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PURCHASING AGENT AGREEMENT
This Agreement, made and entered into on this the 3rd day of September,
2001, by and between Pierre Foods, Inc., a North Carolina corporation with
principal offices located in Cincinnati, Ohio (hereinafter "Company") and PF
Purchasing, LLC, a North Carolina limited liability company with principal
offices located in Hickory, North Carolina (hereinafter "Agent").
W I T N E S S E T H:
WHEREAS, Company is currently purchasing various non-protein supplies
for its food processing and distribution business from various vendors and
suppliers, and
WHEREAS, Company desires to simplify the processes involved in the
selection, negotiation and purchase of such supplies, and
WHEREAS, Company desires to consolidate the purchasing of these
supplies under one provider who will negotiate and purchase such supplies for
Company, and
WHEREAS, Agent has expertise in the negotiation and pricing of such
supplies with various vendors, and is willing to guarantee fixed purchase prices
for such supplies to the Company; and
WHEREAS, Agent has agreed to purchase, on behalf of the Company, and
handle the processes involved in the fulfillment of orders to the Company
pursuant to the terms set forth herein.
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 of Agent. Company hereby appoints Agent as its agent to
purchase and secure the purchase of certain non-protein supplies ("Supplies")
needed in the food processing and distribution business of the Company.
2. Duties of Agent. Company shall provide Agent with a listing of all
Supplies needed during normal business cycles and advise agent of levels of
inventory of such Supplies along with projected and forecasted inventory
quantitative needs in order to allow Agent to secure from its sources of vendors
and suppliers the best pricing available upon the required delivery dates and
quantities. As of the execution of this Agreement, the parties shall agree upon
a maximum fixed price ("MFP") for the Supplies needed by the Company for a
period of one year. Agent shall guarantee the delivery of such items at the
agreed upon MFP price, plus freight, for the quantities
specified for the one year period. Upon the end of the initial one year period,
and for each year of the Agreement thereafter, the parties shall mutually agree
upon such new MFP for Supplies as may be appropriate.
It is expressly agreed that Agent is relying upon the forecast and
volume requirements of the Company in order to commit to the guaranty of the
MFP.
3. Payment. The terms of payment may be by either of the following
methods in the discretion of Agent:
(a) Accounts will paid by check of the Company with the order
or direct billed to Company from Agent's vendor or supplier.
(b) Account orders will be billed by Agent once each month net
10 days.
4. Term. Agent hereby agrees for an initial term of three (3) years,
effective September 3, 2001, to purchase such Supplies for the Company in
accordance with Company's needs and the terms of this Agreement. Within thirty
(30) days prior to each anniversary of this Agreement, the Company shall provide
Agent with a list of the Supplies by item needed and forecasted requirements
(each forecast to be periodically updated along with rolling actual needs and
delivery schedules), and the parties shall mutually agree upon the MFP price for
each items or category of items. Within the ninety (90) day period prior to the
last year 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 two (2) year term from the date of expiration of the then current
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 that
this Agreement shall expire and terminate as of the end of the then current
term.
5. 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 account
orders placed upon the direction of the Company by Agent. Upon receipt of notice
of termination, Agent shall place no additional purchase orders for Supplies
except as specifically directed by the Company.
6. Incentive Payment. During the term of this Agreement, Agent agrees
to make an incentive payment of $100,000.00 per quarter, payable at the end of
each quarter, to Company in
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consideration of the opportunity to act as exclusive purchasing agent and to
offset any costs of personnel of Company for services rendered to or on behalf
of Agent.
7. Commission. As its sole consideration for performance hereunder,
Agent shall be entitled to receive all rebates or discounts receivable by
Company from suppliers and vendors for orders negotiated and placed by Agent
under this Agreement. Payment to Agent will be made within ten (10) days of
receipt by Company of such rebates or discounts, if any.
8. Confidentiality. Except as necessary to procure supply commitments,
Agent 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 Supplies, all of which is the proprietary
information of the Company, to which Agent may have access during the term of
this Agreement. Agent 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.
9. Assignment. This Agreement is not assignable by Agent without the
express written consent of the Company.
10. Disputes. Any disputes that may arise out of this Agreement shall
be governed under the laws of the State of North Carolina.
11. 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.
12. Independent Contractor. Agent 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 Agent and has no interest in the business of Agent,
except to the extent expressly set forth in this Agreement.
13. 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.
14. 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.
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15. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Purchasing
Agent 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 PURCHASING, LLC
By: /s/ Xxxxx X. Xxxxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxxxx, Xx., President
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