Monterey Pasta Company announces area development franchise agreement for Texas.

DANVILLE, Calif.--(BUSINESS WIRE)--Feb. 21, 1995--Monterey Pasta Company (NASDAQ:PSTA) today announced that it has entered into a letter of intent for its second major area development franchise agreement.

This letter of intent has been entered into with PSTA Texas Co. and calls for the development of approximately 50 Monterey Pasta Company quick-serve gourmet pasta restaurant units and, additionally, non-traditional sites such as carts and kiosks throughout the state of Texas. This agreement, combined with the recently announced area development agreement for 75 restaurants in the Rocky Mountain region, brings to 125 the current number of restaurants to be developed by Monterey Pasta Company area development franchisees.

Lance Mortensen, chairman and CEO of Monterey Pasta Company, said: "Three of the most important criteria for success in the continued growth of the Monterey Pasta concept are restaurant site selection, consistency in restaurant operating execution, and exploitation of the restaurant, retail grocery and club store cross-merchandising synergies unique to Monterey Pasta Company. The PSTA Texas Co. management team has an impressively broad experience base that relates to all of these."

The principals of PSTA Texas Co. are Charles M. Lusk III, president and chief financial officer, Ted Beilman, director of operations, and Richard Ethun, director of marketing. This management team has considerable senior management experience: in the real estate industry where Charlie is the president of Realty Advisory Group, based in Texas; in the restaurant and food service industries with Marriott Corp. and National Convenience Stores where Ted directed the development of more than 150 Pizza Hut, Taco Bell, Burger King, and KFC "express" units; and in the specialty frozen foods distribution business where Richard co-founded Sunbelt Distributing, the largest specialty frozen foods distribution company in the Southwest.

Ted Beilman of PSTA Texas Co. said: "We are extremely excited about the opportunity to expand the Monterey Pasta restaurant concept across Texas. The Monterey Pasta menu is in step with today's consumer, the product quality is outstanding, and the value to the restaurant consumer is excellent. We are convinced that this unique, quick-serve pasta concept -- with its restaurant, cart and kiosk operating formats -- will be a great success in Texas."

Mortensen stated: "Monterey Pasta Company has already established a solid beachhead in the Texas pasta market with three company-owned restaurant locations and distribution of fresh pasta and pasta sauces through retail grocery outlets including Kroger, Wal-Mart Supercenters, and Whole Foods. Together with PSTA Texas Co. we will work aggressively to penetrate the Texas market."

Monterey Pasta Company, based in California, produces a premium line of fresh gourmet pasta and pasta sauces served through a chain of company-owned quick-serve restaurants named "Monterey Pasta Company" and distributed through retail grocery and club stores under the product brand name "Monterey Pasta Company." The company's product line emphasizes all-natural ingredients and features a broad variety of non-traditional pasta flavors including Smoked Salmon Ravioli, Sundried Tomato and Cheese Tortelloni, Lemon Pepper Fettucini, and Monterey White Clam and Mushroom Sauce. Retail grocery and club store distribution of the company's product line extends through the Western United States and the East Coast of the United States. The company's quick-serve gourmet pasta restaurants are located in shopping and financial centers in California, Colorado, Texas, and Washington.

CONTACT: Monterey Pasta Company

Lance H. Mortensen, 510/736-9200