Exclusive Manufacturing Agreement

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 Growers92 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



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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 Growers92 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.



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(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 fo ...