Exhibit 10.8


 


AMENDED AND RESTATED


 


AGREEMENT


 


THIS AGREEMENT is executed as of the 21st day of May, 2004, and made
effective as of February 1, 2004, by and between CARL KARCHER ENTERPRISES, INC., a California corporation (“CKE”)
and PIERRE FOODS, INC., a North
Carolina corporation (the “Company”).


 


CKE desires to purchase from the Company and the Company desires to
sell to CKE and any distributors, licensees, franchisees or other persons
designated from time to time by CKE in writing (collectively, all such entities
other than CKE shall hereinafter be referred to as “Distributor”) the products
(the “Products”) described in the “Detailed Product Schedule” (the “DPS”), in
accordance with the terms and conditions hereof.


 


In consideration of the mutual promises contained herein the parties
hereby agree as follows:


 


1.                                       Purchase and Sale.  CKE shall purchase from the Company and the
Company shall produce the Products in accordance with its proprietary formula
(the “Formula”, attached as Exhibit A to the Amended and Restated Formula
Development Agreement of even date) and with CKE’s Finished Product
Specifications attached to this Agreement and sell to CKE and Distributor the
Products set forth in the DPS, as amended from time to time, in the amounts set
forth in the DPS.


 


2.                                       Distributor And Related Parties.


 


(a)                                  This
Agreement shall not to be construed in any manner to be binding upon any
Distributor of CKE or upon any affiliate, parent or subsidiary corporation of
CKE or any individual signing on behalf of CKE.


 


(b)                                 It
is expressly agreed and acknowledged that the Company has entered into a
certain Amended and Restated Agreement of even date effective  December 1, 2002 with HARDEE’S Food Systems,
Inc. (“HARDEE’S”), which Agreement, and any amendments and attachments thereto
(the “HARDEE’S Agreement), grant to HARDEE’S the right to purchase products
similar to the Products in accordance with the terms and conditions
therein.  Notwithstanding anything herein
to the contrary, CKE acknowledges that the rights, privileges, and options of
HARDEE’S under the HARDEE’S Agreement, and the terms thereof, shall not be
deemed a violation of this Agreement, the Amended and Restated Formula
Development Agreement, or any agreements delivered therewith.


 


(c)                                  The
parties hereto acknowledge that CKE designation of a Distributor shall not
constitute a representation by CKE regarding such Distributor’s ability to pay,
and that the Company shall look solely to the entity submitting a purchase
order hereunder for payment.  The Company
reserves the right to decline to provide goods and/or services to any
Distributor it reasonably determines is not credit worthy.


 










	
   

  	
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  Omitted
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  filed
  separately with the Commission.

  



 





















 


3.                                       Volume Commitment.


 


(a)                                  During
each Contract Year (as defined below), CKE and/or Distributor and HARDEE’S
and/or HARDEE’S Distributor (as defined in the HARDEE’S AGREEMENT) will
together purchase in the aggregate from the Company and the Company shall sell
CKE and HARDEE’S, and/or their respective Distributors, *** of the annual
aggregate pound usage of the Products (as defined in this Agreement and in the
HARDEE’S Agreement) by CKE, HARDEE’S, and their respective Distributors up to
an aggregate total of *** pounds of total Product per Contract Year (the “Volume
Requirement”).  Provided, if Company
acquires (by buying or building) an additional plant at a location satisfactory
to CKE which provides additional production capacity which is capable, in the
reasonable determination of HARDEE’S and CKE, of supplying all of their
aggregate pound usage of the Products, then the foregoing limitation of ***
pounds shall be disregarded. 
Notwithstanding the foregoing, however, the Volume Requirement shall be
pro-rated for any Contract Year consisting of less than 12 months (i.e. if the
final Contract Year consists of 7 months, then the Volume Requirement for that
Contract Year shall be 7/12ths of the original Volume Requirement).


 


It is expressly understood that non-compliance with the Volume
Requirement will be deemed a material breach of this Agreement even if the
Purchase Threshold is met under the Formula Development Agreement executed
herewith.


 


(b)                                 The
Volume Requirement of the Products from the Company will be reasonably
allocated over the 12 month period of each Contract Year (or over the actual
number of calendar months in a Contract Year, if less than 12), to the extent
demand on CKE Product permits such allocation.


 


(c)                                  At
all times during the term of this Agreement and at no additional cost to CKE,
the Company will maintain a safety stock volume of up to six (6) weeks of
Product based on trailing six month period average for system wide availability
in the Company’s Ohio storage facilities. 
CKE reserves the right to arrange all freight carriers and to pick up
Product at Company’s manufacturing facility and cold storage warehouses.  Addresses for the storage facilities are as
follows:


 


	
  CSI Brea

  	
  Pierre Foods, Inc.

  	
  Cincinnati Freezer

  
	
  2750 Orbitor Avenue

  	
  9990 Princeton Road

  	
  2881 E. Sharon Road

  
	
  Brea, California

  	
  Cincinnati, Ohio 45246

  	
  Cincinnati, Ohio 45241

  
	
  Attn: Maritza Jimenez

  	
  Attn: Bill Kolb

  	
  Attn: Don Lucas

  
	
  714-993-3533

  	
  800-543-1604

  	
  513-771-3573

  



 


(d)                                 The
Company acknowledges that the annual anticipated purchase volumes set forth in
the DPS are estimates only, and are subject to adjustment based on actual
historical data, promotional forecasts and other information furnished to the
Company from time to time.  CKE will
provide the Company with a quarterly forecast at least thirty (30) days prior
to the start of each calendar quarter. 
Said forecast is an estimate only.










	
   

  	
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  Omitted
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  separately with the Commission.

  



 


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(e)                                  In
the event the Company cannot deliver the Products in the amounts and on the
dates required by CKE, CKE may obtain the Products from alternate suppliers and
test alternate products.  Such
alternative sources will count towards the Volume Requirement as if purchased
from the Company.


 


(f)                                    The
Company acknowledges and agrees that it is a non-exclusive supplier of the
Products to CKE and Distributor.


 


4.                                       Pricing and Payment.


 


(a)                                  Prices
paid by CKE will be fixed for all pick-ups and deliveries on a weekly basis,
or, upon election by CKE, a monthly basis. 
Prices are effective at time of shipment date.  The fixed costs components of Total Labor
Cost, Total Packaging Cost, Total Overhead Cost, and Profit and Corporate
Overhead Cost in the prices paid by CKE will be fixed as shown on Exhibit I
through April 30, 2004 and thereafter as set forth on Exhibit I-A for all
purchases through the remainder of the Term.


 


(b)                                 Formula Pricing.  Pricing will be calculated in accordance with
Exhibits I, I-A, and II, which are incorporated herein by this reference.  The reference document for raw material
pricing will be given to the Company by CKE on a weekly basis, pursuant to CKE’s
agreement with its raw material supplier designated from time to time by it
(currently ***).  The raw material
pricing shall be on a delivered basis and the Company agrees to accept the
freight cost set forth in HARDEE’S agreement with such raw material supplier
for all raw materials being delivered by such supplier to the Company.  The cost basis for Domestic Angus 85%, 80%,
50%, 73%, 65% and all Angus chucks shall be determined pursuant to CKE’s
Agreement with ***.  To the extent CKE
approves imported or other, alternative Angus trim, then the cost basis for the
Angus trim or any applicable Angus trim components shall be provided by CKE
and/or by an authorized agent of CKE.  If
CKE chooses to use least cost formulation, pricing will be adjusted for raw
materials and any effect on yields.


 


(c)                                  Payment
Terms.  Unless specifically
provided otherwise all payments required herein to be made by Distributor to
the Company shall be net 7 calendar days from the date of invoice.


 


(d)                                 Vendor
Return.  The Company
is responsible for the return of rejected products due to non-compliance to
specifications from CKE restaurants.  A
handling fee in the amount of 11% of the product cost will be charged to the
Company ($10 minimum, $300 maximum).  Any
Company approved disposal costs incurred by CKE will be billed to the Company
at cost.


 


(e)                                  Freight
Rate.  All
Domestic freight rates as noted in the DPS are guaranteed through September 30,
2004 and reviewed thereafter, every six (6) months based upon a mutually
agreed-upon carrier price quotation for the subsequent six-month period.  Agreement must be made within ten (10) days
or end of each six-month period.  If
Distributor elects to have product (s) delivered to the requested facility,
freight will be handled FOB










	
   

  	
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Destination
and freight will be added to the price of each product.  Should Distributor pick up product(s) at the
Company’s facility, product(s) will be purchased FOB Origin as noted on the DPS’s.


 


(f)                                    Books
and Records.


 


(i)                                     Invoice Discrepancies.  CKE will monitor the Company’s invoices and,
in the event of continual pricing/invoicing errors, CKE may assess an
administrative charge on all incorrect invoices following notice.


 


(ii)                                  Maintenance
of 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 are necessary to
substantiate that all invoices and other charges submitted to CKE for payment
hereunder were valid and proper.  All
Records shall be maintained in accordance with generally accepted accounting
principles consistently applied.  CKE
and/or its representatives shall have the right at any time during normal
business hours, upon twenty-four (24) hours’ notice, to examine said
Records.  The provisions of this
paragraph shall survive the expiration or earlier termination of this
Agreement.


 


5.                                       Delivery.


 


(a)                                  The
Products purchased hereunder shall be delivered on a timely basis to the
locations designated by CKE or Distributor in the DPS, as amended from time to
time by CKE.


 


(b)                                 In
the event the Company cannot fulfill any order within the delivery dates
designated by CKE or Distributor (as applicable), CKE will invoice the Company
for and the Company shall pay CKE for all additional costs, other than loss of
sale costs, associated with the out of stock or late delivery.


 


(c)                                  The
Company is responsible for reasonable on-time delivery of orders to CKE and
Distributor.  In case of late delivery by
the Company or its carriers in excess of 10% of all deliveries during the
preceding quarter, CKE will assess a charge of $26/hour for administrative and
receiving labor on all late deliveries.


 


6.                                       Individual Order Termination.  CKE and/or Distributor may at any time by
written notice terminate any individual order in whole or in part if the
Company (i) fails to comply with any of the applicable terms and conditions of
the order; (ii) fails to perform within the time specified (or if no time is
specified, within a reasonable time); (iii) delivers any item that is not as
specified; or (iv) so fails to make progress as to endanger performance of the
order in accordance with its terms.  If
individual orders are terminated in whole or in part because of the Company’s
failure to deliver acceptable products in accordance with the requirements and
terms hereof, a mutually agreed upon arrangement would be made by both parties
to ensure continued supply of order at no additional cost to CKE or
Distributor, as applicable.










	
   

  	
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  Omitted
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  filed
  separately with the Commission.

  



 


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7.                                       Quality Control/Micro Testing.  The Company will establish and maintain a
product safety plan (“Safety Program”) and a products quality program (“Quality
Control Program”).  Copies of the Quality
Control Program and Safety Program will be submitted to CKE’s Quality Assurance
Department for approval.  The Safety
Program will include, without limitation, safety controls, monitoring,
corrective action and verification steps to insure that potential risks are
controlled.  The Quality Control Program
will include the necessary controls to assure that all products shipped to CKE’s
Distribution Center or directly to restaurants, meet the current finished
product specifications, including a hold for release microbiological program to
insure that all microbiological test results meet standards prior to its
release.  CKE agrees to accept the
Company’s pathogen results for product from the Company plant’s test and hold
program.  Auditing forms, lab reports and
other verification data will be maintained by the Company and made available to
CKE upon request.  CKE may monitor the
Company’s production and/or inspect the Company’s facilities at any reasonable
time during the Company’s operating hours. 
The Company will submit a manifest of code dates with the corresponding
number of cases on all products shipped to CKE. 
The Company shall reimburse CKE for all reasonable costs associated with
the Company’s failure to deliver acceptable product in accordance with the
product specifications.  In such event,
or pursuant to the Company’s request to transfer production to an unapproved
plant, the Company shall reimburse CKE for all reasonable costs associated with
approving an alternate or secondary plant or location, unless approval of the
alternate or secondary plant or location is initiated solely by CKE for the
sole purpose of providing a lesser cost. 
Any deviation from CKE’s approved specifications, including formulation
and packaging changes, will require prior approval from CKE’s quality
assurance department.  On a monthly basis
the Company shall complete and submit to the CKE’s quality assurance department
specification summary reports.  The
Company shall submit biannually to CKE’s quality assurance department an
independent food safety and GMP systems audit from a CKE’s approved third party
auditor.  Based on CKE’s product
compliance testing program, the Company’s products will be sampled from
approved distribution centers or from individual restaurants by an independent
auditor or by CKE’s personnel for required analysis at supplier’s expense.  Provided, the cost assessed to the Company
with respect to the two foregoing sentences shall not exceed $30,000 in the
aggregate for such expenses arising out of this Section 7 and Section 7 of the
HARDEE’S Agreement per calendar year. 
When and if quality problems occur, the Company shall implement a
temperature tracking and recording program for temperature sensitive products
that are delivered with a radius greater than two (2) hours or one hundred
(100) miles from the nearest distribution center.


 


8.                                       Complete Agreement.


 


(a)                                  The
following attachments (the “Attachments”) are incorporated herein by this
reference and are part of this Agreement and a breach of any terms thereunder
shall constitute a breach hereunder:  (i)
CKE Items #9598 Formula Pricing Exhibits I and I-A, (ii) *** Angus Formula
Pricing and Freight Costs for Pierre Foods Exhibit II, (iii) Detailed Product
Schedule (DPS), (iv) CKE Quality Assurance Department Finished Product
Specification, QA approved label, Mold Plate Data Sheet, Visual Standards, and
CKE’s Label/Case Printing Requirements, (v) CKE Microbiological Testing
Program, (vi) Amended and Restated Formula Development Agreement, and (vii)
Amended and Restated Confidentiality Agreement. 
By










	
   

  	
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  Omitted portions
  are indicated by [***].

  	
  filed
  separately with the Commission.

  



 


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execution of this Agreement,
the Company and CKE acknowledge receipt and acceptance of all Attachments.


 


(b)                                 This
Agreement together with all Attachments hereto, shall constitute the complete
agreement between CKE and the Company and shall supersede all prior or
contemporaneous proposals, representations, understandings, and other
communications between the parties concerning the matters addressed in this
Agreement and the Attachments, whether oral or written, unless specifically
incorporated herein by reference.


 


(c)                                  The
issuance of information, advice, approvals, or instructions by a party’s
technical personnel or other representatives shall be deemed expressions of
personal opinions only and shall be of no force or effect and shall not affect
such party’s rights and obligations hereunder, unless the same is in writing
and signed by an authorized officer of such party and delivered to the other
party.


 


9.                                       Term and Renewal.


 


(a)                                  The
term of this Agreement shall commence as of February 1, 2004 and unless sooner
terminated in accordance with the provisions hereof, shall expire at 12:00
midnight Eastern time on July 31, 2007 (the “Term”).


 


(b)                                 CKE
and the Company agree that prior to six (6) months before expiration of the
Term, the parties shall negotiate in good faith for a one (1) year renewal (the
“Renewal Term”) of this Agreement; provided, in the event the parties are
unable to mutually agree upon the terms and conditions for the Renewal Term at
least one hundred and fifty (150) calendar days prior to the expiration of this
Agreement, this Agreement shall expire as of the original Term, unless
terminated earlier.  For the purposes of
this Agreement, the term “Term” shall be deemed to include any Renewal Term.


 


(c)                                  Every
consecutive twelve (12) calendar month period commencing on February 1 during
the Term shall be referred to as a “Contract Year” with the final period
beginning on February 1 and ending on July 31 (whether or not the Renewal Term
is included pursuant to Section 9(b)) also being considered a Contract Year
except that the Volume Requirement shall be adjusted pursuant to Section 3(a)
above.


 


10.                                 Termination of Agreement.


 


(a)                                  Either
party may terminate this Agreement at any time, effective upon the other party’s
receipt of termination notice, without prejudice to any other legal rights to
which the terminating party may be entitled, upon the occurrence of any one of
the following:


 


(i)                                     Upon
ten (10) days written notice to the breaching party describing with detailed
specificity a material breach of this Agreement that is not cured to the
non-breaching party’s satisfaction within such ten (10) days period.










	
   

  	
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(ii)           upon
a default by a party in the payment of any monetary obligation payable to the
other hereunder and such default continues for ten (10) days after the payee
party gives the payor party written notice of such non-payment.


 


(iii)                               If
any of the representations or warranties made by the other party in this
Agreement or any of the Attachments shall prove to be untrue or inaccurate in
any material respect.


 


(iv)                              The
other party (i) ceases to conduct its operations in the normal course of
business; (ii) is unable to meet its obligations as they mature; (iii) makes an
assignment for the benefit of creditors, or has proceedings in bankruptcy or
insolvency brought against it; or (iv) applies for or suffers the appointment
of a receiver.


 


(v)                                 A
party provides a sixty (60) days written notice to the other party, in the
event CKE makes significant specification changes to, or deletes from the menu
of its CKE restaurants all of the items listed in the DPS.  In the event of significant specification
changes, CKE will allow the Company a reasonable opportunity to become an
approved supplier of the newly defined item(s) upon mutually agreeable
terms.  Significant specification changes
do not include size, shape, weight (provided no raw cost increase without
mutual pricing adjustment), minor formulation or minor production procedure changes;
provided, such change does not require the Company to incur material re-tooling
or line/machine set up costs.


 


(b)                                 If,
within a reasonable time after having received a written notice describing with
specificity the failure to comply with product specifications, the Company
continues to fail to comply with product specifications, CKE may terminate this
Agreement by providing the Company thirty (30) days written notice.  Following such notice of termination, CKE may
return goods in inventory which fail to comply with product specifications for
full reimbursement, due and payable by the Company within seven (7) days of the
date of such return.


 


(c)                                  Termination
of this Agreement for any reason provided herein shall not relieve either party
from its obligation to perform up to the effective date of termination or to
perform such obligations that may survive termination.


 


(d)                                 Promptly
following the date of termination, the Company will return to CKE and CKE will
purchase at cost any unused packaging and labeling supplies and raw materials
on hand, and all finished products on hand complying with the specification;
provided, the Company shall not be required to return and CKE shall not be
responsible for purchasing more than sixty (60) days worth of raw materials
(including packaging) and finished products, as determined by the forecast
submitted by CKE, unless specifically directed by CKE in writing to increase
inventory levels.  The purchased raw
materials and unused packaging and labeling supplies shall be at the Company’s
cost and the purchased finished products shall be at the price set forth
herein, all with payment within seven (7) days after return.










	
   

  	
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  Omitted
  portions are indicated by [***].

  	
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11.                                 Modification.  This Agreement may be modified only by a
written agreement signed by both parties. 
This Agreement amends, restates and supercedes that certain Agreement
pertaining to the subject matter hereof executed by the parties on February 1,
2004.


 


12.                                 Indemnification. 
Company shall indemnify, defend and hold harmless CKE, and its parents,
affiliates, subsidiaries, and all of their respective officers, directors,
employees, agents, representatives and stockholders, and any designee or
customer of CKE (collectively, the “Indemnified Parties”) from and against any
and all losses, claims, actions, damages, expenses or liabilities, including,
without limitation defense costs and attorneys’ fees, resulting from, arising
out of or connected with any or all claims arising from (i) the use of the
products supplied by Company and/or services provided hereunder, including, but
not limited to, any claim for death or personal injury or damage or loss of
property which shall have been caused or alleged to have been caused, in whole
or in part, by any action or failure to act on the part of Company, its
shareholder, directors, officers, employees, contractors or agents, any defect
in the materials or workmanship used to manufacture the products, or any claim
under a theory of strict liability, and (ii) the breach by Company of any
representation, warranty, covenant or obligation of Company hereunder.  In the event any third party asserts any claim
with respect to any matters as to which any guarantee or indemnity in this
Agreement (or given pursuant to this Agreement) relate, the Indemnified Party
or Parties shall give prompt notice written to Company, and Company shall have
the right at its election to take over the defense or settlement of the third
party claim at its own expense by giving prompt notice to the Indemnified
Party(ies).  If Company does not give
such notice and does not proceed diligently so to defend the third party claim
within 30 days after receipt of the notice of the third party claim, Company
shall be bound by any defense or settlement that the Indemnified Party(ies) may
make to those claims and shall reimburse the Indemnified Party(ies) for its
expenses related to the defense or settlement of the third party claim.  Nothing in this Agreement shall be construed
to hold Company liable for any losses, claims, damages, expenses or liabilities
including, without limitation, defense costs and attorneys’ fees, to the extent
such loss, claim, damage, expense or liability results from or arises out of
CKE’s or Distributor’s misconduct or negligence.


 


13.                                 Insurance.  The Company shall furnish to CKE a current
certificate of insurance, which shall include a thirty (30) day written notice
of cancellation to CKE evidencing the Company has automobile, comprehensive
general liability, products liability and workers’ compensation insurance or an
equivalent.  With the exception of
workers’ compensation, all policies shall include CKE, its parent, affiliates,
subsidiaries and franchisees as additional insureds and shall include a
contractual liability endorsement to cover the Company’s indemnification
obligations hereunder.  Such policies
shall state that coverage as it pertains to CKE shall be primary regardless of
any other coverage which may be available to CKE and shall be an occurrence
rather than a claims made basis.


 


(a)                                  Comprehensive
automobile liability, including owned and non-owned autos; Bodily injury, and
property damage:  $3,000,000 per occurrence (aggregate primary
and umbrella coverage).










	
   

  	
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(b)                                 Comprehensive
general liability, with broad form property damage, completed operations,
personal injury, independent contractors and contractual liability: 
$3,000,000 per occurrence (aggregate primary and umbrella coverage).


 


(c)                                  Workers’
Compensation: at Statutory limits with employers’ liability: 
$1,000,000 per occurrence.


 


(d)                                 The Company must provide to CKE the workers’
compensation policy number prior to commencing any work for CKE.  It is the responsibility of the Company to
notify CKE of any changes and/or renewals to the Workers’ Compensation policy
number.  The Company shall require all
subcontractors to maintain the required insurance.  No work hereunder shall commence until above
insurance is obtained, a certificate is provided to CKE and CKE has approved
the certificate in writing.


 


(e)                                  Products
Liability Insurance:  $3,000,000 per occurrence (aggregate primary
and umbrella coverage).


 


14.                                 Assignment.  No assignment or subcontract hereof shall be
made by either party without the prior written consent of the other party, and
no delegation of any obligation or of the performance of any obligation by the
Company shall be made without the prior written consent of CKE.  Any attempted assignment or delegation shall
be void and ineffective for all purposes unless made in conformity with this
paragraph.  The terms shall inure to the
benefit of, and be binding on, the successors and assigns of the parties.


 


15.                                 Captions.  Captions and titles of paragraphs contained
herein are for convenience only, and shall not be construed to limit, expand or
otherwise change the meaning of any provision hereof.


 


16.                                 Force Majeure. 
Either party is excused from performance hereunder if such
non-performance results from any acts of God, war, riots, acts of governmental
authorities, or any other cause outside the reasonable control of the
non-performing party.  Both parties shall
use their best efforts to terminate or cause the expiration of any Force
Majeure as soon as practical following its occurrence.  If the Company cannot deliver the Products in
the amounts and on the dates required by CKE during such Force Majeure event,
then CKE may obtain the Products from the alternate vendors (“FDA Vendors”) set
forth in Section 7 of the Formula Development Agreement between the parties
dated as of even date herewith.  If such
FDA Vendors are unable to deliver the Products in the amounts and on the dates
required by CKE during such Force Majeure event, then CKE may obtain Products
from and Company shall license and work with alternate suppliers and test
alternate products.  CKE’s purchases from
the FDA Vendors and such alternate sources during the Force Majeure event will
count towards the Volume Requirement as if purchased from the Company.


 


17.                                 Governing Law.  This
contract and all Purchase Orders that may be issued hereunder shall be construed
in accordance with, and governed by, the laws of the State of California,
including the Uniform Commercial Code, without reference to laws or principles
regarding choice of laws.    The parties consent to the exclusive
jurisdiction of the state and










	
   

  	
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  Omitted
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federal courts of the State of
California for the adjudication of matters arising out of this Agreement; and
neither party will assert forum  non  conveniens with
respect to such venue.  This Agreement,
and all Exhibits, are only valid if and when duly signed by authorized
representatives of both parties.  No
third party is authorized to amend or waive, on behalf of CKE, any provision of
this Agreement.


 


18.                                 Laws and Regulations.  The
Company shall comply with all applicable laws, ordinances, rules and
regulations including federal, state and local authorities and departments
relating to or affecting the Company and/or the manufacture, sale or use of the
goods or services to be rendered hereunder, including without limitation Title
VII of the Civil Rights Act, as amended from time to time, and shall secure and
obtain any and all permits, licenses and consents as may be necessary in
connection therewith.


 


19.                                 Patent, Trademark and
Copyright Protection.  The Company shall defend and indemnify CKE,
Distributor and their parents, affiliates and subsidiaries, and all of their
directors, officers and employees and hold them harmless with respect to all
patent, trademark and copyright infringement liability or expenses arising out
of the use or sale of the goods covered hereunder, or any part(s) thereof, and
after notice appear and defend at its own expense any such suits in law or
equity, except such trademarks or copyrights as may be furnished to the Company
by CKE for use in connection with the packaging of products pursuant to this
Agreement.  If CKE is enjoined from use
of the goods by reason of infringement of any patent, trademark or copyright
furnished by the Company, the Company shall, at CKE’s option, either procure
for CKE the right to continue using the goods, replace said goods with
non-infringing goods or parts thereof, modify the goods so as to be
non-infringing or, if CKE elects, repurchase the goods at the contract price or
terminate the order without further liability to the Company.


 


20.                                 Severability and Construction.  Any
provision used herein which is held invalid or unenforceable by any authority
of competent jurisdiction shall be ineffective to the extent of such invalidity
or unenforceability without invalidation or rendering unenforceable the
remaining provisions hereof; provided, however, that if such modification would
cause this Agreement to fail in its essential purpose or purposes, it shall be
deemed terminated by mutual agreement of the parties.  If this Agreement is terminated pursuant to
this provision, payment shall be made only to the extent of a party’s
performance to and including the date of termination, and any payments which
shall have been made and which are applicable to future time periods shall be
refunded pro rata to the effective date of termination.  The language used herein shall be deemed to
be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against either party.


 


21.                                 Substitutions.  No
substitution of, nor alteration in any goods, component parts thereof, tooling,
processes, or manufacturing sites may be made without the prior written, or
FAX, consent from CKE.


 


22.                                 Survival.  All
warranties, representations, covenants and obligations of the parties hereunder
shall survive the termination or expiration of this Agreement.










	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.

  



 


10





















 


23.                                 Use of Logos and Marks.  The
Company shall not use, in any manner whatsoever, any of the logos, trademarks,
or service marks owned by CKE or associated with CKE’S restaurant system
without the prior written consent of CKE. 
The Company expressly acknowledges CKE’s exclusive right, title and
interest in and to such logos and marks, and agrees not to represent in any
manner that the Company has any ownership in CKE’s logos or marks.


 


24.                                 Warranty and Regulatory
Compliance.  The Company warrants that all goods to be
delivered hereunder will be of merchantable quality, free from any latent or
patent defects, will strictly conform to all of CKE’s specifications or samples
in all material respects and will be fit and safe for their intended use.  The Company also warrants that the Company
shall be in compliance with all applicable laws, regulations, rules and
ordinances, and warrants that the goods shall comply with and shall not be
misbranded or adulterated under any and all applicable federal, state and local
laws, rules, ordinances and regulations (collectively “Laws”), including
specifically those Laws governing health and food safety and the production,
packaging, storage, distribution and sale of the goods.  The Company also warrants that is has the
full and legal authority to enter into and fully perform this Agreement in
accordance with its terms and that the execution and delivery of this Agreement
has been duly authorized by the Company.


 


25.                                 Expenses. 
Except as otherwise specifically provided in this Agreement, each party
shall be responsible for any expenses incurred by such party in carrying out
its obligations herein.


 


26.                                 Independent Contractor.  The
parties shall be and act as independent contractors, and under no circumstances
shall this Agreement be construed as one of agency, partnership, joint venture
or employment between the parties.  Each
party acknowledges and agrees that it neither has or will give the appearance
or impression of having any legal authority to bind or commit the other party
in any way.


 


27.                                 Failure to Object.  The
failure of either party to object to or to take affirmative action with respect
to any conduct of the other party which is in violation of the terms hereof
shall not be construed as a waiver thereof, nor of any future breach or
subsequent wrongful conduct.


 


28.                                 Notices.  All
notices, requests and approvals under this Agreement shall be in writing and
shall be deemed to have been properly given if and when personally delivered or
sent certified mail, postage prepaid, return receipt requested, or twenty-four
(24) hours after being sent by standard form of telecommunications, or
thirty-six (36) hours after being sent by Federal Express or other overnight
courier service providing delivery confirmation, to the address of the party
set forth below or at such other address as any of the parties hereto from time
to time may have designated by written notice to the other party:










	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.

  



 


11





















 


	
  To the Company:

  	
  To CKE:

  
	
   

  	
   

  
	
  Pierre Foods, Inc.

  	
  Carl Karcher Enterprises, Inc.

  
	
  9990 Princeton Road

  	
  6307 Carpinteria Ave., Suite A

  
	
  Cincinnati, Ohio 45246

  	
  Carpinteria, California 93013

  
	
  Attention: Robert C. Naylor

  	
  Attention: John Dunion

  
	
   

  	
   

  
	
  with a copy to:

  	
  with a copy to:

  
	
   

  	
   

  
	
  T. Stewart Gibson, PLLC

  	
  Carl Karcher Enterprises, Inc.

  
	
  The Power Plant, Suite 302-B

  	
  6307 Carpinteria Ave., Suite A

  
	
  1701 Sunset Avenue

  	
  Carpinteria, California 93013

  
	
  Rocky Mount, North Carolina 27804

  	
  Attention: Legal Counsel

  



 


29.                                 Miscellaneous.


 


(a)                                  Each of the individuals executing this
Agreement certifies that he or she is duly authorized to do so.


 


(b)                                 The rights and remedies set forth herein are
intended to be cumulative, and the exercise of any one right or remedy by
either party shall not preclude or waive its exercise of any other rights or
remedies hereunder or pursuant to law or equity.


 


(c)                                  Should any party commence legal action to
interpret or enforce the terms of this Agreement, the prevailing party in such
action shall be entitled to recover reasonable attorneys’ fees and costs,
including those incurred at the trial and appellate levels and in any
bankruptcy, reorganization, insolvency or other similar proceedings.


 


This Agreement is not to be legally binding until the Company has sent
two (2) signed original copies to CKE and CKE has signed and returned its
acceptance to the Company.


 


	
  PIERRE
  FOODS, INC.

  	
  CARL KARCHER
  ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Robert C. Naylor

  	
   

  	
  By:

  	
    /s/
  John Dunion

  	
   

  
	
   

  	
  Robert C.
  Naylor

  	
   

  	
  John Dunion

  
	
   

  	
  Senior Vice
  President - Sales

  	
   

  	
  Executive
  Vice President

  
								











	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.

  



 


12





















 


EXHIBIT I


 


***










	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.

  



 





















 


EXHIBIT I-A


 


***










	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.

  



 





















 


EXHIBIT II


 


***










	
   

  	
  Confidential
  information redacted and

  
	
  Omitted
  portions are indicated by [***].

  	
  filed
  separately with the Commission.