AMENDED AND RESTATED
MILL AGREEMENT
Between
NEW WORLD PASTA COMPANY
and
XXXXXX MILLING COMPANY
March 10, 2000
(Fresno, California)
TABLE OF CONTENTS
1. Definitions.............................................................2
1.1 Blended Products...............................................2
1.2 Buhler Contract................................................2
1.3 Contract Goods.................................................2
1.4 Contract Year..................................................2
1.5 Delivery Period................................................2
1.6 Durum Products.................................................2
1.7 NWP Plant......................................................2
1.8 Mill Capacity..................................................2
1.9 Mill Property..................................................2
1.10 Mill Reconfiguration...........................................3
1.11 Minimum Quantity...............................................3
1.12 Non-Durum Products.............................................3
1.13 Plant Property.................................................3
1.14 Producer Price Index or PPI....................................3
1.15 Third Party Contract...........................................3
1.16 Actual Freight Cost............................................3
2. Purchase And Sale of Durum Products.....................................3
2.1 Minimum Quantity...............................................3
2.2 Quantity and Quality Requirements of Individual Purchases......4
2.3 Price and Payment..............................................4
2.4 Enrichment....................................................10
2.5 Notice of Requirements........................................10
2.6 Shipment......................................................11
2.7 Purchase and Manufacturing Records............................11
3. Term...................................................................12
4. Termination............................................................12
4.1 Breach of Obligations.........................................12
4.2 Bankruptcy....................................................12
5. Liquidated Damages in The Event of Force Majeure.......................12
5.1 Liquidated Damages............................................12
5.2 Force Majeure.................................................13
6. Inspection Rights of NWP...............................................13
7. Transportation.........................................................13
8. Storage................................................................14
8a. Wheat Storage..........................................................14
9. Governing Law..........................................................14
10. Right of First Refusal.................................................14
11. Notices................................................................15
12. Terms of Sale..........................................................16
13. Breach of Agreement....................................................16
14. Confidentiality........................................................16
15. Arbitration............................................................16
16. Binding Effect.........................................................17
17. Severability...........................................................17
18. Counterparts...........................................................17
19. Costs of Mill Reconfiguration..........................................17
20. Title to Equipment and Fixtures........................................18
21. Integration............................................................18
List of Exhibits
----------------
Exhibit A - Specifications
Exhibit B - Example Calculations for Section 2.3
Exhibit C - Legal Description for Mill Property
Exhibit D - Legal Description for Plant Property
THIS AMENDED AND RESTATED MILL AGREEMENT ("Agreement") is made and
entered into effective as of the 10th day of March, 2000, by and between XXXXXX
MILLING COMPANY, a Minnesota corporation ("Xxxxxx"), and NEW WORLD PASTA
COMPANY, a Delaware corporation ("NWP").
RECITALS
--------
WHEREAS, Xxxxxx has constructed and is operating a flour mill located
in Fresno, California (the "Mill"), for processing wheat and producing semolina
and various wheat flours;
WHEREAS, NWP is engaged in the manufacture of a variety of pasta and
other products at a plant located in Fresno, California (the "Plant");
WHEREAS, Xxxxxx, prior to constructing the Mill, secured a commitment
from the Hershey Pasta & Grocery Group ("Hershey"), the prior owner of the
Plant, to purchase a large volume of the durum wheat flours that will be
produced at the Mill, pursuant to an Agreement between Hershey and Xxxxxx dated
September 17, 1990, which was amended by an Amendment to Agreement dated
September 2, 1992, a letter amendment dated as of August 18, 1994, a letter
amendment dated as of April 9, 1997, an Amended and Restated Mill Agreement
dated March 1, 1998, and a First Amendment to Amended and Restated Mill
Agreement dated January 28, 1999 (as amended, the "Existing Mill Agreement");
WHEREAS, NWP purchased the Plant from Hershey and NWP now purchases
substantial quantities of durum wheat flours for use in conjunction with the
operation of the Plant;
WHEREAS, NWP is required to purchase a portion of its requirements for
durum wheat flours for the Plant, and Xxxxxx is obligated to supply such
requirements, pursuant to the Existing Mill Agreement;
WHEREAS, NWP and Xxxxxx now desire to extend the term of the Existing
Mill Agreement and to modify certain other provisions thereof on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein contained, it is agreed by and between the
parties hereto as follows:
1
1. Definitions. For the purposes of this Agreement, the following
-----------
definitions shall apply:
1.1 Blended Products. The term "Blended Products" shall mean
----------------
any flour comprised of no less than [Confidential Treatment Requested by New
World Pasta].
1.2 Buhler Contract. The term "Buhler Contract" means the
---------------
Contract dated January 20, 2000, between Xxxxxx and Buhler for certain
modifications to Xxxxxx'x "A Mill" in Fresno which are designed to produce the
Contract Goods in accordance with NWP's request.
1.3 Contract Goods. The term "Contract Goods" shall mean
--------------
collectively Durum Products, Non-Durum Products, and Blended Products used by
NWP to manufacture pasta and noodles.
1.4 Contract Year. The term "Contract Year" shall mean a
-------------
period of twelve (12) consecutive months commencing each year on the date, or
anniversary of the date, on which the term of this Agreement shall commence
pursuant to Section 3 of this Agreement.
1.5 Delivery Period. The term "Delivery Period" shall mean
---------------
any period during which Contract Goods purchased by NWP pursuant to a contract
with a third party are to be delivered.
1.6 Durum Products. The term "Durum Products" shall mean no
--------------
less than [Confidential Treatment Requested by New World Pasta].
1.7 NWP Plant. The terms "NWP Plant" or the term the "Plant"
---------
shall mean NWP's plant located in Fresno, California.
1.8 Mill Capacity. The term "Mill Capacity" shall mean the
-------------
quantity of Contract Goods which the Mill shall be capable of producing,
[Confidential Treatment Requested by New World Pasta].
1.9 Mill Property. The term "Mill Property" means the real
-------------
property in Fresno, California, which is legally described on Exhibit C attached
hereto on which the Mill is located together with perpetual nonexclusive
easement rights for the purposes of utilities and railroad trackage to serve the
Mill Property over the North Easement Parcel and the South Easement Parcel as
described on Exhibit C attached hereto, which real property is owned by Xxxxxx
Milling Company Limited Partnership, a Minnesota limited partnership.
1.10 Mill Reconfiguration. The term "Mill Reconfiguration"
--------------------
shall mean the modifications to Xxxxxx'x A Mill in Fresno which are designed to
produce the Contract Goods in
2
accordance with NWP's request. Such modifications are more particularly
described in the Buhler Contract.
1.11 Minimum Quantity. The term "Minimum Quantity" shall have
----------------
the meaning set forth in Section 2.1 below.
1.12 Non-Durum Products. The term "Non-Durum Products" shall
------------------
mean any flour products made in whole from wheat other than durum wheat.
1.13 Plant Property. The term "Plant Property" means the real
---------------
property in Fresno, California in which the Plant is located and which is owned
by NWP and is legally described on Exhibit D attached hereto.
1.14 Producer Price Index or PPI. "Producer Price Index" or
---------------------------
"PPI" means the Producer Price Index for Total Manufacturing Industries as
published by the Bureau of Labor and Statistics for the United States Department
of Labor.
1.15 Third Party Contract. The term "Third Party Contract"
--------------------
shall mean any contract with a third party for any Contract Goods.
1.16 Actual Freight Cost. The term "Actual Freight Cost" shall
-------------------
have the meaning set forth in Section 2.3.
2. Purchase And Sale of Durum Products.
-----------------------------------
2.1 Minimum Quantity. During each Contract Year and subject to the
----------------
further terms of this contract, NWP agrees to purchase from Xxxxxx and Xxxxxx
agrees to sell to NWP and supply from the Mill:
An amount equal to, or greater than [Confidential
Treatment Requested by New World Pasta] in the
aggregate, [Confidential Treatment Requested by New
World Pasta] shall require [Confidential Treatment
Requested by New World Pasta].
2.2 Quantity and Quality Requirements of Individual Purchases. NWP
---------------------------------------------------------
agrees that during the course of the Contract Year it shall purchase such
quantities of Contract Goods, in the aggregate, from Xxxxxx such that by the end
of a Contract Year, NWP shall have purchased at least [Confidential Treatment
-----------------------
Requested by New World Pasta] of its aggregate purchases of goods for use in the
----------------------------
Plant, which are the equivalent of Contract Goods, from Xxxxxx.
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NWP may order, at its discretion, any amount of the specific type of
Contract Goods, subject only to the aforestated aggregate purchase requirement.
Xxxxxx shall sell and deliver, in accordance with the instructions of NWP and
the terms of this Agreement, the specific Contract Goods which are ordered by
NWP. Such Contract Goods shall be of a quality in accordance with the
specifications as set forth in Exhibit A. The specifications set forth on
Exhibit A may be changed if mutually agreed upon by the parties.
In no event, however, shall Xxxxxx be required to sell to NWP Contract
Goods in excess of the Mill Capacity pursuant to the terms of this Agreement.
2.3 Price and Payment. It is intended by both parties that NWP shall
-----------------
buy the Contract Goods from Xxxxxx, and Xxxxxx shall sell and deliver the
Contract Goods to NWP, F.O.B. [Confidential Treatment Requested by New World
Pasta] at a price equal to the Actual Contract Price (as defined below).
[Confidential Treatment Requested by New World Pasta] shall be
determined by multiplying the [Confidential Treatment Requested by New
World Pasta], as agreed upon by the parties, times [Confidential
Treatment Requested by New World Pasta].
Actual [Confidential Treatment Requested by New World Pasta]
shall be determined by multiplying the [Confidential Treatment
Requested by New World Pasta], as agreed upon by the parties, times
[Confidential Treatment Requested by New World Pasta].
(b) During the [Confidential Treatment Requested by New World
Pasta] month period beginning on the date on which the final
implementation of the Mill Reconfiguration is achieved, the price of
Contract Goods shall be computed in accordance with the formula set
forth in Section 2.3(a). However, Xxxxxx agrees that it
4
will provide NWP with a discount/cwt from the price of Contract Goods.
Such per cwt discount shall be computed as [Confidential Treatment
Requested by New World Pasta]. Such per cwt discount shall be applied
on a contract by contract basis at the end of each month based upon
[Confidential Treatment Requested by New World Pasta] for such month.
From and after the date which is [Confidential Treatment
Requested by New World Pasta] after the date on which final
implementation of the Mill Reconfiguration is achieved, the purchase
price for the Contract Goods manufactured by Xxxxxx for NWP shall be
determined in accordance with the calculations below considering
[Confidential Treatment Requested by New World Pasta]; it being the
intent of Xxxxxx and NWP that [Confidential Treatment Requested by New
World Pasta].
(c) Actual Contract Price per hundred weight for Contract
Goods originating [Confidential Treatment Requested by New World Pasta]
shall be determined by multiplying [Confidential Treatment Requested by
New World Pasta], as agreed upon by the parties in accordance with one
of the following formulas, as applicable based upon [Confidential
Treatment Requested by New World Pasta]:
[Confidential Treatment Requested by New World Pasta]
Actual Contract Price per hundred weight for Contract Goods
originating [Confidential Treatment Requested by New World Pasta] shall
be determined by multiplying the [Confidential Treatment Requested by
New World Pasta], as agreed upon by the parties in accordance with one
of the following formulas, as applicable based upon [Confidential
Treatment Requested by New World Pasta]:
[Confidential Treatment Requested by New World Pasta]
Notwithstanding anything herein to the contrary, it is agreed
that [Confidential Treatment Requested by New World Pasta]; and whichever
[Confidential Treatment Requested by New World Pasta], shall be known as the
[Confidential Treatment Requested by New World Pasta.]
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Effective September 1, 1998, Xxxxxx will offer NWP
the following volume incentive discount off the agreed upon
purchase prices specified above for Contract Goods purchased
from the Mill:
Purchases Quantity Discount
------------------ --------
[Confidential Treatment Requested by New World Pasta]
Notwithstanding the foregoing, the pricing formula used in
calculating the purchase price for Contract Goods shall be adjusted on
[Confidential Treatment Requested by New World Pasta], as defined
below, to [Confidential Treatment Requested by New World Pasta] in
accordance with the following formulas:
Formula for adjustment as of [Confidential Treatment Requested by New World
Pasta] [Confidential Treatment Requested by New World Pasta]
Formula for annual adjustments for periods subsequent to [Confidential Treatment
Requested by New World Pasta]:
[Confidential Treatment Requested by New World Pasta]
The initial adjustment shall be calculated using the month of
[Confidential Treatment Requested by New World Pasta] as the Base Month PPI for
the adjustment which takes effect on [Confidential Treatment Requested by New
World Pasta], and the adjustment for each [Confidential Treatment Requested by
New World Pasta] adjustment date thereafter shall be calculated by using
[Confidential Treatment Requested by New World Pasta] which shall be the month
of [Confidential Treatment Requested by New World Pasta] ending immediately
prior to the last adjustment date [Confidential Treatment Requested by New World
Pasta]. The Base Year Processing Margin for the adjustment which takes effect on
[Confidential Treatment Requested by New World Pasta] shall be the processing
margin for [Confidential Treatment Requested by New World Pasta] and the Base
Year Processing Margin for each [Confidential Treatment Requested by New World
Pasta] thereafter shall be the [Confidential Treatment Requested by New World
Pasta]. The calculation of these adjustments shall be made in accordance with
the following:
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For purposes of making the initial adjustment to the price of
Contract Goods, which takes effect on [Confidential Treatment Requested by New
World Pasta], the [Confidential Treatment Requested by New World Pasta] will be
utilized in order to calculate the [Confidential Treatment Requested by New
World Pasta] or [Confidential Treatment Requested by New World Pasta]. In
addition, the pricing formula determined according to Section 2.3(c) that
corresponds with such [Confidential Treatment Requested by New World Pasta] will
be utilized to calculate the[Confidential Treatment Requested by New World
Pasta].
For purposes of making the [Confidential Treatment Requested
by New World Pasta], which takes effect on [Confidential Treatment Requested by
New World Pasta], and the annual adjustments that take place thereafter, the
[Confidential Treatment Requested by New World Pasta].
For purposes of determining the [Confidential Treatment
Requested by New World Pasta]. It is the intent of the parties that each of
these costs be expressed as [Confidential Treatment Requested by New World
Pasta] derived by dividing the [Confidential Treatment Requested by New World
Pasta] by the [Confidential Treatment Requested by New World Pasta], whether
sold to NWP or not, however the denominator shall not include the [Confidential
Treatment Requested by New World Pasta]. Xxxxxx shall use reasonable commercial
efforts to minimize Specific Costs increases.
For purposes of determining the Processing Margin, the
[Confidential Treatment Requested by New World Pasta] shall be determined by
dividing the total initial cost of the Mill by an [Confidential Treatment
Requested by New World Pasta] (straight line depreciation and amortization).
During years [Confidential Treatment Requested by New World Pasta] of the asset
life [Confidential Treatment Requested by New World Pasta]. During years
[Confidential Treatment Requested by New World Pasta] of the asset life, the
straight line depreciation and amortization is reduced by [Confidential
Treatment Requested by New World Pasta] to arrive at an adjusted depreciation
and amortization for that year, [Confidential Treatment Requested by New World
Pasta]. For year [Confidential Treatment Requested by New World Pasta] the
depreciation and amortization expenses are
7
[Confidential Treatment Requested by New World Pasta]. The depreciation and
amortization expenses will be computed as a cost per hundred weight using
[Confidential Treatment Requested by New World Pasta].
The Processing Margin is the remainder determined by taking
[Confidential Treatment Requested by New World Pasta].
Notwithstanding the above, the pricing formula shall not be
adjusted to an extent that would cause the price for Contract Goods to exceed
[Confidential Treatment Requested by New World Pasta], or that would otherwise
put NWP at [Confidential Treatment Requested by New World Pasta]. For purposes
of this Agreement, [Confidential Treatment Requested by New World Pasta]. For
purposes of interpretation, [Confidential Treatment Requested by New World
Pasta] and [Confidential Treatment Requested by New World Pasta] shall not be
construed to require an [Confidential Treatment Requested by New World Pasta],
but shall require an [Confidential Treatment Requested by New World Pasta]. In
the event that the adjustment of the price for Contract Goods is restricted in
this manner, Xxxxxx shall have [Confidential Treatment Requested by New World
Pasta], or it may [Confidential Treatment Requested by New World Pasta], in
which case NWP shall be [Confidential Treatment Requested by New World Pasta].
Such option must be exercised or declined by Xxxxxx promptly and in a timely
fashion.
An example of how the pricing formula used in determining the
purchase price for Contract Goods would be adjusted (based upon certain
assumptions about hundred weight production volume, Specific Costs, depreciation
and amortization, mill extraction rates and wheat costs) is set forth on the
Exhibit B attached hereto.
In the event that price adjustments are [Confidential
Treatment Requested by New World Pasta] pursuant to this Section due to
[Confidential Treatment Requested by New World Pasta], and Xxxxxx elects
[Confidential Treatment Requested by New World Pasta], it is understood and
acknowledged that NWP may [Confidential Treatment Requested by New World Pasta].
However, if NWP establishes a [Confidential Treatment Requested by New World
Pasta], then Xxxxxx shall be [Confidential Treatment Requested by New World
Pasta]. For purposes of this Agreement, a [Confidential Treatment Requested by
New
8
World Pasta] shall be deemed to mean [Confidential Treatment Requested by New
World Pasta].
2.4 Enrichment. In the event NWP is purchasing any Third Party Contract
----------
goods similar to Contract Goods and such similar goods are enriched as per NWP's
specifications, then Xxxxxx shall also enrich the Contract Goods purchased by
NWP, per NWP's specifications, for the same price, terms and conditions as
stated in such Third Party Contract; provided, however, that in the event said
Third Party Contract does not provide for enrichment, then Xxxxxx will, at NWP's
request, enrich said Contract Goods and the cost, to be negotiated by both
parties, shall be paid by NWP to Xxxxxx as an additional cost and expense of
NWP.
2.5 Notice of Requirements. On or before the [Confidential Treatment
----------------------
Requested by New World Pasta] day of each month, NWP shall use reasonable
efforts to give a delivery schedule to Xxxxxx, in writing or by telephone,
forecasting the type and quantity of Contract Goods which NWP shall require at
the Plant during the following month. The quantity of Contract Goods which NWP
may order to be delivered to NWP during any given week shall not, without the
prior written consent of Xxxxxx, exceed an amount equal to the production
capacity of the Mill for such week. The parties recognize that sales of pasta
products in which the Contract Goods will be utilized are seasonal in nature.
Therefore, NWP cannot plan or predict with certainty its need for Contract
Goods. NWP agrees it shall use reasonable, good faith efforts to provide Xxxxxx
with a forecast of NWP's intended purchases of Contract Goods within
[Confidential Treatment Requested by New World Pasta] of expected delivery.
[Confidential Treatment Requested by New World Pasta].
2.6 Shipment. Delivery of Contract Goods to NWP shall be made at such
--------
times as shall be ordered by NWP, provided, however, that Xxxxxx, shall not be
required to ship Contract Goods on Saturdays, Sundays, or any other day the Mill
is closed by reason of a legal or union- bargained holiday unless special
prearrangements have been made.
Xxxxxx shall deliver Contract Goods F.O.B. [Confidential Treatment
Requested by New World Pasta] in accordance with orders placed by NWP. Delay in
delivery resulting from the unavailability of the agreed upon mode of
transportation from the Mill to NWP's plant shall not constitute breach of this
Agreement and shall not give rise to a claim by NWP for damages, unless
otherwise set forth in the delivery terms or transportation arrangements, if (a)
such delay does not exceed [Confidential Treatment Requested by New World
Pasta], (b) such
9
unavailability is not the fault of Xxxxxx (which may include a one (1) week
period each year at which time the Mill's operations shall cease for fumigation,
maintenance, and repairs, for which Xxxxxx shall provide [Confidential Treatment
Requested by New World Pasta] advance notice to NWP), and (c) Xxxxxx has used
reasonable efforts to provide a reasonable substitute mode of transportation.
2.7 Purchase and Manufacturing Records.
----------------------------------
(a) Xxxxxx shall keep complete, true and accurate records and
accounts with respect to all matters and inputs affecting the price of Contract
Goods, including but not limited to, records with respect to purchasing and
transporting of flour, such records to be kept in accordance with generally
accepted accounting principles applied on a consistent basis from year to year.
NWP or its representatives shall have the right to audit such records and
accounts after reasonable prior notice to Xxxxxx, and Xxxxxx shall provide NWP
with monthly statements of such matters in such form as shall be reasonably
requested by NWP.
(b) Xxxxxx shall also keep complete, true and accurate records
with respect to manufacturing practices, quality assurance measures, analytical
procedures and data and inspection reports. Xxxxxx shall allow NWP access to
such records upon NWP's request insofar as they deal with the Contract Goods.
3. Term. The term of this Agreement shall be a period commencing with the
----
first day of the month following that in which such production of Contract Goods
commenced and shall expire on [Confidential Treatment Requested by New World
Pasta].
4. Termination.
-----------
4.1 Breach of Obligations. Failure of Xxxxxx to comply with any of the
---------------------
obligations or conditions herein contained, including, but not limited to late
delivery or failure to meet product specifications, shall be a default and shall
entitle NWP to give Xxxxxx written notice to cure such default. If any such
default is not cured [Confidential Treatment Requested by New World Pasta] after
receipt of such written notice, NWP shall be entitled to terminate this
Agreement by giving written notice to take effect immediately.
4.2 Bankruptcy. If either party shall file a voluntary petition in
----------
bankruptcy, be declared bankrupt, make an assignment for the benefit of
creditors or suffer the appointment of a receiver or a trustee of its assets,
that party shall be in breach of this Agreement and the other
10
party shall have the right to terminate this Agreement by giving written notice
to take effect immediately.
5. Liquidated Damages in The Event of Force Majeure.
------------------------------------------------
5.1 Liquidated Damages. In the event that Xxxxxx shall become unable to
------------------
supply NWP with its requirements in accordance with Section 2 of this Agreement,
or to perform any particular contract between Xxxxxx and NWP, for the sale of
any particular quantity or type of Contract Goods for any reason beyond the
control of Xxxxxx, unless covered by Section 5.2, Xxxxxx shall either purchase
sufficient quantities and quality of comparable Contract Goods on the open
market to fulfill the orders of NWP or notify NWP that Xxxxxx is unable to make
the necessary purchases to enable NWP to effect its own cover for such orders
from other suppliers and Xxxxxx shall pay, as liquidated damages and not as a
penalty, to NWP the difference between the cost of cover for any Contract Goods
which Xxxxxx failed to so deliver and the Actual Contract Price thereof. Such
payment shall be made within 30 days after NWP shall have paid for such cover
and apprised Xxxxxx of the cost of such cover. Xxxxxx and NWP acknowledge that
the terms of this Section 5.1 which provide for liquidated damages are not
intended to apply to those force majeure circumstances described in Section 5.2
below.
5.1.1. For purposes of Section 5.1, the Actual Contract Price
of a particular quantity of any Contract Goods ordered by NWP which
Xxxxxx failed to deliver shall equal the price fixed for such Contract
Goods in accordance with Section 2.3, as applicable considering the
timing of final implementation of the Mill Reconfiguration, at the time
such order was placed.
5.2 Force Majeure. Xxxxxx and NWP shall be excused from performance of
-------------
the purchase and supply provisions of this Agreement by reason of circumstances
beyond their control, including, but not limited to, acts of God, disaster,
fire, floods, the elements, lockouts, strikes, embargoes, governmental acts,
wars (declared or undeclared) and riots. The party experiencing such force
majeure shall provide prompt notice to the other party and its performance shall
be excused during the existence of such force majeure. The party experiencing
such force majeure shall use its best efforts to remove, rectify or correct such
force majeure and if the force majeure extends for longer than eighteen (18)
months, the other party shall have the option of terminating this Agreement upon
written notice. If the force majeure prevents Xxxxxx
11
from supplying Contract Goods to the Plant as set forth in this Agreement, then
after nine (9) months of such force majeure, and during the continuance of such
force majeure, Xxxxxx agrees to reimburse NWP for the difference in cost to NWP
of Contract Goods required to be purchased by NWP for operation of the Plant and
the cost of such Contract Goods as calculated under subsection 2.3.
6. Inspection Rights of NWP. During the term of this Agreement, NWP is hereby
------------------------
granted the rights to examine, at any time that the Mill is open, the Mill and
the raw materials used to manufacture Contract Goods.
7. Transportation. Xxxxxx will deliver Contract Goods to the Plant by truck
--------------
which carrier shall meet the reasonable approval of NWP. Should NWP request
deliveries by a mode other than truck, then NWP will reimburse Xxxxxx for the
actual additional cost incurred by Xxxxxx because of the increase in
transportation costs.
8. Storage. NWP has, at [Confidential Treatment Requested by New World Pasta],
-------
constructed storage at the NWP plant sufficient to hold [Confidential Treatment
Requested by New World Pasta] of Contract Goods, single identity at a time. NWP
agrees to use this capacity only for Xxxxxx produced products. The form and
method of such construction was agreed to by and between Xxxxxx and NWP. At the
termination or the expiration of this Agreement, NWP shall own, at no cost, the
storage facility free and clear of any liens, claims or encumbrances.
8a. Wheat Storage. Xxxxxx has constructed and will make available to NWP
-------------
additional storage at the Mill sufficient to hold an additional [Confidential
Treatment Requested by New World Pasta] of wheat (in addition to the current
storage capacity of [Confidential Treatment Requested by New World Pasta]). NWP
will pay Xxxxxx for the use of this additional storage (for each bushel NWP
stores in excess of [Confidential Treatment Requested by New World Pasta]) a per
bushel amount as follows:
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year [Confidential Treatment Requested by New World Pasta]
Year and beyond [Confidential Treatment Requested by New World
Pasta].
12
NWP's right to use of the storage is always dependent on (i) the
[Confidential Treatment Requested by New World Pasta], and (ii)[Confidential
Treatment Requested by New World Pasta].
9. Governing Law. The parties hereto acknowledge that this Agreement was made
-------------
under, and shall be governed by, the laws of the State of California.
10. [Confidential Treatment Requested by New World Pasta]. For purposes of this
-----------------------------------------------------
Section 10, [Confidential Treatment Requested by New World Pasta] means the
[Confidential Treatment Requested by New World Pasta].
11. Notices. All notices under this Agreement shall be in writing and may be
-------
delivered by hand or sent by mail, courier or facsimile. Notices by mail shall
be sent by United States registered or certified mail, postage prepaid, return
receipt requested, and shall be deemed delivered five (5) days after date of
mailing. Notices sent by facsimile shall be deemed received on the day sent;
provided that (i) the sender receives written confirmation that the facsimile
has been sent, and (ii) the sender delivers a copy thereof to the other party by
overnight courier. Notices by courier shall be deemed to have been received at
the time of delivery or refusal of delivery as confirmed by the courier's
records. Notices shall be sent to the parties at the addresses set forth below,
or at such other addresses or persons as the party may from time to time
designate by written notice to the other party:
If to Xxxxxx: Xxxxxx Milling Company
000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
With copy to: Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP
13
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
and Xxxxx Xxxxxx, Esq.
If to NWP: New World Pasta Company
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chief Executive Officer
With copy to: New World Pasta Company
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President Finance/Chief Financial
Officer
12. Terms of Sale. Except as otherwise provided in this Agreement or in any
-------------
particular contract for the purchase and delivery of any particular quantity of
Contract Goods, all sales of Contract Goods shall be governed by the Uniform
Commercial Code.
13. Breach of Agreement. In the event of any breach of this Agreement, the
-------------------
non-breaching party may avail itself of any remedies afforded it by law.
14. Confidentiality. Both Xxxxxx and NWP hereby agree not to disclose, without
---------------
the other parties' consent, to any third party (except financial institutions or
professional personnel such as lawyers, accountants, and the like who are
employed by the party hereto or as may be required or advisable to comply with
laws including, without limitation, state and federal securities laws) the
specific provisions of this Agreement; provided, however, that either party
shall, at the request of the other party, execute and deliver a Memorandum of
this Agreement in recordable form for recordation against the Plant Property and
the Mill Property to memorialize the purchase and supply obligations of the
parties hereto, Xxxxxx'x obligations under Section 10 and each of the parties'
obligations under Section 16.
15. Arbitration. In the event the parties are unable to agree upon the pricing
-----------
of any products hereunder, the amount due for any delivery, or the quality of
any delivery they shall identify a third party who shall determine such amount,
and whose determination shall be binding upon the parties hereto, and further
provided that if Xxxxxx and NWP shall be unable to agree upon the identity of
such third party, said determination shall be made by a board of arbitration in
accordance with the rules and regulations of the American Arbitration
Association, and held in
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San Francisco or Los Angeles, California. The cost of said arbitration shall be
divided between the parties so that the losing party shall pay to the prevailing
party a portion of the cost of the prevailing party's attorneys' fees and costs
which shall be equal to a percentage determined by dividing (i) the value of the
award to the prevailing party by (ii) the amount of the prevailing party's claim
in the arbitration. The decision of the arbitrators shall be final and binding
and entitled to recognition and enforcement by the courts of the United States
and by the courts of all states of the United States.
16. Binding Effect. This Agreement shall be binding upon and inure to the
--------------
benefit of the parties hereto, their successors and assigns including, without
limitation, any party that purchases or leases substantially all of the Plant
assets or any transferee which acquires effective control or ownership of the
Plant.
17. Severability. The determination that any portion or provision of this
------------
Agreement is invalid or unenforceable shall not affect the remaining portions or
provisions hereof, unless such determination of invalidity relates to the
essence or essential terms of this Agreement, in which event the entire
Agreement shall become null and void.
18. Counterparts. This Agreement may be executed in two or more counterparts and
------------
all counterparts so executed shall for all purposes constitute one agreement,
binding on all the parties hereto, notwithstanding that all parties shall not
have executed the same counterpart.
19. Costs of Mill Reconfiguration. NWP shall pay, as and when due, all amounts
-----------------------------
which are required to be paid to Xxxxxx under the Xxxxxx Contracts which have
not been paid as of the date hereof and will not later than the date that is ten
(10) days after the date this Agreement is signed by both parties, pay to Xxxxxx
any amounts Xxxxxx has paid to Xxxxxx under the Xxxxxx Contracts. In addition,
NWP shall reimburse Xxxxxx or pay directly to any vendor or contractor all costs
incurred by Xxxxxx which are not covered by the Xxxxxx contracts which are
necessary to secure permits, pay permit fees, acquire equipment, supplies and
services from third parties in connection with the Mill Reconfiguration,
provided that the maximum amount payable by NWP under this sentence shall not
exceed [Confidential Treatment Requested by New World Pasta]. Xxxxxx will, at
its expense, pay for the cost of Xxxxxx'x personnel (including travel and
lodging expenses) arising from Xxxxxx'x management of the construction and
installation of the
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Mill Reconfiguration. Xxxxxx shall use reasonable efforts to minimize the costs
covered by Section 19.
20. Title to Equipment and Fixtures. Title to any equipment or other trade
-------------------------------
fixtures which are installed in the Mill in connection with the Mill
Reconfiguration shall belong solely to NWP. NWP shall have no right to use any
equipment or other trade fixtures as collateral or to grant any security
interest in, lien on or otherwise encumber any equipment or trade fixtures.
Title to the equipment and other trade fixtures installed in the Mill in
connection with the Mill Reconfiguration shall pass to Xxxxxx [Confidential
Treatment Requested by New World Pasta]. However, prior to the earlier of
[Confidential Treatment Requested by New World Pasta].
21. Integration. This Agreement amends and restates the Existing Mill Agreement
-----------
in its entirety and represents the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
WITNESS XXXXXX MILLING COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WITNESS NEW WORLD PASTA COMPANY
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
ACKNOWLEDGMENT
Xxxxxx Milling Company Limited Partnership, a Minnesota limited
partnership, is executing this Mill Agreement solely to indicate its agreement
to be bound by the Right of First Refusal provisions contained in Section 10.
XXXXXX MILLING COMPANY LIMITED
PARTNERSHIP
By Xxxxxx Milling Company,
Its General Partner
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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