital stock
of the Company is and shall be: (i) 75,000,000 shares of Common Stock, $.01 par
value per share, of which 13,169,382 shares are outstanding less the number
subject to the Repurchase; (ii) 533 shares of Series A Preferred Stock, $100
par value per share, of which 0 shares are outstanding; (iii) 525shares of Series B Preferred Stock, $100
par value per share, of which 0 shares are outstanding; (iv) 2,731 shares of
Series C Preferred Stock, $100 par value per share, of which 0 shares are
outstanding; (v) 11,340,841 shares of Series D Delivery Preferred Stock, $.01
par value per share, of which 11,275,297 shares are outstanding; (vi) 130,000
shares of Series E Junior Participating Preferred Stock, $.01 par value per
share, of which 0 shares are outstanding; (vii) and 13,525,370 shares of
undesignated preferred stock, $.01 par value per share, of which none are
outstanding.

(b)           Except
as set forth in Schedule 3.4 of the Disclosure Schedules, there are no
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other agreements or arrangements of any
character or nature whatever under which the Company is obligated to issue any
securities of any kind representing an ownership interest in the Company,
except as may arise by this Agreement or the Repurchase.

(c)           All
of the outstanding shares of capital stock are duly authorized, validly issued,
fully paid and nonassessable, and all such shares were issued in material
compliance with all applicable federal and state securities laws, including
available exemptions therefrom, and none of such issuances were made in
violation of any pre-emptive or other rights.

3.5.         Authorization;
Valid Issuance.  (a) All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of the Transaction Agreements by the
Company, for the authorization, sale, issuance and delivery of the Shares, and
for the performance of all of the Company’s obligations under the Agreements
has been taken or will be taken prior to the Closing Date.  The Agreements have been duly executed and
delivered by the Company and constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally and to general principles of equity and to limitations on the
rights to indemnity and contribution that exist by virtue of public policy (the
“Bankruptcy and Equity Exception”).

(b)           The
Shares will, upon issuance pursuant to the terms hereof and upon payment
therefor, be duly authorized and validly issued, fully paid and non-assessable
and except for the rights granted to Purchasers hereunder, will be free of
preemptive or similar rights.

3.6.         Reports and
Financial Statements.  (a) The Company has filed all
reports required to be filed by it under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), including,

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pursuant
to Section 13(a) or 15(d) thereof, for the three years preceding the date
hereof (the foregoing materials being collectively referred to herein as the “SEC
Reports”), on a timely basis, or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of
any such extension.  At the respective
times of filing, the SEC Reports complied as to form in all material respects
with the requirements of the Securities Act and the Exchange Act and the rules
and regulations of the Securities and Exchange Commission (“SEC”)
promulgated thereunder.  The SEC Reports
did not contain and, with respect solely to any SEC Reports filed after the
date hereof, to the best of the Company’s knowledge will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

(b)           The audited
consolidated financial statements and unaudited interim consolidated financial
statements (including, in each case, the notes, if any, thereto), if any,
included in the SEC Reports comply as to form in all material respects with the
SEC’s rules and regulations with respect thereto, were prepared in accordance
with generally accepted accounting principles (GAAP) applied on a consistent
basis during the periods involved (except as may be indicated therein or in the
notes thereto) and fairly present (subject, in the case of the unaudited
interim financial statements, to normal, recurring year-end audit
adjustments that are not material and to the absence of footnotes) the
financial position and stockholders’ equity of the Company as of the respective
dates thereof and the consolidated earnings and cash flows for the respective
periods then ended.

(c)           The Company has a
duly constituted audit committee of its Board of Directors (the “Audit
Committee”), and such committee has operated in accordance with the laws
and regulations applicable to the Company. 
The Company’s independent public accountants have reviewed each interim
financial statement in accordance with the requirements of applicable federal
securities laws, the Audit Committee’s charter and the Commission’s rules and
regulations.  The Company has received no
communications from its independent public accountants that the independent
public accountants are considering or are likely to consider issuing any report
other than a clean, unqualified opinion as to the Company’s audited financial
statements or have raised any unresolved issues with respect to any of the
Company’s interim financial statements.

3.7.         No Integration. Neither the Company nor, to the Company’s
knowledge, its affiliates (as defined in Rule 501(b) under the Securities
Act) (“Affiliates”) has, directly or through any agent, during the six
month period ending on the date of this Agreement, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) in a manner that would cause the offer and sale
of the Shares to fail to be entitled to the exemption afforded by Regulation D,
or under Section 4(2) of the Securities Act.

3.8.         No Public Offering. 
Neither the Company nor, to the Company’s knowledge, its Affiliates have
engaged, in connection with the offering of the Shares, (i) in any form of
general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act, (ii) in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act,
(iii) in any action which would violate applicable state securities, or “blue
sky,” laws, or in any directed selling efforts within the meaning of SEC
Regulation S.

3.9.         Conformity of
Descriptions.  The shares of Common Stock purchased by LBH hereunder
conform in all material respects to the descriptions contained in the Company’s
SEC Reports and other filings with the SEC.

3.10.       No Material Adverse
Changes.  Except as disclosed on Schedule 3.10
or in the SEC Reports, since October 30, 2006 there has been no (i) material
adverse change in the business, prospects,

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results
of operations, stockholders’ equity, cash flows, financial condition of the
Company and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”), or (ii) dividend or
distribution of any kind declared, paid or made by the Company on any shares of
its capital stock.

3.11.       No Conflicts.  The execution, delivery and
performance of the Agreements, the issuance and delivery of the Shares by the
Company and the consummation by the Company of the transactions contemplated
herein and in the other Agreements do not and will not (i) conflict with or
violate any provision of the Certificate of Incorporation, Bylaws or other organizational
documents of the Company, (ii) conflict with, or constitute a default (or an
event which, with notice or lapse of time or both, would become a default)
under, or give to any individual, partnership, joint stock company,
corporation, limited liability company, trust, unincorporated organization,
government agency or political subdivision (each of the foregoing, a “Person”)
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture, patent, license or instrument (whether evidencing a
Company debt or otherwise) to which the Company is a party or by which any
property or asset of the Company is bound or affected or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company is
subject (including federal and state securities laws and regulations), or by
which any asset of the Company is bound or affected.

3.12.       Consents and
Approvals.  The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration (“Consents”) with, any court or other federal,
state, local or other governmental authority, regulatory or self regulatory
agency (“Governmental Authorities”), or other Person in connection with
the execution, delivery and performance by the Company of the Transaction
Agreements, other than (i) the filing of any Registration Statement with the
Commission in accordance with the Registration Rights Agreements, (ii) any
application(s) or letter(s) for the listing or quoting of the Shares (with any
securities exchange or market on which the Common Stock is then traded, listed
or quoted), (iii) any filings, notices or registrations under applicable state
securities laws, (iv) the disclosure requirements of the Exchange Act, and the
disclosure requirements of Item 701 of SEC Regulation S-K, (v) filing a Form D
and a Form 8-K with the Commission, and (vi) any other approvals and
consents set forth on Schedule 3.12 (collectively, the “Required
Approvals”).

3.13.       Proceedings.  Except as described on Schedule
3.13 or in the SEC Reports, there is no action, suit, hearing, claim, notice of
violation, arbitration or other proceeding, hearing or investigation (each, a “Proceeding”)
pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its assets before or by any Governmental Authority or any
arbitrator, which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Agreements, (ii) could reasonably be expected to,
individually or in the aggregate, have or result in a Material Adverse Effect,
or (iii) if adversely decided, could reasonably be expected to have a material
adverse effect on or delay the issuance of the Shares, or the consummation of
the transactions contemplated by the Agreement. 
The foregoing includes, without limitation, any such action, suit,
proceeding or investigation that questions this Agreement or seeks to delay or
prevent the consummation of the transactions contemplated hereunder or the
right of the Company to execute, deliver and perform under same. The Company is
not a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any Governmental Authority that is reasonably likely to
have a Material Adverse Effect before or after consummation of the transactions
contemplated by this Agreement. No action, suit, proceeding, claim,
investigation or inquiry by the Company or any subsidiary is currently pending
nor does the Company presently intend to initiate any action, suit, proceeding,
claim, investigation or inquiry, in each case, that if resolved in a manner
adverse to the Company, is reasonably likely to have a Material Adverse Effect.

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3.14.       No Default or
Violation.  Except for those that would not, individually
or in the aggregate, result in a Material Adverse Effect, the Company is not in
(i) default under or in violation of any indenture, loan or other credit
agreement or any other agreement or instrument to which it is a party or by
which the Company or its assets or properties is bound, or (ii) violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any arbitrator or Governmental Authority applicable to it.  The Company is not in default under, or in
violation of, its Certificate of Incorporation, Bylaws or other organizational
documents.  The business of the Company
is not being conducted, and the Company presently has no plans to conduct its
business, in violation of any law, statute, ordinance, rule or regulation of
any Governmental Authority, except where such violations have not resulted or
are not reasonably likely to result, individually or in the aggregate, in a
Material Adverse Effect. The Company is not in breach of any agreement where
such breach, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect.

3.15.       Broker’s Fees.  No fees or commissions or
similar payments with respect to the transactions contemplated by the
Agreements have been paid or will be payable by the Company to any broker,
financial advisor, finder, investment banker or bank, other than the fees
payable to MVC Financial Services, Inc. and LBH pursuant to Paragraph 8.6(a) of
this Agreement and the fees payable to Morgan Stanley for its advice to the
Company’s Board of Directors in connection with the transactions contemplated
hereby.  The Company shall indemnify and
hold harmless Purchasers from and against any such claims.

3.16.       Listing Compliance.  The
Company has no securities listed or traded on any securities exchange or
automated quotation system or market.  The Purchasers hereby acknowledge
and agree that as of the date of this Agreement, the Company’s securities are
not listed for trading or quotation on any established securities exchange or
market, but are traded through an alternative trading system whose procedures
and methods have been reviewed by the Purchasers.

3.17.       Intellectual Property Rights. 
Except as disclosed on Schedule 3.17, the Company owns or
possesses adequate rights or licenses to use all trademarks, trademark
applications, trade names and service marks, whether or not registered, and all
patents, patent applications, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and intellectual property rights
(collectively, “Intellectual Property Rights”) which are necessary for
use in connection with its business as now conducted and as described in the
SEC Reports and as contemplated and discussed with the Purchasers.  Except as disclosed in the Company’s SEC
Reports, there is no Proceeding which is pending, or to the Company’s
knowledge, is threatened against, the Company regarding the infringement of any
of the Intellectual Property Rights.  The
Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of all of its Intellectual Property Rights.  To the Company’s knowledge, the Company has
not infringed, and is not infringing, on any of the Intellectual Property
Rights of any Person except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or as is disclosed
either on Schedule 3.17 or in the SEC Reports.

3.18.       Registration Rights; Rights of Participation. 
Except as described on Schedule 3.18, and except for the
Registration Rights Agreement, the Company has not granted or agreed to grant
any rights to register, or agreed to register, nor does any person have any
right to require the Company to register, any of its authorized or outstanding
securities under the Securities Act.

3.19.       Title. 
Except as disclosed on Schedule 3.19, the Company (or its
wholly-owned subsidiary Primo Piatto, Inc.) has good and marketable title in fee
simple to all property owned by the Company or Primo Piatto, Inc., in each case
free and clear of all security interests, liens, pledges or negative pledges,
charges, encumbrances, mortgages, hypothecations, adverse claims or equities
(each, a “Lien”), except for Liens that do not materially affect the
value of such property and do not interfere with

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the
use made and proposed to be made of such property by the Company.  Any properties held or used under lease by
the Company are held by it under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use made and
proposed to be made of such properties by the Company.

3.20.       Permits.  The
Company possesses all certificates, authorizations, licenses, easements,
consents, approvals, orders, permits and approvals (“Permits”) necessary
to own, lease and operate its properties and to conduct their businesses as
currently conducted except where the failure to possess such Permits is not
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect (“Material Permits”), and there is no Proceeding pending, or, to
the knowledge of the Company, threatened relating to the revocation,
modification, suspension or cancellation of any Material Permit.  The Company has fulfilled and performed all
of the material obligations with respect to such Permits, and no event or
change in condition has occurred which allows, or which upon notice, the lapse
of time or both would allow, the revocation or termination thereof or results
in any other material impairment of the rights of the holder of any such
Permits, except for failures which would not, individually or in the aggregate,
have a Material Adverse Effect.  The
Company is not in conflict with, in default under or in violation of any
Material Permit.

3.21.       Insurance.  The
Company and its respective properties are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
is prudent and customary in the business in which the Company is engaged.  Except as disclosed on Schedule 3.21,
all insurance policies carried by the Company are in full force and effect and
the Company has no reason to believe that it will not be able to renew such
existing insurance policies as and when such coverage expires or to obtain
similar coverage from similar insurers, at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings, cash
flows, business or business prospects of the Company.

3.22.       Investment Company; Public Utility Holding Company.  The
Company is not (i) an “investment company” or a company “controlled by” an “investment
company” as such terms are defined in the Investment Company Act of 1940, as
amended (the “1940 Act”), or the SEC rules and regulations relating to
such act, or (ii) a “public utility holding company” or a company “controlled
by” a “public utility holding company,” as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended (the “PUHC Act”) and the
SEC’s rules and regulations under each of such Acts.

3.23.       Labor.

(a)           Except
as disclosed on Schedule 3.23, the Company is not a party to, or bound
by, any collective bargaining agreement or union contract, covering any individual
who performs services as an employee primarily for the Company (including such
persons who are on an approved leave of absence, vacation, short-term
disability or otherwise treated as an active employee of the Company, “Employees”),
and there are no controversies or unfair labor practice proceedings pending, or
to the knowledge of the Company, threatened between the Company and any of its
current or former Employees or any labor or other collective bargaining unit
representing any current or former Employee of the Company that would
reasonably be expected to result in a labor strike, dispute, slow-down or work
stoppage or otherwise have a Material Adverse Effect.  To the Company’s knowledge, no organizational
effort is presently being made or, to the Company’s knowledge, threatened by or
on behalf of any labor union.

(b)           The Company is in
compliance in all material respects with all applicable foreign, federal, state
and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours.  Except as disclosed on Schedule 3.23,
there are no pending, or, to the Company’s knowledge, threatened claims or
actions against the Company under any

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workers
compensation policy or long-term disability policy.

(c)           No officer, employee
or consultant of the Company is obligated under any contract or agreement or
subject to any judgment, decree or order of any court or administrative agency
that would interfere with such Person’s efforts to promote the interests of the
Company or that would interfere with the Company’s business.

(d)           No work stoppage or
labor strike against the Company is pending or, to the Company’s knowledge,
threatened.  The Company is not involved
in or, to the Company’s knowledge, threatened with, and the Company has no
knowledge of any reasonable basis for, any labor dispute, grievance, or
litigation relating to labor, safety (except as disclosed on Schedule 3.23),
or discrimination matters involving any employee, including, without limitation,
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, could reasonably be expected to, individually or in the
aggregate, materially adversely affect the Company.  The Company has not engaged in any unfair
labor practices within the meaning of the National Labor Relations Act which
would, individually or in the aggregate, directly or indirectly would result in
a materially adverse effect on the Company.

(e)           The Company has not engaged in any “unfair
labor practices” within the meaning of the National Labor Relations Act which
would, individually or in the aggregate, have a Material Adverse Effect on the
Company.

3.24.       Stock and Other
Plans.  Other than as disclosed in the SEC Reports,
the Company does not have any profit sharing, deferred compensation, stock
option, stock purchase, phantom stock or similar plans, including agreements
evidencing rights to purchase securities or to share in the profits of the
Company which is material to the Company, taken as a whole.

3.25.       Solvency.  The
Company is, and immediately after the Closing will be, Solvent.  As used herein, the term “Solvent”
means, with respect to a particular date, that on such date, (i) the fair
market value of the assets of the Company exceeds their respective liabilities
(including, without limitation, stated liabilities and contingent liabilities),
and (ii) the Company can pay its debts as they come due or mature. The
Company has not taken any steps, and does not currently expect to take any steps,
to seek protection pursuant to any bankruptcy, insolvency, debtor relief,
reorganization or similar law, nor does the Company have any knowledge or
reason to believe that creditors of the Company have initiated or intend to
initiate involuntary bankruptcy or similar proceedings.

3.26.       Environmental. 
Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (i) the Company is in compliance
with and not subject to any known liability under applicable Environmental Laws
(as defined below), (ii) the Company has made all filings and provided all
notices required under all applicable Environmental Laws, and has, and is in
compliance with, all permits required under any applicable Environmental Laws,
each of which is in full force and effect, (iii) (a) there are no
pending Proceedings with respect to any Environmental Laws affecting the
Company, (b)  the Company has not received any demand, claim or notice of
violation of any Environmental Laws and (c) to the knowledge of the
Company, there is no Proceeding, notice or demand letter or request for
information threatened against the Company under any Environmental Law, (iv) no
Lien or restriction has been recorded under any Environmental Law with respect
to any assets, facility or property owned, operated, leased or controlled by
the Company, (v)  the Company has not received notice that it has been
identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”),
or any comparable state law, (vi) no property or facility of the Company (a) is
listed or, to the knowledge of the Company, proposed for listing on the
National Priorities List under CERCLA or any state list of hazardous substance
sites requiring cleanup, (b) is listed in the Comprehensive Environmental
Response,

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Compensation,
Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority, (vii)
no Hazardous Materials are being released (as defined below) at, on or under
any facility owned, operated, leased or controlled by the Company or have been
Released at, on or under any facility owned, operated, leased or controlled by
the Company (except as may be allowed by permit) and, to the knowledge of the
Company, none of the facilities owned, operated, leased or controlled by the
Company are adversely affected by any Release of Hazardous Materials
originating or emanating from any other property.

For purposes of this Agreement, “Environmental Laws” means all
applicable United States federal, provincial, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution, protection
of public or employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or threatened
releases of Hazardous Materials (as defined below) into the indoor or outdoor
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of Hazardous Materials, and
(iii) underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.  The term “Hazardous Material” means
(a) any “hazardous substance,” as defined in the Comprehensive
Environmental Response, the Resource Conservation and Recovery Act, as amended,
(b) any “hazardous waste,” as defined by the Resource Conservation
and Recovery Act, as amended, (c) any petroleum or petroleum product,
(d) any polychlorinated biphenyl, (e) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance, and (f)
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, lead-based paint,
radon and mold.  “Release” means
any release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, including, without limitation, the movement of Hazardous Materials
through ambient air, soil, surface water, ground water, wetlands, land surface
or subsurface strata.

3.27.       ERISA. Schedule 3.27 sets forth
a list of each of the following that the Company maintains or contributes to or
for which the Company has any liability: (i) each employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), (ii) each other pension, profit sharing, incentive,
employment, retirement, severance, deferred compensation or change in control
plan, agreement or arrangement (each of the foregoing in (i) or (ii) a “Plan”).  With respect to any such Plan, the Company
has not, through its own actions or due to the actions of its Affiliates, incurred
any liability for, or taken any action that would constitute, nor to the
Company’s knowledge has any unrelated party taken any action that would
constitute or result in, any prohibited transaction, funding deficiency, plan
termination or complete or partial withdrawal with respect to the Company or
its Affiliates which would reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. 
With respect to each such Plan, the Company is in compliance in all
respects with all applicable provisions of ERISA, the Internal Revenue Code of
1986, as amended (the “Code”),
and other applicable laws, and the Company has performed all of its respective
obligations under such Plans, except where the failure to so comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Each Plan intended to
qualify under the provisions of Section 401(a) of the Code has received a
favorable determination letter with respect to such qualification except where
failure to qualify the Plan would not have a Material Adverse Effect.

3.28.       Taxes.  The
Company (i) has made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject, and (ii) has paid all taxes and other governmental assessments and
charges that are shown or determined to be due on such returns, reports and
declarations or otherwise, in each case except for (A) taxes being contested in
good

 9
 

faith
and for which adequate reserves are shown in the Company’s SEC Reports, or (B)
any liability of the Company for taxes and other governmental assessments and
charges that are not yet due and payable that has been accrued or reserved for
on the financial statements of the Company in accordance with GAAP.  All tax returns filed by the Company were
true, correct, and complete in all material respects as of the time of such
filing.  There are no unpaid taxes in any
material amount claimed to be due from the Company by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

3.29.       Books and Records. The minute books and other records of the
Company contain in all material respects accurate records of all Company board,
committee and stockholders’ meetings and accurately reflect in all material
respects all other corporate action of the stockholders and directors and any
committees thereof of the Company since August 1, 2002.

3.30.       Accounting Controls. The Company maintains a system of
disclosure controls and internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles and to maintain assets accountability,
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences, except for any
controls the absence of which would not result in a Material Adverse Effect.

3.31.       Compliance with Sarbanes-Oxley.  The
Company is in material compliance with all provisions of the Sarbanes-Oxley Act
of 2002 (including all SEC rules and regulations promulgated pursuant to such
Act) applicable to the Company.

3.32.       DNA Dreamfields Company, LLC.

(a)           The
Company owns a 46.71% interest in DNA Dreamfields Company, LLC, an Ohio limited
liability company (“Dreamfields”), a joint venture formed to license
patent pending technology to market and manufacture “low digestible
carbohydrate” pasta, rice and potatoes owned by TechCom Group, LLC (the “Technology”).

(b)           The
agreements related to Dreamfields are listed on Schedule 3.32, complete
and accurate copies of which have been delivered to Purchasers (the “Dreamfield
Agreements”).  Each of the Dreamfield
Agreements as it relates to the Company and, to the knowledge of the Company,
as it relates to any third party:  (i) is
legal, valid, binding, enforceable, and in full force and effect in all
material respects, subject to the Bankruptcy and Equity Exception; (ii) will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby, subject to the Bankruptcy and Equity Exception; (iii) no party is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (iv) no party has repudiated any
material provision of the agreement.

(c)           To
the Company’s knowledge, Dreamfields owns or possesses adequate rights or
licenses to use the Technology and all related trademarks, trademark
applications, trade names and service marks, whether or not registered, and all
patents, patent applications, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and intellectual property rights
which are necessary for use in connection with its business as now
conducted.  To the Company’s knowledge,
Dreamfields has not infringed, and is not infringing, on any of the
Intellectual Property Rights of any Person except as would

 10
 

not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Dreamfields. 
There is no Proceeding which is pending, or to the Company’s knowledge,
is threatened against, Dreamfields regarding the infringement of any of the
Intellectual Property Rights. 
Dreamfields has taken reasonable security measures to protect the
secrecy, confidentiality and value of all of its Intellectual Property
Rights.  To the Company’s knowledge,
Dreamfields has not infringed, and is not infringing, on any of the
Intellectual Property Rights of any Person.

(d)           Patents
relating to the Technology (the “Technology Patents”) have been filed by
TechCom Group, LLC with and are currently pending in the United States Patent
and Trademark Office.  To the knowledge
of the Company, there are no reasons or factors that may result in the
Technology Patent not being approved or granted by the United States Patent and
Trademark Office.  TechCom Group, LLC has
completed clinical and other studies that, to the Company’s knowledge and
belief, conclusively and scientifically prove that the Technology is effective
in reducing the number of digestible carbohydrates in pasta to that reflected
on the nutrition statements on the Dreamfields products manufactured and
distributed by the Company.

(e)           The
Company has made available to each Purchaser prior to the execution of this
Agreement the supporting information from the Company’s financial records that
were derived from Dreamfields’ financial statements for the ten-month period
ending October 31, 2006 (collectively, the “Dreamfields Financials”) and
show the impact on the Company of its relationship with Dreamfields.  To the Company’s knowledge, the Dreamfields
Financials have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby and are correct and complete.  The Company’s financial statements present
fairly the financial impact on the Company of the results of operations of
Dreamfields for such periods.  The
Company’s financial statements do not exclude any material adjustments to
revenue, expenses or liabilities, do not overstate revenues or understate
expenses or liabilities and do not contain any untrue or misleading statements
associated with or arising from the Company’s relationship with Dreamfields.

3.33.       Significant Customers and Distributors. 
Except as previously specifically disclosed by the Company to the
Purchasers, since July 31, 2006, (a) no material customer or distributor has
indicated its plans or intent to stop, or materially decrease the rate of,
buying products from the Company and (b) no material supplier has indicated its
plans or intent to stop, or materially decrease the rate of, supplying
materials, products or services to the Company.

SECTION 4

Covenants
of the Company

The Company hereby covenants
with Purchasers as follows:

4.1.         Offering Limitations.  In
connection with any offering which would be integrated into the transactions
contemplated in this Agreement, none of the Company or, to the Company’s
knowledge, any of its Affiliates will solicit any offer to buy or offer to sell
shares of Common Stock or securities convertible into or exchangeable for
Common Stock by means of any form of general solicitation or general
advertising (as such terms are used in Regulation D under the Securities
Act) in any manner involving a public offering (within the meaning of Section 4(2)
of the Securities Act).

4.2.         Disclosures. 
Subject to Purchasers’ prior approval of the content thereof, promptly
following the Closing the Company will (i) issue a press release announcing the
sale of the Shares, and (ii) file such press release and other appropriate
information reasonably acceptable to Purchasers with the SEC on a Form 8-K.

 11
 

4.3.         Use of Proceeds.  The
Company will use the proceeds from the sale of the Shares and the New Debt
Financing (as defined below) (reduced by the expenses incurred or reimbursed by
the Company in connection with the transactions contemplated hereby) for the
sole purpose of purchasing up to 4 million shares of Common Stock at a price of
$10 per share from existing common stockholders of the Company that tender
shares pursuant to a tender offer expected to be made by the Company in late
February 2007(the “Repurchase”).

4.4.         Right of First Offer / Future Investment Right.

(a)           Subject to Section
4.4(f), following the Closing and as long as a Purchaser beneficially owns
at least 50% of the Shares purchased hereby, in the event that, at any time,
the Company shall decide to issue any additional convertible debt or equity
funding (“New Equity Securities”), the Company shall at such time
deliver to such Purchaser written notice (the “Preemptive Notice”) of
the Company’s issuance of New Equity Securities, describing the amount, type
and terms (including the exercise price and expiration date thereof in the case
of any New Equity Securities in the form of options or warrants) of such New
Equity Securities, the purchase price per New Equity Security (the “New
Equity Securities Price”) to be paid by the purchasers of such New Equity
Securities, the expected timing of such issuance (which will in no event be
more than 60 days or less than 30 days after the date upon which the Preemptive
Notice is given) and the other terms upon which the Company has decided to
issue the New Equity Securities.

(b)           Each Purchaser shall
have 15 days from the date on which it receives the Preemptive Notice to agree
to purchase up to its pro rata share of such New Equity Securities at the New
Equity Securities Price and upon the general terms specified in the Preemptive
Notice by giving written notice (a “Preemptive Exercise Notice”) to the
Company and stating therein the quantity of New Equity Securities to be
purchased by such Purchaser; provided that if the New Equity Securities Price
includes any non-cash consideration, each such Purchaser shall have the option
to pay cash in lieu of any such non-cash component.  In the event that any Purchaser shall for any
reason fail or refuse to give Preemptive Exercise Notice to the Company within
such 15 day period, such Purchaser shall, for all purposes of this Section
4.4, be deemed to have refused (in that particular instance only) to
purchase, and to have waived (in that particular instance only) all of its
rights under this Section 4.4 to purchase, any of such New Equity
Securities.

(c)           For
purposes of this Section 4.4, a Purchaser’s “pro rata share” means, at
any time, the quotient obtained by dividing the number of shares of Common
Stock and Preferred Stock held by such Purchaser at such time by the aggregate
number of shares of Common Stock and Preferred Stock held by the Purchasers.

(d)           In
the event that either Purchaser does not elect to purchase all of its
respective pro rata share of such New Equity Securities, the New Equity
Securities which were available for purchase by such non-electing Purchaser
(the “Excess New Equity Securities”) shall automatically be deemed to be
accepted for purchase by the other Purchaser to the extent that such Purchaser
indicated in its Preemptive Exercise Notice a desire to purchase any Excess New
Equity Securities.

(e)           In
the event and to the extent that, subsequent to the procedure set forth in Sections
4.4(a)-(d), any New Equity Securities to be issued by the Company are not
subject to an agreement by and between the Company and any Purchaser to
purchase such New Equity Securities, the Company shall be free to issue such
New Equity Securities to any person; provided, that (i) the price per
New Equity Security at which such New Equity Securities are being issued to and
purchased by such person is not less than the New Equity Securities Price and
(ii) the other terms and conditions pursuant to which such person purchases
such New Equity Securities are no more favorable than the terms and conditions
set

 12
 

forth in the Preemptive Notice. 
Any New Equity Securities not issued or sold within 180 days after the
date of the Preemptive Notice shall again be subject to the provisions of this Section
4.4.

(f)            Notwithstanding
the foregoing, the rights of Purchasers under this Section 4.4 shall not apply
to (i) any issuance pursuant to any stock option plan of the Company; (ii) the
exercise of one or more warrants, options, conversion rights, exchange rights,
or similar rights (a) existing as of the date of this Agreement; (b) issued
pursuant to any stock option plan of the Company, or (c) issued pursuant to
agreements or rights existing as of the date of this Agreement, including but
not limited to the Company’s Amended and Restated Share Rights Agreement dated
April 19, 2002; or (iii) any issuance pursuant to any merger, asset purchase or
other transaction in which the Company issues its shares as consideration for
such acquisition and in which the Company is the surviving entity.

(g)           MVC
hereby acknowledges and agrees that, with respect to New Equity Securities, the
preemptive right granted in this Section 4.4 replaces any rights granted
to MVC under Section 4.5 of that certain Stock Purchase Agreement, dated
as of July 30, 2004, by and between the Company and MVC.

4.5          Board
of Directors and Observation Rights.  (a)
For such time as LBHor an
affiliate thereof beneficially owns 50% or more of the Shares acquired by LBH
pursuant to this Agreement (as adjusted for stock splits, stock dividends,
share contributions and the like), LBH shall have the right to designate, an
individual to serve as a member of the Company’s Board of Directors (the “LBH
Board Member”), such individual to be reasonably satisfactory to the Company’s
Board of Directors,and the
Company shall use its best efforts to accomplish the nomination and election of
the LBH Board Member.  The initial LBH
Board Member shall be Richard Thompson, who the Company agrees is reasonably
satisfactory to its Board of Directors. 
In the event that LBH or an affiliate thereof does not beneficially own
50% or more of the Shares acquired by LBH pursuant to this Agreement (as
adjusted for stock splits, stock dividends, share contributions and the like),
the Board of Directors shall have the option of removing or replacing the LBH
Board Member at the end of the period ending 30 days after the date on which
LBH or an affiliate thereof fails to own 50% or more of the Shares acquired by
LBH pursuant to this Agreement (as adjusted for stock splits, stock dividends,
share contributions and the like).

(b)           For
such time as LBH or an affiliate thereof beneficially owns 50% or more of the
Shares acquired by LBH pursuant to this Agreement (unless otherwise mutually
agreed to by the Company and LBH), (as adjusted for stock splits, stock
dividends, share contributions and the like) the Company shall give LBH and its
affiliate, if any, that holds the Shares written notice of each meeting of its
Board of Directors (and meetings of any special committee or executive
committee) at the same time and in the same manner as notice is given to the
directors of the Company, and the Company shall permit a representative
designated by LBH or an affiliate thereof to attend as an observer all such
meetings, in person or by telephone.  The
representative designated by LBH or an affiliate thereof shall be entitled to
receive all written materials in connection with such meetings at the same time
that materials and information are given to the board of directors.  The Company shall bear the reasonable
expenses of the representative designated by LBH or an affiliate thereof
associated with the attendance or participation in any meetings of its board.

4.6          Directors
and Officers Insurance.  (a) For such time as a LBH
Board Member sits on the Company’s Board of Directors, the Company agrees that
it will indemnify and hold harmless the LBH Board Member against any costs or
expenses (including attorneys’ fees), judgments, fines, losses, claims,
damages, liabilities or amounts paid in settlement (each a “Loss”)
incurred in connection with any claim, whether civil, criminal, administrative
or investigative, arising out of or pertaining to matters existing or occurring
at or prior to the Closing, whether asserted or claimed prior to, at or after
the Closing, to the fullest extent permitted under applicable law (and the
Company shall also advance expenses as incurred to the fullest extent permitted
under applicable law).  All of such
rights to indemnification and to receive

 13
 

expense advances shall be in accordance with the provisions of the
organizational documents of the Company.

(b)           The
Company shall cause to be maintained commercially reasonable directors’ and
officers’ liability insurance with respect to matters occurring prior to, at or
after the Closing, and the Company shall take all actions necessary to ensure
that the LBH Board Member is covered by the terms and conditions of such
insurance to the fullest extent permitted under North Dakota law (and the
Company shall also advance expenses as incurred to the fullest extent permitted
under North Dakota law).  The
indemnification set forth in this Section 4.6 shall be in addition to
any indemnification set forth in Section 8.7 hereof.

SECTION 5

Representations,
Warranties and Covenants of Purchasers

Each Purchaser, severally and not jointly, hereby
represents and warrants to the Company as follows:

5.1.         Ownership;
Standstill.

(a)           Without giving effect
to the transactions contemplated by this Agreement or the Repurchase: (i) LBH
represents that as of the date hereof and immediately prior to the Closing
Date, LBH beneficially owns no shares of the Company’s equity securities, as
determined in accordance with Section 13 of the Exchange Act and rules and
regulations promulgated thereunder and (ii) MVC represents that as of the date
hereof and immediately prior to the Closing Date, MVC’s beneficial ownership of
the Company’s securities is accurately reflected in that certain Amendment No.
1 to Schedule 13D filed by MVC on April 14, 2006 and that such Amendment No. 1
to Schedule 13D complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC.

(b)           Each Purchaser
agrees that it will not, without the prior approval of the Board of Directors
of the Company, excluding any director appointed by either Purchaser, directly
or indirectly: (i) initiate, propose, make or participate in any solicitation
of proxies to vote or seek to advise or influence any Person with respect to
the voting of any securities of the Company or demand or call a meeting of
stockholders of the Company; (ii) acquire or make any proposal to acquire any
securities or property of the Company; (iii) propose to enter into any merger
or business combination involving the Company or any material portion of the
assets of the Company; (iv) form, join or participate in a “group” within the
meaning of Section 13(d)(3) of the Exchange Act with respect to any voting
securities of the Company; or (v) disclose any intention, plan or arrangement
inconsistent with the foregoing; provided, however,
that none of the foregoing shall prevent any director from fulfilling his
duties as a member of the Board of Directors.

5.2.         Accredited
Purchaser Status; Qualification; Residency.  Each
Purchaser represents that it is an “accredited investor” as defined in Rule
501(a) of Regulation D promulgated under the Securities Act. Each Purchaser
acknowledges that the Company has made available to such Purchaser the
opportunity to ask questions and receive answers concerning the terms and
conditions of the sale of securities contemplated by this Agreement and to
obtain any additional written or verbal information (which the Company
possesses or can acquire without unreasonable effort or expense) as may be
necessary to verify the accuracy of information furnished to such
Purchaser.  Each Purchaser (a) is able to
bear the loss of its entire investment in the Shares, and (b) has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the investment to be

 14
 

made
by it pursuant to this Agreement. MVC represents that its principal office is
located in the State of New York.  LBH
represents that its principal office is located in the State of New Jersey.

5.3.         Investment Intent.  The
Shares being acquired by each Purchaser are being purchased for investment for
such Purchaser’s own account and not with the view to, or for resale in
connection with, any distribution or public offering thereof.  Each Purchaser understands that the Shares
have not been registered under the Securities Act or any state securities laws by
reason of their contemplated issuance in transactions exempt from the
registration and prospectus delivery requirements of the Securities Act
pursuant to Section 4(2) thereof and applicable state securities laws, and that
the reliance of the Company and others upon these exemptions is predicated in
part upon this representation by each Purchaser.  Each Purchaser further understands that the
Shares may not be transferred or resold without (i) registration under the
Securities Act and any applicable state securities laws, or (ii) an
exemption from the requirements of the Securities Act and applicable state
securities laws.  Each Purchaser
understands that an exemption from such registration is not presently available
pursuant to Rule l44 promulgated under the Securities Act by the SEC and that
in any event the Purchasers may not sell any securities pursuant to Rule l44
prior to the expiration of a one-year period after such Purchaser has acquired
the Shares.  Each Purchaser understands
that any sales pursuant to Rule l44 can be made only in full compliance with
the provisions of Rule l44.

5.4.         Organization;
Authorization.  MVC represents that it is a corporation duly
formed, validly existing and in good standing under the laws of Delaware with
the requisite power and authority, to enter into and to consummate the
transactions contemplated by the Transaction Agreements and otherwise to carry
out its obligations under the Agreements. 
LBH represents that it is a limited liability company duly formed,
validly existing and in good standing under the laws of Delaware with the
requisite power and authority, to enter into and to consummate the transactions
contemplated by the Transaction Agreements and otherwise to carry out its
obligations under the Transaction Agreements. 
Each Purchaser represents that the purchase by it of Shares hereunder
has been duly authorized by all necessary action on the part of Purchaser.  Each Purchaser represents that this
Agreement, when executed and delivered by it, will constitute a valid and
binding obligation of such Purchaser, enforceable in accordance with its terms,
subject to the Bankruptcy and Equity Exception.

5.5.         Restrictive Legends.  The
Company will direct its transfer agent and registrar to maintain stop transfer
instructions on record for the Shares until it has been notified by the
Company, upon the advice of counsel, that such instructions may be waived
consistent with the Securities Act and applicable securities laws.  Such stop transfer instructions will limit
the method of sale of the Shares, consistent with Rule 144 or other available
exemptions from registration under the Securities Act.  Any transfers other than pursuant to a
registration statement under the Securities Act will require an opinion of
counsel reasonably satisfactory to the Company and its counsel prior to such
transfers.  Each Purchaser understands
that the Shares will not be certificated, but agree that any documents,
certificates or instruments that may be issued in the future to represent
ownership of the Shares shall bear the following legends:

“THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION UNDER THE SECURITIES ACT.”

 15

In addition, each Purchaser acknowledges that each certificate for
Shares will bear any additional legend required by any other applicable
securities or blue sky laws.

5.6.         No
Governmental Review. Each Purchaser understands
that no federal or state agency or any other government or governmental agency
or authority has passed upon or made any recommendation or endorsement of the
Shares.

5.7.         Residency. MVC
represents that it is a resident of the State of New York. LBH represents that
it is a resident of the State of New
Jersey.

5.8.         Additional Securities Law
Matters. EachPurchaser represents that it (a) has no
present intention to engage in short sales or other hedging activity in
relation to the Company’s securities, (b) has no agreements or understandings,
directly or indirectly, with any person or entity to distribute the Shares, and
(c) does not share voting or investment control over the Company’s securities
with any person or entity (other than relationships, if any, disclosed in the
Schedule 13D filed with the SEC by such Purchaser).

SECTION 6

Conditions to Purchasers’ Obligations to Close

The obligation of each Purchaser to purchase the
Shares to be purchased by it hereunder at the Closing is subject to the
fulfillment of the following conditions, any of which may be waived by such
Purchaser:

6.1.         Representations and
Warranties Correct. The representations and warranties made by the
Company herein shall be true and correct in all material respects as of the date hereof and as of the
Closing Date, except for those representations and warranties which are made as
of a particular date which shall be true in all material respects as of such
date.

6.2.         Covenants. All
covenants, agreements and conditions contained in this Agreement to be
performed by the Company on or prior to the Closing shall have been performed
or complied with in all material respects.

6.3.         No Injunction. No
statute, rule, regulation, order, decree, ruling or injunction shall have been
enacted, entered, promulgated, endorsed or threatened or is pending by or
before any Governmental Authority of competent jurisdiction which restricts,
prohibits or threatens to restrict or prohibit the consummation of any of the
transactions contemplated by the Agreements.

6.4.         Adverse Changes.
Except as disclosed on Schedule
3.10, since the date of the financial statements included in the Company’s
Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or latest Current
Report on Form 8-K, whichever is more recent, last filed prior to the date of
this Agreement, no event which has had or could reasonably be expected to have
a Material Adverse Effect shall have occurred.

6.5.         Litigation. Except
as set forth on Schedule 6.5 to this Agreement, no Proceeding or
Proceedings shall have been instituted or threatened against the Company which
could reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.

6.6.         Certificate of Incorporation. (a) The Company
shall have delivered to each Purchaser a copy of a certificate evidencing the
incorporation and good standing of the Company, issued by the

 16
 

Secretary of State of the
State of North Dakota, as of a date within 10 days prior to the Closing. (b)
The Company shall have delivered to each Purchaser, (i) a copy of a certificate
evidencing the qualification and good standing of Primo Piatto, Inc., issued by
the Secretary of State of the state of Minnesota, and (ii) copies of
certificates evidencing the qualification and good standing of the Company from
such other states or jurisdictions where the Company’s ownership or operation
of its properties or the conduct of its business require the Company to be
qualified to do business as a foreign corporation.

6.7          Certificate of Officers. The Company shall have delivered to the
Purchasers a certificate, dated the Closing Date, executed by an authorized
officer of the Company and certifying to the satisfaction of the Purchasers the
conditions specified in this Section 6.

6.8.         Secretary’s Certificate. The Company shall have delivered to such
Purchaser a certificate of the Company executed by the Secretary of the
Company, dated as of the Closing, certifying (i) resolutions adopted by the
Board of Directors of the Company authorizing the execution of the Transaction
Agreements, the issuance of the Shares, the filing of the Certificate of
Designation for the Series F Convertible Preferred Stock in the form of Exhibit
A hereto, the filing of any Registration Statement that may be required
pursuant to the Registration Rights Agreements, and the transactions
contemplated hereby; (ii) the Certificate of Incorporation and Bylaws of the
Company, each as amended, and copies of the third party consents, approvals and
filings required in connection with the consummation of the transactions
contemplated by the Agreements; and (iii) such other documents relating to the
transactions contemplated by the Agreements as Purchasers may reasonably
request.

6.9.         Registration Rights
Agreement. The Company and such Purchaser shall have executed, entered
into and delivered a Registration Rights Agreement, in substantially the form
attached hereto as Exhibit B.

6.10.       Certificate of Designation. The Company shall have filed with the North Dakota
Secretary of State’s Office the Certificate of Designation for the Series F
Convertible Preferred Stock in the form of Exhibit A hereto and provided
evidence of such filing to the Purchasers.

6.11        Financial Documents.
Such Purchaser shall have received copies of the financial statements of the
Company through December 31, 2006 and annual budget of the Company for the
fiscal year ending July 31, 2007, each reflecting no Material Adverse Effect
from the Company’s financial statements for twelve months ending October 31,
2006, which were previously provided to each Purchaser.

6.12        New Debt Financing.
The Company shall have secured an amount of new debt financing which, when
combined with the funds received from the Purchasers for their purchase of
securities hereunder, is sufficient to fund the Repurchase and the expenses
incurred or reimbursed by the Company in connection with the Repurchase and
Purchasers’ purchase of securities hereunder (the “New Debt Financing”).

6.13        Simultaneous
Funding. The other Purchaser shall have funded the purchase of the
Shares to be purchased by such other Purchaser hereunder.

6.14.       Tender Offer/Share
Repurchase. The Company shall
have provided evidence to the reasonable satisfaction of Purchasers that any
conditions to the Repurchase have been satisfied or irrevocably waived.

 17
 

6.15.       Other Documents. The
Company shall have delivered to such Purchaser such other documents relating to
the transactions contemplated by the Agreements as Purchasers or their counsel
may reasonably request.

6.16.       Opinion of Counsel. At
the Closing, such Purchaser shall have received the opinion of Lindquist &
Vennum PLLP, dated as of Closing in the form and substance attached hereto as Exhibit
C.

SECTION 7

Conditions to Closing of the Company

The Company’s obligation to sell and issue the Shares
at the Closing is, at the option of the Company, subject to the fulfillment as
of the Closing of the following conditions:

7.1.         Representations. The
representations and warranties made by each Purchaser herein shall be true and
correct in all material respects on the dates made and on the date of Closing.

7.2.         Performance by
Purchasers. Purchasers shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Agreements to be performed, satisfied or complied with by Purchasers at or before
the Closing.

7.3.         No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated, endorsed or threatened or is pending
by or before any Governmental Authority of competent jurisdiction which
prohibits or threatens to prohibit the consummation of any of the transactions
contemplated by the Agreements.

SECTION 8

Miscellaneous

8.1.         Governing Law. This
Agreement shall be governed in all respects by the laws of the State of Delaware,
without reference to its conflict of laws principles.

8.2.         Survival. The
representations, warranties, covenants and agreements made herein shall survive
any investigation made by Purchasers and the closing of the transactions
contemplated hereby.

8.3.         Assignments, Successors, and No
Third-Party Rights. Any
Purchaser may assign its Shares and all or any of its rights and obligations
hereunder to any affiliate or lender of such Purchaser so long as such
Purchaser remains liable for such Purchaser’s obligations hereunder. Subject to
the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted assigns
of the parties. Nothing expressed or referred to in this Agreement will be construed
to give any Person other than the parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.

8.4.         Notices, etc. All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by United States mail, postage prepaid, by reliable
overnight delivery service such as UPS or FedEx, or by facsimile transmission,
or otherwise delivered by hand or by messenger, addressed (a) if to a
Purchaser, at such Purchaser’s address set forth below, or at such other
address as such Purchaser shall have furnished to the Company in writing, or
(b) if to the Company, one

 18
 

copy should be sent to the Company at the
address listed below, in each case with a copy to the person at the address
indicated below.

Company:

Dakota Growers Pasta Company, Inc.

One Pasta Avenue

Carrington, North Dakota 58421

Attn: Timothy J. Dodd

Telephone: (701) 652-4894

Facsimile: (701) 652-3713

with a copy to:

Lindquist & Vennum PLLP

4200 IDS Center

80 South Eighth Street

Minneapolis, Minnesota 55402

Attn: Ronald D. McFall, Esq.

Telephone: (612) 371-3551

Facsimile: (612) 371-3207

Purchasers:

MVC Capital, Inc.

287 Bowman Avenue, 3rd Floor

Purchase, New York 10577

Attn: Shivani Khurana

Telephone: (914) 251-1961

Facsimile: (914) 701-0315

with a copy to:

Wildman, Harrold, Allen & Dixon

225 W. Wacker Drive, #3000

Chicago, Illinois 60606

Attn: John L. Eisel, Esq.

Telephone: (312) 201-2000

Facsimile: (312) 201-2555

 19
 

La Bella Holdings, LLC

c/o GO7 Brands LLC

400 Plaza Drive, 1st Floor

Secaucus, New Jersey 07094

Attn: Richard Thompson, Principal

Telephone: (201) 520-4000

Facsimile: (201) 348-1909

with a copy to:

Kirkland & Ellis LLP

Citigroup Center

153 East 53rd Street

New York, NY 10022

Attn: Frederick Tanne, Esq.

         Jeffrey Symons, Esq.

Telephone: (212) 446-4800

Facsimile: (212) 446-4900

Each such notice or other
communication shall for all purposes of this Agreement be treated as effective
or having been given when delivered, or if by facsimile transmission, as
indicated by the facsimile imprint date.

8.5.         Delays or Omissions.
Except as expressly provided herein, no delay or omission to exercise any
right, power or remedy accruing to Purchasers upon any breach or default of the
Company under the Agreements shall impair any such right, power or remedy of
Purchasers, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of Purchasers of any breach or default under this Agreement, or any
waiver on the part of any party hereto of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to Purchasers, shall be cumulative
and not alternative.

8.6.         Fees and Expenses.

(a)           Upon the Closing, the Company shall pay: (i) MVC Financial Services,
Inc., cash in the amount of $200,000 as fees in connection with the investment
contemplated by this Agreement and (ii) LBH, cash in the amount of $200,000 as
fees in connection with the investment contemplated by this Agreement; provided, however, that in the event the Purchasers’
purchase of Common Stock and Preferred Stock is reduced pursuant to the
provisions of Section 1.2 hereof, the Company’s payments to MVC and LBH
hereunder shall also be proportionately reduced.

(b)           The Company shall bear all of its own expenses and, in addition to the
payments described in Section 8.6(a) hereof, all reasonable expenses
incurred by Purchasers in connection with the preparation, execution, and
performance of this Agreement and the transactions contemplated herein,
including, without limitation, all fees and expenses of counsel, accountants,
brokers, finders, agents and representatives.

 20
 

8.7.         Indemnification. The Company
will indemnify, defend and hold harmless each Purchaser (including any
stockholder, officer, director, agent, representative or affiliate of the
Company) from and against any claims, damages, actions, suits, proceedings,
demands, assessments, losses, liabilities, costs and expenses (including
reasonable expenses of investigation and reasonable attorneys’ fees in
connection with any of the foregoing) incurred or suffered by Purchaser caused
by, resulting from or arising out of (1) any inaccuracy in or breach of any
representation or warranty of the Company set forth in this Agreement, (2) any
failure by any of the Company to perform any of their obligations or covenants
set forth in this Agreement, or (3) any certificate delivered pursuant to or in
connection with (1) or (2).

8.8          Counterparts. This
Agreement may be executed in two or more identical counterparts and by
facsimile, each of which shall be deemed an original and all of which shall
constitute one and the same agreement. Any signature that is delivered by facsimile
transmission shall be valid and binding, with the same force and effect as if
an original, manually signed counterpart.

8.9.         Severability. In
the event that any provision of this Agreement is unenforceable, the remaining
provisions shall continue in full force and effect.

8.10.       Section Headings, etc.
The titles and subtitles used in this Agreement are used for convenience
only and are not considered in construing or interpreting this Agreement. As
used herein, any gender shall include all other genders, and the singular shall
include the plural and vice versa. The terms “include,” “including” and similar
terms shall mean include without limitation, whether by enumeration or
otherwise.

8.11.       Further Assurances. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other parties may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.

8.12.       Confidentiality. All
material, non-public information disclosed by the Company to Purchasers
pursuant to this Agreement or otherwise shall be held strictly confidential and
used by Purchasers solely for evaluating purchases of Shares in this Offering, provided this obligation shall not apply
to any information that is generally available to the public or becomes
available to the public without any disclosure by Purchasers. The provisions of
this Section 8.12 shall not in any way amend or supersede the provisions
of any other confidentiality, non-disclosure or similar agreement with the
Company to which Purchasers are bound.

8.13.       Entire
Agreement; Amendment. This Agreement and the Registration Rights
Agreement and the other documents contemplated therein constitute the entire
understanding and agreement between Purchasers and the Company with regard to
the subject matter. Except as expressly provided herein, this Agreement, any of
the other Agreements or any term hereof may be amended, modified, waived or
discharged only by a written instrument signed by the party waiving any term,
condition, or right or remedy that benefits it hereunder.

8.14.       Public Statements or Releases.
Neither the Company nor any Purchasers shall make any public announcement
with respect to the existence or terms of this Agreement or the transactions
provided for herein without the prior approval of the other parties, which
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
nothing in this Section 8.14 shall prevent any party from making any
public announcement it considers necessary in order to satisfy its obligations
under the law or the rules of any national securities exchange or Nasdaq;
provided such party, to the extent

 21
 

practicable, provides the other parties with an
opportunity to review and comment on any proposed public announcement before it
is made.

8.15        MVC Conversion Right.
MVC shall have the right, at any time and from time to time, to convert any
number of the shares of Common Stock then held by it to an equal number of
shares of Preferred Stock, by providing written notice to the Company. Any such
conversion shall be effective on the date indicated by MVC in its notice or, if
no such date is indicated, on the date the notice was given in accordance with
Section 8.4 of this Agreement. Upon receipt of any such notice of conversion
from MVC, the Company shall cause its transfer agent to take any actions required
to effect the conversion.

[Signature Page to Follow]

 22

IN WITNESS WHEREOF, the
undersigned have executed this Stock Purchase Agreement as of the day and year
first set forth above.

	
  

  	
  Purchasers:

  
	
   

  	
   

  
	
   

  	
  MVC Capital, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael T. Tokarz

  	
   

  
	
   

  	
  Name:

  	
  Michael T. Tokarz

  
	
   

  	
  Title:

  	
  Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  La Bella Holdings, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank J. Loverro

  	
   

  
	
   

  	
  Name:

  	
  Frank J. Loverro

  	
   

  
	
   

  	
  Title:

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Seller:

  
	
   

  	
   

  
	
   

  	
  Dakota Growers Pasta Company, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Dodd

  	
   

  
	
   

  	
  Name:

  	
  Timothy J. Dodd

  
	
   

  	
  Title:

  	
  President

  

 

COMPANY DISCLOSURE SCHEDULES TO
THE

STOCK
PURCHASE AGREEMENT

These
disclosure schedules (these “Disclosure Schedules”) are being furnished
by Dakota Growers Pasta Company, Inc., a North Dakota corporation (the “Company”),
in connection with the Stock Purchase Agreement (the “Agreement”) to
which these Disclosure Schedules are attached. 
Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Agreement.

No
disclosure in these Disclosure Schedules relating to any possible breach or
violation of any agreement, law or regulation shall be construed as an
admission or indication that any such breach or violation exists or has
actually occurred.

SCHEDULE
3.4

Stock Options

The Company has options outstanding to purchase
1,977 shares of Series C Convertible Preferred Stock. Each share of Series C
Convertible Preferred Stock is convertible into 24 shares of Common Stock and
24 shares of Series D Delivery Preferred Stock of the Company.

The Company has options outstanding to purchase
658,563 shares of Common Stock.

The Company is also subject to an Amended and
Restated Rights Agreement dated April 18, 2002 between the Company and
Wells Fargo Bank Minnesota, National Association, as “Rights Agent”.

SCHEDULE
3.10

Dividends

The Company’s Board of Directors authorized the
payment of a non-periodic dividend of $0.14 per share on its Common Stock and a
$0.01 per share dividend on its Series D Delivery Preferred Stock to
shareholders of record as of December 20, 2006. The dividends on both classes
of stock were paid on January 3, 2007 and totaled $1,956,466.

SCHEDULE
3.12

Consents and Approvals

None.

SCHEDULE
3.13

Proceedings

None.

SCHEDULE
3.17

Intellectual
Property Rights

None.

SCHEDULE
3.18

Registration
Rights; Rights of Participation

The Company has agreed to register shares of its
Common Stock issued to MVC pursuant to the Stock Purchase Agreement and
Registration Rights Agreement, each dated July 30, 2004, between the Company
and MVC.

SCHEDULE
3.19

Title

CoBank and the Holders of the Series A and Series B
Senior Secured Guaranteed Notes have a security interest in substantially all
assets of the Company.

SCHEDULE
3.21

Insurance

None.

SCHEDULE
3.23

Labor

Collective Bargaining Agreements

The Company is a party to the following collective
bargaining agreements covering certain employees at its Primo Piatto, Inc.
subsidiary:

·                  Bakery, Confectionary, Tobacco Workers and
Grain Millers Union

Twin Cities Local 22 AFL-CIO

Term: October 1, 2005 through September 30, 2008

·                  Teamsters Local No. 120

Term: December 1, 2004 through December 1, 2007

SCHEDULE
3.27

ERISA

Dakota Growers Pasta Company, Inc. 401(k) Plan

Central States, Southeast and Southwest Areas Pension Fund/Health and
Welfare Fund

SCHEDULE 3.32

Dreamfield Agreements

Agreements related to DNA Dreamfields Company, LLC
are as follows:

·                  Amended and Restated DNA Dreamfields Company, LLC
Operating Agreement effective May 1, 2005 between the Company, B-New, LLC,
TechCom Group, LLC and Buhler, Inc.

·                  2005 Line of Credit Loan Agreement effective May 31,
2005 by and between the Company (“Lender”) and DNA Dreamfields Company, LLC (“Borrower”).

·                  LLC Unit Pledge Agreement effective May 31, 2005
between and among B-New, LLC, TechCom Group, LLC, Buhler, Inc.
(collectively the “Pledgors”) and the Company (“Lender”).

·                  Manufacturing Agreement dated December 26, 2003
between the Company and DNA Dreamfields Company, LLC.

·                  Services Agreement dated December 26, 2003 between
the Company and DNA Dreamfields Company, LLC.

·                  Trademark License Agreement dated December 26, 2003
between the Company and DNA Dreamfields Company, LLC.

·                  Technology Sublicense Agreement dated December 26,
2003 between the Company and DNA Dreamfields Company, LLC.

SCHEDULE
6.5

Litigation

None.

EXHIBIT
A

DAKOTA GROWERS PASTA
COMPANY, INC.

CERTIFICATE OF DESIGNATION OF

SERIES F CONVERTIBLE PREFERRED SHARES

The undersigned DOES HEREBY CERTIFY that the following resolution was duly
adopted by the Board of Directors of Dakota Growers Pasta Company, Inc., a
North Dakota corporation (hereinafter called the “Company”):

RESOLVED, that pursuant
to the authority granted to and vested in the Board of Directors of the Company
in accordance with the provisions of the Second Amended and Restated Articles of
Incorporation of the Company, the Board of Directors hereby creates a series of
Preferred Stock, par value $0.01 per share, of the Company and hereby states
the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof as follows:

1.                                      Name and Designation.

The distinctive name and
serial designation of this series of Preferred Stock is “Series F Convertible
Preferred Stock” (the “Series F Preferred Stock”).

2.                                      Number of Shares.

The Series F Preferred Stock
shall consist of 2,100,000 shares.  The
number of shares constituting such series may, unless prohibited by the
Articles of Incorporation or by applicable law of the State of North Dakota, be
increased or decreased from time to time by a resolution or resolutions of the
Board of Directors, provided that no decrease shall reduce the number of shares
of Series F Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares issuable upon the exercise of outstanding
options, rights, or warrants, or upon the conversion of any outstanding
securities issued by the Company convertible into shares of Series F Preferred
Stock.  Shares of Series F Preferred
Stock repurchased or redeemed by the Company or surrendered for conversion
shall be canceled and shall revert to authorized but unissued shares of
Preferred Stock, undesignated as to series, subject to reissuance by the
Company as shares of Preferred Stock of any one or more series.

3.                                      No
Voting Rights.

Shares of Series F Preferred
Stock shall not carry the right to vote on matters submitted to the vote of the
shareholders of the Company.

4.                                      Conversion
of Shares.

Each holder of Series F
Preferred Stock shall have the right, exercisable at any time upon sixty-five
(65) days’ written notice to the Company, to convert any number of the holder’s
shares of Series F Preferred Stock into an equal number of shares of the
Company’s Common Stock, par value $.01 per share (the “Common Stock”).

In addition to the
foregoing, each share of Series F Preferred Stock shall, at the option of the
holder thereof, exercisable by written notice to the Company, convert into one
share of the Common

Stock
upon (i) a Change of Control, (ii) any transaction, however structured,
pursuant to which the holder of such share of Series F Preferred Stock
substantially exits its equity investment in the Company, or (iii) any default
by the Company under any material agreement.

“Change of Control,” as used
in this Section 4, means the occurrence of any of the following events:

(i)                                     Any Person (other than the Company, any
trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or any company owned, directly or indirectly, by the
stockholders of the Company immediately prior to the occurrence with respect to
which the evaluation is being made in substantially the same proportions as
their ownership of the common stock of the Company) acquired securities of the
Company and immediately thereafter is the Beneficial Owner (as determined in accordance
with Regulation 13D under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (except that a Person shall be deemed to be the Beneficial Owner of all
shares that any such Person has the right to acquire pursuant to any agreement
or arrangement or upon exercise of conversion rights, warrants or options or
otherwise, without regard to the sixty day period referred to in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities;

(ii)                                  At any time a majority of the individuals
constituting the Board are individuals who were not members of the Board two
years prior to such time; or

(iii)                               The consummation of a merger or consolidation
of the Company with any other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
resulting entity) more than 50% of the combined voting power of the surviving
or resulting entity outstanding immediately after such merger or consolidation.

The Company shall at all
times keep available a sufficient number of authorized and unissued shares of
the Common Stock to permit any conversion of shares of Series F Preferred Stock
provided for in this Section 4.

5.                                      Other
Rights Identical to Rights of Common Stock.

Except as otherwise provided
in this Certificate of Designation, (i) the Series F Preferred Stock shall have
all of the rights of the Common Stock, including but not limited to any rights
to dividends or to distributions upon liquidation, (ii) for purposes of any
dividends or distributions, stock splits or combinations, or share buybacks or
other redemptions, and for any other purpose whatsoever, the shares of Series F
Preferred Stock shall be treated as shares of Common Stock, except that in the
case of a stock dividend on the Common Stock that is paid in additional shares
of Common Stock, the Company shall pay an equal number of shares of Series F
Preferred Stock, and (iii) for purposes of any distributions or other payments
to the shareholders of the Company, shares of Series F Preferred Stock shall be
treated pari passu with shares of the Common Stock.

* * * * *

IN WITNESS WHEREOF, Dakota Growers
Pasta Company, Inc. has caused this certificate to be signed by Timothy J.
Dodd, its Chief Executive Officer, and attested to by Edward Irion, its Chief
Financial Officer, effective as of the            
day of              ,
2007.

	
   

  	
  DAKOTA GROWERS PASTA COMPANY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Timothy J. Dodd, Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attested:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Edward Irion, Chief Financial Officer

  	
   

  	
   

  
						

 

EXHIBIT B

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of               ,
200   , by and between DAKOTA GROWERS PASTA COMPANY, INC., a
North Dakota corporation (the “Company”), and                                
(the “Purchaser”).

This Agreement is made pursuant to the Stock Purchase
Agreement, dated as of February 9, 2007 (the “Stock Purchase Agreement”),
by and between the Company, Purchaser and                     ,
pursuant to which the Company is issuing and selling               
shares of its [Common Stock/Series F Convertible Preferred Stock], par value
$.01 per share (the “Shares”) to Purchaser.

The Shares are being offered and sold to Purchaser
without registration under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance upon the exemption from registration provided by Section
4(2) of the Securities Act and the provisions of Rule 506 of Regulation D,
promulgated under the Securities Act.  In
order to induce Purchaser to enter into the Stock Purchase Agreement, the
Company has agreed to provide to Purchaser (and their direct and indirect
permitted transferees, if any) the registration rights set forth in this
Agreement with respect to the resale of the Shares.  The execution and delivery of this Agreement
is a condition to the Closing under the Stock Purchase Agreement.  Capitalized terms used but not defined herein
shall have the meaning provided in the Stock Purchase Agreement.

In consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

SECTION 1

Registration Rights

1.1.  Filing of Form S-3 Resale Registration Statement. 
For so long as Purchaser or an assignee of Purchaser owns any of the
Shares, and in its reasonable judgment determines that there is a public market
on which it could efficiently sell Registrable Securities (as hereinafter
defined) if they were registered pursuant to the Securities Act, Purchaser (or
any such assignee) shall have the right to require the Company to prepare and
file with the Securities and Exchange Commission (the “SEC” or the “Commission”)
a registration statement in accordance with the terms of this Agreement.  Purchaser may exercise such right by
providing the Company with written notice requesting that the Company file a
registration statement as required by this Agreement.  As soon as practicable following its receipt
of such notice, the Company shall file with the SEC a registration statement on
Form S-3 pursuant to Rule 415 under the Securities Act (together with any
exhibits, amendments or supplements thereto, and any documents incorporated by
reference therein, the “Registration Statement”), with respect to the
resale of the Shares, and any securities of the Company issued as a dividend or
other distribution with respect to, or in exchange for or in replacement of,
the Shares.  The securities described in
the preceding sentence are collectively referred to herein as the “Registrable
Securities”.

1.2.  Effectiveness
of Registration Statement.  The Company shall, subject to Section 6
hereof, use its best efforts to cause the Registration Statement to become
effective as soon as practicable and in

 1
 

no
event later than three (3) months after the date of filing of the Registration
Statement, and shall use its commercially reasonable best efforts to keep the
Registration Statement continuously effective from the date such Registration
Statement becomes effective until the earlier of (i) the date on which all
Shares have been resold under such Registration Statement and (ii) the date on
which all Registrable Securities may be resold without restriction or
limitation.  The obligations under this Section
1.2 will not apply to any delay or complication caused in whole or in part
by Purchaser.

1.3.  Supplements;
Amendments. 
Subject to Section 6 hereof, the Company shall supplement or
amend the Registration Statement, (i) as required by Form S-3, including,
without limitation, the instructions applicable to Form S-3, or by the
Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or the rules and regulations promulgated under the Securities Act or
the Exchange Act, respectively, and (ii) to include in the Registration
Statement any additional securities that become Registrable Securities by
operation of the definition thereof.  The
Company shall furnish to the holders of the Registrable Securities, or their permitted
transferees, as appropriate (collectively, the “Holders”), to which the
Registration Statement relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five (5) business days in
advance) of its use and/or filing with the Commission to allow the Holders a
meaningful opportunity to comment thereon with respect to the information
contained therein regarding the Holders and any plan for resale of the
Registrable Securities.  The Holders
acknowledge or shall acknowledge that they have supplied the information
regarding themselves and their plan of resale in the Registration Statement
within five (5) business days prior to the filing of the Registration Statement
and hereby waive or shall waive any notice of the initial filing of the
Registration Statement, and such Holders and their successors and assigns shall
promptly notify the Company of any changes in such information.

SECTION 2

Expenses

The Company shall pay all expenses, fees and costs
incurred in connection with the preparation, filing, distribution and
effectiveness of the Registration Statement and any supplements or amendments
thereto, whether or not the Registration Statement becomes effective, and
whether all, none or some of the Registrable Securities are sold pursuant to
the Registration Statement, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, fees and state securities, or “blue sky,” fees and expenses, and the
expense of any special audits incident to or required by, or in connection with
the filing and effectiveness of the Registration Statement. In addition, the
Company shall pay all fees and disbursements of one counsel for the Holders in
connection with the preparation, filing, distribution and effectiveness of the
Registration Statement and any supplements or amendments thereto, whether or
not the Registration Statement becomes effective, and whether all, none or some
of the Registrable Securities are sold pursuant to the Registration
Statement.  The Holders shall pay all
underwriting fees and discounts, selling commissions, brokerage fees and stock
transfer taxes applicable to the Registrable Securities sold by such Holder and
the fees and expenses of any counsel of theirs in addition to the counsel for
the Holders whose fees and disbursements are to be paid by the Company.

SECTION 3

Registration Procedures

3.1.  Registration.  The Company will, from time to time, advise
the Holders as to the status of the preparation, filing and effectiveness of
the Registration Statement and, at the Company’s expense, will do the
following:

 2
 

(a)  furnish to
each Holder a copy of the Registration Statement (including all exhibits
thereto) and any prospectus forming a part thereof and any amendments and
supplements thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness of the
Registration Statement and including each preliminary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, which documents,
other than documents incorporated or deemed incorporated by reference, will be
subject to the review of the Holders and any such underwriter for a period of
at least three (3) business days, and the Company shall not file the
Registration Statement or such prospectus or any amendment or supplement to the
Registration Statement or prospectus if any Holder shall reasonably object
within three (3) business days after the receipt thereof.  A Holder shall be deemed to have reasonably
objected to such filing only if the Registration Statement, amendment,
prospectus or supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission with respect to such Holder or its plan of
resale;

(b)  furnish to
each Holder one conformed copy of the Registration Statement and of each
amendment and supplement thereto (in each case including all exhibits) and such
number of copies of the prospectus forming a part of the Registration Statement
(including each preliminary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, including, without limitation,
documents incorporated or deemed to be incorporated by reference prior to the
effectiveness of such Registration Statement, as each of the Holders or any
such underwriter, from time to time may reasonably request;

(c)  to the
extent practicable, promptly upon the filing of any document that is to be
incorporated by reference into the Registration Statement or prospectus forming
a part thereof subsequent to the effectiveness thereof, and in any event no
later than five (5) business days after such document is filed with the Commission,
provide copies of such document to the Holders, if requested, and make
representatives of the Company available for discussion of such document and
other customary due diligence matters; and provide promptly to the Holders upon
request any document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act;

(d)  make
available at reasonable times for inspection by the Holders, and any attorney,
accountant, financial adviser or other representative (collectively, “Representatives”)
retained by the Holders, subject to the recipient’s prior written agreement to
keep such information confidential and not use or disclose it, all financial
and other records, pertinent corporate documents and properties of the Company
and cause the officers, directors and employees of the Company to supply all
information reasonably requested by the Holders or their respective
Representatives in connection with the preparation, filing and effectiveness of
the Registration Statement;

(e)  use its
commercially reasonable best efforts (i) to register or qualify all
Registrable Securities covered by the Registration Statement under state
securities, or “blue sky,” laws of such States of the United States of America
where required and where an exemption is not available and as the Holders of
Registrable Securities covered by the Registration Statement shall reasonably
request, (ii) to keep such registration or qualification in effect for so
long as the Registration Statement is required to be effective hereunder, and
(iii) to take any other action which may be reasonably necessary or
advisable to enable the Holders to consummate the disposition of the securities
to be sold by the Holders in such jurisdictions, consistent with the plan of
distribution described in the prospectus included in the Registration
Statement, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any
jurisdiction where it is not so qualified, or to execute a general consent

 3
 

to service of
process in effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except as may be
required by the Securities Act or applicable rules or regulations thereunder;

(f)  use its
commercially reasonable best efforts to cause all Registrable Securities
covered by the Registration Statement to be registered or qualified with or
approved by all other applicable Governmental Authorities as may be necessary,
in the opinion of counsel to the Company and counsel to the Holders of
Registrable Securities, to enable the Holders thereof the consummate the
disposition of such Registrable Securities;

(g)  subject to Section
6 hereof, promptly notify each Holder of Registrable Securities covered by
the Registration Statement (i) upon discovery that, or upon the occurrence
of any event as a result of which, the prospectus forming a part of the
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of proceedings for that purpose, (iii) of any
request by the Commission for (A) amendments to the Registration Statement
or any document incorporated or deemed to be incorporated by reference in the
Registration Statement, or (B) supplements to the prospectus forming a
part of the Registration Statement, or (C) additional information, or
(iv) of the receipt by the Company of any notification with respect to the
suspension of the registration, qualification or exemption from registration or
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation of any proceeding for such purpose, and at the request of any
such Holder promptly prepare and file an amendment to the Registration
Statement or a supplement to the prospectus as the Company may deem necessary
so that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and furnish to each Holder a reasonable number of copies
of such supplement to, or amendment of, such registration statement and
prospectus, and, in the event of a stop order, use its commercially reasonable
best efforts to obtain the withdrawal of any order suspending the effectiveness
of any the registration statement, or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction;

(h)  if
reasonably requested by any Holder or if required by law or SEC or other
applicable rule or regulation, promptly incorporate in the Registration
Statement such appropriate information as the Holder may reasonably request to
have included therein by filing a Form 8-K, or filing a supplement to the
prospectus, to reflect any change in the information regarding the Holder, and
make all required filings with the Commission in respect of any offer or sale
of Registrable Securities or any amendment or supplement to the Registration
Statement or related prospectus;

(i)  otherwise
use its commercially reasonable best efforts to comply with all applicable
rules and regulations, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at least
12 months, but not more than 18 months, beginning with the first full calendar
month after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 promulgated thereunder and to provide promptly to the Holders upon
request any document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act; and

 4
 

(j)  use its
commercially reasonable best efforts to cause all Registrable Securities
included in the Registration Statement to be eligible for trading in any
over-the-counter market or trading system in which securities of the same class
are then traded.

SECTION 4

Indemnification

4.1.  Indemnification by the
Company. The Company will indemnify:

(a)                                  each
of the Holders, as applicable,

 

(b)                                 each
of the Holder’s officers, directors, members and partners, and

 

(c)                                  each
individual, partnership, joint stock company, corporation, trust,
unincorporated organization, government agency or political subdivision (each
of the foregoing, a “Person”) controlling each of the Holders within the
meaning of SEC Rule 405 under the Securities Act,

 

with
respect to the Registration Statement, against all expenses, claims, losses,
damages and liabilities (or actions, investigations or proceedings in respect
thereof) (collectively, a “Claim”) arising out of or based on any actual
or alleged untrue statement of a material fact, or any omission of a material
fact required to be stated therein or necessary in order to make the statements
included therein not misleading, contained in the Registration Statement, any
prospectus or other offering document (including any related registration
statement, notification or the like) incident to the registration,
qualification or compliance, or any violation by the Company of the Securities
Act or the Exchange Act or any other laws or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of its officers, directors,
members and partners, and each Person controlling each of the Holders, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such Claim; provided, however,
that the Company will not be liable in any such case to the extent that any
such Claim (i) arises out of or is based on any untrue statement or omission
based upon written information furnished to the Company by the Holders or their
Representatives and stated to be specifically for use therein, or (ii) is
finally judicially determined to have resulted primarily from the gross
negligence or willful misconduct of any person or entity set forth in
subsections (a) through (c) above.

4.2.  Indemnification
by the Holders. 
Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such Registration Statement is being
effected, indemnify the Company, each of its directors and officers, and each
Person who “controls” the Company within the meaning of SEC Rule 405 under the
Securities Act, against all Claims arising out of or based on any actual or
alleged untrue statement of a material fact, or any omission or a material fact
required to be stated therein or necessary in order to make the statement
included or incorporated therein not misleading, contained in the Registration
Statement, prospectus, or other offering document made by or on behalf of such
Holder, and will reimburse the Company, its directors, officers, partners,
members or control Persons for any legal or any other expenses reasonably
incurred in connection with investigating and defending any such Claim, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in the
Registration Statement, prospectus or other document in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder and stated to be specifically for use therein; provided,
however, that the indemnity obligations of each of the Holders
hereunder shall be limited to an amount

 5
 

equal to the net proceeds received by such Holder from
the sale of the Registrable Securities pursuant to the Registration Statement;
and provided, further, that the only
information that a Holder will be required to furnish to the Company for use in
any Registration Statement or prospectus relating to the Registrable
Securities, or in any amendment, supplement or preliminary materials associated
therewith will be statements specifically relating to (a) the beneficial
ownership of Company securities by such Holder and its affiliates and (b) the
name and address of such Holder.  In no
event shall a Holder be jointly liable with any other Holder as a result of its
indemnification obligations.

4.3. Procedures.  Each party entitled to indemnification under
this Agreement (each, an “Indemnified Party”) shall give notice to the
party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any Claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such Claim; provided that counsel for the Indemnifying Party, who shall conduct
the defense of such Claim, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld), and the Indemnified Party may
participate in such defense at such party’s expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action, in
which case the fees and expenses of one such counsel for all Indemnified
Parties shall be at the expense of the Indemnifying Party), and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the Indemnifying Party is
materially prejudiced thereby.  No
Indemnifying Party, in the investigation or defense of any such Claim shall,
except with the consent of each Indemnified Party (which consent shall not be
unreasonably withheld or delayed), consent to entry of any judgment or enter
into any settlement or compromise which does not include an unconditional
release of the Indemnified Party from all liability in respect to such Claim.  Each Indemnified Party shall furnish such
information regarding itself or the Claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the investigation and defense of such Claim.

4.4.  Contribution.  If the indemnification provided for in this
Agreement is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any Claim, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
which resulted in such Claim, as well as any other relevant equitable
considerations; provided, however, that the
Company will not be liable in any such case to the extent that any such Claim
(i) arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holders or their
Representatives and stated to be specifically for use therein, or (ii) is
finally judicially determined to have resulted primarily from the gross
negligence or willful misconduct of any person or entity set forth in Section
4.1(a)-(c) above.  The relative fault
of the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and provided that each Holder shall not be required to contribute more than the
net proceeds received by such Holder from the sale of the Registrable
Securities pursuant to the Registration Statement.  Notwithstanding anything to the contrary set
forth herein, no party shall be liable for contribution under this Section
4.4 except to the extent and under such circumstances as such party would
have been liable for indemnification under Section 4.2 hereof if such
indemnification were enforceable under applicable law.

 6
 

SECTION 5

Plan of Distribution; Information Regarding
the Holders

Each of the Holders agrees that the plan of
distribution included in any prospectus relating to the Registrable Securities
shall be as set forth on Schedule A-1 hereto and that such Holder will
not resell any Registrable Securities pursuant to the Registration Statement in
any manner other than as provided therein or herein.  Each Holder represents, warrants and
covenants to the Company that the information regarding such Holder that
appears in the Stock Purchase Agreement and/or Schedule A-2 is accurate and
complete in all material respects consistent with Commission Regulation S-K,
Items 507 and 508.  The Purchaser will
confirm promptly by delivery of a signed copy of Schedule A-2, the sale
of any Shares pursuant to Rule 144 or the Registration Statement.

SECTION 6

Holdback; Postponement

Notwithstanding
the other provisions of this Agreement, if (a) there is material non-public
information regarding the Company which the Company’s Board of Directors
reasonably and in good faith determines not to be in the Company’s best
interest to disclose and which the Company is not otherwise required to
disclose, or (b) there is a extraordinary business opportunity (including but
not limited to the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or other
similar extraordinary transaction not in the ordinary course of business)
available to the Company which the Company’s Board of Directors reasonably and
in good faith determines not to be in the Company’s best interest to disclose,
then the Company may (upon not less than two trading days prior written notice
by same day delivery of fax or hand delivery) postpone or suspend filing or
effectiveness of a registration statement for a period not to exceed 90 days, provided that the Company may not postpone or suspend filing
or effectiveness of a registration statement for more than 180 days in the
aggregate during any 365-day period and there shall be an aggregate of not more
than two (2) suspensions during any 365-day period; provided,
however that no postponement or suspension shall be permitted for
consecutive 90 day periods arising out of the same set of facts, circumstances
or transactions.

SECTION 7

Rule 144 Reporting, Etc.

7.1.  SEC
Reporting Compliance.

(a)           With
a view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Registrable Securities
to the public without registration, through the second anniversary of this
Agreement, the Company will:

(i)            make
and keep “current public information” regarding the Company available, as
defined in Commission Rule 144(c) under the Securities Act;

(ii)           use its commercially reasonable best
efforts to file with the Commission in a timely manner all SEC Reports and
other filings and documents required of the Company under the Securities Act
and the Exchange Act and otherwise; and

(iii)          so long as a Holder owns any
Registrable Securities, furnish the Holder forthwith upon request a written
statement by the Company as to its compliance with the

 7
 

reporting
requirements under the Securities Act and the Exchange Act, including
compliance with SEC Rule 144(c), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company and
other information in the possession of, or reasonably obtainable by, the
Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.

(b) The Company shall use its commercially
reasonable best efforts to file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instruction to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.

7.2.  Stock
Purchase Agreement Covenants.   The Company will comply with its covenants
under Section 4 of the Stock Purchase Agreement, which are incorporated
herein by this reference.

SECTION 8

Miscellaneous

8.1.  Assignment.  The registration rights set forth herein may
be assigned, in whole or in part, to any transferee of Registrable Securities
permitted in accordance with the Stock Purchase Agreement, which transferee,
upon registration on the Company’s or its transfer agent’s books and records as
a holder of record of Registrable Securities, shall be considered thereafter to
be a Holder (provided that any transferee who is not an affiliate of Purchaser
shall be a Holder only with respect to such Registrable Securities so acquired
and any stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Registrable
Securities) and shall be bound by all obligations and limitations of this
Agreement and the Stock Purchase Agreement.

8.2.  Section
Headings.  The
titles and headings of the sections and subsections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
thereof.

8.3.  Governing
Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.

8.4.  Notices.

(a)           All communications under this
Agreement shall be in writing and shall be delivered by facsimile, by hand, by
reliable overnight delivery service such as UPS or FedEx or by registered or
certified mail, postage prepaid:

(i)            if to the Company, to Dakota Growers
Pasta Company, Inc. One Pasta Avenue, Carrington, N.D. 58421, Attention:  Timothy J. Dodd, Facsimile:  (701) 652-3713, or at such other address as
it may have furnished in writing to Purchaser;

(ii)           if to Purchaser, at                                                                                                                  
                                                                          ,
or at such other addresses as may have been furnished the Company in writing.

(b)           Any notice so addressed shall be
deemed to be given (i) if delivered by hand, on the date of such delivery, (ii)
if sent by reliable overnight delivery service such as UPS or FedEx, on the
first business day following the date of delivery to such service for overnight
delivery, (iii)

 8
 

if delivered by
facsimile, on the date of such facsimile, or (iv) if mailed by registered or
certified mail, on the third business day after the date of such mailing.

8.5.  Successors and Assigns; No Third Party
Beneficiaries. 
This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties.  No other person is intended to or shall have
any rights or remedies hereunder, whether as a third part beneficiary or
otherwise.

8.6.  Counterparts.  This Agreement may be executed in one or more
identical counterparts, each of which shall be deemed an original and all of
which shall be one and the same agreement. 
Any signature that is delivered by facsimile signature page shall be
valid and binding, with the same force and effect as if an original, manually
signed counterpart.

8.7.  Remedies.  Each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement.  The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

8.8.  Severability.  In the event that any provision contained
herein is unenforceable, the remaining provisions shall continue in full force
and effect.

8.9.  Delays or Omissions.  It is agreed that no delay or omission to
exercise any right, power or remedy accruing to the Holders, upon any breach or
default of the Company under this Agreement, shall impair any such right, power
or remedy, nor shall it be construed to be a waiver of any provision hereof, or
of any similar breach or default thereafter occurring; nor shall any wavier of
any single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.  It
is further agreed that any waiver, permit, consent or approval of any kind or
character by a Holder of any breach or default under this Agreement, or any
waiver by a Holder of any provisions or conditions of this Agreement, must be
in writing and shall be effective only to the extent specifically set forth in
the writing, and that all remedies, either under this Agreement, or by law or
otherwise afforded to a Holder, shall be cumulative and not alternative.

8.10.  Attorney’s Fees.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney’s fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.

8.11.  Entire Agreement; Amendment.  This Agreement and the Stock Purchase
Agreement and the other documents contemplated therein constitute the entire
understanding and agreement of the parties with respect to the subject matter
hereof and supersede all prior understandings, written or otherwise, among such
parties.  This Agreement may be amended
only in a writing signed by the Company and the Holders of a majority of the
then outstanding Registrable Securities.

[Signature
Pages to Follow]

 9
 

IN WITNESS WHEREOF, the
undersigned have executed this Registration Rights Agreement as of the day and
year first set forth above.

	
  

  	
  Dakota Growers Pasta Company, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Timothy J. Dodd

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 10
 

SCHEDULE A-1

Plan of
Distribution

Any or all of the shares
offered by the selling stockholders may be offered for sale and sold by, or on
behalf of, the selling stockholders from time to time in varying amounts,
including in block transactions, on any stock exchange or automated quotations
system that is relevant to the Company in shares as being eligible or trading
in such exchange or system, or the over-the-counter market, in privately
negotiated transactions, though put or call options transactions relating to
the shares, through short sales, or a combination of such methods of sale, at
prices prevailing in such market or as may be negotiated at the time of the
sale.  The shares may be sold by the
selling stockholders directly to one or more purchasers, through agents
designated from time to time or to or through broker-dealers designated from
time to time.  In the event the shares
are publicly offered through broker-dealers or agents, the selling stockholders
may enter into agreements with respect thereto. 
Such broker-dealers or agents may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders, and any
such broker-dealers or agents that participate in the distribution of the
shares may be deemed to be underwriters within the meaning of the Securities
Act, and any profit on the sale of the shares by them and any discounts and
commissions might be deemed to be underwriting discounts or commissions under
the Securities Act.  Any such
broker-dealers and agents may engage in transactions with, and perform services
for, the Company.  At the time a
particular offer of shares is made by the selling stockholders, to the extent
required, a prospectus supplement will be distributed which will set forth the
aggregate number of shares being offered, and the terms of the offering,
including the public offering price thereof, the name or names of any
broker-dealers or agents, any discounts, commissions and other items
constituting compensation from, and the resulting net proceeds to, the selling
stockholders.

 

As used herein, “selling
stockholders” includes donees and pledgees selling shares received from a named
selling shareholder after the date of this prospectus.

 

Selling stockholders also
may resell all or a portion of the shares in open market transactions in
reliance on Rule 144 under the Securities Act, provided they meet the criteria
and conform to the requirements of such rule.

 

In order to comply with
the securities laws of certain states, sales of shares offered hereby to the
public in such states may be made only through broker-dealers who are
registered or licensed in such states. 
Sales of shares offered hereby must also be made by the selling
stockholders in compliance with other applicable state securities laws and
regulations.

 11
 

SCHEDULE A-2

Purchaser’s
Certificate of Subsequent Sale

The
undersigned, an officer of, or other person duly authorized by the Purchaser
named below hereby certifies to the Company, as defined in the Registration
Rights Agreement, dated as of                         , 2007
(the “Agreement”) that he/she (said institution) is the Purchaser of the
shares evidenced by the attached certificate, and as such, sold such shares on                       , 200     
in accordance with:

(i)                                     Registration
Statement number                                                       ,
in the manner indicated under “Plan of Distribution” in the current prospectus
and has delivered a current prospectus, or

(ii)                                  Pursuant
to the applicable requirements of Rule 144 of the Securities Act of 1933, as
amended, in which case, a copy of Form 144 as filed with the Securities and
Exchange Commission, together with the representation letter of the undersigned
and the broker’s representation letter are enclosed.

All
capitalized terms used but not defined herein shall have the meanings provided
in the Agreement

Print or Type:

Name of Purchaser
(Individual or Institution):                                                                       

Name of Individual
Representing Purchaser (if an Institution):

                                                           

Title:                                                                        

Confirmed by the
undersigned thereunto duly authorized:

 

	
  

  	
   

  	
   

  
	
   

  	
  Purchaser Name

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

 12

EXHIBIT C

                        ,
2007

MVC Capital, Inc.

287
Bowman Avenue, 3rd Floor

Purchase, New York 10577

La Bella Holdings, LLC

c/o GO7 Brands LLC

400 Plaza Drive, 1st Floor

Secaucus, New Jersey  07094

Ladies and Gentlemen:

We have acted as counsel to Dakota Growers Pasta
Company, Inc., a North Dakota corporation (the “Company”), in connection with
the transactions contemplated by that certain Stock Purchase Agreement dated
February 9, 2007 (the “Stock Purchase Agreement”), complete with all listed exhibits
and schedules thereto, between and among the Company, MVC Capital, Inc., a
Delaware corporation, and La Bella Holdings, LLC, a Delaware limited liability
company (collectively, the “Purchasers” and each a “Purchaser”).  This
opinion letter is being furnished to you pursuant to Section 6.16 of the Stock
Purchase Agreement.  Capitalized terms
used herein and not otherwise defined shall have the meanings set forth in the
Stock Purchase Agreement.

In rendering the opinions
expressed herein, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of the following:

	
  1.

  	
   

  	
  the Stock Purchase Agreement, dated February 9,
  2007;

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  the Registration Rights Agreements dated the date
  hereof;

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  the Company’s Certificate of Incorporation and
  Bylaws;

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  the Certificate of Designation, attached as Exhibit
  A to the Stock Purchase Agreement; and

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  resolutions of the Company’s Board of Directors.

  

 

For the purposes of rendering the opinions expressed
herein, we have also examined such other certificates of public officials,
instruments, documents and records and inquired into such other factual matters
and matters of law as we have deemed necessary or pertinent for the rendering
of the opinions expressed herein.  As to
questions of fact relevant to the opinions expressed herein, among other
things, we have relied upon information obtained from representatives of the
Company and other sources believed by us to be responsible and, with your
permission, we have assumed, without independent investigation, the accuracy of
such information.  In rendering the
opinions expressed herein, we have examined originals, or copies of originals
certified to our satisfaction, of such agreements, documents, certificates and
other statements of government officials and officers and such other papers and
evidence as we have deemed relevant and necessary as a basis for the opinions
expressed herein.  The Stock Purchase
Agreement, the Registration Rights Agreements and the Certificate of
Designation referenced in

clauses 1, 2 and 4 above and the other documents and agreements to be
executed by the Company in connection with the Closing are referred to herein
collectively as the “Operative Documents.” 
References in this opinion to “our knowledge,” “our awareness,” “our
attention,” “known to us,” “the best of our knowledge” or the like, mean no
information has come to the attention of Ronald D. McFall, Jonathan B. Levy or
April Hamlin, the only attorneys within this firm who have actively
participated in giving substantive legal attention to the Company with respect
to the transactions contemplated by the Operative Documents, that gives such
attorney actual knowledge that such opinion is not accurate.  Finally, no inference as to our knowledge
with respect to factual matters upon which we have so qualified our opinions
should be drawn from the fact of our representation of the Company.

Based
upon the foregoing and subject to the qualifications, assumptions and
limitations set forth below, we are of the opinion that:

(a)           The Company is validly existing and
in good standing under the laws of the State of North Dakota, with corporate
power and authority to carry on its business as now conducted and to own, lease
and operate its assets and properties and to enter into and perform its
obligations under the Operative Documents, provided that, with respect solely
to the opinion as to valid existence and good standing set forth above, we have
relied on a certificate of the Secretary of State of the State of North Dakota;

(b)           The execution, delivery and
performance by the Company of each of the Operative Documents to which the
Company is a party have been duly authorized by the Company;

(c)           No consent or other action by, or
filing or registration with, any Governmental Authority is required for: (i)
the execution and delivery by the Company of the Operative Documents; (ii) the
offer, sale and issuance of the Shares in accordance with the Operative Documents;
(iii) the performance by the Company of its obligations under the Operative
Documents, except such as may be required (A) in
connection with the registration under the Securities Act of 1933, as amended
(the “Act”) of the Shares pursuant to the Registration Rights Agreement, (B)
under the “blue sky” or securities laws of any jurisdiction in connection with
the purchase and sale or resale of the Shares, (C) to provide notice and
application to list or quote the Shares with any securities exchange or automated
quotation system or market on which the Common Stock is traded, listed or
quoted, (D) to satisfy the disclosure requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and the disclosure requirements of
Item 701 of SEC Regulation S-K or (E) to file a Form D and a Form 8-K in
respect of the sale and issuance of the Securities with the Securities and
Exchange Commission (the “Commission”) (collectively, the “Required Approvals”).

(d)           Neither the execution and delivery of
the Operative Documents, nor the consummation by the Company of the
transactions contemplated thereby (including the issuance, sale and delivery of
the Shares), nor compliance by the Company with any of the provisions thereof,
will (i) to our knowledge, constitute or result in a default under, or require
any consent pursuant to any Material Permit or material agreement of the
Company, (ii) conflict with or result in a breach of any provision of the
Certificate of Incorporation or Bylaws, or, to our knowledge, any federal or
state law, rule or regulation of any court which would ordinarily be expected
to apply to the transactions contemplated by the Operative Documents or, to our
knowledge, any rule or regulation of any federal, state or other regulatory board
or body or administrative agency having jurisdiction over the Company or over
its properties or business, or (iii) conflict with or constitute a default
under any judgment, writ, decree or order known to such counsel to be
applicable by its terms to the Company;

(e)           Each of the Operative Documents has
been duly authorized, executed and delivered by the Company, and, assuming the
due execution and delivery thereof by the Purchasers, no other corporate action
is necessary to authorize such execution, delivery or performance.  The Operative Documents constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforcement may be subject to the
exceptions set forth below.

(f)            Without giving
effect to the transactions contemplated by the Stock Purchase Agreement or the
filing of the Certificate of Designation, the authorized and outstanding
capital stock of the Company consists of 75,000,000 shares of Common Stock,
$.01 par value per share, 533 shares of Series A Preferred Stock, $100 par
value per share, 525shares of
Series B Preferred Stock, $100 par value per share, 2,731 shares of Series C
Preferred Stock, $100 par value per share, 11,340,841 shares of Series D
Delivery Preferred Stock, $.01 par value per share, 130,000 shares of Series E
Junior Participating Preferred Stock, $.01 par value per share, and 13,525,370shares of undesignated preferred stock,
$.01 par value per share.  Based on
information and documentation provided by officers of the Company, as of the
date hereof, 13,169,382 shares of Common Stock were issued and
outstanding.  In addition and also based
on information and documentation provided by officers of the Company, as of the
date hereof, there were zero shares of Series A Preferred Stock issued and
outstanding, zero shares of Series B Preferred Stock issued and outstanding,
zero shares of Series C Preferred Stock issued and outstanding, 11,275,297
shares of Series D Delivery Preferred Stock issued and outstanding, zero shares
of Series E Junior Participating Preferred Stock issued and outstanding and
zero shares of undesignated preferred stock outstanding.  To the best of our knowledge, except as set
forth on Schedule 3.4 to the Stock Purchase Agreement, there are no options,
warrants or other rights (including conversion, pre-emptive or other rights) or
agreements outstanding to purchase any of the Company’s authorized and unissued
capital stock.

(g)           When issued to the Purchasers against
payment therefor in accordance with the Operative Documents, the Shares will be
duly and validly authorized and issued,
fully paid and nonassessable and will not be issued in violation of any
pre-emptive or other rights.

(h)           To our knowledge, there is no action,
suit, investigation or proceeding pending or threatened against the Company or
any of its properties or assets by or before any court, arbitrator or
Governmental Authority, department, commission, board, bureau, agency or
instrumentality, which questions the validity of the Stock Purchase Agreement,
the Shares or any action taken or to be taken pursuant hereto or thereto;

(i)            To our knowledge, the Company is not
an “investment company” or a company “controlled by” or required to register as
an investment company as such terms are defined in the 1940 Act or the PUHC
Act, and the SEC’s rules and regulations thereunder; and

(j)            Assuming the accuracy of the
Purchasers’ representations and warranties in Section 5 of the Stock Purchase
Agreement, the accuracy of the Company’s representations and warranties in
Section 3 of the Stock Purchase Agreement, and the Company’s and the Purchasers’
satisfaction of their respective covenants thereunder, the offer, sale and
issuance of the Shares contemplated by the Stock Purchase Agreement (the “Private
Placement”) is exempt from the registration requirements under Section 5 of the
Act.

In rendering the opinions expressed herein, we have assumed, with your
permission and without independent verification, that: (i) all documents
submitted to us as originals are authentic, complete and final, and all
documents submitted to us as certified, photostatic or reproduced copies
conform identically to the authentic originally executed documents; (ii) all
parties to the Operative Documents (other than the

Company)
have full power and authority to execute the Operative Documents, to deliver
the Operative Documents and to perform their obligations under the Operative
Documents and all other documents delivered and performed in connection with
the Operative Documents; (iii) except with respect to the Company, the
Operative Documents have been duly authorized by all necessary action, have
been duly executed by such parties and have been duly delivered by such
parties, and constitute the valid and binding obligations of all parties; (iv)
all parties to the Operative Documents (other than the Company) are individuals
or corporations, limited liability companies, partnerships, trusts or other
entities duly organized, legally existing and in good standing under the laws
of their respective state of incorporation or country of formation; (v) all terms and conditions of the transactions and
relationships by, between and among all of the parties to the Operative
Documents are correctly and completely reflected in the Operative Documents;
(vi) all natural persons who have signed the Operative Documents have the
requisite legal capacity; (vii) all of the signatures (other than those on
behalf of the Company ) on all of the Operative Documents are genuine; (viii) each
party to the Operative Documents (other than the Company) has satisfied all
legal requirements that are applicable to it to the extent necessary to make
the Operative Documents enforceable against it, and to enforce the Operative
Documents against the other parties thereto; (ix) the representations and
warranties of each party set forth in the Operative Documents, including,
without limitation, the Company, are true, correct and complete as of the date
hereof; and (x) the Operative Documents and the documents required thereunder
constitute legal, valid and binding obligations of all parties thereto (other
than the Company), enforceable against such parties in accordance with their
respective terms.

The opinions expressed above are qualified to the
extent that the legality, validity, binding effect or enforceability of any
provision of the Operative Documents or any other agreements, documents or
instruments referred to herein or of any rights granted thereunder may be
subject to or affected by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance, or similar laws or decisions
relating to or affecting the rights of creditors generally, and to the extent
that any rights of indemnification and contribution provided for therein may be
limited by federal or state securities laws or by the policies of the
Securities and Exchange Commission (the “Commission”) or state securities
divisions.  Enforceability of the Company’s
obligations under the Operative Documents and any other agreements, documents
or instruments referred to herein is subject to judicial limitations on the
right to specific performance and is subject to general principles of equity,
including (without limitation) concepts of materiality, reasonableness, good
faith and fair dealing, and discretion of the court before which any proceeding
thereof may be brought, whether such enforcement is considered in a proceeding
in equity or at law.

This letter is solely for
the information of the Purchasers in connection with the transactions
contemplated by and memorialized in the Operative Documents and may not be used
or relied upon for any other purpose or delivered to or relied upon by any
other person or entity without our prior written consent.

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LINDQUIST &
  VENNUM P.L.L.P.Exhibit
10.2

Loan No. RIE539T07

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”).

SECTION 1.         The Term Loan Commitment.  On the terms and conditions set forth in the
MLA and this Supplement, CoBank agrees to make loans to the Company from time
to time during the period set forth below in an aggregate principal amount not
to exceed $20,000,000.00 (the “Commitment”). 
Under the Commitment, amounts borrowed and later repaid may not be
reborrowed.

SECTION 2.         Purpose.  The purpose of the Commitment is to fund a
Treasury Stock repurchase.

SECTION 3.         Term.  The term of the Commitment shall be from the
date hereof, up to and including April 30, 2007, 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 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

 2
 

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 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 14 equal, consecutive
quarterly installments of $1,350,000.00, with the first such installment due on
May 20, 2011, and the last such installment due on August 20, 2014; and (2)
followed by a final installment in an amount equal to the remaining unpaid
principal balance of the loans on November 20, 2014.  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.

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.

SECTION
7.         Loan Origination Fee. 
In consideration of the Commitment, the Company agrees to pay to CoBank
on the execution hereof a loan origination fee in the amount of $30,000.00.

SECTION
8.         Additional Conditions Precedent.  In addition to the Conditions Precedent set
forth in the MLA, CoBank’s obligation to extend credit hereunder shall be
conditioned upon the receipt by CoBank, in form and content acceptable to
CoBank, of:

(A)  Evidence of Capital.  Such evidence as CoBank may require that the
Company has obtained additional equity capital of no less than 50% of the
Company’s treasury stock repurchase value with terms and conditions acceptable
to CoBank.

 3
 

(B)
Consent to Additional Borrowings by Institutional Lenders.  Such evidence as CoBank may require that the
Institutional Lenders including Babson Capital Management LLC, The Canada Life
Assurance Company, and Security Financial Life Insurance Co. have consented to
CoBank lending additional debt as required by the inter-creditor agreement.

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

  	
   

  

 

 4

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