exv10w1



 






Exhibit 10.1






LOGISTICS SERVICES AGREEMENT



This Logistics Services Agreement is made and entered into as of March 4, 2005 by and between Pacer
Global Logistics, Inc., an Ohio corporation (“PGL”), and Del Monte Corporation, a Delaware
corporation (“DM”).



WHEREAS, DM is a manufacturer and purchaser of consumer food products and requires that such
products be transported from various shipment points to various points of destination, and wishes
to retain the Supply Chain Services Division of PGL for the purpose of providing comprehensive
logistics services for such shipments as provided herein; and



WHEREAS, PGL, through its Supply Chain Service Division, and DLM Foods, LLC, a predecessor entity
of DM, executed a Supply Chain Services Agreement commencing the 26th day of September,
2002 (the “Original Agreement”);



WHEREAS, PGL, through its Supply Chain Service Division, has been providing dispatching, freight
payment, freight claim processing, boxcar tracing, system order look up processes and
transportation operations support for DM under the Original Agreement since September 26, 2002;



WHEREAS, PGL and DM wish to expand the scope of the services rendered by PGL and change the prices
and amounts charged by PGL as described herein and to establish savings and gain sharing targets;
and



WHEREAS, PGL and DM wish to enter into this Agreement to reflect the changed services, pricing,
savings and gain sharing methodologies as set forth herein and to supersede the Original Agreement;




NOW THEREFORE, in consideration of the mutual agreements, covenants and promises contained in this
Agreement, the parties, intending to be bound legally, agree as follows:





	1.  	TERM AND TERMINATION: This Agreement shall commence on March 4, 2005 (the “Commencement
Date”) and, subject to the terms and conditions set forth herein, shall continue until April
30, 2008. The parties’ obligations during the Implementation Period (as defined below) are
set forth in Section 6. This agreement shall automatically renew for a two (2) year term at
the end of the then current term unless either party provides written notice of non-renewal
prior to the end of the term, by giving the other party at least one hundred eighty (180)
days’ advance written notice.
	 
	   	The foregoing provisions notwithstanding, either party may terminate this Agreement for “cause”
upon giving the other party at least sixty (60) days’ prior written notice of the termination
(or such longer period as the parties shall mutually agree, not to exceed one hundred eighty
(180) days), which notice shall state the “cause” upon which the termination is based, as well
as the effective date of the termination. For purposes of this Agreement, the
term “cause” shall mean a material failure in performing one or more responsibilities described
in this Agreement which continues, without correction for a period of at least thirty




-1-









 












(30) days (or if such failure would reasonably require a longer period of time to cure, such longer
period, not to exceed sixty (60) days) following the receipt by the alleged failing party of
written notice of the failure. “Cause” shall also include the filing of a petition in
bankruptcy or the insolvency or inability of a party to pay its debts as they become due. In
addition, DM may terminate this Agreement pursuant to Section 8 and Appendix E.




During any notice period before termination, the Benchmark Rates (as defined below) shall
continue to apply and each party will continue to perform its respective responsibilities
through the effective date of termination, and will use good faith to transition the services
provided by PGL to DM or any party designated by DM in a commercially reasonable manner. Upon
termination of this Agreement for any reason, each party shall complete its performance and
fulfill all obligations which accrued prior to the date of termination, including DM’s
obligation to pay the Management Fee (as defined in Section 4(a)), linehaul and other charges
and other amounts due to PGL; and PGL’s obligation to provide reporting on transactions through
the termination date (even if the reports must be issued subsequent to the termination effective
date), to continue to track and handle shipments shipped before termination and delivered after
the termination date and to engage in any final quarterly reconciliation of savings and charges.
All unresolved cargo claims will be returned to DM for further handling. After notice of
termination is delivered, upon DM’s request, PGL will provide to DM shipment data, carrier rate
files, Carrier contracts (if permitted by the contract’s terms and such contract does not
contain any confidential information of any other PGL customer), freight claim files and other
information reasonably requested by DM in a mutually acceptable hard copy or electronic format.
DM will comply with all confidentiality restrictions and licensing requirements imposed on data
and any software necessary to access and use the information provided by PGL.




After the effective date of termination of this Agreement, if requested by DM and agreed to by
PGL, PGL will continue to perform the Services (as defined in Section 2, below) for a reasonable
continuing transition period subject to, unless otherwise mutually agreed by the parties, DM’s
payment of the Management Fee in effect on the date of termination, payment of carrier
transportation at the linehaul rates, accessorial charges and other amounts actually charged by
the Carriers and the other fees and charges then in effect hereunder on the date of termination,
but without any obligations under Appendices B, C or E, or with respect to honoring the
Benchmark Rates (as defined below) or gain sharing.




	2.  	DEFINITIONS: For purposes of this Agreement, the following terms shall be defined as
follows:






	 	a)  	“Baseline Period” means the period from May 1 to October 31, 2004 and refers to the
volumes, lead-times, modal allocation, origin/destinations and other statistics set forth
in Appendix D.
	 
	 	b)  	“Benchmark Rates” mean the linehaul rates set forth in Appendices B1 to
B5 in the column labeled “Benchmark Rates”.
	 
	 	c)  	A “boxcar” shipment means a shipment moved exclusively by rail transportation in a rail
boxcar.




-2-









 






	 	d)  	“Business Day” means, as to any location, any day that is not a Saturday, a Sunday or a
day on which banking institutions in such location are authorized or required to be closed.
	 
	 	e)  	“CPU” means customer pick-up order method of transit (MOT) sent by DM. This order is
received from DM with a method of transit of (H) in the 940-order file. The customer will
be responsible for all aspects of the transportation for this load from the origin of pick
up to the destination.
	 
	 	f)  	“NON-CPU” means any other shipments received by DM with a mode of transit different
from H in the 940-order file.
	 
	 	g)  	“Carrier” means a motor carrier (whether providing drayage or truckload
transportation), ocean carrier, non-vessel operating common carrier, ocean transportation
intermediary, rail carrier, transportation broker or rail transportation provider (such as
CSX Intermodal, Inc. or Pacer Stacktrain and other PGL affiliated operations) that actually
provides or arranges for the provision of transportation at the request of the Supply Chain
Services Division of PGL.
	 
	 	h)  	A “Fiscal Quarter” means three-month periods corresponding to the fiscal quarter
established by DM for its financial reporting processes.
	 
	 	i)  	“Fiscal Year” means the fiscal year established by DM for its financial reporting
processes.
	 
	 	j)  	“Force Majeure Condition” means fire or explosions; acts of God, including floods,
hurricanes, tornadoes, earthquakes, unusually severe weather, and natural disasters; labor
disturbances affecting Carriers, ports, terminals or other elements of the transportation
networks or creating a reasonable concern regarding driver safety; war, insurrection,
terrorism or riots; acts of the public enemy; acts of governmental authority; embargo;
epidemics; quarantine restrictions; a declaration of force majeure by a Carrier providing
services pursuant to this Agreement, where there is no reasonable alternative Carrier to
perform such services; or similar event or condition beyond the reasonable control of a
party hereto. In the event either party disagrees as to the existence of a Force Majeure
Condition in accordance with the terms set forth herein, the parties shall have such issue
resolved by reference to an independent arbitrator mutually agreed by the parties (or
appointed by the American Arbitration Association upon the application of either party if
the parties are unable to agree to an arbitrator within five (5) Business Days of the
request for arbitration by either party). Such proceeding shall be an expedited proceeding
dealing solely with the existence of a Force Majeure Condition, and the arbitrator shall be
directed to issue its judgment within no more than ten (10) Business Days.
	 
	 	k)  	The “Implementation Period” means the start-up transition period after the Commencement
Date described in Section 6.
	 
	 	l)  	An “intermodal” shipment means a shipment that moves as COFC/TOFC (container on flat
car or trailer on flat car) on the rail network and has prior and subsequent moves using
drayage motor transportation.
	 
	 	m)  	A “less than truckload” or “LTL” shipment means a shipment that is not a full truckload
and is transported by less-than-truckload motor carriers.
	 
	 	n)  	 An “ocean” shipment means a shipment transported over the ocean by vessel, including
any drayage or other land movement connected therewith.




-3-









 






	 	o)  	An “Operational Day” means, as to any location, any day that DM receives or ships
product, which may be seven (7) days per week.
	 
	 	p)  	“PGL” refers to the Supply Chain Services Division of Pacer Global Logistics, Inc.
	 
	 	q)  	The “Services” mean the comprehensive logistics services provided by PGL hereunder and
described in Section 3 and Appendix A.
	 
	 	r)  	A “Transaction” means any order or number of orders by DM for the shipment of goods
from a stated origin to a stated destination in a single trailer, container or boxcar and
any consequential or related activities associated therewith such as accessorial charges,
fuel surcharges, etc.
	 
	 	s)  	A “truckload” shipment means a shipment that moves as a truckload exclusively by motor
transportation.




Other terms shall have the meaning given to them in the text hereof.





	3.  	SCOPE OF SERVICES: During the term of this Agreement and based on orders submitted by DM, PGL
shall perform comprehensive logistics services on behalf of DM in connection with the shipment
of goods from various origins to various destinations, including, but not limited to:






	 	a)  	The transportation of finished product from DM or DM co-packer locations to DM
distribution centers, customers and others;
	 
	 	b)  	The transportation of materials, supplies and finished product between the United
States, Asia, American Samoa (freight payment only), South America, and other locations by
vessel Carrier and related services;
	 
	 	c)  	Carrier management;

	 
	 	d)  	Accessorial management and reporting;
	 
	 	e)  	Freight payment and reporting for all transportation modes (Freight Payment services
will not be provided for shipments transported by private fleet or by facility-controlled
shuttles);
	 
	 	f)  	Shipment tracking and communication;
	 
	 	g)  	Freight dispatch services (except boxcar shipments, ocean carrier import shipments and
facility-controlled shuttle shipments, which shall continue to be dispatched by DM or its
suppliers);
	 
	 	h)  	Shipment optimization using various shipping modes, Carriers, routes and
configurations;
	 
	 	i)  	Provision of reports as described in Appendix A; and

	 
	 	j)  	Tracking, asserting, collecting and otherwise resolving freight claims




as more particularly described on Appendix A attached hereto (the “Services”).





	4.  	PAYMENTS: In consideration of PGL performing the Services, DM agrees to pay PGL the
following:






	 	a)  	For the services performed by PGL, DM will pay the management fee (the “Management
Fee”) and linehaul and accessorial fees and charges described in Appendix B
(including




-4-









 






	 	   	Appendices B1 through B5) attached to this Agreement, with such rates for
linehaul charges being subject to the fuel surcharge and accessorial charges applicable to
such mode of transportation set forth as Appendix B. For purposes of clarity, the
Benchmark Rates set forth in Appendix B2 are guaranteed rates as provided herein,
and DM shall pay no more for linehaul charges along the identified lanes even if PGL is
subject to higher rates, except as otherwise provided herein.
	 
	 	b)  	In addition, DM and PGL will participate in a gain sharing and savings arrangement as
set forth in Appendix C attached to this Agreement.
	 
	 	c)  	In the event DM requests that PGL provide services in addition to the Services, the
parties shall amend an existing appendix or prepare a new appendix detailing such
service(s), and DM shall pay such fees and charges set forth in such amended or new
appendix.
	 
	 	d)  	If DM disputes the validity of any portion of any invoice or charges, DM will timely
pay PGL the undisputed portion and will notify PGL of the invoice dispute. PGL and DM will
work diligently and in good faith to resolve any invoice dispute. Failure of DM to notify
PGL of a disputed invoice or charge within one hundred eighty (180) days of the receipt of
invoice shall be considered a waiver and release of such disputed amount, except to the
extent that DM would not have reasonably been aware of an error in such invoice or amount,
in which case the one hundred eighty (180) day time period shall commence running when DM
should reasonably have been aware of such error. PGL and DM will work diligently and in
good faith to resolve any invoice dispute.
	 
	 	e)  	PGL will not assess any interest or late payment charges unless the invoice is not paid
more than sixty (60) days after its due date, in which case DM will pay interest on such
unpaid balances at the prime rate (established by Bank of America, N.A.) plus 2% (annual
rate) from the due date until the invoice is paid in full.
	 
	 	f)  	Except as otherwise set forth herein, neither DM nor PGL will have the right to set off
claims for loss, damage or delay, and claims for undercharge, overcharge or duplicate
payment, against transportation or other charges owed to the other party.
	 
	 	g)  	The linehaul rates in Appendix B2 and accessorial charges in Section E.2. of
Appendix B are guaranteed by PGL to the extent provided in
Appendix B. Other than as specifically set forth in this Agreement, including but
not limited to all Appendices attached hereto, DM shall not be subject to any additional
charges for the Services.
	 
	 	h)  	The rates set forth in Appendix B may be adjusted as provided in Appendix
B.
	 
	 	i)  	Provided that DM continues to pay PGL on a timely basis for amounts due under
Appendix B, PGL will (a) pay all Carriers providing transportation and
transportation-related services for the benefit of DM on a timely basis and for amounts
properly due under the applicable agreement with such Carrier and (b) indemnify, defend and
hold DM harmless from claims asserted by any Carrier that it has not been paid in full or
has been paid late. Pacer agrees to obtain the written agreement of each Carrier with
which it enters into a direct agreement that such Carrier will look solely to PGL for
payment for such services and will not seek payment from DM except with the permission of
PGL, which permission shall not be given unless there has been failure of DM to pay PGL
amounts due for Carrier services as provided hereunder.




-5-









 






	 	j)  	DM will reimburse PGL for its reasonable travel and other out-of-pocket expenses
incurred to attend special meetings or projects as requested by DM (not including routine
travel or travel to quarterly meetings).






	5.  	SAVINGS OBJECTIVE






	 	a)  	The parties shall assist one another at all times in carrying out their respective
responsibilities under this Agreement with the objective of continually improving the
efficiency and effectiveness of the Services.
	 
	 	b)  	DM and PGL will participate in a gain sharing and savings arrangement as set forth in
Appendix C.






	6.  	IMPLEMENTATION PERIOD:






	 	a)  	During the period from the Commencement Date until August 1, 2005 (the “Implementation
Period”), the parties shall reasonably cooperate with each other to prepare for PGL to
begin providing the Services. The milestones for the Implementation Period require joint
efforts by DM and PGL and include the following tasks:






	 	1.  	Standard Operating Procedures: This milestone contemplates that PGL
with DM’s active assistance will update existing standard operating procedures
(“SOP”) and develop new SOPs for all new processes involved in providing the
Services. The SOPs will outline the responsibilities and processes used by both
PGL and DM.
	 
	 	2.  	System Process Changes: DM and PGL will jointly identify any systems
processes changes (such as additional EDI communications, including EDI
communications with ES3) that the parties would like to implement consistent with
mutually agreed upon industry standard EDI transaction sets. DM and PGL will
jointly develop an implementation program with mutually agreed upon deadlines and
cost allocation for implementing the system process changes.
	 
	 	3.  	Carrier Contracts: DM will provide PGL with copies of all outstanding
agreements with Carriers used during the Baseline Period that PGL does not
currently have in its possession as of the Commencement Date. DM and PGL will
evaluate all existing contracts with Carriers and determine which contracts to
replace. PGL will then work with DM and the Carriers to enter into new direct
agreements between PGL and the Carrier (expected to include contracts with
truckload Carriers and may include intermodal marketing companies) or tri-party
agreements between PGL, DM  and the Carriers (expected to include the rail
carriers for boxcar and intermodal shipments and ocean carrier
agreements) and such other parties as mutually agreed by the parties. As
part of this process, PGL will verify the insurance of each truckload Carrier and
will enter the Carrier’s rates into its systems.
	 
	 	4.  	Build PGL Team of Personnel: DM and PGL will work together under a
mutually agreed to timeline to identify those existing DM personnel that may be
appropriate to join PGL. PGL will interview identified personnel, make offers
based on such interviews and other considerations and hire DM and other personnel
subject to satisfactory reference checks, drug test results and other standard
elements of PGL’s hiring processes.




-6-









 







	 	b)  	On May 1, 2005, PGL will begin performing the Services, and will arrange for
transportation of ocean, boxcar, intermodal and LTL shipments as provided in Appendix
A using the rates and charges established in accordance with Appendix B,
including Appendices B1, B3, B4 and B5. Fifty nine (59) days after DM provides PGL
with the award letter to truckload Carriers, PGL will begin honoring the Benchmark Rates
for truckload transportation set forth in Appendix B2.






	7.  	EQUIPMENT AVAILABILITY:






	 	a)  	PGL shall provide or arrange for transportation equipment necessary or appropriate to
perform the Services, subject to DM’s continuing to provide dispatch lead times at least
equivalent to the Baseline Period dispatch lead times set forth on Appendix C. DM
will seek to increase the amount of dispatch lead time it provides.
	 
	 	(b)  	PGL shall specify in its contracts for truckload and LTL that all such carriers (i)
provide equipment suitable for the transportation of food products for human or animal
consumption; (ii) maintain equipment in good, safe and lawful operating condition; (iii)
supply equipment that is sound, clean, odor-free, dry, leak proof and free of contamination
or infestation; (iv) inspect all empty equipment before loading to determine whether it is
in apparent good condition to protect the cargo being transported; (v) provide capable,
well-trained and properly licensed drivers and operators for handling, transporting, and
delivering DM goods; and (vi) take all reasonable precautions not to supply equipment for
transportation that has been previously used to transport compressed household, municipal
or commercial waste or any other type of waste material. PGL shall use reasonable efforts
to include in its contracts for ocean, intermodal and rail transportation that such
carriers (i) provide equipment suitable for the transportation of food products for human
or animal consumption; (ii) maintain equipment in good, safe and lawful operating
condition; (iii) supply equipment that is sound, clean, odor-free, dry, leak proof and free
of contamination or infestation; (iv) inspect all empty equipment before loading to
determine whether it is in apparent good condition to protect the cargo being transported;
and (v) take reasonable precautions not to supply equipment for transportation that has
been previously used to transport compressed household, municipal or commercial waste or
any other type of waste material.
	 
	 	(c)  	PGL and DM will comply with their agreed to standard operating procedures, including
escalation processes, to respond to each situation when equipment is not available as
requested.
	 
	 	(d)  	Equipment availability will be monitored as part of the quarterly reporting process and
will be a factor in satisfactory achievement of the KPI’s. If equipment availability




-7-









 






	 	   	becomes an ongoing issue, DM and PGL will discuss the reasons for the issue and develop an
action plan to remedy it. DM and PGL will diligently perform those corrective actions assigned to
it in an effort to resolve the problem. If equipment is consistently not available to
transport DM products or raw materials in accordance with the terms of this Agreement and
following good faith discussions with PGL to resolve the problem, DM shall have the right to
retain third party equipment or suppliers to provide such services at its expense and shall
be entitled to exercise the remedies provided in Appendix E.
	 
	 	(e)  	PGL understands and acknowledges that DM’s business is subject to seasonal and
quarterly variations in volume, and PGL agrees that the rate and equipment guarantees
provided in this Agreement shall apply and remain effective notwithstanding such volume
fluctuations, so long as such variations are generally consistent with those experienced by
DM in 2004 as set forth in Appendix F. DM acknowledges that the rate and equipment
guarantees provided in this Agreement are based on the assumption that DM will maintain
dispatch lead times generally consistent with those set forth in Appendix C.
Should DM fail to maintain such lead times, PGL shall use its commercially reasonable
efforts to obtain equipment as required by DM operational needs and achieve deliveries in
accordance with the service level standards set forth herein, but the additional costs of
obtaining such equipment and achieving such standards shall be borne by DM. DM agrees to
make a good faith effort to improve dispatch lead times and reduce unplanned spikes in
shipment volumes, consistent with the operational needs of its business and customers.






	8.  	SERVICE LEVEL STANDARD:






	 	a)  	PGL shall provide the Services using a standard of care consistent with prevailing
standards in the industry, and meeting the key performance indicators (“KPI’s”) set forth
in Appendix E. Procedures regarding the KPIs and remedies available to DM upon
PGL’s and its Carrier’s failure to achieve them are also set forth in Appendix E.
	 
	 	b)  	The KPI’s shall be reviewed on a quarterly basis and adjusted as mutually agreed to
by the parties.






	9.  	PERSONNEL:






	 	a)  	PGL shall retain sufficient personnel to perform the Services hereunder. PGL shall
perform the Services at such physical locations as mutually agreed and shall schedule
staffing consistent with past practice during the Baseline Period. PGL will have a
dedicated team at its Dublin, Ohio facility from 7:00 am to 8:00 pm, Eastern Time, Monday
through Friday and will have other personnel available for emergency and off-hour inquiries
on a 24-hours a day/seven days per week basis. Any PGL personnel working on-site at DM
facilities will work one shift during normal working hours at the DM facility with a
standard workweek, vacation and sick time. PGL understands that, consistent with past
practice during the Baseline Period, DM’s business requires Saturday crews for certain
customer shipments and that extra crews may be necessary for quarter ends, special
promotions and holidays. As the industry evolves, additional staffing requirements (for
example to meet Sunday shipments) may be required. In the event DM reasonably believes
that staffing is inadequate to perform the Services, DM shall notify




-8-









 






	 	   	PGL in writing of its concern. PGL shall review its staffing in good faith and either increase or modify
staffing in response to DM’s concern or meet with DM to explain why staffing is adequate to
perform the Services; provided, however, that if the additional staffing requirements arise out of changes in business requirements, volumes or other events
such that staffing consistent with staffing during the Baseline Period is no longer
sufficient, PGL shall not be required to increase its staffing until such time as DM and PGL
have agreed on an increased Management Fee to compensate PGL for the costs of the additional
staffing.
	 
	 	b)  	DM may notify PGL when DM believes an PGL employee providing support to DM is
unacceptable for assignment to the provision of Services to DM for any lawful reason,
including DM’s reasonable determination that he or she is not qualified to perform the work
to which he or she is assigned. DM may not exercise this right on grounds unrelated to job
performance or in a manner that obligates PGL to commit an unlawful act. Upon receipt of
such notice, PGL will review the issue, will consider reassignment of the employee and will
notify DM of the course of action taken. In the event that any such PGL employee is
transferred from a position, PGL shall have a reasonable time to replace any such
transferred employee.
	 
	 	c)  	PGL personnel shall attend DM meetings on a quarterly basis and as otherwise reasonably
requested by DM. Routine travel costs shall be considered part of PGL overhead and shall
not be billed to DM except as approved in advance by DM.
	 
	 	d)  	PGL shall supply office space, equipment, phone lines, software licenses, and other
necessary or appropriate work resources as its cost for its employees, except that unless
otherwise agreed by the parties, DM shall supply office space, furniture, office supplies,
phone and data lines and other necessary or appropriate work resources (other than
computers and related software) at DM’s cost for any PGL employee or contractor working
on-site with DM’s authorization at a DM facility.
	 
	 	e)  	PGL will cause its employees working on-site at DM’s facilities to comply with DM’s
published workplace policies related to safety, security, dress code, smoking, working
hours, workplace conduct and similar matters.






	10.  	REPORTING: PGL shall provide such reports provided under the Original Agreement and such
other reports as reasonably requested by DM and available to PGL without undue expense,
including but not limited to those reports set forth on Appendix A. PGL shall
document operating procedures and processes as reasonably requested by DM.
	 
	11.  	ADDITIONAL SERVICES: Any service requested by DM beyond the scope of the Services shall be
subject to such charges as the parties mutually agree in writing in advance.
	 
	12.  	INDEPENDENT CONTRACTOR: The parties agree and understand that PGL is entering into this
Agreement as an independent contractor and that all PGL’s personnel engaged in work to be done
under this Agreement are to be considered as employees of PGL under its exclusive control and
management. Under no circumstances shall they be construed or considered to be employees of
DM. PGL shall indemnify and hold DM harmless from any liability, expenses (including
reasonable attorneys’ fees), or claim relating to wages, salaries, benefits, taxes, claims, or
other payments to, or with respect to, employees of PGL. PGL shall




-9-









 






	   	have no authority under this Agreement to bind DM by any contract except as this Agreement expressly contemplates.
This Agreement shall not be deemed to establish a joint venture, brokerage, partnership or
agency relationship.






	13.  	EMPLOYEES:






	 	a)  	DM and PGL shall not solicit for employment or employ any of each other’s employees
(except for employees terminated by the other party) during the term of, and for a period
of one (1) year following termination of this Agreement without the written permission of
the other party. A general notice of an employment opportunity, such as placed in a
newspaper or web-based job search site, shall not be deemed solicitation for purposes of
this paragraph. In the event either party violates this Section 13, the breaching party
shall remit to the other party a sum in an amount equal to the subject employee’s salary
and cost of benefits over a six (6) month period in addition to and not in lieu of other
remedies at law or in equity. Notwithstanding the foregoing, the parties shall reasonably
cooperate to assist the other party in meeting its employment needs and transitioning, as
appropriate and agreeable, employees from one party to the other.






	14.  	INDEMNITY:






	 	a)  	If PGL enters into contracts with Carriers providing LTL, truckload and intermodal
transportation, PGL will use all commercially reasonable efforts to include a provision
requiring the Carrier to indemnify, defend, and hold DM and PGL harmless from and against
any and all liabilities, claims, losses, costs, expenses (including reasonable attorneys’
fees), judgments, fines or penalties on account of damage of any kind whatsoever
(including, but not limited to, personal injury, property damage, or any combination
thereof), that any person or persons (including DM or PGL) suffers arising out of the
Carrier’s performance of transportation services, except damage or loss to the extent
caused by the negligence or willful misconduct of PGL, DM or DM’s customers, suppliers or
other contractors.
	 
	 	b)  	PGL shall indemnify, defend, and hold DM harmless from and against any and all
liabilities, claims, losses, costs, expenses (including reasonable attorneys’ fees),
judgments, fines or penalties on account of damage of any kind whatsoever (including, but
not limited to, personal injury, property damage, or any combination thereof but excluding
any damage or loss of cargo transported hereunder which is governed by Section 17(c)), that
any person or persons (including DM or any Carrier) suffers or claims to have suffered
caused by PGL’s negligence or breach of any of the terms of this Agreement, except damage
or Losses to the extent caused by the acts or omissions of any Carrier, DM or DM’s
customers, suppliers or other contractors.
	 
	 	c)  	DM shall indemnify, defend, and hold PGL harmless from and against any and all
liabilities, claims, losses, costs, expenses (including reasonable attorneys’ fees),
judgments, fines or penalties on account of damage of any kind whatsoever (including, but
not limited to, personal injury, property damage, or any combination thereof), that any
person or persons (including PGL or any Carrier) suffers or claims to have suffered caused
by DM’s negligence or breach of any of the terms of this Agreement, except damage or loss
to the extent caused by the acts or omissions of PGL or PGL’s Carriers, suppliers or other
contractors.




-10-









 













	15.  	FORCE MAJEURE: Either party to this Agreement shall be free from liability for failing to
perform under this Agreement if such failure is caused by Force Majeure Conditions.
	 
	16.  	INSURANCE:






	 	a)  	At all times during the term of this Agreement, PGL shall have and maintain in full
force and effect Commercial General Liability (including, but not limited to, contractual
liability and products/completed operations liability coverage), Cargo, Automobile,
Employee Theft/Fidelity, and Workers’ Compensation insurance with reliable insurance
companies that are acceptable to DM. Such insurance shall have minimum limits of liability
in the following amounts:






	 	i.  	Commercial General Liability: $1,000,000
combined single limit for bodily injury and property damage per
occurrence;
	 
	 	ii.  	Contingent Cargo: $100,000 per trailer or
container;
	 
	 	iii.  	Automobile: $1,000,000 combined single
limit for bodily injury and property damage per occurrence;
	 
	 	iv.  	Employee Theft/Fidelity: $100,000 per
claim; and
	 
	 	v.  	Workers’ Compensation: statutory limits.






	 	   	Insurance carriers providing the above insurance shall meet the underwriting requirements of
DM’s Risk Management Department and meet the requirements of federal and state regulatory
bodies having jurisdiction over PGL’s performance pursuant to this Agreement. All such
insurance shall be on an occurrence basis; that is, it shall cover any claim made for
injuries or damage arising out of an event occurring during the term of the policy
regardless of whether the claim is made after the expiration of the term of the policy. The
Contingent Cargo and Employee Theft/Fidelity policies will name DM as a loss payee and the
Commercial General Liability and Automobile Liability shall name DM as an additional
insured. DM’s status as an additional insured shall cover shipments arranged by PGL for DM
but only relating to claims arising out of the operations of freight carriers, and excluding
any claims, including damage or loss to freight, arising out of or contributed to by the
additional insured’s negligence or willful misconduct. The policy or policies evidencing
such insurance shall contain a clause that the insurer will not cancel or change coverage of
the insurance without first giving DM thirty (30) days’ prior written notice. Before
commencement of any Services under this Agreement and from time to time thereafter upon
expiration of any such certificates, PGL shall deliver to DM certificates of such insurance
evidencing the coverage set forth above.
	 
	 	b)  	PGL shall verify that the truckload Carriers have Cargo Insurance in an amount of not
less than $100,000 per container or trailer; Automobile Insurance in an amount of not less
than $1,000,000 per occurrence and Workers’ Compensation with the limits required by
applicable statute issued by reliable insurance companies. PGL’s contract with the
truckload Carriers will require that the Carrier’s insurance companies has an AM Best
rating of B+, VIII. Before a Carrier commences providing any transportation services, PGL
shall obtain an insurance certificate from the Carrier evidencing the foregoing coverage
and will obtain updated certificates annually.




-11-









 











17. RISK OF LOSS





	 	(a)  	PGL shall process cargo claims for DM in accordance with past practice during the
Baseline Period as further provided in Appendix A.
	 
	 	(b)  	If PGL enters into contracts with motor Carriers, PGL will use all commercially
reasonable efforts to require such Carriers to assume the liability of a common carrier for
full actual loss of cargo, subject to the provisions of the 49 U.S.C 14706 (or successor
regulation to such Carmack Amendment) and to process claims in accordance with 49 CFR Part
370 (claim regulations) for any loss, damage or delay to Shipper’s cargo while in its
possession, up to a maximum liability of $100,000 per container or trailer. Rail Carriers
will process and pay cargo claims in accordance with and subject to 49 C.F.R. 1005 and
their respective circulars, tariffs, directories and policies as in effect at the time of
the cargo loss or damage (each a “Rail Circular”).
	 
	 	(c)  	PGL will only be liable for loss or damage to cargo to the extent (on a comparative
basis) that PGL’s own negligence or willful misconduct (not the acts or omissions of any
Carrier) in arranging for transportation of the cargo was the proximate cause of the cargo
loss or damage, subject to a maximum limitation of liability of $100,000 per container or
trailer. PGL shall have no liability to DM or any third party, including DM’s customers,
for the use of modes, carriers, and routings when PGL performs according to directions and
instructions of DM.
	 
	 	(d)  	PGL will not be liable and U.S. or Canadian Carriers generally provide that they are
not liable for cargo loss or damage that occurs while the cargo is in the possession of an
international or domestic Carrier in Mexico. Furthermore, PGL does not assume any liability
for, and its insurance coverage does not extend to cover shipments outside the United
States or Canada.
	 
	 	(e)  	In the event of a loss, damage, overage or shortage, PGL agrees to notify DM of such
incident within one (1) Business Day of notification by the Carrier. PGL will use
commercially reasonable efforts to include in its contracts with Carriers that the Carrier
will notify PGL immediately (no later than one (1) Business Day) after it becomes aware of
any loss, damage, overage or shortage.




18. NON-DISCLOSURE: DM acknowledges that during the course of this Agreement, it will be given or
otherwise obtain confidential information of PGL, including PGL’s routings, electronic systems,
trade and business secrets, proprietary information, and other matters relating to the Services and
the know-how, procedures and techniques that PGL uses to perform the Services. DM shall keep all
such information confidential and shall not disclose such information to any third party without
PGL’s written consent, provided, however, that DM may disclose such information to the extent DM is
required to do so by applicable federal, state, or local law, regulation or court order; provided
that DM promptly notifies PGL in writing prior to making such disclosure in order to facilitate
PGL’s seeking a protective order or other appropriate remedy from the proper authority, and DM
agrees to cooperate in seeking such order or other remedy. If such protective order or other remedy
is not obtained, DM will furnish only that portion of the information which is legally required,
and will exercise all reasonable efforts to obtain reliable assurances that confidential treatment
will be afforded such information.








-12-









 







PGL acknowledges that during the course of this Agreement it will be given or otherwise obtain
confidential information of DM including all transaction information, product pricing, customer
lists, product recalls, production volumes, product specifications, vendor carrier rate and service
agreements, trade and business secrets, proprietary information, communications systems, computer
software and programs, and other matters relating to DM ’s products, sales & marketing strategies,
and customers. PGL shall keep all such information confidential and shall not use the same for its
own purposes nor shall it disclose such information to any other party unless necessary to perform
the Services without DM’s written consent, provided, however, that PGL may disclose such
information to the extent PGL is required to do so by applicable federal, state, or local law,
regulation or court order; provided that PGL promptly notifies DM in writing prior to making such
disclosure in order to facilitate DM’s seeking a protective order or other appropriate remedy from
the proper authority, and PGL agrees to cooperate in seeking such order or other remedy. If such
protective order or other remedy is not obtained, PGL will furnish only that portion of the
information which is legally required, and will exercise all reasonable efforts to obtain reliable
assurances that confidential treatment will be afforded such information.



In the event of termination of this Agreement, both parties shall extend the nondisclosure and
confidentially of this Agreement for a period of one year.



Neither party will issue any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other party.



19. OWNERSHIP: The parties acknowledge and agree that all computer software, hardware, source
codes, and data, other than data or equipment originating at DM and its transportation vendors, in
use at PGL’s offices for the purpose of this Agreement, are the property of PGL. Additionally, any
software, designed, purchased, created or developed by PGL remains the sole property of PGL or the
licenser of such software, for its own purposes. PGL shall have all ownership rights associated
herewith and may use the same software programs, source codes, and data, other than originating at
DM its transportation vendors, for other PGL business, including but not limited to, offering the
same dispatching and other transportation related services to other customers of PGL, all without
hindrance or objection from DM, but only to the extent that PGL does not disclose confidential
information of DM.



20. NOTICES: All notices or other communications pursuant to this Agreement shall be in writing
and shall be deemed to be sufficient if delivered personally, by facsimile, sent by
nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):



Pacer Global Logistics

6805 Perimeter Drive

Dublin, OH 43016

Attn: President, Supply Chain Services Division






-13-









 







      And at DM at:



Del Monte Corporation

One Market @The Landmark

San Francisco, CA 94105

Attn: EVP, Operations




	   	All such notices and other communications shall be deemed to have been given and received (i) in
the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by
facsimile, on the date of such delivery (if sent on a Business Day where sent, or if sent on a
day other than a Business Day where sent, on the next Business Day after the date sent), (iii)
in the case of delivery by nationally-recognized, overnight courier, guaranteeing next Business
Day delivery, on the next Business Day where sent following dispatch, and (iv) in the case of
mailing, on the third Business Day where sent next following such mailing.
	 
	21.  	ASSIGNMENT: This Agreement shall inure to the benefit and be binding upon the successors and
assigns of the parties hereto, provided neither party to this Agreement shall assign its
interest or obligations in this Agreement, including but not limited to the assignment of any
moneys due and payable, without the prior written consent of the other party. Notwithstanding
the foregoing, either party may assign this Agreement to the purchaser of all or substantially
all of its business, provided, however, that written notice shall be given to the other party
at least sixty (60) days prior to the consummation of such purchase and the other party shall
have twenty (20) days to issue a notice of non-consent to such assignment based upon
reasonable concerns as to the creditworthiness of the assignee, the volumes of Transactions of
the assignee, changes in business requirements due to the assignment or the status of the
assignee as a competitor of the objecting party. If this Agreement is assigned in connection
with any merger, sale, acquisition, consolidation or similar transaction (each an
“Acquisition”), PGL will continue to perform this Agreement, including but not limited to
honor the Benchmark Rates, with respect to volumes of Transactions associated with the DM
business in effect before the Acquisition but, unless PGL has affirmatively agreed to extend
the terms of this Agreement to the assignee, PGL shall not be obligated to perform this
Agreement, including but not limited to honoring the Benchmark Rates, with respect to volumes
of Transactions that are derived from the Acquisition.
	 
	22.  	SEVERABILITY: Any provision of this Agreement that is prohibited or unenforceable by law
shall be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions of this Agreement.
	 
	23.  	WARRANTY OF AUTHORITY: Each individual signing this Agreement on behalf of a party
represents and warrants that, as of his execution of this Agreement, he has the express
authority to execute Agreement on behalf of that party.
	 
	24.  	COMPLIANCE WITH LAWS: Each party shall comply with (and PGL shall direct the Carriers
retained by it to comply with) all federal, state, and local laws applicable to the




-14-









 






	   	transportation of commodities under this Agreement (including but not limited to the federal
Sanitary Food Transportation Act, the federal Food, Drug and Cosmetic Act, and similar state
laws) and with all applicable tariffs, standards and rules issued by any duly constituted
regulatory body having jurisdiction over the operations conducted under this Agreement. PGL
acknowledges that the products shipped hereunder may include food products for human
and animal consumption, and PGL agrees to follow all regulatory procedures applicable to
products intended for human or animal consumption.
	 
	25.  	ACCOUNTING STANDARDS; RECORDS:






	 	a)  	PGL shall maintain all accounting records contemplated by this Agreement in accordance
with generally accepted accounting principles consistently applied. PGL shall maintain a
copy of all shipping instructions, bills of lading, proofs of delivery, Carrier payment and
insurance records, freight claims and shipment records pertinent to this Agreement and
commodities carried hereunder for at least three (3) years following the transaction or
payment to which such record(s) relates. If PGL enters into an agreement with a motor
carrier or freight broker, such contract will require the carrier or broker to retain
copies of all bills of lading, proofs of delivery, equipment interchange reports, freight
bills and other shipping documents as required by 49 C.F.R. § 379. DM and its
representatives shall have the right to inspect and copy such records maintained by PGL
during normal business after written notice to PGL. PGL will make such records available
within three (3) Business Days of receipt of DM’s notice or such longer period as necessary
to retrieve such records. As reasonably requested by DM, PGL shall demonstrate to DM that
it has appropriate internal controls in place with respect to financial transactions
affecting DM (including payments to Carriers) or bank accounts maintained on DM’s behalf.
For purposes of validating compliance with the Sarbanes-Oxley Act of 2002, Section 404,
unless PGL is able to provide a SAS 70, Type 2 internal controls report of a reasonable
scope prepared by a nationally recognized accounting firm covering a period of greater than
six months and including at least one month of the last six months of DM’s Fiscal Year, DM
or its designated accountants shall have the right to audit such controls on an annual
basis and PGL agrees to discuss and reasonably consider control improvements reasonably
requested by DM. DM will provide PGL with at least thirty (30) days prior written notice
of its intent to perform the controls audit, will agree with PGL on a schedule for the
audit and will conduct the audit during normal business hours. In the event an inspection
of records by DM discloses additional savings to which DM or PGL was entitled, costs or
payments contrary to the terms of this Agreement, overpayments or unidentified payment(s)
and the time limits on such disputes regarding savings, payments or costs otherwise set
forth in this Agreement have not expired, the party receiving the benefit of such mistake
shall promptly refund to the other such amounts.
	 
	 	b)  	PGL acknowledges that failure to promptly release records to DM in accordance with
Sections 1 and 25 hereof may cause irreparable harm to DM, and that DM shall be entitled to
immediate injunctive relief to obtain such records in addition to other remedies available
at law.




-15-









 












	26.  	GOVERNING LAW AND JURISDICTION: This is Agreement shall be governed by the laws of the State
of Delaware, without reference to the conflict of laws principles thereof.
	 
	27.  	ENTIRE AGREEMENT; GENERAL PROVISIONS; DEFINITIONS: This Agreement, with all Appendices
attached hereto, constitutes the entire understanding between PGL and DM and supersedes the
Original Agreement. Any amendments or modifications to this
Agreement shall be in writing signed by a duly appointed representative of each party. Any
amendments or modifications to this Agreement shall be in writing signed by a duly appointed
representative of each party. No waiver, amendment, or modification of any provisions of this
Agreement will be binding unless in writing signed by the duly authorized representative of the
party intended to be bound. Any party’s failure to enforce strictly any provision of this
Agreement will not be construed as a waiver or as excusing the other party from future
performance in accordance with this Agreement. The use in this Agreement of the word
“including” means “including, without limitation.” The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict construction will be
applied against any party.
	 
	28.  	DISPUTE RESOLUTION:






	 	a)  	All disputes, whether sounding in contract, tort or otherwise, arising out of or
relating to this Agreement, including but not limited to the arbitrability of a party’s
claim or dispute or the breach of this provision, shall be resolved pursuant to the
provisions of this Section 28 exclusively.
	 
	 	b)  	The parties intend to expeditiously and amicably resolve any and all disputes that may
arise between them. Within fifteen (15) days after receipt by either party of written
notice from the other party of the existence of a dispute, the party receiving the notice
shall deliver to the other party a written response. The foregoing notice and response
shall describe the nature and circumstances of the dispute, state the party’s position with
respect to the dispute and summarize the evidence and arguments supporting the position.
The managers participating in the dispute shall arrange to meet, in person or by
teleconference, at a mutually agreeable time and location as soon as practicable and shall
diligently attempt to resolve the dispute over the next fifteen (15) days following receipt
of the response. If the parties’ participating managers are not able to resolve the
dispute within this fifteen (15) day period, either party may submit the dispute to PGL’s
President of the Supply Chain Services Division and DM’s Vice President, Supply Chain (or
any commensurate positions in existence from time to time). The submission shall be
accompanied by the original notice of dispute and response thereto and any additional
evidence and arguments that may be relevant. The designated executives shall then arrange
to meet, in person or by teleconference, at a mutually agreeable time and location as soon
as practicable and shall diligently attempt to resolve the dispute over the next fifteen
(15) days following submission of the dispute to them. If such executives do not agree
upon a decision within fifteen (15) days after submission of the dispute to them, or such
longer time as they may agree upon, then either party may, by providing a notice of
arbitration to the other party, submit the dispute to arbitration in accordance with the
following provisions.




-16-









 






	 
	 	c)  	All disputes described in Section 28a of this Agreement which are not resolved under
Section 28b of this Agreement shall be submitted for final resolution pursuant to the
Commercial Arbitration Rules of the American Arbitration Association then in effect, and
the parties hereby consent to the entry of judgment by any court of competent jurisdiction
with respect to the decision of the arbitrator(s). The provisions of this Agreement shall
control if they conflict with the Commercial Arbitration Rules. The arbitration shall be
before an arbitrator selected in accordance with the Commercial Arbitration Rules. Any
decision of the arbitrator shall be rendered within thirty (30) days after the completion of
the presentation of evidence and witnesses. The arbitrator shall have the authority to
award costs, such as pre-award interest, post award interest, expert fees and attorneys fees
as deemed equitable considering the circumstances, the outcome of the arbitration and the
conduct of the parties, but shall not have the authority to award indirect, special,
consequential or punitive damages or to issue equitable relief. Subject to the arbitrator’s
power to award costs, each party shall be responsible for the expenses, fees and costs of
the arbitrator. Any non-telephonic arbitration shall be held in Pittsburgh, Pennsylvania.
	 
	 	d)  	The parties agree that the only circumstances in which the parties may initiate
judicial proceedings under this Agreement are to obtain injunctive relief in connection
with a breach of the confidentiality obligations or arbitration provision hereunder. In
any judicial proceeding to enforce this Section 28, the only issues to be determined will
be the existence of an agreement to arbitrate and the failure of a party to comply with
such agreement, and those issues will be determined summarily by the court without a jury.
	 
	 	e)  	Pending resolution of any dispute brought in good faith, each party will continue to
perform its obligations under this Agreement, including, but not limited to, the payment of
all amounts due to the other party that are not in dispute, provided that the other party
also continues to perform its obligations under this Agreement.




29. BOARD APPROVAL: This Agreement shall be subject to the approval of the DM Board of
Directors in its sole discretion. In the event this Agreement is not approved by the DM Board of
Directors, the Agreement shall be considered void and of no effect and the Original Agreement shall
recommence and be deemed to be amended to remain in effect until superseded or terminated upon one
hundred-eighty (180) days prior written notice. In the event PGL has commenced performing services
for DM following the execution of this Agreement but prior to Board approval, DM shall be liable to
PGL for its actual documented costs in performing such services, including but not limited to costs
incurred to develop SOPs, systems changes and other activities during the Implementation Period,
but shall have no further legal obligation hereunder. DM agrees to submit this Agreement to its
Board no later than the next regularly scheduled in-person meeting of the Board, which is currently
scheduled for March 31, 2005.



30. COUNTERPARTS AND FACSIMILE EXECUTION. This Agreement may be executed in two or more
counterparts, and each such counterpart shall be an original instrument, but all such counterparts
taken together shall be considered one and the same agreement, effective when one or more
counterparts have been signed by each party and delivered to the other parties, it being understood
that all parties need not sign the same counterpart. Any signed counterpart delivered by facsimile
shall be deemed for all purposes to constitute such party’s good and valid execution and delivery
of this Agreement.






-17-









 







31. DISASTER RECOVERY. During the term of this Agreement, PGL will maintain disaster recovery
capabilities that will allow for recovery of systems supporting DM’s business within 72 hours and
the capability of manually processing DM Transactions until the systems are recovered.






-18-









 







IN WITNESS WHEREOF, the
parties have executed duplicate counterparts of this Agreement to be
effective as of the date
first written above.




PACER GLOBAL LOGISTICS,
INC.
(PGL)                                           




	 	 	 	 	 	 	 
	

	 	By:
	 	       /Mike Fielden/


          Mike Fielden
	 	 
	 
	 	 	 	 	 	 
	

	 	Title:
	 	President, Supply Chain Services Division	 	 
	 
	 	 	 	 	 	 
	

	 	Dated:
	 	March 14, 2005
	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	DEL MONTE CORPORATION (DM)	 	 
	 
	 	 	 	 	 	 
	

	 	By:
	 	     /Nils Lommerin/


          Nils Lommerin	 	 
	 
	

	 	Title:
	 	Executive Vice President, Operations	 	 
	 
	 	 	 	 	 	 
	

	 	Dated:
	 	          April 4, 2005
	 	 







-19-