EXHIBIT 10
FIRST AMENDMENT TO
CONSULTING SERVICES AGREEMENT
This First Amendment to Consulting Services Agreement (the "Amendment") is
made this 3rd day of November, 1997, by Progressive Food Concepts, Inc., a
Delaware corporation formerly known as "HFMI Acquisition Corporation" ("PFCI"),
Harry's Farmers Market, Inc., a Georgia corporation ("HFMI"), and Xxxxx Xxxxxx,
an individual ("HB").
Recitals
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A. Pursuant to a series of transactions between PFCI and HFMI on January 31,
1997, including, without limitation, the transaction described in that
certain Acquisition Agreement, dated January 31, 1997, HFMI acquired and
now owns 712.3746 shares of common stock, having a par value of $0.01 per
share, of PFCI (the "Shares").
B. Pursuant to the Acquisition Agreement, HFMI acquired certain rights against
dilution of its interests by requiring PFCI, under certain circumstances,
to issue additional shares of common stock to HFMI.
C. HFMI, PFCI and HB entered into that certain Consulting Services Agreement
(the "Consulting Services Agreement") pursuant to which the parties agreed
to provide certain consulting services to each other as described therein.
D. HFMI has agreed to sell to PFCI, and PFCI has agreed to redeem from HFMI,
all of the Shares (the "Redemption") for, among other things, an amendment
to the Consulting Services Agreement as described herein.
Agreement
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For and in consideration of the foregoing Recitals, which are incorporated
herein, the mutual covenants expressed below, and other valuable consideration,
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Section 4 of the Consulting Services Agreement is hereby deleted and
replaced, in its entirety, with the following:
4. HB Services. Consultant will make HB available to Newco not less than
40 hours (in the aggregate and on a non-cumulative basis) per calendar
month through the third anniversary hereof and not less than 10 hours (in
the aggregate and on a non-cumulative basis) per calendar month throughout
the remainder of the term of this Agreement to assist Consultant in meeting
its obligations to Newco under this Agreement; provided, however, that in
the event Newco assigns this agreement to a competitor, HB shall have no
obligation to consult with the
competitor, unless Xxxx Xxxxxx is personally involved in the management of
the competitor or is a significant shareholder therein.
2. Section 6 of the Consulting Services Agreement is hereby deleted and
replaced, in its entirety, with the following:
Newco will make available, during the term of the Agreement, information
and know-how it acquires pursuant to Section 3 of this Agreement; provided,
however, that Newco shall not be obligated to provide access to any
information pertaining to the Boston Market(R) system except as it relates
directly to the information and know-how described in Section 3 hereof.
Such information and know-how will include any successfully created
business model regarding the Facilities and the Business. Newco will
consult with Consultant and HB not less than 40 hours (in the aggregate and
on a non-cumulative basis) per calendar month through the third anniversary
hereof and not less than 10 hours (in the aggregate and on a non-cumulative
basis) per calendar month and throughout the remainder of the term of this
Agreement in order to discharge its obligations under this Section 6. Newco
will bear its own costs in rendering such consulting services to Consultant
and HB.
3. Section 9 of the Consulting Services Agreement is hereby deleted and
replaced, in its entirety, with the following:
9. Restrictive Covenant. Commencing on the date hereof and continuing
until the sixth anniversary of the date hereof (i.e., January 31, 2003),
Consultant and HB agree not to own, manage, operate, control, be employed
by, provide consulting services to, participate in, or be connected in any
manner with the ownership, management, operation, or control of any entity
that:
(a) owns or operates within the United States megastores,
supermarkets, or other retail or convenience stores specializing in
the following:
(x) perishable food products, including, by way of example and
not by limitation, fresh fruits and vegetables or fresh meats,
poultry and seafood; fresh bakery goods; freshly made ready-to-
eat, ready-to-heat and ready-to-xxxx prepared foods; and deli,
cheese and dairy products; and/or
(y) specialty, hard-to-find, and gourmet nonperishable food
products, kitchen-oriented housewares, floral items, grocery
items, natural health and beauty aids, wines, and imported and
domestic beers; or
(b) owns or operates outside the Restricted Area (as defined below) a
business which is in a line of business the same or similar to any
line of
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business that is then owned, managed, operated, controlled or
otherwise engaged in by Newco and with respect to which Consultant is
or has services hereunder. Restricted Area shall mean:
(x) from January 31, 1997 through November 3, 1999, that area
outside the States of Georgia and Alabama; and
(y) from November 3, 1999 and thereafter, that area outside the
States of Georgia, Alabama, Tennessee, South Carolina and North
Carolina;
provided, however the foregoing shall not (A) prevent Consultant from
operating its current businesses within the States of Georgia and Alabama,
(B) prevent HB from owning, controlling and being employed by Consultant,
(C) prevent Consultant or HB from providing services to Newco as
contemplated by this Agreement, (D) prevent Consultant or HB from
participating as an investor, officer or director in any business venture
not covered by the foregoing applicable restrictions, or (E) prevent
Consultant or HB from investing so as to hold less than 2% of the
outstanding shares of any company which is a "reporting company" under the
Securities Exchange Act of 1934, as amended. It is the intention of the
parties that this Section be interpreted so as to be valid under applicable
law and, if required for validity, any court or applicable tribunal may
reduce or alter the geographic scope and duration of this Section, by
substitution of words or otherwise, so as to create the broadest
permissible protection to Newco.
4. The Consulting Agreement is further supplemented and amended by adding a
new section immediately following Section 21 to read as follows:
22. Personal Obligations. The obligations and responsibilities set
forth in this Agreement are personal obligations and may not be assigned or
transferred by the obligor without the prior written consent of the
obligee, which consent may be withheld by obligee in its sole discretion;
provided, however, that the obligations of Newco may be assigned by it to
its parent in the event of and in connection with any merger of Newco into
such parent.
5. The Consulting Services Agreement shall be amended only as described in the
above particulars. All capitalized terms used herein, but not defined, shall
have the meanings ascribed to them in the Consulting Services Agreement.
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IN WITNESS WHEREOF, the parties have caused this First Amendment to
Consulting Services Agreement to be executed as of the day and date shown above.
HARRY'S FARMERS MARKET, INC.
By: /s/ Xxxxx X. Blazer
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Its: President and Chief Executive Officer
/s/ Xxxxx X. Blazer
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XXXXX X. BLAZER, individually
PROGRESSIVE FOOD CONCEPTS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Its: Vice President
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