**Exhibit 10.2**

 

CONFIDENTIALTREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILEDSEPARATELY WITH THE COMMISSION.

 

**CO-PACKING AGREEMENT**

 

 

**THIS****AGREEMENT,**executed as ofApril 30, **­**2002, is between **NEW WORLD PASTA COMPANY,**acompany incorporated in Delaware, with an address at 85 Shannon Road,Harrisburg, PA 17112 (“New World Pasta”) and **DAKOTA GROWERS PASTA CO.**, acompany incorporated in North Dakota, with an address of One Pasta Avenue,P. O. Box 21, Carrington, ND 58421-0021 (“Co-packer”).

 

**WHEREAS,**Co-Packer is amanufacturer of dried pasta products, and is capable of and willing to produce,package and deliver certain dried pasta products to New World Pasta; and

 

**WHEREAS,**New World Pastadesires to have Co-packer produce, package and deliver certain dried pastaproducts to New World Pasta;

 

**NOW, THEREFORE,**inconsideration of the mutual covenants set forth in this Agreement, and forother valuable consideration, the parties agree as follows:

 

 

**ARTICLE 1**

**DEFINITIONS**

 

**1.1**          **Definitions.**

 

Unless the context otherwise requires, thefollowing words and phrases have the meanings set forth below:

 

**AFFILIATE**means, withregard to any party or person, any person, corporation or other entity who orwhich directly or indirectly controls or is controlled by, or is under director indirect control with, such party or person, and for such purpose,“controlling” means possessing, directly or indirectly, the power to direct orcause the direction of the management and affairs of such party or person, whetherthrough ownership of voting shares, contract or otherwise.

 

**AGREEMENT**means thisco-packing agreement, and any exhibit or schedule attached hereto or referredto herein, and all documents that amend this Agreement.

 

**APPLICABLE LAWS**mean allfederal, state or local laws, regulations, rules or requirements applicable tothe manufacture and supply of the Products to New World Pasta in effect at anytime during the Term of this Agreement.

 

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**BUSINESS DAY**means any dayexcept Saturday, Sunday and a national holiday in the United States or Canada.

 

**CASE**means a casecontaining specified number of cartons of Products described in Schedule “A”.

 

**CONFIDENTIAL INFORMATION**has the meaningin Section 11.1(1).

 

**(CONFIDENTIAL TREATMENT REQUESTED)**

 

**DESIGNATED OFFICERS**has the meaningset forth in Section 12.1(2).

 

**DISPUTES**has the meaningset forth in Subsection 12.1(1).

 

**EFFECTIVE DATE**means  **(CONFIDENTIALTREATMENT REQUESTED)**

 

**FACILITY**means theCo-Packer’s Carrington, North Dakota and New Hope, Minnesota plants.

 

**FORCE MAJEURE EVENT** has themeaning set forth in Subsection 13.9.

 

**INITIAL MEDIATION PERIOD**has the meaningset forth in Subsection 12.1(2).

 

**NON-CONFORMING PRODUCT**means Productthat is unacceptable to New World Pasta because of Co-packer’s deviation fromthe Specifications or an error by Co-packer in the manufacturing or packagingprocess.

 

**OPERATING EQUIPMENT**means allequipment, supplies and materials of****every nature and kind as may from time totime be required or used in the production of the Products.

 

**PACKAGING SPECIFICATIONS**has the meaningset forth in Subsection 2.3.

 

**PRICE SCHEDULE**has the meaningset forth in Subsection 3.l.

 

**PRODUCTS**mean the driedpasta products identified on the attached Schedule “A”.

 

**PRODUCT SPECIFICATIONS**has the meaningset forth in Subsection 2.3.

 

**SPECIFICATIONS**mean theProduct Specifications and the Packaging Specifications, as defined in thisAgreement.

 

**TERM**has the meaningset forth in Section 10.1.

 

 

**1.2          Paragraphsand Headings.**

 

The division of this Agreement into paragraphs and the insertion ofheadings are for convenience of reference only and shall not affect theconstruction or interpretation of the Agreement.

 

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**ARTICLE 2**

**MANUFACTURE AND SUPPLY**

 

**2.1**          **Manufactureand Supply of Products.  (CONFIDENTIALTREATMENT REQUESTED)**

 

 

**2.2**          **ProductionFacility.  (CONFIDENTIAL TREATMENTREQUESTED)**

 

 

**2.3**          **Production   (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

 

**ARTICLE 3**

**PRICES OF PRODUCT**

 

**3.1          Prices.  (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

 

**ARTICLE 4**

**PURCHASEPROCEDURES AND TERMS**

 

**4.1**          **Forecast and Orders. (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

**4.2          PaymentTerms.**

 

Payment terms shall be net thirty (30) daysfrom date of invoice.

 

 

**4.3**          **ProductsAcceptability.**

 

(1)           Co-packer recognizes that it is fundamental to the successof the marketing, distribution and sale of Products that New World Pasta obtaingood quality Products from Co-packer. Accordingly, Co-packer warrants to New World Pasta that the Productswill be free from any defects of whatsoever kind in manufacture, ingredientsand packaging, and will conform in every respect to the Specifications.

 

(2)           Theprovisions of this section shall not be deemed to diminish, restrict or excludethe operation of any warranty implied or imposed by law or otherwise, nor anyother rights and remedies provided by law for breach of warranty and breach ofcontract.

 

 

**4.4          Recall****Procedure.  (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

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**ARTICLE 5**

**ADDITIONALOBLIGATIONS OF CO-PACKER**

 

**5.1          ConflictingAgreements.**

 

Co-packer covenants and represents that ithas not, nor will it enter into any, agreements or arrangements with, or incurobligations to any third party that would interfere or conflict with any of theprovisions of this Agreement in any manner whatsoever.

 

 

**5.2          InformationRequests.**

 

Co-packer shall promptly furnish to New WorldPasta in writing all information and/or reports reasonably requested by New WorldPasta in writing, relating to the Products and performance of Co-packer’sobligations hereunder.

 

 

**5.3**          **Trademarks.**

 

(1)           Co-packer shall not, for any reason during the Term ofthis Agreement, except as authorized in writing by New World Pasta, alter, defaceor remove any trade-marks, patent numbers, notices, information or legends onProducts.

 

(2)           Co-packer hereby acknowledges the validity of New WorldPasta’s title to all trademarks, trade names and logos and designs (whether ornot registered) owned, licensed or claimed by New World Pasta and used inconnection with the packaging, labeling or marketing of Products.  Co-packer covenants and agrees that it willnot at any time directly or indirectly contest the validity of the title to theaforesaid intellectual property by New World Pasta.

 

 

 

**ARTICLE 6**

**OVERSIGHTAND INSPECTIONS**

 

**6.1          QualityControl and Reports.**

 

Co-packer shall establish and maintain arigorous quality control program acceptable to New World Pasta covering allProducts sold to New World Pasta. Co-packer shall provide to New World Pasta any and all quality controlreports and such other reports as New World Pasta may reasonably request inwriting from time to time.

 

 

**6.2          Inspections.**

 

Co-packer shall at all times during normalbusiness hours permit New World Pasta’s personnel and other New World Pastadesignated representatives to have reasonable access to those portions of theFacility where Products are manufactured, the Products, and all locations wherethe Products are stored for the purpose of ensuring Co-packer is complying withits obligations hereunder.

 

 

**6.3          RegulatoryMatters.**

 

Co-packer shall obtain all regulatory and/or governmental permitsnecessary to manufacture and sell the Products hereunder.  Co-packer shall bear the responsibility forfiling any reports relating to the Products required by applicable governmentauthorities.

 

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**ARTICLE 7**

**PROCESSIMPROVEMENTS**

 

**7.1          SharedBenefits.**

 

Co-packer willmake available to New World Pasta all technologies and productivity improvementprograms available to any other co-pack customer of Co-packer.  This section 7.1 shall not be construed torequire (i) Co-packer to make available any such technologies or programs ifsuch use would be prohibited by an agreement with a third party or (ii)disclosure to New World Pasta of any proprietary information of Co-packer.

 

 

**7.2          NewFormulations or Packaging.  (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

**7.3**          **SpecialBatches.  (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

 

**ARTICLE 8**

**REPRESENTATIONS,WARRANTIES AND COVENANTS**

 

**8.1          New WorldPasta.**

 

New World Pasta represents and warrants toCo-packer as follows:

 

(1)           Qualification. New World Pasta is a corporation duly organized, validly existing and ingood standing under the laws of the United States.

 

(2)           Authorization and Enforceability.  New World Pasta has full corporate power andcorporate authority to make, execute, deliver and perform this Agreement, andthe execution, delivery and performance of this Agreement by New World Pastahad been duly executed and delivered by New World Pasta and constitutes a validand binding obligation of New World Pasta enforceable against New World Pastain accordance with its terms.

 

(3)           No Pending Litigation.  There is no pending or threatened litigation challenging NewWorld Pasta’s authority to enter into and perform this Agreement.

 

(4)           Consents.  No consent, approval or authorization of, orregistration or filing with, any person is required in connection with theexecution, delivery and performance of this Agreement, or the performance ofthe Agreement by New World Pasta.

 

 

**8.2          Co-packer.**

 

Co-packer represents and warrants to NewWorld Pasta as follows:

 

(1)           Qualification. Co-packer is a corporation duly organized, validly existing and in goodstanding under the laws of the United States (and Canada, if applicable) andhas all requisite power and authority to operate its business as and wherepresently being conducted.

 

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(2)           Authorization and Enforceability.  Co-packer has full corporate power andcorporate authority to make, execute, deliver and perform this Agreement, andthe execution, delivery and performance of this Agreement by Co-packer has beenduly authorized by all necessary action on the part of Co-packer.  This Agreement has been duly executed anddelivered by Co-packer and constitutes a valid and binding obligation ofCo-packer enforceable in accordance with its terms.

 

(3)           No Pending Litigation.  There is no pending or threatened litigation challengingCo-packer’s authority to enter into and perform this Agreement.

 

(4)           Consents. No consent, approval or authorization of, or registration or filingwith, any person is required in connection with the execution, delivery andperformance of this Agreement, or the performance of this Agreement byCo-packer.

 

(5)           Title. Co-packer has, or at the time of delivery shall have, and shall transferto New World Pasta good title to the Products, free and clear of liens and encumbrancesof any kind whatsoever.

 

(6)                                  Products.  All Products sold or delivered to New WorldPasta hereunder shall: (i) conform to Specifications; (ii) be produced inaccordance with good faith manufacturing practices under strict sanitaryconditions; (iii) not be adulterated or misbranded; (iv) not be short inweight; and (v) comply in all respects with all applicable federal, state andlocal laws, rules and regulations. Without limiting the foregoing, all Products sold or delivered to NewWorld Pasta hereunder shall be a product which can be shipped and/or sold ininterstate commerce.

 

(7)           Raw Materials, Supplies, Packaging Materials,Ingredients.  All raw materials,supplies, packaging materials and ingredients used by Co-packer in Productsshall be merchantable, of good quality and fit for the purpose intended.

 

 

**8.3          Co-packer’sAffirmative Covenants.  (CONFIDENTIALTREATMENT REQUESTED)**

 

 

**8.4**          **Co-packer’sNegative Covenants.  (CONFIDENTIALTREATMENT REQUESTED)**

 

 

 

**ARTICLE 9**

**INDEMNIFICATIONAND INSURANCE**

 

**9.1**          **Indemnification. (CONFIDENTIAL TREATMENT REQUESTED)**

 

 

**9.2**          **Insurance.  (CONFIDENTIAL TREATMENT REQUESTED)**

 

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**ARTICLE 10**

**TERM ANDTERMINATION**

 

**10.1        Term.  (CONFIDENTIALTREATMENT REQUESTED)**

 

 

**10.2        EarlyTermination.  (CONFIDENTIAL TREATMENTREQUESTED)**

 

 

**10.3        Results ofTermination or Expiry.  (CONFIDENTIALTREATMENT REQUESTED)**

 

 

**ARTICLE 11**

**CONFIDENTIALITY**

 

**11.1        Confidentiality.**

 

(1)           Non Disclosure. Each party recognizes that all proprietary or secret information of theother party used or disclosed in the production of the Products and theperformance of such party’s obligations hereunder, including but not limited toinformation relating to equipment, Specifications, product formulations,recipes, processes, operations, production schedules, know-how, customers,suppliers, test results, marketing studies, promotional activities, andforecasts, and the like (collectively, the “Confidential Information”), isinvaluable to the owner of such information. Each party shall instruct its employees to hold in confidence any andall Confidential Information of the other party to which they may have accessor which may be disclosed or described to them.  Co-packer shall not use, nor attempt to use, any ConfidentialInformation of New World Pasta except in the performance of its obligationshereunder.  Each party shall exercise atleast the same degree of care in safekeeping all Confidential Information ofthe other party which may in any manner come into its possession as itexercises with respect to its own Confidential Information, shall disclose orgrant access thereto only to those employees having a need to know for theperformance by such party of its obligations hereunder, and shall promptlysurrender to the other party all written or otherwise reproducible records andevidences of any Confidential Information of the other party in its possessionupon the termination or expiry of this Agreement or any prior request of theowner of such Confidential Information.

 

(2)           Injunctive Relief. Each party expressly acknowledges that the Confidential Information ofthe other party is unique and may be of great value to the owner, but that thevalue of the Confidential Information may be impractical or difficult to assessin monetary terms.  Accordingly, in theevent of an actual or threatened violation of the provisions of Subsection11.1(1), each party expressly consents to the enforcement thereof by injunctiverelief; in addition to any and all other remedies available to such party atlaw, in equity, or otherwise.

 

(3)           Exceptions. The provisions of Subsection 11.1 (1) and (2) above shall not apply toany Confidential Information (i) which is known to the receiving party prior tothe time of disclosure by the owner, (ii) which at the time of disclosure bythe owner, or thereafter, is or becomes publicly known or available through nofault of the receiving party, (iii) which is disclosed in writing to thereceiving party by a third party who has the legal right to make thedisclosure, or (iv) the disclosure of which is expressly consented to inadvance and in writing by the owner or is required by Applicable Law.

 

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**11.2        Survival ofConfidentiality Provisions.**

 

The provisions of this Article 11 shallsurvive the termination or expiration of this Agreement.

 

 

 

**ARTICLE 12**

**DISPUTERESOLUTION**

 

**12.1**        **DisputeResolution.  (CONFIDENTIAL TREATMENTREQUESTED)**

 

 

 

**ARTICLE 13**

**GENERAL**

 

**13.1        Conflicting Documents.**

 

To the extent that any purchase orders,invoices, sales receipts, shipping documents, forms, billing documents or othersimilar documents issued in connection with the sale of Products hereundercontain terms or conditions which conflict with, or derogate from thisAgreement, they shall be null and void and the terms of this Agreement shallcontrol.

 

 

**13.2        Notices.**

 

All notices, requests, claims, waivers,consents, approvals or other communication hereunder shall be in writing (a“Notice”) and shall be given or made (and shall be deemed to have been dulygiven or made upon receipt) by delivery by hand, by reputable overnight courierservice, by facsimile transmission, or by registered or certified mail (postageprepaid, return receipt requested) to the respective parties at the addresses(or at such other address for a party as shall be specified in a notice givenin accordance with this Section) listed below:

 

If to New World Pasta:

 

New World Pasta Company

85 Shannon Road

Harrisburg, PA  17112

 

Attention:  Antonina Piano

Fax:  (717) 526-2468

 

 

with a copy to:

 

New World Pasta Company

85 Shannon Road

Harrisburg, PA  17112

 

Attention:  Vice President and General Counsel

 

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If to Co-packer:

 

Dakota Growers Pasta Co.

7300 36th AvenueNorth

New Hope, MN 55427

 

Attention:  James Cochran

Fax  (___) _______

 

with a copy to:

 

Dakota Growers Pasta Co.

One Pasta Avenue, P. O. Box21

Carrington, ND 58421-0021

 

Attention:  Tim Dodd

 

or to such other address as any party may,from time to time, designate in a Notice given in a like manner.  Notice given by hand shall be deemeddelivered when received by the recipient. Notice given by reputable overnight courier shall be deemed delivered onthe next following business day after the same is sent.  Notice given by facsimile transmission shallbe deemed delivered on the day of transmission provided telephone confirmationof receipt is obtained promptly after completion of transmission.

 

 

**13.3        IndependentContractor.**

 

This Agreement shall not constitute or giverise to a partnership between the parties. All activities by Co-packer hereunder shall be carried on by Co-packeras an independent contractor and not as an agent for New World Pasta.  All activities by New World Pasta hereundershall be carried on by New World Pasta as an independent contractor and not asan agent for Co-packer.  Neither partyshall have, nor represent that it has, the power to bind the other party tothis Agreement.

 

 

**13.4        GoverningLaw.**

 

This Agreementshall be construed and governed in accordance with the laws of Pennsylvania,United States.

 

 

**13.5        Entire Agreement.**

 

ThisAgreement constitutes the entire understanding of the parties and supersedesany prior agreements or understandings, written or oral, between the partieswith respect to the subject matter hereof. All exhibits or schedules attached hereto are hereby incorporated byreference and made a part of this Agreement as if set forth herein.

 

 

**13.6        Successorsand Assigns.**

 

The provisions of this Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns; provided, however, that no party may,directly or indirectly, license, subcontract, assign, delegate or otherwisetransfer any of its rights or obligations under this Agreement, except to anAffiliate, without the prior written consent of the other party hereto, whichshall not be unreasonably withheld.

 

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**13.7        Severability.**

 

This Agreement shall be deemed severable, andthe invalidity or unenforceability of any term or provision hereof shall notaffect the validity or enforceability of this Agreement or of any other term orprovision hereof.  Furthermore, in lieuof any such invalid or unenforceable term or provision, the parties heretoagree that there shall be added as a part of this Agreement a provision assimilar in terms to such invalid or unenforceable provision as may be possibleand be valid and enforceable.

 

 

**13.8        Waivers andAmendments.**

 

This Agreement may not be altered or amended,nor may rights hereunder be waived, except in a writing executed by bothparties to this Agreement.  No waiver ofany term, provision or condition of or failure to exercise or delay inexercising any rights or remedies under this Agreement shall be deemed to be,or construed as, a further or continuing waiver of any such term, provision,condition, right or remedy or as a waiver of any other term, provision orcondition of this Agreement.

 

 

**13.9        ForceMajeure.**

 

Neither party shall be responsible to theother for nonperformance or delay in performance occasioned by any causesbeyond its control including without limitation an act of God, fire, storm,labor relations disruption (including strike, lock-out, illegal work stoppages,slowdowns, boycotts or other labor disputes), any law, regulation or order ofany governmental body or authority having jurisdiction over the party, act ofwar, insurrection, riot or other civil disturbance, bankruptcy or insolvency ofa landlord of any of the premises, transportation disruption caused by anythird party (including freight embargoes, highway, railway or other deliverydisruption), power failure, computer failure or any other cause beyond itsreasonable control, or beyond the control of any person directly or indirectlyengaged by it (any such event being referred to as a “Force MajeureEvent”).  The obligations of the partyprevented from performing shall be suspended for the duration of the ForceMajeure Event.  The party suffering ForceMajeure shall forthwith give notice in writing to the other party of suchfact.  Upon receipt of such Notice bythe other party, representatives of the parties shall establish plans andprocedures to overcome or mitigate the effects of the Force Majeure Event andthe party suffering from the Force Majeure Event shall use all reasonableefforts to minimize any adverse effects on the other party.  When Co-packer has reason to believe thatdeliveries of Product will not be made as scheduled, Co-packer shall use allreasonable efforts to assist New World Pasta in securing alternative suppliesof Product, including using its commercially reasonably best efforts to supplyProducts from Co-packer’s other facilities.

 

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**13.10      SpecificPerformance.**

 

The parties acknowledge and agree that aremedy at law for any breach, or threatened breach, or any material provisionof this Agreement will be inadequate and, accordingly, subject to Section 12.1,the party affected by such breach shall, in addition to any other rights andremedies which such party may have, be entitled to equitable relief, includinginjunctive relief, and to the remedy of specific performance with respect tosuch breach or threatened breach, as may be available from any court ofcompetent jurisdiction.  Such right toobtain equitable relief may be exercised at the option of the affected party,concurrently with, prior to, after, or in lieu of, the exercise of any otherrights or remedies which the affected party may have as a result of any suchbreach or threatened breach.

 

 

**13.11      Announcements.**

 

During the Term of this Agreement andthereafter, neither party hereto shall make or allow any public announcement orother disclosure to anyone regarding this Agreement or the terms hereof, unlesssuch announcement or disclosure is approved in advance, in writing, as to form,substance and timing by the other party hereto.

 

 

IN WITNESS WHEREOF the parties hereto have executed this Agreement asof the date and year first above written.

 
|   |   | **NEW WORLD  PASTA COMPANY**  |
|--------|--------|-------------------------------|
|   |   |                          |
|   |   | By:                           | /s/ Burton R. Freeman |   |
|   |   | Name:                         | Burton R. Freeman |
|   |   | Title:                        | VP Mfg |
|   |   |                          |
|   |   | **DAKOTA  GROWERS PASTA CO.** |
|   |   |                          |
|   |   | By:                           | /s/ Tim Dodd |   |
|   |   | Name:                         | Tim Dodd |
|   |   | Title:                        | Pres./G.M. |
|        |        |                               |  |  |  |  |

 

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Schedule “A” -     Description of Products

 

**(CONFIDENTIAL TREATMENT REQUESTED)**

 

Schedule “B” -      Pricing Schedule

 

**(CONFIDENTIAL TREATMENT REQUESTED)**

 

Schedule “C” -      Product Specifications

 

**(CONFIDENTIAL TREATMENT REQUESTED)**

 

Schedule “D” -     Packaging Specifications

 

**(CONFIDENTIAL TREATMENT REQUESTED)**

 

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