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 XXXX XXXXXXX 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 XXXXXX'X 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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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
0000 Xxxxxxx Xxxxxx 0000 Xxxxxxxxx Xxxx 0000 X. Xxxxxx Xxxx
Xxxx, Xxxxxxxxxx Xxxxxxxxxx, Xxxx 00000 Xxxxxxxxxx, Xxxx 00000
Attn: Xxxxxxx Xxxxxxx Attn: Xxxx Xxxx Attn: Xxx Xxxxx
000-000-0000 000-000-0000 000-000-0000
(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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(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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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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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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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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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.
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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. Xxxx Xxxxxxx Enterprises, Inc.
0000 Xxxxxxxxx Xxxx 0000 Xxxxxxxxxxx Xxx., Xxxxx X
Xxxxxxxxxx, Xxxx 00000 Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx Attention: Xxxx Xxxxxx
with a copy to: with a copy to:
T. Xxxxxxx Xxxxxx, PLLC Xxxx Xxxxxxx Enterprises, Inc.
The Power Plant, Xxxxx 000-X 0000 Xxxxxxxxxxx Xxx., Xxxxx X
0000 Xxxxxx Xxxxxx Xxxxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx Xxxxx, Xxxxx Xxxxxxxx 00000 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. XXXX XXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxx
-------------------------------- -----------------------------
Xxxxxx X. Xxxxxx Xxxx Xxxxxx
Senior Vice President - Sales Executive Vice President
----------
Confidential information redacted and
Omitted portions are indicated by [***]. filed separately with the Commission.
12
EXHIBIT I
---------
FIXED COSTS COMPONENTS
THROUGH APRIL 30, 2004
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
EXHIBIT I
CONFIDENTIAL
ANGUS BURGERS (RESOURCES 9560Z ***) PRICING
PIERRE FOODS
Pricing Effective Week of 02/08/04 (Negotiated Price Using *** Raw Material
Cost)
Resource 9560Z
Per Pound
Price
Fresh Domestic Angus *** $
Fresh Domestic Angus *** $
Fresh Angus *** $
Curavis 350 Phosphate $ ***
$
$
*** $
$
FORMULA
Fresh Domestic Angus *** % $
Fresh Domestic Angus *** % $
Fresh Angus *** % $
Curavis 350 Phosphate *** % $ *** CONFIDENTIAL: This document contains trade
% $ secrets proprietary to Pierre Foods, Inc.
% $ Unauthorized reproduction or disclosure is
*** % $ strictly prohibited and may result in serious
$ legal consequences. Receipt or possession of
-------------- this document does not grant the right to
reproduce the document, to disclose its
TOTAL FORMULA COST $ *** contents, or to use such contents in any way.
YIELD
*** %
*** %
%
--------------
TOTAL YIELD LOSS *** %*
Xxxx Yield (Div. By) %
$
$
*** ***
$
$
$ ***
$
$
PROFIT AND CORPORATE OVERHEAD COST $
***
*** $ ***
TOTAL PRODUCT COST $
--------------
TOTAL *** COST/CASE: $ ***
--------------
* Any changes to formulation will affect the formula cost. Resources 9560Z 25.78
lbs / case
** This product is discontinued and replaced by 9598. This pricing is effective
until 05/01/04. See Exhibit 1-A
5/3/2004 3:12 PM
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
EXHIBIT I-A
FIXED COSTS COMPONENTS
AFTER APRIL 30, 2004
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
EXHIBIT I-A
CONFIDENTIAL
ANGUS BURGERS (RESOURCE 9598 ***) PRICING
PIERRE FOODS
Pricing Effective Week of 05/01/04 (Negotiated Price Using *** Raw Material
Cost)
Resource 9598
Per Pound
*** Price
Fresh Domestic Angus *** $
Fresh Domestic Angus *** $
Fresh Angus *** $
Curavis 350 Phosphate $ ***
$
$
*** $
$
FORMULA
Fresh Domestic Angus *** % $
Fresh Domestic Angus *** % $
Fresh Angus *** % $
Curavis 350 Phosphate *** % $ ***
% $
% $
*** % $
$
------------
TOTAL FORMULA COST $ ***
YIELD
%
*** *** %
%
------------
TOTAL YIELD LOSS *** %*
Xxxx Yield (Div. By)
$
$ ***
*** $
CONFIDENTIAL: This document contains trade
$ secrets proprietary to Pierre Foods, Inc.
$ Unauthorized reproduction or disclosure is
$ strictly prohibited and may result in serious
$ *** legal consequences. Receipt or possession of
this document does not grant the right to
PROFIT AND CORPORATE OVERHEAD COST $ reproduce the document, to disclose its
contents, or to use such contents in any way.
*** $ ***
TOTAL PRODUCT COST $
TOTAL *** COST/CASE: $ ***
* Any changes to formulation will affect the formula cost. Resources 9598 26.48
lbs / case Effective 5/1/04
** This product replaces 9560Z.
4/29/2004 4:01PM
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
EXHIBIT II
ANGUS FORMULA PRICING
AND FREIGHT COSTS FOR PIERRE FOODS
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
January 22, 2004
EXHIBIT II
*** Angus Formula for Pierre Foods
All Lean Percentages
***
Fresh Domestic ***
Fresh Domestic ***
Fresh Domestic ***
Fresh Domestic *** ***
Fresh Domestic ***
Fresh Domestic ***
Select *** ***
Delivered Angus prices week of 1/25/2004
***
Cincinnati, OH Delivered Prices
***
***
***
*** ***
***
***
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
CKE/FFM/MDS NEW ITEM REQUEST FORM/DPS
CKE/FFM/MBM New Item Request Form/DPS
INSTRUCTIONS: PLEASE PROVIDE ALL REQUESTED INFORMATION PLEASE XXXX THE APPLICABLE BOX
Vendor Name: Pierre Foods, Inc. PAYMENT TERMS: Net *** days PRICE BASED ON: order ***ship delivery
Address: 0000 Xxxxxxxxx Xxxx ORDER LEAD TIME: *** days VENDOR PROD. DESC.: *** Xxxxx Xxx Xx Xxx
Xxxxxxxxxx, Xxxx 00000 CKE'S UNIT OF MEASURE: case VENDOR ITEM #: 9598
Vendor# (CKE TO PROVIDE - PRMS/PS): 22293 / 166042 PRICING START DATE: 2/1/2004 GL ACCOUNT CODE:
QA Vendor Code # (CKE TO PROVIDE): 4200A PRICING END DATE: 7/31/2007 CKE WILL COMPLETE GL ACCT CODE
STORAGE CODE
FFM MDS CKE MASTER DETAIL NET GROSS SHELF -------------------
ITEM # ITEM # ITEM # ITEM DESCRIPTION PACK PACK WEIGHT WEIGHT CUBE PALLET LIFE DRY REFRIG FRZN
-------------------------------------------------------------------------------------------------------------------------
01012 *** *** *** oz 26.5# 27.9# 1.16 35 *** days x
Angus Ground Beef Steak
UNIT DIMENSION (LxWxH): 19.84 x 13.20 x 7.64
PLEASE XXXX THE APPLICABLE BOX
UNIT LOADING CASES PER PALLET
------------ ----------------
/X/ Pallet (40" x 48" GMA) Tie: 7
/ / Slipsheet (47" x 41") High: 5
/ / Floor Total: 35
/ / Other
/ / CHEP (Check with Logistics)
PLEASE XXXX THE APPLICABLE BOX
/X/ Pallet Exchange
/ / Other
PRICING/USAGE INFORMATION
----------------------------------------------------------------
FFM MDS CKE CKE
*** *** *** ***
OK 73401 CO 80238 XX 00000 XX 00000
----------------------------------------------------------------
EST. XXX. CS. VOL. *** *** *** ***
3 WEEK USAGE *** *** *** ***
MIN. ORDER TRUCKLOAD
FOB *VARIES WEEKLY
FRT $*** $*** $*** $***
DEL *VARIES WEEKLY
DEL/UNIT
Price may be adjusted for additional costs, if any, for Pierre's compliance with
temperature tracking program.
PLEASE XXXX THE APPLICABLE BOX FOR BOTH AREAS
SHIPPING METHOD FREIGHT BILLING METHOD
--------------- ----------------------
/X/ Vdr Trck/Cmmn. Crrier / / Prepaid
/ / CKE /X/ Prepaid & Add
/ / FFM
/ / MDS
/ / Other:
LTL FREIGHT RATES
QTY 5 PLIT 10 PLIT 20 PLIT 41 PLIT
--- ------ ------- ------- -------
** ***
COMMENTS: This item will be formula-based pricing. Based upon truckload shipment
quantities and distribution center. Truckload - 41 pallets (1,435 cases). Total
Weight =37,999 net lbs.
LTL Shipments are subject to varying freight rates as shown. *FRT as
shown per sale is valid only thru 12/30/04. (See contract).
VENDOR INFORMATION *** *** *** ***
ORDER PLACEMENT Pierre Foods, Inc.
Contact Name: ***
Address: 0000 Xxxxxxxxx Xxxx Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
SHIPPING LOCATION
Contact Name: ***
Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000 Same Same Same
Phone: 000-000-0000
Fax: 000-000-0000
Date: Purchasing Agent: PA Code:
Reason For Issue: Inventory Administrator: IA Code:
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
CONFIDENTIAL:
This document contains certain trade secrets proprietary to CKE
Restaurants, Inc., Unauthorized reproduction or disclosure is strictly
prohibited and may result in serious legal consequences. Receipt or
possession of this document does not grant the right to reproduce document,
to disclose its contents or to use such contents in any way.
QUALITY ASSURANCE DEPARTMENT
FINISHED PRODUCT SPECIFICATION
[CARL'S JR.LOGO]
PRODUCT: Angus Beefsteak ***
PIERRE: SPECIFICATION REFERENCE #: 9598
CKE RESTAURANTS SPECIFICATION REFERENCE #: 01012, MBM 38981, SYS
9873308
SUPERSEDES: None Page 1 of 10 EFFECTIVE DATE: 04/27/04 XXXX.XXXX: A
SUPPLEMENT:
Formula
Mold Plate data Sheet
Label/Case Printing Requirements
Confidentiality Disclosure Agreement
Visual Standards for Char Specs, Minimum Fat Surface Coverage, Crack and/or
Holes.
USDA schedule ***
CKE Restaurants, Inc. E.coli 0157:H7/Micro Sampling Program
USDA Meat Re-inspection Guidelines (USDA Chart 18.1)
Pierre's Beef Angus Boneless, Boneless Combo/Raw Material Specification
Required By CKE Restaurants
FUNCTION/USE: A fully cooked chopped beef steak/xxxxxx xxxxx made from Angus
Beef to be used in Carl's Jr. Restaurants pursuant to an Amended
and Restated Agreement, an Amended and Restated Confidentiality
Agreement, and an Amended and Restated Formula Development
Agreement between Xxxx Xxxxxxx Enterprise, Inc. ("CKE") and
Pierre Foods, Inc. ("VENDOR") all effective February 1,2004
(collectively the "Agreement"). To the extent of any conflict
between these specifications and the Agreement, the Agreement
shall control.
PRODUCT DESCRIPTION: Individually frozen, *** chopped Angus beefsteak
(chopped and formed) without grill marks. It is to be
thawed under refrigeration to a maximum of *** and
heat surface temperature to *** for a minimum of ***.
REGULATORY REQUIREMENTS:
- A CONTINUING GUARANTY LETTER MUST BE ON FILE STATING THAT THIS PRODUCT MEETS
ALL STANDARDS FOR HUMAN CONSUMPTION AND CONFORMS IN EVERY RESPECT TO THE
PROVISIONS OF THE FEDERAL FOOD, DRUG AND COSMETIC ACT AND THE GENERAL
REGULATIONS FOR ITS ENFORCEMENT AND THE FEDERAL FAIR PACKAGING AND LABELING
ACT, OR WITHIN THE MEANING OF ANY STATE AND FOOD AND DRUG LAW; DURING
PROCUREMENT, PRODUCTION, STORAGE OR TRANSPORTATION.
- ALL PRODUCTS SHALL BE PRODUCED IN COMPLIANCE WITH 21CFR110, "CURRENT GOOD
MANUFACTURING PRACTICE IN MANUFACTURING, PACKING, OR HOLDING HUMAN FOOD".
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
- PESTICIDE RESIDUE:
IF THIS PRODUCT IS A RAW AGRICULTURAL COMMODITY OR IS PREPARED FROM SUCH A
COMMODITY, VENDOR'S SPECIAL ATTENTION IS DIRECTED TO THE REQUIREMENT THAT
PESTICIDE RESIDUES MUST NOT BE IN EXCESS OF THE TOLERANCES, IF ANY, SET
THEREFORE BY F.D.A. PESTICIDE RESIDUES SHALL BE REMOVED FROM THE RAW
AGRICULTURAL COMMODITY FROM WHICH THIS MATERIAL HAS BEEN PREPARED TO THE
EXTENT POSSIBLE IN GOOD MANUFACTURING PRACTICE.
- PRODUCT SHALL MEET OR EXCEED ANY REQUIREMENTS IN ANY APPLICABLE
REGULATIONS.
- THIS PRODUCT MUST COMPLY WITH
CALIFORNIA'S HEALTH AND SAFETY CODE, SECTION
25249.5,
CALIFORNIA'S SAFE DRINKING WATER AND TOXIC ENFORCEMENT ACT OF 1986,
COMMONLY KNOWN AS "PROPOSITION 65," OR APPLICABLE STATE REGULATIONS.
RAW MATERIALS:
Ingredients Angus Beef, Salt *** Sodium Phosphates, Spices
ANGUS BEEF: Chemical Lean (CL) must be within +/- 2% fat of purchased and
stated label claim. Must be from Angus Cattle that complies with the
following USDA Schedules: *** and Raw Materials Spec, Beef Angus Trimmings,
boneless Combos/Fresh.
A) Frozen Angus Beef: ***:
1) Target fat content of *** +/-2%.
2) ***.
3) Must be from USDA ***.
4) At time of receipt, frozen product must be 10 DEG. F or less.
5) Receiving: Frozen less than 90 days at time of our receipt.
B) *Fresh Angus Beef: ***.
1) Target Fat content +/-2%.
2) ***.
3) At time of receipt, fresh product must be 40 DEG. F or less.
4) Receiving: Fresh less than *** days from bone date.
C) *Fresh Angus Beef: ***.
1) Target Fat Content of +/-2%.
2) ***.
3) At time of receipt, fresh product must be 40 DEG. F or less.
4) Receiving: Fresh less than *** days from bone date.
* Angus Beef will be combined to target *** fat content in the overall meat
mix.
NOTE: Applies to all of the above:
1) Trimming must be from an USDA inspected and/or certified
facility.
2) Trimming must be in compliance with all US regulations governing
residues of pesticides, medications, or growth hormone.
3) Trimmings must be free from the following defects (bone, bone
chips, cartilage, bruises, blood clots, exposed excessive tendons,
ingesta, and hair).
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
RAW MATERIAL, CONTINUED
4) There shall be no evidence of off condition or foreign materials.
5) Microbiological standards must be met.
6) All manufacturing plants must have HACCP programs.
7) Packaging must provide protection from exposure and no metal
fasteners are to be used.
8) The following ingredients are not allowed for use in Angus Beef
Patties:
a) Partially defatted beef tissue.
b) Added fat such as cod fat, kidney fat, heart fat, pelvic fat,
head meat, cheek meat and weasand meat.
c) Trim with less than 15% attached lean.
d) Meat from Advanced Meat Recovery Systems (AMR).
e) Meat from Lean Finely Textured Beef (LFTB).
f) Meat identified as "Specified Risk Materials" by the USDA.
g) Mechanically separated Meat.
h) Meat from xxxxxx cattle.
i) Meat from cattle stunned with an air injection system.
SPICES AND INGREDIENTS
(As specified in the Pierre Foods Formula)
KEY PROCESSING INFORMATION: These are only guidelines, manufacturer needs to
adjust accordingly.
1) Blend fresh lean/ frozen trim/ fat meat.
2) Beef is ground, mixed with non-meat additives and chilled (Mix time
***mins., + **min. correction if necessary).
3) Mix is final ground through *** plate.
4) Meat mix is formed into patties (temperature ***DEG. F +/- *DEG. F).
5) Adjustments are made to produce patties with raw target weight of *** oz.
6) Patties are *** and ***
7) Patties are ***
Minimum char on the bottom.
8) Patties run through ***
9) Patties are individually quick frozen, and packaged. Will meet Pierre
Foods HACCP/USDA regulations.
10) Patties are produced using the processes, formulation, and ingredients
described in the Pierre Formula.
POTENTIALLY HAZARDOUS FOOD: YES
REASON: Accordingly to the US FDA Food Code, this product is
potentially hazardous food because the water activity is 0.95 and
the pH is above 4.6. Internal temperatures and related bacteria log
kill will be controlled by the "Certificate of Process (COP)
Program" and labeled instructions.
ALLERGEN: None
FINISHED PRODUCT
XXXXX
QUALITY FACTORS TEST METHOD TARGET ANCES
--------------- ----------- ------ -----
Raw ground beef only (at plant): Vendor Certification
Fat Food Scan, CEM AOAC ***% +/-**%
approved (CKE reference:
CKE.41)
Protein Food Scan, CEM AOAC ***% +/-**%
approved (CKE reference:
CKE.41)
Moisture Food Scan, CEM AOAC ***% +/-**%
approved (CKE reference:
CKE.41)
Net Weight Per Xxxxx (CKE reference: CKE.RR) *** oz Average
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
Coarse grind (frozen/fresh) (CKE reference: CKE.LL) *** Plate
Fine grind (mixer grind) (CKE reference: CKE.LL) *** Plate
FINISHED PRODUCT
QUALITY FACTORS TEST METHOD TARGET
--------------- ----------- ------
CONTINUED
COOKED FROZEN XXXXX:
Fat AOAC ***% +/-*%
Protein AOAC ***%
Moisture ***% **+/-*%
Salt AOAC (CKE reference: ***% **+/-*%
XXX.XX)
Count/Case Pierre's Process Control/QA *** **+**/-
(CKE reference: CKE.L)
Net Weight/xxxxx Xxxxxx'x Process Control/QA *** oz/xxxxx ***
(CKE reference: CKE.RR) oz
Dimensions: Pierre's Process Control/QA
* "natural" shape. See
template
*Length Pierre's Process Control/QA *** +/-***
(CKE reference: CKE.LL)
*Width Pierre's Process Control/QA
(CKE reference: CKE.LL) *** +/-***
Thickness Pierre's Process Control/QA
(CKE reference: CKE.LL) *** +/-***
Odor/Flavor Organoleptic
***
Color Visual
Texture Organoleptic
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
Shape/General Appearance Visual
***
(HEATED ON CHARBROILER)
Heat Time Carl's Jr. O.P.M Standards
***
Internal temperature CKE Standards ***
Yield CKE Standards ***
Color Visual ***
Flavor Organoleptic ***
Odor Organoleptic ***
FINISHED PRODUCT
QUALITY FACTORS TEST METHOD TARGET
--------------- ------------ ------
CONTINUED
Texture Organoleptic ***
Structure Visual ***
General Appearance Visual ***
Handling: Feed/Removal CKE Standards ***
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
DEFECTS:
QUALITY FACTORS TEST METHOD TARGET
--------------- ------------ ------
Char specks Visual Less than **% defects. see picture std.
Heavy fat cover on top xxxxx Visual Less than **% defects. see picture std.
Cracks/ fissures or holes in burger Visual Less than **% defects. see picture std.
Broken pieces, falls apart upon Visual Less than **% per load
cooking
Lips Visual No more than ** from the edge
Misshapen Visual Less than *% defective. See template
NOTE: TOTAL OF ALL *DEFECTS SHALL NOT EXCEED **%, BASED ON BOX PIECE COUNT.
* MULTIPLE DEFECTS ON ONE XXXXX WILL BE CONSIDERED AS ONE DEFECT.
MICROBIOLOGICAL: TEST METHOD STANDARD REJECT LEVEL
----------- -------- ------------
APC AOAC* LESS THAN ***/g GREATER THAN ***/g
Coliform AOAC* LESS THAN ***/g GREATER THAN ***/g
E. COLI AOAC* LESS THAN ***/g GREATER THAN ***/g
S. AUREUS (coagulase pos.) AOAC* LESS THAN ***/g GREATER THAN ***/g
SALMONELLA sp. AOAC* *** *** g
LISTERIA sp. AOAC* *** *** g
E. COLI 0157:H7 USDA-Petrifilm *** *** g
*AOAC METHOD OR EQUIVALENT
***
PACKAGING:
QUALITY FACTORS TEST METHOD TARGET
--------------- ----------- ------
Case:
Gross Weight Pierre's Process Control/QA 28.69 lbs.
(CKE reference: CKE.QQ)
Net Weight Pierre's Process Control/QA Average 26.48 lbs. (based on 75
(CKE reference: CKE.RR) pc count)
Dimensions Pierre's Purchasing 19.9" x 13.2" x 7.6"
Specification (CKE
reference: CKE.LL)
Cube Pierre's Purchasing 1.16 cubic feet
Specification (CKE
reference: CKE.LL)
Burst Strength Visual 200 lbs.
Type/Style Visual Corrugated Cardboard
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
Closure Visual No staples, metal ties, nails or
other metallic devices allowed.
Pallet Visual 7 per layer, 5 high.
Bag/Liner
Type/Style Visual Polyethylene. Covers entire
product.
Closure Visual No staples, metal ties, nails or
other metallic devices allowed.
FOREIGN MATERIAL:
RODENT HAIR, FILTH, METAL**, WOOD, GLASS, ETC. None
**Metal detection equipment is required. Minimum sensitivity of *** mm for
ferrous and non-ferrous, and *** mm
for stainless steel or equivalent.
SHELF LIFE:
Maximum days guaranteed Visual *** days
Minimum number of days Visual *** days
remaining at time of
delivery to Distribution
Centers.
CODE DATE: WILL BE AN OPEN CODE DATE WITH *** VENDOR INITIALS, MONTH, DAY,
YEAR, BATCH OR LINE NUMBER. SEE CKE CODE DATE FORMAT. PRINTED
AND VISIBLE ON EXTERIOR SIDE PANEL OF CASE WHERE PALLETIZED.
Use Thru Date Visual
* Bar Code Visual Code 128 and/or equivalent
* DELIVERIES TO CKE RESTAURANTS, INC. OWNED DISTRIBUTION CENTERS ONLY.
IDENTIFICATION: LABEL FORMAT: GENERIC LABEL, OR CKE LABEL FORMAT - CKE
RESTAURANTS, INC
* Bar Code Visual UPC - A and/or equivalent
STORAGE: TEMPERATURE REQUIREMENTS
Freezer Visual/Thermometer LESS THAN 10[DEG]F
SHIPPING: TEMPERATURE REQUIREMENTS. ALL RAW INGREDIENTS AND FINISHED
PRODUCT SHALL BE TRANSPORTED IN TRUCKS/TRAILERS, WHICH ARE CLEAN, AND
IN GOOD WORKING ORDER.
Freezer trucks/containers Visual/Thermometer LESS THAN 10[DEG]F
NOTE:
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
- Manifest of protection code dates faxed prior to delivery of product.
- Temperature recorders (for trailers) required upon request.
- Product will be released to ship based on the vendor's QA results.
CKE's results will be used to monitor Pierre system and products and
to ensure compliance with specifications.
- CKE PRODUCT REJECTION PROCEDURE:
- ***
- ***
- ***
HANDLING:
Good Manufacturing Practices
INGREDIENT / LABEL DECLARATION:
Beef, salt *** sodium phosphates, spices.
NUTRITIONAL INFORMATION
% Daily Value
Serving Size .................... *** g(1 portion)
Total Calories .................. ***
Calories from Fat ............... ***
Total Fat ....................... *** g *** %
Saturated Fat ................... *** g *** %
Cholesterol ..................... *** mg **** %
Sodium Per Serving .............. *** mg *** %
Total Carbohydrate .............. *** g *** %
Sugars .......................... *** g
Dietary Fiber ................... *** g ***
Protein ......................... *** g
Vitamin A ....................... *** %
Vitamin C ....................... *** %
Calcium ......................... *** %
Iron ............................ *** %
* Percent Daily Values are based on 2,000 Calorie Diet.
FORMULATION: IN ACCORDANCE WITH THE PIERRE FORMULA
REFERENCES:
AOAC, OFFICIAL METHODS OF ANALYSIS, 16th EDITION, 1997
AOCS, OFFICIAL AND TENTATIVE METHODS OF THE AMERICAN OIL CHEMISTS'
SOCIETY, THIRD EDITION, 1983
XXXX XXXXXXX ENTERPRISES QUALITY ASSURANCE TEST METHODS BAM
(BACTERIOLOGICAL ANALYTICAL MANUAL), 8TH EDITION, 1998, REVISION A
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
USDA FSIS PROCEDURE FOR LISTERIA (Xxx Xxx), 1987 and E.COLI 0157:H7 (Okrend
and Xxxx)
FOOD CODE BOOK, FDA, U.S. PUBLIC HEALTH SERVICES, 1999
PRIOR TO DELIVERY OF THE FIRST SHIPMENT FROM A NEW SUPPLIER OF A NEW PRODUCT,
THE SUPPLIER MUST APPROVE AND SIGN THE SPECIFICATION. PRODUCT PACKAGING / CASE /
LABELING MUST MEET CKE RESTAURANTS, INC. CASE GRAPHICS GUIDELINES AND BE
APPROVED BY CKE RESTAURANTS, INC. QUALITY ASSURANCE DEPARTMENT.
CKE RESTAURANTS, INC. QUALITY ASSURANCE DEPARTMENT MUST BE GIVEN PRIOR
NOTIFICATION IF THE PLANT AND/OR LOCATION WHERE THIS PRODUCT IS MADE WILL BE
CHANGED. IN SUCH EVENT, OR PURSUANT TO VENDOR'S REQUEST TO TRANSFER PRODUCTION
TO AN UNAPPROVED PLANT, VENDOR SHALL REIMBURSE CKE RESTAURANT, INC. 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 RESTAURANTS, INC.
ANNOUNCED MONITORING AND/OR FACILITY INSPECTION BY CKE RESTAURANTS, INC. QUALITY
ASSURANCE PERSONNEL MAY OCCUR AT ANY TIME DURING OPERATING HOURS.
VENDOR SHALL MAINTAIN EFFECTIVE PRODUCT QUALITY AND PRODUCT SAFETY PROGRAM TO
MONITOR PRODUCT CONSISTENCY, SPECIFICATION COMPLIANCE, MANUFACTURING RISK
POINTS, EMPLOYEE HYGIENE AND PLANT SANITATION. PRODUCT DATA WILL BE MADE
AVAILABLE TO CKE UPON REQUEST. PLANT SANITATION INCLUDES AN ENVIRONMENTAL
AEROBIC PLATE COUNT AND LISTERIA CONTROL PROGRAM. A COPY OF BI-ANNUAL THIRD
PARTY AUDITS ON PRODUCT SAFETY AND PRODUCT QUALITY PROGRAMS, INCLUDING A PRODUCT
RECALL PROCEDURE MUST BE ON FILE WITH THE CKE RESTAURANTS, INC. QUALITY
ASSURANCE DEPARTMENT. FINISHED PRODUCT MUST PASS THROUGH AN OPERATIONAL
AUTOMATIC REJECTION TYPE METAL DETECTOR.
TO THE EXTENT PIERRE IS HANDLING SHIPPING, MANUFACTURERS SHIPPING TEMPERATURE
SENSITIVE PRODUCTS THAT ARE DELIVERED WITH A RADIOUS GREATER THAN TWO (2) HOURS
OR A HUNDRED (100) MILES FROM THE NEAREST DISTRIBUTION CENTER ARE REQUIRED TO
IMPLEMENT A TEMPERATURE TRACKING AND RECORDING PROGRAM. THE ABOVE PRODUCT
SPECIFICATION WILL NEED TO BE MODIFIED AS NEW TECHNOLOGY AND TECHNIQUES BECOME
AVAILABLE. BEFORE ANY CHANGES ARE MADE, TEST SAMPLES MUST BE PRODUCED AND
APPROVED BY THE CKE.
A MANIFEST OF CODE DATES WITH THE CORRESPONDING NUMBER OF CASES MUST BE
SUBMITTED WITH PRODUCT SHIPMENT TO CKE RESTAURANTS, INC. APPROVED DISTRIBUTION
CENTERS.
ADDRESS OF CKE RESTAURANTS, INC. QUALITY ASSURANCE DEPARTMENT:
CKE RESTAURANTS, INC.
QUALITY ASSURANCE DEPARTMENT
000 X. XXXX XXXXXXX XXX
XXXXXXX, XX 00000
PH: (000) 000-0000 EXT: 7107
FAX: (000) 000-0000
ACKNOWLEDGE AND AGREE:
Xxxx Xxxxxxx Enterprises, Inc. Pierre Foods, Inc
By /s/ Xxxx Xxxxxx By /s/ Xxxxxx X. Xxxxxx
------------------------------- ------------------------
Xxxx Xxxxxx Xxxxxx X. Xxxxxx
Executive Vice President Senior Vice President - Sales
DISTRIBUTION:
Q.A. Department: Anaheim, St. Louis, Santa Xxxxxxx, Manteca.
Omitted portions are indicated by [***]. Confidential information redacted and
732003 filed separately with the Commission.
CASE/LABEL LOGO
[CKE RESTAURANTS LOGO]
LEGAL STATEMENT
PACKED EXCLUSIVELY FOR
CKE RESTAURANTS
XXXXXXX, XX 00000
MADE IN THE USA
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
CKE RESTAURANTS
CASE *LABEL/CASE PRINTING REQUIREMENTS
FOOD/PACKAGING/NON-FOOD
- CKE #
- Product Description
- Date Received
- Ingredient Listing (when required)
- Count Information
- Use Direction and/or Warning if applicable
- Packed for Statement
- QA #
- Additional markings/information as required
SEE ATTACHED LAYOUTS
- Labels must be freezer adhesive.
Labels will require modification for some products.
CHEMICAL
- Chemicals require the product name to be largest size illustrated on the
logo sheet.
- Chemical label stock - BLUE
- Chemical label printing - Black
- Chemicals require directions and/or warning to be printed in English,
Spanish, and Vietnamese whenever possible.
- Information format same as for Food/Packaging/Non-food.
- Chemical Symbol.
[CHEMICAL LOGO]
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
CODE DATE FORMAT
Product must be open code date with use thru date for food and processed produce
item, delivery date for whole produce and date of manufacture for non-food
items.
FOOD ITEM
PIERRE FOODS CODING
LL MM DD YY SH HR
LL = Line
MM = Month
DD = Day
YY = Year
SH = Shift
HR = Hour
- NON-FOOD ITEM (Date of Manufacture)
Date of Manufacture - Vendor Initials May 20,1999
Example: BFC 05 20 99
- WHOLE PRODUCE (Delivery Date; date delivered to the D/C or Packed on
date)
Delivery Date or Packed on date - Vendor Initials May 20, 1999
Example: BFC 05 20 99
When the day or month is a single digit, a zero must be used before the digit.
The minimum stamp size for coding is 1/2 inch.
ARTWORK
Coated Paper Uncoated Paper
2-Color 2-Color
PMS 485 red PMS *** red
PMS 116 yellow PMS *** yellow
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
BAR CODE SPECIFICATIONS
(REQUIRED FOR ALL ITEMS DELIVERED TO ANY OF THE CKE RESTAURANTS OWNED
DISTRIBUTION CENTERS.)
1. THIS IS REQUIRED FOR BOTH FOOD AND NON-FOOD PRODUCTS
UPC-A bar code - UPC must have human readable text below bar code and
should be centered on its own line as the first bar code.
PLEASE NOTE: If you supply CKE proprietary product then use: CKE item
number, followed by your QA number. The CKE item number is maximum 5
characters. If your item number is less than 5 characters, all 5 characters
should be filled, right justified, and padded with zeros. Your vendor
number should immediately follow the item number with no separators between
them.
2. THIS IS REQUIRED FOR FOOD PRODUCT ONLY
Code 128 bar code - 128 bar code must have human readable text below bar
code and should be centered on its own line as the second line. This code
is limited to 15 characters. The formula for the bar code information is as
follows:
a. 3 character alpha-numeric vendor initials. If you use less than 3
characters, make sure you 'pad' the remaining positions with blank
spaces.
b. 8 digit numeric Code Date with no separators, blanks or slashes
mmddyyhh where mm = month
dd = date
yy = last two digits of the year
hh = hour
c. 1 character blank space
d. 3 character alpha-number or batch number. If lot or batch number is
not available, add 3 blank characters. A+b+c+d = Code 128 bar code
(Total 15 characters)
LABEL PLACEMENT: Label should be placed on any side of box - NOT top or bottom
SAMPLE LABEL:
[GRAPHIC]
[GRAPHIC]
The above requirements are general, intending to cover the majority of our
vendors. Individual situations will be considered.
Contact _____________________________ if you have any questions.
Phone # ___________________ Ext __________ Fax # ___________
Attachments
Logo Sheets attached Yes No
Label Sheets attached Yes No
Omitted portions are indicated by [***]. Confidential information redacted and
[ILLEGIBLE] filed separately with the Commission.
CASE GRAPHIC PRINTING INFORMATION
? 1 Storage Information (Frozen, Refrigerated or Dry)
? 2 Date Received (to be filled in by Restaurant)
? 3 Special Instructions (Fragile, Keep Frozen, Store at 0 DEG. F, etc.)
? 4 FFM will use top space for Item #
MBM will use bottom space for Item #
? 5 Product Name
? 6 Ingredient Statement when Applicable
? 7 CKE Item #
? 8 HFS Item #
? 9 Quality Assurance Plant Approval #
? 10 USDA Stamp (If Applicable)
? 11 Suppliers may use this space for their internal Item # (Reverse Print)
? 12 Quantity/Net Wt.
[FLOWCHART]
[FLOWCHART]
/Qa/CASE GRAPHICS REVISED 101000
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PAGE 1
CASE GRAPHIC LAYOUT EXAMPLE
FRONT PANELS
[FLOWCHART]
END PANELS
[FLOWCHART]
USING PIERRE STANDARD MASTER CARTON WITH APPROVED LABEL APPLIED.
/Qa/CASE GRAPHICS REVISED 101000
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PAGE 2
COMPLETED CASE GRAPHIC EXAMPLE
FRONT PANELS
[FLOWCHART]
END PANELS
[FLOWCHART]
USING PIERRE STANDARD MASTER CARTON WITH APPROVED LABEL APPLIED.
/Qa/CASE GRAPHICS REVISED 101000
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PAGE 3
LABEL LAYOUT EXAMPLE
FRONT PANELS
[FLOWCHART]
END PANELS
[FLOWCHART]
USING PIERRE STANDARD MASTER CARTON WITH APPROVED LABEL APPLIED.
*PRE-PRINTED BOX OR LABEL IS ACCEPTABLE.
SELECT THE APPLICATION THAT IS LEAST COSTLY AND/OR
MOST EFFICIENT FOR YOUR OPERATION.
/Qa/CASE GRAPHICS REVISED 101000
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PAGE 4
CKE RESTAURANTS
MICROBIOLOGICAL TESTING FOR CKE ANGUS BURGERS
SAMPLE PLAN:
1. Samples of fully cooked and frozen products are collected whenever
this item is scheduled for testing.
2. Samples are collected every hour, using strict aseptic techniques.
These samples are placed in a sterile sample bag, and returned to the
Quality Control kitchen and kept frozen until analysis. The sample
bags are identified with date, item number, shift and the appropriate
analysis.
3. The hourly samples are composited into one analytical.
4. Sample representing the entire day's production.
METHODOLOGY:
1. All samples analyzed for Aerobic Plate Count, Coliform, E.coli,
S.aureus, Salmonella, E.coli 0157: H7 and L. monocytongenes.
2. The Aerobic Plate Count, Coliform, and E.Coli are testing using Petri
film (AOAC method 986.33), the S.aureus method is from FDA BAM 8th
edition, the salmonella and L. monocytogenes testing is conducted
using the VIDAS rapid ELISA system (AOAC method 996.08), the E.coli
0157:H7 is conducted using the USDA/FSIS Microbiology Laboratory
GuidBook 3rd edition.
PRODUCT DISPOSITION:
1. ***
2. Product cannot be shipped until QA has removed the items from computer
QA hold.
3. A COA is then faxed to the Quality Control at CKE, listing the data of
analysis, production date, product description, product code, Pierre's
code, lot number, and test results.
Effective Date: 5/01/04
Replaces: undated
CONFIDENTIAL: This document contains trade secrets proprietary to Pierre Foods,
Inc. Unauthorized reproduction or disclosure is strictly prohibited and may
result in serious legal consequences. Receipt or possession of this document
does not grant the right to reproduce the document, to disclose its contents, or
to use such contents in any way.
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
[GRAPHIC]
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PRODUCT SIZE TEMPLATE
***
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PRODUCT: 9598
EFFECTIVE: 05/03/2004
QUALITY DEFECT:
***
TARGET- ACCEPTABLE
------ ----------
*** ***
***
UNACCEPTABLE UNACCEPTABLE
------------ ------------
*** ***
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PRODUCT CODE: 9598
EFFECTIVE 5/03/04
UNACCEPTABLE
***
PATTIES FROM OVEN TO SPIRAL
FREEZER TRANSFER AREA
UNACCEPTABLE
***
PATTIES FROM SPIRAL FREEZER TO
PACK AREA
***
UNACCEPTABLE
***
PATTIES FROM OVEN TO SPIRAL
FREEZER TRANSFER AREA
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PRODUCT: 9598
EFFECTIVE: 05/03/2004
QUALITY DEFECT:
***
***
ACCEPTABLE PATTIES
------------------
***
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
PRODUCT: 9598
EFFECTIVE: 05/03/2004
QUALITY DEFECT:
***
ACCEPTABLE
----------
***
MINIMUM
-------
ACCEPTABLE
----------
UNACCEPTABLE
------------
Omitted portions are indicated by [***]. Confidential information redacted and
filed separately with the Commission.
