Exhibit 10.11
AMENDMENT NO. 1 TO, AND CONSENT UNDER,
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 TO, AND CONSENT UNDER, LOAN AND SECURITY AGREEMENT
(this "Amendment"), dated this 8th day of March, 2004, is made by and among
PIERRE FOODS, INC., a North Carolina corporation (the "Borrower");
PF MANAGEMENT, INC. , a North Carolina corporation (the "Parent");
FLEET CAPITAL CORPORATION, a Rhode Island corporation (the "Lender");
PF DISTRIBUTION, LLC, PF PURCHASING, LLC, FRESH FOODS PROPERTIES, LLC,
COLUMBIA HILL AVIATION, LLC, and COMPASS OUTFITTERS, LLC, each a North Carolina
limited liability company (each, a "Company Guarantor" and, collectively, the
"Company Guarantors"); and
XXXXX X. XXXXX and XXXXX X. XXXXXXXXXX, each a resident of the State of
North Carolina (the "Validity Guarantors" and, together with the Company
Guarantors, the "Guarantors" and, each, a "Guarantor").
RECITALS
A. Pursuant to the Loan and Security Agreement, dated August 13, 2003
(as amended, modified, restated or supplemented from time to time, the "Loan
Agreement"), among the Borrower, the Parent and the Lender, the Lender has
agreed to make loans and extend credit to the Borrower secured by the
Collateral. All capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Loan Agreement.
B. All of the Obligations owing from time to time to the Lender under
the Loan Agreement or otherwise are unconditionally, jointly and severally
guaranteed by the Parent and each of the Company Guarantors pursuant to the
Guaranty Agreement, dated August 13, 2003, executed by the Parent in favor of
the Lender, and the Guaranty and Security Agreements, dated August 13, 2003,
executed by each Company Guarantor in favor of the Lender.
C. The validity of all Collateral is guaranteed by the Validity
Guarantors pursuant to the Guaranties of Validity, dated August 13, 2003,
executed by each Validity Guarantor in favor of the Lender.
D. Concurrently with the execution and delivery of this Amendment, the
Borrower and certain of the Company Guarantors propose to enter into with the
Indenture Trustee a Fourth Supplemental Indenture (the "Fourth Supplemental
Indenture") to the Indenture and close the Senior Notes Restructuring. Section
9.2.14 of the Loan Agreement prohibits the Borrower, without the prior written
consent of the Lender, from amending or modifying in any way the terms or
provisions
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of the Indenture or the Senior Notes from those in effect on the Closing Date,
except for the amendments and modifications contemplated by the Senior Notes
Restructuring if the Senior Notes Restructuring Conditions are first satisfied.
E. Not all of the Senior Notes Restructuring Conditions have been
satisfied. Specifically, the Indenture Trustee and the holders of the Senior
Notes have refused to subordinate the payment of the Senior Notes to the prior
payment in full of the Obligations as required by section (iii) of the
definition of the Senior Notes Restructuring Conditions, but they have agreed to
subordinate the Liens securing the Senior Notes being granted in connection with
the Senior Notes Restructuring and limit the enforcement of such Liens, all upon
the terms and subject to the provisions of a Lien Subordination Agreement (the
"Lien Subordination Agreement"), dated of even date herewith, between the
Indenture Trustee and the Lender, and acknowledged and agreed to by the
Borrower, the Parent and the Company Guarantors, a copy of which is attached to
the Fourth Supplemental Indenture as EXHIBIT D thereto.
F. The Borrower, the Parent and the Guarantors have each requested
that, notwithstanding the failure of the Borrower and the Parent to satisfy all
of the Senior Notes Restructuring Conditions, the Lender nevertheless grant its
consent to the Senior Notes Restructuring.
G. The Lender has agreed to such request, provided that the Loan
Agreement is modified as set forth herein, and the Guarantors each grant their
respective consent to such amendments to the Loan Agreement and the Lender's
granting of its consent to the Senior Notes Restructuring, and ratify their
respective obligations under their respective Guaranty Agreements and the Loan
Documents to which each of them is a party or by which each of them may be
bound.
H. To accomplish the foregoing, the Borrower, the Parent, the Lender
and the Guarantors have agreed to enter this into Amendment.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are expressly
acknowledged, the Borrower, the Parent, the Lender and the Guarantors hereby
agree as follows:
ARTICLE I
AMENDMENTS TO LOAN AGREEMENT
Subject to the satisfaction of the conditions precedent set forth in
Article III below, the Loan Agreement is hereby amended as follows:
1.1 Definitions. APPENDIX A to the Loan Agreement is amended as follows:
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(a) New definitions are added in proper alphabetical order as follows:
"Fourth Supplemental Indenture - the Fourth Supplemental Indenture,
dated as of the Senior Notes Restructuring Closing Date, among the
Indenture Trustee, the Borrower and the Subsidiaries of the Borrower that
are parties thereto, which supplements and amends the Indenture.
Senior Notes 2005 Offer Purchase Date" - March 31, 2005."
(b) The definition of "Credit Facility Termination Date" is amended in
its entirety to read as follows:
"Credit Facility Termination Date - the earliest to occur of any of
the following: (i) August 13, 2006, (ii) ninety (90) days before the
Senior Notes 2005 Offer Purchase Date, or (iii) ninety (90) days before
the Senior Notes Stated Maturity Date.
(c) The definition of "Fiscal Year" is amended in its entirety to read
as follows:
"Fiscal Year - the fiscal year of Parent, Borrower and each of its
respective Subsidiaries which means twelve (12) periods consisting of four
(4) or (5) weeks each determined based on a 52-53 week accounting period,
the last week of which ends on the last day of February if it falls on a
Saturday, and, if not, on the first Saturday in March of each year. When a
year is used in connection with a Fiscal Year, such as Fiscal Year 2004,
such reference shall mean the Fiscal Year ending in that year."
1.2. Parent Indebtedness for Money Borrowed. SCHEDULE 9.2.5 to the Loan
Agreement is amended as follows: (a) the second to the last loan listed on page
1 as "Xxx Xxxxxxxxx (Peoples)" is amended to refer to "S&D Land Company (Peoples
Bank)"; and (b) the last loan listed on page 2 in the amount of $625,000 owing
to First Century Bank is deleted.
1.3 Tax Consolidation. Section 9.2.11 is amended in its entirety to read
as follows:
9.2.11 Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Parent or any
Subsidiary of Parent.
1.4 Capital Expenditures. Section 9.3.3 is amended in its entirety to
read as follows:
9.3.3 Capital Expenditures. Parent, Borrower and their respective
Subsidiaries shall not make Capital Expenditures (including, without
limitation, by way of capitalized leases) during any period which, in the
aggregate, exceed the amount shown below corresponding to such period:
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PERIOD MAXIMUM CAPITAL EXPENDITURES
------ ----------------------------
3rd Fiscal Quarter of Fiscal Year
Ending 2004 $2,000,000
3rd and 4th Fiscal Quarters of Fiscal Year
Ending 2004 $3,000,000
3rd and 4th Fiscal Quarters of Fiscal Year
Ending 2004 and 1st Fiscal Quarter of Fiscal Year
Ending 2005 $6,200,000
3rd and 4th Fiscal Quarters of Fiscal Year
Ending 2004 and 1st and 2nd Fiscal Quarters of Fiscal
Year Ending 2005 $7,700,000
4th Fiscal Quarter of Fiscal Year Ending 2004 and
1st, 2nd and 3rd Fiscal Quarters of Fiscal Year
Ending 2005 $7,700,000
1st, 2nd, 3rd and 4th Fiscal Quarters of Fiscal Year
Ending 2005 $6,500,000
2nd, 3rd and 4th Fiscal Quarters of Fiscal Year
Ending 2005 and 1st Fiscal Quarter of Fiscal Year
Ending 2006 $6,000,000
Each period of four (4) consecutive Fiscal Quarters
thereafter $6,000,000
ARTICLE II
MODIFICATION OF LOAN DOCUMENTS; CONSENTS OF THE LENDER, THE
PARENT AND THE GUARANTORS
2.1. Loan Documents. The Loan Agreement and each of the other Loan
Documents are amended to provide that any reference therein to the Loan
Agreement or any of the other Loan Documents shall mean, unless otherwise
specifically provided, the Loan Agreement as amended hereby, and as further
amended, restated, supplemented or modified from time to time.
2.2. Consent by the Lender. Subject to the satisfaction of the conditions
precedent set forth in Article III below, the Lender consents to the Senior
Notes Restructuring upon the terms set forth in the Fourth Supplemental
Indenture.
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2.3. Consent by the Parent and the Guarantors; Ratification of Guaranty
Agreements. The Parent and the Guarantors each hereby consents to, and agrees to
be bound by, (i) each of the amendments to the Loan Agreement as set forth in
Article I of this Amendment and (ii) the consent by the Lender to the Senior
Notes Restructuring as set forth in Section 2.2 of this Amendment. The Parent
and each Guarantor hereby ratify its or his obligations under its or his
respective Guaranty Agreement and the other Loan Documents to which each of them
is a party or by which each of them may be bound, each of whom remains in full
force and effect, enforceable in accordance with its terms.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower, the Parent and the Guarantors each hereby represents and
warrants to the Lender that:
3.1. Compliance with the Loan Agreement. As of the execution of this
Amendment, the Borrower, the Parent and the Guarantors are each in compliance
with all of the terms and provisions set forth in the Loan Agreement and the
other Loan Documents to be observed or performed by the Borrower, the Parent and
the Guarantors except where non-compliance has been waived in writing by the
Lender.
3.2. Representations in Other Loan Documents. The representations and
warranties of the Borrower, the Parent and the Guarantors set forth in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects except to the extent that such representations and warranties relate
solely to or are specifically expressed as of a particular date or period which
is past or expired as of the date hereof.
3.3. No Event of Default. No Default or Event of Default exists.
ARTICLE IV
CONDITIONS PRECEDENT
The effectiveness of the amendments to the Loan Agreement as set forth in
Article I of this Amendment and the consent of the Lender as set forth in
Section 2.2 of this Amendment, are each conditioned upon the satisfaction of
each of the following conditions precedent:
4.1. Amendment. The Lender shall have received this Amendment duly
executed by the Borrower, the Parent and the Guarantors.
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4.2. Lien Subordination Agreement. The Lender shall have received the
Lien Subordination Agreement duly executed by the Indenture Trustee and
acknowledged and agreed to by the Borrower, the Parent and the Guarantors that
are parties thereto.
4.3. Conditions Precedent to Fourth Supplemental Indenture. Each of the
conditions precedent to the effectiveness of the Fourth Supplemental Indenture
as set forth in Article III thereof shall have been satisfied.
4.4. Consents to Assignment and Subordination Agreements. The Lender
shall have received a Consent to Assignment and Subordination Agreement duly
executed by each party to whom Parent Indebtedness for Money Borrowed is owed,
each such consent to be in substantially the form agreed to by the Borrower and
Xxxxxxxx Kill & Olick, P.C. on January 30, 2004, with such changes thereto that
are approved by the Lender in its sole discretion.
4.5. Representations and Warranties. The representations and warranties
of the Borrower, the Parent and the Guarantors as set forth in Article III of
this Amendment shall be true and correct in all material respects.
4.6. No Default or Event of Default. No Default or Event of Default shall
exist.
4.7. Cash or Cash Equivalents. All cash or Cash Equivalents owned by PF
Distribution, PF Purchasing, Columbia Hill Aviation and the Parent on the Senior
Notes Restructuring Closing Date are transferred to the Borrower.
4.8. Affiliate Agreements. Each of the Affiliate Agreements are
terminated and the Lender shall have received termination agreements duly
executed by the parties thereto.
4.9 Certificate. The Parent and the Borrower shall have delivered to the
Lender a certificate in form and substance satisfactory to the Lender confirming
that each of the conditions set forth in this Article IV has been satisfied.
ARTICLE V
GENERAL
5.1. Full Force and Effect. As expressly amended hereby, the Loan
Agreement and the other Loan Documents shall continue in full force and effect
in accordance with the provisions thereof. As used in the Loan Agreement and the
other Loan Documents, "hereinafter", "hereto", "hereof", or words of similar
import, shall, unless the context otherwise requires, mean the Loan Agreement or
the other Loan Documents, as the case may be, as amended by this Amendment.
5.2. Applicable Law. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina.
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5.3. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one and the same instrument.
5.4. Further Assurances. The Borrower and the Guarantors shall each
execute and deliver to the Lender such additional documents and certificates as
the Lender may reasonably request to effect the amendments contemplated by this
Amendment.
5.5. Headings. The headings in this Amendment are for the purpose of
reference only and shall not affect the construction of this Amendment.
5.6. Expenses. The Borrower shall reimburse the Lender for all fees and
expenses (legal or otherwise) incurred by the Lender in connection with the
preparation, execution and delivery of this Amendment and the other Loan
Documents required or contemplated hereby, the Fourth Supplemental Indenture and
the closing of the Senior Notes Restructuring.
5.7. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, THE BORROWER, THE LENDER, THE PARENT AND THE GUARANTORS EACH WAIVES ANY
RIGHT TO TRIAL BY JURY THE BORROWER, THE LENDER, THE PARENT OR THE GUARANTORS
MAY HAVE IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS AMENDMENT, THE LOAN
AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered as of the date first above written.
PIERRE FOODS, INC.
("BORROWER")
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Title: CFO
PF MANAGEMENT, INC.
("PARENT")
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Title: President
FLEET CAPITAL CORPORATION
("LENDER")
By: /s/ Xxxxxx X. XxXxxxx
-----------------------------------
Title: Sr. Vice President
COMPANY GUARANTORS:
PF DISTRIBUTION, LLC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Manager
PF PURCHASING, LLC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Manager
[Signatures Continue on the Next Page]
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FRESH FOODS PROPERTIES, LLC
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx, Manager
COLUMBIA HILL AVIATION, LLC
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Xxxxx X. Xxxxx, Manager
COMPASS OUTFITTERS, LLC
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxx, Manager
VALIDITY GUARANTORS:
/s/ Xxxxx X. Xxxxx (SEAL)
---------------------------------
XXXXX X. XXXXX
/s/ Xxxxx X. Xxxxxxxxxx, Xx. (SEAL)
---------------------------------
XXXXX X. XXXXXXXXXX
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