<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended July 31, 1997
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
----------------------------
Commission File No. 33-99834
----------------------------
DAKOTA GROWERS PASTA COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
North Dakota 45-0423511
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
One Pasta Avenue, P.O. Box 21, Carrington, ND 58421-0021
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(701) 652-2855
(REGISTRANT'S TELEPHONE NUMBER)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
----------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The number of shares outstanding of the issuer's classes of common stock
was 1,085 shares of membership stock, par value $125.00, and 7,356,059 shares of
equity stock, par value $2.50, outstanding as of October 31, 1997. As there is
only a limited, private market for shares of the Registrant's stock and the
Registrant does not obtain information regarding the transfer price in
transactions between its members, the Registrant is not able to estimate the
aggregate market value of the Registrant's shares held by non-affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
None.
<PAGE>
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENT SCHEDULES
None
REPORTS ON FORM 8-K
The Company was not required to and did not file any reports on Form 8-K
during the three months ended July 31, 1997.
EXHIBITS
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<S> <C> <C>
3/ 3.1 Certified Articles of Incorporation of Dakota Growers Pasta
Company.
3/ 3.2 Bylaws of Dakota Growers Pasta Company.
3/ 10.1 Form of Growers Agreement between the Company and members of the
Company.
4/ 10.2 Loan Agreement in the aggregate amount of $41,409,007.58 dated
March 31, 1997, between the Company and St. Paul Bank for
Cooperatives.
4/ 10.3 Nonnegotiable Note of Dakota Growers Pasta Company in the
principal amount of $5,000,000.00 dated March 31, 1997.
4/ 10.4 Real Estate Mortgage executed by Dakota Growers Pasta Company to
the St. Paul Bank for Cooperatives in the amount of $42,000,000
dated May 15, 1997.
1/ 10.5 Series A Preferred Stock Purchase Agreement dated October 28,
1992 between the Company and the State of North Dakota acting by
and through North Dakota Future Fund, Inc., including Amendment
to Preferred Stock Purchase Between Dakota Growers Pasta Company
and North Dakota Future Fund dated August 26, 1995.
1/ 10.6 Loan Agreement in the aggregate amount of $100,000 dated February
5, 1993 between the Company and Dakota Central Telecommunications
Cooperative.
1/ 10.7 Promissory Note in the principal amount of $100,000 dated
February 5, 1993 between the Company and Dakota Central
Telecommunications Cooperative.
1/ 10.8 Loan Agreement in the aggregate amount of $100,000 dated February
5, 1993 between the Company and Tri-County Electric Cooperative,
Inc.
1/ 10.9 Promissory Note in the principal amount of $100,000 dated
February 5, 1993 between the Company and Tri-County Electric
Cooperative, Inc.
5/ 10.10 Indenture of Lease between RLN Leasing, Inc. and Dakota Growers
Pasta Company, dated May 1, 1997.
2/ 10.11 Lease Agreement between Congress, Inc. and Dakota Growers Pasta
Company, dated March 13, 1995.
1/ 10.12 Sample Broker Agreement between Dakota Growers Pasta Company and
Sinco, Inc. dated May 1, 1995.
5/ 10.13 Agreement between Dakota Growers Pasta Company and JP
Foodservice, Inc. dated March 7, 1997.
10.14 Consulting Agreement between Dakota Growers Pasta Company and
Peninsula Trading Company, Inc. dated October 15, 1997.
23.1 Consent of Independent Auditors, see Independent Auditor's Report
on page 15.
27 Financial Data Schedule, which is submitted electronically to the
Securities and Exchange Commission for information only and not
filed.
</TABLE>
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2
<PAGE>
1/ Incorporated by reference from the Company's Registration Statement on Form
S-1, File No. 33-99834, declared effective January 26, 1996.
2/ Incorporated by reference from the Company's Registration Statement on Form
S-1, File No. 33-99834, declared effective January 26, 1996. Confidential
treatment was granted with respect to portions of these agreements.
3/ Incorporated by reference from the Company's Quarterly Report on Form 10-Q,
File No. 33-99834, for the quarterly period ended January 31, 1997.
4/ Incorporated by reference from the Company's Quarterly Report on Form 10-Q,
File No. 33-99834, for the quarterly period ended April 30, 1997.
5/ Confidential treatment has been requested with respect to portions of these
agreements.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dakota Growers Pasta Company
Dated: September 30, 1998 By /s/ Timothy J. Dodd
---------------------------------
Timothy J. Dodd,
President and General Manager,
And Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Timothy J. Dodd General Manager September 30, 1998
- -------------------------- (Principal Executive Officer)
Timothy J. Dodd
/s/ Thomas P. Friezen Vice President - Finance September 30, 1998
- -------------------------- (Principal Financial and Accounting
Thomas P. Friezen Officer)
/s/ John S. Dalrymple III Director September 30, 1998
- --------------------------
John S. Dalrymple III
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John D. Rice, Jr. Director September 30, 1998
- --------------------------
John D. Rice, Jr.
/s/ Curt R. Trulson Director September 30, 1998
- --------------------------
Curt R. Trulson
/s/ Allyn K. Hart Director September 30, 1998
- --------------------------
Allyn K. Hart
/s/ Roger A. Kenner Director September 30, 1998
- --------------------------
Roger A. Kenner
/s/ James F. Link Director September 30, 1998
- --------------------------
James F. Link
/s/ Eugene J. Nicholas Director September 30, 1998
- --------------------------
Eugene J. Nicholas
/s/ Jeffrey O. Topp Director September 30, 1998
- --------------------------
Jeffrey O. Topp
/s/ Michael E. Warner Director September 30, 1998
- --------------------------
Michael E. Warner
</TABLE>
4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<S> <C>
10.10 Indenture of Lease between RLN Leasing, Inc. and Dakota Growers Pasta
Company, dated May 1, 1997.*
10.13 Agreement between Dakota Growers Pasta Company and JP Foodservice,
Inc. dated March 7, 1997.*
10.14 Consulting Agreement between Dakota Growers Pasta Company and
Peninsula Trading Company, Inc. dated October 15, 1997.
</TABLE>
- ------------------
* Portions of these agreements have been omitted pursuant to a request for
confidential treatment.
5
<PAGE>
CERTAIN MATERIALS HAVE BEEN OMITTED AND
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED THEREFOR
Exhibit 10.10
INDENTURE OF LEASE
THIS INDENTURE OF LEASE, entered into, in duplicate, this 1st day of
May, 1997, by and between RLN LEASING, INC., (hereafter collectively called
"Landlord"), and DAKOTA GROWERS PASTA COMPANY, INC. a corporation organized
under the laws of the State of North Dakota with principal offices at One
Pasta Avenue, Carrington, North Dakota, 58421 (hereafter "Tenant");
WITNESSETH;
It is covenanted and agreed that in addition to the below listed
covenants, that this lease replaces and supersedes the lease between the above
listed parties dated October 12, 1995.
1. PREMISES. Landlord, for and in consideration of the rents
hereafter reserved and of the covenants and agreements of Tenant hereafter
contained, has demised and leased and by these presents does demise and lease
unto Tenant for the term hereafter set forth, 137,580 sq. ft. of warehouse
space located at 4001 32nd Street North, Fargo, North Dakota. In addition to
the aforementioned square footage of warehouse area, this lease is also to
include the office portion, both upper and lower floors approximately 4,600
in square footage. The total square footage of the building shall be 281,580
sq. ft., and the Tenant's location is shown in Exhibit A and described on
Exhibit C. The build-out of the Tenant's space shall be shown on this
agreement as Exhibit B.
2. (A) ORIGINAL TERM. Tenant shall have and hold the demised
premises described in Exhibit A hereof together with all the improvements
thereon and all rights, privileges, easements and appurtenances thereunto
attached and belonging, for and during the original term of five (5) years
(as hereafter defined) commencing upon the date as hereafter provided.
(B) OPTIONS TO EXTEND. Tenant shall have the right and privilege
at its election to extend the original term of the lease for one successive
additional two year period. The option period shall automatically commence
unless Tenant provides Landlord with written notice of its election not to
extend not less than 90 days prior to the expiration of the original term.
All such extensions shall be upon all the terms, covenants and agreements
contained in this Indenture of Lease. Additional extensions beyond the option
period shall be permitted only upon the express written agreement of the
parties hereto.
3. LEASE YEAR. The parties agree hereto that the term "lease year"
shall refer to the year commencing on the 1st day of May, 1997, and shall end
on the 30th day of April, 2002. The term "rent commencement date" as used
herein, shall be the first day of the lease year.
4. (A) ORIGINAL TERM. Tenant covenants commencing on the rent
commencement date to pay Landlord at such place as may be designated in
writing from Landlord to Tenant from time to time and annual rent for the
initial term of this lease, [*****], INCLUDES OFFICE @ $[****] per month, in
twelve equal installments of $[****], each installment payable in advance on
or before the commencement date of this lease and on or before the monthly
anniversary of said commencement date, subject to the adjustment provisions
hereafter set out. Until further notice, the rent shall be payable to:
RLN LEASING, INC.
2719 40th Avenue North
Fargo, North Dakota 58102
[* - Confidential Treatment Requested]
<PAGE>
(B) RENT FOR THE OPTIONAL TERM. The annual rental for the option
period may be the same as the original term. However, Landlord reserves the
right to make modifications to the rent for increases in real estate taxes
and special assessments, interest rates, and energy costs, Insurance costs.
(Set a base period, verses the 1997)
(C) REAL ESTATE TAXES. Landlord shall pay each year the full
amount of the real estate taxes and special levies and assessments (including
area assessments) levied during the term of this lease or the extension
thereof and assessed against and attributable to the demise premises.
(D) INSURANCE. Landlord shall procure and maintain during the
term of this lease, a policy or policies of insurance, insuring Landlord, any
mortgagee, and Tenant, as their interest may appear, against fire and
expended coverage risks covering demised premises, which coverage shall be
for the full insurable replacement value thereof doing the term of this
lease. Such insurable shall not be subject to cancellation except after 30
days prior written notice to Landlord, Tenant and any mortgagee.
Tenant shall self-insure or procure and maintain during the term of this
Lease, at its own cost and expense a policy or policies of insurance,
insuring Landlord, and mortgagee, and Tenant, as their interest may appear,
against fire and extended coverage risks covering the Tenant's personal
property at the demised premises, which coverage shall be for the full
replacement value of thereof doing the term of this lease. Such insurance
shall not be subject to cancellation, except after 30 days prior written
notice to Landlord, Tenant and any mortgagee. For policies of insurance to be
provided by Tenant, notice of renewal of such policies, or certificates in
lieu thereof, shall be deposited with Landlord not less than 10 days prior to
the expiration of the term of such coverage. Any reasonable counsel fees,
charges or costs involved in collecting the proceeds of casualty insurance
policies provided by the Tenant shall be borne by Tenant, and Tenant shall
have the obligation to proceed with the collection of said proceeds to the
full replacement value of such damages, including suit, if necessary.
5. USE OF DEMISED PREMISES. Tenant may use the demised premises for
the storage of pasta and pasta related products and any other related food
items, the storage of equipment, and such other uses are consistent with
operating a commercial food warehouse.
6. CARE OF PREMISES. Tenant covenants and agrees that it will not
use or occupy said demised premises or any part thereof for the term of this
lease or any extension thereof in such hazardous manner that any building or
improvement thereon of which said demised premises are a part will not be
insurable by the responsible insurance companies against loss or damage by
fire, extended coverage and broad form perils for the fair insurable value
thereof. Tenant further agrees that upon the expiration or termination of
this lease or any extension thereof in any manner, it will surrender
immediate possession of said demised premises to Landlord in good condition,
loss by fire not caused by Tenant, tornado, act of God, or other unavoidable
casualty and ordinary wear excepted, and that it will deliver the keys to
said premises at the place where the rent reserved herein is payable.
7. HAZARDOUS MATERIALS.
(A) DEFINITIONS: As used in this paragraph, the following terms
shall mean:
1. "Hazardous Materials" shall mean (a) asbestos in any form;
(b) urea formaldehyde foam insulation; (c) transformers of other equipment
which contain dielectric fluid containing levels or polychlorinated biphenyls
in excess of 50 parts per million; or (d) any other chemical, material or
substance which is (i) present in amounts in excess of what is permitted or
deemed safe
<PAGE>
under Applicable Law, or (ii) handled, stored or otherwise used in any way
which is prohibited or deemed safe under Applicable Law.
2. "Applicable Law" shall mean any law, rule order,
ordinance, or regulation of any federal, state, county, regional, local, or
other governmental authority.
(B) RESTRICTIONS. Tenant, from the date of this lease, shall not
install, store (including without limitation, storage in underground tanks),
use, treat, transport, or dispose (or knowingly permit or acquiesce in the
installation, storage, use treatment, transportation or disposal by Tenant,
its agents, employees, independent contractors or tenants) on the Leased
Premises any Hazardous Materials. In the event of any subsequent
installation, storage, use, treatment, presence, transportation or disposal
of any hazardous materials by Tenant, or any employees, agents, contractors
or third parties, whether or not known by Tenant, Tenant shall remove any
Hazardous Materials and otherwise comply with Applicable Law, all at the
expense of Tenant. Tenant, for acts done by Tenant from the date of this
lease shall indemnify Landlord and hold Landlord harmless from and against
all loss, damage, and expenses (including, without limitation, reasonable
attorney's fees and costs incurred in the investigation, defense, and
settlement of claims) that Landlord may incur as a result of or in connection
with the assertion against Landlord or the demised premises of any claim
relating directly or indirectly, in whole or in part, to the presence or
removal of any Hazardous Materials, or relating to any activity on or off
demised premises carried by Tenant or any of its employees, agents,
contractors, or third parties, if such activity involved Hazardous Materials,
in whole or in part, directly or indirectly, or noncompliance with any
Applicable Law which relate to acts of Tenant after the date of this Lease.
Tenant's obligations and liabilities under this paragraph shall continue so
long as Landlord remains responsible for any spills, emissions, or discharges
of hazardous substances or wastes at or from the demised premises that occur
during the term of this paragraph shall be restrainable by injunction.
8. REPAIRS AND MAINTENANCE.
(A) TENANT'S REPAIRS. Tenant shall throughout the term of this
lease and any extension thereof at its own cost and expense provide the
maintenance and ordinary repair to the interior of the demised premises,
including door and windows and plumbing fixtures, except for structural
defects and repairs which shall be the responsibility and expense of
Landlord. Tenant shall also be responsible for annual maintenance to the
heating and air conditioning system. Tenant shall replace any broken glass
with glass of like kind. Tenant shall also be responsible for repairs to and
shall respond to any calls regarding their alarm system and shall be
responsible for any service work or monthly charges for the alarm system.
(B) LANDLORD'S REPAIRS. Landlord shall be responsible for the
structural maintenance and repair of the roof, foundation and exterior walls
of demised premises and for any and all structural parts of demised premises.
In addition, Landlord shall maintain, repair and replace all utilities,
conduits, fixtures, facilities and equipment to the outside walls or sulfurs
of the building situated on the demised premises.
Landlord further agrees to maintain and repair the parking lot,
sidewalks and service drives in and about the premises, if any, including
landscaping, snow removal, cleaning and drainage, as appropriate.
9. ALTERATIONS. Tenant shall not make any alterations in or
additions to the interior or exterior of the demised premises nor make any
contract therefor without first securing Landlord's written consent which
will not be unreasonably withheld and delivering to Landlord the Plans and
Specifications and furnishing indemnification against all liens, costs
damages and expenses, as may by reasonably required by Landlord. All
alterations, additions, improvements and fixtures other than Tenant's trade
fixtures which may be made
<PAGE>
or installed by either Landlord or Tenant on the demised premises as a part
thereof without disturbance, molestation or injury at the termination of the
term of the lease, whether be lapse of time or otherwise, all without
compensation or credit to Tenant.
10. ASSIGNMENT AND SUBLEASE. Tenant may not assign this lease or
sublease any of the demised premises without the prior written consent of
Landlord, which shall not be unreasonably denied. No such assignment or
subletting shall release the Tenant from the full payment and performance of
each and every covenant, agreement and obligation herein contained on
Tenant's part to by performed.
11. TRADE FIXTURES. Trade fixtures, equipment, furniture and
furnishings, except floor covering, that may have been or may be installed by
Tenant in demised premises shall not become a part thereof, whether affixed or
annexed or not, but Tenant shall, at its own costs and expense, repair any
and all damage to demised premises resulting from or cause by the removal
thereof from the demised premises. Any floor coverings shall be considered to
be a part of the premises and shall not be removed except in the case of
replacement by equivalent or better floor covering acceptable to Landlord.
12. ADDITIONAL INSURANCE.
(A) Tenant shall self-insure or procure and maintain at its own
expense, such insurance may by necessary to indemnify Landlord as to claims
which might be asserted against the demised premises or the owners thereof by
reason of the Tenant's use thereof, all as hereafter provided.
(B) Tenant shall self-insure or procure and pay for public
liability insurance in responsible companies in an amount not less that
$1,000,000.00 to any one person or $1,000,000.00 on any one accident and
$300,000.00 property damage insurance. For policies of insurance procured by
Tenant from third parties, the original policy or policies or certificates in
lieu thereof shall be furnished by Tenant to Landlord bearing a notation
evidencing the payment of premiums or accompanied by other evidences of
payment of the premiums satisfactory to Landlord.
(C) Not less than ten days prior to the expiration of any such
policy or policies procured from third parties, evidence of the renewal of
such policy or policies, or a new certificate, together with evidence of the
payment or premiums for the renewal period or new policy, as the case may be,
shall be delivered to the Landlord. All such insurance shall contain an
agreement by the insurance company that the policy or policies will not be
canceled, or the coverage changed without ten day's written notice to
Landlord.
(D) Tenant, its successors and assigns, shall carry Worker's
Compensation Insurance as may be required to cover liability to employees as
imposed by the statutes of any state of municipality or by reason of any
federal regulation.
(E) Should any intoxicating beverages at any time be sold or
served upon the premises, Tenant shall carry dram shop insurance to the
extent of the maximum statutory liability.
(F) Any policies and certificates of insurance from third party
insurers shall also designate as insured, Landlord, Landlord's mortgagee, and
Tenant, as their interests may appear.
13. UTILITIES. Landlord agrees to pay the tenants utilities associated
with the leasing of the facility and as provided here within including
electricity for normal warehouse lighting rated at 10 candle power per square
foot, provided, however, Landlord's responsibility to pay for Tenant's
electricity usage is limited to 96,096 kilowatt hours of electrical usage
during any "lease term" as provided free of charge by Landlord, Landlord
will, on a
<PAGE>
monthly basis, furnish during the remainder of the "lease term," Tenant
within ten (10) days of Landlord's receipt of the electrical bill a separate
billing for kilowatt hours in excess of 96,096 kilowatt hours per lease term
representing Tenant's electrical costs not paid by the Landlord pursuant this
section. Tenant shall have ten (10) days after Landlord's date of billing to
pay such utilities directly to the Landlord. Tenant's failure to do so will
constitute additional rent which shall become due and payable immediately and
the Tenant's failure to pay the same shall be considered a default of this
lease. "Lease term" shall be 365 day intervals commencing upon the acceptance
of the facility as provided in Article 3 and for 365 days thereafter.
Subsequent "lease terms" shall be 365 days thereafter. Tenant shall also be
responsible for water, sewer and garbage charges.
Tenant shall pay and discharge as the same become due, all charges for
telephone and telephone services which shall, during the term of this lease,
be levied, assessed, charged or imposed upon or against the demised premises.
Tenant shall also be responsible for any telephone charges and maintenance in
connection with the alarm system.
14. INSPECTION BY LANDLORD. Landlord or their agents may have free
access to said premises at all reasonable times and under reasonable
restrictions for the purpose of examining the same or of inspecting the use
by Tenant of the same or to see if the terms of this lease or extension
thereof are being observed by Tenant, and the Landlord at any time within 90
days before the expiration or sooner termination of the term of this lease or
any extension thereof, may enter upon said premises and affix to the exterior
o the same the ordinary and usual sign or signs for the sale or reletting of
said premises; and Tenant will not remove said sign or signs and will permit
all persons having written authority therefor from landlord to view said
premises at all reasonable hours.
15. FIRE OR OTHER CASUALTY. If during the term of this lease, the
demised premises should be damaged or destroyed by reason of fire, casualty
or any other cause so as to be rendered wholly or partially untenable, the
Landlord shall promptly repair, rebuild and restore the demised premises to
the condition it was in preceding the fire or other casualty or other cause,
such as repairing, rebuilding and restoration to be subject to and in
conformance with all municipal and other governmental regulations, ordinances,
laws, rules, permits and requirements existing at the time of such
repairing, rebuilding and restoration. Landlord shall complete the repairs
and restoration, the rent payable by Tenant shall be abated in proportion to
the extent Tenant shall be reasonably unable to conduct its business from the
demise premises. If the building shall by reason of such fire or other
casualty be damaged in excess of 50% of its replacement value, Landlord shall
have the option of terminating this lease by delivering written notice
thereof to Tenant within 60 days from such fire or other casualty, and this
lease and terms hereof shall thereupon terminate.
16. EMINENT DOMAIN. If any part of demised premises or the parking
lot and entrances to the street of highway and to demised premises shall be
taken for any public or quasi-public use under any statute or by right of
eminent domain or private purchase in lieu thereof to the extent that Tenant
can no longer use the Premises for the purposes for which it is presently
intended, then when possession shall be taken thereunder of the premises or
any part thereof, the term herein demised and all rights of Tenant shall
determine that it can continue using the demised premises for the purposes
for which it is presently intended, then this lease shall continue, but there
shall be a reduction in the annual rental payable hereunder commensurate with
the reduction in space and usability of remaining space available to Tenant.
Such reduction shall be agreed upon by the parties hereto in writing within
15 days or as hereafter set out. As soon as Tenant has determined that it
desires to retain remainder of the premises, it shall so notify Landlord in
writing and the parties hereto shall attempt to agree as to the reduction in
rent. Should such agreement not be consummated within 15 days of said notice,
either party may
<PAGE>
then notify the other that it desires the determination of the renewal rental
to be determined by arbitration and at that time shall give notice to the
other party of the arbitrator that it has chosen. The other party shall then
notify the original party within seven days of said notification of the
selection of an arbitrator to represent that party. The two arbitrators shall
then view the property and the rental and attempt to agree as to a fair
rental. If they are unable to agree within ten(10) days of the appointment of
the second arbitrator, said arbitrators shall select a third arbitrator
within five(5) days thereafter and decision of the majority of the
arbitrators shall control. The above time may be lengthened or shortened by
mutual agreement. The decision of the arbitrators as to the rental, and, if
there is a dispute as to whether the remained of the property can be used for
the original intended use, the decision of the arbitrators in regard to said
factors shall be controlling.
If a party of the premises shall be so taken so as to terminate the
rights of Tenant, or in the event Landlord elects to make a voluntary
conveyance in lieu of such proceedings to some public authority with power to
take under its right of eminent domain, Tenant shall be notified in writing
within 10 days after the institution of such proceedings by the service of
summons or writ upon Landlord or within 10 days after the election of
Landlord to so convey and Tenant shall have reasonable time to vacate. All
rights under such eminent domain procedure shall insure to the benefit of
Landlord; provided Tenant shall have the right to make a separate and
independent claim for any property taken, or damages sustained, by reason of
eminent domain proceedings against itself not provided for hereunder.
17. DEFAULT. It is further covenanted and agreed that during the
term of this lease or any extension thereof, that the Landlord shall have the
right to declare a default and termination of the lease and recover the
immediate possession of the leased premises if:
1. The Tenant shall timely fail to pay rent as required by
Article 4 of this agreement;
2. The Tenant shall neglect to timely perform or timely observe
any of the covenants and conditions as contained in this lease;
3. The Tenant shall fail to pay any utility fee or any
obligation other than rent as required by this lease agreement;
4. The Tenant shall make an assignment for the benefit of
creditors;
5. The Tenant shall be adjudicated a bankrupt or a petition is
filed for the extension of time of payment, composition, adjustment,
modification, settlement, or satisfaction of the liabilities of Tenant or to
which any property of Tenant be subject or the involuntary reorganization
(other than a reorganization not involving the liabilities of the Tenant) or
the involuntary liquidation of Tenant;
6. A receiver by appointed for the property of Tenant by reason
of the insolvency or alleged insolvency of Tenant, and such receiver be not
discharged within 90 days thereafter; and
7. Tenant shall abandon or vacate the premises.
A. If the Tenant fails to timely tender rent, the Landlord may
elect to terminate this lease by providing notice to Tenant of Landlord's
intention to terminate this lease. Notice of intention to terminate this
lease commences to run upon the Landlord's placing the notice in the mail or
personally serving the Tenant, or affixing the notice to the leased premises.
Upon service of the notice of termination, the Tenant shall have five (5)
days to reinstate the lease. The Tenant must actually tender to the Landlord
within the five days all rents in default. If the Tenant fails to timely cure
<PAGE>
the rental payments in default in the manner provided here within, the
termination of this lease will be effective, without further notice, without
the necessity of any legal suit or action, upon the expiration of the five
day period of time Tenant is allowed to reinstate this lease and to timely
cure all defaults.
B. In the event of the occurrence of a default other than the
Tenant's failure to timely tender rent to the Landlord, at its option, may
elect to terminate this lease by providing notice to Tenant of Landlord's
intention to terminate this lease. Notice of the intention to terminate this
lease shall commence and run upon service and service may be accomplished by
Landlord mailing the notice to Tenant's address listed here within or
personally serving Tenant, or affixing the notice upon the leased premises.
Upon service of the notice of termination, Tenant shall have thirty(30) days
to reinstate the lease by curing all defaults (defaults other than the
failure to timely tender the rent to Landlord) within 30 days of the date of
the notice of termination.
C. Unless Tenant reinstates the lease in the time and in the
manner provided here within by providing Landlord with documented proof that
all non-rental payment defaults have been cured, termination of this lease
will be effective, without further notice and without the necessity of any
legal suit or action, on the expiration of the 30 day period of time the Tenant
is allowed to reinstate the lease.
D. Upon the termination of the Lease as provided for here
within, Tenant will then quit and surrender the demised premises to Landlord,
and Tenant shall remain liable as hereafter provided. In any such event,
Landlord, at its option, immediately or any time thereafter, enter upon said
premises with or without process of law, and take possession thereof together
with any and all buildings and improvements which may have been erected
thereon, Tenant waiving any demand for the possession thereof. Landlord will
make its best efforts to relet the demised premises or any part thereof,
applying the same first to the payment of such expenses that Landlord may
have incurred in recovering possession of the premises and putting the same
in good order and condition, and all other such expenses, commission and
charges incurred by Landlord in or about reletting the premises, and then to
the fulfillment of the covenants of Tenant hereunder. Any such reletting may
be for the remainder of the original term, or any extended term (if
previously extended by Tenant) or for a longer period or shorter period.
Landlord shall be entitled, notwithstanding any other provisions of this
lease, to the extent permitted by law, the amount of damages which Landlord
sustains by reason of Tenant's default, including the right to recover the
difference between the total rent, taxes and charges which Landlord is able
to obtain in a new lease for the balance of the term and the then present
value of the remaining rent to be paid hereunder until the end of the term of
the lease.
18. MORTGAGE SUBORDINATION. Tenant agrees that upon the request of
Landlord in writing it will subordinate this lease and Tenant's rights and
interest hereunder to the lien of any future first mortgage placed on any
part of the real estate of which the demised premises are a part,
irrespective of the time of execution or time of recording of any such
mortgage or mortgages, provided that the holder of any mortgage shall enter
into an agreement with Tenant, in recordable form, that in the event of
foreclosure or other right asserted under the mortgage by the holder or any
assignee thereof, this lease and the rights of Tenant and obligations of
Landlord (which must be assumed by the holder) hereunder shall continue in
full force and effect and shall not be terminated, amended, modified, or
disturbed except on accordance with the provisions of this lease.
Tenant agrees that if requested by the holder of any such mortgage, it
will be a party to said agreement and will agree in substance that if the
mortgage or any person claiming under the mortgage shall succeed to the
interest of Landlord in this lease, it will recognize said mortgagee or
person as its Landlord under the terms of this lease. Tenant agrees that it
will, upon request of Landlord,
<PAGE>
execute, acknowledge, and deliver any and all instruments necessary or
desirable to give effect to or notice of such subordination. The word
"mortgage" as used herein includes mortgages, deeds of trust, or other
similar instruments and modifications, consolidations, extensions, renewals,
replacements, and substitutes thereof.
19. SALE OF LANDLORD'S INTEREST. Landlord shall be entitled to
convey and otherwise dispose of the demised premises and Landlord's interest
thereunder at any time, and thereafter, shall not be subject to any of the
obligations of Landlord under this lease. However, nothing in this paragraph
is to be construed in such a manner as to release, extinguish or alter the
rights or the obligations of the successors) to the Landlord's interest
hereunder should a sale be consummated.
Landlord shall be entitled to exhibit the demises during the normal
business hours without disturbing the operation of Tenant's business for the
purpose of selling the premises or Landlord's interest under this lease.
20. WAIVER OF SUBROGATION. Each of Landlord and Tenant hereby
releases the other to the extent of its insurance coverage from any all
liability for any loss or damage caused by fires or any of the extended
coverage casualties, even if such fire or other casualty shall be brought
about by the fault or negligence of the party, or any persons claiming under
it.
21. REMEDIES.
(A) It is mutually covenanted and agreed that this lease is made
upon the express condition that this Tenant shall always keep and perform all
its covenants and agreements hereunder and make all payments of money herein
stipulated to be made, promptly and at the time and in the manner stipulated
and limited for such performance and payment, and that accordingly the time
so limited for such payments and the performance of such covenants and
agreements are, and shall be deemed to be, of the essence of this lease.
(B) No remedy herein or otherwise conferred upon, or reserved
to, Landlord or Tenant shall be considered exclusive of any other remedy
given hereunder, or now or hereafter existing at law or in equity or by
statute: and every power and remedy given by this Indenture of Lease to
Landlord or Tenant may be exercised from time to time and as often as
occasion may arise or as may be deemed expedient. No delay or omission of
Landlord or Tenant to exercise any right of power arising from any default
shall impair any such right or power, or shall be construed to be a waiver of
any such default, or an acquiescence therein.
(C) No waiver of any breach of any of the covenants of this lease
shall be construed, taken or held to be a waiver of any other breach, or
waiver of, acquiescence in, or consent to, any further or succeeding breach
of the same covenants.
22. NOTICES. In the event notice is to be given by either party to
the other, it is agreed that such notice may be given at any time by an
instrument in writing delivered personally or dispatched by registered or
certified mail to the following address:
LANDLORD: RLN LEASING, INC.
2719 40th Avenue North
Fargo, North Dakota 58102
TENANT: DAKOTA GROWERS PASTA COMPANY, INC.
c/o President, General Manager
One Pasta Avenue
Carrington, North Dakota 58421
or as either party otherwise direct in writing to the other party from time
to
<PAGE>
time.
All notices shall be deemed delivered when delivered personally or two
days following deposit in the United States mail in the Continental United
States with first class postage and registered or certified fees prepaid
except in the event of mail strike, in which event proof of actual delivery
shall be required.
23. BINDING COVENANTS. It is mutually covenanted and agreed by and
between the partied hereto that the covenants in this lease contained shall
be covenants running with the land and that each of the covenants,
agreements, conditions and provisions of the lease shall wherever applicable
extend to and bind or inure to the benefit of (as the case may be) not only
the parties hereto and each of the,. but also their respective successors
and assigns and wherever in this lease reference is made to any of the
parties hereto or to Landlord or to Tenant, it shall be held to include and
apply wherever and whenever applicable also the successors and assigns of
such parties the same as is in each case and every case so expressed.
24. REGULATIONS. Tenant, in the performance of its covenants and
obligations, under the terms of the Indenture of Lease, shall comply with all
governmental ordinances, laws, rules, regulations and permits pertaining to
the operation of its business at the demised premises.
Landlord, in the performance of its covenants and obligations, under the
terms of this Indenture of Lease, shall comply with all governmental
ordinances, laws, rules, regulations and permits, pertaining to the buildings
and other improvements or repairs to the same required to be made by Landlord
in order to comply therewith.
25. INTERPRETATION. In the event any clause, paragraph or provision
of this lease should be found to be invalid by reason of any statute, law or
judicial decision, then the remainder of the lease shall nevertheless remain
in full force and effect, the same as if such paragraph or provision had been
deleted therefrom.
In the use of pronouns the singular shall include the plural, and the
use of any gender shall include all genders.
26. LATE PAYMENTS, ATTORNEY'S FEES AND COSTS. In the event of any
legal action or proceeding brought by either party hereto against the other
arising out of this lease, the prevailing party shall be entitled to recover
its reasonable attorney's fees incurred in such legal action or proceeding,
and such attorney's fees shall be included in any judgment rendered.
27. QUIET POSSESSION. Landlord agrees that when possession of the
demised premises shall be delivered to Tenant, the leasehold interest of
Tenant will be free and clear of all tenancies, occupancies, restrictions,
violations, liens and encumbrances. Landlord further covenants and represents
that Tenant, upon paying the rents reserved herein, and keeping, performing,
observing and fulfilling the covenants and agreements in this lease contained
on the part of Tenant, upon paying the rents reserved herein, and keeping,
performing, observing and fulfilling the covenants and agreements in this
lease contained on the part of Tenant to be kept, performed, observed and
fulfilled, shall and may peaceably and quietly possess, have, hold and enjoy
the demised premises and all rights, including ingress and egress, easements,
appurtenances and privileges thereunto belonging or in any way appertaining
during the full term hereby granted and any extensions thereof, without any
interruption or disturbance whatever by Landlord or by anyone claiming by,
through, under or against Landlord.
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this lease as of
the day and year first above written.
LANDLORD: TENANT:
RLN LEASING, INC. DAKOTA GROWERS PASTA
COMPANY, INC.
By: /s/ Robert Nelson By: /s/ Tim Dodd
----------------- ------------
Its: President Its: President
Dated: 5/1/97 Dated: 5/1/97
<PAGE>
EXHIBIT C
Location: 4001 32nd Street North, Fargo, North Dakota
Size: 270' E/W by 160' N/S = 43,200 SF, plus 450' E/W by 200' N/S=
90,000, plus 120 E/W by 36.5 N/S = 4,380, plus two floors
of office space.
Docks: 16 - 8 x 9 door with weather seals.
16 - 6 x 8 mechanical load leveler with swing loading
lights.
Ceiling Height: 24' interior ceiling clear height.
Heat: Electric forced air. Off peak service with Gen Set Backup
Gas backup as alternate heat.
Power: 480 - 208 - 110 volts.
Sprinklers: Yes - Fargo city water.
Lighting: Sodium vapor lights with 10 foot candlepower of light
available.
Water and Sewer: City of Fargo water and sewer.
Misc.: Concrete fit-up poured walls with 4' bead board insulation
and white metal lined walled 12 inch glass ceiling
insulation with wire interior mesh.
<PAGE>
CERTAIN MATERIALS HAVE BEEN OMITTED AND
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED THEREFOR
Exhibit 10.13
AGREEMENT BETWEEN
DAKOTA GROWERS PASTA COMPANY
AND
JP FOODSERVICE, INC.
The following outlines the terms and conditions of this agreement:
A. PRODUCTS
A line of dry pasta products for the Foodservice and retail markets packed
under the Roseli brand.
B. PRICING: TERMS OF SALE
1. Current pricing as of March 3, 1997, as listed on the attached Roseli/JP
Foodservice net pricing schedule.
2. Product pricing will be subject to adjustment every calendar quarter
beginning with the period from July 1, 1997 - September 30, 1997. An
adjustment to pricing will be made based on the projected Minneapolis
semolina price during that quarter. Current pricing, covering the period from
March 3, 1997 - June 30, 1997, is based on $14.50 per cwt semolina.
3. It is understood that JP Foodservice reserves the right to contract at a
specified semolina price over a longer period of time, provided that Dakota
Growers is able to secure sufficient raw material to cover JP Foodservice
requirements for that additional period of time.
4. All price adjustments will be mutually agreed upon and set between the
two parties prior to the start of every succeeding quarterly pricing period,
as described above.
5. All other terms of sale are noted on the current net price list, which is
attached as part of this Agreement.
C. PRODUCT ORDERING: INVENTORY LEVELS
1. Product will be shipped within eight (8) working days after an order is
received.
2. Whenever possible, product will be ordered in full pallet quantities.
3. Finished goods inventories equal to one months normal usage will be
maintained by Dakota Growers on a good-faith basis.
4. It is understood that because of the lead-time required, packaging
material inventories equal to four (4) months or more of normal usage may
need to be maintained by Dakota Growers.
D. PROMOTIONAL PAYMENTS, ALLOWANCES, CHAIN REBATES
This is a met price program other than previously agreed upon chain account
rebates as follows:
1. ***** Paid quarterly direct to ***.
2. ***** /lb. Paid quarterly to JP Foodservice.
3. ***** /lb. Paid quarterly to JP Foodservice.
Additionally, Dakota Growers agrees to pay JP Foodservice a quarterly ***%
label usage allowance covering Roseli dry pasta sold to ****.
[* - Confidential Treatment Requested]
1
<PAGE>
E. FIVE YEAR CONTRACT INCENTIVE PROGRAM
1. Dakota Growers agrees to pay $***** per pound to JP Foodservice up to a
maximum of $***** in return for a five (5) year commitment to provide all
Roseli dry pasta products. The following payment schedule will be established:
January 1 - June 30, 1997 - ***** per pound ($***** minimum)
to be paid by 6/30/97
July 1 - December 31, 1997 - ***** per pound ($***** minimum)
to be paid by 12/31/97
July 1, 1998 and every six (6) months thereafter - ***** per pound
until maximum payment is reached.
In the event that for whatever reason this Agreement terminates prior to the
end of the five years or December 31, 2001, JP Foodservice agrees to pay
Dakota Growers a prorated amount of any monies that were paid in excess of
the *** per pound prior to the termination of the Agreement.
2. The above incentive program is based on JP Foodservice's commitment to
purchase **** pounds of Roseli dry pasta from Dakota Growers covering the
five year period of January 1, 1997 - December 31, 2001, as follows:
1/1/97 - 12/31/97 **** lbs.
1/1/98 - 12/31/98 **** lbs.
1/1/99 - 12/31/98 **** lbs.
1/1/00 - 12/31/00 **** lbs.
1/1/01 - 12/31/01 **** lbs.
3. It is further agreed that the **** pound commitment does not include any
Roseli dry pasta sales made to current chain account customers as listed in
Section D. However, JP Foodservice agrees to purchase a minimum of ****
pounds, per month, of Roseli pasta from Dakota Growers during the contract
period, to include all current chain account customers.
4. In the event of termination, JP Foodservice shall pay Dakota Growers its
cost of existing packaging materials inventory up to four (4) months of
normal useage.
F. ENTIRETY AND INTERPRETATION OF AGREEMENT
1. This Agreement contains the entire understanding and all prior
negotiations and understandings are superceded and merged into this Agreement.
2. This Agreement shall be construed in accordance with and governed by the
laws of the State of North Dakota.
G. DURATION OF AGREEMENT: EXCLUSIVITY
1. While this Agreement is in effect, JP Foodservice authorizes only Dakota
Growers to pack Roseli brand dry pasta products.
2. This Agreement binds both parties through December 31, 2001, unless it is
mutually agreed by both parties to terminate or amend it.
3. This Agreement may not be amended or modified orally at any time.
However, this Agreement may be amended or modified by a written instrument if
mutually agreed and signed by the parties hereto.
4. This Agreement may not be transferred or assigned, or any portion
thereof, by JP Foodservice, Inc., without the written consent of Dakota
Growers Pasta Company.
[* - Confidential Treatment Requested]
2
<PAGE>
Reviewed and accepted by:
DAKOTA GROWERS PASTA COMPANY
/s/ Timothy J. Dodd
Timothy Dodd, President and General Manager
/s/ Gary Mackintosh
Gary Mackintosh, Vice President, Sales & Marketing
Date 3/7/97
Reviewed and accepted by:
JP FOODSERVICE, INC.
/s/ Mark Kaiser
Mark Kaiser, Senior Vice President
/s/ Timothy Lee
Timothy Lee, Vice President, Procurement
Date 3/6/97
3
<PAGE>
Exhibit 10.14
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, ("Agreement") is entered into this 15th day of
October, 1997, by and among DAKOTA GROWERS PASTA COMPANY, a North Dakota
cooperative association, Carrington, North Dakota ("DGPC"), and Peninsula
Trading Company, Inc., a California corporation, 719 Yarmouth Road, Suite
203, Palos Verdes Estates, California 90274 ("Peninsula") and acknowledged by
its shareholders Barry Colvin, Jon Arnett, Bob Arnett, Ronald Parker and
Michael Mulcahy, all residents of California, (referred herein collectively
as "Peninsula shareholders") and is subject to the following terms and
conditions:
1. APPOINTMENT OF PENINSULA; ACCEPTANCE. DGPC appoints Peninsula, and
Peninsula accepts such appointment, as a consultant for DGPC in DGPC's dry
pasta and pasta sauce business with Costco, whereby Peninsula will perform
such services as may be requested by DGPC under the terms and conditions of
this Agreement during the term of this Agreement.
2. REPRESENTATIONS AND WARRANTIES. Peninsula represents and warrants
that (a) the shareholders of Peninsula are Barry Colvin, Jon Arnett, Bob
Arnett, Ronald Parker and Michael Mulcahy; (b) Peninsula is a California
corporation validly existing and in good standing under the laws of the State
of California; (c) that the above named shareholders comprise all of the
shareholders of Peninsula; (d) the execution and performance of Peninsula's
obligations under the Agreement will not violate any agreement, instrument or
organizational documents of Peninsula; (e) it has no knowledge of any
proposed termination of Peninsula's account with Costco and it has no reason
to believe that Costco would terminate the account merely because of its
transfer from Peninsula to DGPC; and (f) Peninsula will not take any action
that is contrary or detrimental to Peninsula's performance hereunder, or in
anyway adversely affects the DGPC - Costco business relationship; (g) the
services to be performed under this Agreement will be performed by certain of
the shareholders of Peninsula. The shareholders agree to use their best
efforts in performing the duties required of Peninsula hereunder.
4
<PAGE>
3. FUNCTIONS AND DUTIES OF CONSULTANT.
3.1 Peninsula shall work diligently and use its best efforts as DGPC's
consultant for the sales and promotion of all DGPC dry pasta products and Zia
Briosa -TM- pasta sauce to Costco as requested by DGPC. In performing such
tasks as requested by DGPC, Peninsula agrees (a) to comply with all DGPC
policies and procedures; (b) to exercise reasonable concern for the financial
welfare of DGPC; (c) to introduce DGPC employees to the appropriate pasta
purchasing personnel for Costco or its agents and to facilitate the creation
and maintenance of a good business relationship by and between those
individuals and the respective companies; (d) to periodically review with
DGPC its relationship with Costco, and to take whatever reasonable steps are
requested by DGPC to maintain and strengthen that relationship; (e) Peninsula
will not take any action or make any contract with Costco, Costco personnel,
or brokers associated with Costco regarding any dry pasta products or Zia
Briosa -TM- pasta sauce without prior approval of DGPC.
3.2 Peninsula shall have no authority to delegate its obligations
hereunder to other entities or individuals.
3.3 Peninsula agrees it will not act as a broker, agent or consultant in
connection with the promotion or sale of any dry pasta products for any pasta
manufacturer other than DGPC, or act as broker, agent or consultant in
connection with the promotion of any Zia Briosa -TM- pasta sauce products, for
five (5) years following the date of this Agreement.
4. TERMS OF SALE. Prices, terms and conditions of sales shall be
determined solely by DGPC and may be changed from time to time. All orders,
returns and credits are subject to DGPC's approval. Costco's payments shall
be made directly to DGPC.
5. CONSULTING FEE. Upon execution of this Agreement, DGPC shall pay to
Peninsula $1,300,000.00 in exchange for Peninsula's development and fostering
of a direct business relationship between Costco and DGPC without Peninsula's
further involvement as an intermediary-reseller of dry pasta products and Zia
Briosa -TM- pasta sauce products. Peninsula shall also be entitled to a
consulting fee of $54,167.00 per month for each month DGPC continues its
business relationship with Costco after execution of this Agreement, up to
maximum additional payment of $975,000.00. If DGPC decides to discontinue its
business relationship with Costco, Peninsula shall be entitled to the unpaid
5
<PAGE>
portion of the $975,000 maximum additional payment. All consulting fees shall
be paid no later than ten (1) days following the close of each month's
accounting period.
6. PENINSULA'S LEGAL STATUS AND AUTHORITY. Peninsula will act as
DGPC's consultant in connection with DGPC in the sale and marketing of DGPC's
dry pasta products and Zia Briosa -TM- pasta sauce to Costco. Peninsula shall
only perform such duties as requested by DGPC. It is agreed that Peninsula is
an independent contractor and not a DGPC employee. Peninsula shall have no
right or power to obligate DGPC in any way or manner, nor represent that it
has any right to do so. Peninsula agrees that it is solely responsible for
all of the expenses of operating its business, including the entertainment
expenses incurred to nurture the business relationships between DGPC and
Costco management, and for the payment and collection of all taxes and levies
of any and all kinds in connection with Peninsula's business. Expenses
incurred for services or acts requested of Peninsula by Costco in order to
properly supply and service Costco's purchasing needs shall be considered a
selling expense of DGPC.
7. OBLIGATIONS PRIOR TO AGREEMENT. Peninsula agrees that it is solely
responsible for all obligations incurred or committed to by Peninsula prior
to the date of this Agreement. Peninsula further guarantees that the
settlement of these obligations will not affect its ability to perform under
the Agreement, nor impact DGPC's business relationship with Costco.
8. SURRENDER OF RIGHTS AND CLAIMS. Peninsula agrees to surrender all
rights and claims related to past and future sales of any DGPC dry pasta
products and Zia Briosa -TM- pasta sauce to Costco, or any other customer,
including but not limited to, any agent, distributor or chain operator,
domestic or foreign, except as expressly approved by DGPC. Peninsula
acknowledges that as of the date of this Agreement it does not have any claim
against DGPC arising from the parties' previous business relationship.
9. TERM. This Agreement shall continue until terminated under any of the
following conditions:
a. Attainment of maximum consulting fee payment;
b. Either party may immediately terminate this Agreement upon written
notice to the other in the event that such other party breaches any material
provision of this Agreement;
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<PAGE>
c. DGPC may immediately terminate this Agreement upon written notice if
it determines, in its sole judgement, that any action of Peninsula is
unlawful or destructive to DGPC's public image or business;
d. DGPC may immediately terminate this Agreement upon written notice in
the event of Peninsula's bankruptcy, insolvency, change of ownership, death
or disability of Peninsula's principal owners or any other condition which
may affect the ability of Peninsula to perform its duties under this
Agreement.
10. OBLIGATIONS UPON TERMINATION. Upon termination of this Agreement,
Peninsula shall immediately cease any and all activities with respect to the
sale of DGPC's dry pasta products and Zia Briosa -TM- pasta sauce products sold
to Costco, and shall cease using any information or material regarding DGPC
for any purpose whatsoever. Peninsula is entitled to all earned consulting
fees through the date of termination. Peninsula agrees to return to DGPC all
records and materials relating to its duties and performance under this
Agreement, as DGPC may request.
11. NOTICE. Any written notice given hereunder by either party shall
be delivered or sent by certified or registered mail, postage prepaid,
addressed as follows:
If to DGPC: Dakota Growers Pasta Company
ATTN: Tim Dodd
One Pasta Avenue
P.O. Box 21
Carrington, ND 58421
If to Peninsula:
Mr. Barry Colvin
Peninsula Trading Company, Inc.
P.O. Box 4199
Palos Verdes Estates, CA 90274-9570
12. GOVERNING LAW; VENUE. It is mutually agreed that this Agreement
shall be conclusively deemed to have been executed under and pursuant to the
laws of the state of North Dakota and that the laws of said State, and only
said State, shall be applied hereunder, and that any causes of action between
the parties hereto shall only have jurisdiction and venue in the courts of
the state of North Dakota, in and for the County of Foster.
13. NO ASSIGNMENT. Peninsula may not assign this Agreement in whole or
in part without DGPC's prior written consent.
7
<PAGE>
14. MISCELLANEOUS.
14.1 EQUAL BARGAINING POSITION. The parties acknowledge that each is a
sophisticated business or business person and is fully capable of
understanding the terms of the Agreement. Each party has had the opportunity
to seek such business and legal advise as deemed appropriate. Each party has
entered into this Agreement voluntarily and freely.
14.2 MODIFICATION. No change or modification of this Agreement shall
be Binding upon the parties hereto, unless it shall be in writing and signed
by Both parties.
14.3 ENTIRE AGREEMENT. This Agreement constitute the entire Agreement
between the parties hereto and supersedes all prior and contemporaneous
negotiations, understandings, Agreements, inducements, and conditions of any
nature whatsoever with respect to the subject matter hereof.
14.4 PROVISIONS SEVERABLE. If any provision of this Agreement shall be
or shall become illegal or unenforceable, in whole or in part for any reason,
the remaining provisions hereof shall nevertheless be deemed valid, binding
and subsisting.
14.5 TITLES NOT TO AFFECT INTERPRETATION. The titles of the sections
and subsections in this Agreement are inserted for convenience of reference
only, and they neither form a part of this Agreement nor are they to be used
in the construction or interpretation thereof.
14.6 BINDING EFFECT. This Agreement is entered into freely and
voluntarily between the parties, and it shall be binding upon and inure to
the benefit of the parties hereto, as well as their respective heirs,
personal representatives, successors and assigns.
14.7 INDULGENCES NOT WAIVERS. No indulgences extended by either party
to the other party shall be construed as a waiver of any breach on the part
of such other party, nor shall any waiver of one breach be construed as a
waiver of any rights or remedies with respect to any subsequent breach.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have set their hands on the day and
year first above written.
DAKOTA GROWERS PASTA COMPANY
By /s/ Tim Dodd
Its President
PENINSULA TRADING COMPANY
By /s/ Barry Colvin
Its President
9
