EXHIBIT 10.26
STORAGE AGREEMENT
MANUFACTURERS PRODUCTS
Agreement made August 3, 1999, between Salinas Valley Public Warehouse, a
corporation organized and existing under the laws of California, with its
principal office at 340 El Camino Real South, #16, Salinas, Monterey County,
California, here referred to as warehouseman and Monterey Pasta Company, a
corporation organized and existing under the laws of Delaware, with its
principal office at 1528 Xxxxxxx Street, Xxxxxxx, Monterey County,
California, here referred to as depositor.
The parties recite and declare that:
1. Depositor desires to ship Pasta Products in trucks or other vehicles to
000 Xx Xxxxxx Xxxx Xxxxx #00, Xxxxxxx, XX 00000, for the account of
depositor, and will require certain services, described below, to be
performed with respect to these products.
All receiving, picking and shipping of goods and pallet exchange;
All perpetual and physical inventory, warehouse receipts, and bills of
lading
Overseeing of day to day operations at CSI until cold storage unit at
000 Xx Xxxxxx Xxxx Xxxxx #00, Xxxxxxx, XX 00000 has been constructed.
2. Depositor desires to make arrangements with warehouseman to perform, and
warehouseman desires to perform for depositor, such of the above-described
services as may be required by depositor during the time this agreement is in
effect.
For the reasons set forth above and in consideration of the mutual covenants
and promises provided in this agreement, the parties agree as follows:
SECTION ONE
WAREHOUSING SERVICES AND RATES
Depositor hereby engages warehouseman to perform, and warehouseman shall
perform, during the term of this agreement and at the following rates, all of
the following services required by depositor in the course of its business
with respect to depositors products shipped in trucks or other vehicles to
000 Xx Xxxxxx Xxxx Xxxxx #00, Xxxxxxx, XX 00000, for the account of depositor:
(a) Handling. Rate: $.275 per case. Handling, for purposes of this agreement,
includes keeping records of the contents of each truck; unloading and moving
depositors goods from the truck to warehouseman's warehouse; and delivering
the goods at the warehouse door on depositors order.
(b) Storage. Rate: $.275 per case. Storage, for purposes of this agreement,
includes storage and usual handling in warehouseman's warehouse.
(c) Making shipments. Making shipments, for purpose of this agreement,
includes filling orders for out-of-town and local shipments; marking the
destination on containers in the manner and from specified by depositor; and
procuring bills of lading or shipping receipts from the carrier and
forwarding them to the address specified by depositor.
(f) Transportation charges. Depositor shall pay lawful transportation charges
on prepaid shipments.
(g) Warehouse receipts. Warehouseman shall issue nonnegotiable warehouse
receipts as requested by depositor for the goods stored under this agreement.
(h) Cross-docking for retail and club shipments.
SECTION TWO
TERM OF AGREEMENT
If warehouseman defaults in the performance of any of the provisions of this
agreement, depositor may terminate the agreement by written notice to
warehouseman. Unless so terminated, or terminated by depositor upon 30 day
written notice, this agreement will continue in effect for a period of 5
(five) years from date of execution of this agreement and thereafter until
terminated by depositor on at least 30 (thirty) days written notice.
If warehouseman does not perform to the specifications of the depositor, the
depositor has the right, upon 30 days notice, to assume all activities
formerly performed by warehouseman on warehouseman's premises under one of
the three potential arrangements:
1) A lease of premises, equipment and refrigerated leasehold
improvements at an
all inclusive lease rate for the remaining term of warehouseman's
lease along with any options for renewal included in the current
building lease held by warehouseman.
2) A purchase of equipment and leasehold improvements in conjunction
with an assumption of warehouseman's current building lease.
3) An assumption of warehouseman's remaining obligations with a lender
or lenders for equipment and leasehold improvements in conjunction
with an assumption of warehouseman's existing building lease.
With all three potential arrangements the warehouseman agrees to no markup
and profit margin added to the cost to the depositor of assuming any
obligations or purchasing any fixed assets. All transactions shall be
purchased or assumed at warehouseman's then existing cost or, in the case of
fixed assets, at a maximum of the warehouseman's book cost or a negotiated
price, whichever is lower.
SECTION THREE
LABOR AND EQUIPMENT
Warehouseman shall furnish all labor and equipment necessary to perform the
services specified above at the rates specified.
SECTION FOUR
CONDITION OF SHIPMENTS
Shipment will be reconciled by warehouseman with bills of lading, and any
damage or shortage will be noted on the original freight xxxx or carriers
receipt and the original freight xxxx or receipt forwarded promptly to
depositor. No goods will be delivered in torn, broken or damaged sacks or
other containers, or with respect to which there is any evidence of
infestation or contamination. In the event of a damaged case the
warehouseman will rebox product at the direction of depositor.
SECTION FIVE
UNLOADING, LOADING, AND HAULING
Unloading, loading, and hauling will be done so as to protect the goods from
rain, snow, and other injurious weather conditions, from theft, and from
contract or proximity to anything that might be damaging or injurious.
Warehouseman shall leave no truck unguarded or unlocked until it is fully
unloaded or loaded. As to any truck that is not unloaded and unloaded within
the required time, warehouseman will promptly notify depositor, specifying
the consignee or consignees and the goods not unloaded or loaded. Hours of
operation shall be 6:00 a.m. to 11:00 p.m. with receiving available during
all hours. Warehouseman will compensate depositor at depositor's cost for
any damage to depositor's product resulting from mechanical or handling
damage, weather damage, insect or rodent damage, or contamination or loss due
to temperature abuse caused by improper handling or storage.
SECTION SIX
MANNER OF STORAGE
Warehouseman shall store all goods so that they will be protected at all
times against theft and against injury or damage from moisture, excess heat,
insects, rodents, improper or unusual location, or injurious contact. All
goods stored will be piled so as to permit inspection by depositor at anytime,
and delivery will always be made from the oldest goods on hand unless
otherwise specified by depositor. All goods shall be stored in a cooler
environment at a temperature of 34-36 degrees unless otherwise specified by
depositor.
SECTION SEVEN
DAILY AND STOCK REPORTS
Daily reports will be forwarded to depositor of all deliveries during the
preceding business day. Warehouseman will furnish depositor stock reports
and exception reports in writing at anytime requested by depositor, showing
deliveries and balance of stock on hand.
SECTION EIGHT
COLLECTIONS
No collections shall be made except as depositor authorizes in writing, and
no C.O.D. deliveries shall be made without obtaining payment as directed by
depositor.
SECTION NINE
TITLE TO GOODS; DELIVERY
Title to all goods remains with depositor. All goods stored shall be
delivered to depositor or to its order on demand and on surrender of any
outstanding warehouse receipt or receipts. No deliveries will be made by
warehouseman without a written order.
SECTION TEN
PAYMENT OF CHARGES AND COLLECTIONS
All amounts due warehouseman will be paid by depositor on monthly invoices
within 30 days of invoice date.
SECTION ELEVEN
ADDRESSES OF PARTIES
All funds, notices, and documents required by this agreement to be sent or
delivered will be sent or delivered to depositor and to warehouseman at their
respective addresses above stated.
SECTION TWELVE
INSURANCE
Depositor on its property will carry insurance. Warehouseman on its property
will carry insurance.
SECTION THIRTEEN
STATUS OF WAREHOUSEMAN
Warehouseman is an independent contractor and not an agent or employee of
depositor.
ASSIGNMENT
This Agreement will bind and insure to the benefit of each party's permitted
successors and assigns. Neither party may assign this Agreement, in whole or
in part, without the other party's written consent; PROVIDED, HOWEVER, that
Depositor may assign this Agreement without such consent to a successor in
interest or in connection with any merger, consolidation, any sale of all or
substantially all of such party's assets or any other transaction in which
more than fifty percent (50%) of such party's voting securities are
transferred. Any attempt to assign this Agreement other than in accordance
with this provision shall be null and void.
MEDIATION AND ARBITRATION
Any controversy arising out of the performance of this Agreement or
regarding the interpretation of this Agreement is subject to a good faith
effort at resolution through nonbinding mediation before any complaint
(whether a civil complaint in court or a implant in arbitration) may be
filed. Mediation is a process in which parties attempt to resolve a dispute
by submitting it to any impartial neutral mediator who is authorized to
facilitate the resolution of the dispute, but who is not empowered to impose
a settlement on the parties. The mediation fees, if any, shall be divided
equally amoung the parties involved. The parties agree to limit the
admissibility in any subsequent litigation or proceeding of anything said,
any admissions made, and any documents prepared, in the course of mediation,
consistent with California Evidence code section 1152.5.
IF ANY PARTY COMMENCES A COURT ACTION OR AN ARBITRATION PROCEEDINGS
BASED ON A DISPUTE OR CLAIM TO WHICH THIS SECTION APPLIES WITHOUT
FIRST ATTEMPTING TO RESOLVE THE MATTER IN GOOD FAITH THROUGH
MEDIATION, THEN THAT PARTY SHALL NOT BE ENTITLED TO RECOVER
ATTORNEY'S FEES EVEN IF THEY WOULD OTHERWISE BE AVAILABLE TO THAT
PARTY IN A SUBSEQUENT COURT ACTION OR ARBITRATION PROCEEDING:
Any controversy or claim arising out of or relating to this Agreement, or the
making, performance, or interpretation thereof, which is not resolved through
the mediation process required by the preceding Section shall be resolved by
arbitration in accordance
with the Rules of the American Arbitration Association then existing, and
judgement on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy. Such award may be
appealed to any appellate court having jurisdiction over the matter to the
same extent that an appeal would be permissible from a civil judgement. The
Arbitrators selected shall be persons experienced in general corporate
matters or general business agreements, and shall make their awards based
upon the principles of California law. The parties shall have the right to
discovery and the Arbitration proceeding shall be reported by a certified
court order.
BY THEIR EXECUTION OF THIS AGREEMENT, THE PARTIES ARE AGREEING TO
HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THIS
"ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION.
ADDITIONALLY, THE PARTIES ARE HEREBY GIVING UP ANY RIGHTS THEY
MIGHT OTHERWISE HAVE POSSESSED TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL; PROVIDED, HOWEVER, THE PARTIES ARE NOT GIVING
UP THEIR JUDICIAL RIGHTS TO APPEAL OF THE DECISION OF THE
ARBITRATION(S). IF ANY PARTY REFUSES TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, SUCH PARTY MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. THE PARTIES' AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY. THE PARTIES HAVE READ AND UNDERSTAND THE FOREGOING AND
AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
In witness whereof, the parties have executed this agreement as signed and
executed below.
Salinas Valley Public Warehouse
/s/ Xxxxxxx Xxxxxx, President 8/9/99
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Xxxxxxx Xxxxxx, President Date
Xxxxxxx Valley Public Warehouse
/s/ Xxxxxx X. Xxxxxx 8/9/99
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Xxxxxx Xxxxxx, General Manager Date
Monterey Pasta Company
/s/ R. Xxxxx Xxxxxx 8/9/99
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R. Xxxxx Xxxxxx, President & Chief Executive Officer Date
Monterey Pasta Company
/s/ X. X. Xxxxxxxx 8/9/99
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Xxxxxxx X. Xxxxxxxx, Chief Financial Officer Date
