Exhibit 10.13
FIRST AMENDMENT AGREEMENT
THIS FIRST AMENDMENT AGREEMENT ("Amendment") is executed as of the 27th day
of June, 2004, by and between XXXXXX'X FOOD SYSTEMS, INC., a North Carolina
corporation ("HFS") and PIERRE FOODS, INC., a North Carolina corporation (the
"Company").
RECITALS
1. HFS and Company are parties to a certain Amended and Restated
Agreement dated May 21, 2004 (the "Original Agreement").
2. HFS and Company are parties to a certain Amended and Restated Formula
Development Agreement dated May 21, 2004 (the "Original FDA").
3. HFS and Company are parties to a certain Amended and Restated
Confidentiality Agreement dated May 21, 2004 (the "Original Confidentiality").
4. HFS and Company desire to amend the Original Agreement and Original
FDA and memorialize the amendment in writing.
5. All capitalized terms herein not otherwise defined shall have the
meaning ascribed to such terms in the respective Original Agreement or Original
FDA, as the content may require.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained herein
for other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. AMENDMENTS.
A. The Original Agreement is amended as follows:
(a) Paragraph 3(a) is amended by the addition of the following
two new paragraphs to be inserted immediately following the first paragraph
thereof:
Company agrees and acknowledges that it shall commence building
an additional plant in a *** location as soon as its production output increases
by at least *** pounds (*** of which must be on a ***) per year of flame cooked
broiled protein from its production output as of the date of this Amendment.
Provided that such additional plant is in a location agreeable to HFS and meets
HFS's standards and specifications, HFS agrees that some of the production
capacity of the Products currently in Company's current plant may be moved to
the additional plant. HFS will determine such amounts of production capacity to
be moved based on business considerations in its sole discretion.
Company shall exercise commercially reasonable efforts to fulfill
all the supply requirements of HFS for the Products. To the extent of any plant
capacity constraints, the
Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
Company shall fulfill the supply requirements of HFS prior to the fulfillment of
any product requirements of a Competitor of HFS (as defined in the Amended and
Restated Formula Development Agreement).
(b) Paragraph 4(a) is amended by the addition of the following
new paragraphs as follows:
***
(c) Section 4(b) is amended by the addition of a new paragraph to
read as follows:
The Company agrees that no raw materials purchased by or arranged
for delivery to Company by and for the account of HFS from a designated raw
material supplier of HFS under contract with HFS, including beef products
purchased by HFS under its contract with ***, may be used by Company or its
agent to produce beef products for any other customer of Company. Provided, the
foregoing sentence does not prohibit Company from contracting directly with such
suppliers for raw materials for Company's other customers nor from accepting
from such suppliers raw materials purchased by or arranged for delivery to
Company for the account of Company's other customers. Company agrees that,
without the prior written consent of HFS, only those raw materials purchased by
or arranged for delivery to Company by and for the account of HFS from a
designated raw material supplier of HFS will be used in the manufacturing of the
Products.
(d) Section 4(f)(ii) is amended to read as follows:
(ii) Maintenance Books and Records. During the Term and for a
period of at least two (2) years thereafter, the Company shall maintain such
books and records (collectively, "Records") as necessary to substantiate that
all invoices and other charges submitted to HFS for payment hereunder are valid
and proper and to verify the Company's compliance with provisions of this
Agreement, the Amended and Restated Formula Development Agreement and the
Amended and Restated Confidentiality Agreement. Upon reasonable request from
HFS, the Company shall deliver evidence satisfactory to HFS for verification of
compliance with this Agreement, the Amended and Restated Formula Development
Agreement and the Amended and Restated Confidentiality Agreement. All Records
shall be maintained in accordance with generally accepted accounting principals
consistently applied. HFS and/or its representative shall have the right at any
time during normal business hours, upon twenty-four (24) hours notice, to
examine, inspect and audit said Records. Provided, under no circumstances shall
any trade secrets or protected confidential information of any person be subject
to such examination, inspection, or audit. Company agrees to take all actions
reasonably necessary and available to it (without disclosing such trade secrets
or confidential information) to substantiate, to HFS's satisfaction, its
compliance with this Agreement, the Amended and Restated Formula Development
Agreement and the Amended and Restated Confidentiality Agreement, including
without limitation, by permitting visual inspection of the Company's plant to
ensure compliance. HFS shall bear any cost related to any such examination,
inspection or audit; provided, however, Company shall be responsible for such
cost of audits for inspections upon a finding based on the results thereof that
Company is not in material compliance with this Agreement.
2 Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
(e) Paragraph 9(b) is amended and restated to read in its
entirety as follows:
(b) At the end of the Term of this Agreement, HFS shall
have the right to renew this Agreement, on the same terms and conditions as set
forth herein, for up to five (5) additional renewal terms of one (1) year each
by giving notice of its intent to renew to Company within ninety (90) days prior
to the expiration of the then current Term or renewal term. For the purposes of
this Agreement, the term "Term" shall be deemed to include any renewal terms.
(f) Paragraph 29 is amended by the addition of a new subsection
(d) to read as follows:
(d) Except with the prior written consent of the other party,
neither party shall disclose the existence of this Agreement or the subject
matter hereof, except on a "need to know" basis in the ordinary course of its
business in dealing with its employees, financing sources, stock or industry
analysts, advisors, and other representatives and as may be otherwise required
by law, including SEC filings. Provided, however, that subject to the foregoing,
in no event shall either party directly disclose the existence of this Agreement
or the subject matter hereof to any competitor of the other party (the
Competitor of HFS as defined in the Amended and Restated Formula Development
Agreement) or to any affiliate of a competitor of the other party. Each party
agrees and acknowledges that such disclosure shall cause irreparable harm to the
other party and entitle the other party to all remedies at law and equity
including without limitation, liquidated damages and injunctive relief.
B. The Original FDA is amended as follows:
(a) Paragraph 4 of the Original FDA is amended by (i) spelling
the word "formula" in subsection (i) of Paragraph 4 as "Formula", (ii) deleting
the "." at the end of subsection (ii) and inserting ", or" and (iii) the
addition of a new subsection (iii) to read as follows:
(iii) manufacture for or directly sell to any Competitor of HFS
any Angus Beef Burger Product (the term "Angus Beef Burger Product" determined
as defined in subsection (ii) above but without the raw weight range
restriction) that is (a) produced solely according to the Formula and HFS's
complete Finished Product Specifications, or (b) produced with or resulting in a
product with Angus beef trimmings and any two (2) of the following three (3)
variables or factors in common with the Product:
- ***
- ***
- ***
(b) A new Paragraph 14 is added to the Original FDA to read in
its entirety as follows:
14. At the end of the initial Term of this Agreement, HFS shall
have the right to renew this Agreement, on the same terms and conditions as
set forth herein, for up to
3 Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
five (5) additional renewal terms of one (1) year each by giving notice of
its intent to renew to Company within ninety (90) days prior to the
expiration of the initial Term or then current renewal term. For the
purposes of this Agreement, the term "Term" shall be deemed to include the
initial Term and any renewal terms.
2. NO CHANGE. Except as otherwise modified or amended hereby, the
Original Agreement, Original FDA, and the Original Confidentiality and all
documents and instruments delivered therewith shall remain in full force and
effect as written.
3 NO DEFAULT. The Original Agreement, the Original FDA, and the Original
Confidentiality are in full force and effect and, as of the date of this
Amendment and to the best knowledge, information, and belief of each party
without independent investigation by either party, (a) there exists no default
or event of default or event, occurrence, condition or act which, with the
giving of notice, the lapse of time or the happening of any other event or
condition, would become a default or event of default thereunder. (b) neither
party has violated any of the terms or conditions of any of the foregoing
agreements, (c) all of the obligations and covenants to be performed by each
party thereto have been fully performed, and (d) each party acknowledges and
agrees that with respect the relationship between the parties as contemplated by
the aforesaid collective agreements, there have been no violations of law. This
provision shall not be construed to limit either party from making any future
claims for future breach or subsequent wrongful conduct by either party.
4. ENTIRE AGREEMENT. This Amendment, together with the Original
Agreement, the Original FDA, and the Original Confidentiality, as may be amended
hereby, shall constitute the complete agreement between HFS and the Company and
shall supersede all prior or contemporaneous proposals, representations,
understandings, and other communications and correspondence between the parties
concerning the matters addressed in this Amendment and the aforesaid agreements,
whether oral or written.
5 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.
4 Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
IN WITNESS WHEREOF, the parties execute this Amendment in accordance with
law the day and year first above written.
XXXXXX'X FOOD SYSTEMS, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: Executive Vice President
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PIERRE FOODS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Senior Vice President - Sales
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5 Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
