Exhibit 10.14
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT, ("Agreement") is entered into this 15th day of
October, 1997, by and among DAKOTA GROWERS PASTA COMPANY, a North Dakota
cooperative association, Carrington, North Dakota ("DGPC"), and Peninsula
Trading Company, Inc., a California corporation, 000 Xxxxxxxx Xxxx, Xxxxx
000, Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000 ("Peninsula") and acknowledged by
its shareholders Xxxxx Xxxxxx, Xxx Xxxxxx, Xxx Xxxxxx, Xxxxxx Xxxxxx and
Xxxxxxx Xxxxxxx, all residents of California, (referred herein collectively
as "Peninsula shareholders") and is subject to the following terms and
conditions:
1. APPOINTMENT OF PENINSULA; ACCEPTANCE. DGPC appoints Peninsula, and
Peninsula accepts such appointment, as a consultant for DGPC in DGPC's dry
pasta and pasta sauce business with Costco, whereby Peninsula will perform
such services as may be requested by DGPC under the terms and conditions of
this Agreement during the term of this Agreement.
2. REPRESENTATIONS AND WARRANTIES. Peninsula represents and warrants
that (a) the shareholders of Peninsula are Xxxxx Xxxxxx, Xxx Xxxxxx, Xxx
Xxxxxx, Xxxxxx Xxxxxx and Xxxxxxx Xxxxxxx; (b) Peninsula is a California
corporation validly existing and in good standing under the laws of the State
of California; (c) that the above named shareholders comprise all of the
shareholders of Peninsula; (d) the execution and performance of Peninsula's
obligations under the Agreement will not violate any agreement, instrument or
organizational documents of Peninsula; (e) it has no knowledge of any
proposed termination of Peninsula's account with Costco and it has no reason
to believe that Costco would terminate the account merely because of its
transfer from Peninsula to DGPC; and (f) Peninsula will not take any action
that is contrary or detrimental to Peninsula's performance hereunder, or in
anyway adversely affects the DGPC - Costco business relationship; (g) the
services to be performed under this Agreement will be performed by certain of
the shareholders of Peninsula. The shareholders agree to use their best
efforts in performing the duties required of Peninsula hereunder.
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3. FUNCTIONS AND DUTIES OF CONSULTANT.
3.1 Peninsula shall work diligently and use its best efforts as DGPC's
consultant for the sales and promotion of all DGPC dry pasta products and Zia
Briosa -TM- pasta sauce to Costco as requested by DGPC. In performing such
tasks as requested by DGPC, Peninsula agrees (a) to comply with all DGPC
policies and procedures; (b) to exercise reasonable concern for the financial
welfare of DGPC; (c) to introduce DGPC employees to the appropriate pasta
purchasing personnel for Costco or its agents and to facilitate the creation
and maintenance of a good business relationship by and between those
individuals and the respective companies; (d) to periodically review with
DGPC its relationship with Costco, and to take whatever reasonable steps are
requested by DGPC to maintain and strengthen that relationship; (e) Peninsula
will not take any action or make any contract with Costco, Costco personnel,
or brokers associated with Costco regarding any dry pasta products or Zia
Briosa -TM- pasta sauce without prior approval of DGPC.
3.2 Peninsula shall have no authority to delegate its obligations
hereunder to other entities or individuals.
3.3 Peninsula agrees it will not act as a broker, agent or consultant in
connection with the promotion or sale of any dry pasta products for any pasta
manufacturer other than DGPC, or act as broker, agent or consultant in
connection with the promotion of any Zia Briosa -TM- pasta sauce products, for
five (5) years following the date of this Agreement.
4. TERMS OF SALE. Prices, terms and conditions of sales shall be
determined solely by DGPC and may be changed from time to time. All orders,
returns and credits are subject to DGPC's approval. Costco's payments shall
be made directly to DGPC.
5. CONSULTING FEE. Upon execution of this Agreement, DGPC shall pay to
Peninsula $1,300,000.00 in exchange for Peninsula's development and fostering
of a direct business relationship between Costco and DGPC without Peninsula's
further involvement as an intermediary-reseller of dry pasta products and Zia
Briosa -TM- pasta sauce products. Peninsula shall also be entitled to a
consulting fee of $54,167.00 per month for each month DGPC continues its
business relationship with Costco after execution of this Agreement, up to
maximum additional payment of $975,000.00. If DGPC decides to discontinue its
business relationship with Costco, Peninsula shall be entitled to the unpaid
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portion of the $975,000 maximum additional payment. All consulting fees shall
be paid no later than ten (1) days following the close of each month's
accounting period.
6. PENINSULA'S LEGAL STATUS AND AUTHORITY. Peninsula will act as
DGPC's consultant in connection with DGPC in the sale and marketing of DGPC's
dry pasta products and Zia Briosa -TM- pasta sauce to Costco. Peninsula shall
only perform such duties as requested by DGPC. It is agreed that Peninsula is
an independent contractor and not a DGPC employee. Peninsula shall have no
right or power to obligate DGPC in any way or manner, nor represent that it
has any right to do so. Peninsula agrees that it is solely responsible for
all of the expenses of operating its business, including the entertainment
expenses incurred to nurture the business relationships between DGPC and
Costco management, and for the payment and collection of all taxes and levies
of any and all kinds in connection with Peninsula's business. Expenses
incurred for services or acts requested of Peninsula by Costco in order to
properly supply and service Costco's purchasing needs shall be considered a
selling expense of DGPC.
7. OBLIGATIONS PRIOR TO AGREEMENT. Peninsula agrees that it is solely
responsible for all obligations incurred or committed to by Peninsula prior
to the date of this Agreement. Peninsula further guarantees that the
settlement of these obligations will not affect its ability to perform under
the Agreement, nor impact DGPC's business relationship with Costco.
8. SURRENDER OF RIGHTS AND CLAIMS. Peninsula agrees to surrender all
rights and claims related to past and future sales of any DGPC dry pasta
products and Zia Briosa -TM- pasta sauce to Costco, or any other customer,
including but not limited to, any agent, distributor or chain operator,
domestic or foreign, except as expressly approved by DGPC. Peninsula
acknowledges that as of the date of this Agreement it does not have any claim
against DGPC arising from the parties' previous business relationship.
9. TERM. This Agreement shall continue until terminated under any of the
following conditions:
a. Attainment of maximum consulting fee payment;
b. Either party may immediately terminate this Agreement upon written
notice to the other in the event that such other party breaches any material
provision of this Agreement;
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c. DGPC may immediately terminate this Agreement upon written notice if
it determines, in its sole judgement, that any action of Peninsula is
unlawful or destructive to DGPC's public image or business;
d. DGPC may immediately terminate this Agreement upon written notice in
the event of Peninsula's bankruptcy, insolvency, change of ownership, death
or disability of Peninsula's principal owners or any other condition which
may affect the ability of Peninsula to perform its duties under this
Agreement.
10. OBLIGATIONS UPON TERMINATION. Upon termination of this Agreement,
Peninsula shall immediately cease any and all activities with respect to the
sale of DGPC's dry pasta products and Zia Briosa -TM- pasta sauce products sold
to Costco, and shall cease using any information or material regarding DGPC
for any purpose whatsoever. Peninsula is entitled to all earned consulting
fees through the date of termination. Peninsula agrees to return to DGPC all
records and materials relating to its duties and performance under this
Agreement, as DGPC may request.
11. NOTICE. Any written notice given hereunder by either party shall
be delivered or sent by certified or registered mail, postage prepaid,
addressed as follows:
If to DGPC: Dakota Growers Pasta Company
ATTN: Xxx Xxxx
Xxx Xxxxx Xxxxxx
X.X. Xxx 00
Xxxxxxxxxx, XX 00000
If to Peninsula:
Xx. Xxxxx Xxxxxx
Peninsula Trading Company, Inc.
X.X. Xxx 0000
Xxxxx Xxxxxx Xxxxxxx, XX 00000-0000
12. GOVERNING LAW; VENUE. It is mutually agreed that this Agreement
shall be conclusively deemed to have been executed under and pursuant to the
laws of the state of North Dakota and that the laws of said State, and only
said State, shall be applied hereunder, and that any causes of action between
the parties hereto shall only have jurisdiction and venue in the courts of
the state of North Dakota, in and for the County of Xxxxxx.
13. NO ASSIGNMENT. Peninsula may not assign this Agreement in whole or
in part without DGPC's prior written consent.
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14. MISCELLANEOUS.
14.1 EQUAL BARGAINING POSITION. The parties acknowledge that each is a
sophisticated business or business person and is fully capable of
understanding the terms of the Agreement. Each party has had the opportunity
to seek such business and legal advise as deemed appropriate. Each party has
entered into this Agreement voluntarily and freely.
14.2 MODIFICATION. No change or modification of this Agreement shall
be Binding upon the parties hereto, unless it shall be in writing and signed
by Both parties.
14.3 ENTIRE AGREEMENT. This Agreement constitute the entire Agreement
between the parties hereto and supersedes all prior and contemporaneous
negotiations, understandings, Agreements, inducements, and conditions of any
nature whatsoever with respect to the subject matter hereof.
14.4 PROVISIONS SEVERABLE. If any provision of this Agreement shall be
or shall become illegal or unenforceable, in whole or in part for any reason,
the remaining provisions hereof shall nevertheless be deemed valid, binding
and subsisting.
14.5 TITLES NOT TO AFFECT INTERPRETATION. The titles of the sections
and subsections in this Agreement are inserted for convenience of reference
only, and they neither form a part of this Agreement nor are they to be used
in the construction or interpretation thereof.
14.6 BINDING EFFECT. This Agreement is entered into freely and
voluntarily between the parties, and it shall be binding upon and inure to
the benefit of the parties hereto, as well as their respective heirs,
personal representatives, successors and assigns.
14.7 INDULGENCES NOT WAIVERS. No indulgences extended by either party
to the other party shall be construed as a waiver of any breach on the part
of such other party, nor shall any waiver of one breach be construed as a
waiver of any rights or remedies with respect to any subsequent breach.
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IN WITNESS WHEREOF, the parties hereto have set their hands on the day and
year first above written.
DAKOTA GROWERS PASTA COMPANY
By /s/ Xxx Xxxx
Its President
PENINSULA TRADING COMPANY
By /s/ Xxxxx Xxxxxx
Its President
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