CONFIDENTIAL TREATMENT REQUESTED









Exhibit 10.2




 




CONFIDENTIAL

TREATMENT REQUESTED. CERTAIN PORTIONS HAVE BEEN OMITTED AND HAVE BEEN FILED

SEPARATELY WITH THE COMMISSION.




 




CO-PACKING AGREEMENT




 




 




THIS  AGREEMENT, executed as of

April 30, ­2002, is between NEW WORLD PASTA COMPANY, a

company incorporated in Delaware, with an address at 85 Shannon Road,

Harrisburg, PA 17112 (“New World Pasta”) and DAKOTA GROWERS PASTA CO., a

company 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 a

manufacturer 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 Pasta

desires to have Co-packer produce, package and deliver certain dried pasta

products to New World Pasta;




 




NOW, THEREFORE, in

consideration of the mutual covenants set forth in this Agreement, and for

other valuable consideration, the parties agree as follows:




 




 




ARTICLE 1




DEFINITIONS




 




1.1          Definitions.




 




Unless the context otherwise requires, the

following words and phrases have the meanings set forth below:




 




AFFILIATE means, with

regard to any party or person, any person, corporation or other entity who or

which directly or indirectly controls or is controlled by, or is under direct

or indirect control with, such party or person, and for such purpose,

“controlling” means possessing, directly or indirectly, the power to direct or

cause the direction of the management and affairs of such party or person, whether

through ownership of voting shares, contract or otherwise.




 




AGREEMENT means this

co-packing agreement, and any exhibit or schedule attached hereto or referred

to herein, and all documents that amend this Agreement.




 




APPLICABLE LAWS mean all

federal, state or local laws, regulations, rules or requirements applicable to

the manufacture and supply of the Products to New World Pasta in effect at any

time during the Term of this Agreement.




 




33





























 




BUSINESS DAY means any day

except Saturday, Sunday and a national holiday in the United States or Canada.




 




CASE means a case

containing specified number of cartons of Products described in Schedule “A”.




 




CONFIDENTIAL INFORMATION has the meaning

in Section 11.1(1).




 




(CONFIDENTIAL TREATMENT REQUESTED)




 




DESIGNATED OFFICERS has the meaning

set forth in Section 12.1(2).




 




DISPUTES has the meaning

set forth in Subsection 12.1(1).




 




EFFECTIVE DATE means  (CONFIDENTIAL

TREATMENT REQUESTED)




 




FACILITY means the

Co-Packer’s Carrington, North Dakota and New Hope, Minnesota plants.




 




FORCE MAJEURE EVENT has the

meaning set forth in Subsection 13.9.




 




INITIAL MEDIATION PERIOD has the meaning

set forth in Subsection 12.1(2).




 




NON-CONFORMING PRODUCT means Product

that is unacceptable to New World Pasta because of Co-packer’s deviation from

the Specifications or an error by Co-packer in the manufacturing or packaging

process.




 




OPERATING EQUIPMENT means all

equipment, supplies and materials of  every nature and kind as may from time to

time be required or used in the production of the Products.




 




PACKAGING SPECIFICATIONS has the meaning

set forth in Subsection 2.3.




 




PRICE SCHEDULE has the meaning

set forth in Subsection 3.l.




 




PRODUCTS mean the dried

pasta products identified on the attached Schedule “A”.




 




PRODUCT SPECIFICATIONS has the meaning

set forth in Subsection 2.3.




 




SPECIFICATIONS mean the

Product Specifications and the Packaging Specifications, as defined in this

Agreement.




 




TERM has the meaning

set forth in Section 10.1.




 




 




1.2          Paragraphs

and Headings.




 




The division of this Agreement into paragraphs and the insertion of

headings are for convenience of reference only and shall not affect the

construction or interpretation of the Agreement.




 




34





























 




ARTICLE 2




MANUFACTURE AND SUPPLY




 




2.1          Manufacture

and Supply of Products.  (CONFIDENTIAL

TREATMENT REQUESTED)




 




 




2.2          Production

Facility.  (CONFIDENTIAL TREATMENT

REQUESTED)




 




 




2.3          Production   (CONFIDENTIAL TREATMENT REQUESTED)




 




 




 




ARTICLE 3




PRICES OF PRODUCT




 




3.1          Prices.  (CONFIDENTIAL TREATMENT REQUESTED)




 




 




 




ARTICLE 4




PURCHASE

PROCEDURES AND TERMS




 




4.1          Forecast and Orders. 

(CONFIDENTIAL TREATMENT REQUESTED)




 




 




4.2          Payment

Terms.




 




Payment terms shall be net thirty (30) days

from date of invoice.




 




 




4.3          Products

Acceptability.




 




(1)           Co-packer recognizes that it is fundamental to the success

of the marketing, distribution and sale of Products that New World Pasta obtain

good quality Products from Co-packer. 

Accordingly, Co-packer warrants to New World Pasta that the Products

will be free from any defects of whatsoever kind in manufacture, ingredients

and packaging, and will conform in every respect to the Specifications.




 




(2)           The

provisions of this section shall not be deemed to diminish, restrict or exclude

the operation of any warranty implied or imposed by law or otherwise, nor any

other rights and remedies provided by law for breach of warranty and breach of

contract.




 




 




4.4          Recall  Procedure.  (CONFIDENTIAL TREATMENT REQUESTED)




 




 




35





























 




ARTICLE 5




ADDITIONAL

OBLIGATIONS OF CO-PACKER




 




5.1          Conflicting

Agreements.




 




Co-packer covenants and represents that it

has not, nor will it enter into any, agreements or arrangements with, or incur

obligations to any third party that would interfere or conflict with any of the

provisions of this Agreement in any manner whatsoever.




 




 




5.2          Information

Requests.




 




Co-packer shall promptly furnish to New World

Pasta in writing all information and/or reports reasonably requested by New World

Pasta in writing, relating to the Products and performance of Co-packer’s

obligations hereunder.




 




 




5.3          Trademarks.




 




(1)           Co-packer shall not, for any reason during the Term of

this Agreement, except as authorized in writing by New World Pasta, alter, deface

or remove any trade-marks, patent numbers, notices, information or legends on

Products.




 




(2)           Co-packer hereby acknowledges the validity of New World

Pasta’s title to all trademarks, trade names and logos and designs (whether or

not registered) owned, licensed or claimed by New World Pasta and used in

connection with the packaging, labeling or marketing of Products.  Co-packer covenants and agrees that it will

not at any time directly or indirectly contest the validity of the title to the

aforesaid intellectual property by New World Pasta.




 




 




 




ARTICLE 6




OVERSIGHT

AND INSPECTIONS




 




6.1          Quality

Control and Reports.




 




Co-packer shall establish and maintain a

rigorous quality control program acceptable to New World Pasta covering all

Products sold to New World Pasta. 

Co-packer shall provide to New World Pasta any and all quality control

reports and such other reports as New World Pasta may reasonably request in

writing from time to time.




 




 




6.2          Inspections.




 




Co-packer shall at all times during normal

business hours permit New World Pasta’s personnel and other New World Pasta

designated representatives to have reasonable access to those portions of the

Facility where Products are manufactured, the Products, and all locations where

the Products are stored for the purpose of ensuring Co-packer is complying with

its obligations hereunder.




 




 




6.3          Regulatory

Matters.




 




Co-packer shall obtain all regulatory and/or governmental permits

necessary to manufacture and sell the Products hereunder.  Co-packer shall bear the responsibility for

filing any reports relating to the Products required by applicable government

authorities.




 




36





























 




ARTICLE 7




PROCESS

IMPROVEMENTS




 




7.1          Shared

Benefits.




 




Co-packer will

make available to New World Pasta all technologies and productivity improvement

programs available to any other co-pack customer of Co-packer.  This section 7.1 shall not be construed to

require (i) Co-packer to make available any such technologies or programs if

such 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          New

Formulations or Packaging.  

(CONFIDENTIAL TREATMENT REQUESTED)




 




 




7.3          Special

Batches.  (CONFIDENTIAL TREATMENT REQUESTED)




 




 




 




ARTICLE 8




REPRESENTATIONS,

WARRANTIES AND COVENANTS




 




8.1          New World

Pasta.




 




New World Pasta represents and warrants to

Co-packer as follows:




 




(1)           Qualification. 

New World Pasta is a corporation duly organized, validly existing and in

good standing under the laws of the United States.




 




(2)           Authorization and Enforceability.  New World Pasta has full corporate power and

corporate authority to make, execute, deliver and perform this Agreement, and

the execution, delivery and performance of this Agreement by New World Pasta

had been duly executed and delivered by New World Pasta and constitutes a valid

and binding obligation of New World Pasta enforceable against New World Pasta

in accordance with its terms.




 




(3)           No Pending Litigation.  There is no pending or threatened litigation challenging New

World Pasta’s authority to enter into and perform this Agreement.




 




(4)           Consents.  No consent, approval or authorization of, or

registration or filing with, any person is required in connection with the

execution, delivery and performance of this Agreement, or the performance of

the Agreement by New World Pasta.




 




 




8.2          Co-packer.




 




Co-packer represents and warrants to New

World Pasta as follows:




 




(1)           Qualification. 

Co-packer is a corporation duly organized, validly existing and in good

standing under the laws of the United States (and Canada, if applicable) and

has all requisite power and authority to operate its business as and where

presently being conducted.




 




37





























 




(2)           Authorization and Enforceability.  Co-packer has full corporate power and

corporate authority to make, execute, deliver and perform this Agreement, and

the execution, delivery and performance of this Agreement by Co-packer has been

duly authorized by all necessary action on the part of Co-packer.  This Agreement has been duly executed and

delivered by Co-packer and constitutes a valid and binding obligation of

Co-packer enforceable in accordance with its terms.




 




(3)           No Pending Litigation.  There is no pending or threatened litigation challenging

Co-packer’s authority to enter into and perform this Agreement.




 




(4)           Consents. 

No consent, approval or authorization of, or registration or filing

with, any person is required in connection with the execution, delivery and

performance of this Agreement, or the performance of this Agreement by

Co-packer.




 




(5)           Title. 

Co-packer has, or at the time of delivery shall have, and shall transfer

to New World Pasta good title to the Products, free and clear of liens and encumbrances

of any kind whatsoever.




 




(6)                                  Products.  All Products sold or delivered to New World

Pasta hereunder shall: (i) conform to Specifications; (ii) be produced in

accordance with good faith manufacturing practices under strict sanitary

conditions; (iii) not be adulterated or misbranded; (iv) not be short in

weight; and (v) comply in all respects with all applicable federal, state and

local laws, rules and regulations. 

Without limiting the foregoing, all Products sold or delivered to New

World Pasta hereunder shall be a product which can be shipped and/or sold in

interstate commerce.




 




(7)           Raw Materials, Supplies, Packaging Materials,

Ingredients.  All raw materials,

supplies, packaging materials and ingredients used by Co-packer in Products

shall be merchantable, of good quality and fit for the purpose intended.




 




 




8.3          Co-packer’s

Affirmative Covenants.  (CONFIDENTIAL

TREATMENT REQUESTED)




 




 




8.4          Co-packer’s

Negative Covenants.  (CONFIDENTIAL

TREATMENT REQUESTED)




 




 




 




ARTICLE 9




INDEMNIFICATION

AND INSURANCE




 




9.1          Indemnification. 

(CONFIDENTIAL TREATMENT REQUESTED)




 




 




9.2          Insurance.  (CONFIDENTIAL TREATMENT REQUESTED)




 




38





























 




ARTICLE 10




TERM AND

TERMINATION




 




10.1        Term.  (CONFIDENTIAL

TREATMENT REQUESTED)




 




 




10.2        Early

Termination.  (CONFIDENTIAL TREATMENT

REQUESTED)




 




 




10.3        Results of

Termination or Expiry.  (CONFIDENTIAL

TREATMENT REQUESTED)




 




 




ARTICLE 11




CONFIDENTIALITY




 




11.1        Confidentiality.




 




(1)           Non Disclosure. 

Each party recognizes that all proprietary or secret information of the

other party used or disclosed in the production of the Products and the

performance of such party’s obligations hereunder, including but not limited to

information relating to equipment, Specifications, product formulations,

recipes, processes, operations, production schedules, know-how, customers,

suppliers, test results, marketing studies, promotional activities, and

forecasts, and the like (collectively, the “Confidential Information”), is

invaluable to the owner of such information. 

Each party shall instruct its employees to hold in confidence any and

all Confidential Information of the other party to which they may have access

or which may be disclosed or described to them.  Co-packer shall not use, nor attempt to use, any Confidential

Information of New World Pasta except in the performance of its obligations

hereunder.  Each party shall exercise at

least the same degree of care in safekeeping all Confidential Information of

the other party which may in any manner come into its possession as it

exercises with respect to its own Confidential Information, shall disclose or

grant access thereto only to those employees having a need to know for the

performance by such party of its obligations hereunder, and shall promptly

surrender to the other party all written or otherwise reproducible records and

evidences of any Confidential Information of the other party in its possession

upon the termination or expiry of this Agreement or any prior request of the

owner of such Confidential Information.




 




(2)           Injunctive Relief. 

Each party expressly acknowledges that the Confidential Information of

the other party is unique and may be of great value to the owner, but that the

value of the Confidential Information may be impractical or difficult to assess

in monetary terms.  Accordingly, in the

event of an actual or threatened violation of the provisions of Subsection

11.1(1), each party expressly consents to the enforcement thereof by injunctive

relief; in addition to any and all other remedies available to such party at

law, in equity, or otherwise.




 




(3)           Exceptions. 

The provisions of Subsection 11.1 (1) and (2) above shall not apply to

any Confidential Information (i) which is known to the receiving party prior to

the time of disclosure by the owner, (ii) which at the time of disclosure by

the owner, or thereafter, is or becomes publicly known or available through no

fault of the receiving party, (iii) which is disclosed in writing to the

receiving party by a third party who has the legal right to make the

disclosure, or (iv) the disclosure of which is expressly consented to in

advance and in writing by the owner or is required by Applicable Law.




 




39





























 




11.2        Survival of

Confidentiality Provisions.




 




The provisions of this Article 11 shall

survive the termination or expiration of this Agreement.




 




 




 




ARTICLE 12




DISPUTE

RESOLUTION




 




12.1        Dispute

Resolution.  (CONFIDENTIAL TREATMENT

REQUESTED)




 




 




 




ARTICLE 13




GENERAL




 




13.1        Conflicting Documents.




 




To the extent that any purchase orders,

invoices, sales receipts, shipping documents, forms, billing documents or other

similar documents issued in connection with the sale of Products hereunder

contain terms or conditions which conflict with, or derogate from this

Agreement, they shall be null and void and the terms of this Agreement shall

control.




 




 




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 duly

given or made upon receipt) by delivery by hand, by reputable overnight courier

service, by facsimile transmission, or by registered or certified mail (postage

prepaid, 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 given

in 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




 




40





























 




If to Co-packer:




 




Dakota Growers Pasta Co.




7300 36th Avenue

North




New Hope, MN 55427




 




Attention:  James Cochran




Fax  (___) _______




 




with a copy to:




 




Dakota Growers Pasta Co.




One Pasta Avenue, P. O. Box

21




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 deemed

delivered when received by the recipient. 

Notice given by reputable overnight courier shall be deemed delivered on

the next following business day after the same is sent.  Notice given by facsimile transmission shall

be deemed delivered on the day of transmission provided telephone confirmation

of receipt is obtained promptly after completion of transmission.




 




 




13.3        Independent

Contractor.




 




This Agreement shall not constitute or give

rise to a partnership between the parties. 

All activities by Co-packer hereunder shall be carried on by Co-packer

as an independent contractor and not as an agent for New World Pasta.  All activities by New World Pasta hereunder

shall be carried on by New World Pasta as an independent contractor and not as

an agent for Co-packer.  Neither party

shall have, nor represent that it has, the power to bind the other party to

this Agreement.




 




 




13.4        Governing

Law.




 




This Agreement

shall be construed and governed in accordance with the laws of Pennsylvania,

United States.




 




 




13.5        Entire Agreement.




 




This

Agreement constitutes the entire understanding of the parties and supersedes

any prior agreements or understandings, written or oral, between the parties

with respect to the subject matter hereof. 

All exhibits or schedules attached hereto are hereby incorporated by

reference and made a part of this Agreement as if set forth herein.




 




 




13.6        Successors

and Assigns.




 




The provisions of this Agreement shall be

binding upon and inure to the benefit of the parties hereto and their

respective successors and assigns; provided, however, that no party may,

directly or indirectly, license, subcontract, assign, delegate or otherwise

transfer any of its rights or obligations under this Agreement, except to an

Affiliate, without the prior written consent of the other party hereto, which

shall not be unreasonably withheld.




 




41





























 




13.7        Severability.




 




This Agreement shall be deemed severable, and

the invalidity or unenforceability of any term or provision hereof shall not

affect the validity or enforceability of this Agreement or of any other term or

provision hereof.  Furthermore, in lieu

of any such invalid or unenforceable term or provision, the parties hereto

agree that there shall be added as a part of this Agreement a provision as

similar in terms to such invalid or unenforceable provision as may be possible

and be valid and enforceable.




 




 




13.8        Waivers and

Amendments.




 




This Agreement may not be altered or amended,

nor may rights hereunder be waived, except in a writing executed by both

parties to this Agreement.  No waiver of

any term, provision or condition of or failure to exercise or delay in

exercising 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 or

condition of this Agreement.




 




 




13.9        Force

Majeure.




 




Neither party shall be responsible to the

other for nonperformance or delay in performance occasioned by any causes

beyond 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 of

any governmental body or authority having jurisdiction over the party, act of

war, insurrection, riot or other civil disturbance, bankruptcy or insolvency of

a landlord of any of the premises, transportation disruption caused by any

third party (including freight embargoes, highway, railway or other delivery

disruption), power failure, computer failure or any other cause beyond its

reasonable control, or beyond the control of any person directly or indirectly

engaged by it (any such event being referred to as a “Force Majeure

Event”).  The obligations of the party

prevented from performing shall be suspended for the duration of the Force

Majeure Event.  The party suffering Force

Majeure shall forthwith give notice in writing to the other party of such

fact.  Upon receipt of such Notice by

the other party, representatives of the parties shall establish plans and

procedures to overcome or mitigate the effects of the Force Majeure Event and

the party suffering from the Force Majeure Event shall use all reasonable

efforts to minimize any adverse effects on the other party.  When Co-packer has reason to believe that

deliveries of Product will not be made as scheduled, Co-packer shall use all

reasonable efforts to assist New World Pasta in securing alternative supplies

of Product, including using its commercially reasonably best efforts to supply

Products from Co-packer’s other facilities.




 




42





























 




13.10      Specific

Performance.




 




The parties acknowledge and agree that a

remedy at law for any breach, or threatened breach, or any material provision

of 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 and

remedies which such party may have, be entitled to equitable relief, including

injunctive relief, and to the remedy of specific performance with respect to

such breach or threatened breach, as may be available from any court of

competent jurisdiction.  Such right to

obtain 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 other

rights or remedies which the affected party may have as a result of any such

breach or threatened breach.




 




 




13.11      Announcements.




 




During the Term of this Agreement and

thereafter, neither party hereto shall make or allow any public announcement or

other disclosure to anyone regarding this Agreement or the terms hereof, unless

such 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 as

of 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.


  
							





 




43





























 




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)




 




44