Document:

Exhibit 10.3

 

QUIDEL CORPORATION

 

AGREEMENT RE: CHANGE IN CONTROL

 

This AGREEMENT RE:  CHANGE IN
CONTROL (this “Agreement”) is dated as of August 20, 2004 and is entered into
by and between Caren L. Mason (“Executive”) and Quidel Corporation, a Delaware
corporation (the “Company”).

 

Background

 

The Company believes that because of its position in the industry,
financial resources and historical operating results there is a possibility
that the Company may become the subject of a Change in Control (as defined
below), either now or at some time in the future.

 

The Company believes that it is in the best interest of the Company and
its stockholders to foster Executive’s objectivity in making decisions with
respect to any pending or threatened Change in Control of the Company and to
assure that the Company will have the continued dedication and availability of
Executive, notwithstanding the possibility, threat or occurrence of a Change in
Control.  The Company believes that
these goals can best be accomplished by alleviating certain of the risks and
uncertainties with regard to Executive’s financial and professional security
that would be created by a pending or threatened Change in Control and that
inevitably would distract Executive and could impair her ability to objectively
perform her duties for and on behalf of the Company.  Accordingly, the Company believes that it is appropriate and in
the best interest of the Company and its stockholders to provide to Executive
compensation arrangements upon a Change in Control that lessen Executive’s
financial risks and uncertainties and that are reasonably competitive with
those of other corporations.

 

With these and other considerations in mind, the Compensation Committee
of the Company has authorized the Company to enter into this Agreement with the
Executive to provide the protections set forth herein for Executive’s financial
security following a Change in Control.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration the receipt of which is hereby acknowledged, it is
hereby agreed as follows:

 

Agreement

 

1.                                       Term
of Agreement.  This Agreement shall
be effective from the date first written above and, subject to the provisions
of Section 4, shall extend to (and thereupon automatically terminate) one (1)
day after Executive’s termination of employment with the Company for any
reason.  No termination of this
Agreement shall limit, alter or otherwise affect Executive’s rights hereunder
with respect to a Change in Control which has occurred prior to such
termination, including without limitation Executive’s right to receive the
various benefits hereunder.

 

2.                                       Purpose
of Agreement.  The purpose of this
Agreement is to provide that, in the event of a “Change in Control,” Executive
may become entitled to receive certain additional benefits, as described
herein, in the event of her termination under specified circumstances.

 

 

3.                                       Change
in Control.  As used in this
Agreement, the phrase “Change in Control” shall mean:

 

(i)                                     Except
as provided by subparagraph (iii) hereof, the acquisition (other than from the
Company) by any person, entity or “group”, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (excluding, for this purpose, the Company or its
subsidiaries, or any executive benefit plan of the Company or its subsidiaries
which acquires beneficial ownership of voting securities of the Company), of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of forty percent (40%) or more of either the then outstanding
shares of common stock or the combined voting power of the Company’s then
outstanding voting securities entitled to vote generally in the election of
directors; or

 

(ii)                                  Individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(as of the date hereof the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board of Directors of the Company,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s stockholders, is or
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or

 

(iii)                               Approval
by the stockholders of the Company of a reorganization, merger or consolidation
with any other person, entity or corporation, other than

 

(1)                                  a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of
another entity) more than sixty percent (60%) of the combined voting power of
the voting securities of the Company or such other entity outstanding
immediately after such merger or consolidation, or

 

(2)                                  a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires forty percent (40%) or
more of the combined voting power of the Company’s then outstanding voting
securities; or

 

(iv)                              Approval
by the stockholders of the Company of a plan of complete liquidation of the
Company or an agreement for the sale or other disposition by the Company of all
or substantially all of the Company’s assets.

 

4.                                       Effect
of a Change in Control. In the event of a Change in Control, Sections 6
through 13 of this Agreement shall become applicable to Executive.  These Sections shall continue to remain
applicable until the third anniversary of the date upon which the Change in
Control occurs.  On such third
anniversary date, and provided that the employment of Executive 

 

2

 

has not been terminated on
account of a Qualifying Termination (as defined in Section 5 below), this
Agreement shall terminate and be of no further force or effect.

 

5.                                       Qualifying
Termination. If following, or within thirty (30) days prior to, a Change in
Control Executive’s employment with the Company and its affiliated companies is
terminated, such termination shall be conclusively considered a “Qualifying
Termination” unless:

 

(a)                                  Executive
voluntarily terminates her employment with the Company and its affiliated
companies.  Executive, however, shall not
be considered to have voluntarily terminated her employment with the Company
and its affiliated companies if, following, or within thirty (30) days prior
to, the Change in Control, Executive’s overall compensation is reduced or
adversely modified in any material respect, including any reduction in salary
or bonus targets, or Executive’s authority or duties are materially changed, and
subsequent to such reduction, modification or change Executive elects to
terminate her employment with the Company and its affiliated companies.  For such purposes, Executive’s authority or
duties shall conclusively be considered to have been “materially changed” if,
without Executive’s express and voluntary written consent, there is any
substantial diminution or adverse modification in Executive’s title, status,
overall position, responsibilities, reporting relationship, general working
environment (including without limitation secretarial and staff support,
offices, and frequency and mode of travel), or if, without Executive’s express
and voluntary written consent, Executive’s job location is transferred to a
site more than twenty-five (25) miles away from her place of employment thirty
(30) days prior to the Change in Control. 
In this regard as well, Executive’s authority and duties shall
conclusively be considered to have been “materially changed” if, without Executive’s
express and voluntary written consent, Executive no longer holds the same title
or no longer has the same authority and responsibilities or no longer has the
same reporting responsibilities, in each case with respect and as to a publicly
held parent company.

 

(b)                                 The
termination is on account of Executive’s death or Disability.  For such purposes, “Disability” shall mean a
physical or mental incapacity as a result of which Executive becomes unable to
continue the performance of her responsibilities for the Company and its
affiliated companies and which, at least three (3) months after its
commencement, is determined to be total and permanent by a physician agreed to
by the Company and Executive, or in the event of Executive’s inability to
designate a physician, Executive’s legal representative.  In the absence of agreement between the
Company and Executive, each party shall nominate a qualified physician and the
two physicians so nominated shall select a third physician who shall make the
determination as to Disability.

 

(c)                                  Executive
is involuntarily terminated for “Cause.” For this purpose, “Cause” shall be
limited to only three types of events:

 

(1)                                  the willful and
deliberate refusal of Executive to comply with a lawful, written instruction of
the Board of Directors, which refusal is not remedied by Executive within a
reasonable period of time after her receipt of written notice from the Company
identifying the refusal, so long as the instruction 

 

3

 

is consistent with the scope and responsibilities
of Executive’s position prior to the Change in Control;

 

(2)                                  an act or acts of
personal dishonesty by Executive which were intended to result in substantial
personal enrichment of Executive at the expense of the Company; or

 

(3)                                  Executive’s conviction
of any felony involving an act of moral turpitude.

 

6.                                       Severance
Payment.  If Executive’s employment
is terminated as a result of a Qualifying Termination, the Company shall pay
Executive within thirty (30) days after the Qualifying Termination a cash lump
sum equal to two (2) times Executive’s Compensation (the “Severance Payment”).

 

(a)                                  For
purposes of this Agreement, Executive’s “Compensation” shall equal the sum of
(i) Executive’s highest annual salary rate with the Company within the
three year period ending on the date of Executive’s Qualifying Termination,
plus (ii) a “Bonus Increment.” The Bonus Increment shall equal the annualized
average of all bonuses and incentive compensation payments paid to Executive
during the two (2) year period immediately before the date of Executive’s
Qualifying Termination under all of the Company’s bonus and incentive
compensation plans or arrangements.

 

(b)                                 In
lieu of a cash lump sum, Executive may, in her sole discretion, elect to
receive the Severance Payment provided by this Section in equal annual
installments over three (3) years.  Such
installments shall be paid to Executive on each anniversary of the date of
Executive’s Qualifying Termination, beginning with the first such anniversary
and continuing on each such anniversary thereafter until fully paid.  Such election to receive the Severance
Payment in installments may be made and/or revoked by Executive at any time
prior to the occurrence of a Change in Control by written notice to the Board
of Directors of the Company.  Upon the
occurrence of a Change in Control, any such election to receive the Severance
Payment in installments that has been made and not revoked prior to the Change
in Control shall be irrevocable and binding on both the Company and Executive.  In the event that at the time of a Change in
Control there is not in effect an election by Executive to receive the
Severance Payment in installments, such Severance Payment shall be paid to
Executive in a single cash lump sum as provided in subparagraph (a) above.

 

(c)                                  The
Severance Payment hereunder is in lieu of any severance payment that Executive
might otherwise be entitled to from the Company in the event of a Change in
Control under the Company’s applicable severance pay policies, if any, or under
any other oral or written agreement; provided, however, that
Executive shall continue to be entitled to receive the severance pay benefits
under the Company’s applicable policies, if any, or under another written
agreement if and to the extent Executive’s termination is not a Qualifying
Termination after, or within thirty (30) days prior to, a Change in
Control.  In addition and
notwithstanding anything to the contrary herein, Executive shall be 

 

4

 

entitled to
receive all accrued and unpaid wages and bonuses that are earned and payable at
the time of any Qualifying Termination.

 

7.                                       Additional
Benefits.

 

(a)                                  In
the event of a Change in Control, any and all unvested stock options of
Executive shall immediately become fully vested and any and all restrictions on
Executive’s restricted stock shall immediately and automatically lapse.

 

(b)                                 In
the event of a Qualifying Termination, Executive shall be entitled to continue
to participate in the following executive benefit programs which had been made
available to Executive (including her family) before the Qualifying
Termination: group medical insurance, group dental insurance, group-term life
insurance, and disability insurance. 
These programs shall be continued at no cost to Executive, except to the
extent that tax rules require the inclusion of the value of such benefits in
Executive’s income.  The programs shall
be continued in the same way and at the same level as immediately prior to the
Qualifying Termination.  The programs
shall continue for Executive’s benefit for two (2) years after the date of the
Qualifying Termination; provided, however, that Executive’s
participation in each of such programs shall be earlier terminated or reduced,
as applicable, if and to the extent Executive receives benefits as a result of
concurrent coverage through another program.

 

(c)                                  In
the event of a Qualifying Termination, Executive shall be entitled to receive
from the Company, upon such Termination, the sum of $25,000 to help defray
legal fees, tax and accounting fees, executive outplacement services, and other
costs associated with transitional matters.

 

(d)                                 In
the event of a Qualifying Termination prior to December 31, 2004, Executive
shall be entitled to receive from the Company, upon such Termination, payment
of the Start Bonus (as defined in Section 4 of her Employment Agreement,
executed concurrently herewith).

 

8.                                       Limitation
on Payments.  Notwithstanding
anything to the contrary herein, in the event that the sum aggregate present
value of (i) the Severance Payment payable under Section 6 hereof, (ii) any and
all additional amount or benefits which may be paid or conferred to or on
behalf of Executive in accordance with Section 7 hereof, and (iii)  any and all other amounts or benefits paid
or conferred to or on behalf of Executive would constitute a “parachute
payment” (“parachute payment” as used this Agreement shall be defined in
accordance with Section 280G(b)(2), or any successor thereto, of the Internal
Revenue Code of 1986, as amended), the payments under this Agreement shall be
reduced (by the minimum possible amounts) until no amount payable to Executive
under this Agreement constitutes a parachute payment; provided, however,
that no such reduction under this Section 8 shall be made if the net after-tax
payment (after taking into account Federal, state, local or other income and
excise taxes) to which Executive would otherwise be entitled without such
reduction would be greater than the net after-tax payment (after taking into
account Federal, state, local or other income and excise taxes) to Executive
resulting from the receipt of such payments with such reduction.  If, as a result of subsequent events or
conditions (including a subsequent payment or absence of a 

 

5

 

subsequent payment under this
Agreement), it is determined that payments hereunder have been reduced by more
than the minimum amount required under this Section 8, then an additional
payment shall be promptly made to Executive in an amount equal to the excess
reduction.  All determinations required
to be made under this Section 8, including whether a payment would result in a
parachute payment and the assumptions to be utilized in arriving at such
determination, shall be made and approved within fifteen (15) days after the
Qualifying Termination by both (1) accountants selected by the Company and (2)
Executive’s designated financial advisor.

 

9.                                       Nonsolicitation
Covenant.  In consideration of the
payments to be made to Executive hereunder, Executive hereby covenants, for a
period of two (2) years following the Qualifying Termination, that she will
not, directly or indirectly (whether as an officer, director, employee,
individual proprietor, control shareholder, consultant, partner or otherwise)
(i) solicit, recruit or hire-away any employee of the Company or successor of
the Company or (ii) solicit, influence or attempt to influence any person or
entity to terminate such person’s or entity’s contractual and/or business
relationship with the Company or successor of the Company.  With regard to this Section 9, Executive
acknowledges that the provisions herein are reasonable in both scope and
duration and necessary to protect the business of the Company or its successor.

 

10.                                 Rights
and Obligations Prior to a Change in Control.  Prior to the date which is thirty (30) days before a Change in
Control, the rights and obligations of Executive with respect to her employment
by the Company shall be determined in accordance with the policies and
procedures adopted from time to time by the Company and the provisions of any
written employment contract in effect between the Company and Executive from
time to time.  This Agreement deals only
with certain rights and obligations of Executive subsequent, or within thirty
(30) days prior to, a Change in Control, and the existence of this Agreement
shall not be treated as raising any inference with respect to what rights and
obligations exist prior to the date which is thirty (30) days before a Change
in Control.  Unless otherwise expressly
set forth in a separate written employment agreement between Executive and the
Company, the employment of Executive is expressly at-will, and Executive or the
Company may terminate Executive’s employment with the Company at any time and
for any reason, with or without cause, provided that if such termination occurs
within thirty (30) days prior to or three (3) years after a Change in Control
and constitutes a Qualifying Termination (as defined in Section 5 above) the
provisions of this Agreement shall govern the payment of the Severance Payment
and certain other benefits as provided herein.

 

11.                                 Non-Exclusivity
of Rights.  Subject to Section 6(c)
hereof, nothing in this Agreement shall prevent or limit Executive’s continuing
or future participation in any benefit, bonus, incentive or other plan or
program provided by the Company or any of its affiliated companies and for
which Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as Executive may have under any stock option or other
agreements with the Company or any of its affiliated companies.  Except as otherwise provided in Section 6(c)
hereof, amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan or program of the Company or any of its
affiliated companies at or subsequent to the date of any Qualified Termination
shall be payable in accordance with such plan or program.

 

6

 

12.                                 Full
Settlement.  The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counter-claim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. 
In no event shall Executive be obligated to seek other employment or to
take any other action by way of mitigation of the amounts payable to Executive
under any of the provisions of this Agreement. 
The Company agrees to pay, to the full extent permitted by law, all
legal fees and expenses which Executive may reasonably incur as a result of
Executive’s successful collection efforts to receive amounts payable hereunder,
or as a result of any contest (regardless of the outcome thereof) by the
Company or others of the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance thereof (including
as a result of any contest by Executive about the amount of any payment
pursuant to this Section).

 

13.                                 Successors.

 

(a)                                  This
Agreement is personal to Executive, and without the prior written consent of
the Company shall not be assignable by Executive other than by will or the laws
of descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

 

(b)                                 The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.

 

14.                                 Governing
Law.  This Agreement is made and
entered into in the State of California, and the internal laws of California
shall govern its validity and interpretation in the performance by the parties
hereto of their respective duties and obligations hereunder.

 

15.                                 Modifications.  This Agreement may be amended or modified
only by an instrument in writing executed by all of the parties hereto.

 

16.                                 Dispute
Resolution.

 

(a)                                  Any
controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants, or
conditions of this Agreement or in any way arising under this Agreement (a
“Covered Dispute”) shall, on demand by either of the parties by written notice
served on the other party in the manner prescribed in Section 16 hereof, be
referenced pursuant to the procedures described in California Code of Civil
Procedure (“CCP”) Sections 638, et seq., as they may be amended from
time to time (the “Reference Procedures”), to a retired Judge from the Superior
Court for the County of San Diego or the County of Orange for a decision.

 

(b)                                 The
Reference Procedures shall be commenced by either party by the filing in the
Superior Court of the State of California for the County of San Diego or the
County of Orange of a petition pursuant to CCP Section 638(1) (a
“Petition”).  Said Petition shall
designate as a referee a Judge from the list of retired San Diego County and
Orange County Superior Court Judges who have made themselves available for trial
or settlement of civil litigation under said Reference Procedures.  If the parties hereto are 

 

7

 

unable to agree on the designation of a
particular retired San Diego County or Orange County Superior Court Judge or
the designated Judge is unavailable or unable to serve in such capacity,
request shall be made in said Petition that the Presiding or Assistant
Presiding Judge of the San Diego County Superior Court or the Orange County
Superior Court, as relevant, appoint as referee a retired San Diego County or
Orange County Superior Court Judge from the aforementioned list.

 

(c)                                  Except
as hereafter agreed by the parties, the referee shall apply the internal law of
California in deciding the issues submitted hereunder.  Unless formal pleadings are waived by
agreement among the parties and the referee, the moving party shall file and
serve its complaint within 15 days from the date a referee is designated as
provided herein, and the other party shall have 15 days thereafter in which to
plead to said complaint.  Each of the
parties reserves its respective rights to allege and assert in such pleadings
all claims, causes of action, contentions and defenses which it may have arising
out of or relating to the general subject matter of the Covered Dispute that is
being determined pursuant to the Reference Procedures.  Reasonable notice of any motions before the
referee shall be given, and all matters shall be set at the convenience of the
referee.  Discovery shall be conducted
as the parties agree or as allowed by the referee.  Unless waived by each of the parties, a reporter shall be present
at all proceedings before the referee.

 

(d)                                 It
is the parties’ intention by this Section 16 that all issues of fact and law
and all matters of a legal and equitable nature related to any Covered Dispute
will be submitted for determination by a referee designated as provided
herein.  Accordingly, the parties hereby
stipulate that a referee designated as provided herein shall have all powers of
a Judge of the Superior Court including, without limitation, the power to grant
equitable and interlocutory and permanent injunctive relief.

 

(e)                                  Each
of the parties specifically (i) consents to the exercise of jurisdiction over
her person by a referee designated as provided herein with respect to any and
all Covered Disputes; and (ii) consents to the personal jurisdiction of the
California courts with respect to any appeal or review of the decision of any
such referee.

 

(f)                                    Each
of the parties acknowledges that the decision by a referee designated as
provided herein shall be a basis for a judgment as provided in CCP Section 644
and shall be subject to exception and review as provided in CCP Section 645.

 

17.                                 Notices.  Any notice or communications required or
permitted to be given to the parties hereto shall be delivered personally or be
sent by United States registered or certified mail, postage prepaid and return
receipt requested, and addressed or delivered as follows, or at such other
addresses the party addressed may have substituted by notice pursuant to this
Section:

 

	
  Quidel Corporation

  	
   

  	
  Caren L. Mason

  
	
  10165 McKellar Court

  	
   

  	
  2523 Park Ridge Drive

  
	
  San Diego, CA 92121

  	
   

  	
  Escondido, CA 
  92025-7775

  
	
  Attn:  President

  	
   

  	
   

  

 

8

 

18.                                 Captions.  The captions of this Agreement are inserted
for convenience and do not constitute a part hereof.

 

19.                                 Severability.  In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein and there shall be deemed substituted
for such invalid, illegal or unenforceable provision such other provision as
will most nearly accomplish the intent of the parties to the extent permitted
by the applicable law.  In case this
Agreement, or any one or more of the provisions hereof, shall be held to be
invalid, illegal or unenforceable within any governmental jurisdiction or
subdivision thereof, this Agreement or any such provision thereof shall not as
a consequence thereof be deemed to be invalid, illegal or unenforceable in any
other governmental jurisdiction or subdivision thereof.

 

20.                                 Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one in the same Agreement.

 

[Remainder of
page left blank intentionally, signatures on following page]

 

9

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in San
Diego, California.

 

	
   

  	
  Quidel Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Mark A. Pulido

  	
   

  
	
   

  	
  Name:  Mark A. Pulido

  
	
   

  	
  Title:

  	
  Chairman of the Board of Directors,

  Quidel Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Caren L. Mason

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Caren L. Mason

  	
   

  
					

 

10<PAGE>

                                                                   Exhibit 10.10

Where indicated below, confidential information has been omitted pursuant to a
request for confidential treatment and filed separately with the U.S. Securities
and Exchange Commission.

                         [Coffee Holding Co. Letterhead]

November 7, 2002

Supervalu
11095 Viking Drive
Attn: Mr. Marc Nosal/Craig Espelien

Gentlemen:

Coffee Holding Co. is pleased to outline to you the following terms and
conditions agreed upon this day for the extension no four contracted business
relationship whereas Coffee Holding Co., Inc. is the exclusive* supplier to
Supervalu for all their private label coffee. This commitment covers private
label coffee for Supervalu for all regions on both ground and instant in all
labels, packs and sizes.

The duration of this contract will be for a period of one year commencing
December 1st 2002 and ending either November 30th, 2003 or at the completion of
the case commitments outlined below.

Supervalu will honor the balance of the old case commitment on the contract
dated September 25, 2001. As of today's date approximately [*] cases of 34.5-oz
coffee remain unfulfilled at the old contract price.

Under the terms and conditions of the extension, Coffee Holding Co. will pay
Supervalu $[*] on December 1st and a balance of $[*] upon completion of the
contract. Supervalu will purchase from Coffee Holding Co. an additional [*]
cases of 34.5-oz. coffee at [*]. In addition, Coffee Holding Co. will offer to
sell Supervalu an additional [*] cases of 34.5-oz. coffee at Supervalu's option
following the completion of the first [*] cases of 34.5-oz. coffee. Pricing for
all other private label items remain the same as the September 25, 2001
contract.

In addition to the above Coffee Holding Co., will offer Supervalu a truckload
buy three times per year at $[*]/case off invoice allowance. Also, Coffee
Holding Co. will offer $[*] per store for new item distributions and Supervalu
will offer Coffee Holding Co. [*] at their shows for [*].

Please fax back a signed copy of this contract if the above terms and conditions
meet your approval.

*Coffee Holding Co. realizes this contract does not cover Winco.

                                        Very truly yours,
                                        Andrew Gordon
                                        President
                                        Coffee Holding Co.

Signature: /s/ Marc Nosal
           ----------------------------
Name:      Marc Nosal
Title:     Store Brands Category Manager
Supervalu/Store Brands

<PAGE>

To: Marc.t.nosal@supervalu.com; craig.espellen@supervalu.com

Gentlemen:

As an amendment to the contract I emailed you earlier today. Coffee Holding Co.
agrees to pay a $|*| bonus per $|*| increase starting with annualized sale of
$|*|.

                                        Regards,
                                        Andrew Gordon
                                        President
                                        Coffee Holding Co.

Signature: /s/ Marc Nosal
           ----------------------------
Name:      Marc Nosal
Title:     Store Brands Category Manager

<PAGE>

Subj:         (no subject)
Date:         11/7/2002 12:50;48 PM Eastern Standard Time
From:         AG GORDON CHC
To:           marc.nosal@supervalue.com

Marc,

As per our conversation, in order to align your Cub pricing at the expiration of
their contract (12-01-02) with the rest of your labels Coffee Holding Co.
suggests the following:

ITEM                                SIMILAR ITEM                   NEW PRICE
-------------------------------------------------------------------------------
Cub 34.5-oz can                     FLV 34.5-oz can                   [*]
Cub 23-oz. Decafe                   none                              [*]
8-oz. Instant                       FLV 8-oz. Instant                 [*]
13-oz. Brick                                                          [*]
13-oz. Brick Decafe                                                   [*]

We hope the above meets with your approval. If it does, we will send you a
revised pricing sheet on excel for all applicable zones and brackets.

                                        Regards,
                                        Andrew Gordon
                                        President
                                        Coffee Holding Co.

* Confidential information has been omitted pursuant to a request for
  confidential treatment and filed separately with the U.S. Securities and
  Exchange Commission.

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