Document:

Exhibit
10.3

 

CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED

AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.

 

 

SERVICES
AGREEMENT

 

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

 

W  I  T 
N  E  S 
S  E  T 
H

 

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

 

WHEREAS, Dakota Growers is
in the business of manufacturing, marketing, distributing and selling dry pasta
products;

 

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

 

WHEREAS, Dakota Growers and
DNA have entered into a certain Trademark License Agreement (the “Trademark
License”), dated of even date herewith, pursuant to which DNA has granted to
Dakota Growers an exclusive license to use the Brand in connection with Dakota
Growers’ manufacture of the Products;

 

WHEREAS, Dakota Growers and
DNA have entered into a certain Technology Sublicense Agreement (the
“Technology Sublicense”), dated of even date herewith, pursuant to which DNA
has granted to Dakota Growers an exclusive sublicense to use certain technology
necessary to manufacture the Products; and

 

WHEREAS, DNA desires that
Dakota Growers provide certain administrative, accounting, information
technology, sales and distribution services to DNA to facilitate the sale and
distribution of the Products, and Dakota Growers desires to provide to DNA such
services.

 

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

 

1

 

1.                                       Term; Services; Other Branded Products;
Relationship to Manufacturing Agreement.

 

(a)                                  Dakota Growers shall provide to DNA the
services set forth on Exhibit A hereto, whereby any and all services, which are customarily and reasonably
connected with the services listed in Exhibit A but are not expressly specified
and not expressly excluded by mutual agreement, shall be deemed to be included
in the list (as Exhibit A may be updated from time to time by
mutual written agreement of the parties to reflect any material changes in the Services
and as Exhibit A, the “Services”) during the period commencing on the
date hereof and continuing until the earliest to occur of the following (the
period commencing on the date hereof and continuing until the earliest to occur
of the following being the “Term”):

 

(i)                                     any assignment or transfer of DNA’s rights
and obligations under the Manufacturing Agreement, the Trademark License and
the Technology Sublicense Agreement by DNA to a person or entity in which
Dakota Growers does not maintain an equity interest;

 

(ii)                                  sixty (60) days following delivery of a
written notice by a party hereto that the other party hereto has materially
breached this Agreement, but only to the extent that the breaching party has
failed to cure such material breach within such sixty-day period;

 

(iii)                               the mutual written consent of Dakota Growers and DNA;

 

(iv)                              sixty (60) days following the date upon which DNA notifies Dakota
Growers in writing pursuant to subsection (b) below that it shall no
longer obtain any of the Services from Dakota Growers; and

 

(v)                                 either Dakota Growers or DNA provides written
notice of termination to the other party, in the event that the other party
commences a case as debtor under Title 11 of the United States Code or any
similar proceeding for the relief of debtors, or has any such case or
proceeding commenced against it, or otherwise cease to function as a going
concern.

 

(b)                                 Upon sixty (60) days’ written notice to
Dakota Growers, DNA may provide any or all of the Services for its own account
and/or may obtain all or part of the Services from third-party providers; provided,
however, that the Manufacturing Agreement shall remain in force and
effect notwithstanding the foregoing or any termination of this Agreement.  Subject to the terms and conditions of the
Technology Sublicense, DNA hereby agrees to share with Dakota Growers all
intellectual property, manufacturing techniques and methods and other
proprietary information owned by or licensed to DNA necessary for Dakota
Growers to provide the Services.

 

(c)                                  In the event that DNA elects to pursue the
manufacture of any other Branded products, including, but not limited to,
Branded rice and potatoes, DNA shall have the right (but not the obligation) to
designate Dakota Growers as a provider of services in connection with such
Branded products.  To the extent that
Dakota Growers provides any services to DNA in connection with Branded rice
and/or potatoes, such Branded rice and/or potatoes shall be deemed to be “Products”
for all purposes of this Agreement, any such services shall be deemed to be
“Services” for all purposes of this Agreement, and any such services shall be
provided by Dakota Growers to DNA subject to the terms and conditions of this
Agreement.

 

(d)                                 DNA and Dakota Growers acknowledge and agree
that Section 3.3 of the Manufacturing Agreement provides for certain default
provisions in respect of Dakota Growers’ manufacture of the

 

2

 

Products, to the extent that the matters
addressed in such default provisions (which default provisions bear upon, among
other things, the ordering, delivery, risk of loss and pricing of, and title
to, the Products) are not addressed in any other written agreement between DNA
and Dakota Growers.  DNA and Dakota
Growers further acknowledge and agree that the matters addressed in Section 3.3
of the Manufacturing Agreement are addressed in this Agreement and encompassed
within the Services and, accordingly, so long as this Agreement is in force and
effect and this Agreement and/or the Services have not been amended or modified
to no longer address the matters addressed in Section 3.3 of the Manufacturing
Agreement, the terms and conditions of this Agreement shall govern the matters
addressed in Section 3.3 of the Manufacturing Agreement; provided, however,
that this Agreement shall in no event be deemed to in any manner whatsoever
amend, or constitute an amendment to, the Manufacturing Agreement.

 

2.                                       Payments.  The amount of the fee to be
charged by Dakota Growers to DNA for each of the Services is set forth on Exhibit
A hereto.  DNA and Dakota Growers
acknowledge and agree that the Services to be provided by Dakota Growers to DNA
include, but are not limited to, Dakota Growers’ distribution and sale of
Products to customers, its invoicing of customers for Products sold and the
collection of invoiced amounts from customers. 
Within thirty (30) days of the end of each calendar month during the
Term (each calendar month during the Term being a “Monthly Period”), Dakota
Growers shall deliver to DNA: (i) a statement (each, a “Monthly Statement”),
substantially in the form as Exhibit B hereto, setting forth thereon the
information called for by Exhibit B in respect of each type of Product
sold by Dakota Growers during the Monthly Period then ended (it being
acknowledged and agreed by DNA and Dakota Growers that Dakota Growers shall be
deemed to have sold Product at the time of invoicing the customer therefor);
and (ii) a check, made payable to DNA, in an amount equal to that calculated
for Line Item L of Exhibit B and shown on each Monthly Statement.  Within nine (9) months following the end of
each calendar year during the Term, DNA shall have the right, but not the
obligation, to conduct and complete an audit of the books and records of Dakota
Growers (during Dakota Growers’ normal business hours and subject to such
confidentiality restrictions as Dakota Growers may impose thereon) for purposes
of confirming the amount of payments made by Dakota Growers to DNA during the
calendar year then ended pursuant to this Section 2.  DNA shall bear any and all costs, fees and
expenses associated with conducting any audit in accordance with the
immediately-preceding sentence; provided, however, that in the
event, as a result of any such audit, it is determined by mutual written
agreement of the parties or by a court of competent jurisdiction that the
amounts actually paid by Dakota Growers to DNA during the calendar year then
ended pursuant to this Section 2 were in excess of three percent (3.0%)
less than the amount that should have been paid by Dakota Growers to DNA during
the calendar year then ended pursuant to this Section 2, then Dakota
Growers shall bear any and all costs, fees and expenses associated with
conducting such audit, including all legal fees.

 

3.                                       Responsibility; Non-Competition.

 

(a)                                  Dakota Growers shall use those efforts and
degree of care in providing the Services that are comparable to those used by
Dakota Growers for its own account in providing services, activities and work
the same or similar in nature to the Services. 
Dakota Growers shall use commercially reasonable efforts under the
circumstances to remedy any delays, interruptions, omissions, mistakes,
accidents or errors in the Services and to restore such Services to comply with
the terms of this Agreement.

 

(b)                                 Dakota Growers hereby agrees not to market or
distribute products that are competitive with the Products for the account of,
or on behalf of, any third party, other than DNA, its affiliates and their
respective successors and assigns.

 

4.                                       Termination.  Upon the expiration of the
Term in accordance with Section 1 hereof, the rights and obligations of
Dakota Growers and DNA under this Agreement will automatically terminate.

 

3

 

Upon such expiration, Dakota Growers will
cease to have any obligation to provide any Services to DNA, and each of Dakota
Growers and DNA will promptly deliver to the other all data, programs, software
materials, and other properties owned by the other and held by it in connection
with the performance of this Agreement (but not in connection with the
performance of any other agreement). 
Each of Dakota Growers and DNA will assist the other at such other party’s
request and expense in effecting an orderly termination of this Agreement.

 

5.                                       Remedies.  In the event of a material
breach of this Agreement by a party hereto, the non-breaching party shall have
right to pursue any and all rights and remedies available at law or in equity
for such material breach.

 

6.                                       Relationship of Parties. 
Except as provided in this Agreement or in any other agreement between
Dakota Growers and DNA, none of the parties will act or represent or hold
itself out as having authority to act as an agent or partner of the other
party, or in any way bind or commit the other party to any obligations.  Nothing contained in this Agreement will be
construed as creating a partnership, joint venture, agency, trust or other
association of any kind, each party being individually responsible only for its
obligations as set forth in this Agreement. 
The employees performing the services contemplated by this Agreement
will remain employees of Dakota Growers, and DNA shall not have any
responsibility for such employees.

 

7.                                       Force Majeure.  If
Dakota Growers is prevented from complying, either totally or in part, with any
of the terms or provisions of this Agreement by reason of war, rebellion, fire,
flood, storm or other acts of God, then upon written notice to DNA, the
affected provisions and requirements of this Agreement will be suspended during
the period of such disability, and Dakota Growers will make all reasonable
efforts to remove such disability as soon as practicable and to carry out is
obligations under this agreement after such disability is removed.

 

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

 

	
  If
  to Dakota Growers:

  	
   

  	
  If
  to DNA:

  
	
   

  	
   

  	
   

  
	
  Dakota
  Growers Pasta Company, Inc.

  One Pasta Avenue

  Carrington, ND 58421

  Attention: Thomas P. Friezen

  Tel.: (701) 652-4893

  Fax: (701) 652-3701

  	
   

  	
  DNA
  Dreamfields Company, LLC

  14 West Park Place

  Oxford, OH 45056

  Attention: Mike Crowley

  Tel.: (513) 524-9256

  Fax: (513) 524-5167

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
  Lindquist
  & Vennum P.L.L.P.

  4200 IDS Center

  80 South Eighth Street

  Minneapolis, MN 55402

  Attention: Ronald D. McFall

  Tel.: (612) 371-3551

  Fax: (612) 371-3207

  	
   

  	
  Ulmer
  & Berne LLP

  600 Vine Street

  Suite 2800

  Cincinnati, OH 45201

  Attention: Scott P. Kadish

  Tel.: (513) 762-6200

  Fax: (513) 762-6245

  

 

4

 

9.                                       Successors and Assigns. 
Subject to the terms and condition of Section 1 of this
Agreement, the provisions of this Agreement will be binding upon and inure to
the benefit of the parties and their respective successors and assigns, provided,
however, that no party may assign, delegate or otherwise transfer any of
its rights or obligations under this Agreement without the prior written
consent of the other party.

 

10.                                 Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of Ohio, without giving effect to the principles of conflicts
of law thereof.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT, SHALL
BE BROUGHT AND MAINTAINED EXCLUSIVELY: (i) IN THE COURTS OF THE STATE OF
MINNESOTA (HENNEPIN COUNTY) OR IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MINNESOTA, IN THE CASE OF ANY LITIGATION COMMENCED BY LICENSOR; AND
(ii) IN THE COURTS OF THE STATE OF OHIO (HAMILTON COUNTY) OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO, IN THE CASE OF ANY
LITIGATION COMMENCED BY LICENSEE.  EACH
PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF MINNESOTA (HENNEPIN COUNTY) AND OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MINNESOTA FOR THE PURPOSE OF ANY SUCH
LITIGATION COMMENCED BY LICENSOR, AND EACH PARTY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF OHIO
(HAMILTON COUNTY) AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF OHIO FOR THE PURPOSE OF ANY SUCH LITIGATION COMMENCED BY LICENSEE.  EACH OF THE PARTIES FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF MINNESOTA AND OHIO,
RESPECTIVELY.  THE PARTIES HEREBY
EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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

 

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

 

13.                                 Further Assurances. 
Each party will cooperate and take such action as may be reasonably
requested by the other party in order to carry out the provisions and purpose
of this Agreement and the transaction contemplated hereby.  Dakota Growers, on the one hand, and DNA, on
the other hand, recognize and acknowledge that, from time to time during the
Term, their respective personnel will need to consult with and ask questions of
the other’s personnel about the Services and other matters related to the Services.  Each party hereto agrees to make its
personnel reasonably available for such consultations and to make reasonable
efforts to respond to such requests at no charge to the requesting party.

 

5

 

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

 

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

 

16.                                 Confidentiality. 
Each party agrees that all information marked as confidential,
proprietary, trade secrets, know how, manuals and other information disclosed
to it by the other party, whether disclosed prior to or during the Term, is
confidential and proprietary to the disclosing party (“Confidential
Information”).  Confidential Information
shall not include information which: (a) is in or hereafter enters the public
domain through no fault or action of the party to which it is disclosed; (b) is
obtained by the party to which it is disclosed from a third party which is not
subject to any legal restriction on its right to use and disclose such
information; (c) is independently developed by employees of the party to which
it is disclosed without use of any Confidential Information of the other party;
or (d) is required by law or judicial or administrative processes to be
disclosed.  The parties agree not to use
any Confidential Information of the other party during the term of this Agreement
and for a period of three (3)
years thereafter for any purpose other than as permitted or required for
performance hereunder.  Upon termination
or expiration of this Agreement for any reason, the parties shall return to
each other all Confidential Information of the other party in tangible form,
including Confidential Information in electronic or magnetic form.

 

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

 

*  *  *  *  *

 

6

 

IN WITNESS WHEREOF, the
parties have caused this Services Agreement to be duly executed effective as of
the day and year first above written.

 

 

	
   

  	
  DAKOTA
  GROWERS PASTA COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Tim Dodd

  	
   

  
	
   

  	
  Its:

  	
          President/CEO

  	
   

  
	
   

  	
   

  
	
   

  	
  DNA
  DREAMFIELDS COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Mike Crowley

  	
   

  
	
   

  	
  Its:

  	
          President

  	
   

  
					

 

7

 

EXHIBIT A

 

 

 

	
   

  	
   

  	
  Fee

  
	
  DNA financial accounting services

  DNA tax accounting services

  Information technology services

  Sales
  administration

  Sales services

  Sales forecasting
Sales
  accounting

  Supply chain administration

  Logistics services

  Customer service and order entry

  Working capital financing

  	
   

  	
  Confidential Treatment Requested.

  

 

To
the extent Dakota Growers supplies logistics services for the delivery and
billing of the Products, the title in and to Products shall remain with Dakota
Growers, and the risk of loss of, or damage to, such Products shall pass from
Dakota Growers to Dakota Growers’ customers (“the Customers”), in accordance
with the terms and conditions set forth in purchase orders or agreements by and
between Dakota Growers and the Customers covering such Products.

 

8

 

EXHIBIT B

 

 

	
   

  	
   

  	
   

  	
   

  	
  Product

  Type A

  	
   

  	
  Product

  Type B

  	
   

  	
  Product

  Type C

  	
   

  	
  Total

  
	
  (A)

  	
   

  	
  Total
  pounds of Product sold during Monthly Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (B)

  	
   

  	
  Total
  sales price of Product sold during Monthly Period(1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (C)

  	
   

  	
  Total
  cash discounts during Monthly Period(2)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (D)

  	
   

  	
  Total
  promotions and allowances during Monthly Period(3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (E)

  	
   

  	
  Total
  brokerage fees during Monthly Period(4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (F)

  	
   

  	
  Bad
  debt write-off during Monthly Period(5)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (G)

  	
   

  	
  Total
  cost of freight during Monthly Period(6)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (H)

  	
   

  	
  Total
  storage and handling fees during Monthly Period(6)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (I)

  	
   

  	
  Total
  transfer price of Product during Monthly Period(7)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (J)

  	
   

  	
  Services
  fees during Monthly Period(8)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (K)

  	
   

  	
  Total
  amount to Dakota Growers (C + D + E + F + G + H + I + J)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (L)

  	
   

  	
  Net
  amount to DNA (B – K)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1)                                  Total invoiced sales price of Product sold
during a Monthly Period.  The sales
price of Product shall be determined from time to time by mutual written
agreement of DNA and Dakota Growers.

 

(2)                                  Total applicable cash discounts on invoiced
sales of Product sold during a Monthly Period. Cash discounts for Product shall
be determined from time to time by mutual written agreement of DNA and Dakota
Growers.

 

(3)                                  Total promotions and allowances during a
Monthly Period shall be a function of reductions in the agreed-upon sales price
of Product sold and/or promotion and allowance accruals and/or merchandising
development fund (“MDF”) accrual programs. Promotions, allowances and MDF
programs shall be determined from time to time by mutual written agreement of
DNA and Dakota Growers. In the case of any promotions during a Monthly Period
taking the form of an off-invoice allowance, such reduction shall be reflected
in Line Item (D) (Total promotions and allowances during Monthly Period) and
shall not be reflected in Line Item (B) (Total sales price of Product sold
during Monthly Period).

 

9

 

(4)                                  Brokerage fees for Products shall be based on
brokerage agreements as determined from time to time by mutual written
agreement of DNA and Dakota Growers.

 

(5)                                  Based upon actual bad debt write-offs by
Dakota Growers for the Products during a Monthly Period.

 

(6)                                  Based upon actual costs and fees incurred by
Dakota Growers for the Products during a Monthly Period.

 

(7)                                  Total transfer price shall be a function of
total pounds of Product sold during a Monthly Period, times the
agreed-upon per pound transfer price of Product sold during such Monthly
Period.

 

(8)                                  Service fees shall be a function of total
pounds of Product sold during a Monthly Period times the service fee per
pound from Exhibit A.

 

10Exhibit
10.4

 

TRADEMARK LICENSE AGREEMENT

 

 

THIS TRADEMARK LICENSE
AGREEMENT (this “Agreement”) is made and entered into as of this 26th
day of December, 2003, by and between DNA DREAMFIELDS COMPANY, LLC, an Ohio
limited liability company having its principal place of business located at 14
West Park Place, Oxford, Ohio 45056 (“Licensor”), and DAKOTA GROWERS PASTA
COMPANY, INC., a North Dakota corporation having its principal place of
business located at One Pasta Avenue, Carrington, North Dakota 58421 (“Licensee”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, Licensee, B-New,
LLC, an Ohio limited liability company (“B-New”), TechCom Group, LLC, a Florida
limited liability company, and Buhler, Inc., a Minnesota corporation, are
parties to a certain DNA Dreamfields Company, LLC Operating Agreement, dated as
of October 31, 2003 (the “Operating Agreement”), and have formed and
capitalized Licensor for the purposes of, among other things, manufacturing in
North America and selling globally, low digestible carbohydrate pasta, rice and
potatoes under the brand name, “Dreamfields” (the “Brand”);

 

WHEREAS, Licensee is in the
business of manufacturing, marketing, distributing and selling dry pasta
products;

 

WHEREAS, Licensee and
Licensor have entered into a certain Exclusive Manufacturing Agreement (the
“Manufacturing Agreement”), dated of even date herewith, pursuant to which
Licensee has agreed to manufacture, on an exclusive basis, low digestible dry
pasta products under the Brand (the “Products”), and Licensor has engaged Licensee
to so manufacture, on an exclusive basis, the Products, upon the terms and
subject to the conditions of the Manufacturing Agreement;

 

WHEREAS, Licensee and
Licensor have entered into a certain Services Agreement (the “Services
Agreement”), dated of even date herewith, pursuant to which Licensee has agreed
to provide certain administrative, accounting, information technology, sales
and distribution services to DNA to facilitate the sale and distribution of the
Products upon the terms and subject to the conditions of the Services
Agreement;

 

WHEREAS, Licensee and
Licensor have entered into a certain Technology Sublicense Agreement (the
“Technology Sublicense”), dated of even date herewith, pursuant to which
Licensor has granted to Licensee an exclusive sublicense to use certain
technology necessary to manufacture the Products in connection with Licensee’s
manufacture of the Products;

 

WHEREAS, in connection with
the formation and capitalization of Licensor and pursuant to the Operating
Agreement and a certain Trademark and Trade Name Assignment, dated of even date
herewith, made by B-New for the benefit of Licensor, B-New transferred and
assigned to Licensor all the right, title and interest B-New had or may have
in, among other things, the United States Trademark Registrations identified
and set forth on Exhibit A hereto (the Trademarks”); and

 

WHEREAS, in order to
facilitate Licensee’s manufacture, on an exclusive basis, of the Products
pursuant to the terms and conditions of the Manufacturing Agreement, and the
sale and distribution of the Products by Licensee, Licensor desires to grant to
Licensee a license to use the Trademarks in accordance with the terms and
conditions of this Agreement.

 

NOW, THEREFORE, in
consideration of the mutual promises contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:

 

1

 

1.                                       Grant of License. 
Licensor hereby grants to Licensee a perpetual, exclusive, global,
royalty-free license to use the Trademarks for purposes of manufacturing,
marketing, selling and distributing the Products (the “Licensed
Purposes”).  Licensor hereby
acknowledges and agrees that the license granted hereby is exclusive to Licensee.  Accordingly, Licensor hereby agrees not to:
(a) directly or indirectly use the Trademarks for its own account in connection
with the manufacture, marketing, sale or distribution of the Products or any
products similar to or competitive with the Products; or (b) directly or
indirectly enter into any agreements, arrangements or relationships with any
third parties (other than Licensee) to use the Trademarks in connection with
the manufacture, marketing, sale or distribution of the Products or any
products similar to or competitive with the Products.

 

2.                                       Terms of Use. 
Licensee hereby acknowledges and agrees that the license of the
Trademarks granted hereby is limited to Licensee’s use of the Trademarks for
the Licensed Purposes, and Licensee hereby agrees to use the Trademarks only
for the Licensed Purposes, subject to the condition that the Products must meet
the Specifications (as defined in the Manufacturing Agreement), to the extent
not inconsistent with applicable law. 
Licensor shall be permitted, on reasonable notice and during normal business
hours, to enter the premises of Licensee in order to inspect Licensee’s
operations and verify that the Products being manufactured under the Trademarks
meet the Specifications, to the extent not inconsistent with applicable law.

 

3.                                       Prohibitions Against Assignments and
Sublicensing.  Neither Licensor, Licensee nor any of their
respective permitted successors and assigns may transfer or otherwise assign
(including, without limitation, by virtue of the merger or sale of all or
substantially all of the assets of Licensor, Licensee or their respective
permitted successors and assigns) this Agreement without the prior written
consent of the non-assigning party, which consent may be denied in the
non-assigning party’s sole and absolute discretion.  In addition, neither Licensor nor Licensor’s permitted successors
and assigns may transfer or otherwise assign (including, without limitation, by
virtue of the merger or sale of all or substantially all of the assets of
Licensor or Licensor’s permitted successors and assigns) the Trademarks without
the prior written consent of Licensee, which consent may be denied in
Licensee’s sole and absolute discretion. 
In the event of any assignment or transfer (including, without limitation,
by virtue of the merger or sale of all or substantially all of the assets of
Licensor, Licensee or their respective permitted successors and assigns) of the
Manufacturing Agreement, the Technology Sublicense and/or the Trademarks, this
Agreement shall contemporaneously therewith be automatically assigned and
transferred to the transferee or assignee of the Manufacturing Agreement, the
Technology Sublicense and/or the Trademarks. Licensee may not grant any
sublicense hereunder without the prior written consent of Licensor, except that
Licensee may grant a sublicense hereunder to a subsidiary of Licensee without
the prior written consent of Licensor for the purposes of fulfilling Licensee’s
obligations under the Manufacturing Agreement or any other agreement entered
into by and between Licensor and Licensee.

 

4.                                       Termination.

 

4.1                                 Dissolution and Insolvency.  If
either party hereto (an “Insolvent Party”) makes an assignment for the benefit
of its creditors, files a voluntary petition under federal or state bankruptcy
or insolvency laws, a receiver or custodian is appointed for that party’s
business, or proceedings are instituted against that party under federal or
state bankruptcy or insolvency laws that have not been stayed or dismissed
within sixty (60) days, this Agreement may be terminated by the party hereto
other than the Insolvent Party, with termination effective immediately upon
written notice to the Insolvent Party.

 

4.2                                 Breach.  If either party (the
“Terminating Party”) believes that the other party (the “Defaulting Party”) has
materially breached this Agreement, the Terminating Party shall give the
Defaulting Party written notice thereof (the “Notice to Cure”).  The Notice to Cure must state the nature of
the breach in reasonable detail and that the Terminating Party views such
alleged breach as a basis for terminating this Agreement.  If the Defaulting Party fails to cure the
alleged breach within sixty (60) days (the “Cure Period”) after its receipt of
the Notice to Cure, this Agreement shall, at the option of the Terminating
Party, terminate.  DNA expressly agrees
that the remedies at law for any breach by DNA of the exclusivity provisions of
this Agreement, including, but not limited to, Section 1 of this
Agreement, would be inadequate and that, in addition to any other remedies that

 

2

 

Dakota Growers may have in the event of any
such breach, Dakota Growers shall be entitled to temporary and injunctive
relief without the necessity of proving actual damages or posting bond.  DNA acknowledges that Dakota Growers would
not enter into this Agreement unless DNA agreed to the exclusivity provisions
of this Agreement, including, but not limited to, Section 1 of this
Agreement.

 

4.3                                 This agreement automatically terminates if
both the Manufacturing Agreement and the Services Agreement are
terminated.  In addition, this Agreement
may be terminated by the mutual written consent of each of Licensor and
Licensee.

 

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

 

5.                                       Miscellaneous.

 

(a)                                  Any written notices between Licensor and
Licensee required or permitted to be given under this Agreement, shall be
sufficiently given if hand delivered or if mailed by certified mail, return
receipt requested, to the respective address of the other party, subject to
change upon written notice, as follows:

 

	
  If
  to Licensor:

  
	
  DNA
  Dreamfields Company, LLC

  
	
  14
  West Park Place

  
	
  Oxford,
  OH 45056

  
	
  Attention:
  Mike Crowley

  
	
  Tel.:
  (513) 524-9256

  
	
  Fax:
  (513) 524-5167

  
	
   

  
	
  with
  a copy to:

  
	
  Ulmer
  & Berne LLP

  
	
  600
  Vine Street

  
	
  Suite
  2800

  
	
  Cincinnati,
  OH 45201

  
	
  Attention:
  Scott P. Kadish

  
	
  Tel.:
  (513) 762-6200

  
	
  Fax:
  (513) 762-6245

  
	
   

  
	
  If
  to Licensee:

  
	
  Dakota
  Growers Pasta Company, Inc.

  
	
  One
  Pasta Avenue

  
	
  Carrington,
  ND 58421

  
	
  Attention:
  Thomas P. Friezen

  
	
  Tel.:
  (701) 652 4893

  
	
  Fax:
  (701) 652-3701

  
	
   

  
	
  with
  a copy to:

  
	
  Lindquist
  & Vennum P.L.L.P.

  
	
  4200
  IDS Center

  
	
  80
  South Eighth Street

  
	
  Minneapolis,
  MN 55402

  
	
  Attention:
  Ronald D. McFall

  
	
  Tel.:
  (612) 371-3551

  
	
  Fax:
  (612) 371-3207

  

 

3

 

A
notice delivered hereunder shall be deemed to have been delivered on the date
of delivery, if delivered by hand with evidence of receipt, or three (3)
business days after mailing by certified mail, return receipt requested.

 

(b)                                 This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without giving
effect to the principles of conflicts of law thereof.  ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY:
(i) IN THE COURTS OF THE STATE OF MINNESOTA (HENNEPIN COUNTY) OR IN THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA, IN THE CASE OF ANY
LITIGATION COMMENCED BY LICENSOR; AND (ii) IN THE COURTS OF THE STATE OF OHIO
(HAMILTON COUNTY) OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF OHIO, IN THE CASE OF ANY LITIGATION COMMENCED BY LICENSEE.  EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF MINNESOTA (HENNEPIN
COUNTY) AND OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MINNESOTA
FOR THE PURPOSE OF ANY SUCH LITIGATION COMMENCED BY LICENSOR, AND EACH PARTY
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF OHIO (HAMILTON COUNTY) AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF OHIO FOR THE PURPOSE OF ANY SUCH LITIGATION COMMENCED
BY LICENSEE.  EACH OF THE PARTIES
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
MINNESOTA AND OHIO, RESPECTIVELY.  THE
PARTIES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(c)                                  If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision will be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never been a part of this Agreement.  In such event, the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid, or unenforceable provision or by its severance from this
Agreement.  Furthermore, in lieu of each
such illegal, invalid or unenforceable provision, there will be added as a part
of this Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible to be legal, valid and enforceable.

 

(d)                                 This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral or
written, relating to the subject matter hereof.  This Agreement may not be amended, supplemented or modified in
any way unless by written agreement signed by all of the parties.

 

(e)                                  The headings in the Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.

 

(f)                                    This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties
hereto.

 

4

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
officers, thereunto duly authorized, as of the date first set forth above.

 

 

	
   

  	
  DNA
  DREAMFIELDS COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Mike Crowley

  	
   

  
	
   

  	
  Its:

  	
          President

  	
   

  
	
   

  	
   

  
	
   

  	
  DAKOTA GROWERS PASTA COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
          /s/
  Tim Dodd

  	
   

  
	
   

  	
  Its:

  	
          President/CEO

  	
   

  
					

 

5

 

EXHIBIT A

 

	
  Mark

  	
   

  	
  Serial Number

  
	
  DREAMFIELDS

  	
   

  	
  Serial Number 76461651

  
	
  DREAMFIELDS

  	
   

  	
  Serial Number 76461652

  

 

6

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