Vendor Service Agreement


    
       

      
        Exhibit
          10.2

      

    


    VENDOR

    SERVICE
      AGREEMENT

    


    


    THIS
      SERVICE AGREEMENT (“Agreement”)
      is entered into effective this 28th
      day of
      Dec., 2005 (the “Effective Date”), by and between Pilgrim’s Pride Corporation, a
      Delaware corporation with its headquarters at 4845 Hwy. 271 North, Pittsburg,
      Texas 75686 (“Pilgrim’s Pride”) and Pat Pilgrim d/b/a Pat Pilgrim Farms (the
“Vendor”), whose address is 1535 Loop 179, Pittsburg, TX 75686, referred to in
      this Agreement separately as a “Party” or collectively as the
“Parties”.

    


    


    WITNESSETH:

    


    WHEREAS,
      Pilgrim’s Pride desires Vendor to provide services as mutually agreed upon by
      the Parties as more fully set forth in Exhibit “A” attached hereto and
      incorporated herein by reference (the “Services”); and 

    


    WHEREAS,
      Vendor is experienced in all facets of the Services and is agreeable to
      providing such Services for Pilgrim’s Pride.

    


    NOW,
      THEREFORE, in consideration of the mutual promises contained herein and subject
      to all terms and conditions hereof, Pilgrim’s Pride and Vendor agree as
      follows:

    


    1. Scope
      of Vendor’s Authority.

    


    
      	 	
              Pilgrim’s
                Pride authorizes Vendor to provide the Services specified on Exhibit
“A”
                attached hereto and incorporated herein by reference. Vendor shall
                not
                commence said Services without the authorization of Pilgrim’s
                Pride.

            


    

    


    2. Fees
      and Charges.

    


    
      	 	
              In
                consideration of the Services performed by Vendor, Pilgrim’s Pride agrees
                to pay Vendor the service fees and other charges as specified on
                Exhibit
                “B” attached hereto and incorporated herein by reference within 30 days
                from the later of i) the date of receipt of invoice at the following
                listed address or ii) upon acceptance of the Services as being
                satisfactory to Pilgrim’s Pride. All invoices must be sent to Pilgrim’s
                Pride at the following address:

            


    

    


    Pilgrim’s
      Pride Corporation

    P.O.
      Box
      5000

    Pittsburg,
      Texas 75686

    Attn:
      Accounts Payable

    


    
      
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    3. Term
      and Termination.

     

    
      	3.1.  	
              The
                Initial Term of this Agreement is up to one (1) calendar year, beginning
                on the Effective Date and ending on December 31st
                of
                the year in which such Agreement is executed by the Parties. This
                Agreement will automatically renew for another one (1) year term
                on each
                January 1st
                following the Effective Date (the “Renewal Term”), unless otherwise
                terminated in accordance with the provisions of this
                section.

            


    

    


    
      	3.2.  	
              Either
                Party may terminate this Agreement, with or without cause, by giving
                the
                other Party sixty (60) days prior written notice of termination using
                the
                notice procedure described in Section 11
                below.

            


    

    


    
      	3.3.  	
              This
                Agreement may be terminated by either Party by providing written
                notice of
                “Immediate Termination” to the other Party in any of the following
                circumstances:

            


    

    


    
      	3.3.1.  	
              if
                a Party fails to pay any amount owed to the other Party under this
                Agreement within ten (10) days after receipt of written “Late Notice”
                demanding payment; or

            


    

    


    
      	3.3.2.  	
              if
                a Party fails to cure a breach of a material provision of this Agreement,
                other than non-payment of any amount owed to the other Party hereunder,
                within thirty (30) calendar days after receipt of written notice
                demanding
                cure.

            


    

    


    
      	3.4  	
              This
                Agreement will be terminated immediately by Pilgrim’s Pride in any of the
                following circumstances:

            


    

    


    
      	3.4.1  	
              If
                Vendor becomes the subject of an insolvency or bankruptcy proceeding
                or
                makes an assignment of all or substantially all of its assets for
                the
                benefit of its creditors;

            


    

    


    
      	3.4.2  	
              If
                Vendor has not provided any Services to Pilgrim’s Pride during the
                previous calendar year.

            


    

    


    
      	3.5  	
              Upon
                termination of this Agreement, Vendor shall return to Pilgrim’s Pride all
                originals and copies of documents provided by Pilgrim’s Pride for purposes
                of this Agreement.

            


    

    


    4. Representations
      of Vendor.

    


    Vendor
      represents and warrants as follows:

    


    
      	4.1  	
              It
                will comply with all applicable laws, rules and regulations governing
                the
                provision of Services and the performance of its dutites under this
                Agreement.

            


    

     

    
      
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      	4.2  	
              It
                is duly authorized and licensed to perform the Services and its duties
                hereunder in each jurisdiction in which it will
                act.

            


    

    


    
      	4.3  	
              It
                will maintain insurance requirements per Section 5 below and agrees
                that
                Pilgrim’s Pride can withold payment for Services if and for so long as it
                fails to comply with Section 5.

            


    

    


    5. Insurance.

    


    Vendor
      agrees to maintain in effect insurance coverage with reputable insurance
      companies covering worker’s compensation and employer liability (or other
      reasonable equivalent, as soley determined by Pilgrim’s Pride’s Risk Management
      Department, such as excess employer’s indemnity insurance or excess worker’s
      compensation) excess insurance, auto liability, commercial general liability,
      including product liability/completed operations, all with such limits as are
      sufficient to protect Vendor and Pilgrim’s Pride from the liabilities insured
      against by such coverage. Vendor’s insurance described herein shall be primary
      and not contributory with Pilgrim’s Pride’s insurance with respect to
      obligations resulting from the negligence of Vendor.

    


    Vendor
      shall have the following minimum requirements on their Certificate of Insurance.
      

    


       General
      Liability

    General
      Aggregate$2,000,000

    Products/Completed
      Operations$1,000,000

    And/or
      Professional Liability $1,000,000
      (if applicable)

    Each
      Occurrence$1,000,000

    


    Automobile
      Liability

    Combined
      Single Limit$1,000,000

    


    Workers
      Compensation   Statutory

    


    Employers'
      Liability

    Each
      Accident $100,000

    Policy
      Limit $500,000

    Each
      Employee $100,000

    


    Pilgrim's
      Pride Corporation is to be listed as an Additional Insured on General Liability
      and Auto policies. A 30-day notice of cancellation is also required. Pilgrim's
      Pride Corporation reserves the right to modify these requirements as deemed
      necessary for the risk presented to Pilgrim's Pride Corporation.

    


    The
      certificate holder address should read as follows:

    


    Pilgrim's
      Pride Corporation

    Attn:
      Risk Management

    4845
      Hwy.
      271 N

    P.O.
      Box
      93

    Pittsburg,
      TX 75686

    


    
      
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6. Indemnification.

    

    


    
      	6.1.  	
              Each
                Party shall indemnify and hold harmless the other Party and all of
                its
                directors, officers, employees and agents (the “Indemnitees”) from and
                against any claims, losses, damages, liens, judgments, awards, penalties
                or other costs or expenses (including, but not limited to, any reasonable
                attorneys’ fees), and defend, at such Party’s cost, each Indemnitee
                against any threatened, pending or initiated claim, action, litigation,
                suit, arbitration, mediation or proceeding, arising out of or connected
                with a violation of law by such Party, a breach of such Party’s
                obligations under this Agreement, or any negligence or willful misconduct
                by any employee, agent, contractor or other representative of such
                Party.
                Parties shall notify each other as soon as reasonably practicable
                of any
                such claim, action, litigation, suit, arbitration, mediation or proceeding
                and provide the other Party with reasonable assistance in the defense
                thereof; provided that such delay or failure to deliver any such
                notice
                shall not relieve either Party’s obligations under this provision except
                to the extent such delay or failure materially prejudices either
                Party’s
                obligations hereunder.

            


    

    


    
      	6.2.  	
              Termination
                of this Agreement shall not relieve either Party of its respective
                obligations of indemnification under this
                section.

            


    

    


    7. Confidentiality.

    


    
      	 	
              Vendor
                acknowledges that its employees and other representatives will be
                exposed
                to confidential and proprietary information of Pilgrim’s Pride during the
                ordinary course of providing the services contemplated by this Agreement.
                Vendor agrees to use its best efforts and to cause its employees
                and other
                representatives to use the same degree of care to maintain the
                confidentiality of such information as it would and/or does with
                respect
                to its own proprietary and confidential business information. Vendor
                agrees to refrain from disclosing any part of Pilgrim’s Pride’s
                confidential and proprietary information to a third party. Vendor
                further
                agrees not to use any confidential and proprietary business information
                of
                Pilgrim’s Pride for any purpose other than the performance of the Services
                described hereunder.

            


    

    


    8. Audit.

    


    Vendor
      shall keep accurate books of account and records covering all transactions
      involving the products and/or services provided by Vendor. Pilgrim’s Pride, or
      its authorized representatives, shall have the right, during normal business
      hours, to examine such books and records to the extent necessary to determine
      Vendor’s compliance with the supply of the products and/or services under this
      Agreement. All such books and records shall be kept available during the term
      of
      business relationship and for at least three (3) years after their
      creation.

     

    
      
        Service
          Agreement FINAL 12-19-05.doc

      

      
        
        

        
          

        

      

      
        
        

      

    

    9. No
      Gratuities.

    


    Neither
      Party will offer or provide to the employees, agents or other representatives
      of
      the other Party any favors, gratuities, gifts, payments, or anything of value,
      whether or not in an attempt to influence such person’s administration of the
      provisions of Agreement or to otherwise gain unfair advantage individually
      and/or relative to competing suppliers/vendors.

    


    Additionally,
      each Party will immediately report to the other Party any requests made for
      favors, gratuities, gifts, payments, or anything of value by employees, agents
      or other representatives of such Party and will cooperate with respect to any
      inquiry or investigation being conducted related to such activities or alleged
      activities. Pilgrim’s Pride has established its PRIDE Line with the toll-free
      number of 1-888-536-1510 to report any unethical conduct.

    


    


    10. Amendment
      and Waiver.

    


    10.1
      This
      Agreement and the Exhibits attached hereto contain the entire agreement between
      the Parties with respect to the subject matter hereof and shall not be amended
      except in a writing duly signed by both Parties to this Agreement.

    


    10.2
      The
      failure of either Party to insist upon strict adherence to any term or condition
      of this Agreement on any occasion shall not constitute a waiver of such Party’s
      rights to insist upon strict adherence to such term or provision on a subsequent
      occasion. Any of the terms or provisions of this Agreement may be waived at
      any
      time, and from time to time, in writing by the Party entitled to the benefit
      thereof without impairing or diminishing any other term or provision hereof.
      Waiver by either Party of a breach of any term or provision of this Agreement
      shall not operate as or be construed as a waiver of any subsequent
      breach.

    


    


    11. Notice.

     

    All
      notices, requests and other communications (“Notices”) required or permitted to
      be given under this Agreement shall be given in writing and shall be deemed
      duly
      delivered if delivered personally with receipt acknowledged, if delivered by
      an
      overnight delivery service such as UPS or FedEx, or by United  States
      registered or certified first class mail, postage paid, return receipt
      requested, addressed to the Parties at the following addresses, or such other
      address as any Party may specify hereinafter by giving notice to the other
      Party
      in accordance with the procedure outlined in this section:

    


    
      
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 If
        to Pilgrim’s
        Pride: 

    

    


    Pilgrim’s
      Pride Corporation

    4845
      Hwy.
      271 N

    Pittsburg,
      Texas 75686

    Attn:
      Risk Management - Contracts

    Telephone:
      903-434-1000

     

     

    If
      to Vendor:

    


    Pat
      Pilgrim

    1535
      Loop
      179

    Pittsburg,
      TX 75686

    Telephone:
      903-856-0316

    


    Notices
      shall be deemed duly received on the date of confirmed delivery.

    


    12. Assignment.

    


    Except
      for merger, sale or acquisition of Pilgrim’s Pride, neither Party may assign its
      rights and obligations under this Agreement without the prior written consent
      of
      the other Party. All representations, convenants and warranties of this
      Agreement shall be binding upon and inure to the benefit of the Parties and
      their respective successor or permitted assigns. Nothing in this Agreement
      is
      intended or shall be construed to confer upon or give to any person or entity
      other than Pilgrim’s Pride and Vendor any right, remedy or claim
      hereunder.

    


    


    13. Severability.

    


    If
      any
      provision of this Agreement shall be declared invalid or unenforceable, the
      remainder of this Agreement shall not be affected thereby and shall remain
      in
      full force and effect.

    


    


    14. Dispute
      Resolution.

    


    If
      a
      dispute arises from or relates to transactions between the Parties, the Parties
      shall endeavor to settle the dispute first through direct discussions and
      negotiations. If the dispute cannot be settled through direct discussions,
      the
      Parties shall endeavor to settle the dispute by mediation under the Mediation
      Rules of the American Arbitration Association before recourse to the arbitration
      procedures contained in this Agreement. If a dispute has not been resolved
      within 90 days after the written notice beginning the mediation process (or
      a
      longer period, if the Parties agree to extend the mediation), the mediation
      shall terminate and the dispute shall be settled by binding arbitration in
      Dallas, Texas or such other location as agreed upon by the Parties.  The
      arbitration will be conducted in accordance with the procedures in this document
      and the Rules of the American Arbitration Association in effect on the date
      of
      the engagement letter, or such other rules and procedures as the Parties may
      designate by mutual agreement.  In the event of a conflict, the provisions
      of this document will control.

    


    
      
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    The
      arbitration shall be conducted by a single arbitrator as agreed upon by the
      Parties. If the Parties cannot agree on a single arbitrator, the arbitration
      will be conducted before a panel of three arbitrators, one selected by each
      Party and the third arbitrator selected by the Parties’ two arbitrators from a
      panel provided by the American Arbitration Association.  Any issue
      concerning the extent to which any dispute is subject to arbitration, or
      concerning the applicability, interpretation, or enforceability of these
      procedures, including any contention that all or part of these procedures are
      invalid or unenforceable, shall be governed by the agreement between the Parties
      and the Federal Arbitration Act and resolved by the arbitrators.  No
      potential arbitrator shall be appointed unless he or she has agreed in writing
      to abide and be bound by these procedures.

    


    The
      individual arbitrator or the arbitration panel shall have no power to award
      non-monetary or equitable relief of any sort.  The arbitrator/panel shall
      also have no power to award (a) damages inconsistent with any applicable
      agreement between the Parties or (b) punitive damages or any other damages
      not
      measured by the prevailing Party’s actual damages; and the Parties expressly
      waive their right to obtain such damages in arbitration or in any other
      forum.  In no event, even if any other portion of these provisions is held
      to be invalid or unenforceable, shall the arbitrator/panel have power to make
      an
      award or impose a remedy that could not be made or imposed by a court deciding
      the matter in the same jurisdiction.

    


    Discovery
      shall be permitted in connection with the arbitration only to the extent, if
      any, expressly authorized by the arbitration panel upon a showing of substantial
      need by the Party seeking discovery.

    


    All
      aspects of the arbitration shall be treated as confidential.  The Parties
      and the arbitrator/panel may disclose the existence, content or results of
      the
      arbitration only as provided in the Rules or by the Parties.  Before making
      any such disclosure, a Party shall give written notice to all other Parties
      and
      shall afford such Parties a reasonable opportunity to protect their
      interests.

    


    The
      result of the arbitration will be binding on the Parties, and judgment on the
      arbitration award may be entered in any court having jurisdiction. The
      prevailing Party in any dispute that is resolved by this dispute resolution
      process shall be entitled to recover from the other Party reasonable attorneys’
fees, costs and expenses incurred by the prevailing Party in connection with
      such dispute resolution process.

     

    
      
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    15. Jurisdiction
      and Venue.

    


    The
      provision for products and/or services between the Parties will be deemed to
      have been made and will be construed and interpreted in accordance with the
      laws
      of the State of Texas. If any matters in dispute are required to be settled
      by
      litigation, such trials will be decided by a judge. THE
      PARTIES WAIVE TRIAL BY JURY IN ANY SUCH ACTION(S) AND CONFIRM THAT THIS WAIVER
      IS A MATERIAL INDUCEMENT TO THEIR BUSINESS TRANSACTIONS. For
      any such action(s) related to their business transactions or enforcement of
      any arbitration, the Parties submit themselves to the jurisdiction of the state
      or federal courts located in Dallas, Texas. 

    


    


    IN
      WITNESS WHEREOF
      the
      Parties have caused this Agreement to be executed by their respective duly
      authorized officers as of the date first written above.

    


    


    PILGRIM’S
      PRIDE CORPORATION PAT
      PILGRIM d/b/a Pat Pilgrim Farms:    

     

    


    By:
      /s/
      Richard A. Cogdill    By:
      /s/
      Pat Pilgrim   

    


    Name:
       Richard
      A. Cogdill    Name:
       Pat
      Pilgrim   

    


    Title:
      Exec.V.P.,
      CFO, Sec. & Treas.   Title:
      Owner
      PPF   

    


    Date:
      1/3/06      Date:
      12-28-05   

    


    


    


    /s/
      TT   

    Tim
      Thomas (Initials)

    Sr.
      V.P.
      - Procurement

     

    
      
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    EXHIBIT
      A

    


    SERVICES

    


    


    


    Vendor
      agrees to provide the following “Services:”

    


    
      	·  	
              Any
                Services requested by Pilgrim’s Pride and mutually agreed upon by the
                Parties.

            


    

    
 

     

    
      
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    EXHIBIT
      B

    
       

       

       

    

    


    FEES
      AND CHARGES

    


    


    


    ______________________________________________________fees
      are as follows:

     

     

    
 

    
      
        Service
          Agreement FINAL 12-19-05.doc