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EXHIBIT 99.5
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (including the Annexes and Schedules
hereto, this "Agreement"), dated as of July 14, 1997, among ▇▇▇▇▇▇'▇ Food
Systems, Inc. (the "Company") and QVS, Inc. ("Supplier"),
W I T N E S S E T H :
WHEREAS, the Company desires to designate Supplier, and
Supplier desires to be designated, an approved supplier (an "Approved
Supplier") of Products (as hereinafter defined) to the Franchised Restaurants
(as hereinafter defined); and
WHEREAS, the Company desires to purchase, either directly or
through a distributor, Products from Supplier, and Supplier desires to sell and
supply, either directly or through a distributor, Products to the Company; and
WHEREAS, Imasco Holdings, Inc., a Delaware corporation
("Seller"), the Company and CKE Restaurants, Inc., a Delaware corporation
("Buyer"), have entered into that certain Stock Purchase Agreement, dated as
of April 27, 1997 (the "Stock Purchase Agreement"), pursuant to which, inter
alia, Buyer has agreed to purchase, take up and assume from Seller, and Seller
has agreed to sell, transfer and assign to Buyer, each on the terms and
conditions therein stated, all of the outstanding capital stock of the Company;
and
WHEREAS, pursuant to and as a condition precedent to the
Closing contemplated by the Stock Purchase Agreement (the "Closing"), Buyer has
agreed to, and Seller has agreed to cause the Company and Supplier to, enter
into this Agreement;
NOW THEREFORE, in consideration of the premises, and of the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
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1. Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or referenced below:
"Affiliate", with respect to any Person, means any other
Person directly or indirectly controlling, controlled by or under common
control with such Person. With respect to Buyer, the term "Affiliate" shall
not include any Person in which Buyer, directly or indirectly, is the
beneficial owner of less than 50% of such Person's voting securities.
"Agreement" shall have the meaning set forth in the Preamble.
"Approved Supplier" shall have the meaning set forth in the
Recitals.
"Breach" shall have the meaning set forth in Section 15.
"Closing" shall have the meaning set forth in the Recitals.
"Company Restaurants" shall mean, collectively, all
restaurants from time to time during the term of this Agreement operated or
wholly owned by the Company or its subsidiaries which offer to customers
Proprietary Products.
"Franchised Restaurants" shall mean all restaurants, other
than Company Restaurants, which, either as of the date of this Agreement or
from time to time during the term of this Agreement, are licensed by the
Company to offer to customers any of the Proprietary Products.
"Franchisees" shall mean, collectively, the several owners
and/or operators of the Franchised Restaurants.
"Intellectual Property" shall mean trademarks, service marks,
brand names, certification marks, trade dress, assumed names, trade names and
other indications of
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origin, the goodwill associated with the foregoing and registrations in the
United States of, and applications in the United States to register, the
foregoing, including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas, whether
patentable or not in the United States; patents, applications for patents
(including, without limitation, divisions, continuations, continuations in-part
and renewal applications), and any renewals, extensions or reissues thereof, in
the United States; non- public information, trade secrets and confidential
information and rights in the United States to limit the use or disclosure
thereof by any Person; writings and other works, whether copyrightable or not
in the United States; registrations or applications for registration of
copyrights in the United States, and any renewals or extensions thereof; any
similar intellectual property or proprietary rights; and any claims or causes
of action arising out of or related to any infringement or misappropriation of
any of the foregoing.
"Person" shall mean any individual, corporation, partnership,
firm, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization, governmental or regulatory body or
other entity.
"Price" shall have the meaning set forth in Section 7.
"Restaurants" shall mean all Franchised Restaurants and
Company Restaurants.
"Seller" shall have the meaning set forth in the Recitals.
"Stock Purchase Agreement" shall have the meaning set forth in
the Recitals.
2. Approved Supplier. (a) The Company hereby designates
Supplier as an Approved Supplier of the Products to the Franchised Restaurants
during the term of this Agreement.
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(b) No provision of this Agreement shall be construed to
require Supplier to sell Products to any Franchised Restaurant or any
Franchised Restaurant to purchase Products from Supplier. Supplier shall
extend the pricing and other terms and conditions offered to the Company under
this Agreement to any Franchised Restaurant which purchases 92% or more of such
Franchised Restaurant's total requirements of the Products in the 12-month
period preceding the date of this Agreement each anniversary of this Agreement,
whichever date shall at any time be the most recent; provided that the related
Franchisee meets Distributor's credit standards as they may from time to time
be amended. In no event shall the Company be responsible for the debts of the
Franchisees.
(c) Subject to Sections 14 and 15, no provision of this
Agreement shall be construed to prohibit or restrict Supplier from selling any
Product to any Franchised Restaurant at any time during the term of this
Agreement.
(d) The Company agrees that Supplier shall remain the
sole national Approved Supplier of Products to the Franchised Restaurants in
the United States during the term of this Agreement. No provision of this
Agreement shall be construed to prohibit the Company from designating
additional Approved Suppliers; provided that in the event the Company decides
to approve more than two Approved Suppliers in any geographic area of the
United States, the Company shall provide notice of such decision to Supplier at
least 90 days prior to the implementation of such approval.
(e) The Company shall not hereafter enter into any agreement
(other than with the Supplier) which is in conflict with the rights granted to
the Supplier by this Section 2. Each party agrees that it will not take any
action the sole purpose of which is to evade or circumvent its obligations
under this Agreement.
3. Purchase Agreement. (a) On the terms and subject to
the conditions set forth herein, the Company hereby agrees to purchase
exclusively from Supplier (either
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directly or through one or more distributors), and Supplier agrees to supply
and sell continuously to the Company (either directly or through one or more
distributors), the cleaning supply products listed on Annex A hereto which have
been and remain approved for use in the Restaurants (the "Products"), in
quantities constituting 92%, or such lesser percentage as is agreed to by the
Company and Supplier, of the Company's total requirements for all Company
Restaurants during the term of this Agreement. This Agreement establishes the
terms and provisions under which the Supplier will supply, but does not
authorize Supplier to ship or deliver, Products. Orders to ship and deliver
Products are to be granted by authorized releases, issued by the Company's
authorized ordering personnel (which may include approved distributors). Upon
the approval by the Company of additional cleaning supply products for use in
any Restaurants, the Company shall promptly offer Supplier the right, subject
to agreements concerning pricing and product specifications, to include such
product or products on Annex A hereto and to thereby amend this Agreement to
include such product or products as Products for all purposes of this
Agreement.
(b) All Products will be safe for their intended use, and
shall be subject to the Company's inspection and acceptance or rejection,
notwithstanding any acceptance of delivery or payments. The foregoing warranty
shall survive acceptance of the Products. If, prior to final acceptance, any
Products are found to be incomplete or not in conformity with the foregoing
warranty, the Company may reject them and require Supplier to correct them
without charge. If, as a result of any Product being found to be incomplete or
not in conformity with the foregoing warranty, the Company must purchase
replacement products from a secondary supplier at a higher price than the price
provided by this Agreement, the difference in cost to the Company will be
passed on to the Supplier by either (a) directly invoicing the Supplier for the
entire differential amount; or (b) requesting that Supplier reduce the cost of
the next order for an amount equal to the difference in cost for the
replacement order from the secondary supplier.
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(c) The Company may, upon at least 10 days written
notice, require Supplier to supply and sell the Products to a distributor
designated by the Company rather than to the Company, provided, and for so long
as, such distributor is an approved distributor of Products for the Company
Restaurants, subject to Suppliers' credit policies.
4. Restaurants. Schedule 1 hereto contains a list of all
Restaurants as of the date hereof. During the term of this Agreement, the
Company shall promptly notify Supplier if any establishment or other unit not
set forth on Schedule 1 shall become a Restaurant.
5. Term and Termination. Subject to Section 14, the term of
this Agreement shall commence at the Closing and shall continue for a period of
five (5) years from the Closing Date. Such term shall automatically be
extended for a single period of two (2) years from the expiration thereof,
unless Supplier or the Company shall have given, either to the other, not less
than three months prior to such expiration, written notice of its desire to
terminate this Agreement as of such expiration.
6. Products. (a) Supplier shall maintain inventory of
Products at levels equivalent to less than ninety (90) days of finished Product
requirements.
(b) No provision of this Agreement shall be construed to
amend, modify or restrict the absolute right of the Company, at its sole
discretion, to approve or disapprove Products for use in the restaurants.
(c) No provision of this Agreement shall be construed to
prohibit or restrict Supplier from selling Products to purchasers other than
the Company, the Company Restaurants or the Franchised Restaurants. No
substitution or alteration of any goods, component parts thereof, sources of
noncommodity raw materials, processes or manufacturing sites may be made
without the Company's prior written consent.
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(d) Supplier shall maintain at all times during the term of
this Agreement a minimum finished goods inventory of each Product representing
between one and two weeks' typical consumption (based on total sales of each
Product to the Company Restaurants during the immediately preceding 12-month
period).
(e) Supplier shall promptly notify the Company of any
short-term inability or anticipated short-term inability on its part to supply
a particular Product and shall indicate the reason for such inability and the
expected duration. Following receipt of any such notification, the Company may
enter into alternative arrangements as may be reasonably necessary to purchase
from sources other than Supplier any of its requirements of such Product, but
only during the period of such inability to supply; provided, however, that
Supplier shall reimburse the Company for its reasonable out-of-pocket costs
incurred in connection with covering any such inability to supply which is the
proximate result of Supplier's failure to timely order ingredients from
suppliers to fill orders previously placed by Company Restaurants. The Company
shall be obligated to purchase the applicable percentage of its requirements
for such Product from Supplier upon advance written notice to the Company that
such Product will thereafter be supplied.
7. Pricing. (a) The prices to be paid by the Company's
approved distributors to Supplier, and the prices to be made available to
approved distributors of the Franchisees, for each Product shall be determined
in accordance with Schedule 2 hereto (the "Price" and collectively, the
"Prices").
(b) The Prices shall be adjusted annually to reflect (i)
reasonable increases and reasonable decreases, as the case may be, in the cost
components within the prices set forth in Schedule 2, and (ii) competitive
conditions in the market for products of comparable quality and quantity to the
Products, and such increases or decreases in the Prices shall be referred to
collectively as "Price Adjustments". Within 30 days of every July 1 subsequent
to the Closing Date, other than July 1, 1997, senior executives of
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Supplier and the Company shall meet and negotiate in good faith to effect
equitable Price Adjustments. In connection with any such negotiations,
Supplier shall afford the Company reasonable access, upon reasonable notice, to
its books and records to the extent and only to the extent necessary to
calculate and verify Supplier's costs in respect of the cost components within
the prices set forth in Schedule 2. If, within 15 days of the date of such
meeting, Supplier and the Company have not agreed upon the amount of any Price
Adjustment, if any, the parties shall submit the matter to arbitration in
accordance with Section 8(b).
(c) Neither Supplier nor the Company shall, and they
shall cause their respective Affiliates not to, establish or initiate any
action, the primary purpose of which is to subvert or evade the pricing or
adjustment provisions of this Agreement.
(d) Supplier and the Company shall meet on a semiannual
basis and negotiate in good faith to effect equitable Price Adjustments based
on changes in prevailing freight rates over such period.
(e) Supplier hereby represents and warrants to the
Company that the prices set forth in Schedule 2 hereto are equal to or less
than the prices provided by Supplier to the Company immediately prior to
Closing.
8. Examination. (a) The Company shall have the right,
at its own expense, not more frequently than once in any 12-month period, upon
giving 30 days' written notice to Supplier, to examine Supplier's books and
records applicable to verifying the proper calculation of the payments due to
Supplier by or on behalf of the Company pursuant to this Agreement during the
previous 12-month period. The Company shall be entitled to employ, at its own
expense, an independent auditor to assist it in connection with such
examination.
(b) Supplier and the Company agree to work together in
good faith to resolve any discrepancy between
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the amounts invoiced by Supplier to or for the account of the Company and the
Company's examination. In the event of a conflict which cannot be resolved, if
the amount involved exceeds $100,000, then the Company or Supplier may give the
other written notice (the "Notice of Dispute") which shall specify in detail
the nature of any disagreements so asserted. All matters specified in any
Notice of Dispute shall be submitted for resolution to and reviewed by an
arbitrator mutually appointed by the Company and Supplier in accordance with
the (commercial) rules of the American Arbitration Association. If within ten
(10) days of the Notice of Dispute the parties are unable to agree upon the
selection of an arbitrator, then either party may request the President of the
American Arbitration Association to select an arbitrator who is willing to
perform such services. The arbitrator selected shall consider only the
disputed items set forth in the Notice of Dispute. The arbitrator shall act
promptly to resolve all disputed matters and its decision shall be final and
binding on the parties. The fees and expenses of the arbitrator shall be
shared jointly and equally by the Company and Supplier.
(c) Within 30 days of the parties' agreement or the
arbitrator's determination, as the case may be, that the amounts paid by or on
behalf of the Company to Supplier with respect to the period for which books
and records were examined pursuant to Section 8(a) either exceeded or were less
than the payments due to Supplier, Supplier shall pay the amount of the excess
to the Company, or the Company shall pay the amount of the deficiency to
Supplier, as the case may be. If Supplier shall become obligated to pay the
Company $250,000 or more in respect of any single examination pursuant to
Section 8(a), Supplier shall pay the reasonable fees and disbursements of the
Company's independent auditors incurred in connection with such examination.
(d) The Company and Supplier agree that the rights and
remedies granted to the Company in this Section 8 are in addition to any other
rights and remedies which may be granted in this Agreement or by law.
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9. Proprietary Rights and Confidentiality. (a) As
between the parties hereto, the Supplier shall own the specifications and
formulations for the Products, the manufacturing procedures for the Products
and the related Intellectual Property, and the parties agree to execute all
documents and instruments necessary to give effect to the provisions of this
Section 9(a).
(b) The Company and Supplier agree that all information
as to the ingredients, Product specifications and formulations and pricing of
the Products and all other information communicated by the Company to Supplier
and by Supplier to the Company, including but not limited to communications
relating to the quantity and price of goods and services provided hereunder,
promotional events, marketing and restaurant data, new product introductions
and the like, where such information is either identified to Supplier as
"confidential" or is reasonably identifiable by either party as such, shall be
maintained in confidence by the party receiving such information, except that
such information may be provided by either party to its auditors, consultants
and advisors who agree to maintain such confidentiality or are otherwise bound
to restrictions on disclosure and to any prospective purchasers of all or part
of their respective businesses; provided, however, that such prospective
purchasers shall have executed and delivered a confidentiality agreement in
form and substance approved by the Company, which approval shall not
unreasonably be withheld or delayed. The confidentiality obligations of this
Section 9(b) shall not apply to information:
(i) which either party is compelled to disclose by
judicial or administrative process, or in the opinion of counsel
satisfactory to the other party, by other mandatory requirements of
law;
(ii) which can be shown to have been generally available
to the public other than as a result of a breach of this Section or of
any act or omission of the Company or Supplier or any of their
respective Affiliates prior to the Closing;
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(iii) which can be shown to have been provided to either
party by a third party who obtained such information after the Closing
other than as a result of a breach of this Section; or
(iv) which can be shown to have been independently
acquired by either party after the Closing without use of any
information provided hereunder or, with respect to Supplier, without
use of information acquired prior to the Closing.
(c) Any designs, drawings, patterns, documents, devices,
apparatuses, and other property, in any such case consisting of or containing
the Company's Intellectual Property shall (i) be and remain the sole property
of the Company; (ii) be subject to prompt return upon the request of Company;
and (iii) be used only in performing this Agreement.
10. Testing. (a) Supplier shall promptly submit to the
products testing laboratory of the Company or any other entity designated by
the Company, in accordance with a testing schedule established from time to
time or upon request by the Company, reasonable quantities of samples of any
Product handled by Supplier.
(b) Supplier shall perform its own inspections of the
Products, shall provide the results of such testing to the Company at the
Company's request, and shall maintain all testing records for a minimum period
of two (2) years following delivery. The Company and its authorized
representatives shall have the right to inspect and conduct tests and other
evaluations at the Supplier's manufacturing facilities, which may include
inspections on an unannounced basis, and Supplier shall use reasonable efforts
to grant the Company reasonable access to the facilities of its subcontractors
and suppliers, for the purpose of assessing the Supplier's sanitation and
manufacturing processes; provided, that such inspections shall not unreasonably
disrupt Supplier's operations. Supplier shall provide reasonable assistance
and cooperate with the Company in
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connection with such inspections and evaluations at no expense to the Company.
11. Insurance and Indemnity. (a) Supplier agrees to
maintain, during the entire term of the Agreement, insurance coverage against
such risks as may be reasonably specified by the Company and the Buyer, in such
minimum amounts as may be reasonably satisfactory to the Company. Supplier
shall provide the Company with certificates of insurance evidencing such
coverage promptly upon the Company's request therefor.
(b) Supplier shall indemnify, defend and hold harmless the
Company from and against any and all losses, claims, actions, damages, expenses
or liabilities, including 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 Supplier pursuant to this Agreement, 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 by any
negligence on the part of Supplier or its agents, any defect in the materials
or workmanship used to manufacture the Products, or any claim under a theory of
strict liability, or (ii) the breach by Supplier of any warranty with respect
to the Products made by Supplier under this Agreement. In the event any third
party asserts any claim with respect to any matter as to which the indemnities
in this Section 11(b) relate, the Company shall give prompt notice to Supplier,
and Supplier 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 Company. If Supplier 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, Supplier shall be bound by any defense or
settlement that the Company may make to such claims and shall reimburse the
Company for its expenses related to the defense or settlement of the third
party claim. The Company and Supplier shall cooperate in defending against any
asserted third party claims. The parties agree to render to each other such
assistance as they may reasonably require of each other
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in order to ensure the proper and adequate defense of any such action, suit or
proceeding, including making available to each other and/or to each other's
attorneys its books and records relating to such proceedings or litigation and
making individuals available for the giving of testimony (including
depositions).
12. Product Recalls. In the event it is deemed necessary
by the Company to recall from the Hardee's(R) System any quantity of any
Product for any reason bearing on quality and/or safety of such Product,
Supplier shall comply diligently with all Products recall procedures then in
effect, as established from time to time by the Company and applicable law.
Supplier shall bear all costs and expenses associated with the recall of any
Product unless such recall is the result of the fault or negligence of the
Company or any Franchisee, in which event the Company shall bear all costs and
expenses incurred by it and/or the Supplier in complying with such recall
procedures. In the event Supplier fails or refuses to comply with the recall
of such Products hereunder upon request by the Company, the Company shall be
entitled to take such action as it deems necessary to recall such Products from
the Hardee's(R) System and Supplier shall reimburse the Company for its
out-of-pocket costs and expenses incurred in such recall procedure to the
extent that such recall is not the result of the fault or negligence of the
Company or any Franchisee.
13. Force Majeure. Supplier shall not be responsible for
damages caused by its delay or failure to perform, in whole or in part, its
obligations hereunder or by its non-compliance with any of the terms hereof
where such delay, failure or non-compliance is due or attributable to acts of
God, fires, floods, storms, earthquakes, explosions, embargoes, acts of or
compliance with requests of governmental authorities, nuclear or atomic
disasters, national emergencies, wars, riots, strikes, civil insurrections, or
similar events beyond Supplier's reasonable control (any such event, a "force
majeure"). In the event of any such force majeure, Supplier shall give the
Company prompt notice thereof, and thereafter Supplier's obligations hereunder
shall be suspended, in whole or in part, for the
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duration of such force majeure. Upon expiration, settlement or other
resolution of the force majeure, Supplier shall resume performance in full
hereunder but shall not be required to make-up for any term of this Agreement.
In the event Supplier's obligations hereunder are suspended during any force
majeure, the Company may enter into other reasonable arrangements with other
suppliers to satisfy its requirements hereunder. Such other arrangements shall
be reasonable in scope and duration such that they may be terminated as soon as
possible upon the expiration, settlement or other resolution of the force
majeure. Supplier shall use its best efforts to terminate or cause the
expiration of the force majeure as soon as practicable following its
occurrence.
14. Assignment. (a) Subject to Section 14(b), Supplier
may not assign this Agreement without the prior written consent of the Company,
which consent shall not be unreasonably withheld or delayed; provided, however,
that nothing in this Section shall preclude Supplier from employing common
carriers, contract carriers, public warehousemen or other similar parties to
temporarily perform its services hereunder.
(b) Notwithstanding Subsection 13(a), Supplier may assign
its rights and obligations under this Agreement without the Company's consent
to any Affiliate of Supplier or to any purchaser of all or substantially all of
its business or assets; provided that Supplier shall not assign its rights
under this Agreement to (i) any party conducting, directly or indirectly, a
significant restaurant business, or (ii) any party which refuses to commit in
writing to provide the same level of service following the effective date of
such assignment as Supplier provided prior to such assignment, in either such
case described by clause (i) or (ii) without the consent of the Company, which
consent shall not be unreasonably withheld or delayed. For purposes of this
Section 14(b), a change of control or majority ownership of Supplier shall be
deemed to be an assignment of rights under this Agreement.
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(c) Any permitted assignment of this Agreement by either
party shall, except as otherwise agreed, be deemed an assignment of all of the
assignor's rights and liabilities under this Agreement accruing, arising or
relating to any period on or after the date of such assignment.
(d) Any assignment made in violation of this Section
shall be null and void.
(e) During the term hereof, (i) if the Company sells 50
or more Restaurants to any single purchaser or group of purchasers directly or
indirectly controlling, controlled by or under common control with Buyer, the
Company, any Franchisee, Checkers Drive-In Restaurants, Inc. ("Checkers") or
Rally's Hamburgers, Inc. ("Rally's"), (a "Significant Sale"), the Company
agrees to use commercially reasonable efforts to cause such purchaser or group
of purchasers to enter into a purchase agreement on terms substantially similar
to this Agreement, including Section 3, and (ii) if the Company sells fewer
than 50 Restaurants to any single purchaser or group of purchasers directly or
indirectly controlling, controlled by or under common control with Buyer, the
Company, any Franchisee Checkers or Rally's, the Company agrees to use its
reasonable commercial efforts to cause such purchaser to enter into an
agreement providing for Supplier to act as its supplier for Products.
15. Termination and Suspension. (a) Notwith-standing
Section 5, if any party fails or refuses to comply with one or more of its
material obligations hereunder, resulting in a material default which is
incapable of being cured or which is capable of being cured and is not cured
within a reasonable period following its receipt of oral or written notice of
such default from the Company (a "Breach"), the nonbreaching party shall
provide the breaching party written notice thereof, describing the Breach and
specifying a date, not less than thirty (30) days following the breaching
party's receipt of such notice, on which this Agreement shall be terminable at
the option of the nonbreaching party unless the Breach has by that date been
substantially cured. If the Breach has been substan-
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tially cured by the date so specified this Agreement shall not be terminable as
a result of such substantially cured Breach.
(b) The Company may terminate this Agreement with respect to
its obligation to purchase Products manufactured at a particular manufacturing
plant, but only with respect to such Products and only to the extent that such
Products are manufactured at such plant, if Supplier shall fail to comply with
its obligations under this Agreement with respect to any Product manufactured
at such plant and such failure presents or is likely to present in the
immediate future a danger of imminent harm to consumers or to restaurant
employees or is in material violation of the requirements of applicable
government health, safety or sanitation standards.
(c) Any party's failure to terminate this Agreement upon the
occurrence of one or more Breaches shall not constitute a waiver or otherwise
affect the right of such party to terminate the Agreement for any subsequent
Breach. Any party's failure to exercise any of its rights or remedies
hereunder or to insist on strict compliance by any other party with any of the
terms hereof shall not constitute a waiver of any of the terms or conditions
hereof with respect to any other or subsequent Breach nor shall it constitute a
waiver by the nonbreaching party of its right at any time thereafter to require
compliance with the terms hereof as provided herein. The rights or remedies
granted to the Company herein are in addition to any other rights or remedies
which may be granted by law.
(d) The obligations of Supplier pursuant to this Agreement
shall be terminable, at Supplier's option, if any of the following events
shall occur and be continuing: (i) if a proceeding is instituted (and not
dismissed within 60 days) by or against the Company under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law to
be adjudicated a bankrupt or insolvent; (ii) the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or similar
official of all or a substantial part of the assets of the Company;
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(iii) any assignment for the benefit of creditors of the Company; or (iv) if
the Company shall admit in writing its inability to pay its debts as they
become due.
(e) The obligations of the Company pursuant to this Agreement
shall be terminable, at the Company's option, if any of the following events
shall occur and be continuing: (i) if a proceeding is instituted (and not
dismissed within 60 days) by or against Supplier under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law to be
adjudicated a bankruptcy or insolvent; (ii) the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or similar
official of all or a substantial part of the assets of Supplier; (iii) any
assignment for the benefit of creditors of Supplier; or (iv) if Supplier shall
admit in writing its inability to pay its debts as they become due.
(f) Upon termination or expiration of this Agreement, (i)
Supplier's designation as an Approved Supplier shall terminate and be of no
further force and effect; (ii) Supplier shall not thereafter identify itself as
an Approved Supplier to the Hardee's(R) System or use any of the Company's
trade secrets, the Confidential Information and/or other proprietary
information of the Company; and (iii) Supplier shall cease to use, in any
manner whatsoever, any of the Company's trade secrets, the Confidential
Information and for other proprietary information of the Company, all of which
shall be promptly returned to the Company.
16. Compliance With Laws. Upon its receipt of any
citation issued by any governmental or other regulatory authority (or of
process or citation issued by any court of law or equity) related to the
activities to be performed under this Agreement, Supplier shall promptly send
written notice thereof to the Company. Supplier shall execute, as to all
Products subject to the Federal Food, Drug and Cosmetic Act, the Caustic
Poisons Act, the Insecticides, Fungicide and Rodenticide Act, and the Hazardous
Substance Act, and any other applicable laws or regulations, a General and
Continuing Guarantee of compliance with such laws and regulations.
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17. No Partnership. Supplier acknowledges that it is an
independent contractor and no party is or shall be construed as an agent,
partner, joint venturer or employee of another. No party shall have the
authority to bind or otherwise obligate any other party in any manner and no
party shall represent to anyone that it has a right to do so.
18. Waivers. No waiver or waivers by any party of any
provision of this Agreement, whether by conduct or otherwise, shall be deemed
to be a further or continuing waiver of the provision or any other provision of
this Agreement.
19. Attorneys' Fees. If it is necessary for either of
the parties to institute suit to enforce any of the provisions of this
Agreement, then the prevailing party in such suit shall be entitled to collect
and receive reasonable outside attorneys' fees and court Prices through and
including appellate litigation, and the other party shall pay for same.
20. Notices. All notices hereunder shall be deemed given
if in writing and delivered personally or sent by telex or telecopier or by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other addresses as shall be specified by like
notice):
(a) If to the Company, to:
▇▇▇▇▇▇'▇ Food Systems
▇▇▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
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With a copy to:
CKE Restaurants, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) If to the Supplier, to:
Fast Food Merchandisers, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Any notice given by mail shall be effective when received. Any notice given by
telecopier shall be effective when the appropriate telecopier confirmation is
printed by the telecopier used to transmit such notice.
21. Captioned Headings. The section headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
22. Governing Law and Venue. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF. EACH PARTY
HERETO AGREES THAT IT SHALL BRING ANY ACTION OR PROCEEDING IN RESPECT OF ANY
CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTAINED
IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN TORT OR CONTRACT OR AT LAW OR
IN EQUITY, EXCLUSIVELY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW YORK FOR THE
COUNTY OF NEW YORK (THE "CHOSEN COURTS") AND (I) IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE CHOSEN COURTS, (II) WAIVES ANY OBJECTION TO
LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE CHOSEN COURTS, (III)
WAIVES ANY OBJECTION THAT THE CHOSEN
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COURTS ARE AN INCONVENIENT FORUM OR DO NOT HAVE JURISDICTION OVER ANY PARTY
HERETO AND (IV) AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH
ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH
SECTION 19 OF THIS AGREEMENT.
23. Amendment and Waiver. Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, the Company and Supplier,
or in the case of a waiver, by the party against whom the waiver is to be
effective. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
24. Counterparts. This Agreement and any amendments
hereto may be executed in one or more counterparts, each of which shall be
deemed to be an original by the parties executing such counterpart, but all of
which shall be considered one and the same instrument.
25. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability.
26. Third-Party Rights. Notwithstanding any other
provision of this Agreement, this Agreement shall not create benefits on behalf
of any third party or person other than the parties hereto or their permitted
assignees (including without limitation any broker, finder, supplier
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or customer), and this Agreement shall be effective only as between the parties
hereto, their successors and permitted assigns.
27. Entire Agreement. This Agreement (including all
Annexes and Schedules hereto) contains the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters.
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IN WITNESS WHEREOF, this Agreement has been signed on behalf
of each of the parties hereto as of the date first written above.
▇▇▇▇▇▇'▇ FOOD SYSTEMS, INC.
By:
--------------------------
Name:
Title:
QVS, INC.
By:
--------------------------
Name:
Title:
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