EXHIBIT 10.45
NORTH CAROLINA
CATAWBA COUNTY
LOGISTICS AGREEMENT
This Agreement, made and entered into on this the 3rd day of March,
2002 (the "Effective Date"), by and between Pierre Foods, Inc., a North Carolina
corporation with principal offices located in Cincinnati, Ohio (hereinafter
"Company") and PF Distribution, LLC, a North Carolina limited liability company
with principal offices located in Hickory, North Carolina (hereinafter
"Distribution").
W I T N E S S E T H:
WHEREAS, Company is currently managing its own warehousing and
distribution programs, and
WHEREAS, Company desires to simplify the processes involved in its
warehousing and distribution process, and
WHEREAS, Company desires to contract with a distribution company that
provides warehousing and distribution services, and
WHEREAS, Distribution has expertise in warehousing and distribution,
and is willing to provide such services to the Company, and
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants contained herein, and further good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Appointment. Company hereby appoints Distribution as its agent to
provide warehousing and distribution services ("Services") as needed in the food
processing and distribution business of the Company.
2. Duties of Distribution. Distribution will provide at its cost all
logistics services necessary to the Company for its warehousing, fulfillment,
and transportation activities. Distribution will perform or provide
transportation of finished goods from the Company's plants to local intermediate
refrigerated warehouse facilities for the purpose of storage and fulfillment
activities. Distribution will also be responsible for procuring storage space
for inventory, maintaining the inventory in a safe environment, and overseeing
the fulfillment of customer orders in a timely manner as received from the
Company.
Distribution will provide transportation necessary to deliver finished
goods of the Company to the customer. These shipments may originate at the
Company's plants or at an intermediate storage warehouse in full truckload or
less than truckload (LTL) quantities. Transportation required to balance
inventories between warehouses is included under this provision. Distribution
will transport goods of the Company in its own fleet equipment or in
equipment operated by third party transportation vendors. Distribution will be
responsible for any warehouse damage and over/under shipments caused by picking
errors at the third party warehouses. Distribution will also administer any
damage caused by common carriers during transit. Xxxx-backs will be made by
Distribution to the warehouses or the carriers responsible for the damage or
picking errors.
3. Duties of Company. The Company will provide timely orders and
instructions to Distribution to allow Distribution adequate lead time to provide
the services hereunder. Shipments that are picked up at the plants by the
customer (customer pickups) will be scheduled and processed by the Company.
These shipments will not be invoiced by Distribution under the terms of this
Agreement.
The Company will be responsible for damage resulting from case
crushing due to packaging design.
4. Rates. All services will be charged on a cents per pound basis.
Different rates will be charged for each plant due to the differential of weight
and volume characteristics between plant products. Periodically, during the term
of this Agreement, and upon the consent of both parties, the rates may be
amended. Initial rates are as follows:
Warehousing services will be charged to the Company based on monthly
weighted average inventory pounds maintained by Distribution on behalf of the
Company during the period.
Cincinnati: $ .0400 per pound
Claremont: $ .1000 per pound
Freight services will be charged to the Company based on total pounds
shipped and delivered to Company customers by Distribution during the period.
Cincinnati: $ .1000 per pound
Claremont: $ .1950 per pound
5. Payment. Company will be billed by Distribution once each month net
10 days. Upon the execution of this Agreement, Company has paid to Distribution
the sum of $500,000 as an advance payment to be credited and applied to the
xxxxxxxx due hereunder in order determined by Distribution.
6. Term. Distribution hereby agrees for an initial term of one (1)
year, commencing as of the Effective Date to provide Services for the Company in
accordance with Company's needs and the terms of this Agreement. Within the
ninety (90) day period prior to the end of the initial term, or any renewal term
of Agreement, the parties hereto will discuss whether or not this Agreement may
be renewed for a subsequent one (1) year term from the date of expiration of the
then current
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term. Within thirty (30) days prior to each anniversary of this
Agreement, the Company shall negotiate with Distribution and agree upon the
rates for services for the renewal term. It is expressly agreed that, in the
event a binding agreement of renewal is not executed by the parties during the
aforesaid ninety (90) day period, this Agreement shall expire and terminate as
of the end of the then current term.
7. Insurance. Distribution shall:
(a) maintain and/or cause its logistics suppliers, including
common carriers and warehousemen to maintain appropriate levels of cargo legal
liability insurance, fire and casualty insurance and such other commercial
general liability insurance in appropriate coverage amounts as customary and as
is required by law and shall provide, and require such logistics suppliers, to
provide, as necessary certificates of insurance naming Distribution and/or the
Company as an additional insured with no less than thirty (30) days notice of
cancellation or non-renewal.
(b) maintain workmen's compensation insurance as required by
law.
8. Termination. This Agreement may be terminated:
(a) for cause by either party, or
(b) upon expiration of its legal term or any extension
thereof, or
(c) without cause upon one hundred-twenty (120) days written
notice by either party.
Upon termination, the Company shall honor all outstanding orders placed
upon the direction of the Company by Distribution.
9. Ancillary Services. Distribution and Company shall coordinate the
development of a logistics service support environment, including
telecommunications linkage, technical and information systems, and equipment and
office space for onsite personnel of Distribution. In consideration of the
support function, Distribution shall reimburse the Company on a monthly basis
$5,551 for office space, computer time and equipment and support.
10. Confidentiality. Except as necessary to procure logistics
commitments, Distribution agrees not to disclose to any persons the existence or
terms of this Agreement or the contents of any forecasts, supply needs,
specifications and other information relating to the Company, all of which is
the proprietary information of the Company, to which Distribution may have
access during the term of this Agreement. Distribution further agrees to return
all such materials to Company immediately upon termination of this Agreement.
The parties agree that this confidentiality agreement shall survive the term of
this Agreement.
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11. Assignment. This Agreement is not assignable by Distribution
without the express written consent of the Company.
12. Disputes. Any disputes that may arise out of this Agreement shall
be governed under the laws of the State of North Carolina.
13. Severability. Any provision of this Agreement that is prohibited,
unenforceable, or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability, or nonauthorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability, or legality of such
provision in any other jurisdiction.
14. Independent Contractor. Distribution is an independent contractor.
No fiduciary relationship exists between the parties. Except as set forth in
this Agreement, neither party shall be liable for any debts, accounts,
obligations or other liabilities of the other party, its agents or employees.
The Company has no proprietary interest in Distribution and has no interest in
the business of Distribution, except to the extent expressly set forth in this
Agreement.
15. Force Majeure. Neither Distribution nor Company shall be liable for
failure of performance hereunder if hindered or prevented by war, strikes, acts
of God, accidents, civil disorder, or for any reason beyond the control of
Distribution or Company, provided however, that nothing herein shall relieve
Distribution from its responsibilities hereunder with respect to indemnity,
insurance and loss of or damage to freight or warehoused product.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and completely supersedes all prior undertakings and
agreements, both written and oral, between the parties relative hereto. Any
modification or amendment of this Agreement shall require the express written
consent of both parties.
17. Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties and their respective successors
and assigns.
18. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Logistics
Agreement to be executed in accordance with law in duplicate originals, one of
which is retained by each of the parties, the day and year first above written.
PIERRE FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Senior Vice President and CFO
PF DISTRIBUTION, LLC
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Vice President
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