Document:

Exhibit 10.1

 

CONFIDENTIAL
TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED

AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.

 

DNA, LLC

OPERATING AGREEMENT

 

THIS OPERATING AGREEMENT
(the “Agreement”), dated as of  October
31, 2003, is among B-New, LLC, an Ohio limited liability company (“BNEW”),
TechCom Group, LLC, a Florida limited liability company (“TechCom”), Buhler,
Inc., a Minnesota corporation (“Buhler”), and Dakota Growers Pasta Company,
Inc., a North Dakota corporation (“Dakota”) (BNEW, TechCom, Buhler and Dakota
may be referred to herein as a “Member and collectively as the “Members”).

 

RECITALS:

 

WHEREAS, the Members are all
of the members of DNA, LLC, an Ohio limited liability company (the “Company”),
as of the date hereof; and

 

WHEREAS, the Members desire
that the Company be treated as a partnership for tax purposes under the
Internal Revenue Code, as amended (the “Code”), and qualify as a limited
liability company  under Ohio Revised
Code (“ORC”) Section 1705.01 et  seq.; and

 

WHEREAS, the Members further
desire to provide for certain rights and obligations relating to the Company
and their ownership thereof;

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

1.                                       Purpose.                                                 The Company has been formed to license the
Technology (as hereinafter defined), and in connection therewith to develop,
manufacture in North America, and sell globally low digestible carbohydrate
pasta, rice and potatoes under the Dreamfields name (the “Brand”), and to
otherwise exploit and ultimately sell the Brand.

 

2.                                       Capital Contributions.

 

(A)                              Initial Contributions.

 

(i)                                     Each Member has on or before the date hereof
contributed to the capital of the Company the cash listed on Exhibit A, and has
been issued the number of membership units (“Units”) in the Company listed on
Exhibit A.

 

(ii)                                  Buhler shall contribute, when and as needed,
additional funds as provided for in the schedule attached hereto as Exhibit B
to the Company to pay for the development of science, proof of principle,
clinical studies and credential/claims development necessary to implement the
Company’s business plan.  Such
contributions shall be made by the payment by Buhler to the Company of
applicable invoices submitted by vendors of the Company, including invoices for
the management fees provided under section 6(E)(i) and/or (ii) below, and
applicable internal costs incurred by Buhler and accounted for by Buhler to the
Board of Managers.  Such contribution
shall be an additional capital contribution by Buhler without the issuance of
any additional Units.

 

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(iii)                               Dakota shall contribute, when and as needed,
additional funds as provided for in the schedule attached hereto as Exhibit B
to the Company to pay for the development of supply chain, product package
development, consumer research, test market launch and regional roll out,
advertising and merchandising necessary to implement the Company’s business
plan.  Such contributions shall be made
by the payment by Dakota to the Company of applicable invoices submitted by
vendors of the Company, including invoices for the management fees provided
under section 6(E)(i) and/or (ii) below, and applicable internal costs incurred
by Dakota and accounted for by Dakota to the Board of Managers.  Such contribution shall be an additional
capital contribution by Dakota without the issuance of any additional Units.

 

(iv)                              B-New hereby assigns and conveys all of its
rights, title and interest in and to the Brand to the Company as an additional
capital contribution by B-New without the issuance of any additional Units.

 

(v)
                              Notwithstanding anything contained herein, if
and to the extent the Company incurs legal fees under section 6(E)(iv)(2) of
this Agreement, one or more Members may loan the needed funds to the Company.  Such loan or loans shall bear interest on
the outstanding amount of 8% per annum, and all loaned funds, and all accrued
interest, shall be paid in full prior to any distribution to the Members of
Distributable Cash Flow.

 

(B)                                Additional Contributions.       If at any time the Company’s Board of
Managers shall decide, in good faith and in the best interests of the Company,
that additional equity contributions beyond that described in section (A) above
are required to further the purposes of the Company, then each Member shall be
given at least 30 days to contribute a portion of the amount of additional
capital required pursuant to a subscription for additional Units.  The purchase price per Unit shall be
determined by the Company’s Board of Managers. 
The number of Units to which each Member shall be entitled to subscribe
shall be equal to a fraction of the total number of Units to be offered, the
numerator of which shall equal the then number of Units held by the Member, and
the denominator of which shall equal the then aggregate number of Units then
held by all Members.

 

(C)                                Capital Call Deficiencies.             In the event a Member fails to subscribe for
the full number of Units to which he is entitled under the provisions of
subsection (B) above within 30 days after written notice (a “Capital Call
Notice”), any other Member or Members who are willing and able to make such
contribution may do so in proportion to the then respective number of Units
held by them, or in such other proportion as they may otherwise agree.

 

(D)                               Loans by Members.                                      Notwithstanding anything contained herein, no
Member shall be required to make any capital contribution or loan to the
Company after the date hereof except as set forth in section (A) above.  If the Company’s Board of Managers
determines that the Company requires additional funds, any Member or Affiliate
thereof may, but shall not be obligated to, advance such funds.  Interest and similar charges or fees for
loans or other advancements made by a Member or Affiliate thereof may equal but
not exceed the amount which would be charged by unrelated lending institutions
on comparable loans for the same purpose in Cincinnati, Ohio, as determined in
good faith by the Company’s Board of Managers. 
As used herein, “Affiliate” means any person or entity who, directly or
indirectly, controls, is controlled by or is under common control with, the
specified person.

 

3.                                       Allocations; Distributions.

 

(A)                              Section 704 Capital Accounts.                                Throughout the term of the Company, a Section
704 Capital Account shall be maintained for each Member.  Such Section 704 Capital Account shall be
determined and maintained at all times in strict accordance with all of the
provisions of Treasury 

 

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Regulations § 1.704-1(b)(2)(iv), as
amended from time to time.  In
connection with maintenance of such Section 704 Capital Accounts, the Company
shall maintain a set of books and records (the “Section 704 Books”) in
accordance with the accounting principles embodied in Regulation §1.704-1(b)(2)(iv),
as amended from time to time.

 

(B)                                Tax Basis Capital Accounts.                                          In addition to the Section 704 Capital
Accounts, the Company shall maintain a “Tax Basis Capital Account” for each
Member to reflect such Member’s interest in the Company determined with respect
to the adjusted basis for tax purposes of Company assets, and in connection
therewith shall maintain a set of books and records (the “Tax Basis Books”) in
accordance with principles of federal income tax accounting.

 

(C)                                Additional Capital Accounts.                                    In addition to the Section 704 Capital
Accounts and the Tax Basis Capital Accounts, the Company shall maintain
additional capital accounts for each Member and such books and records as the
Managing Director deems appropriate.

 

(D)                               Asset Revaluation.                                          Upon a change in the interest of a Member in
the Company, the assets of the Company may, upon the approval of the Company’s
Board of Managers, be revalued on the books of the Company to reflect the fair
market value of such assets at the time of the occurrence of such event, and
the Section 704 Capital Accounts of the Members shall be adjusted in the manner
provided in Treasury Regulations § 1.704-1(b)(2)(iv)(f) and (g).

 

(E)                                 Allocations.

 

(i)                                     After giving effect to the special allocation
provisions hereof, and except as set forth in subsection (ii) below, profits
shall be allocated among the Members in proportion to their respective Units,
and losses shall be allocated in accordance with the balance of the Member’s
respective Section 704 Capital Accounts.

 

(ii)                                  Notwithstanding anything contained herein,
any gain on sale of the Brand shall be allocated as follows: 40% to BNEW; 20%
to TechCom; 20% to Dakota; and 20% to Buhler.

 

(iii)                               The following special allocations shall be
made in the following order:

 

(a)                              Minimum Gain Chargeback.  If
there is a net decrease in minimum gain, as such term is used in Regulation
§1.704-2(d), for a Company taxable year, then the Members shall be allocated
items of income and gain in accordance with Regulation §1.704-2(f).  This subsection (a) is intended to comply
with the minimum gain chargeback requirement in such section of the Regulations
and shall be interpreted consistently therewith.

 

(b)
                              Member Loan Minimum Gain Chargeback.  If there is a net decrease in minimum gain
attributable to nonrecourse liability, as set forth in Regulation Section
1.704-2(i), for a taxable year, then any Member with a share of such minimum
gain shall be allocated items of Company income and gain in accordance with
such Regulation.

 

(c)                                  Qualified Income Offset.  If a Member unexpectedly receives any
adjustment, allocation, or distribution, described in Regulation
§1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of income and gain shall be
specially allocated to such Member in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Member as quickly as possible.

 

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(d)                             Nonrecourse Deductions. 
Nonrecourse deductions, as such              term
is used in Regulation §1.704-2(c), for any fiscal year or other period shall be
specially allocated among the Members in proportion to their respective Units.

 

(e)                                  Member Nonrecourse Deduction.  Any deduction attributable to nonrecourse
deductions, as such term is defined in Regulation §1.704-2(i)(2), for any
fiscal year or other period shall be specially allocated to the Member who
bears the risk of loss with respect to the liability to which such nonrecourse
deductions are attributable in accordance with Regulation §1.704-2(i)(1).

 

(f)                                    Curative Allocations.  The allocations set forth herein (the
“Regulatory Allocations”) are intended to comply with certain requirements of
Regulation §1.704-1(b).  Notwithstanding
any other provision of this Section, the Regulatory Allocations shall be taken
into account in allocating other Profits, Losses and items of income, gain,
loss and deduction among the Members so that, to the extent possible, the net
amount of such allocations of other Profits, Losses and other items and the
Regulatory Allocations to each Member shall be equal to the net amount that
would have been allocated to each such partner if the Regulatory Allocations
had not been taken into account.

 

(g)                                 With respect to property of the Company that
is in the Company’s Section 704 Books at a value that differs from the value of
such property as reflected in the Company’s Tax Basis Books, allocations of
income, gain, loss and deduction with respect to such property shall be shared
among the Members in a manner that takes into account the variations between
the Tax Basis Book value of such property and the Section 704 Book value of
such property in the same manner as variations between the adjusted tax basis
and fair market value of property contributed to a partnership are taken into
account in determining a partner’s share of tax items under Code Section
704(c).

 

(F)                                 Distributions.

 

(i)                                     Distributable Cash Flow from operations shall
be: (a) allocated among and distributed to the Members in proportion to their
respective Units; (b) calculated at least annually as of the end of each year
(and on any more frequent basis determined by the Company’s Board of Managers);
and (c) distributed to the Members not later than 90 days after the end of each
year.

 

(ii)                                  Distributable Cash Flow from the sale of the
Brand shall be: (a) allocated as follows: 40% to BNEW; 20% to TechCom; 20% to
Dakota; and 20% to Buhler; (b) distributed to the Members not later than 30
days after the receipt of the price therefore, provided that if the price is
anything other than cash, the Company may delay distribution until such time as
the price is converted into cash.

 

(iii)                                As used herein, the term “Distributable Cash
Flow” means cash revenues without deduction for depreciation, but after
deducting cash funds used to pay all other expenses, debt payments,
obligations, capital improvements and replacements and after deducting
additional cash funds in such amounts that the Company’s Board of Managers
determines are appropriate to retain as a reserve for contingencies.

 

(G)                                754 Election.                             The Company may elect, pursuant to Internal
Revenue Code Section 754, to adjust the basis of the Company property when a
Member sells his interest in the Company. 
If this election is made, then to the extent an adjustment to the
adjusted tax basis of any 

 

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Company asset pursuant to Internal Revenue
Code Sections 734(b) or 743(b) is required, such adjustment to the Section 704
Capital Accounts shall be treated as an item of gain or loss, as the case may
be, and such gain or loss shall be specially allocated to the Members in a
manner consistent with Treasury Regulations §1.704-1(b)(2)(iv)(m).

 

(H)                               Liquidating Distribution.             The proceeds of any liquidation sale upon the
dissolution of the Company shall be applied and distributed within 90 days
after the closing of any such sale in the following order of priority: (i)
First, to creditors other than the Members; (ii) Second, to the Members other
than for capital; (iii) Third, to the Members in accordance with the positive
balance in the Section 704 Capital Accounts of each Member as such Section 704
Capital Account is determined after making all adjustments thereto for the
taxable year of the Company during which the liquidation occurred, as are
required by Regulation §1.704-1(b), such adjustments to be made within the time
specified in the Regulations.

 

4.                                       Transfers.

 

(A)                              Right of First Refusal.                            No Member shall sell, assign or transfer his
Units to any person, unless the Member desiring to make the transfer
(hereinafter referred to as the “Transferor”) shall have first made the offer
to sell hereinafter described and such offer shall not have been accepted.

 

(i)                                     The Transferor must first notify the Company
in writing, which notice (the “Notice”) shall consist of a statement of the
intention to transfer, the name and address of the prospective purchaser, the
number of Units involved in the proposed transfer, and the terms of the
transfer.

 

(ii)                                  Within 30 days after receipt of the
Notice,  the Company may, at its option,
purchase all, but not less than all, of the Units proposed to be
transferred.  The Company shall exercise
the election to purchase by giving written notice thereof to the Transferor;
failure to provide such notice within the required time period shall constitute
an election not to purchase.  In any
event, the election notice shall specify the date for a closing of the purchase
which shall not be more than 30 days after the date of the election notice.

 

(iii)                               The purchase price which shall be paid to the
Transferor by the Company shall equal the price set forth in, and shall
otherwise be on the terms contained in, the Notice.

 

(iv)                              If the Company does not elect to purchase all
of the Units proposed to be transferred, Transferor may make a bona fide
transfer to the prospective purchaser named in the Notice, subject to
subsection (b) below and provided such sale is made in strict accordance with
the terms therein stated.  However, if
the Transferor shall fail to consummate such transfer within 45 days following
the expiration of the time herein provided for election, such Units shall again
become subject to all restrictions of this Agreement.

 

(B)                                Consent of Members.                             Notwithstanding anything contained herein, no
Member shall sell, transfer, convey, assign, pledge or in any way encumber his
Units in the Company, or any part thereof or interest therein, without the
unanimous written consent of all other Members.  If such consent is obtained, the transferee will be admitted as a
Member only if and when the following conditions are met:

 

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(i)                                     The transferee must execute, and agree to
hold such Units subject to this Agreement; and

 

(ii)                                  The sale or transfer must comply with an
applicable exemption from the registration requirements of the Securities Act
of 1933, as amended, and applicable state securities statutes and, if requested
by the Company, the transferor or transferee shall furnish the Company with an
opinion of legal counsel to such effect.

 

5.                                       Termination.

 

(A)                              Dissolution.                               The Company shall be dissolved upon the
Termination of any Member, unless a majority-in-interest of the other Members
consent to continue the business of the Company within 30 days after the date
of Termination.

 

(B)                                Definitions.

 

(i)                                     As used herein, “Termination” means: (a) a
Bankruptcy Event; (b) a Member who is an individual dies or is adjudicated an
incompetent; (c) a trust that is a Member terminates; (d) a corporation,
limited liability company or partnership that is a Member dissolves; or (e) if
an estate is a Member, the distribution of the estate’s membership interest.

 

(ii)                                  As used herein, “Bankruptcy Event” means a
Member that does any of the following: (a) makes an assignment for the benefit
of creditors; (b) files a voluntary petition in bankruptcy; (c) is adjudicated
a bankrupt or insolvent; (d) files a petition or answer in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief proceeding under any law or rule that seeks for itself any of those
types of relief; (e) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against him or her in any
proceeding seeking the relief described in clause (d) of this subsection (ii);
(f) a period of 120 days has elapsed after the commencement against the Member
of any proceedings seeking the relief described in clause (d) of this
subsection (ii), and the proceeding has not been dismissed; (g) a period of 90
days has elapsed after the appointment of a trustee, receiver, or liquidator
for the Member or for all or any substantial part of his or her properties
without the Member’s consent to acquiescence, and the appointment has not been
vacated or stayed; or (h) a period of 90 days has elapsed after the expiration
of that stay, and the appointment has not been vacated.

 

(C)                                Withdrawal.                               Except as expressly permitted herein, no
Member shall withdraw or retire or in any way be entitled to a return of any
part of its capital account without the consent of the Board of Managers.

 

6.                                       Management Matters.

 

(A)                              Member Meetings.

 

(i)                                     Place.  All meetings of the Members
shall be held either at the principal office of the Company or at any other
place within the United States, designated by the Board of Managers.

 

(ii)                                  Annual Meetings.  An
annual meeting of the Members shall be held at 9:00 AM on the first Tuesday in
May of each year if not a legal holiday, and if a legal holiday, then at the
same time on the next succeeding day not a legal holiday.  In the event that such annual meeting is
omitted by oversight or otherwise on the date herein provided for, the Board of
Managers shall cause a 

 

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meeting in lieu thereof to be held as soon
thereafter as is convenient, and any business transacted or elections held at
such meeting shall be as valid as if transacted or held at the annual meeting.

 

(iii)                               Special Meetings. 
Special meetings of the Members may be called by the Clerk pursuant to a
resolution of the Board of Managers. Calls for special meetings shall specify
the time, place and object or objects thereof, and no business other than that
specified in the call therefor shall be considered at any such meetings.

 

(iv)                              Notice of Meetings.  A
written or printed notice of the annual or any special meeting of the Members,
stating the time and place, and in case of special meetings, the objects
thereof, shall be given to each Member entitled to vote at such meeting appearing
on the books of the Company, by mailing same to his address as the same appears
on the records of the Company, not less than 7 days or more than 60 days before
the date of the meeting; provided, however, that no failure or irregularity of
notice of any annual meeting shall invalidate the same or any proceeding
thereat.  All notices with respect to
any Units to which persons are jointly entitled may be given to that one of
such persons who is named first upon the books of the Company and notice so given
shall be sufficient notice to all the holders of such shares.

 

(v)                                 Quorum.  A majority in number of the
Units authorized, issued and outstanding, represented by the holders of record
thereof, in person or by proxy, shall be requisite to constitute a quorum at
any meeting of Members.

 

(vi)                              Proxies.  Any Member entitled to vote
at a meeting of Members may be represented and vote thereat by proxy appointed
by an instrument in writing, subscribed by the Member, or by his duly
authorized attorney, and submitted to the Clerk at or before such meeting.

 

(vii)                           Voting.         At any meeting of the Members, each Member
entitled to vote shall have one vote per Unit. 
With respect to any matter requiring the consent of or to be determined
by the Members, consent shall have been obtained if: (a) at a meeting of the
Members, upon due notice as required hereunder, at which a quorum is present,
Members holding at least 51% of the total votes present, in person and by
proxy, vote in favor; or (b) holders of at least 51% of the outstanding Units
consent in writing; provided, however, that where the consent of a
majority-in-interest of certain Members is expressly required herein, the
written consent of Members holding more than 50% of the designated Units shall
be required, and where the unanimous consent of the Members is required, the
written consent of all Members shall be required.

 

(B)                                Board of Managers.

 

(i)                                     Election, Number and Term.  The
election of the Board of Managers shall take place at the annual meeting of
Members, or at a special meeting called for that purpose.  The number of Managers shall equal the
number of Members who hold at least 20% of the outstanding Units (each Member
who holds at least 20% of outstanding Units may be referred to herein as an
“Appointing Member”). Each Appointing Member shall be entitled to appoint a
representative to serve as a Manager. 
Managers shall hold office until the next annual meeting of the Members
and until their successors are elected, provided that an Appointing Member may
recall and replace any Manager appointed by it at any time upon written notice
to all other Members. Any fee payable to a Manager for serving on the Board of
Managers shall be subject to the unanimous consent of the Members. If, at any
time, a Member is not entitled to appoint a Manager to the Board of Managers,
such Member shall enjoy observation rights, even though no longer represented
on the Board of Managers.

 

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(ii)                                  Annual Meetings.  An
annual meeting of the Board of Managers shall be held directly after the annual
meeting of the Members.

 

(iii)                               Special Meetings. 
Special meetings of the Board of Managers may be called by the
President, or any two Managers. Calls for special meetings shall specify the
time, place and object or objects thereof, and no business other than that
specified in the call therefor shall be considered at any such meetings.

 

(iv)                              Notice of Meetings.  A
written or printed notice of the annual or any special meeting of the Board of
Managers, stating the time and place, and in case of special meetings, the
objects thereof, shall be given to each Manager, by mailing same to his address
as the same appears on the records of the Company, not less than 7 days or more
than 60 days before the date of the meeting; provided, however, that no failure
or irregularity of notice of any annual meeting shall invalidate the same or
any proceeding thereat.

 

(v)                                 Quorum.  A majority in number of the
Managers shall be requisite to constitute a quorum at any meeting of the Board
of Managers.  A Manager may participate
in a Board meeting by means of conference telephone or by any other means of
remote communication, provided, however, that in each case the Manager participating
from a remote location and all other Managers must be able to communicate with
each other during the meeting.

 

(vi)                              Voting.         At any meeting of the Board of Managers, each
Manager shall have one vote.  With
respect to any matter requiring the consent of or to be determined by the Board
of Managers, consent shall have been obtained if: (a) at a meeting of the Board
of Managers, upon due notice as required hereunder, at which a quorum is
present, a majority of the Managers present vote in favor; or (b) all Managers
consent in writing.

 

(vii)                           Vacancies in the Board.  A
resignation from the Board of Managers shall be deemed to take effect upon its
receipt by the Clerk, unless some other time is specified therein.  In case of any vacancy in the Board of
Managers, through death, resignation, or removal by the Appointing Member, the
Appointing Member appointing such Manager shall appoint a new Manager by
written notice to all other Members.

 

(C)                                Officers.   Subject only to the terms hereof, the
management of the Company shall be reserved to the Officers. The Officers of
the Company shall be a President, a Clerk, and such other Officers, with such
powers and responsibilities, as the Board of Managers may elect.  The salary and other benefits payable to the
Officers shall be determined from time to time by the Board of Managers.

 

(i)                                     Election and Term.  All
Officers shall be elected by the Board of Managers and shall hold office at the
will of the Board of Managers, except that the Manager appointed by BNEW shall
at all times be the President.  Any
person may hold more than one office, provided the duties thereof can be
consistently performed by the same person. Any vacancy shall be filled by the
Board of Managers.  The Board of
Managers shall further determine who shall assume the powers and
responsibilities of any Officer who is temporarily incapacitated or absent.

 

(ii)                                  President. The President shall be the chief executive officer of the
Company.  He shall perform all the
duties commonly incident to his office and shall perform such other duties as
the Board of Managers shall designate. 
When present, he shall preside at all meetings of the Managers and
Members.  Subject to the terms hereof,
the President shall sign all notes, deeds, mortgages, 

 

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extension agreements, modification of
mortgages agreements, property transfer documents, and leases, and shall
generally have the supervision and control of the Company’s affairs.

 

(iii)                               Clerk.  The Clerk shall keep accurate
minutes of all meetings of the Members and Board of Managers, and shall perform
all the duties commonly incident to such office, and shall perform such other
duties and have such other powers as the Board of Managers may designate.

 

(D)                               Extraordinary Transactions.

 

(i)                                     Notwithstanding anything contained herein to
the contrary, the unanimous consent of the Members shall be required to: (a)
sell all or substantially all assets of the Company, and/or sell the Brand; (b)
grant or sell licensing, manufacturing or distribution  rights to Brand rice or potato products; (c)
consummate any merger, reorganization or consolidation involving the Company
where the Company is not the surviving entity; (d) admit any new Member or
issue Units to any party other than a then current Member; (e) pay any fee or
remuneration to, or enter into any business contract or arrangement with, any
Member or Affiliate thereof; or (f) appoint any officer or pay any salary,
wage, fee or other remuneration to any officer.

 

(ii)                                  Notwithstanding anything contained herein to
the contrary, the consent of the Board of Managers shall be required to: (a)
purchase any material asset for or on behalf of the Company outside the
ordinary course of business; or (b) incur any material liability, obligation or
expense for or on behalf of the Company outside the ordinary course of
business.

 

(E)                                 Transactions With Members.

 

(i)                                     The Company is hereby authorized to engage
TechCom for a period of 12 months from and after the date hereof to manage the
implementation of the licensed Technology and to provide additional management
services within the areas of metabolic science, clinical research, IP
development and credential development, and in consideration therefore to pay
TechCom a monthly management fee of $*** during such 12 month period.  Said fee shall be for services rendered and
for expenses incurred in performing such services.  Said monthly fee shall be due on the last day of the month
beginning with the first payment on October 31, 2003.  TechCom shall also be reimbursed on October 31, 2003, for a
one-time charge of $*** spent in September, 2003, on NCI testing, plus a $***
management fee for September, 2003, so that the total amount payable to TechCom
on October 31, 2003, is $***.  TechCom
shall provide such services as an independent contractor, and payments of the
management fee to TechCom shall constitute payments for services rendered and
shall thus be accounted for as an expense of the Company and be paid prior to
any distribution of Distributable Cash Flow hereunder.

 

(ii)                                  The Company is hereby authorized to engage
BNEW for a period of 12 months from and after the date hereof to provide
overall program management, Brand development and management, market and
consumer research, marketing plans, supply chain management and customer
business development, and in consideration therefore to pay BNEW a monthly
management fee of $*** during such 12 month period. Said fee shall be for
services rendered and for expenses incurred in performing such services. Said
monthly fee shall be due on the last day of the month beginning with the first
payment on October 31, 2003, except that the monthly payment due for October,
2003, will be for only $***.  BNEW shall
provide such services as an independent contractor, and payments of the
management fee to BNEW shall constitute payments for services rendered and
shall thus be accounted for as an expense of the Company and be paid prior to
any distribution of Distributable Cash Flow hereunder.

 

*** - Confidential treatment
requested.

 

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(iii)                               Subject to the terms hereof, and except for
expenses incurred by TechCom in performing its management services under
subsection (i) above for which TechCom shall be responsible and expenses
incurred by BNEW in performing its management services under subsection (ii)
above for which BNEW shall be responsible, the Members further authorize the
Company to reimburse a Member for any reasonable, actual, out-of-pocket
expenses incurred by the Member in performing its responsibilities hereunder or
in connection with business of the Company, within 30 days after approval of
payment by the Board of Managers, and all unreimbursed expenses shall be paid
prior to distribution of Distributable Cash Flow.

 

(iv)                              Subject to the terms and conditions of this
Agreement, TechCom hereby grants to the Company an unconditional, irrevocable,
royalty-free, perpetual, exclusive, world wide license to use TechCom’s patent
pending technology to market and manufacture pasta, rice and potatoes only (the
“Technology”), including all improvements to the Technology hereafter developed
by TechCom, and TechCom shall promptly disclose to the Company in writing any
improvements to the Technology hereafter made by TechCom.   The Company may, at its expense, make such
improvements to the Technology as it deems appropriate subject to the prior
consent of TechCom, and the license granted hereunder shall cover such
improvements, provided the Company shall promptly disclose to TechCom in
writing any improvements to the Technology made by the Company, and TechCom
shall be free, at no cost to TechCom, to use such improvements with respect to
other food products.  TechCom hereby
warrants to the Company that to the best of TechCom’s knowledge, the Company’s
use of the Technology as contemplated hereby do not infringe the intellectual
property rights of any third party.  The
Company and TechCom shall, at the request of either the Company or TechCom,
enter into a license agreement confirming the terms of such license which shall
contain normal and customary terms not inconsistent with the terms hereof and
which shall provide as follows:

 

(1)                                  If the Company desires to use the Technology
in any market outside of the United States of America and TechCom has not yet
filed patent applications in such market, then the Company agrees to pay all
expenses and fees required during the period the Company uses the Technology in
such market pursuant to such license for the preparation, filing, prosecution,
maintenance, annuities  related to any
patent application filed by TechCom, such costs to be paid by the Company
within 30 days of delivery of an invoice and reasonable supporting
documentation;

 

(2)                                  If the Company or TechCom becomes aware of
any infringement or alleged infringement of any patent rights covering the
Technology, such party shall immediately notify the other party in writing of
the name and address of the alleged infringer, the alleged acts of infringement
and any available evidence of infringement, and the parties shall work jointly
in good faith to use their reasonable best efforts to prevent infringement and
defend the patents, provided all legal fees to do so shall be paid for by the
Company, and any litigation shall be directed by and legal counsel shall be
engaged by TechCom, all with consultation by the Company;

 

(3)                                  As between the Company and TechCom, the
Company shall be solely responsible for all product liability claims and
damages arising from the manufacture, sale or use of any Brand products , and
shall obtain reasonable and appropriate insurance therefore; and

 

(4)                                  Except for manufacturing and/or distribution
contracts for Brand products or a sale by the Company of all or substantially
all of its assets or any other liquidation, the Company shall not assign or
sublicense such license rights without the prior written consent of TechCom.

 

10

 

(5)                                  If the Company is dissolved pursuant to
section 12(a)(vi) of this Agreement, the license granted hereby shall
automatically thereupon terminate and all such rights shall revert to TechCom,
provided TechCom shall not have rights to any other asset of the Company,
including the Brand name, unless TechCom expressly hereafter purchases same or
the Company hereafter expressly distributes same to TechCom.

 

(6)                                  If during any calendar year beginning with
2005, the Company does not realize bona fide sales of Brand products of at
least $1,000,000.00, then the license granted hereunder shall automatically
thereupon become non-exclusive.

 

(v)                                 The Company shall grant exclusive
manufacturing rights for Brand pasta products to Dakota, subject to execution
of a manufacturing agreement containing normal and customary terms with
reasonable and competitive terms, plus a reasonable premium to Dakota as hereafter
agreed to by Dakota and the Board of Managers and subject to performance by
Dakota. The Company and Dakota shall negotiate in good faith the terms of the
Manufacturing Agreement and use their reasonable best efforts to negotiate and
execute a fully binding definitive agreement by December 31, 2003.  Notwithstanding anything contained herein,
if the Company and Dakota do not enter into a fully binding, definitive,
exclusive manufacturing agreement for Brand pasta products by December 31,
2003, Dakota may, at any time thereafter prior to the execution of such
agreement, withdraw as a Member by providing written notice to all other
Members.  Upon any such withdrawal, the
Company shall return the balance in Dakota’s Section 704 Capital Account as of
the date of withdrawal within one year after the date of withdrawal.  The Company shall be authorized (but not
obligated) to grant exclusive manufacturing rights for Brand rice and/or
potatoes to Dakota, subject to Dakota’s capability to manufacture such products
and subject to approval by the Board of Managers.  The Company shall be further authorized (but not obligated) to
engage Dakota to distribute some or all of the Brand products on reasonable and
competitive terms, subject to Dakota’s capability to distribute such products
and subject to approval by the Board of Managers.  Notwithstanding anything contained herein, TechCom shall
determine who shall manufacture Brand rice products, subject to the reasonable
approval of the Board of Managers as to the terms of such engagement and the
qualification and capability of such prospective manufacturer.

 

(F)                                 Certain Market Transactions.                                     The Members acknowledge that TechCom desires
the Company to market and sell products the same or substantially the same as
the Brand products except under a different brand name and different price, in
connection with humanitarian or charitable causes related to public health
projects, institutional markets (e.g., school lunch, feeding programs) and
governmental markets.  The Members agree
to consider such ventures in good faith and to work cooperatively with TechCom
to consummate such ventures.

 

7.                                       Additional Interests.  Any
membership interest in the Company issued to any Member after the date hereof
(including any additional subscription or contribution or any purchase of an
already outstanding interest) shall automatically become subject to the terms
and restrictions hereof without the requirement of further action.  The term “Units” as used herein shall
include any such additional interest.

 

8.                                       Legend.  Each certificate, if any, for
any interest in the Company now held or hereafter issued by the Company shall,
in addition to any other legend required by applicable law, be endorsed with a
legend indicating that the transfer of such Unit is subject to the restrictions
contained herein.

 

9.                                       Financial Reporting.

 

(A)                              The Company shall maintain and provide to
each Member upon request, the financial statements listed in clauses (i) and
(ii) below, prepared, in each case in accordance with then-current Generally
Accepted Accounting Principles (other than Capital Contributions, Profits and
Losses and other 

 

11

 

allocations, distributions and other
adjustments with respect to Member’s Capital Accounts, which shall construed,
determined and reported to Members in accordance with this Agreement.)

 

(i)                                   As soon as practicable following the end of
each Company fiscal year (and in any event not later than ninety (90) days
after the end of such fiscal year), a balance sheet of the Company as of the
end of such fiscal year and the related statements of operations, Members’
Capital Accounts and changes therein, and cash flows for such fiscal year,
together with appropriate notes to such financial statements, all of which
shall be audited and certified by the Company’s accountants, and in each case,
to the extent the Company was in existence, setting forth in comparative form
the corresponding figures for the immediately preceding fiscal year.

 

(ii)                                  As soon as reasonably practicable following
the end of each of the first three fiscal quarters of each fiscal year and
following the end of each of the first eleven (11) fiscal months of each fiscal
year (and in any event not later than thirty (30) days after the end of such
fiscal quarter or fiscal month, as the case may be), an unaudited balance sheet
of the Company as of the end of such fiscal quarter or fiscal month, as the
case may be, and the related unaudited statements of operations and cash flows
for such fiscal quarter or fiscal month, as the case may be, and for the fiscal
year to date, in each case, to the extent the Company was in existence, setting
forth in comparative form the corresponding figures for the prior fiscal year’s
fiscal quarter or fiscal month, as the case may be, and the fiscal quarter or
fiscal month, as the case may be, just completed.

 

(B)                                Within 90 days after the end of the Company’s
fiscal year, the Company shall furnish each Member with all information
necessary for the preparation of such portion of their federal income tax
return as it relates to the Company.

 

10.                                 Records.  The Members and their
designated representatives shall be permitted access to Company records at all
reasonable times on reasonable prior notice for the purpose of evaluating or
protecting their investment in the Company or to obtain information necessary
to comply with legal obligations.

 

11.                                 Tax Matters Partner.  The
President, or such person designated by the President from time to time, shall
be the “Tax Matters Partner” as defined in Code §6231(a)(7). The Tax Matters
Partner shall, at the Company’s expense, exercise due diligence on behalf of
the Company in responding to and resisting any Internal Revenue Service
attempts to adjust Company items of income, gain, loss, deduction or
credit.  The specific actions to be
taken by the Tax Matters Partner, including commencement of litigation, shall
be determined by it in its sole discretion. 
At the Company’s expense, the Tax Matters Partner may retain such
counsel and other advisors as it deems necessary in order to promptly respond
to or pursue any Internal Revenue Service inquiry, statement, or other
administrative or judicial proceeding.

 

12.                                 Dissolution of the Company.

 

(A)                              Dissolution.                               The Company shall terminate and be dissolved
upon the first to occur of the following: (i) December 31, 2050; (ii) the sale
or disposition of all or substantially all assets of the Company; (iii) the
determination of at least two members of the Board of Managers; (iv) the determination
of a majority in interest of the Members; (v) upon the Termination of a Member
as provided in Section 5, unless the requisite Members elect to continue the
Company in accordance with the terms thereof; or (vi) by any Member if the
Company has not realized bona fide sales of Brand products of at least
$1,000,000.00 by March 1, 2005,  by
written notice to all Members delivered at any time prior to April 1, 2005.

 

12

 

(B)                                Liquidation.                                Upon the dissolution of the Company, the
President shall proceed to liquidate and wind up the Company.  Subject to the unanimous consent of the
Members, all assets of the Company shall be sold at public or private sale, and
on approved terms and conditions; provided that if the Members are unable to
reach unanimous agreement within 30 days after dissolution (unless extended by
their unanimous consent), all assets of the Company shall be sold by public
auction after at least 30 days’ prior written notice to all of the Members.

 

13.                                 Put Option.

 

(A)                              If one Manager does not agree with all other
Managers on any matter subject to vote under paragraph 6(D)(ii), the Member
whose appointed Manager votes differently (the “Dissenting Member”) from the
other Managers appointed by the other Members (the “Majority Members”) may
require the Company to purchase all, but not less than all, of the Units then
held by the Dissenting Member.  The
Dissenting Member must provide written notice of such election within 30 days
after the vote giving rise to the election, or else the Dissenting Member shall
have waived its right to require the purchase of its Units hereunder with
respect to such vote.  The purchase
shall be effective as of the date of election by the Dissenting Member (the
“Effective Date”).  The purchase price
per Unit payable to the Dissenting Member shall equal 75% of the Unit Value (as
hereinafter determined), and shall be payable in 3 equal annual installments
commencing on the first anniversary of the Effective Date, together with interest
of 8% on the unpaid purchase price.

 

(B)                                At the annual meeting of the Members, the
Members shall, in good faith, attempt to determine by unanimous consent the
Unit Value for purposes of this section 13, provided that the value may be
changed by the unanimous written consent of the Members at any time..  Any value so determined shall remain in
effect until the next determination, but in any event not past the next annual
meeting of Members.  The value so
determined shall be equitably adjusted to reflect any subsequent stock
dividend, stock split, reverse split or similar recapitalization of the
Company.  If no Unit Value under this
subparagraph (B) shall be in effect, the Unit Value shall be the fair market
value per Unit of all of the issued and outstanding Units as determined by
appraisal.  Within 30 days after the
date of the exercise of the put option herein, the Company shall appoint an
appraiser, who shall proceed to determine the value of the Units as of the date
of  the exercise of the put option, and
shall be final and binding upon all interested persons.  The Company shall promptly furnish to the
appraiser such information concerning its financial condition, earnings,
capitalization, business prospects and sales of its capital as it may reasonably
request.  The Company and Dissenting
Member shall each be responsible for one-half of the costs of the appraisal.

 

14.                                 Power of Attorney. 
Each Member hereby irrevocably constitutes and appoints each Officer,
with full power of substitution as his true and lawful attorney in his name,
place and stead to make, execute, acknowledge, file or record any and all
documents necessary or appropriate to duly organize, qualify or maintain the
Company as a limited liability company under the laws of Ohio or any other
applicable jurisdiction, or to record the termination and dissolution thereof,
or to consummate the sale or transfer of any interest in accordance with the
terms hereof or amendment hereto arising therefrom.  It is expressly intended by each of the Members that the power of
attorney granted hereunder is coupled with an interest, and it is agreed that
said power of attorney shall survive the delivery of an assignment by said
Member of the whole or any portion of his interest, provided that the foregoing
power of attorney of the assignor Member shall survive the delivery of such
assignment solely for the purpose of enabling the Members to execute, sign,
acknowledge and file any and all instruments necessary to effect the
substitution of the assignee as a Member.

 

13

 

15.                                 Liability of Officers, Managers and Members.

 

(A)                              Limitation on Liability.                         No Officer, Manager or Member shall be
liable, responsible or accountable in damages or otherwise to the Company or any
Member for any loss, damage, liability or expense incurred by the Company or
Member by reason of any act, alleged act or omission of such Officer, Manager
or Member which was performed in good faith on behalf of the Company in a
manner reasonably believed by it to be within the scope of the authority
granted to it hereunder or by law, and in, or not opposed to, the best
interests of the Company, provided that such Officer, Manager or Member is not
guilty of gross negligence or willful misconduct.

 

(B)                                Indemnification.          The Company hereby agrees to indemnify and
hold harmless each Officer, Manager and Member from and against any claim,
demand, loss, damage, liability or expense by reason of any act, alleged act or
omission performed or omitted by any such party in good faith on behalf of the
Company in a manner reasonably believed it to be within the scope of the
authority conferred by this Agreement or by law and in, or not opposed to, the
best interests of the Company, so long as such party is not guilty of gross
negligence or willful misconduct.

 

16.                                 Public Announcements.                No Member, nor any of their respective
affiliates or representatives, shall issue any press release or public
statement concerning this Agreement, the formation or existence of the Company
or the transactions contemplated hereby without obtaining the prior written or
verbal approval of the other Members, unless such disclosure is required by
applicable law or regulation or by an order from a court of competent
jurisdiction;  provided, however, that
the Member intending to make such release shall give the other Members prior
notice and shall use its best efforts consistent with such applicable law,
regulation or order to consult with the other parties with respect to the text
of any such release of information.

 

17.                                 Counterparts. 
This Agreement may be executed in counterparts which taken together
shall constitute one instrument, notwithstanding the fact that all parties have
not executed this Agreement on the same date or that all signatures do not
appear on the same copy.

 

18.                                 Notices.  All notices, offers,
acceptances, waivers and other communication under this Agreement shall be in
writing and shall be sufficiently given when received and receipted for through
certified mail, return receipt requested, or when personally delivered.  Except as otherwise provided in this
Agreement, time shall be counted to or from the date of personal receipt or the
date certified delivery is indicated as having been made.

 

19.                                 Captions.  Captions are included for
convenient reference only and shall not affect the interpretation of any
provision of this Agreement.

 

20.                                 Severability.  The
invalidity, illegality, or unenforceability of any provision of this Agreement
shall not affect or impair the validity, legality, and enforceability of the
other provisions hereof and the Agreement shall be construed in all respects as
if such invalid or unenforceable provisions were omitted.

 

21.                                 Waiver.  Neither any course of conduct
nor any delay by any of the parties hereto in exercising any rights hereunder
shall waive any rights of such party under this Agreement.

 

22.                                 Modifications. 
This Agreement may be amended only upon the consent of all Members;
provided that the President is hereby authorized to amend this Agreement to
reflect any transfers of Units upon any such transfer.

 

14

 

23.                                 Choice of Law. 
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Ohio, and in particular by ORC Section 1705.01 et
seq., and shall be entered in the record of minutes of the proceedings
of the members of the Company.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first set forth above.

 

	
  Witnessed By:

  	
   

  	
  B-New, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Mike Crowley

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Principal

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TechCom Group, LLC

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Jonathan Anfinsen

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  VP of Operations

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Buhler, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Achim Klotz / /s/Beat
  Haeni

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President / Corp.
  Development

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dakota Growers Pasta
  Company, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Tim Dodd

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President/CEO

  	
   

  
									

 

15

 

Date:
October 31, 2003

 

EXHIBIT
A

 

	
  Member

  	
   

  	
  Aggregate

  Cash Contribution

  	
   

  	
  Units

  	
   

  
	
  B-New, LLC

  	
   

  	
  $

  	
  280.00

  	
   

  	
  28

  	
   

  
	
  TechCom Group, LLC

  	
   

  	
  $

  	
  240.00

  	
   

  	
  24

  	
   

  
	
  Buhler, Inc.

  	
   

  	
  $

  	
  240.00

  	
   

  	
  24

  	
   

  
	
  Dakota Growers Pasta Company, Inc.

  	
   

  	
  $

  	
  240.00

  	
   

  	
  24

  	
   

  

 

16

 

Date:
October 31, 2003

 

EXHIBIT
B

 

 

Confidential
Treatment Requested.

 

17Exhibit
10.2

 

CONFIDENTIAL TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED

AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION.

 

 

EXCLUSIVE
MANUFACTURING AGREEMENT

 

This Exclusive Manufacturing
Agreement (this “Agreement”) is made as of this 26th day of December, 2003 (the
“Effective Date”), by and between Dakota Growers Pasta Company, Inc., a North
Dakota corporation (“Dakota Growers”), and DNA Dreamfields Company, LLC, an
Ohio limited liability company (“DNA”).

 

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 (“TechCom”), 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
desires to manufacture, on an exclusive basis, dry pasta products under the
Brand (the “Products”), and DNA desires that Dakota Growers so manufacture, on
an exclusive basis, the Products, upon the terms and subject to the conditions
of this 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, marketing, sale and distribution of the Products; and

 

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.

 

NOW,
THEREFORE,  in consideration of the mutual covenants
hereinafter expressed, the parties agree as follows:

 

1.                                       Exclusive Product Manufacture.  The
types of Products are set forth on Exhibit A hereto, as Exhibit A
may from time to time be updated by the mutual written agreement of DNA and
Dakota Growers.  During the Term (as
defined in Section 2 hereof), subject to the terms and conditions of
this Agreement, Dakota Growers hereby agrees to manufacture, on an exclusive
basis, all of the Products necessary to meet the Forecasted Market Demand (as
defined in Section 4 hereof) for each period covered by a Three-Month
Forecast (as defined in Section 4 hereof), to the extent such Forecasted
Market Demand materializes within such period covered by such Three-Month
Forecast.  During the Term (as defined
in Section 2 hereof), DNA hereby agrees not to: (a) directly or
indirectly manufacture the Products for its own account; or (b) directly or
indirectly enter into any agreements, arrangements or

 

1

 

relationships (i) with any third parties
(other than Dakota Growers) to develop or manufacture the Products, or any
products that are competitive with the Products or (ii) that would enable
any third party to develop or manufacture the Products, or any products that
are competitive with the Products. 
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 the manufacture of the Products.  DNA and Dakota Growers hereby acknowledge
that the technology being sublicensed by DNA to Dakota Growers pursuant to the
terms and conditions of the Technology Sublicense is owned by TechCom and is
being licensed by TechCom to DNA.

 

2.                                       Term.  This Agreement shall commence
on the Effective Date and shall continue in force and effect so long as the
Trademark License is in force and effect, subject to early termination as
provided in Section 8 hereof (the “Term”).

 

3.                                       Manufacturing
Procedures; Title to Products; Etc.

 

3.1                                 Specifications. 
Dakota Growers shall manufacture the Products in accordance with such
specifications as are set forth on Exhibit B hereto (the
“Specifications”), to the extent not inconsistent with applicable law, and
shall maintain sufficient capacity to manufacture sufficient quantities of the
Products to meet the Forecasted Market Demand (as defined in Section 4
hereof) for each period covered by a Three-Month Forecast (as defined in Section
4 hereof).  Dakota Growers may not
make any changes to Specifications without the prior written approval from
DNA.  DNA may from time to time make
reasonable alterations or modifications to the Specifications by written notice
thereof to Dakota Growers, but only to the extent that such alternations or
modifications do not materially disrupt Dakota Growers’ operations or result in
the incurrence by Dakota Growers of unreasonable costs and expenses in
implementing such alterations and modifications.

 

3.2                                 Responsibilities. 
Subject to the terms and conditions of this Agreement, Dakota Growers
shall be responsible for all facets of the manufacture of the Products,
including, without limitation, the ordering and purchasing of all raw materials
required to produce the Products.

 

3.3                                 Orders; Pricing; Shipment; Title and Risk of
Loss.  Except as provided otherwise  in any written agreement by and between DNA
and Dakota Growers:

 

(a)                                  DNA shall order Products from Dakota Growers
by the issuance of separate purchase orders (each, a “Purchase Order”) for Products,
which Purchase Orders shall contain terms consistent with this Agreement except
as provided otherwise in any written agreement by and between DNA and Dakota
Growers.  Such Purchase Orders shall be
in form and substance satisfactory to Dakota Growers, as determined in Dakota
Growers sole and absolute discretion. 
Each Purchase Order shall designate the desired types and quantities of
Products, delivery dates and destinations, and shall be submitted to Dakota Growers
at least fifteen (15) days prior to the delivery date specified in such
Purchase Order.  At the time DNA has
issued a Purchase Order for a specified amount of Products and Dakota Growers
has accepted such Purchase Order, DNA shall be committed to purchase the entire
amount of the Products ordered and the Purchase Order shall become irrevocable.

 

(b)                                 Title in and to Products shall pass from
Dakota Growers to DNA, and the risk of loss of, or damage to, such Products
shall pass to DNA, in accordance with the terms and conditions set forth in the
Purchase Order covering such Products, but not prior to delivery to the shipper
unless agreed to in writing by DNA and Dakota Growers.

 

2

 

(c)                                  The pricing for Products manufactured by
Dakota Growers pursuant to this Agreement is set forth on Exhibit C
hereto (as Exhibit C hereto may from time to time be amended by the
written agreement of DNA and Dakota Growers). Dakota Growers shall invoice DNA
upon transfer of title and based on the pricing set forth on Exhibit C
hereto, for the amount of Products so transferred.  Each such invoice shall describe the number of type of Products
so transferred by Dakota Growers. 
Within thirty (30) days of receipt of an invoice delivered by Dakota
Growers pursuant to this subsection (c), DNA shall remit to Dakota
Growers the amount set forth therein.

 

(d)                                 The pricing set forth on Exhibit C
hereto for Products manufactured by Dakota Growers pursuant to this Agreement
is F.O.B. (as defined by the Uniform Commercial Code) the location where such
Products are actually manufactured by Dakota Growers, and transportation of
such Products from such location is the responsibility of DNA.  DNA shall be responsible for making
arrangements, including, but not limited to, the retention of a carrier, to
ship Products on the delivery date specified in the Purchase Order relating to
such Products.  DNA shall be responsible
for the accuracy of all shipping instructions sent to Dakota Growers.  For non-standard shipments such as
drop-shipments to multiple locations or exports, DNA shall provide Dakota
Growers with bills of lading, shipping and export documents, as required.

 

3.4                                 Other Branded Products.  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 grant Dakota Growers with exclusive
manufacturing rights in respect of such Branded products.

 

4.                                       Forecasts.  No later than five
(5) business days prior to the
first day of each calendar month during the Term, DNA will provide Dakota
Growers with a non-binding, rolling three-month forecast of the quantities of
Products that DNA reasonably anticipates will be necessary to meet market
demand for Products during the three-month period covered thereby (each, a
“Three-Month Forecast”).  Dakota Growers
shall have three (3) business days from the date of receipt of a Three-Month
Forecast to review such Three-Month Forecast and make and communicate to DNA in
writing any reasonable good-faith adjustments to such Three-Month
Forecast.  Any reasonable adjustments
made in good faith by Dakota Growers to a Three-Month Forecast shall
automatically be incorporated into such Three-Month Forecast.  The quantities of Products that are
reasonably anticipated to be necessary to meet market demand for Products
during a three-month period covered by a Three-Month Forecast shall be deemed
to be the “Forecasted Market Demand” in respect of such three-month period.

 

5.                                       Warranties.

 

5.1                                 Dakota Growers represents and warrants to DNA
that all Products manufactured by Dakota Growers pursuant to this Agreement
shall have been manufactured in accordance with the Specifications (to the
extent not inconsistent with applicable law) and applicable law.

 

5.2                                 Dakota Growers represents and warrants to DNA
that all Products manufactured by Dakota Growers pursuant to this Agreement are
in accordance with the applicable law and legal regulations of the country of
origin and, prior to distribution to a country other than the country of
origin, of destination.

 

5.3                                 EXCEPT AS OTHERWISE SET FORTH IN THIS
AGREEMENT, DAKOTA GROWERS HEREBY DISCLAIMS ALL WARRANTIES, EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION, THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE WITH

 

3

 

RESPECT TO ANY PRODUCTS FURNISHED UNDER OR IN
CONNECTION WITH THIS AGREEMENT.

 

5.4                                 NO REPRESENTATION OR OTHER AFFIRMATION OF
FACT MADE BY DAKOTA GROWERS, INCLUDING, BUT NOT LIMITED TO, STATEMENTS
REGARDING SUITABILITY FOR USE OR PERFORMANCE OF THE PRODUCTS, SHALL BE DEEMED
TO BE A WARRANTY BY DAKOTA GROWERS FOR ANY PURPOSE OR TO GIVE RISE TO ANY
LIABILITY OF DAKOTA GROWERS WHATSOEVER.

 

5.5                                 EXCEPT FOR DAMAGES ARISING DIRECTLY FROM A
BREACH OF THE WARRANTY SET FORTH IN SECTIONS 5.1 AND 5.2 HEREOF, IN NO
EVENT SHALL ONE PARTY BE LIABLE TO THE OTHER BE LIABLE FOR ANY LOSS, DAMAGE OR
EXPENSE THAT RESULTS FROM THE SALE, USE OR PERFORMANCE OF THE PRODUCTS THAT
CONFORM WITH THE SPECIFICATIONS, INCLUDING, BUT NOT LIMITED TO:  (A) INCIDENTAL, INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES, OR (B) ANY DAMAGES WHATSOEVER RESULTING FROM PERSONAL
INJURY, WHETHER IN AN ACTION BASED ON CONTRACT OR TORT, OR OTHERWISE INCLUDING,
BUT NOT LIMITED TO, PRODUCTS LIABILITY OR NEGLIGENCE OR STRICT LIABILITY.

 

5.6                                 DNA hereby agrees to indemnify Dakota Growers
against, and hold Dakota Growers harmless from, any and all losses, damages and
expenses (including, but not limited to, reasonable attorneys’ fees) incurred
or suffered by Dakota Growers relating to or arising out of or in connection
with the sale, use or performance of the Products that conform with the
Specifications, including, but not limited to, incidental, indirect or special
damages or any damages whatsoever resulting from personal injury, whether in an
action based on contract or tort, or otherwise including, but not limited to,
products liability or negligence or strict liability.

 

6.                                       Force Majeure.

 

Neither Dakota Growers nor
DNA shall be held responsible for damages caused by a breach of this Agreement
due to conditions beyond their reasonable control, such as fires, strikes,
floods, acts of God, wars, riots, insurrections, governmental restrictions or
other lawful acts of public authorities.

 

7.                                       Confidential Information.

 

7.1                                 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 (including, but not limited to,
formulae and the Specifications), 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; or

 

(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; or

 

(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.

 

4

 

7.2                                 The parties agrees 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.

 

7.3                                 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.

 

8.                                       Termination and
Survival.

 

8.1                                 Termination for Insolvency.  If
a party (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 any party hereto other
than the Insolvent Party, with termination effective immediately upon written
notice to the Insolvent Party.

 

8.2                                 Breach; Mutual Agreement.  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 Dakota
Growers may have in the event of any such breach, Dakota Growers shall be
entitled to temporary and permanent 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.  In addition, this Agreement may be
terminated by the mutual written consent of each of DNA and Dakota Growers.

 

8.3                                 Survival.  Termination or expiration 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, expiration or non-renewal hereof.  The provisions of Sections 5, 6,
7 and 8 shall survive the termination or expiration of this
Agreement and remain in full force and effect thereafter.

 

9.                                       Miscellaneous.

 

9.1                                 Notices. Any notice or other communication hereunder shall be in writing and
shall be deemed given when so delivered in person, by overnight courier (with
receipt confirmed), by facsimile transmission (with receipt confirmed by
telephone or by automatic transmission report) or upon receipt if sent by
certified mail, return receipt requested, as follows (or to such other persons
and/or addresses as may be specified in writing, by proper notice, to the other
party hereto):

 

5

 

	
  If
  to Dakota Growers:

  	
   

  	
  Dakota
  Growers Pasta Company, Inc.

  
	
   

  	
   

  	
  One
  Pasta Avenue

  
	
   

  	
   

  	
  Carrington,
  ND 58421

  
	
   

  	
   

  	
  Attention:  Thomas P. Friezen

  
	
   

  	
   

  	
  Telephone:
  (701) 652-4893

  
	
   

  	
   

  	
  Facsimile:
  (701) 652-3701

  
	
   

  	
   

  	
   

  
	
  With
  copies to:

  	
   

  	
  Lindquist
  & Vennum P.L.L.P.

  
	
   

  	
   

  	
  4200
  IDS Center

  
	
   

  	
   

  	
  Minneapolis,
  MN  55402

  
	
   

  	
   

  	
  Attention:  Ronald D. McFall

  
	
   

  	
   

  	
  Telephone:
  (612) 371-3551

  
	
   

  	
   

  	
  Facsimile:  (612) 371-3207

  
	
   

  	
   

  	
   

  
	
  If
  to DNA:

  	
   

  	
  DNA
  Dreamfields Company, LLC

  
	
   

  	
   

  	
  14
  West Park Place

  
	
   

  	
   

  	
  Oxford,
  OH 45056

  
	
   

  	
   

  	
  Attention:
  Mike Crowley

  
	
   

  	
   

  	
  Telephone:
  (513) 524-9256

  
	
   

  	
   

  	
  Facsimile:
  (513) 524-5167

  
	
   

  	
   

  	
   

  
	
  With
  copies to:

  	
   

  	
  Ulmer
  & Berne LLP

  
	
   

  	
   

  	
  600
  Vine Street

  
	
   

  	
   

  	
  Suite
  2800

  
	
   

  	
   

  	
  Cincinnati,
  OH 45201

  
	
   

  	
   

  	
  Attention:
  Scott P. Kadish

  
	
   

  	
   

  	
  Telephone:
  (513) 762-6200

  
	
   

  	
   

  	
  Facsimile:
  (513) 762-6245

  

 

9.2                                 Entire Agreement; Amendment.  The
parties hereto acknowledge that this Agreement, together with all exhibits and
schedules attached hereto, sets forth the entire agreement and understanding of
the parties and supersedes all prior written or oral discussions, agreements or
understandings with respect to the subject matter of this Agreement.  No modification of any of the terms of this
Agreement, or any amendments thereto, shall be deemed to be valid unless in
writing and signed by the party against whom enforcement is sought.  No course of dealing or usage of trade shall
be used to modify the terms and conditions herein.

 

9.3                                 Waiver.  No waiver by either party of
any default shall be effective unless in writing, nor will any waiver operate
as a waiver of any other default or of the same default on a future occasion.

 

9.4                                 Obligations to Third Parties.  Each
party warrants and represents that its undertaking under this Agreement do not
violate any of its contractual obligations, express or implied, undertaken with
any third party.

 

9.5                                 Assignment.  Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
successors or permitted assigns of each of the parties; provided, however,
that the rights and obligations of the parties hereto may not be assigned or transferred
(including, without limitation, by virtue of the merger or sale of all or
substantially all of the assets of a party hereto) without the prior written
consent of the other party, which consent will not be unreasonably withheld
and, provided, further, that, 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 DNA or its successors and assigns) by DNA

 

6

 

or any or DNA’s permitted successors or
assigns of the Trademark License or the Technology Sublicense, this Agreement
shall concurrently therewith be assigned to such assignee of the Trademark
License or the Technology Sublicense. 
It is the intent that this Agreement, the Trademark License and the
Technology Sublicense shall survive any assignment or transfer of the Brand.

 

9.6                                 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 DNA; 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 DAKOTA GROWERS.  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 DNA, 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 DAKOTA GROWERS.  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.

 

9.7                                 Severability.  If
any provision hereof should be held invalid, illegal or unenforceable in any
respect by a court of competent jurisdiction, then, to the fullest extent permitted
by law, all other provisions hereof shall remain in full force and effect and
shall be liberally construed in order to carry out the intentions of the
parties hereto as nearly as may be possible.

 

9.8                                 Headings, Interpretation.  The
headings used in this Agreement are for convenience only and are not a part of
this Agreement.

 

9.9                                 Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.

 

* * * * *

 

7

 

IN WITNESS WHEREOF, the
parties hereto have each caused this Exclusive Manufacturing Agreement to be
executed by their duly authorized officers as of the date 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

  	
   

  
					

 

8

 

EXHIBIT A

TYPES OF PRODUCTS

 

Confidential Treatment Requested.

 

9

 

EXHIBIT B

PRODUCT SPECIFICATIONS

 

Confidential Treatment Requested.

 

10

 

EXHIBIT C

PRICING

 

 

Confidential Treatment Requested.

 

11

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